Obamacare may be President Obama’s proudest legislative achievement, but the fact is it has been a political disaster for Democrats. The unpopular law has galvanized Obama’s conservative opponents, driven away moderates and independents, and hung like an albatross around the neck of the U.S. economy. A decision by the Supreme Court to overturn the law in its entirety could be the best thing that ever happened to Obama’s prospects for reelection.
If the Supreme Court were to lift the weight of Obamacare from the economy, we might see a spurt of job creation and capital coming off the sidelines that could be extremely helpful to the president come November. As Sen. Tom Coburn (R-Okla.) recently put it, “If [Obamacare] is thrown out, you’re going to see the economy bump up, just simply because [of] all the people who are not hiring with the anticipation of what it’s going to cost and the mandates associated with it. I think you’re going to see a big bump in the economy if it gets thrown out.”
Coburn is right. A recent Gallup survey found that 48 percent of small businesses said the potential costs of Obamacare were holding them back from hiring new workers. As one small business owner told “PBS News Hour” late last year, “when we bring on a new employee, we don’t know what that employee truly is going to cost us in 2014,. And we’re not in the practice of hiring people to then lay them off.”
Indeed, analysts at UBS Investment Research have called Obamacare “arguably the biggest impediment to hiring” in our economy (which is saying a lot considering the pending expiration of the Bush tax cuts and the massive regulations Obama has proposed for the energy sector). One reason is that businesses with more than 50 fulltime employees face large annual penalties if even one of their employees qualifies for subsidies from health exchanges. The effect, according to the National Federation of Independent Business, is to “encourage businesses to downsize, to lay off employees, to shift from full-timers to part-timers, and to avoid hiring individuals who are likely to obtain subsidies and trigger penalties on the employer.” A Supreme Court decision to overturn Obamacare would eliminate these perverse incentives against hiring overnight.
Just look at the new medical device tax that is slated to take effect in January 2013. This tax is already causing medical technology companies to lay off workers. Stryker Corp. — an orthopedic device giant — announced in 2011 that it was laying off 5 percent of its workforce as a direct result of this new tax, which it says will cost the company $150 million. Other device makers have also announced layoffs and plans to move production of their devices offshore. Invalidating the entire bill would eliminate this tax before it can take effect.
Not only could a decision to overturn Obamacare give our anemic recovery a jolt just in time for the November elections, it would also transform the partisan landscape. If the law survives, conservatives know their last hope for stopping Obamacare would be legislative repeal. They would thus be more energized than ever to defeat Obama and take control of the Senate as well as the House in November. But if the law is overturned, one of the central rallying points for conservatives going into the fall campaign is removed.
Supreme Court rejection also helps Obama with moderates and independents. A recent Washington Post/ABC News poll found that 70 percent of independents want the Supreme Court to strike down the individual mandate or Obamacare entirely. Many of these independent voters dislike Obamacare, but do not necessarily dislike Obama. If the law is thrown out, and the economy is improving, they might take another look at the president come November.
Many on the left are hoping that if the court does overturn the individual mandate, it will stop short of invalidating the entire law. The irony is that a partial rejection would be the worst possible outcome for the president. Partial rejection would not remove the uncertainty that is preventing employers from hiring new workers — meaning Obama would get no economic bump. And with most of the law still on the books, conservatives would still be energized to “finish the job” at the polls in November. Obama would suffer the same humiliation as full rejection, but without any of the political or economic benefits.
No doubt a finding that Obamacare is unconstitutional would be a personal rebuke to the constitutional law professor in the Oval Office. It would certainly be a massive blow to the larger progressive dream of government-funded universal health care. But it might be Obama’s best shot at a two-term presidency.
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