Pushing Health Reform When Job Losses Are Rising

Barack Obama told the House Democratic Caucus before the roll call vote on health care on Nov. 7 that they would be better off politically if they passed the bill than if they let it fail. Bill Clinton speaking to the Senate Democrats' lunch on Nov. 10 cited his party's big losses in 1994 after Congress failed to pass his health care legislation as evidence that Democrats would suffer more from failure to pass a bill than from disaffection with a bill that was signed into law.

These were closed meetings, but we can safely assume that the two Democratic presidents also assured their fellow partisans that health care legislation would do all sorts of good things for the American people. We know Obama did say that Democrats should "answer the call of history," even though America has gotten along pretty well without government-run health insurance for some 220 years.

It's easy to spot the job-killing planks of the Obama platform.

But political calculations are always on politicians' minds. The two presidents were urging passage of legislation that has become increasingly unpopular as its provisions become more widely known. They were speaking at a time when Gallup tells us that only 47 percent of Americans think providing health insurance is a government responsibility, down from 69 percent just two years ago.

So despite their assurances, it's unclear whether Democrats will be better off passing a bill or seeing one fail. In political discourse it's often assumed that there is some clear path to a favorable outcome. But sometimes both paths lead down.

The question is how you got to that point or, more specifically, how Barack Obama and congressional Democratic leaders decided to make expensive health care legislation a No. 1 priority at a time when the nation was facing enervating unemployment, now at 10.2 percent and rising far higher than White House projections.

Obama seemed to acknowledge as much when he announced, just before embarking on his trip to Asia, that he will convene a White House "jobs summit" in December. Obama credited his administration, justifiably in my view, for stabilizing financial markets and preventing an even steeper economic downturn, and he might have credited, but didn't, his predecessor's administration for that as well.

But it's hard to see what else his administration has done to address job losses that were already large when he took office and that are far larger now. The $787 billion stimulus package passed in February has undoubtedly prompted the creation of some jobs somewhere and has clearly saved the jobs of many members of the public employee unions that contributed so generously to Obama's campaigns.

As the reporting of my Washington Examiner colleagues has shown, the claims that the stimulus package has "created or saved" specific numbers of jobs posted at www.recovery.gov are as greatly exaggerated as the early obituaries of Mark Twain.

It's easy, in contrast, to spot the job-killing planks of the Obama platform. The prospect of higher taxes on high earners after the Bush tax cuts expire in 2010 is one. The surtax on high earners in the health care bill the House passed is another. The cap-and-trade bill passed by the House, which would increase the cost of energy to avert disasters predicted for 50 years hence, is another. With all this in prospect, why would people choose to make job-creating investments?

The numbers tell a discouraging story. The three-month moving average of jobs lost fell from 829,000 in January 2009 to 230,000 in June. That's the good news. But in the very months that the stimulus package was supposed to be taking effect, and at a time when the economy appears to have started growing again, movement has been in the other direction, with the three-month average of jobs lost rising to 589,000 in October.

That's bad news indeed, for the nation and for Democratic politicians. So here is a suggestion for the jobs summit. The president should put on again the bipartisan hat he wore during much of the campaign and embrace the proposal by some Republicans for a payroll tax holiday. Cutting our most regressive tax should appeal to Democrats. And it would immediately reduce the cost of job creation. Voting for health care legislation may or may not help incumbents. Voting for a payroll tax cut would.

Michael Barone is a resident fellow at AEI.

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