CNN is reporting that the Obama healthcare plan has the votes for Congressional approval. Intrade is also confirming this as the possibility of passage has surged to 90% as of this morning. Let’s look into this a bit more closely because I think this is very poor timing for such a law.
The implications of the plan are relatively simple and they’re not very well thought out in my opinion. I have long argued that this is not the time for Obama to play politics and pass a healthcare plan. The country has MUCH bigger issues at hand, but the President is using this window of opportunity where he has the votes, to pass a plan he has long worked on. Some say it is being jammed down our throats. I am not so sure I’d go that far, but this is certainly poor timing. With so many millions unemployed President Obama is off worrying about healthcare. Well, news flash Mr. President – it’s hard to get healthcare when you don’t even have a job.
As we’ve argued before, this is terrible timing for healthcare passage. With very weak aggregate demand due to high unemployment and weak private sector balance sheets the last thing we need is higher costs for businesses and higher taxes for consumers. This plan will likely contribute to both. Small businesses, the engine of job growth, will be particularly hard hit by this plan. The last second addition of investment taxes is a disaster for the market. This plan alone won’t kill the recovery, but Congress certainly appears to be doing their best to do just that. Like the housing tax credits and cash for clunkers this is just one more ill-timed spending plan that sounds great on political posters, but is not good economic policy, which is precisely what this country needs right now.
Bear in mind, I am not necessarily against government mandated healthcare. However, this is just not the time to be trying to pass a plan like this. The President has the votes to pass a much larger stimulus plan that would help resolve the balance sheet recession and he’s wasting this opportunity to pass his healthcare plan. I think he has his priorities backwards and risks tarnishing his legacy by passing a bill that could actually hurt the economy. We have more important things to deal with than universal healthcare. We’ve just been through the biggest economic calamity in nearly a century. Where are our priorities?