Why Obama May Fail
Daniel Henninger says that President Obama’s health-care bill has hit the wall.
A very long time ago, it was January. Barack Obama stood at the mountain top, bathed in the new light of a historic presidency and gazing down on a congressional lake afloat with contented Democrats. Those who spoke against him were vilified for not wanting this smart, vibrant president to “succeed.” How could he fail? Eight months into his presidency, Mr. Obama may do just that—fail.
Back then, few would have argued persuasively that at the August recess the Obama plan to redraw the American health-care landscape could be at risk of failure, with Democratic Members of Congress going home to halls full of raving constituents.
Why is this happening now? Mr. Obama was clear during the campaign about his plans for health care. He described the public insurance option. He spoke of the need for “sacrifice,” meaning the wealthy would pay higher taxes for his agenda.
If after all this Mr. Obama gets half a loaf or less on health care, look for the reasons among the hopeful, admiring people who voted for him. That is where his support is leaking.
Set to one side the progressive left, Congress’s liberal war horses, and the unions. For them, the Obama presidency is their last best hope, and no one will be dropping out. Not so non-movement Democrats, centrists and independents.
Start with taxes because conventional wisdom has held for years that federal taxes must rise. Reality check No. 1: This much??!!!
I think many of Mr. Obama’s supporters in the upper brackets of politics, who were expected to bear the burden of his “sacrifice” by meekly mailing in higher federal tax payments, are shocked at how high their top marginal rates could go.
This is especially true in high-tax Democratic utopias such as New York City, the famous ATM of Clinton-era fundraising, where the top marginal rate for all taxes could hit 60% if the health surtax is imposed. Mayor Mike Bloomberg is competing with Mr. Obama to pull tax revenue out of the same base of taxpayers, and Sen. Chuck Schumer wants to tap them for campaign contributions. Ask these two politicians what they’re hearing from this high-value swath of the Democratic base. Even the fattest cats in time discover the fairness issue.
Taxpayers in New York, California and other states at the fiscal brink are asking whether they’d rather pay a jacked-up marginal rate unto death for another federal health-care program or pay taxes to support the quality of life where they live.
The newly arrived inhabitants of the Obama White House, who this week floated the possibility of middle-class taxes to pay for their deficit, talk as if the states don’t exist. Factoring in the “millionaire” health surtax, the Tax Foundation’s recent analysis puts the top marginal rate over 50% in 39 states. This is nuts. Even if they back off on the surtax, the health-care debate has made clear the needs and compulsions of this White House, and some loyal Democratic “givers” are backing off (or asking friends about no-tax Tennessee).
They say there’s confusion in the land about the health-care bill. Here is the biggest confusion, and for many Obama voters it’s reality check No. 2:
For years, Democratic politicians said the health-care problem was about “47 million uninsured Americans.” Whatever the merits, many people were willing to do something for those with no health insurance. Suddenly, these voters discovered that ObamaCare is about them. When did that happen?
Every policy wonk in America may have known this was always an everybody-into-the-pool proposal, and Mr. Obama has talked himself blue saying people could stay with the insurance they’ve got or the doctor they’ve got, “if you’re happy with that” and don’t like the public option.
A lot of people simply don’t believe this. How come? White House adviser David Axelrod said this week, “Our job is to help folks understand how this will help them.” It could be they’ve already thought about that. For many people, the first six Obama months already have been an unsettling Dantesque tour through levels of government “help” they never knew existed.
Normally government activity flows by like unnoticed sludge, but Obama’s celebrity got everyone watching. What people have seen is: an $800 billion stimulus package designed by Congress, a $4 trillion budget, massive outlays by an alphabet soup of Treasury and Federal Reserve programs, Barney Frank the symbol of Democratic goals, and then the federal absorption of GM, an American icon. After all this, ObamaCare looks like a bridge too far.
They are proposing the biggest federal social program in a generation, which no one can understand (or explain), and which requires permanent federal tax increases starting with the wealthiest but threatening to engulf the middle class.
The harder the White House and Democrats push this idea, the worse it could get for them. Americans may have arrived at the limit of how much government they want or will pay for. If Barack Obama can’t sell more of it, no one can.
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