Politics is so unpredictable. Obama’s two biggest initiatives were Cap and Trade and Healthcare. Cap and Trade hit the skids when people figured out that it was just a big, new tax on just about everything they buy.
Now Obamacare is on life supports and, as one of my favorite columnists, Charles Krauthammer predicts, will end up being not much more than a health insurance bill. Krauthammer attributes this result entirely to the revelations by the Congressional Budget Office of what this monster would cost us going forward.
I agree that the CBO input was a major factor, but I think there was another influence at work, the public’s growing awareness that half of the promised savings would come from cuts in Medicare. Most Americans are either on Medicare, approaching the eligibility age or have parents on it. Even without the CBO reports, this alone was enough to torpedo the planned government takeover.
The irony is that Democrats are likely to benefit from these two failures. First, as Krauthammer says, Obama will hail his emasculated health bill as a great accomplishment, a rescue from certain disaster. Moreover, these two initiatives together would have constituted a huge drag on any nascent economic recovery. With those dual threats now diminished, the prospects for a more robust recovery are enhanced.
And, the stock market being a forward-looking mechanism, this more optimistic economic outlook bodes well for a more robust market performance in the months just ahead. If the inflation ogre stays at bay until autumn 2010, the Dems stand a very good chance of maintaining their Congressional majorities. As for the effect on Obama’s fortunes in 2012, a lot can, and will, happen between now and then.
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