Democrats Want to Nix the Employer Mandate, They Just Have No Idea How to Pay for It

In 2013 the Obama administration made the politically expedient decision to delay the employer mandate, meaning that businesses would not be penalized for failing to provide health insurance.

The mandate suffered steep opposition among business leaders who were facing the prospect of downsizing their workforce or cutting workers’ hours in order to afford or avoid the costly fee. The delay would put a halt to these measures which could have put a serious dent in the economy in an already-difficult time.

More importantly, at least for the White House, it avoided some of the inevitable political backlash in what would be a crucial election year. The political and economic threat of the mandate became so great that the Obama administration in February surreptitiously announced yes another delay – this time until 2016.

Nevertheless, pundits still assumed that the mandate would have to take effect at some point, after all, it was the “law of the land.” Ron Fournier wrote for National Journal:

What can Obama and his team do about all this? They’ve already delayed the mandate twice. A third time would further diminish the credibility of the law and of the administration.

Canceling the mandate is not a likely course. First, it would require action by a gridlocked Congress, which is divided on the 2010 law. Second, it would create a $150 billion hole in the budget that pays for subsidies to low- and middle-income individuals buying health insurance. That money comes from fines paid by companies that don’t comply with the law, a redistribution of wealth that the White House doesn’t like to acknowledge.

But some liberals saw it differently. Among them was former White House press secretary Robert Gibbs.

“I don’t think the employer mandate will go into effect. It’s a smaller part of the law. I think it will be one of the first things to go,” Gibbs said in April.

Some Democrats immediately leapt up to rebuff Gibbs’ prediction. ON CNN’s State of the Union House Minority Leader Nancy Pelosi said that the “employer mandate, the individual mandate are an integral part” of Obamacare. “This is an initiative that has strong pillars that relate to each other.”

White House Press Secretary Jay Carney also dismissed Gibbs’ claim, even going so far as to take a jab at his predecessor.

“As the final rules put out in February made clear, this will be phased in next year,” Carney said. “Having spent time at the pundits table . . . you can make predictions all the time that turn out to be true.”

While Democrats that ally themselves closely with the White House continue to defend the employer mandate, others on the left are pushing for its repeal. Paige Winfield Cunningham and Kyle Cheney report for POLITICO:

By July, the former aide and longtime confidant of President Barack Obama had a lot more company. More and more liberal activists and policy experts who help shape Democratic thinking on health care have concluded that penalizing businesses if they don’t offer health insurance is an unnecessary element of the Affordable Care Act that may do more harm than good. Among them are experts at the Urban Institute and the Commonwealth Fund and prominent academics like legal scholar Tim Jost.

Those experts are finally coming around to a critique that conservatives have expressed since the bill’s inception – the mandate is not only is a job-killer, but it creates strong disincentives to hire low- and moderate-income workers who are more apt to qualify for subsidies in the exchanges.

But as the POLITICO story also makes clear, there’s a reason that Democrats aren’t jumping on board to make the change:

The main downside to eliminating the mandate, from the Democratic perspective? Money. . .

“The employer mandate doesn’t have a huge impact on insurance coverage. But it does raise a lot of money,” Jon Gruber, an MIT economist who advised the White House on crafting Obamacare, wrote in an email. “So really the question is how to (or whether to) make up that money.”

And that’s the problem that Republicans have longed been wary of. Democrats like to tout that Obamacare wasn’t going to cost money, but what they conveniently left out was that most of the pay-fors have no chance of withstanding policy or political scrutiny. We can do better than this mess of a bill. If it doesn’t fall apart on it’s own it’s beyond time to repeal and replace it.