Obamacare disaster looms, but for whom? (Hint: the GOP)

As the nation possibly slides into yet another war, the Republicans are keeping their focus on the important stuff: Passing House resolutions to repeal Obamacare (40 to date), and plotting to hold the economy hostage in order to defund Obamacare.

Conspicuously absent from these discussions is an explanation of what would happen should the dog actually manage to catch the car.

Calling for the repeal of Obamacare is easy, but what would take its place? The insurance exchanges open for business on October 1st, and the personal mandate comes into effect on 1st January. Businesses have been planning for the rollout of Obamacare for the past four years, they have made business decisions predicated on Obamacare taking effect. Changing the rules with less than four months to go would throw the whole industry into chaos.

And it will certainly damage the economy if GOP brinksmanship forces the Treasury to default on US bonds, but the effects of defunding or repealing Obamacare would actually be much worse. The effect of a Treasury default would at least be fixable and limited in duration, and the administration has tools that allow the damage to be mitigated. Markets can only panic, banks can only face runs when they are open.

Last time the GOP tried to hold the debt limit hostage, the administration finessed the GOP into accepting (no demanding) major cuts in the bloated military budget, a prize the administration could not have won otherwise. As a political matter, the question of default is not whether it would damage the country, but who would be blamed for the damage caused.

By the time the debt limit crisis hits, people will already be shopping for insurance on the exchanges. Journalists working the personal finance beat will be churning out easy stories comparing the plans on offer. Democrats will be holding press calls in hospitals up and down the country as they help desperately sick constituents get real health insurance for the first time ever.

This is the real worry for the Republicans. By personalizing health care reform as ‘Obamacare,’ they have given the Democrats what threatens to become an enduring political brand. Obamacare would have been Obama’s political epitaph if Republicans had succeeded in preventing Al Franken taking his seat, and provided the crucial 60th vote to break the Senate filibuster. But next year, at least one person in ten living in America will be getting their health care from ‘Obamacare,’ and those numbers will rise year on year as the scheme expands. And those Obamacare winners are likely to be concentrated in the Red states, where poverty and ‘right to work’ union-busting legislation leaves a larger proportion of the population uninsured.

Republicans are right that Obamacare will be a disaster. But it will be a disaster for one of the political parties (them), rather than the country.

Common sense would suggest that forcing the US Treasury to default in a last minute attempt effort to stop Obamacare will only increase the value of the  brand. A Treasury default would be a national crisis. What do countries do in times of crisis? In the United States, the country rallies to its President. George W. Bush’s reaction to 9/11 was the most miserable, incompetent performance by any world leader spending ten minutes reading ‘My Pet Goat’ to a kindergarten class, then wandering around aimlessly in Air Force One. But the country rallied to him all the same because in times of crisis the country needs to believe the President can lead.

Reacting to a national crisis is actually quite easy because almost any measure that is bold and decisive will be praised regardless of whether it makes sense. If the Treasury default threatens the markets then sends an order to the SEC to shut down the bourse. Tell the Fed to close the banks as well.

Shutting down Wall Street would be dramatic, but hardly catastrophic and few people would want to risk re-opening them until Congress had passed legislation to pay the debts and eliminate the possibility of future defaults. Republican politicians would appear on the talks shows with bulging eyes and puffy red cheeks to heap blame on the Democrats. But the country would rally round the President as it always will.

The deeper the House Republicans dig in, the greater the political cost of their eventual capitulation. A split in the House GOP is inevitable as there is no other way to pass a bill. But will the moderates who put the good faith and credit of the United States before compliance with a lunatic ideology go quietly or hold their ground? Letting the Koch Brothers primary them with Tea Party challengers is not their only option.

The logical next step for the Tea Party after losing the default standoff is to attempt impeachment. They are spoiled children playing with matches.

Common sense says that this is a fight that Obama is sure to win provided only that he keeps his nerve. But common sense has proved a very poor guide to predicting Republican behavior.

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