Takeaways From Tuesday’s Elections

From today’s New York Times Election Review:

By any measure, Tuesday was a big night for Democrats, especially in Virginia, where they swept the top offices, including governor, and made strong gains in the General Assembly. Here are some key takeaways from the biggest election night since President Trump’s victory a year ago.

Susan Johnston helping coordinate canvassing efforts at the Mainers for Health Care headquarters in Portland on Tuesday. Maine became the first state to vote to expand Medicaid. 

A suburban rebellion propels Democrats. It was largely a suburban rebellion, where more moderate voters rejected Mr. Trump and embraced Democrats. Be it New Jersey, Virginia or Charlotte, N.C., Democrats rode a miniwave of victories that will give them energy for candidate recruitment and fund-raising heading into the midterm elections next year.

In addition to winning the top races, for governor of New Jersey and Virginia, Democrats also captured the mayoral post in Manchester, N.H., the State Senate in Washington, along with other important victories in statehouse elections. Maine also became the first state to vote to expand Medicaid, the 32nd in all under President Barack Obama’s signature Affordable Care Act.

It’s hard to have Trumpism if you don’t have Trump. Ed Gillespie, the Republican candidate for governor in Virginia, tried his best to sound the call of Mr. Trump’s followers in stoking the nation’s culture wars. He was harsh on immigration, supportive of Confederate monuments and opposed to those N.F.L. players who have taken a knee. But his public record before, as a national party chairman, White House counselor and Washington lobbyist, had few of those harsh edges. And like a lot of Republicans, he only grudgingly supported Mr. Trump’s candidacy. Most notably, Mr. Gillespie did not seek to campaign with the president in Virginia, settling for support via Twitter. That left him with almost all of Mr. Trump’s baggage and few potential benefits.
Read the entire review article here.

Tax subsidies and incentives to work

From the NYT “Economix” Blog” by Uwe Reinhardt:

Last week a brouhaha erupted over a passage in Appendix C of a Congressional Budget Office report, Budget and Economic Outlook 2014-24.

In that appendix, “Labor Market Effects of the Affordable Care Act: Updated Estimates,” the agency reported its estimate that the Affordable Care Act “will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor – given the new taxes and other incentives they will face and the financial benefits some will receive.”

The agency estimated this reduction in hours worked as the “full-time-equivalent workers of about 2 million in 2017, rising to about 2.5 million in 2024.” The agency hastens to point out that this number does not represent jobs no longer offered by employers but, for the most part, the decision of employees not to work.

Opponents of the Affordable Care Act and many news reports quickly seized upon this estimate, characterizing it as “dropping a bomb” or having “nuked” Obamacare. Joseph Rago of The Wall Street Journal attributed this interpretation of the data to an exposé by my fellow Economix blogger Casey B. Mulligan.

Commentators supporting the Affordable Care Act pointed out that the pro-growth effect of the law’s lower health costs would swamp any antigrowth effects from a lower labor supply and that ifsome Americans decided to work less, given the incentives they face, they would yield available jobs to others willing to work but unable to find a job, which on balance would be a good thing.

Read the entire article here.

SCOTUS upholds ACA, including individual mandate for the uninsured

In a surprising ruling the Supreme Court today announced that the Americans With Care Act (ACA) is, in fact, constitutional according to the broad tax authority granted Congress by the Constitution.

Opponents of ACA were also dealt a stunning defeat in their argument that so-called “Obamacare” is unconstitutional because it permits the federal government to overreach its legitimate constitutional authority to regulate interstate business according to the Commerce Clause. The majority ruled that the ACA’s individual mandate is not an interstate commerce issue. Chief Justice John Roberts, writing for the majority in a stunning reversal of the swing vote normally reserved for Justice Anthony Kennedy, claimed the law allowed a choice to uninsured but penalized them with a tax if they chose not to get health insurance. That was the Obama administration’s back up argument, and the Supreme Court agreed.

The fact that Roberts sided with the majority and wrote the opinion underscores just how important this ruling is for non-partisan legitimacy of the new health care law. Although critics have scorned the law as “socialism” and derided it based on false assumptions and ignorance about the law’s many benefits, the ruling today represents a major victory for progress in developing a health care system that is both fair and just.

Some benefits of the Affordable Care Act:

  • Children will be able to stay on their parents health plans until age 26, an important benefit in an economy with high unemployment and shrinking benefits.
  • Insurers will no longer be able to discriminate against persons with prior medical conditions.
  • States must set up insurance exchanges so that market competition among firms will deliver low cost insurance to the uninsured.
  • Individuals who can afford insurance but lack it will be penalized by a “free-rider” tax, ensuring that their uninsured medical costs are not passed along to those persons with insurance in the form of higher premiums, more costly health care delivery, and higher taxes for public emergency rooms.