Obama's 'Big Deal' is delivering for millions of Americans
On the day President Barack Obama signed the Affordable Care Act into law, an exuberant vice-president Joe Biden famously pronounced the reform a “big something deal” – except that he didn’t use the word “something”. And he was right.
In fact, I’d suggest using this phrase to describe the Obama administration as a whole. FDR had his New Deal; well, Obama has his Big Deal. He hasn’t delivered everything his supporters wanted, and, at times, the survival of his achievements seemed very much in doubt. But if progressives look at where we are as the second term begins, they’ll find grounds for a lot of (qualified) satisfaction.
Consider, in particular, three areas: healthcare, inequality and financial reform.
Health reform is, as Biden suggested, the centrepiece of the Big Deal. Progressives have been trying to get some form of universal health insurance since the days of Harry Truman; they’ve finally succeeded. True, this wasn’t the health reform many were looking for. Rather than simply providing health insurance to everyone by extending Medicare to cover the whole population, we’ve constructed a Rube Goldberg device of regulations and subsidies that will cost more than single-payer and have many more cracks for people to fall through.
But this was what was possible given the political reality – the power of the insurance industry, the general reluctance of voters with good insurance to accept change. And experience with Romneycare in Massachusetts – hey, this is a great age for irony – shows that such a system is indeed workable, and it can provide Americans with a huge improvement in medical and financial security.
What about inequality? On that front, sad to say, the Big Deal falls very far short of the New Deal. Like FDR, Obama took office in a nation marked by huge disparities in income and wealth. But where the New Deal had a revolutionary impact, empowering workers and creating a middle-class society that lasted for 40 years, the Big Deal has been limited to equalising policies at the margin.
That said, health reform will provide substantial aid to the bottom half of the income distribution, paid for largely through new taxes targeted on the top 1 per cent, and the “fiscal cliff” deal further raises taxes on the affluent. Overall, one per centers will see their after-tax income fall around 6 per cent; for the top 10th of a per cent, the hit rises to around 9 per cent. This will reverse only a fraction of the huge upward redistribution that has taken place since 1980, but it’s not trivial.