The Exchange

How Obamacare helped kill unemployment aid

The Exchange
U.S. President Obama pauses while delivering remarks on Obamacare at an Organizing for Action grassroots supporter event in Washington
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U.S. President Barack Obama pauses while delivering remarks on the Affordable Care Act, commonly known …

The new year began drearily for at least 1.3 million unemployed Americans who soon stand to lose federal benefits that have helped keep them afloat. That’s because Congress declined to renew the benefits when they expired at the end of 2013, even though they’ve been extended repeatedly since first going into effect in 2008 under President George W. Bush.

It’s still possible Congress may renew the aid later this month, with Democrats pushing for an extension and Republicans saying they might go along with it, if the $25 billion annual cost comes out of other spending. But it’s getting harder and harder for President Obama and his fellow Democrats to push aid bills, including higher levels of food-stamp assistance, through a reluctant Congress. One big reason is Obamacare, the controversial health-reform program that launched last October.

The Affordable Care Act, as Obamacare is formally known, has no direct connection to bills languishing in Congress. But the disastrous launch of the health-reform law, which was unpopular to start with, weakened Obama’s political leverage and pushed trust in government to record lows. That comedown has weakened public support for most types of government programs, making politicians less likely to back them.

Mixed reports of support

A couple of recent polls found support for extending unemployment benefits is fairly strong, ranging from 55% to 63% of voters. But both of those polls were commissioned by left-leaning groups that advocate an extension. A Pew Research poll from last February showed much softer support. When those pollsters presented respondents 19 options for cutting federal spending, unemployment aid was the No. 3 program people said they’d cut, while aid to the needy was No. 5. The programs voters most want to protect are veterans’ benefits, Social Security and education.

It’s also difficult to tell from polls how strongly voters feel about protecting benefits for the needy, even when they voice support. But here’s a clue: A strong majority of voters favored an extension of the payroll tax cuts that ended at the start of 2013, effectively raising taxes on most working Americans. That’s not what voters wanted, but there’s little evidence of a backlash against politicians once it happened. Much of the media is now warning Republicans will face a backlash during the midterm elections in November if they scuttle more federal jobless aid, but that doesn’t seem to have happened before on issues affecting many more people.

There’s a lot of evidence, meanwhile, that Americans are losing faith in the government’s ability to solve pressing problems such as unemployment, poverty and costly healthcare. A Pew poll from last September found more than 70% of Americans feel government policies during the past five years have done little or nothing to help the poor and middle class. There’s considerable economic data showing Washington aid packages did, in fact, help ordinary people during that time, but perception often matters more than reality when it comes to generating support for controversial political measures.

Government = biggest threat?

Meanwhile, Gallup polls show a remarkable 72% of Americans feel the government itself is the biggest threat to the United States, the highest level since Gallup started asking the question in 1965. Everybody knows approval of Congress is at record lows, but the same generally goes for most other parts of the government. In an October Pew poll, trust in government was just 19%. In the 1960s, when Medicare and Medicaid went into effect, trust in government exceeded 70% (before the Vietnam War sent it plummeting, never to fully recover).

Obamacare obviously isn’t the only reason Americans are disgusted with their politicians. Adolescent partisan warfare in Washington, threats to default on U.S. debt in 2011 and 2013, and the October government shutdown have convinced many Americans their government is a laughingstock. Some conservatives even feel it helps their cause if the government looks incompetent, because it generates momentum to shrink it.

But the pitiful launch of Obamacare in October and the sorry performance of the healthcare.gov website had one resounding effect: President Obama basically lost the argument over whether government can be a competent contributor to American prosperity. Obama has long claimed  government can help make people’s lives better. The Affordable Care Act gave him a chance to prove it. Many Americans have now drawn the opposite conclusion, driving Obama’s approval rating close to record lows and support for Obamacare to levels far lower than before it went into effect. By some measures, Obama’s ability to push for his policy agenda has never been weaker.

It’s still early days for Obamacare, which could turn out better than expected in 2014 and beyond. But with the pressure on to cut spending in Washington and the economy improving enough to justify it, we may now witness the slow dismantlement of many aid programs that once seemed a necessity but now seem a luxury. “If the people cannot trust their government to do the job for which it exists,” Obama said in 2006, when he was still a senator, “all else is lost.” He may now have a new appreciation for those words.

Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.

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