March 22, 2010 / 3:44 AM / 7 years ago

Q+A: What does healthcare passage mean for Obama?

WASHINGTON (Reuters) - President Barack Obama rallied his fellow Democrats in the House of Representatives to pass his plan to revamp the $2.5 trillion U.S. healthcare industry on Sunday, scoring a huge, long-fought victory over the passionate objections of rival Republicans.

Here are some questions and answers about what the healthcare victory means to the Democratic president:

How Big a Victory Is This?

Passage was a huge victory after a year of intense effort in which Obama put his own reputation on the line, often against the counsel of close advisers and members of his own party who wanted healthcare to take a back seat to efforts to improve the economy and generate jobs.

"This is the defining moment for the presidency," said David Kendall, senior fellow for health and fiscal policy at the centrist Third Way think tank.

"The thing that is fascinating to me is that what he's managed to do in this is to unify the Democratic party on an issue that's not just divided Democrats from Republicans, but divided Democrats from each other," he said.

The bill's failure would have left the Democrats weakened and divided, under a president and congressional leaders who could not push through a top domestic policy priority even while enjoying big majorities in both the House and Senate.

"If you can't lead, you look weak, and Americans don't like weakness," Kendall said.

Will It Help Obama With His Other Agenda Items?


Experts had said failure would cripple Obama's presidency, and some Democrats who had not planned to back the revamp said they were swayed by concern that its failure -- after more than a year of intense effort -- could leave Obama unable to push through any major legislation.

Obama's approval ratings are hovering just below 50 percent.

The healthcare victory provides a resounding denunciation to critics who had termed him a ditherer with little to show for 14 months in office.

If successful, it could give him momentum on a range of other signature causes, including job creation bills, his proposed financial regulatory package, immigration reform and climate change.

But if healthcare reform proves unpopular, Obama will find it even more difficult to gain traction on those issues.


Some economists, at least, say yes.

The $2.5 trillion U.S. healthcare industry accounts for one-sixth of the country's gross domestic product, and a centerpiece of Obama's argument for his overhaul was that rising costs must be controlled because they risked destroying the economy.

Republicans contended that Obama's plan was too broad and expensive, and would increase the high federal budget deficit.

The Democrats' case for the overhaul was boosted on Thursday when the Congressional Budget Office estimated that it would cost $940 billion over 10 years but cut the deficit by $138 billion over the same period.

Many economists say the plan is at least an important step in the right direction toward controlling costs.

"I do think we have a credible shot at bending the curve," said Len Nichols, a healthcare economist at George Mason University in Virginia.

"(Healthcare is) the single biggest fiscal contributor to our structural imbalance. I don't know how to fix that without getting Medicare's delivery system better aligned with incentives. I don't know how to do that without systemwide health reform," he said.

Medicare is the government-run healthcare program for the elderly and disabled.

Investors have not worried about healthcare stocks, seeing little in the bill to hurt the sector because it does not include anything that would allow the government to cap prices and premiums.


The party that holds the White House typically loses seats in Congress in the first election after a new president takes office.

But healthcare's influence on the election in November will depend on whether it works and how quickly voters start to feel an impact.

If Americans feel they are benefiting by Election Day, when more than a third of the Senate and every seat in the House will be up for grabs, it will be hard for Republicans to convince the public to vote against those who backed it. If voters do not feel benefits, the Democrats will have a harder time, especially if joblessness is still near 10 percent.

"I think we know to a pretty high degree of precision what the fall election is going to be about. The Republicans will accuse the Democrats of arrogantly ignoring the will of the people, of cramming (through) this trillion-dollar 'surge into socialism'... and the Democrats will say, in effect, 'take a look at the bill we've just passed. Here's what's in it for you,'" said William Galston, a senior fellow at the Brookings Institution who was an adviser to President Bill Clinton during his failed fight for healthcare reform in 1994.

Editing by Deborah Charles and Paul Simao

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