The business lobby takes on healthcare reform

By Felix Salmon
January 13, 2011

What business, big or small, doesn’t like a government bailout? That’s what the Obama healthcare bill is, in oversimplified terms, from the point of view of employers: up until now they’ve been struggling with soaring healthcare costs, and now the government is stepping in to relieve some of that burden.

David Wessel finds it necessary today to explain this at some length, thanks to the fact that the US Chamber of Commerce and the National Federation of Independent Business both want to repeal the bill.

At the National Business Group on Health, a collection of nearly 300 big employers, President Helen Darling, a former corporate-benefit administrator and Republican Senate staffer, says about executives who call for repeal: “If they really understood it, they wouldn’t.”

Wessel explains that the bill will help minimize the implicit subsidies that insured employees pay to the uninsured; will make it much easier for small businesses to shop for healthcare; will end Cobra obligations; and might even slow the pace of healthcare cost inflation.

What he doesn’t explain is how the US Chamber of Commerce and the National Federation of Independent Business became party-political hack machines, lobbying for whatever’s good for Republicans politically rather than whatever’s good for businesses on a policy basis. Is this something new, something related to the increasingly-partisan nature of Washington? Or were they ever thus?

It makes sense that there should be organizations which aggregate and represent the view of businesses in the economy — but maybe such organizations simply can’t be based in Washington and also be intellectually honest. After all, when politics and economics meet, politics always wins.

7 comments

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“What he doesn’t explain is how the US Chamber of Commerce and the National Federation of Independent Business became party-political hack machines, lobbying for whatever’s good for Republicans politically rather than whatever’s good for businesses on a policy basis. Is this something new, something related to the increasingly-partisan nature of Washington? Or were they ever thus?”

Read Kim Phillips-Fein’s Invisible Hands. The partnership between right wing ideologue William Mullendorf & Leonard Read of the U.S. Chamber of Commerce led to the transformation of the Chamber into an institution devoted to fighting the social changes brought on by the New Deal. It’s not new, but the Chamber’s stance grows out of a relationship formed in the 1930s.

Posted by pumpkin3142 | Report as abusive

My guess is that business sees either higher costs or an expanded mandate (which would lead to higher costs). Certainly one of the likely casualties in the coming years is the deductability of benefits by companies.

Despite the rhetoric about the healthcare bill lowering costs, it came out toward the end of the debate that the initial thrust was actually expanded care, with cost control to come at some point down the road. That’s a dubious proposition for a number of reasons, and if the individual mandate is shot down (anyone’s guess), cost control is probably impossible.

Expanded care is an important and laudable goal, but I think business is assuming they are going to be stuck with permanently higher costs.

Posted by Curmudgeon | Report as abusive

Executives don’t always lobby for what is best for their company, they lobby for what is best for themselves. They don’t make decisions based on what is best for their company in the long term, they make decisions based on what will maximize their short term compensation. Bonuses today, big losses when they are gone – heard that story before?

So why would business execs be against a bill that provides health insurance for their employees for much less than they could pay for it? Because a) they want to pay lower individual income taxes, and b) they want to help Republicans get elected, so they can a) pay lower income taxes.

I’m not sure how it actually ended up, but at one point, the bill included a provision where the government would charge employers $85 per month for each worker who didn’t get health insurance. Wal-Mart was in favor of it, and they were chastised by other CofC members for their stance, but I’m guessing Wal-Mart was thinking “where else can we insure our workers health for $85 per month?”. Cuba, maybe, but not in these here United States.

Posted by OnTheTimes | Report as abusive

I think Wal-Mart’s logic was more along the lines of: Wait, we can employ full time workers, not pay their health insurance, and only fork over $85 a month? That’s saving us like $400/person a month…sign us up!

Posted by REDruin | Report as abusive

most likely its the fact that we tried to keep the health financing system we have (employer funded). they have been over time dropping the benefit all together. which is really where they want to be headed. as it is they will cover their employee, but charge full rate for dependents. but they really want to drop it. otherwise it make no sense as the plan was to reduce the cost of health care by stabilizing the financing of it. and to try and keep that in the private sector. but that ended up meaning there had to be a mandate, otherwise requiring the insurance companies to provide coverage without pre-existing condition exclusion, ends up with no health insurance companies at ll as they would all go broke over night. as it is, we have monopolies controlling the insurance and provider markets for each state and city, and they have no need to control the cost of care. they just won’t pay for it, either by recession or rejecting claims. death panels the private way!

Posted by willid3 | Report as abusive

Lots of posturing, little content. They are already maneuvering for 2012, and by then this won’t be an issue. The Dems won on health care, though the result is a incomprehensible kludge. It will be fought now on the edges, but changing the core will take the same super-majority that the Dems had and lost, and I don’t think that’s in the cards for either party.

Sadr’s return to Iraq is going to put the country into play, and the winner is going to be Iran. We are going to be arguing over who lost Iraq. The answer is Gertrude Bell, and she didn’t have any choice, but that won’t matter.

Posted by ARJTurgot2 | Report as abusive

Executives don’t always lobby for what is best for their company, they lobby for what is best for themselves

Shocker!

Posted by lambertstrether | Report as abusive