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Clear prognosis

28 June 2012 By Daniel Indiviglio

Obamacare is here to stay, so American businesses may as well get used to it. After the U.S. Supreme Court ruled on Thursday to leave President Barack Obama’s healthcare reform mostly intact, Republican presidential hopeful Mitt Romney vowed to try and repeal it next year if elected. But that’s empty rhetoric. His party will lack the votes. The GOP and companies big and small have been obsessing over the broad lack of certainty. They should embrace the fact they just got some.

The landmark overhaul of the U.S. healthcare system escaped the nation’s highest court virtually unscathed. The decision left Republicans gnashing their teeth. Romney said overturning the law would be a day-one initiative in his White House. The Senate, however, would probably make that impossible. It would take 60 votes to do so. The GOP has 47 members in the chamber now. Even the most optimistic scenarios have them gaining only 10 more in November.

At best, Republicans could try neutering the individual mandate, which would require only a simple majority. That could get hairy, though. While the Supreme Court called it a tax, the legislation labels it a penalty. Such a move would also look politically desperate, leaving most of the president’s plan intact anyway.

Corporate America would do well to forget about the iffy political calculus. Chief executives have been blaming uncertainty for all manner of problems for years. A 2011 Cleveland Federal Reserve study cited by Republican House Speaker John Boehner noted that “the net percentage of small business owners planning to hire would be six percentage points higher” if not for uncertainty created by Washington. A Gallup poll found that nearly half of small businesses said they aren’t hiring, in part, because of worries about the potential cost of healthcare.

Even the trade group that filed the lawsuit challenging the healthcare law could find a silver lining. The National Federation of Independent Business kicked off the commentary accompanying its June optimism index lamenting uncertainty, particularly the kind created by Washington. The Supreme Court ruling means firms can more easily plan for the future, invest and hire accordingly. That kind of certitude should help Obamacare’s bitter medicine go down.

 

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