WASHINGTON - The White House decision to delay the implementation of Obamacare's business mandate for one year sent shock waves through political circles here.
The Obama administration tried to cloak its decision in soothing rhetoric about giving small businesses more time to provide health insurance benefits for employees who work more than 30 hours a week that was set to begin next January.
"We believe we need to give employers more time to comply with the new rules," Obama's senior White House political fixer Valerie Jarrett wrote in her blog on Tuesday night. "This allows employers time to ...make any necessary adaptations to their health benefits while staying the course toward making health coverage more affordable and accessible for their workers."
Baloney. The West Wing's sudden decision has midterm congressional election politics and a weak, job-starved, economy written all over it. Obama's top political advisers are getting hit by rising complaints from Democrats who fear that the mandate is a ticking time bomb that will hurt the party's chances in the 2014 elections, especially in close Senate races where Obamacare is very unpopular.
That's when the Obamacare law was scheduled to force businesses with a workforce of 50 or more people to provide health insurance for their employees or else get slapped with a $2,000 fine for each worker.
Businesses who operate on the margin, and have been struggling to survive in the weak Obama economy, have been objecting to the mandate provision, warning that it will mean laying off workers or using more part-timers who work fewer hours to evade the mandate's 30 hour thresh-hold.
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"Employers are going to continue to restructure their businesses to avoid pulling the 50-employer trigger. And it isn't reporting requirements that are the primary concern of employers -- it's the cost of the Obamacare health insurance and fines," says veteran health care analyst Grace-Marie Turner.
While the White House sought to portray the one year delay as a careful policy decision to give small businesses more time to understand the new law's complex rules and regulations, political observers weren't fooled.
By delaying the mandate until January, 2015, "the Obama administration heads off the unseemly spectacle of companies vowing to cut jobs or workers' hours to avoid the costly mandate," writes Sarah Kliff in Wednesday's Washington Post.
Republicans are planning to make Obamacare and its job-killing mandates a major issue in the midterm House and Senate races, warning that it will lead to higher health insurance premiums and that "the train wreck will only get worse," said House Speaker John Boehner. "This is a clear acknowledgment that the law is unworkable."
That fear has led to a case of the political jitters among Democrats in Congress who've privately expressed their concerns to the White House. It hasn't gotten much media attention, but lawmakers in both parties have just begun to draft bipartisan legislation that would raise the mandate's threshold for employees who work more than 40 hours a week, among other changes.
The decision to postpone the mandate was made by President Obama on Air Force One as he was returning from Africa on Tuesday. But the last-minute pullback didn't sit well with some of his advisers.
Bob Kocher, a former health care adviser to Obama, expressed disappointment, saying it will result in a growing uncertainty about when other sections of the law will take effect. "It confuses people [and] will undermine all the other rules because people will expect delay," he said.
Other Obamacare supporters worry that any delays will give opponents of the law more confidence that they can kill it outright.
"Politically, it won't get easier a year from now, it will get harder," says John McDonough, a Harvard professor who was Sen. Edward M. Kennedy's health policy adviser.
"You've given the employer community a sense of confidence that maybe they can kill this. If I were an employer, I would smell blood in the water," he said.
That's exactly what is happening on Capitol Hill among Republicans who have been emboldened by Obama's last minute decision to delay the mandate's implementation.
"Instead of simply delaying implementation of Obamacare, we should repeal it in its entirety," said Chris Chocola, president of the Club for Growth, the well-funded election strike force that bankrolls pro-economic growth candidates.
"Obamacare is a horrible piece of legislation that will harm economic growth and it must be stopped," Chocola said.
The message that the White House has been getting since the Affordable Care Act was passed in 2010 is that business will pare down their work force to reduce their exposure to higher healthcare costs. It is now beginning to sink in, as more Democrats are beginning to hear this from their business constituents back home.
That's the message Neil Trautwein, vice president of the National Retail Federation, has been pushing in his meetings with administration officials: "If you set a hard, 30-hour limit for eligibility, you encourage employers to cut where they can." And that means cutting jobs.
Let's not mince words. The White House's decision to delay the mandate was driven by the nation's weak jobs numbers and its looming political impact next year.
In his mid-year review of the economy Tuesday, the Post's Neil Irwin concluded, "no progress has been made in putting more Americans to work in 2013."
While the national unemployment rate remains around 7.6, the bleak reality is that 18 states -- including the most populated ones -- have much higher jobless rates and 15 of them are between 8 percent and 9.5 percent.
As long as these numbers persist, Obama's employer mandate is dead in the water.
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