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State of the Race, Part 3: Winning by Losing

By Sean Trende - September 21, 2012

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The takeaway is that, at some point in the next few years, we will probably have to implement something that looks like a combination of the Bowles-Simpson spending cuts and massive tax reform, only on steroids. The political impact from that is going to be tremendous.

3. Health care. Democrats were thrilled when Obamacare passed. If Obama is re-elected, it will be implemented. Democrats might be careful what they wish for here too.

Basically, Obamacare is a complex machine that is going to be turned on for the first time in 2014. There are plenty of reasons to think that it will work. But there are also plenty of reasons to think it won’t. Let’s game this out two ways. First, if it doesn’t work:

Back in July, Jay Cost laid out five favorable assumptions that CBO indulged in when scoring the bill. If they don’t hold, the law has some major problems. As Cost pointed out, even if you think each assumption has an 80 percent chance of coming to pass, that still is only a 33 percent chance of all five coming to pass.

If Obamacare doesn’t work -- if seniors really suffer as a result of the benefit cuts to Medicare; if more people get thrown off their employer-sponsored insurance than expected; if insurers get put out of business because people opt to pay the tax rather than get insurance -- it will not be a pretty political situation for Democrats.

Even if it works well, there will be problems. Unlike Medicare and Social Security, Obamacare creates obvious winners and losers. We then get to issues of salience: If people who are tossed onto the exchanges are angrier than people who are no longer denied care for pre-existing conditions are happy, there is a political problem for Democrats. If seniors strongly perceive the cuts to Medicare Advantage, but quickly forget about the “donut hole” being closed, there is a political problem for Democrats. There are dozens of such examples. Maybe they cancel each other out, but I wouldn’t bet the proverbial farm on it.

Republicans have problems of their own. If they repeal Obamacare, we go back to a status quo ante with some pretty ugly features: Children hitting lifetime caps on insurance policies, adults denied care because of pre-existing conditions, ever-increasing costs, and increased numbers of uninsured.

Make no mistake about it: If Republicans repeal Obamacare, the Democrats will make sure they own these things, and will “wave the bloody shirt” of Obamacare for the next several elections. It will be the hypothetical nirvana of Obamacare vs. an all-too-real status quo. Remember also that if the economy is sluggish, there will be even more people without health insurance than expected.

4. Iran. We can be brief here. In the next few years, one of two things will happen. Either Iran will develop a nuclear weapon, or Israel and the United States will forcibly stop Iran from developing a nuclear weapon.

No American president wants to be the one who oversees the former. And the disruptions that could ensue from the latter would be massive, especially in combination with any of the other factors listed above. Add in the continued difficulties we face in the region in general (as we saw last week), and the problems there are similarly insurmountable.

Basically, we’ve been playing kick-the-can on a host of problems for really the past few decades. In many ways, the collapse of 2008 was chickens coming home to roost for steps we took to avoid having a nasty recession in the early 2000s. Right now there are a lot of chickens flying around as a result of steps we’ve taken to avoid having a depression in the late 2000s.

Maybe Obamacare will work as advertised. Maybe we can attack a gigantic Middle Eastern nation without any major problems. Maybe the Fed can unwind massive quantitative easing smoothly. Maybe our economy will surge as a result of additional stimulus and/or supply-side tax cuts, and the debt will take care of itself.

Maybe. But if things don’t turn out for the best here, I sure wouldn’t want to be the one governing. Sometimes you really do win by losing. 

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Sean Trende is senior elections analyst for RealClearPolitics. He is a co-author of the 2014 Almanac of American Politics and author of The Lost Majority. He can be reached at strende@realclearpolitics.com. Follow him on Twitter @SeanTrende.

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