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ACA Repeal Would be A Massive Upward Distribution of Wealth

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We all know that the Affordable Care Act is a neoliberal bailout of the health insurance industry designed by the Heritage Foundation, Milton Friedman, and George Gilder. And, yet, it’s a somewhat odd brand of neoliberalism:

There is one fact that is both central to the debate over repealing the Affordable Care Act yet strangely absent from explicit discussion about it. One of the main ways the ACA makes health insurance affordable is by providing families earning less than 400 percent of the poverty line (i.e., less than $85,000 for a family of three or less than $47,550 for a single person) with tax credits to defray the cost of purchasing insurance. Giving people money helps make things more affordable. President Obama and the congressional Democrats who wrote the law didn’t find the money for those subsidies hidden in a banana stand — they did what Democrats like to do when paying for things and raised taxes on affluent families.

Republicans do not like this idea. They dislike the idea of raising taxes on wealthy households so much that back in 2011, they pushed the country to the brink of defaulting on the national debt rather than agree to rescind George W. Bush’s high-end tax cuts. In December 2012, they tried to insist that they wouldn’t let Obama extend the portion of the Bush tax cuts that everyone (including rich people) got unless he also extended the tax cuts that only rich people got.

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This did not play a major overt public role in the 2009-’10 debate about the law, but the Affordable Care Act’s financing rests on a remarkably progressive base. That means that, as the Tax Policy Center has shown, repealing it would shower money on a remarkably small number of remarkably wealthy Americans.

The Affordable Care Act, in summary, taxed the rich in order to provide benefits to the poor and middle class. It did so first by a historic expansion of the public health insurance system for the poor, and second by substantially increasing public expenditure and regulation of the remaining elements of the system.

The answer, of course, is that the Affordable Care Act is not a “neoliberal” program. It is a liberal program squarely within the New Deal/Great Society tradition. It is absolutely true that it was compromised and failed to achieve all that it could have, but this also…places it squarely within the New Deal/Great Society tradition. The New Deal, as most of you know, was very severely compromised by interests that make insurance rentiers look benevolent by comparison. And it’s truly perverse to assert that LBJ is a New Dealer and Obama is not because the former’s health care reform did nothing at all for people who don’t qualify for Medicare or Medicaid, rather that at least making remaining markets fairer and more accessible when the votes to eliminate them aren’t there.

The Obama administration is the third presidency in the New Deal/Great Society tradition to achieve a substantial measure of policy success. It did not reconstruct American politics — the Republican Party is still represented by the Reagan counterrevolution. But, by the same token, the Trump administration will not uproot the New Deal coalition in the Democratic Party. It may do more or less damage to Obama’s policy achievements, but the next Democratic administration will be committed to restoring and expanding them.

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