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Today's Top News
Obama Takes Healthcare Reforms on the Road
President will have backing of trade unions but Republicans are preparing to mount constitutional challenge to block it
After the late-night drama on Sunday that saw the House vote 219 to 212 in favour of the health bill, Obama and his Republican rivals spent much of today preparing for the campaign ahead.
Obama will use the signing ceremony – at which he will be surrounded by doctors and nurses – to highlight what he sees as the benefits of the reform. After a year of divisive debate that produced a populist, rightwing backlash and led to the Tea Party movement, the bill expands health coverage from 83% of Americans to 95%.
Democrats cheered as the bill, passed by the Senate on Christmas Eve, reached the 216 majority. But the legislation – amounting to the biggest piece of welfare reform since the 1960s – is a messy compromise, with lots of loose ends. It leaves unresolved the question of whether it will, as intended, stop health costs spiralling out of control.
The health secretary, Kathleen Sebelius, described it as a major step for working-class Americans "who right now face bankruptcy because of unpaid health bills or are terrified their kids are going to get into an accident or can't go to a doctor. So it provides some health security for the first time ever in this country."
The campaign by Obama and Democrats will be backed by pro-health reform groups, and trade unions who are planning to spend millions on television advertising to win over a sceptical public. Gerald McEntee, leader of AFSCME, the biggest health workers' union in the US, told the Politico website: "We expect in three months, the American people will understand the bill and they will be happy and satisfied with it."
The White House is banking on health reform being a winner once the public becomes aware of the details of the package, while the Republicans express equal confidence that it will be a vote-winner for them. The test will come in the Congressional mid-term elections in November.
John McCain, the senator and Obama's Republican rival in the 2008 presidential campaign, said he was repulsed by the Democratic euphoria and warned the debate was far from over.
"Outside the Beltway [Washington], the American people are very angry. They don't like it, and we're going to repeal this," McCain told ABC television.
A rearguard effort to bring down the bill is already under way, with Republicans threatening to repeal or challenge the constitutionality of the legislation or block its implementation. At least 12 states, including Utah, Virginia, Florida and South Carolina, are planning to pursue legal action, arguing that the bill is unconstitutional. The Utah attorney general, Mark Shutleff, said: "This mandate and other provisions violate the US constitution and infringe on individual and state rights."
While much of the $940bn bill does not kick in until 2014, Obama, on his tours round the country beginning in Iowa on Thursday, will highlight the parts that will come in effect this year. His grassroots, web-linked organisation, Organising for America, today sent out an email listing points such as an end within six months of insurance companies dropping people after they become sick and an end to discrimination against children with pre-existing medical conditions.
The House vote has already challenged the view that Obama is too aloof and intellectual to get policies through and so was destined to become a one-term president.
While Obama is intent on milking the publicity that will be attached to the signing ceremony, the legislative process has at least a week or more to run yet. Both the Senate and House have passed the health bill but the House passed a second bill revising parts of the Senate version and that will go back to the Senate this week for debate and an eventual vote.
The second bill has tagged onto it a proposal that would fulfil another Obama campaign promise, to provide more funding for poor students.
Health stocks increased today after the vote, possibly because of the prospect of care being extended to 32 million more Americans. Leading drugs companies, including Pfizer, Merck and Bristol Myers Squibb, saw their shares rise by more than 1%, benefiting from an end to uncertainty. Shares in health insurers were mixed as investors picked over the potential winners and losers from the overhaul.
Despite dire warnings from Republicans about the cost of healthcare reforms to the US economy, Wall Street was relatively unflustered by the vote: the Dow Jones industrial average edged slightly higher on Monday morning, rising 28 points to 10,770 within the first hour of trading.
Much of the financial impact will be felt in 2014, when an expansion in healthcare coverage will take effect. But Brian Bethune, chief US financial economist for IHS Global Insight, said companies were likely to begin preparing now. "In the short-term, companies will be more restrained about hiring and they'll be controlling expenses because the cost of health insurance will be going up," he said.