Gigantism in Lawmaking

Here’s another aspect of Obamacare. Last week we witnessed a demonstration of how politicians benefit from a massive law. President Obama signed the vast bill – 2409 pages – with great fun fare.  A video of the signing was all over the web.   The media was full of gushing reports.  Mr. Obama was explicitly praised for refusing to take small steps.

Had it been a more modest measure, it would not have generated all this hoopla and its signing would likely not have been applauded as a historic landmark. For politicians, a colossal piece of legislation has the built-in advantage of providing dramatic theatrics. But that’s not all. Giant laws have other benefits as well for the powers-that-be in Washington.

For one thing, a broad agenda offers many possibilities for horse trading—after all, there is a lot in it. Things can be added, subtracted or otherwise adjusted to garner support for the bill. Also, an item that could not pass by itself can get through as part of the massive legislation, even if there is no relation between the item and the rest. The enormity of the document helps obscure the deals that underpin it.

Moreover, the timeline can be fine-tuned so that the glow of the triumphal media circus lasts for a long time without running into the full impact of the policy. The centerpiece of the “Patient Protection and  Affordable Care Act” – to use its official title – is compulsory insurance. But that’s not going to kick in until 2014. The effects won’t show up until after the Presidential election.

More important, the full cost implications will emerge over decades. The fiscal assumptions of the bill are not realistic, as Mario Rizzo and others pointed out.  A former director of the Congressional Budget Office estimates that the new medical entitlements will add $562 billion to federal deficits in the first 10 years.  But by then, the American public may have forgotten the “Affordable Care Act” of 2010.

Clearly, there are strong political incentives that favor big and complex laws with long-haul effects—the bigger, the less transparent, the longer term, the better. These perverse political incentives are a greater danger to the future of the Republic than a single law, even the monstrous new medical entitlement. Any complicated issue has the potential for a gargantuan bill, with all the opportunities that offers for political spectacle and trading. Everything-and-the-kitchen-sink legislation will always attract politicians.

What is more, gigantism makes it difficult to revise programs in the future. Between thousands of pages and hundreds of provisions, many to take effect years later, it will be hard to know where to even begin undoing the damage. From Medicare to Fannie Mae, public colossuses have been immune to criticism. Compared to those, too-big-to-fail banks are a solvable problem.

No reason to suppose the new medical programs will be any easier to control than Medicare. They will be too big to touch.

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About Chidem Kurdas 58 Articles

Chidem Kurdas is a financial journalist, analyst and writer.

Throughout her career she has held numerous positions, including: Research Analyst at Thomson Reuters, New York Bureau Chief at HedgeWorld, News Editor at Infovest21, Senior Associate Editor at Medical Economics Publications at The Thomson Corporation. She is currently Editor at Opalesque Futures Intelligence.

She holds a PhD in Economics from New School University.

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