The Tradeoff: Healthcare versus Approval Rating

“In discussions with dozens of health-care leaders and economists, I find near unanimity of opinion that, whatever its shape, the final legislation that will emerge from Congress will markedly accelerate national health-care spending rather than restrain it.” –Jeffrey S. Flier, Dean of Harvard Medical School

In staking his approval rating and perhaps even his and his party’s intermediate term political future (think mid-terms and 2012) on the healthcare debate, President Obama has clearly rolled the dice. To Dean Flier’s point above, this debate has become more than a debate about healthcare, but a strongly partisan debate about the future of American society and the use of government funds.  As David Brooks wrote yesterday in the New York Times:

“The bottom line is that we face a brutal choice. Reform would make us a more decent society, but also a less vibrant one. It would ease the anxiety of millions at the cost of future growth. It would heal a wound in the social fabric while piling another expensive and untouchable promise on top of the many such promises we’ve already made. America would be a less youthful, ragged and unforgiving nation, and a more middle-aged, civilized and sedate one.”

Perhaps as a newspaper columnist Brooks is being a bit melodramatic, but this debate does center around the trade off of a massive expansion of government versus potentially raising the standard of living for some segments of society.  For Obama, this tradeoff is between popularity and getting this landmark legislation passed.  To date, his approval has suffered brutally in this battle.  This morning, the Rasmussen Presidential Approval Index clocked Obama in at -13, which is the difference between Strongly Approve at +28 and Strongly Disapprove at +41.  This rating is consistent with the last two weeks in which the President’s Approval Rating has been the lowest of his Presidency.  The Real Clear Politics poll average verifies this point as well, which has the President Obama’s average approval rating at 50.4.  This is the lowest approval rating of his Presidency on that index as well.

Given where the economy is based on unemployment, President Obama is actually faring quite well versus his predecessors.  Specifically, Ronald Reagan had an approval rating that was closer to +35 when unemployment was over 10%.  (We have outlined this in the chart below.) The implication is likely that Obama’s predecessor is still being blamed for the current weak economy in the U.S. The acceleration of the healthcare debate and the growing criticism of the new bill has brutalized Obama’s approval rating though.  According to a Rasmussen Poll that was taken on November 21st and 22nd, a mere 38% favor the bill and 56% oppose the bill.  This delta of 18 points between favor and oppose was the worst spread by 6 points and consistent with his decline in approval.

President Obama’s approval rating seems to have somewhat survived the weak economy, at least based on historical perspectives.  The question remains whether it can survive the highly partisan and emotional healthcare debate.  So far, President Obama looks willing to roll the bones on that one.  But, undoubtedly, a failure of healthcare and its likely long lasting impact on his approval rating will limit any willingness to take political risks on a go forward basis.

As an early leading indicator, President Obama’s Afghanistan policy appears to be one that is positioned to take little political risk.  According to reports out this morning:

“President Obama is expected to address the nation Tuesday evening, 1-Dec on his new Afghanistan policy. The news comes after the President met with his national security team last night to finalize a plan to dispatch ~34,000 additional U.S. troops to Afghanistan. Reports indicate that the plan will call for the deployment over a nine-month period beginning in March and will contain points starting next June at which Obama could decide to continue the flow of troops, halt the deployments and adopt a more limited strategy, or begin looking very quickly at exiting the country.”

The President is clearly intending to leave the door open on his Afghanistan policy.  Indecisiveness, as it relates to foreign policy, potentially also has approval related issues.

Daryl G. Jones
Managing Director

The Tradeoff: Healthcare versus Approval Rating - Obama