WASHINGTON — Thursday was a good day for President Obama’s legacy, but many retailers were left with somewhat of a sour taste.
After a bruising few weeks for Obama, the Supreme Court affirmed his signature health law — to chagrin of many retailers trying to contain costs — and the House put his trade agenda fully back on track. Legislators approved the renewal of trade preference programs for Africa and Haiti and the Trade Adjustment Assistance, a program that helps workers hurt by trade deals.
Just two weeks ago, House democrats defied Obama and shot down a trade package that included both the TAA and Trade Promotion Authority, which is vital to pulling together a free trade deal in the Asia-Pacific covering 12 nations and 40 percent of global gross domestic products. Congress approved TPA Wednesday and sent it to the President for his signature.
While retailers and large apparel brands were generally supportive of the trade moves, which could make it easier to produce goods in countries such as Vietnam, many also bemoaned the fact that the Affordable Care Act, also known as Obamacare, was here to stay.
“It definitely raises health-care costs,” said Allen Schwartz, owner and creative director of ABS by Allen Schwartz. “I’ve accepted it. It’s hard. It is what it is. The timing is unfortunate the way business has been the last six or seven years. They upheld it and it’s something we have to deal with. There’s nothing we can do. You have to accept the things you cannot change. It’s a tough time.”
Paul Rosengard, chief executive officer of Boston Traders, said, “Like many of Obama’s policies, one can make an argument that it is good for certain individuals, but much harder to make an argument that it is good for business.”
Bud Konheim, chief executive officer of Nicole Miller, noted that his own company hasn’t been impacted by Obamacare.
“We’ve always had a good health plan in place (United Health), and the increases were reasonable,” he said. “My general attitude toward anything the government does is it doesn’t work and it costs a lot of money. I’ve yet to be proven wrong. I’m waiting for the day when the government says it’s going to help, and it actually does.
“I don’t subscribe to the general hysteria of partisan politics. The way it’s developed, without knowing all the facts, I would bet it’s not the best. There’s total confusion. Then again, the feeling from all the critics is they don’t have anything else,” Konheim said.
A Target spokeswoman was more circumspect in articulating the company’s stance, noting: “We recognize the importance of access to health insurance for many Americans and will continue to monitor developments related to the Affordable Care Act.”
Arnold Aronson, partner and managing director of retail strategies at Kurt Salmon, saw broader issues in debate over providing better access to health care.
“There’s a redefinition of America’s version of the middle class and the middle class dream, and the obligation we as Americans have to make sure everybody is getting something out of the American model,” Aronson said.
“I think in terms of business, there is a strong reason for the middle class to be able to realize its ambitions and its needs,” he said. “I think that psychologically and substantively, a healthier attitude will help the middle class and the moods of people in terms of having disposable income to spend, not only on the requirements of life, but on the wants of life.”
He pointed out that it’s not the first time that companies have absorbed costs.
“How many companies are raising their minimum wage? It’s something that’s not only a social responsibility but an economic benefit in the long run. If people have more money, they will spend more money. If they’re working at higher wages, there’s the opportunity for more productivity,” he said.
With the Supreme Court having the final world, for now, lobbying groups hoped to springboard off of the landmark decision to prod Congress to make some changes to the sweeping health-care law.
In a 6-to-3 decision, the Supreme Court rejected a challenge to the Affordable Care Act’s federal subsidies, ensuring that federal tax credits are available to millions of Americans who buy their health insurance from both state exchanges as well as from the 34 states with federal exchange marketplaces. The ruling prevented states from having to find a way to prevent millions of people from losing health coverage.
“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” said Chief Justice John Roberts, who wrote the majority opinion. “If at all possible, we must interpret the Act in a way that is consistent with the former — and avoids the latter.”
Congress is now expected to turn to several legislative proposals aimed at easing the burden of the Affordable Care Act on businesses.
Christine Pollack, vice president for government affairs at the Retail Industry Leaders Association, said the association has been working for four years to convince members of Congress to make changes to the health law.
The association said the law has been challenging and has created compliance issues and “ambiguities that impede employers’ ability to comply with the expensive law.”
“Congress was waiting for the [Supreme Court] decision and they have been holding their fire,” Pollack said. “Several legislative proposals need to be introduced and reintroduced. All members were telling us they were waiting until the decision came down to move ahead on those.”
Pollack said RILA is advocating for several pending legislative proposals, including providing employers with regulatory relief for reporting requirements; restoring a 40-hour workweek standard for health insurance eligibility — under ACA, there is a 30-hour workweek eligibility; eliminating certain fees imposed on businesses; improving access to employer wellness programs, and eliminating a 40 percent excise tax on health plans.
She said there have been pros and cons with the health law.
“Obviously the intent of the law was to cover uninsured individuals and create insurance exchanges for market power for a pool of lots people together,” she said. “It has been on the regulatory and compliance side of things where it is very complicated and employers have had to spend a lot of resources to comply with various aspects of the law.”
David French, senior vice president for government relations at the National Retail Federation, said, “Now that the court has spoken, it is imperative that Congress seize the opportunity and address the most egregious errors in this poorly constructed law to ease unreasonable compliance burdens and reduce the cost of coverage for employers and employees alike. Questions about the effectiveness of the Affordable Care Act persist five years after its enactment. The ACA’s impractical and unworkable regulations and requirements continue to cast a shadow on employer-sponsored health coverage.”
The NRF has been fighting to repeal the employer mandate for the past five years.
French argued for the repeal of the employer mandate, and to reform and eliminate “onerous” reporting requirements and restore a 40-hour workweek as the standard for eligibility.
“The Supreme Court decision should provide the pressure needed to thaw out congressional intransigence over health care and pave the way for both parties, Congress and the administration to work together to reform the ACA to make it more practical and reasonable,” French said.