Labor History Provides Clues to Obamacare Fate

An unpopular president. Fury on the right wing over legislation perceived as a radical takeover of the private marketplace. A midterm wave election that sweeps historic numbers of Republicans promising repeal into control of Congress. 

Sound familiar? I’m not talking about this November. The year was 1946, and the way the so-called Republican “Class of ’46” dealt with the 1935 Labor Act sheds light on the fate of Obamacare.

In 1946, Harry Truman was in the White House. He had succeeded Franklin Roosevelt, the charismatic and controversial architect of the Depression-era New Deal, upon the latter’s death. Truman had all of Roosevelt’s controversial nature but little of his charisma, and by the time he faced his first midterm, he had the dubious task of defending what many thought were the legislative excesses of his predecessor’s administration. Flush with post-World War II prosperity, the Depression seemed a distant memory to Americans, and the country was ready for change. Republicans vowed to give it to them.

Few pieces of New Deal legislation were as reviled on the right as the Wagner Act. Passed in 1935, it created a federal right to unionize and collectively bargain, with a governmental board overseeing its implementation and enforcement. In essence, it inserted government squarely at the intersection of capital and labor, which throughout most of economic history had been a private affair. It had a stated pro-unionbias, to boot.

Like this year, where 100 percent of winning Republican Senate candidates vowedObamacare’s  repeal, members of the Class of ’46 were eager to dismantle as much of the New Deal as possible when they convened in January 1947. The Wagner Act was front and center. In June, Congress passed the Taft-Hartley Act, named after two Republican senators, which fell short of outright repeal but outlawed closed union shops (which paved the way for “right to work” state laws), prohibited union unfair labor practices and gave management far greater rights to combat union organizing. Although Truman vetoed the bill, enough cowed Democrats joined with the Republican majority to override the veto. Taft-Hartley was law.

Fast forward. Republicans are promising to seek Obamacare’s repeal when the new Congress is formed. Its full repeal is unlikely, however. Like the Wagner Act, it has quickly become enmeshed in the gears of the economy. Removing it altogether would be massively disruptive, so what is more likely is major reconstructive surgery. Just this week, Sen. John McCain — who is not exactly a Senate firebrand — promised “fundamental changes” in Obamacare. 

So, get ready. Change is coming. The employer mandate is likely dead, and the individual mandate is at risk. So-called “death panels” will likely be abolished, as will the insurance industry bailouts with which Obama bought the acquiescence of that industry (although never count out insurance company lobbyists).

Obamacare, like the redesigned Wagner Act, is probably here to stay. But its legacy and influence will be greatly lessened. When Taft-Hartley was enacted, unions represented close to a third of private sector workers in the U.S. Today, the number is closer to 6percent.

While numerous macroeconomic factors have contributed to the collapse of private sector unionism in the U.S., the weakening of the Wagner Act by the Republican Class of ’46 played a major role. The question is whether the Republican “Class of ’14” will leave a similar legacy in health care.