Self interest again rules in Washington

So Oct 1, 2013, came and went and we have a new healthcare law but no government. Such is life in the land of partisan politics and out-of-touch politicians.

By now, all of you know that the government has been shut down because the Republicans and Democrats in Washington have been unable to agree on a deal to fund the country. Much of that blame seems to land in the laps of House Republicans who insist that any budget deal include the defunding of Obamacare. The Democrats have insisted that is a non-starter.  

How much impact the healthcare law will actually have on the country is anyone’s guess. Depending on which side of the issue you fall will factor into your decision. The truth is nobody knows. But there are strong opinions, particularly in Washington, and that is why we have no budget deal.

In trucking, the impact of Obamacare will be vast, but that is not necessarily a bad thing. According to a new Transport Capital Partners survey, the number of carriers saying the law has had no effect on their business has dropped from 36% to 8% in the latest quarter. The survey said that in November 2011, 43% of carriers indicated they were likely to have employees contribute more toward health costs. Today, carriers are more likely to implement wellness programs (44%) and health savings plans (30%).

The big fear is that carriers will drop health insurance coverage altogether, forcing employees to the public exchanges that have been set up in each state. The survey found that the number of carriers that anticipate opting out of providing healthcare insurance all together by using independent contractors has grown from 13% two years ago to 24% this quarter.

As anticipated my many across all business segments, smaller businesses are more actively dropping coverage. In the TCP survey, smaller carriers reported they are more likely than larger carriers to consider dropping all coverage (30% vs. 10%). They are also more likely to reduce coverage (12% vs. 4%), and to have their employees contribute more (24% vs. 15%).
 

For larger carriers, this could be a boon to driver recruitment efforts.

“Smaller carriers are at a disadvantage to find and retain drivers if they cannot compete with the health packages offered by larger carriers,” said Richard Mikes, TCP partner.

There is a great article in the New York Times today written by Eduardo Porter that delves into the idea that Republicans are not afraid of the healthcare law itself (afterall, many of the concepts in Obamacare have been around for years and were initially Republican ideas – see Romneycare in Massachusetts, which served as the basis for Obamacare), but rather fear that the working class will actually benefit from the law and abandon the Republican party.

It’s interesting that both Republicans and Democrats have accused each other of holding the country “hostage.” It’s also somewhat ironic that despite the shutdown, ostensibly over Obamacare and nothing else – Obamacare launched on time yesterday across the country.

In the end, both parties are fighting over an issue that has been settled already. In case we forget, love it or hate it, since Obamacare passed Congress there has been a court challenge all the way up to the Supreme Court over it. There was also an election, which gave voters a chance to remove those responsible for the law from office, including Obama, and that did not happen. Oh, and the Republican-led House has held over 40 votes to defund the program and had no success to date in doing so. Now comes an approach of last resort – hold up funding for the government until we get our way.

The politicians on both sides of the aisle sound like a bunch of spoiled 3-year-olds that couldn’t care less about critical services being shut down Americans losing paychecks due to government furloughs.

And this is just the beginning. Trucking may not feel an immediate impact from this government shutdown, but in just two weeks time the debt ceiling debate will rear its ugly head. If that isn’t settled, the U.S. will default on its debt obligations and that will likely have a major impact on both the U.S. and global economies.

Following that is the debate over the highway bill, which expires next year. It took several years to sort out the past bill, which is only two years long. Expect another fight next year at this time and more short-term fixes rather than a complete overhaul of the system, which is vastly needed.

All of this political fighting has the real potential to do one thing that greatly affects trucking: spiral the economy back into recession, which will lower freight volumes and consequently profits, as a time when fleets are finally getting the wheels on solid ground.

If you don’t believe me, ask yourself this: Is there anything that has happened in the past several weeks that would indicate our elected leaders have any interest in mind other than their own?

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