Could ObamaCare actually force the man it’s named after to resign as president?
At least one Wall Street analyst says that while the chances are small, it's not out of the question that President Obama could step down before the 2014 mid-term elections if his approval ratings continue to implode amid the controversy over his health-care plan.
“If ObamaCare is the fiasco that some headlines are suggesting it is, I place the odds around 10% the president will resign before next November’s election,” said Kent Engelke, managing director at the brokerage Capitol Securities Management.
Engelke, who has more than 27 years of experience in the securities industry, says he got the 10% number from a simple calculation: 7% of all U.S. presidents faced impeachment or resignation (Presidents Andrew Johnson and Bill Clinton were impeached, while President Nixon resigned). He adds in another 3% due to the heightened animosity between president Obama and Republicans in congress.
“Because of the lack of a strong relationship with congress, I think there are few Democrats who will fall on the proverbial grenade to protect the president," Engelke adds.
Veteran Wall Street analyst Dick Bove of Rafferty Capital says Engelke’s prediction is unusual for a market analyst, and far too simplistic.
“It’s not normal for a financial analyst to make predictions of that nature,” Bove said. “The reality is that if the president resigns, it creates chaos.”
Engelke came to the financial business in 1986 and has worked at several of small brokerage firms including Sovran Investment Corp., Anderson & Strudwick, Davenport & Co. and now Capital Securities Management, a privately owned retail brokerage group headquartered in Richmond, Virginia. The firm had $4.5 billion in customer assets as of October with more than 200 investment professionals and 18,000 accounts in locations across the United States.
Engelke is no stranger to political commentary as it relates to the markets. He is often cited in financial publications such as The Wall Street Journal and has appeared on the FOX Business Network to provide commentary on economic trends and the federal budget.
“The primary issue facing the markets right now is Washington, and if you don’t follow Washington, that’s equivalent to not following interest rates and earnings,” said Engelke.
ObamaCare was designed to make certain all Americans received health-care coverage through a series of government mandates and subsidies. After a catastrophic start on October 1, the health-care law came face to face with a crucial November 30 deadline for an improved insurance enrollment website for Americans attempting to purchase policies that begin on January 1.
Over the weekend officials said they had met their deadline and goal of making HealthCare.gov run smoothly for a “vast majority” of users, but a surge in traffic on Monday created a backlog on the website, showing it still has a ways to go.
According to Reuters, as of Monday evening, HealthCare.gov had logged 750,000 visitors, just 50,000 short of the 800,000 daily users that officials have said the website could handle.
Engelke said that the new developments did not change his opinion on the chances of a possible presidential resignation over the botched health-care plan.
“If the website still has many issues, the president’s political fortunes will continue to erode," he said. "Marginally working will have no meaningful positive effect.”
Yesterday afternoon, President Obama kicked off a three-week campaign to shift the focus from the many troubles of HealthCare.gov to the benefits of the actual health-care law. The president’s approval rating has been slipping since the troubled launch of the website for his signature domestic policy. The most recent polling from Rasmussen Reports showed that 54% of likely U.S. voters disapprove of Obama's job performance, while only 45% approve. The same poll also showed that 43% strongly disapprove of the way Obama is performing as president and only 21% strongly approve.
Engelke thinks ObamaCare may end up being good for the economy if it leads to people focusing on reforming healthcare. “This could cause us to eventually get health-care delivery right in the United States," he said. If ObamaCare fails, then we will move back towards what Engelke calls "capitalism," or a more market-based approach to reforming the system.