Emanuel Defends Obama’s Health Law While Acknowledging ‘Mess’

Chicago Mayor Rahm Emanuel said the U.S. is already seeing a payoff from President Barack Obama’s signature health-care program, an initiative he played a central role in creating, while acknowledging a chaotic rollout.

“What happened here is, without a doubt, a mess-up and they’ll fix it,” Emanuel, 53, said at The Year Ahead: 2014, a two-day conference sponsored by Bloomberg LP in Chicago.

Emanuel’s comments come as Obama has started to lose support among even some of his fellow Democrats who worry the law’s roll-out will prove to be a burden on the party’s electoral prospects in 2014.

The Democratic mayor, in his first term at the helm of the third-most-populous U.S. city, was Obama’s chief of staff in 2010 when Congress passed the Patient Protection and Affordable Care Act. Lost amid the dysfunctional debut of the federal website for finding insurance are benefits that Americans already enjoy, such as coverage for pre-existing conditions, Emanuel said.

“Washington is broken,” he said. “Sometimes, so is the media coverage.”

Asked what advice he’d give to the president before the 2014 midterm congressional elections, Emanuel said he’d suggest that Democrats should pin blame on Republicans for slow U.S. economic growth.

“I would start laying the groundwork that it’s not just about health care,” he said. “The American economy would be growing better and faster if Washington wasn’t always getting in the way.”

Municipal Morass

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Emanuel faces plenty of challenges closer to home, including a budget deficit and soaring pension costs.

The mayor said retirement obligations threaten to “crowd out the future of the city of Chicago, which is our children” and that added revenue will be needed to fix the problem.

“Revenue and reform go together,” he said. “You cannot solve this problem on the backs of taxpayers and you can’t solve the problem on the back of employees.”

To confront a projected deficit of $339 million, Emanuel has proposed raising the cigarette sales tax by 75 cents a pack, among other measures. The 50 percent increase, to $7.42 per pack, would move Chicago ahead of New York as the nation’s most heavily taxed smoking venue.

The increase is part of an $8.7 billion 2014 budget, a plan that leans on higher fines and fees instead of raising property and income levies. Emanuel has said avoiding dramatic increases in real-estate taxes hinges on state legislation to reduce Chicago’s unfunded pension liability.

Chicago and surrounding Cook County have the largest pension burdens among the 50 most indebted U.S. local governments, according to Moody’s Investors Service. Pension liabilities represent 678 percent of Chicago’s revenue, a Moody’s study released Sept. 26 said.

On Nov. 8, Chicago had the credit rating on more than $8 billion of its debt lowered three steps by Fitch Ratings, which cited the pension liability.

To contact the reporter on this story: John McCormick in Chicago at jmccormick16@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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