Obama move on same-sex benefits: small costs, big politics

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    Supporters of same-sex marriage rallied outside a Beverly Hills, Calif., hotel last month, where President Obama was attending a Democratic party fundraiser.
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President Obama's move Wednesday to extend some employee benefits to same-sex partners of federal workers is all about symbolism and politics – and not about the economics.

Which is too bad, because a look at the costs and benefits help put the politics in context.

To begin with, the benefits being extended are limited. For example: Mr. Obama's memorandum of understanding reportedly will allow employees to take sick leave to care for a domestic partner or their children. Partners would be allowed to sign up for long-term care benefits, but not healthcare benefits.

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How much would this cost the taxpayer? If the private sector is any guide, it's minimal: less that 2 percent of total benefit payouts, according to a 2005 Hewitt Associates study. That's because, on average, only 1 percent of employees elect to take domestic partner benefits – that's all domestic partners, not just same-sex ones – when they are offered it, the study found.

If so few people use them, why do slightly more than half (.pdf) of Fortune 500 companies offer such benefits? To recruit and retrain employees. (Seven of 10 companies cited it as the No. 1 reason in the Hewitt Associates study.) Thus, Obama's extension of benefits may help broaden the pool of applicants for federal jobs, but only a little.

Of course, the real reason for his move is political. By defending the Defense of Marriage Act last week with language that gay-marriage advocates found offensive, the Justice Department set off a furor within the gay-lesbian community.

Many prominent donors are pulling out of a June 25 fundraiser by the Democratic National Committee for the gay-lesbian-transgender community. Gay-rights activists are angry, not only with Obama but openly gay Rep. Barney Frank (D) of Massachusetts for saying the fundraiser should go forward. And many are beginning to contrast Obama's campaign rhetoric with the nonactions that his administration has taken on issues such as don't-ask, don't-tell.

The Defense of Marriage Act, incidentally, makes those benefits extended by the White House more expensive (.pdf) for unmarried partners from a tax point of view.

Wednesday's actions may smooth some feathers in the gay community, but it may well ruffle those of religious conservatives. In this debate, the politics swamp the economics.

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