I anticipated the 5-4 Roberts-led decision upholding ObamaCare, although I did not publish my prediction, and I strongly disagree with the decision; I believe in the long run that the decision is irrelevant because the federal involvement in health care is unsustainable.
From a political perspective, I don't think that it is nearly the victory that Obama and others think it is. Let me be clear: I am not in a state of denial. There is no doubt that economic liberty has suffered a major setback. a 5-4 ruling for ObamaCare is worse than a 5-4 ruling against ObamaCare. I predict that the House will vote to repeal ObamaCare, but it's more to set up the election this fall. Even if somehow a repeal would survive the Senate (unlikely because the Democratic votes that put ObamaCare into law are still there and I'm not sure that the GOP can force Senate Majority Leader Harry Reid to put it on the floor), Obama would veto it, and either chamber would sustain the veto. So what we'll see, through the election, is mostly political posturing.
Now what do I mean I anticipated the ruling, and why didn't I publish my prediction? I had noted on Drudge Report a day or two ago a link referencing a rumor (now confirmed) that Chief Justice Roberts would be writing the majority opinion. I knew within a split second of seeing that its implications: (1) that meant that Anthony Kennedy was not the swing justice, as has been the case on a number of narrow "conservative decision" rulings; (2) John Roberts wanted to shape the majority opinion, which likely meant that he was siding with the socially liberal wing of the Court; (3) it would be a comprehensive ruling. It was an INFERENCE, not a proof. Did others interpret the rumor the same way? Perhaps, but I don't recall seeing any such speculation published at the relevant source pages, and I didn't troll various legal forums or search the Internet.
Why didn't I publish my speculation? The answer is that I gave it serious consideration; the leak was unexpected and unusual. I wasn't sure if the source was reliable, and I didn't want to play whack a mole on Internet rumors. I think that most people, including myself, up to that point expected a mixed ruling, like the mandate would be struck but the rest of ObamaCare would be spared.
My analysis of the decision? All things considered, despite the fact the decision went against my preference, it could have been worse and was, in a sense, BETTER THAN I EXPECTED:
- Chief Justice John Roberts explicitly rejected the concept of a mandate; along with the 4 dissenting justices also rejecting the mandate.
Here are relevant CNN alerts about the garbled information on the health insurance mandate. The Court DID say you cannot force someone to buy health insurance, :
"The Supreme Court has struck down the individual mandate for health care - the legislation that requires all to have health insurance"; "The court decided that the individual mandate that requires all Americans to have health insurance will stand and is considered a tax by the court, making it constitutional. Chief Justice John Roberts wrote about the individual mandate, citing the taxing clause: “It is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income, but choose to go without insurance. Such legislation is within Congress’ power to tax."
The news services are also misrepresenting (e.g., notice the contradiction of the first CNN alert and then the next): what he's saying here is the "health care mandate" isn't really a mandate because you can opt out by paying a tax/penalty: Congress is assessing a tax that you can be exempt from by buying health care insurance. Let me be clear that that I don't buy this; I think Roberts is buying into a post hoc sham rationalization. (See the highlighted hedge made by the government in the IMCitizen excerpt below.)
In legalese, the social liberals were trying to argue this was mandatory under the Commerce clause; Roberts specifically rejected it.
Let's recall what the socially liberal justices said at the hearings (tax or penalty, i.e., Commerce Clause):
No way, said Justice Ruth Bader Ginsburg. “This is not a revenue-raising measure,” she noted, referring to the Affordable Care Act. “If it’s successful, nobody will pay the penalty, and there will be no revenue to raise.”
This falls under the jurisprudential category of “if it don’t quack like a tax, it ain’t a tax.” Justice Stephen Breyer made the pithy observation that Congress “did not use the word ‘tax’” in enacting the health-care law.
From IMCitizen.net (my edits):
Chief Justice Roberts actually ruled the mandate, relative to the commerce clause, was unconstitutional. That’s how the Democrats got Obama-care going in the first place. This is critical. His ruling means Congress can’t compel American citizens to purchase anything. Ever. The notion is now officially and forever, unconstitutional.
Next, he stated that, because Congress doesn’t have the ability to mandate, it must, to fund Obama-care, rely on its power to tax. Therefore, the mechanism that funds Obama-care is a tax. This is also critical. Recall back during the initial Obama-care battles, the Democrats called it a penalty, Republicans called it a tax. Democrats consistently soft sold it as a penalty. It went to vote as a penalty. Obama declared endlessly, that it was not a tax, it was a penalty. But when the Democrats argued in front of the Supreme Court, they said ‘hey, a penalty or a tax, either way’. So, Roberts gave them a tax. It is now the official law of the land — Obama-care is funded by tax dollars.
The "Affordable Patient Care Act" is an oxymoron: the last thing government ever knows how to do is to make ANYTHING more affordable--it has RIGGED the health care sector with delusional price-fixing and deadweight losses throughout the system--it's almost as if Obama and the rest of his rogue Administration are out to purposefully or ignorantly sabotage the health care system: nobody who knows anything about health care could possibly be megalomaniac delusional enough to believe the government is here to help you with health care. This is a perversion of the free market.
Unfortunately Republicans have going along with this government scheme to dominate the health care sector since the war-time Depression where, to pay lip service to dysfunctional wage-price controls, a cardinal sin against free markets in and of itself, the government provided business a workaround through tax-free hidden compensation, i.e., health care. (It reminds me of an old joke: "Would you sleep with me for a million dollars?" "Yes." "$20?" "No! Just who do you think I am?" "We've already established what you are; we're just haggling over the price...") There is lip service about "employer contributions" to benefits, but that's putting lipstick on a pig: it's sleight of hand. From the employer perspective, an employee's cost is the employee's wages plus incremental paid for benefit costs. Money is fungible: the employer doesn't really care if employee pays all the benefits from the employee's higher wage or pays a share of benefits on top of a lower wage.
But here's the main point: the Congress has exempted the majority of those benefits from taxes. So effectively the government has been subsidizing (for those working for companies with said benefits) your health insurance, retirement plan, life insurance, whatever... This is just as bad as the government subsidizing the purchases of homes during the housing bubble; I'm pointing out the obvious: the government is playing winners and losers in the economy through its implicit tax subsidies of employee benefits. There are costs which are not immediately obvious to the employee: he may not be able to choose his current doctor in his new company's plan, for instance. What is paid on his behalf is a health insurer's charge, only a fraction of which goes to cover your actual health care services. Think of it this way: how is it possible that Massachusetts insurance policies cost roughly twice the cost in Utah? Is it that Utah citizens are twice as healthy across the board from Massachusetts citizens? Of course not!
Here's the key point: if the federal government has been subsidizing health care all along, why can't it be taxing for health care? It's been choosing winners all the while, why couldn't it be picking losers, too? That's at the core of what Ron Paul was saying in the Daily Bell post I cited the other day, what he meant when he said effectively, it's not only necessary to do away with one level of government intervention in the health care sector: you need strip out Medicare, Medicaid, health care tax-exempt subsidies (I believe that the legislative jargon is "tax expenditures"). All of this creates inefficiencies, contributing to the unsustainable health care bubble. NOTE: our health care expenses cannot, in the long run, outstrip compensation increases any more than housing costs.
The GOP is wary of such a "radical" solution because they will see all the vested interests coming out of the woodwork to protest the fundamental necessity (it's no longer an option) of getting the government out of health care. ObamaCare is simply another layer of economic inefficiency built on other layers of inefficiency.
How realistic is this? Perhaps not. Even if and when Obama is thrown out of office, Romney needs to have a strategy to offset filibusters by a desperate Senate Democratic minority, easier said than done. We will need to liberate as many Senate seats as possible this fall. I think if Romney gets close to 60 senators, he may be able to target enough Democratic holdovers from the 2008 election in 2014, they'll have no choice. To do that, I think he needs to push/reform state/regional assigned risk pools and promote regional or national insurance (and/or self-insurance) pools. That may give Democrats on the bubble enough political cover to switch sides on the issue.
But in the long run, Romney needs a vision to get government out of health care. The Democrats still think that Romney can't argue the issue given the precedent of RomneyCare. No, there are a number of ways to play that attack, and I'm sure that Romney is prepared for that; he's been attacked on that point for 18 months now (well, even before then). Among other things, Romney did not built a bureaucracy from scratch: he simply shifted subsidies from hospitals to citizens. Moreover, there's a big difference between a state running on a balanced budget and running the federal government already averaging over $1T in deficits, an almost $16T national debt and taking on a new entitlement program which will absolutely explode the deficit and national debt. All Romney has to say is, maybe we could have done this with a balanced budget in 2002: but we can't afford to do it now. We need a more feasible alternative.
- ObamaCare does NOT have a "judicial mandate": it got a 5-4 vote, with 4 justices saying the law should be thrown out in its entirety. This is important. In landmark cases, e.g., Brown v Board of Education, the Court wants to affirm the decision's mandate by providing a united front. Given a deeply divided country on the issue, the fact that John Roberts flipped his vote isn't going to change how people feel about the law, no matter how much lipstick Obama puts on the ObamaCare pig. We are talking about nearly 17% of GDP. The fact that Chief Justice Roberts mitigated the decision in important ways is not being fairly reported by the media.
- SCOTUS ruled that the extortion of forcing the states into an all-or-nothing deal on unilateral federal eligibility pikes in Medicaid is out. Again, from IMCitizen: Roberts ruled that if a state takes the [ObamaCare-supplemental] money, fine, the Feds can tell the state how to run a program, but if the state refuses money, the federal government can’t penalize the state by yanking [pre-ObamaCare] funding. Therefore, a state can decline to participate in Obama-care without penalty.
What to do now? I'll study Romney's response and write my reaction in the near future. But the Roberts' decision suggests one political fight that the GOP may want to pick in lieu of a futile ObamaCare repeal (which is not feasible given Obama's certain veto):
Repeal the ObamaCare tax and enforcement mechanism!
If you repeal the tax, you kill the economic case for the mandate, and the whole of ObamaCare collapses under its own weight. It's Obama's Achilles heel. Let the Democrats do the heavy lift of voting against a tax cut/repeal; it will kill them in the fall elections.
