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Friday, June 29, 2012

Who Really Won the Health Care Battle?

Other work is keeping me from the blog today, but here's just a bit of what I'm working on:

Democrats are right to celebrate their substantial political victory, but they must understand that it was a short term victory. I believe the Robert's opinion delivers a far more substantial long term victory to Republicans.

The contemporary welfare state is premised on two things 1) the commerce clause and 2) the power use money and the threat of withholding money to compel states to do things they may not otherwise do (mostly the latter). The contemporary regulatory state is premised on the same two things (mostly the former).  This ruling just drove a stake part way through each of those and severely cracked the foundation of the contemporary welfare and regulatory state. I will post more on this aspect of the ruling later.

On a more immediate issue, as a tax, the law is now susceptible to repeal using budget reconciliation - a measure created by the Congressional Budget Act of 1974 to avoid obstruction of important budget bills. It limits debate in the Senate to 20 hours and eliminates the possibility of a filibuster. As a tax bill, health reform repeal would certainly proceed under the reconciliation process.

If after 2012 Republicans have the White House (very likely based on current polls - ignore Romney's numbers at this point, anywhere Obama is at 47% or below Obama is losing), 50 seats in the Senate (very likely at the very least based on the states in play), and at least a 1 seat majority in the House (a certainty) then health reform is a goner. Democrats could not filibuster.They could not block it in the House. It would just be gone.

With regard to Medicaid. The court just told states they could opt out of the expansion. That expansion was supposed to cover 17 million folks. The states with the highest number of uninsured are the very states most likely to now say "no thanks." So much for expanding coverage.

As to the idea being floated that Roberts somehow expanded the avenues by which a tax can be used to compel people to do what the government wants - it's just not true. Roberts applied the taxing power in the same way it is currently used to reward folks with children, student loans, mortgages, and 401ks. Take two people with the exact same income and wealth living in identical houses. Person A has a mortgage, 2 kids, student loans, and contributes to a 401k, and a flexible spending account. Person B does none of these things. Rather she paid for college as she went, has no kids, puts her money in individual stocks instead of a 401k, and uses a savings account instead of a flexible spending account for medical services. Person A will have a substantially lower tax burden than will person B because our tax code allows him to deduct his interest and his contributions from his income. He will, in effect, receive tax forgiveness for doing things the government wants him to do. Person B cannot be mandated to have a kids, a mortgage, a 401k, or any of the other things Person A does but because she does not do them she pays more in taxes - it's not called a penalty. But to Person B it is in every way a penalty. Health insurance is now part of that list of things people may be rewarded or penalized for not having.

As a quick aside, this tax-based approach to "rewarding" folks with health insurance is actually what conservatives used to advocate. Contrary to the popular talking point, conservatives did not advocate a mandate.

Thursday, June 28, 2012

Justice Roberts just turned PPACA into the model of Republican health care reform from 20 years ago...

Kinda funny... in the late 1980s and early 1990s conservatives called for an end to the free rider problem in health care. They did not, as some have argued, call for an individual mandate, rather they called for a tax benefit for those who had insurance (much like mortgage deductions, child tax credits, etc). The flipside being a penalty for those who did not have insurance. But they did not advocate compelling people to buy it. Conservatives also long fought expansions of Medicaid that forced states to cover more people under the threat of the loss of all funds.

Justice Roberts just turned PPACA into the model of Republican health care reform from 20 years ago...

I'll quote as well from the folks at SCOTUSblog "The rejection of the Commerce Clause and Nec. and Proper Clause should be understood as a major blow to Congress's authority to pass social welfare laws. Using the tax code -- especially in the current political environment -- to promote social welfare is going to be a very chancy proposition."

Consider, the mandate now rests on the size of the tax penalty imposed - good luck ever increasing that tax. In effect, the mandate has been declawed.

Wednesday, June 27, 2012

Democrats must not Assail the Court in Health Reform Battle

In 1983, Newt Gingrich and conservative Republicans formed the Conservative Opportunity Society (COS). COS members were tired of being the happy minority party. They knew, however, that after 30 years in control of Congress the American people needed a real reason to dump the Democrats - a party that at the time was a still a centrist party that worked often with President Reagan. So the COS decided they needed to undermine confidence in the institution of Congress.

After 30 years Congress and Democrats were synonymous. Undermine confidence in Congress and you undermine confidence in Democrats. So the COS began an all out assault on Congress. They obstructed lawmaking, they used ethics reforms adopted in the 1970s to target Democratic leaders. In quick succession ethics inquiries and investigations led to the resignations of Democratic Speaker of the House Jim Wright and Majority Whip Tony Coelho in 1989 – that same year Gingrich gained election as Minority Whip, the second highest-ranking Republican leadership position in the House.

A scandal involving the House bank in 1991 and the House Post Office in 1993 followed the resignations of Wright and Coelho. Though Democrats and Republicans alike were found to have overdrawn their accounts in the House bank, the scandal contributed to a COS narrative of a corrupt Congress controlled by Democrats. Nearly 80 House members either retired or were defeated in 1992 because of the bank scandal. The election 47 freshman Republicans to the House accompanied the election of Democrat Bill Clinton as President in 1992.

The House Post Office scandal erupted in 1993 and effectively ended the career of Democratic Representative Dan Rostenkowski (D-IL) the very powerful Chair of the House Ways and Means Committee. The cumulative effect of the scandals and public dissatisfaction with President Clinton was the Republican sweep of the 1994-midterm elections. In the 1994, election Republicans realized a net gain of 54 seats in the House and 8 seats in the Senate and assumed full control of the U.S. Congress for the first time since 1954. Gingrich gained election as Speaker of the new Republican controlled House.

Other actions taken by the new Republican majority reduced congressional influence and power. They reduced committee staffs, the Congressional Research Service and the General Accounting Office endured budget cuts and dramatic staff reductions - the institutional memory and policy expertise of Congress shrank.

Make no mistake, Democrats were not blameless. The party had grown arrogant in its power and had for years increasingly excluded Republicans from the lawmaking process. The use of restrictive rules and limits on debate aided in undermining public confidence in Congress. But Republicans waged an all out assault on the institution. Public confidence in Congress collapsed and has never recovered. When Democrats found themselves in the majority they took from the GOP playbook and continued the attack on Congress - considered the claims of corruption in 2006 and Nancy Pelosi's battle cry that we "drain the swamp!"

Cumulatively, these attacks on Congress served to make it a less congenial place. They fed into growing partisan differences and undermined cooperation and compromise. A minority party now relies on Congress failing and on public disdain for Congress in order to win elections. Cooperation and compromise might actually cause public opinion of Congress to improve - this is something no minority party can risk. The end result is a Congress that becomes incompetent, inefficient, and ineffective. It's a self fulfilling prophecy that need not have been.
This brings us to the Supreme Court and tomorrow's likely decision on the constitutionality of the atient Protection and Affordable Care Act (PPACA). All indications are Democrats are planning an all out assault on the court if it overturns PPACA:

We'll find out this week if the Supreme Court is listening to the American people and following the U.S. Constitution," said Rep. Xavier Becerra (Calif.), vice chairman of the House Democratic Caucus, "or if it's becoming more and more what we've seen in the past: a partisan body no different from the Congress.
House Democratic leaders said Wednesday that a move to overturn the healthcare law would similarly call into question the court's impartiality.
Rep. John Larson (Conn.), chairman of the House Democratic Caucus, said it would be "illogical and blatantly political if the Supreme Court were to rule [against the law]."
Joining the Democratic leaders in the Capitol, AFL-CIO President Richard Trumka blasted the current court for its "activist" agenda."What we have is several justices on the Supreme Court that, while they were being confirmed, talked about how they would be activist, [and instead] have become the most radical activist judges we've seen," Trumka said.

The logic is of course ridiculous. The Democrats are arguing that a 5 to 4 ruling against PPACA would be evidence of a radical and activist court, but a 5 to 4 ruling upholding PPACA would show that all is well and good with the court.

Tomorrow the Supreme Court will do what it was designed to do - determine the meaning of the U.S. Constitution and its applicability to a law enacted by Congress. Regardless of what many scholars have suggested, there is every reason to question whether the commerce clause empowers Congress to compel citizens to purchase a private product. If the court determines the individual mandate to be unconstitutional then it may well toss the entirety of PPACA. But not out of some activist agenda - rather because Congress failed to include a severability clause in the legislation. Severability clauses protect legislation from being completely overturned should a court find individual aspects unconstitutional. Democrats chose to exclude a severability clause precisely because they needed the support of the health insurance industry and the industry would not support a bill that would allow the individual mandate to be severed by the courts.

If the Supreme Court overturns PPACA (and I believe that it will) Democrats must not make the Supreme Court and the court's legitimacy an issue. Fight the GOP. Fight for constitutional reforms. Accept that PPACA had a fatal flaw. But do not attack the court. about to do the same to the Supreme Court should it rule against the health reform law. Such a tactic might offer short term political gain, but the long term damage would be substantial. If the reputation of the Supreme Court is ruined by Democrats the way the Republicans destroyed Congress then the damage to our system of government may be beyond repair. The court is not elected. More than any other branch, its power and legitimacy rests upon a foundation of public confidence. Democrats should not undermine that all because of a single ruling on a very questionable issue of congressional power.

And let me be clear, I'm not saying Democrats should abstain from attacking the court just because it would harm the court's reputation. I'm saying they should abstain because a ruling to overturn PPACA would NOT be evidence of a radical or activist court - any more than the House Post Office and Bank scandals were evidence of a corrupt and incompetent Congress.