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Right Turn
Posted at 05:20 PM ET, 06/28/2012

Six things to watch

A number of legal and economic implications will get a lot of attention by virtue of the way the Obamacare ruling was written:

1. As a legal matter, Chief Justice John Roberts’s decision on the taxing power is deservedly being pummeled. In his surprisingly brief opinion, the mandate is a tax for the taxing power but not for the Anti-Injunction Act. It’s a tax, even though Congress said it isn’t a tax again and again in the statute. The unusual four-person dissent (a showing of a united, disgusted conservative front) is withering on this point. Roberts chose to cling to a very weak reed.

2. The jurisprudential choice — halt the Commerce Clause trend but come up with a “tax on inactivity” — is a good one for conservatives. There is a political barrier to passing taxes. In the future, members of Congress will have to acknowledge that is what they are up to. The voters can impose their will, or threaten to.

3. Roberts intentionally or not makes President Obama out to be a liar. The entire country will soon be reminded of this from 2009:

He told the Supreme Court one thing and the American people the opposite. He got away with that in the court, but why should voters tolerate this?

4. There should be a lot of focus on the taxes. Americans for Tax Reform has the list totaling about $500 billion. But that is now out of date. Ryan Ellis of ATR e-mails me: “There is no going-forward ten-year score. The one we have is several years old, and is out of date (since it has several ‘zero’ years for tax increases set to be enacted after passage of the broader law). That means the tax score is certainly higher than the one we had back in 2010. But we don’t know what that is. I’m sure it approaches, but does not hit, $1 trillion.”

5. There is a new problem for the president because of the Medicaid ruling allowing states to decline to expand Medicaid but keep their current funding. James Capretta explains: “Specifically, the provisions of the statute by which the federal government would try to coerce the states into a massive Medicaid expansion were ruled invalid by the Court. This could potentially have very significant implications for the law, including how many people gain coverage and federal costs for the premium credit program (which is supposed to cover people above Medicaid eligibility up to 400 percent of the federal poverty line).” In other words, if a bunch of states opt out of Medicaid expansion (and why wouldn’t they?), there is a large financial hit insofar as those people would get subsidized coverage funded by the feds. Are we going to raise more taxes to pay for that?

In a related point, consumers just got some personal finance advice from Roberts: Don’t pay the tax. Jim Pethokoukis writes: “The penalty—now a tax—for failing to purchase insurance in 2014 is $95–for the entire year. That is far less than the monthly insurance premium even young healthy people would pay. It rises to $695 in 2016, or 2.5 percent of income, and increases with inflation thereafter. For a young person trying to afford rent and pay a student loan, the decision is clear. Delaying an insurance purchase is money in the bank, and the tax is too small to matter.” But if many people opt for th tax, then the mandate collapses and costs go sky-hgh for those sick people who remain in the exchanges.

6. The impact on employment and small business may be considerable. The RNC is highlighting this from CNBC’s Jim Cramer: “I think this is just a terrible decision, people, for the possibility of more employment for this year. Look, this is not a great thing for small business, and I think that the market is afraid that small business will lay off people, and I think that the market is taking it over, all right, in that this is just another reason why you should not hire and another reason why you should fire.”

This is precisely the argument that Mitt Romney has been making: Obama’s policies are retarding growth and impairing hiring. If we see continued decline in the jobs numbers, this argument becomes very powerful. In short, Obama chose “historic” health-care legislation over an economic revival, and now Americans are paying the price. Conservatives have a unique opportunity to explain why Obamacare is bad policy and quicksand for Democrats to defend.

By  |  05:20 PM ET, 06/28/2012

 
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