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Campaign Notes: Game unchanged

By John Barron in Sydney, Australia

9 July 2012


The political effect of the Supreme Court ruling in favor of the Patient Protection and Affordable Care Act (The PPACA a.k.a “Obamacare”) may ultimately be measured in what was avoided, not what was gained, because this week it seems little has been gained or lost by either candidate.

Soon after the decision, Gallup found the nation still divided on the ruling: 46 per cent for and as many against. Pew Research found similar divisions, but also found 45 per cent of Americans didn’t know the Supreme Court had ruled or got the ruling wrong.

A glimmer of hope for Democrats can be found in a survey from Reuters/Ipsos, which detected a five per cent spike in support for the healthcare laws from 43 per cent to 48 per cent.

But overall, there is a sense that the game has not be changed.

The national average of opinion polls from the website Real Clear Politics is about where it was before the ruling, with Obama 2.6 per cent in front of Romney.

That’s probably better news for Obama than Romney, for a couple of reasons. Despite all of the economic headwinds and negative attacks launched by both sides, the national data has been consistently in favor of the incumbent — only twice has Romney headed Obama — and that was last October.

In June the Romney camp grew buoyant after finally locking down the Republican nomination and seeing a major spike in donations — Obama lost the money race in May for the first time against any rival since late 2007. The May jobless data ticking up from 8.1 per cent to 8.2 per cent added weight to the Romney refrain that Obama is "just not working".

But polls, like facts, can be stubborn things, and the fact is the polls are unmoved.

On my ABC NewsRadio program Inside America this week I’ll be speaking to opposing political operatives: Democratic strategist Garry South, and former California Republican Party chairman Ron Nehring.

Not surprisingly perhaps, South is convinced President Obama is on track for re-election, on the basis of simple likeability. South says despite all of the policy debates, Americans mostly pick their President on fairly visceral and simple terms — "do I like this guy?" — and South, who has been involved in presidential politics since 1972, says Mitt Romney is a lot more like unlikeable losers Mike Dukakis and John Kerry than he is winners like Bill Clinton or Ronald Reagan.

Nehring still thinks the dire US economy alone will probably sink Obama but concedes that Democratic pandering to minority groups and women could provide a path to victory.


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Election Watch Weekly: Happy 4th of July!

By Luke Freedman in Sydney, Australia

5 July 2012


 

Daryl Cagle MSNBC.com

News

Fallout from the healthcare ruling continues to dominate the news cycle. Sources inside the Court indicate that Chief Justice John Roberts initially voted to strike down the mandate and actually wrote much of what ended up becoming the dissent. Outraged conservatives feel that Roberts was pressured into his decision by politicians and liberal pundits who had suggested that invalidating the law would undermine the Court's reputation and legitimacy.

There's also been much discussion over what the November elections mean for the fate of Obamacare. I speculate on how the Supreme Court ruling will influence the presidential race and Sarah Binder discusses the Republican's chances of successfully repealing the law if they  take back the White House and Senate.

"So, assuming a Republican Congress under President Romney were to judge repeal to be politically feasible, then a road to at least partial repeal would technically be possible in the Senate. But it would be a bumpy and it might hit some dead-ends."

The US celebrated Independence Day and the LA Times reminds us that the Founding Fathers disagreed over many of the same political questions that still divide us today.

Around the Web

 Kevin Drum is troubled by  what he sees as the real motivation behind the recent wave of Republican sponsored voter ID laws.

 "Electoral politics has always been a dirty game, but in recent decades most of us felt that there was, at least, a consensus that systematic, national-level efforts to discourage minority voting were at last beyond the pale. But maybe we were just kidding ourselves."

Victor Davis Hanson says "there is much to criticize" when it comes to the Obama foreign policy.

The Wall Street Journal's Thursday editorial is making news for its tongue lashing of  the Romney campaign:

"The Romney campaign thinks it can play it safe and coast to the White House by saying the economy stinks and it's Mr. Obama's fault. We're on its email list and the main daily message from the campaign is that "Obama isn't working." Thanks, guys, but Americans already know that. What they want to hear from the challenger is some understanding of why the President's policies aren't working and how Mr. Romney's policies will do better."

In a paper co-authored with Macquarie Universitie's Lloyd Cox the USSC's Brendon O'Conner argues that Australia did not passively follow America into Iraq and Vietnam but rather viewed the conflicts as opportunities to strengthen key aspects of the US-Australia alliance and pursue other strategic objectives.

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Maybe a sign Politico's taking the election a bit too seriously (h/t Matthew Yglesias):

"It’s difficult to game out exactly what global peril would mean for Obama’s election hopes."

The best political cartoons of the week

Looking Ahead

Important: The June job's report will be released on Friday and the figures should provide some clarity as to the pace of the recovery and what to make of the lousy May numbers. A payroll survey released Thursday estimates an above expected net gain of 176 000 private sector jobs. However, it's the official government numbers which matter most.

The IMF warns that the US needs to address the  'uncertainty' created the by the end of year 'fiscal cliff' when $4 billion in tax cuts are set to expire and large spending cuts automatically kick in.

Fun Fact: The US has the highest per capita meat consumption "just barely edging out Australia."

Trivia: Which of these Founding Fathers did not sign the Declaration of Independence: Benjamin Franklin, John Adams or Alexander Hamilton?

Answer to Last Week's Trivia: Minnesota

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The implications of the healthcare ruling for the presidential race

By Luke Freedman in Sydney, Australia

2 July 2012


I would love nothing more than to write a lengthy treatise on the health care case’s implications on constitutional law and the future of American healthcare policy. However, seeing as this is an election blog, I’ll resist the siren song and instead focus on what it means for Barack Obama and Mitt Romney.

Broadly speaking, the Court’s ruling probably won’t be a huge boost to either candidate’s chances. As Kyle Klonidck explains, after the dust settles, the “country’s partisan battle over health care essentially remains unchanged.” The ruling left the law almost entirely intact and thus the political calculus doesn’t change for either candidate much if it all. Obama will continue to defend the Affordable Care Act and Romney will still vow to try and repeal it.

However, there’s no doubt that the decision has large implication for Obama’s legacy. The ACA is the biggest legislative victory for a Democratic president since Lyndon Johnson presided over the implementation of Medicare and Medicaid. Even if Obama ends up as a one term president his name will forever be associated with one of the milestones of American liberalism.

Some speculated that the law being declared unconstitutional would have boosted Obama’s chances by freeing him from the obligation of defending a still unpopular policy. I never  bought this argument. Obama’s reputation was inextricably linked with Obamacare regardless of whether it survived  Striking down the law would just have made the president appear weak and ineffective; strengthening Republican claims that Obama lacks political chops to address the country’s challenges. If anything, the Supreme Court’s validation of the president’s signature legislative accomplishment gives his campaign a renewed sense of direction and a bit of good press.

Still, Team Romney isn’t fretting too much over the ruling. Republicans can continue to run under the banner of repeal, rather than feeling pressed to put forward a comprehensive plan of their own. That’s not bad news for a Republican Party that doesn’t  have a concrete alternative to offer.

Long story short, the ruling was monumental for proponents of liberalism but probably doesn’t do too much to bolster the president’s re-election chances.


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Where to from here?

By Jonathan Bradley in Sydney, Australia

2 July 2012


Now that the Patient Protection and Affordable Care Act has been upheld, it's worth looking at the law again from a policy perspective, as well as in terms of its political implications. Along those lines, last month, when he was visiting the Centre, I interviewed Georgetown University's Professor of Global Health Law Larry Gostin about the then-impending challenge to the health care reform. Much of our chat centred on the court challenge, but I also asked him whether the act was better targeted at controlling costs or expanding coverage. In particular, I wanted to know whether the cost controls in the act would be effective. Gostin's response didn't make the final cut, but particularly now that the ACA does indeed look like it will go into action, his take is a worthwhile one:

How effective are the Affordable Care Act's cost controls?

Well, that’s the subject of intense political debate. Democrats think it’s been somewhat successful, Republicans think it’s actually raised premiums. I mean, I think on the margin it’s better in terms of cost than without it, but it doesn’t go to the heart of the issue. If you really look at how all of the countries in the world maintain reasonable levels of health care cost — and they’re not reasonable anywhere, but less than the United States — they do so in ways that are not present in the United States’ reform. Things like having a universal cap on coverage, or leveraging your buying power so you buy pharmaeceuticals and vaccines at a lower cost ... or just paying for cost effective treatments that have been shown to be cost effective. Many of these, the act tinkers with, but at rock bottom they do very little.


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Election Watch Weekly: Fed stays steady

By Luke Freedman in Sydney, Australia

22 June 2012


 News

Last Friday, Obama issued an executive order halting the depuration of undocumented immigrants who came to the country before they were 16. If the announcement energises the Hispanic electorate it could have large implications on the 2012 elections. Obama explained his position in a Time column and Mitt Romney gave his thoughts in an interview with Bob Schieffer. You can read my take here.

Romney completed a five-day bus tour through six key swing states. The “Every Town Counts” tour was billed as a chance to connect middle class Americans from across the country.

John Karl of the American Broadcasting Company said that reliable Republican sources informed him that Florida Senator Marco Rubio was not being vetted as a potential vice president.

“Although it is possible that Rubio may yet be asked to go through the vetting process, it has been nearly two months since Romney named his long-time aide Beth Myers to run his vice presidential search. The fact that Rubio has not been asked to turn over any documents by now is a strong indication that he is not on Romney’s short list of potential running mates.”

The Romney campaign quickly dismissed the story as false explaining that Rubio was being seriously considered for the position.

The Federal Reserve announced on Thursday that it would continue Operation Twist, its program of buying bonds to spur economic activity. Despite downgrading its outlook for future growth, the Fed has decided not to take further steps to help ease unemployment. Ezra Klein says there's a "scary" implication: the Fed isn't sure it can do much more.

Around the Web

Joel Goldstein outlines the process of selecting a vice president.

An interactive New York Times feature provides "analysis and context to some of the candidate’s truths, half-truths and exaggerations” on issues such as federal spending, job creation and health care.

Andrew Sullivan talks to James Fallows about blogging and the 2012 elections in a segment for the American Review.

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Looking Ahead

We’re still waiting for the Supreme Court to decide the fate of Obamacare. Expect the decision to come out Monday or Thursday. Jonathan Cohn runs over the implications of a few possible scenarios and Orin Kerr explains why impact of the decision might not be as big as many think. The Court will also issue a ruling next week on the constitutionality of Arizona’s immigration law.

Fun Fact: There has been two ties in the electoral college. In 1800 the House of Reps broke the deadlock by picking Thomas Jefferson and in 1824 they chose John Quincy Adams.

Trivia: Which US president was born Leslie Lynch King, Jr.?

Answer to last week's trivia: Daniel Webster

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Obamacare explained

By Luke Freedman

23 April 2012


ACA

In February I did a summary of the lengthy journey from bill to law of the Affordable Care Act also informally know as Obamacare. Here, I’m going to explore what the law actually does. This is not intended to be a comprehensive analysis of the nearly 1 000 pages of legislation, but rather a foundation for understanding the major aspects of the ACA.

If you’re looking for a more in depth look at the American health care system, I’d highly recommend Introduction to U.S. Health Care Policy by Donald A. Barr. I frequently cite the 2011 edition of the book in this post. If you have any questions about this post or health care policy in general, feel free to post them in the comment section or under the Ask Uncle Sam feature of the Election Watch website.

As its name suggests, the Affordable Care Act was designed to extend health insurance to 32 million Americans by making coverage more affordable. The ACA doesn’t get rid of the private health insurance market, but it does implement changes in the way it operates and also allows more people to obtain coverage through the government run Medicaid program. The law can be divided into three major parts: 1. Regulations on the insurance market intended to increase the availability of health insurance plans; 2. An individual mandate designed to make these regulations work; 3. Subsidies to help people with “lower incomes” afford the cost of insurance premiums. I’ll deal with these topics one at a time.

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The Affordable Care Act seeks to expand private health insurance coverage in several ways.  Most notably, all insurance companies must “offer the same premiums to all applicants of the same age and geographical location,” regardless of their health status. This is a dramatic departure from the previous system in which insurers would often charge those with pre-existing conditions substantially higher rates, or in many cases deny them coverage altogether. 

Beginning in 2014, companies with over 50 employees will be required to offer health insurance coverage to their workers or else pay a tax penalty . To facilitate access to insurance for those who do not receive it through work, states are required to set up health insurance exchanges in which consumers can compare plans.  Plans offered through these exchanges must provide a baseline set of benefits, and each exchange must offer at least two competing plans, one of which is provided by a non-profit organisation.  These plans must also offer four “predefined level of benefits".

The goal of the exchanges is to create a transparent one stop destination for small businesses and individuals who don’t obtain coverage through their employer to shop for health insurance, and to encourage market competition between insurance companies within a regulatory framework that ensures that they offer coverage to anyone who needs it.

The ACA also expands the scope of Medicaid, the government run health insurance program that is financed by a combination of federal and state funds and administered by the individual states.  Traditionally, Medicaid has been available to all children (and some parents) whose family income is below the poverty line, some pregnant women, the disabled, and seniors at a designated level below the poverty line. Citizens over 65 already receive health benefits through Medicare. Under the new law, all individuals and families with incomes below 133 per cent of the poverty line will be eligible for Medicaid. These changes are expected to extend coverage to 16 million previously uninsured Americans.

Prohibiting private insurers from discriminating against high risk applicants poses challenges though. Charging healthy and unhealthy individuals the same insurance rates creates an adverse selection problem; the sick will rush into the system while the healthy will choose to opt out. If I can purchase insurance at the same price once I get sick, it is rational to wait until I fall ill to buy it. Insurance works by pooling together the risk of individuals, but under the given rules, the pool will be flooded with high risk and expensive consumers. Since the per capita health expenditures within pools will be high, so too will the premiums that consumers pay. In order for these new regulations to work, there needs to be a way of bringing younger and healthier individuals into the risk pool.

This is where the individual mandate comes in. Under the ACA the uninsured -with the exception of select groups such as religious objectors-will be required to purchase a baseline level of health insurance coverage or pay an annual penalty of $695, or 2.5 per cent of annual income, whichever is greater. The penalty is not high enough to create de facto compliance, so it is anticipated that even with the mandate a fair number individuals will choose to opt out of coverage.

The federal government will also offer new subsidies to help offset the cost of purchasing health care.  People who are above the cut off line for Medicaid but whose income is less than four times the poverty level will be eligible for subsidies. Federal funding is provided on a sliding scale. Individuals and families with incomes 3 to 4 times the poverty level would not have to pay more than 9.5 per cent of their income for insurance, while those closer to the federal poverty level would not pay more than 3 to 4 per cent.  

Additionally, some small businesses that pay over 50 per cent of their workers health insurance costs will be eligible for tax credits.

In sum, the ACA attempts to address the affordability of health care by increasing the number of people eligible for Medicaid, preventing insurers from discriminating against those with pre-existing conditions, and increasing federal subsidies to low and middle income Americans.

The costs of the new healthcare program are financed in a number of ways. Most notably, is an additional 0.9 per cent payroll tax on individuals with an annual income over $200 000. Similarly, there is a 3.8 per cent tax on passive income, such as investments or royalties, that totals over $200 000 in a year. These taxes fund the Medicare program that provides health coverage to Americans over 65.

There is also a new excise tax on “group insurers with annual premium payments in excess of $10 200 for individual coverage and $27 500 for families.” The tax rate is “40 percent on the amount of premiums above the thresholds”

Additionally, the ACA imposes a variety of smaller fees on the “health care industry.” Among these are a 2.3 per cent tax on infrequently purchased medical devices , taxes on pay for health care executives whose companies fail to meet given government guidelines,  and an annual tax on “certain manufacturers and importers of brand name pharmaceuticals.” You can peruse the links I've provided if you’re interested in a fully comprehensive list of the funding mechanisms for the ACA. And here’s a good pie chart on how the bill is financed.

Estimating the total costs of the bill is not exactly a straightforward task because individuals disagree over the mechanisms used and in part because politically motivated individuals on both sides are excellent at obfuscating the issue. The Wikipedia article on the ACA provides a good summary of these areas of disagreement.

The nonpartisan Congressional Budget Office which is responsible for scoring the costs of legislation estimated in March 2011 that the act will bring in $813 billion from 2012 to2021 and cost $613 billion to implement, resulting in a deficit reduction of $210 billion dollars. At the time it was passed into law the CBO projected that the ACA will cause “national health... expenditures to rise to 19.6 percent of GDP (by 2019) as compared to 19.3 percent had ACA not been enacted.”

There’s also a final point aspect of the health care bill worth touching on. As Sarah Kliff explains:

“much of the law’s 905 pages are dedicated to... an overhaul of America’s business model for medicine. It includes 45 changes to how doctors deliver health care — and how patients pay for it. These reforms, if successful, will move the country’s health system away from one that pays for volume and toward one that pays for value. "

I’d like to tackle the issue of cost controls on health expenditures in a later post. It’s an extremely important topic, but also a pretty wonky one.   A lot of the new regulations focus on incentivizing efficiency and encouraging health care providers and insurers to keep costs down (such as the previously mentioned tax on expensive health care plans.  Ezra Klein points out that the bill implants a wide variety of potential cost control mechanisms attempting to make “reform a continuous, rather than occasional, process.”

One area of agreement amongst both defenders and critics is that, even if the ACA is upheld by the Supreme Court, this will not be the end of the health care reform process. While the law makes significant attempts to address rising medical costs, it probably doesn't contain the sort of large scale cost-control mechanisms that will curb continuously increasing  health care expenditures. The ACA is not the cure-all for a troubled health care system, but is it an important step in the right direction or a journey down the wrong path?

 

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How will Justice Kennedy vote?

By Luke Freedman in Sydney, Australia

29 March 2012


Justice Kennedy

Tuesday's oral arguments were a cruel two hours for the Obama adminstration and supporters of the health care bill. The four key votes in the case, Chief Justice Roberts and Justices Alito, Scalia, and Kennedy, seemed all too willing to accept the petitioner’s claim that the individual mandate represents an unprecedented and troublesome expansion of governmental power. At the start of the day, most legal experts believed that the Obama administration's arguments would prevail; now, all bets are off.

An especially interesting wrinkle in the case has always been Justice Kennedy and Justice Scalia's embrace of broad federal powers in Gonzales v. Raich. In the 2005 case, which in many ways parallels the one currently before the Court, the two Justices joined the more liberal wing of the Court in ruling that Congress had sufficient power under the Commerce Clause to prohibit individuals from growing medicinal marijuana for private consumption.

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Liberals hoped that this ruling might compel even the very conservative Justice Scalia to uphold the law. Unfortunately for them, that no longer appears likely. Undeterred by the spectre of Raich, Scalia all but announced in oral arguments that he was going to vote to strike down the indvidual mandate.

Justice Kennedy was a bit less transparent. He declared that the "mandate fundamentally changes the relationship of a citizen with the government" but near the end of oral arguments seemed to entertain the idea that the consequences of the uninsured on the national health care system might make this case unique.

Reading the tea leaves in these cases is often a fruitless task, but, since I couldn't resist, I went over the transcript from Gonzales v Raich and compared the two Justice's statements from oral arguments to the votes they ultimately ended up casting. If Justice Kennedy-or perhas even Justice Scalia-appeared sceptical of the constitutionality of the law but eventually upheld it, perhaps they might do the same thing in the current health care case.

Despite ultimately siding with the federal government, Scalia did draw attention to several perceived holes in their argument.

“I mean, in these other... in these other cases, Congress presumably wanted to foster interstate commerce in wheat, in Wickard v. Filburn. Congress doesn't want interstate commerce in marijuana. And it seems rather ironic to appeal to the fact that home-grown marijuana would reduce the interstate commerce that you don't want to occur in order to regulate it. I mean, you know, doesn't that strike you as strange?”

However, far from contradicting his vote in the case, Justice Scalia's line of questioning actually makes a lot of sense given the concurring opinion he ended up writing. While Justice Stevens's majority opinion relied heavily on rationale of Wickard v. Filburn, Justice Scalia's concurrence focused more exclusively on the Necessary and Proper clause. In this context, it seems doubtful that Scalia had a change of heart between oral arguments and voting, but rather that he was trying to convince the other Justices of his own rationale for upholding the government's regulation.

At numerous other points, Justice Scalia appeared outwardly supportive of the federal government's position. He mentioned that the prohibition of marijuana appeared similar to an existing prohibition on the possession of endangered eagle feathers. In that instance, Congress had explained that there was no way of determining whether the feathers came through interstate commerce or not. Obamacare supporters who still cling to the irrational hope that Justice Scalia might uphold the mandate probably won’t take much solace in the oral arguments from Raich. Justice Scalia showed a sympathy for the Bush administration’s argument that was wholly absent from his line of questioning in the health care case.

Justice Kennedy was coyer. Many of his comments in Raich were clarifying questions, asking the lawyers to expand on statements they had made. But, the few viewpoints he did express offered cautious support for the federal government's position. Once, he reminded Bush’s Solicitor General of a case that would support their argument. He also hinted several times that the mere possession of marijuana might constitute economic activity, and that its "fungibility" made it difficult to establish whether it came through interstate commerce or not.

Kennedy voiced concern on Tuesday that the individual mandate could justify a whole host of new federal powers, but he never expressed similar worries over allowing the federal government to regulate private marijuana use within the home. All indications are that he sees the Obama adminstration's argument in the current case as at least somewhat weaker than the Bush's administration's argument for a blanket prohibition on marijuana. In Justice Kennedy’s eyes, Raich may be more or less in line with traditional congressional regulation of economic activity, while Obamacare is an unprecedented use of Commerce Clause power.

Of course, none of this means that Justice Kennedy is a sure bet to strike down Obamacare, only that he sees it representing a somewhat troubling intrusion on indvidual autonomy and state sovereignty. I could see Justice Kennedy going either way. He obviously seems troubled by the idea of government mandates, but, as others have pointed out, the outcome of the case might well hinge on whether he thinks he can uphold the law and still identify clear limiting principles that would restrain the government in the future.

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Do the oral arguments matter?

By Jonathan Bradley in Sydney, Australia

28 March 2012


The Supreme Court has now heard two days of oral argument on whether the Affordable Care Act is constitutional, and experts are inferring, from the thrust of the justices' questioning, that the outlook for Obama's signature reform is grim. Here's Sarah Kliff, for instance:

Going into Tuesday morning’s Supreme Court arguments, there was decently widespread agreement that the health reform law’s mandated purchase of insurance would survive the Court’s questioning. One poll released Monday, of 69 former Supreme Court clerks and attorneys who had argued there, found that 65 percent expected the provision to be upheld. On InTrade, odds hovered just about 67 percent.

But when the Court let out after two hours of oral arguments on the individual mandate, observers seemed a lot less certain. Jeffrey Toobin told CNN that he thought the arguments were a “trainwreck” for the administration, predicting now that the provision would get struck down. Donald Verrilli, who represented the Obama administration, stumbled over his words in his opening statement while Paul Clement, representing the law’s opponents, delivered a strong performance. On InTrade, the odds of the mandate being overturned shot up to 55 percent.

Certainly the court seemed far more hostile to the individual mandate than observers expected — particularly the court's conservative judges, whom many observers expected to take a reticent stance based on precedent and a desire not to extend the court's reach too far into contemporary political debate.

But what if the day's arguments didn't matter that much? Jeffrey Toobin suggested to Ezra Klein that, in general, oral argument is not particularly important to the outcome of a case:

"Most Justices say their minds are changed by oral arguments a handful of times — fewer than five — per year," he e-mailed. "In my experience, the higher profile the case, the less oral arguments matter, because the Justices have strong and longstanding views about major constitutional issues. The Justices mostly use oral argument to talk to, and lobby, each other, through their questions to the lawyers." In other words: The minds the justices are looking to change may not be their own.

Further, Jonathan Bernstein cautions against getting too confident with predictions either way, and Lyle Denniston proposed that not much has changed from before the Court heard the arguments:

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If Justice Anthony M. Kennedy can locate a limiting principle in the federal government’s defense of the new individual health insurance mandate, or can think of one on his own, the mandate may well survive. If he does, he may take Chief Justice John G. Roberts, Jr., and a majority along with him. But if he does not, the mandate is gone. That is where Tuesday’s argument wound up — with Kennedy, after first displaying a very deep skepticism, leaving the impression that he might yet be the mandate’s savior.

Meanwhile, Mike Barthel thinks the politics will end up being far more important than the constitutional questions:

[T]he case you want to look to here, it seems to me, is Bush v. Gore. That case was decided on explicitly partisan grounds. The court came up with some legal logic, but then at the end of the decision they said that they weren’t establishing a principle and no one should apply this logic to any other case. They just sorta waved their hands and said “Hey, we wanted to decide this case this way, but we couldn’t really justify it, so we just decided it that way anyway and never mind why.”

The same thing is likely to happen here, I think. Of course Congress has the authority to tell everyone they have to do something. Even before reform, the health care industry in America was already so highly regulated that it looked like a Soviet grain production scheme. And the Court doesn’t have any interest in overturning that principle, not only because it would cause chaos, but because it would lessen their own authority. (The law that gives administrative agencies power to set regulation also gives federal courts the ability to adjudicate them; it’s the balance-of-powers equivalent of voting yourself a pay raise.)

And so, if they do overturn it, it’s going to be an incredibly narrow and nakedly partisan ruling.

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Voters should decide Obamacare

By Luke Freedman in Sydney, Australia

22 March 2012


Obamacare

Next week, the US Supreme Court will hear oral arguments in the lawsuit challenging the constitutionality of the Patient Protection and Affordable Care Act or “Obamacare.” The case centres on the central piece of the legislation known as the individual mandate, which requires citizens to buy health insurance or pay an annual tax equal to 2.5 per cent of their income.

There has been much public outcry about the mandate. Rick Santorum referred to the law as the single “greatest threat to American freedom,” and a recent poll found that two thirds  of Americans believe that requiring individuals to buy health insurance is unconstitutional.

Given the furor over Obamacare and the attention that the challenge is receiving, it would be natural to conclude that the case presents a very difficult constitutional question. This simply isn’t the case. The Affordable Care Act easily fits within the bounds of prescribed constitutional powers. One can debate whether the act is good policy, but this is a different question than whether it is legal or not. I can’t say for certain whether the Court will uphold the law, but striking it down would represent a sea change in constitutional law. In order to argue the law is invalid one must refute numerous convincing arguments.

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First, the individual mandate can be seen as a straightforward exercise of the government’s power to impose taxes and spend for the general warfare. As Yale Law Professor Akhil Amar explains, Congress clearly can tax citizens and then use that money to buy health insurance for them. As such, it would be extremely strange if it couldn’t instead direct citizens to buy health insurance directly. Those who want to overturn Obamacare are in essence arguing that allowing individuals the freedom to choose which insurance plan to purchase renders the law unconstitutional. Objections to “Obamacare” are anti-tax, not anti-mandate. This might make a good political argument but it’s not a good legal one.

However, the heart of the constitutional debate surrounds the limits of the Commerce Clause. The Constitution gives Congress the power “to regulate commerce ... among the several states.” It would take a book to explicate past Commerce Clause jurisprudence, but it’s fair to say that the Supreme Court has been extremely deferential to Congress in defining what constitutes interstate commerce. Since its founding, the US has transitioned from an agrarian economy to an industrial one in which economic interdependence between the states has steadily increased. The Court has rightly allowed Congress the tools to deal with these new and changing circumstances fulfilling the words of the first Chief Justice, John Marshall, who proclaimed that the Constitution was “intended to endure for ages to come, and consequently, to be adapted to the various crises of human affairs”

In 1942, the Supreme Court unanimously declared in Wickard v Filburn that Congress had the power to prevent a farmer from growing more than a given quota of wheat, even if the wheat never left his property. The majority opinion explained that even if the wheat was privately consumed it would still affect interstate commerce because Mr. Filburn would then not have to purchase wheat from other sources. If other farmers followed Mr. Filburn’s lead, there would be significantly less demand for wheat, and it would undermine the legislative objective of “driving up wheat prices in the wake of the Great Depression.”

A 2005 decision-Gonzales v Raich-affirmed that Congress has the authority to prohibit a state from allowing individuals to grow medicinal marijuana in their own home for private consumption. Justice Scalia agreed with the majority, citing the Necessary and Proper Clause of the Constitution which gives Congress the power to “make all Laws which shall be necessary and proper for carrying into Execution” its expressed powers. Scalia explained that Congress “may regulate even noneconomic local activity if that regulation is a necessary part of a more general regulation of interstate commerce.” In other words, Congress can regulate intrastate drug use since a failure to do so could undermine its ability to regulate the interstate market for illegal drugs.

It’s not difficult to see the relevance for the current health care case. The US spent more than $2.6 trillion on health expenditures in 2010, and health care policy has clear spill over effects between states. The choice of whether to buy insurance directly impacts the national health care market. Given its historical understanding, it should be obvious that the Commerce Clause provides sufficient power to justify the individual mandate.

Many opponents of the law have tried to focus on the distinction between activity and inactivity. Not buying insurance is not a form of economic activity they say, and the Commerce Clause does not allow for the regulation of inactivity. But, this argument doesn’t hold water. First, the Court has never distinguished between activity and inactivity. More importantly, not buying health insurance is very different from choosing not to buy a poodle or watch Dancing with the Stars; it’s a choice with substantial externalities.

Laurence Tribe explains that we cannot voluntarily opt out of health care services altogether: “virtually all of us swim in that stream at one time or another.” It’s not as if one can choose never to get sick. When the uninsured do fall ill, these costs are passed on to others. Emergency rooms are required by federal law to treat everyone regardless of whether they have insurance or not. The government then reimburses hospitals for these expenses and the burden falls on the taxpayers. The costs of this uncovered care totalled over $40 billion last year.

Further, when healthy individuals are allowed to opt out of the health care system, premiums increase dramatically. One of the goals of the Affordable Care Act was to prevent insurers from discriminating against those with pre-existing conditions. This can only work if insurance companies are able to pool the risk of those with pre-existing conditions together with lower risk groups. If insurers are prohibited from denying coverage to those who are sick then without an individual mandate people will just wait until they become ill to buy insurance.

At its heart, the individual mandate, the brainchild of the Heritage Foundation, reflects core conservative principles. It’s not based on the idea that the government should have the ability to regulate all aspect of one’s life, but rather the concept that one should take responsibility for decisions that impose burdens on others. When one can afford health insurance but chooses not to purchase it, there are reprecussions for the rest of society. To borrow the language of economics, the Affordable Care Act seeks to internalise these externalities. Given the economic consequences inflicted by the uninsured and the desire to extend coverage to the tens of millions of Americans without insurance, Congress was well within its power in concluding that the individual mandate was necessary and proper in achieving its larger goal of regulating and reforming the national health care system.

There are a few broader reasons for assuming the constitutionality of Obamacare. Fifty years ago, conservative legal scholar Alexander Bickel- who has been cited as an influence by both John Roberts and Samuel Alito- outlined the inherent tension between judicial review and democratic government based on the will of the majority. There has been much debate over how this "counter-majoritarian difficulty" should influence constitutional theory, but I do think it is especially relevant to the current health care case. The Affordable Care Act is an incredibly high profile piece of legislation that was championed by the President and passed by the most representative political body in the Union. It doesn’t simply reflect the will of a city council or a local law enforcement agency, but rather the judgment of a diverse cross section of political actors. As such, the Court should be reluctant to substitute their own views for those of Congress and the President.

I don't mean to suggest that the judiciary should refrain from striking down any major federal law. Obviously, each case is decided on its merits. But, there should be some deference to the political branch when it comes to deciding the fate of the most substantial legislative act in decades.

The current issue is further complicated by the contentious political climate surrounding health care reform. The majority of those decrying the law as unconstitutional are really much more interested in its policy implications than in any nuanced debate about federalism. A full throated embrace of the narrow conception of federal powers that many opponents of Obamacare seem to be calling for would bring into question the constitutionality of other well established and well liked federal legislation. Overturning Obamacare would likely mean one of two things: vastly reshaping Commerce Clause jurisprudence in response to a politically motivated attack on a particular law, or politicising the Court by finding a constitutionally suspect means of throwing out the law without threatening other popular pieces of legislation. Neither option is appealing.

Republicans were unable to block health care reform legislatively, so now they are trying to use the Constitution to promote their economic theories. Reasonable people can disagree about whether the Affordable Care Act provides an appropriate method for addressing the United States’ obviously problematic health care system, but these are disagreements that should be settled by elected officials, not judicial fiat. If you oppose Obamacare then vote for any of the GOP candidates who have promised to repeal it, but don't use the Courts as a means of circumventing the legislative process.

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