Before the Minnesota Rates Case in 1913, it was questionable whether or not the Congress had the ability to grant rule making authority to an agency that operated under the Executive Branch. It was deemed in many respects as an abdication of law making authority to an branch of government that had no power to make laws. How far we've come. Today, the Supreme Court ruling upholding Obamacare has ensured that the Secretary of Health and Human Services and the Department she presides over are the most powerful branch of the federal government. The rule making authority of that branch, as laid out under the Affordable Care Act (how anyone could name it that without laughing is beyond me. It should be written in crayon on the cover) and its thousands of pages is immense. The Act essentially cedes most of the health care choices to be made in this country to that agency in Washington, D.C. Congress' investment of rule making authority in executive agencies has enabled the government to become more and more bloated to its current level, and no party is free from blame.
The Supreme Court today also said the individual mandate was not constitutional as an exercise of the Commerce Clause. The Court reasoned that this power was not sufficient to allow government to force people to participate in commerce. However, they, at least at first glance, expanded the power to tax to include punishing people who do not participate in commerce. If this strikes you as logically inconsistent, it may be because you have more than one operating brain cell. I will note that this is a first impression and I have not had time to review the nearly 200 page decision. I'm not sure if this decision was made because the arguments did not address the taxation power, which if the case would leave open another avenue of appeal on that issue.
Another potential question is that if the mandate is, in fact, a tax, it may not have been passed pursuant to the Constitution as that provision did not originate in the House of Representatives. All revenue raising bills are to originate from the House. I'm not optimistic that this will end up being much of an issue.
Another of the reported rulings is that the federal government may not punish state governments for not complying with expanding Medicaid rolls. This has the potential to seriously undermine the part of the expansion of coverage. States are going to look hard at this position as they look to the effect on their own budgets. This could result in serious blow back against the law from the individual statehouses.
Was the Court wrong? Technically, no. As the last word on what is and is not an act complying with the Constitution of the United States of America, the Court cannot be wrong. From a personal perspective, I see a massive expansion of federal power into an area I highly doubt the Founding Fathers ever would have conceived. But, that has been happening for 100 years now and frankly, I think all of it has been well outside the scope of the Constitution.
The political fallout is a different matter entirely. If the House can successfully pass a bill to repeal the Act, they will force the Democratic Senate to make a stand in favor of what is now not a mandate, but potentially the largest tax increase in U.S. history. I don't know how that will play out, but keep in mind, the large gains in the House and minor gains in the Senate by Republicans in 2010 came largely as a result of the health care debate. People who didn't like the mandate aren't likely to be more favorable to the idea if it is characterized as a tax which does the same thing. This could energize the Republicans and independents who disliked the law and result in a win for Republican presidential candidate Mitt Romney. Romney's campaign reportedly raised $1 million in just three hours after the decision. On the other hand, liberals...excuse me...statists may see this as a vindication of President Obama's policy and re-energize those who have been, to date, somewhat on the sidelines. We will see quickly if his donations pick up in a similar manner.
As a practical matter, the Bush tax rates are due to expire at the end of the year already, and with this massive tax raise coming, the economy stands to be hit hard at a time where it is least able to absorb the blow. If something isn't done, and soon, I'm not optimistic about the direction the economy will take. If Mitt Romney prevails in November, he can stop this by issuing waivers to all 50 states to comply with the Act. This is also likely to further the trend of a "jobless recovery". Employers are faced with a non-wage increase in the cost of employment that will discourage them from hiring new employees.
It is too early to say what effects this will have long term. The good thing is a precedent has been set on the limitation of the Commerce Clause, but the taxing authority of the Congress becomes an open question which may need resolution.
This is a long decision and to try and sum up the impacts here in a few paragraphs is an exercise in futility. But then, at this point, dialing back big government and restoring the Constitution feels the same way right now. I'm not going to stop doing that either.
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