Thursday, June 28, 2012

How Will the Obamacare Ruling Affect the Election?

The Supreme Court issued its ruling on the matter of Obamacare's constitutionality today, upholding essentially the entire law (part of the law was limited, but not in a way that matters for our purposes). The main focus of the debate was the individual mandate, a requirement that all Americans either purchase health insurance or pay a penalty. The Court upheld the mandate on the basis that the penalty is really a tax, and the federal government has the power to impose such taxes. Legal issues had arisen in part because the law was designed to give the impression that it was not a tax; one of Barack Obama's most important campaign promises was that he would not raise taxes on families making less than $250,000 a year.

The Supreme Court's announcement came as a surprise to many political observers; most believed that if the individual mandate were upheld, it would be upheld as a valid use of the Commerce Clause of the Constitution, which allows the federal government to regulate interstate commerce. By specifically characterizing the individual mandate as a tax, the political implications become more murky.

If Obamacare had been ruled unconstitutional, it would have been a bad result for Obama. It would have made Obama look foolish for spending so much time on something that was overturned, and it would have made him appear to have overreached. It would have also assisted Mitt Romney in claiming an important distinction between Obamacare and Romneycare; the individual mandate in Romneycare was never threatened, because it is a state law.

The ruling is not all good news for Obama, however. By keeping Obamacare in place, the Court has allowed Romney to keep his longstanding campaign promise to "repeal Obamacare on day one" alive. By characterizing the law as a tax, the Court seems to deliberately twist the knife: The Court implies that Obama raised taxes, broke his promise, and tried to disguise it by not calling it a tax.

That sounds like an unhelpful result for Obama. But the waters are muddied by Romneycare. If the main complaint about Obamacare is that it is a tax increase in sheep's clothing, Romney may be pulled into a bit of hypocrisy that can be counterattacked. While governor of Massachusetts, Romney defended Romneycare by saying the individual mandate was not a tax increase. Therefore, if Romney criticizes Obama for raising taxes, Obama can counter that Romney previously agreed that it wasn't a tax increase. The net result would be a victory for Obama.

Romney can avoid this pitfall, of course, by declining to make that specific attack. But other Republicans, and Romney-supporting SuperPACs, certainly will make the attack. Thus Obama can raise the issue himself--perhaps during a debate--challenging Romney to deny that his allies are wrong. This places Romney in an uncomfortable position.

During the Republican primary, Romney was able to defend himself by listing a number of distinctions between Romneycare and Obamacare. He did so skillfully in the debates, and it took his rivals several months to think of ways to properly attack Romneycare. Romney could have used similar methods if the issue came up during the general election. But with the Supreme Court's emphasis on the idea that the individual mandate is a tax, the debate may narrow its focus in a way that does not benefit Romney--by making the debate about whether Obamacare raised taxes.