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[Note: This essay is one in a continuing series by ICCFA executive director Bob Fells focusing on various issues in our federal government. Although the subjects are political in nature, the approach is bipartisan in outlook, at least so far as that is humanly possible. The goal of each essay is not to persuade the reader to adopt a particular political viewpoint or party, but to illustrate why an understanding of the system is important to protect our businesses, our homes, and our families.]
Too Bad We Can't Appeal the Supreme Court's Health Care Decision to the FTC
No matter your opinion of the Health Care law passed by Congress in 2010 and today upheld as being constitutional by the U.S. Supreme Court, the ruling turns this revolutionary legislation into a Trojan Horse for all concerned. Republicans felt sure the thing was unconstitutional and that there were enough so-called “conservative” justices on the Court to say so. But the “conservative” Chief Justice Roberts joined forces with the four “liberal” justices to find that ObamaCare (as its critics have dubbed it) squares quite nicely with our Constitution. Gosh, you just can’t depend on ANYBODY. So how come, except for photo ops, the Democrats aren’t exactly breaking open the champagne?
Well, the plan for enacting the Patient Protection and Affordable Care Act (aka ObamaCare) was based on Congress’ authority to regulate commerce under the Commerce Clause of the Constitution. This is where opponents felt certain this legislation was an unconstitutional misuse of that authority. Ironically, the majority of the Supreme Court agreed. But the Obama Administration made an alternate argument before the Supremes that Congress had the authority to pass the bill under its power to impose taxes under Article I, Section 8, Clause 1 of the Constitution. The Supremes bought this argument so to everyone’s surprise, including members of Congress, the law’s requirement for individuals to purchase health insurance or pay the IRS a penalty is really a new tax. Who knew? Certainly not the members of Congress who voted for it.
This situation is just the reverse of the boy who finds a pile of manure in his yard and assumes this means that his parents bought him a pony. In this case, the Court’s ruling that the individual mandate is legal as a new tax, and a tax on people the least able to afford to pay it, is like Democrats thinking they own a stallion only to find that it’s just a pile of manure. Back in 2010 would the majority party have gone forward with this bill if the mandate were called a tax? Probably not. Would public opposition been even louder if the mandate were called a new tax? Very likely. Worse, this penalty isn’t even a tax on the “rich.” It would affect only those who have no health insurance because they probably can’t afford to pay for it. So this tax is imposed on the poor – not a good strategy for winning in the 2012 elections. This is why we don’t hear too many corks popping.
The Federal Trade Commission has a longstanding regulation prohibiting “bait-and-switch” sales tactics. What should we called a bill advertised as an exercise of Congressional authority to regulate commerce, only to have the Supremes tell us the bill is really a new form of taxation? The term bait-and-switch comes to mind, especially when proponents of the health care bill had no idea they were advocating a new tax – and on the poor. But the Supreme Court is the last stop in our system of governmental checks and balances so there's no chance of having the FTC intervene. But since the lower 50% of wage earners already pay no federal income tax, and many receive a tax refund too (technically called a credit), watch for a similar sleight-of-hand in next year’s Congress to have the health care penalty refunded as a type of tax credit to low income taxpayers. No matter what side you favor, the news from the Supreme Court clearly puts the federal government into the health care business and lends new meaning to the expression, “I’m from the government and I’m here to help you.”