Saturday, October 1, 2011

ObamaCare ... What Impact Will Its Constitutionality Have on 2012 Elections?

The Supreme Court will likely decide on the constitutionality of the Patient Protection and Affordable Care Act of 2010 (aka ObamaCare) by the summer of 2012. If so, the decision will come well in advance of November's national elections.

Health Overhaul Heads to Justices and Supreme Court Is Asked to Rule on Health Care each discusses the Obama administration's request that the Supreme Court act quickly to uphold the legislation's constitutionality and that the Court should decide sooner rather than later. The various states opposing its constitutionality want a speedy and opposite ruling from the Court.

Thus, the stage is set for an important Supreme Court decision that may meaningfully affect next year's presidential and congressional election results.

How will the Court decide? What impact will the decision have on the 2012 elections? And does it really matter which way the Court rules?

Well, constitutionally it matters very much to our system of federalism because the Court's decision will either restrict the federal government's legislative powers in relation to those of individuals and the various states, or will rule that the legislative powers of the national government are virtually unlimited. As a matter of law and future governance, this decision could help restore a balance between the powers of citizens, individual states and the federal government. That's the essential general constitutional issue to be decided.

Regarding the very specific issue of ObamaCare's future, my view is that the Court's ruling, whichever way it goes, will at best represent only one small step toward resolving the high and rising costs of our nation's health care system.

Put simply, almost all Democrats and Republicans are not dealing with the health care cost matter in a straightforward fashion. The very real issues raised by Congressman Paul Ryan analyzed in 'Beyond Repeal and Replace', subtitled "Paul Ryan's health-care roadmap," are worth reviewing.

The editorial says this about Ryan's common sense market based approach to the health care problem:

"Too often, the Republican Party health-care agenda seems to consist of incanting "repeal and replace" and then to stop thinking—if the thinking ever begins at all. Certainly the current Presidential field is saying little beyond promising to repeal ObamaCare, but in the nick of time Paul Ryan has provided some intellectual guidance in an important speech yesterday at Stanford's Hoover Institution.

The Wisconsin Republican didn't stint on the damage that will be done by national health care, but he did locate ObamaCare in the context of America's long-running market and government dysfunctions that President Obama inherited, even if he made them worse. Mr. Ryan then put some flesh on the "replace" bones, because he said "we cannot simply revert to the status quo."
The core challenge, as Mr. Ryan laid out, is that "the health-care sector lacks most of the basic building blocks of a functioning market." The two major government health programs, Medicare and Medicaid, will pay for nearly anything regardless of value but then attempt to restrain costs through price controls. ObamaCare will do the same.

Meanwhile, what's left of the private insurance market is shaped by the tax preference for job-based coverage. This artifact of World War II-era wage controls creates a subsidy for open-ended tax-free benefits instead of taxable higher wages, and the third-party health-payment system that resulted has over the years suppressed the price signals that discipline other markets.

The irony, as Mr. Ryan put it, is that "the system that shields us from the cost of services has actually left us paying more." The "premium support" Medicare reform he proposed and the House passed this year would bring down the entitlement's high and rising costs through choice and competition, much like 401(k)s have arisen to replace increasingly unaffordable and impractical defined-benefit pensions."

Thus, regardless of which way the Supreme Court decides, our escalating cost of health care in America will remain a problem in need of a solution. Although ObamaCare is making a bad situation even worse, its repeal won't make our problems go away.

The people will have to cause the politicians to act, but to do that, the people will have to face facts, too.

With regard to the specific issue of ObamaCare's constitutionality, my belief is that the legislation is not likely to be overturned by the Court. But politically even that negative outcome may work to the advantage of the Republicans.

Even though the 2012 elections are still more than a year from now, the economy at that time will still be in a weakened condition. Add to a weak economy the fact that ObamaCare never has been a popular piece of legislation, and the Democrats have two big political problems on their hands.

So the Republicans should have going for them both a weak economy and the argument that ObamaCare needs to be repealed. They will argue that a solution to these problems will necessitate the election of a Republican Congress and a Republican President, too. Then the people will choose.

In any event, that's the way I currently see the politics developing, so either way the Court rules, it's not likely to be good news for the Democrats and President Obama.

Why do I believe the health care law is likely to be upheld by the Supreme Court? My opinion is based on the Supreme Court's strong tendency to act deferentially with respect to laws passed by the legislature. In this regard, the Court usually adopts the position that if citizens don't like the law being reviewed, they can always cause their elected representatives to repeal that law. In other words, the Court believes that new legislation is the remedy and not an activist judiciary.

The Myth of Judicial Activism recounts this history of judicial deference and the Court's preference to defer to Congress on constitutional issues. A few of the facts cited are the following:

"Over the 50-year period from 1954 to 2003, Congress enacted 16,015 laws, of which the Supreme Court struck down 104—just two-thirds of 1%. The court struck down an even smaller proportion of federal administrative regulations—about 0.5%—and a still smaller proportion of state laws: 455 out of one million laws passed, or less than one-twentieth of 1%.

In fact, on an annual basis, the Supreme Court struck down only three out of every 5,000 state and federal laws passed. Compared with the explosive growth of government, the Supreme Court's efforts to impose constitutional limits on the legislative and executive branches are barely blips on the radar screen."

The editorial continues by setting forth why the Court may in effect overrule congressional action:

"Of course, legislators and bureaucrats are human, too, and therefore fallible. They also face tremendous incentives to push the constitutional limits of their powers. So we should expect at least some of their enactments to be unconstitutional. Those who accuse the Supreme Court of activism for striking down a tiny fraction of laws apparently envision no meaningful role for the court in policing constitutional boundaries. They are like Nancy Pelosi responding to questions about the constitutionality of ObamaCare: "Are you serious? Are you serious?"

And finally, the editorial writer makes the case for a more activist Supreme Court which is eagerly supportive of limited government:

"Our Constitution imposes significant limits on government power—limits that are not being properly enforced because too many judges have adopted an ethic of reflexive deference toward the other branches of government. What America needs instead is a properly engaged judiciary that understands the importance of constitutionally limited government and refuses to be cowed by empirically baseless accusations of judicial activism."

So let's get ready for another interesting year in 2012. What happens with our U.S. economy (and the rest of the world, too) and the constitutionality of ObamaCare will have a very real impact on the 2012 election results.

Then we'll continue to deal with economic issues, the proper role of government and things such as the escalating cost of health care again in 2013.

It won't be boring.

Thanks. Bob.

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