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Instead, Obama relied on Democratic majorities in the House and Senate and fended off Republican efforts to include in the legislation such provisions as broad liability reform and authority for insurers to sell their health-insurance products across state lines. After a full-court press, in particular, on moderate Democratic House members, the legislation narrowly passed. At the time of its passage, surveys showed public opposition to be 60-65 percent.
Now, two years later, a public majority remains opposed and nearly two-thirds of citizens say they regard the legislation as "unconstitutional." Voters backlashed against moderate House Democrats who had voted for the legislation. Democrats lost 63 House seats in 2010 and their majority in that chamber. The House in 2011 convened highly polarized between conservative Republicans and liberal Democrats. The previous center was missing.
Obama's other chancy tactic in 2009 was to attempt the legislation at a time when the country simultaneously was undergoing financial and economic crises. (Roosevelt, after taking office in 1933, waited a full two years before pressing his Social Security legislation). White House staff reportedly argued against taking on the health-care issue until economic stability was restored. Obama, however (reportedly at the strong urging of his wife Michele) insisted that the effort go forward.
Let's set aside, though, the tactics and timing associated with the legislation. What about its content, now under court review?
My own view, from the beginning, was that the so-called "individual mandate," which is the centerpiece of the legislation, was a sine qua non for its viability if a general or catastrophic plan were not to be attempted. As many have pointed out, it originally was proposed by Republicans seeking a mixed public-private approach to health-care reform. It was employed in the Romneycare plan enacted in Massachusetts. The underlying concept was based on the auto-insurance model. That is, that everyone outside Medicare or Medicaid should be required by law to have health-care insurance. If they did not have it, they would be compelled to buy it from a public-established entity — that way, people could not irresponsibly leave others to pay for their care if and when they had an illness or accident. (There is a difference, of course, between the auto-insurance and health-insurance public-option models; not everyone owns or drives a car).
Opponents are now arguing that the Commerce Clause of the Constitution prohibits the federal government from compelling private citizens to buy a certain product. Court observers are now speculating that, since the entire legislation hinges so greatly on the individual mandate's inclusion, the justices may strike down the entire law in June when they reach a decision.
A betting person would wager that the court will knock down some or all of the legislation by a 5-4 vote. But maybe not.
If that does happen, we'll be back to "go" one more time in trying to design any new reform package. Any such effort would no doubt be set back for a time, as after the 1994 failure of the Clinton initiative. My own recommendation, in that case, would be to do a retry toward a national catastrophic plan. But that will be only one idea among many.
What other reconsiderations are in order?
Tax policy, of course, comes immediately to mind. Why should federal and state governments extend subsidies, deductions, and other breaks to certain economic activities but not to others?
Home ownership, for instance, was seen as a virtue and social stabilizer when home-mortgage payments were established as deductible under the Internal Revenue code. But there were unforeseen consequences to this provision: overallocations of capital to the housing sector; assumption of mortgages by people unable to finance them; the creation of such institutions as Fannie Mae and Freddie Mac to subsidize this part of the market; the invention of exotic derivatives which their Wall Street inventors themselves did not understand; a financial collapse partially caused by reckless trading in such derivatives, etc. Then there was the simple fact that many billions were lost to the Treasury annually because of the home-mortgage deduction. Other countries, including Canada, have no deduction and nonetheless have large home-owning populations.
A medical-expense deduction also costs the Treasury billions annually. Rational health-care reform might enable its removal.
Then there are many billions in "tax expenditures" extended to politically favored sectors and companies, ranging from oil and gas and alternative energy companies to defense contractors, auto companies, producers of certain agricultural commodities, and exporters of certain manufactured goods.
Any respectable economist will tell you that overall economic efficiency, growth, and job creation would be served by elimination of all of these tax expenditures. The tax code should not determine economic decision-making. Companies, sectors, and spheres of economic activity should not be chosen for success or failure by government decision. Small business, in particular, gets left out when tax goodies are passed out to the big players with the strongest political clout. Let free competition reign and prosperity ensue.
Both major political parties have pledged to address tax expenditures as they examine their options for long-term public debt reduction. But, thus far, few major leaders have been willing to single out specific candidates for elimination.
There is a natural reluctance to do so but we also should revisit the powers to be reserved, respectively, to the federal government and states in many spheres.
"States rights" were the rallying cry during the civil-rights era for civil-rights opponents who wanted to resist such measures as the Civil Rights and Voting Rights Acts on the basis that the states, and not the federal government, should have jurisdiction in such matters. Presidents, Congresses, and the courts reflexively came to regard states-rights-based arguments as by their nature reactionary and arguments for federal jurisdiction to be enlightened. But that was a half-century and more ago.
States and localities are complaining now that the federal government has overstepped in many policy areas (not having anything to do with minority rights) especially relating to economic issues. It's hard to be sympathetic to these assertions when they are based in state- and local-level desires to void federal environmental or public-lands safeguards. But, in an era of concentration and centralization, we should be willing to hear case-by-case arguments about top-down abuses by government distant from places where people live their daily lives. Political tides change. Laws and regulations adopted in a progressive era can be used for reactionary, coercive purposes in another era.
Both major political parties have, in fact, been running on intellectual empty for several decades. If you follow this year's presidential-campaign debate, for instance, you find it uncannily paralleling that which took place in the 1930s, with one side denouncing the greedy rich, Wall Street, oil companies, and their abuses and the other warning that government and its liberal allies are villains and a threat to freedom.
Maybe the silver lining in the current health-legislation confusion is an opportunity to rethink many of our approaches to governance and public policy.
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