“Pinhead Density Arguments”: There Was A Reason Conservatives Once Supported The Individual Mandate
Of all the arguments being waged over the Affordable Care Act — or, as the Obama campaign now likes to refer to it, “Obamacare” — the one dominating the Supreme Court this week is perhaps the most conceptually trivial.
The individual mandate requires consumers to purchase health insurance in order to eliminate the problem of free riders — people who don’t purchase insurance until they get sick or injured or those who never purchase insurance and end up passing on to the rest of us the costs of care they can’t afford. Detractors argue that the mandate unconstitutionally infringes on personal liberty by forcing Americans to purchase health insurance. But compare it to three ways of addressing the free- rider problem in health care that are clearly, indisputably, constitutional:
• Single payer: The federal government increases income taxes and, in return, guarantees everyone government-provided health-care insurance. There is no option to opt out of the taxes. This is how most of Medicare works, though the insurance kicks in only after you turn 65.
• Late-enrollment penalty: The single-payer approach only holds for “most of” Medicare because the Medicare Prescription Drug Benefit works a bit differently. For every month that you don’t enroll after becoming eligible at age 65, your premium rises by one percentage point.
• Tax credits: Under various health-care proposals — including the plan of Rep.Paul Ryan (R-Wis.) — the tax code is changed to give families a tax credit for purchasing private health insurance. Families that choose to go without insurance, or simply can’t afford it, would not receive the tax credit.
All of these plans share the same basic approach: They impose a financial penalty, either before or after the fact, on those who forgo health insurance. Single payer does it through taxes, Medicare Part D through premiums and Ryan’s plan through tax credits.
Now consider the individual mandate. Here’s how it works: Starting in 2016, those who don’t carry insurance will be annually assessed a fine of $695 or 2.5 percent of their income, whichever is higher.
Skeptics of government should clearly prefer the individual mandate to single payer. In fact, the individual mandate was developed by conservative economist Mark Pauly as an alternative to single payer. “We did it because we were concerned about the specter of single-payer insurance, which isn’t market-oriented, and we didn’t think was a good idea,” Pauly told me last year. In the 1990s, the individual mandate was also the Republican counterproposal to President Bill Clinton’s health-care bill, and in 2005, it was the centerpiece of Massachusetts Gov. Mitt Romney’s health-care reforms.
The Medicare Part D model doesn’t really work as an alternative to the individual mandate because it requires the federal government to set the cost of premiums. That’s possible with the over-65 set, because the government controls the market. To import that idea to the under-65 market, however, would require vastly more governmental intrusion into the health-care space.
The tax credit, meanwhile, is essentially indistinguishable from the mandate. Ryan’s plan offers a $2,300 refundable tax credit to individuals and a $5,700 credit to families who purchase private health insurance. Of course, tax credits aren’t free. In effect, what Ryan’s plan does is raise taxes and/or cut services by the cost of his credit and then rebate the difference to everyone who signs up for health insurance. It’s essentially a roundabout version of the individual mandate, which directly taxes people who don’t buy health insurance in the first place.
“It’s the same,” says William Gale, director of the Tax Policy Center. “The economics of saying you get a credit if you buy insurance and you don’t if you don’t are not different than the economics of saying you pay a penalty if you don’t buy insurance and you don’t if you do.”
Interestingly, Ryan’s plan imposes, if anything, a harsher penalty on those who don’t purchase health insurance. Ryan’s tax credit is far larger than the individual mandate’s penalty, and much easier to enforce. Under Ryan’s plan, if you don’t purchase insurance, you don’t get the credit. End of story. Conversely, the Affordable Care Act doesn’t include an actual enforcement mechanism for the individual mandate. If you refuse to pay it, the IRS can’t throw you in jail, dock your wages or really do anything at all.
This leads to one of the secrets of Obamacare: Perhaps the best deal in the bill is to pay the mandate penalty year after year and only purchase insurance once you get sick. To knowingly free ride, in other words. In that scenario, the mandate acts as an option for purchasing insurance at a low price when you need it. For that reason, when health-policy experts worry about the mandate, they don’t worry that it is too coercive. They worry that it isn’t coercive enough.
The mandate is considered more effective than tax credits because people seem more inclined to take action to avoid penalties than to receive benefits. That’s worked extremely well in Massachusetts, for instance, where there’s been almost no free-rider problem at all. So while it’s not different as a matter of economics, it’s a bit different as a matter of behavioral economics. In that way, the mandate does a little more to solve the free-rider problem with a little less action from the government.
Randy Barnett, a conservative law professor at Georgetown University, agrees that there’s some similarity between the two approaches. But he warns that that doesn’t make them legally equivalent. “Just because the government does have the power to do X, doesn’t mean they have the power to do Y, even if Y has the same effect as X,” he says. “There’s no constitutional principle like that.”
Although that’s true, it also leaves us in a peculiar spot. The constitutional argument over Obamacare is a dispute over a technicality. We agree that it’s constitutional for the government to intervene far more aggressively in the market. We agree that it’s constitutional for it to intervene in an almost identical, albeit slightly more roundabout, manner. We’re just not sure if the government needs to call the individual mandate a “tax” rather than “a penalty,” or perhaps structure it as a tax credit. As Pauly puts it, “This seems to me to be angelic pinhead density arguments about whether it’s a payment to do something or not to do something.”
Of course, this battle isn’t really about the constitutionality of the individual mandate. Members of the Republican Party didn’t express concerns that the individual mandate might be an unconstitutional assault on liberty when they devised the idea in the late 1980s, or when they wielded it against the Clinton White House in the 1990s, or when it was passed into law in Massachusetts in the mid-2000s. Indeed, Sen. Jim DeMint (S.C.), arguably the most conservative Republican in the Senate, touted Romney’s reforms as a model for the nation. Only after the mandate became the centerpiece of the Democrats’ health-care bill did its constitutionality suddenly become an issue.
The real fight is over whether the Affordable Care Act should exist at all. Republicans lost that battle in Congress, where they lacked a majority in 2010. Now they hope to win it in the Supreme Court, where they hold a one-vote advantage. The argument against the individual mandate is a pretext for overturning Obamacare. But it’s a pretext that could set a very peculiar precedent.
If the mandate falls, future politicians, who will still need to fix the health-care system and address the free-rider problem, will be left with the option of either moving toward a single-payer system or offering incredibly large, expensive tax credits in order to persuade people to do things they don’t otherwise want to do. That is to say, in the name of liberty, Republicans and their allies on the Supreme Court will have guaranteed a future with much more government intrusion in the health-care marketplace.
By: Ezra Klein, The Washington Post, March 31, 2012
“As Lawless As The Pharaohs”: The Conservative Grip On Power
Writing in Salon, Natasha Lennard proposes that with the warm weather we can again expect the Occupy movement to shoot up. Arab Spring, American Spring. She’s right about one thing: Like in the decades before the Arab Spring, it has been a long, cold, American winter. In the 30 years since coming to power here, Republicans have used their initial ascent to power to seal themselves into office as tightly as the pharaohs. Smart commentators have noted how lawless the conservatives are in making substantive decisions, but that’s not the worst of it. The worst of it is how they use their tenure to make it increasingly impossible to oust them.
With this week’s Supreme Court hearings — which will end, liberals worry, with the justices overturning healthcare reform — we are nearing the apotheosis of conservative power. Let us recount how we got here: In 2000, a mob of conservative thugs stopped the vote recount in Florida. And that was before the court got involved, the five conservative justices seizing the election and handing the White House to George W. Bush. Secure in the tenure of their undemocratically selected president, the two older conservative justices, William Rehnquist and Sandra Day O’Connor, retired from the bench. Bush replaced them with two young conservatives, destined, by constitutional design and the miracles of modern medicine, to dominate the court into the foreseeable future. At the Supreme Court, it’s always winter (and never Christmas).
The stunningly inept performance by the Bush administration unforeseeably produced the first Democratic federal government since 1994. Immediately thereafter, the conservative Supreme Court majority ruled that the GOP’s wealthy sponsors could spend an unlimited amount of the money putting conservatives in office. Now, the conservative majority on the Supreme Court, appointed, in part, by the conservative president they put in the White House, is preparing to wipe from the statute books the only piece of meaningful progressive legislation in the last half century, passed during the brief Indian summer of a two-year Democratic majority.
And it’s not just the federal government. In 2010, fueled, in part, by the money the conservative justices unleashed, the conservatives took over state legislatures across the country. In power, they enacted a series of measures that should make Hosni Mubarak blush. They redrew the legislative maps to guarantee that they would hold a majority of the legislatures, state and federal, regardless of whether they failed to gain a majority of actual votes. (The design of the Senate, favoring sparsely populated rural states, already way overrepresents the Republicans.) Using a panoply of legislative strategies, they made it infinitely harder for the Democrats to register their supporters and for the Democratic voters, even if registered, to vote. Voters must be reported within 24 hours of being registered or penalties will be levied on the laggard registrars. Would-be voters must produce a fistful of identity documents, notoriously more common among old white (Republican) voters than the youthful and nonwhite Americans likely to support the Democrats. If they run the registration gauntlet, they must again verify their identity on Election Day, with the same culturally skewed set of papers. In the swing state of Florida, the New York Times reports, the activists have given up registering new voters: Too perilous.
True, the Democrats have not been models of political virtue. Cowardly when confronted by their powerful adversaries, confused about the moral grounding of their political vision, faithless to their allies, racketing from one trendy policy initiative to another, without anything resembling long-term planning — with enemies like the Democrats, who needs friends? But blaming the victim is way too easy. Democrats made the mistake of behaving as if the American rules of representative government still applied. Confronted with the lawless conservative Republicans, their fate was sealed.
By: Linda Hirshman, Salon, March 31, 2012
“Openly And Repeatedly Mocked”: What The Supreme Court Thinks Of Congress
The Supreme Court spent the first part of the morning debating the “severability” question, and as Lyle Denniston reported, we learned a bit from the proceedings — most notably what the justices think of Congress.
The Supreme Court spent 91 minutes Wednesday operating on the assumption that it would strike down the key feature of the new health care law, but may have convinced itself in the end not to do that because of just how hard it would be to decide what to do after that.
A common reaction, across the bench, was that the Justices themselves did not want the onerous task of going through the remainder of the entire 2,700 pages of the law and deciding what to keep and what to throw out, and most seemed to think that should be left to Congress. They could not come together, however, on just what task they would send across the street for the lawmakers to perform. The net effect may well have shored up support for the individual insurance mandate itself.
Of particular interest was the justices’ opinions of Congress — it turns out, American voters aren’t the only ones who hold lawmakers in low regard — which was characterized as an institution incapable of creating a new health care law. Denniston added, “Scalia noted the problems in the filibuster-prone Senate. Kennedy wondered whether expecting Congress to perform was a reference to “the real Congress or the hypothetical Congress.”
I’d also note that Kagan complained at one point about “the complex parliamentary shenanigans that go on across the street.”
How dysfunctional is Congress? The legislative branch is now being openly and repeatedly mocked by Supreme Court justices during oral arguments — eliciting laughter from those in attendance.
Congress, they were laughing at you, not with you.
By: Steve Benen, The Maddow Blog, March 28, 2012
Mitt Romney’s “Freedom To Dream”: That Is, If You Just Forget About Reality
At this point, it appears that Mitt Romney delivers a “major” speech on the economy about once a month, apparently working under the assumption that, eventually, someone will take one of these speeches seriously. The last such effort, delivered to an empty football stadium in Detroit, didn’t go well, so the former governor gave it yet another try yesterday at the University of Chicago.
The event was largely overlooked — apparently, once-a-month economic speeches read from teleprompters on a weekday afternoon have started to bore political reporters — but the remarks were actually worth paying attention to. Jamelle Bouie described the speech as “a remarkable work of staggering dishonesty,” which struck me as more than fair.
I believe speechwriters tend to call remarks like Romney’s yesterday as “big picture speeches.” The former governor presented no specifics and offered no details about any aspect of his economic vision, but he used the word “freedom” 29 times, and the word “free” an additional 10 times — all while standing in front of six American flags — all of which apparently was supposed to distract the audience from the fact that Romney’s vision lacked all meaningful substance.
But there was something to be learned from the speech anyway. For one thing, Romney presented an economic vision that’s very conservative.
“[O]ne feature of our culture that propels the American economy stands out: freedom. The American economy is fueled by freedom. Free people and their free enterprises are what drive our economic vitality. […]
“Today, however, our status and our standing are in peril because the source of our economic strength is threatened. Over the last several decades, and particularly over the last three years, Washington has increasingly encroached upon our freedom…. If we don’t change course now, this assault on freedom could damage our economy and the well-being of American families for decades to come.
“We see this attack on our freedom in every corner of the economy.”
Just get the government out of the way and wait for “freedom” to solve all of our problems. Once we get pesky safeguards and regulations out of the way, we’ll be free to breathe dirty air and drink dirty water; we’ll be free of the burdens of affordable medical care; we’ll be free to watch Wall Street excesses rob the country blind; we’ll be free to slip into poverty into an inadequate safety net full of holes; we’ll be free of the homework assigned to college students; and we’ll be free to remain dependent on oil indefinitely.
It’s the kind of freedom that Sen. Jim DeMint (R-S.C.) will find inspiring, and working families will find crushing.
What’s more, yesterday offered a reminder as to just how dishonest Romney is prepared to be to advance his ambitions. To listen to this speech, you’d think that President Obama raised taxes instead of having cut them repeatedly. You’d think the stock market has been crushed by “restricted freedom,” instead of having soared under Obama’s watch. You’d think oil production has been sharply reduced, instead of having gone up each of the past three years.
And you’d think Obama vastly increased government spending and hired legions of new bureaucrats, none of which happened in reality.
“The reality is that, under President Obama’s administration, these pioneers would have found it much more difficult, if not impossible, to innovate, invent, and create.
“Under Dodd-Frank, they would have struggled to get loans from their community banks.
“A regulator would have shut down the Wright Brothers for their “dust pollution.”
“And the government would have banned Thomas Edison’s light bulb. Oh yeah, Obama’s regulators actually did just that.”
When Mitt Romney says “the reality is,” you can probably assume you’re not going to hear anything about reality. In this case, Romney is completely wrong about Wall Street reform; the Wright Brothers line doesn’t make sense; and the light bulb line refers to a Bush-era, bipartisan energy measure that doesn’t ban light bulbs at all.
“A remarkable work of staggering dishonesty,” indeed.
By: Steve Benen, The Maddow Blog, March 20, 2012
“Enormous Power” Used Badly: Olympia Snowe’s Strange Martyrdom
The retirement of Olympia Snowe, at the young (by senatorial standards) age of 65, has again dramatized the perilous condition of the Senate moderates. They have been scorned, marginalized, and hunted close to extinction. Yet the striking fact about Snowe’s career is that, far from being shunted to the sidelines, she has wielded, or been given the opportunity to wield, enormous power. She has used it, on the whole, quite badly.
When George W. Bush proposed a huge, regressive tax cut in 2001, Snowe, sitting at the heart of a decisive block of centrists, used her leverage to support the passage of a modestly smaller and less regressive version. When Barack Obama proposed a large fiscal stimulus in 2009, Snowe (citing fears of deficits that she had helped create) decided to shave a nice round $100 billion off his figure and call it a day. If a Gingrich administration proposed spending a trillion dollars to erect a 100- foot-tall solid-gold Winston Churchill statue on Mars, Snowe would no doubt decide, after careful deliberation, that the wise course was to trim the height down to 90 feet and perhaps use a cheaper bronze alloy in the base.
The characteristic Snowe episode came during the health care fight. The Obama administration, desperate to win her vote, wooed her with endless meetings and pleas, affording her a once-in-a-generation chance to not only help pass health care reform but make it smarter, more efficient, and more compassionate. Instead, Snowe tormented the administration by dangling an elusive and ever-changing criteria before their noses. She at first centered her objections around the inclusion of a public option. Democrats removed it, and she voted for the bill in the Finance Committee, only to turn against it when it reached the decisive vote on the Senate floor. Snowe complained that the process was happening too fast, and that it was too partisan, which seemed to be her way of saying she wouldn’t vote for it unless other Republicans joined her.
This may sound sensible, even admirable, if you subscribe to the notion that securing bipartisan support for major bills is inherently valuable. But it’s worth noting that moderates like Snowe and their fans worship bipartisanship for reasons that have nothing to do with good government. A Republican representing a blue state, or a Democrat representing a red state, faces an inherently precarious situation. Often she will find the demands of her party’s national base pitted against those of her home state electorate. Olympia Snowe’s worst nightmare is to have to choose between infuriating Republicans in Washington and moderate voters in Maine. Creating legislation that passes by wide margins is not done out of a desire to bring bills closer into alignment with any abstract standard of good government, but to ensure her vote sits comfortably in the middle of a wide swath of support from both sides. In a farewell op-ed in the Washington Post, Snowe complains that centrism offers no electoral rewards. For her, though, such careful positioning was a matter of political self-preservation.
The New York Times report on her departure cast the central tension of her career as pitting “her own views as a Republican centrist against pressure from fellow Republicans to support the party position.” This is a common way people think about it – there are two poles, one representing the moderate’s principled convictions, and the other representing party loyalty. The negation of one implies the presence of the other. Snowe’s career proved that it’s entirely possible to steer clear of the party line without upholding any particular notion of the public good.
By: Jonathan Chait, Daily Intel, March 2, 2012
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