In the Name of Fairness

     

    President Obama has found a platform for his re-election campaign. He will the be the one that we are waiting for. He will be the guarantor of fairness, health insurance, and jobs in a time of economic anxiety. Republicans will be put in a position to defend a tax code that punishes the middle-class, to deprive people of health care, and to oppose Obama's jobs program. But behind the rhetoric of fairness, the positions of the Obama administration leave much to be desired.

    White House Senior Advisor David Plouffe tells us that President Obama believes “that the right way to get the fiscal house in order is to ask the wealthy to pay their fair share” and raise their taxes. The so-called Buffett rule (named in honor of billionaire investor Warren Buffett) and other tax proposals advocated by Obama would raise taxes on most individuals (small business are frequently taxed as individuals) with an annual income of $1 million or more. The Obama administration does not scruple to note that the wealthy already pay more in taxes as a percentage of their income than everybody else.

    In their fact-checking, the Associated Press (hardly a right-wing organization) found that households exceeding $1 million in annual income pay roughly 29.1 percent of their income in federal taxes. Households in the $50,000 to $75,000 range pay roughly 15 percent. Those in the $20,000 to $30,000 range pay 5.7 percent.

    Of course, a small number of the very wealthy do not pay their “fair” share. For example, Warren Buffett is one of the wealthiest people on the planet and he apparently pays less in federal taxes than his secretary – a feat he achieves by taking advantage of the tax loopholes and shelters that he derides. Dramatic tax reform similar to one achieved during the 1980's would be a remedy as would a simpler (and flatter) tax, but Obama's proposals fall well short of that goal and by advocating tax hikes during an economic downturn he appears to be ignoring his own advice from 2009: “The last thing you want to do is raise taxes in the middle of the recession because that would just suck up and take more demand out of the economy and put business in a further hole.”

    Yet some liberals are adamant in their support for (among other things) raising taxes in spite of the impact it could have on job growth (see Warren Buffett). Charlie Fink of the Agenda Project claims, “I have built and run businesses... through booms and busts... Taxes were never, ever, a factor in my decisions about hiring.” Never ever?

    Obama's latest job creation program (which would be called a stimulus package if the other one had worked) calls for a temporary reduction in payroll taxes and tax credits for businesses that hire new workers. The point of such reductions is to stimulate job growth. One wonders what economic rationale allows supporters of Obama's tax and job programs to claim that raising taxes on businesses does not impede job growth while simultaneously claiming that lowering taxes does encourage it.

    Perhaps it is the same sort of reasoning that motivates supporters of Obamacare like former House Speaker Nancy Pelosi to ban health insurance policies that charge females policyholders a higher premium than males and insurance policies where policyholders with a pre-existing condition are charged a higher premium than policyholders without one. We are told that “no longer would being a woman be a pre-existing condition.”

    Pelosi and others think it is unfair for insurance companies to charge women four or five dollars extra in monthly premiums. They don't seem to mind the idea of forcing a man to pay higher premiums for an individual health insurance policy that covers birth control pills, morning-after pills, maternity care, and well-baby visits. They think it is unfair to charge someone more if they have diabetes but find it acceptable to charge a healthy 60-year-old three times more than a sickly 30-year-old; apparently, fairness demands that pre-existing conditions must be ignored but age should not when one is trying to ban discrimination on the basis of medical history.

    Fairness is an almost universal human sentiment, but fairness as a political doctrine has serious limitations. For the Obama administration, it is a buzzword that barely disguises the weaknesses of its domestic policy.

Taking a Pass on Obamacare

    Following the passage of the Patient Protection and Affordable Care Act in 2010, opponents of what has been commonly referred to as Obamacare and the individual health insurance mandate began waging legal challenges against what has been President Obama's most notable domestic policy initiative. Nearly 30 states have jointly filed lawsuits claiming that Obamacare is unconstitutional because they believe that having the federal government compel citizens to purchase health insurance is not justified under the interstate commerce clause. Many supporters of Obamacare, including prominent legal scholars like Laurence Tribe, Akhil Amar, and Erwin Chemerinsky, believe that its constitutionality is doubtless.

    However, the lawsuits persist and opponents of Obamacare scored a notable victory when the 11^th Circuit Court of Appeals upheld a lower court's ruling against Obamacare. Their ruling conflicts with the 6^th Circuit Court ruling, and the Supreme Court awaits. The high court should, if it can, take a pass on this one.

    The arguments against the individual mandate basically center around the idea that the individual mandate is not a necessary and proper measure for the regulation of the health insurance industry because such a broad reading of the interstate commerce clause would grant too much power to the U.S. Congress and jeopardize the notion of our government as one of enumerated powers. Supporters of the individual mandate say that such an objection is rubbish and that the individual mandate is necessary and proper for the broader regulatory goal of making everyone eligible for health insurance independent of medical history. Neither side is decisively correct.

    Then what should the court do? It could defer to the determination of the legislative branch and implicitly accept that Obamacare is constitutional; many believe that the court will take such a route. However, expanding the power of the federal government (if it is an expansion) in such a way will stink in the nostrils of the conservative bloc who may wish to revisit the issue at a later date or assert the court's authority to prevent federal overreach in the name of social welfare; they may not be eager to overturn Obamacare, but what about the next legal conflict between economic autonomy and the regulatory powers of Congress?

    If the Supreme Court could punt the issue away on narrower legal grounds or some technicality then it could save itself a huge headache in the 2012 session. They could conjure an argument that questions whether or not state attorney generals and conservative legal groups have legal standing; they could point out that the individual mandate does not take effect until around 2014; they could ask if there have been any legal damages that would warrant such lawsuits; they could simply say that they would rather revisit the issue at a later date (although that is unlikely because that would be conceding fallibility) and promise to expedite similar lawsuits that are filed after a certain point. Such a tact essentially amounts to upholding Obamacare if only temporarily.

     After all, Republicans are poised to take both houses of Congress following the 2012 election and have a better than even chance of capturing the White House. A Republican administration with any of the current frontrunners at the helm will more than likely overturn Obamacare and replace it with something else which would make the lawsuits a moot point. Alternatively, if President Obama is reelected and Obamacare doesn't get axed then voters will have more of a chance to evaluate if Obamacare is effective and desirable in action and not just in theory; in that case, there may be little demand for the court to overturn the law and the high court can comfortably uphold it. The legislative process can spare the Supreme Court some grief.

     And what grief it would be! Any decision will create a storm of controversy that would further politicize the Supreme Court and possibly put the court front and center on the stage of a presidential election. On the other hand, allowing the issue to ripen before judicial intervention would be palatable for many Americans even if it does resemble a political calculation because it is a calculation that reflects judicial modesty. Lawyers, legal activists, and some legislators may find the lack of resolution and direction on commerce clause jurisprudence from the high court undesirable, but the electorate doesn't care about legal purity. They want something that works.