Good policy but bad politics?

It came as a bolt from the blue. Indeed, it was so unexpected that it took the Conservatives a while to recover their bearings. The Republican crowd had banked upon the political leanings of the Supreme Court judges in their fight to get President Barack Obama’s signature healthcare law repealed. Some experts, even those within the Conservative ranks, had cautioned, albeit in hushed tones, regarding putting so much at stake just over the political leanings of the judges but their warnings were summarily dismissed. The confidence proved to be rather misplaced.

The Supreme Court upheld what is popularly called Obamacare last week in a 5-4 decision that vindicated the President's stand. Also, as it turned out, it sort of defined the thinking process of Chief Justice John Roberts. In its majority, the Court maintained that the health law’s individual mandate that essentially asks the lion's share of American taxpayers to either purchase insurance or submit a penalty, is basically a “tax” and hence constitutional. It further strengthened Obama's stand by refusing to strike down the law’s Medicaid expansion altogether but altering it a bit. The decision is being seen as a momentous victory not only for Obama but also for Congressional Democrats, who had insisted that the law was constitutional and within the purview of the power it dispenses.

What really came as a shock to the Republicans is that Roberts – a core conservative judge handpicked by none other than former President Bush himself – wrote the majority opinion. The shock was twofold. While quite a few of them were prepared for the Court ruling, almost none of them expected a situation where a Conservative judge would uphold the individual mandate clause as well. Roberts implicitly recognised the fervent resistance to the law, but maintained that policy decisions devolve to the elected branches of government, not the court.

“I'll rather say it is the other way round. It is because John Roberts sided with the other four liberal judges to uphold the individual mandate that the entire law survived. As far as the four dissenting conservative justices, including Kennedy, are concerned, they had refused to take the tax argument at its face value. If it had been for them, the law would not have seen the day,” explains Daniel McCarthy, a DC conservative political expert.

This decision has created further trouble for the Republicans outside of the Court too. Till the ruling was delivered, there was a sense of urgency that could be seen in the conservative base vis-a-vis the law in general and the issue of individual mandate in particular. In fact it can be safely assumed, considering the figures most of the surveys and polls threw up, that the Conservative base was much more enthusiastic about opposing the law than the liberal base was for its support. This might change now.

Technically speaking, the Republicans still have the chance to re-appeal the law as and when they have the numbers in the legislature. However, the floor-fighters will never recover momentum against the individual mandate clause after it has been declared constitutional by the court. It was on the question of whether the mandate is constitutional that the Conservative base had galvanised.

Also, there are conflicting opinions on how much damage a Republican majority in the legislature following the November elections can do. One opinion suggests that it is virtually impossible for the GOP to break the 60-vote Senate filibuster in the foreseeable future. However, the Republicans can exploit a loophole here. As per the Senate rules, any bill or legislation which might have a fiscal dimension can  be passed with a simple majority and does not require a filibuster, so to say. Lately, it has been used several times by both the parties to suit their convenience. This bypass, known as budget reconciliation, was liberally used by the Bush administration to have major tax cuts passed, which wouldn't have seen the light of the day considering Democrat dominance in the Senate. Even Democrats, most notably under Obama himself, used this route to pass some of the more divisive acts of the Obamacare law. Now according to the Supreme Court, the mandate is officially a tax. And since it is a tax, it can as well be negated through this bypass process.

Says Timothy Carney, American diplomat and political expert, “Republicans, it appears to me, could merely bring down the tax for not having health insurance down to $0.00, in accordance with the provisions for the budget reconciliation. Now, since it’s a tax and not a mandate, there simply can’t be any penalisation for not having it above and beyond the tax.”

That sounds rather simple. But as of now, Democrats can deny even that to Republicans as they have 51 seats in the Senate as well as two independent Senators in their kitty who tend to support the liberal cause. But that is only till November. After that, the game might change.

In a different scenario, if Obama comes back to the White House, the situation will improve marginally. In fact, sources close to TSI suggest that there is little chance for the law to survive in its current form even if Obama wins a second term. The government is under severe pressure to drastically cut federal spending in order to lower the budgetary deficit.  It will simply be impossible for the administration to justify an insurance expansion programme that will increase spending by $1.6-1.9 trillion in the coming decade, according to different Conservative estimates. The president and other supporters of the law would be hard-pressed to defend that kind of price tag.

“This is not merely a healthcare subject. For the planners, it is a monetary issue as well. In fact, I'll safely stick my neck out and say that this is going to be the single biggest issue in the next budget and is going to raise lots of heat,” cautions Tom Scully, a federal medicare expert under the previous Republican administrations and an independent counsellor now.

On the political front, Obama is not expected to gain widely from the decision. Although most of the post-decision surveys, including the largely Republican leaning Rasmussen, have given a 2-3 points lead to Obama over Mitt Romney; almost all these polls have also shown that a majority of the prospective voters have decried the judgment. Some experts believe that the Republican base was more galvanised and that has reflected in the results. But there is a chilling indifference about the law among the liberal base. And that is not good for Obama.

Some experts have suggested that Obama will quietly drop Obamacare from his list of achievements. In fact, in the last few public meetings, he has mentioned it in passing and definitely not as his single biggest achievement. In fact, his biggest masterstroke so far has been the presidential decree that exempts from deportation individuals (mostly Hispanic) brought to the US illegally before the age of 16.

The scenario might change if the administration achieves success in convincing the public about the benefits of the healthcare law. But the government needs time, and that is a commodity Obama is severely short of.