FOLLOWING the ratification of the US Constitution, Benjamin Franklin quipped that “in this world, nothing can be said to be certain, except death and taxes.” Due to the creative jurisprudence of Chief Justice of the Supreme Court John Roberts, President Barack Obama can be thankful that the death of his health care reforms has been avoided.
By declaring the Affordable Care Act’s individual mandate constitutional, under Congress’s power to “lay and collect taxes” rather than its ability “to regulate commerce,” the conservative Roberts handed Obama an unexpected political victory and an opportunity to bookend a legislative saga that has sapped much of the life out of the President’s term. Having witnessed various setbacks and controversies over the past few months, Obama needed this. But the Supreme Court’s ruling may also be a poisoned chalice.
The ruling hardly had time to percolate before congressional Republicans were accusing the President of slapping $1 trillion (£640bn) of taxes on Americans, breaking a campaign promise in the process. “It’s not a tax,” said the Obama administration, “it’s a penalty.” 60 per cent of the US public agreed with the court: it’s a tax.
Early indicators showed Mitt Romney, Obama’s presidential challenger, gaining momentum from the ruling, growing his campaign fund by $6.7m from over 70,000 donors. A poll of likely voters gave him a lead over Obama in 15 battleground states. In addition, 31 per cent of Republicans indicated that they were now more motivated to vote in November, almost twice as many as Democrats. The jubilation emanating from the White House is slowly sapping away.
But the semantics of the individual mandate are not without risk for Romney. Mindful of the fact he implemented similar health care reforms in Massachusetts, his campaign initially stated that he agreed with the dissent of Justice Antonin Scalia “which clearly states the mandate was not a tax.” However, clearly under pressure from congressional Republicans and the party’s base, Romney later acknowledged that the “Supreme Court has spoken… it is a tax.” Romney will remind voters that this is a much more than a health care mandate, but a federal tax hike on families, the middle class and, most importantly, job creators in an economic downturn.
Almost lost in the continued fall-out from the Supreme Court ruling was the news that US manufacturing contracted at its fastest rate since October 2001. A revival had been central to Obama’s re-election hopes. Whether these figures are indicative of an impending recession is open for debate but if, as expected, the Department of Labour releases a disappointing jobs report tomorrow, it will be yet another sign the President is running out of room for manoeuvre in his pursuit of a second term.
Ewan Watt is a Washington DC-based consultant. You can follow him on Twitter on @ewancwatt