Thursday, June 28, 2012

Tom Block: Supreme court ruling adds health care to issues dependent on election results

With the Supreme Court ratifying Obamacare, the focus on its future shifts to the 2012 elections with particular focus on the Presidential and Senate races. Assuming the Republicans maintain control of the House, the fate of health care will depend on the ability of Republicans to win the White House and gain control of the Senate.

While Presidential candidate Romney has pledged to get rid of Obamacare on day 1, the fact of the matter is that repeal will require action by Congress. Democrats in the Senate can protect many of the provisions by filibustering repeal provisions; but the pivotal mandate runs the risk of being repealed in part because of the way the Roberts decision let it stand.

One of the more obscure, but important parts of the Congressional budget process, is the ability of Congress to pass a Budget Resolution that includes “reconciliation” instructions to require changes in law related to spending and revenue. This process, Budget Reconciliation, is the mechanism that was used for passage of parts of Obamacare, and also used to pass the Bush tax cuts and Clinton tax increases. What makes Budget Reconciliation so useful is its unique procedural tool to avoid a Senate filibuster.

For Budget Reconciliation to work Congress must first agree on a Budget Resolution, something they have not been able to do since Republicans gained control of the House and the Budget became a political document with the Ryan Republican budget and a Senate Democratic alternative. Without an agreed Budget Resolution there can’t be a Reconciliation Bill. Hence, for Budget Reconciliation to work one party needs to be in control of the entire process: House, Senate and White House.

With the fate of Obamacare now up to Congressional repeal, the only way this can happen is through Reconciliation. And in my view the Roberts decision to permit it under the taxing clause of the Constitution increases the chances that it would be permitted under Reconciliation. If it had been approved under the commerce clause it might not have been permitted as part of Reconciliation.

What does this mean for the elections? The Democrats have been reluctant to support the health care law, and in my view their silence and lack of enthusiasm played a role in their loss of the House in 2010. Now Republicans will make Obamacare a centerpiece of the 2012 campaign. For the Republicans to successfully repeal Obamacare it will require a successful Reconciliation bill, and that requires the White House and the Senate to be controlled by Republicans. If Republicans capture the House and the Senate, but fail to win the White House, there can be little doubt that a re-elected President Obama would veto any effort to repeal the centerpiece of his legacy, and it seems very likely that the President would have more than enough votes to sustain a veto. Hence, the only repeal strategy that could succeed is for a President Romney to work with a Republican Speaker and a Republican Senate Majority Leader to get a repeal bill through as part of Budget Reconciliation.

The Supreme Court decision just adds health care to issues such as tax policy and energy that in my view there will be real difference based on the election outcome.

Tom Block is a public policy consultant who had a 21-year career with JP Morgan Chase where he served as head of government relations in NYC and created a Washington research product. He also created the bank’s EU Government Relations program and developed a new position as U.S. Government Policy Strategist focusing on how U.S. government policy impacts capital markets. He has an extensive government and banking background, has worked on political campaigns and as a speech writer. He is a family trustee of Bernheim Aboretum in Louisville and holds a B.A. degree in political science from American University. He and his wife make their home in Kentucky. He is a regular contributor to KyForward. Contact him at tomblockct@aol.com.