Well, What the Hell’s the Presidency For? From LBJ and Civil Rights to Obama and Health Care

Jun 20, 2012Richard Kirsch

Like LBJ, Obama has struggled with two competing goals but in the end pushed through historic legislation.

Reading Caro's biographies of LBJ has become a multi-generational experience in our family. At 15, my son, who had never read anything more than Harry Potter, became enthralled with them, devouring the first three. This year, he bought the newest volume as my birthday present, I got my dad the book for Father’s Day, and my dad gave the book to my son for his birthday.

Like LBJ, Obama has struggled with two competing goals but in the end pushed through historic legislation.

Reading Caro's biographies of LBJ has become a multi-generational experience in our family. At 15, my son, who had never read anything more than Harry Potter, became enthralled with them, devouring the first three. This year, he bought the newest volume as my birthday present, I got my dad the book for Father’s Day, and my dad gave the book to my son for his birthday.

Much of our great fascination with Lyndon Johnson is the duality of his character: willing to lie and cheat, devoid of any principles on his path to power, and then as president, using that power to achieve lofty, principled goals that transformed our nation forever.

As Caro describes in the latest volume, The Passage of Power, as LBJ was preparing to address Congress just after assuming the presidency, “a fierce debate” between his advisors “erupted – over the emphasis to be given in the speech to civil rights.” As the discussion went on until 2:30 in the morning, one advisor concluded with the argument, “The presidency has only a certain amount of coinage to expend, and you oughtn’t to expend it on this.”

LBJ replied, “Well, what the hell’s the presidency for?”

As I read the words of the good Johnson – and all it has meant for America – it reminded me of the ongoing controversy over whether Barak Obama made a colossal blunder by pressing ahead for health care reform in 2009 in the face of the growing economic crisis. I’m not interested here in weighing in on whether this was a political mistake or whether it had any impact on the economy. What matters to me is that, like LBJ, Obama overruled his advisors multiple times and made a courageous moral decision, without regard to short-term politics.

Barack Obama is not a great incarnation of good and evil like Lyndon Johnson, but he too is torn between two sides of his nature. As I recount in Fighting for Our Health, there is the Obama that is looking to conciliate, to avoid appearing partisan or strident, to be so committed to finding common ground that he’ll give up half the farm with little or nothing in return. When it came to health care, this Obama surrendered without much of a fight on numerous important provisions that would have made health care more affordable and most famously refused to push for, let alone fight for, the public option.

And then there’s the Obama who not once but four times went against the advice of his staff and insisted on pushing for health reform that would aim to cover everyone. The Obama who, when his back was to the wall, took off the kid gloves and won.

In the summer of 2008, Obama’s campaign staff advised him not to make health care a big issue in the election. He overruled them, and in the month before the election, 86 percent of his campaign ads included health care.

In February of 2009, as the depth of the great recession became apparent, most of Obama’s top team told him to give up on health care and focus just on the economy. Instead, he told the nation in his first joint address to Congress, "health care reform cannot wait, it must not wait, and it will not wait another year.”

In July of 2009, before the tea party eruption, White House Chief of Staff Rahm Emanuel said it was time to retreat to “kiddycare,” legislation that would aim at covering all children and pregnant mothers. The president refused, and after the August tea party demonstrations he appeared before Congress and declared, “I am not the first President to take up this cause, but I am determined to be the last…. We are the only democracy — the only advanced democracy on Earth — the only wealthy nation — that allows such hardship for millions of its people.”

The last and biggest test was after Scott Brown took Ted Kennedy’s seat in January of 2010, a refutation at the polls that led Emanuel to press for kiddycare again. Instead, the president went to a retreat for Republican members of the House and made them look foolish. He unleashed his administration to finally go after the health insurance industry, using a big California rate increase as a pretext. And he worked closely with House Speaker Nancy Pelosi and Majority Leader Harry Reid to design complex legislative maneuvers – along lines that LBJ would have been proud of – to get a strengthened bill to his desk.

What accounts for Obama’s deep commitment to passing a health care law that would finally make affordable health care a right? As with LBJ’s commitment to civil rights, there was clearly a personal side. Obama’s repeated telling of the story of his mother fighting with health insurance companies while dying of cancer was not just a good political anecdote; it was seared into his memory. His own story was reinforced by the letters he read every night in the White House from Americans recounting their own health care horror stories. At his core, Obama understood, as did LBJ, that he had the opportunity to use the presidency to bend the moral arc of the universe toward justice. As Jonathan Alter recounts in The Promise, on the night of his election, before addressing the gleeful crowd in Chicago’s Grant Park, he asked himself what was the one thing he could do that would most help the average American. His answer was health care.

While today we cannot imagine going back to an America before the passage of the major civil rights legislation in 1964 and 1965, both laws met with great resistance in the South after their enactment. Even today, governors and legislatures in the South are trying to undermine voting rights legislation. It is no surprise, then, that the right and its wholly owned political party are intent today on killing a government right to affordable health coverage. But if ObamaCare survives the Supreme Court and the next election – and it is likely to do both – history will reward President Obama for his courage when it mattered.

Dr. King said, “Of all the forms of inequality, injustice in health care is the most shocking and inhumane.” Looking back, ObamaCare will be seen as a fundamental turning point in America’s health care system, toward both greater equity and a focus on the quality of care more than the quantity of care. The historic law will be viewed as a significant measure to deal with a new economy in which jobs do not come with health care benefits. As it grows and evolves, the Affordable Care Act will take its place alongside Medicare and Social Security as foundational elements of the United States government providing security to its citizens. It will be a point of pride to call it ObamaCare.

Well, what the hell’s the presidency for?

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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The House's Latest Health Care Vote Puts Campaign Cash Ahead of People

Jun 12, 2012Richard Kirsch

Congress shouldn't make working- and middle-class families pay for the repeal of a sales tax on one of America's most profitable industries.

Congress shouldn't make working- and middle-class families pay for the repeal of a sales tax on one of America's most profitable industries.

Last week the House voted to increase health care costs on middle-class families in order to protect one of the most profitable industries in the country. And almost nobody noticed. More than three dozen Democrats, oiled by campaign contributions, joined all 233 voting Republicans in voting for a repeal of a 2.3 percent sales tax on the medical device industry included in the Affordable Care Act. They voted to pay for the lost revenues by making families who are fortunate enough to get back on their feet pay more for health coverage.

The vote last week symbolizes most everything that is wrong about our politics, and in particular the politics around the Affordable Care Act, with one very welcome exception. The White House – not known for standing up tall – promised a veto of the legislation.  

One way that the Affordable Care Act will be paid for is by new taxes and reduced Medicare revenues from major segments of the health care industry. In return, health care providers will reap greater revenues from tens of millions newly insured people and improved health coverage for tens of millions more. Medical device manufacturers got off easy with the 2.3 percent sales tax considering that, according to Forbes, the industry is one of most profitable in the country (number one on return on assets, number four on return on sales, and number nine on return on equity).

That did not stop the medical device industry from fighting the tax with the usual cry wolf tactics, saying it will cost jobs and hurt small business. An editorial from, of all places, Bloomberg News takes the industry's arguments apart, one by one. The most glaring example is the charge by the industry’s trade association, AdvaMed, that the tax would cost 43,000 U.S. jobs as manufacturers moved offshore. But since the tax applies to all medical devices sold in the U.S., there is absolutely no advantage in moving jobs offshore. Doing so won’t reduce the tax by a nickel (or a yuan).

The members of Congress who are backing repeal of the tax, led by Minnesota Republican Erik Paulson, come from states where the medical device industry is big -- and so are its campaign contributions. Paulson raked in the third most contributions from the medical supply industry of any candidate for Congress ($64,100) this election cycle. He was topped by two senators from other states with big medical device industries: Utah’s Orin Hatch ($88,399) and Massachusetts’s Scott Brown ($82,150). But it’s not just Republicans. Democratic Minnesota Senator Amy Klobuchar ($63,650) ranks just after Paulson and she opposes the tax too. All together, the industry has contributed $2.9 million to congressional candidates this year. On top of that, the industry reported $31.7 million in lobbying in 2011.

So far, this is a pretty typical story of money and politics. What makes it more reprehensible – and increasingly typical – is that in the bill the House passed last week, the industry tax break would be directly paid for by struggling working- and middle-class families.

Starting in 2014, the Affordable Care Act will provide subsidies to these families to buy health coverage if they don’t get coverage at work. The financial help, in the form of a tax credit given up front, will limit the amount of a family’s income it must pay for health insurance premiums. Under the House bill, if a family’s economic status improved, they would have to pay back the full portion of the subsidy that reflects their increased income.

Think of what this means for a family that has been struggling financially, maybe out of work or working at low-wage, part-time jobs. They’ve been barely getting by and using up their savings, but finally they get back to work or find a job that pays a decent wage. And promptly the government demands a payback of some of the money given to the family to pay for health insurance.

The payback requirement will mean that some 350,000 people – mostly women, whose income fluctuates the most – will decide against applying for subsidies and remain uninsured because of the fear of having to pay the health insurance premium credits back when their income changes.

Because the new system of subsidies does not start until 2014, it is tough to make them seem real and politically salient now. If Congress voted to penalize people when millions of newly insured families were getting subsidies, the harsh impact on people’s lives would be easy to see and understand. But since nobody is affected right now, it is much harder to make a powerful argument.

That is true for all of the core elements of the ACA and the provisions that will extend coverage to some 32 million uninsured people. If the law survives the Supreme Court and the presidential election and is implemented in 2014, Americans will find out that they will no longer have to worry that losing theirs jobs means losing their health care or fret about being turned down for coverage due to a pre-existing condition. Then ObamaCare will be both understandable and popular. 

The Republican move to make families pay back the subsidies is not the first of its kind. When the ACA was enacted, there was no provision to pay any of the money back. But since then, Democrats have twice agreed to some payback provisions as a way to raise money for other purposes. Of course, that’s not enough for Republicans. They want to force families to pay every dime back in the medical device bill. This shows the folly of Democrats ever agreeing to anti-consumer provisions to placate Republicans; it simply emboldens them to ask for more.

President Obama seems to have learned that lesson. On June 6th, the Office of Management and Budget released a statement harshly criticizing the House bill, saying that it would “raise taxes on middle-income and low-income families, in many cases totaling thousands of dollars, not withstanding that they followed the rules.” That’s the kind of language that fits in with the president’s campaign themes and the message he needs to continue to trumpet throughout the country if both he and the ACA are to survive past November.

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

 

Flag image via Shutterstock.

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Mike Konczal on “Fireside Chats”: Tough Times make Liberal Reform Tougher

Jun 5, 2012Danielle Bella Ellison

In the latest episode of “Fireside Chats,” Roosevelt Institute Fellow Mike Konczal talks with David Frum, Daily Beast writer and author of the new novel Patriots. In the clip below, they take on why Democrats have had trouble gathering support for stimulus programs during the current recession. “We’ve gone from Speaker Pelosi and the new Obama presidency and the idea of this wave of progressive energy to really trying to fight between the center and the center right,” Konczal notes.

In the latest episode of “Fireside Chats,” Roosevelt Institute Fellow Mike Konczal talks with David Frum, Daily Beast writer and author of the new novel Patriots. In the clip below, they take on why Democrats have had trouble gathering support for stimulus programs during the current recession. “We’ve gone from Speaker Pelosi and the new Obama presidency and the idea of this wave of progressive energy to really trying to fight between the center and the center right,” Konczal notes.

As Konczal explains, “The real New Deal that we think of – the core economic security and managing the business cycle and so on – occurred in ’35,” when the economy was expanding. Meanwhile, “the conservative agenda to roll back the Great Society and the New Deal” unfortunately becomes more feasible in tough economic times like ours. The public becomes more risk averse and prefers austerity policies to big and potentially risky spending programs. Major liberal reforms, however necessary and beneficial they may be, are just very hard to pass during bad economic times.

The current grim economic condition, as well as the increase in media culture and accelerating ethnic change, have caused a transformation of American politics. Watch the full conversation below in which Konczal and Frum discuss this transition, what a Romney budget would look like, and the future of Obamacare.

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ObamaCare Isn't Just About Health Care – It's a Winning Jobs Issue

May 31, 2012Richard Kirsch

Voters won't have to worry about losing their health insurance when they lose their jobs if Barack Obama is still president in 2014.

Massachusetts is the only state in the country where you don’t have to worry about losing your health insurance if you lose your job, and it will remain that way if Mitt Romney, the man who signed that Massachusetts bill into law, gets elected president. But if President Obama beats him, every state in the Union will join Massachusetts in 2014.

Voters won't have to worry about losing their health insurance when they lose their jobs if Barack Obama is still president in 2014.

Massachusetts is the only state in the country where you don’t have to worry about losing your health insurance if you lose your job, and it will remain that way if Mitt Romney, the man who signed that Massachusetts bill into law, gets elected president. But if President Obama beats him, every state in the Union will join Massachusetts in 2014.

The number one issue in the election, the issue that will decide who will be living at 1600 Pennsylvania Avenue next January 20th, is jobs. President Obama’s reelection prospects will be determined by how many of the small percentage of voters who are up for grabs decide that they might as well give Romney a chance, since their economic prospects are just as shaky now as when President Obama took office. It might help if they could see ObamaCare as a jobs issue, which it clearly is.

Many of the independent voters who will determine the presidential election are confused by the Affordable Care Act, as its passage has offered no relief for a major worry in their lives: if they lose their job, they’ll lose their health insurance. Or maybe they’ve already been forced to take a job without health insurance, or are self-employed or out of work. In that case, they may well be among the 51 million uninsured Americans who are worried that one major illness will wipe out whatever financial security they have left. Other swing voters might like to leave their jobs and start a small business, but they are locked into their current jobs until they reach 65 and qualify for Medicare. All that will change in 2014 if they vote for President Obama – which they might be more likely to do if they knew that.

Starting in 2014, health insurance will be affordable for the great majority of people who don’t get coverage at work. Most will qualify for heavily subsidized private health insurance through the new health insurance marketplaces (exchanges) that will be set up in each state. Many others in low-wage jobs will be eligible for coverage under Medicaid, which will be expanded to cover families up to 133 percent of the poverty level, around $30,600 for a family of four.

ObamaCare is more than a health care bill; it is a major step toward addressing the gaping inequities in our economy, where incomes and wealth for the richest 1 percent keep rising while most Americans are treading water or drowning. Three decades ago, a job came with good health care, along with rising wages and a pension. Now only 56 percent of the workforce gets health care on the job. With the implementation of the Affordable Care Act’s coverage expansions in 2014, almost all workers will have access to affordable health coverage, even if they don’t get the insurance at work.

President Obama and Mitt Romney are both working hard to appeal to the hard-pressed middle class. For Democrats, ObamaCare should be a core part of this appeal and the most powerful rebuttal to attacks on the legislation. The president and Democratic candidates for Congress around the county can reach swing voters on health care if they make the stakes in the election very clear: a vote for Romney and Republicans in Congress is a vote to leave Massachusetts as the only state in the nation in which you don’t have to worry that losing your job will mean losing your health care. A vote for Obama and Democrats will mean that, come 2014, Americans will finally have the security that – job or not – they will have health coverage for themselves and their families.

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

 

Medical bills image via Shutterstock.

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Mark Schmitt: Are Romney and the GOP All Talk on Spending Cuts?

May 21, 2012

In the latest episode of our weekly Bloggingheads series, "Fireside Chats", Roosevelt Institute Senior Fellow Mark Schmitt and Jamelle Bouie, writing fellow at The American Prospect, discuss whether Mitt Romney is conservative enough to actually go through with the cuts to social welfare programs that Republicans have long demanded. In the clip below, Mark points out that Republicans love talking about spending cuts, but they're not so big on implementing them.

In the latest episode of our weekly Bloggingheads series, "Fireside Chats", Roosevelt Institute Senior Fellow Mark Schmitt and Jamelle Bouie, writing fellow at The American Prospect, discuss whether Mitt Romney is conservative enough to actually go through with the cuts to social welfare programs that Republicans have long demanded. In the clip below, Mark points out that Republicans love talking about spending cuts, but they're not so big on implementing them. In the clip below, he notes, "We’ve all the seen the game where the Republicans talk of budgets and cuts, but in fact they don’t really want to pay the price of having those things becoming a reality" and that "actually making the cuts and particularly making the cuts that affect the middle class is a huge political risk."

While there are a lot of Tea Party conservatives who have been successful in moving the Republican Party farther to the right in the past few years, Mark and Jamelle argue that there is a difference between them and more mainstream conservatives, like John Boehner, who just want to have their tax cuts. Referring to the latter group, Mark says that "if they have the low taxes they don’t really care about the rest." However, he argues that there are now a significant number of conservatives in power who adamantly believe that there is a difference between Social Security and Medicare, which people have paid into, and other programs, which are "just giveaways."  If Romney is elected, Jamelle believes that these members of the GOP will seize the opportunity to push for cuts.

Mark also points out that the rhetoric from the Republican Party and Mitt Romney keeps changing, so it's hard to know exactly what they will ultimately do. Regardless, Mark notes that Republicans are focusing on a limited group of people. He says "we’ve never really seen a party that actually draws such a sharp generational line." Since older folks are more affected by Medicare and Social Security, "It also puts yourself on the side of people who are less likely to be around in the future." He concludes that "it’s a big gamble politically."

Check out the rest of the video to listen to Mark and Jamelle talk about the changing rhetoric of the Republican Party, the demise of Americans Elect, and a crazy new Republican Super PAC.

 

Romney image via Shutterstock.

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Social Security: It’s for Young People, Too

May 9, 2012Elisa Walker

Social Security is not just for the elderly, it's an important investment for everyone. 

I’m a young American; I value Social Security; and this week in particular, I’m feeling reassured that Social Security is on solid footing and will be there for me when I need it. In fact, I see it as a great investment. 

Social Security is not just for the elderly, it's an important investment for everyone. 

I’m a young American; I value Social Security; and this week in particular, I’m feeling reassured that Social Security is on solid footing and will be there for me when I need it. In fact, I see it as a great investment. 

To some, these statements might seem unrealistic, especially given all the negative media coverage that followed the release of the 2012 Social Security Trustees Report last week. But despite the doomsday responses, the reality is actually reassuring–especially for today’s young people, who are used to hearing misleading accounts to the contrary.

Social Security is fully financed until 2033–in other words, its ongoing income plus accumulated savings can cover all of the benefits due until then. And over the next 75 years (through 2086, the end of the trustees’ estimates), it’s 85% solvent, or able to pay 85% of its obligations without any changes. That’s a pretty solid base to build on.

There’s much to celebrate: 

  • Social Security is one of the most successful government programs in history. Since 1935, it has collected $15.5 trillion and spent $12.8 trillion, leaving a balance of $2.7 trillion in its reserves.
  • The reserves will continue to grow to about $3.1 trillion by 2020. If Congress acts by then, there may be no need to spend them down.
  • Social Security has responded to the recession and the slow recovery by performing exactly as it was designed to do. In fact, Social Security is an unsung hero of the recession: by pumping out benefits on time and in full, it has helped keep the national economy–not to mention the personal finances of the 56 million people who receive benefits–in better shape. The Center for Rural Strategies has documented that Social Security benefits provide a crucial chunk of total personal income at the local level, especially in rural counties. This makes a real difference to the small businesses and local economies in America’s towns and cities.

Everyone knows that Social Security is critical to today’s seniors, but in fact it’s critical to all generations. It’s the largest federal benefit program for children, with nearly 7 million children receiving part of their family income from Social Security, mostly after the death or disability of a working parent. And if it weren’t for Social Security, how many more of the elderly would have to move in with their adult children? How many disabled workers or surviving widows would face even greater difficulties feeding their families?

Although it may come as a surprise to many of today’s young workers, Social Security is critical for us too. Besides supporting our parents when they retire, it will provide an essential foundation for our own retirement, as far down the road as that seems. Of course we all hope to do well, but think: today, to buy insurance paying a lifelong annuity (a fixed annual amount) at age 65 that would match the average Social Security retirement benefit ($1,230), plus partially keep up with inflation and continue to pay a widowed spouse, you’d have to pay about $430,000 up front in a lump sum. That’s an inconceivable amount for most people. Plus, other sources of retirement income, like pensions, savings, and housing values, are increasingly uncertain–so there’s a good chance that by the time today’s young adults are ready to retire, reliance on Social Security will be even greater than it is today.

For young workers and their families, Social Security also provides critical life and disability insurance. Consider a sample young family: a 30-year-old worker earning around $30,000 a year, with a spouse and two young children. For that family, Social Security disability and life insurance protection are each valued at close to $475,000. And it’s an unfortunate fact that a 20-year-old worker has a 3 in 10 chance of becoming disabled before reaching full retirement age. Again, Social Security is there, especially for those life-changing tragedies we can’t plan for.

That’s the crux of why Social Security is a worthy investment for young people, and indeed for everyone. It’s insurance, on a national scale: you pay in over your working career, in exchange for monthly income if you face work-ending retirement, disability, or death. Plus, it has everything you’d want from an ideal pension plan, including the fact that it pays benefits as long as you live, and those benefits keep up with inflation.

So let’s not let today’s young people, or workers of any age, be misled about this vital program. The truth is that we can be confident in Social Security’s future. Social Security is sound, facing only a fixable long-term revenue shortfall, not insolvency. And it will be there in the future for our generation, and for the generations that follow us. In the words of one blogger, “Social Security has had its ups and downs, but it’s in better financial shape now than it was a generation ago, and unless its enemies prevail, it will be there for you when you need it.”

Politicians who want to cut Social Security benefits always stress that current seniors should be held harmless, unaffected by any cuts. (They’re not dumb; they know seniors vote.) Instead, they talk about cutting benefits “out in the future.” While that may sound innocuous, it’s not. Young people, take note: it’s our benefits (not their own) that they propose to cut.

Instead of talking about benefit cuts, how about benefit improvements? Minor changes to Social Security–such as lifting the cap on taxable earnings, or gradually increasing the contribution rate–could more than cover the program’s long-term shortfall, with money left over to improve benefits (PDF). Now that’s the kind of future that we as young people should be investing in.

Elisa Walker is an Income Security Policy Associate at the National Academy of Social Insurance, where she has co-authored several briefs and fact sheets on Social Security policy.

This piece was originally posted in the National Academy of Social Insurance blog, on May 3, 2012.

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A Quick Thought on Obamacare's Economic Activity/Inactivity Distinction

Apr 16, 2012Mike Konczal

My vacation started off as the Supreme Court was arguing the constitutionality of the individual mandate.  As friend-of-the-blog Noah Millman explains "the question comes down to the commerce power – whether the activity/inactivity distinction is meaningful at all and, if it is, whether, because everyone is part of the healthcare market, the government can legitimately claim that nobody is actually 'inactive.'”

My vacation started off as the Supreme Court was arguing the constitutionality of the individual mandate.  As friend-of-the-blog Noah Millman explains "the question comes down to the commerce power – whether the activity/inactivity distinction is meaningful at all and, if it is, whether, because everyone is part of the healthcare market, the government can legitimately claim that nobody is actually 'inactive.'”

As the argument goes the commerce power allows the government to regulate economic activity but not inactivity.  To use the example that floats out there, the government can regulate the broccoli people purchase - subsidizing it with vouchers, taxing it, requiring safety inspections of it, etc.  But it can't force people to purchase broccoli by ascribing a penalty to those who don't do it.  The first is economic activity, the second is inactivity.  Even if the two activities net out the same, it doesn't matter. "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."  As Cato put it, "there is a qualitative difference between regulating or prohibiting existing economic activity and mandating that someone engage in such activity."

The New Republic has a great article up by Harvard law professor Einer Elhauge explaining how many individual mandates were passed by the founders in the first years of the Republic:

In 1790, the very first Congress—which incidentally included 20 framers—passed a law that included a mandate: namely, a requirement that ship owners buy medical insurance for their seamen. This law was then signed by another framer: President George Washington. That’s right, the father of our country had no difficulty imposing a health insurance mandate...In 1792, a Congress with 17 framers passed another statute that required all able-bodied men to buy firearms.

There's a lot more.

Jack Balkin gives three limiting principles that "that justifies the individual mandate but doesn't give Congress unlimited power under the Commerce Clause."  Here's an interview with Akhil Reed Amir Ezra Klein did that explains some of these issues.

I don't know if I understand the actual activity/inactivity distinction. My legal realist/marginalist mind always believes there are five people who are party to an economic transaction - the buyer (B), the seller (S), the next best buyer (B'), the next best seller (S') and the government (G).  If B = B' and S = S' you are starting to see the shadow of that beast economists are always talking about - an efficient market.

But what if they are different?  Picture you are B, and you are drowning in a lake and looking to buy a life-preserver from the shore, and I'm S, who will sell it to you for $50,000. If there isn't a S' who will do it for the dollar of time it takes to do it around (or if S' is even more of a jerk than I am and will charge more), and if a government G will enforce the contract instead of voiding it, then you just bought yourself one hell of an expensive life-preserver.

The existence of the next available buyer and seller, even if they don't buy or sell anything, has a huge impact on how the market functions and the subsequent distributional consequences.  There's no economic inactivity, no outside the market, even if people aren't actually buying and selling.  And that's with generic transactions, not ones with informational dynamics like health care.

But that's me.  What would a conservative judge make of this argument?  Luckily we have one who upheld Obamacare last NovemberLawrence Silberman.  His opinion upholding Obamacare is worth your time.  He argues:

But to tell the truth, those limits are not apparent to us, either because the power to require the entry into commerce is symmetrical with the power to prohibit or condition commercial behavior, or because we have not yet perceived a qualitative limitation. That difficulty is troubling, but not fatal, not least because we are interpreting the scope of a long-established constitutional power, not recognizing a new constitutional right....

It certainly is an encroachment on individual liberty, but it is no more so than a command that restaurants or hotels are obliged to serve all customers regardless of race, that gravely ill individuals cannot use a substance their doctors described as the only effective palliative for excruciating pain, or that a farmer cannot grow enough wheat to support his own family.  The right to be free from federal regulation is not absolute, and yields to the imperative that Congress be free to forge national solutions to national problems, no matter how local–or seemingly passive–their individual origins.

It's worth noting that when Citizens United came back as a 5-4 decision, the court went all out with an expansive ruling against campaign finance regulations, reworking the entirety of the legal framework, instead of a narrow interpretation relevant to the case at hand.  Will we see a similar move if the court comes back 5-4 against Obamacare?

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Progress on Trial: How FDR Fought to Make SCOTUS Serve the Greater Good

Mar 30, 2012David B. Woolner

FDR struggled to make a reactionary Court recognize that the government served a greater purpose than defending property. Today President Obama faces a similar battle over health care reform.

FDR struggled to make a reactionary Court recognize that the government served a greater purpose than defending property. Today President Obama faces a similar battle over health care reform.

In our generation, a new idea has come to dominate thought about government, the idea that the resources of the nation can be made to produce a far higher standard of living for the masses of the people if only government is intelligent and energetic in giving the right direction to economic life. - Franklin D. Roosevelt

The hearings of the Supreme Court this week over the Patient Protection and Affordable Health Care Act have led some commentators to compare President Obama's potential difficulties with the Supreme Court to the troubles FDR had with the Court in the mid 1930s, when some of the key provisions of the New Deal were struck down as unconstitutional. In response to the Court challenge, Roosevelt ultimately decided to pursue a court reform effort -- his famous "court-packing" scheme -- that aroused widespread opposition from both the public and those holding public office, even among members of his own party.

Most historians agree that Roosevelt's attempt to alter the Court in 1937 was both ill-conceived and badly handled. But the debate over the legal dimensions of FDR's attempt to alter the make-up of the Court -- like today's debate over the legality of Obama administration's Affordable Health Care Act -- has to a certain extent obscured the real issue that stood at the heart of the New Deal reforms: how the nation might, as FDR said, "use the agencies of government to assist in the establishment of means to provide sound and adequate protection against the vicissitudes of modern life."

Using government to pursue this goal was somewhat of a novel idea in early 20th century America. But it was not something that FDR came up with on his own. As the nation made the 19th-to-20th century transition from an agrarian to a modern industrial economy, questions about the health, safety, and living conditions of the working class -- more appropriately called the working poor -- gave rise to ever-increasing calls for social legislation to protect working Americans, including women and children, from dangerous employment practices like starvation wages and other forms of economic exploitation. The same sentiments also gave rise to a series of laws, such as the 1906 Pure Food and Drug Act, to protect American consumers from tainted foods and poisonous and/or useless "medicines," as well as anti-trust legislation to prevent the establishment of anti-free market monopolies that would lead to exploitative prices of key commodities and other goods and services.

Not surprisingly, all of these efforts aroused considerable opposition from conservative business interests, who frequently argued that such legislation was an infringement on their liberties. This was especially true in FDR's day, when, in the wake of the 1929-1932 financial crisis and the failure of the free market to provide adequate levels of employment to roughly 25 percent of the American workforce, the Roosevelt administration launched a series of efforts to reform the financial sector, offer employment to the jobless, and provide a basic measure of economic security to the average American through Social Security, unemployment insurance, and the right to collective bargaining.

Even before many of these measures were fully put in place, FDR anticipated what the wealthy conservative opposition would say about them. In a June, 1934 Fireside Chat on the subject, for example, FDR noted that a "few timid people, who fear progress," would try to give "strange names" to these efforts.

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Sometimes they will call it 'Fascism,' sometimes 'Communism,' sometimes 'Regimentation,' sometimes 'Socialism.'

But, in so doing, they are trying to make very complex and theoretical something that is really very simple and very practical.

I believe in practical explanations and in practical policies. I believe that what we are doing today is a necessary fulfillment of what Americans have always been doing -- a fulfillment of old and tested American ideals...

All that we do seeks to fulfill the historic traditions of the American people...We are restoring confidence and well-being under the rule of the people themselves. We remain, as John Marshall said a century ago, 'emphatically and truly, a government of the people.' Our Government 'in form and in substance . . . emanates from them. Its powers are granted by them, and are to be exercised directly on them, and for their benefits.'

What emerged from the New Deal, then, was an attempt to use government as an instrument to provide basic economic safeguards within the free enterprise system, to mitigate the worst excesses of capitalism, so that all Americans could enjoy its benefits.

As was the case in previous governmental efforts to provide a measure of social and economic protection for the average American citizen, these measures were challenged in the Supreme Court as an infringement of contract and property rights, and up until 1937 -- the year that FDR's struggle with the Court came to its head -- the Court tended to rule in favor of property. For progressives like Theodore Roosevelt, this tendency on the part of the Court was unacceptable. Indeed, roughly two decades before his cousin Franklin was sworn in as President, TR articulated his firm belief that government had a responsibility to serve as "the steward of the public welfare." As such, he insisted that the judiciary should "be interested primarily in human welfare rather than in property... just as... the representative body shall represent all the people rather than any one class or section of the people."

It was this basic idea that government had a responsibility to serve the "public welfare" that animated both the social justice legislation of the progressive era and the social and economic reform legislation of the New Deal. Hence, FDR's frustration with the inability of the Court to embrace this fundamental  -- or what he would term modern --concept was not unique and in fact had led many other public figures before him to call for some type of judicial reform.

This is not to say that FDR was correct in pursuing his so-called Court packing scheme; he was most surely wrong to do so. But we should not allow this misguided attempt to bring the Supreme Court into the modern world to mask the reasons why he -- and others -- felt such drastic measures might be necessary. In the end, of course, the Court would reverse itself and from 1937 forward would uphold every New Deal provision that came before it, including two prior pieces of legislation -- the Agricultural Adjustment Act and a minimum wage law -- that the Court had previously struck down.

In the decades that followed the New Deal, Americans came to accept and understand the idea of government as the keeper of the public welfare. But in the past two decades, this basic concept of governance has come under a sustained assault from the same special interests that fought this idea in FDR's day. As a result, President Obama's attempt to provide equal access to health care for the nearly 50 million Americans who remain uninsured through the so-called individual mandate has been attacked as an infringement on our liberties. But in embracing this point of view, the Court (should it decide to strike down the law) will have failed to take in the larger argument that the purpose of the law is to provide a means to secure a greater good for all. Viewed from this perspective, requiring all Americans to purchase health care is perhaps the most important step we can take "to provide sound and adequate protection against the vicissitudes of modern life."

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.

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Watch the Court, Epilogue: It's All Over But the Ruling

Mar 30, 2012Rajiv Narayan

health-care-money-150The Supreme Court subjected the new health care law to harsh interrogation, but they overlooked the human questions.

health-care-money-150The Supreme Court subjected the new health care law to harsh interrogation, but they overlooked the human questions.

Supreme Court proceedings on the legal challenges facing the Patient Protection and Affordable Care Act are over after three days of oral argumentation. But the Court commentary did not end with the proceedings. As the justices are likely to hand down their opinion in June, speculation is rife -- and varied -- on how the decision will lean. Until then, it is worth reflecting on this week's proceedings.

Given my youth, I am first concerned with what seems to be a kind of chasm between young people and the Court. At multiple points in the oral arguments, justices brought up hypothetical examples in which young people would be forced to pay for insurance when they otherwise wouldn't. The assumption here is that we are healthy, so we should not be required to pay the same premiums others must pay. This assumption bothers me in two ways.

Primarily, it is a myth that young folks like myself neither want nor need health insurance. Organizations like Young Invincibles and the Roosevelt Institute | Campus Network are frequently showcasing projects and findings that show the opposite. When we worked together to build and extend a health care toolkit to graduating college students, the response was always positive. If there are young people who don't want or need insurance, we haven't found them. Indeed, Young Invincibles just recently unveiled a their "Meet a Young Person" campaign to debunk these myths.

The second issue with this view of healthful indiscretion is that it mischaracterizes the relationship between health and health care. Often in legal challenges the opponents of health care reform will allege that people should not have to buy health insurance if they are properly healthy, by which it is usually meant these people eat a healthy diet, exercise frequently, and follow a balanced lifestyle. That is indeed a healthy lifestyle; no one would argue otherwise on this point. But the purpose of health care insurance is not redundant with a healthy lifestyle. Health can deteriorate despite good habits in all manner of ways, including accidents, unexpected or unknown conditions, and the loss of income requisite to remain sufficiently healthy. We don't enroll in health insurance solely because we are sick (though that can be the case), but because we recognize the realities of health.

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To extend this concern, my next issue with this week's proceedings is that this case was not about health. While Solicitor General Donald Verrilli, Jr. struggled to introduce the realities of health on the ground at the beginning of his argument Tuesday and the end of his arguments Wednesday, a series of questions from the bench and the structure of the oppositions' arguments shifted the discourse toward markets, insurance mechanisms, and legal questions of accountability rather than what it means for millions of Americans to gain previously denied coverage, medical counsel, and treatment.

In some sense this is not surprising. The proceedings are not set up to pull at the heartstrings of justices so much as they are to rigorously debate the conflicting obligations of law. Unless a clear line could be drawn from the human condition under the ACA to the questions of constitutionality, the Court is unlikely to turn on sympathy. For better or worse, the Supreme Court is not Court TV.

How this decision will come down is anyone's guess. Legal scholars and court watchers previously confident in their affirmative prospects for the ACA backtracked from their speculation after the unexpected level of skepticism displayed Tuesday. Those sure that the entire law would be struck down are now unsure given the Supreme Court's perceived hesitance to scour through 2,700 pages of legislation with a surgical scalpel. However the Court turns, we can be sure that this case has lived up to its coverage.

Rajiv Narayan is the Senior Fellow for Health Care Policy at the Roosevelt Institute | Campus Network and a graduating senior at the University of California, Davis.

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Watch the Court, Day 3: Health Care Reform's Goldilocks Dilemma

Mar 29, 2012Rajiv Narayan

health-care-money-150A final day of arguments that many expected to be purely hypothetical could decide the fate of the Affordable Care Act.

health-care-money-150A final day of arguments that many expected to be purely hypothetical could decide the fate of the Affordable Care Act.

On Wednesday, the last day of oral argumentation in the case against the Affordable Care Act, the Supreme Court once again brought Solicitor General Donald Verrilli, Jr. and former Solicitor General Paul Clement to the lectern for two oral arguments. The first part considered the legal question of severability -- what happens to the ACA if the individual mandate is struck down. The second part considered the legal question of whether the ACA's Medicaid expansion is unconstitutional.

The question of severability has garnered much more attention ever since Tuesday's oral argument. Had this case proceeded as court watchers expected, yesterday's arguments would likely have been perceived as after-the-fact hypothetical decision-making. But with the Court seemingly skeptical of the individual mandate, the third day of the proceedings was as critical as ever.

Clement took to the lectern to argue that an ACA without the individual mandate is no ACA at all. He reasoned that because parts of the law are so interconnected, this part falling necessitated the implosion of the entire legislation. His line of argumentation found it better for Congress to begin anew than to give it a mangled shell of a law to work with. While some justices expressed skepticism at this all-or-nothing take, it was Justice Kagan who asked explicitly, albeit rhetorically, "Isn't a half loaf better than no loaf?" From her analogy, it appears Justice Kagan believes in the ability of the ACA to grant at least some benefit worthy of keeping intact.

Justice Kagan (as well as other justices) also expressed concern that the Court would be overstepping its bounds to strike so many provisions that Congress could have passed without the individual mandate; she asked Clement why the task of sifting through the provisions worth keeping couldn't be left to Congress. This question becomes a key theme for the narrative of the ACA's supporters: if the law is too messy to take apart, it may be better to keep everything. This theme, in turn, gives those eager to sever the individual mandate some misgivings about the consequences. In answer, Clement argued that it is unlikely Congress will actually perform this task. Supporting Clement's response, Justice Scalia asked (also rhetorically) whether there was "such a thing as legislative inertia."

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H. Bartow Farr, another counsel brought into the oral argumentation, attempted to persuade the justices that the entirety of the ACA could survive if the individual mandate was struck down. Justice Scalia once again scrutinized clean severability and made the case that health insurance would collapse if the insurance companies lacked the premiums of healthy individuals to balance the risks and costs of the less healthy. Where Farr argued that there were other incentives to enroll the healthy to balance costs, some justices expressed further skepticism. What one could take away from the proceedings was a kind of Goldilocks dilemma: The justices do not seem to believe that the individual mandate can be struck down in isolation, but they also do not seem to buy the argument that the whole legislation must go. The charge of the Court, then, is to find out what is just right.

The second segment of oral arguments concerned the ACA's expansion of Medicaid.

Clement sought to ask and answer two questions in his argument: First, whether the Medicaid expansion is coercive, and second, whether that coercion matters. Right from the get-go Justice Kagan presented Clement with a hypothetical situation to zero in on his sense of coercion. When Clement said even a full gift of $10 million could potentially be coercive, Justice Kagan's flabbergasted response drew laughs from the crowd.

This exchange seemed to draw the line in the sand between Clement and Verrilli as they made their appeals to the bench. Where Clement was surgical in his defense of states' rights from the Medicaid expansion, Verrilli appealed to sympathy for the poor who would stand to benefit the most from the expansion.

Much of this segment centered around the theory of coercion -- the case in which the federal government places such burdensome conditions on taking its money that states are functionally forced into compliance. While Verrilli argued that this wasn't the case at hand, the debate took coercion as the key issue. But while coercion dominated the discussion, the discourse was not always in Clement's favor. Between hard-hitting hypotheticals from Justice Kagan and the heated exchange Clement shared with Justice Breyer over whether the statute applied strictly to formal coercion, the left side of the Court arrived at its main concern, expressed by Justice Sotomayor: A strong ruling in favor of Clement's petitioners would irreparably "tie the hands of the federal government" to enter into cooperative ventures with states.

If only because Justice Kennedy is so often the swing vote, his comments are worth noting. During Solicitor General Verrilli's time at the lectern, Justice Kennedy assumed coercion theory to be fact and asked who individuals in states could hold accountable if the state lost funding for its refusal to adopt provisions in the ACA. In some ways, the issue of blame here harkens back to Justice Sotomayor's concern. However, Justice Kennedy seemed not to be looking for a reason to strike down the law because the federal government would bear blame. Instead, Justice Kennedy seemed more concerned to find a "clear line of accountability so the citizen knows it's the federal or the state government should be held responsible for the program." This decision could turn on what Justice Kennedy finds to be proper in his view of federalism.

Rajiv Narayan is the Senior Fellow for Health Care Policy at the Roosevelt Institute | Campus Network and a graduating senior at the University of California, Davis.

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