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The Supreme Court Could Burn Down Obamacare In Order To Save It (Forbes.com) January 13, 2014

Posted by daviddavenport in Newspaper Columns/Essays, Op/Eds.
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Few recall that after the opening 100 days of the New Deal–when Franklin Roosevelt and the Congress ran a prolific two-minute offense passing bills, creating an alphabet soup of new government agencies and spending money in an effort to counter the Great Depression—the U.S. Supreme Court did everyone a big favor by declaring the centerpiece of it all to be unconstitutional. Oh, it didn’t seem like a favor to Roosevelt and his allies when the Court said a key part of the National Industrial Recovery Act was an unconstitutional overreach of federal power. In fact, Roosevelt was so angry about it that he initiated his ill-fated plan to pack the Court with new justices.

But looking back, most historians and economists agree that stopping the NIRA was a very good thing, indeed. Not only was it a vague and excessive delegation of power over private markets to the federal government, but it was bad economic policy to boot. It mistakenly treated falling prices as a cause, not effect, of the economic crisis and tried to address it with cartels to regulate outputs and prices, creating a huge bureaucracy to do so. As Amity Shlaes points out in her book, The Forgotten Man, in a year some 10,000 pages of federal regulations had been created under the NIRA, more than doubling the entire federal canon since the Founding. The bill was developed haphazardly and, by all accounts, it needed to be killed somehow. The Court provided a convenient way out.

Funny, but it sounds like a history that should repeat itself now with Obamacare. You know, the 2000-page bill that House leader Nancy Pelosi said, in classic Washington doublespeak, we had to pass so we could read what’s in it? The bill that has generated so much regulation that Obamacare chief Kathleen Sebelius couldn’t tally it up in testimony last month (turns out it is 10,000 pages, like FDR’s NIRA). The bill that, despite promises you could keep your own policies and doctors, ended up rendering millions of health plans illegal, destroying more health insurance than it created, at least in the early going. A law that has never been popular and grows less so every time it is polled.

My point is that, just as FDR could not see or politically afford to acknowledge the serious problems of the NIRA and received a huge favor when the Court declared it unconstitutional, we are in the same position today with respect to Obamacare. The NIRA at least had bipartisan support, but Obamacare was famously passed on a one-party vote and, rather than taking a surgical approach to fixing problems of healthcare policy, it undertook an extreme makeover (federal takeover) of healthcare. It has been beset by constant problems of implementation. You can hardly get through the website to buy it and, when you do, you find the price is much higher than you expected. So far it has managed to disappoint almost everyone.

The good news is that there are still court challenges out there that could undo it. The most promising challenge started in Oklahoma, but is now being brought in federal courts in 4 states, pointing out that buried in that language Nancy Pelosi and her colleagues did not read was a provision that federal subsidies for healthcare are only available where there are state health exchanges. Since 34 states declined to create their own exchanges, leaving their citizens on the federal exchange, most people would not be eligible for subsidies, which is crucial to Obamacare’s main priority, providing universal coverage. Nor would employers and individuals be subjected to related fines, which is a key part of the financing of Obamacare. The IRS, in a remarkable overreach, attempted to fix this by writing a regulation that ignored the plain wording of the law, all of which is now under court challenge. This seemingly small problem of wording, in fact could not be bigger for the future of Obamacare. As the first challenger, Oklahoma Attorney General Scott Pruitt put it, the Affordable Care Act would “crumble” if this court challenge is upheld.

If you’re old enough to remember the Vietnam war, you’ll recall the legendary, some say mythical, statement by a military officer: “we had to destroy the village in order to save it.” Like Roosevelt’s NIRA, Obama’s ACA may only be rescued if a court stops it cold and cooler, more deliberate heads work much more diligently on the smaller-scale, tailored and blended public/private approaches that could, in fact, improve the healthcare system.

Link to Forbes.com article: http://www.forbes.com/sites/daviddavenport/2014/01/13/the-supreme-court-could-burn-down-obamacare-in-order-to-save-it/

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