Business leaders are ambivalent about the massive health reform law the Supreme Court has now upheld. Some oppose its intrusive reach into the healthcare system. Others recognize the legitimate problems it's meant to address, and support the effort to insure more Americans.
But there's one thing business leaders generally believe in unison: Congress needs to get its act together. If it doesn't, the biggest danger to the economy will be chronic dysfunction in Washington.
Congress already faces a daunting challenge come the end of the year when a combination of tax hikes and spending cuts scheduled to go into effect could trigger another recession. Congress could have addressed all those issues long ago, but in today's spirit of confrontation and recklessness, it chose to wait until the last second. So a "fiscal cliff" looms. If Congress fails to forestall some of those austerity measures, it could turn a growing economy into a shrinking one, overnight.
Concern about what Congress will end up doing, or not doing, is already beginning to show up in data such as declining business confidence, slowing orders, and reduced hiring. Now, the Supreme Court ruling adds to an already complicated end-of-year agenda. And by raising the stakes in the November elections, it all but assures that Congress won't get anything meaningful done before then.
Republican House Speaker John Boehner has already pledged to work on repealing Obamacare, a movement that could gain strength among conservatives in the aftermath of the court's ruling. A House vote on repeal is likely in mid July, and Senate Minority Leader Mitch McConnell has pledged action there, too. A flurry of repeal efforts will complicate the must-do agenda of economic issues that business leaders want to see addressed promptly. And if Republicans gain Congressional seats—or the White House—in the upcoming elections, the repeal of Obamacare could easily become the dominant legislative push of the next Congress, to the detriment of economic priorities such as reforming the tax code, dealing with the national debt and coming up with new ways to generate jobs.
There's also a new tax on those who earn more than $200,000 per year ($250,000 for couples) that will now go into effect on January 1, 2013, as part of the health reform law. The court could have struck that down, but with it still in effect, Republicans who are opposed to all tax increases will have one more matter to pile on top of their lame-duck to do list.
"The Court's decision adds to the challenges that Congress will face at year end," says tax expert Clint Stretch, formerly of Deloitte Tax.
Business leaders already have weak faith in Washington politicians when it comes to the economy. The court outcome gives Congress one more thing to fight about. That's the last thing the economy needs right now.
Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.