Hudsons' Healthcare Ruling Could be Obamacare's Death Knell

First it was the tax cut deal, now it's Judge Henry Hudson's ruling on the president's healthcare program.

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It is no longer news to say that President Obama seldom seems to catch a break. It is equally true that the few he gets soon become eclipsed by the unforeseen and the unexpected.

Last week, Obama seemed to have resolved a two year dispute with Republicans over whether to allow the “Bush tax cuts” to remain in place and for whom. (Republicans wanted them renewed for everyone; Obama favored extending the lower rates to all but the upper 2 percent of all earners.) The stalemate ended with the GOP getting what it most wanted; extending unemployment benefits for another 18 months, a must for Democrats; activists on both sides of the political spectrum upset; and assurances that the great tax wars will resume in two years. Only in Washington are results such as this called “compromise.” [Read 10 Things You Didn't Know About the Bush Tax Cuts. ]

Be that as it may, the deal no one seemed to like was proclaimed to have paved the way for subsequent cooperation between the two sides. Obama was said to have needed the tax fight behind him if he had any hope of passing some of his other priorities, such as START treaty, repeal of “don’t ask, don’t tell,” and the “Dream Act,” and turn his attention to “real tax reform” (assuring both fewer loopholes and tax brackets). [Read the U.S. News debate: Should the U.S. ratify the New START treaty?]

Then, not exactly out of nowhere, but not entirely unexpected, came Federal Judge Henry E. Hudson’s ruling that a major provision (perhaps the major provision) in the healthcare bill Obama signed into law might be unconstitutional. At issue is the mandate that those without healthcare coverage either purchase it at their own expense, or pay a fine. Obamacare, as the Commonwealth of Virginia and Judge Hudson point out, marks the first time when the federal government mandates that citizens purchase a product. (States mandate that all licensed motorists obtain car insurance.) Judge Hudson also found the fine that Obamacare imposes for non-compliance is the equivalent of a tax. (The Constitution forbids the federal government from imposing direct taxes on persons. Ergo the need for the 16th Amendment, which allowed for the income tax.)

Hudson’s ruling, if sustained at higher levels, could prove the death knell to a program for which the president invested so much of his political capital for the first half of his term. For it is what Obama calls fees or fines--and what the judge calls taxes--that are to pay the costs of extended coverage to the presently uninsured. Obama and his team continually had difficulty deciding how to achieve two contradictory goals simultaneously: universal coverage and cost containment. They thought they had found it with a new money stream and adverse Supreme Court ruling might put in jeopardy.

[See photots of the Obamas behind the scenes.]

As has become its default reaction to what catches it by surprise, the administration appears unphased and unconcerned. Its spokesmen’s reactions boil down to two understatements: 1) that this is the opinion of only one judge; and 2) and that even that judge would strike but one provision of the bill. Puzzling is the way the administration thinks it a good thing that the Virginia’s challenge to the law, whose major provisions do not kick in until 2014, will probably not be short-circuited and sent directly to the Supreme Court. Does it really want a prolonged battle, in which an issue it regards is long settled, as the prospect of seeing its landmark achievement unearthed appears more of a possibility with each passing day?

Already, Obama’s critics on the left, already upset over the administration’s perceived “cave-in” to the GOP on taxes, are pressing Obama to save the program by embracing the public option, an alternative he previously bargained away. Republicans, lacking either the votes in both houses to “repeal and replace” Obamacare or to override a veto, had considered withholding funding for the program. Now, they wonder, whether the courts will do their work for them. [See editorial cartoons on healthcare.]

On both sides of Capitol Hill, in both party caucuses in both legislative chambers, and, especially in the White House, Judge Hudson’s ruling roared in like the cat the principals thought they had finally rid from their backyard. And what a mean cat this one has turned out to be.

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