By upholding Obamacare, the Chief Justice has given Republicans a legal framework to support privatizing Social Security and Medicare.
Many are saying Chief Justice Robert's decision to sustain Obamacare was designed to preserve the long-term political capital of the Court. I think he simply made the decision he ultimately decided was right on the tax issue, which the precedent strongly supported. But to the extent a long-term political angle may have subconsciously motivated him, there is a large one that commentators have so far missed.
The unseen long game is that sustaining Obamacare as a tax helps preserve the Republicans' ability to adopt two items on their own political wish list: the Paul Ryan plan to privatize Medicare and George W. Bush's plan to privatize Social Security.
Consider the Ryan plan. It would convert Medicare into a voucher that seniors could use toward buying medical insurance from either Medicare or private insurers. The voucher amount would equal the cost of the second-cheapest plan, so if traditional Medicare is not one of the two cheapest plans, individuals would have to buy a private plan to avoid paying extra.
In short, under the Ryan plan, Medicare would become a mandate to make contributions into a Medicare trust that you would later draw from to buy yourself medical insurance, which could be from a private insurer, and might have to be so in order to avoid paying a penalty. This looks a lot like Obamacare's mandate to buy yourself medical insurance. There are two seeming differences, but neither is telling.
First, under the Ryan plan, the government would hold the mandatory contribution as a middleman. But it is hard to see why that should make a difference given that the Ryan plan requires the government to hold at least some of that money in trust for you, and you get to direct which insurer receives it. Nor does this feature distinguish Obamacare, under which government exchanges will also hold mandated contributions as a middleman for many people.
Second, under the Ryan plan, individuals can use their mandatory contributions to buy their insurance from a public provider. But that is the very public option that Republicans refused to allow in Obamacare, so it would seem odd to say that such a public option is constitutionally required. Nor does adding such a public option lessen any concern with mandating the purchase of insurance. No one argued that the feared "broccoli mandate" would have been fine if one had the option to buy that broccoli from a government store.
So, if Roberts had held that Obamacare was an unconstitutional mandate that could not be sustained under the taxing power, that would have created a serious risk that some later court would say the same about the Ryan plan. The same risk would have also imperiled any revival of the Bush plan, which effectively converts Social Security into an individual mandate to invest your Social Security contributions into a private retirement plan.
True, the Ryan and revived Bush plans could have tried to avoid this risk by using the word "tax" over and over to describe our mandatory contributions to their plans. But the one thing that is crystal clear from the tax power case-law is that it relies on function, not labels, to decide what counts as a tax.
So Roberts could have held Obamacare outside the taxing power only if he held that functionally it could not be treated as a tax. If so, then the Ryan or Bush plans are even less like a tax (no matter what label they bear) because if you don't make your required Medicare or Social Security contributions, you are subject to the full panoply of coercive IRS penalties, including criminal punishment. In contrast, Obamacare merely requires those with significant earned income to either obtain insurance or pay a small tax.
Maybe Roberts was not thinking about any of this. But a traditional judicial tool involves considering how any holding would affect a range of future possible cases. So this possibility strikes me as far more plausible than imaging he caved to political pressure, especially since Obamacare has (so far) not been that popular with the public anyway.
Whatever Roberts was thinking, one important effect of his decision is to preserve our nation's flexibility to try these sort of mixed public-private approaches, rather than being limited to only statist solutions to our national problems.
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