Why the Senate is baking Obamacare repeal into tax reform

Nov. 22--Now that Donald Trump is the president of the United States, a lot of Americans are reading the Constitution with a magnifying glass to find something in it that limits the power of the president.

For example, there recently was a Senate hearing on whether the president has the power to order a nuclear attack. He does, of course, but not on Twitter. There are safeguards in place.

You don't really need a magnifying glass to find the part of the Constitution that limits the power of the president, or the power of the federal government. It's the entire document. The whole thing is about what the federal government -- and everybody in it -- is allowed to do. Everything that's not in the document, they're not allowed to do.

That's a bit of a simplification, but not as much as you might think. Here's a short history of the Constitution: the states existed first; the states agreed to give some powers to a new federal government; all powers not delegated to the federal government remained with the states.

After the Civil War, the Fourteenth Amendment gave the federal government the power to force the states to protect due process of law and the equal protection of the laws for all persons. Most of the rest of the power that the federal government has today could be characterized as "mission creep" -- the tendency of a project or mission to expand beyond its original goals, generally continuing to expand until it hits a catastrophic failure.

And that brings us to Obamacare.

There was always a question about whether the federal government actually had the power under the Constitution to require people to buy health insurance and to force them to pay a penalty if they refused. The question was answered in the affirmative by the U.S. Supreme Court, when Chief Justice John Roberts decided to call the penalty a tax. The federal government has the power to levy taxes, so that worked around the problem.

It also set the stage for the repeal of Obamacare to be part of the tax-reform bill currently under consideration in the U.S. Senate.

The next logical question, if the penalty for not buying health insurance is a tax, is whether the tax unfairly targets the poor. Republicans are asking that right now. Their answer is yes, the individual mandate -- and the penalty for not buying insurance -- is hammering lower-income people.

Sen. John Cornyn, R-Texas, said recently that "about half of the people who pay the penalty under the individual mandate are people who make $25,000 or less."

That's based on tax returns from 2014 and 2015. Over 8 million people paid a penalty in 2014, the first year that penalties were assessed for being uninsured. The number dropped a little to 6.7 million in 2015. About 42 percent of those 15 million people had an adjusted gross income (after exemptions and deductions) of less than $25,000.

But the law is so confusing that it's hard to say how many people had to pay the penalty. In 2015, 7.8 million tax returns were sent in without any insurance information, so nobody knows whether those people owed a penalty or not. And some people paid a penalty without realizing that they qualified for an exemption from it -- about 313,000 low-income taxpayers in 2015, by the IRS' own estimate.

Higher income taxpayers qualify for an exemption, too, if they make more than four times the poverty rate -- too much to qualify for a subsidy -- but not enough to afford the least-expensive health insurance plan in their area.

The force of government sets all these numbers -- the penalties, the poverty rate, the subsidies and the affordability calculations.

The Affordable Care Act didn't only require Americans to buy health insurance, it specified the kinds of coverage that the policies had to include. Nothing's free, so the cost of that mandated coverage was reflected in higher premiums, deductibles and co-payments. With higher premiums, more people qualify for subsidies. Taxpayers are on the hook, no matter how much it costs.

The government is deciding what people are allowed to buy, what they will be forced to buy, and how much they will be forced to pay for it.

With a magnifying glass or without one, you won't find any authorization in the U.S. Constitution for any of that.

Free countries limit the power of government. That's because freedom is defined by what other people can't do to you, even with the best intentions.

Susan Shelley is a columnist for the Southern California News Group. Reach her at [email protected] and follow her on Twitter: @Susan_Shelley.

___

(c)2017 The Orange County Register (Santa Ana, Calif.)

Visit The Orange County Register (Santa Ana, Calif.) at www.ocregister.com

Distributed by Tribune Content Agency, LLC.