Normally, when a president wins a big case at the Supreme Court, his administration takes an extended victory lap. That may be even truer when the vote breaks down in unexpected ways, as it did last Thursday on the court's decision to uphold the Affordable Care Act on a 5-4 vote with conservative Chief Justice Roberts siding with the liberals. Expectations had run high that the court would overturn the individual mandate at the core of the ACA, and perhaps the entire bill, based on the direction and tone that oral arguments took in March. Instead, President Obama scored a surprising and near-total victory. One would have expected to hear a lot of triumphal cheering from the West Wing.
Instead, the White House seemed to downplay the win. Obama gave a short statement a couple of hours after the decision came out, but otherwise remained quiet about his health-care plan. By Sunday, Obama's chief of staff Jack Lew insisted that Republicans needed to change the subject, and that voters had no interest in debating ObamaCare all over again.
Why stay so quiet? The answer is simple: While the decision represented a legal victory for ObamaCare, it also created a huge political liability for Obama and his hopes for re-election.
For years, Obama and his team insisted that the mandate at the core of ObamaCare was not a tax, but in a somewhat overlooked part of the oral arguments, Solicitor General Donald Verilli told the court that the mandate could actually be upheld as a tax, if the court was inclined to strike it as an overreach on the Commerce Clause. Chief Justice Roberts did exactly that, specifically rejecting the White House argument on the Commerce Clause and upholding the bill solely on the recognition of the mandate as a tax.
While the decision represented a legal victory for ObamaCare, it also created a huge political liability for Obama and his hopes for re-election.
Needless to say, that put Democrats like Lew and Nancy Pelosi on the defensive this weekend, rather than in a celebratory mood. At the same time, the decision fueled fundraising for Mitt Romney and Republicans all the way down the ticket. Romney and the RNC hauled in a combined $4.6 million in 24 hours from 47,000 online donors. President Obama had a tougher fundraising week. By Friday night, the incumbent was pleading with 2008 donors on a conference call conducted aboard Air Force One rather than celebrating his court win, begging for cash and warning that the GOP would be running Washington if his old donors didn't commit money immediately.
This whole issue puts Obama into a three-front war over ObamaCare, and takes away one of his best non-economic arguments. Here, three problems Obama faces after the ObamaCare ruling.
1. The return of the Tea Party
The Tea Party was born before Congress began debating the health-care overhaul in the summer of 2009, but the proposal galvanized the protests into a full-fledged movement. Until the court upheld ObamaCare, Tea Party activists had little reason to organize or donate on Romney's behalf, as they viewed him with distrust after his own health-care reforms in Massachusetts. But now, Tea Party activists have no way of getting rid of the ACA except by defeating Obama in November. Commentator and early Tea Party supporter Kevin McCullough told me that he has heard from every Tea Party group with which he's worked about the need to elect Romney, a big change from earlier in the year when some of these same groups threatened to sit out the 2012 elections if Romney won the GOP nomination. The Supreme Court's decision guarantees that the Tea Party will go from lukewarm to fired up.
2. The resistance of Republican governors
In a move that didn't garner much attention at first, Roberts' decision did overturn one key component of the ACA. Before the court's ruling, states that refused to comply with a Medicaid expansion that provides most of the coverage for the uninsured would have risked losing at least a significant part of their existing federal Medicaid funding. Roberts limited the penalty in the ACA to only the funds for the expansion — which means that states no longer pay a penalty for refusing to expand Medicaid.
Now that the federal government can't threaten to reduce base Medicaid funding in retaliation for refusing to enact the expansion, a number of Republican governors have announced that their states will not participate: Bobby Jindal of Louisiana, Rick Scott of Florida, Scott Walker of Wisconsin, and Rick Perry of Texas, among others.
The problem for Obama is that the refusal to use Medicaid to cover these lower-income workers will force them into the exchanges, where federal subsidy dollars will cover most of their health-insurance costs. This will make the costs of the subsidies skyrocket far higher than the projections used by Obama and Democrats during the ObamaCare debate. If any doubt existed that the ACA would bust the federal budget, that doubt will be immediately dispelled. Furthermore, the new cost projections will expose the cost-shifting onto the states used by ObamaCare advocates to hide the real price tag of Obama's reform.
3. The ire of the Catholic Church
Call this one the War of Choice in the health-care battles, irony fully intended. Obama took a powerful voting bloc that gave him a nine-point edge in 2008 and its Catholic bishop leaders that support universal health care, and turned them into bitter foes just months before the election. Had the court overturned ObamaCare, the HHS contraception mandate would have disappeared too, and with it the only reason for the U.S. Conference of Catholic Bishops to be politically engaged in this cycle.
Obama could solve this battle in a heartbeat by announcing an expansion of the religious exemption to religious-based organizations rather than just churches, a change that might affect only a few hundred thousand workers. His own First Lady made the Catholic bishops' argument in a speech to an AME Church conference, insisting that ministry and religious practice isn't limited to "the four walls of the church." Why not acknowledge the error and put an end to an unnecessary fight with potential supporters, not to mention an infringement on religious liberty by attempting to restrict the definition of religious expression? Obama picked the fight to impress single women, and even though it's not working, a retreat now might look even worse, and may be too late to solve the problem among Catholic voters.
Not only does Obama have to fight on these fronts, but another promising line of attack has vanished. In the run-up to the court decision, the progressive commentariat worked themselves into a lather about the supposedly radical nature of the Roberts Court. Democrats wanted to use the Supreme Court battle as yet another distraction from the economy, making the argument that Obama needed another four years to stop the Roberts Court from continuing its supposedly radical path. Instead, the decision gave that argument to Romney and the Republicans.
Without a doubt, Obama won a big legal fight on Thursday. His troubles have only begun, however, and the best way to understand that is to see how hard Obama and his allies are trying to change the subject.