POLITICS

OMB director undercuts legal case for Obamacare

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Politics,Beltway Confidential,Philip Klein

Testifying before Congress this morning, President Obama's acting budget director Jeffrey Zients directly undercut one of the administration's key legal defenses of its national health care law as it nears a hearing before the Supreme Court.

In a hearing of the House Budget Committee Rep. Scott Garrett, R-N.J., pressed Zients on whether the penalty that the health care law imposes on individuals who do not purchase health insurance constitutes a tax. Eventually, Zients said it did not.

But this directly contradicts one of the arguments the Obama administration is making before the Supreme Court in defense of the health care law, which is that the mandate is Constitutional because it's a tax and government has taxing power.

This has always been a tricky argument for the Obama administration, because admitting that the mandate is a tax means that Obama violated his pledge not to raise taxes on those earning less than $250,000. In September 2009, Obama told ABC's George Stephanapoulos that the mandate was not a tax. But by the following June, his administration was arguing in court that it was.

Now the administration is making both arguments simultaneously. Before Congress, Zients is arguing that it is not a tax. But before the Supreme Court next month, the administration will argue that it is, in fact, a tax.

"The practical operation of the minimum coverage provision is as a tax law," reads the administration's Supreme Court brief filed last month. "It is fully integrated into the tax system, will raise substantial revenue, and triggers only tax consequences for non-compliance."

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