Chris Christie should veto Obamacare exchange

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Politics,Beltway Confidential,Philip Klein

Gov. Chris Christie has a choice today: he can veto a bill to set up Obamacare exchanges in New Jersey, or he could do nothing, in which case the exchange legislation would become law and his state will begin to implement Obamacare. 

President Obama's national health care law puts governors in a bind -- if they don't create subsidized insurance exchanges at the state level, then the federal government will step in and create them anyway. This is a possibility that governors want to avoid.

But as Cato's Michael Cannon explains:

Supporters warn that if Trenton doesn’t create an exchange for New Jersey, the feds will. But so what? Obamacare gives federal bureaucrats a chokehold on New Jersey’s health insurance markets no matter who runs the exchange, because it requires state-run exchanges to do everything a federal exchange would do. Obamacare has already stripped New Jersey of its sovereignty. The only question is, should New Jersey also pay for the privilege?

The bill before Christie would also subject the state to a second unnecessary tax: Obamacare’s employer mandate. If employers fail to offer a government-defined package of health benefits, Obamacare whacks them with a tax of up to $3,000 per employee. When you tax hiring, you get fewer jobs.

Due to an odd quirk in Obamacare, however, that tax is only enforceable if a state creates an exchange itself. It disappears in states that don’t create exchanges. What that means is that even though Trenton has the power to block the employer mandate, state legislators are actively trying to subject New Jersey employers to Obamacare’s nastiest tax.

Even if Christie prefers to set up an exchange for New Jersey, there's no rush to do it now, because it wouldn't have to be operable until 2014. A Supreme Court decision next month could strike down Obamacare and if not, if Mitt Romney is elected in November with a Republican Senate and House, it could be repealed next year. So why bother spending money now that New Jersey might not need to?  If it turns out that the Supreme Court upholds Obamacare and Obama is reelected in November, Christie would have more of an excuse for setting up the exchanges. But doing so while there's still hope of stopping Obamacare only creates facts on the ground that make the law seem like a fait acompli, undermining repeal efforts. 

UPDATE: Christie just vetoed the bill. Good for him.

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