The DOJ is wrong when it claims the ObamaCare mandate is a tax, says … Obama’s OMB chief

posted at 7:48 pm on February 15, 2012 by Allahpundit

Fun, fun, fun via Philip Klein as GOP Rep. Scott Garrett lays a trap and hapless Hopenchange budget director Jeffrey Zients walks right into it. Obama and his apparatchiks have been trying to have it both ways on this since long before O-Care was passed; watch the second clip below, from 2009, to see him battle Stephanopoulos for two minutes on the subject. For political reasons, O doesn’t want to be accused of having slapped a brand new tax on the middle class before the election, but he’s on much firmer ground constitutionally if he can argue that the mandate is an exercise of Congress’s taxing power. So we get this pitiful spectacle, in which he and his team insist to any reporter within earshot that the mandate’s not a tax while the DOJ turns around and tells the Supreme Court that it most assuredly is. (At least one federal appellate court agrees.) The logic is simple: You’re being compelled by the state to pay a sum towards a public purpose, i.e. defraying the cost of health care for the uninsured. But instead of collecting your money and giving you certain benefits in return (a.k.a. FICA and Medicare), the state lets you pay your “tax” to, and receive your coverage from, the private insurer of your choice. It’s a tax, but a tax over which you have a bit more control than you usually do. If Congress has the power to simply take your money and toss it in the Treasury, surely they also have the power to take it while giving you a little extra leeway over where it ends up — or so the argument goes. The counterargument is that if Congress can use its taxing power to steer your money directly to private insurers, then in theory it could force you to fork your money over to any number of congressionally-favored private-sector businesses for not-so-public purposes. Darn it, that’s not American. In America, when we want to let Congress shower cash on its cronies, we force them to collect the money themselves and then earmark the hell out of it.

I honestly don’t think it’ll hurt O all that much if the Supreme Court upholds O-Care on grounds that the mandate is a constitutionally valid tax. Winning that lawsuit is more important to him than having to defend the rationale; if it wasn’t, he wouldn’t have let the DOJ make the tax argument in the first place. If he wins, he’ll simply say that he disagrees with the Court’s interpretation of a “tax,” but in any event, it’s not a broad-based “tax” on the middle class but rather a targeted tax levied on people who don’t have insurance and who can afford to pay. In fact, if he wants to be really cagey, he could argue that it’s only because we now have the mandate that he doesn’t need to raise taxes on the general population in order to cover the uninsured. See? Our gigantic new health-care boondoggle is actually saving you money. Be grateful.


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Clueless and deceiving at the same time. Dangerous for freedom and liberty.

they lie on February 15, 2012 at 7:51 PM

It’s almost like they arbitrarily change their story on the basis of whatever happens to benefit them at that given moment…

thirtyandseven on February 15, 2012 at 7:53 PM

It all depends upon how taxing the definition of the word “tax” is …

ShainS on February 15, 2012 at 7:53 PM

Being taxes for doing nothing…
What a Country!

Electrongod on February 15, 2012 at 7:57 PM

Their incompetence is the only thing saving us from their malevolence.

rbj on February 15, 2012 at 7:57 PM

I heard some clips of this guy today on the radio. I almost felt sorry for him. He was so out of his depth it was sad.

Doomberg on February 15, 2012 at 7:57 PM

Will this be entered into evidence…?

Seven Percent Solution on February 15, 2012 at 7:58 PM

The Obama regime and Dems. are a whole lot better at propaganda and deception than were the Communists. Gulags may not even be necessary in their ruling party. Political correctness was the first major step to reeducation camps without having to put up the barbed wire.

they lie on February 15, 2012 at 7:58 PM

“The power to tax is the power to destroy.”

McCulloch v. Maryland, 17 U.S. 327 (1819).

Wethal on February 15, 2012 at 7:59 PM

Question for Scalia or Thomas to ask the administration’s lead lawyer:

“Your head of the Office of Management and Budget testified under oath before Congress that the mandate isn’t a tax. The president himself told ABC News that the mandate isn’t a tax. Why is the mandate suddenly a tax in your view?”

amerpundit on February 15, 2012 at 8:00 PM

Will this be entered into evidence…?

Seven Percent Solution on February 15, 2012 at 7:58 PM

Obama’s statement was put into evidence in the Florida challenge. The district judge referred to it in its opinion.

Wethal on February 15, 2012 at 8:01 PM

Someone ask Carney. “Jay, so the administration has argued to the Supremes that it is a tax, but your OMB director has said that it is not a tax, who is correct?” Tapper would do it I bet.

wte9 on February 15, 2012 at 8:01 PM

Huh?

good luck with this gotcha.

Set up two different analogies and expect the same answer?

Peshaw.

Your Gulp in the last thread could probably tied to stupid games like this.

55% by march 1st.

freshface on February 15, 2012 at 8:02 PM

“just words”

Mord on February 15, 2012 at 8:05 PM

55% by march 1st.

freshface on February 15, 2012 at 8:02 PM

Yeah, genius, the soaring cost of gasoline that is coming down the pike will surely garner more support for His Jugeared Oneness.

hillbillyjim on February 15, 2012 at 8:08 PM

Just in time for Oral Arguments in front of the SCOTUS. Another reason the contraception mandate was poor timing on Obama’s part.

Love it.

Ca97 on February 15, 2012 at 8:09 PM

The Court, in City of New York v. Feiring, 313 U.S. 283 (1941), established a test to be utilised in making the determination of whether an assessment is a tax or a penalty has been described as a four-part test incorporating the following criteria:

(1) an involuntary pecuniary burden, regardless of name, laid upon individuals or property; and,

(2) imposed by, or under authority of the legislature; and,

(3) for public purposes, including the purposes of defraying expenses of government or undertakings authorised by it; and,

(4) under the police or taxing power of the state.

The individual mandate is NOT a tax. The Obama administration CANNOT make the argument that the FDR administration relied upon (Taxing and Spending powers) when it argued for the constitutionality of Social Security. In Helvering v. Davis, 301 U.S. 619 (1937), the Court said that Congress had the authority to tax income to provide for Social Security BECAUSE IT WAS A TAX PAID TO THE GOVERNMENT. Blue Cross/Blue Shield is not an arm of the Federal government; thus, paying premiums to it CANNOT be viewed as a form of taxation.

The other argument that the administration has made concerns that monetary sum one must pay in the event he fails to obtain insurance. Most would call it a penalty. The Obamacare legislation does not have the section on the “penalty” in the revenue-raising section. It is no referred to as a tax, but the administration is arguing that it is a tax. So, the Court will have to decide whether it is a tax or a penalty. Fortunately, the precedent is not on the government’s side.

As the Court noted in a somewhat different context, “a tax is an enforced contribution to provide for the support of the government; a penalty…is an exaction imposed by statute imposed for an unlawful act.” United States v. La Franca, 282 U.S. 568, 571 (1931).

As the Court explained as recently as 1996 in United States v. Reorganized CF&I Fabricators of Utah, Inc., et al., 518 U.S. 213 (1996) distinguishing between taxes and penalties, “a tax is a pecuniary burden laid upon individuals or property for the purpose of supporting the government.” In contrast, the Court went on to say that, “if the concept of penalty means anything, it means punishment for an unlawful act or omission, and a punishment for an unlawful omission.” The Court could not have been more clear in enunciating the difference between a tax and a penalty. It would be very difficult to arrive at a better example of a penalty than the fine imposed on Americans for failing to purchase mandated and government-approved health insurance.

To be a constitutional tax, a levy must be an excise tax, an income tax, or a proportional capitation tax. The penalty is none of these.

Resist We Much on February 15, 2012 at 8:12 PM

Set up two different analogies and expect the same answer?

freshface on February 15, 2012 at 8:02 PM

Nice to know that the left considers the US Constitution nothing more than a word game.

pedestrian on February 15, 2012 at 8:12 PM

I am confused. I have a letter, an actual paper letter, from my congressional representative, Jay Inslee D – WA 01, who insists that Obamacare is constitutional under Congresses ability to tax.

So which is it?

AndrewsDad on February 15, 2012 at 8:16 PM

Every time I see this idiot’s face he reminds me of the new villain on Justified, Quarles from Detroit.

Mark1971 on February 15, 2012 at 8:16 PM

I hope that the legal team arguing against O-Care in front of the Supremes brings these snippets of double-talk up during oral arguments to ask O’s team which story is the one they want to stick to.

Bitter Clinger on February 15, 2012 at 8:19 PM

hillbillyjim on February 15, 2012 at 8:08 PM

You really think Obama is just going to sit back and let the gas companies hand the election to his opponents?

Lol

Every week you guys have a new savior.

pedestrian on February 15, 2012 at 8:12 PM

But it’s the gop playing the word games.

Oh, and this argument that everything you don’t agree with is unconstitutional is so freaking boring.

freshface on February 15, 2012 at 8:20 PM

I am confused. I have a letter, an actual paper letter, from my congressional representative, Jay Inslee D – WA 01, who insists that Obamacare is constitutional under Congresses ability to tax.

So which is it?

AndrewsDad on February 15, 2012 at 8:16 PM

It is NOT a tax. Perhaps, you should write Rep. Inslee and ask him when he became a Fascist since he, seemingly, is endorsing corporatism.

Unlike Social Security, where the government taxes and provides you a benefit, Obamacare mandates individuals enter into a contract with a third party, who is NOT a public entity, for the provision of a product. The government never collects a dime of the money. It never delivers one iota of product. Under all precedent, it cannot be a tax. It is a mandate, which is different.

Ironically, under current precedent, a single-payer system would be upheld as constitutional, but it will take serious legal gymnastics to uphold Obamacare.

Resist We Much on February 15, 2012 at 8:21 PM

The wise Latina and Darth Vader Ginsburg will completely understand and agree with this!

ConcealedKerry on February 15, 2012 at 8:28 PM

“You lie” was the truest thing ever told about this administration…to the Liar in Chief.

The fish rots from the head.

Schadenfreude on February 15, 2012 at 8:29 PM

Oh, and this argument that everything you don’t agree with is unconstitutional is so freaking boring.

freshface on February 15, 2012 at 8:20 PM

OK, well then, perhaps, you could help us out…along with the White House, the Department of Justice, the Congressional Budget Office and the Congressional Research Service … by citing JUST ONE example in the history of the United States where the Federal government mandated that all citizens enter into a third-party contract for the provision of a government-approved good or service as a condition of good citizenship. Just one.

Even the judges, who have upheld Obamacare, have been unable to cite one example and concede that this is an issue of first impression upon which the Court will have to make new law.

What I find more than boring is your feigned outrage during the Bush administration about how he was “shredding the Constitution” — I was standing along side of you — only to see you become a regular Darth Cheney now that a Democrat is in the White House killing Americans, demanding the power to indefinitely detain Americans without trial, making recess appointments when the Senate cannot possibly be in recess because of Article I, Section 5, starting wars for oil (Libya) on his own without any authorisation whatsoever from Congress, drones, Gitmo, quadrupling the deficit, filing amicus briefs that the government doesn’t need a search warrant to kick down a person’s door and search his home (Kentucky v. King), etc.

Yes, I find you “Obama-Firsters” disgusting hypocrites.

Resist We Much on February 15, 2012 at 8:30 PM

Zeintz’s sworn remarks that the fine is not a tax, no doubt, has already been included in an amended brief of our friends who are challenging Obamacare as unconstitutional. In the Supreme Court, it is one thing for a President to say something against interest in a TV interview, quite another for it to be said by his representative in Congressional testimony.

Kudos, Rep. Garret!!!

TXUS on February 15, 2012 at 8:30 PM

You really think Obama is just going to sit back and let the gas companies hand the election to his opponents?

Lol

There’s not a whole hell of a lot he can do about it. He could draw down our strategic reserve, which would be insane at this time, but that would only have a miniscule effect on the oil market.

hillbillyjim on February 15, 2012 at 8:33 PM

Why is it suddenly acceptable lately to use the term “TAX” ?
Since 2006 EVERYTHING ELSE has been called AN INVESTMENT!
Can’t use the word FEE either, can they!

KOOLAID2 on February 15, 2012 at 8:35 PM

To be a constitutional tax, a levy must be an excise tax, an income tax, or a proportional capitation tax. The penalty is none of these.

Resist We Much on February 15, 2012 at 8:12 PM

But to whom is the penalty paid? An insurer or the government? If you refuse to participate in Obamacare and refuse to pay the penalty, do the insurers come after you for payment, or is it enforced by the federal government through asset seizure, jail, or both?

BobMbx on February 15, 2012 at 8:35 PM

You could just see the oh sh.. moment in Jeffrey Zients’ eyes…this guy is what is wrong with the federal government.

d1carter on February 15, 2012 at 8:35 PM

Oh, and this argument that everything you don’t agree with is unconstitutional is so freaking boring.

freshface on February 15, 2012 at 8:20 PM

Your strawman is particularly boring.

hillbillyjim on February 15, 2012 at 8:36 PM

Some times you feel like a tax ; some times you don’t!

ProfShadow on February 15, 2012 at 8:37 PM

hillbillyjim on February 15, 2012 at 8:33 PM

He will demagog the hell out of them then threaten them with a windfall profit tax.

Maybe get Eric to launch a rico investigation or two.

You’ll see. He’ll let them go up and look like Batman when he forces them back down.

And you’ll be crying about what a tyrant he is. :)

freshface on February 15, 2012 at 8:38 PM

I’m curious whether this soundbite and/or transcript is now in the hands of every damn attorney bringing a suit on O care.

jersey taxpayer on February 15, 2012 at 8:42 PM

He will demagog the hell out of them then threaten them with a windfall profit tax.

Yeah, the House is going to start on that right away, I’m sure.

Maybe get Eric to launch a rico investigation or two.

Eric is too busy stonewalling Congress over F&F, and cannot afford any more overtly political missteps.

You’ll see. He’ll let them go up and look like Batman when he forces them back down.

He’ll LET them go up? MMMMkay. Keep telling yourself this little Batman theory. I hate to upset your applecart, but His Oneness isn’t an actual god, no matter how badly he and ye want to believe it.

And you’ll be crying about what a tyrant he is. :)

He is a wannabe tyrant; let me know the next time you see me crying about anything. :>P

hillbillyjim on February 15, 2012 at 8:46 PM

But to whom is the penalty paid? An insurer or the government? If you refuse to participate in Obamacare and refuse to pay the penalty, do the insurers come after you for payment, or is it enforced by the federal government through asset seizure, jail, or both?

BobMbx on February 15, 2012 at 8:35 PM

The penalty is paid to the government, but that doesn’t make it a tax. In fact, Congress did not think of it as a tax when it drafted Obamacare since the penalty is not dealt with in the revenue-raising section of the legislation with the taxes on tanning beds, medical devices, etc. It is addressed elsewhere.

Obamacare: Do Not Resuscitate

One other thing, the Court said in New Jersey v. Anderson, 203 U.S. 483 (1906) that it doesn’t matter what the government labels something. It is only a tax if it meets the Feiring test that I laid out above. A fine is not considered a tax. A penalty is not considered a tax.

Resist We Much on February 15, 2012 at 8:46 PM

Question for Scalia or Thomas to ask the administration’s lead lawyer:

“Your head of the Office of Management and Budget testified under oath before Congress that the mandate isn’t a tax. The president himself told ABC News that the mandate isn’t a tax. Why is the mandate suddenly a tax in your view?”

amerpundit on February 15, 2012 at 8:00 PM

This x 1000…

hillsoftx on February 15, 2012 at 8:48 PM

It is neither a tax nor a fine. It is simply a byproduct of Unicorn farts.

mouell on February 15, 2012 at 8:48 PM

Oh, and this argument that everything you don’t agree with is unconstitutional is so freaking boring.

freshface on February 15, 2012 at 8:20 PM

Obamacare is unconstitutional. If SCOTUS said that the Federal government claimed that they could outlaw gay marriage I would disagree. If the fed. forces the entire nation to buy insurance I also will disagree. It is not the federal governments job. Plain , simple ,and boring.

CW on February 15, 2012 at 8:53 PM

hillbillyjim on February 15, 2012 at 8:46 PM

LOL

He’s only a wanna be when you guys are called on your hyperbole.

I’m sure there are tons here who would disagree with your wanna be assertions.

After all he’s destroying America single handed.

BTW did you notice each of your answers relied on as much faith as mine, yet you think I have a hero complex.

It’s not a hero complex. It just practical forecasting based on how Obama has dances circles around you since 08.

And I can’t wait to see the arguments the GOP will use to protect the gouging oil companies.

freshface on February 15, 2012 at 8:56 PM

CW on February 15, 2012 at 8:53 PM

When you are asked to replace all the sitting justices your opinion on what is constitutional will be worth more than a fart in the wind.

freshface on February 15, 2012 at 8:58 PM

freshface on February 15, 2012 at 8:58 PM

Just because you are one of the dumbest phucks ever and oh so willing to give up so much to your BIG BROTHER does not make you right. Now go phuck yourself.

CW on February 15, 2012 at 9:23 PM

So what does Barry plan to do to me if I’m asked on my 1040 who my health insurance company is and I reply “None of your Damned Business Co.”?

GarandFan on February 15, 2012 at 9:33 PM

No, no, no…

Congress’ taxing power doesn’t give them the authority to raise revenue for any darn thing they want.

As with the often abused clauses of the Constitution, Congress can only rase revenue from the income tax to fund its enumerated powers. They can tax the bejeezus out of us for defense for example, but they can’t tax us for something that isn’t authorized under the constitution, i.e. Obamacare or even Social Security.

Charlemagne on February 15, 2012 at 9:44 PM

Don’t worry about this sock puppet.

He is told what to say.

Geithenr and Holder also reamin frustrated in testimony because they are told what to spin and say.

This poor sock puppet needs more practice.

seven on February 15, 2012 at 10:02 PM

It’s almost like they arbitrarily change their story on the basis of whatever happens to benefit them at that given moment…
thirtyandseven on February 15, 2012 at 7:53 PM

Whatda ya mean almost like?

DSchoen on February 15, 2012 at 10:24 PM

Okay, Scott does not look much at all like he did back in college. I’d walk right past him on the street. Dude needs to regrow his mustache. He looked better with one.

Meryl Yourish on February 15, 2012 at 10:29 PM

This isn’t new. To sell it to the public, they argue that it’s NOT a tax. To sell in the courts, they argue that it IS a tax.

They’ve been blatently lying about this for three years now and the LSM have given them a pass the whole way.

Tomolena1 on February 15, 2012 at 10:54 PM

The Obama Regime does not care in the slightest that they get caught lying about basically everything.

Why?

The Media Matters, democrat party controlled media will simply never call them on their endless deception.

The viewership of Alternative and New Media like Hot Air has a miniscule audience compared to the massive audience of Mainstream Media.

formerACLUmember on February 15, 2012 at 11:01 PM

The Obama Regime does not care in the slightest that they get caught lying about basically everything.

Why?

The Media Matters, democrat party controlled media will simply never call them on their endless deception.

The viewership of Alternative and New Media like Hot Air has a miniscule audience compared to the massive audience of Mainstream Media.

formerACLUmember on February 15, 2012 at 11:01 PM

Bingo—with emphasis on the first sentence. It is so bad I cannot even bear to rewatch his lies. I thought Carter and Clinton were bad, but this POS makes me want to throw my computer off the desk when I watch him spew his lies.

Renwaa on February 16, 2012 at 3:43 AM

To be a constitutional tax, a levy must be an excise tax, an income tax, or a proportional capitation tax. The penalty is none of these.

Resist We Much on February 15, 2012 at 8:12 PM

pretty much, it should be easy to argue it from this angle. A shame it even gets this far. The only thing that could stop this behemoth of federal governance might be an Andrew Jackson redux, even Coolidge might be a bit too non-forceful.

John Kettlewell on February 16, 2012 at 5:26 AM

Just do what this administration does for every situation. Just lie about your coverage. /s

44Magnum on February 16, 2012 at 9:15 AM

Dem on Dem. This is going to get ugly.

dczombie on February 16, 2012 at 9:27 AM

pretty much, it should be easy to argue it from this angle. A shame it even gets this far. The only thing that could stop this behemoth of federal governance might be an Andrew Jackson redux, even Coolidge might be a bit too non-forceful.

John Kettlewell on February 16, 2012 at 5:26 AM

The bill, in black and white, uses the word “penalty,” and not the word “tax.” The Zero administration will not be able to argue that away.

The SCOTUS cannot be dazzled with BS.

dogsoldier on February 16, 2012 at 9:39 AM

“Some times you feel like a tax ; some times you don’t!“

ProfShadow on February 15, 2012 at 8:37 PM

“You’ll wonder where the money went, with Obama as your President!”

AesopFan on February 16, 2012 at 1:52 PM