Obama Threatens to Break 2008 Promise Not to Raise Taxes on Families

President Obama pledged during the 2008 campaign not to raise taxes on families earning less than $250,000, but his proposed health insurance mandate could count as a tax: The mandate is compulsory and substantially costly, although it is not paid to the government.

The liveliest topic on the Sunday shows: George Stephanopoulos' tussle with President Obama over the question whether a health insurance mandate counts as a tax. It's a fascinating definitional issue. On the one hand, the mandate is compulsory and substantially costly, which is tax-like, but it is not paid to the government. Because President Obama pledged during the 2008 campaign not to raise taxes on families earning less than $250,000, the mandate-tax issue offers a gratifying opportunity to trip him up.

That would be good sport. But question - sport aside, should Republicans oppose an individual mandate as a policy matter? (Actually not all Republicans do - the Healthy Americans Act sponsored by Utah Sen. Robert Bennett contains such a mandate.) There are two grounds for opposition: (1) the libertarian principle that people should not be required to do what they do not wish to do, and (2) the pragmatic concern that any mandate will likely imply higher subsidies to those Americans who cannot afford to pay the cost the law imposes on them.

As to (1), that battle was lost back in the 1980s, when hospitals were required to treat all comers, insured or not. It's not very libertarian to say that you have a right to eat all you want at the buffet, but no duty to pay the bill.

However, (2) is very concerning. The costs of subsidy were the main deterrent to a Republican healthcare reform in the years 2001-2007, when we held our majorities in Congress. Even Sen. Bennett's plan, deficit neutral over 10 years, showed heavy costs to the Treasury in the early years. With budget deficits already gaping, Republicans preferred to avoid another big immediate expense. On the other hand, it's not like we are not spending a lot of public money now. Medicare plus Medicaid plus veterans and Indian programs already cost more than $800 billion annually. Add the value of the exclusion from tax of employer-provided insurance, and healthcare costs the Treasury $1 trillion, not all of it spent in the most intelligent way. A mandate plus subsidies in the context of reforms aimed at cost control could well fulfill Sen Bennett's hopes to save money in the long term. This is not the issue where Republicans should be fighting in the last ditch.