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Morning Jay: Obamacare in Trouble, Mitt in Iowa, and Pataki?

6:00 AM, Feb 4, 2011 • By JAY COST
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1. Make no mistake: Obamacare is in trouble. For the Patient Protection and Affordable Care Act to go fully into effect, two things need to happen. First, the Democrats need to hold the presidency and the Senate in 2012. According to Keith Hennessey, Republicans can repeal most of Obamacare via reconciliation -- irony alert! -- meaning that the Dems have to keep their losses to three or fewer in the Senate. Second, they need the law to be upheld by the Supreme Court. These two events are independent of each other, which enables us to get a sense of the probability that the law will ultimately be implemented (largely as it's currently structured).

Morning Jay: Obamacare in Trouble, Mitt in Iowa, and Pataki?

Regarding the 2012 election, right now, InTrade has Obama's reelection trading around 60, which seems to me to be a pretty reasonable assessment. Let's also assume that as goes the presidency, so goes the whole Congress. Again, pretty reasonable.

What about the chances that Obamacare gets overturned by the Supreme Court? In a November conversation with ReasonTV, University of Chicago law professor Richard Epstein noted the cleverness of the constitutional challenge, which is primarily directed against the individual mandate. First, it attacks Obamacare without threatening existing, and broadly popular, social welfare programs like Medicare and Social Security. The Supreme Court could strike down Obamacare without striking down any other major piece of social welfare legislation. Second, it puts the government on the defensive, as it has to explain how accepting the individual mandate does not result in an unlimited grant of power to the Congress. As Epstein puts it: "If you can force us to buy $2,000 because there’s a coordination problem and a free rider problem, why can’t you force us to brush our teeth three times a day, to have certain kinds of balanced diets, do exercise – and it turns out you get yourself a totalitarian state." This is a very serious Commerce Clause argument, which Judge Vinson accepted in his recent ruling on Obamacare.

Back in November, Epstein was willing to give the challenge a 20-25 percent success rate, but he also suggested that the odds would increase over time as the unpopularity of the plan becomes more evident. Recently, in an interview with Peter Robinson, Epstein said that the battle in the courts would be a "horse race." So, let's assume that there's now a 25 percent chance Obamacare gets overturned by the Court, and thus a 75 percent chance that it's affirmed.

That gives us a simple probability estimate of the odds that the bill actually gets implemented when it's all said and done: 60 percent X 75 percent = 45 percent. In other words, if you take InTrade and Epstein as accurate, at this point you'd have to conclude that the odds of implementation are about the same as, if not a little worse than, the odds of non-implementation.

The lesson in all this? It's simply not enough to get a big bill passed. You have to build a broad consensus in support of the proposition that the law is beneficial and constitutional. A one-off, outsized majority full of Northern, liberal Democrats is insufficient to force major changes on a policy area as important as health care.

2. Mitt Will Go To Iowa. An interesting exchange between Mitt Romney and Hugh Hewitt on the former's political strategy "should" he decide to run:

Hewitt: The National Journal’s got a story out that if you run, you’re going to skip Iowa because John Thune’s from South Dakota, Tim Pawlenty’s from Minnesota, they’re neighbors, and you know, you didn’t win last time, so there’s no upside. Even if you finish third or fourth, you’ll get blasted. What’s your response? If you run, will you be competing for votes in Iowa?

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