John Roberts: Most Valuable ‘Umpire’

John Roberts promised in 2005 to take the Supreme Court’s helm as a pragmatist. He was going to be an umpire, using the Constitution to call the balls and strikes of the American legal system. He was not going to throw and hit baseballs around the diamond, win a World Series ring, or be named Most Valuable Player. But the man who George W. Bush appointed to succeed former Chief Justice William Rehnquist got his nation’s spotlight on Thursday.

The 57-year-old Roberts has long been considered the Court’s conservative ideologue. He once clerked for Rehnquist, worked in the White House counsel’s office under President Reagan, served as George H.W. Bush’s deputy solicitor general, and later became a federal appeals court judge. He opposes abortion and affirmative action, and he deregulated campaign finance reform, ruling in favor of Citizens United two years ago.

But for the court who needed five votes to uphold the constitutionality of President Barack Obama’s signature Affordable Care Act, he was number five. Roberts’s court reviewed four clauses prior to Thursday’s ruling – the constitutionality of the individual mandate to purchase health insurance, the impact of expanding Medicaid on each of the fifty states, whether any or all parts of the law must be rejected if the mandate is turned down, and whether all these questions can be reviewed before the mandate takes form in 2014. His ruling that the law’s individual mandate was permissible as a tax pleasantly surprised liberals who had predicted him to declare the very opposite, while also pleasing those in his conservative base seeking to do away with the Commerce Clause.

“The Affordable Care Act is constitutional in part and unconstitutional in part,” Roberts wrote in a 59-page opinion released Thursday morning. “It is reasonable to con­strue what Congress has done as increasing taxes on those who have a certain amount of income, but choose to go without health insurance. Such legislation is within Con­gress’s power to tax.”

Advocates of the act call the mandate crucial in expanding health coverage nationwide to roughly 31 million Americans. And starting in 2015, those who refuse to purchase health insurance will be taxed extra.

Here are some key elements to Thursday’s Supreme Court majority ruling, collectively issued by Roberts, along with Justices Stephen Breyer, Ruth Bader Ginsburg, Elena Kagan, and Sonia Sotomayor:

Although the breadth of Congress’s power to tax is greater than its power to regulate commerce, the taxing power does not give Congress the same degree of control over individual behavior. Once we recognize that Congress may regulate a particular decision under the Commerce Clause, the Federal Government can bring its full weight to bear. Congress may simply command individuals to do as it directs…

But imposition of a tax nonetheless leaves an individual with a lawful choice to do or not do a certain act, so long as he is willing to pay a tax levied on that choice…

The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.

The Supreme Court’s majority ruling has not gone without its opposition. According to Talking Points Memo, a photo caption on Roberts’s Wikipedia page was briefly changed to “17th Chief Traitor of the United States” just after the decision was announced. Republican Congressman Jack Kingston of Georgia tweeted Thursday that he no longer considers the Chief Justice a friend:

The four justices who called the act unconstitutional, Antonin Scalia, Clarence Thomas and Samuel Alito Jr., and Anthony Kennedy, called the ruling a “vast judicial overreaching.” The Republican-appointed justices added that it “creates a debilitated, inoperable version of health care regulation that Congress did not enact and the public does not expect.”

But nearly a majority of Americans have not been expecting much from their nation’s highest court lately. Nearly 52 percent of Americans view the Supreme Court favorably, according to a recent Pew survey. That statistic was at 80 percent as recently as 1994, but the court’s Bush v. Gore ruling in 2000 was seen as the centerpiece of its partisan leanings.

Roberts and his fellow justices often insist that they ignore the see-saw dynamics of national politics, stating that they are instead focused on upholding the country’s oldest laws. But that has not likely stopped the Chief Justice from weighing the partisan implications of each possible outcome against one another. Roberts knew how liberals and conservatives would view him following the momentous decision, and nobody aside from the man himself will ever know if such considerations affected his ruling.

Timothy S. Jost, a Washington and Lee University law professor, told Talking Points Memo that politics could have played at least a minor role in the Chief Justice’s ruling. “A lot of people really believe that the Supreme Court is a super-legislature that decides things on political rather than legal grounds. This would be an opportunity for the chief justice to say, ‘No, we’re going to defer to Congress on major issues and only strike down laws that are clearly unconstitutional.’”

The long-term impacts of the Affordable Care Act are years in the making. And in between Thursday’s ruling and the time the act takes full effect, Roberts will make more decisions that will upset both of Washington’s aisles. But the Chief Justice’s one-time Harvard law professor, Laurence H. Tribe, told The New York Times that Roberts will keep his eyes on the ball:

“This could be a huge day in the evolution of Chief Justice Roberts as a great chief justice,” Tribe said. “I have some sense of gratification.”


SCOTUS Healthcare Ruling Will Echo With Obama and Romney, Not With Voters

Barack Obama moved into the White House three-and-a-half years ago hoping to use his knowledge in constitutional law to reform the American healthcare system. Seven presidents before him had the same exact dream but failed to make it a reality. But the former University of Chicago law professor insisted that his Affordable Healthcare Act would be different, adding that it would address some of the nation’s most pressing statistics. Approximately 50 million Americans went without medical coverage as recently as two years ago. Many of the businesses who once offered employees health benefits are no longer providing such services. And those who have health insurance face costs that have risen tenfold since 1980. The President told ABC’s Charles Gibson three years ago that healthcare will soon become less of a nationwide worry and that his act, which Congress had just recently passed, “will be the single most important piece of domestic legislation passed since Social Security.”

The Supreme Court will announce on Thursday morning whether or not it finds the Affordable Care Act fully or partially constitutional. Justices could uphold the law, strike it down fully, or eliminate specific clauses, such as Medicaid expansion, the individual health coverage mandate, and protections for those with pre-existing conditions. Regardless of outcome, Democrats and Republicans alike will quickly publicize their own talking points in a predictable effort to boost their respective presidential candidates’ credibility. But while the healthcare debate is an easy, reliable way for both Obama and challenger Mitt Romney to wrangle in their partisan bases, the issue is hardly a concern for most voters.

Only six percent of Americans consider healthcare the defining issue of this year’s campaign, according to a recent Gallup survey. Four other issues – the economy, unemployment, inaction in Washington, and the budget deficit – took more precedent among voters. Obama’s recent support of gay marriage affected him little in the polls, and the dent following the success or defeat of his healthcare law will probably be just as miniscule in this year’s race.

But those on both sides of the campaign trail will still remind voters that since the “Obamacare” debate played a key role in many congressional elections two years ago, it still has a chance to impact the vote this time around. Five of the nine justices were nominated by Republican presidents, so if the law is fully upheld, chances are that the Obama campaign will praise the decision as a bi-partisan effort. But if the court rejects any or all parts of the act, Team Romney will likely stress that the President spent nearly his entire term passing an unconstitutional law when he could have instead focused on restoring the economy.

“If Obamacare is not deemed constitutional, then the first three-and-a-half years of this president’s term will have been wasted on something that has not helped the American people,” Romney told a crowd of supporters in Salem, Virginia on Tuesday. “If it is deemed to stand, then I’ll tell you one thing: We’re going to have to have a president, and I’m that one, that’s going to get rid of Obamacare. We’re going to stop it on Day 1.”

Former Senate Majority Leader Tom Daschle (D-ND) was Obama’s initial selection for health and human services secretary. He told The Washington Post last week, “It will be heavily politicized, regardless of whatever decision the court makes. It will be overstated, exaggerated.”

Regardless of how urgently Obama, Romney, and their supporters repeat their messages about healthcare, the issue cannot and will not be a determining factor in this year’s presidential election. White House campaigns typically have more diverse fundraising sources than low-profile congressional races and must satisfy several interest pockets in order to gain ground. There are simply too many concerns at stake and too many lobbyists to please.

The healthcare decision will rather affect policymakers on the congressional level. If the Supreme Court does not repeal the act completely, Democrats will try salvaging what they do have. Republicans will hurriedly formulate an alternative solution to Obamacare, despite it still being a point of party-wide contention.

“As I, Leader Cantor, Whip McCarthy and other leaders have made clear in recent days, the House will act in the coming weeks on legislation to repeal any part of Obamacare that is left standing by the Supreme Court,” House Speaker John Boehner wrote in a memo to his fellow Congress Republicans last Thursday.

Such tasks are easier said than done. Members of both congressional chambers will most likely not follow through with their respective party’s plans until early next year. Calling the ruling an immediate game-changer would be a premature move.

If You Can’t Take the Heat, Get Out of Wall Street

Just as thermometers rose to record levels on Thursday, the credit scores of fifteen world financial powerhouses took discouraging plunges. Ratings agency Moody’s downgraded major banks like JPMorgan, Citigroup, Goldman Sachs by up to three notches. The updated ratings signify spreading fears that Wall Street’s debts are posing wider risks.

This came as no surprise to the financial sector. Moody’s said in February that it might downgrade the credit ratings of major banks. But with the euro’s declining value and the Dow Jones Industrial Average experiencing its second-biggest drop of the year, losing over 250 points on Thursday, investors are slowly losing confidence in even the safest financial assets. The downgrades could raise borrowing costs and tempt trading partners to increase their collateral.

Johannes Wassenberg is a managing director at Moody’s who primarily covers European banks. He told Bloomberg News in a Friday morning phone interview that updating the ratings was an inevitable task.

“We have had negative outlooks for these banks for some time and clearly as risk increased we had to reassess our ratings,” Wassenberg said.

JPMorgan is the largest American bank, with services ranging from corporate lending, credit cards, and asset management. Their recently announced $2 billion trading loss was an important factor in the downgrade, Wassenberg added.

JP Morgan CEO Jamie Dimon testified before the Senate Banking Committee last Wednesday and faced the House Financial Services Committee on Tuesday. At the latter hearing, he doubted that the loss was directly responsible for the credit plunge.

“It may have aggravated what happened,” said Dimon. “I wouldn’t say it was the cause of what happened.”

Moody’s decision to release updated ratings bookends a trying week for America’s banks. The Financial Industry Regulatory Authority fined Bank of America’s Merrill Lynch wealth-management unit $2.8 million earlier this week. The private regulatory organization noted that the New York-based brokerage overbilled customers by $32.2 million over an eight-year period because they lacked adequate supervisory systems.

“Investors must be able to trust that the fees charged by their securities firm are, in fact, correct,” FINRA enforcement chief Brad Bennett told the Associated Press on Wednesday. “When this is not the case, investor confidence is threatened.”

Public relations representatives from other banks quickly dismissed the updated ratings, calling them inaccurate portraits of their business models.

Royal Bank of Scotland:

The Group disagrees with Moody’s ratings change, which the Group feels is backward-looking and does not give adequate credit for the substantial improvements the Group has made to its balance sheet, funding and risk profile… The Group continues to maintain a solid liquidity and funding position. RBS has completed its planned wholesale funding requirements for 2012.

RBS spokeswoman Katherine Gay:

We remain one of the strongest and one of the highest rates banks in the world across a number of categories. We don’t expect any impact on our clients and minimal impact on our business.

Morgan Stanley:

We believe the ratings still do not fully reflect the key strategic actions we have taken in recent years… With our de-risked balance sheet, stable sources of funding, diverse business mix and strong leadership team, we are well positioned to deliver for clients and shareholders.

Goldman Sachs spokesman David Wells:

We believe our strong credit profile and unique mix of attractive, high-return businesses with an institutional client focus will continue to serve our shareholders, creditors and clients well.


Citi strongly disagrees with Moody’s analysis of the banking industry and firmly believes its downgrade of Citi is arbitrary and completely unwarranted. Moody’s approach is backward-looking and fails to recognize Citi’s transformation over the past several years, the strength and diversity of Citi’s franchise, and the substantial improvements in Citi’s risk management, capital levels and liquidity.

Hey, Big Spenders

President Barack Obama fears that he will become the first incumbent to be outspent by his opponent. Nobody needs to look at his graying hair or his summertime sweat beads to know this. Just look at his campaign finance reports released Wednesday.

The president’s re-election campaign, along with the Democratic National Committee-backed Obama Victory Fund, raised about $54 million in May. And in that time, they spent $69 million, primarily for advertising, food, and travel. But officials close to the camp note that Mitt Romney and the Republican National Committee raised $77 million last month and could potentially spend a total of $1.2 billion for their half of the election.

Neither candidate is a stranger to big-budget campaigns. The Obama team and his party associates raised a record $750 million in 2008. This time around, they have nearly $147 million on hand, compared to Romney and his party’s $107 million, as of last month. But with May marking the second month this year in which the Obama campaign spent more money than it produced — January was the first — Democrats worry that their financial edge is waning.

Steven D. Levitt wrote an article in the August 1994 edition of The Journal of Political Economy,  in which he dismissed the philosophy that skilled fundraising garners more votes.

“When a candidate doubled their spending, holding everything else constant, they only got an extra one percent of the popular vote,” he wrote. “It’s the same if you cut your spending in half, you only lose one percent of the popular vote. So we’re talking about really large swings in campaign spending with almost trivial changes in the vote.”

The spending habits of this year’s Iowa caucus candidates did not correlate with vote allocation. Malapropism-prone Rick Perry spent $4.3 million on the state-wide race, but only won 10 percent of the vote. Rick Santorum spent the least on advertising than any other Iowa candidate and nearly tied Romney, who spent $1.5 million.

University of Missouri at Columbia economics professor Jeff Milyo told Freakonomics Radio earlier this year that a campaign’s money is not nearly as influential as many people think.

“How many people do you know who ever change their minds on something important like their political beliefs?” he said. “People just aren’t that malleable. And for that reason, campaign spending is far less important in determining election outcomes than many people believe.”

Like Romney, former New York City Mayor Rudy Giuliani spent a great deal of money on his unsuccessful 2008 presidential bid. He says he no longer believes that a politician should spend his or her way into office.

“I tell candidates, it’s always better to be the candidate with the most money, but you can win without it.”

With Ohio’s Portman Running With Romney, Bland Is In

Most presidential candidates choose a running mate who can balance out a fault. John F. Kennedy selected Lyndon Johnson to acquire the Southern vote, while George W. Bush picked Dick Cheney to negate his foreign policy inexperience. This year, Mitt Romney’s biggest weakness is Ohio. The state is arguably the electoral college’s most important; no Republican has ever won the presidency without carrying it in November.

One of the former Massachusetts governor’s strongest potential assets lies in the Buckeye State as well. Its junior senator, Rob Portman, is a boring and wonky technocrat. But his loyalty to conservatives just might equalize accusations of Romney’s moderate views and create the one-two team that Republicans need. And his fundraising ability in his home battleground state could give what will likely be the most expensive election in American history a bold shade of red.

It’s a full two months until the Republican National Convention in Tampa. But one Republican official, requesting anonymity, told The Hill in April that the wingman-less Romney is taking a head-start look at Portman, among other candidates, to finish off his White House ticket and maximize donation potential. While the John McCain camp was more adventurous in selecting Sarah Palin as their number two in 2008, the insider added that Romney is a careful thinker who has learned from that blunder.

“It’s going to be a very deliberate process and he’s going to come up with a very high-quality selection,” the insider wrote. “When you’re a business executive, you’re used to recruiting.”

Husband-and-wife team Steve and Cokie Roberts reinforced Portman’s potential role in the Romney campaign. They wrote a nationally syndicated piece for United Media newspapers last Sunday:

“He will never claim to see Russia from his house in Cincinnati,” said Mr. and Mrs. Roberts. “More important, he is completely qualified to serve as president, perhaps even more qualified than Mitt Romney.”

Both the Obama campaign and Democrats in the two congressional chambers have yet to single out Portman from Marco Rubio, the Florida Senator running a close second in the vice presidential running. Liberals and moderates fear that such an interference would be premature. And since presidential candidates typically appoint their running mates within just a week of their respective conventions, perhaps it is early for such an attack. But after a few difficult weeks – of disappointing poll statssecond-place fundraisinghigh unemployment, and one gut-wrenching recall election defeat – Democrats cannot afford to hesitate in attacked their presumed adversary.

The 56-year-old Portman could also ground Romney’s self-proclaimed entrepreneurial persona. He spent his childhood in Cincinnati, watching his father’s forklift dealership surge in staff size – from six to over 300. Though he is only in his first Senate term, his sharp Republican presence overtakes that of the 40-year-old Rubio. Many of his financial backers are retired Americans who feel that healthcare privatization is a major campaign priority. And his conservative voting record matches that message.

Portman also has an impressive record with raking in campaign dollars nationwide. Nearly half of his 2010 campaign’s donations came from out of state, and he has an even deeperhistory of fundraising in battlegrounds like Florida and Virginia.

Before acquiring his current office, Portman was appointed President Bush’s U.S. Trade Representative in 2005 and began a stint as his budget director the following year. Since both cabinet positions were Senate-confirmed, he has already faced Capitol Hill scrutiny. Selecting him would still carry its share of controversy, of course – that is only expected in a vice presidential pick – but he would probably not distract voters the way Rubio’s involvement could.

The campaign trail is familiar territory for Portman. He has never lost an election and often plays the devil’s advocate role when helping his Republican colleagues prepare for highly publicized debates. After a training session four years ago with John McCain, he channeled his adversary so well, one Republican aide exclaimed, “Portman just annihilated our guy!”

Obama strategists hope that campaign funds will surge in the next few months. But to do so, they must take a tip from the Portman rulebook – understand the opposition and centralize their target on the man who will likely be the Mitt Romney’s right-hand, right-wing man.