The impact on the beef industry of the resurrected federal health care law has little to do with health care or deficits, but a lot to do with how we’ll be regulated and governed.
In what was a somewhat surprising announcement yesterday, the U.S. Supreme Court upheld the health care law, nicknamed Obamacare, as constitutional. In writing the majority opinion, Chief Justice John Roberts stated that the individual mandate in Obamacare can’t be upheld under the commerce clause of the U.S. Constitution, which was the basis of the suit. But it could be upheld as a legitimate exercise of the federal government’s taxing power. In essence, the Supreme Court said the mandate was no different than a tax on gasoline or some other product. Certainly, the significance of what will now be one of the largest tax increases ever pales in comparison to what this means for the commerce clause.
With this Supreme Court ruling, the commerce clause essentially has been eliminated from the U.S. Constitution, as any regulation of commerce will be construed as legal as long as it can be interpreted as a tax of some sort. That means the federal government can elect to tax people, for instance, who elect not to buy low-mileage cars or even those who buy sugary drinks.
It’s striking that what was considered a conservative court has ruled twice in the last two weeks that the federal government basically has the ultimate say on all matters. Thus, states will only have a choice or say in those matters that the federal government hasn’t an interest or involvement in, which increasingly means only specialized local matters will be the purview of the states.
This development has significant implications for the U.S. beef industry, as all state groups will increasingly have to become involved in Beltway politics. Thus, the national organizations will supersede all others in importance and clout. Meanwhile, state organizations will largely be left to deal with the state and local agencies that will help to ensure the implementation of federal mandates and legislation.
Perhaps for rural audiences, and agriculture in general, the real concern is that this appears to be a continuation of a shift away from a representative democracy to a more egalitarian democracy. Thus decisions affecting rural areas, rural states and ag interests will increasingly be decided by those with little or no knowledge of our unique rural issues, lifestyle or interests. Whether or not it’s a good thing that California and New York will be creating policy for all of us probably depends upon which side of the fence you happen to sit on.
According to Tom Curry, MSNBC political writer, the pertinent points of Roberts’ ruling was that Obamacare is constitutional in part and unconstitutional in part. First, the individual mandate can’t be upheld as an exercise of Congress’s power under the commerce clause, because that Clause authorizes Congress to regulate interstate commerce, not to order individuals to engage in it. But it is reasonable to construe what Congress has done is 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, Roberts said.
So, essentially, you can’t order individuals to engage in commerce, but you can tax anyone for not engaging in the way you would like them to. For perspective, Congress can’t mandate that you buy Angus bulls, but they could tax you $3,000 if you don’t purchase them.
From an election standpoint, both sides were elated with the decision – Obama’s campaign was thrilled that his hallmark piece of legislation was upheld. Meanwhile, the Romney campaign was thrilled that a piece of legislation that remains very unpopular will now rival the economy as a major issue in the upcoming elections.
The short-term political gain and loss, however will be insignificant; it is the long-term ramifications of this ruling that will be onerous, as it allows the federal government to solidify control over all areas of our lives.