The quicksilver qualities of the Affordable Care Act individual mandate penalties—what you pay if you don’t buy government approved health coverage—are something to behold. Does the Obama Administration think they’re a fine, a tax, or maybe something else? Well, that depends, as revealed in a telling exchange at a House budget hearing Wednesday.
New Jersey Republican Scott Garrett asked White House budget director Jeff Zients about his claim that no one earning under $250,000 will see a tax increase under his boss: “So if I am part of a family that does not buy health insurance in violation of the President’s health-care program and I got to pay because of that, that is not a tax increase—that is not a tax on me?”
Mr. Zients replied, “The Affordable Care Act saves money,” which is not merely irrelevant but false. Mr. Garrett tried again and Mr. Zients said “I’m not sure I’m following the question.” Mr. Garrett once more: “Is that a tax on me or is that not a tax on me?”
Mr. Zients: “Well, this is—” Mr. Garrett: “A moment ago you said there’s no tax increase.” Mr. Zients: “There aren’t.” Mr. Garrett: “So that’s not a tax?” Mr. Zients: “No.” Mr. Garrett: “That’s not a tax. Okay. I just want to be clear on that because that’s not the argument the Administration is making before the Supreme Court.”
Game, set, match. Mr. Garrett is better informed about the Obama legal team’s arguments before the High Court, which call the penalty a tax to try to better defend its constitutionality. What Mr. Zients’s confusion really shows is that what the President also once tried to define as a non-tax tax is indefensible.