Bloomberg News

Romney Declaration on Health Mandate Tax May Boomerang

July 06, 2012

Romney Declaration on Health-Care Mandate Tax May Boomerang

Mitt Romney's response to the U.S. Supreme Court ruling on the Affordable Healthcare Act on June 28, 2012 in Washington. Photographer: Alex Wong/Getty Images

Mitt Romney’s assertion that President Barack Obama’s mandate to buy health insurance amounts to a tax increase may boomerang by opening the presumptive Republican nominee to the same charge.

As governor of Massachusetts, Romney championed a state health-care plan with a similar mandate to buy insurance -- one he says today should be described as a penalty not a tax boost. He also raised hundreds of millions of dollars for the Massachusetts budget by ending some tax benefits for businesses and approving higher fees on professional licenses and identification cards for the blind.

The fees and corporate tax changes allowed Romney to close a projected $3 billion state budget gap, while preserving his pledge not to raise taxes. Not everyone saw it that way.

“Any time the government mandates that you buy something or imposes a penalty, it’s a tax by any other name,” said Matt Kibbe, president of FreedomWorks, a group aligned with the anti- tax Tea Party movement. Kibbe said he still intends to support Romney.

The shifting political rhetoric means Romney is “playing defense,” said Dan Schnur, director of the Jesse M. Unruh Institute of Politics at the University of Southern California and former communications adviser to Republican Arizona Senator John McCain’s 2008 presidential campaign. “Romney doesn’t want to talk about Massachusetts. He wants to talk about what’s wrong with the American economy.”

Primary Attack

The line of attack on Romney, the presumptive Republican presidential nominee, isn’t new: In primary debates, opponent Rick Santorum highlighted the fee increases. An Obama campaign ad charges him with enacting “over 1,000 fee hikes” on such services as school bus rides, hospitals and health care.

In an interview with a Cincinnati television station, Obama framed Romney’s comments as a flip-flop done for political convenience. Romney’s characterization of the mandate as a tax reversed six years of calling it a penalty, Obama said.

“The question becomes, are you doing that because of politics?” the president said in the interview, airing today. “Are you abandoning a principle that you fought for, for six years simply because you’re getting pressure for two days from Rush Limbaugh or some critics in Washington?”

Democrats Wary

Still, it’s a turn in the political conversation that troubles some Democrats, too.

“Why does the Obama campaign want to have a fight over who raised the most taxes?” said Tad Devine, a Democratic political strategist,

Speaking to reporters yesterday, Obama spokeswoman Jen Psaki dismissed the discussion over whether the mandate is a penalty or a tax as a “silly debate.”

The Romney campaign has tried to measure its message, claiming during the Republican primaries that the mandate in the Massachusetts law was a penalty, not a tax.

Keeping with that depiction, Eric Fehrnstrom, a senior campaign adviser, said in a July 2 interview that Romney held the same view of the federal mandate to buy insurance. He described it as a “penalty or a fee or a fine.”

Fehrnstrom’s response conflicted with that of congressional leaders who said the June 28 Supreme Court ruling upholding the 2010 Patient Protection and Affordable Care Act was based on the assumption that the mandate is essentially a tax.

Obama’s ‘Tax’

In an interview with CBS News two days after Fehrnstrom’s appearance, Romney brought his position in line with that of his party, declaring Obama’s mandate a “tax.”

Still, he said the opinion written by Chief Justice John Roberts, an appointee of Republican President George W. Bush, differentiated what he did as governor because states have the power to constitutionally mandate purchases using mechanisms other than taxes.

“States have the power to put in place mandates. They don’t need to require them to be called taxes in order for them to be constitutional,” Romney said. “As a result, Massachusetts’s mandate was a mandate, was a penalty, was described that way by the legislature and by me.”

His campaign has made a similar argument about the higher fees imposed during his term as governor, saying they can’t be considered tax increases because they were charges for specific services. Romney spokeswoman Andrea Saul declined to comment yesterday.

Increased Fees

A National Conference of State Legislatures study said Massachusetts imposed more than $501.5 million in fee increases in 2003, more than any other state. Those included raising the cremation inspection fee to $75 from $50, increasing the application fee for a pesticide examination to $50 from $25, and raising the fee for marriage licenses to $50 from $4. Blind citizens were required to pay a new $15 renewal charge for identification cards.

The fees were part of Romney’s plan to close the projected $3 billion budget gap facing Massachusetts when he entered office in 2003. Romney raised another $309 million between 2003 and 2005 by ending tax breaks for business, according to the Boston Globe. Those included banning the use of tax-free real estate trusts and cracking down on the use of shell corporations to shelter income. Romney described the measures as closing tax loopholes. Business leaders considered them tax increases.

Republican anti-tax activists now dismiss much of that criticism. Grover Norquist, the president of Americans for Tax Reform, described Romney’s gubernatorial record as almost irrelevant, saying his more recent pledges to cut spending and taxes make the choice in November an obvious one.

“Who cares? That’s yesterday,” he said. “This is now all about: vote for Obama, get tax increases and massive new spending. Vote for Romney all of that goes away.”

To contact the reporter on this story: Lisa Lerer in Washington at llerer@bloomberg.net

To contact the editor responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net


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