What We Learned: The Tax Argument Cometh

What we at The Hotline learned this week:

-- Supreme Court Chief Justice John Roberts surprised us all by joining the liberal majority, angering some of his staunchest champions in the process. But this was no 5-4 decision upholding the individual mandate. Instead, by allowing the mandate to stand as a tax, Roberts, consciously or not, handed GOPers tools to use both this year and next in the pursuit of defeating President Obama and his health care law.

Expect the GOP to call it the biggest tax increase in history, the party's well-worn label last used during the debate over extending the Bush tax cuts. And imagine the advertisements contrasting Obama's insistence that he's not raising taxes with the Court's decision. If the GOP wins back the Senate majority, a tax is likely easier to undo via the budget reconciliation process than a mandate would have been. Aides caution the rules are complex, and they're still exploring their options, but the ruling once again reminds that the battle for the Senate is as crucial to both sides as the fight for the White House.

-- For all the awkward, nervous or frog-in-their-throats public speakers just having a bad day, there's hope. The Supreme Court's decision to uphold the health care law, despite widespread criticism of Solicitor General Donald Verrilli's performance in the courtroom, proves that oral arguments are less about putting on a good show than making viable points and that, more significantly, oral arguments aren't always what seals the deal. Verrilli did, in fact, argue the mandate as a tax, but Roberts's endorsement of this argument reminds us that votes are cast and opinions are written based on much more than courtroom crossfire. Perhaps there's a reason the high court is one of the last venues in American politics still averse to live recordings and modern media technology.

-- Polling on the health care law shows it remains unpopular. Nearly half of Americans oppose it, outpacing the percentage supporting it by about 10 percentage points. The individual mandate earns even less support in most surveys, and polls showed that most Americans supported striking down that provision.

The July 4 holiday notwithstanding, expect a slew of national and state polls over the coming weeks that ask Americans what they think about the court's ruling. But be wary: differences in question wording and methodologies could make a big difference between these surveys. Polls that ask about the court's decision regarding the overall law, or just the individual mandate, will produce divergent results. Question order could be an issue, too; polls that ask about the unpopular mandate, for instance, before questions about the ruling could prime respondents to oppose the decision.

-- Most of the victories that the Left has won recently, such as the Obama administration's decisions on contraception, gay marriage, immigration, and, of course, the healthcare ruling, are generally seen as net political washes nationally. But in many red states and districts, and even some purple ones, each "win" might well lead to the vague sense amongst voters that more of a check on the president's power is needed back in Washington. It's easy to see Republican Senate and congressional candidates as the ultimate political beneficiaries of decisions that can be perceived as concentrating more power inside the Beltway.

-- It's not just Democrats who are avoiding their national convention. Rep. Denny Rehberg, R-Mont., former Hawaii Republican Gov. Linda Lingle and former New Mexico Republican Rep. Heather Wilson announced that they'll be skipping the GOP convention in Tampa to campaign at home. Even in the current partisan environment, moderation is still a strong suit in several key races. Just ask Angus King in Maine. -- Arizona Democratic Senate candidate Richard Carmona used the events of the week to put some distance between himself and Obama. After the Supreme Court ruled on the federal health care law, Carmona said the measure still has "major flaws." He also announced he would not attend the Democratic National Convention. The story of Carmona's rise can't be told without mentioning that the president recruited him to run. But in a red state, its not a story we're likely to hear Carmona repeat much in the fall campaign. -- It's not every day rival candidates earn endorsements from the same group. But that's the case in Connecticut, where the League of Conservation Voters is backing former Republican Rep. Chris Shays, adding to a prior endorsement of Democratic Rep. Chris Murphy. Both candidates scored high on the LCV's National Environmental Scorecard and will receive fundraising help. -- A federal investigation isn't necessarily the end of the world (or the campaign). In Connecticut's 5th District, Democratic state House Speaker Chris Donovan and Republican businesswoman Lisa Wilson-Foley continue to pick up endorsements despite ongoing probes into their organizations. Donovan's former finance director was arrested on May 30 and charged with attempting to conceal the sources of donations to the candidate, while a federal grand jury is examining the nature of former Gov. John Rowland's involvement with Wilson-Foley's campaign. Donovan this week secured the endorsements of the Connecticut AFL-CIO and MoveOn, while Wilson-Foley gained the backing of Maggie's List. Much could change in the weeks before the August 14 primary, as the probes are ongoing -- indeed, there are reports of a possible raid at one of Rowland's offices on June 28 -- but for now, both campaigns remain afloat. -- Last week's Washington Post report on outsourcing at Bain Capital has given the Obama campaign -- and particularly Vice President Joe Biden, who spent two days touring Iowa this week harping on the issue -- fuel to use against Romney, who Democrats like to call the "outsourcer-in-chief." One sign that it's working (and that Romney's distinction between "outsourcing" and "off-shoring" is lost on voters): The Republican's campaign staff headed to the Post's offices on Wednesday seeking a retraction. A Post spokesperson told The Hotline after the meeting that the paper was "confident" in its reporting, meaning that we can expect to see more of the argument. -- CNN had a rough week. The network's second quarter ratings across the board were the worst since 1991. What's more, the network initially incorrectly reported the Supreme Court's health care ruling. CNN wasn't alone -- Fox also erroneously reported on the health care ruling -- which is a reminder that the saying "haste makes waste" is especially applicable in cable news.

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Reid Wilson, Editor-in-Chief
Steve Shepard, Executive Editor
Julie Sobel, Editor
Kevin Brennan, Deputy Editor


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