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Mitt Romney, Surprised By Health Care Decision, Pivots To Tax Attack

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WASHINGTON -– A few weeks ago, a senior adviser to Mitt Romney said the approaching Supreme Court decision on the constitutionality of President Barack Obama's health care law would be "the most over-reported story of the election."

While that statement during a background conversation may have been a bit of egregious spin designed to keep expectations in check, the premise -– that the election will be about the economy and jobs -– was sound.

If the court repealed the Affordable Care Act, Romney would have said Obama was a failed president and then moved back to hammering him on the economy, as he has been doing for months. Now that the court has upheld most of the law, Romney will say that Obamacare needs to be repealed, and go back to hammering Obama on the economy.

"If we want to get rid of Obamacare, we're going to have to replace President Obama," Romney said Thursday after the ruling. "If we want good jobs and a bright economic future, for ourselves and for our kids, we must replace Obamacare."

Even in a short statement in which he laid out the reasons why he thinks the Affordable Care Act should be repealed, Romney came back to his bread and butter (though his statement, somewhat oddly, included several warnings that Obamacare would cause Americans to " lose the insurance they currently have, the insurance that they like and they want to keep)."

However, the court's decision Thursday did deprive Romney of a huge club that he had hoped to batter the president with.

"Short term, Obama would have taken a big shot if it had been tossed out," a senior Romney adviser told The Huffington Post after the ruling was announced.

Romney said earlier this week that a repeal ruling would have meant Obama's first term would have been "entirely wasted."

At the same time, Chief Justice John Roberts' opinion handed Romney a different weapon. Romney and Republicans will mention every day between now and Election Day that Obama has raised taxes by $500 billion and broken his campaign promise not to do so for those Americans making less than $250,000 a year.

The ruling is likely to drive voters toward Romney as "people realize they just got hit with a massive tax increase," the Romney adviser argued, adding that the tax argument is simpler than any previous criticism that Romney has leveled at the president regarding Obamacare.

"Frankly, to be able to tell you your taxes have been raised by this bill and you didn't know that, as opposed to trying to explain Congress's powers under the commerce clause, it's easier," the Romney adviser said, referencing the issue of the law's constitutionality.

Another of Romney's top advisers said the ruling "does increase the intensity for the change vote."

"The only way to defeat Obamacare is to defeat Obama. That's a very straightforward, compelling argument. It helped power the 2010 elections and it will energize the 2012 elections," the second Romney adviser said.

Rick Wiley, the political director for the Republican National Committee, said the court ruling is a rallying cry. If there were any doubts about the grassroots energy that Republicans need this fall, "now for sure I think it's going to be there," Wiley said.

It was clear Thursday from talking to numerous Romney advisers and aides that his campaign base in Boston was surprised by the ruling.

"I didn't see the tax issue coming," the first senior Romney adviser said of Robert's decision, which upheld the individual mandate to purchase health insurance on the grounds that Congress has the power to issue a tax of that kind.

And that's why Thursday's ruling was a wild card of sorts. Neither side likely anticipated that the ground of the debate would shift so quickly from mandates and constitutionality to taxes. But that was the effect of the court's majority opinion.

"The president said he would not raise taxes on the American middle class and now he is raising taxes on the American middle class," said Sen. Marco Rubio, (R-Fla.), who was quick to jump out and do TV interviews using talking points that aligned closely with what the Romney campaign was saying.

The Romney campaign aides based their assertion that the Affordable Care Act is a $500 billion tax increase on congressional testimony in March 2011 by Congressional Budget Office Director Douglas Elmendorf. The $500 billion figure was largely backed up as well by PolitiFact earlier this year, though it said the figure might be closer to $465 billion.

And in that same PolitiFact article, a liberal economic think tank official said the tax increase in Obamacare was more than $500 billion.

"Someone could quibble that some of the fees do not represent a tax increase, but I cannot fault anyone for saying that the ACA increased taxes by $525 billion," James Horney, vice president for federal fiscal policy at the Center on Budget and Policy Priorities, told PolitiFact.

Democrats, including Neera Tanden of the Center for American Progress, responded quickly that "if you call the mandate a tax increase, then Mitt Romney increased taxes in Mass" as governor.

Obama, in his remarks at the White House after the ruling, pointed to the 2006 law that Romney signed as governor of Massachusetts that included a mandate to purchase health insurance.

"Even though I knew it wouldn’t be politically popular, and resisted the idea when I ran for this office, we ultimately included a provision in the Affordable Care Act that people who can afford to buy health insurance should take the responsibility to do so," Obama said. "In fact, this idea has enjoyed support from members of both parties, including the current Republican nominee for president."

From 2007 to 2010, Massachusetts residents who did not have health insurance paid $87 million in fines, said Dick Powers, a spokesman for the Massachusetts Health Connector. He added that the number of state residents paying the penalty, or tax, has gone down each year, from 67,000 in 2007, to 44,000 in 2010.

The immediate response to the Democrats' tax rebuttal from Republicans was less than impressive.

Romney "supported it on the state level. Which means if you didn’t like it in Massachusetts, you could move to another state," Rubio said on Bloomberg Television. "What are people supposed to do? Leave the United States now because of Barack Obama’s brilliant idea to stick the IRS on millions of people? More importantly, the state of Massachusetts doesn’t have the IRS. The IRS will follow you. Do people understand what this means?"

But if the presidential campaigns litigate the issue of whether Romneycare included a tax, they will inevitably confront the fact that Romney originally proposed a plan that did not include any penalty or tax. Instead, those who did not want to obtain health insurance would have been required to "post a bond" of $10,000, said Amy Lischko, a former top health care policy adviser to Romney who helped design the overhaul in Massachusetts.

"There would be something that would happen if you didn't post a bond. There would be an attachment to your wages or whatever to pay for the care that you used. But it wouldn't be a penalty for not getting health insurance," Lischko said in an interview. "So if you didn't use any health care, then there would be no penalty. If you used health care, there would be the ability for the hospital to go after your assets.

"The way it ended up coming through in statute and then in regulation is that there's a penalty whether you use care or not. So you have to have health insurance. You have to document that health insurance on your taxes, and if you don't have health insurance, then you have to pay a penalty, unless it's deemed not affordable to you and you get an exemption," Lischko said. "But when Romney proposed it, it was only if you used health care … and didn't have a way of paying for it. It wasn't really taxed. It was just, you just had to pay for it."

Lischko said that the version of the bill Romney signed into law, after the Democratic-controlled legislature made changes to it, had morphed into legislation that included a penalty or tax.

Douglas Holtz-Eakin, president of the American Action Forum, a conservative advocacy group, said he did not think the political debate would get too far into the weeds on whether Romney's plan included a tax.

"I've never thought the president wanted to talk about this. This is not a good story for him. He spent two years doing this and not on jobs. He's not going to go there," Holtz-Eakin said. "And I don't think Romney will either. He'll stay focused on the economy and jobs."

On Thursday evening, Obama sent out a fundraising email through his campaign asking supporters to "say you're with me on the Affordable Care Act.

"My opponent said a short while ago that the first thing he would try to do as president is repeal the health care law. We can't allow that to happen. So we have to win this election," Obama said.

The coming weeks will show whether that's an appeal the president continues to make, or whether Obama can now -- thanks to the court's decision -- continue to ignore his most significant legislative achievement, as he has for most of campaign so far.

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