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Health Care Reform and the Laws of Unintended Consequences

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When the Supreme Court ruled that President Obama's sweeping overhaul of the nation's health care system was constitutional, about the only thing critics and supporters could agree on was the historic importance of the legislation itself. But if history is any guide, there will be one other inescapable truth: The Affordable Health Care for America Act of 2010 will generate the same unintended consequences that have shaped, distorted, and even perverted so many other important pieces of legislation in our nation's history.

Whether tackling social security, veterans' benefits, civil rights or immigration reform, Congress has demonstrated over the past 75 years that when it addresses significant social issues with complicated legislation, the results will, more often than not, vary dramatically from what was originally intended. In some instances, as in the case of the GI Bill, the impact was broader than the original drafters could have dared to hope. More commonly, as in the case of social security or immigration reform, a small detail has ended up undermining the loftiest goals of the original bill.

A general rule of thumb for determining how likely a bill is to veer off course is to ask how ambitious the legislation is: the more far-reaching, the more likely it is to produce unanticipated consequences. As we saw with health care reform, big, complicated laws are often the product of partisan brokering and compromise that makes their "intent" ambiguous and open to interpretation. That gives enormous power to the government bureaucrats charged with enforcing the law, and to the courts that are inevitably called upon to settle the conflicts. The gap that opens between the bill's lofty goals and its often haphazard implementation is the breeding ground for unforeseen results.

Take, for example, what is often considered the most important social legislation passed in the twentieth century -- the Social Security Act of 1935. When it debated the benefits of old-age pensions and unemployment insurance that were at the heart of the bill, Congress overlooked a small provision that provided aid for dependent children. It seemed innocent enough: The clause provided a small stipend to a mother raising children following the death of her husband. Everyone assumed that it would be a temporary program that would fade away once social insurance expanded.

How wrong they were.

At the outbreak of World War II, only 360,000 families in the United States were enrolled in the program. But by 1950, the number of recipients had surged to 2.2 million. By the 1960s, that noncontroversial provision provided the legal scaffolding of the modern welfare state. Women moved into the workforce, bureaucrats and politicians expanded the definition of rights and tinkered with the program, families dissolved, and the number of people eligible for welfare exploded. By the time it was abolished in 1996, the government was paying $24 billion a year for that innocuous provision.

Today, nearly everyone hails the GI Bill as one of the most successful and influential laws ever passed. Its impact, however, was accidental. Congress wanted to pass a bill that would avoid the chaos that followed the rapid demobilization at the end of World War I. The most controversial provision, and the one that Congress focused most of its attention on, was a plan to guarantee veterans $20 a week in unemployment benefits. There was little discussion of two other "smaller" provisions: the offer for free college education and low-interest mortgage loans. Roosevelt predicted that the number of vets taking advantage of these benefits would be "in the hundreds of thousands." Over the years, millions of veterans used these provisions to get a college education and to buy new homes in the sprawling suburbs. The GI Bill proved that unintended consequences can sometimes be fortuitous: The law unwittingly allowed for the expansion of the middle class and made American postwar prosperity possible.

More commonly, the unintended consequences of major social legislation are debilitating when judged against the Bill's original intent. One of the key points of debate in the passage of the Civil Rights Act of 1964 concerned the issue of quotas. Conservatives complained that Title VII, which banned employment discrimination, would eventually lead to racial quotas. The White House and congressional leaders assured everyone it would never happen. "If the senator can find in Title VII," Minnesota senator Hubert Humphrey thundered, "any language which provides that an employer will have to hire on the basis of percentage or quota related to color, race, religion, or national origin, I will start eating the pages one after another, because it is not in there."

Humphrey was sincere when he made the comment. Neither he, nor anyone in the White House, supported racial quotas. But within a short period of time, officials at the EEOC decided that quotas were the only way to realize the goals of the legislation, and liberal judges backed them up. Ironically, quotas received their biggest boost from Richard Nixon, who used them to drive a wedge between two traditional Democratic constituencies -- African Americans and organized labor. Humphrey never did eat those pages, however.

Similar problems plagued the Johnson administration's efforts to overhaul the nation's immigration laws. In 1965, with the noblest of intentions, it set out to overturn the "national origins clause," which set quotas for particular countries based on how many immigrants were living in the United States in 1890. Obviously, the quotas favored countries in Western Europe and placed severe restrictions on immigrants from Asia and Africa. The administration wanted to end discrimination, but it was determined not to increase the overall number of newcomers or dramatically alter immigration patterns. They came up with what appeared to be a simple solution: replace "national origins" with "family unification." It seemed logical: preference would be given to those people who already had family members living in the United States. They were confident they had found the right solution for stemming the flow of immigration.

How wrong they were again.

By some estimates, over a thirty-year period (1965-1995) the 1965 reforms were responsible for an additional 40 million people coming to the United States. The vast majority of those immigrants now come from Asia, Africa, and South America. Many of the immigration issues being debated today are a direct outgrowth of the unintended consequences of the 1965 Immigration Act.

It is possible that the health care legislation that president signed, and that the Supreme Court has now ruled constitutional, will avoid falling victim to the laws of unintended consequence. But history suggests otherwise. President Obama has said that health care reform will be his legacy. Whether it's the legacy that he anticipated remains to be seen.