Romney’s tax trap

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The path Mitt Romney needs to walk on health care got a little bit narrower Monday, when one of the Republican’s top advisers declared in a TV interview the presumptive GOP nominee agrees with the Obama administration that the individual mandate to buy health insurance is a penalty, not a tax.

The comments by Romney strategist Eric Fehrnstrom go to the core of the political clash that has unfolded between President Barack Obama and the GOP since last week’s Supreme Court ruling on the Affordable Care Act. In that case, the Court ruled that the law known as Obamacare is constitutional under Congress’s power to tax — a decision Republicans have brandished as proof that the president broke his promise not to raise taxes.

Republican outside-spending groups such as American Crossroads and Americans For Prosperity have already launched high-dollar ad campaigns pummeling Obama for raising taxes. “Now it’s official: Obama increased taxes on struggling families,” one Crossroads ad says. “President Obama breaks another promise.”

Romney has been conspicuously quiet on the issue for the obvious reason that as governor of Massachusetts, he imposed a health insurance mandate of his own. For that reason, his campaign has avoided addressing explicitly whether a mandate is the same thing as a tax.

That changed when Fehrnstrom stepped directly onto a political land mine on MSNBC.

Asked by anchor Chuck Todd whether Romney “agrees with the president” that “you should not call the tax penalty a tax, you should call it a penalty or a fee or a fine,” Fehrnstrom answered: “That’s correct.”

To Democrats, the comment looked like a get-out-of-jail-free card for the White House. If Romney agrees that the mandate is not a tax, they argued, then Obama can’t fairly be attacked for raising middle-class taxes. The Obama campaign blasted out clips of Fehrnstrom’s interview and deputy campaign manager Stephanie Cutter declared on Twitter: “Well, that clears it up.”

( Also on POLITICO: Jindal: Romney never favored national individual mandate)

Republicans argue the reality is more complicated, at least politically. Strategists familiar with the Romney campaign’s thinking say there’s a recognition Fehrnstrom — an aide known for his closeness to the candidate — fumbled the message. That would mark the second highly public stumble for Fehrnstrom, who previously drew criticism for saying Romney could adjust his public image after the GOP primary, like an “Etch A Sketch.”

But going forward, strategists say Romney intends to continue attacking Obama over the ACA, including the mandate. The argument is, essentially, that Obama can pick his poison: either admit that the mandate is a tax, or acknowledge that the law is unconstitutional. Romney’s personal view of the mandate is secondary.

“The Supreme Court left President Obama with two choices: the federal individual mandate in ‘Obamacare’ is either a constitutional tax or an unconstitutional penalty,” spokeswoman Amanda Henneberg said. “Romney thinks it is an unconstitutional penalty. What is President Obama’s position: Is his federal mandate unconstitutional or is it a tax?”

As for Romney’s own assessment of the mandate — whether or not it’s a tax — the campaign makes no apology for trying to have it both ways, defending Romney’s policy in Massachusetts as a penalty while hanging the Obama administration on the Supreme Court’s description of the measure as a tax.

“It’s fair to say both, because I’m taking the administration at their word on this,” said one senior Romney adviser, pointing out that Obama’s solicitor general justified the mandate under the taxing power in part of his argument.

The senior adviser, who spoke on condition of anonymity, said Fehrnstrom “expressed the position of the campaign” when he said the conservative wing of the Supreme Court had been correct in calling the mandate unconstitutional.

“I think what Eric was expressing was the governor’s view that the dissent had it right in this case,” the adviser said. “The entry point into the discussion, is that the entirety of ‘Obamacare’ has to be replaced with the kind of step-by-step, patient-centered reforms that we’ve been talking about for a while.”

Asked whether the campaign would describe the mandate as a penalty or a tax — the same question Fehrnstrom addressed — the adviser said that until the Obama team clears up the dissonance on their side of the issue, “I would decline to answer the question.”

The White House has struggled with its own messaging imperatives since the Supreme Court ruling, celebrating the ACA as constitutional but trying to avoid the precise implications of Chief Justice John Roberts’s majority opinion. In an appearance on “Fox News Sunday,” Obama chief of staff Jack Lew argued — dubiously — that there’s a difference between the mandate being a tax and the mandate being upheld under the power to tax.

“Technically, what they said is the Congress has many powers. There is the Commerce Clause, there’s taxing powers and it was constitutional. That’s what they said. It doesn’t matter what they call it,” he said.

If the Romney and Obama campaigns’ messaging is narrowly tailored to avoid the riskiest elements of the Court decision, the full array of GOP groups involved in the 2012 race is under no similar pressure to proceed with caution.

Nor, for that matter, is it even clear the Romney campaign wants them to. The presumptive GOP presidential nominee cannot coordinate with outside groups such as AFP and Crossroads, but he can coordinate with GOP committees and other federal candidates. And so far those parties haven’t gotten a signal to back off.

One Republican strategist involved in down-ballot races said when it comes to the Romney campaign and health care, “I have not received an indication yet that anybody is skittish about it yet.” Among the heaviest spenders in the super PAC community, the mood of the day is full speed ahead.

“‘Obamacare’ as a tax increase is most importantly an Obama myth-buster. It busts the myth that Obama wouldn’t raise taxes on the middle class, and it busts the myth that Obamacare is a free lunch that doesn’t cost anything or bloat government,” said American Crossroads spokesman Jonathan Collegio. “And when the national debate is centered on taxes and the size of government, conservatives are winning.”

The challenge of reconciling Romney’s record to the demands of 2012 politics, then, is unique to the former Massachusetts governor and his campaign aides. It’s possible that they’ve managed to square the circle with their message on the constitutionality of the law, minus Fehrnstrom’s miscue.

But for some GOP strategists and conservative opinion leaders, the whole exercise looks too clever by half — a whole lot of political acrobatics when a simple message of repealing ‘Obamacare’ would get the job done.

“I wouldn’t obsess on the tax/penalty issue one way or the other. No reason not to attack it as a tax increase, though. But Romney should be against taxes, penalties, fines, mandates, IPAB and everything else in ‘Obamacare’,” said Weekly Standard editor Bill Kristol. “They look silly today trying to draw some verbal distinction to protect against a possible ‘So’s Your Mandate’ attack, which won’t be effective and on which the Obama campaign won’t waste money, anyway.”

Kristol, an on-and-off critic of Romney’s needle-threading approach to the 2012 election, dismissed the notion that Romney’s Massachusetts health law would be a serious impediment this fall.

“The Romneycare complication is only much of a complication if they let it be one. Reagan ran on tax cuts though he’d raised taxes as governor. But people believed he’d cut tax rates, because he said over and over he would and explained why he would,” he said. “You don’t have to be a virgin to make the case against promiscuity. You do have to be credibly committed to responsible behavior going forward.”

California-based GOP strategist Rob Stutzman shrugged at whether the penalty-or-tax question is “all that relevant,” given that Republicans successfully campaigned against the ACA as a tax-raiser in 2010.

“It highlights the delicacy of Massachusetts for Romney, but at some point you’ve got to give him credit for getting through a primary and more or less, if you average out the last four weeks of trends, getting to a dead heat with the president,” said Stutzman, who worked for Romney in 2008. “I think you’ll see Senate candidates and House candidates fully exploit the Court’s ruling.”