The Smart Money: How does the fall of DOMA affect the economy?

Posted Tuesday, July 2, 2013 in Analysis

The Smart Money: How does the fall of DOMA affect the economy?

by Gina Hamilton

Last week's Supreme Court decision, knocking down a key part of the Defense of Marriage Act, will have immediate and profound effects on the American economy, in business economies, and in tiny local economies in millions of households.

It is difficult to pinpoint the percentage of people who identify as gay or lesbian in the U.S., primarily because they still face discrimination in many quarters.  However, using a Gallup poll from last year (which is likely a low reporting), 3.4 percent of the people in the U.S. are gay, lesbian, bisexual, or transgendered. 

That means that the DOMA ruling will affect more than 10 million people at the very least, and probably many more.  Even if a person lives in a state where same-sex marriage is not legal, or even if they live in a state where there is a state constitutional amendment banning it, their federal rights, should they choose to marry in a state that does permit it, are still intact.

Now, 10 million people are not all going to want to marry, but assuming they marry at the same rate as their heterosexual brothers and sisters, roughly 50 percent, that still means that DOMA's fall will benefit an additional five million Americans. 

There are more than a thousand regulations that benefit or affect married people in the U.S. that do not apply to domestic partnerships or civil unions. Everything from survivor benefits in the military, to the marriage benefit of filing income taxes jointly, to the automatic inheritance without estate taxes for a surviving spouse, to burial costs for spouses at military cemeteries, will cost the U.S. money, although it can be argued that it is the right thing to do, and virtually no federal agency is complaining.  Indeed, the military was the first to speak out in favor of dropping DOMA restrictions for spousal and family benefits in the military, on the grounds that soldiers whose families are cared for have one fewer thing to worry about, going into a battle zone.

Changes to the military spousal rules and benefits alone make a major difference for same-sex couples.  Here are some of the ways the fall of DOMA will change how the military does things to make its same-sex soldiers and their spouses equal to their other military families:

This is only a partial list, and serves to illustrate some of the major reasons why DOMA was, in fact, discriminatory.  Until last week, legally married same-sex spouses did not have these benefits.

The cost to employers who until now have had the choice of whether or not to provide health care coverage to the gay partners of their employees will also rise.  As the Affordable Care Act is implemented, these regulations will cover all same-sex couples everywhere in the country, whether they live in a state where gay marriage is legal or not.  Employers will also have to provide other federal benefits ... such as the Family Medical Leave Act ... to same-sex employees.  As same-sex married couples, a spouse is entitled to bereavement leave and other benefits that he or she may not have been entitled to before.

There will be cost offsets, for sure.  Adopted children of two same-sex partners will have to use both incomes when applying for student aid, for instance.  Couples who choose to file separately will be hit with the "marriage penalty"; and their joint income may force them into the still-unresolved Alternative Minimum Tax zone, previously only the domain of upper middle class heterosexual couples.

But this isn't really about the money, and it never has been.  It is about recognizing the dignity of same-sex marriages, and holding them to be equal to other marriages.  The Supreme Court decision on DOMA was a fairly broad decision. Writing for the majority, Anthony Kennedy said:

The power the Constitution grants it also restrains. And though Congress has great authority to design laws to fit its own conception of sound national policy, it cannot deny the liberty protected by the Due Process Clause of the Fifth Amendment.

What has been explained to this point should more than suffice to establish that the principal purpose and the necessary effect of this law are to demean those persons who are in a lawful same-sex marriage. This requires the Court to hold, as it now does, that DOMA is unconstitutional as a deprivation of the liberty of the person protected by the Fifth Amendment of the Constitution. The liberty protected by the Fifth Amendment’s Due Process Clause contains within it the prohibition against denying to any person the equal protection of the laws.

It's a matter of time ... probably sooner rather than later ... that the kerfuffle about gay marriage goes the way of the angst about interracial marriage, or interfaith marriage.  Until the court decides, in another landmark decision, to wipe away all the discriminatory laws in every state, federal benefits to same-sex married couples will have to suffice.

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