DOMA and the High Cost of Government-Mandated Discrimination

Conservatives frequently talk about the cost of regulations. For instance, Freedomworks, a well-known conservative organization, published a piece called The Hidden Cost of Regulation. It said, “Complying with regulations is not cheap,” noting that regulations aren’t paid for by just corporations, but by “the entire economy.” It notes that consumers pay higher prices as well, due to these regulations, and that they “act as a drag on economic growth.”

Allow me to add two other points Freedomworks did not mention, but which I believe they would agree with: 1) motives of the regulators do not change costs imposed by the regulations (that is, costs are not lower if the motives of regulators are good); and 2) costs are not changed if regulations are imposed by one political party rather than the other (in other words, the cost of Republican-imposed regulations would be just the same if Democrats had been the guilty party).

With this in mind, let us turn to a set of regulations Republicans put into place, with the claimed motive of “protecting the family”: the Defense of Marriage Act (DOMA).

On the surface, DOMA doesn’t appear to create new regulations. It says:

In determining the means of any Act of Congress, or of any ruling, regulation, or interpretation of the various administrative bureaus and agencies of the United States, the word “marriage” means only a legal union between one man and one woman as husband and wife, and the word “spouse” refers only to a person of the opposite sex who is a husband or a wife.

It sounds simple, but then some of the worst results come out of the simplest of regulations.

Until DOMA, for the entirety of American history, marriage was defined at the state level. Over the last couple of centuries the federal government and the states have woven a web of rules and regulations around the marriage contract. Until DOMA the federal government accepted state-recognized marriages as valid on the federal level. Now there are federal regulations that don’t correspond with the laws in 10 states and the District of Columbia.

Federal regulations control everything from health insurance options to pension plans when it comes to employees. Absent DOMA, an employer in states with marriage equality could treat all married employees the same way. With DOMA, they are forced to establish a dual system of employment where one set of employees is treated one way, and a second set another way, when it comes to federally regulated issues such as taxation and pensions. But, on the state level, employers treat employees identically. Having to comply with DOMA imposes direct regulatory costs on employers.

Don’t take my word for it: consider an amicus brief filed in the case of Massachusetts vs. United States Department of Health and Human Services, currently before the U.S. Court of Appeals, First Circuit. A group of 70 corporations, trade organizations and non-profits signed the amicus, including Aetna, Levi Straus, Blue Cross Blue Shield of Massachusetts, CBS, Microsoft, Chubb Corporation, Google, Starbucks, Xerox, Time Warner Cable, the Greater Boston Chamber of Commerce, Retailers Association of Massachusetts and 12 law firms.

In the brief, they lay out precisely what negative impact DOMA regulations have on their ability to do business. They note that the law forces them to impose a “dual regime” for legally married employees: one set of rules for those with opposite-sex spouses and another set for those with same-sex spouses. This requirement “put us, as employers and enterprises, to unnecessary cost and administrative complexity, and regardless of our business or professional judgment forces us to discriminate against a class of lawfully-married employees, upon whose welfare and morale our own success in part depends.”

The brief notes that the 10th Amendment “protects certain state powers from federal intrusion” and that states have the “power to regulate marriage.” Historically employers “look to state law to determine which employees were married for purposes of administering workplace benefits.” But DOMA intrudes with federal regulations on some legal marriages that are different from the norm. The amici note, “Absent DOMA, employers could treat all employees married under the law of any state in a consistent way. Our burden arises because federal law intrudes to conflict with state law, forcing the employer to create two groups of married employees, and to treat one group different from another.”

The amici noted that 86 percent of full-time employees have health benefits through their workplace and 74 percent have an employer-provided retirement plan that “are a direct contributor to employee loyalty.” Under DOMA requirements, they have to “investigate the gender of the spouses of our lawfully-married employees and then to single out those employees with a same-sex spouse.” They are required to tax health-benefits of spouses of gay employees, but not those for the spouses of straight employees. Forcing the company to treat employees in a discriminatory manner harms good will between employer and employee and, when it comes to pension benefits, requires them to ignore the same-sex spouse of an employee who dies — something employers do not wish to do.

When employers try to compensate gay employees for the higher taxes they must pay, it requires them to pay those employees more than similar straight employees, just so things even out when the paycheck is cut. Social Security and unemployment taxes are based on the income of employees. There is no method for calculating these taxes for health benefits given to an employee’s same-sex partner, yet they are obligated to pay the taxes without knowing how to calculate them. They complain, “The I.R.S. declines to provide official guidance, and instead puts the burden (and risk of error) on the employer.” This is how it is with simple regulations such as DOMA; they have widespread implications, often unknown or unconsidered when the legislation or regulation is implemented.

Freedomworks wrote: “Continued overregulation will only drag the economy down. On the other hand, pursuing a policy of deregulation, would free up the economy to grow and prosper.” I couldn’t agree more, and an easy place to start is repeal of DOMA, an unnecessary regulation that intrudes on the powers of the states. Returning to the federalist approach that was pursued in regards to marriage for over two centuries is a deregulation that is long overdue.

Note: A full report on the costs that DOMA imposes on employers and gay employees can be found here.


Books by this author


This Blogger’s Books from



City Limits

Open all references in tabs: [1 – 7]

Leave a Reply