Budget • Federal Treasury would net more money if denial of spousal benefits to gays and lesbians is declared unconstitutional.
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Washington • The federal Defense of Marriage Act may be history in a matter of months, but same-sex couples won't be the financial winners, and the U.S. Treasury won't be the loser.
Those are but some of the unexpected consequences that could emerge if the Supreme Court overturns the 1996 law, which appeared likely though far from assured following Wednesday's oral arguments.
For years, the debate has focused on the law's denial of federal spousal benefits to gay and lesbian couples married in states that have legalized same-sex marriage. Those benefits include joint tax returns and estate tax exclusions, Social Security and veterans benefits, civil service and military pensions.
A Supreme Court ruling declaring DOMA unconstitutional would make married same-sex couples eligible for all those benefits, leading to the presumption that they would gain and the federal Treasury would lose. But just the opposite is true.
A 2004 study by the Congressional Budget Office estimated that it would increase government revenue by nearly $1 billion a year over 10 years just a fraction of the $3.8 trillion budget. That's mostly because two-income gay couples with relatively equal earnings would pay more in taxes, not less.
The estimate was based on 600,000 same-sex couples nationwide in 2000 who might choose to marry. Today, there are an estimated 131,000 in 10 states and the District of Columbia including 18,000 in California, where gay marriage was legal for five months in 2008. So the impact would be even less.
"It's absolutely going to net the federal Treasury more money," says James Esseks of the American Civil Liberties Union, which helped represent New York widow Edith Windsor in her challenge to the law.
Windsor, 83, was in court Wednesday as a slim majority of justices indicated their displeasure with the law. She stands to win back the $363,000 she paid in 2009 on the estate of her deceased spouse, Thea Spyer a tax she would not have owed if their marriage was recognized by the federal government.
A few dozen other same-sex married couples, widows and widowers also stand to gain because they had filed legal challenges or tax claims that have not expired, says Mary Bonauto, civil rights project director at Gay & Lesbian Advocates & Defenders. For all other same-sex married couples, the impact of the court's ruling would be prospective, not retroactive.
Bonauto represents 17 people in New England with tax, Social Security and other such claims who would stand to benefit. But, she cautions, "on the tax issue, it really does cut both ways. Many people will pay more."
There are other potential legal and legislative consequences as well:
• House Republicans who have defended the law because the Obama administration refused to do so could mount a new effort in Congress. But the political impetus has been the opposite recently, as Chief Justice John Roberts noted Wednesday.
• It could be a victory for states' rights and a defeat for federal power, based on Justice Anthony Kennedy's concerns about federalism. That's normally a conservative cause, so the eventual decision's reasoning could offer consolation for those who had defended DOMA.
• A decision based less on the law's discriminatory impact on gays and lesbians could also could give an emotional boost to same-sex marriage efforts elsewhere, including Delaware, Hawaiii, Illinois, Minnesota, New Jersey and Rhode Island.