Tag: aca

Obamacare Is Bigger than Roe v. Wade

This morning, as expected, the Supreme Court agreed to take up Obamacare.  What was unexpected – and unprecedented in modern times – is that it set aside five-and-a-half hours for the argument.  Here are the issues the Court will decide:

  1. Whether Congress has the power to enact the individual mandate. - 2 hours
  2. Whether the challenge to the individual mandate is barred by the Anti-Injunction Act. - 1 hour
  3. Whether and to what extent the individual mandate, if unconstitutional, is severable from the rest of the Act. - 90 minutes
  4. Whether the new conditions on all federal Medicaid funding (expanding eligibility, greater coverage, etc.) constitute an unconstitutional coercion of the states. - 1 hour

In addition to the length of argument, which we can expect to be heard over multiple days in March or April, perhaps the biggest surprise is the Court’s decision to review that fourth issue.  There is no circuit split here – in large part because 26 states are already in this one suit – and no judge has yet voted to uphold what also be described as a claim that the federal government is “commandeering” the states to do its bidding.  The Court probably took the case precisely because so many states have brought it; that former solicitor general Paul Clement is their lawyer also doesn’t hurt.  As a practical matter, this could be a bigger deal than the individual mandate because, while Congress had never before tried an economic mandate, it certainly does attach plenty of strings to the grants it gives states – and the spending power is thought to be even broader than the power to regulate commerce.

In any event, the Supreme Court has now set the stage for the most significant case since Roe v. Wade.  Indeed, this litigation implicates the future of the Republic as Roe never did.  On both the individual-mandate and Medicaid-coercion issues, the Court will decide whether the Constitution’s structure – federalism and enumeration of powers – is judicially enforceable or whether Congress is the sole judge of its own authority.  In other words, do we have a government of laws or men?

North Dakota Rejects ObamaCare ‘Exchange’

Here’s the story, from the Bismarck Tribune:

Angered by a federal health care law that most of them despise, North Dakota House Republicans defeated legislation Thursday to give state officials authority over a health insurance marketing agency that the law requires states to establish.

(Correction: ObamaCare does not require states to create an Exchange.)

They said endorsing state administration of the agency, which is called a health insurance exchange, would be tantamount to approving the federal health reform law itself.

“I certainly am not going to legitimize Obamacare with my vote,” said Rep. Wes Belter, R-Fargo. “We, as a state of North Dakota, need to follow some of the other states who have said no… It is the law, but the fight should not be over.”

Supporters … said Thursday’s vote was the state’s last realistic chance for running its own exchange, since deadlines are looming and the Legislature does not meet again until January 2013…

After a debate that lasted almost two hours, representatives voted 64-30 late Thursday to reject the legislation. All but 10 of the House’s 69 Republicans voted against the bill, while 20 of its 25 Democrats supported it…

Opponents of the bill said they resented the pressure, which they said was caused by unrealistic deadlines in the federal health care law.

Rep. Keith Kempenich, R-Bowman, compared the situation to high-pressure sales tactics in a used car lot.

“If the federal government was really sincere on trying to reform health care, they wouldn’t have put these artificial dates in,” Kempenich said. “Whenever I’ve seen things that get rushed like this, or they get where you’re pressured like this, usually, they’re full of it, and that’s what this is starting to look like.”

Kudos to the North Dakota Policy Council’s Brett Narloch.

Obamacare’s Footnote Four

This post was co-authored by Cato legal associate Chaim Gordon.

Freedom-loving lawyers everywhere recoil in horror at the mere mention of “footnote four.” In that infamous citation in the 1938 case of Carolene Products, the Supreme Court officially renounced judicial review of laws that infringe on economic liberty. This week, in his dissent from the D.C. Circuit opinion that upheld the individual mandate on Commerce Clause grounds, Judge Brett Kavanaugh added his own dubious “footnote four.”

Judge Kavanaugh’s 65-page dissent was devoted to his parsimonious reading of various provisions in the Internal Revenue Code, culminating in the conclusion that the Anti-Injunction Act robbed federal courts of jurisdiction to hear the case until the mandate penalty is actually enforced. As Judge Kavanaugh noted, “the Tax Code is never a walk in the park.” But the Tax Code is even more grueling when you are given lousy legal advice. And that is why footnote four – in which Judge Kavanaugh inexplicably decides to publicly thank former IRS commissioners Mortimer Caplin and Sheldon Cohen and their counsel for their amicus brief – is so troubling. Here is his footnote four:

Both sides before us want this case decided now and contend that the Anti-Injunction Act does not bar this suit. The amicus brief of former IRS Commissioners Mortimer Caplin and Sheldon Cohen, submitted by able counsel Alan Morrison, cogently argued the opposite position. The Court is grateful to amici and counsel for their assistance.

But it is entirely unclear why Commissioners Caplin and Cohen and Counsel Morrison deserve the court’s thanks. For starters, the Caplin and Cohen brief was not advocating either of Judge Kavanaugh’s nuanced readings – be they correct or not – of various provisions in the Internal Revenue Code. (It did, however, make one of Kavanaugh’s main arguments in response to one of the government’s arguments toards the end of the brief.) Rather, the Caplin and Cohen brief broadly asserts that the AIA “prevents courts from reviewing all claims involving payments under the Code, not just those labeled taxes.”

The problem is that, in support of this broad, sweeping assertion, the Caplin and Cohen brief misleadingly cites cases that do not support its claim. That is, almost all the cases cited by the Caplin and Cohen brief specifically relied upon the fact that the penalties at issue were found in chapter 68 of the IRC or were part of a larger taxing scheme (as in the Mobile Republican case). But you would not know that from reading the Caplin and Cohen brief.

Take, for example, the Caplin and Cohen brief’s citation to Shaw v. United States and Botta v. Scanlon as “perhaps the best illustration of the breadth of the applicability of” the AIA. What the Caplin and Cohen brief does not say is that both of these cases specifically rely upon provisions in the IRC that define the penalty at issue in those cases (under section 6672) as taxes for the purposes of the AIA. Those provisions, by their own terms, only apply to penalties under chapter 68 of the Code, and the penalty for violating the individual mandate is in chapter 48.

This is really green-eyshade stuff, we know, but that’s what this litigation has come to – and it’s why tax lawyers are not suffering the higher rates of unemployment of their peers in other specialties.

To make matters worse, Caplin and Cohen filed essentially the same amicus brief with the Supreme Court in one of the cases that the Court will take up at its cert petition conference this week. This is especially alarming because the government has urged the Court to appoint an amicus counsel to argue for the position that the AIA applies to the penalty for violating the individual mandate (even though the government now agrees with the mandate’s challengers that the AIA does not apply).

We think the justices’ clerks are fully capable of advising their bosses on the pro-AIA arguments, which in any event does not apply to the 26 state plaintiffs in the Eleventh Circuit case.  Plus the Court has the Fourth Circuit’s and now Judge Kavanaugh’s thorough “briefs.” If the Court does decide to appoint an amicus to argue that issue, however, let’s hope that it receives better legal advice than the D.C. Circuit got from Caplin and Cohen.

Ohio’s 2-1 Vote against the Individual Mandate Is a Wholesale Rejection of ObamaCare

Yesterday, Ohio voters approved by 66-34 percent an amendment to the state constitution blocking any sort of individual mandate in the state.  The Cleveland Plain Dealer reported that this “strike at President Barack Obama’s health care plan…was ahead by a wide margin even in Cuyahoga County – a traditional Democratic stronghold.” A little over a year ago, Missouri voters likewise rejected ObamaCare’s individual mandate by 71-29 percent.

Supporters typically dismiss such setbacks, including two years of solid public hostility to ObamaCare, by claiming that voters don’t hate the entire law.  In fact, they actually like specific provisions.  A year ago this month, The Washington Post’s Greg Sargent quoted approvingly a McClatchy-Marist poll:

Almost six in ten voters – 59% – report the part of the health care law that prevents insurance companies from denying coverage due to pre-existing conditions should remain law while 36% want it repealed.

Supporters are in serious denial if they still cling to this theory. These overwhelming rejections of the individual mandate are indeed a rejection of the entire law.

Asking people whether they support the law’s pre-existing conditions provisions is like asking whether they want sick people to pay less for medical care.  Of course they will say yes.  If anything, it’s amazing that as many as 36 percent of the public are so economically literate as to know that these government price controls will actually harm people with pre-existing conditions.  Also amazing is that among people with pre-existing conditions, equal numbers believe these provisions will be useless or harmful as think they will help.

But as the collapse of the CLASS Act and private markets for child-only health insurance have shown, and as the Obama administration has argued in federal court, the pre-existing conditions provisions cannot exist without the wildly unpopular individual mandate because on their own, the pre-existing conditions provisions would cause the entire health insurance market to implode.

If the pre-existing conditions provisions are a (supposed) benefit of the law, then the individual mandate is the cost of those provisions. If voters don’t like the individual mandate–if they aren’t willing to pay the cost of the law’s purported benefits–then the “popular” provisions aren’t popular, either.

Or, as Firedoglake’s Jon Walker puts it, ObamaCare is about as popular as pepperoni and broken glass pizza.

D.C. Circuit Paves Way for Supreme Court Consideration of Obamacare

Today the D.C. Circuit ruled that the individual mandate is a constitutional exercise of federal power under the Commerce Clause.  Senior Judge Laurence Silberman (Reagan appointee) wrote the opinion, which was joined by Senior Judge  Harry Edwards (Carter appointee).  Judge Brett Kavanaugh (George W. Bush appointee) dissented on jurisdictional grounds without reaching the merits, finding that the Anti-Injunction Act barred the suit until the individual mandate/penalty/tax goes into effect.  (The case is Seven-Sky v. Holder; see Cato’s amicus brief and a quick breakdown by Tim Sandefur.)

Sure, this is a loss for our side but it’s not a big deal. Every development in the Obamacare litigation has been anticlimactic since the Eleventh Circuit split with the Sixth, guaranteeing that the Supreme Court would take the case.  Today’s ruling, therefore, is notable not so much for its result – upholding the individual mandate – as for the reluctance with which it reached it.  

After acknowledging the novelty of the power Congress is asserting, the court expressed concern at “the Government’s failure to advance any clear doctrinal principles limiting congressional mandates that any American purchase any product or service in interstate commerce.”  In other words, the majority saw itself bound by the Supreme Court’s broad reading of federal power under the Commerce Clause but felt “discomfort” at reaching a result that seemingly had no bounds.  

Indeed, the government has yet to tell any court in any of the cases what it cannot do under the guise of regulating interstate commerce.  But rest assured that the Supreme Court will ask again, and soon – it considers the myriad cert petitions later this week.  And if the high court is as unsatisfied with the government’s jurisprudential non-theory as the D.C. Circuit was, it will not hesitate to strike down this expansion of federal power. 

“Federalism is more than an exercise in setting the boundary between different institutions of government for their own integrity,” wrote Justice Kennedy for a unanimous Court last term (United States v. Bond).  “Federalism secures the freedom of the individual.” 

I am confident that the Supreme Court will not allow this unprecedented invasion of individual liberty.