Tag: commerce power

Ted Olson on John Roberts’ Saving Construction of ObamaCare

At a recent legal conference, former Solicitor General (and Cato Institute board member) Ted Olson offered this slightly nerdy take on Chief Justice John Roberts’ saving construction of ObamaCare’s individual mandate:

Roberts’ support for the individual mandate brings to mind the Higgs boson — it can’t be seen, it disappears upon occurrence, and it’s the God particle that controls everything in the universe.

Hat tip: Louise Bennetts.

ObamaCare Lost on the Medicaid Mandate & Commerce Power. It May Yet Lose on the Tax Power.

Supporters of the Obama health law are incorrectly reading the Supreme Court’s ruling as a victory.

First, the ruling severely limited the Obama health law’s Medicaid expansion, effectively giving states the green light to refuse to expand their Medicaid programs. Coupled with the fact that the statute already enables states to block the other half-trillion dollars of new entitlement spending, the law is in a very precarious position.

Second, the Court ruled 5-4 that the individual mandate is not a legitimate use of the Commerce Power. That too is a defeat for the government, even if it is of no immediate consequence.

Third, while the Court upheld the individual mandate as a tax, that ruling may be vulnerable to legal challenge.

Chief Justice Roberts wrote, “The Federal Government ‘is acknowledged by all to be one of enumerated powers,’” and, “The Constitution’s express conferral of some powersmakes clear that it does not grant others.” So it is interesting that Roberts did not specify exactly what type of constitutionally authorized tax the mandate is.

As Cato chairman Bob Levy wrote in 2011, that’s not an easy thing to do:

Assume, however, the Supreme Court ultimately disagrees and finds that the penalty for not purchasing health insurance is indeed a tax. Nevertheless, say opponents of PPACA, the tax would be unconstitutional. They underscore that taxes are of three types—income, excise, or direct. Each type must meet specified constitutional constraints. Because the mandate penalty under PPACA does not satisfy any of the constraints, it is not a valid tax.

Income taxes, authorized by the Sixteenth Amendment, must (by definition) be triggered by income. Yet the mandate penalty is triggered by the nonpurchase of insurance. Except for an exemption available to low-income families, the amount of the penalty depends on age, family size, geographic location, and smoking status. So the penalty is not an income tax.

Excise taxes are assessed on selected transactions. Because the penalty arises from a nontransaction, perhaps it qualifies as a reverse excise tax. If so, it has to be uniform across the country (U.S. Const., Art. I, sec. 8). But the penalty varies by location, so it cannot be a constitutional excise tax.

Direct taxes are assessed on persons or their property. Because the penalty is imposed on nonownership of property, perhaps it could be classified as a reverse direct tax. But direct taxes must be apportioned among the states by population (U.S. Const., Art. I, sec. 2). The mandate penalty is assessed on individuals without regard to any state’s population. Hence, it is not a lawful direct tax.

On the last point, Roberts agreed: ”A tax on going without health insurance does not fall within any recognized category of direct tax.” But then what kind of constitutionally authorized tax is it?

The dissent suggests the Court has given this issue scant attention:

Finally, we must observe that rewriting [the mandate] as a tax in order to sustain its constitutionality would force us to confront a difficult constitutional question: whether this is a direct tax that must be apportioned among the States according to their population. Art. I, §9, cl. 4. Perhaps it is not (we have no need to address the point); but the meaning of the Direct Tax Clause is famously unclear, and its application here is a question of first impression that deserves more thoughtful consideration than the lick-and-a-promise accorded by the Government and its supporters. The Government’s opening brief did not even address the question—perhaps because, until today, no federal court has accepted the implausible argument that [the mandate] is an exercise of the tax power. And once respondents raised the issue, the Government devoted a mere 21 lines of its reply brief to the issue…At oral argument, the most prolonged statement about the issue was just over 50 words…One would expect this Court to demand more than fly-by-night briefing and argument before deciding a difficult constitutional question of first impression.

There is even less discussion about what type of constitutionally authorized tax the mandate is.

I’m not a lawyer. But it seems to me there may be room here for the same individual citizens who brought this case to again file suit against the federal government for trying to impose an unconstitutional tax. It may seem unlikely that Roberts would reverse himself on the Tax Power issue. Then again, since he never specified what type of constitutionally permissible tax the mandate is, perhaps voting to strike the mandate would not be reversing himself.

Stop Using Slippery-Slope Arguments? Where Would that End?

Richard Thaler writes in the New York Times:

Justice Scalia is arguing that if the court lets Congress create a mandate to buy health insurance, nothing could stop Congress from passing laws requiring everyone to buy broccoli and to join a gym…Can anyone imagine Congress passing a broccoli mandate law, much less the court allowing it to take effect?

Yes annnnd…yes. Next question.

Surely, the justices have the conceptual resources to draw a distinction between the health care market and the market for broccoli. And even if they don’t, then all the briefs, the zillions of blog posts and a generation’s worth of economic literature can help them.

If drawing a constitutionally meaningful distinction between the markets for health insurance and broccoli is child’s play for Thaler, he should school all the brief- and blog-post-writers who so far have failed. That would have been a more productive use of his thousand words than his build-up to this thesis:

If you are opposed to a policy, state your case based on the merits — not on the imagined risk of what else might happen down the road. The path of that road is so unpredictable that it may even produce a U-turn.

Good grief. Slippery-slope arguments are about principles. As in, “If you concede this principle because you don’t mind the result here, you will no longer have it to protect you against that bad result there.” Thaler’s thesis would lead, for example, to all manner of civil-liberties violations by the state because there simply isn’t enough political support to protect all the civil liberties of various minorities. But Thaler doesn’t want us to think about things like consequences or the future.

The potential for U-turns makes no more sense as an argument against invoking slippery slopes principles, because principled arguments can help generate the U-turn that opponents of, say, ObamaCare want to see.

I take silly arguments like this to be evidence that ObamaCare supporters are in complete panic mode.

The GOP’s Legislative Malpractice

If you read Virginia Attorney General Ken Cuccinelli’s op-ed in Sunday’s Washington Post, you witnessed the too-rare spectacle of a Republican denouncing his own party’s hypocrisy on medical malpractice reform:

With Senate Bill 197 — legislation that would have the federal government dictate how state judges are to try medical malpractice cases and cap what state courts may award — several Republican senators have…take[n] an approach that implies “Washington knows best” while trampling states’ authority and the 10th Amendment. The legislation is breathtakingly broad in its assumptions about federal power, particularly the same power to regulate commerce that lies at the heart of all the lawsuits (including Virginia’s) against the individual mandate of the 2010 federal health-care law. I have little doubt that the senators who brought us S. 197 oppose the use of the commerce clause to compel individuals to buy health insurance. Yet they have no qualms about dictating to state court judges how they are to conduct trials in state lawsuits…

This legislation expands federal power, tramples the states and violates the Constitution. And if it were ever signed into law — by a Republican or Democratic president — I would file suit against it just as fast as I filed suit when the federal health-care bill was signed into law in March 2010 (15 minutes later).

For more on why ObamaCare is unconstitutional see this white paper by Cato chairman Bob Levy.  For a discussion of why nearly all federal med mal reforms are unconstitutional, see this Policy Analysis by Bob Levy and Michael Krauss.  For a discussion of why mandatory caps on damages may harm patients, see this recent Policy Analysis by Cato adjunct scholar Shirley Svorny.  For an individual-rights-based approach to med mal reform, see this paper by yours truly.

Yes, Madam Speaker, We’re Serious

During the initial legislative debate over ObamaCare, a reporter asked (now-outgoing) House Speaker Nancy Pelosi (D-CA) whether the U.S. Constitution grants Congress the power to compel Americans to purchase health insurance. Pelosi responded, “Are you serious? Are you serious?

Today, a federal court answered Ms. Pelosi’s question when it declared ObamaCare’s individual mandate unconstitutional.

Here is Pelosi’s statement responding to today’s court ruling in Cuccinelli v. Sebelius:

Pelosi Statement on Affordable Care Act Ruling in Virginia District Court

WASHINGTON, Dec. 13, 2010 /PRNewswire-USNewswire/ – Speaker Nancy Pelosi issued the following statement today after a District Court judge in Virginia ruled one provision of the Affordable Care Act unconstitutional. The judge refused to freeze implementation of the law during the appeals process, meaning Americans already benefitting from health insurance reform – or set to benefit soon – will not be affected:

“Today’s court ruling stands in stark contrast to 14 similar challenges to the Affordable Care Act – in two, federal district judges strongly upheld the law; in the other 12, the challenges have been dismissed.

“Since its enactment, health insurance reform has delivered concrete benefits to millions of Americans. Among provisions already benefitting the American people, it has offered small businesses a tax break to cover their workers, allowed young adults to stay on their parents’ plans until age 26, and provided assistance to seniors struggling to pay prescription drug costs. These changes are good for our middle class, and will not be impacted by this court’s decision to overturn a single provision of the law.

“There have been and will continue to be a wide range of attempts to weaken this law. But as in previous court rulings across the country, I am confident that the Affordable Care Act will ultimately be sustained and will keep benefitting our middle class, our families, and our businesses, indeed every American. In Congress, we will stand firm against attempts to roll back the law, including the Patient’s Bill of Rights and the critical consumer protections enacted by health insurance reform.”

SOURCE Office of the Speaker of the House

Note that Pelosi does not address the constitutional issue.