Some of the Supreme Court appear skeptical of the claim that, if they strike down the individual mandate provision, they must strike down the entirety of the Act. Early accounts of the justices from the courtroom appeared to be favoring severability but new reports have cast doubt — yet another example how artificial the denial of cameras and live coverage has become. As the argument unfolded, conservative justices appear to suggest that it really is an all-or-nothing proposition.
This was always been viewed a weak argument because of the preference of federal courts to minimize the degree to which they strike down federal laws. However, the Administration blundered in removing the common severability clause of the legislation — creating a game of chicken with the courts where a ruling against the individual mandate would torch the entire historic act. The hope for a “sticker shock” deterrent did not work when the trial court struck down the Act. It still seems a significant departure from past cases to strike down the entire act, including provisions not dependent on the individual mandate.
This matter is made more difficult by the confused and conflicted statements of both the Administration and the Justice Department. Initially, the Justice Department insisted that the individual mandate was essential to the Act, which would be fatally harmed if it were ruled unconstitutional. Then, as with other issues, the Justice Department changed its position on severability.
The argument did indicate that Scalia appears inclined to strike down the individual mandate in saying “One way or another, Congress will have to revisit it in toto.” Scalia added “Once you cut the guts out of it, who knows which parts were desired and which ones weren’t?” Even Justice Elena Kagan (who many felt should have recused herself from the case due to her prior positions as Obama’s Solicitor General) noted “The question is, is half a loaf better than no loaf?”
Even more worrisome for the Justice Department is the statement of Justice Anthony Kennedy who described it as an “extreme proposition” to allow the various insurance regulations to stand after the mandate was struck down.
The gamble of the Administration and Democratic leadership in pulling a severability clause now may have backfired in a major way.
Today, the justices are also considering whether the law’s proposed Medicaid expansion violates the Constitution as a form of conditional legislation. Congress routinely takes in more taxes than it needs so that it can return the money to states with conditions or “strings attached.” The question is whether this is a condition “so coercive as to pass the point at which pressure turns into compulsion.” However, the Court has routinely denied such claims while reserving the possibility that a condition might someday be so coercive as to be unconstitutional. The Court in South Dakota v. Dole did include a strong message that the Court would not dismiss such a claim categorically. It remains a viable claim but one without a successful track record.
It’s no surprise Supreme Court Justice Antonin Scalia isn’t a fan of President Obama’s health care law. But his disdain was on full display during both sessions of Wednesday’s arguments.
In the morning session on the question of how much of the law should stand if the mandate is ruled unconstitutional, Scalia cited the horsetrading that was required to pass the bill — including the politically embarrassing, and failed, Cornhusker Kickback. He also admitted that he’d like to see the whole law fall if the mandate is ruled out of bounds.
In the afternoon he took pains to remind the Court of the unpopularity of the individual mandate.
The exchange occurred when Solicitor General Donald Verrilli rejected a hypothetical that relied on the notion of Congress passing a massive new tax. This, he argued, would have to overcome massive political constraints.
At that point Scalia chimed in: He would’ve thought the individual mandate would also be too much of a political liability to ever pass Congress.
His fiery outbursts from the bench marked the three days of oral arguments, and will likely be reflected in his opinions when rulings come down in June. TPM
I hear you Tony C. The unfortunate part of all this debate is that it really isn’t going to matter for too much longer. Like Ron Paul says, the country is broke. Period. There is no feasible way for the national debt to be paid back. In fact, there is no feasible way for us to even prevent it from continually growing exponentially. So we will just continue as if nothing is wrong until all the chickens come home to roost. When that happens, rather than being concerned about free birth control, we’ll be wondering how we’re going to turn the lights back on.
Neil
I am not enthusiastic about the attempt to make the word “entitlement” mean “not entitled” unless you also point out that rich people have their sense of entitlement which can be questioned. All rights are claimed at first, and can be questioned, including freedom of speech.
The Limiting Principle
JB
Hey kids? Are you down in the dumps after Tuesday’s oral argument? Do you want a limiting principle that justifies the individual mandate but doesn’t give Congress unlimited power under the Commerce Clause? Fine. Here are three of them. Pick your favorite.
1. The Moral Hazard Principle. Congress can regulate activities that substantially affect commerce. Under the necesary and proper clause, Congress can require people to engage in commerce when necessary to prevent problems of moral hazard created by its regulation of commerce. But if there is no problem of moral hazard, Congress cannot compel commerce. Courts can choose different standards of review to decide how much they want to defer to Congress’s conclusion. Even under the strictest standard of review the individual mandate passes muster.
Explanation: The guaranteed issue and community rating rules prevent insurers from discriminating against uninsured people because of preexisting conditions. These rules creates a moral hazard: people will wait until they get sick to buy insurance. Congress can require them to buy insurance early to prevent gaming the system. (Actually, it exacerbates an already existing moral hazard in all health insurance, because insureds know more about their health condition than insurers).
Why not broccoli? There is no moral hazard problem created when people refuse to buy broccoli. It’s true that buying and eating broccoli might make you healthier, but people don’t wait until they are sick to buy broccoli. That’s because broccoli is not going to do them much good at that point. In this sense, broccoli doesn’t work like health insurance.
Why not cars? Under this principle, Congress can’t make everyone buy a car in order to help the auto industry. There is no moral hazard that Congress is responding to that is caused by people strategically waiting to buy cars. Note, by the way, that if fewer people buy cars, the price of cars might go down, not up, as Justice Scalia thought.
Closest analogy: In United States v. Comstock, the Supreme Court held that Congress could create a civil commitment system for mentally ill prisoners following their criminal sentences when no state wanted to take them. Congress had created a situation in which after long prison terms connections to states were attenuated, and no state wanted to risk being stuck with the costs of civil commitment. As a result, Congress could create its own system.
2. The Interstate Externalities Principle. Congress can regulate activities that substantially affect commerce. Under the necesary and proper clause, Congress can also require people to engage in commerce when necessary to prevent spillover effects on states, interstate externalities and solve interstate collective action problems. But Congress can’t require people to engage in commerce if there are no serious interstate externalities or spillover effects, or if Congress is not seriously attempting to solve a collective action problem. Once again, courts can adopt higher or lesser standards of review to prevent sham or pretextual attempts, but even under the strictest standard, the individual mandate is fine.
Explanation: States that adopt guaranteed issue and community ratings rules will become magnets for sick people, driving up rates, and uninsureds may flock to states without individual mandates, further driving up rates in the states they leave. This discourages many states from adopting this combination of reforms. Put differently, states might adopt these rules only if other states did so as well. Only Massachusetts, because of peculiar features of its health care markets, was able to make its reforms work on its own.
The incentive structures just described create a national problem that requires a national solution. Congress had plenty of evidence to this effect; therefore even under a strict standard of review, the mandate is constitutional.
What about broccoli? A broccoli mandate doesn’t work like an insurance mandate, because of the way that insurance works. First, a mandate to buy broccoli is unlikely to cause people to leave Massachusetts in significant numbers. Second, and more importantly, a broccoli mandate won’t make Massachusetts a magnet for broccoli lovers or people who desperately need broccoli. They can buy broccoli in their home states. Broccoli doesn’t work like health insurance because grocers don’t refuse you the right to buy broccoli because of a preexisting condition. On the other hand, insurance is based on risk pools, and so it is a different kind of product.
What this justification most resembles: Social security disability programs, which solve collective action problems between states. By creating a national system of disability insurance, no state becomes a magnet for the disabled and employers don’t leave for states without disability insurance.
3. The “It’s a tax, stupid!” Principle. Congress can regulate economic activities that cumulatively affect interstate commerce. But if Congress wants to regulate inactivity, it must use the taxing power instead. Congress can use its taxing power to give people a choice between engaging in commerce or paying a tax. The rules for the taxing power are well settled since the New Deal. The tax (1) must promote the general welfare, (2) must raise revenue; and (3) and it must not be a criminal penalty in disguise. The individual mandate passes this test with flying colors. The tax was estimated to raise some 4 billion dollars in revenue. In earlier cases, involving taxes on guns and drugs, the Court found that 500 dollars was sufficient.
Justice Ginsburg worried about the revenue question in the oral arguments on Monday. She argued that the individual mandate was designed to give incentives to buy insurance. If it works perfectly, she argued, nobody will pay, so it won’t raise revenue. That argument proves too much– it would also apply to taxes on contraband, drugs and guns, which the Court has previously upheld.
But there’s an even more important response to Ginsburg’s concern. That’s not the way the individual mandate was actually designed. The penalty was not set to ensure total compliance. It was not set to be equivalent to the most expensive health care premium available, but only to the average amount of health care premiums calculated nationally. That means that Congress expected that some people would rather pay the penalty. Congress knew it wouldn’t get 100 percent compliance, and the bill was not intended to ensure 100 percent compliance. This is like a tax on pollution, which allows some people to continue to pollute if it is worth it to them to pay the tax.
Paul Clement argued that the individual mandate is a direct tax, like a head tax, and therefore has to be directly apportioned by state population under Article I, section 9. This is incorrect. Head taxes are taxes that you can’t get out of by anything you do. They just tax you for living. But you can easily get out of the individual mandate. Just buy insurance. The mandate is like a tax on people who don’t invest in solar panels or antipollution devices. Such taxes give people a choice; they won’t get 100 percent compliance, so they raise revenue.
In sum, without giving Congress unlimited powers under the Commerce Clause, the Court can uphold the mandate under the moral hazard theory, the interstate externalities theory, or the “It’s a tax, stupid!” theory. Tony Kennedy, John Roberts, are you listening?
Posted 2:50 PM by JB [link] From Balkanization
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Sanford Levinson, Framed
Sanford Levinson, Framed: America’s 51 Constitutions and the Crisis of Governance (Oxford University Press, 2012)
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Mary Dudziak, War Time: An Idea, Its History, Its Consequences (Oxford University Press, 2012)
Living Originalism
I like how Frum characterizes the Republican position: “Our plan is to take away the government-mandated insurance of millions of people under age 65, and replace it with nothing.”
What’s funny is that the Republicans have proposed an individual mandate of their own. http://www.slate.com/articles/news_and_politics/jurisprudence/2011/05/paul_ryans_individual_mandate.html
Why do people listen to these clowns. They lack basic intelligence. The only thing that matters to them and to the general public is which team can get their legislation enacted. If you get your legislation enacted, your team gets points. So stupid.
@Neil: I stand with libertarians on certain rights and beliefs. I do not believe the government has any business in drugs, I do not believe in preemptive war, I believe in most applications of the Commerce Clause overstep federal government bounds. I hold that quaint belief in the right to be charged and have a trial and be proven guilty beyond a reasonable doubt before a lifetime incarceration or summary execution. I believe in full legal equality of all races, genders, sexual orientations, creeds and religions.
However, I have no problem with socially funded common good programs that produce goods we all need or benefit from, like road, power, water, and information infrastructure, scientific research, public education, public healthcare, law enforcement, food and drug inspection, anti-pollution enforcement, the armed forces and national defense, etc.
After nearly two hours of arguments over the health care law’s significant expansion of the Medicaid program, it was impossible to determine whether a clear majority of Supreme Court justices were leaning toward a particular ruling.
As expected, liberal justices signaled their view that the challenge should fail, and conservative justices — notably Antonin Scalia — seemed sympathetic to the idea that the Medicaid expansion is unconstitutional. That might not seem surprising. But many legal scholars were shocked that the Court even agreed to hear this challenge. And the consequences of an adverse ruling would be so techtonic for the federalist system that the ambiguity of the conservative justice’s opinions is worth noting and taking seriously. from TPM
Tony C, I prefer to forget Paul. His party has.
@Neil: Swarthmore is telling you to read a newsletter that Ron Paul did not write, which she knows. His name was on the letterhead, but he has since disavowed those views, which she also knows.
Further, Swarthmore is saying Ron Paul is against civil rights for women, which is a lie. Ron Paul is a pro-lifer (I am not). Being pro-life does not mean he would deny women the rights of habeas corpus, a trial, divorce, or any other right exercisable by men. It is a gross distortion of Paul’s position to say he is against civil rights for women.
I am not the one “making this about Paul,” Swarthmore brought it up, and if she wants to hijack this thread to be about Ron Paul, so be it. I will respond if attacked.
[If the ACA is struck down,] Republicans will need a Plan B. Unfortunately, they wasted the past three years that might have developed one. If the Supreme Court doesn’t rescue them from themselves, they’ll be heading into this election season arguing, in effect, Our plan is to take away the government-mandated insurance of millions of people under age 65, and replace it with nothing. And we’re doing this so as to better protect the government-mandated insurance of people over 65—until we begin to phase out that insurance, too, for everybody now under 55,” – David Frum.
Neil , Read his newsletter if you want to know more.
How is Paul not for gay people?
The Medicaid argument is just finishing
Paul Clement is concluding his rebuttal now. In the second half of the argument there were more voices, including justice Alito, for the idea that the Medicaid expansion is coercive but it did not seem at all a likely outcome. The questions were too abstract about general principles. One very plausible middle ground outcome would be to say that there are some limits on the federal government’s ability to revoke all Medicaid funds in response to a state’s decision just to refuse the expansion. What those limits are would be left for another case. But I don see the Court going further than that. The Chief repeatedly suggested that maybe the states gave up this aspect of the sovereignty by accepting federal funds. The SG closed with an argument that the health care statute as a whole including the mandate was essential to the public receiving the “blessings of liberty” because health care is so important. All the usual caveats apply about how you cant be sure from an argument. SCOTUS BLOG
Tony C He is for civil rights for a few certainly not women and gay people. . Let’s not make this about Ron Paul. He did not go anywhere in his party.
Oops, I guess not. Sorry Tony.
Perhaps Tony C would actually be considered a libertarian then, espousing the currently radical “if you want something, you pay for it yourself” idea.
@Swarthmore: I completely disagree with Ron Paul on healthcare and taxes. I agree with Ron Paul on wars and civil rights, which I consider more important. Do not attribute beliefs to me that I do not hold; it is an untruth.
@Neil: That is basically what I advocate, either that or a version of Sweden’s national health care system; in which private insurance and hospitals can still operate if they wish, but everybody is entitled to basic health coverage and emergency care, at government-owned hospitals, with salaried doctors and personnel (earning essentially the same pay and benefits as our military doctors and healthcare personnel).
If the rich want private suites and instant care, they can pay for it, if being treated like the military treats a private is good enough for you (and I thought that it was excellent when I was one) then go to the government hospital and wait your turn. Bring a book and an iPod. It isn’t that bad.
Neil, Tony C is a Ron Paul supporter. Ron Paul is not a progressive on healthcare. Quite the opposite is true. Neil, Don’t call me “mom”, again, please.
Mom,
I belive the women’s rights groups, which really seem to be women’s entitlement groups, are supporting Obamacare so strongly because they love the idea of not having to pay for birth control out of pocket anymore. They think it’s going to be “free”.