If you are a careful reader, you will notice that Justice Kennedy begins by expressing skepticism that there is any limiting principle (which would suggest he was leaning toward striking down Obamacare). But then he changes the tone, suggesting that the slipperly slope argument exists in most areas. Everything is a matter of degree. He then states that in his view "the young person who is uninsured is uniquely proximatelyl very close to affecting" insurance and health care costs of others "in a way that is not true in other industries." And if you listen to the audio, he really places a heavy emphasis on the work "uniquely." If he believes that, he has given himself an answer to his own question, and the answer would not be good for those of us who think upholding Obamacare will be the end of the doctrine that ours is a government of only limited, enumerated powers. Justice Kennedy does call this issue his "concern" in the case, and although my friend Mike Carvin, who was arguing on behalf of the National Federation of Independent Business, addressed Justice Kennedy's concern, I think the attorneys arguing the next phase of the case tomorrow would be well advised to reinforce that answer for Justice Kennedy.
You would have to have been hiding in a cave, or on a beach some place in the South Pacific, to have missed the fact that the Supreme Court is holding an extraordinary 3 days of oral argument to consider the constitutional challenges to the Patient Protection and Affordable Care Act (aka Obamacare). The issues are complicated, and the news commentary not always very helpful. So let me offer a bit of a user's guide to this week's arguments.
Yesterday, the Court considered a highly technical challenge to its jurisdiction (that its, its legal authority) to even hear the case. There is a federal statute, the Anti-Injunction Act, that prohibits legal challenges to taxes prior to the payment of taxes, on the theory that we don't want frivolous legal challenges interrupting the government's revenue flow. Of course, President Obama was pretty adamant two years ago when Obamacare was passed that it was not a tax. Rather, the mandate that everyone purchase a government-determined level of health insurance simply resulted in a fine, or penalty, for anyone failing to comply. That the Internal Revenue Service would collect these fines did not turn them into a tax, we were told. The government adhered to that position yesterday, joining with the two sets of challengers -- the 26 States who joined Florida's lawsuit, and the National Federation of Independent Business representing private individuals and businesses -- to argue that the Anti-Injunction Act was not applicable here. Because the Court has an independent obligation to consider whether it has jurisdiction even if both parties think it does, the Court appointed a friend of the Court to argue the other side. Based on the oral argument yesterday, it appears that he will be wildly unsuccessful -- the Court appears poised to rule overwhelming, perhaps 9-0, that the individual mandate penalty is not a tax, at least for purposes of the Anti-Injunction Act. That means the Court will get to proceed to step two of the legal challenges.
That step was heard today. The issue is whether the individual mandate is itself constitutional, or whether it exceeds the powers given to Congress that are enumerated in the Constitution. The principal argument being made by President Obama's Solicitor General is that the health industry is interstate commerce, and that forcing people into the insurance market as a way to pay for the health care they will ultimately need is a valid, "necessary and proper" means of supporting Congress's regulation of the "commerce" that is the health care industry. A second line of defense argued by the Solicitor General is that the mandate penalty is really a tax, and therefore a valid exercise of Congress's power to tax and spend for the general welfare. If you are perplexed by how the SG could argue yesterday that the mandate was not a tax, yet argue today that it is a tax, you are not alone. The Justices themselves (well, most of them -- Justice Breyer seemed comfortable with the apparent contradiction) gave the SG a pretty rough time over that point.
But the Commerce Clause argument is where much of the discussion focused, and here, as I have been saying for two years, I think the case will come down to whether Justice Kennedy asks the question whether, under the Government's rationale, there is anything that the Congress cannot regulate, and if he receives a satisfactory answer to that question. Twice in the last 15 years, he has asked that question in Commerce Clause cases, and when the Government did not have an adequate answer, he ruled against them. If that question cannot be answered with a defensible "yes," then the entire doctrine that ours is a Constitution of limited, enumerated powers would be gone, something that Justice Kennedy has repeated said cannot be done.
So here's the money quote from today's argument:
"JUSTICE KENNEDY: Well, then your question is whether or not there are any limits on the Commerce Clause. Can you identify for us some limits on the Commerce Clause?"
We'll have to wait until the case is decided in June to see whether Solicitor General Verrilli's response satisfied Justice Kennedy, but my read of the discussion is that it was a feeble response, so feeble that Justice Sotomayor, whom most people believe to be a solid vote to uphold Obamacare, had to try to rescue him, but in doing so, she dug his hole deeper. Here's the exchange:
"JUSTICE SOTOMAYOR: -- you're answering affirmatively to my colleagues that have asked you the question, can the government force you into commerce?
"GENERAL VERRILLI: So -- no. No.
"JUSTICE SOTOMAYOR: And there's no limit to that power.
"GENERAL VERRILLI: No, because that's -that's the first part of our argument.
Toward the end of the argument, Justice Kennedy reframed the question as follows:
JUSTICE KENNEDY: And the government tells us that's because the insurance market is unique. And in the next case, it'll say the next market is unique. But I think it is true that if most questions in life are matters of degree, in the insurance and health care world, both markets -- stipulate two markets -- the young person who is uninsured is uniquely proximately very close to affecting the rates of insurance and the costs of providing medical care in a way that is not true in other industries.
That's my concern in the case.
There are a couple of moments in the argument where the stakes become crystal clear. At one point, the Solicitor General stated: "I think Congress is entitled the latitude of making the judgments of what the appropriate scope of coverage is." I cannot think of a greater intrusion on liberty that for Congress to get to decide what our scope of coverage is. As we have recently seen, the federal government is already using this new-found power to impose all sorts of mandates that threaten the freedom of religious conscience as well as liberty more generally. That is just the tip of the iceberg if the power to compel people to enter into commerce is upheld.
At another point, Justice Breyer, who seems, quite predictably, to be strongly predisposed to upholding this (and every other) exercise of power by the federal government, really demonstrates what the crux of the claim of power is.
"JUSTICE BREYER: But do you think you can, better than the actuaries or better than the members of Congress who worked on it, look at the 40 million people who are not insured and say which ones next year will or will not use, say, emergency care?" There it is, in bold, stark terms. Justice Breyer thinks the government knows better than we individuals do how we should order our lives; how much risk we should take; how much risk we should mitigate by the purchase of insurance; how much we would rather spend on food and shelter (or anything else, for that matter) than on health insurance; etc. A government that thinks they know better than its citizens is an arrogant government. One that has enough power to make good on its paternalistic tendencies is a dangerous government, even a tyrannical one. The stakes of this case could not be more clear.
Let me close, then, with a short preview of tomorrow's argument. Phase 3. Assuming the Court finds that it has Jurisdiction (Monday's topic), and assuming that at least 5 Justices think the individual mandate exceeded Congress's constitutional power (Tuesday's topic), can the unconstitutional individual mandate be severed from the rest of the statute so that only it is struck down, or is it such an essential part of the overall Obamacare law that the entire law must fall. That is the topic which will be addressed Wednesday morning.
And finally, Wednesday afternoon, the Court will confront whether Congress's threat to take away all existing Medicare and Medicaid funding from any State that declines to go along with the massive expansion in Medicare and Medicaid that another section of Obamacare requires, is an unconstitutional use of Congress's Spending Power. The Supreme Court has previously said that some conditions on federal spending could be so coercive as to be unconstitutional, but thus far it has never struck down an Act of Congress on those grounds. We cannot imagine a more coercive power play than this one, so if the "coercion" theory is to ever have any merit, it will be here.
That last issue has been flying under the radar, but as I have noted before, have been urging the Court to get back into business of enforcing the Constitution's limits on Congress's spending power for some time, and we do so in our briefs in this case as well. You might enjoy reading our two briefs in the case, as well as our initial brief successfully urging the Court to take up the Spending Clause issue.
Individual Mandate Brief
Spending Clause brief on the merits
Spending Clause brief in support of review
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John C. Eastman