In a move that seems to have surprised many observers, the Supreme Court today upheld nearly all of the Patient Protection and Affordable Care Act by a 4+1 to 4 majority (I’ll explain the math below). Chief Justice John Roberts, who wrote the Court’s opinion, joined with the four liberal justices in affirming the individual mandate and essentially all of the Medicaid provisions. The Court’s three reliable conservatives, plus Justice Kennedy, wrote in dissent that the entire law should be ruled invalid. The opinions can be read in their entirety here.
Addressing the question of the individual mandate, Roberts agreed that the mandate was not a proper exercise of Congress’s commerce power:
“The power to regulate commerce presupposes the existence of commercial activity to be regulated. … As expansive as this Court’s cases construing the scope of the commerce power have been, they uniformly describe the power as reaching “activity.” … The individual mandate, however, does not regulate existing commercial activity. It instead compels individuals to become active in commerce bypurchasing a product, on the ground that their failure to do so affects interstate commerce. Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority.”
That’s the good news. A majority of the Supreme Court Justices recognize that Congress’s commerce power is not totally unbridled. Predictably, Justice Ruth Bader Ginsburg wrote a concurring opinion expressing her belief that the mandate WAS in fact a constitutional exercise of the commerce power (explaining the 4+1 majority I mentioned above). Although Justices Breyer, Sotomayor, and Kagan concurred with parts of Roberts’s majority opinion, they concurred with Ginsburg on the extent of Congress’s commerce power.
The four-Justice majority also rejected the government’s backup argument that the mandate could be justified under Article I, Section 8, Clause 18 (what grade schoolers are taught is the “elastic clause”) as “necessary and proper” for effectuating the rest of the Affordable Care Act:
“The individual mandate … vests Congress with the extraordinary ability to create the necessary predicate to the exercise of an enumerated power and draw within its regulatory scope those who would otherwise be outside of it. Even if the individual mandate is “necessary” to the Affordable Care Act’s other reforms, such an expansion of federal power is not a “proper” means for making those reforms effective.”
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Today, in a really perverse ruling, the Supreme Court upheld Obamacare’s individual mandate as a tax in a 5-to-4 decision, even though Obamacare’s supporters repeatedly denied when they were passing it that it was a tax. (The Court did concede that the individual mandate wasn’t valid under the Constitution’s Commerce Clause, so it instead relied on Congress’s tax power.) This ruling lets politicians avoid the political heat by denying that something is a tax in order to pass it (as President Obama and congressional leaders did, to deny that they had broken Obama’s pledge not to raise taxes on anyone making less than $250,000 a year), even if they intend for it to be upheld later as a tax. That undermines political accountability, and gives cover to fork-tongued politicians seeking to bamboozle their constituents.
To uphold Obamacare as a tax, the Court twisted itself into a pretzel, first treating Obamacare as not a tax for purposes of the Anti-Injunction Act in order to rule on the merits of the challenge, then upholding it as being a tax for purposes of the Constitution. (The Anti-Injunction Act prevents the courts from ruling on constitutional challenges to taxes before they are collected.) I explained earlier how upholding Obamacare cannot be justified under the Commerce Clause, since it would effectively remove any limit on federal regulatory power, violating principles of federalism.
Some press accounts have claimed that Roberts, who authored the Court’s opinion, is a “conservative” justice (his ruling was joined in large part by the Court’s most liberal justices). I’ve never considered Roberts a “conservative justice.” Whatever his personal inclinations may be, he is subject to the peer pressure of being in a largely liberal milieu. (And his decisions reflect that, since he has joined in many liberal rulings). The Supreme Court bar, Supreme Court reporters, and lawyers in general are largely a liberal bunch. Lawyers are much more Democratic-leaning than the general public (the Harvard Journal of Law and Public Policy once noted that Clinton beat Bush by a nearly two-to-one margin among lawyers, despite winning by only several points among the general public). And even so-called “conservative” justices are products of the liberal legal community. Being a “conservative” lawyer is like being a “conservative” Democrat — conservative only in relative rather than absolute terms. The fact that the legal community is much more liberal than the public at large results in peer pressure for judges to uphold laws backed by liberal politicians even in the face of well-grounded constitutional challenges. [click to continue…]
The Supreme Court upheld the health care bill, as you’ve no doubt heard by now. Over at The Daily Caller, I add a few quick thoughts about how Randy Barnett’s Commerce Clause argument also applies to Congress’ taxation power, on the Court’s reluctance to check the other branches’ excesses, and how happy rent-seeking insurance companies must be right now.
Read the whole thing here.
The Supreme Court announced four decisions today, three of them decided by slender 5-to-4 margins, but not the long-awaited ruling about the constitutionality of Obamacare. I discuss these four decisions at this link. Two of the three decisions in which the court split 5-to-4 were cases in which there was no ideological division among the justices, and both liberal and “conservative” justices joined the majority opinion. That, too, is unremarkable, as I explain here, and Point of Law explained explained earlier, contrary to the false conventional wisdom that depicts 5-to-4 splits as being caused only by politics or ideological divisions on the Court.
Although there was no ruling in the Obamacare case today, it is expected within a couple weeks. In The Washington Post, a disillusioned Robert Samuelson, who writes about economic topics for the newspaper, gives Obamacare a thumbs down, in an article entitled “The Folly of Obamacare.” He notes that Obamacare “discourages job creation by raising the price of hiring,” “worsens the federal budget problem,” and effectively “discriminates against the young.”
As we previously explained, Obamacare’s regulations and taxes will harm the health care system and reduce employment. The Dean of Harvard Medical School, Jeffrey Flier, noted that Obamacare will harm life-saving medical innovation. Obamacare is causing layoffs in the medical device industry. Obamacare will raise the cost of insurance by at least 55 percent in Ohio, according to one study. It taxes medical devices and cosmetic surgery, arbitrarily discriminates against certain hospitals, and raises taxes starting in 2013 on investors. The Associated Press and others have noted that it breaks a number of Obama campaign promises. Earlier, CEI filed an amicus brief against the health care law on behalf of Minnesota and North Carolina legislators.
Obamacare will drive up costs for most patients and insurance policyholders. Yet “health-insurance companies must tell customers who get a premium rebate this summer that the check is the result of the Obama administration’s health-care law, according to federal guidelines released Friday. . . .Rules finalized by the Department of Health and Human Services on Friday instruct insurers to notify recipients of rebates in the first paragraph of the mailing by writing: ‘This letter is to inform you that you will receive a rebate of a portion of your health insurance premiums. This rebate is required by the Affordable Care Act-the health reform law.’” Never mind that Obamacare has already caused sizeable hikes in insurance premiums for some policyholders.
Earlier, HHS Secretary Sebelius warned insurers not to inform policyholders that their premiums were rising due to Obamacare, even though that was the truth. Obama’s HHS secretary sought to gag insurers that disclosed how Obamacare’s mandates are increasing the cost of health insurance, even though such speech is clearly protected by the First Amendment, telling them if they did so, they could be excluded from health insurance exchanges. Prior to that, the Obama administration attempted to gag insurers from disclosing how Obamacare harms Medicare Advantage participants, drawing criticism from First Amendment experts like UCLA law professor Eugene Volokh, the author of two First Amendment textbooks.
Forcing companies to make politicized disclosures to customers implicates the First Amendment, as does interfering with the content of their speech to customers in billings. In International Dairy Foods v. Amestoy, 92 F.3d 67 (2d Cir. 1996), an appeals court struck down a Vermont law that required labeling for milk derived from animals treated with bovine growth hormones, where the labeling could not be justified on consumer deception or public health grounds.
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Typically, after the economy suffers an unusually severe recession, it bounces back in an unusually rapid recovery — what some economists and others refer to as the “rubber-band effect.” But not now. Despite the huge worldwide recession in 2008-09, the economy has experienced only a weak recovery, with fewer people employed in America today than when President Obama took office. “At this point in the typical post-World War II recovery, the economy was growing at an average pace of nearly 5 percent. The Obama recovery has managed just over 2 percent.” As James Pethokoukis notes in the New York Post,
A Federal Reserve study from late last year looked at the behavior of recoveries from recessions across 59 advanced and emerging market economies during the last 40 years. The Fed found, to no great surprise, that recoveries “tend to be faster” after severe recessions, such as the one we just had. . .The deeper the downturn, the more robust the rebound — unless government messes things up.
For example, during the 1981-82 recession, output fell by 2.7 percent and then rose by 15.9 percent over the next 10 quarters (at an average pace of 6.0 percent). During the Great Recession, output fell even more, by 5.1 percent. But during the 10 quarters since, total economic output is up only a paltry 6.2 percent. Score one for Reaganomics.
But what about the depressing effect of Wall Street’s near-death experience back in 2008 and 2009? Well, that same Fed study found that bank or other financial crises “do not affect the strength” of subsequent recoveries. . .[What] might explain half of the Obama recovery’s underperformance versus the Reagan recovery. . .? Maybe we can attribute that to policy differences.
While one president cut long-term marginal tax rates, the other tried a massive burst of federal spending. One empowered private enterprise; the other empowered government.
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Conservatives are ebullient over the unexpected hostility and skepticism the government’s lawyers faced from the Supreme Court Justices over the three days of hearings on the constitutionality of Obamacare. In fact, so withering was the interrogation that the consensus of the Beltway-NYC elite has shifted virtually overnight from “Of course the Court will uphold it!” to “Oh my God! The individual mandate is doomed!”
It is heartening to see the Justices take the constitutional question seriously, and entertaining to see them pick apart the very weak case(s) for the individual mandate that every American purchase health insurance or face government sanction. And it certainly seems more possible now than it did last week that the Court may throw the baby out, and the bath water too, for good measure.
However, it is possible that this focus on constitutionality may someday backfire on conservatives.
If the law is upheld, that will take a lot of the steam out of the opposition to Obamacare. In the minds of many voters, rightly or wrongly, the imprimatur of the Supreme Court may function as a sort of ne plus ultra for the whole debate. Voters may figure, “Oh yeah, Obamacare. Didn’t the Supreme Court settle that? So what’s the big deal?” On the other hand, if the law goes down the left will say, “See, we tried that individual mandate that conservatives came up with, and it didn’t work. Time for single-payer national health care!” Which, of course, is what they’ve really wanted all along.
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I was looking over the latest Reason-Rupe poll and found something strange: 87 percent of people think a federal broccoli mandate would be unconstitutional, while 62 percent think a health insurance mandate would be unconstitutional. That’s a 25-percent difference even though the basic principle is exactly the same. These two mandates were compared during this week’s Supreme Court oral arguments on the health care bill.
Over at the Daily Caller, I go over some possible explanations for the different results and conclude:
Public opinion has precisely nothing to do with whether a policy is a good idea or not; anyone who thinks otherwise would do well to read Shirley Jackson’s short story “The Lottery.” But since I think that government should not have the power to mandate that people buy certain products — think of the lobbying and rent-seeking by companies that stand to benefit! — it is heartening that the majority of Americans think the same way as I do about broccoli. And, to a lesser extent, health insurance.
More importantly, we’ll soon find out how the Supreme Court polls on the broccoli mandate issue. Er, health insurance mandate. Same principle.
Read the whole thing here.
While public attention has focused on Obamacare’s unconstitutional “individual mandate,” challenged yesterday in oral arguments at the Supreme Court, other parts of the health care law are more worrisome to governors facing massive state budget deficits that will be aggravated by Obamacare.
As the National Governors Association noted in its Fall 2011 “Fiscal Survey Of States,” “state spending on Medicaid is likely to continue to see above average growth due to… the implementation of the Affordable Care Act.” (Obamacare is known as the “Affordable Care Act” or PPACA.) A congressional report, “Medicaid Expansion In The New Health Law: Costs To The States,” “conservatively estimates that PPACA will cost state taxpayers at least $118.04 billion through 2023.”
Even Democratic governors call its impact “devastating,” saying things like “I have no idea how we’re going to pay for it.” Gov. Steve Beshear (D-Ky.) notes that “starting in 2016, Washington will begin shifting that additional costs to the states. ‘I have no idea how we’re going to pay for it,’ Beshear said candidly.” (Editorial, “Medicaid Expansion Will Cost Taxpayers,” The Paducah Sun, Feb. 13, 2011). Gov. Brian Schweitzer (D-Mont.) laments that “I’m going to have to double my patient load and run the risk of bankrupting Montana.” (“Montana Looks North For Health Care That Works ,” Yes Magazine, Oct. 21, 2011.) “In 2014, when the PPACA kicks in, many of the uninsured will be given the opportunity to enroll in Medicaid. With this change, Schweitzer expects the state’s Medicaid population to double, creating a huge financial burden on the state of Montana under the current health care system.” “The governor told Marguerite Salazar, a regional director of the Department of Health and Human Services, that Congress has designed a ‘pack of crap’ that gives away far too much” to special interests. California Governor Jerry Brown says, “We will be further disadvantaged under the Medicaid expansions mandated under the Affordable Care Act … proposals to shift several billion dollars in Medicaid costs to California would be devastating and would clearly move us in the wrong direction.” (Gov. Jerry Brown, Letter To President Obama, June 27, 2011)
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At CNN, George Mason University law professor Ilya Somin explains why Obamacare’s requirement that individuals buy health insurance is beyond Congress’s power under the Interstate Commerce Clause. GMU law professor David Bernstein explains why Obamacare’s defenders are wrong, and have contradicted themselves, in trying to defend Obamacare based on a cost-shifting rationale. Vanderbilt law professor James Blumstein, an advisor to former Governor Phil Bredesen (D-Tenn.), argues that Obamacare’s Medicaid mandate is a violation of the Tenth Amendment and exceeds Congress’s power under the Spending Clause. GMU’s Somin rebuts the “everyone uses healthcare” argument for Obamacare here.
The Cato Institute’s briefs, which CEI joined, explain why Obamacare’s individual mandate is not valid under the Constitution’s Interstate Commerce Clause and tax provisions. The brief CEI filed in the Eleventh Circuit Court of Appeals for Minnesota and North Carolina legislators explains why Obamacare’s Medicaid mandate violates the Tenth Amendment, and in its last section, explains why the government’s cost-shifting rationale for the individual mandate is baseless. CEI also explained in a more recent brief why the court need not invalidate just the unconstitutional individual mandate, since it is interrelated with other provisions of the Obamacare statute, which logically should be invalidated along with it. Law professor and former University of Chicago Law Dean Richard Epstein explains how Obamacare is an “unconstitutional misadventure” here.
The Supreme Court, which is rather deferential to Congress, has only invalidated two federal statutes as beyond Congress’s power under the Commerce Clause since 1936, and it has been even more reluctant to enforce Tenth Amendment limits on Congress’s spending-clause powers. On the other hand, if the government can force people to engage in economic activity under the Commerce Clause, and do so based on the sweeping rationales advanced by the government in this case, there will effectively be no limit on Congress’s power under the Commerce Clause. The language and logic of the Supreme Court’s Morrison and Lopez decisions cut against the government’s arguments, and the Morrison decision requires more than a simple quantitative relationship to interstate commerce for an activity to be federally regulated; but these were 5-to-4 decisions unpopular with the largely liberal legal community.
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