United Liberty

If you were hoping that the Supreme Court would punt on a ruling on the controversial health care reform law, the Patient Protection and Affordable Care Act (PPACA), you’re no doubt disappointed in yesterday’s oral arguments. It appears, based on comments from various Justices, that there is no appetite for punting on the issue.

In case you missed it, you can listen to the oral arguments below and read the transcript from the Supreme Court’s website:

Over at the Volokh Conspiracy, Ilya Somin provides us with a brief recap of the arguments on the Anti-Injunction Act (AIA) as it applies — or seemingly doesn’t, based on comments by court members yesterday — in the case of the PPACA:

Justice Stephen Breyer suggested that the mandate is not a tax because “Congress has nowhere used the word “‘tax.’” Justice Ginsburg noted that the mandate may not be a tax because it isn’t a “revenue-raising measure,” and because the monetary penalty is separable from the mandate itself. Justice Sotomayor also expressed doubts about whether the mandate is a tax, as did several for the conservative justices. As far as I can tell, none of the justices seemed to support the argument that the mandate is a tax.

Thus, today’s events do not bode well for the federal government’s constitutional tax argument. However, there are two caveats to this conjecture. First, the justices sometimes ask questions for rhetorical effect or play devil’s advocate. I don’t think they are doing so here, but obviously I can’t be sure. Second, it is theoretically possible that the constitutional definition of what qualifies as a “tax” is broader than the AIA definition. This is not the usual view of the matter. Indeed, the one lower court that ruled that the AIA applies to this case did so precisely because they thought that the AIA’s definition of “tax” is broader than the Constitution’s. But it’s not completely impossible that the Court will reach the exact opposite conclusion, and the Solicitor General actually argued for such an approach today. However, there is no indication that the justices are leaning in that direction, or that any of them believe that the constitutional definition of a tax is broader than the AIA definition.

Even if the federal government loses on the tax argument, they could still win on the Commerce Clause or the Necessary and Proper Clause. The latter is probably their strongest point. Still, it’s interesting that the tax argument – which has attained great popularity among legal academics supporters of the mandate – has been overwhelmingly repudiated by the courts, including several judges who voted to uphold the law on other grounds. And it looks like the Supreme Court may well go the same as the lower courts on this issue.

Lyle Denniston, writing at SCOTUSBlog, has a much more lengthy, very detailed post about the oral arguments as it pertains to the AIA. If you’re interested in this issue at all, you should definitely check it out, though I won’t post it here for sake of space and context. Philip Klein, who has done some excellent work on ObamaCare, also has a solid write-up on yesterday’s arguments.

Today’s oral arguments on the individual mandate are really what matters, when it’s all said and done. And the effects of the decision will not be limited to health care policy, but also what limitations the Constitution places on Congress. The Wall Street Journal explains what exactly is at stake:

The argument against the individual mandate—the requirement that everyone buy health insurance or pay a penalty—is carefully anchored in constitutional precedent and American history. The Commerce Clause that the government invokes to defend such regulation has always applied to commercial and economic transactions, not to individuals as members of society.
[…]
The framers feared arbitrary and centralized power, so they designed the federalist system—which predates the Bill of Rights—to diffuse and limit power and to guarantee accountability. Upholding the ObamaCare mandate requires a vision on the Commerce Clause so broad that it would erase dual sovereignty and extend the new reach of federal general police powers into every sphere of what used to be individual autonomy.

These federalist protections have endured despite the shifting definition and scope of interstate commerce and activities that substantially affect it. The Commerce Clause was initially seen as a modest power, meant to eliminate the interstate tariffs that prevailed under the Articles of Confederation. James Madison noted in Federalist No. 45 that it was “an addition which few oppose, and from which no apprehensions are entertained.” The Father of the Constitution also noted that the powers of the states are “numerous and infinite” while the federal government’s are “few and defined.”

That view changed in the New Deal era as the Supreme Court blessed the expansive powers of federal economic regulation understood today. A famous 1942 ruling, Wickard v. Filburn, held that Congress could regulate growing wheat for personal consumption because in the aggregate such farming would affect interstate wheat prices. The Court reaffirmed that precedent as recently as 2005, in Gonzales v. Raich, regarding homegrown marijuana.

The Court, however, has never held that the Commerce Clause is an ad hoc license for anything the government wants to do. In 1995, in Lopez, it gave the clause more definition by striking down a Congressional ban on carrying guns near schools, which didn’t rise to the level of influencing interstate commerce. It did the same in 2000, in Morrison, about a federal violence against women statute.

A thread that runs through all these cases is that the Court has always required some limiting principle that is meaningful and can be enforced by the legal system. As the Affordable Care Act suits have ascended through the courts, the Justice Department has been repeatedly asked to articulate some benchmark that distinguishes this specific individual mandate from some other purchase mandate that would be unconstitutional. Justice has tried and failed, because a limiting principle does not exist.
[…]
The reality is that every decision not to buy some good or service has some effect on the interstate market for that good or service. The government is asserting that because there are ultimate economic consequences it has the power to control the most basic decisions about how people spend their own money in their day-to-day lives. The next stops on this outbound train could be mortgages, college tuition, credit, investment, saving for retirement, Treasurys, and who knows what else.

Trevor Burrus, a legal associate with the Cato Institute, has also written some excellent commentary against the argument that the individual mandate is constitutional due to the Necessary and Property Clause:

Previous decisions based the Necessary and Proper Clause all concerned people who actively did something to enter Congress’s jurisdiction. The uninsured, however, are inactive and have done nothing to come under Congress’s power. This “activity/inactivity” distinction is crucial for two reasons: 1) it provides the limit of “necessity” on Congress’s power; 2) it provides the limit of “propriety.”

In two cases that defined the limits on what is “necessary” to Congress’s power, the Supreme Court articulated a clear, judicially administrable line: Laws that do not touch “economic activity” are impermissible because they are not a “necessary” extension of the commerce power. The virtue of a clear limit based on “economic activity” is that it does not involve the courts in micromanaging Congress’s decisions, something they cannot and should not do.

Now, the government asks the Supreme Court to do just that: to analyze Congress’s determination that, in this special instance, the inactivity of not purchasing healthcare is an “economic activity.” They argue that the decision not to purchase healthcare is equivalent to the economic activity of shifting the costs onto others. They say this despite conceding that only 37 percent of the uninsured’s healthcare expenses are cost-shifted as “uncompensated care,” or about 1.9 percent of our total healthcare economy.

Most legal analysts predict that the individual mandate will be upheld by the Supreme Court. Much like Ron Paul, I hopeful that they will overturn at least the individual mandate, but I’m also pessimitic given current case law on the Commerce Clause, which includes Justices Anthony Kennedy and Antonin Scalia taking a very expansive view in Raich.