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The Constitutional Importance of the ObamaCare Ruling

Posted By Joseph Klein On June 29, 2012 @ 12:55 am In Daily Mailer,FrontPage | 136 Comments

The United States Supreme Court has finally spoken on the constitutionality of Obamacare, particularly its core provision – the so-called individual mandate under which most Americans must buy health care insurance with at least the minimum amount of coverage stipulated by the federal government or pay a fine.  The Supreme Court upheld the mandate on the grounds that it is within the taxing authority of Congress (Art. I, §8, cl. 1). Chief Justice John Roberts provided the swing vote to give the liberal justices on the bench the majority they needed to uphold the controversial law.

In a 5-4 decision written by Chief Justice Roberts, he concluded that “Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.” Although the Obama administration had tried to characterize the individual mandate as a legitimate exercise of congressional power under the separate Commerce Clause of the Constitution (Art. I, §8, clause 3), Chief Justice Roberts’ opinion rejected that approach and opted to call the fine, imposed on individuals who decide not to buy health insurance despite the mandate, a tax.

This sets up a very interesting political dynamic for this year’s presidential campaign. President Obama can claim a victory on the substance of his health care law. His most significant domestic policy achievement has now been declared constitutional by a majority of the Supreme Court led by the normally conservative Chief Justice.  On the other hand, Obama can no longer duck the reality that Obamacare is built on the foundation of huge tax increases that affect virtually all Americans. Furthermore, the left’s incessant attacks against the court and the right as of late — that the conservative Supreme Court has become corrupted by “politicalization” and “activism” — have suddenly become obsolete and exposed as hypocritical. After a slim 5-4 ruling, of the kind leftists typically scorn as illegitimate, The New York TimesEthan Bronner is now opining on the Roberts court’s “balance” and judiciousness. Robert Shrum at the Daily Beast praised the split decision as “clear and compelling,” where before he was anxious to lead the offensive against the “Tea Party Supreme Court” and the “five horsemen of  the judicial right.” Much has changed in a single day.

The first impression, and the one that is being played out in the mainstream media, is that Chief Justice Roberts had some sort of epiphany and saw the logic of the left’s arguments in upholding Obamacare. Yet while the outcome supported by Chief Justice Roberts certainly looks that way and is disappointing to many conservatives, the Chief Justice included a number of nuggets in his opinion that will serve conservatives well in future cases.

Indeed, although the Obama administration won the day in terms of the constitutional validation of Obamacare by the Supreme Court, Chief Justice Roberts’ opinion lays down some important markers regarding the core constitutional principle of enumerated federal powers. This may be useful in the event of any future attempts by a left-leaning Congress to push beyond discernible limitations on its power under the Commerce Clause in order to regulate the everyday lives of the American people.

“If no enumerated power authorizes Congress to pass a certain law, that law may not be enacted, even if it would not violate any of the express prohibitions in the Bill of Rights or elsewhere in the Constitution,” Chief Justice Roberts wrote. “The Federal Government has expanded dramatically over the past two centuries, but it still must show that a constitutional grant of power authorizes each of its actions.”

Chief Justice Roberts also lays down a marker on the principle of federalism – the relationship between the federal and state governments:

Because the police power is controlled by 50 different States instead of one national sovereign, the facets of governing that touch on citizens’ daily lives are normally administered by smaller governments closer to the governed.

The federalism issue comes into play on the separate constitutional question dealing with Medicaid expansion and penalties placed upon states that decline to spend more of their own money to pay for expanded health insurance coverage. His opinion places limits on how far the federal government could impose its policies on the states.

Thus, while the final outcome of the Supreme Court decision upholding the constitutionality of Obamacare is disappointing and was reached by the circuitous route of relying on Congress’ broad taxing authority (even though Congress and the Obama administration had labored to avoid the tax nomenclature in the statute in favor of the term “penalty”), in the long run Chief Justice Roberts accomplished two key objectives. He shielded the legitimacy of the Supreme Court from partisan attacks that would have been generated from the White House, Congressional Democrats, the mainstream media and their colleagues on the Left accusing the Court of unbridled judicial activism.  Second, as discussed below, he used the opinion as an occasion to reinforce core conservative constitutional principles regarding limitations on congressional power affecting individuals and the states.

In first dealing with the argument that the Commerce Clause provided a constitutional basis for the Obamacare individual mandate, Chief Justice Roberts’ opinion rejected this argument but walked a fine line. Chief Justice Roberts acknowledged the precedents greatly expanding the reach of the Commerce Clause over economic activities that individually, or in the aggregate, may have an effect on interstate commerce. He did not seek to reverse or erode any of those precedents – a demonstration of respect for well-established Supreme Court precedents (stare decisis) and judicial restraint. However, he declared for the first time in a major Supreme Court opinion that there is a substantive difference between regulating activity and inactivity, which has constitutional significance:

The Constitution grants Congress the power to “regulate Commerce”…The power to regulate commerce presupposes the existence of commercial activity to be regulated. If the power to “regulate” something included the power to create it, many of the provisions in the Constitution would be superfluous…. The language of the Constitution reflects the natural understanding that the power to regulate assumes there is already something to be regulated.

Based on this reasoning, Justice Roberts’ opinion concluded that since the individual mandate did not regulate existing activity, but instead “compels individuals to become active in commerce by purchasing a product,” it could not be justified as a valid exercise of Congress’s powers under the Commerce Clause (emphasis in the original).

Allowing Congress to justify federal regulation by pointing to the effect of inaction on commerce would bring countless decisions an individual could potentially make within the scope of federal regulation, and—under the Government’s theory—empower Congress to make those decisions for him

Congress already enjoys vast power to regulate much of what we do. Accepting the Government’s theory would give Congress the same license to regulate what we do not do, fundamentally changing the relation between the citizen and the Federal Government.

The Commerce Clause is not a general license to regulate an individual from cradle to grave, simply because he will predictably engage in particular transactions. Any police power to regulate individuals as such, as opposed to their activities, remains vested in the States.

The individual mandate forces individuals into commerce precisely because they elected to refrain from commercial activity. Such a law cannot be sustained under a clause authorizing Congress to “regulate Commerce.”

The Chief Justice’s opinion also concluded that the individual mandate cannot be sustained under the Necessary and Proper Clause of the Constitution (Art. I, §8, clause 18) as an essential component of the health insurance reforms. The Necessary and Proper Clause gives Congress the authority to “make all Laws which shall be necessary and proper for carrying into Execution” the powers enumerated in the Constitution.

As he did in dealing with Congress’ powers under the Commerce Clause, Roberts did not seek to reverse or erode any Supreme Court precedents interpreting the reach of the Necessary and Proper Clause. He acknowledged that these precedents have been very deferential to Congress’ determination that a regulation is “necessary.” However, like the Commerce Clause, there are limits on what Congress may do under the Necessary and Proper Clause. He held that the individual mandate went too far.

In a nutshell, Chief Justice Roberts used his opinion to draw a line in the sand on the limits of Congress’ powers under the Commerce Clause and Necessary and Proper Clause, and on where the states have police powers not shared by the federal government.

Nevertheless, say the critics of the Supreme Court’s decision, the Commerce Clause discussion is all theoretical.  Chief Justice Roberts still ended up in the wrong place when he found another basis on which to uphold the mandate through the back door of Congress’ taxing authority. The liberal justices reserved their opposition to Chief Justice Roberts’ reasoning on the limits of the Commerce Clause but were happy to jump aboard the Chief Justice’s holding that the individual mandate was nevertheless constitutional by whatever means he took to reach that conclusion.

Disturbingly, Roberts bought the government’s argument that the individual mandate could be viewed as simply imposing a tax on those who do not buy the product that Congress commanded them to purchase. This argument stretches logic beyond any reasonable bounds and ignores the expressed intent of Congress in making clear that its “penalty” for not purchasing health insurance was not a tax.

While finding the “penalty” label fatal to the application of the Anti-Injunction Act that would have prevented the lawsuit from even being heard in the first place at this time if it were deemed a tax for the purposes of this Act, Justice Roberts decided that for constitutional purposes it was indeed a tax after all. The notion is that if someone chooses to pay the IRS the penalty rather than obtain health insurance, they have fully complied with the law. This “suggests instead that the shared responsibility payment merely imposes a tax citizens may lawfully choose to pay in lieu of buying health insurance,” Roberts wrote.

The intent of Congress, as reflected by the language it used to describe the payment and contemporaneous statements denying that it was a tax, apparently does not matter. Moreover, even though the Chief Justice’s opinion held that Congress did not have the authority under the Commerce Clause to mandate that individuals purchase health insurance, he concluded that Congress nevertheless had the authority to tax individuals for specifically declining to do what Congress had mandated, even though Congress had no authority to impose that mandate in the first place. This simply makes no sense. Chief Justice Roberts went off the rails here to reach the result he wanted to reach and thereby avoid a major blowback against the SupremeCourt’s legitimacy if it had overturned Obamacare.

Roberts got back on track when dealing with the issue of the expansion of Medicaid payments to subsidize health care insurance for those who cannot afford it. Congress may attach appropriate conditions to federal taxing and spending programs to preserve its control over the use of federal funds given to the states, as it has done in the past with respect to Medicaid. The federal government contributes money to the states to pay the lion’s share of Medicaid costs on condition that the states put in some of their own money. The states are free to accept those conditions or not at the time they are imposed. However, in this case, instead of simply refusing to grant the new funds earmarked for Obamacare subsidies to states that will not accept the new conditions requiring additional contributions from the states’ budgets, Congress has also threatened to withhold those states’ existing Medicaid funds for programs that pre-existed Obamacare. This crosses the line from financial incentives to contribute to the costs of a federal program to coercive pressure on the states to take on new burdens or lose everything that they had previously received.

“When, for example, such conditions take the form of threats to terminate other significant independent grants,” Chief Justice Roberts wrote, “the conditions are properly viewed as a means of pressuring the States to accept policy changes.”  He called such pressure “a gun to the head.”

If states do not want to accept the additional financial burdens in contributing to the expansion of the categories of people eligible for assistance as a result of Medicare, Congress is free to deny those states the extra federal funds made available for that expansion.  “What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding.”

The conventional wisdom was that Justice Kennedy would be the swing vote in a 5-4 decision and that the individual mandate at minimum would be struck down. The conventional wisdom was wrong. Justice Kennedy voted with the conservative minority in this case. Chief Justice Roberts turned out to be the swing vote, siding with the four liberal Justices to uphold Obamacare even if his reasoning did not fully track with theirs.

What motivated Chief Justice Roberts to become the fifth “liberal” vote in this case?  It may seem counterintuitive, but it may have very well been Chief Justice Roberts’ innate conservatism that led him to his surprise decision in this case.

Justice Roberts is most concerned with preserving the legitimacy of the Supreme Court as a co-equal branch of the federal government. In order to do that, he may have felt it necessary to demonstrate that in a case as fraught with partisan controversy as the constitutional challenge to Obamacare, the Court could render a reasoned decision without being driven primarily by ideological bias. References to judicial restraint, Court precedents, deference to the will of Congress and examining every reasonable construction of a statute in order to save a statute from unconstitutionality are sprinkled throughout his opinion.

At the same time, Justice Roberts set down markers on the limits of congressional authority under the Commerce Clause and on federalism principles that are now part of one of the most important Supreme Court decisions in decades. They are incorporated into the body of precedents that the Supreme Court in the future will be expected to pay attention to.

Moreover, by holding that the penalty for non-compliance with the Obamacare individual mandate is a tax, Justice Roberts has managed to frame Obamacare as a tax-and-spend program that will play to the Republicans’ strengths in the upcoming presidential and congressional campaigns. If that label sticks in voters’ minds and makes Obamacare even more unpopular than it already is, its days may be numbered irrespective of what the Supreme Court decided.

In sum, Chief Justice Roberts arguably followed a circuitous route to reach the wrong result with regard to the constitutionality of the Obamacare individual mandate. However, whether or not the political process eventually sweeps Obamacare away, the limitations on the Commerce Clause that Chief Justice Roberts used his opinion to clearly articulate will endure and may serve as a brake on future progressive initiatives that go too far.

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