I think that, prior to last weekend, most everyone reasonable was expecting that the Supreme Court was going to rule both the Individual Mandate and the Medicaid Expansion of the Patient Protection and Affordable Care Act an unconstitutional overreach of Congress' enumerated powers, specifically with regard to the Commerce Clause, the Necessary and Proper Clause, and perhaps even the Tenth Amendment. The only question would then become whether or not severability (or lack thereof) would give SCOTUS the necessary leverage to send Barry Obama's "signature achievement" down in flames. (That latter result seems to have been clearly anticipated by Speaker Boehner's "don't spike the ball" memo from 21 June.) But then, at around 10:07 a.m., on 28 June 2012, . . . well, we'll get to that.
To say that in the immediate aftermath opinions have varied as to what, exactly, John G. Roberts, jr., 17th Chief Justice of the United States, was thinking when he sided with the four hardcore liberals on the court in upholding the individual mandate (albeit as a tax) is probably an understatement. Yes, I absolutely agree with those who hold that Chief Roberts should have sided with the other four conservative associates (Scalia, Kennedy, Thomas, and Alito) and eviscerated BHO's signature achievement, thus officially rendering his first year in office a complete waste of time. However, having taken the time to dissect the opinion as best as my non-legal expertise will provide, I'm rather inclined to believe that Chief Roberts is a masterful chess player, at least politically. As to why I think that way . . . well, let's go below the fold and discuss that.
In advance, I should probably warn you that this is going to get a bit lengthy, so you might find a fresh pot of coffee useful. This also may require more than one read-through, for the same reason.
I'll grant that I'm not a lawyer, but I do know how to read. Though I may need a highlighter to avoid losing track of what I'm paying attention to, I'm educated enough to be able to make sense of most legal opinions. Which means that, rather than listening to what the talking heads, pundits, and spin merchants have to say about National Federation of Independent Business v. Sebelius, I'm perfectly capable of dissecting the text myself and drawing my own conclusions, which is what I'll be doing for the purposes of this opinion piece.
The way it seems to me, once we've cleared the six-page syllabus of the majority opinion, the initial six-pages of the Opinion of Chief Justice Roberts appears as a sort of preamble or introduction to the Opinion of The Court. In other words, it sets the table, so to speak, and provides the reader with a foreshadowing of what the court is going to rule on, and what principles are going to be used to make that ruling.
From the Opinion of Chief Justice John Roberts:
... We do not consider whether the Act embodies sound policies. That judgment is entrusted to the Nation's elected leaders. We ask only whether Congress has the power under the Constitution to enact the challenged provisions.
In our federal system, the National Government possesses only limited powers; the States and the people retain the remainder. ... rather than granting general authority to perform all the conceivable functions of government, the Constitution lists, or enumerates, the Federal Government's powers. ... The Constitution's express conferral of some powers makes clear that it does not grant others. ...
... 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.
... And when the Bill of Rights was ratified, it made express what the enumeration of powers necessarily implied: "The powers not delegated to the United States by the Constitution . . . are reserved to the States respectively, or to the people." 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. ... Because the police power is controlled by 50 different States instead of one national sovereign, ... The independent power of the States also serves as a check on the power of the Federal Government: ...
This case concerns two powers that the Constitution does grant the Federal Government, but which must be read carefully to avoid creating a general federal authority akin to the police power. The Constitution authorizes Congress to "regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." ... Congress may also "lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States." ... The reach of the Federal Government's enumerated powers is broader still because the Constitution authorizes Congress to "make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers." ...
Our permissive reading of these powers is explained in part by a general reticence to invalidate the acts of the Nation's elected leaders. ... Members of this Court are vested with the authority to interpret the law; we possess neither the expertise nor the prerogative to make policy judgments. Those decisions are entrusted to our Nation's elected leaders, who can be thrown out of office if the people disagree with them. It is not our job to protect the people from the consequences of their political choices.
Our deference in matters of policy cannot, however, become abdication in matters of law. ... Our respect for Congress's policy judgments thus can never extend so far as to disavow restraints on federal power that the Constitution carefully constructed. ... And there can be no question that it is the responsibility of this Court to enforce the limits on federal power by striking down acts of Congress that transgress those limits.
The questions before us must be considered against the background of these basic principles.
And here's what I get from that:
The Enumerated Powers are an absolute limit on the reach of Congress. If the enumerated power isn't explicitly stated in the Constitution, then neither chamber of Congress has any business even considering the bill, let alone enacting the law.
The case hinges on correctly interpreting the Commerce Clause, the Taxing and Spending Clauses, and the Necessary and Proper Clause . . . especially as federal power is constitutionally checked and counterbalanced by state sovereignty.
Except as specifically provided in the enumerated authority (Article 2, Section 2), the national executive possesses no police power.
The Court is compelled by the constitutional separation of powers to defer to the elected representation in Congress in the arena of legislative and policy matters . . . unless the act of Congress in question can be shown to violate the absolute limits of the Enumerated Powers, or to violate State Sovereignty.
For what my opinion may be worth, that last point cannot possibly be overemphasized. Over the past two or three decades, both political parties (the republicans in particular) have developed the bad habit of using the Supreme Court as a goalie to cover for their legislative, political, and/or electoral sloppiness. Elections have consequences, but as long as we have a majority on the court, no worries, right? Wrong, at least according to Chief Roberts, "It is not our job to protect the people from the consequences of their political choices." In other words, solve these problems through the constitutionally-provided means, the ballot box, and quit using the courts as a backstop.
The first item considered is the "shared responsibility payment" (the penalty for non-compliance with the mandate) relative to the Anti-Injunction Act. This isn't a small matter, because if the penalty initially meets the threshold of being structured as a tax for the purposes of 26 U. S. C. §7421, then this whole case is void ab initio, because the prescribed remedy for a person resisting the assessment of a U. S. federal tax is to first pay the full amount of tax asserted by the IRS and then file a formal administrative claim for refund. Generally, the courts won't entertain a suit to stop the government from assessing the tax, but will entertain a suit for a tax refund after the IRS has denied the refund claim, or 6 months since the filing of the claim, whichever happens first. Since the Fourth Circuit threw the case out based on the Anti-Injunction Act, and because there is a reasonable argument that the Anti-Injunction Act deprives the court of jurisdiction to hear challenges to the individual mandate, this potential show-stopper has to be considered.
... Because of the Anti-Injunction Act, taxes can ordinarily be challenged only after they are paid, by suing for a refund. The penalty for not complying with the Affordable Care Act's individual mandate first becomes enforceable in 2014. The present challenge to the mandate thus seeks to restrain the penalty's future collection. ...
... Indeed, [amicus curiae's] earlier observation that the Code requires assessable penalties to be assessed and collected "in the same manner as taxes" makes little sense if assessable penalties are themselves taxes. In light of the Code's consistent distinction between the terms "tax" and "assessable penalty," we must accept the Government's interpretation: §6201(a) instructs the Secretary that his authority to assess taxes includes the authority to assess penalties, but it does not equate assessable penalties to taxes for other purposes.
The Affordable Care Act does not require that the penalty for failing to comply with the individual mandate be treated as a tax for purposes of the Anti-Injunction Act. The Anti-Injunction Act therefore does not apply to this suit, and we may proceed to the merits.
I think here that Chief Roberts does a brilliant job of hoisting the government on its own petard. The entire time that the democrat's were maneuvering to get ObamaCare passed, they were arguing that the shared responsibility payment wasn't a tax. However, once they started having to defend this garbage in court, the yes-it-is-a-tax argument was the first card they pulled, because the Anti-Injunction Act would place all lawsuits on hold until someone actually had to pay the damn thing. Chief Roberts finds otherwise; the law as enacted draws a clear distinction between penalties and taxes, so the plaintiffs do indeed have standing to bring their suit.
And now that the case can be considered on its merits, Chief Roberts goes right to them:
The Government advances two theories for the proposition that Congress had constitutional authority to enact the individual mandate. First, the Government argues that Congress had the power to enact the mandate under the Commerce Clause. Under that theory, Congress may order individuals to buy health insurance because the failure to do so affects interstate commerce, and could undercut the Affordable Care Act's other reforms. Second, the Government argues that if the commerce power does not support the mandate, we should nonetheless uphold it as an exercise of Congress's power to tax. According to the Government, even if Congress lacks the power to direct individuals to buy insurance, the only effect of the individual mandate is to raise taxes on those who do not do so, and thus the law may be upheld as a tax.
We may remember Solicitor General Donald B. Verelli infamously arguing that the shared responsibility payment could be viewed either way, as a penalty enforceable under the Commerce Clause, or as a penalty enforceable under Congress' Taxing Power. Chief Roberts didn't come up with the reasoning that the individual mandate is enforceable only through taxation on his own; the government actually put that out there as an option to be considered.
The first issue that Chief Roberts tackles is the argument is that the individual mandate is a valid exercise of Congress's power under the Commerce Clause:
... Congress addressed the problem of those who cannot obtain insurance coverage because of preexisting conditions or other health issues ... through the Act's "guaranteed-issue" and "community-rating" provisions. These provisions together prohibit insurance companies from denying coverage to those with such conditions or charging unhealthy individuals higher premiums than healthy individuals. The guaranteed-issue and community-rating reforms do not, however, address the issue of healthy individuals who choose not to purchase insurance to cover potential health care needs. ... The reforms also threaten to impose massive new costs on insurers, who are required to accept unhealthy individuals but prohibited from charging them rates necessary to pay for their coverage. ...
The individual mandate was Congress's solution to these problems. ... This allows insurers to subsidize the costs of covering the unhealthy individuals the reforms require them to accept. The Government claims that Congress has power under the Commerce and Necessary and Proper Clauses to enact this solution. ... But Congress has never attempted to rely on that power to compel individuals not engaged in commerce to purchase an unwanted product. ... At the very least, we should "pause to consider the implications of the Government's arguments" when confronted with such new conceptions of federal power. ...
... 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. Our precedent also reflects this understanding. As expansive as our cases construing the scope of the commerce power have been, they all have one thing in common: 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 by purchasing a product, on the ground that their failure to do so affects interstate commerce. ... 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.
...
People, for reasons of their own, often fail to do things that would be good for them or good for society. Those failures - joined with the similar failures of others - can readily have a substantial effect on interstate commerce. Under the Government's logic, that authorizes Congress to use its commerce power to compel citizens to act as the Government would have them act. ... While Congress's authority under the Commerce Clause has of course expanded with the growth of the national economy, our cases have "always recognized that the power to regulate commerce, though broad indeed, has limits." ... 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 ...
The Government sees things differently. It argues that because sickness and injury are unpredictable but unavoidable, "the uninsured as a class are active in the market for health care, which they regularly seek and obtain." ... The Government repeats the phrase "active in the market for health care" throughout its brief, but that concept has no constitutional significance. ... The individual mandate's regulation of the uninsured as a class is, in fact, particularly divorced from any link to existing commercial activity. ... If the individual mandate is targeted at a class, it is a class whose commercial inactivity rather than activity is its defining feature.
... The proposition that Congress may dictate the conduct of an individual today because of prophesied future activity finds no support in our precedent. We have said that Congress can anticipate the effects on commerce of an economic activity. But we have never permitted Congress to anticipate that activity itself in order to regulate individuals not currently engaged in commerce. ... 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 Government argues that the individual mandate can be sustained as a sort of exception to this rule, because health insurance is a unique product. ... No matter how "inherently integrated" health insurance and health care consumption may be, they are not the same thing: They involve different transactions, entered into at different times, with different providers. ... The proximity and degree of connection between the mandate and the subsequent commercial activity is too lacking to justify an exception of the sort urged by the Government. 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."
And that is that for that. The first definitive limit has been planted on Congress' abuse of the Commerce Clause. In order for the Commerce Clause to apply, there must first be some actual economic activity to be governed in the first place; economic inactivity is by definition beyond the reach of Congress. (That this may set the stage for an ultimate overturn of Wickard v. Filburn is perhaps not beyond consideration, getting Congress the hell out of anything that isn't actually interstate or international commerce.) Next up, the Necessary and Proper Clause:
... Under this argument, it is not necessary to consider the effect that an individual's inactivity may have on interstate commerce; it is enough that Congress regulate commercial activity in a way that requires regulation of inactivity to be effective.
... Although the Clause gives Congress authority to "legislate on that vast mass of incidental powers which must be involved in the constitution," it does not license the exercise of any "great substantive and independent power[s]" beyond those specifically enumerated. ... As our jurisprudence under the Necessary and Proper Clause has developed, we have been very deferential to Congress's determination that a regulation is "necessary." ... But we have also carried out our responsibility to declare unconstitutional those laws that undermine the structure of government established by the Constitution. ...
Applying these principles, the individual mandate cannot be sustained under the Necessary and Proper Clause as an essential component of the insurance reforms. Each of our prior cases upholding laws under that Clause involved exercises of authority derivative of, and in service to, a granted power. ... The individual mandate, by contrast, vests Congress with the extraordinary ability to create the necessary predicate to the exercise of an enumerated power.... No longer would Congress be limited to regulating under the Commerce Clause those who by some preexisting activity bring themselves within the sphere of federal regulation. Instead, Congress could reach beyond the natural limit of its authority and draw within its regulatory scope those who otherwise would be outside of it. Even if the individual mandate is "necessary" to the Act's insurance reforms, such an expansion of federal power is not a "proper" means for making those reforms effective.
...
Just as the individual mandate cannot be sustained as a law regulating the substantial effects of the failure to purchase health insurance, neither can it be upheld as a "necessary and proper" component of the insurance reforms. The commerce power thus does not authorize the mandate.
Boom. Abuses of the Necessary and Proper Clause aren't going to fly anymore, either. What is "necessary" or "proper" must, according to the Constitution, flow from the lawful exercise of an enumerated power. However, now we have to look at the Government's other argument: that the individual mandate may be upheld within Congress' Taxation Power. (Keep in mind that, had the Government not offered this alternative argument, then we wouldn't even be having this discussion):
... The Government's tax power argument asks us to view the statute differently than we did in considering its commerce power theory. ... Instead, the Government asks us to read the mandate not as ordering individuals to buy insurance, but rather as imposing a tax on those who do not buy that product. The text of a statute can sometimes have more than one possible meaning. ... And it is well established that if a statute has two possible meanings, one of which violates the Constitution, courts should adopt the meaning that does not do so. ... Under our precedent, it is therefore necessary to ask whether the Government's alternative reading of the statute - that it only imposes a tax on those without insurance - is a reasonable one.
Under the mandate, if an individual does not maintain health insurance, the only consequence is that he must make an additional payment to the IRS when he pays his taxes. ... Under that theory, the mandate is not a legal command to buy insurance. Rather, it makes going without insurance just another thing the Government taxes ... And if the mandate is in effect just a tax hike on certain taxpayers who do not have health insurance, it may be within Congress's constitutional power to tax.
The question is not whether that is the most natural interpretation of the mandate, but only whether it is a "fairly possible" one. As we have explained, "every reasonable construction must be resorted to, in order to save a statute from unconstitutionality." The Government asks us to interpret the mandate as imposing a tax, if it would otherwise violate the Constitution. Granting the Act the full measure of deference owed to federal statutes, it can be so read, for the reasons set forth below.
And by "below," Chief Roberts is referring to an additional eight pages of decision opinion in which he discusses the functional approach that the Court will take in its reasoning, why the shared responsibility payment can constitutionally be considered a tax, and why this doesn't violate the Direct Taxation Clause. If you haven't added that Bailey's to your coffee yet, now might be a good time to do so.
The exaction the Affordable Care Act imposes on those without health insurance looks like a tax in many respects. ... The requirement to pay is found in the Internal Revenue Code and enforced by the IRS, which - as we previously explained - must assess and collect it "in the same manner as taxes." This process yields the essential feature of any tax: it produces at least some revenue for the Government. ...
It is of course true that the Act describes the payment as a "penalty," not a "tax." But while that label is fatal to the application of the Anti-Injunction Act, it does not determine whether the payment may be viewed as an exercise of Congress's taxing power. It is up to Congress whether to apply the Anti-Injunction Act to any particular statute, so it makes sense to be guided by Congress's choice of label on that question. That choice does not, however, control whether an exaction is within Congress's constitutional power to tax.
Our precedent reflects this: ... We have similarly held that exactions not labeled taxes nonetheless were authorized by Congress's power to tax. ... We thus ask whether the shared responsibility payment falls within Congress's taxing power, "[d]isregarding the designation of the exaction, and viewing its substance and application." ... Our cases confirm this functional approach. ...
The same analysis here suggests that the shared responsibility payment may for constitutional purposes be considered a tax, not a penalty: First, for most Americans the amount due will be far less than the price of insurance, and, by statute, it can never be more. ... Second, the individual mandate contains no scienter requirement. Third, the payment is collected solely by the IRS through the normal means of taxation - except that the Service is not allowed to use those means most suggestive of a punitive sanction, such as criminal prosecution. ...
None of this is to say that the payment is not intended to affect individual conduct. Although the payment will raise considerable revenue, it is plainly designed to expand health insurance coverage. But taxes that seek to influence conduct are nothing new. ... Indeed, "[e]very tax is in some measure regulatory. To some extent it interposes an economic impediment to the activity taxed as compared with others not taxed." That §5000A seeks to shape decisions about whether to buy health insurance does not mean that it cannot be a valid exercise of the taxing power.
In distinguishing penalties from taxes, this Court has explained that "if the concept of penalty means anything, it means punishment for an unlawful act or omission." ... Neither the Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS. The Government agrees with that reading, confirming that if someone chooses to pay rather than obtain health insurance, they have fully complied with the law. ... It suggests instead that the shared responsibility payment merely imposes a tax citizens may lawfully choose to pay in lieu of buying health insurance.
The plaintiffs contend that Congress's choice of language - stating that individuals "shall" obtain insurance or pay a "penalty" - requires reading §5000A as punishing unlawful conduct, even if that interpretation would render the law unconstitutional. We have rejected a similar argument before. ... We see no insurmountable obstacle to a similar approach here.
The joint dissenters argue that we cannot uphold §5000A as a tax because Congress did not "frame" it as such. In effect, they contend that even if the Constitution permits Congress to do exactly what we interpret this statute to do, the law must be struck down because Congress used the wrong labels. ... Our precedent demonstrates that Congress had the power to impose the exaction in §5000A under the taxing power, and that §5000A need not be read to do more than impose a tax. That is sufficient to sustain it. The "question of the constitutionality of action taken by Congress does not depend on recitals of the power which it undertakes to exercise."
Even if the taxing power enables Congress to impose a tax on not obtaining health insurance, any tax must still comply with other requirements in the Constitution. Plaintiffs argue that the shared responsibility payment does not do so, citing Article I, §9, clause 4. That clause provides: "No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken." This requirement means that any "direct Tax" must be apportioned so that each State pays in proportion to its population. According to the plaintiffs, if the individual mandate imposes a tax, it is a direct tax, and it is unconstitutional because Congress made no effort to apportion it among the States.
...
A tax on going without health insurance does not fall within any recognized category of direct tax. It is not a capitation. Capitations are taxes paid by every person, "without regard to property, profession, or any other circumstance." The whole point of the shared responsibility payment is that it is triggered by specific circumstances - earning a certain amount of income but not obtaining health insurance. The payment is also plainly not a tax on the ownership of land or personal property. The shared responsibility payment is thus not a direct tax that must be apportioned among the several States.
There may, however, be a more fundamental objection to a tax on those who lack health insurance. ... If it is troubling to interpret the Commerce Clause as authorizing Congress to regulate those who abstain from commerce, perhaps it should be similarly troubling to permit Congress to impose a tax for not doing something. Three considerations allay this concern.
First, and most importantly, it is abundantly clear the Constitution does not guarantee that individuals may avoid taxation through inactivity. A capitation, after all, is a tax that everyone must pay simply for existing, and capitations are expressly contemplated by the Constitution. ... Whether the mandate can be upheld under the Commerce Clause is a question about the scope of federal authority. ... Congress's use of the Taxing Clause to encourage buying something is, by contrast, not new. ... Upholding the individual mandate under the Taxing Clause thus does not recognize any new federal power. It determines that Congress has used an existing one.
Second, Congress's ability to use its taxing power to influence conduct is not without limits. A few of our cases policed these limits aggressively, invalidating punitive exactions obviously designed to regulate behavior otherwise regarded at the time as beyond federal authority. ... We have already explained that the shared responsibility payment's practical characteristics pass muster as a tax under our narrowest interpretations of the taxing power. Because the tax at hand is within even those strict limits, we need not here decide the precise point at which an exaction becomes so punitive that the taxing power does not authorize it. It remains true, however, that the " `power to tax is not the power to destroy while this Court sits.' "
Third, although the breadth of Congress's power to tax is greater than its power to regulate commerce, the taxing power does not give Congress the same degree of control over individual behavior. Once we recognize that Congress may regulate a particular decision under the Commerce Clause, the Federal Government can bring its full weight to bear. ... An individual who disobeys may be subjected to criminal sanctions. ... By contrast, Congress's authority under the taxing power is limited to requiring an individual to pay money into the Federal Treasury, no more. If a tax is properly paid, the Government has no power to compel or punish individuals subject to it.
The Affordable Care Act's requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness. ... It is only because the Commerce Clause does not authorize such a command
[to purchase insurance] that it is necessary to reach the taxing power question. And it is only because we have a duty to construe a statute to save it, if fairly possible, that §5000A can be interpreted as a tax.
The Federal Government does not have the power to order people to buy health insurance. Section 5000A would therefore be unconstitutional if read as a command. The Federal Government does have the power to impose a tax on those without health insurance. Section 5000A is therefore constitutional, because it can reasonably be read as a tax.
Holy cow, that's a bit of verbiage, even edited down. The points that I get out of all that are these:
If there is more than one way to reasonably interpret a statute, then the Court is expected to use an interpretation that doesn't violate the Constitution.
Though Congress intends the shared responsibility payment to be different from taxation (thus making the Anti-Injunction Act inapplicable), this doesn't preclude it from being so functionally, nor would such an interpretation be novel.
As long as the exaction isn't so large as to be inherently punitive (so that lawfully avoiding taxation is cheaper), and so long as criminal sanctions don't attach to the exaction itself, and so long as the normal means of tax collection are used, then it's a constitutionally acceptable use of Congress' taxation power.
The shared responsibility payment doesn't fit any recognized category of direct taxation, so apportionment doesn't apply.
Congress is permitted to tax economic inactivity (and has done so in the past), so long as the tax in question doesn't rise to the level of being punitive or destructive.
Before I get to what I actually think about that, there is one more element of this decision that we still need to consider. The final part of the decision is the interface between the Spending Clause and State Sovereignty, particularly whether Congress can use its spending power to coerce the states to comply with a federal program. Again, this is going to contain a lot of verbiage:
The States also contend that the Medicaid expansion exceeds Congress's authority under the Spending Clause. They claim that Congress is coercing the States to adopt the changes it wants by threatening to withhold all of a State's Medicaid grants, unless the State accepts the new expanded funding and complies with the conditions that come with it. This, they argue, violates the basic principle that the "Federal Government may not compel the States to enact or administer a federal regulatory program."
...
The Spending Clause grants Congress the power "to pay the Debts and provide for the . . . general Welfare of the United States." ... We have long recognized that Congress may use this power to grant federal funds to the States, and may condition such a grant upon the States' "taking certain actions that Congress could not require them to take." ...
At the same time, our cases have recognized limits on Congress's power under the Spending Clause to secure state compliance with federal objectives. "We have repeatedly characterized . . . Spending Clause legislation as `much in the nature of a contract'." The legitimacy of Congress's exercise of the spending power "thus rests on whether the State voluntarily and knowingly accepts the terms of the `contract'."
Respecting this limitation is critical to ensuring that Spending Clause legislation does not undermine the status of the States as independent sovereigns in our federal system. ... Otherwise the two-government system established by the Framers would give way to a system that vests power in one central government, and individual liberty would suffer.
That insight has led this Court to strike down federal legislation that commandeers a State's legislative or administrative apparatus for federal purposes. ... Congress may use its spending power to create incentives for States to act in accordance with federal policies. But when "pressure turns into compulsion," the legislation runs contrary to our system of federalism.
Permitting the Federal Government to force the States to implement a federal program would threaten the political accountability key to our federal system. ... Spending Clause programs do not pose this danger when a State has a legitimate choice whether to accept the federal conditions in exchange for federal funds. In such a situation, state officials can fairly be held politically accountable for choosing to accept or refuse the federal offer.
... Congress may attach appropriate conditions to federal taxing and spending programs to preserve its control over the use of federal funds. In the typical case we look to the States to defend their prerogatives by adopting "the simple expedient of not yielding" to federal blandishments when they do not want to embrace the federal policies as their own. The States are separate and independent sovereigns. Sometimes they have to act like it.
The States, however, argue that the Medicaid expansion is far from the typical case. They object that Congress has "crossed the line distinguishing encouragement from coercion," in the way it has structured the funding: Instead of simply refusing to grant the new funds to States that will not accept the new conditions, Congress has also threatened to withhold those States' existing Medicaid funds. The States claim that this threat serves no purpose other than to force unwilling States to sign up for the dramatic expansion in health care coverage effected by the Act.
Given the nature of the threat and the programs at issue here, we must agree. We have upheld Congress's authority to condition the receipt of funds on the States' complying with restrictions on the use of those funds, because that is the means by which Congress ensures that the funds are spent according to its view of the "general Welfare." Conditions that do not here govern the use of the funds, however, cannot be justified on that basis. When, for example, such conditions take the form of threats to terminate other significant independent grants, the conditions are properly viewed as a means of pressuring the States to accept policy changes.
...
In this case, the financial "inducement" Congress has chosen is much more than "relatively mild encouragement" - it is a gun to the head. ... A State that opts out of the Affordable Care Act's expansion in health care coverage thus stands to lose not merely "a relatively small percentage" of its existing Medicaid funding, but all of it. ... The threatened loss of over 10 percent of a State's overall budget ... is economic dragooning that leaves the States with no real option but to acquiesce in the Medicaid expansion. ... The States contend that the expansion is in reality a new program and that Congress is forcing them to accept it by threatening the funds for the existing Medicaid program. We cannot agree that existing Medicaid and the expansion dictated by the Affordable Care Act are all one program simply because "Congress styled" them as such. ...
Here, the Government claims that the Medicaid expansion is properly viewed merely as a modification of the existing program because the States agreed that Congress could change the terms of Medicaid when they signed on in the first place. ... But "if Congress intends to impose a condition on the grant of federal moneys, it must do so unambiguously." ... The Medicaid expansion, however, accomplishes a shift in kind, not merely degree. ... Indeed, the manner in which the expansion is structured indicates that while Congress may have styled the expansion a mere alteration of existing Medicaid, it recognized it was enlisting the States in a new health care program. Congress created a separate funding provision to cover the costs of providing services to any person made newly eligible by the expansion. ... The conditions on use of the different funds are also distinct. ... A State could hardly anticipate that Congress's reservation of the right to "alter" or "amend" the Medicaid program included the power to transform it so dramatically.
JUSTICE GINSBURG claims that in fact this expansion is no different from the previous changes to Medicaid, such that "a State would be hard put to complain that it lacked fair notice." But the prior change she discusses - presumably the most dramatic alteration she could find - does not come close to working the transformation the expansion accomplishes. ... The Court in Steward Machine did not attempt to "fix the outermost line" where persuasion gives way to coercion. ... We have no need to fix a line either. It is enough for today that wherever that line may be, this statute is surely beyond it. Congress may not simply "conscript state [agencies] into the national bureaucratic army," and that is what it is attempting to do with the Medicaid expansion.
Nothing in our opinion precludes Congress from offering funds under the Affordable Care Act to expand the availability of health care, and requiring that States accepting such funds comply with the conditions on their use. 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. ... In light of the Court's holding, the Secretary cannot apply §1396c to withdraw existing Medicaid funds for failure to comply with the requirements set out in the expansion.
That fully remedies the constitutional violation we have identified. The chapter of the United States Code that contains §1396c includes a severability clause confirming that we need go no further. ... Instead, we determine, first, that §1396c is unconstitutional when applied to withdraw existing Medicaid funds from States that decline to comply with the expansion. We then follow Congress's explicit textual instruction to leave unaffected "the remainder of the chapter, and the application of [the challenged] provision to other persons or circumstances." ...
The question remains whether today's holding affects other provisions of the Affordable Care Act. ... We are confident that Congress would have wanted to preserve the rest of the Act. It is fair to say that Congress assumed that every State would participate in the Medicaid expansion, given that States had no real choice but to do so. The States contend that Congress enacted the rest of the Act with such full participation in mind ... According to the States, this means that the entire Act must fall.
We disagree. The Court today limits the financial pressure the Secretary may apply to induce States to accept the terms of the Medicaid expansion. As a practical matter, that means States may now choose to reject the expansion; that is the whole point. ... We have no way of knowing how many States will accept the terms of the expansion, but we do not believe Congress would have wanted the whole Act to fall, simply because some may choose not to participate. ... Confident that Congress would not have intended anything different, we conclude that the rest of the Act need not fall in light of our constitutional holding.
And this is how I distill it:
Federal grants to the states are properly viewed as a contract, which the states are free to not enter into (or, presumably, withdraw from) at will. If the state takes the money, then it has to comply with the conditions of the grant. If the state doesn't want to participate in the program, then it's free to reject the money.
The Medicaid Expansion, as enacted, is a separate program from the original Medicaid program. As such the Secretary has no authority to withhold the funds for one program because a state chooses to not participate in the other.
Because the Medicaid Expansion is indeed severable from the rest of the PPACA, the rest of the act stands.
Which brings us to Chief Roberts' conclusion:
The Affordable Care Act is constitutional in part and unconstitutional in part. The individual mandate cannot be upheld as an exercise of Congress's power under the Commerce Clause. ... Such legislation is within Congress's power to tax. As for the Medicaid expansion, that portion of the Affordable Care Act violates the Constitution by threatening existing Medicaid funding. Congress has no authority to order the States to regulate according to its instructions. ... The remedy for that constitutional violation is to preclude the Federal Government from imposing such a sanction. That remedy does not require striking down other portions of the Affordable Care Act. ... But the Court does not express any opinion on the wisdom of the Affordable Care Act. Under the Constitution, that judgment is reserved to the people.
Just to make it clear, I am not going to also dissect the 61 page "concurring opinion" of Justice Ginsberg, nor the 65 page joint "dissenting opinion" of Scalia, Kennedy, Thomas, and Alito. I will, however, comment on what I think about them momentarily. So, just to refresh, this is what I think we have out of the official decision of the Court:
The Enumerated Powers are an absolute limit on the reach of Congress. (This is expressly stated in the 10th Amendment.) If the enumerated power isn't explicitly provided in the Constitution, then neither chamber of Congress has any business even considering the bill, let alone enacting the law. What is "necessary" or "proper" must, according to the Constitution, flow from the lawful exercise of an enumerated power.
Except as specifically provided in the enumerated authority (Article 2, Section 2), the national executive possesses no police power. (I think that this means that all of the several "alphabet agencies" are now officially toothless . . . if the states have the testicular fortitude to stand up to them.)
In order for Congress to have any authority under the Commerce Clause, there must first be some actual economic activity to be governed in the first place; economic inactivity is by definition beyond the reach of Congress. The Necessary and Proper Clause cannot be abused to create economic activity for the purpose of then regulating it.
The Court is compelled by the constitutional separation of powers to defer to the elected representation in Congress in the arena of legislative and policy matters . . . unless the act of Congress in question can be shown to violate the absolute limits of the Enumerated Powers, or to violate State Sovereignty.
If there is more than one way to reasonably interpret a statute, then the Court is expected to use an interpretation that doesn't violate the Constitution. Though Congress intends the shared responsibility payment to be different from taxation (thus making the Anti-Injunction Act inapplicable), this doesn't preclude it from being so functionally, nor would such an interpretation be novel.
As long as the exaction isn't so large as to be inherently punitive (so that lawfully avoiding taxation is cheaper), and so long as criminal sanctions don't attach to the exaction itself, and so long as the normal means of tax collection are used, then it's a constitutionally acceptable use of Congress' taxation power. Congress is permitted to tax economic inactivity (and has done so in the past), so long as the tax in question doesn't rise to the level of being punitive or destructive.
Federal grants to the states are properly viewed as a contract, which the states are free to not enter into (or, presumably, withdraw from) at will. If the state takes the money, then it has to comply with the conditions of the grant. If the state doesn't want to participate in the program, then it's free to reject the money. The Medicaid Expansion, as enacted, is a separate program from the original Medicaid program. As such the Secretary has no authority to withhold the funds for one program because a state chooses to not participate in the other.
Because the Medicaid Expansion is indeed severable from the rest of the PPACA, the rest of the act stands.
Now, what do I think about all of that?
I think that I find myself agreeing with the essence of Justice Thomas' two-page dissent (really only one page). We now live in a country whose legal system has so horribly mutilated the concept of stare decisis that fourteen generations of "court precedent" now overrides the plain language of our founding documents.
The Declaration of Independence, the pre-amended Constitution of the United States, and the Bill of Rights, copied-and-pasted into a Microsoft Word document from a faithful online transcript (and after cleaning up the formatting), produces a document 18 pages long and 6,560 words in length. The Northwest Ordinance adds another six pages and 2,892 words; the additional amendments add nine and 2,580. They're written in a fairly straightforward manner, such that anyone with an honest high school education should be able to understand them.
The Supremacy Clause, particularly, very plainly points out that treaties and federal laws are the "supreme law of the land" . . . only to the extent that those treaties and laws are themselves in full compliance with the Constitution. In other words, "What does the Constitution say?" should be the first question we ask when it comes to federal laws, treaties, and court decisions. That, in my opinion, would put an end to a lot of the foolishness going on these days.
Instead we somehow now apply a "substantial effects test" to economic activity to determine whether or not Congress has the Commerce Clause authority to regulate it. Having read the Notes on the Debates in the Federal Convention, I think I can say with some certainty that the "substantial effects test" wasn't something that the Founding Fathers devised. Certainly they never intended that Congress be able to regulate everything that they currently claim they can. Commerce that crosses state lines, or national boundaries, or with the Indian tribes, yes, and only to the extent that it does so . . . but that's it; intrastate economic activity was always supposed to be off-limits.
Why we can't just say so . . . well, there are times that just baffles the hell out of me.
In skimming the concurring opinion of Justice Ginsberg and the jointly-written dissenting opinion, I can readily see how people can claim that the original intent of the Court was to strike down both the Individual Mandate and the Medicaid Expansion as thoroughly unconstitutional, and then scrap the rest of the PPACA in toto due to lack of severability. I have no idea what actually happened, though I find Paul Campos' theory quite plausible, but for one reason or another it does seem that Chief Roberts did indeed switch his vote at the last possible opportunity, and we can only speculate as to why that would have happened. Like it or not, what is is what is, so what exactly do we have?
The Court has in fact finally drawn clear limits on what Congress can do under the auspices of the Commerce Clause and the Necessary and Proper Clause. Even though they didn't say so directly, the joint dissent agrees with Chief Roberts on this one. How long it'll take to realize Justice Thomas' interest in ultimately throwing out Wickard v. Filburn . . . couldn't tell you, but at least the ne plus ultra's finally been demarcated.
A federal grant to the states for the purpose of a particular program is properly understood as a contract. The states do not have to take the money if they don't want the program. However, Congress cannot structure the terms of the contract (so as to threaten other federal programs) such that states are compelled to comply. In other words, state sovereignty overrides the federal spending power.
A federal mandate that doesn't lawfully flow from one of the Enumerated Powers (such as the Individual Mandate) is unenforceable except through taxation. And taxation for the purpose of influencing economic activity is not a novel concept. Provided that the tax is not so large as to make lawfully avoiding the tax cheaper than just paying it, this is a legitimate use of the taxation power.
The Court is compelled by the constitutional separation of powers to defer to the elected representation in Congress in the arena of legislative and policy matters . . . unless the act of Congress in question can be shown to violate the absolute limits of the Enumerated Powers, or to violate State Sovereignty. This should mean that the Roberts Court isn't going to be playing goalie for our political sloppiness.
So, the only way that ObamaCare stands is as a tax, more specifically as 21 individual taxes totaling, if my memory serves me correctly, over $500 billion dollars . . . defend that socialists, if you can. I should think that, because the Shared Responsibility Payment has now been ruled a tax, it can be repealed through the budget reconciliation process, a strategy advocated by Keith Hennessey among others. This would only require flipping a net of four Senate seats, plus enough to provide insurance against any squishies, as well as maintain a cohesive-enough majority in the House that makes this doable.
This leaves us with what we do moving forward. Chief Justice John G. Roberts, jr. has just said that the President is a liar; however, fixing this problem is to be handled politically, not legally.
I have lost count of the number of times that I've spoken with tea partiers and other conservative grassroots activists, about this issue and others, and left that conversation with the feeling that the person I was speaking with just didn't get it. Apparently, even tea partiers can fall into that 64% to 70% of the electorate that are relatively either clueless or disengaged from a political standpoint. They're looking for some "auto pilot" answer that will allow them to go back to ignoring what's going on politically, as long as they're left alone in they're day-to-day lives. Evidently, they need to heed the warning of Pericles:
"We do not say that a man who takes no interest in politics is a man who minds his own business; we say that he has no business here at all. Just because you do not take an interest in politics doesn't mean politics won't take an interest in you."
In other words, we need to realize that not only do elections have consequences, but it's our fault for those consequences; we must quit relying on the courts to cover our six. If we want to do something about it, then we have to resort to the lawfully-provided means of removing elected officials. And we also have to make a point of continually holding our elected officials accountable for their votes.
We need to start where we're at, with what we have to work with (realizing that no elected official will be perfect), and do what we can. Repeat as necessary until we completely undo every last vestige of Progressive Socialism.
