Tuesday, July 3, 2012

The Decision: A Primer

No, not THAT decision.
We are trying to attract a broad range of readers to Sons of Cincinnatus.  Many of the readers of this blog, and thank you for reading, may be political junkies.  In that case, the posts Jack and I have made to the site are probably your cup of tea.  But we hope to also attract readers who may not be as interested in politics. 
On July 8, 2010, in a prime-time TV show called "The Decision," LeBron James announced he was taking his basketball talents to South Beach to play for the Miami Heat.  A little less than two years later, The U.S. Supreme Court announced "The Decision" to uphold the constitutionality of the Affordable Care Act ("ObamaCare").  LeBron's Decision worked out pretty well for him and The Heat.  This post is a primer on the other Decision for those who may not have the time or inclination to do a deep dive on the subject. 
What is the Case About? 
Whenever Congress passes legislation, it must have Constitutional authority for its action.  Recently (since the Great Depression), Congressional actions are supported, or at least claimed to be supported, by Congress’ enumerated power under the Commerce Clause of the Constitution.  The Commerce Clause states that Congress has the power “to regulate Commerce with foreign nations, and among the several States, and with the Indian Tribes.”  The Supreme Court has justified Congressional action under the Commerce Clause in a virtually unlimited variety of subjects, including a case where an Ohio farmer raised wheat only for himself and his family on the theory that his tiny bit of wheat arguably affected the interstate market for wheat.
In the Affordable Care Act (“ObamaCare”), Congress requires virtually every American to have approved health insurance provided through his employer, Medicaid, or through a government ‘exchange’ program or pay a penalty (relatively small in the first two years, but escalating thereafter based on the amount of the citizens' income).  This is what is called the ‘individual mandate.’  The States and individuals who challenged ObamaCare claimed that while Congress can regulate individuals who participate in Commerce, it does not have the authority to require individuals to participate in Commerce -- buy a health insurance policy -- if they choose not to.  If Congress can require that action, they argued, what possible limit is there to Congressional authority?  The Government argued that since everyone is a consumer of health care at one time or another, it is within Congressional authority to require individuals to purchase or participate in a health insurance plan. 
The challengers to ObamaCare also argued that since the individual mandate is the hub of the wheel of ObamaCare, if Congress does not have authority to require individuals to purchase a private product, the entire legislation must fall.
Most experts thought the Supreme Court would split on a 4-4 basis, with the Justices who are ‘reliably liberal’ – Breyer, Ginsburg, Kagan and Sotomoyor – affirming the right of Congress to pass ObamaCare, and the Justices who are ‘reliably conservative’ – Scalia, Alito, Thomas and Chief Justice Roberts – striking down at least the individual mandate requirement of ObamaCare.  The Justice who was historically least predictable, Justice Kennedy, was generally thought to hold the ‘keys to the kingdom.’  Whoever got Justice Kennedy’s vote would probably win the case, most experts thought before Thursday. 
So What Happened?
As most expected, Chief Justice Roberts ruled that Congress did not have the right under the Commerce Clause to pass the individual mandate.  Four other Justices (Thomas, Scalia, Alito and Kennedy) reached the same conclusion.  The other four Justices disagreed with this part of his Decision. 
However, in a surprise development, CJ Roberts ruled that Congress did have authority to pass the Individual Mandate under the Tax and Spend Clause (remember, every Congressional action must be authorized by a power set forth in the Constitution).  The Tax and Spend Clause states that Congress “shall have Power to 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; but all Duties, Imposts and Excises shall be uniform throughout the United States.”  Under ObamaCare, citizens who don’t purchase or otherwise subscribe to an approved health insurance policy must pay a penalty.  CJ Roberts concluded that while the Mandate/Penalty provision of ObamaCare was not presented as a tax in the way most Americans think of taxes, it could be viewed under the Constitution as a Tax and therefore is within Congress’ authority to pass under the Tax and Spend Clause.  The four other reliably liberal Justices agreed with CJ Roberts, giving the Administration the five votes necessary to uphold the Constitutionality of ObamaCare.  The four remaining Justices disagreed intensely with this part of the Decision.  In fact, these four Justices would have eliminated the entire ObamaCare legislation as unconstitutional. 
In another part of the Decision, CJ Roberts (joined by six other Justices) stated that the Federal Government had gone too far in another aspect of ObamaCare.  The legislation was purportedly passed, at least in part, to address the issue of individuals who do not have access to health insurance.  One of the ways the ObamaCare legislation deals with this is to expand the eligibility standards of Medicaid to funnel millions of uninsured citizens into that program.  The Medicaid program is administered by the individual States, with partial funding by the Federal Government.  The ObamaCare legislation provides that States who do not participate in this expansion of the eligibility standards would forfeit 100% of the Federal funds the State receives for administering Medicaid.  The Supreme Court ruled that this forfeiture provision was too severe, and the Federal Government could withhold from the States who choose not to participate in the expansion only that part of their Medicaid funding associated with the expansion program.  In other words, the Feds cannot threaten the States with taking away all of their Medicaid funding if they do not participate in the insurance expansion program.
What Does It Mean?
First, ObamaCare is upheld as Constitutional, not as a valid exercise of power under the Commerce Clause, but under the Tax and Spend Clause.
Second, States may opt out of the Medicaid Expansion program and not put at risk 100% of its' Federal Medicaid funding.  
Third, Unless Republicans gain control this fall of the Presidency and Senate and retain control of the House, the bureaucratic requirements of ObamaCare will continue in full force and ratchet up towards complete implementation.
What Do I Think? 

1.  In my opinion, CJ Roberts worked backwards from a premise that he was going to vote to uphold ObamaCare, and then manipulated the legal and popular definitions of a ‘Tax’ to fit the individual mandate within the Tax and Spend Clause.  ObamaCare was never passed as a tax.  Neither President Obama nor the Democrat supporters of ObamaCare ever characterized this legislation as a tax.  In fact, they worked very hard (and are continuing to work hard following the Decision) to convince the public this is not a tax.     

2.  If CJ Roberts thinks that Congress has the power to pass ObamaCare, not under the Commerce Clause but under the Tax and Spend Clause, he should have voted to strike the statute and advise Congress it could pass ObamaCare but only under its Tax and Spend authority.  (Perhaps because he could not obtain a Court majority to support this position.)  Also, CJ Roberts never adequately explains the Constitutionality of a tax on inactivity.  Taxes are levied on activity (generation of income) and material things (property, gasoline, cigarettes, etc.).  In this case, even if you accept the mandate/penalty as a tax, how does the Government tax something which has not occurred?  (a citizens' decision to not purchase a compliant health insurance policy)

3.  There is a Federal Statute which states that a party cannot challenge the imposition of a tax until the Government actually attempts to collect the tax.  In the Decision, the Supreme Court ruled that this statute doesn’t apply, even though the individual mandate/penalty is a tax.  Basically, the Court ruled that Congress can decide the mandate/penalty is not a tax for purposes of this Federal Statute, but the Supreme Court can decide it is a tax for purposes of considering the Constitutionality of the mandate.  This seems intellectually dishonest at best and disingenuous at worst.  

4.  By changing the conditions of Medicaid funding, the Supreme Court changed the details and balancing act of ObamaCare.  The Supreme Court’s authority should be limited to deciding if a statute is or is not Constitutional; it should not have the legislative power to rewrite a statute.  If I were a Democrat supporter of ObamaCare, which I am not, I would be extremely upset with the Court’s presumption that it can rewrite the provisions of duly-enacted laws at its pleasure.  Under the Constitution, this is the job of the Congress, not the Court.  Fidelity to the Constitution would result in the Court striking the Medicaid expansion program and instructing Congress that the present enforcement mechanism, forfeiture of 100% of Federal Medicaid Funding, is not acceptable and Congress should try again.

5.  Rumors are circulating that CJ Roberts initially decided ObamaCare was unconstitutional, then changed his mind in part due to the possible media and PR blowback the Court would receive if it struck down the signature legislation of the Obama Administration.  With all due respect to CJ Roberts and the Supreme Court, it is not his or its job to look good to the public.  It is the job of the Justices to decide whether the action under review, in this case ObamaCare, complies with the U.S. Constitution.  The Court ‘looks good’ by deciding cases honestly and impartially, and not weighing or considering the public relations impact of its decisions.  

6.   This is the latest example of our Federal Government expanding its scope and reach into virtually any and every action of private companies, citizens and organization.  Unless electorally checked, this trend will soon reach the tipping point in terms of the regulatory costs incurred by our Federal Government, the taxes imposed, and debt assumed.  We simply can't afford these programs.

7.  Under its present composition, Conservatives cannot count on the Supreme Court to strike down legislation or Executive Actions (see previous blog post on the HHS Mandates) which appear to be in violation of the U.S. Constitution.  The yoke is on the shoulders of those who want change, and the change has to come at the ballot box in November.  Are you registered to vote?  Are your friends and families?  Are you discussing these issues around the Kitchen Table?

As Jack notes in his previous post, we find ourselves at a conflict of visions.  On this eve of the Fourth of July, what is your vision?  What kind of future do you want for you and your children for your country?      
Most Important, What do you Think?  Please Read and Comment       

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