RobertsCare

When the US Constitution was drafted in the summer of 1787, it was written for a nation of farmers and shop keepers. They would have to be convinced that it should be ratified by each state’s ratification convention. It was, therefore, written as a simple straightforward explanation of how the proposed central government would work – something poorly-educated farmers, merchants, and shop keepers could comprehend. The proponents argued and assured a suspicious populace that the Constitution established a federal system – i.e. one in which the sovereignty of the states and their citizens would coexist alongside the new national government whose powers were explicitly enumerated. Indeed, in Federalist 45 James Madison wrote:

The powers delegated by the proposed Constitution to the federal government, are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.

In the first two decades of the young Republic, the Supreme Court was about as busy as the Maytag repairman. But by hearing the 1803 case of Marbury v. Madison, the Court asserted it had the authority under the Constitution to review the legality of the acts of Congress, and with that, the interpretation of the meaning of this “farmer’s guide to the operation of government” has become more complex with each generation.

The Supreme and inferior courts of each generation have discovered new rights in nuanced interpretations of the document’s simple and straightforward provisions, such as the 1973 Roe v. Wade, which legitimized abortion under the Due Process provisions of the 14th Amendment of 1868 – a right that, lo and behold, had been hiding there for 105 years before its discovery by Justice Harry Blackmun. Moreover, the insights of the jurists of one generation could be found flawed by those of a later generation, such as the 1896 Plessy v. Ferguson decision, which upheld the constitutionality of state racial segregation laws under the “separate but equal” doctrine, only to be found unconstitutional in the 1954 Brown v. Board of Education.

Some Supreme Court decisions have been positively hilarious. In the infamous 1942 case of Wickard v. Filburn Farmer Filburn, planted and harvested more wheat than President Roosevelt’s overreaching New Deal Agricultural Adjustment Act of 1938 allowed. Roosevelt wanted to limit free markets in order to drive up the price of wheat during the depression. When his transgression was discovered, Farmer Filburn was fined. He claimed he raised the excess wheat to feed to his livestock, not to sell it – a fact not disputed by the federal government. Thinking he was a free citizen with the right to grow grain to feed his chickens and cows, Filburn appealed to Roosevelt’s Supreme Court. Bad mistake. The Court told Farmer Filburn that if he hadn’t grown his surplus feed grain, he would have had to buy grain on the market to feed his animals. And if every farmer did what Farmer Filburn had done, why, the demand and the price for wheat would go down! While there was no proof that a nationwide black market in feed grain existed, nevertheless Farmer Filburn stood guilty as charged because his actions could have had “substantial affect” on the government’s regulation of interstate wheat sales – even though his additional production for animal feed was modest to any reasonable observer. Thus the Court was on record for finding a man guilty who could have made something happen that didn’t happen.

John Roberts was therefore in good company last Thursday when he delivered the tortured logic of the majority in NFIB v. Sebelius commonly referred to as the ObamaCare case.

Let’s begin at the beginning – always a good place to start.

The first clause of Article I, Section 7 of the Constitution, also known as the Origination Clause, explicitly says:

All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.

There’s a reason for this. This country had its founding in a rebellion against taxes. Thus the Founders wanted to make sure that the origination of taxes, never popular with those who must pay them, occurred in the House of Representatives whose members face the voters every two years, making them much more accountable than the Senate – which was originally elected by state legislatures and served for longer, six-year terms.

Oops. The ObamaCare bill originated in the Senate, not the House, and was largely the work of Sen. Max Baucus. Only the bill number – HR 3590 – originated in the House. This bit of flim-flammery occurred by gutting an original bill authored by Rep. Charles Rangel under HR 3590, which was named the Service Members Home Ownership Tax Act of 2009, intended to amend “the Internal Revenue Code of 1986 to modify the first-time homebuyers’ credit in the case of members of the Armed Forces and certain other Federal employees." The bill passed the House in October 2009 and was sent to the Senate.

The Senate Majority Leader, Harry Reid (D-NV) stripped out the contents of the bill (except the first sentence), retained its HR designation number, renamed it the Patient Protection and Affordable Care Act, and stuffed it with Baucus’ 2,700-page bill replete with 21 new or higher taxes needed to make ObamaCare work. Therefore, ObamaCare was illegal from the outset.

A significant problem had to be overcome to make ObamaCare work in the real world, however. Many people were uninsured – about 45 million – some voluntarily because they were young and healthy and the purchase of expensive health insurance was not a good value for them. Others were temporarily uninsured because they were between jobs. Still others – the minority of uninsured – couldn’t afford insurance. Somehow the voluntarily uninsured young healthy people would have to be dragooned into the insurance system because insurance companies lose money on sick people, whose claims exceed their premiums, and make money on healthy people whose premiums exceed their claims. The insurance companies needed the premium payments of the healthy to offset the losses of the chronically and acutely sick.

The answer: a mandate in ObamaCare that required everyone in the country to be insured – i.e. everyone had to pay into the risk pool – and anyone who did not would be subject to a penalty whose amount varied by income. The mandate would allegedly prevent insurance premiums from rising. If everyone weren’t forced to pay into the pool, the sickest insureds would drive up premiums, then those on the income margins would drop their insurance coverage because it would become too expensive – exacerbating the uninsured problem without a mandate. Well, in theory that was the idea.

The irony of the ill-conceived ObamaCare, however, is that it makes it illegal for insurance company premiums or issuance to discriminate against people with preexisting conditions. Therefore, there is no incentive for many (if not most) people to buy insurance until they are sick or old enough to need it. The penalty they pay for foregoing insurance pales against premium cost, and with this perverted incentive, going without insurance will only get worse.

When ObamaCare passed into law without a single Republican vote – and without the votes of some in the Democrat caucus – critics howled at its constitutional underpinnings (or lack thereof.) The effect of the individual mandate, they correctly claimed, was to arrogate to the federal government police powers – i.e. “do this or else” – which are expressly reserved to the states in the Constitution. Police powers allow the regulation of behavior for the general welfare. Violations can result in compulsion, like arrest, or inducements, like fines. The 10th Amendment, one of the original Bill Of Rights, states “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” In other words, the federal government is limited to its enumerated powers in the Constitution, which don’t include police power.

In order to get around the restriction of the 10th Amendment, Congress used another provision to seize police power whenever it wanted to control society’s behavior. It used the Commerce Clause. This is an abuse of Article I, Section 8 which clearly was intended to regulate real commercial transactions across state lines – not implied, not potential, not “could have been” transactions like Wickard v. Filburn. I have previously blogged on the rationale of the Commerce Clause and therefore won’t repeat its rationale here, but suffice it to say when Congress found the cookie jar in its insatiable quest for power to regulate people’s lives, it usually found a willing accomplice in the Supreme Court.

I fully expected that to happen again as ObamaCare wended its way through the court system en route to the Supreme Court. The Commerce Clause defense had survived the scrutiny in the majority of District and Appellate courts that heard its contorted logic, including the finding of a conservative appeals court justice about whom I also blogged almost a year ago to the day of the Roberts’ findings. I predicted then that there was a good chance that ObamaCare would survive – not because I was prescient, but because the “liberal” side of the Court always brings guns to a knife fight, and I didn’t trust the “conservative” side to restrain its liberal activists any more than the Court has restrained an activist Congress that has been out of control most of my life.

ObamaCare was argued before the Supreme Court from March 26 to 28 and quite likely the Court made its decisions in late March or early April in order that assignments could be made for writing the majority and dissenting opinions. Normally, Supreme Court hearings last an hour – 30 minutes for each side. The fact that this case spanned six hours over three days suggested that the Court considered the issues extraordinary. Similarly, the hearing that led to the 1966 Miranda decision, wherein police officers must advise suspects of their rights, had taken six hours. Two important campaign finance cases were each granted four hours to argue. Interestingly, only 90 minutes was set aside to hear the important 2000 Bush v. Gore arguments, which the silliness of Florida’s “hanging chad” Supreme Court had stirred up.

The first day heard 90 minutes of ObamaCare oral arguments concerning the Anti-Injunction Act, a law that harks back to 1793 and prohibits challenges to tax laws until taxes are collected. The AIA would only be germane if the mandate, which doesn’t go into effect until 2015, or any part of it could be considered a tax, which Obama and his coterie steadfastly denied. Justice Alito anticipated the government’s strategy and jumped into the argument Solicitor General Donald Verrilli put forward on the first day:

General Verrilli, today you are arguing that the penalty is not a tax. Tomorrow you are going to be back, and you will be arguing that the penalty is a tax. Has the court ever held that something that is a tax for the purposes of the taxing power under the Constitution is not a tax under the Anti-Injunction Act?

"No," answered Verrilli.

The second day of hearings lasted for two hours during which the arguments defending and disputing the coercion of individuals into purchasing insurance under the provisions of the Commerce Clause were put forward.

The third day dealt with severability and the Medicaid mandates imposed on the states. ObamaCare has no severability clause, therefore, if any part is found unconstitutional, the entire law could be struck down. Severability arguments were heard for 90 minutes, followed by an hour of arguments concerning the usurpation of states’ rights if ObamaCare is allowed to tell states to expand the reach of their Medicaid program “or else” forfeit all federal Medicaid funding – another police power grab.

When the decisions were to be read last Thursday, a lawyer in attendance observed that Justice Kennedy – usually the swing vote – entered the chamber virtually seething with anger. That was a sign there were fireworks ahead.

In years past, Congress has made an art form of abusing the intent of the Commerce Clause, as I’ve said above, to pass all manner of laws, often with the collaboration of the Supreme Court. The Civil Rights Act of 1964 became law under the provisions of the Commerce Clause, if you can believe it, and so did the Endangered Species Act. So I was surprised that the Court found against the mandate under the provisions of the Commerce Clause. The Court opined that Congress would have unlimited authority if the mandate was allowed under that provision of the enumerated powers.

“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," Roberts wrote for the majority, which included Justices Scalia, Kennedy, Thomas and Alito. Congress can regulate commerce; it cannot compel one to engage in commerce.

The Roberts opinion for the majority thus lectured future Congresses:

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....

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.” It is nearly impossible to avoid the word when quoting them....

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. 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.

It would therefore appear that Roberts has sealed off the Commerce Clause pretense when future Congresses attempt to force citizens to “do” something rather than “not do” something. Roberts went on to reject the mandate as an exercise of congressional authority under the Necessary and Proper Clause, which had also been argued by Verrilli. Therefore, the naked grab for police power implied in the mandate and penalty was rebuffed, and the 10th Amendment continues to prevail against the intrusion of the federal government.

But just at the point where it seemed the mandate was about to go down, Roberts resuscitated it by launching into a logical backflip that would rival Abbott and Costello’s “Who’s on First” routine. Joining the four Court liberals to form a majority he wrote:

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. That, according to the Government, means the mandate can be regarded as establishing a condition – not owning health insurance – that triggers a tax – the required payment to the IRS. 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, like buying gasoline or earning income. 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.

Verrilli’s bumbling tax argument had hooked its prey – Roberts. The Court had unanimously agreed that the individual mandate was not a "tax" under the Anti-Injunction Act, thus allowing the ObamaCare case to be heard. But Roberts, searching for some justification to avoid throwing out ObamaCare, concluded that, notwithstanding what Congress called the mandate, it was a tax. ObamaCare became RobertsCare when he essentially rewrote it by interpretation. Thus, he explained,

The Affordable Care Act describes the ‘[s]hared responsibility payment' as a ‘penalty,' not a ‘tax.' That label is fatal to the application of the Anti-Injunction Act.… It does not, however, control whether an exaction is within Congress's power to tax.

In other words, sometimes ‘tis, sometimes ‘tain’t.

Stay tuned to the continuing saga next week.