This is how you get from a mandate to a tax, according to SCOTUS

The New Neo Posted on by

I’ve been wondering what sort of reasoning the Court used to justify calling the mandate a tax, despite the fact that it the people who designed it and passed it explicitly claimed it was not a tax.

Here’s the text of the ruling. From the majority opinion:

“[T]he rule is settled that as between two possible interpretations of a statute, by one of which it would be unconstitutional and by the other valid, our plain duty is to adopt that which will save the Act.” Blodgett v. Holden, 275 U. S. 142, 148 (1927) (concurring opinion).

The most straightforward reading of the mandate is that it commands individuals to purchase insurance. After all, it states that individuals “shall” maintain health insurance. 26 U. S. C. §5000A(a). Congress thought it could enact such a command under the Commerce Clause, and the Government primarily defended the law on that basis. But, for the reasons explained above, the Commerce Clause does not give Congress that power. 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. 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. Crowell v. Benson, 285 U. S. 22, 62 (1932) . As we have explained, “every reasonable construction must be resorted to, in order to save a statute from unconstitutionality.”…

The exaction the Affordable Care Act imposes on those without health insurance looks like a tax in many respects. The “[s]hared responsibility payment,” as the statute entitles it, is paid into the Treasury by “taxpayer[s]” when they file their tax returns. 26 U. S. C. §5000A(b). It does not apply to individuals who do not pay federal income taxes because their household income is less than the filing threshold in the Internal Revenue Code. §5000A(e)(2). For taxpayers who do owe the payment, its amount is determined by such familiar factors as taxable income, number of dependents, and joint filing status. §§5000A(b)(3), (c)(2), (c)(4). 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.” Supra, at 13”“14. This process yields the essential feature of any tax: it produces at least some revenue for the Government…

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.”…While the individual mandate clearly aims to induce the purchase of health insurance, it need not be read to declare that failing to do so is unlawful. Neither the Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS.

Federalism’s weird victory

The New Neo Posted on by

Randy Barnett, who has been instrumental in developing the legal arguments against Obamacare, asks a very good question:

Who would have thought that we could win while losing?

The “we” he refers to are those who’ve been arguing—like he has—that the federal government’s attempt to impose an individual mandate is unconstitutional. It must be very hard for Barnett to understand that although he won that battle, and the Court ruled 5-4 that it is unconstitutional, the case challenging Obamacare was lost on other grounds.

I don’t think anyone anticipated that, or at least I haven’t found anyone who did.

And this is a good question, from commenter “gcotharn”:

Obama is taxing economic inactivity.

Isn’t this the first time, in all of American history, in which that has occurred?

Tax fraud

The New Neo Posted on by

I don’t usually listen to talk radio. But today I’ve made an exception, and I think that Rush Limbaugh’s approach makes a lot of sense. His point: Obama passed the biggest tax increase in history and committed fraud on the American people by insisting it wasn’t a tax.

That could be made into a campaign slogan.

[ADDENDUM: Limbaugh also pointed out what I hadn’t gotten around to discussing yet, which is that part of the decision involved the states and Medicaid. The Court ruled that states could opt out of the Medicaid increases required by the Act and not be penalized. This could be significant:

Holding that it would be unconstitutional to terminate existing Medicaid funds to states that refuse to go along with the Medicaid expansion is quite significant, particularly as seven justices joined this result. While the holding here may not go beyond the limits articulated in South Dakota v. Dole, the Supreme Court has not limited the exercise of the spending power to impose conditions on states since the New Deal and, again, seven justices endorsed this result. Going forward, I expect this portion of the opinion to have the greatest practical impact. In fact, I can think of some federal laws, including portions of the Clean Air Act, that are likely to be challenged on these grounds.]

And I don’t understand…

The New Neo Posted on by

…this reaction at all:

Obama just won a second term.

I disagree—although of course, Obama may win anyway. But that was always true.

I think the SCOTUS decision today actually reduces Obama’s chances of winning, if it affects them at all. I cannot imagine that people who dislike Obamacare will now shrug their shoulders and say, “Oh, the Supreme Court said the mandate’s a tax, so it must be okay.”

The mandate’s unconstitutionality was hardly the reason that most people were against the bill. Although it certainly was (and remains) a factor, few people are that legalistic in their thinking. They were (and should remain) against Obamacare for a host of reasons, including (but not limited to) government intrusion, its effect on the economy, and how it was passed. Today’s ruling should not change that, it should only intensify the desire to repeal it and replace it with something better.

Of course, people are strange. But as I said in this post:

This should fire up the troops on the right as almost nothing else could. If the American public is foolish enough to re-elect Obama and the Democrats, I suppose it deserves what it gets.

It’s understandable to be down about today’s ruling. And no doubt the left will crow over its victory. No matter. This is hardly the time to give up; it should be the time to say we’ve not yet begun to fight.

[NOTE: And yes, I understand that we may face a tipping point, and I understand what the danger is to liberty. My favorite literary passage that expresses this is from Dostoevsky’s The Brothers Karamazov, the section known as “The Grand Inquisitor”:

Oh, never, never can [people] feed themselves without us [the Inquisitors and controllers]! No science will give them bread so long as they remain free. In the end they will lay their freedom at our feet, and say to us, “Make us your slaves, but feed us.” They will understand themselves, at last, that freedom and bread enough for all are inconceivable together, for never, never will they be able to share between them! They will be convinced, too, that they can never be free, for they are weak, vicious, worthless, and rebellious. Thou didst promise them the bread of Heaven, but, I repeat again, can it compare with earthly bread in the eyes of the weak, ever sinful and ignoble race of man? ]

The HCR ruling: there’s a pony somewhere

The New Neo Posted on by

Here it is:

On the mandate, the Chief [Justice Roberts] then goes on to agree with Randy Barnett’s activity/inactivity theory. He writes:

“To an economist, perhaps, there is no difference between activity and inactivity; both have measurable economic effects on commerce. But the distinction between doing something and doing nothing would not have been lost on the Framers, who were “practical statesmen,” not metaphysical philosophers. Industrial Union Dept., AFL”“CIO v. American Petroleum Institute, 448 U. S. 607, 673 (1980) (Rehnquist, J., concurring in judgment). As we have explained, “the framers of the Constitution were not mere visionaries, toying with speculations or theories, but practical men, dealing with the facts of political life as they understood them, putting into form the government they were creating, and prescribing in language clear and intelligible the powers that government was to take.” South Carolina v. United States, 199 U. S. 437, 449 (1905). The Framers gave Congress the power to regulate commerce, not to compel it, and for over 200 years both our decisions and Congress’s actions have reflected this understanding. There is no reason to depart from that understanding now.”

Roberts also construes the Necessary and Proper Clause narrowly ”” construing it to bring inactivity in the scope of the Commerce Clause would not be “proper”:

“[S]uch a conception of the Necessary and Proper Clause would work a substantial expansion of federal authority. 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.”

So, what difference does it make, if Obamacare is held to be a constitutional tax? I repeat: it sets a precedent that limits the Commerce Clause.

The remedy for Obamacare is now a political one. We need to emphasize that. The Court will not save us. But this is a step better than if SCOTUS had said that anything goes under the Commerce Clause.

Of course, you could say this is a distinction without a difference. Call it a tax, call it macaroni—a mandate by any other name is still as stinky, and it should have been declared unconstitutional. I agree.

It underscores the task before us between now and November of 2012, both on the congressional and the presidential level. It is especially important to elect a Republican president to appoint new Justices to replace those who are likely to retire in the next few years. This is a long struggle, not a short one.

[NOTE: The title of the post refers to this joke, which apparently was Ronald Reagan’s favorite.]

The Humpty Dumpty ruling: “Ah, but it’s not a mandate, it’s a tax,” says SCOTUS

The New Neo Posted on by

Justice Roberts has joined the liberal wing of the Supreme Court in ruling that the HCR bill is constitutional, 5-4.

It seems that, when faced with the dilemma of possibly invalidating a huge act of Congress, the Court sidestepped that particular steaming pile of doo-doo and accepted the Democrats’ position that, although they were careful to make sure it was not called a tax for the purpose of passing it (a political move), it nevertheless could be considered a tax for the purpose of constitutionality (a legal one).

Reports are preliminary; more, much more, will be coming later in the day. But it also appears that the individual mandate was voted unconstitutional, 5-4. That doesn’t matter for the purposes of Obamacare, which stands. But it matters for considering the all-important issue I mentioned yesterday in this post:

I’m far more concerned with the precedent the Court will set regarding the further expansion of the Commerce Clause [than with its ruling on Obamacare itself]. If the Court fails to declare a federal mandate of this type unconstitutional, that would be an enormous triumph for “progressives”—far beyond the momentary victory of the Court’s upholding Obamacare.

Many conservatives may not see it that way, but I stand by my words, although people may consider them scant comfort.

In the same post I wrote that whatever happened with the mandate and the Court (short of a total invalidation of the bill, which never seemed likely to me), it could be fixed by changing the bill and clearly making it a tax, if the Democrats gained control of the legislature in 2012. Well, now they won’t have to do that, will they? It’s the Republicans who will need to take control and undo what was done by the previous Congress. This should fire up the troops on the right as almost nothing else could. If the American public is foolish enough to re-elect Obama and the Democrats, I suppose it deserves what it gets.

It also is scant comfort to me that I was correct in my prediction, here:

Maybe it’s just my tendency towards brooding, but even though I don’t usually make predictions I’ll go on record here as saying my gut feeling is that the Court will not strike down the mandate. Why? Because the Court is exceedingly reluctant to invalidate a major act of Congress, even one passed with such shenanigans and unsupported by the American people, and so it would require a very high burden of certainty that it’s unconstitutional before declaring it so.

They wanted a way out, and they took it.

It’s interesting that people have been joking, “why don’t we just ask Justice Kennedy what he thinks, since he’s always the determining vote in a 5-4 decision?” Well, this time that wisdom was wrong; it was Justice Roberts who swung.

And I bet that liberals won’t have any trouble whatsoever considering this particular 5-4 vote highly valid, even though it’s as close as it can get.

[NOTE: I call it a Humpty Dumpty ruling because of this passage from Through the Looking Glass, in which Alice has a chat with Humpty Dumpty:

…As I was saying, that seems to be done right – though I haven’t time to look it over thoroughly just now – and that shows that there are three hundred and sixty-four days when you might get un-birthday presents – ‘

‘Certainly,’ said Alice.

‘And only one for birthday presents, you know. There’s glory for you!’

‘I don’t know what you mean by “glory”,’ Alice said.

Humpty Dumpty smiled contemptuously. ‘Of course you don’t – till I tell you. I meant “there’s a nice knock-down argument for you!”‘

‘But “glory” doesn’t mean “a nice knock-down argument”,’ Alice objected.

‘When I use a word,’ Humpty Dumpty said, in rather a scornful tone, ‘it means just what I choose it to mean – neither more nor less.’

‘The question is,’ said Alice, ‘whether you can make words mean so many different things.’

‘The question is,’ said Humpty Dumpty, ‘which is to be master – that’s all.’ ]

On the eve of the Obamacare decision…

The New Neo Posted on by

…I thought you might like to read this remarkably prescient and cogent article by David Rivkin. Amazingly, it was written in 1993, but it is right on target for today.

I think it is of no small significance that Rivkin was born in the Soviet Union, and emigrated here with his parents when he was young. Having experienced life in a totalitarian leftist state can tend to concentrate the mind and create an intense appreciation of liberty.

I haven’t been this nervous…

The New Neo Posted on by

…about a pending SCOTUS decision since Bush v. Gore.

And back then I was on the other side.

[ADDENDUM: It occurs to me that I need to explain why I feel this degree of nervousness.

It’s not about Obamacare, although that does matter to me. But whatever way the Court rules, the ultimate fate of Obamacare will be determined by the upcoming election. If the Democrats are victorious, Obamacare can be easily fixed to eliminate the individual mandate and call it a tax, if need be. If Republicans take control, the bill can be repealed or unfunded, even if SCOTUS decides to uphold its constitutionality tomorrow.

I’m far more concerned with the precedent the Court will set regarding the further expansion of the Commerce Clause. If the Court fails to declare a federal mandate of this type unconstitutional, that would be an enormous triumph for “progressives”—far beyond the momentary victory of the Court’s upholding Obamacare.]

The campaign against Scalia continues…

The New Neo Posted on by

…with columnist E.J. Dionne quite predictably calling for his resignation (preferably, I assume, while Obama is still in office).

And here’s Ed Whelan’s complete takedown of Dionne’s arguments.

But the fact that Whelan exposes Dionne’s errors probably won’t matter all that much. I very much doubt that Dionne is trying to be either fair or accurate (if so, he’s remarkably incompetent). He’s trying to rabble rouse, and way too many of the people who would agree with Dionne’s conclusions and cite him approvingly are not going to bother to read Whelan in the National Review or to check things out for themselves.

Activist Court?

The New Neo Posted on by

The left is busy criticizing the Supreme Court as “activist” and biased in advance of any possible ruling against Obamacare. Oh, it’s perfectly fine for the Court to be activist when it is stretching the Constitution to fit the leftist agenda. Finding a right to privacy in order to guarantee abortion nationwide? No problem. And the left never met an extension to the Commerce Clause that it didn’t like.

But if there is a case in which the Court steps back in order to curtail the powers of the federal government and return to a former and stricter state of constitutional interpretation—well, that’s unconscionably activist. And of course the Roberts Court has been doing that more and more, right?

Nope, wrong, says Jonathan H. Adler at Volokh—and, of all things, the the NY Times is his source of information:

The problem with these characterizations of the court is that if by “judicial activism” one means a willingness to overturn precedents and invalidate federal laws, the Roberts Court is the least activist court of the post-war period. As a recent NYT analysis showed, thus far the Roberts Court has overturned prior precedents and invalidates federal at a significantly lower rate than its predecessors. Further, many of the Court’s most “activist” decisions, so-defined, have moved the law in a more liberal direction (see, e.g., Boumediene, Kennedy v.Louisiana) or were broadly supported First Amendment decisions (e.g. Stevens). This does not mean the Roberts Court’s decisions are correct and there are exceptions to every rule. Nor does the court’s past conduct necessarily predict the future. It does, however, mean that when one looks at the Court’s overall behavior (and not at a single case) it is inaccurate to say that this Court is particularly “activist” in moving the law in a conservative direction by overturning precedents and invalidating federal laws.

But people such as James Fallows, for example, don’t like to let the facts get in the way of a good argument.