Friday, June 29, 2012

A Bad Decision

Yesterday the court announced its ruling in the case of National Federation of Independent Businesses, et al v. Sebelius.  The court ruled on two elements of the Affordable Care Act (ACA), the individual health insurance mandate and the Medicare expansion.  The individual mandate is the heart of the act, and I will analyze the opinion as it relates to the mandate.

In Chief Justice John Robert's majority opinion, he explores two possible constitutional justifications for the individual mandate, the commerce clause and the taxing clause.  Both are located in Article II section 8 of the U.S. Constitution.  The commerce clause grants Congress the power "to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."  The Taxing clause says, "The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises."

The commerce clause has been badly misinterpreted by the Supreme Court for the better part of a century.  In 1942, the Court ruled in Wickard v. Filburn that the federal government could punish a farmer (Wickard) for growing wheat on his own land for his own family's consumption.  The court decided that Wickard's attempts to feed his family probably affected the interstate wheat market by a few thousandths of a cent, and were thus fair game for federal regulators.  This is wrong because the commerce clause is expressly concerned with interstate commerce itself, not anything and everything that might affect that commerce.  As Justice Clarence Thomas wrote in his personal dissent in yesterday's case, "I adhere to my view that 'the very notion of a "substantial effects" test under the Commerce Clause is inconsistent with the original understanding of Congress’ powers and with this Court’s early Commerce Clause cases.”

In his opinion on the ACA case, Roberts does not try to challenge the monstrosity that is Wickard v. Filburn, but he does make a distinction between commercial action and non-action. "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 concludes that the federal government may regulate commercial activity but not punish inactivity under the commerce clause.  Thus, the individual mandate cannot be justified by the commerce clause.

When reporters first heard the court's rejection of the commerce clause as a constitutional authorization for the individual mandate, many prematurely reported that the mandate had been struck down.  It turned out however, that the Chief Justice had a trick up his robes.  Roberts finagled a justification for the individual mandate out of the taxing clause.  The mandate penalizes those who are not covered by health insurance with a fee, that "shall be assessed and collected in the same manner as taxes."  Roberts says, "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."  Roberts is right about the role of the judiciary but wrong about the Constitution.

Incredibly, Roberts holds not only that the penalty is a tax, but that it is simultaneously a non-tax.  The Anti-Injunction Act bans lawsuits brought for the purpose of preventing the collection of taxes.  Roberts ruled that the penalty for failure to comply with the individual mandate is not a tax for the purposes of the Anti-Injunction Act.  He argues that Congress "chose to describe the '[s]hared responsibility payment' imposed on those who forgo health insurance not as a 'tax,' but as a 'penalty.'  There is no immediate reason to think that a statute applying to 'any tax' would apply to a “penalty.”  The Chief Justice offers a reasonable argument that the Anti-Injunction act does not deny standing to those suing over the individual mandate, but he then turns around and declares the individual mandate to be a tax after all.  To claim that the mandate penalty is simultaneously a tax and a non-tax is absurd.  The dissent by Scalia, Kennedy, Thomas, and Alito tears apart the majority opinion on this point.  The dissenters write,
What qualifies as a tax for purposes of the Anti-Injunction Act, unlike what qualifies as a tax for purposes of the Constitution, is entirely within the control of Congress . . . . Congress could have defined "tax" for purposes of that statute in such fashion as to exclude some exaction that in fact are "taxes."  It might have prescribed, for example, that a particular exercise of the taxing power "shall not be regarded as a tax for purposes of the Anti-Injunction Act."  But there is no such prescription here.  What the Government would have us believe in these cases is that the very same textual indications that show this is not a tax under the Anti-Injunction Act show that it is a tax under the Constitution. That carries verbal wizardry too far, deep into the forbidden land of the sophists.
Roberts' "verbal wizardry" aside, his claim that the individual mandate is authorized under the taxing power is problematic in and of itself.  Roberts says that regulatory taxation does not count as regulation.  He rejects outright Thurgood Marshall's axiom that "the power to tax is the power to destroy," quoting instead Oliver Wendell Holmes' dissent in Panhandle Oil Co v. Mississippi, which says, "The power to tax is not the power to destroy while this Court sits."  Common sense tells us that Marshall was right and that Holmes and Roberts are wrong.  If the federal government institutes a tax for the express purpose of regulating some activity, then it is itself a regulation.  If such a regulation could not be justified in the form of a direct statutory command under the commerce clause, then it is unconstitutional.  However, even if one believes regulatory taxation to be constitutional, the Chief Justice stretches the power of regulatory taxation beyond credulity.  The individual mandate is a command with a fine attached for failure to comply.  The majority opinion would have us believe that it is the fine that makes the mandate constitutional.  If the mandate did not punish noncompliance with a monetary penalty, then even the most liberal judge would never consider it to be authorized under the taxing power.  The court's ruling means that the federal government can tell American citizens to do absolutely anything provided that a fee for noncompliance is attached.

The effect of this case goes far beyond the Affordable Care Act.  The police power, the power to regulate the lives of the citizenry once belonged to the states alone.  Wickard v. Filburn and similar decisions transferred much of that power to the federal government.  In yesterday's decision, the Chief Justice completed the American government's transformation into a European style state in which every action or inaction of the citizenry is subject to regulation from an all powerful central authority.  In the 18th Century American colonies, the relationship between government and governed became perverted.  The colonists demanded the rights of Englishman and resisted those who denied them their rights.  All right thinking men today demand the rights of Americans, the rights usurped by a tyrannical federal government aided by a failed judiciary.  


  1. Thanks for bringing up Wickard v. Filburn, I was trying to remember it but couldn't. Thursday's ruling will go down as 1 of the last straws. Either this mess gets cleaned up & we go back to following the Constitution's original intent, or we may see a 2nd American Revolution.

  2. thanks for sharing.