Regardless of whether one agrees or disagrees with the approach taken by the Patient Protection and Affordable Health Care Act or the Court’s decision on its constitutionality, the decision is undeniably the most signficant one issued by the United States Supreme Court since Roe v. Wade. The 193 page opinion (including dissents) contained some surprises and will take more time to fully understand, but some initial observations are worth noting.
To start, Chief Justice John Roberts joined what many consider to be the liberal wing of the Supreme Court and wrote the 5-4 decision upholding the individual mandate as a tax. Reports surfacing since the decision have suggested that he initially sided with the conservative wing of the Court and planned to strike the law down, but that something happened to cause him to switch sides. Because many considered him a reliable conservative vote on the Court, questions surrounding the decision are fair game.
It would be impossible to reduce the whole opinion to a manageable length and analyze every aspect of it in the space even a well-informed reader would be able to stomach at one time. But looking at several key elements of the Chief Justice’s opinion is worth the exercise for constitutional scholars of all walks and those interested in what the law will bring.
The Commerce Clause appears in Article I, Section 8 of the Constitution. It give Congress the power to “regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes” (emphasis added). Court precedent has increased the reach of the Commerce Clause consistently since the days of the New Deal and, in fact, was perhaps the impetus behind President Obama’s bold attempt to create yet another social welfare program here. This case has many of the same political markings and legal undertones as President Roosevelt’s attempts to pass Social Security.
The Obama Administration argued before the Court that the failure to purchase insurance has a “substantial and deleterious effect on interstate commerce” by creating a cost-shifting problem. In simpler terms, it proffered the intellectually dishonest argument that the decision not to act was in fact engaging in commerce. Chief Justice Roberts, writing for the majority, flatly rejected this argument. Concluding that the law was an attempt to compel Americans to participate in commerce, the Court limited the power of Congress to the regulation of already active commerce. In other words, Congress may regulate existing interstate commerce. It may not compel it.
This case is the first real attempt by the Supreme Court to reign in the power of Congress to legislate under the Commerce Clause. Prior to this holding, it was supposed by most legal scholars and Court observers that Congress had virtually no limits on its power under the Commerce Clause. This decision, in no uncertain terms, makes clear that that is not the case. This is a good thing for conservatives and those who believe in limited government.
After rejecting the government’s arguments under the Commerce Clause and the Necessary and Proper Clause, the Court turned to the position that received the least attention from either side or the Court – whether the law could withstand constitutional scrutiny under Congress’ power to tax. Despite the possible legal appropriateness of the argument, it remains logically repugnant and unacceptable.
The federal Anti-Injunction Act prohibits the issuance of an injunction to prevent the government from collecting a tax. Rather, the law requires that the tax be paid and a challenge to its constitutionality be made after the harm is suffered. The appropriate remedy would be a tax refund, not an injunction blocking the collection of the tax in the first instance. The Court held that Obama-care was defined as a penalty by Congress in the statutory language. Based on this logic, it ruled that the penalty under the law was not a tax and that as a consequence the Anti-Injunction Act did not apply to bar it from hearing the case.
Then, in a remarkable transformation, it declares the very same penalty a tax for purposes of passing constitutional muster. Its justification? The penalty is not punitive enough to really be a penalty, it anticipates that people will actually choose to pay the penalty in lieu of purchasing health insurance and does not prohibit such a decision, and the entire system is administered through the IRS. This analysis makes a large assumption that is not valid though. The penalty will inevitably get much larger when the government, as it always does, realizes it can’t pay for its portion of the program’s cost. At what point does the penalty become overtly punitive and more than a tax? This question is left unanswered.
Aside from the facially flawed logic of the tax argument, this decision arguably opens the door for Congress to be involved in many things it has no business touching if it can figure out a way to have it declared a tax. Dangerous.
Obama-care remains valid law and the unbearable consequences it will bring are still a reality. It is beyond doubt that this law will bring with it unspeakable costs and increases in taxes. It will also cause untold damage to our economy and stall any economic recovery.
For example, one immediate impact will be lay-offs or the use of more part-time and temporary employees to adjust to the 50 employee threshold. Because the law requires any business employing more than 50 people to provide health insurance to their employees or pay the penalty for not doing so, many businesses are incentivized to reduce the number of employees before 2014. This will drive up unemployment and give businesses little reason to grow. Moreover, there are other known costs for business that are as of yet undefined. A governmental infrastructure to administer the law will need to be created and could mean higher taxes. Companies will also need to meet increased demands on overhead and expenses to comply with new regulation.
There are other problems that have gone largely unreported to date. For example, the law increases the payroll tax on wages and self-employment incomes in excess of $200,000 by 1%. This will hit the tax returns of small business owners who permissibly include their small business income as part of their personal tax returns. Similarly, the bill includes a 40% excise tax on certain insurance plans over a threshold value beginning in 2018. Provisions like these will mean significant tax increases for the Americans already paying the bulk of the taxes in this country. Intended or not, this is a huge transfer of wealth.
In the final analysis, there is still a great deal to analyze in the Court’s opinion. Perhaps this is the scariest thing of all. The Supreme Court’s decision does nothing to help bring legal clarity to how the Patient Protection and Affordable Health Care Act will work or to fully define the constitutionally permitted power of the federal government to be involved in something as personal as an individual’s health care.
More challenges will come to the law; but the outcomes of those lawsuits are far from certain and will likely take a good deal of time to work their way through the system.
One thing is more certain than ever now though. President Obama and the Democrats must be defeated in November so that this law can be repealed.