Unconstitutional! Well, Maybe…

Judge Roger Vinson

Today, Judge Roger Vinson refused to halt implementation of the PPACA, allowing it to stand pending appeal.

The one area of general contention regarding the legislation is the “mandate.” That is, can the government require citizens to engage in commerce?

The law’s implementation consists of a penalty to be paid as part of annual income taxes if the filing party doesn’t have health insurance meeting a minimum standard. I believed before, and continue to believe, that a tax increase, coupled with a tax credit for meeting that minimum standard, would have passed constitutional muster without difficulty. After all, we can get tax credits for buying wind turbines, or hybrid cars, or extra insulation for our houses. This would have been a slam dunk.

But that’s not what’s in the law. We are penalized for not buying something. Is this a distinction without a difference? Certainly our wallets would say so. But the law is funny in that it looks at the means as much as it does at the end. This may be the pin upon which the entire law will hinge at the Supreme Court.

About Michael Weiss

Michael is now located at http://www.logarchism.com, along with Monotreme, filistro, and dcpetterson. Please make note of the new location.
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26 Responses to Unconstitutional! Well, Maybe…

  1. GROG says:

    Not sure if that Reuters headline could be any more misleading. Judge Vinson is fed up with the administration’s feet dragging and has given Obama 7 days to file an appeal. That’s how the headline should have read.

  2. mclever says:

    Michael,

    I personally think that it’s a distinction with out a difference, but it will be interesting to see how the lawyers parse it out.

    I understand that Congress didn’t want to be seen as “raising taxes”, but really. Would it have been that hard to turn it into a tax credit for having insurance rather than a penalty for not? As you say, such a construction would have passed constitutional muster easily.

  3. mostlyilurk says:

    There’s nothing inaccurate or misleading about the Reuters headline. The Administration requested a stay of the ruling while the appeal was pending and the stay was granted. The time period within which the appeal must be filed is a relatively minor issue. Allowing the law to be implemented while the appeal is pending, OTOH, is much more significant. The headline reflects that.

  4. dcpetterson says:

    A highly-respected Constitutional scholar, Lawrence Tribe, thinks that the law is unquestionably Constitutional — and that it’s a slam-dunk SCOTUS will rule that way, even with its current makeup. Tribe’s piece makes for interesting reading.

  5. There are some significant issues with Tribe’s article.

    Since the New Deal, the court has consistently held that Congress has broad constitutional power to regulate interstate commerce. … Many new provisions in the law, like the ban on discrimination based on pre-existing conditions, are also undeniably permissible.

    All true. There is ample precedent for regulation of the details of a contract, with the understanding that if the two parties cannot agree on terms, there is no requirement to enter into a contract at all.

    But they would be undermined if healthy or risk-prone individuals could opt out of insurance, which could lead to unacceptably high premiums for those remaining in the pool.

    So what? Just because a regulation may have detrimental effects to an industry doesn’t make the regulation unconstitutional.

    In this regard, the health care law is little different from Social Security.

    Except for one really, really big issue. There is ample precedent for citizens of our nation being unable to opt out of commerce with their government. There is no precedent for citizens of our nation being unable to opt out of commerce with private companies.

    Individuals who don’t purchase insurance they can afford have made a choice to take a free ride on the health care system.

    In the same way that individuals who don’t send their kids to private school have made a choice to take a free ride on the public school system.

    After all, the individual mandate is enforced through taxation, even if supporters have been reluctant to point that out.

    I’ve already pointed this one out. Raise taxes, and provide a credit, and it’s a slam-dunk. But this is a penalty. And penalties aren’t taxes.

    That I was able to pull that one apart so quickly and easily, using real examples of limitations, suggests that it’s hardly the slam-dunk that he claims it is.

  6. dcpetterson says:

    @mclever
    I understand that Congress didn’t want to be seen as “raising taxes”, but really.

    Yeah. Well, the partisan atmosphere in America today makes that impossible. The Republican spinners are so skilled, it would have been political suicide for the Administration to even suggest a new tax to cover Health Care. As it is, Obama has overseen on of the largest series of middle-class tax cuts in American history, and yet the Republicans have a significant percentage of Americans falsely believing the Obama Administration has raised their taxes.

    I agree, the real way to handle Heath Care is a dedicated tax. Move everyone into a single-payer system, and nationalize the insurance companies. We’re already paying for insurance anyway. The result will be lower premiums and better health care for nearly all Americans.

  7. dcpetterson says:

    Michael,
    In the same way that individuals who don’t send their kids to private school have made a choice to take a free ride on the public school system.

    This is, I think, a good point, but I think it argues in the other direction from how you see it. Children are required to go to school. In the same way, PPACA requires health care coverage. It is constitutional to require parents to send their kids to school. I think the parallel argument could be made that it is, therefore, also constitutional to require health care coverage.

    You can argue that health coverage is an economic activity, whereas sending a child to school is not. Anyone who has a child in school will disagree with you. For the vast majority of Americans, sending a child to school costs quite a lot of money. The government is forcing me to engage in economic activity by requiring my children to go to school.

    Of course, there are various federal and state programs to assist in offsetting the costs to parents. In the same way, there will be tax credits and the like to assist people in purchasing insurance.

    I think we’ll have to see how the appeals courts handle these issues before we draw any conclusions about the effectiveness of arguments such as Tribe’s.

  8. Max aka Birdpilot says:

    Actually, there is no “free ride” in the public school system. A locality or county or state or combination, taxes all of its citizens to pay for those schools. 70% of my property taxes here in Texas are for the school district, and I haven’t had a child of school age since 1994.

    In fact, the reverse is true in that even those without children in public schools pay for those who do.

  9. DC,

    You can argue that health coverage is an economic activity, whereas sending a child to school is not.

    I could, but that would be a dead-end argument. Rather, I point out again that you can be required to participate in commerce with the government. And there’s even precent for substituting a private equivalent (subject to whatever the government decides is the minimum standards for substitution). That’s what’s happening here.

    Anyone who has a child in school will disagree with you. For the vast majority of Americans, sending a child to school costs quite a lot of money.

    In what way does the government fine you for not buying something when your children go to public school?

  10. Max,

    Actually, there is no “free ride” in the public school system.

    The meaning of “free ride” here is that there is no marginal cost difference to you for sending your child to public school.

  11. dcpetterson says:

    Michael,
    In what way does the government fine you for not buying something when your children go to public school?

    The government requires I send my child to school, and will fine me if I do not. PPACA requires I have health insurance, and will fine me if I do not. If I can find a public or private school that will allow my child to attend without cost to me, that would be fine with the government. If I can find an insurance company that will provide coverage without cost to me, I’m sure the government would be fine with that too.

    But in point of fact, sending a child to school costs me money, and requires that I purchase items (clothes, school supplies, etc.) from private businesses. The mandate that I send my children to school requires that I engage in commerce with private businesses. If I refuse to spend the necessary money, the school might well disallow my child from attending, and I would likely be (unfairly, I feel) subject to fines for not sending my child to school.

    Likewise, acquiring health coverage costs me money, and requires that I engage in commerce with private businesses. I fail to see a substantive difference. In both cases, the government is requiring that I engage in commerce in order to fulfill governmental mandates, and will fine me if I do not.

  12. Max aka Birdpilot says:

    Michael,

    Then you need to come up with a MUCH better term for the point you wish to make. “‘Marginal cost difference’ of zero” is one hell of a lot different from “free ride” when one is ALREADY paying the bill for something. The operative word is “free”.

    Say I am paying a flat rate of $200 for my electricity and choose to have a solar panel on my roof instead of using off the grid. I’m STILL PAYING for that grid power. That is completely different than saying that using 1000 kW of grid power is a “free ride”

  13. DC,

    The government requires I send my child to school, and will fine me if I do not.

    And your marginal cost for sending your child to public school is zero.

    But in point of fact, sending a child to school costs me money, and requires that I purchase items (clothes, school supplies, etc.) from private businesses. … If I refuse to spend the necessary money, the school might well disallow my child from attending, and I would likely be (unfairly, I feel) subject to fines for not sending my child to school.

    You have to acquire (though not necessarily buy) clothing for your children regardless of whether or not they attend school. Schools that have uniform requirements must also provide those uniforms to low-income families. Likewise with school supplies.

    Moreover, all of these decisions are made at state and local levels, not at a federal level.

    And, finally, you’d surely agree with me that procreation is considered a voluntary activity by the government. So even if there are expenditures required as part of the procreation, we as free citizens have the right to opt out of that activity.

    All that this discussion proves is that it’s not a slam dunk. They certainly can call it constitutional, but there’s a fine case to make in the other direction as well.

  14. Max,
    Be reasonable here. “Free ride” was not my term; it was Tribe’s. I used it in the same way he did. In both cases, the taxpayers are footing the bill.

  15. rgbact says:

    Is there any required timeline for the appeal process? Given the law seems to be going forward, what exactly is going to push Obama to rush this to the SC? Will it still be an issue during the 2012 campaign?

  16. Max aka Birdpilot says:

    Michael,

    I stand corrected. Saw your use of the term. My apologies.

  17. Max, apology accepted. No hard feelings.

  18. dcpetterson says:

    Michael,
    Moreover, all of these decisions are made at state and local levels, not at a federal level.

    Another fair point. In which case the analogy is irrelevant as an argument in either direction, no?

    Tribe’s basic argument seems (to me, not a constitutional scholar) to be that since Congress has unquestioned authority to regulate the insurance industry, the mandate falls easily with those powers as a necessary part of the whole package. Speaking for myself, again, as not a constitutional scholar, I have no idea what arguments federal judges, or SCOTUS Justices, will find convincing. So far, it’s been a 50 / 50 split on whether Federal judges have upheld the law.

  19. dcpetterson says:

    @rgbact
    Is there any required timeline for the appeal process? Given the law seems to be going forward, what exactly is going to push Obama to rush this to the SC? Will it still be an issue during the 2012 campaign?

    For the process as a whole, I can’t see that there’s a limit. These things sometimes stretch out for years. But in this case, I’d expect all parties to move things as quickly as possible, in the interests of getting the questions settled, and then either adjusting the law, or adjusting TO the law.

    As for it being an issue in 2012, I don’t think the Republicans are smart enough to drop it that quickly. They’ll try to milk it for another couple of cycles, and then will continue using it as a way to rile up their base, the way they do keep claiming Social Security and Medicare to be “socialist,” even today.

  20. rgbact,

    Is there any required timeline for the appeal process?

    Yes and no. I don’t think there’s a specific set of dates or anything, but foot-dragging will be punished, per Vinson’s statement today.

    Given the law seems to be going forward, what exactly is going to push Obama to rush this to the SC?

    Nothing in particular. The executive has the option of going to the appellate court first. Regardless of whether it goes to appellate, it will end up at SCOTUS eventually.

    Will it still be an issue during the 2012 campaign?

    That depends on numerous factors. It is highly unlikely that the Supreme Court would take the case on an expedited basis, given that there are no significant deadlines coming up between now and this time next year. So depending on how long the appellate court takes (assuming it goes there first), the case might make it for the upcoming session, or it might not. I can’t imagine the court not accepting the case once it’s submitted to them.

    So, let’s assume that they take it for this fall’s session. We’d hear the result next spring, and whatever they decide will be a hot topic during the peak of campaign season.

  21. DC,

    Tribe’s basic argument seems (to me, not a constitutional scholar) to be that since Congress has unquestioned authority to regulate the insurance industry, the mandate falls easily with those powers as a necessary part of the whole package.

    It seems that way. But then take it to its logical conclusion. Can Congress require every citizen to buy a Chevy Cavalier? Should this be within their constitutional powers?

  22. dcpetterson says:

    Michael,

    I’d think there would be a difference between a mandate to support a specific corporation such as you suggest in the hypothetical, and a broader mandate that clearly supports a pubic good without specifying how that mandate is to be satisfied. The PPACA even provides for a wide range of options, through the exchanges. Nor does one even have to take advantage of the exchanges, if one can find another option that meets the PPACA requirements.

    Indirectly, of course, we all support various specific corporations through our tax dollars, the government forcing our indirect economic activity through purchases and tax benefits that we all contribute to. But I suspect no lawyer before a Federal court would make that argument.

    It’s going to be a fascinating lesson in constitutional law to follow where the arguments actually go.

  23. dcpetterson says:

    Michael,

    Rather, I point out again that you can be required to participate in commerce with the government. And there’s even precent for substituting a private equivalent (subject to whatever the government decides is the minimum standards for substitution).

    This is an interesting aspect I missed. It points the way to one possible solution to the constitutional questions. If the PPACA were amended to add public option into the exchanges, that could represent the required “commerce with the government.” Private insurance would be the allowable “private equivalent.” Of course, this is unlikely to happen while the Republicans have a majority in the House. But if the Democrats win back a majority in 2012, it could easily be accomplished by amending the Senate’s filibuster rules.

    (My own favorite way to do this would be by dropping the minimum age requirement for buy-in to Medicare.)

    Of course, the other easy solution is, as has been mentioned, to redefine the “penalty” as an official “tax” which is credited back to all taxpayers who have private insurance. Either of these solutions would seem to resolve the issues, and could be implemented with relatively small changes to the existing structure of PPACA. So I’d think even an adverse ruling from SCOTUS could be remedied with only the will to do so and a bare majority of sane congresspeople.

  24. jc2 says:

    @Michael- It seems that way. But then take it to its logical conclusion. Can Congress require every citizen to buy a Chevy Cavalier? Should this be within their constitutional powers?

    Probably not.

    Can Congress require every citizen to buy a car?

    Possibly.

  25. jc2,

    Can Congress require every citizen to buy a car?

    Possibly.

    I sure hope not, because this would make bribery under the guise of lobbying much more valuable. But you may be right.

    My gut says that the Supremes won’t come to that conclusion.

  26. Mainer says:

    Don’t know about buying a Chevy but have not Republicans in some areas toyed with the idea of requiring every one to own a gun?

    I’m not even sure the Supremes are going to want to see this one land on their table. If what comes out of the Appeate level is very narrow in how it is projected they might not accept the bait. To have a case that comes out as the case before Vinson where even he had to apparently jump through some hoops to get to his conclusion that was desired from those that filed (judge shopping much?) may well make the Appelate level wince or at least blink. I don’t see any slam dunks here for either side.

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