The Obamacare Ruling: Winners, Losers and Consequences

Last updated on: June 28, 2012 at 12:15 pm by Timothy Dalrymple

The Obamacare Ruling: Winners, Losers and Consequences 2012-06-28T12:15:42-04:00 Timothy Dalrymple

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Along with a number of other media folk, I’m at an event hosted by the Alliance Defense Fund to learn their perspective on current religious liberty issues. I’m surrounded by the conservative legal brain trust. The Supreme Court’s decision on Obamacare hit this place like shock and awe. No one saw this precise scenario — with Kennedy among the dissenters who would have overturned the entire act, and Roberts casting the decisive vote in favor of the ACA and justifying that vote with reference to Congress’ taxation power — coming. The Obama administration sought to justify the individual mandate first on the basis of the Commerce Clause, second on the basis of the Necessary and third on the basis of the federal government’s power to tax. Few people gave the third argument credence — partly because it was explicitly framed by Obama and the crafters of the ACA as “not a tax,” and partly because it does not seem to fit into any of the categories of taxes that are permitted.

Here are my quick thoughts on the judgment and its consequences:

1. Roberts certainly believes that this is an originalist decision. He issues a devastating series of arguments against the notion that the federal government can use the Commerce Clause to control behavior in this manner. But in the same way that Congress can pass a law that adds $2 to the cost of a pack of cigarettes (Roberts explicitly uses this analogy), so it can pass a law that taxes an individual who fails to purchase health insurance. It must be viewed as a tax and not a penalty, and that tax must not be unduly coercive. So just as you can simply choose to pay the extra $2 and purchase the pack of cigarettes and thus comply with the law, so you can pay the “tax” for not purchasing health insurance and thereby comply with the law. You will not be considered a lawbreaker if you simply pay the tax and do not comply with the intention of the law to drive you toward the purchase of health insurance.

Roberts expresses himself with some regret on this manner. He says it is not their job to pass judgment on the wisdom or such a tax, but neither is it their role as interpreters of the Constitution to stand in the way of the tax. In other words, the greater controls on Congress’ power to tax are political and not judicial. If we elect representatives who pass a law imposing a tax we do not like, the remedy is a political one: elect different representatives who will write a different law. As Roberts writes, “It is not our job to protect the people from the consequences of their political choices.”

2. In a sense, then, the mandate is not a mandate. It’s questionable to me, formally, whether the mandate survived as a mandate. It’s not exactly a mandate, any more than a tax on cigarettes is a mandate to cease purchasing cigarettes. Effectively, however, the function the mandate was meant to serve did survive. The “mandate” was intended to fund coverage for those who would be a net loss on the health care system. If you are a young and healthy individual who does not particularly need health insurance, you can fund the system either by signing up for health insurance or by paying the tax that helps to fund the system.

I have to say, I find the cigarette tax parallel fairly reasonable. I’m not sure Roberts is in the wrong here. It basically means that if the American electorate puts in place representatives who want to tax the country into oblivion, as long as those taxes are within some very loose limits then there is nothing the courts can do to stop it. So, Roberts is saying, don’t look to the judiciary to solve a political problem.

But I’m not a legal expert – I’m looking forward to hearing more.

3. The problem here is that there are no judicial limits, and it’s not clear what kind of tax this is. I haven’t finished reading the ruling, but thus far Roberts does not say what kind of a tax this is, although he clarifies a couple kinds of tax it is not. It will be interesting to see the legal scholars argue over this one. But the larger problem is that this opens the door in massive ways for further government interference in our lives. Whereas the Commerce Clause had been the way for Congress to control behavior it did not like, now the power of taxation will become the backdoor means for any and every kind of social welfare program. The controls on this will be political and not judicial; there will be very limited means of appeal for those who are in the minority in Congress.

In other words, this opens the door to all kinds of interventions, and to a host of lawsuits, so the clear winners here are those who want to use the government to control our lives, and the trial lawyers. The losers, it seems to me, are the American people — at least if they cannot elect the right people.

4. This is both good and bad for Obama. He will be able to go into every state in the union and tell compelling stories of the individuals who will have coverage under Obamacare, and he will be able to say that one of George W. Bush’s appointees confirmed the Constitutionality of his signature law. It will be very difficult to overturn Obamacare and it looks as though Obama has a good chance of seeing his legacy-defining law endure.

On the other hand, get ready for the Tea Party to burst back to life. Romney’s coffers are ringing right now, and conservatives are going to be energized in a way that they have not been for years. If there was any question whether conservatives would unite behind Romney, there is no question any longer.

5. What does this mean for the confirmation process? Conservatives are – let’s not fool ourselves – going to feel profoundly betrayed by Justice Roberts. They’re having a David Souter moment all over again. Roberts must be in agony right now, knowing full well how this will be received. Perhaps he’s thinking in the long term, and expects to overturn ACA on other grounds, or is looking to improve his credibility with the left before he overturns the HHS mandate or etc. (Roberts has spoken repeatedly on the role of the Chief Justice superintending the long-term direction of the court), but this is going to be just devastating to the way in which Conservatives regard Justice Roberts. Which means that conservatives are going to demand even greater scrutiny, even more conservative justices, and even stronger proof that the justice will rule in the way they want him or her to rule. The confirmation process just got about ten times more difficult.

6. Who will step down? The odds of one of the liberal justices stepping down in the next couple months are about 50-50.

My quick thoughts. More tonight.

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