Friday, July 6, 2012

A Libertarian Perspective on the Obamacare Decision by a Libertarian Leaning Blog


With Republicans practically calling for the crucifixion of Chief Justice Roberts, a George Bush appointee, there is very little clarity on the decision and much condemnation from the conservative camp. Republicans just wanted Obamacare overturned to humiliate Obama. Anyway, The Libertarian leaning Volokh Conspiracy legal blog shares some fascinating insights on the SCOTUS ruling. Specifically, Randy Barnett has thoroughly read the decision and offers his own legal eagle interpretations of the controversial opinion.

Court Did Not Authorize Economic Mandates Under the Tax Power
Throughout the Obamacare litigation, I freely conceded that Congress could use its tax powers to create incentives to buy health insurance, and even enact a “single payer” Medicare for everyone scheme. But I never accepted the claim made by Obamacare proponents that all Congress needed to do was call the mandate a “tax” (from which they then claimed that it was just a matter of labels). ...

Chief Justice Roberts did not uphold the individual insurance mandate under the tax power. Instead he rewrote the law using a “saving construction” to eliminate the insurance mandate, leaving only a penalty that he “saved” by calling it a tax even though he admits this is not the natural or best reading of the statute, i.e. of congressional intent. In this morning’s Washington Examiner, I explain this in layman’s terms....

Memo to Mitt Romney: Obamacare is a tax because the Supreme Court rewrote the law to make it one. The Supreme Court did not uphold Obamacare’s individual insurance mandate as a tax.

This is a difficult legal distinction to explain, but one that matters nonetheless.

In Obamacare, the mandate was called an “individual responsibility requirement.” To “save” the rest of Obamacare, the Supreme Court deleted the “requirement” part. So the mandate is gone. What’s left is a tax.

What’s the difference?  Under Obamacare, all Americans (who were not exempted) had to buy health insurance. Under the Supreme Court’s ruling, no American has to buy health insurance, though some Americans will pay a tax if they don’t. 

Under Obamacare, millions of Americans who did not have to pay the penalty because they don’t pay any or enough income taxes were still required by law to get insurance or be a law breaker. Under the Supreme Court’s revision, they don’t.

Under Obamacare, those Americans who paid the penalty but did not get health insurance were still outlaws because they disobeyed the “requirement.” Under the Supreme Court’s ruling, if you pay the tax, you’re cool with the feds.

Chief Justice John Roberts justified his re-characterization of the “penalty” in Obamacare as a “tax” on the ground that the amount involved is so small as not to be coercive. It merely provided an “incentive,” like how Cash for Clunkers provided a $5,000 incentive to trade in an old car. Millions kept their old cars and effectively lost $5,000. The court’s opinion implied that, if this “tax” was so high as to coerce compliance, it would then be an unconstitutional penalty. 

Which brings me to the biggest difference: Congress, the Obama administration and most law professors defended the mandate as a regulation of interstate commerce under the Commerce Clause. Had this argument been accepted, future Congresses could jack up the amount of the penalty, and add prison time to boot. But a majority of the justices rejected this argument and held that the mandate was not a “proper” exercise of the commerce power. So, in the future, Congress may not punish people who fail to engage in economic activity with a high fine or jail time.

Roberts’ decision made bad law in two respects. First, he claimed the power to rewrite a law by giving it a “saving construction” to uphold it, after he admitted that this was not the best reading of what the law actually said. Second, he allowed that Congress may impose an unprecedented tax on inactivity, provided that it is low enough to preserve the tax payer’s “choice” to obey or pay. Both of these maneuvers made constitutional law worse, even if they did save this law in hope of avoiding political attacks on the court.

But the deal that Roberts gave constitutional conservatives was to make constitutional law better in more important ways. He agreed with the four conservative justices that the powers of Congress were limited by Article I of the Constitution; that the Supreme Court would enforce these limits; that the individual insurance mandate exceeded the powers of Congress under the Commerce Clause; that compulsion to engage in commerce was “improper” under the Necessary and Proper Clause; and that Congress could not use its spending power to coerce states into vastly expanding the Medicaid program by withholding existing funding. These are all rulings that 99 percent of law professors had argued against.

I do not praise Chief Justice Roberts for making this political deal. But neither do I want to throw away all that we won because I don’t like what we lost.

And conservatives and libertarians need to stop agreeing with progressives that his ruling gave Congress a green light to impose economic mandates under its tax power. It didn’t.
Read the rest here
The Volokh Conspiracy 

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