Archive for the 'Individual Mandate' Category

How a Conspiracy Cracked a Monopoly

Posted by on Dec 01 2013 | Constitutional Law, Constitutional Theory, federalism, Health Care, health control law, Individual Mandate, Internet, Law schools, Legal professor, Natelson Rob', obamacare, Popular Constitutionalism, Rob Natelson, Spending Clause, supreme court, Taxing and Spending Clause, Tenth Amendment, U.S. Constitution

Anyone interested in the constitutional debate over the “Affordable Care Act” should pick up a copy of the new book, A Conspiracy Against Obamacare: The Volokh Conspiracy and the Health Care Case.

This “conspiracy” was not a political plot or an illegal combination. Rather, it is one of the nation’s two top constitutional law websites—a blog called the Volokh Conspiracy, founded by UCLA law professor Gene Volokh.

The book is about more than constitutional arguments over Obamacare. It is also about the cracking of a monopoly (or more precisely an oligopoly): the grip on constitutional discourse by a relatively small, and overwhelmingly liberal, cohort of professors who teach at certain elite law schools. These schools include the University of Michigan, Columbia, the University of Chicago—and most notably Harvard and Yale.

Faculty at elite law schools tend to dominate constitutional discourse for a number of reasons. Their prestige attracts a disproportionate amount of legal talent—bright students who later take influential positions as judges, advocates, and policymakers. (Disclosure: I was admitted to several of these institutions, but nevertheless elected to attend Cornell Law School, which is considered very good but not in the “top ten.”) The mainstream media seeks out these professors, largely to the exclusion of other legal experts.

The elite professors also dominate, indirectly, the highly influential law journals published by their own law schools. These journals are edited by law students, who lack the knowledge necessary to measure the quality of a submitted article. Hence, in deciding whether to publish a submission they often rely on the attitudes of their own faculty and/or where the article’s author teaches or attended law school. My own publication career offers two (negative) illustrations of the monopoly’s methods: (1) As a student I resigned from from my own law review in disgust because the editorial board, in imitation of the elite journals, was running the review with a leftist agenda, and (2) as a law professor, I saw all my earlier constitutional articles—including those that ultimately proved most influential—uniformly rejected by the Harvard-Yale axis.

When the Obamacare law was first challenged in court, the Harvard-Yale axis pronounced it “obviously” constitutional. The six authors of this book dared to disagree, and most of the book consists of their postings. In addition to the Independence Institute’s own Dave Kopel, the authors include five full-time law professors, none of whom work at Harvard or Yale. They are Randy Barnett of Georgetown, Jonathan Adler of Case Western, David Bernstein and Ilya Somin of George Mason, and Orin Kerr of George Washington University. All lean libertarian except Kerr; his dissents add spice to the discussion.

Of course, these authors ultimately were vindicated. The Supreme Court’s decision to uphold the individual insurance mandate as a “tax” was a 5-4 squeaker. The Court also held that the mandate was outside the Commerce Clause and the Necessary and Proper Clause, and that the Obamacare Medicaid expansion was partly unconstitutional. As you make your way through the book, you can see how the winning arguments evolved. My favorite was the realization that the Supreme Court’s “substantial effects” test is a (mis-) application not of the Commerce Clause but of the Necessary and Proper Clause.

At the end of the volume is a section called “Postscript and Concluding Thoughts.” It encompasses six original essays in which the authors discuss the Obamacare case and its outcome. Probably the longest of these is Dave Kopel’s. I personally found it most interesting because it provides historical context and tells the story of the Independence Institute’s participation in the case.

A Conspiracy Against Obamacare is published by Palgrave MacMillan and edited by the Cato Institute’s Trever Burrus. Paul Clement, the former U.S. Solicitor General who argued the case against Obamacare in the Supreme Court, has written an engaging Foreward.

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The Bar Review version of NFIB v. Sebelius

Posted by on Jul 10 2012 | Commerce Clause, Constitutional Law, Individual Mandate, Originalism, supreme court, Taxing and Spending Clause

Over at Scotusblog, I present the legal rules of NFIB v. Sebelius, as they might appear in a bar review outline, or in a student study aid for a Constitutional Law I class.

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Chief Justice Roberts and the window tax

Posted by on Jul 09 2012 | Constitutional History, Constitutional Law, Health Care, Individual Mandate, Originalism, Taxes, Taxing and Spending Clause

In NFIB v. Sebelius, Chief Justice Roberts imagined a hypothetical federal tax on windows, in order to bolster his point that the Court should treat the individual mandate as a “tax,” even though the Obamacare statute calls it a “penalty.”

Suppose Congress enacted a statute providing that every taxpayer who owns a house without energy efficient windows must pay $50 to the IRS. The amount due is adjusted based on factors such as taxable income and joint filing status, and is paid along with the taxpayer’s income tax return. Those whose income is below the filing threshold need not pay. The required payment is not called a “tax,”a “penalty,” or anything else. No one would doubt that this law imposed a tax, and was within Congress’s power to tax. That conclusion should not change simply because Congress used the word “penalty” to describe the payment. Interpreting such a law to be a tax would hardly “[i]mpos[e] a tax through judicial legislation.” Post, at 25. Rather, it would give practical effect to the Legislature’s enactment.

The above language is a plausible argument for the Chief Justice’s tax/penalty analysis. But by discussing a window tax, the Roberts opinion provides one more reminder why the individual mandate, if it is a tax, is a direct tax, not an indirect tax. Direct taxes must be apportioned by state population. Art. I, sect. 9, cl. 4. If the individual mandate is a direct tax, then it is unconstitutional, because it is not apportioned by state population.

Pursuant to the 16th Amendment, direct taxes on income need not be apportioned, but neither the individual mandate nor the hypothetical window tax are taxes on income. Constitutionally, “income” subject to the federal income tax must be  ”undeniable accessions to wealth.” Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955). A decision not to buy overpriced insurance from Congress’s Big Insurance pets, like the decision not to buy a particular type of window, is not an “accession to wealth.” The decision provides no additional income to the person.

So let’s accept Chief Justice Roberts’ theory that a window tax and the individual mandate are analytically comparable. On July 9, 1798, Congress enacted a direct tax statute, to pay for national defense preparations against France. “An Act to provide for the valuation of lands and dwelling-houses, and the enumeration of slaves, within the United States. On July 14, Congress passed the “Direct Tax Act,” to provide for collection of the July 9 taxes. Pursuant to the Direct Tax Act, federal assessors were to examine houses to assess them for purposes of the direct tax. In addition, the Direct Tax Act ordered the assessors make records of the number and sizes of windows in each house. The window data were to be gathered so that Congress could, in the future, decide to impose a direct tax on windows. Paul Douglas Newman, Fries’s Rebellion: The Enduring Struggle for the American Revolution 76-77 (2004).

It seems there was no dispute that a window tax was a direct tax. A fortiori, a tax on not having certain types of windows would be also be a direct tax. This is one more piece of evidence that Chief Justice Roberts was wrong in stating that the individual mandate “tax” is not a direct tax. Much more extensive discussion of the direct/indirect tax issue (but not of window taxes) can be found in Rob Natelson’s 27 minute podcast on the subject, for iVoices.org.

 

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TV: Dave Kopel Explains ObamaCare Decision

Posted by on Jul 02 2012 | Constitutional Law, Health Care, health control law, Idiot Box (TV Show), Individual Mandate, Kopelization, obama, obamacare, PPC, The Founders, U.S. Constitution

This aired Friday night, just a day after the SCOTUS decision dropped.

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Next step: Repeal the individual mandate because it is unconstitutional

Posted by on Jun 29 2012 | congress, Constitutional History, Equal Protection, Health Care, Individual Mandate, Necessary and Proper, Politics, Popular Constitutionalism, Presidency, Separation of Powers, supreme court, Taxes, Taxing and Spending Clause, Uncategorized

McCulloch v. Maryland had a very good day at the Supreme Court yesterday, with NFIB relying on and applying McCulloch‘s rules for when an enactment violates the Necessary and Proper Clause. What happened after the McCulloch decision also shows the next steps in battle over the individual mandate, as I suggest in an essay this morning for National Review Online.

In refusing to hold the Second Bank of the United States unconstitutional, the McCulloch Court gave Congress broad latitude in Congress’s own evaluation of whether the Bank was “necessary” in a constitutional sense. Relying on and quoting McCulloch, President Andrew Jackson made his own judgment of constitutional necessity when he vetoed the recharter of the Bank in 1832. After a titanic political struggle, the Bank was gone, and a new term created by Jackson, “equal protection,” had become part of what the American People were coming to believe the Constitution was supposed to mean.

President Jackson dealt the Bank a fatal blow by withdrawing federal deposits from the Bank, and moving them to state banks. President Romney can follow Jackson’s lead on his first day in office, instructing the Acting Secretary of Health and Human Services to use the waiver powers in the ACA statute to issue waivers to everyone for the individual mandate. Because the individual mandate is (supposedly) a tax, it can then be repealed through the budget reconciliation process, which cannot be filibustered.

I predict that the individual mandate will never mandate anyone. Yet the mandate will be long remembered as one of the most consequential laws enacted by a Congress. The result of the “bank battle” was that even though a central bank was judicially permissible, central banking was politically toxic for the rest of the century. The “mandate battle” may have the same effect in deterring any future thoughts of congressionally-imposed mandates. (Putting aside the obvious exception for mandates that have a solid basis in the constitutional text, such as jury service.)

The enactment of the mandate has also significantly increased the probability that the next Supreme Court appointments will be made by a President and confirmed by a Senate which denounces the mandate as unconstitutional, and that the new Justices will be the kind who are inclined to vigorously enforce the many strong constitutional limits on congressional over-reaching which are articulated in NFIB v. Sebelius.

I would have preferred that the mandate had met its end yesterday morning, but the fact that the mandate will have to be finished off by the People in November and their elected officials in January may lead to even better long-term results for advocates of a constitutionally limited federal government.

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Is the individual mandate a “tax” according to the original meaning?

Posted by on Jun 29 2012 | Constitutional History, Constitutional Law, Individual Mandate, Originalism, supreme court, Taxing and Spending Clause

Absolutely not. Rob Natelson explains why in this 27 minute podcast from iVoices.org.

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NFIB as Marbury

Posted by on Jun 29 2012 | Constitutional History, Constitutional Law, federalism, Individual Mandate, Politics, Spending Clause, supreme court, Taxing and Spending Clause, Unconstitutional Conditions

My article yesterday for Scotusblog discussed the tremendous importance of the Court’s 7-2 use of the non-coercion rule to limit Spending Clause violations of State sovereignty and independence. The rule has been around ever since Steward Machine Company v. Davis (1937), but NFIB v. Sebelius is the first decision by any federal court to find that a conditional congressional grant violates the rule.

The folks who think that the “evolving Constitution” completed its evolution in 1937-42, and that everything the Court did during those years must be applied today with the broadest possible reading, should be especially pleased with the NFIB Court’s vigorous enforcement of a very important New Deal precedent.

My essay argues that the application of the non-coercion rule, as well as the  application of the doctrine of incidental powers for the Necessary and Proper Clause, are among the many elements of the Roberts opinion whose significance approaches that of some of the most important opinions by Chief Justice Marshall.

Although we do not know Chief Justice Roberts’ motives, I suggestion a comparison of NFIB to Marbury v. Madison: adroitly escaping from a partisan assault on the Court itself, the opinion moves constitutional law very far in the opposite of the direction favored by partisan assaulters–and does so in a way that leaves the partisan assaulters unable to use the case in their attacks on the Court.

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Dave Kopel Responds to ObamaCare Decision

Posted by on Jun 28 2012 | Constitutional Law, Health Care, health control law, Individual Mandate, obama, obamacare, PPC, U.S. Constitution

Hey everyone. I know today’s Supreme Court ObamaCare decision is a lot to stomach right now, but I wanted to share with you our Constitutional Law scholar Dave Kopel’s statement on the issue. It should soften the blow considerably.

The Court’s decision against the Medicaid mandate means that Colorado has the right to choose whether or not to drastically expand state spending on Medicaid; Congress cannot coerce Coloradans to do so. The Medicaid mandate decision stops Congress from misusing of its Spending power to violate the 10th Amendment rights of the States; and it is the first time since 1936 that the Court has enforced significant constitutional limits on the Spending power.

The Medicaid mandate would have required Colorado to provide Medicaid to able-bodied childless adults. Simply put, this mandate would have put Colorado on a short path to insolvency.

The Independence Institute is gratified that the Court agreed with both of our amicus briefs, on the Medicaid mandate and on the Necessary and Proper Clause. On the Medicaid mandate, the Court strongly affirmed the fundamental constitutional principle, detailed in our brief, that the States are separate and independent sovereigns. The decision is in line with the Court’s record over the last two decades years in protecting state sovereignty. The Independence Institute has a long record of advocacy in this field; for example, in 1997, II Research Director Dave Kopel and Colorado Attorney General Gale Norton (herself a former Senior Fellow at II), co-authored an amicus brief for eight States in Printz v. United States. There, a 5-4 majority of the Court held that Congress could not order state and local law enforcement officers to carry out federal background checks on handgun buyers.

Today’s decision on the Medicaid mandate was 7-2, with Justices Breyer and Kagan joining the majority. This is one sign of how the Independence Institute’s long-term work is paying off.

The Court also agreed with our amicus brief on the Necessary and Proper Clause. As the research of our Senior Fellow Rob Natelson has explained, the Necessary and Proper Clause confers no additional powers on Congress. The Clause simply restates the general principle that Congress can exercise powers which are merely “incidental” to Congress’s enumerated powers. For example, since the Constitution gives Congress to power to establish the rules of bankruptcy, Congress can enact laws against bankruptcy fraud. The Court’s adoption the originalist interpretation developed by Natelson is the most important decision on the Necessary and Proper Clause since McCulloch v. Maryland in 1819.

Of course we were disappointed that the Supreme Court upheld the individual mandate under a different theory–not that the mandate is a “Necessary and Proper” regulation of interstate commerce, but instead that the mandate is merely a tax.

While the socialists are celebrating the individual mandate that they love and that most Americans loathe, let’s consider the bottom line, according to Lyle Deniston, the most-esteemed and most senior Supreme Court journalist in the United States: “The rejection of the Commerce Clause and Nec. and Proper Clause should be understood as a major blow to Congress’s authority to pass social welfare laws. Using the tax code — especially in the current political environment — to promote social welfare is going to be a very chancy proposition.”

There are more legal challenges coming to other parts of Obamacare. The political challenges are going to continue too, and the Independence Institute is going to remain at the forefront–in the courts, and in the court of public opinion–fighting for the day when there will be no more Obamacare, and for the day when all Americans will truly enjoy patient protection and affordable care.

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The PPACA in Wonderland

Posted by on May 18 2012 | Constitutional Law, Constitutional Theory, federalism, Health Care, Individual Mandate

That’s the title of a new article by Gary Lawson and me, in Boston University’s American Journal of Law and Medicine, in a symposium issue on the PPACA. Except that unlike Alice, the PPACA neither becomes a Queen, nor wakes up to return to reality. Written before the oral argument, the article provides an overview of some of the main constitutional and linguistic topics at play in the PPACA cases.

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Post-argument debate on the constitutionality of Obamacare

Posted by on Apr 17 2012 | Commerce Clause, Constitutional History, Constitutional Law, federalism, Health Care, Individual Mandate, Necessary and Proper, Taxing and Spending Clause

Held at Denver University, Sturm College of Law, on April 11. Debaters were University of Colorado Prof. Scott Moss and me. Moderator is DU Prof. Ann Scales. WMV, via ftp.

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