Constitutional Challenges to ACA Medicaid Reforms Would Be a Lot Stronger If They Had a Constitutional Principle To Support Them
At oral arguments over the health reform law last week, the Eleventh Circuit panel showed a surprising amount of interest in the other constitutional challenge to the Affordable Care Act (ACA)—the states’ claim that the ACA’s Medicaid provisions are unconstitutionally coercive, effectively commandeering state governments into doing the federal government’s bidding. Brad Joondeph reviews the arguments presented by former Solicitor General Paul Clement on behalf of the states.
First there’s an argument from “sheer volume”: the enormity of federal Medicaid funding unconstitutionally tips the balance of federalism in favor of the feds. The difficulty with this argument is that, if the sheer volume of Medicaid makes new conditions on federal spending unconstitutionally coercive, then every new amendment that has increased states’ program costs in the past several decades must also have been unconstitutional.
Then there’s an argument from the disproportionality of new conditions: a state’s noncompliance with the new conditions jeopardizes all its federal funds, not just funds newly dedicated in the ACA. Same problem as before. If new conditions on existing federal funding were unconstitutionally coercive, then you’d have to explain why the Supreme Court reached the exact opposite conclusion in South Dakota v. Dole.
And then there’s a third argument that Joondeph sums up like this:
[T]he ACA (a) imposes an individual mandate on all Americans to acquire health coverage, (b) applies that mandate to everyone, including Americans below the poverty line, but (c) provides no subsidy for those persons falling below the poverty level (though it does provide subsidies for those between 133% and 400% of poverty). Thus, the ACA on its face assumes that every state will comply with the Act’s Medicaid conditions, for this is the only way envisioned by the Act for indigent Americans to satisfy the mandate.
So Congress imposed the mandate assuming that the states will comply with new Medicaid conditions, and therefore . . . the ACA is coercive? Hmmm. Well, the first problem with this argument is that it is not an argument—it doesn’t connect premises to a conclusion. 
But even if we spot them a major premise to be articulated later, there are two other, fatal problems with it: it confuses states with the people who live in them; and it does not take into account that the ACA provides exemptions to the mandate for those who cannot afford qualifying coverage.
If State XX decided to quit Medicaid rather than accept new conditions on federal funds, the formerly Medicaid-eligible population of XX would likely be less than enthused, mandate or no. But here’s the thing. Even if they were subject to the mandate, the fact that Congress had imposed that burden on them would have precisely nothing to do with the state and its former Medicaid program. In no sense does the individual mandate place demands on the states in their sovereign capacity. It is touching that these states would equate a mandate upon its less fortunate citizens as a mandate upon the sovereign state itself. Touching, but false. And irrelevant. The mandate has nothing to do with Medicaid and nothing to do with the states (except in the minor sense that state officials in the Exchanges might certify compliance with the mandate).
What’s more, if Medicaid coverage were not available, the mandate would not apply to many people with incomes under 133% of the poverty level (FPL). This gets pretty complicated, so I’m going to save the details for another post. Suffice it to say that the mandate may not apply to people earning under 100% FPL, and people between 100% FPL and 133% FPL will either have access to subsidies or will be exempt due to the ACA’s provision excusing anyone for whom the cost of the cheapest qualifying plan would be more than 8% of their income.
In fairness, it is probably best not to think of these as separate arguments. Each fails on its own, but together they loosely approximate plausibility. As Joondeph wrote in an earlier post:
Perhaps, as the states’ brief seems to suggest, it is not any one of these factors in isolation, but the three in combination, in the context of a singularly enormous federal spending program, which renders the ACA’s Medicaid expansion unconstitutional. This is not implausible. But it is also hard to figure out how the Court could ever articulate a rule or principle of constitutional law that actually operationalizes the idea. Even if one could articulate it, the implications could be extremely destabilizing for constitutional law, and in an area that really matters (and matters on a regular, ongoing basis).
As I’ve written before, the Supreme Court’s precedents have left the door open to this kind of challenge, but they don’t illuminate a distinct line between what is and isn’t coercion. Probably because there isn’t one.
Not All Medicaid Provisions Were Created Equal
I feel like some key points I wanted to make in my last post got lost in . . . well, all those words. So I’ll try again. I do not think it is optimal policy to enforce Medicaid’s Section 30(A) “equal access” provision by means of litigating cuts in provider payment rates. The analysis required is not within the institutional competence of the courts.
But that’s not to say that there’s anything wrong with private enforcement of Medicaid provisions in general. For example, Igor Volsky wrote favorably of the Washington state supreme court’s recent decision blocking reductions in coverage of personal care for children. I agree completely with that decision and with the use of private litigation to enforce the provisions of federal Medicaid law at stake in that case.
But there are significant differences between the Washington case and the Independent Living Center case which is now pending at the U.S. Supreme Court (and which I wrote about last time). The Washington case, Samantha A. v. DSHS (pdf), concerned the “comparability requirements” of the federal Medicaid law, 42 U.S.C. 1396a(a)(10)(B), aka “Section 10(B).” Independent Living concerns the “equal access” provision, 42 U.S.C. 1396a(a)(30)(A), aka “Section 30(A).” The relevant difference between them is that Section 10(B) is cast in terms of guaranteeing a clear and specific individual entitlement, whereas Section 30(A) issues a broad, multi-faceted directive to the states which, while intended to protect Medicaid beneficiaries as a whole, does not accord them specific rights individually.1
The point is, some statutory provisions are better suited than others for enforcement by litigation. It is one thing to adjudicate individuals’ rights, but another thing entirely to adjudicate whether broad policy objectives are met.
- To be enforceable under 42 U.S.C. 1983, a statutory provision must contain clear rights-creating language. Note that the case was decided in state court, which means that a federal cause of action was not necessary anyway. But the case undoubtedly could have been brought in (or removed to) federal court. Unlike Section 30(A), the provisions implicated in Samantha A.—Section 10(B) and the “early periodic screening, diagnosis, and treatment” (EPSDT) provisions of 42 U.S.C. 1396d—have been found enforceable via Section 1983 civil rights actions. And whether we like it or not, the same rationale that has led the Supreme Court to limit the availability of § 1983 actions is very likely to apply to the Court’s consideration of actions brought under the auspices of the Supremacy Clause theory being tested in Independent Living. [↩]
Explaining the Administration’s Brief against Suits to Block Medicaid Cuts
There’s a bit of dissension simmering among Medicaid advocates over the surprising amicus brief (pdf) filed with the Supreme Court a few weeks ago by then-acting Solicitor General Neal Katyal in the case of Douglas v. Independent Living Center of Southern California. The brief takes the position that Medicaid providers and beneficiaries do not have the right to sue state governments over cuts in provider payments, even if the cuts would violate federal Medicaid law. That might sound harsh, as it would leave people without a remedy when state cuts threaten to make vital medical care unavailable. But I would contend that Katyal’s brief for the Administration has it right. The remedy that is needed is a policy remedy—one that requires balancing interests and responsibilities of varied groups of citizens and multiple levels of government—and should be formulated, enacted, and overseen by policymakers, not the courts.
Medicaid is a cooperative program jointly administered and financed by the federal government and the states. States have flexibility in setting provider payment rates but must conform to certain federal requirements. The underlying dispute in the Independent Living case is about whether California’s decision to cut Medicaid rates breached those federal requirements.
Under 42 U.S.C. § 1396a(a)(30)(A) (“Section 30(A),” also known as the “equal access provision”), a state participating in the Medicaid program must:
provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the [state Medicaid] plan . . . as may be necessary to safeguard against unnecessary utilization of such care and services and to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area[.]
(Note: Don’t worry, there’s nothing wrong with your eyes or brain. You’ve just read a tiny portion of Title XIX of the Social Security Act, and it always feels like that.)
Now, the issue on appeal to the Supreme Court is not the substantive issue of whether California’s rate cuts violated the bolded provision, but the threshold issue of whether Medicaid beneficiaries and providers have the right to sue the state to enforce that provision. There’s a bit of a history to this, but the short version is that, at least since its 2002 decision in Gonzaga v. Doe, the Supreme Court has curtailed access to the courts in cases like this by narrowing application of Section 1983 of the Civil Rights Act (42 U.S.C. 1983). It was once, but is no longer, possible to sue state officials via Section 1983 for violations of Medicaid’s equal access provision. So the California plaintiffs in Independent Living had to get creative and find a cause of action elsewhere.
Enter the Supremacy Clause theory. The Ninth Circuit let the plaintiffs’ substantive claims go forward, holding that the state can be sued via a nonstatutory “implied” right of action under the Supremacy Clause of the U.S. Constitution. The idea here is intuitive: there’s gotta be some way to make states conform to the federal statute—federal law being the “supreme law of the land” and all.1
But that intuitive rationale assumes a false dilemma between private enforcement and none. And while every right deserves a remedy, not every provision of law confers a right. There are good reasons not to read Section 30(A) to establish an enforceable individual right. One is the difficulty of assessing what constitutes compliance—what payment levels are sufficient to ensure access to care and are “consistent with efficiency, economy, and quality”—and, hence, of fashioning an appropriate remedy. The judiciary’s institutional competence to make those assessments is, in a word, suboptimal.2 To give just a little flavor to the point, consider that for any rate cut in provider payments, the state saves money which it might then use to finance more Medicaid enrollment or more expansive coverage. (The likelihood that it would in fact do so is beside the point.) How’s a court to decide if the new allocation has worsened access or improved it?
The fundamental obstacle to realizing the promise of equal access in Medicaid has not been simply a failure of enforcement. It is deeper than that. The problem has been that there is no broadly accepted measure of access to care. But as a result of a new report from the Medicaid and CHIP Payment and Access Commission (MACPAC) established in 2009, CMS has now proposed regulations (pdf) which would require states to develop data and methods for evaluating Medicaid beneficiaries’ access to care. The MACPAC report lays out a framework for analyzing access along three dimensions: (1) enrollee needs, (2) availability of care and providers, and (3) utilization of services. Within that broad framework, states would have flexibility to design methods as they see fit. The data and analysis would be publicly available and reviewed by CMS for sufficiency of access whenever the state proposed to amend its State Medicaid Plan in a way that reduced rates or restructured payments.
Medicaid advocates say federal enforcement is not a viable alternative to private suits, because it is hampered by limited means. CMS may withhold federal funds from states who fall out of compliance with Section 30(A), but such withholding only hurts providers and beneficiaries of Medicaid, not the state officials responsible.
However, the new regulatory scheme, if adopted, would transform the whole landscape. The metrics developed will for the first time give CMS the ability to make evidence-based evaluations of state plan amendments and—crucially—to reject amendments that are inconsistent with the mandate of equal access.
The Administration’s brief in Independent Living is not some sort of concession to states who want to cut Medicaid, or a betrayal of the goals of PPACA. As Suzy Khimm suggested in a guest post at Ezra Klein’s blog last week, it should be understood as part of a strategy to consolidate federal regulation and oversight in Medicaid. It seems to me that’s the approach most likely to realize the promise of Medicaid’s equal access provision.
- There’s a deeper legal rationale to the Supremacy Clause theory—one which explains some mysterious gaps in federal court jurisprudence and which I may post on separately—but it would take us pretty far afield from the Medicaid policy implications of interest here, so I’ll leave it aside for now. But it’s important to note that this is not an established theory recognized by the Supreme Court, and the chances it will be adopted now are slim. Furthermore, it is not the case that a decision in agreement with Katyal’s argument would undo a vibrant regime of private enforcement of Section 30(A). At present there is no regime of private enforcement of 30(A). [↩]
- Prior to Gonzaga, private enforcement of the equal access provision had been the norm, and the federal circuit courts developed their own, sometimes inconsistent standards for evaluating state compliance. For helpful background, see this discussion (pdf) by Boston University law professor Abigail Moncrieff. Also, see Moncrieff’s article on the trend toward federal enforcement. [↩]
Is the Mandate Penalty a Penalty?
Arguments for the constitutionality of the individual mandate as an exercise of the taxing power often start by noting that the penalty is reported on income tax returns, calculated as a percentage of income (with a flat minimum and a cap), and codified in the Internal Revenue Code. They go on to detail the ways the ACA’s penalty differs from typical penalties: there is no scienter requirement (one’s state of mind is irrelevant to assessment of the penalty); criminal punishments are not available to enforce payment; the amount of the penalty is reasonable, not exorbitant, and limited to the actual cost of qualifying coverage; and it is imposed in proportion to the frequency of noncompliance, month by month. These points have been fixtures of the United States’ briefs throughout the ACA litigation.
Two weeks ago, arguing before the Fourth Circuit, Acting Solicitor General Neal Katyal went momentarily off script and made a point I don’t recall seeing before. At around 1:15:28 of the audio for the argument in Liberty University v. Geithner (mp3 available here), Katyal says:
Unlike any other kind of criminal penalty which I’m familiar with, when you pay the penalty here, you are excused altogether from the underlying thing that the government is asking you to do, which is to have insurance.
This is a surprisingly tricky argument to tease out. First, a quick set up: Katyal wants to establish that the mandate is an exercise of the taxing power. To do that, he is arguing that the mandate penalty operates like a tax and that it does not operate like all or most other penalties. By distinguishing other penalties, Katyal hopes to strengthen the inference that the mandate is a tax. The more essential or fundamental the distinction, the stronger the inference. So that’s where we are.
Now, note that Katyal couldn’t possibly mean you are generally or prospectively excused from the mandate when you pay a penalty for past noncompliance. You will still be required to get insurance in the future, or else pay another penalty. This is no different from any other kind of penalty. If you are a hospital administrator and you get hit with a “civil monetary penalty” (a fine) for some improper HIPAA disclosures, obviously payment of that penalty does not give you free license to go hog-wild releasing even more personal health information.
What Katyal must mean instead is that paying the mandate penalty excuses you from correcting past noncompliance. Without undertaking a systematic inquiry, it seems plausible that other laws’ penalty schemes typically do require corrective action in addition to payment of penalties. HIPAA imposes higher penalties for uncorrected violations. Violations of Stark, the law prohibiting physician self-referrals, incur stiff penalties and require the physician to return the proceeds derived from prohibited referrals. Pay your taxes late, you pay a penalty—and you pay your taxes. In various ways, each of these penalties requires corrective action. The ACA does not. So that’s a promising interpretation of Katyal’s argument. Now let’s evaluate it.
There’s something a little weird about the idea of correcting the fact that you were uninsured at some time in the past. If it were just a matter of money being in the wrong place, like a late tax payment that’s in your bank instead of the U.S. Treasury, you could easily fix that: just move the money. But there’s not really anything you could do to correct your past insurance status, so it’s not exactly clear that there’s anything for the law to excuse you from. I suppose we might say you are excused from having to get retroactive health insurance, but that would be a purely notional benefit to you, because there is no such thing as retroactive health insurance. The law might as well excuse you from giving birth to yourself.
The question then is whether excusing people from corrective action tells us that (a) the ACA penalty is not like other penalties in an important way; or that (b) the ACA penalty differs only as a result of the peculiar nature of ”the underlying thing that the government is asking you to do.” Whether or not (a)—Katyal’s thesis—is right, I think (b) is wrong. It would be a mistake to think that the above-mentioned weirdness arises only because insurance is involved. The weirdness arises because the fact that you did not have insurance is irreversible.
But other things can be just as irreversible. When a HIPAA violation occurs and someone’s protected health information has been disclosed, you can stop further disclosures from happening and fix whatever caused this one, but you can’t un-disclose the disclosed information. You can’t just wipe the memories of anyone who happened to see it. The genie is out of the bottle and can’t be stuffed back in. However, unlike the ACA, HIPAA does require that you correct the cause of your noncompliance. If your patients’ records aren’t secured, you’ll have to secure them. Which is to say, in the context of HIPAA, “corrective action” is not about undoing past violations—it’s about preventing future ones.
And that brings us to a clear, meaningful difference with the individual mandate. The ACA penalty scheme is fundamentally indifferent to the causes of noncompliance, past or future. It is more incentive than corrective or deterrent. It offers you a choice—get coverage or pay the penalty—but there are no enforcement consequences beyond the penalty. In the eyes of the law, failing to get insurance will be like making early withdrawals from your 401(k). You are free to do it, for any reason or none, but you will pay a price for it on your taxes.
A Surprising Concession on Severability
Brad Joondeph comments on a surprising development in the United States’ reply brief (pdf) before the Eleventh Circuit Court of Appeals:
[T]he United States is now conceding that the ACA’s community-rating and guaranteed-issue provisions are not severable from the minimum coverage provision. The government had essentially conceded as much in a hearing before the district court, but I think this may be the first time it has done so in a brief.
There is a fair amount of strategic sense to this. First, making such a concession only bolsters the government’s argument that the minimum coverage provision is essential to the ACA’s broader regulation of the health insurance or health care services markets. Second, it makes the government seem more reasonable. Third, it essentially forces the Supreme Court’s hand a bit when the case ultimately gets there: if the justices want to take down the mandate (which might be politically popular), they will also have to bring down the ACA provisions that overwhelming majorities of Americans support. And that would not be so popular.
The background, of course, is that when District Court Judge Roger Vinson ruled the Affordable Care Act’s minimum coverage provision (i.e., the individual mandate) unconstitutional in Florida v. HHS, he struck down the entire ACA on the grounds that its many provisions were “inextricably bound together in purpose and must stand or fall as a single unit.” I’ll take Joondeph’s word that there is strategic sense to the administration’s concession, but it’s questionable whether the law really requires non-severability of the guaranteed-issue and community-rating provisions. Certainly there is strong evidence that such regulations can destabilize insurance markets in the absence of a coverage mandate. But it is not, I think, generally desirable that we put judges in the position of conducting severability analysis based on their sense of what policy outcomes are more workable than others.
Severing unconstitutional provisions from a statute necessarily calls for some measure of legislative judgment. But if the focus of the analysis is on limiting the extent of judicial lawmaking, rather than on the workability of various policy alternatives, it’s not clear that the right result would be to lump the guaranteed-issue and community-rating provisions in with the mandate.
Was the Fourth Circuit Baffled by the Inactivity Argument?
The Fourth Circuit Court of Appeals heard oral arguments on the constitutional challenges to the ACA in Liberty University v. Geithner and Virginia v. Sebelius on Tuesday. Tim Jost has an authoritative overview and summary at Health Affairs, and Brad Joondeph has some insightful notes at the ACA Litigation blog. After listening to the audio, the single dominant impression I’m left with is something I already knew: Acting Solicitor General Neal Katyal has got some serious game.
The arguments have sparked some interesting intramural debate at the Volokh Conspiracy about whether and why the judges might have been skeptical of, or baffled by, the challengers’ Commerce Clause argument and its reliance on the much-ballyhooed distinction between activity and inactivity. Orin Kerr points out that the criminal-law treatment of acts and omissions is not always a model of clarity, and that the common-law “actus reus” requirement—the requirement that there be a “guilty act” and not just a “guilty mind”—may be satisfied by an omission or failure to act in certain instances. When someone is under a legal duty to act and fails to do so—i.e., is inactive—the actus reus requirement is met and the government may impose punishment on the person even in the absence of a specific, affirmative act.
If the proposed activity requirement for Commerce Clause regulation were modeled on the doctrine of actus reus, it would have zero effect in the context of the individual mandate. Consider: The mandate imposes a kind of legal duty, the duty to obtain health insurance; the “inactivity” of the uninsured is the failure to carry out that duty; and failure to carry out the duty to obtain health insurance triggers the federal government’s authority to regulate, which it does by means of a monetary assessment (or “penalty”) on your annual income tax.
Now, obviously the analogy is imperfect, and it’s important to note that no one is specifically advocating that the activity/inactivity distinction be patterned after the common law act/omission distinction. It wouldn’t have to be. But Kerr wants to make the broader point that we don’t really know what the distinction will mean when elevated to constitutional doctrine, given the vagueness and ambiguity it carries. I sympathize, though I don’t think the point is unanswerable. There’s a lot of vagueness and ambiguity in legal doctrine. There’s a lot of vagueness and ambiguity in everything, at the margins. But as Jonathan Adler responds, paraphrasing somebody (Edmund Burke maybe?), “[W]e know the difference between day and night even if twilight blurs the line of demarcation.”
Activity and inactivity were much discussed at Tuesday’s hearing, but metaphysical unpleasantness was largely avoided. In Katyal’s hands, the government’s argument seems a little tighter and more refined, while following broadly the same outline: The individual mandate is a regulation of economic activity—an activity in which we all partake, eventually—namely, the consumption of healthcare services. Its purpose is to stabilize the financing of healthcare services through the private insurance system. These are appropriate means and ends for a valid exercise of authority under the Commerce Clause. But even if the courts were to construe the mandate as regulation of inactivity, it would still be authorized under the Necessary and Proper Clause as a rational means to effectuate the ACA’s comprehensive scheme of insurance regulation. Thus, Katyal argued, it doesn’t matter whether the courts do or do not recognize an activity requirement under the Commerce Clause. The mandate should be upheld either way.
This Week in Fed Reform
Rep. Barney Frank (D-MA) has a new bill to trim the membership of the Federal Open Market Committee (FOMC), the rate-setting arm of the Federal Reserve. WSJ:
The bill would remove from the 12-member policy-setting Federal Open Market Committee the five members who represent regional Fed banks. Only the seven-member board in Washington, which currently has two vacant seats, would get to vote on interest rates. The congressman said this would make the Fed more democratic and increase “transparency and accountability on the FOMC” by eliminating those officials who are effectively picked by business executives. (Read the bill.)
[* * *]
Analysts said Frank’s new proposal could hurt the Fed’s independence from Congress. Dan Greenhaus, analyst at Miller Tabak & Co., said the move is “one step closer to having monetary policy dictated by the Congress.”
“Analysts” say lots of things. I took several steps towards Congress myself when I walked eastward toward the Capitol after breakfast this morning, but since I’m 3,000 miles away I’m still not very close. Plus, even if they haul me in front of some oversight committee, I won’t necessarily have to do everything they want me to do. Indeed, I’m likely to get very different instructions from different members, making it hard to know which policies I should consider to have been dictated by Congress rather than within my officially recognized discretion.
So I’m not sure Frank’s bill would put us one step closer to Congressional control of monetary policy. But it is one step closer to having monetary policy dictated by an agency whose composition is not baldly unconstitutional. And it is one step closer to making the FOMC less independent from the President, who is charged with the constitutional responsibility to take care that the laws be faithfully executed and who should maybe therefore have a say in selecting the officials who will do the actual executing. (The regional bank reps on the FOMC are selected by private citizens (business executives) who are board members of the regional reserve banks; members of the Fed Board of Governors are appointed by the President of the United States subject to Senate confirmation.) You’d think that unitary-executive-loving Republicans would be climbing over themselves to support this bill.
I’m in no position to say what bureaucratic arrangements will lead to optimal monetary policy from the Fed. But it seems to me there are real and appropriate concerns with the lack of accountability at the Fed, and one way to begin to address those concerns would be to replace that portion of the FOMC that is 100% unaccountable to any person, office, or entity of the United States government with something at least as accountable as the Board of Governors. Like, say, the Board of Governors. Conveniently, the Board of Governors already constitutes part of the FOMC and is appointed in compliance with the Constitution.
Meanwhile, Sen. Richard Shelby (R-AL) continues to block President Obama’s nomination of Nobel-prize-winning economist Peter Diamond to the Fed Board on the grounds that he does not have enough experience.
Hat tip Niklas Blanchard.
More of my occasional forays into Fed-blogging here.
How the Justices Will Decide
In his new article in the journal Publius, Brad Joondeph discusses three factors that will go into the Court’s ultimate decision (pdf) on the constitutional challenges to the Affordable Care Act. The first two are the ideological preferences of the justices and institutional pressures on the Court itself (e.g., the potential for public or congressional backlash). The third factor, perhaps less appreciated among the non-lawyer set, is the imperative of doctrinal coherence:
[T]here is another factor that conventional political analysis might understate: the degree to which a particular legal argument would create doctrinal complications for the Court in its ongoing attendance to the details of constitutional law. The principal intellectual task in which the justices are engaged, in every case they consider or decide, is managing the coherence of legal doctrine, particularly as it pertains to the Constitution. Regardless of their deeper instincts and motivations, the justices must justify their votes in written opinions that attempt to rationalize and harmonize the mass of doctrinal rules that govern federal law (Friedman 2006). This is why the briefs lawyers submit to the Court, and the justices’ questions at most oral arguments, focus principally on the broader implications of the parties’ claims or legal theories. No matter how sympathetic a party’s plight might be in a given case, if the theory on which her claim rests portends a range of far-reaching implications— implications that would seriously disrupt the justices’ task of rationalizing legal doctrine—it is unlikely to prevail. To be sure, other variables may be more significant in explaining the justices’ behavior in a particular case, or across the full run of the Court’s decisions. But it seems clear that, as a general rule, the justices are disinclined to sustain legal arguments that carry disruptive doctrinal implications.
It seems like Joondeph is trying to salvage a bold point from a squishy one here, but I’m not sure it works. Attending to doctrinal coherence is what judges do, but the extent to which that explains how judges decide is pretty limited.
It definitely seems right to say that “rationalizing legal doctrine” is the principal mode in which the justices undertake their work; and this explains the prevalence of analogy in appellate argument (and, in the present context, a curious preoccupation with hypothetical broccoli mandates). But coherence is a pretty low bar. As a rule, in closely contested appellate cases, there will be coherent solutions available on both sides. Coherence does not get you a single, uniquely determined outcome in these cases.
The universe of legal reasoning is open-ended; its rules and principles are often vague; novel issues and changing circumstances virtually guarantee that meaningful (or meaningful-enough) distinctions can be drawn to avoid disruptive implications. If Joondeph is saying that Supreme Court justices make decisions with due consideration of doctrinal coherence, he is right. But if he is saying that the imperative of coherence will determine what decision the justices reach, to the exclusion of other factors (like ideological preferences), he overstates the point.
But the more modest, squishy point is still worth making. People sometimes talk as if they think the justices pursue ideologically preferred outcomes without any constraints whatsoever. But they don’t. They pursue ideologically preferred outcomes within a host of normative constraints, including that of maintaining a reasonably coherent body of jurisprudence.
Roberts’ Rule?
Brad Joondeph has an excellent article on the legal challenges to the ACA (pdf) in Publius: The Journal of Federalism.
Perhaps the most interesting tidbit is that Joondeph thinks the Supreme Court’s decision may hinge not on Justice Kennedy’s vote but on Chief Justice Roberts’. Roberts joined Justice Breyer’s majority opinion in U.S. v. Comstock (May 2010), which advanced a strong view of the Necessary and Proper Clause according to which government action will be upheld so long as it is “rationally related to the implementation of a constitutionally enumerated power.”
In the parlance of constitutional law, a requirement of rational relation—known as a “rational basis test”—ordinarily means the Court will be deferential to the government, giving Congress the benefit of the doubt. In the ACA litigation context, such a strong rendering of the Necessary and Proper Clause would be highly favorable to the Administration’s defense, because it would only need to show that the individual mandate was rationally related to the regulation of insurance markets, an undisputedly valid exercise of the Commerce power.
Justices Kennedy and Alito also concurred in the result of Comstock, but they each wrote separate opinions to qualify their views and distance themselves from the majority opinion. Justice Kennedy’s concurrence specifically called out the majority for its use of the rational basis language, which he notes is imported from Due Process doctrine and not native to the Necessary and Proper context. My read on Kennedy at this point is that he has been carving out the space he’d need to justify striking down the individual mandate, whether he intends to actually do so or not.
The fact that Chief Roberts signed on to Breyer’s opinion but did not feel compelled to qualify his views—at a time when he would likely have been cognizant of the implications for the ACA litigation, as Joondeph notes—may mean that Roberts, not Kennedy, is the “median justice” in this case.
That’s an interesting bit of informed speculation, given that the CW is that it will come down to a 5-4 decision with Justice Kennedy deciding the winner.
Via Joondeph’s aca litigation blog.
One Sentence to End the Mandate Controversy
Tax day is probably as good a time as any to remind folks that the constitutional controversy over the individual mandate could be resolved by amending the ACA with a single sentence. Something like this:
Section 1501 of this Act is enacted under the power of Congress to lay and collect taxes to provide for the general welfare of the United States, and under the power to lay and collect taxes on incomes, pursuant to Article I, Section 8 and Amendment XVI of the Constitution of the United States.
This is admittedly (a) not going to happen and (b) a problematic sequencing of Congressional action and Congressional expression of intent. But (b) doesn’t really matter; it should be sufficient to create a judicial presumption that the mandate was enacted under the taxing power.
As for (a), the lesson should be clear. If indeed the lawsuits were motivated by concern for fidelity to the Constitution, rather than by less high-minded interests, Congressional Republicans could put this scourge behind us by the end of the week.
Is Senate Approval Required to Abolish the Senate?
Matt Yglesias answers a reader’s question about whether there is a “legal path to getting rid of or disempowering the Senate that would not require Senate approval“:
It all depends on what you mean by “legal” but the short answer is “no.” The longer answer is just to observe that the existing United States Constitution was adopted by means that were, at the time, illegal. Elites felt that the Articles of Confederation were inadequate to resolving the problems of the country, so elites gathered to write a new constitution that contained a ratification procedure at odds with what’s spelled out in the Articles. Then along they went seeking ratification by various states and when they had the number the said was necessary, they declared victory and pushed ahead, installing victorious General George Washington as the new head of state and head of government.
At some point in the future if there’s some crisis, you could imagine something like that happen[ing] again.
I think this is an interesting and underrated piece of the historical background to the framing of the Constitution, but it’s not the right answer to the question. There is a clear legal, Constitutional path to disempowering the Senate that does not require Senate approval. Article V says only that “no state, without its consent, shall be deprived of its equal suffrage in the Senate.” An amendment to abolish the Senate could be proposed by “application of the legislatures of two thirds of the several states” and then ratified by the states. The question then would be whether all the states must ratify in order that none be deprived of equal suffrage without its consent. It seems to me you could ratify with the normal threshold of three quarters of the states, since zero senators per state is also “equal suffrage.”
I’m pretty sure I agree with Yglesias’s pragmatic take on the historical legal context to the adoption “our unconstitutional Constitution.” There’s no doubt it was in flagrant violation of the terms of the Articles of Confederation. People can talk about this in two ways. One way is to say the written constitution (the Articles) is not the whole constitution, and adoption of the 1787 Constitution was merely unarticlesofconfederational, not unconstitutional. The other way is to say the 1787 Constitution was the product of a revolutionary coup. But those are just two ways of saying the same thing. Personally I avoid talk of an “unwritten constitution” because it sounds too sort of Platonic for my taste, but at the same time I think a constitution is an arrangement of political institutional practices and can’t be perfectly reduced to ink on paper.
A Veto for 1099 Repeal?
Repeal of the ACA’s quasi-notorious 1099 provision has now passed the House and Senate and is on its way to President Obama. The provision was scored as generating $22 billion in revenue, and so its repeal must pilfer $22 billion from elsewhere in the budget to achieve deficit-neutrality. The repeal bill, H.R. 4, essentially siphons the money from the ACA.
Under the ACA, people making between 133% and 400% of the federal poverty level (FPL) may receive tax-credit subsidies to purchase health insurance in the exchanges. If their income shifts into a higher bracket during the year—say, from 150% FPL to 300% FPL—they have to pay the government back for some portion of those tax credits, but the ACA capped the amount taxpayers (with incomes under 400% FPL) could owe at $400. If the taxpayer’s income ended up over 400% FPL, they’d have to pay back the whole subsidy. That “cliff” was smoothed out by legislation passed during the December lame-duck session, and subsidy paybacks were capped for incomes up to 500% of the poverty line, though on a raised sliding scale up to $3,500. If President Obama signs H.R. 4, subsidy recipients whose incomes rise above 400% FPL will once again have to pay back the entire subsidy, potentially thousands more than the capped amount under current law.
There’s no doubt that the ACA’s 1099 reporting requirements would cause widespread annoyance and some genuine headaches. Businesses would have to issue 1099s to any person or company they paid $600 to, for any goods or services. One thing that isn’t often mentioned though is that there were already rules requiring businesses to issue 1099s above the $600 threshold. But the ACA’s probably-soon-to-be-repealed provision would have required that 1099s also be issued (a) to corporations, not just individuals and partnerships, and (b) for sales of goods, not just for services.
But even as we pat ourselves on the back for rescuing businesses from headaches and paper cuts, we ought to be concerned about the very real difficulties we’re creating for people participating in subsidized exchange plans. Tim Jost explained this a while back:
Excess advance payments can happen easily and will happen often. The income of hourly-wage lower and middle-income Americans often fluctuates from week to week and is difficult to predict. Dependents may leave or return home. Family members may become eligible for Medicaid or CHIP. Taxpayers may be eligible for a premium tax credit in the early months of the year while unemployed but then get a job with coverage and no longer need premium assistance. Or they may lose a job part way through the year and face dramatically reduced income, even though their full year reported income remains high.
All these changes will affect the subsidy calculation. It will be difficult for the exchanges to keep up with changes in family circumstances and for families to know what changes they should report and to whom. It is inevitable that there will be some inconsistency between advance payments based on estimated income for the year and the final credit determined at tax time.
[* * *]
Fear of potential end-of-year liability could be a substantial deterrent to participation in the advance premium tax credit program. It was estimated that the December amendment increased the likely number of uninsured after 2014 by about 200,000 people, who would rather be uninsured than face substantial repayments. Millions more consumers will face unanticipated financial burdens. This is likely to create a powerful backlash, as Americans who thought they were receiving a tax credit to help them purchase insurance find out it was in fact only a loan, and that they owe the IRS a substantial debt.
That’s serious cause for concern. With plenty of time to deal with the ACA’s 1099 provision (§ 9007) before it takes effect in 2012, I don’t think a veto should be out of the question.
UPDATE 4/8: Fixed an error in my description of the subsidy-payback provisions of the ACA.
UPDATE 4/18: President Obama signed H.R. 4 on April 14. So that’s that.
Conspirators and Windmills
Eric Posner responds to comments from readers of the Volokh Conspiracy:
If nothing else, I want to convince you that arguing that we should return to the original Madisonian design is tilting at windmills—and will enjoy no more success than arguments that we should live in a night watchman state, return to the gold standard, create an agrarian republic, abolish private property, or set up a benevolent world government. All of these arguments are on the fringes—not because they violate the rules of logic but because they have no constituency—and that is where the Madisonian argument belongs as well.
I don’t know what to say to people who continue to insist that because executive primacy violates the (original) Constitution, something must be done about it. Arguing that our current system of government is unconstitutional is like arguing that the original Constitution was unconstitutional because it violated the amendment procedures of the Articles of Confederation. It is a logical argument that makes no difference in the real world because ultimately what matters is popular sentiment, and popular sentiment has acquiesced in constitutional change without regard to the rules established to control it.
Well put. The point there is about executive primacy but clearly also applies to constitutional originalism in other contexts. In the Commerce Clause arena, the major legal context around the individual mandate debate, I think you see a little more pull towards originalist thinking precisely because there is a constituency for opposing federal regulation of big business—namely, big business.
And I think it’s mostly a good thing that there is real power behind the constitutional abstractions that limit the scope of the government’s power. One side effect, though, is that people may take the dressed-up theoretical justifications for those limits a little too seriously. Originalism is, logically, a very powerful theory of constitutional meaning. But practically, it is mostly a fig leaf.
The Not-So-Long Road to October
Federal Courts of Appeals have begun scheduling hearings on the various ACA lawsuits, and the schedules they’re adopting are pretty aggressive. Brad Joondeph writes that the Supreme Court is likely to hear the case in its October 2011 term, which means we could have a decision well in advance of the 2012 election.
Of course, it’s also possible that things will drag on. There are a number of ways the Court could delay matters, if it were so inclined.
Legislative History on the Tax Issue, A Compilation of Selected Sources
In my last post I discussed the role of legislative history in the legal argument over whether the penalty for failure to comply with the ACA’s individual mandate is a tax. I’ve been doing some digging, and I’ve compiled excerpts from some of the relevant materials here, in three categories: (A) early drafts and committee bills, (B) the Senate Finance Committee debate transcripts, and (C) floor debate from the Congressional Record.
The basic story these sources tell is this: Early drafts of health-reform legislation plainly and directly called the penalty a tax. The Senate HELP bill was the only exception. Lawmakers on both sides openly discussed the penalty as a tax, with a few instances of Democrats being a little cagey. Then Harry Reid unveiled his merged Senate bill, the Patient Protection and Affordable Care Act (pdf, as passed), which dropped the “tax” label entirely even as it preserved all the functional mechanics of the earlier bills’ mandates. The change of label does not seem to have registered in the public debate or affected the politics or rhetoric very much on either side, if at all. (My research has not been exhaustive.)
A. Early Drafts and Committee Bills
- H.R. 3200 (pdf), Early House bill (introduced July 14, 2009)
Sec. 401, “Tax on Individuals without Acceptable Health Care Coverage” would have amended Internal Revenue Code (IRC) with a new Sec. 59B:
(a) TAX IMPOSED.—In the case of any individual who does not meet the requirements of subsection (d) at any time during the taxable year, there is hereby imposed a tax equal to 2.5 percent of the excess of—
- H.R. 3962 (pdf), House bill (introduced Oct. 29, 2009, passed Nov. 7, 2009)
Sec. 501, “Tax on Individuals without Acceptable Health Care Coverage” (same as § 401 of H.R. 3200) would have amended IRC with new Sec. 59B:
(a) TAX IMPOSED.—In the case of any individual who does not meet the requirements of subsection (d) at any time during the taxable year, there is hereby imposed a tax equal to 2.5 percent of the excess of—
- S.1679 (pdf), Senate HELP bill (introduced Sept. 17, 2009)
Sec. 161 institutes “shared responsibility payments.” For individuals without qualifying coverage, “there is hereby imposed for the taxable year…an amount” to be specified by HHS. Not a penalty or a tax, but “an amount.” The HELP bill is the least forthright of all the pre-PPACA bills on this question. However, it goes on to specify that “The amount imposed by this section shall not be treated as a tax” for certain purposes, but “shall be treated as if it were a tax” for certain other purposes. One might quibble with the “as if it were a tax,” but this is consistent with an understanding that the payments would be a proper exercise of the taxing power. If Congress expressed its intent that something be a tax for at least one purpose, any argument that it did not intend to exercise its taxing power is foreclosed.
- Senate Finance Chairman’s Mark (pdf), Baucus draft (introduced Sept. 22, 2009)
Excise Tax. The consequence for not maintaining insurance would be an excise tax. If a taxpayer’s MAGI is between 100-300 percent of FPL, the excise tax for failing to obtain coverage for an individual in a taxpayer unit (either as a taxpayer or an individual claimed as a dependent) is $750 per year. However, the maximum penalty for the taxpayer unit is $1,500. If a taxpayer’s MAGI is above 300 percent of FPL the penalty for failing to obtain coverage for an individual in a taxpayer unit (either as a taxpayer or as an individual claimed as a dependent) is $950 year. However, the maximum penalty amount a family above 300 percent of FPL would pay is $3,800.
- S.1796 (pdf), Baucus bill (introduced Nov. 19, 2009)
Sec. 1301. EXCISE TAX ON INDIVIDUALS WITHOUT ESSENTIAL HEALTH BENEFITS COVERAGE
[...]
(b) IMPOSITION OF TAX.— ‘‘(1) IN GENERAL.—If an applicable individual fails to meet the requirement of subsection (a) for 1 or more months during any calendar year beginning after 2013, then, except as provided in subsection (d), there is hereby imposed a tax with respect to the individual in the amount determined under subsection (c).
Both H.R. 3200 and H.R. 3962 specified that the mandate penalty would not be treated as a tax for certain purposes (namely, calculating tax credits). The fair implication of this proviso—following a canon of statutory construction known by the Latin Expressio Unius—is that the penalty would be treated as a tax for other purposes.
B. Senate Finance Committee Debate
On Sept. 22, 2009 the Senate Finance Committee began a series of executive sessions on health reform for the purpose of debating and marking up Sen. Max Baucus’s “Chairman’s Mark,” an outline of what would later become “the Baucus bill,” S.1796 (pdf). Here, with my notes, are relevant excerpts from the transcript of that day’s session. In [brackets] are page numbers to the pdf of the transcript.
[32] Sen. Hatch says mandate penalties raise $20 billion in new taxes, are “a new tax on middle-class families.”
[57] Sen. Bunning mocks the President’s and other Democrats’ attempts to finesse their way around calling the mandate penalty a “tax”:
And I was stunned when I heard the President say this past weekend that the individual mandate, which is an amendment to the Tax Code and is specifically called an excise tax in the Chairman’s mark, is not really a tax. Perhaps we should change the name of the Tax Code to “A Shared Responsibility Code” so we are not really imposing taxes on the American people.
[72] Sen. Crapo remarks that “it is pretty clear . . . that the consequences for not maintaining insurance would be an excise tax.”
I noted that this weekend there was quite a bit of talk in the news shows about whether or not this proposal even contains a tax or not. I think that it is pretty clear–the proposal itself states that the consequences for not maintaining insurance would be an excise tax and makes it clear that the excise tax would be assessed through the Tax Code and apply it [sic] as an additional amount of Federal tax owed. Yet the President is saying that there is no new tax in the bill, that his pledge to avoid increasing taxes for those who make under $250,000 is honored. Yet last year, in September, he indicated that under his plan no family making less than $250,000 a year will see any form of a tax increase, not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes. And yet we see this major new proposal for more taxes before us now.
[196-97] Sen. Grassley has an exchange with Mr. Barthold, Chief of Staff of the Joint Committee on Taxation:
Senator Grassley. [. . .] So Mr. Barthold, is the penalty here not an excise tax, and will it not affect people making under $250,000 a year?
Mr. Barthold. Senator Grassley, the penalty proposed in the Chairman’s mark is, as you observed,structured as a penalty excise tax. We have other penalty excise taxes in the Internal Revenue Code. We have not separately analyzed. We have worked in conjunction with Dr. Elmendorf and his colleagues at the Congressional Budget Office in terms of the overall effects of what sort of people might purchase insurance through the exchange who would not have insurance provided by their employer, and where the individual mandate or the employer free rider penalty would arise.
We have not done a combined distribution analysis across income to specifically answer your question, but to the extent that, yes, we think that some people would be subject to the penalty excise tax when everything shakes out, we would expect that some would have incomes less than $200,000.
[197-98] Sen. Baucus then jumps in and tries to distinguish the penalty from a tax, saying that IRS collection is only incidental, and that HHS or some other agency could collect the mandate penalty.
Let me just say on that point, it is an interesting question. This is really a penalty that is being collected by the Internal Revenue Service. It could be collected by another body, another entity,another agency, perhaps HHS.
The modification, too, will reduce the penalty significantly, will cut it in half, so it is much smaller than it otherwise was. But somebody is going to have to collect it to the degree that there is one, and it is this committee’s determination–at least it is my determination so far–that the better, more efficient is for the IRS, which is set up to collect these kinds of penalties. So it is really a penalty that we are talking about here, just the IRS, not HHS, is collecting the penalty.
Sen. Baucus’s remark there is the only clear instance I’ve found of a Congressional Democrat denying (or flirting with denying) that the mandate penalty is a tax. But of course, Baucus’s Chairman’s Mark and subsequent bill (see S.1796 [pdf]) are unmistakably clear that the penalty is a tax. (See the excerpts from those draft bills above.)
[303-] Sen. Hatch in another exchange with Mr. Barthold and Mr. Reeder, Senior Benefits Counsel on the Democratic Senate Finance Committee staff:
Senator Hatch. Let us go further. While we are on the topic of upholding the Constitution, the -– legislation would require all U.S. citizens and legal residents to purchase a certain level of health insurance coverage.
They must record qualified coverage on the federal income tax return. Failure to do so would result in an excise tax of $750 on individuals applied as an additional amount of federal tax owed. Would that be a direct tax?
Mr. Barthold. If we applied an excise tax on all individuals –-
Senator Hatch. But you are not. I am told that this would be the first time in our history that Americans would be faced with the situation where they were ordered to do some specific act by the federal government which if they refuse to do it they would be subject to a tax. Is that correct?
Mr. Barthold. I do not know, Senator.
Senator Hatch. I think it is.
Mr. Reeder. If I could jump in here and just add that the code, the Internal Revenue code is replete with excise taxes that are applied as penalties. [typos in transcription, corrected here –JH]
Senator Hatch. Well, this is on a person, not a service or product.
Mr. Reeder. There are lots of excised taxes that are applied to an individual.
Senator Hatch. I guess I’m asking do you believe this individual mandate raises possible Constitutional issues as I have been told? It sure seems like it to me.
Mr. Barthold. Senator, it is just not something that I am qualified to answer. An excise tax applied on activities by all individuals would not seem to be beyond the flush of the Constitution’s authority for the Congress to assess a tax. But I am not the right person to engage in a Constitutional discussion. I’m sorry.
Senator Hatch. It would be a tax on a person for doing absolutely nothing. I mean, can anyone on the panel say whether the mandate of excise tax would be constitutional? Anybody?
The Chairman. Well, I will. This is an equally applied penalty for all persons meeting a certain category. I think it is a stretch to say this is unconstitutional. I will take that argument any day that it is not constitutional. It is constitutional.
Mr. Reeder. We did refer this to CRS and we got guidance from them that it is.
Senator Hatch. To be honest with you, I do not think it is at all. Let me move on. [...] According to the Chairman’s mark, the individuals who failed to maintain health insurance are subject to an excise tax, right?
Mr. Barthold. It is the penalty, excise tax penalty.
Senator Hatch. The penalty for excise tax. The excise tax would be assessed with a tax code and applied as an additional amount of federal tax owed. However, there are various rules protecting those who are uninsured for less than three months or to the extent that the cost of the health insurance premium exceeds 10 percent of adjusted gross income. Are there any excise taxes in the current tax system that are treated this way? And are there any other excise taxes that vary based on the taxpayer’s income? Are there any other taxes at all in our current tax system that are furthered by the failure of the taxpayer to take some action?
Mr. Barthold. Well, as Mr. Reeder noted, there are some penalty excise taxes that apply to individuals for either actions that they take or in some instances for not having taken an appropriate action.
We have penalty excise taxes on excess distributions or premature distributions from qualified retirement plans. There is excise taxes in the tax exempt organization area for, I guess for lack of a better term, for inappropriate activities or decisions made by management of the tax exempt order.Senator Hatch. But are they based on the taxpayer’s income?
Mr. Barthold. None of those are based on taxpayer’s income. The excise taxes on the distribution indirectly are based on income in the penalty taxes for early withdrawals for example key off of the size of the withdrawal.
Sen. Hatch then confuses the mandate penalty “excise tax” with the mark’s other excise tax, the “Cadillac tax” on high-cost plans.
[329] And later:
Senator Hatch. I have a few [questions] now. The CRS report concludes the government can require individuals to obtain health insurance and penalize you if you do not. However, the penalty must be something the government has already given you and can take away, such as the right to a deduction. Now, this is an excise tax imposed on you, regardless of if you have a tax liability or not. I think the CRS has not analyzed the Chairman’s proposal.
And at [352], Hatch refers to his amendment to strike “the new individual mandate tax proposed in this bill.”
Other relevant discussions occurred on subsequent days of the Committee markup. Democrats more or less dodged the debate, and Republicans showed no sign of straying from their normal m.o. in which things that are bad and things that are taxes are conceptually indistinguishable, more or less.
On October 1, Sen. Hatch presents a much more polished constitutional argument and directly challenges the proposition that the penalty qualifies as an “excise tax” as it was described in the Chairman’s Mark. If it is a tax at all, Hatch contends, it must be a “direct tax”:
The second constitutional problem with the individual mandate arises because the penalty for failing to purchase health insurance is, in fact, not the excise tax that the Chairman’s mark calls it. An excise tax is a tax on the manufacturer and sales of goods or services. The gasoline tax would be a good example. The tax imposed upon people who failed to purchase health insurance, however, is the exact opposite. It occurs not when there has been the sale of something, but when there has been no sale of anything at all.
This actually works more like a fine, but the Chairman’s mark said it is an excise tax to be assessed through the Tax Code and collected by the IRS. If this is a tax at all, it is certainly not an excise tax. Instead, it is a direct tax. And while the Constitution requires that excise taxes must be uniform throughout the United States, it requires that direct taxes must be apportioned among the States by population.
Now, just as the excise tax on high-premium plans is not uniform, this direct tax on individuals who do not purchase health insurance is not apportioned. In an analysis just published in the well-respected B&A Daily Tax Report, they looked at this question. I would ask, Mr. Chairman, consent that this be placed in the record at this point.
Sen. Hatch had by this point developed the argument into a fairly sophisticated analysis. It’s just not clear that any other Senators were on board with that analysis. I haven’t found any instances of other Senators picking up the argument, or responding to it specifically. But, as shown below, it is clear that Democrats did not abandon the taxing-power justification of the mandate, and they continued to cite that authority right through the passage and enactment of PPACA.
C. Congressional Record, Floor Speeches
- Rep. George Miller (D-Cal.), 156 Cong. Rec. H1854, H1882 [pdf] (Mar. 21, 2010):
The bill contains an individual mandate to either obtain health insurance or pay a penalty. This provision is grounded in Congress’s taxing power but is also necessary and proper—indeed, a critical linchpin—to the overall effort to reform the health care market and bring associated costs under control throughout interstate commerce.
- Sen. Ensign (R-Nev.), 155 Cong. Rec. S13830 (Dec. 23, 2009):
In this case, if you choose to not do something — in other words, if you do not choose health insurance — this bill will actually tax you. It will act as an onerous tax.
Via Ezra Klein. I discussed the significance of this episode here.
- Sen. Leahy (D-Vt.), 155 Cong. Rec. S13751, S13753 [pdf] (Dec. 22, 2009):Sen. Leahy argues in favor of PPACA, remarks on constitutionality under both commerce power and tax power, citing noted constitutional law scholar Erwin Chemerinsky’s op-ed in the L.A. Times (from Oct. 6, 2009). Note that Chemerinsky’s piece was written and published long before Sen. Reid’s merged bill appeared, so it wouldn’t be properly taken as an opinion about the constitutionality of the actual language of PPACA. But Leahy’s reference counts as another instance of how the Reid bill’s removal of the tax label had no discernible effect on Congressional debate or Members’ talking points.
- Sen. Max Baucus (D-Mont.) 155 Cong. Rec. S13558, S13581-82 [pdf] (Dec. 20, 2009):Sen. Baucus stated his belief that there is “ample authority for Congress to enact such a provision under the Commerce Clause, and also under the congressional authority to tax and spend for the general welfare provided for in the Constitution,” and he submitted an article by Mark Hall, law professor at Wake Forest Univ, for the record.
Conclusion
If you were one of the litigators challenging the individual mandate in court, you would want to find instances of Democrats arguing, in an official forum, that the mandate/penalty is not a tax. I’m not aware that any exist. There’s President Obama’s noted Sept. 20, 2009 interview with George Stephanapoulos, which Judge Vinson cites in his October ruling (pdf). What the President meant by his statement that “the responsibility to get health insurance is absolutely not a tax increase” is arguable. I tend to think he meant the mandate itself is not a tax—not that the penalty isn’t. But then again, I doubt he was really drawing that distinction, so I concede that the other interpretation is fair. In any case, it would be exceedingly strange if an interview with George Stephanopoulos were regarded as a proper source of legislative history.
Other than that, there’s Sen. Baucus’s cagey remark from the Sept. 22 transcript (above). And that’s all I’ve found so far. I’ll update this post if I come across anything worthy of note.
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