GOING SMALL

GOING SMALL

It was supposed to be historic and certainly was the most anticipated Supreme Court decision since Bush v.  Gore.  The result was also unexpected and therefore surprising

But in the end, if it lives up to all the hype, it will be for all the wrong reasons.

That's my take on National Federation of Independent Business et al. v. Sebellius, the decision issued by the Supreme Court last week on the constitutionality of the Affordable Care Act (ACA), a/k/a Obamacare.  

To begin, the decision contains a number of anomalies. 

One is that it violated the settled practice that High Court opinions generally avoid unnecessary arguments or holdings.  Lawyers call this unnecessary stuff dicta, a kind of judicial throat clearing generally done in the privacy of chambers rather than the pages of opinions.  But National Federation of Independent Business marches dicta into a judicial hall of fame.

Five justices, including the Chief Justice, decided that the ACA's individual mandate  was a constitutional exercise of Congress's taxing power.  Their take was that the penalty imposed on those who remain uninsured was essentially a tax, which Congress has the power to levy under Article 1, Section 8 of the Constitution.  Under that view, the individual mandate could be construed simply as imposing that tax on those who avoided insurance, rather than as mandating insurance coverage from those who would refuse it.  If you do not want to be insured, the claim goes, you do not have to be.   You just have to pay the tax (to defer the cost your free riding inevitably imposes when you get sick and go to the emergency room anyway).  

That ended the argument on constitutionality per se, and consequently there was no need for the Chief Justice to sally forth with his claim that the Act was not  Constitutional under the commerce clause.  But sally forth he did.  On the theory that he, Roberts, would have upheld the law under the commerce clause if he could have, so he had to first determine that he could not  . . . 

So that he could then find it Constitutional under the taxing power.

This, however, is no theory at all.

Because if it were, two centuries of Supreme Court jurisprudence go out the window.   Every case involving multiple claimed bases for Constitutionality necessarily presents the option of deciding them all.  Nevertheless, the practice of refusing to do so has -- until last week -- triumphed anyway. 

Another anomaly was the Court's market analysis, which was part of its unnecessary holding that the individual mandate was not a proper exercise of Congressional power under the commerce clause.  The Court focused on one ostensible market (the market in health insurance) while ignoring the other far more important one (the market in health care itself).  This was the only way the Court could get to its determination -- with which five Justices agreed -- that inaction (in the form of not insuring, which was what the mandate is designed to end) could not constitute the act of engaging in commerce.

The problem here, however, is that the insurance market is really not an independent market.  Insurance is simply a mechanism that health care consumers use to obtain and pay for health care.  Without the market in health care, there would be no insurance market.  Most importantly, those who refuse to buy insurance are not passively inactive in the health care market.  To the contrary, they are very active when they need care.  They march to the nearest hospital emergency room and get it.  And the rest of us then pay for it.  Consequently, the more accurate economic take on insurance refuseniks is not that they are doing nothing.  It is that what they are actually doing -- namely, self-insuring, or more accurately, "free riding" -- is running up the costs for the rest of us and for the system as a whole.  Those "acts" unmistakably affect commerce, and the Congress thus had the unimpeachable Constitutional right to regulate them.

Under the commerce clause.

Anomaly Number Three -- the Court's majority holding that the ACA's Medicaid expansion is unconstitutional because it gives the states no real choice other than to accept the expansion.  

This was truly poppycock.  For as long as anyone can remember, the federal government has had the right to offer states money in return for the states agreeing to be bound by the terms of the offer.  That is how Medicaid works, and has worked since its passage in 1965.  Last week, however, the Supreme Court junked that right.  Now, if the feds give the states the option of receiving money under federal terms, and the states accept that offer, the feds cannot later amend the offer (even if the original grant comes replete with a bold warning that the feds were retaining the right to do so) and condition receipt of all the funds on compliance with the newly amended program.  

The Gang of Five who held the ACA's Medicaid expansion illegal claimed that requiring the states to lose all their Medicaid money if they did not agree to the new expansion of eligible recipients --to those whose incomes were 133% of the federal poverty level -- constituted a "gun to the head" of the states and left them no option but acceptance.  It was OK, so the Court said, for the federal government to withhold the new money if the states did not cover those eligible under the new rule, but they could not lose their old Medicaid money.

This was ludicrous at two levels.   On the one hand, the "gun to the head" analogy pretty much dies once the actual terms of the ACA are examined.  Under it, the federal government pays for 100% of the costs of the newly eligible Medicaid recipients for the first two years the Act is in effect, and for 90% thereafter.  This is hardly a gun; it's more like a Congressional wet kiss. On the other, there really was no basis for the decision in any Supreme Court precedents, all of which have allowed the federal government to condition grants and to amend those conditions later on so long as the states were advised of that possibility in the first place.  

What the Court did, in fact, was to basically turn federalism on its head.  Now, instead of the federal government retaining the right to control how its (or the country's federal income taxpayers') money is spent,  the states get to say yes once, on one set of conditions, and the feds can never thereafter alter those conditions, even if they told you they could when they gave you the initial grant.  It's a bit like Mom and Dad being duty bound never to reduce the initial allowance they give the kids.

Contra the Gang of Five, this sort of behavior does not respect the sovereignty of the individual states.  It just institutionalizes (or Constitutionalizes) their dependence.

Which is not what conservative jurisprudence is supposed to be about.

So why all the anomalies?

It is difficult to avoid the conclusion that more is going on here.  Some have suggested privately that Roberts switched his vote in the last weeks after Sen. Leahy criticized the Court on the floor of the Senate.  Others have claimed that the decision itself puts new and not so hidden arrows in the conservative quiver (e.g., the commerce clause holding and the Medicaid expansion holding) that will come back to bite those who try to use the federal government to solve any national problems in the future.  Still others have raised Chief Justice Roberts to new heights, arguing that he has put the interests of the nation ahead of his party and, in the words of the New York Times's Tom Friedman, "gone big."

I vote for a modified version of the first and second options.

I think Roberts knows the Court has been losing its luster for some time now and is increasingly viewed as just another partisan operator in today's highly charged political environment.  Its decision to award the Presidency to George W. Bush in 2000 began this walk down the slippery slope of judicial partisanship, and the Citizens United decision in the last term (which unleashed unidentified and unlimited corporate money on the political process) more or less capped it.  Now the Court's public approval rating is in the thirties. 

Nothing like Congess, but worse than it has ever been.  

Roberts had to do something to reverse this trend and pulling the ACA off the Constitutional cliff may do it.  The best way to rebut a claim of partisanship is to do the unexpected.  No one expected John Roberts to uphold Obamacare.

So he did.

He, of course, also wrote a wacky and unnecessary commerce clause opinion that smacks of the sort of judicial ignorance of economic reality characteristic of pre-New Deal Supreme Court rulings .  In that world, manufacturing was not commerce; it just preceded it.  In the Gang of Five's world, marching to the emergency room is not commerce if you decide beforehand not to be insured (or, more probably, if an insurance company decides that for you).  And he also wrote an equally wacky attack on Medicaid expansion that Constitutionally binds the federal government to deals it never struck in the first place, and then makes those deals un-amendable unless the states agree to the actual amendment or unless those initial deals are so small that ending them does not really matter to the states in any case. 

The combined effect of these rulings over time will be to limit the federal government's ability to solve national economic problems.  Instead, the national government will be Constitutionally bound to make its programs small enough so that any offers to the states do not become too big to amend or improve.  The commerce clause -- which has more or less saved every piece of national economic legislation since 1939 -- will be  back in a danger zone where phony semantics substitute for real economics.  And the only thing left will be the taxing power.  Lots of luck with that.   

Because no one other than the cognescenti is reading all of Chief Justice Roberts's opinion right now, he gets credit for "going big."

When what he really did could turn out to be . . . 

Pretty small.