The U.S. Supreme Court decision to uphold the health care reform that is the signature policy of Obama’s presidency came as a surprise to many observers because Chief Justice John Roberts, a conservative appointed by George W. Bush, ruled with the majority to uphold the law.
Many court watchers assumed the court would strike down the law after the hostile questioning they gave government lawyers during oral argument on the central question of whether the Commerce Clause of the U.S. Constitution, which empowers the federal government to “regulate commerce between the states,” empowers Congress to require individuals to purchase health insurance or face a fine.
Unlike the Canadian Supreme Court, the judges in Washington read summaries of their decisions and dissents from the bench. There is no pre-briefing or “lock-up” for reporters by court officials. Cellphones are banned in the courtroom, and the decision was not posted to the court’s website until after it was announced. As a result, confusion ensued inside the court room and among TV correspondents outside when the Chief Justice began to read his decision, the first section of which explained why the majority of the court held that the law was not a valid exercise of the Commerce Clause power.
But Roberts was just getting started. He eventually found the law could be upheld under a third argument advanced by the federal government – that the fine was essentially a tax and therefore within federal powers.
(Adding to the confusion was that earlier in the decision, he found that the fine was not a tax for the purpose of deciding whether the case should be postponed under a law that says a tax can’t be challenged in court until someone has actually had to pay it, and then can sue for a refund. In that instance, Roberts reasoned, the fine was not covered by the law, called the Anti-Injunction Act,” Congress had labeled it a “penalty” and not a “tax” and Congress gets to decide whether or not the statute applies. But for the constitutional analysis, he concluded the fine was functionally a tax, whether or not Congress decided to call it so.)
“That label cannot control whether the payment is a tax for purposes of the Constitution, but it does determine the application of the Anti-Injunction Act,” the decision states.
The full decision is here.
During his Senate confirmation hearings, Roberts memorably said, “Judges are like umpires – umpires don’t make the rules, they apply them.” He talked about “judicial humility.” In writing the majority opinion, he emphasized the theme of judicial deference to the legislative branch in his decision – arguing that judges should look for ways to uphold duly enacted statutes if at all possible:
“Our permissive reading of these powers is explained in part by a general reticence to invalidate the acts of the Nation’s elected leaders. “Proper respect for a co-ordinate branch of the government” requires that we strike down an Act of Congress only if “the lack of constitutional authority to pass [the] act in question is clearly demonstrated.”
Members of this Court are vested with the authority to interpret the law; we possess neither the expertise nor the prerogative to make policy judgments. Those decisions are entrusted to our Nation’s elected leaders, who can be thrown out of office if the people disagree with them. It is not our job to protect the people from the consequences of their political choices.”
Commerce clause analysis
Roberts drew the line at allowing the federal government to force people into commercial who aren’t already engaged in commercial “activity”:
“Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority. Indeed, the Government’s logic would justify a mandatory purchase to solve almost any problem. (Page 22)
“Under the Government’s theory, Congress could address the diet problem by ordering everyone to buy vegetables.” (Page 23)
He also rejected the argument advanced by the government that everyone is in the market for health care because sooner or later they will get ill or be injured in an accident:
“The proposition that Congress may dictate the conduct of an individual today because of prophesied future activity finds no support in our precedent.” (Page 26)
Having rejected the Commerce Clause arguments, he turned to the Government’s second argument: that the mandate may be upheld as within Congress’s enumerated power to “lay and collect Taxes,” as laid out in Article 1, Section 8 of the US Constitution.
Tax clause analysis
Roberts writes that if the requirement to buy health insurance “is in effect just a tax hike on certain taxpayers who do not have health insurance, it may be within Congress’s constitutional power to tax.” He begins by setting out the low bar he will use for evaluating the government’s claim:
“The question is not whether that is the most natural interpretation of the mandate, but only whether it is a “fairly possible” one.” (Page 33)
Roberts gives several reasons for accepting the government’s interpretation as “fairly possible.”
- If an individual does not maintain health insurance, the only consequence is that he must make an additional payment to the IRS when he pays his taxes. “Under that theory, the mandate is not a legal command to buy insurance. Rather, it makes going without insurance just another thing the Government taxes, like buying gasoline or earning income.”
- The penalty functions like a tax: It will raise money for the government, is not so high as to be a financial “punishment,” and does not require any knowledge of wrongdoing to be triggered.
- The payment is collected solely by the IRS through the normal means of taxation.
He notes that the court has in the past found other penalties to be taxes even when Congress has not labeled them as such.
Roberts goes on to say that the federal government is free to use taxes as a means to shape individual behavior:
“None of this is to say that the payment is not intended to affect individual conduct. He noted that cigarette taxes are intended to do the same. “Although the payment will raise considerable revenue, it is plainly designed to expand health insurance coverage. But taxes that seek to influence conduct are nothing new. Some of our earliest federal taxes sought to deter the purchase of imported manufactured goods in order to foster the growth of domestic industry.” (Page 36)
In sum, he said he would not strike down the law simply “because Congress used the wrong labels.” He concludes: “Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.”
Justice Antonin Scalia authored the dissent, joined by Justices Kennedy, Alito and Thomas – arguing that far from deferring to Congress, the majority rewrites the law. A taste of his reasoning:
“…we have never held—never—that a penalty imposed for violation of the law was so trivial as to be in effect a tax. We have never held that any exaction imposed for violation of the law is an exercise of Congress’ taxing power—even when the statute calls it a tax, much less when (as here) the statute repeatedly calls it a penalty.”
“…And the nail in the coffin is that the mandate and penalty are located in Title I of the Act, its operative core, rather than where a tax would be found—in Title IX, containing the Act’s “Revenue Provisions.
“For all these reasons, to say that the Individual Mandate merely imposes a tax is not to interpret the statute but to rewrite it. Judicial tax-writing is particularly troubling.”
“The Government’s opening brief did not even address the question … And once respondents raised the issue, the Government devoted a mere 21 lines of its reply brief to the issue. At oral argument, the most prolonged statement about the issue was just over 50 words One would expect this to demand more than fly-by-night briefing and argument before deciding a difficult constitutional question of first impression.”
After the ruling was released, Mitt Romney vowed to repeal the law if elected president. House Republicans also said they would hold a vote to repeal the law, but a repeal is not expected to the pass the Senate.
The court gave Obama a big legal victory, and Republicans a political rallying cry to get their voters to the polls.