ObamaCare and the Constitutional Road Not Taken

The Eleventh Circuit majority opinion (nicely summarized by Dan Miller) is noteworthy not only as the most thorough judicial discussion to date -- 207 pages -- but as an opinion written jointly by Chief Judge Joel F. Dubina (appointed by the first President Bush) and Judge Frank M. Hull (appointed by President Clinton). As a single opinion, co-authored by two experienced judges, appointed by Republican and Democratic presidents, it has considerable persuasive force.

The federal district courts have divided on the constitutionality of ObamaCare under the Commerce Clause; the courts of appeal have now split 1-1 (we are awaiting the decision of the Fourth Circuit); and the Supreme Court will have to provide the definitive answer. But with respect to one argument -- the attempt to uphold the ObamaCare mandate as a “tax” under the Tax and Spending Clause of the Constitution -- the verdict is pretty clear: the Eleventh Circuit became the seventh straight court in which the government failed to convince a single judge.

A “tax” is intended to raise revenue, and a “tax penalty” is intended to enforce a tax provision. The ObamaCare penalty punishes a failure to purchase insurance, not a revenue-related provision of the Internal Revenue Code. Moreover, the sponsors of ObamaCare, from the president on down, repeatedly declared the penalty was not a tax. While we have yet to hear from the Fourth Circuit, one expert declares that “the tax argument has essentially no chance of actual success in the [Supreme] Court.”

It is nevertheless worth reviewing the relationship of ObamaCare to taxes -- not because the government’s tax argument merits further consideration, but because it highlights the constitutional road not taken, and thus sheds light on the path that was taken to avoid it.


ObamaCare essentially sought to extend Medicare to the entire nation, but Democrats found it impossible to do so with taxes. The necessary taxes would have been a political non-starter. Buried in the ObamaCare legislation was an increased “Medicare Contribution” by top bracket taxpayers -- which was then diverted from the Medicare Trust Fund to help fund ObamaCare rather than Medicare -- but Obamacare was otherwise structured as a reform of the insurance industry under the Commerce Clause, not as a use of the taxing authority of Congress.

Since 1944, when the Supreme Court held insurance is “commerce,” Congress has had the authority to regulate insurance companies. But it goes beyond regulation to design a new insurance product and mandate that everyone buy it. In 1994, the CBO noted that an individual mandate “would be an unprecedented form of federal action,” because the government “has never required people to buy any good or service as a condition of lawful residence in the United States.” The Eleventh Circuit concurred that the individual mandate is “unprecedented.”