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.
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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.”
The case commonly thought to mark the high water of Commerce Clause power is Wickard v. Filburn, 317 U.S. 111 (1942), in which the Supreme Court upheld wheat production quotas imposed even on a small farmer producing wheat for use on his own farm. Filburn argued his activities were “local” and any effects on interstate commerce were “indirect.” The Court held the indirect effects of local activities could, in the aggregate, have a substantial economic effect on interstate commerce and thus could be regulated under the Commerce Clause. In Gonzales v. Raich, 545 U.S. 1 (2005), the Court relied on Wickard in upholding federal regulation of homegrown medical marijuana, since it might in the aggregate affect the interstate market for it.
ObamaCare would be analogous if Congress had directed Filburn to grow wheat, and everyone to buy wheat products. But it is one thing to regulate the activities of a person engaged in farming (or marijuana production); it is another to make everyone start farming or buy farm products.
Last week President Obama told a town hall that the Eleventh Circuit had “taken sort of the conservative line that this restricts freedom and Congress doesn’t have the authority to do it,” but that if the Supreme Court “follows existing precedent, existing law, it should be upheld without a problem.” But a former professor of constitutional law should have known the constitutionality of ObamaCare cannot be resolved simply by citing Wickard v. Filburn and Gonzales v. Raich.
Congress could have enacted ObamaCare in a constitutional fashion by using its taxing power — raising employment or income taxes to extend Medicare to everyone. But that was an insuperable political problem, so Congress tried an end run — making everyone buy a government-designed product from private companies assured of government-mandated customers. It is precisely the unprecedented situation the CBO noted in 1994. ObamaCare is — as Vice President Biden might have put it — a “big constitutional deal.”
It is not grounds for recognizing a new federal power that Congress finds it politically difficult to use the power it has — particularly since, as the Eleventh Circuit noted, the individual mandate has no inherent limiting principle. It could be used not only for ObamaCare but Obamacars, or any other product or service the government decides to mandate. Nor is ObamaCare’s beneficent purpose a reason to endorse the power, but rather to be wary of it — as Louis D. Brandeis memorably warned in his dissent in Olmstead v. United States, 277 U.S. 479 (1928):
Experience should teach us to be most on our guard to protect liberty when the Government’s purposes are beneficent. Men born to freedom are naturally alert to repel invasion of their liberty by evil-minded rulers. The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding.
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