“If names be not correct, language is not in accordance with the truth of things. If language be not in accordance with the truth of things, affairs cannot be carried on to success.”
— Confucius, Analects, Book XIII, Chapter 3, verses 4-7
Just eleven days ago, facing the sort of unholy pressure usually reserved for presidential debates and World Cup shootouts, Chief Justice John Roberts defied expectations and upheld the individual mandate in the Affordable Care Act (ACA) on the grounds that the law’s “shared responsibility payment” could “reasonably be characterized as a tax.” This display of intellectual honesty was a shock to the political system and a clear violation of Washington’s prime directive, so of course conspiracy theories immediately took root. Conservative New York Times columnists Ross Douthat and David Brooks accused the Chief Justice of acting politically (without evidence). Meanwhile, liberals everywhere were jubilant, but confused. A gift of this magnitude from a prominent conservative must be a Trojan Horse, they reasoned. Surely this could not be the same Chief Justice who had failed to grasp the distinction between “I have a dream” and a $2,300 campaign contribution.
But it was, even if that truth proved too strange for the political punditry to accept. The man who had promised to make it his job to distinguish “balls” from “strikes” had called a fair game and in so doing had exposed as naked partisanship the fury of the political arena’s many disgruntled fans. It was a victory for common sense and impartiality, as well as an embarrassing reminder that much of the chaos of the past few years could have been avoided had politicians simply been willing to call a spade a spade. Small wonder that the reaction to the ruling was so vociferous.
To be clear, the proper extent of Congress’s powers is rightly the subject of legitimate disagreement. But how legitimate are the arguments that are usually advanced? How many liberals, for example, have read the actual text of the Commerce Clause with an open mind?
“The Congress shall have the power to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”
Reasonable people can disagree about what the framers meant by “among,” but is there any denying that this meaning has been stretched? Is growing marijuana in your house really an activity that happens “among” the states?
Similarly, how many conservatives have honestly considered the true scope of the power to tax?
“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defenceand general Welfare of the United States.”
Or of the Necessary and Proper Clause:
“The Congress shall have Power to make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers.”
This is not rocket science, although it requires a bit of fair-mindedness to interpret correctly. The past two hundred years have shifted the debate over Congressional authority along a variety of axes, but the clear implication of the passages above remains the same as it ever was: Congress has the power to regulate interstate commerce and to tax just about anything that it pleases. Recent confusion on these points has arisen only because the lines separating taxation and regulation from one another (and from the general police power) have been blurred. Furthermore, the court has made a distinction between a “tax” and a “penalty” that is mystifying to any student of microeconomics.
What should be obvious from the Constitution itself is that using a tax incentive for quasi-regulatory purposes is constitutional, provided the tax in question is not so burdensome as to effectively eliminate the option of paying it. This is the principle that Roberts upheld in his decision when he wrote that the federal government “may enact a tax on an activity that it cannot authorize, forbid, or otherwise control.” Roberts ruled that the individual mandate is intended to encourage but not compel individuals to purchase health insurance. Hence, it is constitutional. As I see it, to reject this line of reasoning (as conservatives apparently do) is to render most of our current, incentive-laden tax code unconstitutional.
For Roberts (but not for the four liberal justices) the argument that Congress may not force individuals to engage in commerce so that it may regulate that commerce was compelling. The relevance of this argument turns upon a question – whether uninsured individuals are active participants in the healthcare market or merely passive observers of the health insurance market – that may be unanswerable. However, regardless of which interpretation is correct, it makes zero economic sense to insist on distinguishing between activity and inactivity when it comes to taxes. After all, a tax penalty for not doing something is just a tax reward for doing that thing. For example, suppose that Congress had imposed a universal head tax of $690 in accordance with the Direct Tax Clause. Now suppose that it had also established a tax credit of equal size that could be claimed by anyone who purchased health insurance (ironically, this is exactly what Mitt Romney is now proposing). Voila! I give you the individual mandate in two undeniably constitutional steps. Must these steps really be taken one at a time? Does the Constitution prohibit Congressional efficiency?
Now let’s consider liberals’ primary complaint: Supposedly, by rejecting Congress’s authority to “require” the purchase of health insurance, Roberts has substantially limited the scope of the Commerce Clause going forward. Yet the Obama Administration’s Commerce Clause argument was grounded upon the claim that the healthcare market’s uniqueness justified the mandate. If liberals really believed that then it seems there is no harm done. But even if they did not, it is difficult to understand why the Chief Justice’s ruling that the government may not compel individuals to engage in commerce is such a blow. After all, this issue has come up only once in two hundred years, and even in this instance it is fairly clear that Congress was invoking the wrong power.
Personally, I was unaware of Congressional Democrats’ burning desire to replicate the fight over the individual mandate by pushing for a corresponding broccoli mandate. But even if they were, I suspect that next time they will just make it a credit, or simply call it a tax and be done with it. Perish the thought!
Far more consequential than the fate of the individual mandate was the ruling on the ACA’s expansion of Medicaid, in which the Court held that states could not be punished for rejecting this expansion by losing the rest of their Medicaid funding. It is not clear what precedent this ruling sets, given the extraordinarily generous terms that the feds are offering. Yet even if the implications for future program design are murky, the practical implications of the ruling are clear. Recent evidence suggests that expanding Medicaid will benefit new enrollees, but in light of the Court’s ruling Republican governors are likely to resist raising taxes to pay for their small share of the cost. In other words, the next great healthcare battle begins right now. Raise your hand if you’re excited!
In the wake of the Court’s decision, shocked Republicans have begun to regroup, and their new message sounds much like their old message: Defeat President Obama so that we can repeal the healthcare bill! Now, however, they can add to that familiar refrain the charge that Obama broke his promise not to raise taxes, to which the President will no doubt reply that he never promised not to raise penalties that could reasonably be characterized as taxes and that anyway Romney did it first. And so it goes.
As much as I am looking forward to watching Mitt “I was for it before I was against it” Romney and Barack “I was against it before I was for it” Obama debate the merits of Hillary Clinton’s/the Heritage Foundation’s/their own virtually identical, wildly centrist, thoroughly unpopular ideas for reforming healthcare and saving the American Empire from certain financial ruin, I cannot help but wonder what has become of us. Is the ruling class so bored that it must invent disagreements over policy?
“When a court confronts an unconstitutional statute, its endeavor must be to conserve, not destroy, the legislation,” the Chief Justice opined. But to which court was he referring? Supporters of the ACA were relieved by its preservation, but it did not escape their attention that four of the nine justices were prepared to throw out the entire law on grounds that were practically Egyptian in their transparently political spuriousness. Justice Scalia, who wrote in Gonzales vs. Raich that Congress may regulate “even those intrastate activities that do not themselves substantially affect interstate commerce,” was nevertheless unable to locate even a single provision of the Affordable Care Act that passed constitutional muster. It is so difficult with these Democrat laws, you see.
In the end, one individual’s sense of duty once again proved to be all that stood between America and the forces of discord and chaos. Yet the high court’s power is still as frightening as it is necessary. Last Thursday, a slim majority showed some deference to democracy, but beneath the surface we are still the unruly subjects of philosopher kings. Long may they reign.
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