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Friday
Jun292012

US Politics Analysis: How Chief Justice Roberts Saved ObamaCare...and Gave the President an Election Problem

In a 5-4 split decision, the Supreme Court ruled on Thursday that the individual mandate --- the cornerstone of President Obama's healthcare reform law --- is constitutional.

The narrowness of the verdict was far from unexpected. However, the surprise was that it took the support of Chief Justice Roberts, one of the conservative bloc, to save Obamacare.

Roberts' decision to uphold the mandate should not be regarded as vindication of the continual trumpeting by Democrats that the law is obviously constitutional. In his opinion, the Chief Justice is scathing about the attempted usurpation of powers by the Federal Government, disagreeing vehemently with the idea that Washington can require individuals to buy health insurance by penalising them if they do not. However, he bent over backwards to find reasons that the mandate can be considered a tax, thus allowing it to stand.

Much will be written over the next few days about the reasons why Roberts decided to find a rationale to protect Obamacare, with speculation on how far political pressure in the media swayed him. That makes it even more important to assess the published arguments of the Chief Justice.

Finishing his introductory remarks, Justice Roberts explains why his opinion that follows will stretch the meaning of the Government's taxing powers:

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". [United States v. Harris, 106 U. S. 629, 635 (1883)]

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.

At the conclusion of his comments, Roberts repeats this requirement that the Court should try and find a way, wherever possible, to uphold Congressional legislation:

“Under the mandate, 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.

That, according to the Government,means the mandate can be regarded as establishing a condition (not owning health insurance) that triggers a tax (the required payment to the IRS). 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. And if the mandate 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.

The question is not whether that is the most natural interpretation of the mandate, but only whether it is a “fairly possible” one. [Crowell v. Benson, 285 U. S. 22, 62 (1932)] As we have explained, “every reasonable construction must be resorted to, in order to save a statute from unconstitutionality". [Hooper v. California, 155 U. S. 648, 657 (1895)] The Government asks us to interpret the mandate as imposing a tax, if it would otherwise violate the Constitution. Granting the Act the full measure of deference owed to federal statutes, it can be so read, for the reasons set forth below.

Justice Roberts then offers an 11-page discussion of the arguments that can be made for the mandate as a tax. This includes an analysis of why, even though the mandate was not framed in this way --- explaining why the four dissenting Justices said it was not a tax and therefore unconstitutional --- it should be regarded as a tax:

The joint dissenters argue that we cannot uphold §5000A (the mandate) as a tax because Congress did not “frame” it as such. In effect, they contend that even if the Constitution permits Congress to do exactly what we interpret this statute to do, the law must be struck down because Congress used the wrong labels.

An example may help illustrate why labels should not control here. Suppose Congress enacted a statute providing that every taxpayer who owns a house without energy efficient windows must pay $50 to the IRS. The amount due is adjusted based on factors such as taxable income and joint filing status, and is paid along with the taxpayer’s income tax return. Those whose income is below the filing threshold need not pay. The required payment is not called a “tax", a “penalty", or anything else. No one would doubt that this law imposed a tax, and was within Congress’s power to tax. That conclusion should not change simply because Congress used the word “penalty” to describe the payment. Interpreting such a law to be a tax would hardly “[i]mpos[e] a tax through judicial legislation.” Rather, it would give practical effect to the Legislature’s enactment.

Justice Roberts ends his deliberations on why he found the mandate constitutional as a tax with this barbed, if guarded, appraisal of the law he has just upheld:

The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.

So Roberts, along with four other judges, found the mandate unconstitutional if it required the purchase of health insurance, with a criminal penalty for not doing so. By a majority of 5-4 the mandate had been struck down, at least under the Government's power to regulate commerce, the Obama Administration's primary argument for defending the law.

However, the verdict was reversed when Roberts broke with those four judges and accepted the argument that the mandate was constitutional as a tax.

This leads to the political impact of the decision. Roberts' opinion has rewritten the dynamics of the upcoming Presidential election. With Obamacare being declared constitutional as a tax, the face-value victory for the Administration may well cost Obama the White House in November.

The law was already unpopular with many Americans who saw it as an unconstitutional infringement on their rights. A majority of the Court agreed with them, but the salvation of the Affordable Care Act is that it is a Federal tax.

So after the dozens of pages of legal opinion, a one-sentence question: can you imagine the political advantage Mitt Romney and Republicans will try to take from the President being forced to defend that new tax scheme?

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