Obamacare Is Unconstitutional, But The Texas Judge Was Wrong To Strike It Down

Obamacare Is Unconstitutional, But The Texas Judge Was Wrong To Strike It Down

Obamacare is probably the worst piece of legislation in American history, but this judge’s decision was based on a weak legal argument and will almost certainly be overturned.
Michael Autery
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On December 14, District Court Judge Reed O’Connor ruled that the Affordable Care Act (ACA) is unconstitutional. Earlier this year, some 20 conservative state attorneys general sued in federal court arguing that since the tax law that passed last year reset the individual mandate penalty to zero, it’s no longer a tax.

When the Supreme Court weighed in on Obamacare for the first time in 2012, they ruled that the individual mandate was constitutional, but only as a tax. So if it’s no longer a tax now because it raises no revenue, it’s no longer constitutional.

That’s fair enough, but the problem with the ruling is the next argument. The states’ attorneys general claimed that the rest of Obamacare must also be unconstitutional because the rest of the law cannot be “severed” from the individual mandate. Judge O’Connor agreed. Obamacare is probably the worst piece of legislation in American history, but this judge’s decision was based on a weak legal argument and will almost certainly be overturned.

The first argument actually does make sense: in National Federation of Independent Business (NFIB) v. Sebelius in 2012, Chief Justice John Roberts, writing for the 5-4 majority, only upheld the mandate by essentially rewriting the law to reinterpret the penalty for noncompliance as a tax under the general welfare clause.

Is the Mandate Still a Tax?

The key point in the question of whether the mandate is still a tax if the penalty is zero comes from Roberts’ definition of a tax. His most useful assertion for the current case is this: “the essential feature of any tax: it produces at least some revenue for the Government.”

Last December, Congress passed a tax bill in which the mandate itself remains, but the penalty for noncompliance is now zero. Since the penalty no longer produces any revenue for the government, it is no longer a tax as Roberts defined it in 2012, thus eliminating the entire justification for the constitutionality of the individual mandate. This makes perfect sense, and the Supreme Court should uphold this part of the district court ruling based on the court’s own precedent.

The second, and more important, argument doesn’t make sense, though. The legal reasoning that takes you from the idea that the individual mandate is unconstitutional if the penalty is zero to the conclusion that the whole ACA is unconstitutional stems from a technicality known as “severability.” Judge O’Connor basically argues that the individual mandate is “essential,” and that Congress and President Obama never intended for the rest of Obamacare to exist without it. He concluded:

Because rewriting the ACA without its ‘essential’ feature is beyond the power of an Article III court, the Court thus adheres to Congress’s textually expressed intent and binding Supreme Court precedent to find the Individual Mandate is inseverable from the ACA’s remaining provisions.

Now on its face, that sounds pretty good, but the problem is, he’s talking about the wrong Congress. He’s right about the intent of the 2010 Congress and Obama, but that doesn’t matter anymore. Law professor––and strong critic of Obamacare––Jonathan Adler encapsulated this point perfectly over at Reason. He said:

The cornerstone of severability doctrine is congressional intent…a court must offer its best guess on what Congress would have wanted for the rest of the statute if a single provision is rendered unenforceable. But this guessing-game inquiry does not come into play where…Congress itself…eliminated the provision in question and left the rest of a statute standing. In such cases, congressional intent is clear…a court’s substitution of its own judgment for that of Congress would…violate basic black-letter principles of severability.

No Guessing Needed

In other words, the courts don’t have to guess what Congress meant in December 2017 when they passed the tax law; it’s obvious. They threw out the tax penalty but left the rest of Obamacare intact. They obviously believed the ACA could stand without the individual mandate.

It is clear that the 2010 Congress believed the individual mandate was essential, as Judge O’Connor says, but it’s nonsense to contend that under the new Congress, the individual mandate can be both completely ineffectual and “essential” at the same time. Thus, O’Connor’s ruling was just judicial activism and political hackery.

The Supreme Court is more conservative now, but in 2012, it was Chief Justice Roberts (a conservative), who joined with four liberal justices to save Obamacare. He’s still on the court with four liberals, so the same judges would very likely overrule the severability ruling if the Fifth Circuit doesn’t do it first.

Despite this erroneous ruling, Obamacare is still unconstitutional and always has been. The constitutional problem with Obamacare comes from Roberts’ assertion in the 2012 case that just because a provision is a tax, that makes it constitutional under the general welfare clause. The clause states: “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States.”

James Madison’s take was this: “With respect to the words ‘General welfare’ I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense, would be a metamorphosis of the Constitution into a character, which…was not contemplated by its Creators.”

In other words, Congress can tax and spend money to exercise the powers listed in the rest of Article I, Section 8 and the “general welfare” part simply explains why they can spend, not what they can spend on. Alexander Hamilton’s take was this:

“the power to raise money is plenary and indefinite; and the objects to which it may be appropriated are no less comprehensive…The phrase (general welfare)…necessarily embraces a vast variety of particulars, which are susceptible neither of specification nor of definition.”

Basically he’s saying Congress can raise and spend money to do anything it wants.

Alexander Hamilton Was Wrong

These have the two opposing views on the tax and spend power of Congress since the days of the Washington administration. This is very in-depth debate, but long story short, Madison is right and Hamilton is wrong, and here are a couple of quick reasons:

1) Madison’s point is never addressed by any advocate of the Hamiltonian view. He points out that if Hamilton is right, what would be the point of carefully listing all the powers granted to Congress in the rest of Article I, Section 8, since this one unqualified and unlimited superpower would include all of those powers plus infinitely more?

2) Hamilton himself argued the Madisonian view in Federalist 83, three years before his “Report on Manufactures” I just quoted. Here he said, “…the convention declares that the power of Congress…shall extend to certain enumerated cases. This specification of particulars evidently excludes all pretension to a general legislative authority, because an affirmative grant of special powers would be absurd, as well as useless, if a general authority was intended.” This is exactly Madison’s point––Hamilton only changed his tune later when he was Treasury secretary and trying to pass his pet projects.

The Hamiltonian view was rejected from the very beginning and the Madisonian view prevailed until about the Civil War. After that, there was a gradual shift towards Hamilton’s view. But in the New Deal cases, starting with United States v. Butler in 1936, the Supreme Court gave its unqualified endorsement to Hamilton’s views on the taxing power of Congress, and it’s been that way ever since. Also, the court disavowed any role for judicial review of congressional spending policies and supported the right of the Congress to interpret the “general welfare” however it wants.

Congressional Free Reign

So, for more than 80 years, Congress has enjoyed unlimited tax and spend power and free reign to define “general welfare” however is most useful. So when the Supreme Court ruled on the Obamacare’s individual mandate in 2012, all they had to do was say the magic word: “tax.”

It’s a semantic loophole. If we call it a tax, it falls under the general welfare clause, and since there had been no recognized limits on general welfare for 76 years up to that point, there were no arguments to be made for narrowing Congress’s tax-and-spend authority.

The Butler decision in 1936 was a political decision based on the politically convenient (but obviously incorrect) Hamiltonian interpretation of the general welfare clause, and the 2012 Obamacare case was based on the same logic. So one incorrect Supreme Court decision led to 76 years of more incorrect decisions and eventually led the incorrect Obamacare decision of 2012.

It’s all nonsense. Just because something is a tax, doesn’t mean it’s constitutional––Congress can only raise and collect taxes to carry out its powers explicitly enumerated in the Constitution. Congress was granted no authority in the Constitution to compel citizens to purchase a product. Tax or not, Obamacare’s individual mandate is unconstitutional. Full stop.

The views expressed here belong to the author and do not necessarily represent the official policy or position of the Department of Defense, Department of the Navy, or the U.S. government.

Michael Autery is an active duty United States Naval officer and host of a political podcast called Unalienable in which looks at current political issues through the lens of the Constitution. He has been in the Navy for nine years. You can find him on Twitter: @MichaelAutery.

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