The Supreme Court & Obamacare

[Jacob]

The liberal justices keep raising Social Security as a supporting argument for mandated activity and neither of the no guys is doing a very good job of knocking it down.

Payments into the Social Security system are taxes, though (even if the law was crafted to make it look like they aren't), and only a few nuts question the power of the government to levy taxes, at least post-Sixteenth Amendment.

How are payments into the Health Security system different, such that they are not taxes?

[Jacob]

Striking down only the mandate would be the worst of all possible worlds, wouldn't it? Would Congress/the President have the balls to repeal the popular elements (like prohibiting discrimination against those with preexisting conditions) that the mandate was meant to finance?

Alternately, could they fund it with some sort of tax?

[Kleves]

Alternately, could they fund it with some sort of tax?

With this Congress? In an election year? I don't think so.

[Jacob]

With this Congress? In an election year? I don't think so.

... but maybe after the election (assuming an appropriate set of majorities, which is probably a bit assumption)?

Though that, of course, raises the question of how they'll get to the end of the year.

[Sheilbh]

Claro, which is why I was puzzled by the inability of shysters to make that argument.

Yesterday's argument dealt with whether it was a tax or not.  If it was a tax, under the Anti-Injunction Act, the Court can't rule on it until it's come into force (2015 at the earliest).  The Administration said the penalty isn't intended as a tax under the AIA, the challengers say it's a 'penalty' not a tax and it's not that they're challenging, but the mandate itself and the AIA only applies to individuals not to states.  The Court appointed a lawyer to argue that they shouldn't rule on a constitutional matter until compelled to do so, so after a tax has been levied.

[Admiral Yi]

How are payments into the Health Security system different, such that they are not taxes?

It appears that if taxes are only levied on a subset of the population then they are a "direct tax" and therefore verbotten.

[Jacob]

How are payments into the Health Security system different, such that they are not taxes?

It appears that if taxes are only levied on a subset of the population then they are a "direct tax" and therefore verbotten.

I see.

Heh... I kind of think it a thing of beauty if the mandates got struck down and then Obama went with "alright, fine. No mandates. The government will pay the premiums, and here's a corresponding tax increase."

Of course, he probably won't be able to pull that off even if he wanted to.

(By the way, I agree... the transcript is interesting reading for sure).

[Neil]

I question the legitimacy of the 28th Congress.

The 1st Congress and all the other ones were illegitimate.

[dps]

How are payments into the Health Security system different, such that they are not taxes?

It appears that if taxes are only levied on a subset of the population then they are a "direct tax" and therefore verbotten.

No, that's not it.  Payments into the Social Security system are paid to the government, just like any other tax.  Payments for health care premiums under would still be to private insurance companies for most people. 

Now, the government in most US states does require you to purchase auto insurance in order to operate a motor vehicle, so that's a precedent of a sort, but there are a couple of differences.  First, the states have a general police power that the federal government in theory isn't supposed to have.  Second, you aren't legally required to own or operate an automobile, so if you don't want to buy auto insurance, you can legally avoid doing so by not owning or driving a car.  It the court upholds the individual mandate, there'd be no way you could avoid either buying health insurance or paying a penalty.  It would be almost as if the states not only required you to have auto insurance, but also required you to buy a car.

[Admiral Yi]

No, that's not it.  Payments into the Social Security system are paid to the government, just like any other tax.  Payments for health care premiums under would still be to private insurance companies for most people. 

I was talking about the fine, not the premium.

[dps]

No, that's not it.  Payments into the Social Security system are paid to the government, just like any other tax.  Payments for health care premiums under would still be to private insurance companies for most people. 

I was talking about the fine, not the premium.

Fine, but I think Jacob was asking about the premiums.

[Jacob]

Yeah, I was.

What's the penalty for not paying your Social Security premiums?

[Admiral Yi]

Yeah, I was.

What's the penalty for not paying your Social Security premiums?

Same as any other kind of tax avoidance I would guess.

[Sheilbh]

Is this my bias or does the transcript show Verrilli making a hash of things?

That seems to be the press and liberals verdict on it.  On the other hand, from SCOTUS Blog, there's this:

A tale of two great arguments
Having now had a chance to take a breath from thinking about the substance, I wanted to step back and comment on the advocates.  I really only heard a couple of minutes of Michael Carvin's argument, but I was there for almost the entirety of Don Verrilli's and Paul Clement's.  Paul told me that Don was terrific, and I'm sure Don would say the reverse. I certainly think that both were tremendous.  We'll have the consolidated version of the argument tape up soon, but I thought I'd give a couple of examples now.

General Verrilli had one stumble out of the gate as he had to get a drink of water and then restart, but immediately got his footing.  I thought all of his answers were clear and straight to the point.  The most impressive thing about it is that – even if the Government wins – it had the much harder case to argue.  The plaintiffs have very clear, bumper sticker points.  The Government has to answer a lot of very difficult hypotheticals.  The Solicitor General has the especially hard job of defending not just this statute but Congress's prerogative to enact almost any law in the future.  And finally the Court's more conservative Justices are on the whole more effective questioners than the left.

But none of those phased Verrilli, who brought to the argument his status as really one of the small handful of lawyers the Justices genuinely trust after decades of hearing him argue.  For example, Verrilli stood his ground against the plaintiff's efforts to recharacterize the mandate.  Responding to Justice Kennedy, he immediately disavowed any power to "create commerce," explaining that the government's position was that the financing of health care "is economic activity with substantial effects on interstate commerce."  Tr. 5.  In a point that the Chief Justice later cited, he focused on the fact that "virtually everybody" is "either in that market or will be in that market and the distinguishing feature is that they cannot – people cannot generally control when they enter that market or what they need when they enter that market."  Id.

Under sustained fire from the Court's conservatives, Verrilli also kept at the theme that the plaintiffs had conceded the government could impose a mandate at the time an individual receives health care, so that the mandate merely raises a question of timing.  And Verrilli carefully planted the seeds several times – including in his rebuttal – for one or more Justices to rule in the government's favor under the taxing power.  It was a tremendous argument.

As good as Don Verrilli was, Paul Clement was even better.  It was the best argument I've ever heard.  Paul had a bunch of natural advantages that I mention above.  But even without that, he was extraordinary.  His ability to parry difficult questions and press forward the heart of his argument was astonishing.

Clement succinctly made the point that the mandate is not just about timing because it applies to many people each year "who don't want to purchase health insurance and also have no plans of using health care services in the near term."  Tr. 56.  When Justice Kennedy – obviously a critical vote – articulated the government's argument that individuals who do not purchase health care have a significant effect on the market as a result, Clement effectively countered (in a point that Kennedy later repeated) that one of the things Congress sought to do "was to force individuals into the insurance market to subsidize those that are already in it to lower the rates."  Tr. 57.  And throughout, Clement articulately pressed the government's weakest point – it's inability to identify a clear limiting principle on its reading of the Commerce Clause.

I commend the entire argument to anyone who is interested in great oral advocacy.

This analysis, which I found interesting, says he was generally good but not as clear or crisp as he should have been on one key point:
http://www.scotusblog.com/2012/03/argument-recap-it-is-kennedys-call/

[Admiral Yi]

I thought Verrili could have done a much better job of articulating his nascent "regulation of inevitable future commerce" argument.