To uphold the individual mandate as an exercise of the taxing power, the majority overlooked the natural meaning of the statutory text.
The Supreme Court’s ObamaCare decision is both a triumph and a tragedy for our constitutional system. On the plus side, as we have long argued in these pages and in the courts, the justices held that Congress’s power to regulate interstate commerce cannot support federal requirements imposed on Americans simply because they exist. The court also ruled that there are limits to Congress’s ability to use federal spending to force the states to adopt its preferred policies.
However, in upholding ObamaCare’s mandate that all Americans buy health insurance as a kind of “tax,” the court itself engaged in a quintessentially legislative activity—redrafting the law’s unambiguous text. The court struck down ObamaCare as enacted by Congress and upheld a new ObamaCare of its own making.
Congress grounded ObamaCare’s individual insurance coverage mandate in its power to regulate interstate commerce, supported by the Constitution’s Necessary and Proper Clause, which permits Congress to make all laws “necessary and proper” for carrying into effect its various enumerated powers. It relied on these constitutional provisions so as to avoid the clear political costs involved in simply raising taxes to create the universal health-care system ObamaCare’s backers really desired.
ObamaCare defenders, in the courts of law and public opinion, have been pressing these points for the last two years, and they lost. A majority of justices ruled that the Commerce Clause, even in conjunction with the Necessary and Proper Clause, cannot support federal regulation of “individuals as such, as opposed to their activities.”
This is a profound and highly significant reaffirmation of the Constitution’s federalist structure, which assigns only limited and enumerated powers to the federal government and reserves the power to enact broad health and welfare regulations to the states. Here, the court clearly rebuked Congress, sending a very clear message: There are judicially enforceable limits to your power.
Equally important, the court also ruled that the federal government cannot use its spending power to coerce the states into adopting federal programs and requirements. As originally enacted, ObamaCare required the states to expand their Medicaid programs so that they would cover those with incomes far above the federal poverty line. This would have shifted untold costs to the states, with the federal government paying these costs only for a limited time. The alternative that states faced was the loss of all federal Medicaid funding. Seven justices ruled that, applied in this manner, the law was unconstitutional and rewrote it to avoid this outcome. As a result, this federal hammer can no longer be used to force the states to support ObamaCare’s Medicaid expansion.
This is significant. Since deciding Steward Machine Co. v. Davis in 1937, the Supreme Court has maintained that the Constitution limits Congress’s power to coerce the States through federal grants, but it has never identified the boundaries between the permissible use of federal funding as a carrot and unconstitutional federal coercion. The ObamaCare decision began to draw those lines, putting real limits on Congress’s ability to use the states as simple administrative units to carry out its will.
On the debit side, the court upheld ObamaCare’s individual mandate as an exercise of the federal taxing power. The law was not passed as a tax, and both the president and ObamaCare’s congressional supporters persistently proclaimed that they were not raising taxes. The court itself was forced to concede that “the statute reads more naturally as a command to buy insurance than as a tax.”
In order to reach its conclusion that the mandate was a tax, and avoid the political fallout of striking down President Obama’s signature achievement in an election year, the court did more than overlook the statutory text’s natural meaning. It ignored congressional enactment of the mandate in a separate provision from any penalty. As Justices Scalia, Kennedy, Thomas and Alito wrote in dissent, “to say that the Individual Mandate merely imposes a tax is not to interpret the statute but to rewrite it.” The perhaps unintended irony of this judicial edit is that politicians who wish to impose this type of mandate in the future will no longer be able to claim that they are not imposing a new tax.
The court’s ObamaCare opinion presents an uncertain legacy. The court reaffirmed and clarified the constitutional limits on Congress’s power to regulate commerce and to spend money. Yet the individual mandate and the law’s Medicaid expansion were upheld through judicial copyediting that the court has always found to be beyond its own constitutional power. The fact that this happened in the context of a hotly contested statute raises questions about the court’s ability to remain immune to political pressures.
Messrs. Rivkin and Casey are lawyers in the Washington, D.C., office of Baker & Hostetler LLP. They pioneered the constitutional arguments against the individual mandate and represented 26 states in challenging ObamaCare before the trial and appellate courts.
A version of this article appeared June 29, 2012, on page A13 in the U.S. edition of The Wall Street Journal, with the headline: The Court Rewrites ObamaCare.