Read My Lips! This Is A Tax, Not A Mandate!

Robert Pear at NYT:

When Congress required most Americans to obtain health insurance or pay a penalty, Democrats denied that they were creating a new tax. But in court, the Obama administration and its allies now defend the requirement as an exercise of the government’s “power to lay and collect taxes.”

And that power, they say, is even more sweeping than the federal power to regulate interstate commerce.

Administration officials say the tax argument is a linchpin of their legal case in defense of the health care overhaul and its individual mandate, now being challenged in court by more than 20 states and several private organizations.

Under the legislation signed by President Obama in March, most Americans will have to maintain “minimum essential coverage” starting in 2014. Many people will be eligible for federal subsidies to help them pay premiums.

In a brief defending the law, the Justice Department says the requirement for people to carry insurance or pay the penalty is “a valid exercise” of Congress’s power to impose taxes.

Legal Insurrection:

There were two important developments recently in the continued unraveling of the Obamacare public relations BS.

First, the Obama administration cemented its legal position that the health care mandate is a tax, which means that Obama is raising taxes on people making less than $250,000 a year contrary to his campaign promise.

Second, the promise that you could keep your doctor is evaporating as health insurers, in a desperate attempt to keep down premiums under the burden of Obamacare requirements, are reformulating their plans by limiting choice of physicians.

Read Obama’s Tax Lips

Read Obama’s lips: I will not raise taxes on anyone making less than $250,000 per year.

Read Obama’s lips: The health care mandate is not a tax, so even though people making less than $250,000 per year have to pay it, I have kept my promise.

Moe Lane at Redstate:

The individual mandate is a tax.  It has always been a tax, denials of the administration to the contrary.  And, as the article makes clear, the administration is now going to enthusiastically call it a tax in order to keep it from being thrown out as blatantly unconstitutional.  You see, the Commerce Clause argument falls down when you put too much pressure on it

Ed Morrissey:

That is exactly what the mandates do — regulate individual behavior in an area where the federal government has no jurisdiction and punish those who don’t exhibit favored choices, in this case buying comprehensive health insurance regardless of whether it makes sense for anyone.  This court will almost certainly take a dim view of the same attempt that the 1922 court struck down as a gross overreach by the government.

Doug Mataconis:

It’s worth noting in this regard that the provisions regarding the health insurance mandate and related penalties are now parts of the Internal Revenue Code, which in and of itself could be a powerful argument to the Court in favor of the mandate being a tax. Most importantly, though, if the Courts do accept the government’s argument that the mandate is actually a tax the legal challenges to health care reform are doomed, because the Courts have given Congress very broad authority under the General Welfare Clause.

Of course, President Obama has potentially opened himself up to a political problem by advancing this argument:

While Congress was working on the health care legislation, Mr. Obama refused to accept the argument that a mandate to buy insurance, enforced by financial penalties, was equivalent to a tax.

“For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase,” the president said last September, in a spirited exchange with George Stephanopoulos on the ABC News program “This Week.”

When Mr. Stephanopoulos said the penalty appeared to fit the dictionary definition of a tax, Mr. Obama replied, “I absolutely reject that notion.”

Defending a proposed bill politically is different from defending it in Court, but, as Bruce McQuain notes, there’s potentially some hypocrisy here:

One has to assume they just plan on overwhelming the Court with as many “viable alternatives” as it takes to get their way.

Well, yea, but that’s sort of the definition of litigating. You put forward as many viable arguments as you can because you never know which one is going to persuade the Court to rule in your favor. Is the President really going to pay a political price for what the Dept. of Justice argues in a legal brief ? Personally, I don’t see it happening.

Personally, I find the idea of stretching the General Welfare Clause this far to be absurd and I think the Supreme Court has been far too deferential to Congressional assertions of power like this one. However, the fact of the matter is that Supreme Court precedent stretching back to the New Deal Era clearly justifies it. Unless the Court is willing to overrule about a century worth of precedent, the tax argument is a very strong one for the government.

Of course, even if the tax argument fails, there’s always the Commerce Clause, and a five year old opinion from Justice Scalia that seems to put a nail in any effort to challenge the law under that provision:

Reporting from Washington – Lawsuits from 14 states challenging the constitutionality of the new national healthcare law face an uphill battle, largely due to a far-reaching Supreme Court ruling in 2005 that upheld federal restrictions on home-grown marijuana in California.

At issue in that case — just like in the upcoming challenges to the healthcare overhaul — was the reach of the federal government’s power.

Conservative Justices Antonin Scalia and Anthony M. Kennedy joined a 6-3 ruling that said Congress could regulate marijuana that was neither bought nor sold on the market but rather grown at home legally for sick patients.

They said the Constitution gave Congress nearly unlimited power to regulate the marketplace as part of its authority “to regulate commerce.”

Even “noneconomic local activity” can come under federal regulation if it is “a necessary part of a more general regulation of interstate commerce,” Scalia wrote.

The decision throws up a significant hurdle for the lawsuit filed last week in federal court by 13 state attorneys — all but one a Republican.

Here’s the relevant section from Scalia’s concurrence in Raich:

The regulation of an intrastate activity may be essential to a comprehensive regulation of interstate commerce even though the intrastate activity does not itself “substantially affect” interstate commerce. Moreover, as the passage from Lopez quoted above suggests, Congress may regulate even noneconomic local activity if that regulation is a necessary part of a more general regulation of interstate commerce. See Lopez, supra, at 561. The relevant question is simply whether the means chosen are “reasonably adapted” to the attainment of a legitimate end under the commerce power. See Darby, supra, at 121.

The analysis is longer than this, obviously, but the principle that Scalia states still stands and, if that principle is applied in the challenges to the health care law, the Attorneys General and are Plaintiffs are going to be in a very tight spot to say the least, because its not hard at all to see what the arguments on the other side will be:

In the healthcare legislation, signed by the president Tuesday, Congress required virtually all Americans to have health insurance beginning in 2014. Those who fail to do so could be assessed a tax penalty of up to $750 per year.

Legislators argued that the “individual mandate” was necessary because it would undercut the insurance market if individuals could just opt out of having health insurance. Freeloaders could wait until they were hurt in an accident or contracted a disease and then demand insurance coverage for their “preexisting condition.”

The court’s ruling in the 2005 case, Gonzales vs. Raich, “is an enormous problem” for those who contend that the healthcare mandate is unconstitutional, said Simon Lazarus, a lawyer for the Washington, D.C.-based National Senior Citizens Law Center.

“It clearly says Congress has vast regulatory authority over interstate commerce,” he said.

Indeed, and they have a conservative Justice to thank for it.

Jonathan Adler:

UPDATE: Speaking of the legal challenges to health care reform, law professor Brad Joondeph of Santa Clara has launched the new ACA Litigation Blog: “A place to find news updates, legal analysis, and all official documents related to the states’ constitutional challenges to the Patient Protection and Affordable Care Act (as amended by the Health Care and Education Reconciliation Act of 2010).”

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