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    Understanding the Health Care Litigation, Part Three

    By The Wizard of Laws, Section News
    Posted on Tue Mar 27, 2012 at 11:02:41 PM EST
    Tags: Clement, health care, medicaid, Obamacare, severability, states, Verrilli (all tags)

    Cross-posted in the Wizard of Laws.

    First, the gloating.

    Yesterday, I wrote:  "Commerce doesn't exist to be regulated until people engage in commerce. The ACA forces people to engage in commerce, then regulates them."

    Today at the Supreme Court, Justice Kennedy asked the Solicitor General: "Can you create commerce order to regulate it?"

    Now, I'm not saying that Justice Kennedy checks out the Wizard of Laws before important arguments, but is it more than a coincidence that his first question to the Solicitor General echoed the Wiz?  Just sayin'.

    Now, to business.

    Today's Arguments

    Not a good day for the Obama administration or its Solicitor General, Donald Verrilli.  He was questioned relentlessly by the Justices -- especially Kennedy, Alito, and Scalia -- on the implications of the administration position that the individual mandate was founded on the Commerce Clause.

    Here are three beautiful statements by Justice Scalia:

    The argument here is that this also is -- may be necessary, but it's not proper, because it violates an equally evident principle in the Constitution, which is that the Federal Government is not supposed to be a government that has all powers; that it's supposed to be a government of limited powers. And that's what all this questioning has been about. What -- what is left? If the government can do this, what -- what else can it not do?
    An equally evident constitutional principle is the principle that the Federal Government is a government of enumerated powers and that the vast majority of powers remain in the States and do not belong to the Federal Government.
    I mean, the Tenth Amendment says the powers not given to the Federal Government are reserved, not just to the States, but to the States and the people. And the argument here is that the people were left to decide whether they want to buy insurance or not.

    Verrilli had a difficult time, but as flustered as he got, Paul Clement, arguing for the 26 states challenging Obamacare, was that composed and cool under fire.  Here's an example from an exchange between Clement and Justice Breyer, who, as part of a question that ran two pages in the transcript, inquired whether Congress had the power to create commerce, based on the fact that Congress created a national bank, which was approved by the Supreme Court in the 1819 McCulloch v Maryland decision.  Clement replied coolly:

    MR. CLEMENT: Well, Justice Breyer, let me start at the beginning of your question with McCulloch.  McCulloch was not a commerce power case.

    JUSTICE BREYER: It was both?  

    MR. CLEMENT: No, the bank was not justified and the corporation was not justified as an exercise of commerce power. So that is not a case that says that it's okay to conjure up the bank as an exercise of the commerce power.

    That's pretty much the way the day went -- Verrilli struggling and Clement in command.  As most appellate lawyers will tell you, it's risky to predict outcomes based on questions during oral argument, but it's difficult to see this as anything other than a good day for Obamacare opponents.

    Wednesday's Arguments on Severability and Medicaid

    Read about severability here.  If the lower court decisions on severability were laid end to end, they would point in all directions.  Still, it's hard to imagine that this bill would have passed without the individual mandate, so if the mandate is declared unconstitutional, there is no logical reason the rest of the bill should survive.

    The other issue is Obamacare's Medicaid expansion.  As described by the 26 states challenging the law:

    Title II of the ACA expands the Medicaid program in multiple respects and transforms it from a cooperative program addressed to specific categories of the most needy into a mandatory program designed to fulfill the individual mandate for the entire non-elderly population with income below 138% of the federal poverty line. Whereas States traditionally were required to offer Medicaid only to those low-income individuals who fell within certain
    "categorically needy" groups (families with dependent children, elderly, blind, disabled, children, and pregnant women), and retained significant flexibility to determine whether and to what extent to cover other low-income individuals, the Act requires States to cover all individuals under age 65 with incomes up to 133% of the poverty level, with a 5% "income disregard" provision that effectively raises that threshold to 138%.

    Congress could not require the states to implement and expand these programs through direct legislation, however, so it is attempting to accomplish it through the "spending power."  Congress has conditioned the receipt of all federal monies on state compliance with the new Medicaid provisions, thus effectively coercing state compliance by a kind of blackmail.  As the 26 states put it:

    The ACA threatens States with the loss of every penny of federal funding under the single largest grant-in-aid program in existence--literally billions of dollars each year--if they do not capitulate to Congress' steep new demands. There is no plausible argument that a State could afford to turn down such a massive federal inducement, particularly when doing so would mean assuming the full burden of covering its neediest residents' medical costs, even as billions of federal tax dollars extracted from the State's residents would continue to fill federal coffers to fund Medicaid in the other 49 States.

    Ultimately, I think the Court may end up not deciding the Medicaid question at all.  If the Court finds the individual mandate unconstitutional and determines that it is not severable, the entire act, including the Medicaid provisions, crumbles.  At that point, the Medicaid issue is moot and can be reserved for another day.

    Another fascinatiing day coming up on Wednesday, with severability being the big issue of the day.

    < Understanding the Health Care Litigation, Part Two | As Michigan Gas Prices Jump Stabenow Blames President? >

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    Federalist No. 45 addresses this nicely. (none / 0) (#1)
    by KG One on Wed Mar 28, 2012 at 01:19:49 AM EST
    With all of the hand-wringing over what the Constitution does and does not mean, along with that "negative liberty" bunk, it amazes me that the overwhelming majority fail to look at the source material, namely the guy who wrote it in the first place for the final answer.

    "The powers delegated by the proposed Constitution to the federal government, are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State."

    And people wonder why this isn't taught to kids in school (along with current members of the Michigan Legislature) nowadays?

    I'm looking forward to hearing the audio from later today.

    Things aren't looking very good for the individual mandate, and given that pesky detail you pointed out about Obamacare not containing a severability clause, I see the rest of Obamacare coming down like a house of cards later this year.

    Again Thank You (none / 0) (#2)
    by grannynanny on Wed Mar 28, 2012 at 08:47:53 AM EST
    for your legal insight into this.  I have been following and reading the transcripts.  It has been eye opening.  One comment that a blogger made that is sticking with me:  Nancy Pelosi must be crapping her pants because the solicitor general who is arguing for the government is actually showing us what is in the bill and how it affects a government take over of our freedoms.

    In reading the transcripts I am finding that Vermelli sounds a lot like the lawyer in the movie My Cousin Vinny.  

    If Obama is such a smart Harvard educated lawyer and supposedly taught constitutional law, why is he not before the SC arguing for this?  

    • You asked by JGillman, 03/28/2012 09:25:00 AM EST (none / 0)
      • The problem by grannynanny, 03/28/2012 10:53:41 AM EST (none / 0)
    One has to understand the the individual mandate (none / 0) (#5)
    by Bruce on Wed Mar 28, 2012 at 11:29:36 AM EST
    is subterfuge.  It is a means to an end... the end of private insurance due to the elimination of pre-existing condition restrictions which allow people to pay a small penalty [relative to the cost of insurance] and then obtain insurance once they become seriously ill.

    The penalty for ignoring the mandate: Impose an annual penalty of $95, or up to 1% of income, whichever is greater, on individuals who do not secure insurance; this will rise to $695, or 2.5% of income, by 2016. This is an individual limit; families have a limit of $2,085.

    The average annual cost of health insurance: Average Annual Premiums for Family Health Benefits Top $15,000 in 2011

    $2,085 vs. $15,000... and I can obtain the insurance when I need it? Hard choice.  Let's take the mandate and scam the system.  We'll screw the responsible people and the insurance companies.
    That's the real argument for the individual mandate.

    That, of course, is the ultimate goal of Obamacare.  Force private insurance companies out of business and make the government the sole provider.  Then replace the penalty for non-participation with a significant general tax increase to cover the cost of government provided and administered health care.

    • Bingo. AND by JGillman, 03/28/2012 12:01:25 PM EST (none / 0)
    Hope our (none / 0) (#7)
    by grannynanny on Wed Mar 28, 2012 at 06:55:05 PM EST
    Supreme Court sees thru the merits of this case and rules for the American people.  It was very interesting and educational to hear and read the merits of the case.  Biggest decision in many years and I hope the justices see this for what it is and strike it all down.  

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