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December 27, 2010

Barnett: It's Not Just About the Individual Mandate

One of the leading lights of conservative jurisprudence, Randy Barnett, has been at the forefront of efforts to see ObamaCare stopped in the courts. He writes in the Wall Street Journal today that stopping ObamaCare is not only about halting Congress' creeping seizure of power under the Commerce Clause; Barnett says that it's also about preventing the federal government from compelling the states to do things that the federal government isn't constitutionally authorized to do alone.

Article I, Section 8 of the Constitution gives Congress the power "to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States." The problem with the Cornhusker Kickback was that the citizens of 49 states would have had to pay for Nebraska's Medicaid exemption—without getting anything in return. The special exemption exceeded Congress's constitutional authority because it did not serve the "general welfare"—meaning, the welfare of the people of each and every state.

This defect is true of the new health law, the Patient Protection and Affordable Care Act. Although the constitutional objections to its individual insurance mandate—the requirement that any person who isn't provided insurance by his employer buy it on his own—have gotten all the public attention, the law also has a "general welfare" problem. It will pile unspecified new costs on states by requiring them to extend their Medicaid coverage to more people. In Florida, 20 states have challenged these state mandates as exceeding Congress's spending power. Their challenge is based on South Dakota v. Dole (1987).

In Dole, the Supreme Court upheld the congressional mandate that every state raise its drinking age to 21, or lose 5% of its highway funding. But the Court also acknowledged that "in some circumstances, the financial inducement offered by Congress might be so coercive as to pass the point at which 'pressure turns into compulsion'" (quoting a 1937 opinion by Justice Benjamin Cardozo). The Court upheld the drinking age mandate because a state would only "lose a relatively small percentage of certain federal highway funds."

ObamaCare won't alter Medicaid in a relatively small way. It's an "all in or all out" proposition—not a threat of losing just 5% of some transportation funds, but a threat of losing 100% of the single largest federal outlay to the states.

The Medicaid mandate/General Welfare Clause argument was not made in some of the other challenges to ObamaCare, which mostly focused on the individual mandate under Commerce Clause and tax arguments. As we saw with the Virginia lawsuit, the judge held that the individual mandate is severable from the rest of ObamaCare, and thus upheld the rest of the healthcare law. I'm sure the severability finding will be upheld on appeal.

But the General Welfare Clause argument applies to much more than just the individual mandate. ObamaCare without the Medicaid mandates is essentially an empty shell. In fact, if the Medicaid mandate portion of ObamaCare were overturned, Congress would immediately have to pass new laws relating to Medicaid, since Obamacare supplanted them.

From a litigators' perspective, this argument of Barnett's is strategically attractive because the Dole restriction, discussed in the WSJ piece, is relatively unfleshed by the courts. This case is absolutely headed for the Supreme Court and justices hesitate to overturn precedent. Dole's very vagueness gives them (ahem, Kennedy) room to maneuver because ObamaCare says 100% of Medicare dollars will be withheld from states that opt out. The justices won't have to decide a sticky question about just how much is too much coercion; it's relatively easy to say that 100% is too much.

Barnett writes over at Volokh Conspiracy that this op-ed explains a point not emphasized in oral argument a few weeks ago in the 20-state case: that if under ObamaCare a state opts out of Medicaid, the federal taxes of its citizens are transfered to other states on a massive, dare I say coercive, level. Be sure to click over for the whole thing.

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posted by Gabriel Malor at 04:26 PM

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