Obamacare: What Can One Wish For?

Adam White has a characteristically insightful piece in the Weekly Standard on the Obamacare litigation. After a concise summary of the legal issues and their trajectory in the lower courts, Adam notes that NFIB v. Sebelius “is the latest case in a remarkable string of cases confronting the Roberts Court with an unprecedented assertion of government power, and leaving the Court with the difficult task of how to preserve our constitutional structure.” The earlier cases include Citizens United; the Gitmo cases; and Free Enterprise Fund v. Public Company Accounting Oversight Board (PCAOB) (2009), where the Court held that the congressional creation of an independent agency within another independent agency (the SEC) violated the Constitution. Adam correctly identifies the common thread among these disparate cases:

In each, the government had attempted to ground an unprecedented assertion of power in the letter of old precedents. In each, the change involved a fundamental innovation in the structure of government… And in each, the justices lacked useful rules guiding their decision, leaving them to exercise judgment rooted in more fundamental principles. The Court responded in each case by exercising prudence, drawing a new line in the constitutional sand, and requiring the government to step back to a more limited assertion of power…The Court’s review of the individual mandate poses no less a challenge, and merits no less a response.

It’s entirely possible (though of course not certain) that the Court will follow this course. If so, it would mow down the individual mandate (the “new line in the constitutional sand”), while severing it from the remainder of the statute. That cautious exercise of remedial power (“prudence”) would be in keeping with Free Enterprise Fund, which is most closely analogous to and in fact bears directly on the “severability” question in NFIB v. Sebelius: the Court left the statute—the 2002 Sarbanes-Oxley Act—and even the PCAOB intact. (It merely determined that the President could henceforth remove its members.)

(Small world disclosure: I serve as Chairman of the Competitive Enterprise Institute, which in Free Enterprise Fund served as co-counsel alongside Michael Carvin—as good fortune would have it, now the private plaintiffs’ chief lawyer in the Obamacare cases.)

What would that outcome mean, in real life? It’s hugely important to establish the proposition, and to have the Court affirm the proposition, that there are indeed limits to federal power. The catch is that the “new lines” are all too often incommensurate to the practical task of reining in, let alone rolling back, an out-of-control government and its ever-more monstrous inventions. Sarbanes-Oxley, for all its havoc, has become unrepealable. (As we speak, regulators are torpedoing a modest, bipartisan House Bill that would free small firms from a few of its onerous impositions.)  Likewise, Obamacare would continue its march of destruction even without the mandate.

To avert that outcome, the plaintiffs insist that the mandate is in fact inseverable from the remainder of the statute. Congress, they say, enacted it as a central element of a comprehensive plan to expand and maintain health insurance markets (specifically, to prevent a “death spiral” in private insurance markets, where coverage mandates sans purchase mandate would drive up rates). If the mandate falls, so must the entire act. That argument, however, has failed in the courts below and will fail in the Supreme Court. It is, first, at war with itself:  the more you insist that the mandate is crucial to the regulatory regime, the more it begins to look like a “necessary” and therefore constitutional element of a plan that undoubtedly regulates interstate commerce . It is, second, at war with reality. The individual mandate has no economic function. (To illustrate, some expensive coverage mandates have long gone into effect, while the individual mandate will kick in only in 2014; yet insurance rates have gone sideways. Death, where is thy spiral?) The mandate was “necessary” only for the purpose of bribing the health insurance lobby into the scheme; it is of one piece with the “Cornhusker kickback” and a hundred other bribes and give-aways in this so-called “law.” (Candidate Obama, remember, didn’t want the mandate to begin with; he may yet get his wish.) And, the all-or-nothing position is at war, third, with the Roberts Court’s general approach, described so well in Adam White’s piece.

None of this is to counsel despair. An invalidation of the individual mandate, to repeat, is worth having as a matter of principle and as a marker even if the rest of Obamacare were to survive. The fact that this would be the worst of all outcomes for the health insurance lobby is an independent, utterly compelling reason to wish for it. (If you want to re-limit government, punishing unscrupulous Beltway bandits isn’t a bad start.) But we should recognize that win, were it to materialize, for what it is: a few important inches forward, in a very grim game.