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Obamacare Is Going Down

November 18, 2014

As we saw, the 11th Circuit U.S. Court of Appeals became the first federal appellate court to find the Obamacare individual mandate unconstitutional last Friday. I filed briefs in that case on behalf of the American Civil Rights Union urging that result. More important than the ruling is what the trend is showing. For all that matters in the end is what five Justices on the Supreme Court say.

One of the two judges voting to strike down the Obamacare mandate is Frank Hull, a Clinton appointee. She now joins her 11th Circuit colleague Judge Joel Dubina, appointed by Bush I, District Court Judge Henry Hudson, appointed by Bush II, and District Court Judge Roger Vinson, appointed by Reagan, in producing thorough, compelling opinions all agreeing that the Obamacare mandate violates the Constitution.

Commerce Clause Abuse

The Congress only has the powers specifically enumerated and granted to it in the Constitution. One of those is in Article I, Section 8, Clause 3, the Commerce Clause, which grants Congress the power “To regulate commerce… among the several states.”

As James Madison explained in The Federalist Papers, that power was granted in the Constitution because under the prior Articles of Confederation the various states started adopting protectionist measures against each other, disabling the national economy. Congress was actually granted the Commerce Clause power to put an end to this interstate protectionism and allow the emergence of a national economy, not primarily to grant Congress its own powers of interstate regulation (let alone the vast, unlimited powers claimed today). Madison wrote that the Commerce Clause “grew out of the abuse of the power by the importing States in taxing the non-importing, and was intended as a negative and preventive provision against injustice among the States themselves, rather than as a power to be used for the positive purposes of the General Government, in which alone, however, the remedial power could be lodged.” (The Founder’s Constitution, Vol. 2, Art. I, Section 8, Clause 3 (Commerce).)

But, of course, the clause was turned around long ago to justify federal regulation, now claimed by President Obama and the Democrats to do so without limit. The question presented in the Obamacare cases is whether there is still any limit.

In State of Florida v. Department of Health and Human Services last Friday, federal appellate Judges Hull and Dubina joined Judges Hudson and Vinson in saying there definitely is such a limit. Hull and Dubina wrote, “The Supreme Court has staunchly maintained that the commerce power contains outer limits which are necessary to preserve the federal-state balance in the Constitution.” They explained:

    The Supreme Court has placed two broad limitations on congressional power under the Commerce Clause. First, Congress’s regulation must accommodate the Constitution’s federalist structure and preserve “a distinction between what is truly national and what is truly local.” Id. at 567–68, 115 S. Ct. at 1634. Second, the Court has repeatedly warned that courts may not interpret the Commerce Clause in a way that would grant to Congress a general police power.

The police power is general government power to regulate conduct and preserve public order in service to the general welfare, morals, health, and safety of citizens. This power is not delegated to the federal government under the Constitution, but is retained by the states, limited only by the Bill of Rights and the extent to which they apply to the states.

The Judges continued:

    Properly formulated, we perceive the question before us to be whether the federal government can issue a mandate that Americans purchase and maintain health insurance from a private company for the entirety of their lives. These types of purchasing decisions are legion. Every day, Americans decide what products to buy, where to invest or save, and how to pay for future contingencies such as their retirement, their children’s education, and their health care. The government contends that embedded in the Commerce Clause is the power to override these ordinary decisions and redirect those funds to other purposes.

    Under this theory, because Americans have money to spend and must inevitably make decisions on where to spend it, the Commerce Clause gives Congress the power to direct and compel an individual’s spending in order to further its overarching regulatory goals, such as reducing the number of uninsureds and the amount of uncompensated health care.

The Judges rejected such a reading of the Commerce Clause, saying “the Supreme Court has always described the commerce power as operating on already existing or ongoing activity.” All prior cases “involved attempts by Congress to regulate preexisting, freely chosen classes of activities.” Not buying health insurance is not an already existing or ongoing activity, or a preexisting class of activity, the Judges concluded.

The Judges found the government power exercised in the individual mandate to be so unprecedented that the government could not cite a single precedent upholding it, in their briefs or in oral argument. Nor could the Judges find one. Hull and Dubina wrote:

    Even in the face of a Great Depression, a World War, a Cold War, recessions, oil shocks, inflation, and unemployment, Congress never sought to require purchase of wheat or war bonds, force a higher savings rate or greater consumption of American goods, or require every American to purchase a more fuel efficient vehicle.

Finding Obamacare constitutional would be a precedent for precisely those horrible results.

The Judges concluded, “The government’s position amounts to an argument that the mere fact of an individual’s existence substantially affects interstate commerce, and therefore Congress may regulate them at every point of their life. This theory affords no limiting principles in which to confine Congress’s enumerated power.”

The bottom line takeaway from this decision is that if this is how Judges Hull, Dubina, Hudson, and Vinson, appointed by Presidents Clinton, Bush I, Bush II, and Reagan view the Commerce Clause analysis of the Obamacare individual mandate, then this is how Justices Scalia, Thomas, Kennedy, Alito and Roberts are going to view it also. That is based not primarily on who appointed these Justices, but on a long reading of their opinions, and a career of filing briefs in cases before the Court. What we have seen from these four judges so far is going to be persuasive at least to these five Supreme Court Justices. At this point, the vote of Clinton-appointed Justice Stephen Breyer is more in play than the vote of any of the above five.

Challenging the Death Panel

Also working its way through the courts is another Obamacare challenge brought by the Goldwater Institute in Arizona that not only challenges the individual mandate, but also challenges the constitutionality of the Medicare Independent Payment Advisory Board (IPAB) also adopted by Obamacare.

That board will be composed of 15 unelected bureaucrats with the power to cut payments to doctors and hospitals under Medicare to keep the program within specified spending targets. Though its backers deny it, IPAB was designed to be a federal rationing authority analogous to the National Institute for Clinical Excellence (NICE), which decides who can live or who can die under British socialized medicine. The IPAB merely needs to severely cut, or deny altogether, payments for treatments it decides are not in the public interest, regardless of what you or your doctors think.

That should be unconstitutional on many grounds. But what the Goldwater Institute has focused on is the isolation of the board from democratic, executive or judicial accountability.

The rulings of this board will automatically go into effect unless two-thirds of Congress overrides them with Medicare cuts of its own of equal magnitude. The Obamacare law provides that the decisions of the board cannot be challenged in the courts. And the board is even shielded from executive oversight.

As Galen Institute President Grace-Marie Turner has written:

    The decisions of this unelected, stand-alone board will be virtually untouchable by Congress or the courts. Unless Congress can muster super-majority votes to come up with its own cuts to reach the same targets, the board’s dictates will carry the force of law. No judicial review of the IPAB’s decision is allowed — a highly controversial rule that is contrary to the constitution’s system of checks and balances in government.

As a result, Turner explains, Obamacare not only “takes $575 billion out of Medicare — starting now — to create two shockingly expensive new entitlement programs,” it also “creates the all-powerful IPAB whose rulings will quickly dry up access to care for seniors.” Yet, “President Obama wants to double-down on IPAB’s powers, giving the board authority to cut payments to doctors even more deeply and giving the board power to ‘sequester’ congressional appropriations if Congress tries to overrule its cuts.” That unrealistic, draconian, undemocratic power was one of the hot ideas proposed by President Obama in his April 13 budget speech where he tried to pose as a serious deficit hawk. Almost no one knew what he was talking about.

The Goldwater Institute argument is strongly supported by a 2010 Supreme Court ruling in Free Enterprise Fund v. Public Company Accounting Oversight Board. The board in that case had authority to administer the Sarbanes-Oxley law, with similar though less extreme exemptions from congressional, executive and judicial oversight. The Court found that board to involve an unconstitutional delegation of authority in violation of the Constitution’s separation of powers doctrine. In my opinion, the same result is likely for the IPAB.

James Stockdale, executive director of the Reagan/Bush 1980 campaign, and political director of the Reagan PAC Citizens for the Republic in 1977-78, wrote recently that the Obamacare struggle is “a battle between Obama and his socialist coalition and the American people. The people must win or we have lost our individual freedom.” That is an appropriate conception for the entire 2012 election campaign.

Peter Ferrara is Senior Fellow at the Carleson Center for Public Policy, Director of Entitlement and Budget Policy for the Heartland Institute, and General Counsel of the American Civil Rights Union.



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