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Deeply Shaken

I saw Howard Dean on Fox News Sunday.  He was saying that it would be a victory for the President if the Supreme Court Justices strike down the individual insurance purchase mandate and uphold the rest of Obamacare.  We've come a long way from when liberal commentators were assuring us that the legal case for Obamacare was a slam dunk.  Now we have Howard Dean pretty much begging the Supreme Court to uphold part of Obamacare and hoping he can spin the partial survival of the law into a political win.  Smugness has been replaced with panic.

The panic is premature.  I take it as a given that only Anthony Kennedy knows how he is going to vote on Obamacare.  And maybe not even he knows.  And even if he thinks he knows, he might change his mind.  I've been rereading Jan Crawford Greenburg's excellent  Supreme Conflict.  The book won't help you predict what Kennedy will do on the mandate, but it might make your confusion better informed.

From the oral arguments, Kennedy clearly seemed to think that the insurance purchase mandate was an unprecedented and fundamental expansion of federal power under the interstate commerce clause.  He was skeptical that the interstate commerce clause gave Congress the power to force citizens to contract with a private company to purchase a particular class of product.  He also seemed skeptical that, if the Supreme Court consented that Congress had this power in matters of health insurance, the power could then be cabined to only health insurance and not cell phones, broccoli, burial insurance, or whatever other product Congress imagined.  Every attempt by the Solicitor General to construct a "limiting principle" was quickly demolished.  This is possibly because neither the Solicitor General, nor the administration he represented, nor the congressional majorities who voted for the law believed that any such limiting principle was necessary.  The result was a group of badly thought out bad faith arguments that collapsed under questioning.  Before liberals get too upset with the Solicitor General, they should remember that he would have fared even worse if he had been more honest and argued something along the lines of "Hell yeah the Congress can mandate that Catholic Charities purchase aborted fetuses by the dozen as a way to reduce premiums for government-mandated abortion insurance.  The Supreme Court said so.  Where?  It was that case with the wheat or the weed, or the national bank.  I dunno."

So what is Kennedy going to do?  I think some of it will come down to Kennedy's self-image.  Greenburg quotes Kennedy as saying "I try to accommodate more of the precedents in a more case-by-case approach than does, say, Nino [Scalia] or Bill Brennan."  I think that Kennedy's self-image has some major reality problems when you look at his votes and opinions on the death penalty and social issues, but it is still his self-image.  If the conservative Supreme Court Justices (and especially the careful and prudent John Roberts) can convince Kennedy that striking down the Obamacare mandate does not mean striking down (even in part) New Deal-era precedents like Wickard, then Kennedy might vote to strike down the mandate. 

On the other hand, Greenburg writes that Kennedy "pays attention to the social and political fallout from the Court's work, and frequently winds up in the middle, looking for that elusive compromise position that will resolve the most divisive either-or cases."  Kennedy must know that, if he votes to strike down the mandate, he will be cursed by center-left dominated institutions to his grave and beyond.  So he might put aside his principles (to the extent he has any or understands those he thinks he has), and try to find a "compromise" that will maximally salvage his reputation with every side and maybe accommodate his principles a little too.  One can imagine Kennedy talking himself into a "compromise" where he votes to uphold the mandate and conservatives get a little eyewash about how Congress only has the power to impose purchase mandates on health insurance - until Obama appoints another Supreme Court Justice.  Heh, heh.

Liberals and conservatives each have plenty of reason to chew antacids until the Supreme Court announces its decision.     
Categories > Politics

Discussions - 9 Comments

Kennedy has made up his mind. They were scheduled to hold the vote this past Friday, so the only thing left is the writing of the opinions. The reasoning behind the decision may change, but the decision is done. Stop worrying about it.

My understanding is that the intial votes are tentative and that the votes can change in the process of assigning and writing opinions. I don't know how common that is, but this would seem to be a case where a change-of-position is quite possible given that the swiing Justice is Kennedy. Greenburg describes something like that happening with Kennedy in a much lower stakes civil rights case. If thought Kennedy was more inner-directed than I think he is, I wouldn't be so worried.

kennedy's vote to overturn federal anti-gun law in Lopez is telling.

Ken, I'm not sure. Lopez works in the situation in that Kennedy recognizes some limits to congressional power derived from the interstate commerce clause. And that's a good thing. But he can tell himself that the gun ban wasn't really about commerce while the health insurance purchase mandate is about commerce.

Say the mandate stands. What is now to prevent the following situation?:

Something becomes deemed critical to healthcare for a somewhat small but very politically influential percentage of the population--say a drug--but the drug cannot be made profitably as it is operating at too small of a scale with too high of an overhead. The users of this product are, once again, extremely influential, politically.

Congress decides that instead of subsidizing the maker of this healthcare product--say that the Chinese economy has collapsed and this time there really is no more money to borrow from there, defense spending is already at 1933-style levels, and the money has to come from somewhere-- Congress instead decides it will simply instruct all American heads of households to buy one box of the drug, at a cost of $350, so as to keep the manufacturer in business. The drug has no benefit for anyone not actually needing it.

If the mandate is upheld, what principal keeps this situation from happening (since I have already said raw political force is on the side of the manufacturer)? And how is the situation not somewhat like that of the monopoly granted the East India Tea Company in the colonies in 1773 (said monopoly granted because the company was having difficult financial times)? And how is it not like making healthy young people get more insurance than a rational economic decision might justify just so as to make the insurance pool big enough and healthy enough to allow for mandates for insurers to take on pre-existing condition applicants?

Going further with the slippery slope argument:

Now, let's say, thay thirty years from now, with above kinds of things left to stand--"because it's HEALTHCARE!, ya idgit...it's just more important....", let's say that there is a shortage of doctors nationwide, or a shortage of doctors in particular inner urban areas.

What is now to prevent an attempt to tell doctors that while they can practice, they can only charge for compensation if they move to, say, Chicago or Detroit, because the market is distorted and needs fixing? Or that college students who were accepted for Harvard Law must now, for the greater good, and if they wish to be eligible for Social Security benefits, must go into med school instead and practice for eight years? After all, we have used the draft and militia arguments, yes? And the military sometomes does, due to critical shortages in certain fields, sometimes make mass assignment decisions--"this year everybody will go helos, and there will be no fighter pilot slots. You just had bad timing...". Why then are both the above scenarios excluded from happening based upon arguments presented last week?

The mandate, in my opinion, violates the spirit of three Bill of Rights amendments. The first two are the Ninth and Tenth, which despite some people's disdain as antiquated are actually, the last time I checked, still part of the Constitution and have not been repealed by the people--and zero indications the people have any intention or desire to do so any time soon. Therefore, they are still operative. Reading these amendments, they, to a logical mind, say that any time there is a genuine debate on an expansion of the Federal government's role, that the Ninth and Tenth are pre-planned dampers, just as in a fluid damper, dampers to stop and/or slow down such expansions--that the assumption should be that when such questions arise, the benefit of the doubt, the finger on the scale, should be given to saying that the people and states retain that right and it has not yet been given to the national level of the Republic--and thus the Federal government cannot do it until given a charter to do so by the people (said authority having to happen before said law based upon that authority can be enacted).

The other amendment the mandate violates in sprit--and in this case utterly shreds--is the Third. The Federal government has the full authority to levy taxes for the purposes of quartering troops. What it cannot do is make the people do it for them, where the Federal government steps aside completely as far as the financial situation goes. No. There has to be a tax if the government wishes the people to support the quartering of troops, and if private property is to be used for such purpose in peacetime, there has to be compensation via eminent domain.

The Federal government, by the Third amendment and the Fifth, simply cannot appropriate private property for public use purposes without just compensation--except via taxes, which if one considers it is a process of eminent domain. But in taxes the government takes ownership of e monies, and even in eminent domain cases where the property is eventually transferred to third properties, there is a period where the government entitiy actually has title to the property in question. It does not tell Citizen X to just sign over the deed to Citizen Y. Especially without compensation. And certainly it does make him pay Citizen Y a profit percentage for the privilege of helping the common good by subordinating himself and giving property to Citizen Y. No. The government has to be the intermediary in these case, so as to preserve the concepts of sovereignty and "majesty", and avoid the government being seen as nothing more than a shake-down artist who has favorites. The mandate violates the spirit of this amendment, and the spirit of the principal that when it comes to property, that at some point the government has to be owner of the property at some point if it is to be taken from citizens and used for public purposes.

Should be "certainly it does not make hom pay Citizen Y a profit percentage"

Two things--first, iPAD screens are tiny. Hard to catch all spelling errors. Apologies.

Second, I hope I have demonstrated that with this mandate, the Federal government is trying to do something novel, and that when it comes to the Federal government doing novel things, there are two amendments speaking to the question. They do not outright forbid, they just say there are other players with their own rights.

And then, once that is established, we must consider that in the Anglo-American legal tradition, rights held by entities or personages outside the central government can in fact trump those held by the central government.

In fact, it is the keystone principle of the Republic. If the King of England cannot enter the broken down cottage, even though wind and rain and snow can, neither can the Federal government. The entire thrust of Anglo-American constituional history since 1688 says the government does not have absolute power. Sovereignty resides in the people.

The Federal government does not have, and never has had, total sovereignty, whose majesty is not to be challenged, able to do as it wills, like a Plantagenent king, say Henry II. Total sovereignty is still held by the people, achieved by them in 1783 (or 1776 or 1781, depending on how one wants to view it), and they have never completely, as a national whole, signed the entire deed over to anyone or thing. They, and not the national government, are still are the owners in fee simple of the beautiful plot of land that is America, and hopefully always will be.

2+4 are correct statements by Pete.

I am suspicious of this Logicus character! But I like the easier hypo's.

Brief Answer to: "Say the mandate stands. What is now to prevent the following situation?"

1) The U.S. is monetarily sovereign. China buys our debt because they don't want to import our products.

So I think congress is more likely to just subsidize the politically powerful manufacturing concern. (in part because I could give you examples where it already does so).

2) The drug manufacturing industry is not characterized by that sort of overhead.

"but the drug cannot be made profitably as it is operating at too small of a scale with too high of an overhead."

The overhead is mostly from the USPTO and the USDA clinical trials, and more extensively the wages and material equipment used by the scientist...It is high R&D.

But the manufacturing of the drug itself does not display that sort of curve. Or economies of scale.

In point of fact large production runs will actually increase the unit cost of the drug. Especially if say certain rare earth elements (China monopoly here) are used in its manufacture. Large production runs of hard to get ingredients, drive up the price of the illiquid market in those imputs. There are economies of scale in production runs, just not any that correspond to that type of political pressure.

On the demand side the U.S. is more likely to pressure Canada or Germany to lift price caps on the drug.

Look Canada and Germany, we know the drug company can manufacture the drug for $5 per box, but there is no way we are going to let you cap the price at $10, so that the american consumer pays the full price of the R&D.

Canada and Germany basically cap american drugs at something close to 2-5x the manufacturing cost. If your hypothetical factual situation was closer to the truth, this would not work for them.

3) The USDA would not allow consumers to buy perscription drugs that are not specifically the result of a medical diagnosis.

4) Personal pet peve: "the money has to come from somewhere." Indeed it does! But lets at least be clear on where the money comes from. Money comes from spending by the federal government.

If you have money that was not created by spending from the federal government, then it is counterfeit. If it is a $100 bill it may have been made in North Korea.

Let's also be clear when the federal government taxes it destroys money.

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