Why John Roberts Was Wrong About Healthcare

A Conservative Critique of The Supreme Court's Obamacare Ruling

Sen. Mike Lee

• Publisher: Threshold Editions
• Year: 2013
• eBook ISBN: 9781476740546
• Topic: Politics & International Relations
• Subtopic: American Government
• Index: Politics & International Relations

An original ebook from the current US senator to Utah, explaining why Chief Justice Roberts was wrong to disregard the Constitution in making his historic and controversial healthcare decision. During Chief Justice Roberts's first seven terms on the Supreme Court of the United States, he distinguished himself as a fair-minded jurist and a true constitutional scholar—a man seemingly committed to the rule of law and to core constitutional principles. That hard-earned distinction was turned on its head when, on June 28, 2012, the Chief Justice—writing for a five-to-four majority in National Federation of Independent Businesses v. Sebilius —essentially re-wrote key provisions of Obamacare in order to uphold the law, and allow it to be approved, in the face of a justified constitutional challenge. Now United States Senator Mike Lee presents a conservative critique of this controversial ruling, and explains why John Roberts in particular was wrong to vote to preserve the act. In an attempt to be perceived as fair in the mainstream media, Roberts allowed himself to be swayed by outside influences -- influences to which a Supreme Court justice is supposed to be absolutely immune. Not only that, Senator Lee explains, Roberts conceded that much of the Obamacare act was unconstitutional; yet he instructed states simply to ignore those parts, instead of recognizing that those parts made the entire act invalid. A smart, fair and evenhanded argument, Why John Roberts Was Wrong provides a definitive, concise argument against Obamacare.

II. Why the Court Was Wrong to Rewrite the Mandate as a Tax

There is a difference between laws that impose penalties and laws that impose taxes. For decades, the Supreme Court has consistently held that while a penalty is an exaction imposed by statute as punishment for an unlawful act, a tax is an enforced contribution to provide for the support of government. In simpler terms, a penalty is a consequence attached to violating the law, while a tax is imposed without regard to legal wrongdoing.

Thus, when a statute makes something unlawful (breaking the speed limit, for example), any fine attached to breaking that law is a penalty, and not a tax—even though the fine is paid to, and helps fund the operation of, the government. Applying that standard to the plain text of the ACA’s individual mandate provision, there can be little doubt that the fine attached to the mandate is a penalty, and not a tax, because the fine is triggered by failure to comply with the mandate. If it quacks like a duck and has webbed feet like a duck, it probably isn’t a kangaroo.

Here, however, the stakes of calling the mandate a penalty, and not a tax, would be high. In light of the Court’s finding that the mandate could not be sustained under the Commerce Clause, it could be sustained only if the Court found a way to characterize it as a tax. But calling it a tax would—in addition to contradicting time-honored precedent addressing the distinction between taxes and penalties—create another problem. A federal law known as the Anti-Injunction Act prohibits courts from deciding any legal challenge to a tax until the tax in question has been collected. Thus, the Court understood that if it held that the fine attached to the mandate was really a tax, that finding might preclude any court from resolving questions surrounding the mandate’s constitutionality until at least 2014, when the mandate is scheduled to take effect.

In any event, the Court’s own precedents made clear that the fine triggered by failure to comply with the mandate was a penalty, and not a tax. Seven members of the Court reached precisely that conclusion—at least for purposes relevant to the Anti-Injunction Act. Had they reached the opposite conclusion, they would likely have been barred from reviewing the mandate’s constitutionality for another two years. This aspect of the Court’s ruling was unremarkable and unsurprising.

What was remarkable and surprising was the fact that, immediately after finding that the mandate would be enforced through a penalty (and not a tax) in the Anti-Injunction Act context, the Court somehow found that the mandate would, for constitutional purposes, be enforced through a tax. This novel act of verbal gymnastics resulted in the Court’s amending the ACA, completely circumventing the legislative process prescribed by the Constitution. The Supreme Court’s willingness to transform the ACA’s individual mandate into a tax—and thereby save the mandate from an otherwise-inevitable finding that the mandate was unconstitutional—was both stunning and without precedent. Once the Court found that the mandate could not be upheld as a valid exercise of Congress’s power to regulate interstate commerce, it had an obligation to determine whether the mandate could be upheld as an exercise of Congress’s power to tax. The Court’s job was not to ascertain whether Congress could have achieved the same ends by properly invoking its taxing power. Nor was it the Court’s job to make any change to the statute that might be necessary to save it. Rather, the Court’s job was to decide whether what Congress actually enacted was a valid exercise of Congress’s power to tax. In other words, the question was not “whether Congress had the power to frame the [individual mandate] provision as a tax, but whether it did so.” Dissent at 17-18 (emphasis in original).

Importantly, however, Congress did not frame the individual mandate—or the penalty attached to it—as a tax. As Chief Justice Roberts himself acknowledged, “The Act describes the payment as a ‘penalty,’ not a ‘tax.’ ” Slip Op. at 33. He also recognized that “the most straightforward reading of the mandate is that it commands individuals to purchase insurance”—using the word “shall”—and imposes a fine on those who fail to comply with that command. Id. at 31-32 (quoting 26 U.S.C. § 5000A[a]). Under that reading, the fine is a penalty, not a tax. That is why it surprised almost no one when the Court found the fine attached to the mandate to be a “penalty”—and not a “tax”—for purposes relevant to the Anti-Injunction Act. See Slip Op. at 12. In explaining this aspect of its ruling, the Court noted that “Congress’s decision to label this exaction a ‘penalty’ rather than a ‘tax’ is significant because the Affordable Care Act describes many other exactions it creates as ‘taxes.’ ” Slip Op. at 12.

The Court nonetheless went on to explain that a determination that a particular exaction is a penalty (and not a tax) for purposes of the Anti-Injunction Act does not necessarily “control whether [the same] exaction [falls within] within Congress’s constitutional power to tax.” Id. at 33. According to the Court, the “label” Congress attaches to the exaction may be dispositive with respect to the Anti-Injunction Act, but does not determine whether Congress has exercised its taxing power. Id. Under this theory, a provision of law may amount to a tax for some purposes, but not for others. The Court thus refused to proceed based on the commonsense understanding that a provision of law either imposes a tax or doesn’t, and that if it does impose a tax it must do so through statutory language actually enacted by Congress.

The Court likewise declined to adopt the most natural reading of the statutory text. The majority explained that “the question is not whether [reading the exaction as a tax] is the most natural interpretation of the mandate, but only whether it is a ‘fairly possible’ one.” Id. at 32 (quoting Crowell v. Benson, 285 U.S. 22, 62 [1932]). It then concluded that it is “fairly possible” to read the mandate penalty as a tax—even though that is not the most natural reading of the statutory text—in essence because the penalty (1) is not excessive when compared to the cost of complying with the mandate, (2) contains no scienter requirement (it applies even to those who violate the mandate without intending to do so), and (3) “is collected solely by the IRS through the normal means of taxation.” Id. at 35-36.

In summarizing the majority’s analysis, the Chief Justice insisted that the penalty does nothing more than incrementally enhance the tax burden of the noncompliant (uninsured) taxpayer, “leav[ing] [each such] individual with a lawful choice to do or not do a certain act, so long as he is willing to pay a tax levied on that choice.” Id. at 44. Thus, he concluded, it is “fairly possible” to read the mandate as a tax for constitutional purposes—even though the Court had already held that the mandate is not a tax for purposes relevant to the Anti-Injunction Act.

The majority’s decision to treat the individual mandate as a tax is not supported by a “fairly possible” reading of the statutory text. While the majority’s approach correctly identifies what Congress could have done or might have the power to do, the ruling does not fairly describe what Congress actually did in enacting the Affordable Care Act. The Court’s own precedents outlining the penalty-tax distinction, read together with the plain text of the ACA, make that abundantly clear.

Never before had the Court classified as a tax “an exaction described in the legislation itself as a penalty.” Dissent at 20 (emphasis added). Likewise, never before had the Court “classified as a tax an exaction imposed for violation of the law.” Id. The “exaction” triggered by noncompliance with the individual mandate is by all accounts “imposed for violation of the law,” and is characterized as a “penalty” no fewer than eighteen times in the Affordable Care Act itself. Id. at 21. By comparison, not once does the statutory text characterize the same exaction as a “tax.” In these respects, neither precedent nor the relevant statutory text can fairly be read to support the conclusion that the mandate is a valid exercise of Congress’s power to tax.

The dissent acknowledged that the Court might have an obligation to “construe the provision to be a tax rather than a mandate-with-penalty”—especially because such a construction “would render it constitutional rather than unconstitutional”—but only if that reading were “fairly possible.” Dissent at 18 (quoting Crowell v. Benson, 285 U.S. at 62). The dissent further recognized that such a reading is not “fairly permissible” in this instance because the statutory text cannot support it, and the Court “cannot rewrite the statute to be what it is not.” Id.

The majority opinion in NFIB did precisely that—it rewrote the statute to turn what was clearly written as a penalty into a tax. Based on established precedent, a tax “is an enforced contribution to provide for the support of government,” while “a penalty . . . is an exaction imposed by statute as punishment for an unlawful act.” Dissent at 18 (quoting United States v. Reorganized CF&I Fabricators of Utah, Inc., 518 U.S. 213, 224 [1996]). “When an act ‘adopt[s] the criteria of wrongdoing’ and then imposes a monetary penalty as the ‘principal consequence on those who transgress its standard,’ it creates a regulatory penalty, not a tax.” Dissent at 19 (quoting Child Labor Tax Case, 259 U.S. 20, 38 [1922]).

The ACA’s individual mandate provision commands individuals to purchase health insurance, making it illegal to remain uninsured. It then imposes a monetary penalty as the principal consequence for those who transgress its standard. Thus, according to the Supreme Court’s own clear precedent, the mandate provision imposes “a regulatory penalty, not a tax.”

The majority tried to get around this rather glaring defect in its analysis by relying on the Obama administration’s assurance that “if someone chooses to pay [the penalty] rather than obtain health insurance, they have fully complied with the law.” Slip Op. at 37. That assurance, the majority insisted, somehow refutes the notion that the failure to purchase health insurance amounts to an unlawful act on the part of one who pays the penalty. See id.

Here again, the majority disregarded the statutory text, rewriting it in order to uphold the individual mandate as a tax. Significantly, the ACA categorically exempts some individuals from the mandate itself, while exempting others from the penalty. Consequently, some individuals are exempt from the penalty but not exempt from the mandate. Dissent at 21 (discussing §§ 5000A[d], 5000A[e]). If the mandate were a tax, “these two classes of exemption...

Table of contents

• Cover
• Foreword: The Judgment of Solomon
• Introduction: National Federation of Independent Businesses v. Sebilius
• I. The Court’s Ruling
• II. Why the Court Was Wrong to Rewrite the Mandate as a Tax
• III. Why the Supreme Court Was Wrong to Rewrite the ACA’s Medicaid-Expansion Provisions to Save the Rest of the ACA
• IV. What Happened to Chief Justice Roberts?
• V. Where Do We Go from Here?
• Conclusion
• Copyright