All is Fair Game

Supreme Court Running Out of Time
June 12th, 2012 1:11 PM

If the Supreme Court does decide to strike down any or all of the Affordable Health Care Act, the implications will range from the political to the medical to the economic.

For me, such a decision will take its place among the more supremely ironic of unintended consequences: a law designed to avoid greater government intrusion into health care will have been invalidated as an unconstitutional overreach of government power, while a far more intrusive approach would have clearly passed muster.

How could this be possible? Welcome to the wonderful world of constitutional interpretation.

Let’s begin by imagining that Congress and the president decided to adopt a genuinely radical health care plan—the kind in place in most of the industrialized world. They decide on a “single-payer” system, where the government raises revenue with taxes, and pays the doctor, hospital and lab bills for just about everyone.

Put aside the question of whether this is a good idea, or an economically sustainable notion. The question is: would such a law be constitutional?

The answer, unquestionably, is “yes.” In fact, it would be the simplest law in the world to enact. All the Congress would need to do is to take the Medicare law and strike out the words “over 65.” Why is it constitutional? For the same reason Medicare and Social Security are: the taxing power. Its reach is immense. During World War II, the maximum income tax rate was 91 per cent (it was paid by few, thanks to loopholes, but still). The same Congress that could abolish the estate tax could set just about whatever limit it chose; it could impose a 100 percent tax on estates over, say, $5 million. If it decided that a national sales tax was an answer to huge budget deficits, it could impose one at whatever level it chose.

(The remedy, of course, lies with the voters, who would be more than likely to send a powerful message at the next election, which is why the lack of constitutional limits on the taxing power do not lead to confiscatory rates.)

[Related: Romney pushed for individual mandate in Mass.]

So why is Obama’s health care plan, with a far more modest use of government power, in serious jeopardy? It’s because the key element in the plan—the “mandate” to purchase health insurance or pay a penalty—was not based on the taxing power, but on Congress’s power, under Article I, Section 8, to regulate interstate commerce. And that power, while broad, has its limits...even if those limits are murky.

Up until the late 1930s, those limits were more like shackles. The Supreme Court repeatedly struck down sate and federal laws regulating wages, hours and working conditions on the grounds that the commerce power only touched the distribution of goods, not their manufacture. But once the court changed its mind—after an effort by FDR to “pack” the court with additional justices had failed—there seemed to be no limits at all. Back in 1942, the court said the government could stop a farmer from growing his own wheat for his own use, because of the potential effects on the wider market. But in 1995, for the first time in decades, the court said “no” to a federal law based on the Commerce clause—one banning firearms within school zones—because it could find no reasonable connection between the law and interstate commerce.

[Related: Biggest insurer to keep parts of health law, regardless of ruling]

In the health care case, the questioning by several justices indicated strong skepticism about the mandate. If the commerce clause can compel a citizen to buy a specific product—in this case, health insurance—what couldn’t it do? Could it, as the now famous question had it, compel citizens to buy broccoli on health grounds? (Well, a defender might have pointed out, the government does compel taxpayers to “pay for” all kinds of things in the form of government subsidies, such as ethanol. It could clearly do the same with a broccoli subsidy.)

As a policy matter, it’s clear that a “mandate” is a much more modest extension of government power than a single-payer system. The citizen would choose which insurance to buy; in fact, under the law, a citizen could choose not to buy any insurance, and pay a penalty instead. The whole premise of a mandate is to spread risk as widely as possible; as Mitt Romney used to note when he was defending the Massachusetts plan he designed, the mandate to prevent “free riders” from benefiting from treatment once they are sick or injured. That’s why the genesis of the idea came from such conservative roots as the Heritage Foundation.

[Related: Two-thirds of Americans want health law struck down]

As a constitutional matter, however, the idea of compelling a citizen into a specific economic activity raises alarm bells. It evokes the specter of some bureaucrat inviting himself into your home, while checking the shelves to make sure you’ve purchased multigrain cereal and cage-free eggs. (It’s a specter the administration tried to avoid by arguing that the health-care market is unique, one in which we are all likely participants at some point, voluntarily or otherwise. Unlike life in a Robert Heinlein libertarian “utopia,” hospital ERs do not have the power to say to an uninsured heart attack or auto accident victim: "you chose not to buy insurance? Sorry...have a nice day.”)

So, for its effort to design a health care plan that moved in the direction of less government intrusion, the Obama administration faces the distinct prospect of having its signature domestic program shot down for exceeding the limits of the constitutional power it did choose to use.

I somehow doubt the White House will appreciate the irony.

Failed Bank Updates

Bank Name




Acquiring Institution

Closing Date

Updated Date

Waccamaw Bank Whiteville NC 34515 First Community Bank June 8, 2012 June 12, 2012
Farmers' and Traders' State Bank Shabbona IL 9257 First State Bank June 8, 2012 June 11, 2012
Carolina Federal Savings Bank Charleston SC 35372 Bank of North Carolina June 8, 2012 June 11, 2012
First Capital Bank Kingfisher OK 416 F & M Bank June 8, 2012 June 11, 2012
Alabama Trust Bank, National Association Sylacauga AL 35224 Southern States Bank May 18, 2012 May 30, 2012
Security Bank, National Association North Lauderdale FL 23156 Banesco USA May 4, 2012 June 4, 2012
Palm Desert National Bank Palm Desert CA 23632 Pacific Premier Bank April 27, 2012 May 15, 2012
Plantation Federal Bank Pawleys Island SC 32503 First Federal Bank April 27, 2012 May 30, 2012
Inter Savings Bank, fsb D/B/A InterBank, fsb Maple Grove MN 31495 Great Southern Bank April 27, 2012 May 15, 2012
HarVest Bank of Maryland Gaithersburg MD 57766 Sonabank April 27, 2012 May 15, 2012
Bank of the Eastern Shore Cambridge MD 26759 No Acquirer April 27, 2012 May 24, 2012
Fort Lee Federal Savings Bank, FSB Fort Lee NJ 35527 Alma Bank April 20, 2012 April 24, 2012
Fidelity Bank Dearborn MI 33883 The Huntington National Bank March 30, 2012 May 24, 2012
Premier Bank Wilmette IL 35419 International Bank of Chicago March 23, 2012 May 24, 2012
Covenant Bank & Trust Rock Spring GA 58068 Stearns Bank, N.A. March 23, 2012 May 24, 2012
New City Bank Chicago IL 57597 No Acquirer March 9, 2012 May 24, 2012
Global Commerce Bank Doraville GA 34046 Metro City Bank March 2, 2012 May 24, 2012
Home Savings of America Little Falls MN 29178 No Acquirer February 24, 2012 May 24, 2012
Central Bank of Georgia Ellaville GA 5687 Ameris Bank February 24, 2012 May 24, 2012
SCB Bank Shelbyville IN 29761 First Merchants Bank, National Association February 10, 2012 May 24, 2012
Charter National Bank and Trust Hoffman Estates IL 23187 Barrington Bank & Trust Company, National Association February 10, 2012 May 24, 2012
BankEast Knoxville TN 19869 U.S.Bank National Association January 27, 2012 May 24, 2012
Patriot Bank Minnesota Forest Lake MN 34823 First Resource Bank January 27, 2012 May 24, 2012
Tennessee Commerce Bank Franklin TN 35296 Republic Bank & Trust Company January 27, 2012 May 24, 2012
First Guaranty Bank and Trust Company of Jacksonville Jacksonville FL 16579 CenterState Bank of Florida, N.A. January 27, 2012 May 24, 2012
American Eagle Savings Bank Boothwyn PA 31581 Capital Bank, N.A. January 20, 2012 May 24, 2012
The First State Bank Stockbridge GA 19252 Hamilton State Bank January 20, 2012 May 24, 2012
Central Florida State Bank Belleview FL 57186 CenterState Bank of Florida, N.A. January 20, 2012 May 24, 2012

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Posted by Greg Shelley Phd on June 12th, 2012 1:11 PMPost a Comment

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