Monday, April 02, 2012

Obamacare and Coercion

We moved our offices last week so I have not had much time to look at what happened in last week's Supreme Court arguments on Obamacare. Day three was probably the best one for the government but let's not get carried away. The government's "good day" involved asking whether it had acted with the tender mercies of La Cosa Nostra. Had it made the states an offer they can't refuse?

Up for consideration was that feature of the Affordable Care Act that requires the states to substantially expand eligibility for Medicaid. The Constitution quite clearly forbids the federal government from requiring the states to adopt - or to dictate the nature of - social programs, so the Act uses an old tried and true trick. If the states refuse to do federal bidding, the Secretary of Health and Human Services is empowered to eliminate all Medicaid funding for the state. (The cost of the expansion is also to be paid for completely by the federal government at first and then at 90% after that, although there is - and can be - no guarantee that this will continue.)

This trick - justified under Congress' implicit authority to spend to advance the "General Welfare." Courts have long justified that money spent by sending it to the states can come with all sorts of strings attached extending the federal writ where it might not otherwise have run.

There is a substantial criticism of these cases. In a forthcoming book, The Upside-Down Constitution, Michael Greve argues that the use of the spending power in this way constitutes an uhholy alliance between the states and the federal government in which both substantially evade accountability for policy decisions.

But the permissibility of this approach is well established and the Obamacare case is about its limits. The Supreme Court has suggested the possibility that federal money with strings attached might be coercive of the states and, if so, impermissible. The Court has never found this to be the case. Might this be the first time?

How can giving someone money be coercive? There are two ways. The weaker arguments are that a deal can be too sweet to say "no" to or that states have become dependent on federal money that they have effectively ceded their sovereignty,

A stronger version is that the states are faced with an offer that they can't refuse. These programs are not truly "opt-in" or "opt-out." The citizens of any particular state have to pay for the federal program whether or not their state participates. Seen in this way, Wisconsin can only "opt-out" of the benefits and not the costs.

Seen in this way, the larger the program - particularly the larger the loss of benefits - the more it is likely for participation to be no choice at all.

Is the Affordable Care Act such a case? Here we saw a bit of reversal from the argument on the individual mandate. With respect to the individual mandate, certain of the Justices were looking for a limiting principle on the power of Congress. With respect to the Medicaid expansion, they were looking for a triggering principle on coercion. Just when does an offer become one that a state can't refuse?


George Mitchell said...

President Obama's derisive observation today about the role of an "unelected" body in this matter are noteworthy. I am not aware of other times when a President has registered such a view in the aftermath of oral arguments. How might this affect Chief Justice Roberts and Justice Kennedy, whose initial (but not final) votes were cast last week? Is this a pre-emptive move by Obama to undercut an anticipated defeat or is it just another illustration of his amazing sense of self-importance? With is SOTU shot at the USSC, this is a President who has a skewed view of the three co-equal branches.

George Mitchell said...

Obama says a strong majority passed the bill, further justifying his claim that it should be upheld. As noted here

he must have forgot the vote count.

I believe he would have been better advised to take a more deferential public view of the court's Constitutional prerogatives.

Billiam said...

George, he doesn't know how to be deferential. His arrogance is, however, no longer astounding. He cares nothing for checks and balances. What he says goes. End of story. That's pretty much the way he's acted. Congress, those nutless eunuchs, have done little to reign him in.