Judge Vinson to Congress: You Really Should Read These Laws Before You Pass Them
[Guest post by Aaron Worthing]
I posted a link the other day to Judge Vinson’s opinion in Florida v. United States Department of Health and Human Services, the biggest of the Obamacare challenges, but I have only now had a chance to read it and I think I have something to contribute to the analysis.
One of the key questions in the case is whether the mandate is a tax or a penalty. If it is a tax, it becomes much easier to defend the law from a constitutional perspective. I mean, think about it. Do you deduct interest on your mortgagewhen doing your taxes? And of course one of the reasons why you would get a house with a mortgage, instead of just renting a house, is that you can’t deduct anything from a rental. So in that situation, the government is encouraging you to enter into a specific kind of contract with a private party and raising your taxes if you refuse. Which sounds a lot like the mandate, doesn’t it? As much as I despise Obamacare, I can see the argument.
But if it’s a penalty and not a tax, it is a lot harder to justify. So in his opinion, Judge Vinson spends a lot of time analyzing the law to determine that it is penalty, not a tax. He arrives at that conclusion citing a number of facts:
- The act called it a penalty, not a tax.
- Earlier versions of this law, and similar proposals called it a tax. So as they went through their drafts, they changed the word “tax” to “penalty.”
- The law enacts a number of taxes and labels them as taxes, but not this alleged “tax.” This is an example of expressio unius, a concept I explain here.
- The findings of fact (in the statute) invoked Congress’ power under the commerce clause, but not the taxing power. Meanwhile the taxes in the act were justified under the taxing power.
- When the CBO ran its cost estimates, tallying how much the law would cost versus how much revenue it would raise, it didn’t include any money from the mandate. In other words, the CBO acted as though the mandate would raise absolutely no revenue at all.
- “[T]he Act lists seventeen ‘Revenue Offset Provisions’… and … it further includes a section entitled ‘Provisions Relating to Revenue’…. However, the individual mandate penalty is not listed anywhere in them.”
So put that all together, Judge Vinson says, and it is clear that Congress intended it to be a penalty and not a revenue-raising tax.
Now that is all well and good in classic plain language statutory construction. But what leaps out at me is that his entire analysis depends on Congress paying a lot more attention to the language of the law than they actually did. From Nancy Pelosi declaring that we had to pass the law to see what was in it, to Max Baucus claiming paradoxically that he wrote the healthcare law, but didn’t actually read it, not to mention that they manage to pass laws called “The ______ Act of ____,” it’s really hard to pretend that Congress carefully crafted this law.
Now, it is possible that Vinson was just applying precedent as he saw fit, and he didn’t want to send a message. But whether he intended to or not, anyone who reads the opinion sees that the courts following this approach are going to act as though Congress carefully crafted and scrutinized every word. So if they don’t actually devote this much attention to a statute’s language, then the law of unintended consequences will bite them right in the kiester. Whether Vinson intended to send that message, it is the message being sent.
Of course the flaw in the theory that he is trying to send a message is that Judge Vinson would have to believe that Congress would actually read what he wrote—which is itself a dubious proposition.
Another possibility is that Judge Vinson felt that the law is constitutional under the tax power, but he chose to strike it down to force Congress to take a “second look.” This is a theory of judicial review popularized by Alexander Bickel in his book The Least Dangerous Branch. The idea is that for certain laws, the courts like to strike down a law based on B.S., in order to force them to look at the law and the policy underneath a second time.
Mind you, I am not defending this approach to interpreting the constitution. In fact, I am appalled by it. But just because it is wrong, doesn’t mean it’s not happening.
On the other hand, when Congress has so clearly abdicated its duty to actually know what it is passing, a “second look” seems more justified than usual. I mean “second look” would seem like a misnomer in relation to Obamacare. First look is more like it.
And you could consider it to be either a horrible or perfect example of the Bickelian principle in operation. The fact is if the law is struck down in order to make Congress take a second (or first) look, it will be very hard to pass anything like this law twice. Unless the poll numbers are very misleading, the next Congress won’t do it, so it would have to be done during the lame duck section, which also strikes me as unlikely. So on one hand you might argue that the judge is manipulating constitutional interpretation in light of the elections. Or, you might say that the voter anger over this issue is the second look Bickel was talking about and in that case, you could say this is a perfect example of this principle in operation.
And just as with the theory that Judge Vinson is trying to tell Congress to actually read the law, his application of precedent is reasonable enough that he might be doing nothing more than applying the law to the facts. But the obvious effect of this his decision, if he strikes down Obamacare and his decision is upheld on the grounds he invoked, is to give Congress a second bite at the apple—a chance to give the matter a second (or first) look. And when person’s actions has an obviously foreseeable effect, it is generally reasonable to wonder if that effect was intended.
[Posted and authored by Aaron Worthing.]
I can’t find the link now (and don’t feel like trying) but Obama’s staff have admitted that he did not read the bill, either. This, of course, is not unusual as bills are written by staff and lobbyists but the consequences of this one are so catastrophic that it has become an issue.
Mike K (568408) — 10/19/2010 @ 8:47 amJudge Vinson arguably is talking means/extremes in his various references to the ‘penalty’ or ‘tax’ nomenclature. In the final analysis a penalty is a tax and a tax is a penalty. They both end up in the general fund as a revenue source whether the CBO counts them as such or not.
Given the proclivities of this administration a case could be made that the Obama minions were flexing their muscles when they chose to call it a penalty instead of a tax. They went with the Sword of Damoclese instead of the Biden approach; “time to man up..pay your fair share” or “patriotic” words to that effect.
Drunk with their new-found power, it is my opinion that the writers knew exactly what they were doing and attempted to threaten the public into acquiescence. As I recall, about this time there was talking about adding 15,000 new IRS agents to make good on the threat. Obama was the good cop in this scenario selling the snake oil while the administration Obamabots were playing the bad cops behind the scenes.
vet66 (9d1bb3) — 10/19/2010 @ 8:55 amGreetings:
I’m no political scientist but one of the things that has me more than a bit dumbfounded is that the Republicans seem not at all interested in highlighting the Congressional mal/nonfeasance of voting on bills that haven’t been read and not establishing a proper budget.
I would seem to me that after “showing up” those two responsibilities are a pretty fundamental part of the job description. But, then again, they don’t really have to show up either, do they?
11B40 (3086a4) — 10/19/2010 @ 9:10 amLets not also forget that the geniuses who pass this bill forgot to put in separation clause, which means if one part of it gets struck down, everything goes down.
BigFire (71927b) — 10/19/2010 @ 9:15 amBig fire,
Not to pick on you, but the term is “severance clause.” There is one in the senate reconciliation bill, but given that this was a law to amend a law, if the original law is struck down, how do you uphold the amended part?
Now it doesn’t mean that the whole law is automatically struck down, but under the relevant case law, it probably will be, if the mandate goes.
Aaron Worthing (e7d72e) — 10/19/2010 @ 9:23 amIANAL but the distinction between tax and penalty is quite significant, and will likely decide the unconstitutionality of this. No?
JD (08d820) — 10/19/2010 @ 9:37 amOnce again, I learn from reading this blog and the comments that go with it.
Bar Sinister (a148e1) — 10/19/2010 @ 9:39 amA.W. – Did you get your argument reversed in the beginning of the second paragraph? That if it was a tax it would be tougher to attack?
daleyrocks (940075) — 10/19/2010 @ 9:50 amDaley
*embarrassed* yeah, fixed.
Aaron Worthing (e7d72e) — 10/19/2010 @ 10:02 amIn the next Constitutional Convention, we will include a provision that the Rules of the Senate/House cannot provide for a Waiving of the Reading of the Bill – that should put finis to these 1000+ page omnibus bills as they would not have time to read, debate, and vote on more than one per session.
AD-RtR/OS! (91b834) — 10/19/2010 @ 10:17 amCongress to Judge Vinson: Make me.
Socratease (5c1dd6) — 10/19/2010 @ 10:20 amAD
combine that with the texas constitutional provision that only allows their legislature to meet something like 6 months every 2 years…
combine it with your proposal that they read everything aloud, and they will get nothing like this done again. 🙂
Aaron Worthing (e7d72e) — 10/19/2010 @ 10:28 amNo. There is a conceptual difference between not getting a tax deduction and having your taxes raised.
steve (369bc6) — 10/19/2010 @ 10:31 amSeems to me that the argument that Congress didn’t know they were creating a tax doesn’t fly: This specific issue was raised by opponents of the bill when it was being debated, and the proponents (i.e. those who voted to pass it and the President that signed it) declared that it was not a tax, but was a penalty. Such public statements imply both knowledge of this specific part of the bill and legislative intent, and would seem to me to negate the argument that Congress inadvertently passed a tax without knowing it.
Socratease (5c1dd6) — 10/19/2010 @ 10:31 amAW…correction needs to be done in your post above…
AD-RtR/OS! (91b834) — 10/19/2010 @ 10:38 amWe do not get to deduct our “mortgage payment”, only the mortgage interest.
A couple of points, one related to AD-Rtr’s comment. When I first started making enough money that income tax mattered, all interest was deductible: car, credit card, house, the works. The feds probably wanted to encourage consumption, but I wouldn’t say that it was a tax on non-credit consumption. When they changed the tax code, Congress didn’t have the guts to remove the deduction for housing. Again, I think it pretty obvious that they were cowards, not that they wanted to tax non-credit consumption, or penalize renters.
The second point, unrelated: it is in the best interest of both parties to have Obamacare struck down. Dems would likely recover in a couple of cycles without that millstone around their necks. After all, very few people actually talked about Hillarycare in 2008, and she came close to being the Dem nominee, and likely POTUS. I would bet you that every Dem who is going to lose this time would have been very happy for Obamacare to disappear before it destroyed them (probably).
It would also be good for the RINOs’ who don’t want to repeal Obamacare (See Erickson, Redstate, today), but would likely be blown away in 2012, 2014, if Obamcare was still on the table after significant Republican gains. The Tea Party movement would lose a huge plank if it was struck down. It might save some of the Republicans their offices.
Scott (f77753) — 10/19/2010 @ 10:53 amI’ve seen mortgages where they are one and the same.
And I don’t mean a standard 30 year fixed where payments are mostly interest for a few years.
I do find it peculiar that if you set up such an unreasonable loan, you gain a tax advantage. This also is an incentive to repeatedly take out equity loans to keep the deduction high.
Back to the topic, it is startling to consider the evolution of the commerce clause. A penalty for not buying health insurance? I know this is a basic issue everyone talked to death last year, but damn.
Dustin (b54cdc) — 10/19/2010 @ 11:03 amAD
agreed. failure to be sufficiently subtle. my bad.
Steve
> There is a conceptual difference between not getting a tax deduction and having your taxes raised.
Well, then could congress do this instead? Raise every person’s taxes by exactly $4K, and then allow you to deduct $4K if you buy sufficient insurance?
Aaron Worthing (e7d72e) — 10/19/2010 @ 11:19 amWhat about this: seems they forgot to include the usual boiler-plate severability clause, so if one part of the law is found unconstitutional, the whole ball of wax is history.
mojo (8096f2) — 10/19/2010 @ 11:25 amWhat if they didn’t forget? Whose fault is it if Obamacare goes up in smoke, now? Obama wins if this happens, since a political albatross flies away, but he also gets to claim he fought the good fight, blame some vague problem, and even harp more about one of his favorite issues: a runaway activist conservative court system (I realize how stupid this is).
I’m giving the democrats far too much credit, but if Obamacare were to blow up because of the way it’s written, that would serve many of the same people who fought for it.
Dustin (b54cdc) — 10/19/2010 @ 11:28 ammojo, dustin
its not quite automatic. but i have checked the case law, and i think it is very likely that if the mandate goes, it all goes.
But its not automatic.
Aaron Worthing (e7d72e) — 10/19/2010 @ 11:52 amIt’s all Bush’s fault!
AD-RtR/OS! (91b834) — 10/19/2010 @ 12:01 pmCummings v. Missouri:
“A bill of attainder, is a legislative act which inflicts punishment without judicial trial and includes any legislative act which takes away the life, liberty or property of a particular named or easily ascertainable person or group of persons because the legislature thinks them guilty of conduct which deserves punishment.”
Are people who don’t buy health insurance an easily ascertainable group of people?
Nate_MI (8efdaa) — 10/19/2010 @ 1:20 pmI’ve used (and I hold one now) those low interest short term ARM’s to leverage real estate. I’m taking a risk and pouring that money into this crap real estate economy in order to earn a return…. something I am confident I will do.
If I get my remodel project done and sold within the term of the ARM, for a profit all is well.
One of my loans is around 2.50% right now, interest only… which is as close to free as a retail client gets… and yeah I will write that off.
I keep too much of my own skin in the game by being very conservative on what my LTV ratio is, I keep people working, producing products, buying, selling, paying taxes, paying bills, so I think I deserve the write off.
The people who misuse those loans by spending the money like a Democrat getting out the vote at a public employee union hall; ruining it for the rest of us, should be tased in their nether region(s).
SteveG (cc5dc9) — 10/19/2010 @ 2:18 pmI know you’re right (to be honest, because you explained this upthread). I’m don’t really believe the dems are clever enough to do what I suggested. The reason this bill seems perilously close to falling apart is because it was rushed and sloppy, not some conspiracy to save Obama from the consequences while appearing to have fought the good fight.
SteveG, I’m not trying to demonize people like you you take advantage of the law to make money. There’s nothing wrong with you following the rules to your best advantage. I just think the system is set up in a way that too easily rewards those who ‘ruin it for the rest of us’.
There’s a public interest in your improving your real estate and keeping folks working. I’m glad somebody out there is managing to succeed with that these days. Any solution that preserves your benefit while discouraging the abuse will be decried as horribly regressive, I’m sure.
Dustin (b54cdc) — 10/19/2010 @ 2:27 pmMy only real problem with the attack on the individual mandate is that the next time (and there will be a next time), we’ll get something obviously constitutional like “Medicare for all” or some other form of payroll-tax supported single-payer system. Admittedly it would be just as bad as Obamacare, but hopefully less confused.
My personal preference would be for eliminating all medical insurance under a cap set based on income. Set this right and you drive down costs for basic care without bringing ruinous expenses to those hit with catastrophe.
I’d call that system “insurance.”
Kevin M (298030) — 10/19/2010 @ 4:08 pmIt sorta hit a nerve… so many of the tools I’ve used to develop business, build wealth (and in the process, spread it around) are being threatened.
A write off means I get to keep more of my own money at tax time… wow. Novel concept
SteveG (cc5dc9) — 10/19/2010 @ 6:01 pm