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Monday, July 04, 2011

Be Careful What You Wish For and Novel Constitutional Arguments

As Mark Tushnet has noted, we have recently seen both the left and the right launch novel constitutional arguments in response to political developments.  On the right, it is the argument that the Commerce Clause does not permit Congress to regulate inactivity.  On the left, it is the argument that Section 4 of the Fourteenth Amendment prohibits default.  As with all novel arguments, the proverb “be careful what you wish for” is apt.

Take the Section 4 argument.  The argument is that Section 4 prohibits defaulting on the debt.  But it is important to understand that there is no real risk of defaulting on the debt, if we understand “the debt” as meaning only U.S. Treasury bonds.  There are more than enough tax revenues coming in to cover the interest payments on existing bonds.  What there is not enough to do is to pay the interest and all the other government expenses, like Social Security payments.  And it is the Republicans who have been trying to make sure that bondholders get paid first.

Is Social Security also a “debt” that is inviolable under Section 4?  Liberal scholar Garrett Epps (who pioneered the § 4 argument) argued that it is.  But that is pretty hard to square with (1) Fleming v. Nestor, 363 U.S. 603 (1960), which held that Congress can pretty much change social security at will, (2) the fine print that comes with your social security statement that says Congress can cut benefits at any time, and (3) the fact that Congress has cut benefits, such as by raising the retirement age.  So assuming Social Security is not an inviolable “debt,” at least one plausible result of the Section 4 argument is that when the government cannot pay all of its expenses, the constitutionally mandated solution is to pay disproportionately-wealthy bondholders first while throwing people reliant on Social Security and Medicare to the wolves.  What’s not for a conservative to love?

Now lets take the Commerce Clause argument.  The argument is that the individual mandate is unconstitutional.  But if the individual mandate dies while the rest of the law survives (only one court has bought the inseverability argument), then the result is that insurance companies must still take all applicants without regard to preexisting conditions, and poor people still get subsidies to purchase health insurance.  The big losers are the insurance companies, who will be plagued by crippling adverse selection effects.  What’s not for a liberal to love?

Posted by Tun-Jen Chiang on July 4, 2011 at 02:07 PM | Permalink


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I agree with everything in your latest comment.

Posted by: WPB | Jul 5, 2011 2:37:32 PM

Will, they are playing Kabuki in this sense: the U.S. is arguing that the two provisions are inseparable, because they think it helps the Commerce Clause issue. The plaintiffs are arguing they are inseparable, because they don't want to give away the inseverability issue. So there is seeming agreement on this point, but actually there is no agreement at all.

The easiest way for a conservative judge to resolve the tension between the two issues is to hold that the two provisions are actually completely and utterly unrelated. And then you can strike down the mandate without having to deal with the necessary and proper issue. But that easy route gets you only the mandate.

Posted by: TJ | Jul 5, 2011 2:35:55 PM


Maybe I'm being unclear. I'm not necessarily suggesting that anybody on the Court will vote to "strike the whole law." I do think that some of them might vote to strike two provisions out of the thousands that make up the law, if they lose on their argument to strike zero. (Positions in the severability debate include "strike only the mandate," "strike only the mandate and the pre-existing conditions rules" and "strike the whole thing" as well as many others.)

I also don't see how the United States is playing kabuki on this. They agree that the two provisions are inseverable, which is consistent with their commerce clause argument that one is necessary for the other.

Posted by: WPB | Jul 5, 2011 2:29:27 PM

Will, actually, the legal merits of the severability claim is surely not the true source of our disagreement, because I largely agree with you that, strictly as a doctrinal matter, the inseverability argument is very strong. But the inseverability argument is very, very tricky for both sides. To the extent you think that the individual mandate is an inseparable part of the ban on preexisting condition exclusions (which Congress has unquestioned power to enact), then that makes it harder to argue that the mandate is not "necessary and proper" to the ban on preexisting condition exclusions. Not impossible, but harder. So both sides are playing kabuki on this.

My disagreement with you, however, is not about doctrine but about whether one believes the doctrine is remotely important in this case. As a legal realist, I say that doctrine is almost completely irrelevant in this case. As a political matter, there is simply no way that any of the liberals will votte to strike the whole law. And that means you need to keep all five conservative votes on the mandate and inseverability. I'm not seeing it happening.

[Finally, as to Judge Hudson's opinion, my point is not that conservatives point to the inseverability part in particular, but conservatives would overall be delighted if the Supreme Court wrote "affirmed" on that opinion. And that is "be careful what you wish for", since conservatives largely wish for Judge Hudson to be affirmed. They might prefer a greater victory, but they are wishing for a Hudson affirmance.]

Posted by: TJ | Jul 5, 2011 2:20:44 PM

Sorry, I passed over the reference to Judge Hudson's opinion. I don't know any conservative who has suggested that the severability portion of Judge Hudson's opinion is part of the "huge victory" and I think it has gotten so little attention in part because nobody took that analysis seriously. But I will also add that Judge Hudson's holding is sufficiently confusing that it's hard to even know what parts of the statute he invalidated.

Posted by: WPB | Jul 5, 2011 2:18:42 PM


As for the first part of your comment, I'm not sure what we're fighting about, but there seem to be a lot of different issues in play, and I'm not sure we've defined them clearly. For example, the Supreme Court might consider the merits and severability in two successive cases, which would make it easier for judges who voted to uphold the statute in case 1 to vote to keep the two provisions inseverable in part 2. And even if the Court considers both issues in a single case, there's no rule that forbids the dissenters on the merits from joining a remedial opinion treating the two as inseverable. Consider as United States v. Booker, where the four Justices who would have upheld the Guidelines (i.e., merits dissenters) nonetheless joined a remedial opinion that voted to excise provisions of the statute that other Justices would have continued to uphold.

So while it may be true that we shouldn't ignore judges who upheld the mandate, we also shouldn't assume that they represent a vote for the position of total severability. None of the single-judge district courts who upheld the mandate have had cause to reach the issue either way. If and when a multi-judge court strikes down the mandate, we will have some data points on severability from pro-mandate judges.

Now, as for the merits of the severability claim, which may be the true source of our disagreement: All of the parties in the case agree that the pre-existing conditions rules and the mandate must rise or fall together, and their legal reasons for agreeing seem sound. I don't know if that rises to the level of a "slam dunk judicially," but I don't know of anybody paying any attention to the case who has provided us any reason to doubt that the provisions will indeed rise or fall together, as the parties all believe they should. If there are such arguments, we could analyze them.

Posted by: WPB | Jul 5, 2011 2:08:32 PM

Will, fair enough to note small sample size, but your apparent additional point that the relevant sample is the judges who have reached inseverability after striking down the mandate (and thus excluding all the judges who upheld the mandate) is wrong. Put it this way, there are at most five votes on the Supreme Court to strike down the individual mandate -- take 50% of that sample and there is no way you will get a majority on inseverability. You cannot exclude the liberal judges who uphold the mandate from the sample because their votes on inseverability is completely predictable.

The whole severability issue has been treated as an afterthought, but that is not because people regard it as a slam dunk judicially, but rather because of Asher's assumption above that Democrats will somehow cave and repeal the ban on preexisting condition exclusions if they lose the individual mandate in the courts. If people regarded inseverability as a slam dunk judicially, then Judge Hudson's decision would not be paraded around by conservatives as a huge victory.

Posted by: TJ | Jul 5, 2011 4:48:18 AM

The argument that "only one court has bought the inseverability argument" strikes me as too-quick and also misleading, since only two courts have made a decision on constitutionality that required them to *reach* the inseverability argument, and neither of them resolved it in a particularly nuanced fashion.

Not even the United States-- which argues for broad severability in these cases-- contends that the pre-existing conditions rules can be severed from the individual mandate. (And given the express declaration in the text of the mandate provisions that the mandate is necessary to the functioning of the pre-existing conditions rules, the concession is unsurprising.)

But I do agree that in the highly unlikely event that a court of last resort invalidated the mandate and not the pre-existing conditions rules, it would qualify as a careful-what-you-wish-for case.

Posted by: William Baude | Jul 4, 2011 11:54:53 PM

Asher, that seems to be the conventional assumption. But put yourself as a Democrat senator who has just seen the Supreme Court strike down the individual mandate by a 5-4 majority. The incentive to save the (highly unpopular) insurance companies from adverse selection effect by repealing the (highly popular) ban on preexisting condition exclusion is...?

A long-term political strategy that relies on first utterly infuriating and alienating the opposition (by going to the courts), and then requiring their cooperation afterwards (by going through the legislature), has a rather deep-seated tension that is precisely what "be careful what you wish for" phrase is designed to invoke.

Posted by: TJ | Jul 4, 2011 8:12:39 PM

Surely Congress wouldn't let the rest of the act stand if the mandate got struck down.

Posted by: Asher | Jul 4, 2011 6:20:57 PM

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