The Volokh Conspiracy

The Health Care Case: The Supreme Court’s Decision and its Implications - A new book on last year’s controversial Supreme Court decision on Obamacare is now available for pre-order at Amazon. The book is edited by Columbia law professors Nathaniel Persily, Gillian Metzger, and Trevor Morrison, and published by Oxford University Press. It contains essays on numerous aspects of the health care decision by a wide range of scholars, including VC-ers Jonathan Adler, Randy Barnett, and myself. There is also a large number of contributions by leading scholars on the other side of the issue, including Jack Balkin, Jamal Greene, Andrew Koppelman, Gillian Metzger, and Neil Siegel, among others. The Oxford University Press website has a complete table of contents here.

My own contribution to the volume addresses the Court’s analysis of the Necessary and Proper Clause, and explains why the individual health insurance mandate was not “proper” even if it could be considered “necessary.” An earlier version of that essay is available on SSRN here.

I quite enjoyed reading David Hyman’s new article of this title. It vividly illustrates a point that I tried to make three weeks ago at the Intellectual Diversity Conference at Harvard Law School (Panel 2 – 47:00) — which is that the liberal echo chamber of elite law schools has made them startlingly poor at predicting and analyzing what arguments will actually succeed in American courts. (See also Randy’s thoughtful discussion of this topic.) Hyman’s piece is exactly right, I think, and it is also breezily and stylishly written. Here is the abstract:

Almost without exception, law professors dismissed the possibility that the Patient Protection and Affordable Act Act (“PPACA”) might be unconstitutional — but something went wrong on the way to the courthouse. What explains the epic failure of law professors to accurately predict how Article III judges would handle the case? After considering three possible defenses/justifications, this essay identifies five factors that help explain the erroneous predictions of our nation’s elite law professors, who were badly wrong, but never in doubt.

Download Hyman’s article here.

The Liberty Law Blog recently posted my review of Harvard Law Professor Einer Elhauge’s book Obamacare on Trial, which was possibly the first academic book on the Obamacare litigation published by a legal scholar since the Supreme Court issued its decision in NFIB v. Sebelius. Elhauge is a topnotch scholar, and his book makes some interesting points in defense of the constitutionality of the individual health insurance mandate. But it’s not as strong as it could have been had he been able to address some key issues in greater depth:

Harvard Law Professor Einer Elhauge’s book Obamacare on Trial is a useful and sometimes insightful statement of several arguments in defense of the mandate. It is impressive that Elhauge managed to get the book in print just a couple months after the Court’s decision came down on June 28, 2012. But, perhaps because of the haste with which it was published, the book fails to adequately address some key issues, and likely will not be persuasive to those not already inclined to agree with Elhauge’s conclusions....

Elhauge’s most distinctive contribution to the debate over the mandate was his repeated invocation of two 1790s laws that, he argues, provide precedents for upholding the individual mandate as an exercise of the commerce power: The 1792 Milita Act, which required militia members to possess muskets and other military equipment; and the 1798 Act for the Relief of Disabled and Sick Seamen, which required owners of American ships arriving from foreign ports to a withhold a part of their seamen’s wages and pay the money into a government-administered fund for the “temporary relief of sick and disabled seamen....”

This is an interesting thesis and Elhauge defends it well. But, ultimately, it flounders on the many clear differences between the two 1790s acts and the health insurance mandate....

Although Obamacare on Trial is a thoughtful defense of Elhauge’s distinctive take on the mandate litigation, it gives short shrift to several other important aspects of the case. For example, Elhauge argues that the mandate is authorized by the Necessary and Proper Clause as well as the Commerce Clause. But he fails to consider the point that a mandate authorized by that Clause must be “proper” as well as “necessary” for “carrying into Execution” other powers granted to the federal government in the Constitution. That is the key reason why the Necessary and Proper Clause rationale was rejected by a majority of the Court...

Elhauge also devotes little attention to the Tax Clause reasoning under which Chief Justice Roberts ultimately upheld the mandate. And he devotes almost none at all to the many arguments against that conclusion, including those endorsed by every lower court that considered the issue....

Overall, Obamacare on Trial is a thought-provoking contribution to the debate over the individual mandate case. But its limitations prevent it from becoming the definitive work on the subject, or even the definitive defense of the case for the mandate’s constitutionality.

In his recent response to Randy Barnett, co-blogger Orin Kerr argues that previous precedent, especially the Supreme Court’s 2010 decision in United States v. Comstock justifiably led many observers to expect that the Court would readily uphold the individual health insurance mandate, and that its failure to do so under the Commerce and Necessary and Proper Clauses was a major change from Comstock and other prior precedents.

I agree that Comstock was a very broad interpretation of federal power in some respects, and I believe it was wrongly decided. Yet, even at the time Comstock was decided, it was easy to find crucial differences between that case and the individual mandate case. In a post written on the day that Comstock came down and in an article about Comstock published in the fall of 2010, I pointed out two such distinctions. First, Comstock endorsed a broad interpretation of the meaning of “necessary” in the Necessary and Proper Clause, but said nothing about the meaning of “proper.” The challenge to the mandate was primarily based on the idea that it was “improper” rather than unnecessary. Second, in upholding the law at issue in Comstock, the Court relied in part on a five-factor test that, when applied to the mandate mostly cut against the federal government. In my article (pg. 266), I also noted the possibility that the inclusion of the five factor test in the opinion may have been the price that Chief Justice John Roberts forced the four liberal justices to pay for casting the decisive fifth vote in favor of the majority opinion (Justices Alito and Kennedy concurred in separate opinions that outlined much narrower visions of the scope of federal power).

These distinctions were, in fact, exactly the ones relied on by Chief Justice Roberts in his key swing vote opinion in the individual mandate case. He concluded that the individual mandated was not “proper,” even if it was “necessary,” and also cited key differences between the law in Comstock and the individual mandate under the five factor test, such as that the mandate was not “narrow in scope” (though Roberts did not go through all five factors individually).

Orin and other observers who expected the mandate case to be a lopsided victory for the federal government also missed the significance of Justice Kennedy’s opinion for a unanimous Court in the 2011 case of Bond v. United States, where he emphasized that constitutional “[f]ederalism secures the freedom of the individual” as well as the prerogatives of state governments. As I pointed out in two posts written well before the mandate oral argument (see here and here), this signaled that the Court’s key swing voter was unlikely to uphold the mandate if it meant giving Congress a virtual blank check to enact any other mandates it wanted. And inability to specify a meaningful limit to the scope of its power was always the key flaw in the federal government’s position.

I don’t mean to suggest that, after Comstock and Bond, it was clear that a majority of the Court would reject the federal government’s Commerce and Necessary and Proper arguments, or even that it was unreasonable to believe that the federal government was more likely to win on these points than the plaintiffs. I also don’t mean to suggest that I myself was an especially good prognosticator during the individual mandate litigation. Although I was right about the implications of Comstock and Bond, and also right (from early on) to expect a close decision, I got some other important points wrong, especially in dismissing the possibility that the mandate might be upheld as a tax. But I do think Comstock and especially Bond should have alerted observers to the likelihood that the individual mandate litigation would not be an easy win for the federal government. In combination with other factors, they certainly had that effect on me.

UPDATE: Randy Barnett had some prescient thoughts about the interaction between Comstock and the individual mandate case in this post written the day Comstock was decided.

UPDATE: #2: I should note that, until the oral argument, I consistently predicted that it was more likely that the mandate would be upheld than struck down, and afterwards, I said it was a 50-50 proposition. So I don’t blame anyone merely for believing that the the mandate was going to be upheld under the Commerce or Necessary and Proper Clauses. My critique is directed at those who claimed that the case would be an easy win for the federal government and that any other result would be a major break with precedent, in some cases long after there were plenty of indications suggesting otherwise.

The point of the individual mandate was to counteract the adverse selection problem caused by community rating and the requirement that insurance companies issue insurance policies without regard for preexisting conditions. The mandate — or, as we now know it, the tax on being uninsured — provides an incentive for younger, healthier (and less costly to insure) to obtain health insurance. The problem, as I’ve noted before, is the size of the penalty is way too small to achieve its desired effect. While the penalty will have some effect on the margin, it will not have a dramatic effect because, for many individuals, the penalty is less than the cost of obtaining a qualifying insurance policy (a gap that only grows as many PPACA provisions take effect and premiums rise).

What to do? The easiest thing to do would be to increase the size of the penalty. Yet in upholding the penalty as a tax, Chief Justice Roberts also tied Congress’s hands. While there may be room to increase the penalty somewhat, Congress can’t increase the cost it too much, lest it no longer qualify as a “tax.” Should the penalty exceed the cost of a qualifying health insurance plan, it would lose some of the characteristics that enabled Roberts to deem it a tax.

Insurance companies would love a larger tax penalty, but getting something like that through Congress could be quite difficult. So they’ve turned to the Administration. As Politico reports, insurance companies are urging the Department of Health and Human Services to adopt other measures to penalize those who fail to obtain health insurance and encourage broader enrollment.

The individual mandate penalties will be pretty weak as they are phased in over two years — only $95 when they start in 2014, much less than it costs to buy insurance. And yet, everyone with pre-existing conditions will have to be accepted for coverage right away.

That’s why insurance companies are telling the administration the mandate won’t be enough for the first two years. They want more incentives — such as a late enrollment fee — to get healthy people to sign up quickly. Without getting the healthy folks in, the fear is that everyone’s health insurance premiums could shoot through the roof when all those sick people get their coverage.

The idea is being called “mandate plus” — because some of the ideas were floated by health experts last year as replacements, in case the Supreme Court struck the mandate down. Now that the mandate is here to stay, insurance companies and some policy experts say the other ideas should go hand in hand with the coverage requirement to make the whole system work — and be affordable.

In NFIB v. Sebelius the Supreme Court upheld the individual mandate penalty as a constitutional exercise of the federal taxing power. Although little of the briefing (and even less of the oral argument) considered the question, the Court concluded the penalty did not constitute a “direct tax.” This conclusion was necessary to sustain the penalty as a tax because direct taxes must be apportioned among the states by population. But if the penalty is not a direct tax, that does not mean it is free from constitutional defect. As David Rivkin and Lee Casey write in today’s WSJ, the Uniformity Clause of Article I, Section 8 could provide the basis for another attack on the penalty. They write:

If the mandate is an indirect tax, as the Supreme Court held, then the Constitution’s “Uniformity Clause” (Article I, Section 8, Clause 1) requires the tax to “be uniform throughout the United States.” The Framers adopted this provision so that a group of dominant states could not shift the federal tax burden to the others. It was yet another constitutional device that was simultaneously designed to protect federalism and safeguard individual liberty.

The Supreme Court has rarely considered the Uniformity Clause’s reach, but it cannot be ignored.. . . And although the court has upheld as “uniform” taxes that affect states differently in practice, precedent makes clear that a permissible tax must “operate with the same force and effect in every place where the subject of it is found,” as held in the Head Money Cases (1884). The ObamaCare tax arguably does not meet this standard.

ObamaCare provides that low-income taxpayers, who are nevertheless above the federal poverty line, can discharge their mandate-tax obligation by enrolling in the new, expanded Medicaid program, which serves as the functional equivalent of a tax credit. But that program will not now exist in every state because, as a matter of federal law, states can opt out. The actual tax burden will not be geographically uniform as the court’s precedents require.

Thus, having transformed the individual mandate into a tax, the court may face renewed challenges to ObamaCare on uniformity grounds. The justices will then confront a tough choice. Having earlier reinterpreted the mandate as a tax, they would be hard-pressed to approve the geographic disparity created when states opt out of the Medicaid expansion. But that possibility is inherent in a scheme that imposes a nominally uniform tax liability accompanied by the practical equivalent of a fully off-setting tax credit available only to those living in certain states. To uphold such a taxing scheme would eliminate any meaningful uniformity requirement—a result that the Constitution does not permit.

I am not familiar enough with the relevant precedents to evaluate the strength of this claim, but it is certainly true that people with equivalent incomes will be subject to different penalties in different states. So if the Uniformity Clause has any real bite, the penalty would appear vulnerable. It’s also worth recalling that PPACA defenders have been a bit too quick to dismiss Rivkin and Casey in the past.

UPDATE: Insofar as a lack of uniformity is a real constitutional concern under current doctrine, the PPACA’s problems could be larger than Rivkin and Casey suggest. This is because that even without regard to state decisions to participate in Medicaid, the penalty is not uniform. This is because the affordability exemption is based upon the cost of obtaining qualifying health insurance, and this cost will vary across states. A potential counter-argument might be that this variation is due, at least in part, to state policy choices (e.g. mandated minimum coverage, etc.), nonetheless it would remain the case that two individuals with the same incomes living in different states would not necessarily both be subject to the same penalty. Note further that this would be true even if one does not assume (as Michael Cannon and I have argued) that the tax credits and subsidies for the purchase of health insurance are not available in states without state-run exchanges.

In July, I suggested that Chief Justice Roberts’ decision to uphold the individual mandate as a tax in NFIB v. Sebelius was largely consistent with the overall judicial approach he’s demonstrated since joining the Court. I have expanded this argument into an essay that will be included as a chapter in the forthcoming book The Health Care Case: The Supreme Court’s Decision and Its Implications, edited by Nathaniel Persily, Gillian E. Metzger, and Trevor W. Morrison and to be published by Oxford University Press early next year. (This is the same book Ilya noted here.) A draft of the chapter is available on SSRN. Here is the abstract:

Chief Justice John Roberts’s decision in NFIB v. Sebelius holding the individual mandate exceeded the scope of Congress’s power to regulate commerce but could nonetheless survive as a constitutional exercise of the taxing power caught most commentators by surprise. Post-decision reports that Roberts changed his vote at some point during deliberations fueled speculation his opinion was politically motivated. Ignored in most post-decision commentary is the extent to which Chief Justice Roberts’s NFIB opinion is consistent with his own stated judicial philosophy and his record on the bench. The key elements of his opinion, including his Commerce Clause analysis and adoption of a “saving construction” to preserve the statute’s constitutionality are of a piece with his prior opinions as a Justice and Circuit Court judge and his accounts of the proper judicial role. This decision provides further confirmation that the Chief Justice is, above all else, a conservative judicial minimalist in his approach to deciding cases.

At the Law and Liberty Blog, my George Mason colleague Michael Greve has posted an insightful commentary on my forthcoming article analyzing the proper meaning of “proper.” Michael agrees with my conclusion that the individual health insurance mandate was improper, but takes issue with some of my reasoning:

My colleague Ilya Somin has penned a good piece on “The Individual Mandate and the Proper Meaning of ‘Proper’,” arguing that Chief Justice John Roberts’ opinion in NFIB v. Sebelius has “moved our jurisprudence closer to the proper meaning of proper.” Moreover, the Chief was right to conclude that the notorious individual mandate flunks a proper “proper” test. I agree with that assessment and much else in Ilya’s instructive article, though perhaps for somewhat different reasons.

The basic proposition is that “proper” in the Necessary and Proper Clause must have some independent meaning (independent, that is, from “necessary”). A “minimalistic” reading of “proper,” Ilya writes, holds that Congress may not pass laws that imply a limitless understanding of congressional powers, or which would render large parts of the Constitution redundant. (In other words, a constitutional interpretation that can’t handle broccoli must be wrong.) A broader reading, advocated by a scholars’ amicus brief in NFIB v. Sebelius... and suggested twice in Chief Justice Roberts’ opinion, picks up John Marshall’s M’Culloch suggestion that the Necessary and Proper Clause encompasses “incidental” powers but not “great substantive and independent” ones. A power to impose mandates (the argument concludes) flunks that test.

I’m not entirely happy with either formulation. The “minimalistic” reading simply restates the principle of limited and enumerated powers, which would control (and since at least Gibbons v. Ogden has controlled) even without “proper.” And the broader reading rests on a distinction that to my mind was suspect the day it was announced. (Nobody ever incorporates something for its own sake, the Chief wrote in M’Culloch; the power didn’t have to be enumerated because it is incidental. But nobody ever taxes for the heck of it, either; yet that power is enumerated.)

I’m not persuaded by Michael’s critique of either the minimalistic or the broader interpretation of “proper.” If the Necessary and Proper Clause were a mere “Necessary Clause” with the word “proper” omitted, Congress might well have virtually unlimited power, at least if necessary is defined broadly as anything that is in some way “useful” or “convenient” for executing some other enumerated power (which is the definition adopted by the Supreme Court in the famous 1819 case of McCulloch v. Maryland). As I explain in my article, virtually any mandate or regulation of any kind could be justified on that basis. Even the famous broccoli mandate might be a convenient way of regulating the interstate market in food, and thereby permissible under a combination of the “Necessary Clause” and Congress’ power to regulate interstate commerce. This is not an inevitable interpretation of “necessary.” But it’s plausible enough that the word “proper” was deliberately inserted into the Constitution in part to prevent courts from adopting this sort of view.

Michael’s critique of the broader view of “proper” advocated by Chief Justice Roberts and the scholars’ amicus brief also has flaws. The distinction between an incidental power and a “great substantive and independent one” is not based on the idea that the latter exists “for its own sake,” while the former is purely instrumental. All powers are essentially instrumental. Rather, the distinction is between powers that are relatively minor compared to the greater power they help to execute and those that are major grants of power in their own right. To put it more crudely, the argument is that the Necessary and Proper Clause can be used to give a dog a tail to wag, but not to create a dog where the other enumerated powers only create a tail. The power to tax is a massive power in its own right, and therefore could not have been created by the Necessary and Proper Clause if it were not established on its own. Taxation is a dog, not a tail.

As I explain in my article, the minimalistic interpretation of “proper” is potentially compatible with the incidental power interpretation. The former holds that “proper” at the very least excludes assertions of power that give Congress unconstrained authority or render other congressional powers redundant. But it doesn’t necessarily require us to conclude that those are the only assertions of federal power that might be improper.

By the way, the scholars’ amicus brief Michael refers to was written by co-blogger David Kopel, on behalf of three leading Necessary and Proper Clause scholars. The brief lays out their theory much more fully than I can do here, or even in my article.

Michael’s post also advances his own interpretation of “proper”:

Necessary” is a means-ends test: legislation must be necessary (convenient, useful) to a constitutionally provided-for end. “Proper,” in contrast, can’t be a means-ends test, at least not exclusively: if it were, it would be swallowed by ”necessary” and judicial deference canons. It’s best read (to my mind) as shorthand for the proposition (Marshall’s proposition) that legislation must be consistent with the letter and the spirit of the Constitution—not its ghost but its structural principles, including principles that (unlike the principle of limited and enumerated powers) aren’t immediately obvious.

The principle here at issue is the distinction between a prohibition and an affirmative command. That distinction is better than the (admittedly, related) distinction between regulating “activity” (okay) and “inactivity” (not okay) because the Constitution itself makes it: explicit powers to command (like the Militia Clauses and, by conventional—though not unassailable—understanding the Supremacy Clause, as to state judges) are exceedingly few and, moreover, institutionally cabined. Whence we (or at least I) infer that unless the power to command is provided for (textually or by unmistakable inference, as with military conscription) it’s excluded.

This view isn’t necessarily incompatible with my minimalistic interpretation, for the same reason that the incidental power theory isn’t. But I have my doubts about it. It’s true that a general power to issue any commands of any kind would be “improper.” On the other hand, I’m not sure that the power to issue commands is always precluded unless explicitly stated or unmistakably implied. Much depends on the wording of the particular Clause in question. In the case of the power to regulate interstate commerce, the power to issue commands is, I think, barred, because “commerce” implies that Congress many only use it to regulate some kind of preexisting interstate economic activity. But not all grants of power work that way. For example, Congress’ power to raise and support armies is a power to create an army where none existed previously, and therefore implies a power to issue commands. The same goes for Congress’ power to coin money, for example, which implies a power to create money where none previously existed. But it may be that all such cases fall within Michael’s category of situations where a power to issue commands is created by “unmistakable inference.” If so, the difference between our two positions may be relatively small.

Back in December, I criticized the false dichotomy set up by those who claim that the only available alternative to the Obama health care plan is some form of socialized medicine.

In this recent essay, University of Chicago economist John Cochrane gives an excellent summary of free market alternatives to the ACA that can cut health care costs and deal with the problem of preexisting conditions, which is the main justification for the ACA’s individual mandate.

Here’s one of his key points:

We all agree what we’d like to see: Health care needs to become efficient, innovative, and provide high quality care at lowest possible cost....

How will this happen? Well, we have before us many good examples. Walmart and Home Depot revolutionized retail. Airlines are dramatically cheaper than in the 1970s. Consumer electronics, telecommunications, computers, and even cars are much better and cheaper, for what you get, than ten or twenty years ago.

These revolutions are not just about technology. In most of these cases, we see process innovation, reorganizing activities to deliver complex services at lower cost and with better and more uniform quality. This process efficiency is most glaringly absent in health care...

How will this change come about? My examples share a common thread: Intense competition by new entrants, who put old companies out of business or force unwelcome and disruptive changes. Microsoft displaced IBM, and Google is displacing Microsoft. Walmart displaced Sears, and Amazon.com may displace Wal‐Mart. Typewriter companies didn’t invent the world processor, nor did they adapt. The post office didn’t invent FedEx or email. Kodak is out of business. Toyota gave us cheaper and better cars, not Ford/GM/Chrysler competition. When the older businesses survive, it is only the pressure from
new entrants that forces them to adapt....

A small example: In Illinois as in 35 other states, every new hospital, or even major purchase, requires a “certificate of need.” This certificate is issued by our “hospital equalization board,” appointed by the governor (insert joke here) and regularly in the newspapers for various scandals. The board has an explicit mandate to defend the profitability of existing hospitals. It holds hearings at which they can complain that a new entrant would hurt their bottom line. Specialized practices that deliver single kinds of service or targeted groups of customers cheaply face additional hurdles, as they undermine the cross‐subsidization provided by “full service” hospitals....

Cochrane discusses various ways in which deregulation and competition can cut costs and increase access to health care, including for those with preexisting conditions. He also points out that the ACA and various other highly interventionist policies are not needed to provide health care for the poor:

If cash markets were functional [as would be the case under deregulation], health insurance could become what it should be: a way of protecting lifetime wealth from catastrophic shocks, like life insurance. Such insurance would, of course, be a lot cheaper. It would not have to be a negotiator and payment plan for routine expenses. “Access” should mean a checkbook and a willing supplier, not a Federally Regulated payment plan. Insurance means your large‐scale standard of living isn’t enormously impacted by rare events....

“What about the homeless guy with a heart attack?”

Let’s not confuse the issue with charity. The goal here is to fix health insurance for the vast majority of Americans....

Yes, we will also need charity care for those who fall through the cracks, the victims of awful disasters, the very poor, and the mentally ill. This will be provided by government and by private charity. It has to be good enough to fulfill the responsibilities of a compassionate society, and just bad enough that few will choose it if they are capable of making choices. I wish it could be better, but that’s the best that is possible. For people who are simply poor, but competent, vouchers to buy health insurance or to refill health savings accounts make plenty of sense.

But supplying decent charity care does not require a vast “middle‐class” entitlement, and regulation of health insurance and health care for everyone in the country, any more than providing decent homeless shelters (which we are pretty scandalously bad at) or housing subsidies for the poor (section 8) requires that we apply ACA style payment and regulation to your and my house, Holiday Inn or the Four Seasons.

To take care of homeless people with heart attacks, where does it follow that your and my health insurance must cover first‐dollar payment for wellness visits and acupuncture?

UPDATE: Co-blogger Jonathan Adler made some related points here.

My forthcoming book chapter, “The Individual Mandate and the Proper Meaning of ‘Proper,’” is now available on SSRN. It is forthcoming in The Health Care Cases, edited by Gillian Metzger, Trevor Morrison, and Nathaniel Persily, eds. (Oxford University Press). The book is a collection of essays on NFIB v. Sebelius, the case where the Court addressed the constitutionality of the Obama health care bill. Among the many other contributors are Jack Balkin, Erwin Chemerinsky, Richard Epstein, Charles Fried, Jamal Greene, Linda Greenhouse, Andrew Koppelman, Neil Siegel, Larry Solum, and VC co-bloggers Jonathan Adler and Randy Barnett.

Here is the abstract for my contribution:

The Necessary and Proper Clause of the Constitution has often been at the center of debates over the limits of federal power. But in the first 220 years of its history, the Supreme Court never gave us anything approaching a comprehensive analysis of what it means for a law to be “proper.” The Court’s recent decision on the constitutionality of the Affordable Care Act individual health insurance mandate in NFIB v. Sebelius helps fill this gap. It moves constitutional jurisprudence closer to the proper meaning of proper.

In this article, I explain why Chief Justice John Roberts’ key swing-vote opinion was right to conclude that the individual health insurance mandate requiring most Americans to purchase government-approved health insurance is outside the scope of Congress’ power under the Necessary and Proper Clause becasue it is not “proper.”

Part I shows that the Necessary and Proper Clause compels laws authorized by the Clause to meet two separate requirements: necessity and propriety. Both the original meaning of the Clause and Supreme Court precedent support this interpretation. The Necessary and Proper Clause cannot be reduced to a mere “Necessary Clause” that renders the word “proper” meaningless.

Part II argues that the individual health insurance mandate is improper because upholding it under the Clause would have given Congress virtually unlimited power to impose other mandates, and also render large parts of the rest of Article I redundant. This is consistent with a relatively minimalistic reading of the word “proper.” I consider and reject various attempts to prove that the health insurance mandate is a special case different from other mandates. I also briefly discuss a broader interpretation of the Clause: that the power to impose mandates on the general population is not a power “incidental” to Congress’ other enumerated powers, but rather a major independent power of its own. Both the minimalistic and broad interpretations of “proper” lead to the same conclusion in the mandate case.

Finally, Part III briefly discusses the possible future implications of Roberts’ interpretation of propriety. Here, much depends on the future composition of the Supreme Court and other contingent factors. There is also an ongoing debate over whether the Chief Justice’s Necessary and Proper reasoning is mere dictum that does not bind lower courts. But it is possible that the ruling will have a noteworthy impact in curtailing future federal mandates. Future courts might also build on the NFIB’s interpretation of “proper” as a tool for incrementally strengthening limits on federal power.

Co-blogger Jonathan Adler recently posted on United States v. Elk Shoulder, a recent Ninth Circuit decision which may be the first court of appeals case interepreting the Supreme Court’s individual health insurance mandate decision in NFIB v. Sebelius.

When NFIB came down, some commentators argued that Chief Justice Roberts’ conclusion that the mandate was not authorized by the Commerce Clause and Necessary and Proper Clause was mere dictum, and therefore not binding precedent for the lower courts. I criticized that view here. It’s worth noting that the Ninth Circuit just treated the Roberts’ Necessary and Proper reasoning from NFIB as if it were binding. In upholding the Sex Offender Registration and Notification Act sex offfender registration requirement, they relied heavily on NFIB’s interpretation of the Necessary and Proper Clause:

[B]ecause SORNA registration requirements are imposed only on individuals who were convicted of sexual offenses, it regulates only “those who by some preexisting activity bring themselves within the sphere of federal regulation.” NFIB, 132 S.
Ct. at 2592....

Although the Necessary and Proper Clause provides no justification for laws effecting “a substantial expansion of federal
authority,” NFIB, 130 S. Ct. at 2592, SORNA’s registration requirement is “narrow in scope” and “incidental to the exercise” of enumerated powers. Id. at 2592 (opinion of C.J. Roberts)...

The conclusions that the Necessary and Proper Clause does not authorize legislation that doesn’t regulate a “preexisting activity” or that effects “a substantial expansion of federal authority” are central elements of Roberts’ analysis of the Clause in NFIB. And in Elk Shoulder, the Ninth Circuit seems to be treating them as binding precedent. It’s theoretically possible to interpret these passages as merely citations of persuasive authority that happen to accord with the Elk Shoulder panel’s own views of the Necessary and Proper Clause. But the decision seems to be citing NFIB in exactly the same way as it cites other Supreme Court precedent, and without any hint that it isn’t binding.

Although two of the three members of the Ninth Circuit panel are conservative Republican appointees, the third – Wallace Tashima – is a liberal Democrat appointed to the district bench by Jimmy Carter and the Ninth Circuit by Bill Clinton. I doubt that Judge Tashima actually agrees with Roberts’ Necessary and Proper reasoning in NFIB. Very few liberal jurists do. If he nonetheless went along with the Ninth Circuit’s adoption of it in this case, it is probably because he sees it as binding precedent, not merely persuasive dictum.

Obviously, this does not mean that other circuit courts will also treat this part of NFIB as binding. Nor does it prove that defenders of the dictum theory are necessarily wrong. They can simply claim that the Ninth Circuit made a mistake here. But it’s an interesting development nonetheless.

UPDATE: It’s also worth noting that three district courts have decided whether or not to treat Roberts’ Commerce Clause and Necessary and Proper Clause rulings in NFIB as binding. Two have treated it as a valid precedent, while one considers it to be dictum. See United States v. Williams, 2012 WL 3242043, at *3 (S.D.Fla. Aug.7, 2012) (stating that Chief Justice Roberts was “writing for the Court” when discussing Congress’s commerce power) ; United States v. Moore, 2012 WL 3780343, at *3 (E.D.Wash. Aug.31, 2012) (treating it as a binding concurring opinion under Marks v. United States, 430 U.S. 188 (1977)); and United States v. Spann, 2012 WL 4341799 at*3 (N.D. Tex. Sept. 24, 2012) (concluding that NFIB’s Commerce Clause analysis was dictum).

In addition to Willow, there were two major dogs that didn’t bark during tonight’s presidential debate. First, even though the debate was supposed to focus on domestic policy, neither the moderator nor the candidates ever focused on some of the most important domestic issues on which the president can have a big impact: issues such as judicial nominations (not discussed at all) and regulatory agencies (only mentioned in passing). Instead, they spent a lot more time talking about short term economic performance, which presidents have only very limited leverage over. That is likely because voters who know little about politics and policy tend to focus on the wrong issues because they often don’t understand what a president can actually control and what he (mostly) can’t.

Second, although Romney predictably spent a lot of time attacking Obamacare, he said absolutely nothing about the individual health insurance mandate, which remains hugely unpopular – far more so than any other part of the law. Even when Obama waxed eloquent about the evils of insurance companies, Romney didn’t play the obvious gambit of pointing out that the President is the one who passed a law that forces millions of people to buy insurance company products that they don’t want, after saying in 2008 that “[f]orcing people to buy health insurance [in order to provide them with health care] is like forcing the homeless to buy a house to eliminate homelessness.”

Why did Romney let this opportunity slip by? The answer is obvious. If he had attacked the individual mandate, Obama could have countered by noting that Romney’s own Massachusetts health care plan also includes an individual mandate, and Obamacare was modeled on Romneycare. Even as it stood, Obama was able to point out (correctly) that his health care plan was modeled on Romney’s and designed by some of the same advisers.

Overall, Romney did reasonably well in tonight’s debate. If the CNN commentators I’m watching are to believed, he even outperformed Obama. But by nominating the father of Romneycare, the GOP cost itself an opportunity to attack the most politically vulnerable part of Obamacare. That’s what happens when, as economist Bryan Caplan once put it, the Republicans nominate the John the Baptist of Obamacare to run against the program’s Jesus Christ.

UPDATE: I have made a few minor stylistic revisions to this post.

UPDATE #2: A CNN poll of people who watched the debate shows that 67% thought Romney won, compared to only 25% who picked Obama. My own impression is that the two candidates were pretty even. But I’m obviously not the the average swing voter whom they were trying to appeal to. That said, surveys have repeatedly shown that swing voters (like most of the rest of the public) hate the individual mandate. Other things equal, the GOP would be better off if they had a candidate who was able to attack it.

For those who may be interested, I am going to be speaking at the University of Minnesota Law School and the University of Tulsa this week.

On Wednesday at 12:15 PM, I will be debating University of Minnesota Professor Fred Morrison about the Supreme Court’s health care decision at the University of Minnesota Law School, at an event sponsored by the Minnesota Federalist Society.I summarized my thoughts on the decision here.

I did not notice until after the fact that this event coincides with Yom Kippur. I apologize if that ends up driving away a significant part of the potential audience. But there was no other date that fit all the participants’ schedules.

On Friday, I will be participating in a conference at the University of Tulsa College of Law devoted to the work of Yale Law School Professor Heather Gerken, one of the nation’s top federalism and election law scholars. The conference is open to the public and the schedule is available here. I am told that lawyers can get CLE credit for attending. Among the other participants are well-known constitutional law and elections scholars such as Sanford Levinson (Texas), Ernie Young (Duke), my GMU colleague David Schleicher, and many others.

I previously commented on Gerken’s important work on federalism here.

The Congressional Budget Office has just released new estimates of the number of people who will be subject to the individual mandate penalty tax for failing to obtain qualifying health insurance in 2016. According to CBO’s new analysis, the penalty tax will be paid by six million people. The penalty tax will generate an estimated $7 billion for the U.S. treasury and 80 percent of those paying the penalty tax will earn less than 500 percent of the poverty level. (For reference, the poverty line for a family of four is $23,050 in 2012, according to HHS.) The estimated number of people who will have to pay the penalty tax is approximately 50 percent higher than the CBO’s 2010 estimate, but the CBO only attributes a small portion of the increase to potential state decisions to opt out of the Medicaid expansion as allowed by NFIB v. Sebelius. According to the CBO, 30 million Americans will remain uninsured in 2016.

UPDATE: The AP reports: “Nearly 6 million Americans — significantly more than first estimated— will face a tax penalty under President Barack Obama’s health overhaul for not getting insurance, congressional analysts said Wednesday. Most would be in the middle class.”

This Thursday at noon, I will be debating the Supreme Court’s recent decision upholding the individual health insurance mandate, at the University of Toledo College of Law. Toledo law professor Rebecca Zietlow, author of several important articles on the health care law and related issues, will be defending the constitutionality of the mandate.

For my take on the Court’s decision see here.