In Monday morning’s oral argument at the Supreme Court, Solicitor General Donald Verrilli, Jr. juggled several legal balls in the air simultaneously while keeping a straight face. And he probably provided the most workable path for the Court to conclude that the Anti-Injunction Act (AIA) will not keep it from reaching a decision on the merits in the constitutional law challenges to the individual mandate under the Affordable Care Act (ACA).
Verrilli first had to insist that the 19th century AIA is a jurisdictional limit on courts, and not just a claims processing rule, regarding pre-enforcement challenges to the assessment or collection of any “tax” before it is due. As a general rule, the federal government does not want to concede its broad powers to collect revenue without facing early interference by prospective taxpayers. Nor did Verrilli want to abandon completely the Obama administration’s fading argument that the individual mandate still could be upheld as part of the constitutional powers of Congress to raise taxes and spend money to promote the general welfare (instead of as part of the power of Congress to regulate interstate commerce).
To the naked eye, it might appear that the government’s position was that the mandate was a “tax” when it needed to be one, and a “penalty” imposed to enforce the regulation of interstate commerce when it needed to be something else; i.e., for political reasons on one day, and for legal reasons on another day.
Think of the Decepticons in the “Transformers” movies and you’ve figured out how politically malleable, reversible, and misleading the Obama administration wants the mandate to be. Or just close your eyes and wish upon a falling star…
Nevertheless, Verrilli insisted that the precise language Congress used in the ACA and related provisions in the Internal Revenue Code is “determinative.” Then Justice Alito shot back, “…today you are arguing that the penalty is not a tax. Tomorrow you are going to be back and you will be arguing that the penalty is a tax.”
Verrilli explained that something (hint — the individual mandate and its penalties) can be a constitutional exercise of the taxing power, whether or not it is called a tax. But determining whether the court has jurisdiction relative to an AIA-based challenge requires construing the statutory text and its precise choice of words more closely.
In this case, Verrilli and the federal government (finally) decided to argue that the penalty for violating the individual mandate did not involve a “tax” that’s subject to the AIA.
The solicitor general also insisted that the ACA provides no other consequence apart from the tax penalty for someone who violates the individual mandate. Hence, he dismissed the argument made by the private appellees in this case that they were challenging only the individual mandate itself, and not enforcement of the related tax penalty. Verrilli concluded that if there was no penalty, then there would be no other legal obligation for someone to purchase minimum essential health coverage.
Chief Justice Roberts in particular seemed skeptical that the mandate alone could be enforced as a legal requirement without use of the accompanying tax penalty. “It seems very artificial to separate the punishment from the crime,” he observed.
The attorney for NFIB and other private plaintiffs, Greg Katsas, first tried to argue (without great success) that the AIA does not involve jurisdiction but rather procedural instructions to courts. He then pointed out more effectively that Congress separated out mandate exceptions from penalty exceptions (they applied to different categories of people, respectively). And he observed that Congress believed that at least some people would comply with the mandate simply because “it is the law.” (CBO actually based some of its questionable budget estimates on this premise.)
Another argument by Katsas appeared to fall flat (at least with Justices Kagan and Ginsburg): that the states were injured by the mandate because it would cause more people to enroll in their Medicaid programs than if they had a “voluntary” choice, and the states would have to spend more money than before to cover them.
Several other supportive arguments against holding that the AIA prevented further consideration of this case were filed in legal briefs with the Court but not highlighted specifically during oral argument. They include:
• Congress determined in the ACA not to apply the full panoply of statutory rules governing taxes to the individual mandate penalty,
• The Internal Revenue Code, in a number of its sections, treats a penalty different than a tax, and
• The federal government in the ACA tried to use the individual mandate to pay for its new regulatory impositions in an “off-budget” manner — without the political accountability that comes with new taxes.
The bottom line on the intersection of the ACA and AIA is: The tedious statutory construction analysis involved suggests that Congress did not intend to prohibit early consideration of this legal challenge to the individual mandate. And this case is Too Big to Fail to reach a decision on the merits by the Supreme Court later this year.
Next up: the individual mandate and the most important constitutional law issues in this case on Tuesday morning.