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Between the Lines

Why liberalism faces a new era of constitutional insecurity.

SOME VICTORIES prepare the ground for more victories; others lay the basis for future defeats. The great question for liberals about the Supreme Court’s decision on the Affordable Care Act (ACA) is which kind of victory it is.

John Roberts’s decision to spare the ACA at least allows the president this fall to claim health reform as a major achievement. But the chief justice’s new limits on the scope of the Commerce clause and federal spending powers may put future reforms at risk of being struck down and require liberals to rethink their approach to national policy. Roberts’s opinion upholds conservative positions in nearly every respect except its conclusion, and it is especially worrisome in light of the readiness of the four right-wing dissenting justices to use the same arguments to overturn the ACA in its entirety. As long as the Court has a conservative majority, the threat of a judicial veto will now hang over a wide range of liberal initiatives, including many long believed to be moderate, incremental, and constitutionally secure.

FROM A HISTORICAL perspective, the ACA followed the path of least resistance to universal health insurance. Through most of the twentieth century, the model that many Democrats favored for health care was a tax-supported national program like Social Security or Medicare. They regarded private health insurance as inefficient and inequitable, and they saw Medicaid as providing only limited access to care. But after years of frustration, congressional Democrats pursued incremental reforms as a stopgap. During the 1980s, they worked with Republicans to extend Medicaid to pregnant women and young children in families with incomes up to 133 percent of the poverty level. These extensions, signed into law by Ronald Reagan and George H.W. Bush, began as options for states and were soon revised and became mandates, and the states all complied in expanding coverage. In the early ’90s, as a counterproposal to President Bill Clinton’s health plan, many prominent Republicans also endorsed a mandate on individuals to purchase health coverage as part of federal legislation to bolster private insurance and make coverage universal.

In short, both elements at issue in the legal challenge to the ACA—the individual mandate and the Medicaid expansion—had a Republican imprimatur. Serious questions had never been raised about their constitutionality. Perhaps the most worrisome aspect of the ACA case is that the Court nearly overthrew the entire act on the basis of arguments that Congress had no reason to take seriously when it passed the legislation.

Strictly interpreted, the Court’s new limit on the scope of the Commerce clause should not have far-reaching consequences. Bill McCollum, Florida’s former attorney general, unintentionally made this point when he said after the decision, “Well, at least it’s clear that they can’t order you to buy broccoli”—as if anyone had proposed to do that. Under the Commerce clause, according to Roberts as well as the four right-wing justices, the federal government cannot set a minimum requirement for health insurance any more than it can require people to buy vegetables. But by arguing that the ACA’s insurance mandate was a novel and radical departure in federal legislation, Roberts and the conservative dissenters appear to concede that their ruling doesn’t apply to any other existing legal requirement. In fact, the only recent proposal to mandate purchase of a private product has come from conservatives who want to replace Social Security with a requirement to buy private annuities—an idea safe under Roberts’s tax-powers argument. The real worry about his Commerce clause ruling is that it may only be one in a series of new and dubious lines drawn to hem in federal regulatory powers related to the economy, environment, and other concerns.

The more immediate danger comes from the Court’s ruling that the Medicaid expansion involves an unconstitutionally coercive use of federal spending power. Like more than 50 previous federal laws revising Medicaid, the ACA would have denied a state all funding for current Medicaid beneficiaries if it failed to comply with new rules. The original Medicaid statute reserved to Congress the authority to make revisions. Roberts claims that, unlike the earlier Medicaid extensions, the ACA’s broadening of coverage—to all individuals with incomes up to 133 percent of the poverty line—is so large that it constitutes a new program. But while the earlier extensions came with no extra funds beyond the traditional federal match for each state’s Medicaid costs, the ACA calls for the federal government to pay nearly all of the costs of new beneficiaries and will increase state Medicaid costs by less than 1 percent, according to the Congressional Budget Office. Yet, thanks to the Court’s ruling, states can now decline to extend Medicaid without any penalty, and some Republican states will at least initially do so.

The long-term impact of the Medicaid ruling is unclear. The federal government has never cut off all Medicaid funding to a noncompliant state. Like nuclear bombs in international conflict, a total cutoff is too destructive for practical use, so the denial of that weapon is not a great loss to federal authority. Roberts’s ruling suggests Congress could impose a smaller penalty on a state that declines to participate in a program undergoing major change—say, 5 percent of the funds for the existing program. Even without any penalty, however, the ACA offers the states so good a deal that red states with minimally rational leadership will eventually participate.

The main trouble with Roberts’s decision is ambiguity. While saying that Congress could constitutionally impose a smaller penalty on a state, Roberts doesn’t specify at what level a penalty becomes coercive or how much change in an old program makes it a new program. The result is likely not only to be a flood of litigation but also uncertainty in Congress about the conditions it can attach to the funds going to a wide range of federally supported programs in the states.

The four right-wing justices’ dissent in the health care case will only intensify the sense of constitutional insecurity surrounding future liberal legislation. Not content to strike down the individual mandate and related insurance market reforms, the conservatives hold that the subsidies, insurance exchanges, and employer requirements must also fall because they would not work as Congress intended. And rather than making the Medicaid expansion optional for the states, the conservatives would annul it altogether on the grounds that the Court should not introduce a “divisive dynamic” among the states in which some receive federal aid and others do not. After overturning all related provisions, the conservatives say that all other provisions must go because they are unrelated: “There is no reason to believe that Congress would have enacted them independently.”

As Justice Ruth Bader Ginsburg writes in her opinion, “When a constitutional infirmity mars a statute, the Court ordinarily removes the infirmity. It undertakes a salvage operation; it does not demolish the legislation.”

To anyone with a historical memory, the right-wing demolition derby may seem puzzling. Conservatives now say that the alternatives they once approved—the individual mandate and extensions of Medicaid—are unconstitutionally coercive, while acknowledging that liberals may constitutionally establish the very thing conservatives most oppose, a tax-financed national program. But this may not be as odd as it seems. Republicans know that Democrats are allergic to big tax increases and may believe that, by cutting off more moderate, incremental alternatives, they will force Democrats out into the open as the tax-and-spend party. Roberts’s ruling that the mandate’s penalties are taxes also fits into that agenda.

Democrats might well have to face up to explicit support for tax increases because of the long-term inadequacy of revenue for existing commitments. But after the conservatives’ embrace in the ACA case of what only recently seemed far-fetched constitutional theories, no one can be confident that any new national initiatives, even if firmly rooted in the federal government’s tax powers, are safe from being struck down.

For the short term, Democrats should adjust the penalties in conditional-aid programs and provide backup mechanisms in legislation whenever there is even a remote chance that a provision may be invalidated. The Court may only narrowly apply the new limits on federal powers or ultimately find them unworkable. But especially if the Court’s right wing gains another vote in a Mitt Romney presidency, a major national crisis over judicial usurpation may eventually be unavoidable. Roberts pulled the Court’s right wing back from the brink this time, but we cannot be certain that those instincts will continue to prevail. 

Paul Starr, professor of sociology and public affairs at Princeton University, is the author, most recently, of Remedy and Reaction: The Peculiar American Struggle over Health Care Reform (Yale University Press). This article appeared in the August 2, 2012 issue of the magazine.