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Posted at 1:53 PM ET, 02/28/2011

No taxation with misrepresentation

By Charles Lane
While everyone was away quarreling about Wisconsin last week, Judge Gladys Kessler of the U.S. District Court in Washington D.C. issued the most impressive of the pro-health-care reform judicial rulings so far. Kessler's terse, lawyerly opinion made the score 3-2 in favor of the law at the trial level.

Kessler upheld the statute's individual mandate as a constitutionally proper exercise of Congress's power to regulate interstate commerce, basically adopting a better-written version of arguments that other judges and journalists have already made: Health care is a national market; Congress can regulate it in such a way as to provide for universal coverage; individuals can't "free-ride" off the system.

Yet, in a very important sense, Kessler's opinion was also a victory for the law's opponents. She rejected, in no uncertain terms, the Obama administration's alternative argument: The individual mandate is constitutional as an exercise of Congress's power to tax the citizenry and spend the funds for the "general welfare." As you'll recall, more than a few pundits and law professors have supported this claim, arguing that the law's monetary "penalty" for non-compliance with the mandate is obviously the functional equivalent of a tax, and so, as any idiot can see, it does not matter that Congress went out of its way not to call it a tax.

Kessler flatly rejected this contention. Congress plainly did not intend the penalty "as a revenue-raising tax, but rather as a punitive measure" designed to enforce a regulatory program, she wrote. In so doing, Kessler -- a lifelong Democrat appointed to the bench by President Bill Clinton in 1994 -- adopted with warm approval the analysis of Judge Roger Vinson, the supposedly second-rate Republican hack who struck down the individual mandate in a Florida court just weeks ago.

Indeed, as Kessler noted, every district judge to consider this point before her, whether appointed by a Republican president or a Democrat, has sided with the law's opponents: Her opinion makes the score 6-0. (This includes a Pennsylvania judge who has not yet decided on the law as a whole, but rejected the tax argument in a preliminary ruling.)

At this point, it's unanimous: Congress cannot invoke its taxation authority or disavow it according to political convenience. If it wants to levy taxes it must be open and honest about it. This is not a mere matter of semantics; it's a basic safeguard against deceptive legislation. No taxation with misrepresentation, you might say.

Or, to put it another way, when Congress deliberately removes the word "tax" from a statute and replaces it with a different word with a different legal and policy meaning, that's a clear legislative choice to which the courts must defer. Penciling "tax" back in later on would be a feat of judicial activism that neither Kessler nor any other judge of either party (so far) has been willing to perform.

More and more, this case looks like boiling down to the one essential - and novel - constitutional question on which the courts have divided: Whether the individual mandate is a constitutional exercise of Congress's power to regulate interstate commerce. More thoughts on that in a later post.

By Charles Lane  | February 28, 2011; 1:53 PM ET
Categories:  Lane  | Tags:  Charles Lane  
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Judge Kessler in essence says that individual sitizens may be commanded to do anything that the federal government decides that would be in the interest of the nation. If this ruling stands, the government may next command that each citizen eat yogurt or tofu or string beans if it decides that doing so will make citizens healthier and thus lower the cost of government medical insurance.

Say goodbye to the Constitution and the Bill of Rights. They are rendered meaningless by this decision.

Posted by: concernedcitizen3 | February 28, 2011 3:24 PM | Report abuse

Could you tell us what Gabby Giffords would say about this if she could speak normally?

Posted by: tjtucker | February 28, 2011 3:28 PM | Report abuse

Democrats should seize this opportunity to get rid of the unpopular individual mandate and support the hugely popular public option. My bet is you'd see the same conservative hacks decrying Obamacare today start forcefully defending the mandate tomorrow.

Posted by: dnahatch1 | February 28, 2011 3:43 PM | Report abuse

Is there a limit to the power of the interstate commerce clause of the constitution? For example, when I breath, take in oxygen and omit CO2. This is a reality. The EPA wants to regulate CO2.Therefore, does this mean given how the powers given to the EPA under the interstate commerce clause of the constitution that the EPA can regulate my breathing or indeed everyone else's breathing. Just food for thought.

Posted by: jeffreed | February 28, 2011 4:12 PM | Report abuse

At least they all agree that what the law calls a penalty is a penalty. Pundits and professors should realize that words have meaning.

As for the commerce clause justifying this new power grab, I strongly disagree. If true, you can be ordered to buy a house, or buy a car, or even buy fruit and vegetables in support of our national commerce.

Posted by: kitchendragon50 | February 28, 2011 4:42 PM | Report abuse

Unfortunately, the author doesn't really explain why this ruling is the most impressive. He says the judge agrees with every other judge on the tax issue, but doesn't explain what makes this ruling so special versus, say Vinson's ruling. So, one must think it is special simply because the author agrees with it?

Posted by: Marin823 | March 1, 2011 1:18 AM | Report abuse

dnahatch - The mandate has nothing to do with the public option. You have to have a mandate if you require companies to insure people with pre-existing consitions, i.e. sick people. Otherwise folks will simply wait until they get sick to buy insurance.

The basic problem here is competitive insurance companies. Like the competitive fire companies of colonial America, they just don't work. We could give an improved Medicare to every man, woman, and child and it would cost less per person for health care because of the enormous waste of private insurance companies and drug companies.

All other industrialized countries have some form of universal government run health care. They get better care as measured by all 16 of the bottom line public health statistics, and they do it at half the cost per person. If our system were as efficient, we would save about $1.3 TRILLION each year.

BTW, Lane, like most others, forgets to mention the 10 or so cases where judges have ruled that the plaintifs do not have standing to even bring their case.

Posted by: lensch | March 1, 2011 7:06 AM | Report abuse

The fact that there is no mention of fact that very important legislation, such as healthcare reform, is almost always passed in need of even major modifications and passage in almost any form is great success, leads me to recognize that some are more interested in selfish benefit than that of our nation.

Posted by: reenie10 | March 1, 2011 9:13 AM | Report abuse

I believe that the individual mandate is unconstitutional, but that will ultimately be decided by the Supreme Court. These peliminary rulings serve merely to refine the arguments.

The much bigger and more cogent point about Obamacare is that, in its present form, it is a fiscal impossibility for both the states and the federal government. 28 states sued the government not on some abstract principle but because Obamacare will destroy their state budgets.


Posted by: pilsener | March 1, 2011 10:56 AM | Report abuse

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