On States Suing over a National Healthcare Plan

I had a guest here this weekend who told me of one theory of why states might sue the federal government over portions of the Obama Healthcare Plan that requires individuals to buy insurance.  The theory goes that the federal government is not authorized by any clause in the Constitution to force individuals to pay for healthcare.  A plain and superficial reading of the Constitution would seem to support that. This leads to three questions:

  1. Is ObamaCare constitutional?
  2. If not, can it be made constitutional?
  3. Who is doing the suing and why?

First, a caveat: I am not a lawyer.  All lawyers: please chime in.

Is ObamaCare Constitutional?

Next, some Constitutional basics.  The way our form of government works, each and every law that Congress passes must find some authorizing basis from within the Constitution, because the 10th Amendment of the Constitution clearly states:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

In other words, Congress has to find a basis for the law from within the Constitution.  For the better part of three centuries, however, Congress has largely been able to get around this restriction through what has become known as the Interstate Commerce Clause (Article I, §8 Cl. 3):

[The Congress shall have power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes;

“Commerce among the several states” has been interpreted to mean, for instance, the ability of someone in New York to charge for access to its waterways.  That was what Gibbons v. Ogden (22 US 1) in 1824.  It’s largely the basis of how drug laws are authorized today by the federal government.  Some people might say that this is a stretch of the clause, and that in fact requiring expenditures from individuals on health insurance would be even more of a stretch.

So what’s the logic in favor of the law?  That has its basis in the theory of insurance.  Here I will say that I am not an insurance expert, by the way.  This much I know: a risk pool requires that everyone not make a claim at the same time, and the lower the likely percentage of claims over some period of time, the need for less money by the insurance companies to satisfy claims.

In the context of health care, if only old and sick people buy insurance, because they make up for the bulk of claims, the money required to pay out claims would require very high premiums, thus reducing any benefit to having insurance.  On the other hand, if only healthy people bought into the system, since there would be very few claims, there would be no need for high premiums.  Indeed, healthy people might not buy insurance at all, or very limited policies.  In short, insurers can only sell health insurance to sick and old people if they have a group of otherwise healthy and young to reduce costs.

Does the decision of someone to not buy insurance in one state impact consumers in and companies in other states?  If there exist risk pools that cross state boundaries, then the answer would appear to be yes.  Otherwise it would seem the answer is no.

If ObamaCare is not constitutional, can it be made so?

Supposing the Supreme Court found mandatory premiums unconstitutional, what could the Congress and administration do to get around it?  The tax system offers us one possibility.  The 16th Amendment authorized Congress to tax us:

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

One way the Congress could get around this would be to impose a tax that is the amount of a minimum premium, and then allow for a credit based on the costs expended on that premium.  Loophole?  Perhaps.  But not the first.

Coming back to the Commerce Clause, the Congress probably could not have imposed a national speed limit without relying on highway funding.  They probably could not themselves have prosecuted individuals for traveling over 55 or 65 mph.  Instead they required the states to pass laws or face losing highway funding.

Who is doing the suing and why?

Ultimately if we look at the states that have filed suit, I’m sure we’ll see a distinctly Republican red tinge to them.  For one thing, the strategy of Republicans has been to obstruct any Democrat initiative, no matter the harm that obstruction causes to individuals.  Here, what possible benefit could individuals who are uninsured gain from not having health insurance?  Today 45 million Americans don’t have a choice because they cannot take part in a well balanced risk pool, and hence cannot afford any coverage.  Tomorrow even if they don’t have a choice on insurance, at least they’ll have some coverage.


In short, while considering the constitutional elements is interesting at an academic level, the officials doing the suing are harming the very people they are supposed to be serving.  Perhaps voters should remember that.

Who needs an opposition party? We’ve got Democrats

RooseveltAs long as I could recall, we Democrats have prided ourselves on being the “Big Tent” party.  This probably stems from a combination of deft political maneuvering by FDR and a singular hatred of the Republicans after the stock market crash of 1929.  The downside of the big tent is that nobody inside agrees on much.  Here is an article by Peter Baker and David Herszenhorn of the New York Times that talks about how allies in the U.S. Senate are criticizing President-elect Obama and his team about a stimulus package that they claim looks a little too much like trickle-down economics.  Everyone agrees that we need more jobs created.  Even Republicans!  But nobody agrees on how to go about it. President Bush was the darling of the party (not to mention their leader), and was able to set the agenda.  But he certainly did that with a lot of support from Republican congressional leaders.  Obama doesn’t seem to be doing the same.

This does not bode well for the next administration.  If Democrats form a circular firing squad, as they did in 1994, we can expect a Republican Congress just two years from now.

A Question I keep getting asked: What do you think of Obama?

President-elect Barack ObamaAs an American living abroad, very few people ever asked me what I thought of President Bush.  They all have their opinions, it seems.  And while few Swiss generally share their opinions with me, they are very intrigued about my own opinion of the incoming president.  To this question, I’ve developed a pretty stock answer: “I don’t know.  Ask me in a few years.”

President-elect Obama has demonstrated thoughtfulness in the few times I have heard him speak extemporaneuously.  He also seems to have assembled a very competent cabinet with vast amounts of political experience.  This can be put another way- it’s the same old faces we’ve come to know.  Another young president did his best to put together a superstar team, and it led us to the war in Vietnam.  All this says is that brain power isn’t everything.

President Carter is perhaps one of the smartest men in the world, and yet his presidency is generally views as a failure.  It took President Bush to eclipse him in that department, showing that failure is not limited to one party or another.

Given the choice between having brain power and experience and not having it, clearly I’d rather have it.  But something more is required: wisdom.  While it’s easy to demonstrate a lack of wisdom, I’m not sure how easy it is to demonstrate that one has it.  Again, the thoughtfulness that he has applied to complex issues leads me to hope, but that’s the best I can do for now.

Obama’s team, thus far

President-elect Obama has selected key members of his cabinet to be nominated.  Here is the list of which I am aware, in order of succession.

  • Secretary of State: Hilary Clinton
  • Secretary of the Treasury: Timothy Geithner
  • Secretary of Defense: Robert Gates
  • Attorney General: Eric Holder
  • Secretary of Commerce: Bill Richardson
  • Secretary of Homeland Security: Janet Nepalitano

Here are some key members of his staff he has named:

  • Director of OMB: Lawrence Summers
  • National Security Advisor: James Jones
  • Press Secretary: Robert Gibbs
  • Ellen Moran

These choices do not reflect a radical shift from the Clinton era but rather a subtle change.  This is probably a good thing, since Clinton seemed to have gotten it mostly right.  The most provocative choices, of course, are Senator Clinton and Ellen Moran.

Ellen Moran, coming from Emily’s List sends a strong message that the issues that group holds dear will be front and center in an Obama administration.  The right will certainly not be pleased with such a choice.

And it’s not clear who should be pleased with Mrs Clinton as a choice for Secretary of State, aside from perhaps President Clinton, as she has very limited foreign policy experience, and clearly does not see eye to eye with the President-elect regarding Iraq.  Worse, she has her hands dirty with her vote to go to war, having perhaps lost a primary over that very issue.

In the meantime, the President-elect is very busily cleaning out southwester governors’ mansions with the choices of Janet Nepolitano and Bill Richardson. Perhaps he will name Arnold Schwarzenegger back to his old job as head of the President’s Council on Health and Fitness.

Vetting Bill Clinton?

Here is the most bizarre story I’ve heard in a while.  Apparently President-elect Obama is considering Senator Hillary Clinton as Secretary of State.  While I wonder whether this is a good choice alone on its merits, what really gets me is how people in the press seem to believe that Bill Clinton, a former president who received millions of votes twice, somehow needs to be vetted.  It’s not as if the media has cut him a break.

The reason behind all of this might be best put as the calm before the storm.  Right now there is no news, and so a vacuum must be filled.  With names being bantered about like Clinton and Richardson, who knows who the real nominee will be?