The 3rd Burning of Washington: Uncivil Health Care Wars Continue

The 3rd Burning of Washington: Uncivil Health Care Wars Continue

By Alvin D. Lurie

Historical Headnote: Washington has been burned twice before - once 197 years ago literally, by the enemy from without, when the British burned the White House and the U.S. Capitol during the War of 1812; and once metaphorically, by the enemy from within, when the Confederacy broke away from those central institutions of the United States (indeed untied itself from the Union) in the civil war between the states. The following lines tell of the third time, right now, when those two bulwarks of our system have been subject to severe risk of conflagration figuratively in the overheated environment of the health care debate, and the third of our three constitutionally founded institutions, the Supreme Court, is about to be drawn into the same fire, from which it may become badly burned.

Season of Discontent

At a time when the dysfunction of Congress has triggered a mass disaffection of Americans with their government, which one might suppose could not possibly get worse, one could be wrong. We are rushing headlong into a season of potentially greater discontent - the period directly preceding the 2012 presidential election - when attacks on the incumbent and on those of the other party who are vying to unseat him will not just discredit all the rivals, but even the very institution of the presidency, which is certain to add a new dimension of disenchantment with our system of government in many quarters.

As if that were not enough, the third branch of our democracy, the judiciary, may be about to take its lumps alongside the other two, as the Supreme Court takes up a case that is at the core of much of the breakdown of comity among the working parts of our federal government that has exacerbated the low esteem in which the government is presently held by the public. In accepting the appeal in this case the Court has agreed to review the constitutionality of the health care reform legislation - the Affordable Care Act (so named more for public-relations effect than for truth in naming) - that is certain to cleave the High Court's judges into warring camps, that in itself will likely be seen to discredit its Justices, to say nothing of the Court itself, in the eyes of one or another of huge swaths of the public whose political persuasions are sharply at odds with whichever turns out to be the majority view of the Court.

Consequently, a further crumbling of the foundations on which the three pillars of our government sit is not a bridge too far. Do I prove too much? I can hear some readers declare so, especially as to the impact I have just foretold for the judiciary. To them I would say, remember Florida 2000 and the judgment of the Court's majority that Bush beat Gore for that state's Electoral College votes, resulting in the Democrat's supporters (not just the lay voters, but even some in academe) demonizing the majority for having "shamelessly" stolen the presidency from Gore, who, by every count, had won the popular vote. Do not think that didn't lessen the respect for and authority of the Court that echoes still in the view of many of that mind-set.

I would submit that the impending health care review by the Court could actually carry much more potential threat to the Court's authority than Gore versus Bush, when viewed from the perspective at this writing, i.e., before commencement of arguments before the High Bench, because of all the baggage already borne by the health reform issues, going back four years to the time Obama first raised the health reform banner on the campaign trail, and continuing with increasing intensity and animosity between the Parties in the Congress after the 2008 election, as the White House made the issue its signature (almost sole) legislative objective for all of 2009 and continuing into 2010, while the Republicans as steadfastly fought the effort at every turn.

Much of the battle then was galvanized around the fighting words "public plan option", building with escalating rancor and anger among the Members to what had seemed like irreconcilable differences between the D's and R's in both Houses of Congress (particularly in the Senate, where the Republicans, although a minority, held enough seats to maintain a filibuster). Suddenly, in March 2010, the Democratic strategists dropped the public option and devised an ingenious stratagem that finessed any possibility of a filibuster in the Senate, by breaking the legislation into two separate bills that passed in both Houses one week apart at the end of March; and so these two bills, with their overstuffed names - the first the "Patient Protection And Affordable Care Act" and the second the "Health Care And Education Reconciliation Act" - became the law.

The Beat Goes On

Was that a sweet victory for the President? History may show that he was the first casualty of his victory, and that his wounds of that struggle will continue to fester right up until his reelection bid in November. It certainly was not the end of the war between the Parties? Far from it. That became the rallying cry for the Republicans for the midterm elections in 2010, as they vowed to repeal the law if they won the Congress in the November elections; and there were increasing signs all through the polls taken in the Spring and Summer that their position resonated with increasing segments of the voters. There was, of course, also the little matter of a severe economic downturn, a mortgage crisis, and growing unemployment that played into the hands of the "outs". The election did indeed confirm the polls, as the Republicans won a smashing victory in the House and came within a couple of votes of capturing the Senate. That immediately led to triumphal announcements by the new Republican leadership in the House (Boehner) and the Ranking Minority Leader in the Senate (McConnell) that they would promptly introduce repeal legislation, and, further, bend their efforts to limiting Obama to a one-term presidency come the 2012 elections. Repealer bills were introduced in the immediate wake of the 2010 elections; but there is little evidence that much effort was put into their passage.

There was much evidence, however, of the scars of the reform battles and of the Obama-one-term strategy as the Congress turned to the then more pressing concerns of: (1) financial reform (that eventuated in passage of Dodd-Frank over strenuous Republican resistance); (2) raising the U.S. debt limit, which engendered a monumental donnybrook between the Parties, that went to the brink and led to just a short-term accord deep into the 11th hour (but not without a one-step downgrade of the Nation's credit rating by one of the three rating agencies, due in no small part to the apparent intransigence of both Parties in so crucial a matter); and (3) attempts to pass a budget bill that would greatly diminish the increasingly worrisome debt financing to which the U.S. has resorted, with each Party beating its predictable drum ("raise taxes on the rich," cried the D's; "cut spending," replied the R's). When neither side acceded one whit to the other's demands, that led to an agreement to establish a super Congressional committee equally divided between R's and D's from both Houses; but that too proceeded to reach the same deadlock as the full Congress, on essentially the same incompatible grounds, the pre-ordained consequence of deadlock being to default into a so-called "sequestering" of funds, that is, cutting the entire federal budget by an inflexible across-the-board percentage on every line of the expense budget, purportedly to achieve an arbitrary and inadequate debt reduction goal of $1.4 trillion over the next decade. All agree, even the super committeemen, that is totally insufficient, but each side blames the other. The title of a newly published book, "Throw Them All Out", neatly captures much of the public's view as to whom to blame.

Can anyone doubt that the seeds of this entirely indefensible way of running the finances of the most powerful nation in the world are to be found in the health care debates, that so poisoned the atmosphere in Washington. The President, now in full reelection mode, and borrowing a phrase from a previous Democratic warrior in the Oval Office, is going around the country decrying the "do-nothing" Congress (of course, only the Republican part of it), as if to obliterate the contribution his lack of effective leadership made to these bitter and partisan battles. If by so doing he hopes to forestall a resumption of the health care battle during the campaign, that is an idle hope.. Once the Republicans sort out their selection of his challenger, their designated standard bearer will sharpen his full sheath of arrows for doing battle with the President; and chief among that armory will most certainly be missiles directed at the Affordable Care Act.

Republican strategists certainly believe - and many objective observers agree - that passage of the health reform legislation by the Democratic-controlled Congress, over the vocal and vigorous opposition of the Republicans, was the factor that most fueled the fury of voters who in such convincing numbers supported Republican candidates in federal and state races in 2010. Can one suppose the GOP will retire that issue in the 2012 elections? Observe how Republicans have turned on even their own for evidencing partiality to Democratic initiatives. Is any better evidence required than the way the pack of Anyone-but-Romney presidential candidates has gone after Romney in the Republican debates - mainly for his identification with the Massachusetts law that is viewed as the precursor of the federal law - to know how central that issue is to the core of the Republican strategy for 2012.

Nor has Romney been the only target of the Republican rivals. No sooner did Gingrich emerge from his lagging position in the rear of that group than he was made to eat his words of praise for Romney's leadership on the Massachusetts health reform legislation when that law was working its way through the Bay State legislature, that, if not the only thing that caused the precipitous decline in Gingrich's poll numbers in the final days of the Iowa caucuses, was not an insignificant factor. The man from Massachusetts himself has been forced to distance himself from the legislation by arguing how far removed from Obamacare is the Massachusetts model - so far without visible success in effecting a Houdini-like escape. The closest he has come so far was in the December 10th debate in New Hampshire among the Republican hopefuls, when, responding to Perry's charge that he had attempted to cover up his support for the health care mandate by deleting a passage from the original printing of his book, "No Apology", Romney offered to bet Perry $10,000 that Perry's claim was false, which he has since characterized as just meant as "an outrageous number to answer an outrageous charge."

In a 2011 year-end tally of Obama's report card in dealing with the economy in the U.S. by a fairly large collection of economists, the majority of them rated him Fair or Poor, citing his focus on health care reform during his first year and a quarter in the presidency, at the expense of the economy. In a clear sign that the Administration is getting the message coming from so many sectors, it made really a quite shocking swerve to the right in its tactics regarding implementation of the health care law as enacted, by announcing in mid-December that it would not define a single, uniform set of standards of so-called essential health benefits that insurers throughout the country must provide in health insurance policies required under the federal law to be offered to policyholders, but rather leave it to the States to specify benefits within broad guidelines, thereby allowing significant variations among the States geared to their respective specific conditions within the several states.

The New York Times front-page headline for that story, coming as close to tabloid papers' colorful headlines jargon as the Gray Lady of the Press will allow its scribes, called it "WHITE HOUSE SURPRISE --Effort to Address G.O.P. Complaint." The story itself, with greater candor, acknowledged that --

[T]he Obama administration sought to deflect one of the most powerful arguments made by the Republican critics of President Obama's health care overhaul - that it was imposing a rigid, bureaucratic-controlled health system on Americans and threatening the quality of care. Opponents say that the federal government is forcing a one-size-fits-all standard for health insurance and usurping state authority to regulate the industry.

The article goes on to state that this criticism "helps explain why public opinion of the law remains deeply divided."

High Court In High Peril

With this overview of the impact of the health care struggles in the other branches of government that preceded the Supreme Court's agreeing to the grant of certiorari in the legal test of the health reform law, we can now return to consideration of the potential damage of the Court's ruling on the health care reform issue to the authority of the Supreme Court itself. Until the Affordable Care Act became law there was, of course, no role for the federal judiciary in respect of federal health reform, let alone for the Supreme Court as the court of last resort in this country, which in all but very rare instances takes a case only if it determines to exercise jurisdiction (the grant of certiorari), and only after determination in the trial court and decision by an appellate court on review of the trial judge. Its decision to grant certiorari in the pending case, entitled State of Florida v. U.S. Dept. of Health & Human Services, came only in the middle of November this year; after the question of legality of the federal health law had worked its way through at least 10 trial courts and four circuit courts in the past couple of years, albeit relatively below the radar screens of most Americans. Indeed, there was no evidence that this outbreak of litigation was even on the screens of Congress or the White House, that were too engaged in the battling within Capitol Hill, and between Congress and the White House, to pay attention to anything beyond their own turfs.

There was, however, one other large segment of government that was very much aware of and spurred to action by the federal reform act, i.e., governments in numerous State capitals, that attacked the law in court, both because the Affordable Care Act laid costly burdens on the States to fulfill obligations that the new law imposed on the States themselves, and because it mandated individuals to purchase and businesses to provide to their workers health insurance in every State. Consequently, shortly after enactment of the law in March 2010 cases were commenced by state attorneys general around the country, challenging the constitutionality of the law under the Commerce Clause, by reason of its imposing an unfair burden on commerce between the States. The Florida Attorney General appears to have been the first to institute suit, and his case became a magnet for many other state attorneys general who, in ensuing months, joined that litigation on behalf of their respective States, their numbers finally swelling to 25 in addition to the Florida plaintiff. That is the case in which the Supreme Court has now agreed to hear the appeal.

It is not the first case in which the High Court has had the opportunity to have its say on the law. There was an earlier case when it ducked the issue, declining to grant certiorari where a California judge had dismissed a challenge to the law on the ground that plaintiffs lacked standing to sue. But since that time a welter of judicial activity has broken out (as noted above, at least 14 decisions in district courts and circuit courts of appeals). The decisions run the gamut of possible outcomes, the principal issue relating to the constitutionality of the insurance mandate provided for in the Affordable Care Act (hereafter "ACA"). Of the four circuit court decisions, two sustained its constitutionality (6th Circuit and DC Circuit), one rejected it (11th Circuit), and one (4th Circuit) held the issue was not yet ripe for adjudication because of being barred by a federal anti-injunction statute that prevents a tax statute from being challenged before it takes effect (applicable at this stage because the insurance mandate will not come into force until 2014).

Cutting the Baby In Half or To Pieces?

Since the ACA in its thousands of pages provides an enormous number of rules directly impacting the provision of health care, the equally important legal question is whether the different parts of the law are severable, so that, were the mandate to be struck down, the rest of the law need not also be ruled unlawful, and, in that case, what parts can stand and what must fall. The question is moot for the courts which have sustained the constitutionality, the 6th and DC circuits, and for the 11th circuit (now on appeal in the Supreme Court) which ruled that the mandate, though unconstitutional, does not taint the balance of the ACA. Note, however, that the district court in the 11th circuit case, that had also ruled that the insurance mandate was not sustainable under the Commerce Clause, determined that requirement to be "so inextricably bound" to the other provisions of the law as to require invalidation of the entire statute. Although its reviewing appellate court did not sustain that part of the trial decision, the Supreme Court apparently intends to give considerable attention to that issue.

Surprisingly, the White House has been reported in the press to have made a comparable analysis of the interaction of the insurance requirement with at least two other central provisions of the ACA: one, forbidding insurance carriers to refuse to issue policies to certain applicants; and, two, barring carriers from taking preexisting conditions into account. The logic of that argument would lead to the Court's invalidating the entire statute, a result the Administration surely does not want. One may be permitted to speculate that the Administration has calculated this might be a scare tactic to dissuade the Court from striking down the insurance mandate and certain other requirements. It will be interesting to see whether this position makes its way into the Government's briefs. It is not to say that the argument lacks merit. In fact, other provisions can be pointed to as well where the question may fairly be asked whether Congress would have intended the challenged provision to be effective absent the individual or employer mandates. Some insiders have, in fact, reported that the mandates were an important part of the bait that the Administration offered to the insurance industry to buy off its opposition to the new law.

This severability issue could well become the most difficult issue for the High Court to resolve. The Solomonic answer - cut the baby in half - while preserving part of the law, may prove no less acceptable to the Supreme Court than it obviously really would have been to King Solomon as a disposition of the (probably apocryphal) case before him.

The Case Before the Court

The issues before the Supreme Court in the 11th circuit appeal can be assured of full development in the briefs and arguments of the parties and in the numerous amici briefs that will fill the Court's case files. But the Court will also have a wealth of other materials to draw upon. A large body of judicial learning on the ACA has accumulated in the 20 months that have elapsed between its enactment and the Court's announcement on November 14 to hear the Florida case, that is to be found in the opinions of the other district and circuit courts - not least a 37-page majority opinion and a 65-page dissent in Susan Seven-Sky v. Holder, decided by the D.C. Circuit Court of Appeals shortly after the grant of certiorari in Florida.

So it is doubtful that an issue relevant to the complete disposition of the questions that have arisen, or conceivably could arise, under ACA has not been vetted in this large body of work. That is far different than the state of the law when an unsuccessful effort had been made a year ago by the Virginia attorney general to obtain quick review by the Supreme Court of a case in which he had been only partially successful, by getting the district court sitting in Richmond, Virginia to strike down the ACA provisions mandating health insurance for employees of businesses and all other individuals (on the grounds of exceeding Congress' authority to regulate interstate commerce), but failing to convince the district judge to invalidate the rest of ACA. He thus sought to expedite review by the Supreme Court by means of a direct appeal to it, bypassing the circuit court - a procedure technically available but rarely granted. He pointed to the confusion in legal and government circles that would be engendered by the predictable proliferation of conflicting decisions in the courts. The Justice Department opposed, contending that arguments should be fully developed before the case was presented to the Justices of the Supreme Court for decision; and the Justices obviously concurred.

An Historic Event, An Historic Court

That desirable precondition to deliberation by the High Court - full airing of the issues in the lower courts - has now occurred. The Court itself has gone further. In announcing its decision to take the appeal of the Florida case; it has set up unusual special measures to assure that it receives maximum argument on the issues involved, not just those asserted in the applications for certiorari by the parties, but also other matters that the Court itself has signaled it intends to address in its consideration of the case. First, instead of the normal one hour of oral argument, equally divided between the parties, the Court has assigned a probably unprecedented three days for oral argument, and directed that 90 minutes thereof be devoted to severability and one hour to the Anti-Injunction Act. Even more unprecedented, it has appointed two lawyers not associated with the parties to make arguments by briefs and oral presentations, as friends of the court, one to speak to the severability issue, and one to argue for the position that the anti-injunction law prohibits legal challenge of the insurance mandate before 2014 when the penalty sanction for failing to obtain insurance kicks in under ACA.

The Court has done one other highly significant thing to set the stage for its determination of this case: with an eye on the fast approaching November elections, it has announced that it will hear oral arguments next March, with decision to be expected before July 4th, 2012 - an unusually rapid response. The decision would be important, perhaps monumental, whenever handed down, and could well seal the fate of the ACA. But coming in the very critical months before the election in November, it will take on historical significance, very possibly sealing the fate - in the election and in the history books - of the man for whom the term "Obamacare" was coined.

Moreover, the Court could not be unaware that, as noted already, its decision, whichever way it goes, will cast a long shadow over the regard in which its Justices are held by one large segment or another of their countrymen (depending on their respective points of view) - to say nothing of the Court's place in history, both that of the law and of the Nation. Their action gives new meaning to the term "without fear or favor".

It is not that the question of law at stake is likely to rank this decision with the many great ones of the Court - McCulloch v. Maryland, Marbury v. Madison, Dred Scott v. Sandford, Schechter v. U.S. - but that its determination will resolve a matter that has attracted so much heated dispute and that has split the Nation so deeply that, whichever way the Court rules, it will spark fury and contempt among maybe as much as 50 percent of the population (and, of course, a much higher percentage among discrete segments, e.g., the Occupy-Wall-Streeters, many of whom would, in a Wall Street minute, be torn between wiping the Supreme Court out of the Constitution entirely and pitching tents outside the Justices' chambers right down to Decision Day). That cannot be good for the authority and dignity of the Court. More importantly, widespread disrespect for the Supreme Court is not good for the Country.

...But Politics Can Overrule the Court

One might postulate that the Court's agreeing to resolve this issue that has so riven the body politic was especially problematic, inasmuch as the Court could understandably have avoided the matter at this time, given the proximity of the elections, since its decision might not even be the last word. Much will depend on the interaction of how the majority of the Court votes and how the public votes in the elections to follow in the immediate wake of the Court's decision. Indeed, the decision might even precipitate a reaction among blocks of voters sufficient to change the election outcome.

Most observers expect a 5-4 split in the Court, but are doubtful which group of Justices will comprise the 5. The common wisdom (probably less reliable in this instance even than it ever is) is that there are two easily predictable blocks of 4 - Breyer, Ginsburg, Kagan and Sotomayor in one camp, Alito, Roberts, Scalia and Thomas in the other - which makes Kennedy the man in the middle, whose predilection at this time is unknown, perhaps even to himself.

The other unknown is who will win the elections for president and for control of the two Houses of Congress. If the Democrats were to retain the presidency and their slim majority in the Senate, the Supreme Court decision might stand whichever way the majority of the Justices vote. That is almost foregone if the Court upholds the constitutionality of the ACA, or even all of ACA except the insurance mandate. But even were the Court to strike down the entire law, it is doubtful the Democrats would have the stomach to renew the health care war again in the next Term of Congress. Conversely, if the Republicans retain the House and win the Senate, and the Court were not to have stricken the law branch and root, or even if only the insurance mandate were stricken, one could expect a full-court press from the Republicans to attempt to repeal the portion of the law left standing, irrespective of whether Obama retained his office. (Indeed, Obama himself might be disinclined to buck the will of the Congress in order to retain some leverage in salvaging his legacy in his final years in office.) A more serious obstacle to the Republicans' success might be a Democratic filibuster in the Senate if the Republicans win the Upper House just barely, unless they could engineer a change in the Senate rules of the 112th Congress to accommodate their winning margin, thereby defanging the filibuster threat.

There is a further (albeit highly unlikely) imponderable in the mix: the possibility that Chief Justice Roberts will be able to achieve what few chiefs before him have accomplished in the Court, a unanimous decision on a deeply divisive issue from a philosophically divided bench, that will be supported not only by the entire Court but by a polarized Congress, with the overwhelming approval of the public, thus putting to rest this painful time in our history. That would be in keeping with the increasing war-weary mood in the Country, whether on foreign battlefields or in the chambers of the D.C. Capitol. That apart, like in so many wars this Country has been embroiled in for the past several decades that seem never to end, there comes a time when the fat lady has sung her last note. (Bucking the national unemployment statistics, fat sopranos may be in high demand for some time.)



Author's note: The input of Edward A. Zelinsky, professor of law at Benjamin N. Cardozo Law School, is acknowledged with much appreciation.

Copyright 2011, A.D. Lurie

Alvin D. Lurie is a practicing pension attorney. He was appointed as the first person to administer the ERISA program in the IRS National Office in Washington. He is general editor of Bender's Federal Income Taxation of Retirement Plans (LexisNexis), a 2-volume treatise, and he is also editor of the annual compendium of articles published under the title New York University Review of Employee Benefits and Executive Compensation (LexisNexis). Mr. Lurie is the first recipient of the Lifetime Employee Benefits Achievement Award sponsored by the Employee Benefits Committee of the American Bar Association Tax Section. He can be contacted at Alvin D. Lurie, P.C. in Larchmont, New York, at (914) 834-6725 or via email: allurie@optonline.net. He is also of counsel to The Wagner Law Group in Boston.