There is much to say about the Supreme Court’s recent ruling on the Affordable Care Act, and most of it has already been said. As I predicted, with the whole nation watching, the Justices put the rule of law above partisanship. With Chief Justice Roberts’ vote, the Court simultaneously rejected the administration’s expansive view of the Commerce Clause and honored the constitutional precept that an Act of Congress should receive a saving construction whenever possible. By calling the individual mandate a tax, even though legislative history, plain language, and presidential pronouncements suggested otherwise, Chief Justice Roberts rescued the signature domestic legislative accomplishment of a president who had openly sparred with him and the Court, in what was often the most overt display of executive-judicial interbranch tension since the Roosevelt administration.
Which brings us to what may have been on the Chief Justice’s mind—the Court’s legitimacy as an institution. The Court has taken quite a beating in the press since Bush v. Gore, and the more recent Citizens United v. Federal Election Commission. Deserved or not, there are many who would cynically describe the Court as a collection of politicians in robes, and run this fall’s Democratic presidential campaign against its conservative wing. But John Roberts, like John Marshall in Marbury v. Madison, was as concerned with the institution he presides over as he was with the particular case at hand. His majority opinion, whatever else it is, is an exercise in long ball, from a man who has described baseball as a metaphor for his profession.
But the Chief Justice was not the only one playing long ball. What are we to make of the 7-2 majority that included Justices Breyer and Kagan striking down the Medicaid expansion provision of the ACA? Rejected by all the federal courts of appeal that considered it (including those that found the individual mandate In violation of the Commerce Clause) the Court for the first time placed a restriction on the breadth of Congress’ spending power. It seems the Court has finally found the limit of how far the Congress can go in the exercise of what is known as “coercive federalism”.
A little background is in order. While there are many exclusively federal spending programs that benefit states, Congress has also chosen to share responsibility for a number of programs with the states, with the federal government contributing a share and the states contributing a share. Medicaid, which covers medical care for families at or near the poverty line, was enacted as a shared program between federal and state governments; and the states have used the flexibility to structure coverage suitable to the needs of their state’s eligible population, and tailored to their budgetary capacity and inclination to largesse. In the current condition of austerity in state budgets, many states have cut their coverage to a minimum, accepting that there would be a corresponding loss of federal funds. However, there is no question that all of the states have become extremely dependent on Medicaid, which constitutes on average over 20 percent of state budgetary outlays, and in states like New York, as much as 30 percent.
The ACA expanded Medicaid eligibility, shouldering the entire burden of that added enrollment through 2016, and demanding the states begin to pick up 10 percent of the costs after 2016. The coercive and contentious enforcement mechanism for this expansion is the threat that states that chose not to participate will lose not only expansion funding, but all their Medicaid funding. Many governors claimed that this coercive method went well beyond an incentive for their states to cooperate to achieve particular federal policy goals, and was instead tantamount to a gun to their heads. The Court compared the ACA’s coercive provision to one that they had upheld in the 1987 South Dakota v. Dole case. There, to secure a uniform national over-21 drinking age, and unable to do so directly due to the constitutional amendment that repealed prohibition and left regulation of alcohol consumption to the states, Congress had “nudged” cooperation by threatening to withhold about 5 percent of federal highway funds from those states that did not raise their drinking age. South Dakota challenged the provision and lost, but the Court held out the possibility in the ruling that there could be circumstances where a nudge could send a state over a cliff—and that is what seven Justices agreed was happening with the Medicaid provision in the ACA.
What explains Justices Kagan and Breyer’s approach? Let’s imagine a different Congress attempted to coerce one or more states by threatening to cut off all its Medicaid funding because the state chose to define family in a way disfavored by Congress. Revoking Medicaid funding could be used as a bludgeon that would deprive such a state of the type of autonomy that makes each state a “laboratory of democracy”— in the famous formulation of Justice Brandeis. Thus, the same legal rule, in different political circumstances, could lead to vastly different results.
Like Justice Roberts, Justices Breyer and Kagan showed they understand the impact of their decisions beyond the ACA, and the necessity of maintaining a neutral constitutional jurisprudence that withstands the vagaries of who sits in the Oval Office or controls Congress. Their choice is reflective of a thoughtful approach that looks to future cases likely to come before the Court, and is a resounding refutation of those who would hope to exploit the Court’s decisions for their own political purposes.
