The Corner

CRS Says Parts of Obamacare May Be Unconstitutional


DC’s Jonathan Strong relates that the non-partisan Congressional Research Service isn’t so sure that all of Obamacare is constitutional. You’ve gotta wonder whether there may have been a more opportune time for Congress’s fact-finding arm to have investigated this possibility.

It calls to mind one of the president’s jokes from this weekend’s White House Correspondents Dinner:

“You might have heard we passed a health care bill and — (applause.) Is that Roger Ailes applauding out there? (Laughter.) Some Republicans have suggested that the bill contains a few secret provisions. That’s ridiculous. There aren’t a few secret provisions in the health care plan — there are, like, hundreds. (Laughter.)”

Quite. In addition to the individual mandate, which has been the locus of state judicial challenges, the CRS memo worries about the constitutionality of a provision that could tax local and state governments if their employees take advantage of newly-created insurance exchanges:

In light of the employer requirements created in § 1513 and the potential federal taxation of noncompliant employers, application of the employer mandate to state and local governments may face challenges alleging violations of the principle of federalism embodied in the Tenth Amendment and the doctrine of intergovernmental tax immunity.

The memo looks at several ways that Obamacare could run afoul of the Tenth Amendment, the most substantive of which is probably that it could tax states as states, violating the “intergovernmental tax immunity doctrine.”

[T]he Court has held that, implicit in the federalist structure provided under the Constitution, as represented by the Tenth Amendment, is the concept that the federal government is restricted in its ability to tax the states.39 This principle is part of what is known as the intergovernmental tax immunity doctrine. The doctrine’s other side, which is rooted primarily in the Supremacy Clause,40 is that the states cannot tax the federal government.41 Under the Supreme Court’s modern jurisprudence interpreting the doctrine, the Constitution’s restriction on the ability of the states to tax the federal government is stricter than that on the ability of the federal government to tax the states.42 While the states are generally prohibited from taxing the federal government without Congress’ consent, the federal government may tax the states, within certain limits.43

The Court has not precisely enunciated the boundaries of these limits. Initially, the Court permitted the federal government to tax state activities that were “proprietary,” but shielded those that were “governmental.44 However, the Court subsequently moved away from this theory, describing it as “untenable.”45 The current standard used by the Court to determine constitutional limits on federal taxation of the states is not clear. At a minimum, the federal tax must be nondiscriminatory.

So don’t get your hopes up. The slow and steady erosion of the federalism makes it anybody’s guess whether the courts will take exception.


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