The critics' central constitutional claim is that the 2010 law's individual-mandate provision exceeds Congress' regulatory authority. In essence, this provision requires a broad swath of Americans to procure health insurance conforming to certain federal standards. Those who do not procure this insurance must generally pay a "penalty" to the IRS.
Had the bill explicitly used the word "tax" instead of "penalty," the fatal flaw of the constitutional challenge would be obvious to all. The Constitution undeniably gives Congress sweeping power to tax. And if Congress can tax a person, and then use that tax money to buy a health-care package for that person's benefit, why can't it simply direct the person to procure the package himself, or else pay a higher tax?
Of course, tax is a word that lawmakers try to avoid at all costs, and so the euphemistic penalty won the day. Yet, as Shakespeare reminds us, "a rose by any other name would smell as sweet." Here, penalty and tax are simply two ways of saying the same thing.
Indeed, the Constitution itself does not always use the T-word when referring to taxes, broadly defined. It also uses the words excises, duties, and imposts in the opening sentence of Article I, Section 8, and elsewhere refers generally to all generic "Bills for raising Revenue." The important thing here is not the term, but how the actual instrument functions, and clearly Obamacare functions as a tax - as a revenue measure. In perfect synch with the Constitution's key word, revenue, the penalty section of Obamacare is in fact codified in title 26 - the Internal Revenue Code. The "penalty" is paid to the IRS via forms administered by that very same IRS.
Once we see that the "penalty" is a tax and that Congress has the power to tax, the constitutional case against the law collapses.
But even if the law were not a tax, it still easily passes muster as an exercise of a second key power of Congress - the power to regulate interstate commerce.
There are two questions here. First, is health-care insurance a genuinely commercial issue? Of course. Insurance is a classic economic issue of who pays for what.
Second, does health care raise genuinely interstate issues? In other words, does Obamacare address a problem that truly spills across state lines? Yes, of course.
At any given moment, millions of Americans are in states other than their home state. If they fall sick, they will go to local emergency rooms. But an obvious interstate problem arises when sick out-of-state patients lack insurance, and their emergency-room visits end up being paid for by host-state taxpayers. Obamacare solves this problem by generally requiring Americans to get insurance.
Another interstate problem: When an employed person gets a better job offer from an out-of-state employer, he may not be able to take the job - and thereby contribute more to his family and the general economy - without a rule requiring his new employer to cover his preexisting medical conditions. By imposing this requirement on employers, Obamacare creates greater interstate labor mobility in perfect harmony with the core purpose of the interstate commerce clause.
To our friends in the tea party who think the American Revolution is on their side, we say, think again. The rallying cry of the American Revolution in 1776 was "no taxation without representation!" But the 1787 Constitution's big idea was taxation with representation. Bluntly, the Constitution was a pro-tax revolution. It aimed to give a representative Congress broad power to tax and to regulate - to do all sorts of things that Parliament could not properly do precisely because the new Congress, unlike the old Parliament, would be elected by American voters who could vote the bums out if we disliked the taxes, or the duties or the excises or the imposts or the penalties or the regulations. Whatever.
The federal government represents voters, so it can tax voters and impose mandates on voters, whether these mandates oblige constituents to join militias or buy muskets (as did the Militia Act of 1792, signed into law by President George Washington), to serve on juries, or buy health-care insurance.
The proper check when Congress has acted within its constitutional power is political, not judicial. So if some justices don't like the law, they should indeed vote against it - not on the court this spring, but in the election this fall.
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