On Day 1 of Health Reform Arguments, Justices Sound Skeptical that Challenge Is Premature

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Dana Verkouteren / AP

Attorney Gregory G. Katsas speaks in front of the Supreme Court Justices in Washington, March 26, 2012, in this artist rendering, as the court began three days of arguments on the health care law signed by President Barack Obama in Washington.

If the Affordable Care Act, President Obama’s sweeping new health care law, seems complicated, the Supreme Court case parsing its constitutionality is far more so. This week, over three days, justices on the High Court are hearing six hours of arguments on four distinct but intricately related pieces of the law. The first session, on Monday, illustrated how complex this week’s proceedings and the relevant legal arguments really are. At stake is health insurance coverage for some 30 million Americans, not to mention Barack Obama’s re-election campaign and an issue that has galvanized Republican voters like no other in recent memory.

With the courtroom packed to capacity and sunlight streaming through the windows, lawyers presented arguments over whether the High Court has standing to decide if the health care law is constitutional two years before it fully kicks in. If the court doesn’t, the future of  Obama’s signature legislative achievement won’t be clear for years. If it does, the law’s fate will be known as soon as the Supreme Court rules on a second item: the constitutionality of the individual mandate, a requirement that all Americans have health insurance or pay a financial penalty. The Obama Administration says the individual mandate is within the federal government’s power to regulate commerce. Republican leaders from 26 states suing the government say lawmakers overreached with the individual mandate and the requirement should be thrown out. These matters are on Tuesday’s agenda.

(PHOTOS: Health Reform Protesters Outside the Supreme Court)

But on Monday, the Obama Administration and the states that originally filed suit were actually on the same side, arguing that the High Court should decide the constitutional issues this year. Lining up against them was a lawyer appointed by the justices to represent a lower court finding that said a ruling must wait.

The day’s proceedings mostly focused on whether the financial penalty for not having health insurance under the Affordable Care Act, slated to go into full effect in 2014, constitutes a “tax.” An existing law called the Anti-Injunction Act says the government can’t be sued over a tax that hasn’t yet been levied, which is why this distinction is important. Essentially, the text of the Affordable Care Act calls the fine for not having insurance a “penalty” and not a “tax,” but the fine would be collected via individual income tax returns, muddying the waters. In a sign of how this difference is semantic and not substantive, Donald Verrilli, the solicitor general arguing for the government that the penalty is not a tax, slipped up and repeatedly referred to it as just that, drawing laughs from the audience in the courtroom.

GENERAL VERRILLI: No. Our position is
that person should give the answer “no.”
JUSTICE KAGAN: And that’s because —
GENERAL VERRILLI: That if they don’t
pay the tax, they violated a federal law.
JUSTICE KAGAN: But as long as they
pay the penalty —
GENERAL VERRILLI: If they pay the
tax, then they are in compliance with the law.
JUSTICE BREYER: Why do you keep
saying tax?
GENERAL VERRILLI: If they pay the tax
penalty, they’re in compliance with
the law.
GENERAL VERRILLI: Thank you, Justice
JUSTICE BREYER: The penalty.
GENERAL VERRILLI: Right. That’s right.

Verrilli had to engage in some artful acrobatics, arguing that the Anti-Injuction Act shouldn’t bar the Supreme Court from ruling this year while leaving open the door to argue on Tuesday that the individual mandate penalty is in fact a tax, so the government has the power to levy it. Justice Samuel Alito couldn’t resist pointing out the seeming contradiction. “General Verrilli, today you are arguing that the penalty is not a tax. Tomorrow you are going to be back and you will be arguing that the penalty is a tax.”

(MORE: Why the Health Reform Legal Challenge Isn’t About Obama)

Even so, most experienced court watchers were already saying, after Monday’s proceedings wrapped, that they expect the justices to decide they have standing to rule on the merits of the health care case this year. The justices’ skepticism of the argument that they shouldn’t rule now was easy to spot on Monday, at least on the liberal wing of the court. Justice Sonia Sotomayor wanted to know what “parade of horribles” would occur if the court rules that the penalty is not a tax. (She seemed to doubt that the court would set a dangerous precedent by deciding it will rule this year.) Justice Stephen Breyer pointed out that the authors of the health care law deliberately did not call the penalty a tax, which is significant, he said. Just because it’s “collected in the same manner as a tax doesn’t mean it’s a tax,” he said. Justice Ruth Bader Ginsburg questioned whether the penalty is a “revenue raising measure,” the general definition of a tax, given that the government will collect no money if the individual mandate works as intended and people buy insurance rather than pay the fine.

With the exception of Clarence Thomas, who is known to keep silent during oral arguments, all the justices asked multiple questions of the lawyers before them on Monday. The calm, respectful tone of the courtroom stood in sharp contrast to the hyperbolic rhetoric that surrounds most mentions of the Affordable Care Act on cable television or on the campaign trail. (Republican presidential candidate Rick Santorum appeared in front of the High Court around midday on Monday to make the case that the health care reform plan Mitt Romney supported as governor of Massachusetts, which is similar to the new national plan, was a “disaster.”) Just beyond the courthouse steps, supporters and critics of the law carried signs and protested. But inside, the noise fell away. No electronic devices are permitted in the Supreme Court, which meant no Tweeting, no e-mailing and no cameras. Two artists sitting on the left side of the courtroom silently sketched the justices and lawyers arguing before them at a lectern.

The Supreme Court’s review of the health care law will will draw the most attention on Tuesday, when lawyers will argue for and against the idea that the federal government has the right to force people to buy a commercial product like health insurance. On Wednesday, the court will hear oral arguments over whether the federal government violated state sovereignty by doubling the size of the Medicaid program and whether the rest of the Affordable Care Act can exist if the individual mandate is struck down.