Roberts's Solution to a Non-Problem

On the fourth day of the Battle of Gettysburg, General Richard S. (“Bald Dick”) Ewell, riding behind the lines, was hit in the leg by a Union sniper’s bullet. Unfazed, the one-legged general remarked, “It don't hurt a bit to be shot in a wooden leg.”

It may be that the federal government was shot in a wooden leg today. Overall, that’s true—the ACA survived, by one vote, a case that could have voided it in its entirety and wreaked havoc on federal power generally. But in particular, in the Court’s major new cutback on federal power—the limits on the use of Congress’s spending power to convince the states to sign on to an expanded Medicaid program—the federal government was wounded by being forbidden to do something it really never wanted to do. 

The federal government can’t coerce states by threatening to cut off existing program funding as a penalty for refusing to accept more money for new programs, the important opinion said. That means the ACA can go ahead as planned—because the government wasn’t making that threat.

Quickly review the facts. Under the ACA, states were made an offer they couldn’t refuse: They can greatly expand the coverage of Medicaid, the federal program that funds medical care for lower-income people. If they join, the federal government will fund all of the cost for the first few years, and 90 percent thereafter.

In fact, the challengers argued, it was too good an offer. By making the program and the funding so attractive, they said, Congress was being “coercive.” At oral argument, Justice Elena Kagan asked Paul Clement, representing the state governments, whether it would be coercive to offer a prospective employee a $10 million salary. Clement hedged, and Kagan went on, “Wow. Wow. I'm offering you $10 million a year to come work for me, and you are saying that this is anything but a great choice?”

If a majority had accepted Clement’s definition of coercion, the result would have been disaster for Congress’s power to coordinate national programs with state governments. Since Congress can’t order states to enact a program, it uses its spending power to offer rewards to those who do. But if the Court began to monitor each bargain to make sure it wasn’t too good, we could expect to see regular invalidation of progressive social programs.

In striking down the Medicaid funding, however, Chief Justice John Roberts—joined by Justices Elena Kagan and Sonia Sotomayor—used a different rationale. The ACA Medicaid provision, he said, offered states a choice: Get with the new program or lose all your Medicaid funding. That, they said, was “coercive.” Roberts’s opinion then fashioned a novel remedy: The federal government could proceed with Medicaid expansion as long as it doesn’t punish non-participating states with a complete cutoff. If a state doesn’t sign on, the Department of Health and Human Services (HHS) can withhold new money, but not the funding for the state’s existing program.

That sound you heard, friends, may just have been a bullet hitting wood.

Why do I say this? Well, consider this colloquy at oral argument between Clement and Justice Stephen Breyer. Reading from the federal Medicaid statute, Breyer noted that the statute did not require HHS to withhold all funding from states that refuse to accept new funding programs. Read at its most extreme, he said, it gave the Secretary discretion to do so.

That discretion, Breyer said, has never been used. “I could not find one case where the secretary ever did go further” during the 40-plus year life of the Medicaid program, he said. 

Well, Clement said, it was “coercive” simply because the Secretary might do it.

Breyer replied suavely, “Now, let me relieve you of that concern, and tell me whether I have. [A] basic principle of administrative law, indeed, all law, is that the government must act reasonably. And should a secretary cut off more money than the secretary could show was justified by being causally related to the state's refusal to take the new money, you would march into court with your clients and say, ‘Judge, the secretary here is acting unreasonably, and I believe there is implicit in this statute, as there is explicit in the [Americans with Disabilities Act], that any such cut-off decision must be reasonable.’ Now, does that relieve you of your fears?”

Clement said that the government had not promised to interpret the statute to require “reasonableness” in cutting funds, so a total cutoff remained a theoretical possibility.

Later in the argument, Breyer tried to get Solicitor General Donald Verrilli to make that promise. This—far more than Verrilli’s scratchy throat at the beginning of the mandate argument—was the painful moment in his performance. Verrilli replied, “I don't think it would be responsible of me to commit now that the Secretary would exercise the discretion uniformly in one way or another.” Given that the entire program was hanging by a thread, it seemed to some of us in the courtroom (reporters were saying aloud, “Say yes, say yes”) that it would have been better to give away theoretical discretion than to lose the actual case.

As it turned out, Verrilli’s refusal didn’t cost the government the case. (In fact, after a few months as a punching bag, Don Verrilli had has a pretty good week.) But it did produce a stern warning from Roberts, Sotomayor, and Kagan that the federal government had better darned well not threaten to cut states off altogether—in other words, that the government shouldn’t do exactly that thing that it never had done, probably can’t do under the statute, and definitely doesn’t want to do.

I don’t want to minimize the potential of the new Spending Clause limitation to cause mischief down the road. As Justice Ruth Bader Ginsburg pointed out in her dissent, the Court had never before found any Congressional spending program to be coercive. Members of Congress and state attorneys general will be parsing Roberts’ language to find new avenues to attack congressional spending programs, and the Court has now opened its doors to them quite a bit wider than they were before—especially given the radical mutilation of the Spending Clause proposed by the four conservative dissenters.

But in terms of the ACA, the wound is not only not mortal, it may not even really be a wound. That’s precisely because, as Clement complained, the new funding is too attractive to turn down. Most if not all states will sign on to the Medicaid expansion, exactly as the bill’s sponsors hoped.

 So today, federal power got shot in a wooden leg. But, as at Gettysburg, that wound was just a skirmish. In the long battle ahead, Roberts may aim for the head next time

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