...why is a big gift from the Federal Government a matter of coercion? In other words, the Federal Government is here saying, we are giving you a boatload of money. There are no -there's no matching funds requirement, there are no extraneous conditions attached to it, it's just a boatload of federal money for you to take and spend on poor people's healthcare. It doesn't sound coercive to me, I have to tell you.
---- Justice Kagen, this past Wednesday during oral argument over "ObamaCare"
Apparently the idea that the government can just print up "a boatload of money" and deliver it to the states is good hypothetical reasoning. Read below for the rebuttal.
CHIEF JUSTICE ROBERTS: We will continue argument this afternoon in Case 11-400, Florida v. Department of Health and Human Services.
Mr. Clement. ORAL ARGUMENT OF PAUL D. CLEMENT ON BEHALF OF THE PETITIONER
MR. CLEMENT: Mr. Chief Justice, and may it please the Court:
The constitutionality of the Act's massive expansion of Medicaid depends on the answer to two related questions. First, is the expansion coercive? And, second, does that coercion matter?
JUSTICE KAGAN: Mr. Clement, can I ask you just a matter of clarification? Would you be making the same argument if, instead of the Federal Government picking up 90 percent of the cost, the Federal Government picked up 100 percent of the cost?
MR. CLEMENT: Justice Kagan, if everything else in the statute remained the same, I would be making the exact same argument.
JUSTICE KAGAN: The exact same argument. So that really reduces to the question of why is a big gift from the Federal Government a matter of coercion? In other words, the Federal Government is here saying, we are giving you a boatload of money. There are no -there's no matching funds requirement, there are no extraneous conditions attached to it, it's just a boatload of federal money for you to take and spend on poor people's healthcare. It doesn't sound coercive to me, I have to tell you.
MR. CLEMENT: Well, Justice Kagan, let me --I mean, I eventually want to make the point where, even if you had a stand-alone program that just gave 100 percent, again, 100 percent boatload, nothing but boatload, why there would still be a problem.
JUSTICE KAGAN: Yes. I mean, you do make that argument in your brief, just a stand-alone program, a boatload of money, no extraneous conditions, no matching funds, is coercive?
MR. CLEMENT: It is. But before I make that point, can I simply say that you built into your question the idea that there are no conditions. And, of course, when you first asked, it was what about the same program with 100 percent matching on the newly eligible mandatory individuals, which is how the statute refers to them, and that would have a very big condition.
And the very big condition is that the States, in order to get that new money, they would have to agree not only to the new conditions, but the government here is -- the Congress is leveraging their entire prior participation in the program -
JUSTICE KAGAN: Well, let me give you a hypothetical, Mr. Clement.
MR. CLEMENT: Sure.
JUSTICE KAGAN: Now, suppose I'm an employer, and I see somebody I really like, and I want to hire that person. And I say, I'm going to give you $10 million a year to come work for me. And the person says, well, I -- you know, I've never been offered anywhere approaching $10 million a year. Of course, I'm going to say yes to that.
Now we would both be agreed that that's not coercive, right?
MR. CLEMENT: Well, I guess I would want to know where the money came from. And if the money came from -
JUSTICE KAGAN: 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?
MR. CLEMENT: Sure, if I told you, actually, it came from my own bank account. And that's what's really going on here, in part. And that's why it's not
JUSTICE KAGAN: But, Mr. Clement -
MR. CLEMENT: -- simply a matter of saying -
JUSTICE KAGAN: Mr. Clement, can that possibly be? When a taxpayer pays taxes to the Federal Government, the person is acting as a citizen of the United States. When a taxpayer pays taxes to New York, a person is acting as a citizen of New York. And New York could no more tell the Federal Government what to do with the Federal Government's money than the Federal Government can tell New York what to do with the moneys that New York is collecting.
MR. CLEMENT: Right. And if New York and the United States figured out a way to tax individuals at greater than 100 percent of their income, then maybe you could just say it's two separate sovereigns, two separate taxes; but, we all know that in the real world, that to the extent the Federal Government continues to increase taxes, that decreases the ability of the States to tax their own citizenry, and it's a real tradeoff.
JUSTICE SOTOMAYOR: Is that a limit on the Federal Government's power to tax?
MR. CLEMENT: What's that?
JUSTICE SOTOMAYOR: Are you suggesting that at a certain point, the States would have a claim against the Federal Government raising their taxes because somehow the States will feel coerced to lower their tax rate?
MR. CLEMENT: No, Justice Sotomayor, I'm not. What I'm suggesting is that it's not simply the case that you can say, well, it's free money, so we don't even have to ask whether the program's coercive.
JUSTICE SOTOMAYOR: Now, counsel, what percentage does it become coercive? Meaning, as I look at the figures I've seen from amici, there are some states for whom the percentage of Medicaid funding to their budget is close to 40 percent, but there are others that are less than 10 percent.
And you say, across the board this is coercive because no state, even at 10 percent, can give it up. What's the percentage of big gift that the federal government can give? Because what you're saying to me is, for a bankrupt state, there's no gift the federal government could give them ever, because it can only give them money without conditions.
No matter how poorly the state is run, no matter how much the federal government doesn't want to subsidize abortions or doesn't want to subsidize some other state obligation, the federal government can't give them 100 percent of their needs.
MR. CLEMENT: And, Justice Sotomayor, I'm really saying the opposite, which is not that every gift is coercive, no matter what the amount, no matter how small. I'm saying essentially the opposite, which is there has to be some limit. There has to be some limit on coercion.
And the reason is quite simple, because this Court's entire spending power jurisprudence is premised on the notion that spending power is different, and that Congress can do things pursuant to the spending power that it can't do pursuant to its other enumerated powers precisely because the programs are voluntary. And if you relax that assumption that the programs are voluntary, and you are saying they are coercion, then you can't have the spending power jurisprudence -
JUSTICE SOTOMAYOR: What makes them coercive; that the state doesn't want to face its voters and say, instead of taking 10, 20, 30, 40 percent of the government's offer of our budget and paying for it ourselves and giving up money for some other function? That's what makes it coercive -
MR CLEMENT: Well -
JUSTICE SOTOMAYOR: -- that the state is unwilling to say that?
MR. CLEMENT: Maybe I can talk about what makes it coercive by talking about the actual statute at issue here and focusing on what I think are the three hallmarks of this statute that make it uniquely coercive.
One of them is the fact that this statute is tied to the decidedly nonvoluntary individual mandate. And that makes this unique, but it makes it significant, I think.
I will continue. I thought you had a question. I'm sorry.
The second factor, of course, is the fact that Congress here made a distinct and conscious decision to tie the state's willingness to accept these new funds, not just to the new funds but to their entire participation in the statute, even though the coverage for these newly eligible individuals is segregated from the rest of the program. And this is section 2001A3 at page 23A of the appendix to the blue brief.
Tip o' the hat to: