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Camp Opening Statement: Hearing on the Tax Ramifications of the Supreme Court’s Ruling on the Democrats’ Health Care Law

July 10, 2012
(Remarks as Prepared)

Good morning.  Writing for the Majority in the ObamaCare decision handed down last month, Chief Justice John Roberts quoted the Lopez decision writing, “At the very least, we should ‘pause to consider the implications of the Government’s arguments’ when confronted with such new conceptions of federal power.”  

Whether or not one agrees or disagrees with the ruling of the Supreme Court, or with the underlying law itself, the words of the Chief Justice have great meaning – particularly for Congress, and specifically for the House Committee on Ways and Means.

On June 28, 2012, the Supreme Court narrowly ruled that the Democrat health care law’s individual mandate was constitutional.  The Court rejected the Obama Administration’s argument that such power is granted under the Commerce Clause or the Necessary and Proper Clause of the Constitution.  But, the Court accepted another argument put forth by the Obama Administration that the individual mandate is a tax increase authorized under the Congress’s taxing power.  

This holding is especially important for this Committee.  Under the Constitution’s Origination Clause, all revenue measures must originate in the U.S. House of Representatives, and the rules of the House grant jurisdiction over “[r]evenue measures generally” to the Committee on Ways and Means.

That is why we are here today – to focus on the implications of the Supreme Court’s ruling that the individual mandate is constitutional on the grounds that it is a tax.   And, in light of the Court’s ruling, Congress now has the broad power to levy taxes far beyond the historic understanding of raising revenue.  

By all accounts, the discussion surrounding the individual mandate tax received only scant attention from the government’s lawyers – they devoted just a mere 21 lines of the government’s reply brief to the issue, and it was the subject of just 50 lines in the oral arguments held in March.  

Yet, in the Majority opinion, Justices Breyer, Ginsburg, Kagan, Sotomayor and Chief Justice Roberts upheld the individual mandate as a tax.  In doing so, they confirmed that the individual mandate, which President Obama, Senate Majority Leader Reid, House Minority Leader Pelosi, and the Obama Administration’s lawyers called “essential” to its health care law more than 100 times in their legal briefs, is a tax and must now be pursued solely under Congress’s taxing power.

So, as Chief Justice Roberts suggested, today we “pause to consider the implications.”  As a result of the Court’s opinion, the limits on Congress’s taxing power are now anything but clear.

Some may argue that this ruling simply reaffirms a power that Congress has always had.  However, until the Democrats enacted their health care law, and until the individual mandate tax was determined to be an acceptable use of Congress’s taxing power, the power to tax has never been used to coerce people who do not purchase a specific product or service.  This is the first indirect tax on inactivity in American history.

Yet, in the case of the Court’s ruling that the individual mandate is a tax, both of those notions are reinforced – that absence of action is taxable and that the government can compel individuals to act.  The purpose of the individual-mandate tax is to force people to do what they otherwise may not freely choose to do.  In this case, beginning in 2014, the federal government will force individuals to purchase government-approved health insurance.

How is this different than the government requiring Americans to purchase broccoli or pay a tax for not doing so?  How is this different than the government requiring Americans to purchase low-fat or low-salt foods or pay a tax as a means to fight the obesity epidemic?  After all, the case put forth by the Democrats and the President was that the individual mandate was necessary to improve the nation’s health.  Under that premise, what is there to stop future Congresses from using this taxing authority to compel a similar “it’s for the good of the country” outcome?  If one refuses to purchase the goods and services the government thinks are best for the country, the act of not purchasing can now trigger a tax.

Without a doubt, the Supreme Court’s ruling that the individual mandate is a tax reveals what can only be characterized as a “brave new world,” and as such its implications might be imagined but cannot be entirely known. 

Chief Justice John Marshall said in the early days of the Republic, “The power to tax is the power to destroy.”  As Congress examines this new taxing power, we must consider whether a future Congress will restrain itself from using the power to control individual lives and decisions, or whether this is just a first step into that brave new world.  

Those are the issues we will explore today.  I welcome our panel of witnesses and look forward to their testimony.

I will now recognize Ranking Member Levin for the purposes of an opening statement.