Message for the Chairman:  Obamacare's Legal Achilles Heel - Severability

As Republicans take control of the House of Representative this week, they are already planning Obamacare's repeal as one of their earliest actions.  To be sure, some commentators have scoffed at the effort, pointing out that the repeal faces an uncertain future in the Senate and a likely veto.

However, efforts to stop Obamacare do not depend only on the new Congress.  Several legal challenges to the law continue.  Among the issues at stake, less attention has been paid to what may prove to be Obamacare's potential legal Achilles heel, the lack of a "Severability Clause."

Nearly every complex law contains a specific provision that if any single part of a bill is found to be unconstitutional by the courts, the remaining portions of an act need not be affected. The Democratic drafters committed a surprising oversight with the Obamacare bill; although the bill is hundreds of pages long, there is no mention of a severability clause. 

The problem likely stems from the unusual manner the legislation was passed.  First, the failure to allow the bill to be publicly read prior to passage prevented the careful review that might have avoided the mistake. 

Secondly, there was no conference between Senate and House bills to reconcile differences because the House decided to pass the Senate's version without modification.  House Democratic leaders did this to avoid the necessity of another Senate vote after Scott Brown's election.  This eliminated another opportunity to insert a severability provision.

The absence of a severability clause does not automatically mean that if one provision is unconstitutional that an entire law will be invalidated.  The courts do try to retain those provisions of the law can be separated from the unconstitutional provisions if the remainder of the law can still function. Just last year the Supreme Court allowed the balance of the Sarbanes-Oxley legislation to remain in effect, despite the lack of a severability clause.

However when an unconstitutional provision is essential to a law's functioning, and then large parts of the rest of a law will be scrapped.  If Obamacare's requirement that every individual must purchase health care insurance is held to be unconstitutional, then separating it from over parts of the law may virtually impossible.

The individual mandate to buy health insurance is central the Obamacare's design because it assures private insurers of revenue stream to pay for the bill's other requirements.  Without the individual mandate, healthy people may delay purchasing insurance until they became sick.  They could do so and be assured of immediate full coverage under the Obamacare's guarantee of full coverage despite a preexisting medical condition.    

The Commonwealth of Virginia has already argued that the entire law should be invalidated.  While siding with the challengers on many points, the Federal Judge in Virginia's challenge declined to throw out the entire law, saying the Court did not have sufficient information to determine "what, if any, portion of the bill would not be able to survive independently."   The judge effectively deferred the issue to later consideration.  While the Judge may have declined to speculate, interestingly, the White House has acknowledged in a briefing to reporters after the decision how central the individual mandate is to the rest of the law:

"If the constitutional challenge to the Affordable Care Act's individual responsibility requirement ultimately prevails, it would mean that provisions preventing health insurance companies from discriminating against people with pre-existing conditions would also be invalidated by the court because the two are inseparably linked. If insurance companies are required to cover those with pre-existing conditions, who are potentially more expensive to cover, without requiring everyone-both sick and healthy people-to have insurance, premiums will increase rapidly. Similarly, other provisions - including banning insurers from discriminating based on health status, age and gender - would also fall."[1]

The impact of the lack of severability clause should not be overstated.  Many of the law's provisions could still remain in effect even if a substantial part of the law is found unconstitutional. These could include the Medicare benefit cuts and the expansion in Medicaid entitlements.  Nevertheless large parts of the law are likely to be impacted.

There is, though, immense poetic justice that by circumventing normal legislative procedures that Democrats seem to have created a legal flaw which could so completely undermine their principal objective. Sometime in politics there is a temptation to believe that "the ends justify the means."  However Obamacare may provide a lesson that the failure to follow "normal means" can result in a failure to achieve "desired ends."

Mark Uncapher

Montgomery County Republican Chairman

For example, Sen.-elect Victor Ramirez, D-Prince George's, plans to introduce legislation to offer in-state college tuition benefits to illegal immigrants who have attended state high schools.

Let's leave heated arguments for and against liberalizing immigration aside for a moment and just look at numbers.

The PewHispanicCenter estimates 250,000 illegal immigrants live in Maryland. Based on a 2004 Urban Institute study, the proportion of children in that group is about 42,500. The proportion who graduate from Maryland high schools each year is a tiny fraction of that and those who go on to attend college even smaller.

Making the matter even less urgent is the fact that the number of illegal immigrants in the United States dropped by about 8 percent from 2007 to 2009 as job opportunities evaporated.

So the question really should be: At a time when the state faces a $1.6 billion budget shortfall and regularly shortchanges payments for state employee pensions, why are legislators wasting precious time arguing about subsidizing a tiny fraction of the population?

Two Marylands

Taxing our way to prosperity does not work.

Over the past decade the gap between rich and poor has grown in Maryland, despite massive tax increases in 2007 that raised sales, income and other taxes. According to a new report from two groups that regularly support higher taxes, poverty has also risen over the last decade, from 7.4 percent in 2000 to 9.1 percent in 2009.

But those figures have not stopped the same groups from proposing higher taxes on millionaires, corporations, gasoline and liquor and extending the sales tax to a wide variety of services to "promote a broadly shared recovery."

They would also like to raise Maryland's minimum wage to $10.

According to December's "The State of Working Maryland," from the Progressive Maryland Education Fund and the Maryland Budget and Tax Policy Institute, "Raising the state minimum wage would not only ensure that Marylanders can escape poverty through work, it would also boost the economy by bolstering the purchasing power of lower-paid workers at a time when weak consumer spending is the biggest factor in the current anemic recovery."

The problem with that logic is that unemployment is highest for those with minimal skills. Making it harder for businesses to hire those low-skilled workers will decrease employment, not increase it.

The City of Baltimore, a haven for many low-skilled workers and home to some of the highest unemployment in the state, passed its first living wage law in 1994. Since then the city has lost about 100,000 people. From 2002 to 2007, the most recent statistics, the city has lost about 50,000 jobs. A variety of factors have contributed to those losses, but raising the minimum wage can hardly be cited as an effective way to raise employment and wages.

If legislators want to increase wealth in the state they need to create an environment where businesses can and want to hire people. Returning to Maryland's 2006 tax rates would be a good start. Redistributing wealth has increased poverty and widened the gap between rich and poor in the past decade, so why will more of it make Marylanders richer?