Thursday, September 21, 2017

Socialism or Federalism? More Like Bribery and Revenge

by Michael Dorf

As the latest effort by Republicans to repeal and replace the Affordable Care Act races against the calendar for a showdown vote, one of its sponsors, Lyndsey Graham, has declared that America faces a choice between "socialism or federalism." The characterization is preposterous, of course. If the ACA represents socialism because it includes subsidies to individuals to buy health insurance on the exchanges and increases federal funding to Medicaid--a program administered by states--then surely Medicare--a federally funded and administered program is even more clearly an instance of socialism; and yet, Graham does not oppose Medicare.

Nonetheless, there is a non-trivial chance that Graham-Cassidy will become law, thanks in part to the possibility of support from John McCain, who of late has been sounding less maverick-y than he did over the summer. Given some cover by Arizona Governor Doug Ducey's announcement that he supports stripping health insurance from millions of Americans, McCain is apparently now tempted to support his BFF Graham, despite his preference for "regular order" and, one suspects, despite the desire to inflict some more pain on President Trump.

To be sure, even if McCain votes for Graham-Cassidy, it could still fail, thanks to the defection of Rand Paul, who regards the bill as insufficiently cruel. Thank heavens for principle!

Assuming Paul holds fast, the GOP will need to switch either Susan Collins or Lisa Murkowski from a no to a yes. How might leadership do that? Collins is probably not in play. Threats against Murkowski backfired in July. Now the strategy for winning her over appears to be bribery.
Murkowski is (understandably) concerned that Graham-Cassidy would adversely affect Alaskans, chiefly because Graham-Cassidy is a lie. It doesn't simply take a chunk of money that currently comes with federally imposed rules and hand it over to the states to use as they please. It greatly reduces the amount of money and then, in 2026, completely eliminates the funding, which will result in an estimated 32 million people nationwide losing coverage. Because Alaska has high health-care costs and expanded Medicaid, it would be particularly hard-hit.

So why might Murkowski fold? The short answer is special treatment. Graham-Cassidy could be modified to provide more money for Alaska. To be sure, this strategy runs the risk of alienating Senators from other states, who might then demand that their states also be given sweetheart treatment. If enough of them pile on, the bill might lose support from still other Republicans who, on ideological grounds like those advanced by Senator Paul, object to spending too much money on ensuring that people have health insurance. Or perhaps the GOP will be able to thread this needle by doling out just enough goodies to states with reluctant Senators without doling out so many goodies as to make the bill collapse.

Regardless of the outcome, it is worth stepping back and noting just how appalling that particular prospect is--even if it is familiar. We tend to think of logrolling as a basic feature of the legislative process, but political polarization makes it increasingly problematic. In a Federalist 10 utopia, members of Congress will come together and apart in ever-shifting coalitions, so that over the long run no particular Senator or Representative can obtain for her state or district a disproportionate share of the legislative spoils as the price of her vote. But if persistent polarization leads to purely intra-party bargaining, then states that are not represented or under-represented by the majority party in Congress will be systematically disadvantaged.

That is a real prospect with respect to Graham-Cassidy. States that accepted Medicaid expansion funds and are represented by Republican Senators (like Alaska and Arizona) may be given some compensating relief, but states that accepted such funds and are represented by Democrats (like California and New York) will be shut out.

We might well see the same phenomenon with respect to the tax "reform" legislation currently being contemplated by GOP lawmakers. They are reportedly considering eliminating the deduction for state and local taxes, which disproportionately benefits residents of relatively higher tax blue states.

To be clear, more or less politically neutral arguments can be advanced for or against any particular tax deduction. But the notion that a particular tax deduction should be eliminated because its elimination will only harm voters from states represented by the minority party is a terrible--indeed, fundamentally undemocratic--basis for a change in the tax code. The idea that the spoils of legislation should be distributed disproportionately to representatives of the majority party is likewise terrible and undemocratic.

Terrible and undemocratic perhaps, but unconstitutional? Probably not, although an opinion authored by Chief Justice Roberts and widely reviled by liberals--Shelby County v. Holder--may suggest an opening.

In Shelby County, the Supreme Court invalidated the coverage formula of the Voting Rights Act partly on the ground that, by subjecting some but not all states and their subdivisions to a pre-clearance requirement, the law departed "from the fundamental principle of equal sovereignty" of the states. Various commentators objected to the equal sovereignty principle. Here's what I wrote a couple of days after the case was handed down:
Congress routinely writes laws that apply differently in different states.  Consider federal environmental regulation, which regulates or forbids particular activities in proximity to threatened land, water or species habitats.  Under such laws, an activity that may be permissible in one state or locality--logging, say--is forbidden in another state or locality.  Now it's true that in these instances the law does not EXPRESSLY differentiate between the various states and localities, but so what?  Federal spending measures often do draw express distinctions, as when Congress authorizes a particular national park or military base.  As a matter of practical politics, Congress often attempts to disguise the fact that it has singled out some place for some special burden or goody, but this doesn't fool anyone. 
Should there be some rule that requires Congress to legislate in a way that formally treats the states equally?  It's hard to see why.  Often there are good reasons to treat different places differently because of different contexts and circumstances.  General rules can probably take that into account, and so a formal requirement of equal treatment of the states wouldn't do much damage, but for the same reason it would be relatively easy to evade.  In any event, the Court in Shelby County does not say that Congress must use general rules; it says that if Congress singles out states, it has to keep the basis for the singling out reasonably up to date.  Yet there doesn't appear to be any requirement that general rules with differential impact be kept up to date.  And so the opinion seems rooted in formalism on this point.
I still think Shelby County was wrongly decided. I also continue to think that some sort of judicially enforced rule of equal treatment of all states would be relatively easy for Congress to evade. But recent events have made me at least a bit more sympathetic to a principle requiring Congress to treat all states equally.


Joe said...

My understanding of Shelby County is that the majority specifically argued that states have the power to legislate (in particular elections) and that preclearance is a special exception to this general constitutional principle.

Some places need a special okay before changing electoral laws. This is a special limit on state sovereignty. Justice Black (if alone) flagged the "problem" back when the VRA was first ruled upon by the Supreme Court. And, the majority held that the need was not strong enough for singling out certain states in this way.

This is not merely a matter of states not being treated equally as a matter of policy.

Michael C. Dorf said...

Joe: You are correct. I did not say and don't think that Shelby County imposed a freestanding state equality obligation. But its logic indicated that such equality is a kind of baseline. My point then was that this wasn't true. My point now is that it would be good if it were true -- even though I don't think that state equality is a justiciable principle.

Joe said...

I'm not sure if the opinion's "baseline" is that broad.

The "equal sovereignty" idea to me specifically was about states having the equal ability to legislate, especially in the special area of elections (a core issue of sovereignty). I guess you can pick out something broader.

Craig said...
This comment has been removed by the author.
Craig said...

I argue on Huffpo that reading Shelby County WITH NFIB makes the opening Professor Dorf identifies somewhat bigger.

Joe said...

Michael Dorf posted something dealing with a NFIB issue on Take Care Blog. Perhaps, it will be posted here as well later.