Does the Supreme Court ruling on the Affordable Care Act reopen the drinking age debate?

The US Supreme Court building.

In which I tackle an angle of the healthcare ruling you probably haven’t heard yet.

The Supreme Court, as I am sure most non cave-dwelling sentient beings know by now, today ruled the individual mandate of the Obama’s healthcare bill, the Affordable Care Act, Constitutional, though under an interpretation of the mandate as a tax, not under the Commerce Clause. The second half of the ruling, the portion that strikes down parts of the Medicaid expansion, is the part that relates to the drinking age.

The Medicaid Decision

While the 5-4 majority voted to rule the ACA constitutional, they ruled aspects of federal government’s expansion of Medicaid unconstitutional. This expansion of Medicaid originally was to extend the low-income healthcare program to cover more people, with the federal government paying substantial amounts. The catch was that states which refused to join in the expansion were to lose all of their federal Medicaid funding.

The court says, in the part of the ruling the justices—even those on the majority—were very divided on, that while the federal government was allowed to expand Medicaid in this fashion, states that decided not to join up could do so without losing all of their federal Medicaid funds. In his majority opinion, Roberts explains, “The threatened loss of over 10 percent of a State’s overall budget, in contrast, is economic dragooning that leaves the States with no real option but to acquiesce in the Medicaid expansion.” (page 52).

How this relates to the drinking age

Now how does this relate to the drinking age? Well, United States’ drinking age of 21, which is one of the highest drinking ages in the world among countries that legislate such things (and is much higher than those in the rest of the developed world), is actually not a result of direct federal action. The National Minimum Drinking Age Act, signed in 1984 under the Reagan administration, did not actually set the drinking age across the United States at 21—that would have crossed the federal government’s authority. Instead, the law made the receipt of federal highway funds—specifically 10 percent of such funds—contingent upon a state making the drinking age 21 or higher.  While states can, any day, lower the drinking age if they wanted to, this law basically guarantees that doing so would amount to a tax increase or a budget cut, as states would suddenly have to fill that hole in their budgets.

Where the court came down last time

If all of this sounds constitutionally dubious, you are not alone. In 1987, the case of South Dakota v. Dole came before the Supreme Court. The state of South Dakota challenged the law (Dole refers to the then Secretary of Transportation) on the grounds that the law infringed on the right of South Dakota itself to decide the drinking age, under the scope of the 21st Amendment, which rolled back Prohibition. There the states were given purview over the regulation of alcohol, as opposed to the federal government.

As you probably have guessed, the Supreme Court upheld the drinking age law in a 7-2 decision. In the majority ruling, which was penned by then-chief justice William Rehnquist, the court actually sidestepped the question that South Dakota focused on in their legal argument, which was the fact that the 21st Amendment gave sole control of alcohol regulation to the states. Instead, Rehnquist’s majority opinion focused on the fact that this issue fell under the tax clause of the constitution. From the decision:

“The Constitution empowers Congress to ‘lay and collect Taxes, Duties, Imposts, and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States.’ Art. I, 8, cl. 1. Incident to this power, Congress may attach conditions on the receipt of federal funds, and has repeatedly employed the power ‘to further broad policy objectives by conditioning receipt of federal moneys upon compliance by the recipient with federal statutory and administrative directives.’”

The court in their 1987 decision did set out three major limitations on Congress attaching conditions to federal grants. In brief, these conditions are that the limitation must be conducive to the “general welfare”—a question on which the courts normally would defer to Congress—that the limitation must be clear one that states are made aware of and know the consequences of, and “that conditions on federal grants might be illegitimate if they are unrelated “to the federal interest in particular national projects or programs.” The court admitted here that precedent was unclear on what that last one meant.

South Dakota maintained that even if all this was true, Congress could not use the above explained spending power to essentially make an end-run around the 21st Amendment. The court did not buy this—here is another block of text from the ruling:

“These cases [a series of earlier precedents on federal spending power] establish that the ‘independent constitutional bar’ limitation on the spending power is not, as petitioner suggests, a prohibition on the indirect achievement of objectives which Congress is not empowered to achieve directly. Instead, we think that the language in our earlier opinions stands for the unexceptionable proposition that the power may not be used to induce the States to engage in activities that would themselves be unconstitutional. Thus, for example, a grant of federal funds conditioned on invidiously discriminatory state action or the infliction of cruel and unusual punishment would be an illegitimate exercise of the Congress’ [483 U.S. 203, 211]   broad spending power.”

Here is the kicker in the decision—even though the court concludes by admitting that the elimination of federal funds can at a certain point be coercive, they did not accept that the loss of 5% of highway funds (the law was later amended to be 10%) did not reach that threshold.

How today’s ruling may be a game changer

Today’s decision on Medicaid reinforces the idea that there are limits to federal spending power coercion. In the “syllabus” of the Roberts majority decision, it is written with regards to the Medicaid expansion:

“When Congress threatens to terminate other grants as a means of pressuring the States to accept a Spending Clause program, the legislation runs counter to this Nation’s system of federalism. Cf. South Dakota v. Dole, 483 U. S. 203, 211. Pp. 45–51.”

Notice the citation of the Dakota case. In the meat of the decision, the court says that the federal government does have the power to use the “power of the purse” to do things it would not be able to do by statute, but also that this power of incentives only extends to the point that pressure becomes “compulsion.” Here is perhaps the most important part of today’s ruling with regards to the drinking age law:

“Spending Clause programs do not pose this danger when a State has a legitimate choice whether to accept the federal conditions in exchange for federal funds.  In such a situation, state officials can fairly be held politically accountable for choosing to accept or refuse the federal offer.  But when the State has no choice, the Federal Government can achieve its objectives without  accountability.”

In 1987, the court ruled that the states do have a legitimate choice, but the thinking of the court today sort of reframes the question. In their decision, the court said that the Medicaid compulsion was unconstitutional because Medicaid accounts for such a large amount of state spending, and at least 50% of state budgets for their Medicaid programs comes from the federal government.

The court ruled that this amount was just too much for the federal government to use the power of the purse. At this point, the court calls coercion. This sets up an interesting brightline argument for anyone who wants to challenge the drinking age act—does 10% of federal highway funds account for a large enough amount of a state’s budget to be coercive? The federal government spends 21% of its money on Medicare and Medicaid. The Medicaid portion is mostly money handed to individual states. Meanwhile, transportation only is 3% of the federal budget (again, this is mostly money handed to states). At the state level, transportation is only 5% of state spending, much lower than the 13% that states spend on Medicaid alone. What this makes clear is that to overturn the drinking age, even with this new ruling, the court would have to be persuaded that 10% of federal highway funds reaches a level of coercion that is unconstitutional. The fact that all 50 states have complied with the law could be noted as an example of the law’s coercive force.

So will we see a challenge? Will the justices see this differently?

As to the question of will we see a challenge, the answer is uncertain. It is likely that this ruling will likely lead to challenges of other healthcare and education federal mandates, but it is not clear whether Dakota will be one of the targets of this possible gold rush. The fact that the court has not given a hard threshold of coercion in today’s ruling does indicate a challenge would at least pass the threshold of lower courts.

This is the court that upheld the Dakota case in 1987. Today’s court looks very different, and the vote would almost certainly look different today.

As for the justices, the Dakota decision was 7-2. As with most of these things, all but one of the justices who voted on that ruling are either dead or retired. That sole survivor would be conservative firebrand Antonin Scalia. He joined the majority opinion of Rehnquist, and we can presume from the lack of a concurring opinion by him that he largely agreed with the reasoning discussed above. Whether the new Antonin Scalia would agree with the Scalia of 1987 is yet to be seen. The Scalia of today, in his dissent striking down the law, agreed with the majority’s reasoning on the Medicaid provision. In the majority, justices Kagan and Breyer joined Roberts in saying the Medicaid expansion. So theoretically, we could be looking at 7 justices who are at least amenable to the argument that federal restrictions on money to states can reach a level of coercion (ironically the exact opposite of the number of justices who upheld in Dakota). Whether 10% of highway funds meets that test is something we could see soon in the court.

See for yourself: Court decisions

Full text of the healthcare decision[http://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf] and with annotations from NPR’s reporters[http://www.npr.org/2012/06/28/155907705/interactive-inside-the-health-care-ruling]

Full text of South Dakota V. Dole[http://caselaw.lp.findlaw.com/scripts/getcase.pl?navby=CASE&court=US&vol=483&page=203]

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