Would ruling against Obamacare be ‘unprecedented’?

(Saul Loeb - AFP/Getty Images)

For the past few days, there’s been a back-and-forth between the White House and a federal judge over what, exactly, the Supreme Court can do. The exchange ended on a pretty anti-climactic note: Everyone pretty much agrees about the nine Justices’ powers. But the debate illustrated one of the biggest disagreements at the heart of the entire case.

This all started about 72 hours ago, when President Obama remarked that if the Supreme Court overturned the Affordable Care Act, it would be an “unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a Democratically elected Congress.”

That’s not quite true: There is a whole bunch of precedents for the Supreme Court nullifying laws. The New Deal legislation that the Court overturned in the 1930s stands out as one of the more notable examples. Overturning unconstitutional laws, as Brooks Johnson puts it, “has been part of the Supreme Court’s job description for more than two centuries.”

What Obama’s remarks meant to get at — and what he would later clarify — is that the Supreme Court overturning the health reform law would be an unprecedented example of “overturn[ing] a law that was passed by Congress on an economic issue.”

The key word there is “economic.” And the president is referring to Congress’s authority to regulate economic activity that happens between states, known in legal parlance as inter-state commerce. The question about whether the individual mandate is a constitutional exercise of that power is one at the heart of the Affordable Care Act’s legal challenges.

President Obama’s clarification did not satisfy Jerry Smith, a federal judge on the Fifth Circuit Court of Appeals. In the middle of hearing an unrelated case, one on the health care overhaul’s regulation of physician-owned hospitals, he asked a Justice Department lawyer if she thought the Supreme Court could strike down laws. She said yes, it could. And Thursday, Attorney General Eric Holder followed up with a letter confirming that sentiment (you can read the full letter here).

And that’s pretty much it. Everyone involved agrees that, yes, the Supreme Court can review the laws that Congress passes.

On the flip side though, this was a fight about everything that matters in the health care overhaul’s legal challenges. It gets at one of the biggest disagreements between the two parties, over whether the decision not to purchase health insurance counts as an economic one.

Health reform opponents contend that the decision not to do something — namely, not buy health insurance — is economic inactivity, rather than activity, and therefore not a behavior the federal government can regulate. Health reform supporters argue that the decision to not purchase health insurance has an economic effect. An individual without coverage, for example, may not have the money to pay for an emergency room visit, sticking hospitals or taxpayers with the bill.

If the Supreme Court accepts the White House’s case that not purchasing insurance counts as economic activity, then it would indeed be unprecedented not to allow this type of regulation. But if it sides with the opponents’ argument and finds it not to be economic, then repeal would have much more precedent on its side.