What we know about how the Supreme Court will rule on health care: Nothing.

June 26, 2012

Here's what we know about how the Supreme Court is going to rule on health care after Monday's rulings: Nothing.

Oh, Monday's rulings did lead to some theories, of course. Since Justice Kennedy wrote the ruling striking much of, but upholding some of, Arizona's controversial immigration law (more on that later in Wonkbook, by the way), there's an expectation that Chief Justice Roberts will write the ruling on health care. The justices tend to split work up that way.

So what does that tell us about which way the Court will go on health care? Nothing. One theory holds that it points towards a favorable ruling for the administration. If the conservatives had had to entice Kennedy to their side, they would have had to give the ruling to Kennedy to write. But if Kennedy joined the liberals to uphold the law, Roberts would also flip sides so he could write a ruling that imposed some kind of limiting principle on the Commerce Clause.

Or maybe Kennedy is with the conservatives and Roberts is simply the guy writing the ruling. Or maybe someone who is not Roberts and also not Kennedy is writing the ruling.

There's been other tea-leaf reading, too. Perhaps the language used in the Knox vs. SEIU decision means SCOTUS is skeptical of free-rider arguments, signaling that they'll rule against health care reform. Perhaps their decision in the Arizona case, where oral arguments also went against the administration, suggests oral arguments don't much matter in high-profile cases, and so the pessimism that descended on the Affordable Care Act's advocates after Solicitor General Don Verrilli's stumbling performance is unwarranted.

As you read more of this in the coming days, keep in mind that studies show legal experts are very, very bad at predicting how the Supreme Court will rule. They're usually not much better than a coin toss, and they're particularly bad at cases dealing with "economic activity" -- which is what the case against the individual mandate is all about. If they're that bad in normal circumstances, then it's hard to believe they're not much worse in a case as extraordinary as this one.

But we did learn one thing yesterday: The Supreme Court is going to rule on health-care reform -- or, in an unlikely event, decide not to rule on health-care reform this year -- on Thursday. So we'll know what the Justices have decided soon enough.

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Top story: SCOTUSbook

The Supreme Court issued a mixed decision on Arizona's immigration law."The Supreme Court on Monday struck down several key parts of Arizona’s tough law on illegal immigrants, but it left standing a controversial provision requiring police to check the immigration status of people they detain and suspect to be in the country illegally. The 5 to 3 decision upholding the “show me your papers” provision came with a warning that the courts would be watching its implementation...The court threw out three such provisions in the Arizona law. It said the state cannot make it a misdemeanor for immigrants to not carry registration documents; criminalize the act of an illegal immigrant seeking employment; or authorize state officers to arrest someone on the belief that the person has committed an offense that makes him deportable." Robert Barnes in The Washington Post.

The rest of the law could still be struck down by the Court. "The Supreme Court explicitly left the door open for subsequent challenges to the 'papers, please' provisions. 'This opinion does not foreclose other preemption and constitutional challenges to the law as interpreted and applied after it goes into effect,' the court explained in its decision. In other words, it will essentially depend on how state law enforcement actually carries out the law -- which was enjoined in Arizona before it was ever put into effect--and how state courts rule on any future legal challenges to it. As it stands, 'there is a basic uncertainty about what the law means and how it will be enforced,' the Supreme Court explained." Suzy Khimm in The Washington Post.

The Justices also declined to revisit Citizens United. "In a brief unsigned decision, the Supreme Court on Monday declined to have another look at its blockbuster 2010 campaign finance decision, Citizens United v. Federal Election Commission. In the 5-to-4 ruling on Monday, the court summarily reversed a decision of the Montana Supreme Court that had upheld a state law limiting independent political spending by corporations. That decision, the United States Supreme Court said, was flatly at odds with Citizens United, which said the First Amendment allows corporations and unions to spend as much as they like to support or oppose political candidates." Adam Liptak in The New York Times.

@mattyglesias: Thanks to Montana ruling, business will finally have the chance to influence the political process.

The Court will issue its healthcare ruling on Thursday. "Mark your calendars: The Supreme Court decision on the Affordable Care Act’s constitutionality is almost certainly going to come down Thursday about 10 a.m. The court announced Monday morning that Thursday would be the last day of this year’s term. Unless the justices decide to punt it over until next year -- an outcome that is possible, although thought to be unlikely -- the decision will come Thursday. We don’t know how the Supreme Court will decide on the health-care law; the justices tend to be better at keeping secrets than the CIA. But court watchers expect that Chief Justice John Roberts will author the opinion, after seeing Justice Anthony Kennedy write the opinion in the Arizona immigration case. The justices tend to split up the workload each term, especially when it comes to high-profile and complicated rulings." Sarah Kliff in The Washington Post.

@jonathanchait: SCOTUS is going to make me die of heart failure before I can be denied coverage for a preexisting condition.

Lawsuits could be coming on the billions already spent on Obamacare. "Now that the Supreme Court has announced it will rule Thursday on President Barack Obama's 2010 health-care overhaul, one of the biggest questions that hangs over the decision is what happens to the billions of dollars already spent or pledged to carry out the law if parts or all of it are struck down. While it is clear that funding would end eventually if the law is thrown out, there is no precedent for exactly how the money would be unwound since no law of this size has been invalidated in recent history. Legal experts predict companies may file lawsuits to recoup any money they spent tied to requirements under the law." Louise Radnofsky in The Wall Street Journal.

What's the Supreme Court doing right now? Proofreading. "The much-anticipated Supreme Court ruling on challenges to the health care law did not come on Monday. But the wait doesn't mean any last-minute maneuvering is going on. More likely, it's proofreading...Several former clerks said that the Court's work has entered, or is just about to enter, the proofreading stage, when professional legal editors review the text to check for style and ensure that all the case citations are correct. The Supreme Court reporter's office, which performs these functions and writes a brief summary of each case called the 'syllabus,' typically takes a few days to ensure that all the t's are crossed and i's dotted before the opinion reaches the public. There is also the matter of printing the opinion. Every time the Court announces a ruling, it must also have paper copies at the ready for the public. The Supreme Court printing office is run by an in-house team of professionals, and they need time to produce hard copies." Margot Sanger-Katz in National Journal.

Experts aren’t very good at predicting Supreme Court cases. "Legal experts aren’t much better at predicting the case outcomes than a coin toss. Sometimes, they even do worse...Washington University’s Andrew Martin did an even deeper dive into the issue and looked at the types of cases that experts are good (and not so good) at predicting. They turn out to do the absolute worse on cases involving questions of 'economic activity,' which happens to be the crucial issue in the health reform challenge. It’s the one area where the experts predicted the decision accurately less than half the time. In other words, a coin toss would make a better prediction model." Sarah Kliff in The Washington Post.

KLEIN: Republicans have made it possible for Justices to strike down the mandate. "Over the past two years, the Republican Party has slowly been building a permission structure for the five Republicans on the Supreme Court to feel comfortable doing something nobody thought they could do: Violate the existing understanding of the commerce clause and, in perhaps the most significant moment of judicial activism since the New Deal, overturn either all or part of the Affordable Care Act. The first step was perhaps the hardest: The Republican Party had to take an official and unanimous stand against the constitutionality of the individual mandate. Typically, it’s not that difficult for the opposition party to oppose the least popular element in the majority party’s signature initiative. But the individual mandate was a policy idea Republicans had thought of in the late 1980s and supported for two decades. They had to, in effect, persuade every Republican to say that the policy they had been supporting was an unconstitutional assault on liberty." Ezra Klein in The Washington Post.

LANE: The role of government in society is being redefined. "The United States periodically redefines the role of the federal government in society, in a process that is both political and legal -- and, sometimes, more revolutionary than evolutionary...In the 1930s, expanding federal power was innovative, promising. By blessing it, the court aligned itself with the wave of the future, in this country and globally. Ditto for the 1960s. Much of the legislation that resulted -- from Social Security to the Voting Rights Act -- was indeed progressive. Today, however, there is nothing new about federal intervention -- and much evidence from the past 70 years that big programs produce inefficiencies and unintended consequences. The post-New Deal consensus about the scope of federal power has broken down amid national, and global, concern over the welfare state’s cost and intrusiveness -- a sea change of which the tea party is but one manifestation. Obamacare itself, which has consistently polled badly, fueled that movement." Charles Lane in The Washington Post.

FALLOWS: This is beginning to look like what, in any other country, we would call a coup. "Try this at home. Pick a country and describe a sequence in which: First, the presidential election is decided by five people, who don't even try to explain their choice in normal legal terms. Then the beneficiary of that decision appoints the next two members of the court, who present themselves for consideration as restrained, humble figures who care only about law rather than ideology. Once on the bench, for life, those two actively second-guess and re-do existing law, to advance the interests of the party that appointed them. Meanwhile their party's representatives in the Senate abuse procedural rules to an extent never previously seen to block legislation -- and appointments, especially to the courts. And, when a major piece of legislation gets through, the party's majority on the Supreme Court prepares to negate it -- even though the details of the plan were originally Republican proposals and even though the party's presidential nominee endorsed these concepts only a few years ago." James Fallows in The Atlantic.

Top op-eds

1) STIGLITZ: Economic equality is good for growth. "The US grew far faster in the decades after the second world war, when inequality was lower, than it did after 1980, since when the gains have gone disproportionately to the top. There is growing evidence looking across countries over time that suggests a link between equality, growth and stability. There is good news in this: by reducing rent-seeking...and the distortions that give rise to so much of America’s inequality we can achieve a fairer society and a better-performing economy. Laws that tax speculators at less than half the rate of those who work for a living or make the innovations that are transforming our society, say something about our values; but they also distort our economy, encouraging young people to move into gambling rather than into more productive areas. Since so much of the income at the top is derived from rent seeking, higher taxes at the top would discourage rent-seeking." Joseph Stiglitz in The Financial Times.

2) PURCELL: Shareholders are key to ending too big to fail. "There are many reasons people give for breaking up financial institutions that are 'too big to fail.' It would reduce their complexity, making it less likely they would fail in first place. And ending the government's implicit subsidies to these behemoths means they would no longer enjoy a lower cost of borrowing funds...But there is one benefit of breakups that hasn't gotten much publicity: Shareholders would get greater value from their investments...Breaking up these banks and isolating their investment banking and capital-markets businesses solve the shareholder-valuation problem. And by not allowing investment banks to fund the assets on their balance sheets with insured deposits, the risk to taxpayers is largely reduced. Breaking these banks up will be difficult for many practical, legal, regulatory and political reasons. But corporate boards of directors can and should begin to do so, as a matter of fulfilling their fiduciary obligations to shareholders." Phil Purcell in The Wall Street Journal.

3) SELINGO: Higher education needs to change to slow the surge in cost. "University leaders desperately need to transform how colleges do business. Higher education must make up for the mistakes it made in what I call the industry’s 'lost decade,' from 1999 to 2009...The almost insatiable demand for a college credential meant that schools could raise their prices and families would go to almost any end, including taking on huge amounts of debt, to pay the bill. In 2003, only two colleges charged more than $40,000 a year for tuition, fees, and room and board; by 2009, 224 were above that mark...Other information industries, from journalism to music to book publishing, enjoyed similar periods of success right before epic change enveloped them, seemingly overnight...Colleges and universities could be next, unless they act to mitigate the poor choices and inaction from the lost decade by looking for ways to lower costs, embrace technology and improve education." Jeff Selingo in The New York Times.

4) BLINDER: Stimulus shouldn't be a dirty word. "Many Democrats, including President Obama, want to help state and local governments maintain their spending, which has now dropped 6.4% since its 2008 peak--and is still falling. Most Republicans reject that idea, even when it saves the jobs of teachers, fire fighters and police officers...Democrats also typically seek a growth strategy that boosts the incomes of the middle class, not just of the top 1%. Many Republicans counter that the most effective way to bolster middle-class incomes is via trickle-down from the rich--who start and grow businesses...If we are serious about an evidence-based program that spurs growth and improves the lots of average Americans, we should want a near-term jobs program, long-term deficit reduction, more spending on infrastructure, improvements in education, and a tax reform that clears out loopholes, returns to the 39.6% top rate, and protects the middle class. Which candidate does that remind you of?" Alan Blinder in The Wall Street Journal.

5) YGLESIAS: The future of unions could be decided by an obscure legal battle. "The failed effort by Democrats to recall Wisconsin Gov. Scott Walker prompted much speculation about the tenuous future of American unions, but the real future of American labor is being determined right now not in a high-profile electoral fight but in an obscure legal battle in Texas. Everyone on both sides of the fight recognizes that either unions will win the right to represent more private-sector workers or else will wither and die. That’s why the Communications Workers of America’s effort to organize about 10,000 passenger service agents at American Airlines is so important...On Friday afternoon, along came Judge Terry Means of the U.S. District Court for the Northern District of Texas with an injunction halting the election. In his view, the new 50 percent standard should be applied retroactively to the workers’ petitioning for union representation, and American would suffer 'irreparable injury' from allowing the vote to go forward." Matthew Yglesias in Slate.

California folk rock interlude: Lissie plays "Bully" live at Mophonics Studios.

Got tips, additions, or comments? E-mail me.

Still to come:The sequester could be delayed; Obamacare saves seniors money; the FDA user fee bill will pass soon; fracking rules are still coming; and a den of kittens.

Economy

Congress may delay the fiscal cliff until March. "Republican and Democratic congressional leaders are weighing whether to delay automatic federal spending cuts until March 2013, according to a House aide and industry officials who were briefed on the discussions. The $1.2 trillion in automatic spending cuts over a decade, half of which would affect the Defense Department, are scheduled to begin in January 2013. At the same time, lawmakers must decide what to do about income tax cuts and other tax breaks scheduled to expire at the end of the year. Leaders in both chambers are discussing whether to propose a catch-all bill that would delay the automatic cuts, fund the government through March or later and temporarily extend the George W. Bush-era tax cuts and other tax laws, said the House aide and industry officials, who asked to speak on condition of anonymity...The measure would follow a short-term stopgap spending bill to keep the government operating after Oct. 1, the people said." Roxana Tiron in Bloomberg.

New home sales reached a two year high. "Sales of newly built homes climbed to the highest level in two years, driven by limited supply of previously owned homes and record-low mortgage rates. New single-family homes sold at a seasonally adjusted annual rate of 369,000 in May, up 7.6% from April and nearly 20% from a year earlier, the Commerce Department said Monday. The pace was the strongest since April 2010, when federal tax credits temporarily spurred sales. The median price climbed 5.6% in May from a year earlier to $234,500. The improvement in the new-homes market comes as the housing sector appears to have hit bottom this spring after a six-year downturn." Alan Zibel and Dawn Wotapka in The Wall Street Journal.

New proposals could give the EU power to rewrite national budgets. "The European Union would gain far-reaching powers to rewrite national budgets for eurozone countries that breach debt and deficit rules under proposals likely to be discussed at a summit this week, according to a draft report seen by the Financial Times. The proposals are part of an ambitious plan to turn the eurozone into a closer fiscal union, giving Brussels more powers to serve like a finance ministry for all 17 members of the currency union. They are contained in a report to be presented at the summit, which will also outline plans for a banking union and political union...Under the plans for closer fiscal union, the European Commission would present detailed adjustments for a country in breach of its commitments. The changes would be put to a vote of all other EU countries. Although the budget amendments would be described as a 'proposal', the EU has strong new tools to punish countries that do not adopt such proposals, including levying big fines." Peter Spiegel in The Financial Times.

Some big banks' living wills are due for July 1. "Some of the biggest banks are being asked to submit by July 1 road maps for how they can be quickly and cleanly liquidated, but a top regulator said he doesn't back using the so-called living-will process to break them up. Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corp., also doesn't think that the new regulatory process will end 'too big to fail'--the expectation that the government will bail out faltering financial firms rather than risk the damage their failure would inflict on the system. Nine of the largest financial institutions must submit their initial living wills to the FDIC and Federal Reserve by July 1. The early group includes top U.S. financial institutions as well as Deutsche Bank AG, Barclays PLC, Credit Suisse and UBS AG. Smaller companies have longer to craft their plans, with all due by the end of 2013." Victoria McGrane in The Wall Street Journal.

@grossdm: Hey! No banks failed on Friday. So we've got that going for us, which is nice.

Horror film history interlude: Bolaji Badejo reherses for his part as the Alien in Ridley Scott's Alien.

Health Care

The FDA user fee bill could clear the Senate today. "The Senate is expected to send the Food and Drug Administration Safety and Innovation Act -- a major piece of election-year health care legislation -- to President Barack Obama late Monday or Tuesday. The bill, which would provide the FDA with more than $6 billion in industry user fees over five years to fund a share of its medical products reviews, passed the full House last week with scarcely a complaint...the FDA bill has sailed through months ahead of its Sept. 30 deadline, when the last round of industry-negotiated fees are set to expire. Usually, it’s a more drawn-out battle -- although with a bipartisan finale -- as legislators try to attach their proposals to the reauthorization, needed once every five years." Brett Norman in Politico.

Treating infants better lowers costs for hospitals. "Using an evidence-based approach for treating sick infants ultimately lowers costs for hospitals, according to a new study conducted in Utah. Working with faculty at the University of Utah, Intermountain Hospitals found that using an updated care model for treating feverish infants saved four hospitals $1.9 million in 2009. The care model included obtaining a complete blood count and urinalysis for every infant and included treatment and discharge guidelines related to those tests. The changes prompted several positive outcomes, including shorter hospital stays, according to the study...Overall, hospital stays went down in length -- from 60 to 44 hours on average -- and hospital costs dropped by 'more than $1,000 per infant admission' after the model was implemented, according to the study. The study also found that as a result of the new model, infants with serious bacterial infections were more likely to be treated quickly." Elise Viebeck in The Hill.

Domestic Policy

A flood insurance bill is set to pass the Senate this week. "Vacation homes and commercial properties in flood-prone areas could see their flood-insurance premiums more than double over a four-year period under a bill poised to clear the Senate this week. The measure, which was endorsed by the Obama administration Monday, is meant to shore up the finances of a federal program that provides mandatory flood insurance. The Congressional Budget Office estimates the bill would save $4.7 billion by 2021. The government-run National Flood Insurance Program has borrowed nearly $18 billion from the Treasury Department to pay claims resulting from the hurricane season in 2005--a particularly bad year for flood losses. The Senate is expected to take up the legislation Tuesday or Wednesday...The increases would more than double premiums for about 440,000 policyholders who pay $1,174 a year on average, the CBO estimates." Alan Zibel and Leslie Scism in The Wall Street Journal.

Adorable overload interlude: Enter the den of kittens.

Energy

The DOE's clean energy loans have been a mixed bag. "The Energy Department’s clean-energy loan program hasn’t yet yielded the kind of moonshot-style success that President Barack Obama envisions would transform the U.S. economy. But its results also go well beyond the $535 million collapse of Solyndra. With help from the $16 billion loan guarantee program, solar farms are spreading across the California and Arizona deserts, wind turbines are producing electricity in Oregon, and workers in southwestern Kansas are building a factory to convert inedible plant parts into ethanol. Some of the 26 projects aided by the program are even creating jobs -- as many as 4,000 all told, according to partial figures provided by several of the companies that received the guarantees...The projects’ woes don’t appear to be evenly distributed. They’ve largely been concentrated in the solar manufacturing industry that has been battered by competition with cheap panels from China." Andrew Restuccia and Darius Dixon in Politico.

Fracking rules are still coming before the end of the year. "A senior White House official said Monday that regulations to toughen oversight of oil-and-gas 'fracking' on federal lands are on track despite a two-month extension of the public comment period announced last week. Heather Zichal, the top White House energy aide, told reporters that she expects the Interior Department rules regulating hydraulic fracturing, dubbed fracking, to be completed by year’s end. An Interior department spokesman offered the same forecast Friday. But the comments from a senior White House official could help ease jitters among environmentalists, who fear the extension of the comment period, until mid-September, on the draft rules could set back the measure...Interior floated draft rules in May that require industry disclosure of chemicals used in the fracking process. The draft rules also address well integrity and management of so-called flowback water." Ben Geman in The Hill.

Wonkbook is compiled and produced with help from Karl Singer and Michelle Williams.

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