South Carolina exercising the Tenth Amendment


On April 25, the South Carolina House passed a partial nullification of Obamacare that, according to State Representative Mike Burns, would be the first such legislation “passed by any state in modern American history AFTER the Supreme Court gave its opinion on the constitutionality of a federal act.”

Burns, who opposes Obamacare, said “H.3101 would require the state to refuse the creation of an ObamaCare exchange, Medicaid expansion, and much more. This covers a big portion of the steps needed to fully nullify Obamacare.”

If passed by the Senate, signed by the governor, and implemented by the state’s Attorney General, the bill would cost the state $2.6 million while accomplishing the following:

The bill would prohibit the state or any of its political subdivisions, including local governments or schools boards, from forming or participating in state health-insurance exchanges. It also would give tax deductions to individuals or businesses equal to the amount of any federal taxes or penalties that they have to pay for not complying with the health-care law’s requirements, including buying health insurance or providing it to employees.

The deductions would cost the state $2.6 million — a small cost to help those who opt out of buying insurance, Delleney said.

The bill would also empower the state attorney general to take action against any person or entity who harms the state by carrying out the Affordable Care Act. Supporters say that would block health-care “rationing panels,” for instance — boards intended to reduce health-care costs that some fear will result in the government limiting the medical treatments that patients can receive.

Laughably, the  Center for American Progress’ blog, Think Progress, insinuates this bill’s supporters may cause a Civil War-level controversy:

Nearly two centuries ago, South Carolina Sen. John C. Calhoun nearly sparked a civil war when he led an unconstitutional effort to nullify a federal law his state government disagreed with. One hundred and eighty years later, South Carolina lawmakers want to do it again. Last night, the South Carolina House passed an attempt to “interpose and refuse to enforce” much of the Affordable Care Act.

Later on in this diatribe, Think Progress does actually come up with a legitimate policy point. The piece points out that while the bill would nullify the individual mandate, it would leave the required coverage for people with pre-existing conditions in place, thus possibly causing the following situation within South Carolina:

As a result, smart South Carolina residents would soon figure out that they can drop their insurance plans, save the cost of paying premiums, and then pick those plans back up the minute they are about to be hit with an expensive medical bill. Beginning in the 1990s, seven different states passed laws allowing health care consumers to behave this way, and it ended in disaster every single time. Some consumers saw their premiums rise over 350 percent. Others lost access to individual insurance plans entirely.

Think Progress says the SC bill, if it became law, would be struck down in federal court:

Under longstanding constitutional law, federal law invalidates state laws that “stand . . . as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”  Since the sole purpose of this South Carolina bill is to undermine a federal health care law, it should be struck down by the courts.

In an e-mail, Mike DeVine of Atlanta’s Ruf Law Firm disagreed with legal assessment of the partial nullification bill:

Unlike John C. Calhoun’s antebellum “Nullification” legislation that directly prohibited the state from paying federally imposed tariffs on imported goods, S.C. State Rep. Burns’ bill merely rejects the formation of a state exchange, which choice is contemplated by the federal Affordable Care Act; and grants an off-setting state tax deduction; neither of which provision directly contradict or prohibit the carrying out of actual provisions of Obamacare.

States are allowed to opt out of exchanges and raise or lower state tax obligations. The proposed S.C. law does not, in fact, “nullify” any provision of the federal law, and thus does not violate the Supremacy of Clause in Article VI of the U.S. Constitution, no matter the “purposes” in the minds of the Legislators that pass it. The Supreme Court “dicta” Think Progress cites from the majority opinion of the 2012 Arizona v. U.S. immigration case concerning state laws as “obstacles” to the “full purposes and objectives of Congress” was not controlling on that case. Arizona’s immigration laws directly contradicted federal law in many particulars. The proposed S.C. House bill does not so contradict Obamacare. States are allowed to refuse to set up exchanges and the federal individual mandate tax would still be imposed, whether S.C. residents have an off-setting state tax deduction or not.

South Carolina is leading the country in reclaiming state sovereignty under the 10th Amendment. If more states were this willing to stand up to the federal government, the balance of government power envisioned by the founding fathers could be restored. While doing so, state legislators would be wise to take Think Progress’ biased but legitimate concern about the unintended consequences of eliminating the individual mandate while leaving the ban on pre-existing conditions in place.