Interposition Now

Hope, Advent reminds us, often comes from unlikely protagonists and places, such as a peasant girl in a no-name village. In the less earth-shattering but still consequential case of constitutional federalism, hope comes from frightened state politicians: they can, should, and very likely will interpose their authority against the national government, in protection of their citizens.

The notion of state “interposition” is usually traced to Madison’s and Jefferson’s 1798 Virginia and Kentucky Resolutions. Those resolutions, sent from the two states’ legislatures to legislatures in other states, well served their intended purpose of launching Thomas Jefferson’s campaign for the presidency. But they don’t make much constitutional sense. The whole point of the Constitution is that the federal government can tax and regulate citizens without the states’ help; and since federal law always trumps state law, it’s hard to see what and how—short of armed rebellion or secession—states could “interpose” the feds’ designs. The Resolutions contain a lot of bluster to the effect that the right to string up people for seditious libel really belongs to states and not the feds, but that’s about it.

That was then, though, and this is now. The heart and soul of our government is the delivery of services, benefits, and entitlements; and with the exceptions of Social Security and the federal tax code, all of that work is being done through and with the assistance of state and local governments: education, transportation, welfare, housing, food stamps, medical services, the environment, etc., etc. States cannot be compelled to do that work (the Constitution gets in the way); they have to be asked and incentivized. Under the “cooperative” federalism programs that implement the states-do-the-feds’-bidding m.o., states gain what they lacked in 1798: an institutional trump against the feds. And for the first time in memory, states now have a powerful incentive to play that trump. They will very likely do so within the next two or three years, to altogether salutary effect.

Squeeze Play

The States Project (a joint enterprise of Harvard’s Institute of Politics, the Fels Institute of Government at the University of Pennsylvania, and the American Education Foundation) has recently released its 2012 State of the States Report. It paints an unremittingly grim picture of unfunded pension obligations (upwards of $3.4 trillion), a crumbling infrastructure, out-of-control health care expenditures, and increased state dependency on federal transfer payments. More than ever, Medicaid—as yet, still in its pre-Obamacare configuration—takes the cake. Federal Medicaid payments come to $265 billion, or 43.3% of all federal transfers. (K-12 education and food stamps are next, at slightly over $100 billion and about 17% each.) Pennsylvania and Massachusetts spend over 40 percent of their budgets on health care. In Illinois, Missouri, and North Carolina, Medicaid alone consumes more than 30 percent of the state budget. The rest of the country isn’t really different, the Report notes. It’s just a tad behind the curve.

Having painted a harrowing picture, the Report comes up with decidedly lame recommendations for better bookkeeping and improved intergovernmental “dialogue”—plus two substantive recommendations:

States must reduce Medicaid costs. While supporting the public safety net is an important priority, states must balance this need with other objectives, such as supporting education and infrastructure. 

States must tackle persistent unemployment by supporting education on all levels, giving citizens the skills necessary to compete in a 21st century job market.

Sorry, dear policy experts: ain’t gonna happen. See page 16 of your Report:

 

Wow. This momentous shift over a very short time lends urgency to the experts’ recommendations. However, the stern “states must” policy advice is feckless: states “must” reduce Medicaid expenses and support education with what? The federal government expects state and local Medicaid expenses to “settle” into an annual growth rate of 7.4 – 7.7 percent, assuming full implementation of Obamacare (about which more anon). But even without that program, state and local government expenses will double over roughly a decade. State revenues won’t. So where is the money going to come from? Answer, in large measure: the next-best federally funded programs—education.

Hurrah: at long last, the entitlement state has begun to eat its own. The biggest federally funded program (Medicaid) is competing directly with the next-biggest set of programs (education). State politicians are now squeezed between the two most voracious (and unionized) constituencies in American politics: the education blob, and the health care/AARP/provider complex.  They will want a way out; otherwise, they’re toast. And the only way out is interposition to Obamacare.

Farewell, Obamacare

Obamacare est omnis divisa in partes tres: Medicare, a grandly expanded Medicaid, and health care “exchanges.” Crucially, both Medicaid and the exchanges require the states’ active cooperation. The Affordable Care Act seeks to “incentivize” states to cooperate in Medicaid’s expansion by offering 100 percent federal reimbursements for previously uncovered individuals. (Over time, the payment is scheduled to decline to 90 percent.) Obamacare seeks the states’ cooperation in establishing exchanges by threatening the establishment of federal exchanges in states that fail to see the good sense of the overall system.

It now looks as if a good number of states will decline either of those offers. As for Medicaid, many states fear not only the marginal added cost in the out-years but also, and far more, the lock-in effect: once the feds have lured states into expanding the covered population and services, they are free to reduce their promised payments—and leave states holding the bag. Ordinarily, state politicians ignore these dangers because their time horizon extends no farther than the next election. Evidently, however, the situation is sufficiently dire, the counter-pressure is sufficiently severe, and the federal government’s commitments are sufficiently empty, to have prompted an outbreak of long-term thinking and public spiritedness. Something like that is also true of the exchanges: the power to establish a state exchange is the power to be commandeered by Kathleen Sebelius from here to eternity. No, thank you.

Should a sufficient number of states stick to an interpositionist position, Obamacare will still consist of three parts: a quarum unam  incolunt Belgae Medicare program that wreaks havoc on the federal budget, and a Medicaid-cum-exchange system that will leave millions of poor and near-poor consumers in the lurch. They can’t be covered under a non-existent Medicaid program, and they can’t receive subsidized insurance under non-existent exchanges. The uninsured on whose behalf the Affordable Care Act was ostensibly enacted will gain a lot of company in a real hurry. At which point, Obamacare will collapse. Or so one hopes.

Come the Constitution

In a pre-election Wall Street Journal op-ed, my brother-in-arms-and-despair Chris DeMuth warned that the election would have one irreversible consequence: President Obama’s reelection would render Obamacare effectively irreversible (and there goes the country). That may well be right. However, state interposition—meaning a refusal to cooperate in Medicaid or exchanges—may yet produce an Obamacare crash-and-burn within the President’s term in office. Moreover, and more importantly , it may produce a collapse on constitutional terms, provided someone can articulate them.

Envision early 2014, when Obamacare will fully kick in: if a sufficient number of states hold out, the system will break. Mrs. Sebelius cannot run a workable exchange in a single state, let alone 13 or 16. Small employers will cancel whatever health insurance they once offered. And far from expanding Medicaid, states follow the States Project’s sage advice to hack away at the system and its beneficiaries. The uninsured—the ostensible beneficiaries of the law— get a lot morecompany. Lawsuits over HHS regulations come from the left, the right, and the AHIP whores who slobbered this statutory Johnson and now demand to be paid: what happens then?

Politics- and policy-wise I have no idea. I am, however, quite confident of the constitutional possibilities.

It will be said—by, e.g., E.J. Dionne and Ezra Klein, whose prospective columns I offer to write for them now so they can attend to their full-time occupation as shills—that Obamacare would have worked but for partisan opposition in the states. It wouldn’t have, but the far more important point is that state opposition is how the system is supposed to work. A ruthless partisan scheme will beget ruthless partisan opposition: that’s how we check ambition.

The Madisonian precept gains special force and constitutional dignity in the context of federal programs that require, or rather imperiously demand, the states’ active cooperation. A state failure to do the feds’ bidding is not an ugly outbreak of neo-Calhounism. The power to interpose comes from a form of government that the Constitution permits but, unmistakably, treats as deeply suspect: a government over governments. States have been complicit in that scheme for far too long. Saying “no” to a further extension—for partisan reasons, fiscal reasons, or no reason at all—is an implicit embrace of a constitutional proposition: the feds have their sphere, and we (the states) have ours. If the feds insist on their scheme, let them do so with their money and their officers: they have the power. If they want to work through us, we interpose. The Constitution contemplates it; allows it; and very nearly demands it.

Behold: from the rubble and depredations and fiscal ruin of our politics, a constitutional thought and agenda.

Michael S. Greve is a professor at George Mason University School of Law. From 2000 to August, 2012, Professor Greve was the John G. Searle Scholar at the American Enterprise Institute, where he remains a visiting scholar. His most recent book isy The Upside-Down Constitution (Harvard University Press, 2012).

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Comments

  1. R Richard Schweitzer says

    The interposition of which you speak is actually the use of the citizenry and its interest of the instrumentalities of state governments.

    In this way the coalitions of individual interests are represented through the state governments and the actions of those governments; or the refusal of actions by those governments.

  2. ThomasD says

    It is heartening to think that there might be a Constitutionally valid check to this Federal overreach, and if successful may restore some faith in the value of the system we have inherited.

    But therein lies my concern. This is equally an opportunity for those progressives, who for a century have decried the ‘limitations’ of an active Constitution, to further untether that document from it’s service as a check on absolute power.

    As this struggle plays out look for the closeted statists ostensibly on the right to ignore the substance of your argument. Particularly those State Governors currently playing Hamlet over the decision to establish State Exchanges or not. On the progressive side the media/government complex will openly deny the position any legitimacy, and denigrate anyone who attempts to promote it.

  3. theBuckWheat says

    The further that the federal government is no longer restrained by the 13 enumerated powers in the Constitution, the more certain it is that eventually its actions provoked a crisis. We must reign in the self-funding federal Leviathan State before it consumes us. Whither the enumerated powers and the Tenth Amendment?

  4. Rick Caird says

    Any rational observer would have seen that we cannot afford ObamaCare. The idea that ObamaCare would “bend the cost curve down” was nonsense to begin with. The whole idea that the medical profession, particularly the primary care doctors, would accept without complaint all the government nonsense and certain to be reduced payments was and is nonsense. The idea that Medicare expense is going to be reduces by over $700 billion by some shadowy IPAB will not work.

    My suspicion is that as the some of the initial problems with ObamaCare, like the state exchanges, become evident, people will start to stare in horror at the totality of the problems with ObamaCare. Once the MSM starts pointing those out (and they will eventually), the dissolution of ObamaCare will be a snowball rolling downhill. Or, so I hope.

  5. VA Teacher says

    As others have observed before me, this dog’s breakfast was designed to fail. The progressives are hoping that when it does, the single payer plan, that holy grail of liberalism, will be seen as the only remaining viable option.

    Given the fiscal realities…that may be a bridge too far for the progressive juggernaut.

  6. Achillea says

    A couple of things occur to me.

    Since the people in the holdout stats will still be subject to the tax regardless, there might be pressure on the state government to ‘get their share.’ Paying in, they’ll want to at least feel like they’re getting something out.

    It also seems to me that states that refuse to set up exchanges, and have the feds not do so (or do so inadequately, which is pretty much guaranteed), are likely to see some emigration. Spongers (and those actually in legitimate need) in search of free government cheese, will go where it’s available. So if, say, Idaho blocks the exchanges, but Oregon and Washington establish them, impecunious Idahoans are likely to decamp to those two states, further impacting their exchanges. (note: if I were an Idahoan, I would not regard this as a bad thing).

  7. says

    I hope that you are right. How fitting it would be if the latest progressive power grab effectively unmade much of the mess created by one of the first progressive follies exactly a hundred years after the 17th Amendment passed.

  8. ZSorenson says

    That ‘bluster’ contained in the Virginia and Kentucky resolutions refers to something called nullification which has proven to be an entirely valid check on federal power.

    With nullification, the states don’t contest the supremecy of federal law, only exercise judgment on the constitutionality of federal law.

    Unconstitutional is unconstitutional. The need for states making this judgment, where the Supreme Court is entirely a federal entity and favorable to federal power, appears clear in light of nearly all the 20th century.

    Prior to the civil war, nullification worked well, without causing an outbreak of war.

    Only Lincoln’s crusade, killing 600,000 Americans, put a chill on the idea of states challenging federal power. Despite their failings, lets be clear that it was the federal government, not the states, which originated violence in that instance. You can’t understand the issue of the overreach of federal power given the limits of the constitution without acknowledging this. Nevertheless the issues there were secession and slavery, far removed from states interposing to nullify federal law.

    Unfortunately, limiting the federal government to its enumerated powers would collapse most of the programs critical to American political life: imperial war machine and subsidies, funding of entitlements in half the states, etc.

    It is my understanding that scholars of law are uncomfortable with extralegal power struggles. It’s called lawlessness. Hence, I suspect, the use of interposition rather than nullification on this blog. Nullification remains the best and only meaningful check on federal power, and the corresponding lawlessness is actually just states excercising their rightful authority in a federated system. Notwithstanding the imperial ambitions of the federal authority.

  9. Ben Franklin says

    The illiterate Roberts will merely read “cat” as “dog” and the states will be forced to do whatever the federal government wishes. You have to understand that only 5 people in the entire country voted for this “tax.” Congress passed a mandate. Yet 1/6th of the entire country will be remade in the idiot Pelosi’s image nevertheless.

    We have been living in the post constitutional phase of the American experiment since FDR was in office. The government has had no basis for legitimacy in any of our lifetimes and the only thing that keeps it together is the memory of what we once were and the time it takes to dismantle traditions of habit and thought.

    To expect any of this to change short of revolution is foolish.

  10. ZSorenson says

    You say that it’s hard to see how ‘interposition’ makes constitutional sense. Well, the issue here is nullification, and it’s states interpreting whether a law is constitutional.

    How is the supreme court interpreting the constitutionality of federal behavior ‘constitutional’? Maybe to a lawyer this would seem natural, since the court is the supreme legal authority in the land. But, strictly speaking, the constitution says nothing, implies nothing, about the court having this lofty authority over ruling on the scope and scale of federal power. Given the perennial political battles over the political opinions of life-appointed justices, I’d say that this is NOT what the founders intended.

    In fact, it’s absolutely historically clear that both the drafters and ratifiers of the constitution would have found the concept of states interpreting the constitutionality of federal law much more consistent with the form of government they were establishing than they would have found the concept of their peripheral supreme court doing so.

    You might ask how a state can get away with nullification without armed rebellion? What of the court, what happens if a President ignores a court ruling? What then? There’s no legal process for that. That’s the nature of balance of power: if everything was settled by legal process, then we could happily accept a unicameral parliament with executive power.

    It behooves the federal government to respect the interposition of the states, it’s how the system was designed. The only thing preventing this from being so is precedent. There was once precedent for this, but Lincoln’s invasion of the South overruled this fine American tradition of nullification (used in both South and North). While his actions may have been justified vis-a-vis slavery and the union, his was not a suppression of rebellion, but legally an act of imperial conquest against independent states. His party acknowledged as much repeatedly. It was only the duplicity of Lincoln’s political rhetoric that left us with any other impression.

    This seems radical, but it’s important. Nullification and state interposition against unconstitutional federal laws was a wholehearted tradition of the federal system, consistent with the intent of its creators. And it was, and only was, the after effects of the Civil War that changed the precedent. Burn down an entire region of the country with federal troops and that’s what you get: precedent. That, to me, is the failure of law, not the triumph of it. Nullification worked because it relied on a balance of power, not federal goons and their guns.

    • Niijii says

      I agree. Our Constitutional Republic was created by the STATES and is subservient to the whims and opinions held within the confines of the free men and women who reside and vote. Any debate which allocates supreme power to those branches of government beyond the confines of the highest law of the land must answer to those residing within those states. All three branches of the Federal Gvt must answer to the individual states. What beauty, what foresight, our Founding Fathers had.

  11. says

    I disagree that states didn’t have an “institutional trump” on the feds at the founding. In fact they did–state legislators, not the voters, chose the US Senators. The Senators, if they wanted to keep their jobs, would have no incentive to pass laws infringing on state authority.

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