In a September 2009 interview with George Stephanopoulos, President Obama argued that the individual mandate was “absolutely not a tax increase.” In court filings responding to various lawsuits filed by state attorneys general challenging the constitutionality of the individual mandate, however, the Obama administration is taking the position that the individual mandate is “a valid exercise” of Congress’s power to impose taxes. Since news of the administration’s legal position broke, the President has taken heavy criticism for allegedly changing its position on the issue. While some criticism is merited (mostly for breeding confusion), the “change” of positions by the administration is not nearly as dramatic as it initially appears.

First, it’s critical to realize that what the media dubs the “individual mandate” actually has two components: the mandate itself and the penalty for failing to comply with the mandate. The mandate (i.e., the requirement that individuals obtain minimum levels of health insurance) comes from Section 1501(a) of the Patient Protection and Affordable Care Act. Non-lawyers may not realize that Congress may only pass laws pursuant to powers granted to Congress in the Constitution. Each law Congress passes identifies the source of Congress’s power in the Constitution. As is clear in the health reform statute, the source of Congress’s power to enact the individual mandate is the Commerce Clause of the Constitution.

The penalty for failure to comply with the mandate, however, was not enacted pursuant to the Commerce Clause. Instead, Congress’s source of power to impose a penalty was the Tax and Spend Clause of the Constitution. This is clearly evident in Section 1501(b) of the law which creates the penalty through an amendment to the Internal Revenue Code (all of which operates under Congress’s power to tax). There is, undoubtedly, a necessary connection between the penalty and the mandate, and in that sense the Commerce Clause also underlies the penalty, but the primary support for the penalty is Congress’s tax power just as the primary support for the mandate is the Commerce Clause.

This structure is, admittedly, complex. It’s easy to see how a reference in the media to “individual mandate” glosses over significant differences between the mandate itself and the penalty for failure to comply with the mandate, let alone the separate, yet overlapping, constitutional provisions underlying the mandate and the penalty.

In fairness to the media, the government’s brief also engages in some sleight of hand with respect to the mandate and the penalty. For those interested, the government’s entire brief is available here.

The government’s first argument defending the mandate on the merits comes under the heading “The Minimum Coverage Provision is a Valid Exercise of Congress’s Power to Regulate Interstate Commerce.” That’s quite right and consistent with the text of the legislation (although a discussion on this aspect of the government’s brief is almost entirely absent from the New York Times article linked above for some reason). The very next section of the brief, however, provides for a defense of the mandate under the heading “The Minimum Coverage Provision is Constitutional as an Exercise of the Power to Tax and Spend to Provide for the General Welfare” (this portion of the brief captures almost all of the Times’ attention).

So why would the government defend the mandate (as opposed to the penalty) on the grounds of Congress’s tax power? Because it would be malpractice for a government attorney not to make such a defense. As noted above, the mandate and the penalty are clearly interconnected, even if distinct, provisions of law. While the Commerce Clause was Congress’s preferred source of power for the mandate, the Commerce Clause and tax powers are intertwined in this instance, as in several other laws (such as Medicare, for example). A court could disagree with the government’s view that the Commerce Clause offers a valid source of power to enact the individual mandate, in which case the government has provided for a fallback position. This doesn’t represent a shift or change in the government’s argument; it represents a reinforcement.

Unfortunately, by denying claims that the legislation enacted a tax of any sort, President Obama helped create the confusion and discontent surrounding this issue today. It’s worth noting that Obama did not “lie,” nor was he even incorrect in his interview with Stephanopoulos mentioned above.

Stephanopoulos asked Obama:

Under this mandate, the government is forcing people to spend money, fining you if you don’t. How is that not a tax?

His question blurs the line between the mandate and the penalty. Stephanopoulos is referring to the mandate when he says the government is “forcing people to spend money,” but he refers to the penalty when he says the government “fines you if you don’t.” Obama, perhaps deliberately, responded by focusing solely on a defense of the mandate itself under the Commerce Clause. He later continued defending the mandate (but not the penalty) by stating, “for us to say that you’ve got to take responsibility to get health insurance is absolutely not a tax increase.” Again, as a technical point Obama is correct. The minimum coverage requirement itself is definitely not a tax increase (the proceeds do not go to the government when you purchase health insurance). Obama’s responses are arguably misleading by dodging the issue of the penalty which is a tax (even if a completely avoidable one). That said, other than the brief reference to the penalty quoted above in Stephanopoulos’s first question, Stephanopoulos’s questions focused entirely on whether the mandate itself is a tax, and Obama responded accordingly. The full exchange is in the video below:

In this instance, Obama and many of his critics are each guilty of some degree of obfuscation. Obama blends the mandate and the penalty together under the label “individual mandate” to avoid an admission that any new tax has been created. Many of Obama’s critics blend the mandate and the penalty together to make the argument that the individual mandate is entirely a tax. Neither argument is correct.