Nineteenth century nullificationist Senator John C. Calhoun

Labeled a “nullification” bill because it declares that “provisions of the Patient Protection and Affordable Care Act of 2010 grossly exceed the powers delegated to the federal government in the Constitution” and then offers several measures intended to undermine this federal law, the bill is part of a larger trend of conservative state lawmakers claiming that their state can simply wipe away federal laws that they disagree with. Kansas Gov. Sam Brownback (R) recently signed a bill purporting to nullify various federal gun laws, and Virginia Attorney General Ken Cuccinelli (R) relied on a nullification bill as part of his lawsuit challenging Obamacare (the federal appeals court that heard his case did not bite).

Nullification also conflicts with the unambiguous language of the Constitution, which provides that duly enacted federal laws “shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the constitution or laws of any state to the contrary notwithstanding.” Yet, despite clear constitutional language and Supreme Court precedents stretching as far back as 1819 establishing that states cannot enforce laws contrary to federal laws, nullification bills began to spring up shortly after a conservative writer named Tom Woods published a 2010 book entitled “Nullification: How to Resist Federal Tyranny in the 21st Century.” Some lawmakers have even openly cited Woods’ book to justify their views.

Woods is an odd source for lawmakers to rely upon. Among other things, he once published an article entitled “Christendom’s Last Stand,” which claims that the Civil War was a battle between “atheists, socialists, communists, red republicans, jacobins on the one side and the friends of order and regulated freedom on the other.” In Woods’ words, “[t]he real watershed from which we can trace many of the destructive trends that continue to ravage our civilization today, was the defeat of the Confederate States of America in 1865.”

The Confederacy was defeated, and the vision of states rights that drove that act of treason shares many of the same roots as the nullification bills under consideration today. But America’s rejection of nullification has roots far deeper than Lincoln’s triumph over slave holders and traitors. If South Carolina has the power to nullify the Affordable Care Act, then it also has the power to nullify federal taxes, or to forbid military recruitment within its borders during war time. Similar fears that the United States Congress could not collect taxes or provide for an army drove America’s rejection of the Articles of Confederation, and eventually led to the much stronger Constitution we live under today.

As James Madison once warned, nullification will “speedily put an end to the Union itself.” The United States of America cannot function if each individual state can exempt itself and its citizens from any law they do not feel like following by passing a bill declaring that law unconstitutional.

Nineteenth century nullificationist Senator John C. Calhoun

A little more than a month ago, the state house passed a bill seeking to undermine the Affordable Care Act. This bill is now on the state senate’s agenda for this week. Although there are many concerning provisions in this bill, the most troubling is a proposal to refund any taxpayer required to pay a tax penalty under the Affordable Care Act for failing to carry insurance. What the federal government taketh, under this provision, the state of South Carolina giveth back.

The problem with this provision is that it effectively disarms Obamacare’s mechanism for ensuring that everyone gets to participate in the health insurance market without anyone imposing crippling costs on that same market. Currently, providers of individual insurance simply refuse to cover people with expensive preexisting conditions. This prevents a person from refusing to buy insurance until they incur substantial health costs, and then trying to get an insurance pool that they haven’t paid into to cover their expenses. If everyone were allowed to do this, it would potentially collapse the entire health insurance market by draining all the money out of the insurance system.

The Affordable Care Act uses a three-part process to enable people with preexisting conditions to still obtain insurance. First, it bans the insurance industry’s practice of excluding people with preexisting conditions. Second, it requires most people to buy insurance before they get sick and imposes a tax penalty on those who don’t. Finally, it provides subsidies so that people who cannot afford insurance get assistance to enable them to do so.

The South Carolina bill, however would remove the second piece of this process by taking away South Carolinian’s financial incentive to buy insurance before they get sick. The result, if this provision takes effect, would be catastrophic for everyone currently in the individual health insurance market. Beginning in the 1990s, seven different states passed laws requiring insurers to cover all comers without also passing an Obamacare-style mandate. It ended in disaster every time. Some people saw their premiums rise 350 percent. Others lost access to individual insurance plans entirely.

Should the South Carolina bill become law, it is likely the courts will strike it down under a constitutional doctrine prohibiting state laws that “stand . . . as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Given the current, conservative and highly partisan state of the judiciary, however, there’s no guarantee that judges will follow this longstanding doctrine.

South Carolina’s senate is scheduled to adjourn Thursday at 5pm. Between now and then, it will decide whether to potentially rip health care away from thousands of people.

Nineteenth Century nullificationist Senator John C. Calhoun

The bill includes a number of attempts to undermine health reform, some of which are unconstitutional, others of which are merely unwise. The most insidious provision of the bill, however, is this:

A South Carolina resident taxpayer who is subjected to a tax by the Internal Revenue Code under 26 U.S.C. Section 5000A of the Patient Protection and Affordable Care Act shall receive a tax deduction in the exact amount of the taxes or penalty paid the federal government pursuant to 26 U.S.C. Section 5000A. The tax deduction allowed by this section must be used in the year the federal tax or penalty is paid.

“26 U.S.C. Section 5000A” refers to the so-called individual mandate that was the primary subject of a losing attempt to convince the Supreme Court to repeal Obamacare last year. That provision works by requiring people who are not insured to pay slightly more income taxes in order to give them an incentive to buy insurance. Such an incentive is necessary because the Affordable Care Act also prohibits insurers from denying coverage to people with preexisting conditions. So if people did not have a financial incentive to buy insurance before they get sick, they would wait until they got sick to buy insurance, and would eventually drain all the money out of an insurance plan that they paid virtually nothing into.

The South Carolina bill would erase this incentive by effectively having the state refund taxpayers hit with additional taxes because they did not purchase insurance. What the federal government takes, the state of South Carolina would give back. 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.

Beyond the fact that this bill could literally collapse the individual health insurance market in South Carolina, it is also a tribute to fiscal irresponsibility. By giving a tax deduction to South Carolinians who do not carry insurance, the state is essentially paying people to free ride. That’s money, by the way, that will not go to hiring teachers or putting cops on the streets or building schools because it is being diverted to this crusade against Obamacare.

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