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Trumpcare’s ‘Alaska Bribe’ has a big constitutional problem

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In one of the more surreal chapters in the ongoing Trumpcare saga, the Independent Journal Review’s Haley Byrd reports that some of Sen. Lisa Murkowski’s (R-AK) Republican colleagues hope to entice her into supporting their latest effort to repeal Obamacare by letting Alaska keep much of Obamacare.

Under the reported deal — alternatively nicknamed the “Alaska Bribe,” the “Alaska Purchase,” the “Polar Purchase,” and the “Snow Job” — Alaska and Hawaii “will continue to receive Obamacare’s premium tax credits while they are repealed for all other states.” The proposal reportedly also includes favorable treatment for these two states under Medicaid.

After Byrd’s report became public, for what it’s worth, one of the leading Senate sponsors of the new Trumpcare bill reportedly went into damage control mode.

If Murkowski ultimately is offered the deal described by Byrd, however, it would raise serious constitutional concerns. According to Georgetown law professor Brian Galle, the Alaska Purchase probably runs afoul of a provision of the Constitution requiring the U.S. tax code to have a degree of uniformity.

Though the Constitution gives Congress the power to tax, it also provides that “all Duties, Imposts and Excises shall be uniform throughout the United States.” This clause has not played much of a role in American tax policy, but it creates a problem for the Alaska Bribe should Murkowski’s state be offered tax credits that most states will not receive.

As Galle writes, “the leading recent authority on the uniformity clause is, coincidentally, also a case from Alaska, U.S. v. Ptasynski.” There, the Supreme Court held that “where Congress does choose to frame a tax in geographic terms, we will examine the classification closely to see if there is actual geographic discrimination.” For such discrimination to be permitted, “Congress has to show ‘neutral factors’ that justify its distinction. A purpose to ‘grant…an undue preference at the expense of other…states’” would flunk the test.

So a provision of Trumpcare whose purpose is to provide particular states with favorable tax treatment, in order to entice a wavering senator into supporting the bill, could be struck down under Ptasynski.

Would it actually be struck down? That decision would ultimately rest with an increasingly partisan Supreme Court that may be reluctant to undo major legislation pushed by Republicans. And if it is struck down, it is far from clear that the Court would strike down more than just the one provision involving the tax code.

At the very least, however, if Murkowski were to agree to the enticement described in Byrd’s report, she would likely see her name in unfavorable headlines for years as the legal challenge to the Alaska Purchase wound its way through the courts.

Republican officials were once quite bothered by the idea that one state might receive favorable treatment in order to buy an uncertain senator’s support for a larger bill.

In 2009, thirteen state attorneys general wrote Speaker Nancy Pelosi and Senate Majority Leader Harry Reid threatening litigation against the so-called “Cornhusker Kickback,” an enticement for Nebraksa Sen. Ben Nelson (D) that was ultimately removed from the Affordable Care Act. Their letter offered several theories, including allegations that the now-defunct special treatment for Nebraska was a “display of arbitrary power” and that it could violate various constitutional provisions because it “is a disadvantage to the citizens of 49 states.”

These were weaker legal arguments than the case against the Alaska Purchase, largely because the Nebraska deal did not involve the tax code. But they are indicative of what Republican officials thought was an appropriate way to secure votes when Democrats controlled the Congress.

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