VIRGINIA ATTORNEY GENERAL KEN CUCCINELLI on Day Two of the Supreme Court hearing on Obamacare:

Today was the second day of the three-day healthcare hearing in the U.S. Supreme Court, and as promised, I wanted to offer you my reflections on today's hearing.

Today the Court heard two hours of argument on the individual mandate - the heart of the federal health care law. It was exciting and modestly encouraging today in the courtroom.

Let me note at the outset that I am a litigator, and any good litigator will tell you their own stories of having been in court and having the feeling that things were going their way, only to see the court rule against them in the final order. So, while today went well for the limited government side, it always comes with the foregoing caveat born of experience.

The federal government went first in the person of Solicitor General Verelli. He was up for almost an hour, followed by Paul Clement for half an hour on behalf of the states, and Mike Carvin for half an hour on behalf of the NFIB.

Previous Compass readers will recall that this argument has two parts: the most important is the argument whether or not the mandate is permissible under Congress' power to regulate interstate commerce; the federal government's fallback argument is that the penalty you have to pay if you don't buy the government-mandated insurance is a tax for constitutional purposes (a position that Justice Scalia quietly called "extraordinary" at the end of the SG's argument).

Justice Kennedy spoke early and asked the SG if the federal government could order people into commerce in order to regulate them. And thus began more quasi-answers (like yesterday) by the federal government, as the SG said "that's not what's happening here."

Gradually the SG was directly confronted with the main challenge the feds had in court today, namely, to identify some limiting constitutional principle regarding federal power if the mandate was in fact constitutional.

The SG identified two circumstances that he said demonstrated the uniqueness of the health care (I'm going to say "HC" for short) market that would restrict 'mandates' from spreading to the other areas of the economy. First, he said that HC was unique because big, unaffordable costs could hit someone without insurance unexpectedly; and Second, those costs would be shifted to others if the person couldn't afford to pay those costs.

Somewhat amusingly, Justice Alito noted that burial costs were expensive and could hit one unexpectedly as well. He further noted that if he was too poor to pay his own costs and hadn't prepared for his burial, he would still certainly be buried, and those costs would in turn be shifted to others either by raising everyone else's burial costs if the buriers had to absorb those costs, or we'd all pay higher taxes if the government bore those costs.

The Chief Justice had his own examples handy.

The SG more or less simply insisted that HC was unique.

The old standbys of the fed's being able to order you to buy a car or broccoli came up too.

My strong sense is that the federal government failed to overcome its main hurdle of the day, namely, to articulate some limitation to federal power if the mandate was constitutional.

Justice Kennedy noted that the mandate was unique in light of its affirmative requirement of a citizen to purchase something, and that would appear to alter the relationship between the government and individuals in a "fundamental way." This is a powerful and deeply philosophical statement that I take great comfort in.

It is a point that we have been making repeatedly, and it goes deeper than just this piece of legislation. It is akin to my consistent comment that this case is not about HC, it's about liberty. And I believe the fundamental change Justice Kennedy was speaking of was one that dramatically reduces citizens' liberty.

At several points, Justice Kagan threw the SG what I thought were 'lifelines.' She seemed to advance the notion strongly that this is just ordinary regulation of a national market, and it's just a question of timing - of 'when' the feds apply regulation. Justice Kagan seemed to base her assertion on the notion that we are all in, or will be in, the HC market.

Justice Scalia roughly hammered on what market was actually being regulated. He noted to the SG that 'you are talking about HC, but you're regulating insurance.'

The Chief Justice played off that discussion a bit by noting that the feds were trying to solve the problems in the HC market by regulating insurance. Thus, even if the HC market were unique, what's to stop the feds from coming back later with some other mandate that was not related to insurance but that was rationalized as helping out with the HC problem?

The Chief Justice also noted wryly that if the Court allows the mandate, 'you'll just be back with something else that's unique' later.

Justice Breyer referred to the opinion of former Scalia clerk and now 6th Circuit Judge Sutton who ruled the mandate constitutional, and noted his two pages of alleged government compulsions. To which Mike Carvin simply said 'none of them apply.'

Never before has the federal government ordered us to buy a product under the guise of regulating commerce.

Justice Breyer also played off one of Justice Kennedy's exchanges with the SG, and pressed the SG to concede that if they could compel this under the commerce clause, then the feds could compel other purchases too. This revealed one of the numerous difficulties of the federal position. Justice Breyer's tone strongly suggested he thought the SG's position should be that the feds could order us all to make government-directed purchases under the commerce power, but the SG knew that would be a deep hole with many of the Justices and he wouldn't go there.

The SG's problem is that Justice Breyer was actually pushing him toward a much more consistent position. And it was the logical position for the SG, but it didn't suit his more limited goals in this case - goals that have left him desperately trying to find some way to treat insurance for health care as totally unique from everything else on earth.

He simply did not pull it off, and while Justice Breyer may vote his way, I don't think Justice Breyer will agree with the SG's argument re the mandate.

The Justices also heard argument about whether the the penalty you have to pay if you don't buy the government-mandated health care was a tax. There was much less discussion of this, frankly, because I think it is seen as a far-fetched argument... I would call it radical.

If all the feds have to do to bring a directive under the taxing power is fine you if you fail to do it, then they can order you to do anything that doesn't conflict with some other constitutional protection.

That argument is going nowhere.

As a final sign that the tax argument is going nowhere, Justice Ginsberg reiterated her statement from yesterday that taxes are designed to raise revenues, but penalties are to compel behavior, and if the penalty works perfectly (i.e., everyone buys the health insurance), the penalty will raise no revenue at all. I.e., there's no way it's a tax.

No Justice gave any particular indication that they were ready to defend the penalty=tax position.

Thus my conclusion that it's going nowhere.

I left court today happier than when I arrived.

Tomorrow morning, the Court will hear argument on the severability of the individual mandate (i.e., the remedy if the mandate is found unconstitutional); and tomorrow afternoon they will hear the 4th and final argument regarding whether the massive medicaid burdens foisted on the states under the health care law are so onerous as to amount to unconstitutional coercion by the feds of the states under the spending power.

Unconstitutional coercion of the states using the spending power has never been found to exist by the Court, but if this isn't the case for it, I don't know what is.

You can hear my audio summary of the day by clicking here.

From my email.