12 January 2011

ObamaCare Lynchpin is Unconstitutional

Stephen Kershnar
Obama versus the Constitution: Interstate Commerce and ObamaCare
Dunkirk-Fredonia Observer
January 10, 2011

ObamaCare (2010 Patient Protection and Affordable Care Act) requires individuals to buy health insurance or pay a penalty. Specifically, in 2014 Americans will either buy federally approved health insurance or pay a fine of up to $695 per year.

The law has already been challenged in court. Before the federal law was passed, Virginia passed a law (Virginia Health Care Freedom Act) that prohibited any individual from being required to buy health insurance. In a case relating to Virginia’s law, U.S. District Judge Henry Hudson on December 13, 2010 ruled against the mandate. Also, the attorney generals of thirteen states have gone to court in opposition to it.

In court, the Obama Administration argued that the federal government may impose this mandate because it is authorized under three different parts of the Constitution: the Necessary and Proper Clause, the Tax and Spending Clause, and the Commerce Clause.

The first argument should be quickly dismissed. The Necessary and Proper Clause says that “Congress shall have Power … To make all Laws which shall be necessary and proper for carrying into Execution the foregoing powers, and all other Powers vested by this Constitution…” Both the language and precedent make it clear that the clause authorizes the implementation of other specifically listed powers. This clause, then, permits a law only if it comes under another specifically listed power.

The Tax and Spending Clause states that “The Congress shall have Power To lay and collect Taxes, Duties, Imposts, and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States.” This clause clearly does not authorize the mandate.

First, as the state of Virginia argued, the part of ObamaCare that sets out the mandate explicitly claims that it is authorized by the Commerce Clause. Second, as Judge Hudson points out, the mandate is a penalty rather than a tax. The statute itself labels the mandate as a penalty. In addition, it has the penalty-like structure in that if you don’t do what you’re told, you have to pay a fine.

Third, as George Mason law professor Ilya Somin points out, if this were a tax, then Congress could control pretty much everything people do through the use of penalty-like taxes. It could mandate that people run every day, avoid alcohol, or stay thin. Fourth, Somin further points out, the mandate allows that the insurance payment go to private insurance companies. This is not part of the common defense or general welfare as the clause requires. If it were, then the government could require people give their money to private parties, thereby gutting the part of the Constitution (The Taking Clause) that limits when property can be taken. For example, the Constitution would conflict with a law that required all citizens to give $500 directly to Goldman Sachs, J. P. Morgan, or AIG. Fifth, for roughly 75 years, the courts have repeatedly held that the taxing power must aid another specifically listed power, for example, interstate commerce.

The Obama administration argued that the federal government has imposed sanctions for failure to pay taxes, show up for military duty, or register for the draft and that this mandate is similar to those sanctions. However, these sanctions rest on specifically listed Constitutional powers and hence shed no light on the ObamaCare mandate.

The Commerce Clause asserts that “The Congress shall have Power … To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes.” The purpose of this clause was to prevent states from passing tariffs and other protectionist measures against products sold made or sold by people in other states. Evidence for this comes in part from comments from the principal author of the Constitution, James Madison, in The Federalist Papers. Further evidence of this comes from the way that the Commerce Clause was designed to fit into the Constitution. Madison intended that the Constitution grant the federal government only a few and well-defined powers, in contrast the many other powers left to the states. On his account, the federal government was to be focused largely on international affairs, such as war, foreign affairs, and international commerce. Madison is clear that the objects on which people’s daily lives focus were to be left to the states.

Up until the 1930’s, the Supreme Court followed the language and structure of this clause and the Constitution and shot down President Roosevelt’s early attempts to extend federal control over every corner of the American economy. Starting in 1937, two Supreme Court Justices switched their interpretation of the Commerce Clause to allow the federal government to control vast portions of the economy. The changed Court rejected the view that interstate commerce meant the sales of goods between individuals in different states. On this earlier interpretation, which characterized most of American history, the clause didn’t cover production, manufacturing, mining, and so on.

The rewriting of the Commerce Clause was completed in Wickard v. Filburn, 317 U.S. 111 (1942). There the Supreme Court held that it applied to any activity that is part of a larger group of activities that substantially affect interstate commerce. In Wickard, the Supreme Court looked at whether the federal government could set a quota on wheat that a farmer grew and consumed on his own property. The farmer claimed that these activities were not interstate commerce. The Court held that the federal government could enforce the quota because wheat growing and consumption in general affected interstate commerce, regardless of whether the individual farmer’s wheat did so. This line of reasoning has been repeatedly upheld.

The ObamaCare mandate pushes this line to its absurd conclusion. As Somin points out, most purchases of health insurance are not interstate because a combination of state and federal laws makes it illegal to buy health insurance across state lines. Hence, buying health insurance is not interstate commerce.

In addition, the mandate focuses on people refraining from buying something. This is a refusal to engage in interstate commerce. Even if the government can regulate economic activity, it cannot force someone to engage in it. The government is in essence arguing that it may force people to buy various products by labeling their refusal to do so, “economic activity.” To use an analogy from University of Chicago law professor Richard Epstein, under this reasoning, your refusal to buy a bicycle or healthy food is economic activity and you can be forced to buy them.

The Obama administration responded by claiming that consuming health care without paying for it is an activity. The administration seems to think that refusing to buy insurance is similar to stealing food from Walmart. This is mistaken. People who pay for healthcare out of pocket don’t act like this, but would be made to buy insurance. Also, just because some people are forced to pay for others’ healthcare doesn’t transform a refusal to purchase insurance into stealing.

The fight over the mandate shows that Congress and President Obama have contempt for the Constitution. Let’s hope the Supreme Court doesn’t.


The Objectivist said...

The legal-reasoning problem here is a tricky one. You have a roughly 70 year history of a court that has interpreted a Constitutional provision in a way that conflicts with the language of the provision, the structure of the Constitution, and inte intentions of the ratifiers. You now have to decide whether to extend the reasoning of this purposeful misinterpretation of the statute. On approach is to not extend the clause to economic inactivity as it is neither required by precedent and is completely at odds with the original Constitutional provision.

The Objectivist said...

There is an interesting issue as to whether Scalia or Thomas is the best Justice. The former's disgraceful opinion in Gonzales v. Rauch (extending the Commerce Clause to intrastate marijuana matters) and cheerleading the law in Lawrence v. Texas ends the issue. Thomas is more principled and better able to adhere to originalist reasoning.

The Objectivist said...

FDR doesn't get the credit for the massive harm he caused to the Constitution that he deserves. His attempt to regulate the U.S. economy and the Supreme Court's approval involved a wholesale rewriting of the Constitution. I wonder if the rest of the world views Justice Owen Roberts (switch in time saves nine - although not obviously correct) as a Constitutional disaster.

Bill Hawthorne said...

Dear Objectivist,

My name is Bill Hawthorne and I am a political blogger. Just had a question about your blog and couldn’t find an email—please get back to me as soon as you can (barbaraobrien(at)maacenter.org)