Last week, Ed Fallone posted his prepared remarks at our debate on the constitutionality of the individual mandate in the health care law. Inspired by his example, I have – after a fashion – cleaned up my notes for last week’s debate. This is how I see it.
When Nancy Pelosi was asked about the potential for a constitutional challenge to the health care law, her response was “you’ve got to be kidding.” The substance of her response – “look, we used the commerce power and that permits us to do almost whatever we want” – reflected large patches of conventional wisdom.
Many lawyers (particularly those trained before the Rehnquist Court began to push back against an unlimited commerce power) and, in particular, Progressive legal academics thought that this dragon had been slain long ago. They assumed that the idea that there might be structural limits on the federal constitution had been relegated to the status of flat earth creationism and alchemy.
Legal Progressives believed that the notion that the commerce power does not give Congress a generalized police power had been reduced to a meaningless genuflection to history and the intent of the founders – something that only a far right remnant who mutter about the Federalist 51 and the lost constitution believe is – or ought to be – true.
As a political and historical matter, pushing aside structural limits on the power of the federal government was a cardinal – and necessary – achievement of the Progressives’ constitutional project.
If you wish to (and believe that you can) “rationalize and improve” significant swaths of social activity through centralized regulation and, if you believe, as Daniel Patrick Moynihan put it, that “everything relates to everything” such that regulation must be comprehensive and that “there are no social interests about which the national government does not have some policy or other,” these structural limits get in the way.
You will not see limitations on what Congress can do to manage a national and interdependent economy – as I think Madison saw them – to be important safeguards of negative liberty, state sovereignty, and factional abuse. To the contrary, you will think that they frustrate reform and impede positive liberty. You will regard them as undemocratic in that they make it more difficult for a current majority to do what it wants to do.
On the other hand, more classical liberals – we call them conservatives today – see the sweeping away of limitations of the power of the federal government as an infringement on the liberty of individuals and voluntary associations. They will see this “brush clearing” project as a threat to federalism and anti-democratic in that they attenuate political accountability. They see them as flattering the hubris of elites who believe that they can do far more than they actually can and as empowering the special interests – Madison called them factions – who inevitably capture the regulatory process.
As early as 1908, Woodrow Wilson called for structural limits on Congressional power to be read out of the Constitution:
There can be no successful government without the intimate, instinctive co-ordination of the organs of life and action. . . . Living political constitutions must be Darwinian in structure and in practice. All that progressives ask or desire is permission—in an era when “development,” “evolution,” is the scientific word—to interpret the Constitution according to [the] Darwinian principle.
Legal Progressives have had a great deal of success in achieving this “brush clearing” objective. Nevertheless, the differing attitudes that we see on the part of politicians, commentators, and jurists toward the health care law can be placed in the context of this long-running dispute. Although courts don’t necessarily resolve constitutional questions – and won’t resolve this one – simply in terms of the debate, these differing attitudes color how smart people on both sides see – and characterize – the same facts.
With that bit of context, let’s turn to the doctrinal dispute over the health care law.
The commerce power has – with a few important bumps in the road – been ascendant since the New Deal. This was not always so and was not always expected to be the case. Madison, writing in Federalist 45, thought that the constitution established a federal government whose powers were “few and defined” while those remaining with the states were “numerous and indefinite.” He saw the commerce power as something of a minor thing “from which no apprehensions” concerning the disruption of federal scheme “are entertained.”
Yet, within the lifetime of those who are still among us, the commerce power has been transmogrified from regulation of the channels and instrumentalities of interstate commerce to those activities having a direct impact on commerce to regulation of those activities which, even if wholly instrastate and (perhaps) noncommercial and noneconomic, can be rationally thought to have a substantial impact on interstate commerce.
The poster child of the commerce power “mission creep” might be Wickard v. Filburn. In that case, the Court held that Congress could forbid a farmer engaged in interstate commerce from growing wheat to feed his own livestock. The offending wheat, although it would not enter interstate commerce, would reduce the amount that the farmer might buy on the interstate market. This reduction in demand would frustrate Congress’ efforts to regulate the market in a way that will raise the price of wheat.
If Congress can do that, the argument goes, there must be very little that it cannot do.
But still – if you look closely – it isn’t quite so clear. The law has not yet settled on a virtually unlimited commerce power. The Supreme Court has continued to say the Congress has only enumerated powers and that the commerce power is not unlimited. It has continued to say that the commerce power may not be read to give Congress a general police power.
On two occasions, the Rehnquist Court – for the first time since the New Deal and to the astonishment of legal Progressives – invalidated congressional exercises of the commerce power. In United States v. Lopez, the Court held that the commerce power cannot reach non-economic activity. It held that something that is not economic cannot be made economic because of it has economic impacts.
The Lopez Court expressly rejected the idea that the commerce power could reach activity – in this case the possession of guns in school zones that could lead to gun violence – can be regulated simply because it will create costs that will be borne by third persons – insurers and the government – and affect interstate commerce. Concurring, Justice Kennedy wrote, “[i]n a sense, any conduct in this interdependent world has an ultimate commercial origin or consequence but we have never said that the commerce power reaches so far.”
Similarly, in United States v. Morrison, the Court held that one cannot justify what is, in substance, the exercise of a federal police power by saying that what it prevents will have economic impacts on interstate commerce
What appeared to be a substantial push back against sixty years of commerce power jurisprudence was, at least, given pause by the result in Gonzales v. Raich. In that case, the Court rejected an as-applied challenge to application of the Controlled Substances Act to ban the home cultivation of marijuana for medicinal use – as permitted by California law. Carving out an exception for home grown medicinal marijuana would render unworkable Congress’ ban on the sale of marijuana in the interstate market. Home production would inevitably be drawn into the market and frustrate federal enforcement efforts.
What Wickard did for wheat, Raich did for weed. In fact, Justice Scalia went so far as to suggest that the commerce power might even reach noneconomic power if necessary to effectuate a comprehensive regulatory scheme.
But Raich might mean less than a mere description of the outcome would suggest. It was an “as-applied” challenge. Still the Court said that there are limits. Still the Court said that the commerce power was not the equivalent of a federal police power. Even after Raich, there was reason to think that the health care act might be vulnerable.
Of course not everyone thought so. When I suggested at a faculty meeting that the challenge would be taken seriously and even if unsuccessful could get 4 votes I was looked at as if I had just questioned the catastrophic view of anthropogenic global warming (which, in fairness, I probably had).
But then the plaintiffs started to have success. Several district courts and one federal Court of Appeals struck down the mandate. The problem is, I think, that the individual mandate – at least for those who do retain some belief in enumerated and limited powers – is close to – if it does not reach – the constitutional gag reflex.
The individual mandate provisions in the health care law are unprecedented and extraordinary. The law purports to regulate what – at least at first blush – seems to be, not only noncommercial but non-economic activity. The prescribed conduct is, in fact, the refusal to engage in commercial or noneconomic activity. This does not seem to be activity at all.
Congress is, for the first time, using the commerce power to tell individuals people how to allocate their own resources with no possibility of escape. The Eleventh Circuit, in striking down the mandate, put it like this:
Every day, Americans decide what products to buy, where to invest or save, and how to pay for future contingencies such as their retirement, their children’s education, and their health care. The government contends that embedded in the Commerce Clause is the power to override these ordinary decisions and redirect those funds to other purposes. Under this theory, because Americans have money to spend and must inevitably make decisions on where to spend it, the Commerce Clause gives Congress the power to direct and compel an individual’s spending in order to further its overarching regulatory goals . . . .
The Congressional Budget Office has said that upholding the mandate could “open the door to a mandate issuing government taking control of virtually any resource allocation decision that would otherwise be left to the private sector.”
Congress is using the commerce power to require people to engage in an activity – to purchase a product or to enter into a transaction – simply because one is alive. This may be why Justice Kennedy said, at oral argument, that the individual mandate – and its constitutional implications – changes the nature of the relationship of the individual to the federal government in a fundamental way.
While I recognize that some people’s response to this may be to shrug and suggest that this is as it should be. Abuses can be tempered by the political process, the provisions of the Bill of Rights or, perhaps, substantive due process.
But the majority of the Court – for good reasons in my view – does not see it that way. They want a limiting principle and, as we will now see, there does not appear to be one.
The question becomes how one is going to characterize the thing being regulated by the individual mandate – can one adopt a persuasive verbal formulation that this is regulating commerce or an economic activity that has a substantial effect on commerce without creating a protean commerce power?
There are essentially two arguments offered by the government. The first is that the failure to buy something is a decision to self- insure. On this view, the refusal to participate in commerce now is a decision about – or at least has an impact upon – how one will participate in commerce later.
This decision, it is said, will have an impact on commerce because many who decide to “self insure” will, in fact, do no such thing or will do it inadequately. They will be unable to pay for health care at the time that they need it and, due to federal law requiring that certain kinds of care be provided – perhaps combined with societal conventions against the denial of care – that inability to pay will shift the cost of that care to others.
As a causal sequence, this is probably correct although, ironically, the individual mandate does not apply to many of those who actually cause cost shifting to occur. As the 11th Circuit noted, 34.1% of these cost shifters are poor and not subject to the mandate. 18.9 % are foreign nationals illegally present in the US and not subject to the mandate, 7.6% are those who are insured but fail to pay out of pocket costs that the mandate does not eliminate, and 20.1% are those who lost their insurance but cannot get it due to pre-existing conditions. Presumably such people will no longer exist – or more accurately many fewer will exist – under the new law due to its guaranteed issue provisions. More on that later.
But let’s accept the connection. It tracks – at least to some degree . But the causal connections in Lopez and Morrison tracked, too. The exercise of the commerce power in those cases did not fail because gun violence or gender related violence did not cause cost shifting or affect interstate commerce. The commerce justification failed because the activity being regulated was not economic in nature. It did not consist of the production, distribution, or consumption of commodities.
So the fact that the failure to buy insurance will result in cost shifting can’t, in and of itself, support regulation under commerce power. There are too many things that would apply to including, as the 11th Circuit noted, many other forms of insurance. Indeed, such a justification would apply to any allocation of resources that might be thought to be unwise and lead one, at some point in the virtue, eligible for government assistance or private charity.
A variation on the theme is premised on the fact that almost everyone will use health care at some point and Congress is merely advancing the point at which one must pay for it.
But, in fairness, that’s not the government’s only argument.
It wants to distinguish health care as unique because almost everyone will eventually consume it. It is said to be inevitable, unpredictable, expensive, subject to a federal mandate that at least certain types be provided and, as we say, results in cost shifting.
But it is unclear that the supposedly unique nature of health care is of constitutional significance. If Congress is empowered to regulate commerce and we think that, at minimum, this should require the regulated activity to be economic activity associated with commerce, does that power require parties to engage in economic activity or to enter into commerce earlier than they might otherwise? Does it require them to prepare themselves to enter into commerce so, when they do, it will be on terms and in a way that Congress prefers?
To be sure, you can string together a verbal formulation that says this. The English language is malleable and you can always characterize the failure to do something now as affecting the options that one will have later. If the latter activity is subject to regulation, you can say, why then the earlier one should be as well.
But you can’t do that and continue to say that the commerce power is limited. There are all sorts of things that everyone – or almost everyone – will someday need. We will all participate in the markets for food, clothing, shelter, employment, retirement income, and even, alas, burial. There are all sorts of ways in which one’s decision to allocate one’s resources or to refuse it engage in some form of economic or commercial activity will affect our subsequent participation in those markets.
And, of course, all of these things may affect – even impose costs upon – others. If I decide to forgo saving, I will impose burden on others if I become disabled, seek to retire or die (thereby requiring burial). If I refuse to learn a marketable skill, I may become a ward of the state. All of these things seem at least as likely as the prospect that an uninsured person will consume health care for which he or she cannot pay – or at least close enough to question whether the state has offered an effective limit on the commerce power.
There is, however, another way in which the government attempts to justify the individual mandate. Let’s assume that refusing to engage in an economic activity cannot be said to be economic activity and, therefore, failing to buy insurance is not economic activity. Perhaps requiring people to buy it will be necessary to make other regulation – guaranteed issue and community rating – work. Isn’t this within Raich?
Strictly speaking, of course, these regulations would still work – they’d just result in more expensive insurance. Nevertheless, you can say the words. Making regulation more expensive makes it more difficult – perhaps even impractical.
But you can’t say these words if you believe that there should be any meaningful limit on the commerce power. There are all sorts of noneconomic activity that will frustrate a regulatory scheme – if by frustrate you mean raising the cost of regulation. If I don’t eat right or exercise, I will almost certainly require more health care. If I don’t use available resources to buy a new form of hybrid, insufficient demand will leave the cost of these vehicles high interfering with Congress’ attempt to reduce carbon emissions produced by interstate commerce. If I save – and do not spend – my resources, I may frustrate an economic stimulus package.
There are a number of legal academics supporting the constitutionality of the mandate who will admit that these justifications for the mandate offer no limiting principle – and they don’t care. As noted above, they say that there ought not to be any limit on Congressional authority other than those set forth in the Bill of Rights or, perhaps, by some notion of substantive due process.
But a majority of the Court seems to believe otherwise – I would say for very good reasons – and this is why Solicitor General Verelli was in so much trouble in the oral argument. Unless a majority of the Court can find a persuasive and substantial limiting principle that he could not suggest, the individual mandate will not survive.
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