Affordable Care Act

February 2, 2011

The ruling to read for this one seems to be Gonzales v. Raich (2004), which holds a special place in my heart for Justice Thomas’ dissent, viz. :

” Respondents Diane Monson and Angel Raich use marijuana that has never been bought or sold, that has never crossed state lines, and that has had no demonstrable effect on the national market for marijuana. If Congress can regulate this under the Commerce Clause, then it can regulate virtually anything–and the Federal Government is no longer one of limited and enumerated powers.”

However, that was the dissent, which means the government’s view prevailed that it can regulate marijuana not sold or intended for sale. Justice Stevens traces the relevant history:

“The Commerce Clause emerged as the Framers’ response to the central problem giving rise to the Constitution itself: the absence of any federal commerce power under the Articles of Confederation.25 For the first century of our history, the primary use of the Clause was to preclude the kind of discriminatory state legislation that had once been permissible.26 Then, in response to rapid industrial development and an increasingly interdependent national economy, Congress “ushered in a new era of federal regulation under the commerce power,” beginning with the enactment of the Interstate Commerce Act in 1887, 24 Stat. 379, and the Sherman Antitrust Act in 1890
Our decision in Wickard, 317 U.S. 111, is of particular relevance. [..] Wickard thus establishes that Congress can regulate purely intrastate activity that is not itself “commercial,” in that it is not produced for sale, if it concludes that failure to regulate that class of activity would undercut the regulation of the interstate market in that commodity.”

So the Commerce Clause, as originally written, was intended to stop States from placing barriers to trade with each other. The people who wrote the constitution didn’t want to allow tariffs or import quotas on Maryland goods for those who live in Virginia.

But the Wickard decision really represents a fundamental change in what the Commerce Clause allows Congress to do. These days, we know enough economics to know that you can argue, accurately, that all activities that people engage in affect some interstate market. Some people make fun of libertarians for wanting to turn back the clock and argue about old cases like Wickard, but I really don’t think those people are paying enough attention to what the thinking represented by Wickard allows the federal government to do, namely, anything. If you believe that the power of Congress to regulate activity is constrained at all, you have to talk about Wickard, there’s no way around it.

As I see it, Justice Thomas correctly describes the implications of the Supreme Court’s decision in Gonzales v. Raich. If the federal government can regulate marijuana grown by individuals for personal consumption, neither sold nor intended for sale, then the federal government can regulate anything.  Since the government can regulate anything that affects interstate commerce, it follows that Congress can require individuals to purchase health insurance without violating the Constitution. After all, the regulation sketched out under the ACA includes price controls for insurers, and if individuals are allowed to opt out, the adverse selection problem will substantially interfere with that regulation.

If the Supreme Court upholds Vinson’s ruling this week, declaring the ACA unconstitutional, it will be taking away powers previously given to Congress. That’s the right thing to do, in my opinion, as I view the Commerce Clause as properly used to do only what Stevens presents as its original purpose, preventing states from erecting barriers to trade with one another. But I don’t know whether Justice Kennedy shares my view.


7 Responses to “Affordable Care Act”

  1. Rrrobert! Says:

    The key articulation of the commerce power here is Scalia’s. First, the commerce clause grants Congress the power to regulate interstate commerce. I can’t see any reason why that should be construed as solely a power to remove trade barriers; in fact, such a reading seems crazy unless you want to redefine trade barriers in a way which includes things we usually think of as affirmative regulations (e.g., which side of the road to drive on). I think we can all agree that the ACA is, at least broadly, a permissible regulation of an interstate market.

    Next: Both implicit and explicit in the Constitution is Congressional power to pass laws which are instrumental to permissible ends. Scalia, an absurd textualist, ties it to the necessary and proper clause, which certainly at least makes explicit what ought to be obvious even in the clause’s absence. He also thinks that “necessary” might limit Congressional means, which is mad wrong. See McCulloch v. Maryland for the better exegesis of implied powers and the NP clause.

    So basically, if Congress thinks X is an appropriate means to an end which is validated by the commerce power, it will be upheld unless it runs afoul of constitutional limits on Congressional power. Which are plentiful, but don’t really apply to paying taxes or buying health insurance.

    So it’s obvious to me, and probably to Scalia, and almost certainly to Kennedy, that the individual mandate falls within the ambit of the commerce power; the real question is whether there’s any constitutional limit which makes Congress’s chosen means impermissible. And I just don’t see it, though it’s conceivable that Scalia might.

    As for the more interesting question, about whether there is anything Congress can’t regulate: I think Scalia has a solid idea that regulations of purely intrastate activities must be explicitly connected with some kind of broader national policy, as he talks about with Lopez. But I don’t think the dissents’ reverence for geography holds water in an interdependent market. It’s the interdependence that’s really relevant to the commerce power, not the physical boundaries.

  2. Hm… I’m not very familiar with the Necessary and Proper clause.

    In his judgement, Vinson makes a good point about the application of the NP clause to this case, namely that the individual mandate is not actually necessary to the operation of regulations concerning the interstate health care market, it is only necessary to support the chosen method by which Congress wants to regulate the health care market.

    Yes, if Congress wants to require insurers to issue insurance policies to people regardless of health status, then the individual mandate is necessary. But Vinson points out that there is a perverse incentive at work here, because then Congress can render legislation necessary by passing completely crazy laws that need support in order to be workable.

    I think this speaks to the question of whether there is anything Congress can’t regulate. If Congress has some legitimate Commerce Clause goal, then they can adopt whatever ill-thought-out scheme they want, and subsequently any activity or inactivity, interstate or intrastate, could substantially impede the ability of that scheme to work.

    I agree, markets are interconnected. That’s the problem with allowing the Commerce Clause to bestow broad powers. If it is truly broad enough to say that Congress can do anything it wants, as long as it has some effect on interstate commerce, then Congress can do anything it wants, because everything affects interstate commerce.

  3. Rrrobert! Says:

    McCulloch treats this issue more thoroughly than I ever could, and it’s also beautiful prose, so I highly recommend it. But a few points:

    1) It’s unclear that the NP clause is anything but declaratory. The primary argument for the individual mandate is implied power – that Congress has the commerce power plus power to enact appropriate measures instrumental to the commerce power, so long as they don’t rub up against contravening affirmative limitations in the Constitution.

    One reason to think it’s declaratory is that it’s in the part of the constitution that describes congressional powers. Had the intention been to limit Congress’s power, it would have been in the next section, on limitations. It seems more likely that the clause was intended to be clear that Congress had full instrumental power within its legitimate realm of governance, though that realm be limited to the enumerated powers. If that realm of legitimacy has grown as our economy gets more interconnected, so be it.

    If you do insist that “necessary” and “proper” are limitations, you’re still not out of the woods on the mandate. Obviously, no Congressional policy is strictly necessary. Adjudicating a policy as unnecessary requires a judicial judgment about what is necessary. This judgment would of course also have to include political factors. Courts are rightly wary of wading into such judgments, and traditionally leave them to the politically accountable branches. Sometimes they apply a stricter level of scrutiny, usually when the policy is brushing up against affirmative constitutional limits like free speech. But by and large the courts think it’s more appropriate for Congress to judge instrumental necessity. The more reasonable goalpost is for courts to overturn laws beyond the “proper”, but that’s a very different judgment (and one I would accept, though again I would say such authority is implicit, and the NP clause only declaratory). It’s not clear to me what’s improper about the mandate, though, particularly given, say, the 16th amendment’s explicit endorsement of redistributive taxes.

    I think the Constitution evolves, so I’m not willing to dismiss your version of the commerce power outright based on original intent. But it seems to me you have to make your argument on normative grounds, that we ought to reread the commerce power as a kind of one-way power, to reduce state trade barriers but not shape federal ones. And it seems to me that argument rests on one of two pillars: one, we ought to maintain the balance of power between the states and the federal government, even at the expense of federal power to regulate national markets; or two, deregulation is always good and regulation is always bad. Neither of these have much force for me, but I think the second is particularly weak, insofar as the current Constitution already has political mechanisms for reflecting citizens’ national-market preferences. The first argument is somewhat stronger, but I would need some kind of compelling reason demonstrating why the concern over federalist balance should trump federal regulatory power (one that isn’t based on a simple preference for deregulation). It’s also not clear to me that the federalist balance is all that different from what it once was; states still enjoy considerable formal and informal power with respect to the federal government.

  4. I view the Commerce Clause as properly used to do only what Stevens presents as its original purpose, preventing states from erecting barriers to trade with one another

    Just to clarify, before I get to mull over your comment fully. When I wrote that sentence, I suspected I was being unclear. And I was. So here goes: I do not reject the expanded Commerce Clause because of the original intent of the Clause at the time it was written. I want it to be narrowly interpreted because I think that’s the proper power to bestow on Congress, regardless of what the founders intended.

    I agree that interpretations evolve, and if there was a newer and better way to interpret the Commerce clause, I’d be in favor of that one. It just so happens that the interpretation I favor is the one (according to Stevens) that was originally intended.

    [EDIT: Upon re-reading your comment, I don’t think you were misinterpreting what I said in the original post. So nevermind.]

  5. Alright, with all this trying to learn about stuff, especially the necessary and proper clause, I failed to notice that your original response mostly ignored what was the basis for the ruling in the Florida case, namely, that the individual mandate is unconstitutional.

    We agree that it is within Congress’s Commerce Clause power to regulate the health insurance market. The question, from my perspective, is how immediately does a class of action have to affect this market in order for Congress to be authorized to regulate it under the Commerce power.

    It is, of course, from an economic and philosophical perspective, wrong to say that the only way you can affect interstate commerce is by engaging in commercial activity. If you open a Chinese restaurant, you are lowering the price of restaurant food and raising the price of rice throughout the nation. The flip side of this is that every day you don’t open a restaurant, you are lowering the price of rice and raising the price of restaurant food, relative to what it would have been had you opened a restaurant.

    The consequence of accepting that Congress has the power to regulate all activities that, individually or as a whole, have a substantial effect on interstate commerce, thus requires you to accept that Congress can literally regulate anything. If that’s true, you don’t need the rest of the Constitution, except that I suppose there are still a few constraints on the means Congress can use to reach its end of regulating Commerce.

    The precedent set by Wickard and Raich, in my view, takes us too far into the realm of being able to regulate any activity with indirect consequences for interstate commerce.

    The ruling in the Florida case is not really advocating the Necessary and Proper clause interpretation you represent. Vinson merely argues that since Congress does not have the authority to enact the individual mandate under the Commerce clause (i.e. because not buying health insurance is not “activity”, and thus cannot be regulated under the Commerce clause), the Necessary and Proper clause does not have the ability to justify such a regulation.

    I don’t know what Scalia thinks, but my impression is that your interpretation of Necessary and Proper is right. If I ask you to go to the store and buy some milk for me, I am implicitly telling you that you can take my car to go do it. But at issue in this case, to extent the analogy, is that I’m not authorizing you to go charter a private jet to run this errand. Including the individual mandate may be necessary and proper to make Congress’s health care system work, but that way of thinking about regulating commerce just isn’t normal (runs the argument).

  6. Rrrobert! Says:

    I haven’t read Vinson’s opinion in full, but to the extent that it relies on a distinction between activity and inactivity, that seems silly. We regulate inactivity all the time. If I’m in a crosswalk and you’re in a car, and you don’t stop for me, you are required to hit the brakes – you’re not entitled to not act.

    To the extent that we assume healthcare regs are within the commerce power, and the question is only whether the mandate falls within the ambit of necessary and proper, what we really have is a question of jurisprudence. Obviously, “necessary” includes some sense of appropriateness within a discretionary zone around strict philosophical necessity. Who decides how far that zone extends? Congress, who answers to the people politically, or the unaccountable courts?

    Traditionally, at least since the New Deal, the court hasn’t spent a lot of energy second-guessing the judgments of the Congress on what is necessary and proper. If there is a “rational basis” tying the law as written to a constitutionally permissible purpose, it’ll pass muster. The court pays more attention to laws which brush up against laws that are constitutionally suspect in terms of individual rights or separation of powers or political structures. This seems like a good structure to me, though I have my issues with the particular framework they’ve set up.

    If the question is how far the commerce power extends, I think it could certainly be plausibly read, in a revisionist way, to only authorize reduction of trade barriers. But I think such a reading is impoverished compared to the reading we actually want. In order to prefer your reading, you have to think that there are no circumstances in which regulations that were not reducing barriers were good. That is to say, that the police powers of regulation traditionally delegated to the states ought not be within their powers, either. Because if the state powers are defensible for intra-state activity, it seems like we would also want a federal analog for inter-state matters. And indeed, perhaps even more so, since even if you think state regulatory power is bad, and the ideal government is totally hands-off, as a second-best given state regulations you might want a federal government that can regulate national standards in order to avoid patchwork standards in the states.

  7. We regulate inactivity all the time.
    a. Under the Commerce Clause?
    b. Though, as I wrote above, the distinction between inactivity and activity is arbitrary on some level, I still think it’s a valid distinction for policy. If the Commerce Clause can regulate anything you choose to do or not do, then I truly do not know why we need the rest of the Constitution, except to proscribe a few means that Congress might otherwise want to use (e.g. restrictions on speech or religion).

    In order to prefer your reading, you have to think that there are no circumstances in which regulations that were not reducing barriers were good.
    No. You’d have to believe that, on net, a government powerful enough to create regulations would do more harm than good.

    You could say exactly the same thing about free speech. Do you believe that there are no circumstances where restrictions on speech might be good? Does anyone?

    That is to say, that the police powers of regulation traditionally delegated to the states ought not be within their powers, either. Because if the state powers are defensible for intra-state activity, it seems like we would also want a federal analog for inter-state matters.

    So much ink has been wasted in printing the 10th Amendment in all copies of the Constitution.

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