By the time that I had started working as a counsel on the Senate Judiciary Committee, in 2003, it was clear that the U.S. Supreme Court would not allow the commerce clause to serve as the license for congressional intervention into state action that it once had. Unlike congressional staff, legal academia is too often significantly lacking in diverse political thinking, and this hampers its ability to successfully accomplish its oft-sought-after constitutional soothsaying.
The Supreme Court’s ruling that the insurance mandate in the Patient Protection and Affordable Care Act exceeded Congress’ authority under the commerce clause was not particularly surprising if you didn’t listen too closely to the vast majority of legal academics. Although the academy is significantly diverse in gender, race, sexual orientation and, to some extent, even national origin, law professors remain remarkably monolithic in viewpoint. Their political thinking is generally liberal. And the legal academy is typically favorable to a highly empowered federal government — with some good historical reason. It was a strong view of federal power and the commerce clause that allowed Congress and the president to drag a resistant South away from explicit discrimination persisting almost a century after the enactment of the 14th and 15th amendments. And law professors still properly view these events as one of the most dramatic positive political and legal events occurring in their lifetimes. This viewpoint, however, clouds legal academia’s perspective, which led to the academy-initiated popular chorus chanting the constitutionality of the insurance mandate under the commerce clause.
Outside the legal academy, the Court’s action on the commerce clause was predictable based on the law. Congress itself knew its action was a stretch. The nonpartisan Congressional Research Service warned that “[w]hether such a requirement would be constitutional under the Commerce Clause is perhaps the most challenging question posed by such a proposal, as it is a novel issue whether Congress may use this clause to require an individual to purchase a good or a service.”
Four cases predicted this outcome. Two cases directly opposed holding the mandate constitutional under the commerce clause. In U.S. v. Lopez (1995), the Court invalidated a federal ban on gun possession near schools, even though roughly “95% of the firearms in the United States were transported across state lines” and thus “within Congress’s regulatory authority,” and even though “[Alfonso] Lopez himself was paid $40 to traffic the gun for which he was [prosecuted].”
Similarly, U.S. v. Morrison (2000) invalidated the federal Violence Against Women Act, even though the regulated activities affected commercial productivity and activity. The Court held that the proscribed behavior was not sufficiently related to interstate commerce to fall under the federal government’s limited authority granted by the Constitution.
Two cases seemingly favored the constitutionality of the mandate under the commerce clause. In Wickard v. Filburn (1942), Congress limited intrastate wheat production in order to increase interstate wheat prices. But that case is 70 years old and predates the modern trend of the law. And in Gonzales v. Raich (2005), the Court held that Congress could regulate the intrastate manufacture of marijuana that could be diverted into the interstate market. That would justify the broad view of the commerce clause. However, drug cases don’t make for good predictors of a conservative Court. While that’s not a good legal distinction, it’s a reality that more legal academics should have recognized.
A further weakness in the commerce clause argument should have been seen when the government asserted that the limiting principle on why the commerce clause would not again become a free-pass on federalism is that health insurance is “unique.” The law appropriately eschews such arguments. Every case is unique in some way — just not unique under the law.
In contrast, many academics did espouse the argument made by the government that the mandate is constitutional under the federal government’s taxation powers. However, in the congressional debate over the act and in the argument before the Supreme Court, this was a tertiary argument. And the discussions within the academy on this issue were similarly muted. This was no surprise. Congress did not finance the act through a new direct tax, as it did in enacting Medicare, for example. Politics intervened because taxes are unpalatable generally, more problematic during a recession, and they pose greater difficulty to Democrats (who still sting from the “tax and spend” label — true or not). Indeed, the administration’s argument then, and again now that the Supreme Court has ruled, is that the tax is a “penalty collected by the IRS.” (Of course, in Court, the administration classified this as a tax.)
Accordingly, Congress financed the bulk of the act through the mandate. Only those not complying with the mandate are, according to the Court, taxed to make up the difference. Taxes, however, usually work the other way — by directly financing governmental action; those not complying are addressed through nontax procedures. That doesn’t mean that the mandate/penalty process cannot be viewed as a tax. Indeed, that’s what the Court did. But it perhaps foretells that the taxation power may become what the commerce clause was in the past: the means by which the federal government exercises broad powers.
The likely results of this decision beyond the specific outcome on the act are at least twofold. First, even the legal academy will now see that the commerce clause is not the magic bullet that it once was. And, second, the baton permitting Congress to regulate otherwise state action may have simply been passed from the commerce clause to the taxation powers of the federal government. Only time will tell.
Robert Steinbuch is a law professor at the University of Arkansas at Little Rock William H. Bowen School of Law.