Is the individual mandate constitutional? Part 5, Addendum

This is an addendum to my previous blog post in this series, which largely concerned Lopez’s test that, according to Justice Scalia’s interpretation, allows Congress to regulate intrastate, noneconomic activity when such regulation is an essential part of an interstate regulatory scheme. There, I argued that it would be unreasonable to hold that requiring individuals to purchase insurance was an essential part of a scheme to regulate the price of insurance premiums.

However, I came across a stronger argument in the federal government’s brief in Commonwealth of Virginia v. Sebelius. Pages 19-20 of the brief summarize the Commerce Clause arguments in its favor, making several arguments I’ve already addressed. But the brief also argues on page 19 that the individual mandate “prevents individuals from relying on the Act’s reforms (such as the ban on denying coverage for people with pre-existing conditions) to delay the purchase of health insurance until illness strikes. In short, . . . the provision at issue . . . forms an essential part of a comprehensive, intricately interrelated regulatory scheme.”

As I’ve noted previously, the ban on denying coverage for individuals with preexisting conditions is concededly constitutional. And it is true that, in light of this ban, and without an individual mandate, people may wait to be covered until they get sick or hurt, and then buy insurance. Consequently, the ban could result in skyrocketing premiums, with people not paying into the system until they were withdrawing more than they paid in. The mandate purports to avoid this problem by requiring people to buy insurance at the outset instead of waiting until they need it.

This is a powerful argument. Since the preexisting conditions ban would only arise in the insurance context, and the individual mandate is tailored to deal with an adverse side effect that could otherwise emerge out of the ban, accepting the mandate’s constitutionality would not automatically allow Congress to require citizens to purchase any good or service whose price it regulated. Thus, by making this argument, the government has discovered a narrow holding that the courts could hand down that would not confer vast new powers on Congress. Indeed, because of the “essential part” test, the Court’s precedents appear to allow for this regulation already, even when noneconomic, intrastate activity is being regulated.

As I see it, the best argument that the challengers could make in response would center on the lack of enforcement methods for failure to comply with the mandate. The monetary penalty for such failure is collectible by the IRS, but the law appears to deprive the IRS of any ability to collect it if it is not paid, by disallowing criminal penalties or the ability to impose a lien or levy. One caveat: the bill’s wording may allow for other methods of enforcement, as I’m not familiar with all of the methods that appear in Subchapter B of Chapter 68 (to which the bill refers, as quoted at the previous link). But the methods of enforcement that the bill disclaims are the only ways I’m aware of to enforce an unpaid tax or fine (and the articles and comments I’ve read on the subject from various segments of the political spectrum agree).

In light of this, the challengers could argue that, because one wouldn’t expect compliance with an “essential” regulation to be voluntary, Congress must not think that the individual mandate is essential. And, as previously noted, if the regulation of an intrastate, noneconomic activity is not essential to an interstate regulatory scheme, Congress lacks the power to regulate it under current precedent.

This reasoning could be attacked because it creates a somewhat aberrant result, in which Congress has the power to enact an enforceable mandate, but lacks the power to enact an unenforceable mandate. Even if the “essential part” test might lead to this result if applied logically, a court might not apply it in this way because of its strange practical effect, which would grant Congress a greater power but withhold from it a lesser power. All in all, because of the novelty of the individual mandate provision, and because Lopez’s “essential part” test itself is relatively new, it’s hard to say how the test’s application will play out.

In any event, if the case for the mandate ends up being a close call, the validity of the government’s “essential part” argument arising out of the preexisting conditions provision may well become the key question. It’s the strongest argument in favor of the federal government under current precedent.

Of course, the wild card in all of this is that, if the case goes to the Supreme Court (as I expect it will), the Court won’t necessarily follow its precedents to the letter, and may simply craft a new analysis that could be more permissive, or more restrictive, of congressional power. I’ll discuss my own take on what the Commerce Clause should be interpreted to mean in my next post.

6/3/10 UPDATE: The more in-depth analysis in this post and in Part 5 should be read to supersede the analysis in the third and fourth paragraphs of Part 3. However, I'm not going to strike those paragraphs out of Part 3 for two reasons. First, and more prosaically, this blog doesn't have a text strikethrough option. Second, analysis in the fifth paragraph of Part 3 refers back to the analysis in the supserseded paragraphs but is itself still correct.

Is the individual mandate constitutional? Part 5

In my most recent post of this series, I argued that the individual mandate may be unconstitutional because Congress may only regulate “economic activity” that has substantial economic effects, and because deciding whether to engage in economic activity is not economic activity in and of itself. However, the economic activity requirement may not always apply. Analyzing the Court’s decision in United States v. Lopez, Justice Scalia concluded that “Congress may regulate even noneconomic local activity if that regulation is a necessary part of a more general regulation of interstate commerce.” Gonzalez v. Raich, 545 U.S. 1, 37 (2005) (Scalia, J., concurring in the judgment) (citing United States v. Lopez, 514 U.S. 549, 561 (1995)).

Under this reading, regulation of intrastate noneconomic activity can only be upheld if it is an “‘essential part’” of Congress’s regulation of an interstate market whose elimination would “‘undercut’” the regulatory scheme. Id. at 36 (Scalia, J., concurring in the judgment) (quoting Lopez, 514 U.S. at 561). Justice Scalia maintains (correctly, I think) that this power is derived from the Necessary and Proper Clause, id. at 34, 37-38 (Scalia, J., concurring in the judgment), which gives Congress the power to “[t]o make all Laws which shall be necessary and proper for carrying into Execution the [enumerated] Powers.” U.S. Const. art. I, § 8, cl. 18. According to precedent, regulations that are “‘reasonably adapted’” “means” to a “legitimate end under the commerce power” should be upheld under the Necessary and Proper Clause. Raich, 545 U.S. at 37 (Scalia, J., concurring in the judgment) (quoting United States v. Darby, 312 U.S. 100, 121 (1941)); see also McCulloch v. Maryland, 4 Wheat. (17 U.S.) 316, 421 (1819).

The tests in Lopez and Darby may appear to set forth dueling standards—must a regulation of intrastate, noneconomic activity be “essential,” or may it simply be “reasonably adapted?” I think they can be harmonized by understanding that, because intrastate, noneconomic activity is being regulated, its regulation is “reasonably adapted” only when it is an “essential part” of an interstate regulatory scheme. In other words, in this context, the “essential part” test determines whether the regulation is necessary and proper.

Legislation that attempts to control prices is a legitimate end under, at the very least, Wickard v. Filburn. But it is hard to argue that the individual mandate is an “essential part” of a price regulation scheme. Less draconian measures have been used in all previous price regulation schemes, and in all other currently existing schemes to regulate prices. Was it essential for Congress in the Wickard era to require every individual to buy wheat in order to regulate prices in the wheat market? Obviously not—which is why it didn’t. And there is no reason for a court to conclude that requiring individuals to buy a product has suddenly become essential when regulating its price. So the federal government cannot get around Lopez’s economic activity requirement by invoking its noneconomic regulatory exception.

A few other arguments are worth addressing in brief: First, the federal government might argue that, if Congress can prohibit a person from buying marijuana, similar logic should enable it to require that a person buy health insurance. Contrary to what I argued in my last post, doesn’t prohibiting someone from buying marijuana determine whether, and not how, to engage in an economic transaction?

This superficial similarity hides a crucial distinction. When it prohibits the purchase of (for instance) marijuana, Congress uses its power to regulate the use of the channels of interstate commerce. This power enables Congress to prohibit movement across state lines, see, e.g., Lottery Case, 188 U.S. 321, 354 (1903), and is a completely separate power from Congress’s ability to regulate substantial interstate economic effects, on which the individual mandate is supposedly based. See Lopez, 514 U.S. at 558.

Of course, Congress’s power to forbid the intrastate purchase of a commodity whose interstate sale is forbidden cannot be explained solely by its ability to regulate interstate channels, but, given the fungibility of most commodities, forbidding intrastate sale may be said to be an essential part of the interstate regulatory scheme that falls within the power conferred by the Necessary and Proper Clause. See Raich, 545 U.S. at 40-41 (Scalia, J., concurring in the judgment).

A second argument worth addressing: the federal government could try to draw an analogy to the fact that state law may require individuals to possess car insurance. But the U.S. Constitution doesn’t limit the power of state legislatures. So even though state law can compel individuals to buy insurance in certain circumstances, that doesn't mean that federal law can.

Moreover, it’s far from clear that the circumstances surrounding car insurance and health insurance are analogous. You only need to buy car insurance if you drive a car on public roads—a privilege. The government can require you to do a number of things if you want to avail yourself of a privilege—for instance, you also need a driver's license in order to drive on public roads, and you need a license in order to practice medicine or sell alcohol. But under the individual mandate requirement, if you’re alive and you don’t already have health insurance, you must buy it. You can't choose whether or not to avail yourself of a privilege before the obligation to buy insurance attaches.

A third argument worth discussing: challengers could argue that health insurance is a purely intrastate market, because federal law gives states the right to regulate health insurance plans, which states have done, and which has generally led insurance subsidiaries to only offer plans within a given state. Also, the health insurance exchanges that the new legislation sets up are intrastate exchanges.

However, even if subsidiaries operate wholly intrastate, their parent companies are often national—which probably generates a sufficiently interstate component to the health insurance market. I doubt that the intrastate insurance exchanges would undermine that interstate nexus. The phrase “interstate commerce” has become somewhat synonymous with the phrase “national economy.” See, e.g., United States v. Morrison, 529 U.S. 598, 610-11 (2000) (quoting Lopez, 514 U.S. at 573-74 (Kennedy, J., concurring)); see also Lopez, 514 U.S. at 563-64 (majority opinion); id. at 626 (Breyer, J., dissenting). I don’t condone this definitional blurring (consider in particular that the text of the Commerce Clause doesn’t actually contain the phrase “interstate commerce” but simply gives Congress the power “[t]o regulate Commerce . . . among the several states,” making this drift in meaning even more dubious), but I suspect that it’s a fact of life. As such, I don’t think that the challengers are pressing this argument in their litigation, probably because they feel that the courts would be unreceptive.

In my next post, I’ll give some of my own thoughts on the proper interpretation of the Commerce Clause.

Is the individual mandate constitutional? Part 4

So far in this series of posts, I have given a brief outline of congressional power generally and under the Commerce Clause specifically, discussed several salient precedents, and set forth arguments that the government could make in favor of the constitutionality of the individual mandate. (Previous posts are here: Post 1, Post 2, and Post 3.) In this post, I’ll cover the basic arguments that the challengers to the individual mandate’s constitutionality could make.

Congress’s commerce power is certainly broad, as can readily be seen from Gonzales v. Raich, 545 U.S. 1 (2005), and, given its record in Commerce Clause cases over the last 75 years, it’s hard not to conclude that the federal government has a sort of home-field advantage on this turf. But the constitutional challenge to the individual mandate is not frivolous. The challengers’ argument starts with a simple, startling observation that, as far as I know, is true: no federal law has ever required that private citizens enter into an economic transaction with a private entity, until now. If that is so, then (the challengers can argue) the Supreme Court cannot simply apply preexisting precedent, and the federal government cannot simply argue that the mandate is, in its constitutional aspect, analogous to other laws it has previously passed. Instead, the Court would have to extend the scope of its precedents in order to cover the government’s newfound assertion of congressional power.

Still, the challengers need to show that the mandate is genuinely different from exercises of the commerce power that have previously been upheld. Without a foothold in existing doctrine, the challengers are merely begging the question. I think they’ll find their foothold in the requirement that Congress regulate only economic activity that has a substantial economic effect. See United States v. Lopez, 514 U.S. 549, 560 (1995) (“Where economic activity substantially affects interstate commerce, legislation regulating that activity will be sustained." (emphasis added)); United States v. Morrison, 529 U.S. 598, 610 (2000) (quoting Lopez), quoted in Raich, 545 U.S. at 25. Raich hewed to this rubric by holding that intrastate possession of marijuana that had not been purchased was nevertheless part of a larger class of “quintessentially economic” activity, and that Congress had the right to make a policy judgment that included the “narrower class of activities within the larger regulatory scheme.” Raich, 545 U.S. at 25-26 (internal quotations omitted). Raich distinguished its holding from the holdings of Lopez and Morrison, in which the statutes at issue had been struck down, by invoking this economic/non-economic distinction. See id. Accordingly, the challengers could argue, Congress cannot require that people purchase health insurance, because the decision whether or not to engage in economic activity is not itself an economic activity.

In the online debate that I discussed in my last post, Dean Chemerinsky asserts that, “if I decide to buy or not buy something, that is economic activity. Those not purchasing health insurance have a substantial economic effect on interstate commerce.” But this blurs the line between the two distinct requirements of the substantial economic effect test: that an activity be economic, and that it have a substantial economic effect on interstate commerce. Just because an activity has a substantial economic effect does not automatically make the activity economic; otherwise, the two parts of the test would collapse into one. See Lopez, 514 U.S. at 566-68 (suggesting that a robust economic/noneconomic activity distinction provides an important limitation on Congress’s enumerated powers).

This analysis dovetails into Dean Chemerinsky’s argument, summarized in my last post, that the holdings of Wickard v. Fillburn and Raich show that an activity can be considered “economic” even if it does not involve an economic transaction. While this is concededly true, it does not end the inquiry. The activity in both of those cases was regulable because the class of activity (growing wheat, in Wickard; possessing marijuana, in Raich) fell within Raich’s definition of economic activity: activity involving “the production, distribution, and consumption of commodities.” Raich, 545 U.S. at 17-21, 25-26 (internal quotations and citation omitted). By contrast, deciding whether to purchase health insurance does not seem to fall within this definition, any more than deciding whether to produce, distribute, or consume a commodity is itself an economic activity.

Taking another tack, Dean Chemerinsky argues that the cases which establish Congress’s power “to require that hotels and restaurants serve racial minorities” show that “the refusal to engage in an economic transaction” may be “deemed economic.” See Heart of Atlanta Motel, Inc. v. United States, 379 U. S. 241 (1964); Katzenbach v. McClung, 379 U. S. 294 (1964). But these cases pertained to hotel owners and restaurateurs who were already engaged in economic activity, and federal law simply told them that, if they chose to enter into economic transactions, they had to do so on a non-discriminatory basis. It was not compelling them to engage in those transactions in the first place. In other words, the laws at issue in these cases still regulated economic activity, because they told sellers of goods and services how to engage in economic transactions, not whether to do so.

And so, the challengers can argue, with the health care law. Congress can regulate how insurance companies engage in their economic transactions by, for instance, requiring that companies not discriminate against individuals with preexisting conditions. (Whether or not that provision of the law is wise, it is pretty clearly constitutional under current law.) In so doing, Congress has defined the parameters of an economic transaction—a fairly straightforward regulation of economic activity, and one that is akin to the anti-discrimination laws addressed in Katzenbach and Heart of Atlanta in an important respect: it prohibits the seller from differentiating among potential clients on the proscribed basis. Such regulation of economic activity is qualitatively different from requiring that an individual enter into an economic transaction in the first place—which, under the challengers’ argument, Congress has never had the power to do.

In a sense, the novelty of the individual mandate aids the challengers—if the mandate is truly unprecedented, then, by definition, no precedent could support it. But that’s a double-edged sword, because no precedent forbids it yet, either. Given that the history of the Commerce Clause in the 20th century was primarily a history of the commerce power’s expansion, the government has reason to hope. On the other hand, the Supreme Court may decide that the individual mandate goes too far by requiring that private citizens enter into economic transactions with other private entities.

My next post will tie up some loose ends in my summary of the Commerce Clause debate.

Is the individual mandate constitutional? Part 3

In my first and second posts, I gave a broad overview of congressional power and the Commerce Clause, and summarized three major precedents in Commerce Clause law. In this post, I’ll take a first look at how these precedents might apply when determining the constitutionality of the individual mandate by discussing how the federal government could argue in its favor.

The Supreme Court has held that the sale of insurance is “commerce” within the meaning of the Commerce Clause. United States v. South-Eastern Underwriters Assn., 322 U.S. 533, 552-53 (1944). And the applicability of the substantial economic effects test (discussed in my previous posts) to the individual mandate, which requires that non-exempt individuals purchase health insurance, seems to be self-evident: if more people pay insurance premiums, insurance claim costs are more dispersed and the price of insurance goes down. Hence the regulated activity (the purchase of health insurance) will have a substantial economic effect on the interstate insurance market (by affecting premium prices). That’s particularly true because people who would not otherwise buy insurance, were it not for the law, are more likely to be healthy (all things equal). So the government can argue that courts should apply the substantial economic effects doctrine in a straightforward way: Congress has regulated the purchase of health insurance, and this activity has a substantial economic effect on the interstate market for that insurance.

Moreover, although it struck down a law by invoking a limit to Congress’s Commerce Clause power, the Lopez decision nevertheless noted that intrastate activity could be regulated as “an essential part of a larger regulation of economic activity, in which the regulatory scheme could be undercut unless the intrastate activity were regulated.” United States v. Lopez, 514 U.S. 549, 561 (1995). It thereby distinguished its holding, which struck down a criminal statute that stood apart from any regulatory scheme, from such an instance. See id. This reasoning subsequently provided some of the justification for the Supreme Court’s decision in Raich. Gonzales v. Raich, 545 U.S. 1, 23-25 (2005); id. at 36-38 (Scalia, J., concurring in the judgment).

Of course, federal regulation of the health insurance market, even under the new health care bill, isn’t nearly as comprehensive as that of the marijuana market regulated by the Controlled Substances Act, the statute at issue in Raich. In the latter instance, the sale of the commodity (as well as its manufacture, distribution, or possession) is banned entirely. The federal health care bill, by contrast, does not purport to completely control the market for health insurance, nor does it otherwise supplant state insurance regulation. So the government might have a harder case to make in this instance that the individual mandate is an “essential part” of Congress’s regulatory scheme whose absence would “undercut” that scheme. But this line of attack would probably be a dead end for the mandate’s challengers; Congress clearly intended to make health insurance premiums more affordable, and eliminating the individual mandate would undermine that intention. That should be enough to withstand rational basis scrutiny, the most deferential form of constitutional review. See id. at 22.

In any event, it would also be a dead end for challengers to argue that the failure of any given individual to purchase health insurance cannot be regulated because that failure is a purely intrastate activity, or because that one individual’s failure, alone, will not substantially affect the interstate insurance market. First, as noted above, even intrastate activity can be regulated if the failure to regulate it would undercut a constitutional regulatory scheme. Lopez, 514 U.S. at 561; see also Raich, 545 U.S. at 18. Second, under either the “substantial economic effects” justification or the “essential part of a larger regulat[ory scheme]” justification, Wickard and Raich tell us that the key inquiry is whether a regulated activity will, in the aggregate, have a substantial economic effect or undercut the regulatory scheme. So the mandate can be applied to individuals even if any one individual, on his or her own, would not substantially affect the interstate market by purchasing or declining to purchase health insurance. See Wickard v. Filburn, 317 U.S. 111, 127-28 (1942); Raich, 545 U.S. at 19.

The government may have one more hurdle that I haven’t previously noted: it may have to show that the regulated activity (i.e., the decision not to purchase health insurance) that substantially affects interstate commerce is itself an economic activity. Five years before Raich was handed down, the Supreme Court noted that “thus far in our Nation’s history our cases have upheld Commerce Clause regulation of intrastate activity only where that activity is economic in nature,” United States v. Morrison, 529 U.S. 598, 613 (2000), and Raich essentially did not disturb that principle. See Raich, 545 U.S. at 25-26 (noting that the federal Act at issue therein “is a statute that directly regulates economic, commercial activity,” and including within this category the Act’s “[p]rohibiti[on of] the intrastate possession . . . of an article of commerce [i.e., marijuana]”). The challengers to the individual mandate could ask: How can a failure to engage in economic activity constitute economic activity and so satisfy Supreme Court precedent?

The government will have a ready response to this question, probably akin to that articulated by Dean Erwin Chemerinsky of the UC Irvine School of Law in this online debate. Dean Chemerinsky argues that Wickard and Raich itself show that a person can engage in economic activity even in the absence of an economic transaction—indeed, recall from my last post that Wickard’s holding was based in part on the premise that farmer Filburn grew wheat for his own consumption and thus abstained from purchasing wheat in the market, and that this failure to participate in the market had a substantial economic effect on wheat prices in the aggregate and could be regulated by Congress. “If this is economic activity,” Dean Chemerinsky argues, “then certainly the purchase of health insurance (or a refusal to do so) is economic activity.”

As a result, the government should be able to make a fairly strong case under current law that the Commerce Clause authorizes Congress to enact the individual mandate.

In my next post, I’ll discuss some possible counterarguments to the government’s position.

Are moderates moving into "repeal" camp...?

An interesting poll came out this morning which shows support for repealing the recently passed health care bill is gaining, not losing support (58% favor repeal compared to 38% not in favor of repeal). For more insight into the upcoming legal battles, I would point you to our multi-part introspective analysis here and here. The purpose of the legal analysis is to discuss the potential weight, if any, already filed lawsuits may have. I look forward to the conclusion.

Back to the poll. We're cautious about reading too much into polls, particularly the headline numbers as they can differ wildly. For an idea, Stu Rothenberg gives a concise example of how different polls of the same Senate race can show a completely different picture. What is important are the internals (ie, the numbers that make up the headline number), and the internals of Rasmussen's recent poll depict two important things: 1) there is a +18 point intensity gap between those that strongly favor repeal compared to those that strongly oppose repeal; and 2) moderate voters are moving into the "repeal" camp.

Let's take each point separately.

1) "There is a +18 point intensity gap between those that strongly favor repeal compared to those that strongly oppose repeal".

Pundits often talk about "intensity gaps" as vital to the success of any election cycle. Intensity gaps can be broad based (ie, in favor / against a given party) or specific (ie, in favor / against a given policy). At the risk of stating the obvious, the higher the motivation, the increased likelihood a given bloc of voters will vote (of course, this assumes candidates' messages are aligned with the issues).

2) "Moderate voters are moving into the "repeal" camp."

According to Rasmussen, "[e]ighty-eight percent (88%) of Republicans and 54% of voters not affiliated with either major party favor repeal." This does not bode well for the Administration's strategy of limiting its losses in November by "rallying the base".

According to a recent Gallup poll 40% of the electorate is conservative, 20% is liberal, and 37% is moderate.

The implication is 40% of the electorate is considered to be in the Republican base, while only 20% of the electorate is in the Democrat base. Winning moderate support is imperative to a successful "base" strategy. It's a large reason Obama won in 2008 (there was also an enormous intensity gap) and it's a huge reason Democrats should be worried come November.

On a side note, voters are starting to associate the health care bill as being bad for the economy, which is not good for those who supported it, particularly since the economy is the most important issue as November inches closer. "Seventy-six percent (76%) of Republicans believe repeal would be good for the economy, while 59% of Democrats believe it would be bad. Among those not affiliated with either political party, 47% believe repeal would be good for the economy, and 29% believe it would be bad." Adding salt to the ever increasing Democrat wound is the second most important issue for voters: health care.

The bottom line is really three-fold: there is a large intensity gap favoring repeal; swing voters are moving into the repeal "camp"; and the economy and health care are no longer exclusive of one another.

Is the individual mandate constitutional? Part 2

In my last post, I gave a brief overview of the limitations on congressional power generally, and on the Commerce Clause power specifically. I noted that Congress may invoke its Commerce Clause power to regulate three categories: 1) the use of the channels of interstate commerce; 2) the “instrumentalities of interstate commerce;” and 3) activities that “substantially affect” interstate commerce. See, e.g., United States v. Lopez, 514 U.S. 549, 558-59 (1995).

The individual mandate obviously doesn’t fit into either of the first two categories, but that shouldn’t particularly concern its proponents; the substantial economic effects test is the most frequently used category to justify congressional action pursuant to the Commerce Clause.

There are literally thousands of pages of Supreme Court opinions on the Commerce Clause, many of which pertain in whole or in part to the substantial economic effects test. Since I can’t canvass each of these opinions in depth, this post will instead summarize three cases that are more or less representative of the Court’s precedents in this area. I had originally intended to analyze the application of these precedents to the individual mandate in this post, but given its length as is, I will leave that analysis for a subsequent post.

The 1942 case Wickard v. Filburn provides a good example of the expansive reading of congressional power under the Commerce Clause that emerged during the New Deal. The Agricultural Adjustment Act of 1938 required farmers to produce only a certain amount of wheat, in an attempt to restrict the volume of wheat in the market and thereby to control wheat prices. In Wickard, the Supreme Court held that the Act could regulate the excess wheat that a commercial farmer grew on his own farmland for the purpose of personal consumption rather than sale. The Court reasoned that the farmer would otherwise purchase his wheat in the open market, and that, when he was considered along with similarly-situated farmers in the aggregate, their participation in the wheat market (or lack thereof) would affect interstate supply and demand (and would thereby affect prices that Congress was trying to regulate). The Court also noted the potential that a change in prices would shift some of that excess wheat into the interstate market, thereby affecting the volume of wheat in that market (and also affecting prices). See 317 U.S. 111, 114-19, 128-29 (1942).

In the 1995 case United States v. Lopez, by contrast, the Supreme Court, for the first time in sixty years, struck down a federal statutory provision on the ground that Congress had exceeded its Commerce Clause power. The statute had outlawed possessing a firearm within 1,000 feet of a school. The government argued that the law regulated an activity that had a substantial economic effect because possession of a firearm in a school zone might result in violent crime (and crime imposes costs on the economy and may inhibit travel) or otherwise hamper public education (which leads to a less productive citizenry and thus to a less productive national economy). The Court ruled that upholding a law that had, in its view, such an attenuated connection to interstate commerce would convert Congress’s power under the Clause into a general police power, a power that the Constitution does not delegate to Congress. 514 U.S. at 563-64, 567-68.

Finally, Gonzales v. Raich, a Supreme Court case from 2005, held that Congress’s power under the Commerce Clause allows it to outlaw the possession of marijuana for medical reasons that the medical patient litigants had either grown, or obtained for free, wholly within a state (California), even where such possession was legal under state law. Drawing parallels with Wickard, the Court ruled that exempting the litigants in Raich from the provisions of the federal Controlled Substances Act, which bans the manufacturing, possession, distribution, or sale of marijuana (and may generally do so because those activities either constitute interstate commerce in and of themselves or else have a substantial effect on the interstate market for marijuana), would leave a “gaping hole” in that Act and hinder Congress’s ability to regulate the interstate market. 545 U.S. 1, 17-22 (2005).

Notably, courts need only apply rational basis scrutiny to the government’s claim that a regulated activity has a substantial economic effect on interstate commerce. E.g., id. at 22 (citing, inter alia, Lopez, 514 U.S. at 557). The rational basis test, which is used in many areas of constitutional law, is notoriously lenient to the legislature; virtually any reason that can be adduced by a legislature in support of its enactment will do.

In my next post, I’ll discuss how the existing Commerce Clause precedent may be applied to the individual mandate.

Is the individual mandate constitutional? Part 1

A major aspect of the recently-enacted health care legislation is the so-called individual mandate, which requires that all individuals who do not fit a narrow range of exceptions possess health insurance. Those individuals who do not fit one of the exceptions and who do not possess health insurance will have to pay a fine that will be collected by the IRS.

Fourteen states, as well as four individuals, have now filed lawsuits challenging this aspect of the law as unconstitutional. The underlying issue is: Has Congress exceeded its enumerated powers by requiring some individuals to purchase health insurance or else pay a penalty?

With several exceptions not relevant here, Congress may only enact legislation that falls within the scope of the enumerated powers delegated to it by Article I, Section 8 of the Constitution. (All other powers are reserved to the states or to the people by the Tenth Amendment.) In defense of the individual mandate, the government will almost certainly invoke the Commerce Clause, one of Congress’s enumerated powers, and may also invoke the Taxing and Spending Clause as a separate enumerated power that could justify the enactment of the individual mandate.

In this post, I’ll give a brief overview of current Commerce Clause jurisprudence. In my next post, I’ll discuss several particular precedents in this area of the law and how they might affect the constitutionality of the individual mandate. Subsequent posts will discuss the Taxing and Spending Clause and other issues related to the pending lawsuits.

The Commerce Clause gives Congress the power “[t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” U.S. Const. art. I, § 8, cl. 3. The Commerce Clause is most commonly invoked in the context of the second type of commerce, namely, interstate commerce. The Supreme Court has held that Congress may properly invoke its interstate commerce power to regulate three categories of activities or things: 1) the use of the channels of interstate commerce (e.g., transporting a minor across state lines for an immoral purpose); 2) the “instrumentalities of interstate commerce” (e.g., safety regulations for vehicles that transport goods across state lines); and 3) activities that “substantially affect” interstate commerce (e.g., national minimum wage laws, which, among other things, prevent states from lowering their minimum wages to give local corporations an unwarranted advantage over the corporations of other states in interstate commerce).

The government will try to invoke the third, “substantial economic effects” category when justifying the individual mandate. And the Supreme Court has used that category to countenance very expansive exercises of congressional authority. My next post will discuss several seminal cases in Commerce Clause law and their application to the individual mandate issue.

6/3/10 CORRECTION: I've added the phrase “With several exceptions not relevant here, . . . ” to the beginning of the third paragraph. The paragraph as originally written was inadvertently incorrect because it didn't take into account, for instance, the congressional power found in Section 5 of the Fourteenth Amendment.

Doubling down...

It's hard to deny it: the President had a good political week last week. He signed the health care bill, reached an agreement with Russia on nuclear nonproliferation, and won a PR victory by visiting our troops in Afghanistan, unannounced. Seems like a perfect time for the President to build some political capital, prove to the public that he is listening (after suggesting otherwise for the past year) and shelve his ultra-partisan legislative agenda unless he garners significant Republican support. That's too logical for Washington. Rather, the President is going to take his waning political capital stock and double-down.

A senior Democratic official said the push was a textbook case of taking advantage of political momentum as the campaign season begins. Republicans are "on the defensive," the official said, "and as long as they're not cooperating, we ought to keep them there." - WSJ 3/30/10

On Thursday, the president challenged Republicans who planned to campaign on repealing his health-care bill with, "Go for it." Two days later, he made 15 senior appointments without Senate consent, including a union lawyer whose nomination had been blocked by a filibuster. - WSJ 3/25/10

For someone who came into office as the "first post-partisan" President, he's been anything but that.  According to Rasmussen, "Only 28% now say the president is governing on a bipartisan basis". Proving time-and-again his unwillingness to work with Republicans and an uncanny knack for revising the historical record on Republican participation / ideas throughout the legislative process.

His objective is clear: one of the few ways Democrats can avoid a shellacking in November is to make sure their base is energized. Given the partisan rancor this country is enveloped in, what better way to work towards this goal than lambasting Republicans? The only problem is, there are segments of the President's electoral voting bloc from 2008 that are net sellers, not buyers, of his first 15 months.

For instance, a study released by Pew Research in February about the Millennial generation (those aged 18-30) pointed out the following:

Politically, Millennials were among Barack Obama's strongest supporters in 2008, backing him for president by more than a two-to-one ratio (66% to 32%) while older adults were giving just 50% of their votes to the Democratic nominee. This was the largest disparity between younger and older voters recorded in four decades of modern election day exit polling. Moreover, after decades of low voter participation by the young, the turnout gap in 2008 between voters under and over the age of 30 was the smallest it had been since 18- to 20- year-olds were given the right to vote in 1972.

But the political enthusiasms of Millennials have since cooled —for Obama and his message of change, for the Democratic Party and, quite possibly, for politics itself. About half of Millennials say the president has failed to change the way Washington works, which had been the central promise of his candidacy. Of those who say this, three-in-ten blame Obama himself, while more than half blame his political opponents and special interests.

To be sure, Millennials remain the most likely of any generation to self-identify as liberals; they are less supportive than their elders of an assertive national security policy and more supportive of a progressive domestic social agenda. They are still more likely than any other age group to identify as Democrats. Yet by early 2010, their support for Obama and the Democrats had receded, as evidenced both by survey data and by their low level of participation in recent off-year and special elections.

The infatuation of young voters with Obama and his "Rock Star" personality shouldn't come as a surprise, especially if you read more about Millennials and what they believe. It also reminds me of the classic Churchill quote. The question is: can Obama invigorate his supporters when he's not no the ticket? Judging by this chart, he may have a difficult time.

To be fair, this is only one segment of his voting bloc, but it did represent roughly 20% of total votes, which is significant, and up from 17% in 2004, or a 17.5% increase in turnout within this single demographic.

While November is a universe away, it will be interesting to see how much of a bump this past week gives Obama (and Democrats) and how sustainable it is. Voter fatigue should be a real concern for Democrats, particularly given the amount of energy spent since 2006 to get where they are. If the generic ballot remains within its recent range (Republicans +6-9), the enthusiasm gap remains wide, and Independents continue to prefer Republican candidates, pandering to his base and not engaging the other team could be a losing strategy for the President.

Quick hits (health care version)...

Attorneys General in South Carolina and Florida Set to Sue on Health Care Reform

South Carolina Attorney General Henry McMaster says he and Florida Attorney General Bill McCollum are ready to file a federal lawsuit if health care reform legislation passes.


The U.S. House plans to vote on the plan Sunday.

McMaster said Friday that he expects attorneys general to join the lawsuit. He and other GOP counterparts have denounced the legislation.

Democratic Rep. DeFazio Switches Vote to 'No' on Health Care Bill 

Democratic Rep. John Boccieri of Ohio is switching his vote to "yes" on President Obama's health care overhaul, bringing House Speaker Nancy Pelosi just one vote shy of the 216 needed for passage .
The vote tally on health care reform is starting to look like the Dow.


Just when House Speaker Nancy Pelosi seemed to be one vote shy of the number needed for health care reform to pass, a Democrat who voted for the bill last year says he's switching his vote to no.

The opposition from Rep. Peter DeFazio, D-Ore., dials back the number of House members leaning toward voting yes to 214, and the number leaning toward voting no to 217.

Pelosi needs 216 for the bill to pass.

Democrats Gain Support as They Move on Health Vote 

March 19 (Bloomberg) -- U.S. House Democrats, who cleared a big hurdle in their effort to overhaul the health-care system by producing compromise legislation, are picking up fresh support for a showdown vote this weekend.


Democrats need about six more votes from House members to pass the 10-year, $940 billion bill, Obama administration officials said today. President Barack Obama and Democratic leaders aim to sway some in a pool of 14 or 15 undecided lawmakers to get to the 216 votes needed to pass the measure, according to the officials, who spoke on condition of anonymity.

“We are going to have the votes, when the roll is called,” House Majority Leader Steny Hoyer told reporters today. A vote is scheduled for March 21, leaders said.

Caterpillar: Health care bill would cost it $100M

Dow Jones Newswires Caterpillar Inc. said the health-care overhaul legislation being considered by the U.S. House of Representatives would increase the company's health-care costs by more than $100 million in the first year alone.

In a letter Thursday to House Speaker Nancy Pelosi (D-Calif.) and House Republican Leader John Boehner of Ohio, Caterpillar urged lawmakers to vote against the plan "because of the substantial cost burdens it would place on our shareholders, employees and retirees."

Caterpillar, the world's largest construction machinery manufacturer by sales, said it's particularly opposed to provisions in the bill that would expand Medicare taxes and mandate insurance coverage. The legislation would require nearly all companies to provide health insurance for their employees or face large fines.

The Peoria-based company said these provisions would increase its insurance costs by at least 20 percent, or more than $100 million, just in the first year of the health-care overhaul program.

"We can ill-afford cost increases that place us at a disadvantage versus our global competitors," said the letter signed by Gregory Folley, vice president and chief human resources officer of Caterpillar. "We are disappointed that efforts at reform have not addressed the cost concerns we've raised throughout the year."

Quick hit...

Stephen Lynch [a democrat] calls health care vote plan ‘disingenuous’

"Even one of House Speaker Nancy Pelosi’s floor whips, U.S. Rep. Stephen Lynch, says a proposed parliamentary move to pass health-care reform would be “disingenuous” and harm the credibility of Congress.


In a sign of how tough it’s been for Pelosi to round up votes for the massive bill, Lynch - a South Boston Democrat who supported a House reform package last year - said he’ll probably vote against a key Senate version of the legislation, unless unexpected major changes are made soon.

Lynch, who serves as one of Pelosi’s key vote counters, said he also can’t support a proposed “deem and pass” procedure that would allow Democrats to vote to strip out controversial portions of the Senate bill and then “deem” that the entire package has passed without a second, direct vote.

“It’s disingenuous,” said Lynch, who considers unfair a Senate provision to tack a surcharge on higher-end health plans. “It would really call into question the credibility of the House.”

Other Democrats have countered that the “deem and pass” tactic has been employed before, including when Republicans were in the majority in Congress."

This is the key...

On the surface, "Deem and Pass" (AKA "The Slaughter Rule" -- named after the Chairwoman of the House Rules Committee)---the method the democrats are proposing to pass the health care bill---might be unconstituional, but I'm no lawyer. That said, I can read and the Constituion appears to be pretty cut-and-dry that "[v]otes of both Houses shall be determined by Yeas and Nays"...

Article I, Section 7 of the U.S. Constitution states: "Every Bill which shall have passed the House of Representatives and the Senate, shall, before it become a Law, be presented to the President of the United States; If he approve he shall sign it, but if not he shall return it, with his Objections to that House in which it shall have originated, who shall enter the Objections at large on their Journal, and proceed to reconsider it. If after such Reconsideration two thirds of that House shall agree to pass the Bill, it shall be sent, together with the Objections, to the other House, by which it shall likewise be reconsidered, and if approved by two thirds of that House, it shall become a Law. But in all such Cases the Votes of both Houses shall be determined by Yeas and Nays, and the Names of the Persons voting for and against the Bill shall be entered on the Journal of each House respectively.”

Put simply,

"...instead of House members casting their votes on the Senate version of the health-care bill, the House would vote on a package of “fixes” made to those parts of the Senate bill to which House members object...Under the House’s “self-executing rule” provision, if the lawmakers pass a rule that says passing the “fixes” is the same as passing the actual bill -- then the House would magically "deem" the health-care bill to be “passed.” The "rule" itself would be sponsored by the chairman of the House Rules Committtee, Rep. Louise Slaughter (D-N.Y.)."

Source: http://www.cnsnews.com/news/article/62939

Does the math work...?

The question remains: do the democrats have enough votes to pass health care?


According to most reports, the health care vote is set to take pace sometime on Friday (or Saturday). As it stands today, it appears the democrats do not have enough votes to carry-the-day; otherwise, as logic goes, they would have already voted. Rumors are percolating that another "deal" may have been struck between the Obama Administration (more accurately, the Department of the Interior) and two California Congressman (Cardoza and Costa, who both voted 'yes' previously) at the behest of Boxer and Feinstein. (http://nrcc.org/blog/blogitem.aspx?id=261)

ABC News took a stab at estimating where the vote stood yesterday (http://blogs.abcnews.com/thenote/2010/03/do-pelosi-and-the-democrats-have-the-health-care-votes-heres-the-math-.html) and came up with the following conclusion:

“If every sitting House Democrat who voted for the health care bill in November, voted for it again this weekend, Nancy Pelosi would have the 216 votes she needs to pass it.

However, because of resistance to the Senate bill overall and (for several anti-abortion rights Democrats) specifically its abortion language, Democrats know they will not be able to get all their previous YES votes to vote YES again.

So, the game becomes how many previous YES votes can Democratic leaders afford to lose? The answer to that question is another question, of course.

How many previous NO votes can Democratic leaders definitively flip to YES?

You will see below that there is no margin for error. And this remains somewhat fluid as Pelosi searches for her final handful of votes.”

There are a handful of "targets" (ie, those representatives who will decide the outcome). See below.

Assuming the democrats that voted 'yes' previously vote 'yes' this time around, the democrats will come up five votes shy of the requisite 218 votes.

Obviously, this is very fluid and the numbers are certain to change but this helps to explain why Pelosi hasn't held the vote, Obama delayed his trip to Australia, and 'deals' are being made.