Most of the discussion in the wake of last week’s Supreme Court ruling upholding the Patient Protection and Affordable Care Act (ACA) dealt with its political implications, such as whether this will help President Barack Obama’s reelection campaign and whether Chief Justice John Roberts, worried about the reputation of the highest court, as well as his own legacy, has decided to soften his partisan Republican leanings. However, many of those who have read the ruling and, in particular, Justice Ruth Bader Ginsburg’s 61-page concurring opinion, have found Roberts’ reasoning to be a disturbing assault on the power of the legislature branch of the U.S. government, one that could set back constitutional law by 75 years.

 

Two important concepts underlie the dispute: the individual mandate and the Commerce Clause of the United States Constitution. The Obama administration considers the individual mandate, which requires all Americans to have health insurance, essential to the success of the ACA, as does the health insurance industry. Their argument is that if people only buy health insurance when they are ill or injured, then there is not enough money to pay for the system. If healthy people are also forced to pay for health insurance, then the program can be solvent. Obama and his supporters justified the individual mandate by invoking the Commerce Clause of Article I of the Constitution, which gives Congress the power “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”

 

Although none of the justices disputed the fact that the huge health care industry ($2.5 trillion in 2009) engages in interstate commerce, Roberts wrote that the individual mandate was not covered by the Commerce Clause. Instead, he approved of the individual mandate because it was part of Congress’ power of taxation because, according to Roberts, the penalty paid by those who refuse to buy health insurance is really a tax.

 

In the words of Justice Ginsburg, Roberts’ “crabbed”, “rigid reading of the Commerce Clause makes scant sense and is stunningly retrogressive….The Chief Justice relies on a newly minted constitutional doctrine. The commerce power does not, the Chief Justice announces, permit Congress to ‘compe[l] individuals to become active in commerce by purchasing a product.’”

 

According to Roberts’ argument, people who do not have health insurance are not actively involved in commerce and are thus not covered by the Commerce Clause. Ginsburg counters that eventually almost all Americans make use of health care, even if they don’t have insurance and that, in fact, almost 90% do so in any given 5-year period.

 

Justice Ginsburg wrote, “Virtually everyone…consumes health care at some point in his or her life. Health insurance is a means of paying for this care, nothing more. In requiring individuals to obtain insurance, Congress is therefore not mandating the purchase of a discrete, unwanted product. Rather, Congress is merely defining the terms on which individuals pay for an interstate good they consume.”

 

Here is a bit of background to the history of the Commerce Clause.

 

Although the Constitution states that Congress has the power to “provide for … the general Welfare of the United States,” since the 1830s the Supreme Court has held that this is not an independent grant of power to Congress. Instead, the Court created the doctrine of “enumerated powers,” which limits the powers of Congress to those specifically listed, or enumerated, in Article I, Section 8, of the Constitution. Two of the most important enumerated powers are the Commerce power and the Necessary and Proper power. The Commerce Clause gives Congress the power “to regulate Commerce … among the several States,” while the Necessary and Proper clause gives Congress the power “to make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers.”

 

Early in the nation’s history, the Supreme Court interpreted the commerce power broadly. In the 1824 case of Gibbons v. Ogden, Chief Justice John Marshall wrote that Congress can regulate “the commercial intercourse … in all its branches,” that exists among the states, including its effects on commerce internal to the states. In the same case, the Court unanimously rejected a suggestion that interstate commerce be limited to the buying and selling or trading of commodities between states, but it did recognize that commerce that is “completely internal” to a state would be beyond the power of Congress to regulate.

 

In the late 19th century, pressure from industrial corporations resisting Congressional attempts to regulate their behavior led to the appointment of Supreme Court justices who were more sympathetic to their concerns and more inclined to favor a narrowing of the commerce power. The Court began to distinguish between the transportation of goods across state lines, which Congress could regulate, and the local manufacture of goods, which Congress could not touch unless it “directly affected” the “stream of commerce.” In practice, however, the distinction between commerce and manufacturing, and “direct” and “indirect” affects, proved impossible to apply in a neutral manner, and the Court’s pro-business members often wielded it as a way of invalidating social reform laws not to their liking.

 

All that changed during the years of the Great Depression. Between 1933 and 1936, President Franklin D. Roosevelt and Congress enacted sweeping new laws as part of the New Deal, which granted the federal government new powers to regulate the national economy in order to restore prosperity, more closely regulate business, and more equitably distribute the national wealth. At first, the Supreme Court applied its old commerce power arguments to strike down most of these laws, but starting in 1937 the Court changed course and adopted a more expansive interpretation of the Commerce Clause.

 

In the current case, Justice Ginsburg has pointed out that Roberts’ attempt to distinguish between “activity” and “inactivity” regarding the use of health care will take the courts back to the days when they tried, and failed, to develop a neutral way of distinguishing between “direct” and “indirect” affects on interstate commerce. The upshot will be that conservative judges will feel empowered to strike down economic laws they don’t like, just as they did between the 1880s and the 1930s. 

 

Given the fact that the Court’s five Republican justices explicitly endorsed this novel “activity” test for defining interstate commerce, it seems likely that some version of it will become the law in the near future. It is not the law now, because the Commerce Clause portion of Roberts’ opinion did not decide the case, so in legal terms it is known as “dicta,” which means words used by the Court in discussing a side issue in a case. If the activity test does become the law, we may expect to see federal laws regulating business challenged by pro-corporate lobbyists and overturned by the Court.

 

Of course it could turn out that Chief Justice Roberts’ labeling of penalty payments as taxes might have been a subtle political move after all, giving Republicans the opening to attack the individual mandate as another attempt by Democrats to raise taxes.

-David Wallechinsky, Matt Bewig

 

Why Justice Roberts’ Opinion Could Set Alarming Precedents (by Steven Rosenfeld, Alternet)

In Obama’s Victory, a Loss for Congress (by James B. Stewart, New York Times)

National Federation of Independent Business et al. v. Sebelius (see pdf pages 66-126)