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May 21, 2012

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Let’s assume that McCulloch had contained the iconic statement that Chief Justice Marshall later explained in his “Friend” essays was what he actually meant:

“Let the power be legitimate, let it be an enumerated power within the scope of the constitution, and all direct means and incidental powers which are appropriate, which are plainly adapted to the execution of that enumerated power, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional.”

How would Obamacare have fared under McCulloch properly construed in this way?

The first question would be whether the Obamacare statute was an exercise of the Commerce Power by what Marshall regarded as “direct” means. The answer here is clearly “no” because the Affordable Care Act is not actually a regulation of interstate commerce, but rather new set of rules governing intrastate sales of health insurance.

Indeed, we have a Balkanized state system of health insurance regulation that precludes interstate sales of health insurance policies. Congress could have enacted a direct regulation of interstate commerce that struck down these intrastate regulations to create a genuine interstate health insurance market, but it chose not to do so. Instead, it sought indirect change of the interstate healthcare market by promoting intrastate sales of health insurance through the “guaranteed issue” and “community rating” provisions. These provisions cannot be direct means of exercising the Commerce Power because they do not implement any regulation of interstate commerce.

This leads to a second question, namely whether the “guaranteed issue” and “community rating” provisions are justified as incidental powers under the Necessary & Proper Clause. Again the answer must be “no” because again they are not supporting or perfecting any regulation that executes the Commerce Power by direct means. Thus, they are not “necessary” in either the restrictive (“indispensable”) or expansive (“convenient”) sense because they are not tethered to any actual exercise of the Commerce Power. The issue of whether they are also “proper” does not even come up.

The only justification for the “guaranteed issue” and “community rating” requirements is that they are rationally related to the permissible goal of expanding health insurance coverage. This would be a legitimate “object” within the scope of the Preamble, but not the type of legitimate “end” that Marshall was talking about in McCulloch because expanding health insurance coverage is not itself the exercise of an enumerated power, only a goal to be achieved through an enumerated power.

To be sure, ever since the New Deal, Congress has been able to regulate intrastate activities that have a substantial effect on interstate commerce, and my revision of Marshall’s iconic statement above would not undermine this doctrine when the intrastate regulation is needed as an incidental power for supporting or perfecting the interstate regulation. Indeed, the Substantial Effects Doctrine can be viewed legitimately as a method of construing the Necessary & Proper Clause to determine if the intrastate regulation is in fact supporting or perfecting the interstate regulation.

But you still need a specific interstate commerce regulation, not just some amorphous goal involving interstate commerce, before asking whether it is necessary and proper to regulate intrastate activity that has a substantial effect on interstate commerce. Congress, for example, could have passed a statute that directly prohibited the interstate sale of health insurance policies that lack “guaranteed issue” and “community rating” provisions. Under United States v. Darby, which proscribed the interstate shipment of lumber manufactured by workers lacking certain minimum wages and maximum hours, Congress would have a plausible precedent for further prohibiting the sale of intrastate health insurance policies lacking “guaranteed issue” and “community rating” provisions.

The issue then would have been whether the prohibition on such intrastate policies was a necessary and proper means for supporting or perfecting the direct prohibition on such interstate policies. If we had an existing interstate market for health insurance policies, then the intrastate prohibition would likely be upheld under Darby as a proper exercise of an incidental power for enforcing the interstate prohibition. The fact that no such interstate market exists, however, would expose the intrastate prohibition as a mere pretext for regulating intrastate activity.

By this analysis the “guaranteed issue” and “community rating” requirements of Obamacare are themselves unconstitutional even without resorting to the individual mandate. The individual mandate is just one more step removed from the Commerce Power in that it is not itself a direct regulation of interstate commerce or an incidental power for executing such a regulation.

At best the individual mandate is a secondary incidental power for perfecting other incidental powers (“guaranteed issue” and “community rating”) that are not themselves means for executing an enumerated power. This is Jefferson’s proverbial “House that Jack Built” – piling necessities upon necessities – made worse by the fact that one of the “necessities” of Obamacare, namely preventing the adverse selection caused by the “guaranteed issue” and “community rating” requirements, was created by the Obamacare statute itself.

Of course, under modern Commerce Clause jurisprudence, one no longer has to show how an incidental power is needed to execute an enumerated power; it is enough if the incidental power regulates an intrastate activity that substantially affects interstate commerce, and the incidental power is rationally related to one of the goals found in the Preamble.

Nonetheless, I would argue that this construction of the Necessary & Proper Clause constitutes a improper judicial amendment of the Constitution (at least as applied in interstate commerce cases), and I think it can be attributed in large measure to the linguistic sleight of hand whereby Marshall’s legitimate “end” is no longer an enumerated power, but any of the Preamble’s “objects.” In any event, this linguistic sleight of hand is what has made Obamacare possible thus far, and we can only hope that the Supreme Court will strike down this House that Jack Built and force Congress to start over.

Copyright © 2012 Anthony W. Hawks. All rights reserved.


  1. June 14, 2012 at 12:47 pm, Chintan said:

    , I do not believe the oianigrl understanding of the Constitution at the time of its ratification would have supported the interpretation that it did grant plenary legislative power to Congress–whether via the IC clause, the necessary and proper clause, or any kind of “inherent” sovereignty power.In such cases since I believe oianigrl understanding is the most sensible and most honest interpretative method, I often simply do a thought experiment–just imagine what would have been the reaction of the framers and intelligent laymen at the time, had you asked them if the language being ratified meant what is now being proposed. For example, if you had asked in 1789 whether the Constitution establishes a central, national state of plenary, general legislative powers–pointing to whatever text you wish–it seems quite clear that you’d receive resounding NO’s. IF you had asked whether a state choosing to leave the union later could be militarily attacked (again–point to any clause you want), it seems again clear the answer would be not.As for the Fourteenth Amendment, nowadays we have modern libertarians arguing that it incorporates fundamental rights, the Bill of Rights, rights to engage in sodomy, etc. Imagine asking the Framers and ratifiers of that Amendment in the 1860s if the language meant federal judges could outlaw state laws prohibiting homosexual sodomy. To ask is to answer.Now while such considerations are not dispositive–it is possible for people to simply be incorrect about the consequences of the language they do approve–I think they can help inform a realistic and honest inquiry as to what the language really means, as opposed to what one wants it to mean.”Second, I am all for construing things against the grant of power. But where are judges instructed by the Constitution to do that?”What judges? I am very sympathetic to the nullification ideas of Jefferson and Madison, and think states can nullify federal laws, including state judges. So I think they would tend to construe the federal Constitution like this quite naturally.As for federal judges–again, this is another area of ambiguity. It is not even clear that there is judicial review, though I think the tripartite division of power and the equal obligation of each branch to abide by the Constitution does imply at least a “veto” on the part of the federal judiciary, on any federal law they believe is unconstitutional. So one of their jobs is to refuse to enforce an unconstitutional law. Given the federal scheme of enumerated powers, it’s clear (in my view) that a federal law that Congress is not authorized to enact is unconstitutional. This means as a practical matter that a judge as a preliminary step has to first look for an enumerated power in the Constitution authorizing the federal statute. But the mere act of looking for this authority, for this power, is tantamount to construing things against a grant of power. In other words, it presupposes that there IS no authority to enact the law UNLESS one can find authority in the Constitution. This is a unique way of examining the validity of law by a “sovereign,” since all other sovereign states in the world are held to have general or plenary legislative and police power. But not the feds. So merely by trying to identify an authorizing provision in the Constitution, one is in effect adopting an implicit rule against a grant of power. The presumption is that there is not a grant of power–unless one an find one.I think it’s almost impossible to argue with a straight face that the IC or other clauses were actually meant to grant Congress plenary legislative power. To argue this is in effect to endorse the reasoning of Wickard v. Filburn, which is one of the worst reasoned cases in Supreme Court jurisprudence.


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