Positive Steps, Silver Linings
From the July 30, 2012, issue of NR

(Darren Gygi)


Jonathan H. Adler

The Supreme Court’s ruling in NFIB v. Sebelius was disheartening, especially after overturning the mandate seemed within reach. But despair is unwarranted. The negative consequences of the ruling for constitutional law are actually quite limited, and there is much in it upon which to build.

The constitutional battle was largely a defensive one. The primary challenge to the individual mandate was an effort to prevent further expansion of Congress’s already-inflated authority under the Commerce Clause. From the New Deal to 1995, Congress exercised its commerce power without meaningful restraint. Only during the later years of the Rehnquist Court did the justices finally say “Enough,” in United States v. Lopez (1995) and Morrison v. United States (2000). Yet even these decisions did not prevent the Court from upholding the federal government’s authority to prohibit simple possession of medical marijuana apart from commercial activity, in Gonzales v. Raich (2005).

With the individual mandate, Congress tried to stretch beyond its well-established authority to regulate “commerce,” or even commercial “activity,” and control an individual’s decision to abstain from commerce or commercial activity. Prior Commerce Clause cases had hinged on whether Congress had the authority to regulate a given “class of activity,” such as growing wheat (yes) or possessing a gun near a school (no). But regulating inactivity was something Congress had never done before.

Since a mandate to make purchases from a private company was unprecedented, the case did not require the Court to revisit its earlier Commerce Clause decisions. The challenge was a rear-guard action, not a frontal assault on existing doctrine. Nevertheless, the stakes were high. The federal government’s theory of the Commerce Clause, if adopted by the Court, would have dealt a serious new blow to the principle that the federal government has limited and enumerated powers. In ruling that the mandate was unconstitutional, the Eleventh Circuit had concluded that the government’s Commerce Clause theory would “obliterat[e] the boundaries inherent in the system of enumerated congressional powers.” A majority of the Supreme Court endorsed this view. Chief Justice Roberts wrote that the government’s position “would open a new and potentially vast domain to congressional authority,” warning that it would “fundamentally chang[e] the relation between the citizen and the Federal Government.”

The conservative dissenters agreed with the chief justice on this point, observing that the Commerce Clause justification for the mandate “threatens [our constitutional order] because it gives such an expansive meaning to the Commerce Clause that all private conduct (including failure to act) becomes subject to federal control, effectively destroying the Constitution’s division of governmental powers.”

A majority of the Court also rejected the claim that the Necessary and Proper Clause could be used to accomplish what the commerce power alone could not. The Constitution vests Congress with the power “to make all Laws which shall be necessary and proper for carrying into Execution” its other powers, such as the power to regulate interstate commerce. The government argued that the mandate was necessary to offset the effects of the law’s other insurance reforms, but neither the chief justice nor the conservative dissenters could accept this view. 

Some now worry that the majority opinion closed one door only to open another — that, in upholding the mandate’s penalty as a tax, Chief Justice Roberts provided Congress with a new and equally dangerous power. But Roberts did not identify a previously undiscovered power; rather, he shoehorned the mandate into a power Congress already had. Although the mandate was not drafted as a tax, he argued, it functions as one. Congress already imposes higher taxes on those who fail to act as the government wants, largely by granting credits and deductions to those who act as desired. For example, Americans pay more in taxes if they don’t pay mortgage interest or give to charity.

But don’t take just our word for it. If Roberts’s opinion had recognized a new federal power, the conservative dissenters would have pointed this out. But they didn’t, and their silence on this point is deafening. The dissenters were unconvinced that the particular mandate Congress enacted constituted a tax, but they didn’t deny that a mandate of this sort could be structured in such a way as to fall within Congress’s power to tax: “The issue is not whether Congress had the power to frame the minimum-coverage provision as a tax, but whether it did so.”