Congress’s power to regulate interstate commerce is broad but not limitless.

(published in The Wall Street Journal, March 21, 2012)

By DAVID B. RIVKIN JR. AND LEE A. CASEY

On Monday, the Supreme Court will begin an extraordinary three-day hearing on the constitutionality of ObamaCare. At stake are the Constitution’s structural guarantees of individual liberty, which limit governmental power and ensure political accountability by dividing that power between federal and state authorities. Upholding ObamaCare would destroy this dual-sovereignty system, the most distinctive feature of American constitutionalism.

ObamaCare mandates that every American, with a few narrow exceptions, have a congressionally defined minimum level of health-insurance coverage. Noncompliance brings a substantial monetary penalty. The ultimate purpose of this “individual mandate” is to force young and healthy middle-class workers to subsidize those who need more coverage.

Congress could have achieved this wealth transfer in perfectly constitutional ways. It could simply have imposed new taxes to pay for a national health system. But that would have come with a huge political price tag that neither Congress nor the president was prepared to pay.

Instead, Congress adopted the individual mandate, invoking its power to regulate interstate commerce. The uninsured, it reasoned, still use health services (for which some do not pay) and therefore have an impact on commerce, which Congress can regulate.

Congress’s reliance on the Commerce Clause to support the individual mandate was politically expedient but constitutionally deficient. Congress’s power to regulate interstate commerce is broad but not limitless.

First among the limits is the very nature of congressional authority, which is based on specifically enumerated powers. As the Supreme Court has consistently acknowledged, the Constitution denies the federal government the type of broad public health and welfare regulatory authority known as a “general police power,” which is reserved exclusively to the states. The court has also repeatedly held that preservation of this division between federal and state authority is a matter for supervision by the courts, and its precedents make clear that congressional Commerce Clause regulation must be subject to some judicially enforceable limiting principle.

The defining characteristic of a general police power is the states’ ability to regulate people simply as people, regardless of an individual’s activities or interaction with goods or services that might themselves be subject to regulation. Thus, the Supreme Court has ruled that states, exercising their general police power, can require all resident adults to obtain a smallpox vaccination. Only this type of authority could support ObamaCare’s individual mandate, which applies to all Americans as such, regardless of any goods they may buy or own, or any activities in which they might choose to engage.

Congress has crossed a fundamental constitutional line. Neither the fact that every individual has some discernible impact on the economy, nor that virtually everyone will at some point in time use health-care services, is a sufficient basis for federal regulation. Both of these arguments, advanced by ObamaCare’s defenders, are flawed because they admit no judicially enforceable limiting principle marking the outer bounds of federal authority.

On the left and right, legal thinkers too often forget that Congress has no constitutional power simply to regulate the economy. Rather, that power comes from a series of discrete authorities—to regulate interstate and foreign commerce, to tax, spend and borrow, to coin money and fix its value and so forth—that together allow it broad control over the nation’s economic affairs. As a result, congressional efforts to address national problems may well be less economically efficient than would a more straightforward exercise of police power. The Constitution subordinates efficiency to guarantee liberty.

The Constitution divides governmental power between federal and state governments so that one may check the other. This requires that the electorate be able to tell, especially on Election Day, which government is responsible for which policies and regulations with which we live.

As Justice Anthony Kennedy explained in one leading Commerce Clause case, United States v. Lopez (1995): “The theory that two governments accord more liberty than one [emphasis added] requires for its realization two distinct and discernible lines of political accountability: one between the citizens and the Federal Government; the second between the citizens and the States.” Congress’s use of its commerce power in passing ObamaCare eradicates those “discernible lines of political accountability.”

Even so, Congress’s enumerated powers support a vast and ever growing regulatory state, much of it based upon the Commerce Clause. Neither that Leviathan, nor the Supreme Court’s precedents upholding it, is now at issue.

Justice Antonin Scalia explained in another of the Supreme Court’s recent Commerce Clause cases, Gonzales v. Raich (2005), that the power to regulate interstate commerce, especially in conjunction with the power “to make all laws which shall be necessary and proper [emphasis added] for carrying into execution” its enumerated powers, gives Congress broad authority to reach even local and non-commercial activities when necessary to make legitimate regulatory schemes effective. Raich upheld federal control of purely local cultivation, sale and use of marijuana, and it is often incorrectly cited as support for the individual mandate.

But the Necessary and Proper Clause does not guarantee Congress whatever power it would like to reach its policy goals. That provision supports only otherwise legitimate exercises of Congress’s enumerated powers. So under the Commerce Clause, Congress can try to achieve universal coverage through regulating the interstate health-care insurance market, as ObamaCare does, by requiring insurance companies operating in that market to cover pre-existing conditions. Then under the Necessary and Proper clause, Congress could also require employers to collect data on pre-existing conditions from new hires so insurers can better plan.

Requiring all Americans to have health insurance may well create a new revenue stream for insurance companies so as to lessen these new burdens on them, but it does nothing to make these new coverage requirements effective regulations of interstate commerce as the Supreme Court uses that term. In particular, the individual mandate does not prevent avoidance or evasion of these new insurance regulations. Nor does it make compliance easier to police, as was the case in Raich. There, the ability to regulate local marijuana production and use was necessary to make its interstate regulation effective because, as Justice Scalia noted, the homegrown variety “is never more than an instant from the interstate market.”

Unlike the regulations at issue in Raich, the individual mandate applies regardless of anyone’s interaction with a commodity, service or other activity, like the interstate sale or transport of marijuana, that Congress can legitimately regulate. Put another way, the Controlled Substances Act is about the regulation of drugs, not people. It affects individuals only to the extent that they interact with the substances it proscribes, and it can be avoided by simply avoiding those substances.

Americans cannot escape the individual mandate by any means because it regulates them as people, simply because they are alive and here. That requires police power authority. Permitting Congress to exercise that authority—however important its ultimate goal—is not constitutionally proper and would forever warp the federal-state division of authority.

Messrs. Rivkin and Casey are lawyers who served in the Justice Department during the Reagan and George H. W. Bush administrations. They represented the 26 states in their challenge to ObamaCare before the trial and appellate courts.

A version of this article appeared Mar. 22, 2012, on page A15 in some U.S. editions of The Wall Street Journal, with the headline: The Supreme Court Weighs ObamaCare.

Source: http://online.wsj.com/article/SB10001424052702304636404577291883293776326