In the immediate aftermath of the historic three-day hearings there was much buzz about the fate of the Affordable Care Act. There was a palpable sense, in the blogosphere and in the physical world of the DC area, that the ACA was in deep trouble. I kept going back to the idea that I could not see Justice Kennedy, in spite of some of his negative questions about the constitutionality of ACA, ruling with the four conservative justices against this act of Congress. Now comes a lengthy article in The New York Review of Books by the law professor Ronald Dworkin that includes this thoughtful analysis of why Kennedy will indeed rule the ACA to be a constitutional exercise of congressional power.
Do the Supreme Court’s past decisions nevertheless force it to strike the act down out of respect for precedent? No, on the contrary the precedents emphasize that the Constitution’s allocation between national and state power rests only on the subsidiarity principle I described earlier—giving Congress power to deal with national issues—and so they confirm that the conservatives’ distinction is irrelevant.
Two great chief justices set out that principle in these often-quoted remarks. In 1824, John Marshall, in Gibbons v. Ogden, said:
The genius and character of the whole government seem to be, that its action is to be applied to all the external concerns of the nation, and to those internal concerns which affect the States generally; but not to those which are completely within a particular State, which do not affect other States, and with which it is not necessary to interfere, for the purpose of executing some of the general powers of the government.
In 1937, in the Jones & Laughlin Steel case, Charles Evans Hughes said:
Although activities may be intrastate in character when separately considered, if they have such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens and obstructions, Congress cannot be denied the power to exercise that control.
The precedent most directly in point is the Court’s 1942 decision in Wickard v. Filburn. The Agricultural Adjustment Act of 1938, which was designed to protect the market price of American wheat by limiting production, was applied to limit the wheat a farmer could grow on his own land for his own consumption. Justice Robert Jackson, for a unanimous Court, said that restricting what farmers could grow for their own use was a valid exercise of congressional power because it meant they would have to buy the wheat they needed in the market and so helped to sustain the price of that commodity. Jackson treated forcing large farmers to buy some of the wheat they need as an important part of the act: he drew no distinction between forcing them not to sell wheat and forcing them to buy it: if either had a significant impact on the national economy, it was a proper subject for congressional regulation.
By the end of the twentieth century it seemed that because local, national, and indeed international economies had become so densely interwoven, there was almost no limit to the regulatory power the subsidiarity principle gave Congress. But in 1995 and 2000, in two 5–4 decisions, conservative justices called a halt to the extension of national authority over local matters. In United States v. Lopez they denied Congress the power to forbid handguns in or near schools and in United States v. Morrison they denied it the power to provide civil remedies to battered women. Liberals deplored these decisions because they denied needed powers to the national government. But they could be defended, at least plausibly if not persuasively, as an application of the subsidiarity principle.
Kennedy wrote an instructive concurring opinion in Lopez; in view of his potential swing vote in this case, we must pay particular attention to that opinion. He endorsed a dynamic, shifting application of Congress’s power to regulate commerce. He spoke of “the Court’s definitive commitment to the practical conception of the commerce power” and he quoted this from an opinion of Justice Sandra Day O’Connor in an earlier decision:
[The federal-state balance] has been sufficiently flexible over the past two centuries to allow for enormous changes in the nature of government. The Federal Government undertakes activities today that would have been unimaginable to the Framers in two senses: first, because the Framers would not have conceived that any government would conduct such activities; and second, because the Framers would not have believed that the Federal Government, rather than the States, would assume such responsibilities. Yet the powers conferred upon the Federal Government by the Constitution were phrased in language broad enough to allow for the expansion of the Federal Government’s role.2
Kennedy said that nevertheless the subsidiarity principle, even so broadly understood, would not permit Congress to forbid guns in school. “The statute now before us,” he said, does not have, in either design or purpose, any “evident commercial nexus.” Furthermore, it “forecloses the States from experimenting and exercising their own judgment in an area to which States lay claim by right of history and expertise, and it does so by regulating an activity beyond the realm of commerce in the ordinary and usual sense of that term.” None of that applies to either health care or health insurance. These are both very much caught up in a national nexus of commerce and, particularly through such programs as Medicare and Medicaid, Congress has a much greater experience in those areas than any state does.
In these passages Kennedy emphasized two cardinal ideas. The first is that when Congress regulates commerce in a new way, the novelty of its mode of regulation is not in itself an objection to its power to regulate. Changing economic structures require changes in regulatory strategy. He cited the Wickard decision I just mentioned, in which the Court upheld Congress’s then novel limit on growing wheat not for commerce but for home consumption. It would therefore be surprising if he thought that the novelty of the act’s mandate requiring people to buy health insurance is in itself a ground for constitutional objection.
Second, he insisted on a “practical” test of the proper distinction between federal and state power. It does make sense to place what he called, in the oral argument of the present case, a “heavy burden of justification” on those who defend a new mode of regulation. But that burden must be understood to require them to show convincingly, not that the mode is not new, but that it is necessary to meet a truly national demand. Congress met that heavy burden by establishing, in its findings, that a national program of health care for everyone is desperately needed and that a mandate is essential to the program it designed.
Even the act’s opponents concede that since the Constitution explicitly gives Congress the power to “lay and collect taxes,” it could establish a single-payer national health care system, like the British National Health Service, by imposing a special health care tax and providing medical care itself. Congress relied on the taxing power to make the Social Security program constitutional, for instance. Solicitor General Verrilli noticed the irony: the conservative justices questioned the constitutionality of the Affordable Care Act, which relies on private insurance and traditional private medical practice, while admitting that a program that gave the national government much more control over doctors and patients would survive any constitutional challenge. Of course, as the conservatives know, a single-payer system would be politically impossible in the United States now, or in the foreseeable future.
Verrilli made a further argument, however. He said that the act was already, even as adopted, a form of taxation and therefore should be held constitutional in virtue of the explicit taxing power even if not under the interstate commerce clause. The oral argument over this issue seemed largely about a question of language. The act describes what eligible people must pay if they fail to insure themselves as a “penalty,” which suggests a criminal regulation rather than a tax, and President Obama once denied that the act counted as a tax increase. On the other hand the prescribed penalty is to be calculated and paid as part of income tax, and it would be silly to think that those who are excused from the penalty, which include the very poor, are nevertheless criminals. It makes more sense to regard them as falling below a tax threshold.
In the oral argument Justice Kennedy set out the important substantive question behind the semantics:
I’m not sure which way it cuts, if the Congress has alternate means. Let’s assume that it could use the tax power to raise revenue and to just have a national health service, single payer. How does that factor into our analysis? In one sense, it can be argued that this is what the government is doing; it ought to be honest about the power that it’s using and use the correct power. On the other hand, it means that since…Congress can do it anyway, we give a certain amount of latitude. I’m not sure which way the argument goes.
Kennedy’s question comes to this: Is the proper balance between congressional and state power better secured by limiting what Congress can do or what it can say it is doing? Can the fate of an ambitious piece of legislation really turn on how many times the word “tax” appears in its text or on the accident of how many senators actually say, as several of them did in this case, that they were exercising the tax power rather than the commerce power? True, the American public is allergic to tax increases so that any such labeling might make some difference to a statute’s reception. But the act hardly lacked opponents who decried it as a tax increase and, in any case, it seems reasonable to ask people to judge a statute by asking what it actually does to or for them, not how politicians for and against label it. Our politics would be much improved if more citizens did exactly that.
The act could easily be recast, with no change of substance, to make it look more like what it really is: a more conservative example of using the tax power to achieve social justice, just as the Social Security Act does. It would then obviously be a valid exercise of the tax power. It seems worse than perverse to punish the nation for what its legislators happened not to say. So the act the conservative justices threaten to strike down is doubly constitutional: it is a legitimate exercise of Congress’s power both to regulate the nation’s commerce and to require its citizens to contribute to the cost of vital national programs.