However, the advocates of government‐controlled medicine are no longer laughing. The Eleventh Circuit Court of Appeals last week struckdown an essential part of the legislation. This evens the score, balancing an earlier decision by the Sixth Circuit to uphold the vast expansion of federal power. In the latest case, Judge Frank Hull, a Democratic appointee, voted with Chief Judge Joel Dubina to overturn the legislation.
The substantive sections of the majority opinion in State of Florida, et al., vs. U.S. Department of Health and Human Services run roughly 150 pages, making it the longest and most detailed decision yet. As such, noted my Cato Institute colleague Ilya Shapiro, the “ruling shows that the constitutional issues raised by the healthcare reform — and especially the individual mandate — are complex, serious, and non‐ideological.”
The decision obviously will affect Americans’ health care. But the more basic issue is whether there remains any limit to the reach of the federal government. The Framers viewed the national government as having important but only limited and enumerated powers. That is, Washington was an island of government authority in an ocean of individual liberty.
Over the years the courts have gutted constitutional doctrines intended to limit state power and justified almost any government action unless barred by the Bill of Rights. Indeed, the Commerce Clause, which authorizes federal regulation of commerce “among the several states,” has been interpreted to largely swallow up Article 1, Section 8, which enumerates Congress’s authority. The ocean became one of government power, with but a few islands of personal freedom.
However, Obamacare went further than any previous federal intrusion. In the name of regulating commerce, the law ordered people who had not entered any market to purchase a private product. If upheld, the measure would establish the principle that Americans could be forced to buy American cars to bail out the auto industry, Lehman securities to save Wall Street, and homes to revive the housing market. Whether or not the insurance mandate is good policy — and there are lots of reasons to argue that it is not — it effectively dismantles any meaningful limits on the national government.
The five federal District Court decisions so far have broken three‐to‐two in upholding Obamacare. Although in the majority, the former have been less than persuasive. Indeed, District Court Judge Gladys Kessler stated in her opinion that the government could regulate “mental activity” — under a constitutional provision involving “commerce.”
All of these rulings were appealed. The Sixth Circuit was first to deliver its opinion, with the judges split two‐to‐one in favor of the president’s plan to treat passivity as if it was activity. Then last week the Eleventh Circuit said no.
Twenty‐six states sued the federal government, challenging several aspects of the misnamed Patient Protection and Affordable Care Act. (The law actually supersedes patient choice and bends the medical cost curve upward.)
One claim was that the legislation’s dramatic expansion of Medicaid, which would impose additional costs on the states, was “coercive.” Explained Judges Dubina and Hull: “[T]he coercion test asks whether the federal scheme removes state choice and compels the state to act because the state, in fact, has no other option.”
Unfortunately, the states all have chosen to accept federal Medicaid dollars. With their hands greedily extended, they have been unable to convince any judge in any case that they could do nothing about the extra costs to be imposed. The Eleventh Circuit majority noted: “[S]tates have plenty of notice — nearly four years from the date the bill was signed into law — to decide whether they will continue to participate in Medicaid by adopting the expansions or not.”
States might want to stay in the program without paying more, but that is not the same as being unable to pay more. Thus, observed the judges, “Medicaid‐participating states have a real choice — not just in theory but in fact — to participate in the Act’s Medicaid expansion” and “Where an entity has a real choice, there can be no coercion.”
States should take this lesson to heart before again lining up for a federal handout.
The more important challenge was to the individual mandate. Under any serious interpretation of the meaning of “commerce” carried out “among” the states, not buying insurance does not qualify. The activity would have to cross state boundaries and, more important, actually be a commercial activity.
Under extraordinary political pressure the New Deal Supreme Court systematically denuded the Constitution of limits on government, substituting political preference for legal principle. In Wickard v. Filburn, the justices allowed the federal government to restrict a farmer from planting food for his family’s personal use, ruling that intra‐state non‐commercial activity was the same as inter‐state commerce, since the former could affect the latter.
It was a profoundly dishonest opinion, ignoring the plain meaning of the phrase as well as clear intent of those who wrote and ratified the Constitution. Had the recently rebellious Americans understood that they would end up authorizing the federal government to regulate almost every human activity with this one phrase, they would have struck it from the text or refused to ratify the document.
Still, Wickard only covered almost everything. Explained Judges Dubina and Hull in Florida v. HHS: “Nonetheless, the Supreme Court has staunchly maintained that the commerce power contains outer limits which are necessary to preserve the federal‐state balance in the Constitution.”
Those limits may be hard to discern, but the high court eventually enunciated them in two cases. In 1995 the majority ruled in United States v. Lopez that the Commerce Clause did not allow Congress to ban possession of a gun in a school zone since there was no commerce. In United States v. Morrison, decided in 2000, the Court overturned a penalty against gender‐related violence, since there was no “economic activity.” In both cases the Supreme Court recognized that accepting the government’s position yielded no obvious limit to government power. Said the majority in Lopez, “[W]e are hard pressed to posit any activity by an individual that Congress is without power to regulate.” The justices stepped back from that jurisprudential abyss.
After a detailed review, the Eleventh Circuit noted that Congress’ latest assertion of power is unprecedented: “Even in the face of a Great Depression, a World War, a Cold War, recessions, oil shocks, inflation, and unemployment, Congress never sought to require the purchase of wheat or war bonds, force a higher savings rate or greater consumption of American goods, or require every American to purchase a more fuel efficient vehicle.”
Equally important, the power being claimed through Obamacare is extraordinary. The majority added: