Constitutionality of Obamacare

by Don Boudreaux on March 21, 2010

in Health,Law

Is Obamacare constitutional?  Georgetown University law professor Randy Barnett, writing in today’s Washington Post, has some doubts.  Here’s a key ‘graf:

But the individual mandate extends the commerce clause’s power beyond economic activity, to economic inactivity. That is unprecedented. While Congress has used its taxing power to fund Social Security and Medicare, never before has it used its commerce power to mandate that an individual person engage in an economic transaction with a private company. Regulating the auto industry or paying “cash for clunkers” is one thing; making everyone buy a Chevy is quite another. Even during World War II, the federal government did not mandate that individual citizens purchase war bonds.

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  • Have some doubts? From my reading of Article 1, Section 8, it's not even a gray area, not even remotely close to being constitutional. I am at a loss to understand how an honest and otherwise intelligent person can read the Constitution and believe that this business is Constitutional.
  • muirgeo
    It's kind of a pretty pathetic complaint even from a libertarian perspective. Would you rather they mandated Medicare for all and took it directly out of your payroll and left you NO CHOICE were to get your insurance?? Many of us would have preferred that. This is a least some what of a market oriented approach allowing the individual to shop for the best deal.

    Would you rather they allowed you the option to direct your social security contributions into the market or just keep it the way it is?

    When your arguments bite your own tail they are usually not very well thought out.
  • Dr. T
    I agree that the proposed health care financing bill is unconstitutional, but many recently enacted bills are unconstitutional and are still in effect. Some were never challenged in the Supreme Court. Others were challenged but remain the law of the land because at least five of the justices ignored the unconstitutional provisions. Will the current Supreme Court rule that the federal government has again overstepped its constitutional limits with this health care financing bill? Probably not. My bet is that the Supreme Court will support the bill with a 5-4 majority. (I also predict that the decision will have an idiotically-argued majority opinion written by John Paul Stevens and a logically-argued minority opinion written by Clarence Thomas).
  • aussieBComm
    Stevens is retiring. It has been announced. I do not think that there will be a majority in agreement with this bill. It is so seriously flawed. I think that there will be a minority opinion that includes Sotomeyor. I am not sure about Ginsburg because she can be all over the place.

    The interesting member of the court will be Kennedy. I do think that he will consider any penalties applied as unconstitutional and will be on the side that will strike down the bill... but let's just see what happens.
  • aussieBComm
    If they are challenged and reach SCOTUS anything can happen. This is what happened in the Citizens United case. Clearly what was struck down was unconstitutional.
  • jacoboost
    I'm expecting a Nixon-wage-and-price-controls-like disaster that is quickly rescinded by the next administration. Dems think they've begun a transition process to universal socialized medicine, I think they've begun a process towards an absolute, unmanageable mess of a health care industry, economic nightmare, bad press, legal challenges, etc. At the very least, the mandate to buy "health insurance" will be overturned either through the courts or through politics.
  • vikingvista
    An "unprecedented" CotUS violation--on top of all of the precedented ones. Not really surprising. Nor should we expect the SCotUS to care either.

    The CotUS is long dead. Arbitrary rule is not more tolerable under the pretense of a CotUS. There is a bright future for human liberty, but it is WAY behind the horizon.
  • It’s very telling that the Democratic Party sees fit to put a known and convicted criminal in charge of the Legislative and Budget Process and even let him open his ignorant mouth:

    http://www.youtube.com/watch?v=CbHTJSu_2Lk

    People like this belong in jail, not chairing Congressional process subcommittees.
  • vidyohs
    "but when the deal goes down......all this talk about rules....we make 'em up as we go along"

    Hmmmm, wonder where I've heard that before.

    To answer your unspoken question amigo (People like this belong in jail, not chairing Congressional process subcommittees.), congress has used the authority here in this flaw, Art 1. Sec 5, para 2, 1st phrase, "Each house may determine the rules of its proceedings", to create the committee system and in so doing wrote all the nuance into that creation that allow scumbags to be appointed as committee members and worse as committee chairs.

    Of all the things that flaw permits, the committee system is the most egregious and corrupt; because it totally negates the principle of equal representation, allows one man to control a specific area of congressional operations to the degree that he alone can buy and sell influence with certainty, and makes we the people supplicants instead of supervisors.

    Because of that flaw, once seated, no congressman is controlled by his constituents.
  • Yep, thought you’d like that one, vids. Visual confirmation from that impeached bastard.

    The most interesting part is yet to come – state AGs huddling tonight to see what to do about this mess. It’s likely that this will pit most states directly against the federal govt., and if enough are adamant, that’s a constitutional amendment critical mass.

    This thing will be locked up for months, if not years, of lawsuits.
  • MilesStevenson
    I don't understand how this would be "unprecedented". Is he speaking only of the Federal level? Many states have enacted legislation for some time now that require citizens to buy auto insurance, or face punishment by the law. As awful as it is, I don't think it is a particularly "new" evil that we haven't seen before.

    As far as the comments I've seen on how this violates the Commerce Clause, I was doing some more reading on it last night and I would have to unfortunately disagree. It is a shame, but the language of the Commerce Clause is in fact so ambiguous that it essentially gives unlimited power to the federal government to interfere with trade as it sees fit. Luckily, it has been successfully challenged sometimes throughout our history, but there is no getting around that it was a poorly written section of the Constitution.
  • jpezz
    Auto insurance is "liability" insurance. You are required to purchase it for my benefit not yours. It is intended to protect me and my property from acts commited by you in the course of legally operating your motor vehicle on a public road.
    Heath insurance is purchased by you to insure risks associated with your health not mine.
  • Skinneyx1
    Driving is a privilege bestowed by -- and therefore controlled by -- the State. To exercise the previlege legally you must request it from the State. As such, the State can place stipulations upon that privilege (age, testing, insurance, infractions that result in a loss, or suspension of licence, et al).

    The intent of the Commerce Clause was to prevent one state from placing excessive burdens (taxes, levies, fines) upon the services or goods originating within another state. It was never meant to allow Congress to regulate commerce to the extent that they are now.
  • aussieBComm
    you are also wrong in the interpretation regarding the commerce clause. That can only relate to an activity, not a non-activity. Therefore it does not apply. Also, the clause relates more to activities that are USA wide, rather than state wide. At present people cannot purchase health insurance outside of their own state, thus I would think that the commerce clause does not apply because of an infringement of state rights.
  • aussieBComm
    auto insurance is a very different matter. If you do not have a car, you do not need to buy auto insurance. In my country we have compulsory third party insurance and you pay it each year when you re-register the car. It is not the same thing and it is a very poor comparison.

    No one compels you to own a car, and if you do not own a car, you do not need that auto insurance. On the other hand everyone is compelled to have health insurance. That is why it is different, there is no choice to be made.
  • AU03
    Driving a car is a privilege- by turning a certain age one does not gain that privilege spontaneously. They have to meet other requirements (driving tests, eye tests, etc). The only "requirement" to being subject to the individual mandate of the health insurance legislation is a beating heart.
  • MilesStevenson
    I agree that driving a car is *treated* as a privilege, but do not concede that it *should* be a privilege. Which is why I don't see that forcing citizens to buy insurance because they own a car is any more legitimate than forcing citizens to buy health insurance if they meet some other criteria, which, as I understand, is a criteria that has yet to be revealed by this bill.
  • MilesStevenson
    Thank you all for the many distinctions between auto insurance and health insurance. I am aware of them. I'm not sure why everyone felt the need to point all of this out, but I am aware that there are many differences between the two.

    My point, was simply that I did not find this particular abuse of government power surprising or "unprecedented". That is all.
  • brotio
    I don't see that forcing citizens to buy insurance because they own a car...

    They don't mandate you buy insurance (Mesa's right, the States have been spectacularly awful at forcing citizens to buy insurance) because you own a car. They mandate that you buy insurance if you're going to drive it on government-owned roads. If you buy a truck that never leaves your farm, there is no mandate that you insure it.
  • AU03
    I believe the only criteria is to be a living, breathing human being.
  • DCribbin
    If the only requirement that need be met before the government is able to brings it's force to bear against you to make you heel, is that you have a pulse , then their power is infinite and your rights are nil.
  • MilesStevenson
    Well, if that turns out to be the case, then I'll have to agree with you that it probably does more damage than auto-insurance requirements. I'd probably be easily convinced of that anyway though.
  • vikingvista
    States have tremendous leeway under the CotUS, since the CotUS primarily describes what the Federals can do (and in the superfluous bill of rights, can't do). Mandating auto insurance purchases is a violation of the spirit of the CotUS, but since it is enforced on a state level, the CotUS doesn't have jurisdiction. So, I do think there is a key difference between a Federal, and a state, mandate. "Congress shall make no law..." has no bearing on state legislatures.

    But I also don't think it matters, practically speaking. The Federal government violates the CotUS routinely, and has for a long time. It is a virtually dead document. The same people who selectively appeal to it as it serves them, also actively campaign against it when it doesn't. The Noble Experiment has failed.

    As a matter of principle, mandatory auto insurance is clearly immoral. There isn't even a strong practical reason for it, since insurance is available, and properly used, for an individual to protect *himself* against events, not to protect others. And as always, it is my moral right to decide if I want to buy an insurance product, or simply insure myself. Taking away that right is always an act of force against the innocent.

    States do grant privileges, because they have the army to enforce it. But those privileges are not legitimate, and a free people should never respect them, even if they choose to obey them to avoid having their kneecaps proverbially busted.
  • aussieBComm
    I am going to disagree regarding the mandatory auto insurance, but I will do so from the point of view of what we have in Australia since I do not know whether what you have applies only to the car or to personal injury.

    I do not believe that it is immoral to have the third party personal injury insurance. However, some people do make fraudulent claims against it but that is a different issue.

    The personal injury insurance that should be attached to people driving on our streets protects those who have been injured as a result of the negligent driver. To give an example: a family of 6 is traveling in a car and comes to an intersection. The car has the right of way (let's say that it has green traffic lights). However a car coming to the left of that vehicle goes through the red light and plunges into the car. The family car is a write-off, through no fault of theirs. The occupants of the car are injured - one is critically injured (but she survives), the others have more minor injuries including a broken collar-bone and concussion. Obviously there are hospital bills. The third party personal injury insurance pays for their hospital and other medical bills. Without the third party insurance the family has to hire a lawyer, and sue the other party, putting up with delays (and in the real case the negligence of the lawyer hired meant the claim was not put in on time so the family did not get just compensation).

    The third party insurance means that you have protection against any claims for personal injury that has been caused by your negligence by persons in your car or in another vehicle, or one who is a pedestrian and has been hit by your vehicle.

    On the other hand, it should be up to the individual to insure a car against property damage, yet it is a good idea to at least have third party property damage. Do you want to have to pay for damage to a BMW or a Mercedes or a Jaguar?
  • vikingvista
    Insurance is not (obviously) just sold for events that are your fault. The laws mandating insurance coverage in this country have proven so successful, that there is an active market for insurance to cover you against uninsured motorists.

    If you want to be financially protected against someone hitting you (or against any unlikely costly event), then buy insurance to cover it. Trust me, your insurance company will have a lot more success in going after the at-fault party for damages than you ever will. And anyone afraid of ever being that at-fault party, should consider buying insurance to cover that as well.

    There is no need, and certainly no justification, for lawmakers to be twisting the arms of the innocent.
  • Not everyone drives, Miles. Everyone who makes that choice is required to be covered, but no one is forced to make that choice.

    [And as an aside, come on down to the Southwest to see how many folks drive without insurance here – some who are here legally, too]

    That’s unprecedented.
  • MilesStevenson
    A valid distinction, but I'm not sure how much that distinction is worth. If we were all required to buy TV insurance, I would be willing to bet that there would be more people outraged about it than making the point "well, not everyone has a TV, so it's not quite that bad."

    I am against the bill of course, I'm simply not amazed or surprised about it, nor do I see it as being inconsistent of government behavior in the past.
  • Probably too late for this thread, but Prof. Barnett offered an explanation to this very question in his Q&A today:

    Alexandria, Va.: If the Supreme Court overturns health care on the basis of it being mandatory -- can I cancel my car insurance (I'm an excellent driver) and stop paying the mandatory flood insurance on my HUD loan?

    Randy Barnett: Good question! There is a difference between saying "If you want to do X, then you must do Y" and saying "If you are alive, you must do Y." The first happens all the time. The only clear example of the second at the federal level is the military draft, which is analogous to mandatory militia service. But this question truly goes to the heart of the question of what power government has over the people.
  • It’s compelling people – all of them - to purchase a service, which has never been done before in this country.

    Never mind that government run health programs have never been tried on this scale before, and that we can’t afford it….
  • BTFU_95
    How spurious. Anyone who works is required to purchase the services of the federal government - use / need them or not. Your argument is tantamount to saying the income tax is unconstitutional (which some argue but most do not agree).

    If I purchase gas, I pay for roads, regardless of whether I drive. You can argue the commerce clause covers that as we all benefit from roads indirectly, but couldn't the same case be made for health insurance since federal law mandates treatment (at least critical stabilization) of all persons regardless of means?
  • Way to be late, but thanks for trying. I'll play along.

    You are arguing that the personal mandate constitutes a tax, and that power is expressly granted to the federal government. Agreed. Strangely, Mr. Obamalini doesn't think it's a tax, but that's a political/economic argument.

    What this "tax" then hinges on is a definition of "commerce," particularly "Commerce...among the several states" [Article 1, Section 8, Cl. 3]

    While I'm no constitutional lawyer, I would find it hard for "interstate commerce" to envelop personal insurance and risk mitigation in meaning (especially given that current law prohibits interstate sales of this very type of insurance). Nor would I accept a definition of "tax" which includes a mandatory purchase of a good or service of which any random consumer might not necessarily avail themselves (i.e. "voluntary"). The secondary incidence of a gas tax, regardless of driving status, is just that: secondary. No one is forced to purchase gas. No one forced you to buy that lawn mower, or whatever. Here, everyone is forced to purchase health insurance.

    A logical extension of this would be life insurance: everyone dies, and there are costs associated with that, so why not require everyone to have some form of de minimis life insurance?

    If you wish to argue that the Supreme Court should extrapolate this power, then I will argue they should extrapolate the economic impact such a decision would have. In allowing this massive new expansion of federal power, all states would be negatively impacted to varying degrees (also a per capita issue). The federal government cannot be allowed to expand both state and federal liabilities ad infinitum. That is an automatic recipe for disaster, and is economic more than legal, but is highly relevant nonetheless.

    That state tax impact also has Article 1 and 10th Amendment ramifications: the federal government cannot compel states to raise revenue for federal causes. It clearly does so here, and the state attorneys general case against ObamaCare is predicated on this.

    So that argument falls apart on numerous fronts, not the least of which is unprecedented new taxation power compelling people to purchase a service.
  • AU03
    "While Congress has used its taxing power to fund Social Security and Medicare, never before has it used its commerce power to mandate that an individual person engage in an economic transaction with a private company."

    Though it wasn't an act of Congress, didn't the Supreme Court decision Wickard v. Filburn kind of establish a precedent for forcing an individual to engage in an economic transaction with a private entity, in saying that by violating wheat growth quotas, Filburn was engaging in activity that, had it not been undertaken, would have resulted in more commerce.
  • Mommsen1625
    Yes, but the moronic wheat quotas of the FDR administration (we must always keep in mind that it is FDR which gave us the abomination known as agricultural subsidies) did not require than anyone grow wheat; only that if they grew wheat they had to sell it at a set price, etc.
  • AU03
    Very true- the individual mandate basically is saying that life is a privilege that requires purchase of a certain product, whereas ag quotas require a conscious decision to grow things in order for them to be applicable.
  • Up to 38 states are projected to file legal challenges against this if it passes. Litigation is inevitable.

    This represents a departure from "regular" legislative process for the reasons Prof. Barnett gives, and also because a legislative body is directly flouting the political sentiment of the country on a comprehensive program, impacting every single American. That will have profound effects in November, likely larger than anticipated right now, as details about how poorly constructed this bill is and second order effects become clearer.

    Politically, if this isn't passed, it's effectively the end of the Obama presidency. The stakes are so high here, any loss would be devastating.
  • vikingvista
    Gee. The progressives lose the next election. But win the remaining days of this country. I think they consider that a fair trade.
  • Indeed, win at all costs.

    I do think there are some very legitimate challenges here, and that this bill likely will not survive the scrutiny process. The question then becomes, is it fixable?

    Constitutionality aside, the economic component, specifically, the small business job-killer aspect of this legislation, will almost certainly be changed within a year, if not sooner. It risks turning the Democrat party into a permanent minority.
  • muirgeo
    Hey how's our law suit coming? Let me know when it's my turn to testify.
  • These things take a while, fool (you should know that from your malpractice suits, no?):

    http://www.bloomberg.com/apps/news?pid=20601087...

    All in good time…
  • Update:

    It’s looking like tonight’s House vote will be ceremonial, at best. Senate Republicans have found a point of order which will kill the reconciliation bill in the Senate (if the Senate parliamentarian agrees, which he likely will), forcing another House vote:

    If Republicans can get the parliamentarian to agree with them even once, whatever ultimately passes the Senate will have to go back to the House. And Democrats in the House quietly admit that its very likely they will have to vote again on the reconciliation fixes at some point down the road.


    GOP Says Senate Parliamentarian Will Kill Fix-Its Bill
  • Much of what the Federal Government does is nowhere authorized in the U.S. Constitution (and those who think the General Welfare Clause and Commerce clause play the role of Enabling Acts are encouraged to read Madison 41)

    t doesn't matter; as Lysander Spooner pointed out over 100 years ago, the Constitution is a dead piece of parchment, that the government it purportedly defines is for all intents and purposes not restrained by it.

    Obama's giant corporate welfare project for Health Insurance and Pharmacological companies will happen because a critical mass of U.S. citizens have learned civics, history, economics and political theory at government schools and through state licensed and regulated media, and have been well trained to believe that they have to accept whatever the state dishes out to them.
  • Randy
    It depends on how it is implemented. Social Security or Medicare would be unconstitutional if they forced people to buy a retirement plan or old age health insurance, but that's not what they are. They are simply a tax on income - and the constitionality of taxing of income is established (questionably established, but established). So if failure to buy health insurance results in a "penalty", it will be unconstitutional, but if it results only in a "tax", it will be constitutional. If they're smart (or at least devious) they will implement it as a tax credit that is only available if proof of insurance coverage is provided. In essence, what they'll do is just raise taxes and authorize a new series of entitlements.
  • aussieBComm
    they have set up such that there is a penalty for failure to purchase health insurance. They are not listing it as a fine but as a tax.

    When this goes to the Supreme Court the penalty provision will definitely be a part of the challenge so it will be interesting to see how the SCOTUS will view the penalty. Also, the fact that they have put a tax on the high end health insurance could be a problem.

    Keep in mind that they have provided for something like an extra 16000 to be employed by the IRS for implementation and checking what people have done, plus they have direct access to bank accounts.

    The "penalty" from what I have been reading is not in the form of a tax credit.

    I think that there are at least 3 other ways in which it can be challenged, including the fact that Congress has exempted themselves from the impact of the bill. That one is also unconstitutional.

    Then there is the commerce clause - this is a mandate based upon a non-activity. In other words if you do not comply you get fine via the tax system (a tax penalty). Again will be interesting to see how SCOTUS handles the commerce clause.

    Also "general welfare" has nothing to do with health or paying health insurance just in case of a catastrophic event. I see this as another area of challenge.

    The executive order is absolutely worthless, and not even worth a mention. If it is challenged it will be thrown out, that is if it has not already been reversed - I expect the double cross.

    I see the main issue for challenge as being that of States rights. Some people already say that the federal law will trump the rights of the states, but unless there is case law to back the assumption, it will be an area of intense interest.

    In the end, I would think that SCOTUS will rule on several provisions - that they are unconstitutional - including things like the cornhusker kickback.

    The whole thing has been dealt with in such a sleazy manner, with the bribes and corruption that it will be hard to see how people are just going to sit back and accept this takeover of health.
  • danielkuehn
    Well said.
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