Court challenges will fail; federalism is dead

If you don’t like political commentary, don’t read this.

“It is illuminating for purposes of reflection, if not for argument, to note that one of the greatest ‘fictions’ of our federal system is that the Congress exercises only those powers delegated to it, while the remainder are reserved to the States or to the people. The manner in which this Court has construed the Commerce Clause amply illustrates the extent of this fiction. Although it is clear that the people, through the States, delegated authority to Congress to ‘regulate Commerce … among the several States,’ one could easily get the sense from this Court’s opinions that the federal system exists only at the sufferance of Congress.”—William Rehnquist writing in a concurring opinion Hodel v. Virginia Surface Min. & Reclamation Ass’n, Inc.
452 U.S. 264, 101 S.Ct. 2389 (Mem)

The federal system exists only at the sufferance of Congress. Doubt that? The health reform bill is a massive intrusion of federal power into private and local matters. While some states and individuals will challenge the constitutionality of the congressional action, chances of a victory are slim.

According to the Washington Post, “the Supreme Court has long allowed Congress to regulate and prohibit all sorts of ‘economic’ activities that are not, strictly speaking, commerce. The key is that those activities substantially affect interstate commerce, and that’s how the court would probably view the regulation of health insurance.”

Without a doubt this is correct. Insurance is an economic activity that could easily be found to influence commerce between the several states. The Supreme Court reasoned that water which often is not property in the traditional sense, but often is subject only to a “usufructuary right” was an element of commerce because it was important to agriculture, and agriculture is involved in interstate commerce. (In Sporhase v. Nebraska, the court struck down a Nebraska law that prohibited the exportation of water without a permit as an unreasonable interference in commerce because the statute required reciprocity before the issuance of a permit. While not a perfect example, it struck me at how far afield from traditional elements of commerce that the court has traveled. Rehnquist in dissent wrote, “‘Commerce’ cannot exist in a natural resource that cannot be sold, rented, traded, or transferred, but only used.”) If Commerce exists in something like this, then commerce must exist in everything. What then are the limits of Congressional power?

But things get worse. Also, according to the Post, “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.”

Does Congress have the power to require this? The question centers on the exact nature of the power to regulate commerce. If we conclude that insurance is subject to Congressional regulation, and the court precedent seems clearly to indicate it would fall under the expansive Commerce Clause powers, how far does congressional power extend? Unfortunately, the power is limitless. Chief Justice John Marshall wrote in Gibbons v. Ogden that the federal commerce power was “plenary,” or “limited only by the ‘wisdom and discretion of congress, their identity with the people, and the influence which their constituents possess at elections.” (Quote from the American Constitution: Its Origins & Development Seventh Edition. The actual quote in Gibbons v. Ogden was more verbose.)

How limited can “plenary” power be? Will any court reason that Congress has finally exceeded its authority to act? Or will the courts declare this a political matter?

The trend seems to indicate it would be a political matter and the courts would refrain from intrusion. This seems a radical departure from the system created by the founders. The Constitution of the United States created a system of limited government; the national government was limited to powers delegated to it via the constitution, and state governments were also restrained through the Contracts Clause and through delegation of Commerce powers (and other powers) to Congress.

However, the health reform bill ends any notion of limited government.

The Rubicon has been crossed. Don’t expect the courts to do their job. The only hope is the ballot box.

33 Comments

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  1. 2
    alex hamilton

    Maybe, maybe not. If you’re asking me to bet on an industry that can commit all of its resources to find a weakness in a bill in order to defeat it through challenge versus an excrement sandwich that liberals ram rod through Congress for a big pat on the back, then I’m going to put my money on an industry.

    The simple thing at work is that liberals have made sure that they use their power to grow their power and conservatives are content to sit on their ass or make their own money.

    George Bush is as much to blame for the degredation of the country as Barack Obama. And their blame is equal, and not greater than, each of us that are too lazy to go and vote. Liberals get out their vote early and often, they even get the dead to vote (twice in Chicago), so Americans only have themselves to blame for allowing a jackass like Obama to ruin the country.

  2. 3
    Greg

    Federalism is dead, and has been for some time I am afraid. This latest bid for totalitarianism won’t be the last. The takeover of student loans buried in the same package might be even scarier. While I would like to see a robust legal challenge to the HCR bill, my money is on the ballot box.

  3. 4
    Ballplay Indian

    Alex is actually close to the truth. The Fed. Government is a mirror reflection of the country that put them into power. Unfortunately , our country is to blame. This means that there are more idiots in the U.S. than sane people.

    Not good.

  4. 5
    Joe

    Any suggestion the health care industry does not trigger the Commerce Clause is absurd. Doesn’t anybody wonder why insurance companies are the only industry in the U.S. which are not subject to antitrust laws? The only industry which can price fix with impunity? Motorist are required to maintain auto coverage; is that an improper intrusion by the Government into our lives? It is amazing to me to read these comments which are nothing more than a defense of the health care insurers.

  5. 6
    capstonereport

    State governments are the ones who require insurance for those driving, and not Congress. The states possess a treasure trove of powers beyond the small set of powers handed to Congress in the constitution.

    Insurance has traditionally been held as not commerce and solely regulated by the states. I tend to agree that insurance has become a critical element of business and would fit how the court construes the commerce power. However, can Congress require economic activity?

    I don’t think it should have that power. Otherwise, our system of government is not limited by the constitution; rather, the constitution would in one small clause render citizens nothing more than serfs. Serfs who can be told what to buy, when to buy it and face punishment for failing to buy the right thing.

    That isn’t America.

  6. 8
    THE CRIMSON HAMMAH

    BURNING IN THE LAKE OF FIRE FOR ALL ETERNITY IS NOT ENOUGH PUNISHMENT FOR THESE POLITICIANS …SOMEONE NEEDS TO STEP UP TO THE PLATE.

  7. 11
    THE CRIMSON HAMMAH

    I LOVE TIGER WOOD’S COMMENT – ONE INCIDENT OF ADULTERY WAS BAD ENOUGH BUT OBVIOUSLY THAT WAS NOT THE CASE

  8. 12
    THE CRIMSON HAMMAH

    ROOTED AGAINST TEBOW ALL MY LIFE UNTIL HENNE SAID TEBOW WOULD NOT BE AN NFL QB AND EVERYBODY ASSUMES HE GOT THAT FROM TEBOWS QB COACH AT THE SR BOWL

  9. 13
    THE CRIMSON HAMMAH

    QUOTE OF THE DAY….JERUSALEM IS NOT A SETTLEMENT..IT IS OUR CAPITAL. MY PRESIDENT AND YOURS – BENJAMIN NETANYAHU 3/22/2010

  10. 14
    Pacheydurm Pride

    There is a lucifers hammer of sort that can still be played:

    State legislatures needed to convene a Constitutional Convention: 34

    State legislatures needed to agree for an amendment to the Constitution proposed in a Constitutional Convention to be ratified: 38

    This path to amending the Constitution has never been used, but there’s always a first time. In any case, the President has no power to veto any proposal or ratification coming out of the process.
    In the nearly 225 years since the adoption of the Constitution, we’ve never held another convention. Maybe it’s time. Maybe that’s why so many fear it but it seems preferable to the more contentious way of resolving Constitutional conflicts. We’ve done that once before… in 1861. Once was enough.”

  11. 15
    Ballplay Indian

    Joe. Your right about the insurance companys being a monopoly to a point. I get your meaning , but they are not a true monopoly in the sense that there are MANY Ins. co. out there and they keep the prices low. At least in the automotive sector. Not so in the medical sector. The problem in the automotive sector is the way they gouge and set prices on the repair facilities. Wich is exactly what the Fed. will do to the healthcare system…..And therefore lower the quality of healthcare, research, engineering, etc.

    There is / was some much needed reform in the legislation of how these co.s can regulate / administrate how, or who people can see for their medical care. This is the complete opposite of what we got in this healthcare bill. The states (as cap pointed out) have enough control to set a lot of that straight. But choose not to.

    In a nutshell, the Gov. wanted control over those insurance dollars. That is all it boils down to. Yes, illegal immagrants healthcare bills will no longer be flipped by the Fed.

    We get that honor now.

    They saw a big pile of money, and a way to hand someone else the bill. So, they pulled the trigger.

    Social Security is a bigger problem than helthcare. Why do they not act on that, and allow the private sector in on that pule of money ?

    Control.

    The only reason they acted on healthcare was not about our contrys healthcare. It was / is about control.

    Does anyone know of someone that has been refused healthcare ? I didnt think so.

  12. 16
    TideFanAtlanta

    Federalism Dead? You think so? Yikes look at history, nothing new here.

    This is about money. The folks that are against it the most are the ones sticking it to the rest of us.

    First, all of the folks that are picketing and saying “don’t mess with my healthcare” are selfish. Obviously they have healthcare and don’t care about anyone who does not. It is amazing how people who say they love America, don’t give a hoot for Americans.

    Second, everyone of those folks will, upon their retirement, want to take their Social Security and their MEDICARE.

    I have no patience with them.

    The sad thing is that other countries (and I have friends in Canada and France) have it better and cheaper that US? That is wrong. We are getting screwed everyday and so are the companies that we work for.

  13. 18
    Rob M.

    Comparing the HCR bill to car insurance has two problems:

    1) You don’t have to own a car. Crazy to think about it in AL or up here in NJ, but plenty of people in NYC (and other metro areas) don’t own cars. Therefore they don’t have to pay any insurance.
    2) If you do have a car you are usually only mandated to have liability. So you are only covered for injuries to other people’s property or medical costs.

  14. 19
    Ballplay Indian

    Rob, your right. There is no comparison.

    How many different car insurers do you have to choose from in this state ? 2 dozen ? Each offering different policies to suit you, with rates depending of that policy, and the make and model of car.

    Your pretty much stuck with the same body.

    The healthcare system will not benefit from this bill. It will have a negative impact. JMO.

  15. 20
    THE CRIMSON HAMMAH

    I PREDICT A CIVIL WAR – THE MILITIAS OF THE RIGHT VS THE UNIONS AND THE MOB ON THE LEFT ..NOT SURE WHO WILL DRAW FIRST BLOOD…BUT WHILE WE R HAVING OUR CIVIL WAR WE WILL BE VULNERABLE TO A FOREIGN INVASION….AMERICA BLESSES ISRAEL AND IT ALL GOES AWAY FOR NOW

  16. 22
    Joe

    While it is true, an individual may choose not to drive and therefore would not be compelled to purchase car insurance an individual does not have any control over whether they become ill and need healthcare. Those individuals who choose not to purchase health insurance raise the price for everyone else. The cost are on an unsustainable path. It is a utility and needs to be regulated as such. Those who believe the government is “taking over health care” are just uninformed. If you disagree with the interpretation of the “rights reserved to the states” amendment, that battle was lost more than 100 years ago.

  17. 23
    capstonereport

    People who engage in promiscuous sexual activity increase the risk of STDs and thereby increase the medical costs faced by the national health insurance system. Therefore, persons should be prohibited from engaging in sex except for once every seven years.

    According to Comic Book Guy in the State of the City Address in Springville: “Inspired by the most logical race in the galaxy, the Vulcans, breeding will be permitted once every seven years. For many of you this will mean much less breeding, for me, much much more.”

    If the state can regulate any activity with economic consequences, then it can regulate any activity because every element of human life has some economic result.

  18. 24
    Joe

    You can engage in promiscuous sexual activity with as many consenting adults as you can find. You can engage in wide variety of activities which increase your risk of serious injury or death. Just don’t do the cheerleader and send me the bill. Your not regulating the activity you are requiring individuals to be responsible for the activity. By the way I like your web page.
    RTR

  19. 25
    Rob M

    Joe, you need to do some more digging and see why costs are on an unsustainable path.

    1)People don’t know what their true health care costs are. Wage controls during WWII caused companies to offer benefits instead. Now companies don’t have to pay taxes on benefits. This does two things: Lowers employee’s salaries and keeps people from knowing how much health care costs them.

    2)Politics: Politicians love to pass laws to force insurance companies to add things to coverage. NJ forces all insurance plans to cover In-vitro Fertilization. $30K for something that might not work.

    There are so many other barriers to reducing costs, mostly implemented by the federal government, that they are too many to name.

    A common sense approach that focused on letting the market truly worked would have been more prudent and reduced costs.

  20. 26
    capstonereport

    I’m depressed! I tried and tried to find that Simpsons episode to embed, but couldn’t find it. Thankfully, South Park provides embed code!

    This has nothing to do with health insurance. I just thought it was funny.

  21. 27
    capstonereport

    And thanks for stopping by. Hopefully, it provides some entertainment while we await some REAL football news. 🙂

  22. 28
    Joe

    Rob M, Respectfully I have done the digging. What could possibly be unreasonable about requiring a carrier to have a “loss ratio” of 80% particularly considering the significant games that are played with “reserves”? By the way such a loss ratio would allow for a return far in excess of 20%. Very few people know nor understand how medical bills are priced or created. The 30k example you use is not based on actual cost even providing for a reasonable rate of return. Why do you think the price of the same blood test often fluctuates on a quarterly basis. Why does a kit with a toothbrush and toothpaste cost $24 on your hospital bill? It has nothing to do with the cost of the kit or the overhead associated with the cost. It is a complicated topic. The bottom line is health insurance in most states operate in a vacuum acting as monopolies to control an inelastic economic service with virtually no regulations. While the current bill is not great it is a start and the more people really understand the issues the more they will come to understand some regulation of insurance companies are needed. Monopolies which can price fix without being subject to anti trust litigation or regulation are not a good business model.

  23. 29
    RabitHead

    Totally OT, but I find nothing funnier than when South Park tackles Scientology, or the Mormons, “dumb, dumb, dumb!”

  24. 30
    THE CRIMSON HAMMAH

    CAN WE DEFEAT THESE SCUMBAGS WHO TRAMPLE ON THE GRAVES OF EVERY SOLDIER WHO FOUGHT AND DIED AND GAVE THEIR LIVES FOR WORLD FREEDOM…

  25. 32
    julio

    As to the “federalism” argument, I think it will be more interesting to watch the court battles than the title of this article suggests. There is little doubt that Clarence Thomas would throw the entire thing out based upon his interpretation of the commerce clause. Scalia has shown that he lets his personal political views guide his interpretation of the commerce clause, no matter what he says otherwise (feds pass law about gun free school zones – not allowed by the commerce clause; feds pass a law that prohibits someone from growing pot in their backyard solely for their own personal use – that affects interstate commerce and is allowed by the commerce clause. What the %#@!????) Roberts and Alito haven’t written that extensively on the CC since they’ve been on the Supreme Court, although I have no doubt that they are “federalists” by nature. I certainly wouldn’t be suprised to see them strike down at least portions of the bill. That’s 4. Kennedy will be true the wild card. He’s (in)consistent with Scalia on the guns and pot cases. It will be fun to watch things develop.

  26. 33
    BamaHate

    Great article Cap,
    Joe one thing you have wrong is the reason for overpriced hospital bills to insurance is because the hospital charges so much to offset all the people who don’t pay. Insurance companies in effect already pay for those who don’t pay by indirectly paying more for those who do have insurance.

    Therefore, insurance companies are not so evil after all. They still are a monpoly so I agree with you about that. However, interstate competition would solve this problem.

    One poster talked about the Constitutional convention. I have heard of that and wrote my state senator in FL about it to limit terms for US Congress. Another good idea would be to have a vote of no confidence on a seated US Senator, like Rangel if they are obviously corrupt. Something like the State attorney general could petition the State supreme court to repeal the seat and have a popular vote of no confidence. Reed and others would have long been gone and less likely to only listen to lobbyists instead of the voting constituency. This would subjugate our national politicians more to the will of the people or they could lose their job at any time. Sounds good to me.

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