The score is now 2-2: Two U.S. district courts have found that the individual mandates in last year’s federal health care act are authorized by the power of Congress to “regulate Commerce . . . among the several States,” while two have found the contrary. This latest decision – arising from a case brought by 26 attorneys general and governors – invalidated the entire law, not just the mandates. The Obama administration had defended the mandates by claiming they were crucial to the operation of the law. The court said “okay”— if the mandates are so crucial that the rest of the Act can’t operate without them, then the rest of the Act gets trashed, too.
This latest holding, like the one immediately before it, invalidated the mandate on the ground that it regulated “inactivity” (failure to buy insurance) rather than “activity.” The distinction arises because the modern Supreme Court holds that under the Commerce Clause (or, more precisely, under the Necessary and Proper Clause), Congress may regulate activity that is NOT interstate commerce if it is “economic activity that substantially affects interstate commerce.”
The Obama administration argued that failure to buy insurance was “activity,” but this fell flat with the court. The judge did not say so, but saying that a power to “regulate ….Commerce” includes a power to regulate those who refuse to engage in commerce is a little like saying that Congress’s power to “define and punish Piracies” authorizes it to punish people for NOT being pirates.
This latest opinion held one disturbing aspect for the advocates of federalism. In 1986, the Supreme Court said that if Congress were to impose sufficiently burdensome conditions on federal grants-in-aid, the courts would strike down those conditions as “coercive.” That pronouncement came in a case upholding a condition that the state raise its drinking age or lose 5% per cent of federal highway funding. The court held that 5% percent was not sufficiently coercive.
The health care law went much further, however. It imposed extremely costly conditions on states receiving Medicare funds, apparently with the threat that if the states didn’t meet the conditions they could lose all (not just 5%) of Medicaid funds. Since federal Medicare aid is now a monster portion of all states’ budgets, the threat would seem to qualify as coercive.
Yet the court dismissed that part of the states’ complaint, saying it did not have the wherewithal to judge whether and when such threats become “coercive.” Unless the Supreme Court overrules this part of the opinion—or, better still, pares back Congress’s spending power to constitutional limits—the trend can continue toward rendering the states mere puppets on the federal string.