NFIB v Sebelius: Wickard’s Wicked New Companion

My previous commentary, “Why Merely Repealing Obamacare Isn’t Enough,” was written in anticipation of the Supreme Court’s Obamacare verdict.   Its aspirational title reflected my conviction that, for the Supreme Court to restore true Constitutional order, it couldn’t just reject the insurance mandate and its unprecedented intrusion into the lives of individual citizens—it would also have to overturn a deeply flawed 1942 decision that inflicted catastrophic damage on our national compact, a compact where the federal government is limited to powers specifically enumerated in the Constitution.

Today, that once-hopeful title now serves as a bitter reminder of a Supreme Court decision that—rather than restoring appropriate boundaries to federal power—instead broke an astonishingly wide new hole in the safeguards carefully crafted by our founders.

The Court Ceases Fire on the Commerce Clause

The 1942 case, Wickard v Filburn, inflicted upon the nation an utterly implausible if deviously imaginative interpretation of the Commerce Clause, one that disregarded the context in which the clause was written, severely eroded Constitutional restraint and helped enable the sprawling federal government we have today—and its ever-broadening threat to personal and economic liberty, state sovereignty and its own fiscal security.

In the health care case, while leaving Wickard fully intact, five justices found the Commerce Clause offered no justification for a federal government mandate to purchase insurance—or any other product. Chief Justice John Roberts’ opinion declared:

“The individual mandate…does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product, on the ground that their failure to do so affects interstate commerce.  Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority.”

The opinion goes further, sounding a series of alarms about what such an expansive Commerce Clause interpretation would imply for the nation:

  • “The Government’s logic would justify a mandatory purchase to solve almost any problem.”
  • “Under the Government’s logic,… Congress [could] use its commerce power to compel citizens to act as the Government would have them act.  That is not the country the Framers of our Constitution envisioned.”
  • “The Government’s theory would…[permit] Congress to reach beyond the natural extent of its authority, ‘everywhere extending the sphere of its activity and drawing all power into its impetuous vortex.’ The Federalist No. 48, at 309 (J. Madison).”

Diabolus ex Machina

Given Roberts’ zeal in illustrating the perils of the government’s Commerce Clause logic, it’s almost inconceivable that he would then embrace a different premise to unleash essentially the same perils—and yet, that’s precisely what he did, declaring that the government’s mandate was within its power to lay and collect taxes.

To do so, he had to first conclude that the Patient Protection and Affordable Care Act’s financial consequence for not purchasing a qualifying health insurance plan—called, in Orwellian fashion, a “shared responsibility payment”—is a tax and not a penalty.  That conclusion flatly contradicts the language of the Act itself, which repeatedly refers to it as a penalty, never once in its 2,700 pages calling it a tax.  It also contradicts the positions taken by the law’s architects—including President Obama, who had memorably ridiculed those who would call it a tax.

More significantly, Roberts’ tax label is inconsistent with how the court has distinguished taxes from penalties throughout its history.  According to the non-partisan Tax Foundation, “tax” has been widely defined as “an exaction imposed for the primary purpose of raising revenue for general spending.”  If, however, Americans all rise to their newly-imposed “responsibility” to purchase health insurance, this so-called tax wouldn’t raise a single penny of revenue—making it clear that revenue can’t be its primary purpose.

On the other hand, the Tax Foundation notes, a penalty “is an exaction imposed for the primary purpose of punishing the payor for an unlawful act.”  As the dissenting justices note in their opinion, the Act:

commands that every “applicable individual shall . . . ensure that the individual . . . is covered under minimum essential coverage”…[and]…states that, “if . . . an applicable individual . . . fails to meet the requirement of subsection (a) . . . there is hereby imposed . . . a penalty.” (emphasis added).

Official 2005 photo of Chief Justice John G. R...

Chief Justice John G. Roberts (Photo: Wikipedia)

Clearly this is not a tax carrot—like a deduction for retirement plan contributions—but rather a federal stick used to penalize those who disobey a federal command.  Roberts embraced the notion that the mandate “makes going without insurance just another thing the government taxes, like buying gasoline or earning income”—blissfully unware, it would seem, of the vast chasm between taxing consumption or income and taxing a citizen’s decision to defy a government order to buy something the federal government thinks he should own.  Or, more fundamentally, the difference between taxing activity and taxing inactivity.

This plot twist was all the more surprising since not one of the lower courts had found the tax argument plausible.  Worse, Roberts remarkably declared the mandate both a penalty and a tax, conveniently calling it the former to permit the court to rule on the case and the latter to uphold its constitutionality.  It was a first:  Until Justice Roberts’ dubious display of cognitive dissonance, never in the long and varied history of Supreme Court tax rulings had an imposition been determined to be both a penalty and a tax at the same time.

A Broad and Intrusive New Federal Power

While the ruling’s immediate effect is to uphold the insurance mandate, the real danger lies in its potential to spawn countless future government mandates dressed up as “taxes.”  In his opinion, Roberts noted several attributes of the penalty that made him comfortable with his conclusion that it represented a tax:
  • “By statute, the (shared responsibility payment) can never be more” than the price of what Washington is commanding them to buy and “for most Americans the amount due will be far less”.   (Note: The insurance penalty varies by income,  reaching, for example, $2,250 at $100,000 of income)
  • “It may often be a reasonable financial decision to make the payment rather than (the) purchase”
  • The penalty doesn’t apply to households whose income is too low to pay federal income tax
  • “The payment is collected solely by the IRS”
  • There are no “negative legal consequences…beyond requiring a payment to the IRS”
  • It “produces at least some revenue”
  • The more the merrier:  Roberts felt it was tax-like because “it is estimated that 4 million people each year will choose to pay the IRS rather than buy.”

Etched in precedent, this list of attributes now offers a recipe for concocting new challenge-proof mandates far from the realm of health care.  Indeed, the universe of things the government can tax you for not buying is largely limited by the imaginations of legislators and lobbyists—solar panels, U.S. automobiles and fitness club memberships could all be fair game.   Who knows—with the federal debt racing toward $16 trillion, Americans may someday face a “solvency responsibility payment” paired with a command to buy U.S. Treasury debt.  

But that’s only just the beginning.  With Roberts noting that “taxes that seek to influence conduct are nothing new”—and with the Supreme Court offering ample evidence of its ability to expand previous boundaries—there may be little standing in the way of financial penalties for disobeying federal edicts that have nothing to do with purchase decisions.

While George Will and others are justified in taking a measure of satisfaction in the Supreme Court’s rejection of an expansion of government power under the Commerce Clause, Americans nonetheless face a grim reality:   The court’s enormously permissive Commerce Clause precedents are fully intact, and are now paired with a precedent that creates a new means of federal intrusion in the lives of American citizens.  

The Last Remedy for Runaway Federal Government 

President Obama, speaking after the decision and seeking to impart a sense of finality, declared, “The highest court in the land has now spoken.” But is the Supreme Court—as implied by Obama and assumed by most Americans—really the final authority on the constitutionality of federal laws?  Thomas Jefferson’s answer to that question is a resounding “no”:

“To consider the Judges of the Supreme Court as the ultimate Arbiters of Constitutional questions would be a dangerous doctrine which would place us under the despotism of an oligarchy.  They have with others, the same passion for party, for power, and for privileges of their corps—and their power is far more dangerous as they are in office for life, and not responsible, as the other functionaries are, to the Elective control.”

If not the Supreme Court, to whom can American citizens turn for protection of their individual liberties?  Jefferson’s counsel is again clear: “The true barriers of our liberty in this country are our State governments.”

With Wickard v Filburn now joined in dishonor by National Federation of Independent Business v Sebelius, and with personal liberty further jeopardized by an ominous new federal power, the time has come for individual states to protect their citizens against unconstitutional federal overreach—with a power that’s largely forgotten but firmly rooted in the American tradition:  nullification.  

In nullifying an unconstitutional federal law, a state declares it void and inoperative within that state, and may also make it a crime for federal or local officials to enforce it.  Wondering what state nullification of the Patient Protection and Affordable Care Act might look like? Learn more at the Tenth Amendment Center. 

 NFIB v Sebelius: Supreme Court’s decision and justices’ opinions

Brian McGlinchey is principal at Liberty Messaging—a communications firm serving libertarian causes. He is the founder of 28Pages.org and a contributor at The Libertarian Institute.
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Why Merely Overturning Obamacare Isn’t Enough

With June at its midpoint, the Supreme Court’s verdict on the constitutionality of the Patient Protection and Affordable Care Act—known more commonly as “Obamacare”—may come any day now.  Among those who cherish liberty and limited federal power, hopes are high that the court will find the Constitution gives no power to Congress to compel individual citizens to purchase any product—in this case, health insurance.
English: West face of the United States Suprem...

However, if the Supreme Court merely overturns the insurance mandate—even if it tosses out the entire legislation that was wrapped around it—it will fall short of its duty, missing an opportunity to correct a previous high court decision that has been as disastrous in its effects at it was flawed in its logic.

Specifically, the court should abandon its decision in Wickard v Filburn—and with it, the notion that the Constitution’s Commerce Clause gives the federal government authority to usurp state power and intrude upon nearly every aspect of American life.

A Principal Catalyst of Federal Sprawl

The 10th Amendment, enacted to limit federal power, concisely reads: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” In other words, the federal government cannot assert any power or claim any responsibility not specifically given to it by the Constitution.

Given those constraints, how is it that the federal government has its clumsy hands in so many endeavors never mentioned in the Constitution—from subsidizing home mortgages (and inflating the housing bubble) to funding elementary education (and unleashing No Child Left Behind) to “investing” in green energy (by guaranteeing loans to ill-fated solar panel businesses) and meddling in agriculture markets (by paying farmers—and even non-farmers—to not grow crops)?

Much of the federal government’s current sprawl can be traced to 1942’s Wickard v Filburn and its excessively creative and expansive interpretation of the Constitution’s Commerce Clause.  That clause, found in Article 1, grants the federal government the power “to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”  While historical context makes it clear the clause was meant to aid the federal government in promoting free trade among the newly united states, Wickard v Filburn embraced a far broader definition of “commerce” that asserts a federal role in essentially any economic activity—even that of a single individual.

Destructively Creative Reasoning

Wickard v Filburn centered on the Agriculture Adjustment Act of 1938, which imposed federal limits on the production of wheat.  Roscoe Filburn, a small-scale Ohio farmer, dared to grow more food on his own private land than what the government allowed.  It’s important to note that, while the federal limits were aimed at bolstering the national price of wheat, Filburn’s extra wheat was grown for his own use for feeding animals, future planting, and to provide food to his family.  Regardless, the federal government fined him $117.11—the equivalent of more than $1,800 today.  Filburn refused to pay and the ensuing battle was elevated to the Supreme Court.

Roscoe Filburn: Outlaw Farmer (courtesy Mary Lou Filburn Spurgeon)

To side with the government, the court would have to somehow construe Filburn’s growing of wheat for his own consumption—on the mere 12 acres that exceeded his quota—as having a substantial effect on interstate commerce.   Regrettably, the court did just that, reasoning that, by growing his own wheat, Filburn would purchase less in the market.  And though Filburn’s individual activity couldn’t materially affect the national wheat market, the court further reasoned that the aggregation of such individual actions could theoretically have a substantial effect on interstate commerce—and with that, the court reinforced federal authority to punish individual citizens for planting food on their own property.

If only the court’s Constitutional damage were confined to this one atrocity.  Unfortunately, Wickard v Filburn opened a Pandora’s box, licensing federal authorities and the judiciary to use similarly creative thinking to conjure “interstate commerce” connections and thus justify federal impositions of all stripes.

Dissenting in a 2005 decision (Gonzales v Raich) that took Wickard’s flawed Commerce Clause logic to new depths, Justice Clarence Thomas said,  “If the majority is to be taken seriously, the federal government may now regulate quilting bees, clothes drives, and potluck suppers throughout the 50 states.  This makes a mockery of Madison’s assurance…that the ‘powers delegated’ to the Federal Government are ‘few and defined,’ while those of the States are ‘numerous and indefinite.’ ”  Perversely, what was once written with the intent of limiting federal power is now used to justify its relentless expansion.

A Chance to Close Pandora’s Box

Gonzales was especially disappointing since it followed two cases where the Supreme Court had finally demonstrated a willingness to put boundaries on Commerce Clause creativity:

  • United States v Lopez, 1994.  A Congressional ban of gun possession within a thousand feet of a school was deemed unconstitutional.  The court wasn’t persuaded by the government’s argument that violence in and around schools could undermine the education system and thus the American economy.
  • United States v Morrison, 2000.  The court struck down provisions of the Violence Against Women Act, despite the government’s claim that such violence has broad economic implications.

Opposing the federal position in these cases does not make one a supporter of schoolyard gunfights or violence against women.  Rather, it makes one a champion of our founders’ design of a governing arrangement that purposefully granted more responsibilities to the states than to the federal government—thus guarding the American people from excessive, centralized authority.

With our federal government borrowing 41 cents for every dollar it spent last month, a Supreme Court-prompted return to our Constitutional principles and a far slimmer federal apparatus may very well be the salvation of our republic.  While Lopez and Morrison slowed the runaway Commerce Clause train, it’s time for the Supreme Court to abandon Wickard and derail it altogether.

Recommended reading: In this amicus curiae briefSenator Rand Paul examines the flawed logic of Wickard and urges the Supreme Court to use the health care case as an opportunity to abandon the decision.

Recommended viewing:  From reason.tv, an entertaining 10-minute video: “Wheat, Weed and ObamaCare: How the Commerce Clause Made Congress All-Powerful.” 

Brian McGlinchey is principal at Liberty Messaging—a communications firm serving libertarian causes. He is the founder of 28Pages.org and a contributor at The Libertarian Institute.