The Health Insurance Mandate: Commerce, Taxes, and the Necessary and Proper Clause

I won't try to cover all the ground that other bloggers have scoured in commenting upon Judge Henry Hudson's opinion that the individual mandate is unconstitutional, but I do have some additional thoughts, especially on the necessary and proper clause.  For other bloggers of interest, see the various posts on the Volokh Conspiracy and the New York Times's Room for Debate blog. 

Let's assume (though it's obviously controversial) that the commerce power does not extend to forcing people to buy a good or service from a private vendor.  (Of course, there are exceptions to this, but they involve a mandate as a condition to some activity that an individual has voluntarily undertaken, such as mandated liability insurance if you choose to own a car, or a mandated child seat if you choose to have a child and transport that child by auto, or mandated seat belt usage, or motorcycle helmet laws, etc.) 

Let's also assume that Judge Hudson got it right in declaring the "tax" to be a penalty, and thus invalid if the underlying mandate is ultra vires, as he declared it to be.  In this regard, note that the law itself characterizes the "tax" as a penalty.  The Supreme Court has recently characterized the distinction between a tax and penalty as follows: "[a] tax is an enforced contribution to provide for the support of government; a penalty ... is an exaction imposed by statute as punishment for an unlawful act." United States v. La Franca, 282 U. S. 568, 572 (1931), quoted in United States v. Reorganized CF&I Fabricators of Utah, Inc., 518 U.S. 213, 224 (1996).  The CF&I opinion was for a unanimous court.  It's unlawful to not have health insurance; the "tax" is an exaction imposed to punish those who fail to observe the mandate.  No; wait; here's Lame Duck Speaker Pelosi's spokesperson:  "The bill uses the tax code to provide a strong incentive for Americans to have insurance coverage and not pass their emergency health costs onto other Americans—but it allows them a way to pay their way out of that obligation."  I suppose in the L.D. Speaker's universe laws that merely create "strong incentives" fall into a different category.  Would the speaker argue that a federal law prohibiting murder, coupled with a "tax" -- let's call it weregild in honor of English legal history -- to "pay their way out of that obligation" is simply a tax?  Surely it's not a penalty. 

On to the necessary and proper clause:  It is not disputable that Congress has very broad discretion to select the means to implement its legitimate powers.  As the Court said in Comstock: If "the means adopted are really calculated to attain the end, the degree of their necessity, the extent to which they conduce to the end, the closeness of the relationship between the means adopted and the end to be attained, are matters for congressional determination alone." (Quoting Burroughs v. United States, 290 U.S. 534, 547-548 (1934)).  Comstock, of course, created a five-part test for locating the outer boundaries of congressional discretion.  The individual mandate is of dubious validity under that test, because it is hardly "a modest addition to a set of [health care regulatory] statutes that have existed for many decades."  Comstock.  But the larger point is that the Comstock five-part test misses the real issue in parsing the necessary and proper clause.  The problem is the level of generality at which the congressional objective is stated, for the n&p clause merely allows Congress to choose how it will implement a legitimate objective.  If the objective is phrased at a high level of generality the n&p clause imposes no limit whatever.  Thus, if Obamacare is to "regulate the provision of helath care services throughout the nation" that general objective is within the commerce power and Congress's choice of the mandate is necessary.  But is it proper?  That's where the level of generality comes in.  If the level of generality of the congressional objective is phrased so specifically that it tracks the commerce power question precisely, the commerce clause and n&p clause questions are conflated.  Thus, if the objective is to impose an individual mandate, and that is ultra vires, the n&p clause adds nothing to the government's case.  As with substantive due process liberty claims, the government's objective should be "carefully described," a circumlocution that means that the government objective cannot be divorced from the specific actions or effects of the statue challenged.  Here, Congress sought to regulate the provision of health care services by mandating the scope of insurance coverage and, to that end, forcing people to buy insurance.  The latter means may be necessary to the scheme, but is surely not proper if, as Judge Hudson ruled, the commerce power does not extend to such forced consumption of goods and services.  Whether under the Comstock approach or by "carefully describing" the end of the legislation, this particular means is not proper.  

Comments

[BDG]

Hi, Calvin. Interesting (and I'm certainly with you on the tax analysis), but I think you've got the N&P analysis wrong. This is an easy case.

As the statute says, the goal was to provide for no discrimination by insurers against people with pre-existing conditions. That's obviously regulation of commerce. But the health care system collapses if you do that without a mandate. That's why the mandate is necessary, and that's why it's proper.

Everything else is just people blowing smoke to obscure that, IMHO.

[Kurt Lash]

BDG--We are long past the point where a claim of necessity was sufficient to establish the constitutionality of federal power. The forced ownership provisions in New York were probably "necessary" to solve the collective action problems relating to the disposal of low-level hazardous waste (congress continues to grapple with the issue to this day). But the court nevertheless struck down the provision as unduly intruding upon powers reserved to the states. The claim is no different for the insurance mandate--even if necessary for the proper functioning of a congressional program, such necessity cannot itself resolve whether the power nevertheless remains beyond national authority.

Calvin--You seem to agree with the thrust of a number of commentators who emphasize a distinction between "necessary" and "proper." I remain agnostic on this point, if only because my reading of the historical evidence suggests the terms were never disaggregated. Still, I think it can be useful to consider the possible meanings of "proper." How do you think we should go about determining the meaning of that particular term?