“If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions.” -- James Madison
In drafting the Constitution, the Founders wisely sought to create a limited federal government. The Constitution specifically grants certain enumerated powers. The powers not delegated to the federal government were reserved for the individual states and the people.
Under the Articles of Confederation, States erected protectionist trade barriers and the federal government was powerless to intervene. When drafting the Constitution, the Founders sought to address this problem by granting Congress the power to “regulate Commerce ... among the several States ...”
Congress cited the Commerce Clause as its Constitutional authority for passing the Affordable Care Act (“ACA”). The Act requires every American to purchase an approved health insurance plan, under penalty of law. Never in the history of our nation has the federal government required people to buy any good or service as a condition of lawful residence in the U.S.
While Congress has the power to regulate commerce, it does not have the power to compel commerce so it can then be regulated. Congressional power under the Commerce Clause has greatly expanded over the years. The Supreme Court has held that Congress may regulate the exchange of goods across state lines, and transportation linked to such exchanges. Congress may also regulate non-commercial economic activity that has a substantial aggregate effect on interstate commerce.
Proponents of the ACA claim the decision not to buy health insurance is economic activity having an effect on the health insurance market. Before the Act was passed, Congress’ attorneys in the Congressional Research Service advised that it was “unclear” whether the individual mandate had “solid constitutional foundation, finding that the individual mandate “could be imposed on some individuals who engage in virtually no economic activity whatsoever.”
Undeniably, being without health insurance has no impact on interstate commerce. Only when an uninsured individual seeks health care and then refuses to pay for the services rendered is there arguably an effect on interstate commerce. There is virtually no decision one can make which has no economic impact, particularly in the aggregate. If Congress were permitted to regulate thought processes (i.e. the decision to forego buying health insurance) there would be virtually no limit to federal power under the Commerce Clause. For this reason, the individual mandate is beyond the power bestowed upon Congress in the Commerce Clause.
It has also been argued the individual mandate is authorized under Congress’ power to tax. Congress has the power to tax to raise revenue in support of the specifically enumerated powers. Remarkably, President Obama himself argued that the individual mandate was not a tax, and the Act itself describes the fee for non-compliance as a “penalty.” Any revenue generated secondary to the mandate penalty is purely incidental. If the penalty for non-compliance were to achieve the desired result, no revenue would be garnered. Congress’ power to exact a penalty is more constrained than its taxing authority because it must be in aid of an enumerated power. Sunshine v. Anthracite Coal Co. v. Adkins, 310 U.S.381, 393 (1940). Congress cannot regulate through taxation that which it cannot otherwise regulate. See Bailey v. Drexel Furniture, 259 U.S. 1, 68 (1936). Since Congress does not have the power to regulate inactivity, it also lacks the power to penalize individuals for the very same inactivity.
Finally, proponents of the ACA have argued that the individual mandate is valid under the Necessary and Proper Clause which provides that Congress shall have the power: “To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers ...” The Supreme Court has repeatedly held that the Clause is not an independent source of federal power; rather, it is simply “a caveat that the Congress possesses all the means necessary to carry out the specifically granted ‘foregoing’ powers of [section] 8 ...” Kinsella v. U.S., 361 U.S. 234 (1960). The Necessary and Proper Clause cannot be used to enforce an unconstitutional exercise of power. As indicated above, the mandate is beyond the scope of the enumerated powers.
In the end, the ACA is well intentioned, but unconstitutional. “The Constitution protects us from our own best intentions: It divides power among sovereigns and among branches of government precisely so that we may resist the temptation to concentrate power in one location as an expedient solution to the crisis of the day. . . [A] judiciary that licensed extra-constitutional government with each issue of comparable gravity would, in the long run, be far worse [than the crisis itself].” New York v. United States, 505 U.S. 144, 187 (1992).