How Will the Commerce Clause Be Interpreted?

This is part of the Taipan Publishing Group's March 24, 2010 American Wealth Underground.  This is a good analysis of how this could play out.


A-4 Driver

States Could Thwart ObamaCare
by Michael Robinson

Dear American Wealth Underground Reader,
A wide range of liberal legal scholars is predicting a decision by several states to sue the federal government to overturn ObamaCare on constitutional grounds will end in failure.

Sorry, but to me that sounds like a political hit job designed to get their allies in the media to build support for the most controversial bill to clear Congress in a generation.

The idea is to get the majority of Americans who oppose ObamaCare and conservatives in Congress to accept the adoption of the law along strict partisan lines as a fait accompli.

To liberals it’s an open-and-shut case: They say the Constitution’s Commerce Clause grants Congress enormous latitude in passing legislation that impacts private citizens and the states.

Moreover, they argue that a 1937 Supreme Court decision upholding the Social Security Act makes it certain the federal government can force residents to buy health insurance.

To this I say, not so fast. We haven’t yet gotten to the point in America where Congress gets to say that anything it does is, by definition, legal no matter the impact on the states or individual liberties.

That’s why I don’t think we will know the full impact of ObamaCare on health-related stocks for some time. Right now investors, particularly fund managers, are handicapping the lawsuits to determine who they think will prevail.

But I say consider this: constitutional conservatives have a strong case. No, I’m not predicting the states will prevail. But I do think despite the uphill battle they have a solid shot at overturning this landmark legislation.

I am a former legal affairs reporter who has covered two state supreme courts and the U.S. Supreme Court. I also have interviewed dozens of law professors, legal experts, attorneys, attorneys general and judges over the years.

So, I’ll make this prediction. If the case does make it to the U.S. Supreme Court the justices will rule in favor of the states. Under Chief Justice John Roberts, the court has become more open to a strict interpretation of the Constitution, whose Bill of Rights is supposed to protect the states from overreaching by the federal government.

In the end it may all boil down to a simple question: Is just being alive in the U.S. in an of itself an act of “interstate commerce?” I’ve already summarized the liberal defense of ObamaCare. Let me review the arguments opposed to it from three conservatives.

Former U.S. Attorney Rudy Giuliani says the fact that individuals can’t buy health insurance across state lines undermines the federal government’s claim that interstate commerce trumps state’s rights.

America’s mayor makes an excellent point. The power-hungry liberals at the federal level appear to be making contradictory arguments. They forbid us from buying insurance in a national market, which would lower costs, but say they have control over the states because of “interstate” commerce.

Kenneth T. Cunnicelli, the Virginia attorney general who is suing the federal government, notes that his state recently enacted a law against mandated insurance. Here is the crux of the matter from Cunnicelli:

“Just being alive is not interstate commerce,” Cunnicelli says. “If it were, there would be no limit to the U.S. Constitution’s commerce clause and to Congress’s authority to regulate everything we do. There has never been a point in our history where the federal government has been given the authority to require citizens to buy goods or services.”

Former U.S. Rep. Tom Campbell, who seeks the Republican nomination for U.S. Senate in California, amplified that theme. Campbell is a free-market economist who studied under Nobel Laureate Milton Friedman. He also is a Harvard-trained former Stanford University law professor who clerked at the U.S. Supreme Court.

Campbell cites a 2001 U.S. Supreme Court decision that struck down the federal government’s jurisdiction over man-made ponds not on federal lands. The federal government argued the ponds affected migratory bird patterns and thus had an impact on interstate commerce.

“This is a very close parallel” to ObamaCare, Campbell says. “Defenders of this statute argue that without a mandate that everyone get insurance, the obligation imposed that all insurance carriers cover those with pre-existing conditions would be too costly for the health insurance companies, or their policy holders, to afford.

“That, however, is likely not enough a connection to interstate commerce. Like the migratory bird case, the connection is indirect, not direct.”

Michael Robinson
Editor, American Wealth Underground