If You Don’t Spend Money, It Doesn’t Affect the Economy
Two conservative Republican attorneys who worked in the Justice Department during the Reagan and Bush 41 administrations argue in the Washington Post that universal health insurance coverage is unconstitutional. Their reasoning? Lacking health insurance does not have any effect on the economy:
The Constitution assigns only limited, enumerated powers to Congress and none, including the power to regulate interstate commerce or to impose taxes, would support a federal mandate requiring anyone who is otherwise without health insurance to buy it.
Although the Supreme Court has interpreted Congress’s commerce power expansively, this type of mandate would not pass muster even under the most aggressive commerce clause cases. In Wickard v. Filburn (1942), the court upheld a federal law regulating the national wheat markets. The law was drawn so broadly that wheat grown for consumption on individual farms also was regulated. Even though this rule reached purely local (rather than interstate) activity, the court reasoned that the consumption of homegrown wheat by individual farms would, in the aggregate, have a substantial economic effect on interstate commerce, and so was within Congress’s reach.
The court reaffirmed this rationale in 2005 in Gonzales v. Raich, when it validated Congress’s authority to regulate the home cultivation of marijuana for personal use. In doing so, however, the justices emphasized that — as in the wheat case — “the activities regulated by the [Controlled Substances Act] are quintessentially economic.” That simply would not be true with regard to an individual health insurance mandate.
The otherwise uninsured would be required to buy coverage, not because they were even tangentially engaged in the “production, distribution or consumption of commodities,” but for no other reason than that people without health insurance exist. The federal government does not have the power to regulate Americans simply because they are there. Significantly, in two key cases, United States v. Lopez (1995) and United States v. Morrison (2000), the Supreme Court specifically rejected the proposition that the commerce clause allowed Congress to regulate noneconomic activities merely because, through a chain of causal effects, they might have an economic impact. These decisions reflect judicial recognition that the commerce clause is not infinitely elastic and that, by enumerating its powers, the framers denied Congress the type of general police power that is freely exercised by the states.
Here’s another professional legal opinion on the matter:
It was only a matter of time. After Michelle Bachmann and Virgina Foxx, now come David Rivkin and Lee Casey to tell us that if health care reform passes, it will be unconstitutional. And they even drag out a case from the Lochner Era, Bailey v. Drexel Furniture, to make their case.
You see, Rivkin and Casey think that a federal requirement that uninsured individuals must purchase health insurance can’t be within Congress’s commerce power because when ordinary individuals don’t purchase health insurance, their mere failure to do so has no effects (economic or otherwise) on interstate commerce.
[...]
Got it? When people don’t buy things, by definition it doesn’t affect commerce! (For example, during recessions people stop buying things and everyone knows that has no economic effects.) On the other hand, Rivkin and Lee begin their op-ed by arguing that “[w]ithout the young to subsidize the old, a comprehensive national health system will not work.” This sounds to me like a claim that the number of people who buy health insurance affects the ability of private insurance companies to sell health insurance at a profit. So again, why is it that failure to purchase health insurance does not affect interstate commerce?
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37 Responses to “If You Don’t Spend Money, It Doesn’t Affect the Economy”
[...] If You Don’t Spend Money, It Doesn’t Affect the Economy – The Moderate VoiceTwo conservative Republican attorneys who worked in the Justice Department during the Reagan and Bush 41 administrations argue in the Washington Post that universal health insurance coverage is unconstitutional. Their reasoning? Lacking health [...]
Well they are correct, the federal government is not empowered to force the people to have healthcare. No matter what legislation gets passed I'm sure neither the Congress not the Whitehouse will make such a rookie mistake about Constitutionalism.
So what are you (they) saying…..? That recessions are unconstitutional?
No, that recessions are not economic events. We're in a recession right now that is characterized by millions of Americans having cut their spending drastically or not spending at all. The lack of spending deepens the recession — which would seem to suggest that not spending has an economic impact. But according to these two attorneys, not so. Millions of Americans not spending has no effect on the economy and is not an economic event. Only spending is economic. Not spending is not economic.
Not spending is not an economic activity is simply not true. If the “not spending” is an investment of some sort which is not immediately convertible to “stimulate the economy,” it is savings and a form of deferred economic activity. Congress simply has no power to regulate indirect economic activity such as savings or hoarding, as long as it is done inside one state. That's the Constitution. Even if you put it under a mattress, it is a form of economic activity, in a passive sense. It's simply not under congressional jurisdiction.
I'm pretty sure that the Social Security system did not require a constitutional amendment. See Steward Machine Company v. Davis, 301 U.S, 548, in which a highly pressured (FDR tried to pack the Court) Supreme Court ruled Social Security constitutional. If I'm not mistaken, Social Security is compulsory in both input (payroll taxes) and output (SSI). I also believe that Medicare is compulsory.
Oh, but they're not economic activities, are they?
If individual states can compel drivers to have auto insurance, why couldn't the federal government compel them to carry health insurance?
I don't know what role these guys had in Bush II, but it's this kind of ridiculous, twisted and perverted legal logic which brought us “enhanced” interrogations, illegal imprisonment and preemptive defense.
Where do crazy right wing attorneys go? Obviously, not all of them go to Pepperdine and Berkeley.
This litany has been repeated by the right since the Great Depression. Which, of course, did not affect economic activity.
Where do these people come from?
Wow, by this logic, TV, computers, immunization shots, electricity, indoor plumbing, women representatives in congress, black people voting and going to school are all illegal because they aren't in the Constitution! I know I am missing some stuff. By this logic, the Talibon slobs are very constitutional.
Kathy and others: by your reasoning, a law requiring all citizens to buy a car would be constitutional. Do you agree with that? Maybe you'll tell me that health insurance is much different than a car. But if you are arguing that not spending is an economic activity, and therefore can be regulated such that we are forced to spend, then there is no difference. By this reasoning, since any individual decision to buy or not buy something affects the economy, the congress has consitutional power to make any law it wants to force us to buy whatever it pleases.
Instead of sneaking around the issue by implementing cash for clunkers, we could just pass a law that requires everyone to buy a new car. Of course we would all object to that for many obvious reasons, but would it be constitutional in your view? If so, can you give me an economic mandate that congress might reasonably propose that would be unconstitutional in your view?
But Leonidas is right that this actually isn't what is being proposed. Instead, they are following the precedent that has been established previously for getting around federalism (namely, that the feds can't force the states to do anything, but they can tax their citizens and then refuse to give the state the money unless the state complies with the federal government's wishes). Now, they are applying that principle to personal economics: We can't force you to buy a car, but we can use your tax dollars to give money to those who will. We can't force you to buy insurance, but we can penalize you through taxes. This arguably might follow the letter of the constitution, but it doesn't follow the spirit for sure.
“If individual states can compel drivers to have auto insurance, why couldn't the federal government compel them to carry health insurance?”
I think you just answered your own question. We're talking about what powers the US constitution does and does not grant to the federal government.
“Wow, by this logic, TV, computers, immunization shots, electricity, indoor plumbing, women representatives in congress, black people voting and going to school are all illegal because they aren't in the Constitution! “
When did the federal government mandate TVs, computers, immunization shots, electity, and indoor plumbing? These things came about in the private sector, without the need for government mandates, which indeed would have been unconstitutional. No one is saying health insurance is not constitutional. But a mandate is.
As for who represents the people and who can vote, the constitution largely leaves those issues up to the states, except for certain age requirements for representatives and the 15th amendment. This is completely different than the specific power granted to the federal government to regulate *interstate* commerce, and no other kind. This is exactly why the supreme court had to go to such extreme lengths to justify its decision in the wheat case. It had to argue that regulating the production of wheat for personal use was necessary in order to regulate interstate commerce.
rfyork
Regarding Social security, well not a fan of that either and I'm not convinced of its Constitutionality either. But aside from that, employment for wages is not technically mandatory. The President, Members
of Congress, and Supreme Court justices do not pay Social Security taxes after all.
Ok I was indulging when I said TV and computers, but things like child labor laws, a 5 day work week, unions,universal education (its more recent format, no child left behind) the FDA, clean water laws are not in the Constitution. I know there are conservatives who believe poisoned water, food, and 5 year olds working 80 weeks instead of going to school are a good thing… but there are lot of people who think the word is a better place when 5 year olds go to school instead of work in a sweatshop.
Adelinesdad: In effect, the federal government already already compels all US citizens to purchase old age insurance. This was challenged in the Supreme Court (see above) and declared constitutional. I really don't see anything so far – whether it relates to economic activity or not – which makes compulsory health insurance unconstitutional.
MANDATES, THE CONSTITUTION & MORE STRAW MEN…
A couple of days ago I suggested that the President and his progressive supporters would be faring better in the health care reform debate if they would stop producing disingenuous answers to sincere and legitimate questions about Obamacare.
An indic…
A good article about the situation involving Helvering v. Davis whose Constitutionality I'm skeptical about, the court makes mistakes sometimes, remember the Dred Scott ruling?
http://www.lewrockwell.com/orig3/attarian7.html
You guys are framing the issue in bizzare and distorting ways. The question is not whether “not spending” or saving or hoarding is within the purview of Congress. Instead, the question is whether having millions of uninsured people has a substantial effect on interstate commerce and whether requiring universal coverage is essential to achieve the purpose of reform: reducing costs and expanding accessibility in health insurance and health services markets. This is clearly within the power of Congress to regulate.
http://dissentingjustice.blogspot.com/2009/08/i…
Kathryn,
All of those issues are umbrellas that combine multiple issues, some of which are consitutional and some of which may not be. Some involve interstate commerce (such as some clean water laws, the functions of the FDA to some degree), and yes, some of them probably are unconstitutional by a strict interpretation. I've already hinted on my position of no child left behind, which follows the “we can't force the state to do it, so we'll take their money and not give it back unless they do it” model, which I've said I don't agree with even though the court has upheld it.
But the most objectionable thing I have in your comment is your assumption that the federal government is our only option to bring about good public policy. The US constitution is not intended to specify all powers that might be necessary to govern a people, which is why it specifically says that any powers that it doesn't grant to the federal government should be exercised by the states. The US constitution only enumerates the specific federal powers that can best be executed at the federal level, and defaults to the states for all other powers. Therefore, a strict interpretation of the constitution does not imply acceptance of child-labor or poisoned food. That is a straw-man.
And all of these issues just divert attention away from the basic question: is it consitutional for the federal government to require the citizens to buy anything (not because they drive a car, and not even because they are employed, but merely because *they exist*)? It sounds like your (and others') position is “yes”. In which case I guess we'll have to agree to disagree, because as I see it that goes directly against the principles outlined in the constitution, most broadly the one giving the citizens the negative right to liberty, but also with respect to the limited regulatory power of government over commerce.
“Instead, the question is whether having millions of uninsured people has a substantial effect on interstate commerce”
How does it? And would it if there was not a mandate on hospital to provide care for the uninsured? And, implementing public policy that lessens the number of uninsured (or even drops it to zero, hypothetically), would not necessarily be unconstitutional, depending on the method used. An individual mandate would not be constitutional, for the reasons I've already mentioned.
“and whether requiring universal coverage is essential to achieve the purpose of reform: reducing costs and expanding accessibility in health insurance and health services markets.”
If your reasoning for why it would be consitutional is that it would be “essential to achieve the purpose of reform”, then I'd say that that shreds the constitution, since it means that we can ignore the principles within it whenever we deem some action essential to achieve some purpose. If that's the case then the constitution has no meaning.
Here is a question I haven't seen asked yet, how much money would mandatory healthcare purchases take out of the general economy? If people are forced to buy this, how much will other sectors suffer due to lost sales revenue?
My response to this Washington Post article boils down to two questions:
1) Is Universal Health Insurance Coverage constitutional?
2) If it's not, what specifically makes it unconstitional?
I agree with the authors with regards to the first question but not the second question.
Universal Health Insurance Coverage mandated or regulated by the federal government is NOT constitutional, but not for the reasons argued by the authors of this article. Mandating/regulation Universal Health Insurance Coverage is not constitutional for the simple reason that the U.S. Constitution does not grant such powers to the federal government. It has nothing to do with the U.S. Supreme Court rulings generated by Wickard v. Filburn or Gonzales v. Raich, both of which were based upon seriously flawed interpretations of the interstate commerce clause.
Basically, we have a federalized system of government, meaning that there are two levels of government operatingsimultaneously: federal government and state government. Under such a system, certain powers are delegated to the the federal government, and certain powers are delegated to the individual states. The U.S. Constitution (specifically the tenth amendment) makes it clear that on issues that are not specifically addressed by the U.S. Constitution, power is assumed to lay with the individual state governments.
This is as opposed to a unitary state government (such as the United Kingdom) in which the central government is supreme, and local governments only have those powers which are specifically delegated to them by the central government.
This is not a philosophical question of whether the government should be involved in the regulation of health care insurance. It is a legal question regarding which level of government (state versus federal) would have the power to regulate health care insurance, should the people want that. I see no basis in the U.S. Constitution that would grant the federal government this power.
I love how progressives after complaining about the power grads of the Bush Administraiton are now carrying the Obama Administration's water by proposing that there is no limits on the government in the constitution. The federal government can only regulate innerstate commerce. That is why the restaurant inspections are performed by local inspectors.
The federal government only regulates drugs sold in innerstate commerce or imported into the U.S. as virtually are drugs are these days. Look at how California tried to regulate cars differently that other states and all of the progressives thought that was a great idea. Now that there is an Obama Administration, now states have no say.
Medicine is regulated at the state level with state licensing. Medical facilities are regulated at the state level. Insurance is regulated at the state level. Congress should not have the ability to dictate how ever state regulates the insurance industry.
But then again, progressives are the ones proposing hate crime legislation, regulate speech and association, religion.
[...] Jonathan Adler at the Volokh Conspiracy as well as Kathy Kattenburg from The Moderate Voice both have posts up reviewing the debate over a new issue that has arisen in the debate over health [...]
DissentingJustice says it beautifully — and thank you, Darren, because I saw your post yesterday, late, and was going to link to it today.
AdelinesDad writes:
How does it? [have a substantial effect on interstate commerce]? And would it if there was not a mandate on hospital to provide care for the uninsured?
To the first question, because large numbers of uninsured Americans significantly raises the cost of both health care services and private health insurance policies. I'm guessing that your second question is suggesting that the mandate on hospitals to provide care for the uninsured helps to neutralize, or reduce, the significant negative effect that large numbers of uninsured Americans have on interstate commerce. But it doesn't. Quite the opposite — it worsens the problem, because the vastly increased costs of hospital ER care for preventable health issues that could have been and should have been addressed at a much earlier stage gets passed on to you, and to all of us. It raises the cost of health care and of health insurance policies.
Simple solution:
If you don't have Health-insurance and you can't afford care, we throw you out of the hospital and leave you to die on the sidewalk.
What do you say?
Kathy,
Do you agree with Dissenting Justice that a mandate being “essential to achieve the purpose of reform” would necessarily make it consitutional? Maybe I'm misunderstanding what he was trying to say, but it seems to me that he is trying to say that the government has the right to implement whatever policy it wants, so long as that policy is necessary for some reform that it wants to pursue. I think I must be reading that wrong because that's indefensible. By that logic, all one must do to show torture is consitutional is argue that it is necessary for national defense. Some Bush supporters attempted to make that argument and I disagreed with it then as well.
As for whether having a lot of uninsured people affects interstate commerce, it seems to me the only reason why it might is because of other federal and state regulations that force health care providers to provide care to the uninsured. Absent those regulations, I don't see how someone not being covered affects interstate commerce. That's what I was getting I when I asked “And would it if there was not a mandate on hospitals to provide care of the uninsured?”
Now, I'm not arguing that such regulations are bad, just that I don't think you can create a regulation which might create an interstate dependency, and then rule that the activity counts as interstate commerce because of that regulation. I think that in order to show that a particular activity is interstate commerce, it must be shown to do so independent of other government interventions.
And in any case, the question is beside the point, because there are other ways to decrease the number of uninsured that don't rely on an individual mandate. Therefore, showing that the federal government has a right to try to lower that number of uninsured does not lead to the conclusion that it has the power to create an individual mandate.
I return to my original question: to those who would support an individual mandate as consitutional, can you provide an example of some mandate to buy something that congress might propose that you would consider unconstitutional? If there is none, then the constitution sure uses some awkward language to suggest that the congress really has any power it wants to control the economic decisions of the citizens.
Do you agree with Dissenting Justice that a mandate being “essential to achieve the purpose of reform” would necessarily make it consitutional? Maybe I'm misunderstanding what he was trying to say, but it seems to me that he is trying to say that the government has the right to implement whatever policy it wants, so long as that policy is necessary for some reform that it wants to pursue.
No. That's not what he's saying. He's saying that the existence of “millions of uninsured Americans has a substantial effect on interstate commerce.” Therefore, the argument that mandatory insurance coverage is unconstitutional is invalid because Congress has the authority to regulate interstate commerce.
This is a very interesting discussion that I will be following because we at Doctors on Strike for Freedom in Medicine see the health care reform war being waged on four fronts: constitutional, moral, economic, and pragmatic.
Not meaning to detract from the serious discussion going on here, I would like to submit my “tongue-in-cheek” answer the the central question: “Under what provision of the Constitution does the government have the right and/or responsibility to provide health care in any way, shape, or form?”
Obama, the former constitutional instructor at University of Chicago, will chew on a few breath mints–perhaps a combination of “Euromint” and “Frisk” would be the magic elixir–to help him breath new constitutional life into the Fifth Amendment.
Obama will start the process of stacking the Supreme Court with statists.
Eric “The Law Unto Himself” Holder will personally argue before the Court that, because the Constitution is now officially a living, breathing document, the Eminent Domain clause can be injected with a breath of fresh statist air and thereby stretched to include not just property, but the human body as well.
Under the “takings clause,” the Court will rule that that the government can legitimately claim ownership of people, their bodies, and, of course, their health. Justice Sotomayor, in her unfathomable, and now constitutionally unpardonable, Latina-feminist wisdom, will write a “one sentence” opinion for the majority: “Our decision goes without saying.”
(This manner of rendering Supreme Court decisions will establish a new “green precedent,” justified by the need to save taxpayers the cost of ink and paper that were previously spent on those oh-so-wordy opinions.)
We will be literally and figuratively taken.
Tom “The Body Snatcher” Daschle will then be appointed “Health Enforcement Czar” with the patriotic mission of “leveling the health care playing field” and “spreading the health around.”
Joe “The Plagiarizer” Biden will call on us to adhere to our “patriotic duty” to pay taxes–with the exception, of course, of families making less than $250,000, who are absolved of the duty to be patriotic, and are encouraged to plunder the wealth of the patriotic producers.
Panels of health czars (“Useful Lifers”) will calculate our useful half-lives.
Panels of spiritual czars will be appointed to help us find this new meaning in life:
A half-assed, half-life ain't half as bad as the alternative.
Dr. Gregory Garamoni
Founder, Doctors on Strike for Freedom in Medicine
http://www.doctorsonstrike.com
No offense intended.
None taken.
Kathy,
Ok, I'm glad we cleared that up. Then I'll refer to my other parts of my response, regarding whether those uninsured Americans really would have a substantial effect on interstate commerce absent other government regulations, and whether mandating the purchase of insurance is really the only way (and therefore necessary) to address the problem.
As fun as this debate is, it's only hypothetical because an individual mandate actually isn't being proposed. The only thing close to a mandate is a tax penalty if you don't purchase insurance, which as I've said is a way around the constitutional issue which might follow the letter of the law but not the spirit. So, since this isn't an issue that important to the current debate, I think my time is best used elsewhere. No offense intended.
People need to learn how the government works before they become policy wonks. In one area of medicine that I know, Mammography Quality Standards Act, what the federal government did was say that any institution that accepts payment from Medicare, Medicaid, or other federal insurance will comply with MQSA.
The problem with the government trying to force everyone to have insurance is what is the enforcement mechanism. Will it be that everyone who files an income tax form have to show proof of insurance?
[...] The Constitution assigns only limited, enumerated powers to Congress and none, including the power to regulate interstate commerce or to impose taxes, would support a federal mandate requiring anyone who is otherwise without health insurance to buy it. Although the Supreme Court has interpreted Congress’s commerce power expansively, this type of mandate would not pass muster even uRead more at http://themoderatevoice.com/44060/if-you-dont-spend-money-it-doesnt-affect-the-economy/ [...]
[...] If You Don’t Spend Money, It Doesn’t Affect the Economy | The Moderate Voice themoderatevoice.com/44060/if-you-dont-spend-money-it-doesnt-affect-the-economy – view page – cached Two conservative Republican attorneys who worked in the Justice Department during the Reagan and Bush 41 administrations argue in the Washington Post that — From the page [...]
[sigh] Kathy is misstating and could well be misinterpreting (again!) something which should be obvious.
The constitutionality of so much (2/3 and more) of what Washington does is open to serious question, even if so much of is established as well as accomplished fact with so much public support in addition to vast ignorance that we can't expect a “return to the Constitution” ever, and I've surpassed many a lefty by saying we should admit and recognize this by making all the feds do and as much more as it conceivably can do, fully constitutional and unconstrained to achieve clarity as well as correctness in our future.
It all falls on blind and deaf people, or on those who cannot accept that they are so badly wrong. [shrug]
As for federal health care, we have accomplished fact from the 1960s that has established a precedent, namely Medicare, so we lamentably must be concerned with good or bad of what else the feds might do, rather than its essential propriety in the first place (lost among a population who is stupid or doesn't care).
“People need to learn how the government works before they become policy wonks.”
Too many of the militants are ignorant as well as childish. We smarter folks who know we're exchanging one set of problems for another by going to more federal health care (which is what nearly everybody who wants government health care wants; they care no more for state governments than any other facet or iota of federalism or constitutionalism) at least don't want us to be rushed stupidly into this, which is not only a feature of this current effort, but which is characteristic of the harried, destructive lib Dems all this year.
We who are smarter are braking things, and trying at least to insist on some intelligent kind of a controlled descent with incremental federal takeover, while the militants (including those on this site) are ignorant of reality and insist on a fully powered (even accompanied by afterburners) power dive (with the crash we smarter people know is being obviously risked if not deliberately sought).
“”Under what provision of the Constitution does the government have the right and/or responsibility to provide health care in any way, shape, or form?”
You mean does it have the power (“may”) and possibly the responsibility (“must”)?
It doesn't.
The firmest soft ground on which supporters may honestly tread is what is implied by having federal as well as state citizenship, coupled with what is commonly associated with this in our modern (post-World War II in particular) environment with the modern (if unsustainable in its current form) welfare state.
(And even that obviously does not grant unlimited powers to Washington nor retention of those not granted or reasonably implied by what powers Washington obviously has.)
One of the books I've long read and owned (by the best known-legal scholar and author on the subject of impeachment since Watergate) might be of assistance as (often remedial) reading for many.
http://www.amazon.com/Federalism-Founders-Desig…
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