Is a Federal Mandate Constitutional?

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Journalist Ezra Klein has come out in favor of the proposition that a federal health insurance mandate is constitutional, but the question remains a thorny legal problem. If a reform bill is passed with an individual mandate, will it pass constitutional muster? The answer isn’t quite as clear as Klein would have us believe.

PENNumbra, the University of Pennsylvania Law Review’s online effort at “Uniting the Public and Legal Academy”, features a debate between legal scholars on this issue. David Rivkin and Lee Casey hold the position that a mandate to purchase individual health insurance would be found unconstitutional by our current Supreme Court as an over-reach of the Commerce Clause, while Professor Jack Balkin holds that the mandate is simply a tax, without the need for invoking the Commerce Clause.

Some samples, starting with Rivkin and Casey:

Of course, what Congress is contemplating with regard to a health care mandate is even less defensible under a Commerce Clause analysis than what it sought to do in the Gun-Free School Zones Act of 1990 or the Violence Against Women Act of 1994, both of which, after all, purported to regulate non-economic activities that were nevertheless freely engaged in by individuals [Editor’s note: both laws were found unconstitutional by the current court]. By contrast, the health care mandate would not regulate any “activity” at all. Rather, it features an affirmative federal command that parties engage in a particular commercial activity—i.e., a purchase of insurance. It is imposed not because an individual engaged in any particular profession or employment, even so much as growing pot in the bathroom. This regulation would apply to every American simply because they exist.

Significantly, even the Congressional Research Service (CRS), an entity that traditionally and institutionally takes the most permissive view of Article I powers, when asked by the Senate Finance Committee to opine on whether the Constitution allows Congress to impose this type of a mandate, came up with the most lukewarm of answers, indicating that “[w]hether such a requirement would be constitutional under the Commerce Clause is perhaps the most challenging question posed by such a proposal, as it is a novel issue whether Congress may use this clause to require an individual to purchase a good or a service.” Cong. Research Serv., Requiring Individuals to Obtain Health Insurance: A Constitutional Analysis 3 (2009), available at http://assets.opencrs.com/rpts/R40725_20090724.pdf. While we have never worked for the CRS, we know from experience in the Executive Branch, both at the Department of Justice (DOJ) and the White House Counsel’s Office, that when the Office of Legal Counsel, a highly respected DOJ component, in response to the question of whether or not a given approach is constitutional, tells you that it is a novel issue, it sure is not a green light.

Professor Jack Balkin holds that the individual mandate is nothing more than a tax, and therefore permissible regardless of the interpretation of the Commerce Clause:

One might object that Congress lacks the power to tax where the tax is not a genuine device for raising revenue but merely an attempt to regulate conduct that Congress is otherwise forbidden from regulating under the Constitution.

This argument fails for two reasons. First, as noted above, the tax on uninsured persons is a genuine revenue-raising device. It helps to pay some of the costs of comprehensive public health reform that includes an expansion of Medicaid, reform of insurance practices, and an employer mandate.

Second, the Supreme Court has made clear that a tax with regulatory purposes will not be held unconstitutional when the tax on its face seeks to raise revenue:

Every tax is in some measure regulatory. To some extent it interposes an economic impediment to the activity taxed as compared with others not taxed. But a tax is not any the less a tax because it has a regulatory effect, and it has long been established that an Act of Congress which on its face purports to be an exercise of the taxing power is not any the less so because the tax is burdensome or tends to restrict or suppress the thing taxed.

Sonzinsky v. United States, 300 U.S. 506, 513 (1937) (citations omitted). The point was made even more forcefully in United States v. Sanchez:

It is beyond serious question that a tax does not cease to be valid merely because it regulates, discourages, or even definitely deters the activities taxed. The principle applies even though the revenue obtained is obviously negligible, or the revenue purpose of the tax may be secondary. Nor does a tax statute necessarily fall because it touches on activities which Congress might not otherwise regulate.

340 U.S. 42, 44 (1950) (citations omitted). Given long-settled legal principles, House Bill 3296 is clearly constitutional.

The PENNumbra debate provides a reasoned, well thought out introduction to the constitutional issues that will be debated. Even though it is geared toward a general audience, it is still a relatively technical article. But it shows that, pundit assurances aside, the constitutionality of the mandate is still in question.

Cross-posted to FrankHagan.com