Obamacare, the Constitution, and the original meaning of the Commerce Clause

Several lawsuits over the health-care reform's individual mandate hinge on interpretations of the constitution's Commerce Clause. This clause is widely believed to grant Congress broad power over national markets. But that isn't what the founders had in mind.

Does Congress’s power to regulate commerce permit it to mandate that all Americans purchase a health insurance policy? So far two federal district courts have answered “yes” and one has answered “no.” The courts’ opinions exhaustively discuss and interpret modern Supreme Court case law, but barely touch upon the history of the commerce power and the intent of the Constitution’s framers. Judges apparently fear that discussion of relevant history would not only cast doubt on the constitutionality of Obamacare, but also myriad federal laws based on the regulation of commerce.

The purpose of the Commerce Clause

The Commerce Clause, in pertinent part, provides that Congress has the authority “[t]o regulate commerce with foreign nations, and among the several States, and with the Indian Tribes.” No such power existed under the Articles of Confederation, which was the first constitution of the United States. This lack of power injured Americans in two principle ways.

First, the Confederation government could not retaliate when other nations restricted access to their markets. As early as 1782, Alexander Hamilton complained that the Confederation Congress had no power to “preserve the balance of trade in favor” of the thirteen states. A commerce power would permit Congress to shut our ports to the ships of nations that did not welcome American ships and goods.

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Second, internal trade barriers inhibited the free movement of goods across the United States. When defending the Commerce Clause in the Federalist Papers, James Madison observed that a “very material object of this power was the relief of States which import and export through other States, from the improper contributions levied on them by the latter.” Internal customs duties, Madison argued, hampered trade of the whole and led to tensions between neighboring states.

The original definition of 'commerce'

Madison’s and Hamilton’s view of commerce as what we call “trade” is borne out by the contemporary dictionary definitions of commerce. For instance, Samuel Johnson’s Dictionary of the English Language (3d ed., 1765), defined commerce as “intercourse, exchange of one thing for another, interchange of anything; trade; traffick.”

Usage of the word “commerce” in other parts of the Constitution further buttresses this understanding. Section 9 of Article I provides that “[n]o Preference shall be given to any Regulation of Commerce or Revenue to the Ports of one State over those of another.” This provision obviously prohibits Congress from favoring, say, the port of Boston over the port of Charleston. The mention of commerce in connection with ports indicates that the framers had in mind the traffic of goods – the importing or exporting of various items.

Even the Supreme Court’s first foray into the realm of the Commerce Clause supports a narrow interpretation. In Gibbons v. Ogden (1824), Chief Justice John Marshall struck down a state-granted monopoly for steamboat service. In discussing commerce, Marshall noted that state laws concerning the quality of manufactured items or foodstuffs “act upon a subject before it becomes an article of foreign commerce, or of commerce among the States.” In other words, gainful activities such as manufacturing or agriculture are outside the scope of Congress’s authority.

In his famed “Commentaries on the Constitution” (1833), Justice Joseph Story viewed commerce as trade and gave examples of areas beyond congressional commerce regulations: “[a]griculture, colonies, capital, machinery, the wages of labour, the profits of stock, the rents of land, the punctual performance of contracts, and the diffusion of knowledge.” If Congress presumed to regulate such activities, he went on, the result would be “the utter demolition of all constitutional boundaries between the State and national governments.”

In light of this evidence, it takes dubious legal gymnastics to find that Congress, via the Commerce Clause, can compel an individual to involuntarily purchase an item from a private market. Unfortunately, under the guise of the “Living Constitution,” the Supreme Court has abandoned Hamilton, Madison, Marshall, and Story, and created its own definition of commerce. Today, the high court claims that commerce is shorthand for any economic activity that could substantially affect a national market.

What can't Congress regulate?

District courts upholding the individual insurance mandate reason that a person’s decision to forego health insurance is economic in nature. Receipt of medical care without adequate insurance affects the national health care and insurance markets by shifting costs for uncompensated care to doctors, insurance companies, and the government. Thus, Congress can require the purchase of insurance.

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Under this reasoning, is there any activity (or inactivity) beyond the reach of Washington? Decisions to bike to work rather than to purchase a car affect the national market for transportation. Decisions to rent an apartment rather than to purchase a house affect the national housing market. Decisions to follow a vegetarian diet rather than to eat meat affect the national food market. Can Congress thus decree that bike riders buy GM cars, that renters purchase houses, or that vegetarians eat steaks?

If these hypotheticals seem absurd, Americans should recognize that Congress already uses the Commerce Clause in inventive ways to criminalize certain activities. For example, Congress prohibits categories of individuals from possessing firearms based on the fact the firearm, at some point in its existence, traveled across state lines. Congress prohibits the storage of certain material on computer disks because the disks once traveled “in the channels of commerce” from the manufacturer to the end user.

Divorced from historical meanings and the original intent of the framers, the Commerce Clause has become the fount of unlimited government. Obamacare is but the latest episode of rampant commerce abuse. If the individual insurance mandate passes constitutional muster and enters the realm of precedent, then we can safely assume that no right, liberty, or inactivity is protected from the schemes of Washington’s lawgivers.

William J. Watkins, Jr. is a research fellow at The Independent Institute in Oakland, Calif. and author of “Reclaiming the American Revolution.”

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