By JESS BRAVIN
The Wall Street Journal
January 11, 2010
WASHINGTON — As congressional Democrats try to iron out differences in the House and Senate health-care bills, Republicans are attacking the legal premise of the legislation, saying Congress has no power to make people carry health insurance or pay a penalty or tax.
Constitutional-law scholars say that if the health-care overhaul becomes law, it could give courts an opportunity to test the limits of congressional authority in areas that haven’t been examined since the New Deal era. However, courts usually defer to lawmakers, and Democrats could smooth the way further by using language in the final version that clearly asserts Congress’s power under the Constitution to levy taxes — which the House bill already does.
Sen. John Ensign, a Nevada Republican, tried last month to hold up the bill on grounds that Congress lacked authority to enact it. The move failed, with 60 Senate Democrats and independents outvoting 39 Republicans.
Last week, the Texas attorney general, Republican Greg Abbott, wrote that a federal mandate to carry health insurance “threatens individual liberty.” Florida Attorney General Bill McCollum, a Republican running for governor, held a press conference in December to make the same point.
Democrats dismiss the Republican arguments as a last-ditch effort by the minority party to block the majority’s will. They say the plan is grounded in basic powers the Constitution grants Congress: to regulate interstate commerce, collect taxes and “provide for the general Welfare.”
Since the New Deal era, the Supreme Court has broadly interpreted congressional authority under the Commerce Clause. Congress has successfully invoked that power to limit the amount of wheat farmers can grow, ban racial discrimination at restaurants and prosecute medical patients for raising marijuana to alleviate their symptoms.
But the court has never considered a federal program structured like the health overhaul, which would require people without insurance to buy it or face a tax or penalty. The nonpartisan Congressional Research Service said in July that it was a “challenging question” whether the commerce power extends that far.
Democrats and their allies say that despite its novelty, the insurance mandate falls within the definition of interstate commerce. The Senate bill cites data to show the importance of the health-care industry to the national economy and the damage caused by leaving millions of Americans uninsured.
Requiring the uninsured to buy coverage will “create economies of scale” and “is essential to creating effective health-insurance markets,” the bill says.
Republicans argue that while Congress can regulate economic activity, the failure to buy insurance amounts to inactivity — and the Constitution doesn’t give Congress power to regulate that.
“Anything we have ever done, somebody actually had to have an action before we could tax or regulate it,” Mr. Ensign said on the Senate floor.
Democrats say that failing to buy insurance is a form of economic activity, because it shifts costs to others in the marketplace through higher insurance premiums, and onto the public when the uninsured use emergency rooms to obtain primary care.
The Senate bill imposes a penalty of up to $750 for people who fail to comply with the insurance mandate. Although it would be collected by the Internal Revenue Service, Senate Democrats avoided calling it a tax.
The House version explicitly includes a “tax on individuals without acceptable health-care coverage.”
Congress has broad power to tax — and courts have been highly deferential to the way it is exercised.
In 1919, the Supreme Court upheld a federal narcotics law even though a key provision — imposing a $1-per-year tax on heroin dealers and requiring that sales of the drug be registered with the commissioner of internal revenue — clearly did little to boost the public treasury.
Opponents said the tax was just a smoke screen for a crackdown on what the court called “dope fiends.” The ruling, by Justice William Day, held that simply having “another purpose as well as raising revenue” didn’t make the law unconstitutional.
Although the bottom line of both health-care bills may be similar, the clear use of the taxing power might make the House bill harder to attack, said Yale law professor Jack Balkin.
Randy Barnett, a Georgetown University law professor, said neither version is really a tax, and therefore falls outside congressional power. “You’re fining people for failing to enter a private insurance contract,” he said.
Mr. Barnett argued that Congress would be on stronger constitutional ground had it taken a far more radical approach to restructuring the health-care system, such as raising taxes and creating a single payer for all Americans akin to the Medicare program that covers the elderly and disabled.
“Given the precedent of Medicare, courts are likely to uphold Congress if it imposes an income tax to pay for a government health-care system,” Mr. Barnett said.
Write to Jess Bravin at jess.bravin@wsj.com
Printed in The Wall Street Journal, page A4