Earlier this month, a federal appeals court heard oral argument in the case of Florida v. U.S., in which 26 state governments sued to have President Obama’s signature health reform law struck down as unconstitutional.
Most of the discussion focused on the law’s “individual mandate” requiring all individuals to have health insurance or pay a tax penalty, but the judges also wanted to hear about the constitutionality of the law’s Medicaid expansion requirements – an issue we raised in our amicus brief to the appeals court. Both are critical tests of the vanishing constitutional limits to the expansion of federal power.
The federal government is appealing U.S. district court judge Roger Vinson’s summary judgment, which declared that the individual mandate is an unconstitutional exercise of federal power. The federal commerce power has never been used to regulate inactivity, or to force people to buy anything, and if the oral argument last week was any guide, the judges are not inclined to sanction such an unprecedented expansion of federal power.
The Framers’ vision of shared sovereignty between states and the federal government required that the powers of the federal power be both supreme with its sphere and strictly limited to those subjects enumerated in the Constitution. As James Madison explained during the ratification debates, “The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite.”
The new health care law requires that states expand their Medicaid rolls if they are to continue receiving federal matching grants. The choice is supposed to be voluntarily but it’s not: the states’ only other option is to bear the full cost of caring for their state’s current Medicaid population, while continuing to subsidize the Medicaid programs of other states through the federal taxes their citizens pay.
The constitutional danger of such a scheme has long been recognized. In 1936, the Supreme Court warned in U.S. v. Butler that conditioning federal grants under the taxing and spending power “could become the instrument for the total subversion of the governmental powers reserved to the individual states.”
The coercion arises when the federal government taxes money from the citizens of all the states, and then returns the revenue only to those states that comply with federal preferences on a range of matters that lie outside the federal government’s power to regulate directly. The federal government is clearly prohibited from forcing the states to regulate in a certain way, but it can accomplish much the same thing through fiscal coercion, as the Supreme Court recognized in the case of South Dakota v. Dole.
In Dole, the Supreme Court let Congress condition 5 percent of federal highway funds on states raising their drinking ages to 21. The Court ruled that this modest penalty was mere persuasion, but cautioned that at some point the economic penalty for not complying with federal conditions might be so painful and coercive that states would unconstitutionally be compelled to comply.
The problem with the logic of Dole – and the reason why it has failed to protect states from federal coercion – is that coercion is not a matter of degree. The government always engages in coercion when it taxes money away from the citizens of all the states, and returns it only to those that comply with its conditions. The practice of conditional federal grants is coercive by definition.
The federal government is supposed to have limited, enumerated powers, but it is increasingly governing outside those powers across the board. The Constitution the states ratified at the birth of the Republic is being largely replaced by the principle of national majority rule with virtually no protection for state autonomy.
This relentless expansion of federal power is gradually replacing the diverse “laboratories of democracy” with a stifling and sterile uniformity imposed from Washington. That expansion spells the death knell both for competition among the states and for self-government and citizen choice at the state level – all of which the Constitution was meant to preserve.
The new health reform law is on its way to the Supreme Court, and far more than the future of national health care policy hangs in the balance.
Mario Loyola is director of the Center for Tenth Amendment Studies at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. He authored the Texas Public Policy Foundation’s amicus curiae brief for the 11th U.S. Circuit Court of Appeals.