From liberty to Leviathan in a nutshell

On Monday the Supreme Court will begin hearing oral argument on the Patient Protection and Affordable Care Act (“Obamacare”), which will run for six hours over three days. Brought against the Obama administration by 26 states, the National Federation of Independent Business and two individuals, Florida v. Dept. of Health & Human Services raises fundamental questions about the scope of Congress’s powers, the powers reserved to the states and the rights of individuals over their medical care. It is, without question, the most important case the Court has taken in decades.

Every court so far that has ruled against Obamacare has cited the promise of the Constitution’s principal author, James Madison, that the powers of the new government would be “few and defined,” aimed mainly at securing liberty. That hardly squares with the act’s mandate that every American buy government-approved health insurance or pay a hefty fee. Enacted pursuant to Congress’s power to regulate interstate commerce, the mandate compels individuals to engage in commerce. Prior to the law’s enactment, Congress’s own lawyers called the mandate “unprecedented.” At oral argument in the courts below, the government’s lawyers have been unable to identify a single limit on Congress’s commerce power.

As we watch the proceedings unfold, it’s worth asking how we got to this point, where judges and lawyers split hairs over fine distinctions, as we’ll see next week, yet often ignore the larger constitutional principles. The answer is quite simple: It took just three decisions — two in 1937, one in 1938 — to undermine the Constitution’s design and turn it on its head, giving us modern “constitutional law” — not to be confused with the Constitution. Indeed, Obamacare’s defenders often make the point themselves when they begin their arguments by saying “Since the New Deal” or “For the past 75 years.” The plain implication is that prior to that time, Congress had no such power. And it didn’t. For 150 years both Congress and the Court understood clearly that federal regulatory and redistributive power was limited mainly not by the Bill of Rights but by the enumeration of Congress’s 18 powers or ends, which left most power with the states or the people.

So what happened during the New Deal? Did we amend the Constitution, as we did after the Civil War when we made fundamental changes in federalism? Of course not: The New Deal constitutional revolution changed not one word in the document. What happened, rather, was pure politics. Because the Supreme Court had ruled several of Franklin Roosevelt’s New Deal schemes unconstitutional, he threatened to pack it with six new members after his landslide re-election of 1936. Congress balked, but the Court got the message. With just three decisions it shifted the Constitution’s focus from liberty to Leviathan, launching us on the road toward ever-larger government — including, finally, Obamacare.

The first of the three seminal decisions was NLRB v. Jones & Laughlin, decided in April 1937. The issue in that case, as here, was the scope of Congress’s power to regulate interstate commerce. At the Founding the commerce power generated little concern because it was understood by all as aimed mainly at checking state protectionist measures that had frustrated interstate commerce under the Articles of Confederation. Accordingly, Congress was authorized to regulate — or “make regular” — commerce among the states. Understood functionally, it was thus a power to secure liberty. But the cowed Jones & Laughlin Court read it as permitting Congress to regulate, for any reason, any activity that affected interstate commerce, which of course is virtually anything, especially if aggregated with other such activities, as the Court would hold in the infamous Wickard v. Filburn decision of 1942.

The irony should not be missed: A power intended by the Framers to free commerce is today used by countless unaccountable regulators to hobble it — for ends limited only by the political imagination. Still, in 1995, for the first time in 58 years, the Court put a brake on Congress’s commerce power. In United States v. Lopez the Court said that only activities that were “economic” could be regulated under the commerce power. Yet here, not buying insurance is neither an activity nor, accordingly, economic activity.