Obamacare’s Medicaid Expansion Violates Federalism
Today Cato filed its second Supreme Court amicus brief in the Obamacare litigation, on the issue of whether the health care law’s Medicaid expansion is a proper exercise of the Constitution’s Spending Clause.
That is, states must now accept a comprehensive reorganization of Medicaid or forfeit all federal Medicaid funding—even though the spending power is circumscribed to preserve a distinction between what is local and what is national. If Congress is allowed to attach conditions to spending that the states cannot refuse in order to achieve an objective it could not outright mandate, the local/national distinction that is so central to federalism will be erased.
Joining the Center for Constitutional Jurisprudence, Pacific Legal Foundation, Rep. Denny Rehberg (chairman of the House Appropriations Subcommittee on Labor, Health & Human Services, Education, and Related Agencies), and Kansas Lt. Gov. Jeffrey Colyer (also a practicing physician) we argue that, in requiring states to accept onerous conditions on federal funds that it could not impose directly, the government has exceeded its enumerated powers and violated basic principles of federalism.
California is at risk of losing $25.6 billion in annual federal funding, for example, and together the states stand to lose more than a quarter trillion dollars annually. On average, states would have to increase their general revenue budgets by almost 40% in order to maintain their current level of Medicaid funding.
The 1987 case of South Dakota v. Dole, however, prohibits such a coercive use of the spending power and recognizes that “in some circumstances the financial inducement offered by Congress might be so coercive as to pass the point at which ‘pressure turns into compulsion.’” Indeed, the states’ obligations, should they “choose” to accept federal funding and thus commit themselves to doing the government’s bidding, are far more substantial than those the Supreme Court invalidated in New York v. United States and Printz v. United States (which prohibit federal “commandeering” of state officials).
Moreover, the Congress that enacted the original Social Security Act, to which Medicare and Medicaid were added in the 1960s, recognized that social safety has always been the prerogative of the states and should continue to be done under state discretion. Medicaid itself was narrowly tailored to serve particularly needy groups.
In short, if Obamacare does not cross the line from valid “inducement” to unconstitutional “coercion,” nothing ever will. Just as the Commerce Clause is not an open-ended grant of power, the Spending Clause too has limits that must be enforced.
Did Canada Steal Our Tenth Amendment?
Under the U.S. Constitution, the federal government was assigned specific limited powers, and most government functions were left to the states. To ensure that people understood the limits on federal power, the Framers added the Tenth Amendment: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” Those delegated powers are “few and defined,” noted James Madison.
But the Tenth Amendment has disappeared. No one has seen it in recent decades. But I’ve found some statistics that make me very suspicious that the Canadians stole the Tenth. Look at the pie charts below. The top pie shows that 71 percent of total government spending in the United States is federal, while 29 percent is state/local. (See BEA tables 3.1, 3.2, 3.3 for 2010 data).
Back when we still had the Tenth, that ratio was the other way around—like how the bottom chart looks for Canada today. In Canada, federal spending accounts for just 38 percent of total government spending, while provincial/local spending accounts for 62 percent. (See Canada Yearbook for 2010/11 data.)
Actually, the real culprit for the missing Tenth is not the Canadians, but the U.S. Congress. In recent decades, Congress has undertaken many activities that were traditionally reserved to state and local governments. A primary method has been through “grants-in-aid.” These are federal subsidies combined with regulatory controls that micromanage state and local affairs. In United States, federal grants are about 4.1 percent of GDP (in fiscal 2011), while in Canada they are about 3.3 percent of GDP.
Even more striking: while we’ve got a complex mess of more than 1,000 state grant programs, Canada seems to have just a handful, and they are simple block grants. As I understand it, Canada’s federal grants to lower governments mainly just include:
- A health care block grant
- A social services block grant
- An “equalization” block grant to help the poor provinces.
There is a smattering of other aid, but that’s just about it. There are no federal subsidies for K-12 education in Canada, for example. There are a few large block grants and not much else.
On October 27, I’m on an Urban/Brookings panel looking at “What Can the United States Learn from Canada.” Perhaps we can learn how to get our decentralized federation back. While we’re at it, we could get some tips on how to cut government spending, as the Canadians did in the 1990s.
The President Can’t Increase Congress’s Power Simply by Signing a Treaty
A lost episode of Jerry Springer found its way into the Supreme Court’s 2010-11 term in the case of United States v. Bond. Mrs. Bond, upset by the pregnancy that resulted from an affair between her husband and her erstwhile best friend, decided to take revenge. A trained microbiologist working at a chemical manufacturer, Mrs. Bond tried to poison her husband’s mistress by dusting her door knobs, mailbox, and car handles with dangerous, possibly lethal chemicals.
Upon being caught by (federal) postal inspectors, Mrs. Bond was charged with violating the law Congress passed to implement an international chemical weapons treaty. (There are no generally applicable federal attempted murder statutes, so prosecutors had to get creative to remain in federal court.)
But if general criminal statutes are beyond Congress’s powers, as even the most ardent federal-power activist must acknowledge, how did Congress have the power to pass the law that ensnared Mrs. Bond? — who, whatever her character flaws, was not selling chemical weapons to terrorists (the treaty’s target). Mrs. Bond thus hoped to challenge her conviction by arguing that Congress did not have the power to pass the law in question.
The Third Circuit, however, ruled that she did not have standing — a legal doctrine defining who has the right to bring a claim — to challenge the law on federalism grounds. Cato filed a Supreme Court brief supporting Mrs. Bond’s position and arguing that it makes no sense to deny standing to someone challenging a law under which she is being prosecuted. The Court unanimously agreed and remanded the case back to the Third Circuit, to finally hear arguments over whether the statute is beyond congressional power.
Cato has now reentered the fray, in a brief authored by Georgetown law professor Nicholas Quinn Rosenkranz and joined by the Center for Constitutional Jurisprudence. We again support Mrs. Bond’s claim that the law under which she was charged is beyond Congress’s enumerated powers. The main obstacle to this argument is the 1920 case Missouri v. Holland, a short and not completely clear opinion by Justice Oliver Wendell Holmes that has been interpreted to mean that Congress can expand its enumerated powers via the Treaty Clause.
In other words, even though Congress does not have the power to pass, for example, general criminal statutes, if Congress ratifies a treaty calling for such statutes, its power increases beyond constitutional limits. We argue that this is an astounding manner in which to interpret a Constitution that creates a federal government of limited powers. Not only would this mean that the Executive has the ability to expand congressional power by signing a treaty, but it would mean that foreign governments could change congressional power by abrogating a previously valid treaty — thus removing the constitutional authority from certain laws. We also point out how the most influential argument supporting Missouri v. Holland is based on a clear misreading of constitutional history and that the ruling is in deep tension with other cases.
On the treaty power, we’re in a constitutional quagmire that can only be escaped by limiting or overturning Missouri v. Holland. The Third Circuit can’t itself overturn a Supreme Court decision, of course, but it follows our brief, it can at least limit its damage.
Republicans and the New York Marriage Law
Since New York passed a law extending marriage to same-sex couples, Republican presidential candidates have been mostly silent. But not Rep. Michele Bachmann, who has had a long and strong interest in gay rights issues. In an interview on Fox News Sunday she endorsed both New York’s Tenth Amendment right to make marriage law and the federal government’s right to override such laws with a constitutional amendment, confusing host Chris Wallace:
WALLACE: You are a strong opponent of same-marriage. What do you think of the law that was just passed in New York state—making it the biggest state to recognize same-sex marriage?
BACHMANN: Well, I believe that marriage is between a man and a woman. And I also believe—in Minnesota, for instance, this year, the legislature put on the ballot for people to vote in 2012, whether the people want to vote on the definition of marriage as one man, one woman. In New York state, they have a passed the law at the state legislative level. And under the 10th Amendment, the states have the right to set the laws that they want to set….
WALLACE: But you would agree if it’s passed by the state legislature and signed by the governor, then that’s a state’s position.
BACHMANN: It’s a state law. And the 10th Amendment reserves for the states that right.
WALLACE: All right. I want to follow up on that, because I’m confused by your position on this. Here’s what you said in the New Hampshire debate. Let’s put it on.
(BEGIN VIDEO CLIP)
BACHMANN: I do support a constitutional amendment on marriage between a man and a woman, but I would not be going into the states to overturn their state law.
(END VIDEO CLIP)
WALLACE: That’s why I’m confused. If you support state rights, why you also support a constitutional amendment which would prevent any state from recognizing same-sex marriage?
BACHMANN: Well, because that’s entirely consistent, that states have, under the 10th Amendment, the right to pass any law they like. Also, federal officials at the federal level have the right to also put forth a constitutional amendment….
WALLACE: My point is this, do you want to say it’s a state issue and that states should be able to decide? Or would like to see a constitutional amendment so that it’s banned everywhere?
BACHMANN: It is— it is both. It is a state issue and it’s a federal issue. It’s important for your viewers to know that federal law will trump state law on this issue. And it’s also—this is why it’s important—
WALLACE: And you would [sic] federal law to trump state law?
BACHMANN: Chris, this is why it’s so important because President Obama has come out and said he will not uphold the law of the land, which is the Defense of Marriage Act. The Congress passed the Defense of Marriage Act and Bill Clinton signed it into law, to make sure that a state like New York passed a definition of marriage other [sic] one man, one woman, that other states wouldn’t be forced to recognize New York’s law….
WALLACE: So, just briefly, you would support a constitutional amendment that would overturn the New York state law?
BACHMANN: Yes, I would. I would. That is not inconsistent, because the states have the right under the 10th Amendment to do what they’d like to do. But the federal government also has the right to pass the federal constitutional amendment. It’s a high hurdle, as you know.We only have 27 amendments to the federal constitution. It’s very difficult. But certainly, it will either go to the courts, or the people’s representatives at the federal level.
Congratulations to Chris Wallace for his tenacious questioning. Presumably the way to understand Bachmann’s position is that she thinks states have a Tenth Amendment right to make their own laws in any area where the federal government doesn’t step in, and she supports a federal law overriding state marriage laws. That includes the Defense of Marriage Act, whose Section 3 says for the first time in history that the federal government will not recognize marriage licenses issued by the states. And it also includes a federal constitutional amendment to prohibit states from implementing equal marriage rights for gay couples.
Bachmann is not the only Republican who should be asked about the tension between support for the Tenth Amendment and support for federal laws and amendments to carve exceptions out of the Tenth Amendment. This month George Will has praised two Texas Republicans: First, Senate candidate and former Texas solicitor general Ted Cruz, whom he called a “limited-government constitutionalist” and who wrote a senior thesis at Princeton “on the Constitution’s Ninth and 10th amendments. Then as now, Cruz argued that these amendments, properly construed, would buttress the principle that powers not enumerated are not possessed by the federal government.” And second, Governor Rick Perry, who “was a ‘10th Amendment conservative‘ (‘The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people’) before the Tea Party appeared.”
Cruz boasts on the same page of his website of his support of both the Tenth Amendment and DOMA. Does he really think, as a staunch defender of the Tenth Amendment, that the federal government should override the marriage law of the great state of New York? Perry may be a consistent Tenth Amendment conservative. In his book Fed Up! Our Fight to Save America from Washington he makes his opposition to gay marriage more than clear. But he does write, “Crucial to understanding federalism in modern-day America is the concept of mobility, or the ability to ‘vote with your feet.’ If you don’t support the death penalty and citizens packing a pistol, don’t come to Texas. If you don’t like medical marijuana and gay marriage, don’t move to California.” And an NPR interviewer reported:
States should be free to make decisions regulating such things as taxes, marijuana and gay marriage, Perry says.
“If you want to live in a state that has high taxes, high regulations — that is favorable to smoking marijuana and gay marriage — then move to California,” he says.
Now that a large state has made national headlines by passing a gay marriage law—without any prodding from the judiciary—more political candidates, from President Obama to his Republican challengers, are going to be pressed to make their positions clear on the issue of marriage equality itself, on federalism and the powers of the states, and on the lawsuits that are moving through the courts.
Two Cheers for the Bill of Rights!
As Tim Lynch has already blogged — and as Cato is currently featuring on its front page, today is Bill of Rights Day. But of course, this is less of a big deal than Constitution Day (September 17, when we release the Cato Supreme Court Review at an annual conference) — because the Bill of Rights is essentially redundant of the Constitution’s original structural protections: Whenever the government exceeds its constitutionally granted powers, it violates rights of some sort.
Tim Sandefur explains over at the Pacific Legal Foundation’s blog:
Madison, along with his colleagues like James Wilson, Alexander Hamilton, and others, expected the Constitution to give Congress only a limited set of powers—powers that were listed in the text of the document. If it wasn’t listed in the text, then Congress couldn’t do it. So the federal government could collect taxes or run a post office, but it couldn’t do other things—like run a national health care program, for instance. Since Congress’s powers were, in Madison’s words, “few and defined,” there was no need to add a bill of rights to declare that the federal government couldn’t do such-and-such, because they already couldn’t do such-and-such.
Indeed, the argument went, if you enumerate various rights, some will later claim that this is an exhaustive list – even though it’s impossible to list all of our rights at every conceivable level of specificity – with everything else subject to state regulation and control and perhaps implied powers too. That concern is why, even though Jefferson and others won the debate over whether to have a bill of rights, Madison and others ensured that the Ninth Amendment would be included as a safeguard against those who would “deny or disparage” other rights that are “retained by the people.” And why the Tenth Amendment reiterated that, conversely, the powers “not delegated to the United States” are “reserved to the States respectively, or to the people.”
We’re fortunate that both Jefferson and Madison got their way because, as we’ve seen over the last 70+ years, the Supreme Court read out of the Constitution the structural protections for liberty that are plainly there in the pre-amended Constitution. Not that the Court has done a very good job on the “rights” side of the coin, either — think eminent domain abuses (earlier this week it denied cert. in the Columbia University case, by the way), or the Second Amendment before Heller, or, perhaps most infamously, economic liberties since the rights bifurcation of 1937′s Carolene Products footnote 4 – but if it weren’t for these little bones that it has thrown our way, why the government would always be the sole judge of its own powers. (Which, of course, is what Obamacare proponents argue, that the check on Congress’s power is purely political.)
In any event, bully for the Bill of Rights, even if it’s not — as many people think — the most important part of the Constitution.
ObamaCare Comes Up against the Constitution
Today POLITICO Arena askes:
How badly does today’s ObamaCare ruling set back the Democrat’s signature domestic achievement? Should Tenth Amendment enthusiasts take heart that other federal laws with which state officials disagree can be struck down?
My response:
A quick reading of Judge Henry Hudson’s opinion today striking the “individual mandate” provision of ObamaCare gives hope to those of us who have long urged, more broadly, for a restoration of limited constitutional government. As Judge Hudson put in granting summary judgment to Virginia, “the legislative process must still operate within constitutional bounds.”
The administration had argued that Congress had authority to enact and enforce the individual mandate to buy health insurance under its power to regulate interstate commerce. But Judge Hudson responded that “Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market.” Indeed, he noted, the administration’s reasoning could apply to “transportation, housing, or nutritional decisions. This broad definition of economic activity [to include inactivity] subject to congressional regulation lacks logical limitation.” The federal government remains, in short, one of delegated, enumerated, and thus limited powers, notwithstanding the leviathan that surrounds us today.
This is a significant setback for the administration, not least because Judge Hudson cites to a similar argument set forth by federal district Judge Roger Vinson in Vinson’s October 14 opinion denying the administration’s motion to dismiss the ObamaCare suit brought against it by 21 states, with more to follow. There will be more litigation on these issues, of course, but for today, at least, the Tenth Amendment and the limited government it implies are alive and well.
An Education in Bizarro Constitutional History
Last week, Rep. Mike Honda (D-CA) published a call in The Hill for a much bigger federal role in elementary and secondary education. His plans are loaded with flaws too numerous to dissect here, so I’ll just highlight one, depressing thing about his piece: his bizarro constitutional history. Follow Honda’s narrative and you’d think for most of our history the feds stayed out of education because of the Articles of Confederation, and a jerky little state called Rhode Island:
Inequity in education has historical roots. At its inception, the Federal Government lacked the capacity and the authority to take responsibility for public education. Before the Constitution was drafted, the 13 colonies operated under the Articles of Confederation, created by the Second Continental Congress. The Articles of Confederation could only be amended by unanimous vote of the states. Any state had effective veto power over any proposed change.
In addition, the Articles gave the weak federal government no taxing power. It was entirely dependent on the states for its money and had no power to force delinquent states to pay. In fact, Rhode Island, fearing that the Convention would work to its disadvantage, boycotted the Convention in the hopes of preventing any change to the Articles. When the Constitution was subsequently presented to the Confederation, Rhode Island refused to ratify it. To placate the states, the Tenth Amendment ceded broad authority to the state governments.
Consequently, as regions of the country developed their own public education systems, disparities opened up.
That Rep. Honda published this dreck is as good as any argument for keeping Washington way out of our schools, especially our American history and civics classes.
The Articles, for one thing, were weak on purpose – Americans were extremely concerned about concentrating too much power in the hands of a central government. Mr. Honda, however, sounds almost as if Americans somehow arrived to find the Articles of Confederation already in place and just had to put up with a bad situation.
Much more egregious — but also, I’m afraid, more common – Honda writes as if the Constitution does not contain Article I, Section 8, which purposely gives the federal government only specific, enumerated powers, and automatically leaves all others to the states and people. The 10th Amendment — which Honda asserts is what long kept DC out of education — does not actually change in any way what power belongs to the feds, states, and people — it just makes it more explicit.
Finally, very few Americans in the 1770s and 1780s would have even recognized something called “public education,” much less tried to give the national government “responsibility” for it. Back then education was almost entirely a family, church, and community affair, and most people wouldn’t have imagined anything different.
Sadly, Honda’s piece is just further confirmation that many of our representatives in Washington care not one whit about what the Constitution says and permits Washington to do. That, or they really don’t know. Either way, it helps explain why the nation is in a world of hurt, and makes very clear that the obstacles to getting Washington out of education are very tall, indeed.
Is Rick Perry Really for Limited Government?
Conservative radio hosts are excited about a recent speech by Texas governor Rick Perry. Perry forcefully argued his theme of “unwavering support for efforts all across our country, but, most of all, here in Texas, to reaffirm the states’ rights affirmed through the Tenth Amendment to the U.S. Constitution.”
That sounds great, but does he really mean it?
In a study, I noted that Perry and the Texas state government are aggressive scavengers of federal grant dollars. The rise in federal granting is one of the central causes of the destruction of the Tenth Amendment in recent decades.
I noted that Perry’s official webpage is chock full of press releases touting his distribution of federal subsidies. These press releases are from a short time period in 2006:
- “Perry: Texas Farmers and Ranchers to Share $780 Million in Drought Assistance.”
- “Perry: FEMA Agrees to Reimburse Texas at Same Rate as Louisiana for Hurricanes.”
- “Gov. Perry Announces $1.6 Million in Grants to Juvenile Offender Accountability Programs.”
- “Perry: Homeland Security Grants to Focus on Technology Needs.”
- “Gov. Perry: Presidential Disaster Declaration Approved for El Paso.”
- “Gov. Perry Announces $38,098 in Victims of Crime Act Funds to El Paso County.”
- “Gov. Perry Announces $3.6 Million in Grants to Local Law Enforcement.”
Notice how Perry takes credit for all the new spending? Politicians love spending, especially when they can foist the cost on taxpayers living in other states.
Look at these two press releases up on Perry’s website right now:
- Apr. 9: “Gov. Perry Backs Resolution Affirming Texas’ Sovereignty Under 10th Amendment.”
- Apr. 10: “Gov. Perry Calls on FEMA to Assist the State in Fighting Wildfires.”
Governor Perry: Do you want to revive the Tenth Amendment or do you want the FEMA money? You’re giving us whiplash out here!
I don’t think Perry’s tax policies have been particularly conservative either, as they have centralized fiscal power at the state level and thus reduced beneficial competition between local governments.
Cato on Facebook
Cato on Twitter
Cato on Google+
Cato on YouTube
