WASHINGTON – Sen. Orrin Hatch (R-Utah) spoke from the Senate floor again today on the constitutionality of the Democrat health care reform bill, saying it is not only bad policy for this country, but undermines the basis of our democracy – the Constitution. This speech follows on the heels of a speech he gave yesterday to the renowned Heritage Foundation on this same important subject.
The Senator urged his colleagues to not assume the Constitution allows Congress to do whatever it wants to do; and equally as important ignore the Constitution question altogether.
“The Constitution empowers Congress to do many things for the American people,” stated Hatch. “Just as important, however, is that the Constitution also sets limits on our power. We cannot take the power without the limits.”
The Senator addressed the biggest Constitutional hurdle the legislation presents – the so-called “personal mandate” which requires Americans to obtain a certain level of health insurance coverage or face a financial penalty.
“We hear a lot about how Senators on this side of the aisle are supposedly defending the big, evil insurance companies while those on the other side of the aisle are the defenders of American families,” Hatch stated. “This insurance mandate exposes such partisan hypocrisy. Let me ask one simple question; who would benefit the most from the unprecedented mandate to purchase insurance or face a penalty enforced by our friends at the Internal Revenue Service?
“The answer is simple. There are two clear winners under this draconian policy and neither is the American family. The first winner is the federal government, which could easily use this authority to increase the penalty, or impose similar ones, to create new streams of revenue to fund more out of control spending. Second, the insurance companies are the most direct winners under this insurance mandate because it would force millions of Americans who would not otherwise do so to become their customers. I cannot think of a bigger windfall for corporations than the federal government ordering Americans to buy their products.”
Hatch’s complete remarks follow:
Mr. President, I rise today to explain why I believe that the Reid healthcare bill is not only bad policy for this country, but also undermines the Constitution and the liberty it makes possible.
I urge my colleagues to resist two errors that can distort our judgment and lead us down the wrong path. Those errors are assuming that the Constitution allows whatever we want to do, and ignoring this question altogether. We have only the powers the Constitution grants us because liberty requires limits on government power and we have our own responsibility to make sure that we stay within those limits.
James Madison said that if men were angels, no government would be necessary and if angels were to govern men, no limits on government would be necessary. Because neither men nor the governments they create are angelic, government and limits on government are both necessary to protect liberty. Those limits come primarily from a written Constitution which delegates enumerated powers to the federal government.
Here is how the Supreme Court put it just a few years ago:
"Every law enacted by Congress must be based on one or more of its powers enumerated in the Constitution. 'The powers of the legislature are defined and limited; and that those limits may not be mistaken or forgotten, the constitution is written.'"
No one likes limits, least of all politicians with grand plans and aggressive agendas. It is tempting to ignore or forget the limits that the Constitution imposes on us by pretending that the Constitution means whatever we want it to mean. But we take an oath to support and defend the Constitution, not to make the Constitution support and defend us. The Constitution cannot limit government if government controls the Constitution.
In April 1992, during a debate on welfare reform legislation, the senior Senator from New York, Senator Moynihan, made a point of order that an amendment offered by a Republican Senator was unconstitutional. Here is what Senator Moynihan said: “We do not take an oath to balance the budget, and we do not take an oath to bring about universal peace, but we do take an oath to protect and defend the Constitution of the United States.”
Applying that sage advice today, we do not take an oath to reform the healthcare system or to bring about universal insurance coverage, but we do take an oath to protect and defend the Constitution of the United States.
For the past eight years, my friends on the other side of the aisle insisted that the Constitution sets definite and objective limits that the President must obey. The Constitution, they said, does not mean whatever the President wants it to mean. Compelling circumstances or even national crises, they said, cannot change the fact that the Constitution controls the President, not the other way around.
It is easy to insist that the Constitution controls another branch of government, that the Constitution does not mean whatever another branch wants it to mean. The real test of our commitment to liberty, however, is our willingness to point that same finger at ourselves. I ask my colleagues: is the Constitution rock-solid, unchanging, and supreme for the executive branch but malleable, shape-shifting, and in the eye of the beholder for the legislative branch?
A principle applied only to others is just politics, and politics alone cannot protect liberty. We must be willing to say that there are lines we may not cross, means we may not use, and steps we may not take.
The Constitution empowers Congress to do many things for the American people. Just as important, however, is that the Constitution also sets limits on our power. We cannot take the power without the limits.
I want to address several constitutional issues raised by this legislation. The first is the requirement in Section 1501 that individuals obtain not simply health insurance, but a certain level of insurance. Failure to meet this requirement results in a financial penalty which is to be assessed and collected through the Internal Revenue Code.
We hear a lot about how Senators on this side of the aisle are supposedly defending the big, evil insurance companies while those on the other side of the aisle are the defenders of American families. This insurance mandate exposes such partisan hypocrisy. Let me ask one simple question: who would benefit the most from this unprecedented mandate to purchase insurance or face a penalty enforced by our friends at the Internal Revenue Service?
The answer is simple. There are two clear winners under this draconian policy and neither is the American family. The first winner is the federal government, which could easily use this authority to increase the penalty, or impose similar ones, to create new streams of revenue to fund more out of control spending. Second, the insurance companies are the most direct winners under this insurance mandate because it would force millions of Americans who would not otherwise do so to become their customers. I cannot think of a bigger windfall for corporations than the federal government ordering Americans to buy their products.
Right now, states are responsible for determining policies that best meet the particular demographic needs and challenges of their own residents. Massachusetts, for example, has decided to implement a health insurance mandate while Utah has decided not to do so. This bill would eliminate this state flexibility so that the federal government may impose yet another one-size-fits-all mandate on all 50 states and on every American. I cannot think of anything more at odds with the system of federalism that America’s founders established, a system designed to limit government and protect liberty.
I can understand why this mandate is so attractive to those who believe in an all-powerful federal government. After all, raising the percentage of those with health insurance is easy by simply ordering those without insurance to buy it. But while government may choose the ends, the Constitution determines the permissible means. That is why one of the basic principles is that Congress must identify at least one of our powers enumerated in the Constitution as the basis for any legislation we pass.
The health insurance mandate is separate from the penalty used to enforce it. The only enumerated power that can conceivably justify the mandate is the power to regulate interstate commerce. For more than a century, the Supreme Court treated this as meaning what it says. Congress could not use its power to regulate commerce in order to regulate something that is not commerce. Congress could not use its power to regulate interstate commerce in order to regulate intrastate commerce.
In classic judicial understatement, the Supreme Court has said that "our understanding of the reach of the commerce clause…has evolved over time." Indeed it has. Since the 1930s, the Supreme Court has expanded the power to regulate interstate commerce to include regulating activities that substantially affect interstate commerce. That is obviously far beyond, by orders of magnitude, what the commerce power was intended to mean, but that is where things stand today and some say it justifies the health insurance mandate.
Using the Constitution, or even the Supreme Court’s revision of the Constitution, as a guide requires more than a good intention fueled by an active imagination. The Supreme Court has certainly expanded the category of activities that Congress may regulate, but every one of its cases has involved Congress seeking to regulate just that, activities in which people have chosen to engage. Even the Supreme Court has never abandoned that category altogether and allowed Congress instead to require that individuals engage in activities, in this case by purchasing a particular good or service.
Let me mention just three of the Supreme Court’s commerce clause cases. In its very first case, Gibbons v. Ogden in 1824, Thomas Gibbons had received a federal license to operate a steamboat between New Jersey and New York and wanted to compete with Aaron Ogden, who had been granted a steamboat monopoly by New York State. In Wickard v. Filburn, Roscoe Filburn used the winter wheat he planted on his Ohio farm to feed his livestock and make bread for his dinner table. In the winter of 1942, he grew more wheat than allowed under the Agricultural Adjustment Act and challenged the resulting fine. And in Hodel v. Surface Mining & Reclamation Association, companies challenged a federal statute regulating surface coal mining.
These cases have two things in common. The Supreme Court upheld federal authority in each case, but each case involved an activity in which individuals chose to engage. There would have been no Gibbons v. Ogden if Thomas Gibbons had not chosen to operate a steamboat. Congress could regulate his activity but could not have required that he engage in it. There would have been no Wickard v. Filburn if Roscoe Filburn had not chosen to grow wheat. Congress could regulate his activity but could not have required that he engage in it. And there would have been no Hodel case if companies had not chosen to mine coal. Congress could regulate their activity but could not have required that they engage in it.
The key word in the commerce clause is the word regulate and the key word in every Supreme Court case about the commerce clause is the word activity. Regulating an activity in which individuals choose to engage is one thing, requiring that they engage in that activity is another.
The Congressional Budget Office examined the 1994 healthcare reform legislation, which also included a mandate to purchase health insurance. Here is the CBO's conclusion: "A mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action. The government has never required people to buy a particular good or service....Federal mandates typically apply to people as parties to economic transactions, rather than members of society."
In other words, Congress can regulate commercial activities in which people choose to engage, but cannot require that they engage in those commercial activities.
Just a few months ago, as Congress once again is considering a health insurance mandate, the Congressional Research Service examined the same issue. Here is what CRS concluded: "Whether such a requirement [to have health insurance] would be constitutional under the Commerce Clause is perhaps the most challenging question posed by such a proposal, as it is a novel issue whether Congress may use this clause to require an individual to purchase a good or service."
One thing did change in the legal landscape between 1994, when CBO called the health insurance mandate unprecedented, and 2009, when CRS called it novel. The Supreme Court twice found that there are limits to what Congress may do in the name of regulating interstate commerce. In United States v. Lopez, the Court rejected a version of the commerce power that would make it hard "to posit any activity by an individual that Congress is without power to regulate."
If there is no difference between regulating and requiring what people do, if there is no difference between incentives and mandates, if Congress may require that individuals purchase a particular good or service, why did we bother with the Cash for Clunkers program? Why did we bother with the TARP or other bailouts? We could simply require that Americans buy certain cars or appliances, invest in certain companies, or deposit their paychecks in certain banks. For that matter, we could attack the obesity problem by requiring Americans to buy fruits and vegetables.
Some say that because state governments may require drivers to buy car insurance, the federal government may require that everyone purchase health insurance. Simply stating that point should be enough to refute it. States may do many things the federal government may not, and if you do not drive a car, you do not have to buy car insurance. This legislation would require individuals to have health insurance simply because they exist, even if they never see a doctor for the rest of their lives.
The defenders of this health insurance mandate must know they are on shaky constitutional ground. The bill before us now includes findings which attempt to connect the mandate to the Constitution. I assume that they are the best arguments that this unprecedented and novel mandate is constitutional.
Those findings fail in at least four ways. First, the findings say that the requirement to purchase health insurance will add millions of new consumers to the health insurance market. I cannot dispute the observation that requiring more people to purchase health insurance will result in more people having health insurance. That seems quite self-evident. But the question is not the effect of the mandate, but the authority for the mandate. Liberty requires that the ends cannot justify the means.
The findings also fail to establish that the insurance mandate is constitutional by failing to offer a single example, a single precedent, a single case in which Congress has required individuals to purchase a particular good or service or the courts have upheld such a requirement. The cases I described are typical, and similar examples are legion. Every one involves regulation of activity in which individuals choose to engage. Requiring that individual engage in such activity is a difference not in degree, but in kind.
The findings also fail to answer the question by observing that states such as Massachusetts have required that individuals purchase health insurance. As I noted regarding the example of car insurance, our federal-state system allows states to do many things that the federal government may not. That is one of those limits on government power that is necessary to protect liberty.
And the findings fail to answer the question by mistakenly focusing on whether Congress may regulate the sale of insurance. That misses the point in two respects. Simply because Congress may regulate the sale of health insurance does not mean that Congress may require it. And simply because Congress may regulate the sale of health insurance does not mean Congress may regulate the purchase of health insurance.
This legislation requires you to believe that non-activity is the same as activity, that choosing not to do something is the same as choosing to do it, that regulating what individuals do is the same as requiring them to do it. That notion makes no common sense, and it certainly makes no constitutional sense.
If Congress can require individuals to spend their own money on a particular good or service simply because Congress thinks it is important, then the Constitution means whatever Congress says it means and there are no limits on the federal government’s power. That version of federal power would be exactly what the Supreme Court in Lopez prohibited, namely, that there would be no activity by individuals that the federal government could not control.
Neither the power to regulate interstate commerce granted by the Constitution, nor the power to regulate activities that substantially affect interstate commerce granted by the Supreme Court, go that far.
The American people agree. A national poll conducted last month found that 75 percent of Americans believe that requiring them to purchase health insurance is unconstitutional because Congress’ power to regulate commerce does not include telling Americans what they must buy. By a margin of more than seven-to-one, Americans believe that elected officials should be more concerned with upholding the Constitution regardless of what might be popular than enacting legislation even if it is not constitutional.
Some defenders of this legislation, such as the House Majority Leader, have said that Congress may require individuals to purchase health insurance because it can pass legislation to promote the general welfare. The only thing necessary to dismiss this argument is reading the Constitution. Just read the Constitution. Article I refers to general welfare as a purpose, not as a power. And it is a purpose that limits, rather than expands, Congress’ power to tax and to spend. The requirement that individuals purchase health insurance is not an exercise of either the power to tax or the power to spend, and so even the purpose of general welfare is not connected to it at all.
Needless to say, it makes no sense to include in a written Constitution designed to limit federal government power an open-ended, catch-all provision empowering Congress to do anything it thinks serves the general welfare. If America’s founders wanted to create a federal government with that much power, they could have written a much shorter constitution, one that simply told Congress to go forth and legislate well.
The Heritage Foundation has just published an important paper arguing that this health insurance mandate is both unprecedented and unconstitutional. It is authored by Randy Barnett, the Cormack Waterhouse Professor of Legal Theory at the Georgetown University Law Center; Nathaniel Stewart, an attorney with the prestigious law firm of White & Case; and Todd Gaziano, Director of the Center for Legal and Judicial Studies at the Heritage Foundation. I ask consent to place this paper in the record.
I also want to share with my colleagues a letter I received from Dr. Michael Adams and attorney Carroll Robinson. They are on the faculty of the Barbara Jordan-Mickey Leland School of Public Affairs at Texas Southern University. Mr. Robinson, a former member of the Houston City Council, was named by the Democratic Leadership Council in 2000 to its list of 100 to Watch. I ask consent that their entire letter, which is dated October 25, 2009, be placed in the record following my remarks. Let me share here just an excerpt:
"Our reading of the Constitution and Supreme Court precedent could not identify any reasonable basis, expressed or implied, for granting Congress the broad, sweeping and unprecedented power that is represented by the individual mandate requirement. In fact, we could not find any court decision, state or federal, that said or implied that the Constitution gave Congress the power to mandate citizens buy a particular good or service or be subject to a financial penalty levied by the government for not doing so.”
It is certainly possible to achieve the goal of greater health insurance coverage by constitutional means. I am quite certain, however, that those means are politically impossible. Liberty requires that the Constitution trump politics, but in the legislation before us, politics trumps the Constitution.
Another provision in this legislation that is inconsistent with the Constitution is Section 9001, which imposes an excise tax on high cost employer-sponsored insurance plans differently in some states than in others. The legislation imposes a tax equal to 40 percent of benefits above a prescribed limit, but raises that limit in 17 states to be determined by the Secretaries of the Treasury and Health and Human Services.
The Constitution allows Congress to impose excise taxes, but requires that they be “uniform throughout the United States.” This is one of those provisions that will be dismissed with pejorative labels such as archaic by those who find it annoying. But it is right there in the same Constitution that we have all sworn that same oath to protect and defend and we are just as bound to obey it. And frankly, a good test of our commitment to the Constitution is when we must obey a provision that limits what we want to do.
The Supreme Court has had relatively few opportunities to interpret and apply the uniformity clause. But its cases do provide some basic principles which I think easily apply to the legislation before us today. The Court has held, for example, that a federal excise tax must be applied “with the same force and effect in every place where the subject of it is found.” Congress has wide latitude in determining what to tax and may tailor a regional solution to a geographically isolated problem, but laws drawn explicitly in terms of state lines will receive heightened scrutiny.
By the plain terms of the legislation before us, insurance plans providing a certain level of benefits in one state will be taxed while the very same plans providing the very same benefits in another state will not be taxed. We do not yet know which states will be treated differently, but we do know that 17 of them will. That actually makes the constitutional point more clearly by identifying the state-based discrimination more starkly.
Congress may decide to tax insurance plans with benefits that exceed a particular limit, but the tax must have the same force and effect wherever that subject of the tax is found. That is the clear meaning of the constitutional provision and the clear holding of the Supreme Court’s precedents. Taxing the same insurance plans differently in one state than in another is the opposite of taxing them uniformly throughout the United States.
I commend to my colleagues the work of Professor Thomas Colby, of the George Washington University Law School, whose comprehensive work on the uniformity clause was published in volume 91 of the Virginia Law Review.
I asked the Congressional Research Service to look at this uniformity clause issue. Its report confirmed that this differential tax on high-cost insurance plans is drawn explicitly along state lines and that a court will more closely scrutinize the reasons for the state-based distinction. It also concluded that Congress has not articulated any justification for singling out certain states for different treatment.
I have raised this issue over and over throughout the process of developing and considering this legislation. I serve on both of the Senate committees that are involved in this process. I have never heard any justification for singling out certain states for different tax treatment. The attitude seems to be that this is what the majority wants to do and so they are going to do it, no matter what the Constitution says. That may be politically possible, but that does not make it constitutionally permissible.
Other legal analysts and scholars who are examining this healthcare takeover legislation are raising additional constitutional objections. Professor Richard Epstein of the University of Chicago School of Law, for example, focuses on provisions that restrict insurance providers’ ability to make their own risk-adjusted decisions about coverage and premiums. He argues that these restrictions amount to a taking of private property without just compensation in violation of the Fifth Amendment.
Others have observed that the legislation requires states to establish health benefit exchanges. It does not ask, cajole, encourage, or even bribe them. It simply orders state legislatures to pass legislation creating these health benefit exchanges and says that if states do not do so, the Secretary of Health and Human Services will establish the exchanges for them.
But as the Supreme Court said in FERC v. Mississippi in 1982, “this Court never has sanctioned explicitly a federal command to the States to promulgate and enforce laws and regulations.” The Supreme Court reaffirmed a decade later in New York v. United States that “The Framers explicitly chose a Constitution that confers upon Congress the power to regulate individuals, not States.” In that case, the Court struck down federal legislation that would press state officials into administering a federal program.
And more recently, in Printz v. United States, the Supreme Court stated: “We have held, however, that state legislatures are not subject to federal direction.” And yet, this legislation does what these cases said Congress may not do. It commands states to pass laws, it regulates states in their capacity as states, and it attempts to make states subject to federal direction.
Let me return to the principles with which I began. Liberty requires limits on government power. Those limits come primarily from a written Constitution which delegates enumerated powers to Congress. We must be able to identify at least one of those enumerated powers to justify legislation and those powers do not mean whatever we want them to mean.
Those principles lead me to conclude that Congress does not have authority to require that individuals purchase health insurance and that Congress cannot tax certain health insurance plans in some states but not in others. These, and the others I have mentioned, are only some of the constitutional issues raised by this legislation. Any of these, and others I have not mentioned, could well be the basis for future litigation challenging this legislation should it become law.
Writing for the Supreme Court in 1991, Justice Sandra Day O'Connor reminded us all that "the Constitution created a Federal Government of limited powers." America's founders, she wrote, limited federal government power to "protect our fundamental liberties." Here is the way Justice O’Connor put it, writing for the Supreme Court in New York v. United States:
“But the Constitution protects us from our own best intentions: It divides power among sovereigns and among branches of government precisely so that we may resist the temptation to concentrate power in one location, as an expedient solution to the crisis of the day.”
I could not have said it better myself. Those are either principles that we must obey or cliches that we may ignore. If the Constitution means anything anymore, if it does what it was created to do by not only empowering but, more importantly, limiting government power, then now is the time to stand on principle rather than to slip on politics.
I yield the floor.
