12.22.09

Statement On The Constitutionality of the Health Insurance Reform Legislation

The urgent need for comprehensive reform of our health care system has not stopped opponents from launching spurious attacks.  I understand that the Junior Senator from Nevada recently raised a constitutional point of order against the pending health care reform bill.  As Chairman of the Senate Judiciary Committee, I would like to respond to those who have called into question whether Congress has the authority under the Constitution to enact health insurance reform legislation.  The authority of Congress to act is well-established by the text and the spirit of the Constitution, by the long-standing precedent established by our courts, by prior acts of Congress and by the history of American democracy.  The legislative history of this important measure should leave no doubt with respect to the constitutionality of our actions. 

The Constitution of the United States begins with a preamble that sets forth the purposes for which “We the People of the United States” ordained and established it.  Among the six purposes set forth by the Founders was that the Constitution was established to “promote the general Welfare.”   It is hard to imagine an issue more fundamental to the general welfare of all Americans than their health. 

The authority and responsibility for taking actions to further this purpose is vested in Congress by Article I of the Constitution.  In particular Article I, Section 8, sets forth several of the core powers of Congress, including the “general welfare clause,” the “commerce clause” and the “necessary and proper clause.”  These clauses form the basis for Congress’ power, and include authority to reform health care by containing spiraling costs and ensuring its availability for all Americans.  The necessary and proper clause of the Constitution provides that “The Congress shall have Power . . . To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States or in any Department or Officer thereof.”                                                               

Any serious questions about congressional power to take comprehensive action to build and secure the social safety net have been settled over the past century.   According to Article I, Section 8, “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States.”  This clause has been the basis for actions by Congress to provide for Americans’ social and economic security by passing Social Security, Medicare and Medicaid.  Those landmark laws provide the well-established foundation on which Congress builds today by seeking to provide all Americans with access to quality, affordable health care. 

The Supreme Court settled the debate on the constitutionality of Social Security more than 70 years ago in three 1937 decisions.  In one of those decisions, Helvering v. Davis, Justice Cardozo wrote that the discretion to determine whether a matter impacts the general welfare “is not confided in the courts” but falls “within the wide range of discretion permitted to the Congress.”  Turning then to the “nation-wide calamity that began in 1929” of unemployment spreading from State to State throughout the nation, leaving older Americans without jobs and security, Justice Cardozo wrote of the Social Security Act: “The hope behind this statute is to save men and women from the rigors of the poor house as well as from the haunting fear that such a lot awaits them when journey’s end is near.”

The Supreme Court reached its decisions upholding Social Security after the first Justice Roberts—Justice Owen Roberts—in the exercise of good judgment and judicial restraint began voting to uphold the key New Deal legislation.  He was not alone.  It was Chief Justice Hughes who wrote the Supreme Court’s opinion in West Coast Hotel v. Parrish upholding minimum wage requirements as reasonable regulation.  The Supreme Court also upheld a Federal farm bankruptcy law, railroad labor legislation, a regulatory tax on firearms and the Wagner Act on labor relations in National Labor Relations Board v. Jones & Laughlin Steel Corporation.  The Supreme Court abandoned its judicially-created veto over congressional action with which it disagreed on policy grounds and rightfully deferred to Congress’ constitutional authority.   

Congress has woven America’s social safety net over the last three score and 12 years. Congress’ authority to use its power and its judgment to promote the general welfare cannot now be in doubt.  America and all Americans are the better for it.  Growing old no longer means growing poor.  Being older or poor no longer means being without medical care.  These developments are all due to congressional action. 

These Supreme Court decisions and the principles underlying them are not in question.  As Dean Erwin Chemerinsky of the University of California Irvine School of Law wrote in a recent op-ed in The Los Angeles Times: “Congress has broad power to tax and spend for the general welfare.  In the last 70 years, no federal taxing or spending program has been declared to exceed the scope of Congress' power. The ability in particular of Congress to tax people to spend money for health coverage has been long established with programs such as Medicare and Medicaid.”  I ask unanimous consent that this article be included in the record following my remarks. 

The right-wing opponents of health care reform are so intent on partisan warfare that they are even calling into question the constitutionality of America’s established social safety net.  They would leave American workers without the protections their lifetime of hard work have earned them.  They would turn back the clock to the hardships of the Great Depression, and thrust modern American back into the conditions of Dickens’ novels.  That is what some extremists will be urging another Justice Roberts—Chief Justice John Roberts—to do.  That path should be rejected now, just as it was when another inspiring President led the effort to confront the economic challenges facing Americans.  To strike down principles that have been settled for nearly three quarters of a century would be wrong and damaging to the Nation.  

For months now, we have been debating whether or not to pass health care reform.  We can debate whether to control costs by having all Americans be covered by health insurance.  In fact, we have been having that debate for months and months in this Congress, through extensive public markups in two committees in the Senate, as well as in the House of Representatives, and now for weeks on the Senate floor.  We have considered untold numbers of amendments in Committees and several before the Senate.  That is what Congress is supposed to do.  We consider legislation, debate it, vote on it and act in our best collective judgment to promote the general welfare.  Some Senators will agree and some will disagree, but it is a matter for the full Senate to decide.  I wish we could do so by a majority but Senate Republicans abhor majority rule now that they are not in control.  So it will take an extraordinary majority for the Senate’s will to be done.   

Tomorrow, we will vote on a point of order challenging the pending bill’s constitutionality.  The fact that Senate Republicans disagree with the majority’s effort to help hardworking Americans obtain access to affordable health care does not make it unconstitutional.  As Justice Cardozo wrote in upholding Social Security, “whether wisdom or unwisdom resides in the scheme of benefits set forth . . .  it is not for us to say.  The answer to such inquiries must come from Congress, not the courts.”  I agree.  Justice Cardozo understood the separation of powers enshrined in the Constitution and the Supreme Court’s precedent.  In 1803, our greatest Chief Justice, John Marshall, upheld the constitutionality of the Judiciary Act in Stuart v. Laird noted that “there are no words in the Constitution to prohibit or restrain the exercise of legislation power.”  That is true here, where Congress is acting to provide for the general welfare of all Americans.  

I believe that Congress can and should decide whether the problems of the lack of availability and affordability of health care, and the rising health care costs that burden the American people, is a problem, “plainly national in area and dimensions,” as Justice Cardozo wrote of the widespread crisis of unemployment and insecurity during the Great Depression.  I believe that it is right for this Congress to determine that it is in the general welfare of the Nation to ensure that all Americans have access to affordable quality health care.  But whether other Senators agree or disagree with me, none should argue that we should take steps that turn back to clock to the Great Depression when conservative activist judges prevented Congress from exercising its powers to make that determination.  As Chief Justice Marshall wrote in his landmark decision in McCulloch v. Maryland:  “Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adopted to that end, which are not prohibited, but consistent with the letter and spirit of the Constitution, are constitutional.” 

In seeking to discredit health care reform, the other side relies on a resurrection of long-discredited legal doctrines used by courts a century ago to tie Congress’ hands by substituting their own views of property to strike down laws such as those guaranteeing a minimum wage and outlawing child labor.  They have to rely on such cases of unbridled conservative judicial activism as Lochner v. New York, Shechter Poultry Corporation v. United States, Reagan v. Farmers Loan and Trust and the infamous Dred Scott case.  Those dark days are long gone and better left behind.  The Constitution, Supreme Court precedent, our history and congressional action all stand on the side of Congress’ authority to enact health care legislation including health insurance reform.    

Under Article I, Section 8, Congress has the power “to regulate Commerce with foreign Nations, and among the several States.”  Since at least the time of the Great Depression and the New Deal, Congress has been understood and acknowledged by the Supreme Court to have power pursuant to the commerce clause to regulate matters with a substantial effect on interstate commerce.  The Supreme Court has long since upheld laws like the Fair Labor Standards Act against commerce clause challenges, ruling that Congress had the authority to outlaw child labor.  The days when women and children could not be protected, when the public could not be protected from sick chickens infecting them, when farmers could not be protected and when any regulation that did not guarantee profits to corporations are long past.  The reach of Congress’ commerce clause authority has been long established and well settled.  

Even recent decisions by a Supreme Court dominated by Republican-appointed justices have affirmed this rule of law.  In 2005, the Supreme Court ruled in Gonzales v. Raich that Congress had the power under the commerce clause to prohibit the use of medical marijuana even though it was grown and consumed at home, because of its impact on the national market for marijuana.  Surely if that law passes constitutional muster, Congress’ actions to regulate the health care market that makes up one sixth of the American economy meets the test of substantially affecting commerce. Conservatives cannot have it both ways.  They cannot ignore the settled meaning of the Constitution as well as the authority of the American people’s elected representatives in Congress. 

The regulation of health insurance clearly meets the test from Raich, whether the activities “taken in the aggregate, substantially affect interstate commerce.”  Addressing these problems is at the core of Congress’ powers under the commerce clause.  In fact, the Supreme Court expressly addressed this issue 65 years ago, ruling in 1944 that insurance was interstate commerce and subject to Federal regulation.  Congress responded to this decision in 1945 with the McCarran-Ferguson Act, which gave insurance companies an exemption from antitrust laws unless Federal regulation was made explicit under Federal law.  It is the immunity from Federal antitrust law enacted in McCarran-Ferguson that I have been working to overcome with my Health Insurance Industry Antitrust Enforcement Act of 2009 and the amendment I have sought to offer to the current health insurance reform legislation.  Why would this exemption have been necessary if insurance was not interstate commerce?  I strongly believe that the exemption in McCarran-Ferguson is wrongheaded but would anyone seriously contend that it is unconstitutional?  Of course not.  That is why I am working so hard to pass legislation to repeal it.

The legislation and amendment I have sponsored will prohibit the most egregious anticompetitive conduct – price fixing, bid rigging and market allocations – conduct that harms consumers, raises health care costs, and for which there is no justification.  Subjecting health and medical malpractice insurance providers to the Federal antitrust laws will enable customers to feel confident that the price they are being quoted is the product of a fair marketplace.  The lack of affordable health insurance plagues families throughout our country, and my amendment would take a step toward ensuring competition among health insurers and medical malpractice insurers.   The need for Congress to repeal the out of date Federal antitrust law exemption only further demonstrates the tremendous impact of health care on our economy and congressional power to act.  

The third clause of Article I, Section 8, to which I have referred, is the necessary and proper clause, as a basis for congressional action.  This clause gives Congress the power “to make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers and all other Powers vested by his Constitution in the United States.”  The Supreme Court settled the meaning of the necessary and proper clause 190 years ago in Justice Marshall’s landmark decision in McCullough v. Maryland, during the dispute over the National Bank.  Justice Marshall’s wrote that “the clause is placed among the powers of Congress, not among the limitations on those powers.”  The necessary and proper clause goes hand in hand with the commerce clause to ensure congressional authority to regulate activity with a significant economic impact.   

We face a health care crisis, with millions of Americans uninsured and with uncertainty and high costs for Americans who are insured.  We need to ensure that Americans not risk bankruptcy and disaster with every illness.  Americans who work hard their whole life should not be robbed of their family’s security because health care is too expensive.   During the New Deal we charted a path for America where growing old did not mean being poor, or being without health care.  Americans should not lose their life savings because they have the misfortune of losing a job or getting sick.  That is not America. 

The success of the last century was the establishment of a social safety net for which all Americans can be grateful and proud.  Through Social Security, Medicare and Medicaid, Congress established some of the cornerstones of American security.  They are within the constitutional authority of the Congress just as health insurance reform is.  No conservative activist court should overstep the judiciary’s role by seeking to turn back the clock and deny a century of progress.  The authority of Congress is well settled and well established by the Constitution, judicial precedent, and our history of legislation promoting the general welfare and protecting the economic security and health of Americans.   

The cumulative economic effects on the Nation of the rising costs of health care are significant, with those costs making up a large percentage of our economy and with American businesses struggling to provide benefits to their employees.   As set forth in a paper by Georgetown University and the O’Neill Institute for National and Global Health Law, the requirement for individuals to purchase health insurance would address the problem of free riders, millions of Americans who refuse to buy health insurance and then rely on expensive emergency health care when faced with medical problems.  This shifts the costs of their health care to people who do have insurance, which in turn has a significant effect on the costs of insurance premiums for covered Americans and on the economy as a whole.  A requirement that all Americans have health insurance -- like requirements to be vaccinated or to have car insurance or to register for the draft or to pay taxes -- is within congressional power if Congress determines it to be essential to controlling spiraling health care costs.  Requiring that all Americans have health insurance coverage, and preventing some from depending on expensive emergency services in place of regular health care, can and will help reduce the cost of health insurance premiums for those who already have insurance.   

Whether Senators agree or not on the necessity to reform our health care system and health insurance, I trust that all Senators, Republican, Democratic and Independent, agree that it is our responsibility to act and within Congress’ constitutional authority to legislate for the general welfare of all Americans.

# # # # #

Press Contact

David Carle: 202-224-3693