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Why the Courts Must Presume that Economic Legislation is Constitutional

by Professor Will Huhn on April 6, 2012

in Constitutional Law,Health Care,Separation of Powers,Wilson Huhn

In yesterday's post I cited abundant authority in support of the principle that the courts must defer to the judgment of Congress in reviewing the constitutionality of economic legislation. Decisions under the Due Process, Equal Protection Clause, Spending Clause, and Commerce Clause all reveal the same idea, that the courts lack the power to second-guess the political branches in the determination of national economic policy.

I promised that today I would explain why the courts lack that power. There are two reasons. First, the courts are not institutionally equipped to undertake the complex analysis necessary to the establishment of economic policy. Second, the courts are not democratically authorized to balance and compromise the economic interests of different segments of our society.

Both of these points were made in Part III of the amicus brief that I submitted to the Supreme Court on behalf of a committee of professors in the health care case. For the second point regarding the compromise among economic interests we are indebted to a member of the committee, Professor David S. Cohen of the Earle Mack School of Law, Drexel University. Part III of the brief is reproduced below:

III. ECONOMIC ANALYSIS IS SUITED TO THE LEGISLATIVE DUTY TO DEVELOP PUBLIC POLICY BUT IS NOT COMPATIBLE WITH THE JUDICIAL DUTY TO INTERPRET THE MEANING OF THE CONSTITUTION

In deciding whether to enact the individual mandate as part of the PPACA, Congress had to consider a host of interrelated factors including the following: the cost of health care in the United States; the cost of health insurance; the extent of out-of-pocket expenses for health care; the increase in the cost of health insurance relative to increases in personal income and the cost of living; the absolute and relative cost borne by persons in different income groups; the extent and effect of cost-shifting under current law; and the number and effect of personal bankruptcies attributable to the cost of health care. Most importantly, Congress had to assess the state of the nationâs health and the effect of the lack of adequate insurance upon peopleâs health.

In deciding whether the nationâs system of paying for medical care ought to be reformed, Congress also had to evaluate the cost and effectiveness of current federally funded programs, including Medicare, 42 U.S.C. §1395, Medicaid, 42 U.S.C. §1396, the National Health Service Corps, 42 U.S.C. §254d, the Veterans Health Administration, 38 U.S.C. §7401, and federally funded community health centers, 42 U.S.C. §254b. For purposes of comparison, Congress had to familiarize itself with the details of the health care delivery systems in other countries as well as the relative cost and efficacy of those programs. Once again, a prime consideration was whether the people of other countries enjoy better health than American citizens.

Congress also had to predict the likely effect of the PPACA on all of the previously mentioned cost and health factors. Specifically, Congress sought to anticipate the likely effect of insurance reforms, including guaranteed issue regardless of health; guaranteed coverage of preexisting conditions; complete coverage for preventive care; coverage for adult children; and minimum medical loss ratios. It had to determine the level of federal subsidies to individuals and families of different income groups that would be necessary to enable them to purchase health insurance and offset out-of-pocket expenses; the future cost of federal contributions to the states that would be necessary to pay for the expansion of Medicaid; and the extent and mix of tax increases and spending reductions that would be necessary to pay for these reforms.

In keeping with our constitutional tradition that the states have served as laboratories for experimentation in governing, Congress also examined the efficacy of health insurance reform in the various states and modeled the PPACA after the plan that was adopted in Massachusetts in 2006, Mass. St. 2006, c. 58 (An Act Providing Access to Affordable, Quality, Accountable Health Care).

In making these determinations Congress had at its disposal an array of economic studies from various sources, including the Agency for Healthcare Research and Quality, the Office of the Actuary of the Centers for Medicare and Medicaid Services, the Congressional Budget office, the Joint Commission on Taxation, the Commonwealth Fund, the Organisation for Economic and Cooperative Development, the World Health Organization of the United Nations, the Kaiser Family Foundation, and Families USA. Congress also was free to consider the voluminous literature published by health care economists as well as their testimony before Congress.

All of the foregoing economic factors had to be considered in designing this complex, comprehensive scheme of legislation. In the words of the District Court below, the various elements of the PPACA are a âfinely crafted watch,â containing âapproximately 450 separate pieces,â many if not most of which are interrelated and interdependent. Florida v. U.S. Dept. of Health and Human Services, 780 F.Supp.2d 1256, 1304 (N.D. Fla. 2010). Congress had to choose not only from a competing set of economic models and theories but also had to decide how to combine the hundreds of moving parts of this Act into a comprehensive and unified scheme of economic regulation. This was a matter of legislative prerogative and is beyond judicial competency.

In the exercise of its lawmaking function, Congress is not only permitted but expected to take economic data and expert economic opinion into account in determining whether to enact a system of universal health care coverage and in deciding what form that system should take. While judges as individuals are as capable as legislators at understanding and acting upon this information, it is incompatible with their judicial role to bring these considerations to the interpretation of the Constitution. The role of the courts is limited to determining whether Congress had a rational basis for enacting a particular plan of economic legislation.

In our brief we cited a dozen economic studies that bear upon the economic judgments that Congress had to consider in drafting this legislation. We could have cited hundreds.

Generations of Americans have struggled to achieve a program of universal health care. Health care providers, health insurers, consumer advocates, non-profit think tanks, and government agencies have researched this issue for decades and produced mountains of data. The issue has repeatedly come before Congress consuming vast amounts of political energy. (It bears repeating that the model of the "individual mandate" has been a Republican idea for nearly twenty years; the Party abandoned it only when Democrats embraced it after the 2008 election. Until then no-one thought of it as unconstitutional.) Congress worked on this specific legislation for over a year. The law contains over 450 separate provisions, most of which are intertwined and interdependent.

In contrast, the Supreme Court has undertaken review of this law only a few months ago as one case in a particularly full caseload. Even without the health care case this would be a challenging year for the Court to clear its docket. It is understandable – though still alarming – that at oral argument some members of the Court exhibited confusion regarding what was in the law and how the health insurance market works. That confusion reinforces the constitutional principle that under the doctrine of Separation of Powers, economic policy is the province of the political branches, not the judicial branch.

When the courts consider the constitutionality of laws that affect fundamental rights the presumption of constitutionality disappears. The courts are appropriately skeptical of legislation that affects fundamental rights such as freedom of speech, freedom of religion, the right to privacy, or the right of self-defense. But when the courts undertake to review the constitutionality of measures that are designed to adjust economic realities and reassign economic rights and responsibilities, their role is extremely limited, and for good reason. The federal courts do not democratically represent the economic interests of American society. That role is assigned to Congress and the President.

Congress had a rational basis for believing that Americans' lack of access to affordable health care is substantially affecting interstate commerce, and it had a rational basis for believing that the individual mandate is necessary to carry out the plan of universal coverage enacted in the PPACA. The law is constitutional.

Wilson Huhn teaches Constitutional Law at The University of Akron School of Law.

{ 5 comments }

larry d. April 6, 2012 at 8:35 am

The legislative branch also didn't know what was in the law when they passed it, professor. Does Pelosi's famous statement that "We've got to pass the bill to know what's in it" suggest that Congress does not have the constitutional power to pass economic legislation?

Dave April 6, 2012 at 4:09 pm

It really does not matter what you started out presuming after something has been proven Unconstitutional.

Gary April 8, 2012 at 4:24 pm

Professor,

You keep skirtting the main issue, the federal government lacks the authority under the constitution to enact such a law through the commerce clause, absent existing interstate commerce. As I stated in my response to your last post, had the president had the political courage to lobby for support for a single-payer health care system, it would have been constitutional through congress' taxing authority. Had the president sought bipartisan support and asked for and included minority party ideas, more than half the states in the country wouldnt be suing over it. Had the president lobbied for a constitutional amendment expanding federal powers, this would be legal. Had the president provided leadership and encouraged states to adpot health care reform that work for citizens of their respective states, there wouldnt be a constitutional issue.

This is all about the presdents ideology, ego, and expansion of federal power, little if anything about actually improving health care or reducing costs because it will do neither. We already have government run health care called Medicare and Medicaid that neither decrease costs nor improve healthcare, quite the contrary to both. Making it bigger only compounds the problems. The masses of uninsured could become insured through lowering the threshold to quallify for Medicaid, that would be a one page law not a 2700 page law. This law throws a few bones to select people at a cost of giving up freedoms for all, and is the classic "bait and switch."

Theres no getting around the fact that the president tried to short cut the process, it its blown up in his face. This is the president's own doing and it can be seen as nothing other than a failure in leadership. It takes no political courage to push something through congress, when you have huge majorities in both houses, therefore this mess falls squarely in his lap. A credible claim can not even be made there was majority public or congressional support given the consistent polls showing the contrary and given that to even get to the slim majority to pass it required, lets call it "creative favors to select Democratic senators." Which will be the next aspect of the law found to be unconstitutional.

Your arguments in this and the last post rely solely on the presumption…."Yes the legistaltion is not founded in constitutional law, but we did it and now no one should undo it because although illegal, its good for the country"………bad things done for good intentions are still bad things. The ramifcations of upholding this law will be felt for years to come as the solicitor general for the government wasnt able to credibly cite a single limiting factor that would prevent government expansion in every other area of life. Although I suppose if one is inclined to desire unlimited federal powers, that works for you, it doesnt work for most of us. As I said earlier, if thats what you want, go through the process of amending the constitution to permit it, otherwise this is the tail wagging the dog.

camackey71369 April 9, 2012 at 10:56 am

Gary

I think what the professor is saying is that any law passed by congress is deemed to be constitutional. The court must assume that the law is constitutional until proven beyond a reasonable doubt that it is unconstitutional.

The professor's posts are showing reasonable doubts which have to be proven unconstitutional for the law to be ruled unconstitutional. If the court uses the same process as the professor I think the court has no other choice than to rule that the law in its present form is constitutional.

However there are multiple processes to look at the constitutionality of laws. Two different outcomes, but similiar processes are Roe v. Wade and Citizens United. Both cases looked at the constitution in a very narrow focus and did not look at precedent. If the Court looks at ACA in this fashion it will probably be found unconstitutional.

There is a clause that would prevent government expansion into other areas of life. General defense and welfare clause. If the law would not better the general welfare of the American people, then it would be unconstitutional. The ACA law passes this test because the laws main purpose is to increase access to healthcare for those presently without insurance.

Gary April 9, 2012 at 8:29 pm

To camacky71369

The general welfare clause will not limit further goverment intrusion, if this law is allowed to stand. In fac,t it will be used as reason to promote an increase in government control. For instance, prospects such as banning certain foods, or consumption of "accepted" foods will fall under the perview of government because it is providing health care, and it is in the general welfare of the public for some people to not be fat, or not smoke, or not drink, or not be homosexual, or (insert about anything else here). This law is something out of a dystopian novel.

As i mentioned, the commerce clause has already been perverted from its original intent in other other cases, which certainly stretch the limits of the definition of "interstate commerce." Applying it to force commerce is well above the high water mark. I mentioned three other ways to achieve the same goals (not that I am saying that this legislation will achieve those goals because I dont believe it will) that would not have come under constitutional scrutiny. Theres no denying that there were better ways to do this. This opens up pandora's box.

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