“Well written and an interesting perspective.” Clan Rossi --- “Your article is too good about Japanese business pushing nuclear power.” Consulting Group --- “Thank you for the article. It was quite useful for me to wrap up things quickly and effectively.” Taylor Johnson, Credit Union Lobby Management --- “Great information! I love your blog! You always post interesting things!” Jonathan N.

Saturday, August 13, 2011

On the Health-Insurance Mandate: Nullification or Judicial Review?

A Republican U.S. President pushes hard for the U.S. Government to play a more active role in K-12 education under the rubric of “No Child Left Behind.” A Democratic U.S. President pushes hard for the U.S. Government to require residents to purchase health-insurance. Some of the same Republicans who cry foul on the insurance mandate insist that “marriage” be federalized through an amendment to the U.S. Constitution. From whichever vantage-point one cares to assume, political consolidation at the expense of federalism seems to be the name of the game in American politics.

Proponents of the health-insurance mandate have argued that Congress acted within its authority under the U.S. constitution’s commerce clause. However, Ken Cuccinelli, the attorney general of Virginia, argued the U.S. Supreme Court has never ruled that the clause allows Congress to require citizens to purchase a good or service in commerce. Cuccinelli’s complaint suggested that the Virginia law that outlaws the federal government from forcing state residents to purchase health insurance trumps the federal law because it is a matter assigned to the states under the Constitution’s 10th Amendment rather than enumerated to the purview of the U.S. Government. In other words, the supremacy clause pertains only to powers delegated to the U.S. Government. That government is not supreme where the states are sovereign. The latter is substantial in principle, even if not recognized in practice; all powers not explicitly granted to the federal government remain with the states or the people, according to the Tenth Amendment to the U.S. Constitution.

So it is rather perplexing that the State governments have generally been sleeping through federal encroachments since the time of the CSA-USA war in 1861-1865. As repeated efforts to thwart federal encroachment failed, I suspect the state governments have given up, though several of them seem to have woken up in contesting the federal mandate on health-insurance. Yet the objection is issue-specific, and thus not apt to lead to any fundamental realignment from consolidation back to federalism. Americans tend to be issue- rather than systemic-oriented, and this is reflected in the focus of their elected representatives. Unfortunately, this can mean that no one is left watching the store itself; everyone is debating the particular products on the shelves—and with carefree indifference to even the most relevant history. For instance, the history of nullification has apparently fallen off the shelf, at least with respect to any collective memory.

In 1830, Andrew Jackson sent federal troops into South Carolina because its legislature had decided that it could nullify federal law encroaching on its domains of governmental sovereignty. The South Carolina legislature relented (though its succession document would be retrieved in 1858, after the Congress had just passed another tariff on rice and cotton exports. Jackson’s message was that nullification of federal law would mean the dissolution of the Union.

Nevertheless, the governor of Virginia signed a bill into law in 2010 nullifying the federal mandate. The policy argument against nullification stresses that state opt-outs would reduce the size of the insurance pool and thus reduce the anticipated cost-savings. Similarly, Gov. Mike Rounds of South Dakota, a Republican, signed a bill into law on March 12, 2010 declaring that the federal regulation of firearms is invalid if a weapon is made and used in South Dakota. On the day before, Wyoming’s governor, Dave Freudenthal, a Democrat, had signed a similar bill for that state. The same day, Oklahoma’s House of Representatives approved a resolution that Oklahomans should be able to vote on a state constitutional amendment allowing them to opt out of the federal health care overhaul. In Utah, lawmakers embraced states’ rights with a vengeance in the final days of the legislative session that week. One measure said Congress and the federal government could not carry out health care reform, not in Utah anyway, without approval of the Legislature. Another bill declared state authority to take federal lands under the eminent domain process. A resolution asserted the “inviolable sovereignty of the State of Utah under the Tenth Amendment to the Constitution.” Alabama, Tennessee and Washington are considering bills or constitutional amendments that would assert local police powers to be supreme over the federal authority. Rhode Island, Vermont and Wisconsin — none of them known as conservative bastions — were considering bills that would authorize, or require, governors to recall or take control of National Guard troops, asserting that federal calls to active duty have exceeded federal authority.

Given the Nullification Crisis in the nineteenth century, the actions of public officials at the state level in the twenty-first century seem foolhardy. They were on much firmer ground in contesting the validity of the federal law through the federal courts, which can declare a law of Congress unconstitutional. However, this means is not without drawbacks.  In particular, there is a structural conflict of interest in having the federal high court decide a matter between the government of which the court is a branch and a state government. Not surprisingly, the U.S. Supreme Court has tended historically to interpret the U.S. Constitution in the federal government’s favor. It is like having a member of one of the teams as the umpire and finding that that umpire tends to rule in favor of his or her own team. The surprising thing is that onlookers are surprised when this happens.

“Everything we’ve tried to keep the federal government confined to rational limits has been a failure, an utter, unrelenting failure — so why not try something else?” said Thomas E. Woods Jr., a senior fellow at the Ludwig von Mises Institute, a nonprofit group in Auburn, Alabama. Article 6 of the U.S. Constitution indicates that federal law is superior over state law where there is a conflict, but this doesn’t make sense outside of the federal government’s enumerated powers—for otherwise why even enumerate? To rely on elections for the needed correction is not sufficient, according to Mises. “Whether the political impulse of states’ rights and nullification will become a direct political fault line in the national elections this fall is uncertain.” It is almost never asked: “Who is the sovereign, the state or the federal government?”—a question put by State Representative Chris N. Herrod, a Republican from Provo, Utah. Technically (but not in practice), both governments have governmental sovereignty in the American federal system; it is not an “either/or” question.

The question is perhaps whether a balance between the two systems of governmental sovereignty within the American system can be restored simply by reacting issue by issue. Is it possible, moreover, for the American people to embrace a constitutional moment wherein the architectonic of the system itself is the issue?


Kirk Johnson, “States’ Rights Is Rallying Cry for Lawmakers,” New York Times, March 16, 2010. http://www.nytimes.com/2010/03/17/us/17states.html

Alexander Mooney, “Virginia Governor to Sign Law Firing Back at Health Care Bill,” CNN, March 24, 2010. http://politicalticker.blogs.cnn.com/2010/03/24/virginia-governor-to-sign-law-firing-back-at-health-care-bill/?fbid=UERb4EI-c6a#more-96318