Ronald Reagan famously summarized the federal government's attitude toward the economy this way: "If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." Last week, a federal judge added a corollary: If it doesn't move, don't regulate it.
In overturning the Patient Protection and Affordable Care Act, U.S. District Judge Roger Vinson said the law's requirement that every American obtain government-approved health insurance exceeds Congress's power to "regulate commerce ... among the several states." While all the other regulations that the Supreme Court has upheld under the Commerce Clause have targeted some sort of activity, Vinson noted, the health insurance mandate is aimed at the failure to buy something Congress thinks everyone should have.
For constitutionalists as well as ObamaCare partisans, this activity-inactivity distinction, which was embraced by another federal judge in December, leaves much to be desired. But it is vastly preferable to the one-prong test that the Supreme Court has implicitly applied in almost every Commerce Clause case since 1937: If Congress wants to do something, who are we to stand in its way?
The main advantage of drawing a line between activity and inactivity is that it does not require overturning any of the Supreme Court's Commerce Clause precedents. That is also its main disadvantage.
As the historical section of Vinson's ruling reminds us, the Court has strayed far from the original understanding of the Commerce Clause, which was aimed at eliminating interstate trade barriers. At the time the clause was written and for many years afterward, "commerce" was understood to mean the exchange of goods (as opposed to manufacturing or agriculture), while "regulate" meant "make regular" by removing obstacles. And believe it or not, "among ... the several states" meant "among the several states," as opposed to the purely intrastate activities that Congress routinely regulates (or bans) nowadays.
This narrow understanding of the Commerce Clause prevailed well into the 20th century. It explains why the Supreme Court in 1918 overturned a federal ban on the interstate transportation of goods whose production violated child labor laws, concluding that the power to regulate commerce "is directly the contrary of the assumed right to forbid commerce from moving." It explains why the dry activists who achieved National Alcohol Prohibition in 1920 had to do so by amending the Constitution. It explains why the Court, as late as 1935, rejected federal regulation of employee hours and wages at businesses that were not engaged in interstate commerce.
But, as Vinson notes, "everything changed in 1937," when the Court held that Congress can regulate purely intrastate activities if they have a "substantial effect" on interstate commerce. That doctrine has led the Court to uphold federal regulation of activities, including the cultivation of wheat and marijuana for personal consumption, that are only remotely and hypothetically related to interstate commerce.
Since 1937, the Court has rejected just two provisions of federal law on Commerce Clause grounds: a ban on gun possession in or near schools, which it overturned in 1995, and a civil remedy for victims of gender-motivated violence, which it overturned in 2000. Those decisions were based on the Court's reluctance to "pile inference upon inference" in a way that would leave no activity beyond the reach of the Commerce Clause, thereby erasing the constitutional distinction between state and federal powers.
But as Justice Clarence Thomas noted in both cases, that danger will persist until the Supreme Court revisits the "substantial effects" doctrine. "By continuing to apply this rootless and malleable standard," he warned in 2000, "the Court has encouraged the federal government to persist in its view that the Commerce Clause has virtually no limits."
Despite the apoplectic reaction to Vinson's ruling from ObamaCare's supporters, the Supreme Court will leave this situation essentially unchanged if it ultimately endorses his reasoning. If it does not, an instrument of free trade will be converted into an instrument of compulsory transactions limited only by the imaginations of meddlesome legislators.