Kessler’s Stretch Should Worry Democrats

February 28th, 2011

Earlier this week, District Court judge Gladys Kessler upheld ACA, deciding that it is constitutional based on the Commerce Clause. Her reasoning is absurd, and reveals exactly how precarious the Democratic healthcare reform law’s constitutional basis is.

You can read the decision in its full text here. It’s worth reading; she provides a good overview of Commerce Clause decisions in the twentieth century and it should be instructive for future court decisions on the law.

Kessler’s reasoning rests primarily on two points. First, while she acknowledges that there is little case law for her to reference on this issue, she argues that deciding not to purchase health insurance—”mental activity”—is indeed within Congress’s power, because

It is pure semantics to argue that an individual who makes a choice to forgo health insurance is not “acting,” especially given the serious economic and health-related consequences to every individual of that choice. Making a choice is an affirmative action, whether one decides to do something or not do something. They are two sides of the same coin. To pretend otherwise is to ignore reality.

In other words, because choosing not to purchase something is an “affirmative” action, Congress can regulate that action. That is, Congress can force individuals to purchase some good.

This would mean, then, that Congress has the power to force individuals to purchase any good under the Commerce Clause. They could, say, require all individuals to purchase a car. Or a computer. Or a cheeseburger. Or anything else they so desired.

Not so, says Kessler. In her second point, Kessler attempts to explain why Congress can compel individuals to purchase health insurance but not other commodities by distinguishing between the healthcare market and any other market. She says that, unlike the transportation market or food and lodging, the federal government requires hospitals to provide uncompensated care for uninsured individuals, and thus choosing not to purchase health insurance spreads costs onto others:

In choosing not to purchase health insurance, Plaintiffs are actively arranging their circumstances (whether to save for their children’s education or buy a new car) so that they must, in the future, rely on either their own resources or on federal law requiring medical providers to care for the sick and injured. There is no question, as Congress noted, that such mandatory care often goes uncompensated, although ultimately paid for by other market participants and the taxpayer. For these reasons, the Court concludes that a decision not to purchase health insurance is an “activity.”

Therefore, since not purchasing health insurance results in costs shifting on to others, which result in higher premiums for individuals, it is impossible to choose not to participate in the medical market—you are just choosing whether to pay for it through insurance or by shifting that cost onto others, and so there is no such thing as inactivity in the healthcare market.

That is Kessler’s argument. To re-phrase it, she is arguing that as long as some inactivity, in the aggregate, substantially affects a market, Congress has the right to regulate that activity.

Her distinction here between the healthcare market provides no distinction at all; specifically, she says that because the federal government has no law for restaurants or hotels requiring them to provide food or housing for anyone who requests it, Congress cannot compel individuals to purchase food or hotel rooms. This isn’t the standard she set up, however—the standard is that the inactivity substantially affects market prices.

Every economic decision, in the aggregate, has an economic effect. Choosing not to purchase a computer, for example, affects the price of computers generally. If all individuals purchased a computer every year, manufacturers could reach greater economies of scale, and thus reduce computer prices for everyone. Government subsidies could be provided for those who cannot afford to purchase one. Therefore, since individuals deciding they do not want a computer (that is, taking no action) results in higher costs for everyone else, the federal government can require all individuals to purchase a computer or face a substantial penalty.

That’s absurd. Kessler’s standard means there is virtually no limit at all on what the federal government can and cannot do. Provided an individual’s action or inaction has, in the aggregate, some substantial economic effect, Congress can force them to do whatever they choose. That is, for all intents and purposes, an unlimited power and runs counter to the purpose of the Constitution—to substantially restrain the federal government’s actions to its enumerated powers.

Let’s assume for a second, though, that Kessler’s test is whether there is a federal law requiring some industry to provide their commodities to users without compensation. If that’s the case, then Kessler is stating that, without that law in place, regulating inactivity is unconstitutional; therefore, by Kessler’s reasoning, the federal government can create conditions where violating the Constitution is legal. This should not need to be said, but if Congress has the power to create the conditions for which violating the Constitution is, well, constitutional, then we may as well have no Constitution at all.

If Congress wanted to force individuals to purchase some good, all they would need to do is first pass a law requiring companies in that industry to provide their good to people without compensation. There is nothing else necessary, based on Kessler’s decision.

Reading Kessler’s logical gymnastics is fine entertainment, but it should be profoundly worrying for supporters of healthcare reform. If ruling that the individual mandate is constitutional requires this sort of abuse of reason, they are on uncertain ground indeed.