The latest Obamacare case was wrong to uphold Medicaid expansion—Part I

August 20, 2011 by Rob Natelson
Filed under: All Postings, ObamaCare, The Founding 

RGNStPauls As noted in my last post, on August 12 the U.S. Court of Appeals for the Eleventh Circuit struck down as unconstitutional the Obamacare mandate that citizens purchase health insurance. However, the Court upheld the law’s massive expansion of the Medicaid program.

Medicaid—part the 1960s “Great Society” mishmash now so widely understood to be a failure—originated as a program by which the federal government gives grants-in-aid to states for health care for the poor. Over the years, the program has been expanded to include many people who are not really poor. It has been a major force for the bureaucratization of health care. By driving up medical costs crazily, Medicaid had made health care less accessible for almost everyone. It also has proved to be a budget-buster both for the federal government and the states.

And, by the way, it’s not like health programs for the poor didn’t exist before Medicaid—all the states had them.

If you read the Constitution, you will find that spending federal money on health care is not within the enumerated powers of Congress. So why don’t judges simply strike down the Medicaid program as unconstitutional?

The answer lies in one of the Supreme Court’s most bizarre misinterpretations of the Constitution. Let’s look first at the constitutional language, then see what it actually means, and finally see how it was mangled.

The provision is Article I, Section 8, Clause 1. It reads as follows: “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the Common Defence and general Welfare of the United States. . . ”

Note that the only express power Congress clearly receives under this Clause is the power to tax. Also included (as in all other powers) is implied authority to spend money for carrying it out. For example, this provision, in conjunction with the Necessary and Proper Clause (Clause 18 of the same section), authorizes Congress to spend money for printing tax legislation and tax returns, hiring revenue officers, leasing or buying office space and equipment for them, and the like. But that’s the only spending this Clause authorizes.

What about the phrase “to pay the Debts and provide for the Common Defence and general Welfare?” You can argue that “to pay the Debts” grants a power for that purpose (although not necessarily: that power can be implied from the following Clause (”borrow money”) and Article VI’s statement that Confederation debts remain binding against the United States. But the phrase “provide for the general Welfare” certainly was not designed to grant a power to spend.

To explain: During the Founding Era the words “to provide for” did not mean to spend, but “for the purpose of laying up provisions for.” Properly understood, this phrase restricts the purposes for which Congress can tax. It was inserted to prevent levies imposed for purely local or special-interest purposes, even if what Congress was doing was technically within the enumerated powers. Thus, under the intended meaning of the Constitution, Congress may not impose a tax for constructing post offices only in Massachusetts or for defending some states but not others. The phrase is a limitation only; it grants no authority.

This is the reading of the text as explained by advocates for the Constitution during the Founding-Era debates.

To be sure, after the Constitution was ratified Alexander Hamilton (a supporter of an almost unlimited central government) argued that the Clause also authorized “general Welfare” spending outside the enumerated powers. But this position contradicted what almost everyone else understood about the Constitution, and in fact contradicted what Hamilton had said before ratification. So this new argument seems to have persuaded very few.

The proper reading of the Clause survived in the Courts for 150 years. But in 1936 the U.S. Supreme Court decided United States v. Butler. In that case, the Court invalidated an agricultural spending program, but then went on to say that Hamilton had been right all along—that Congress could spend almost anything it wanted for the “common Defence and general Welfare.” The following year, the Court began to apply that rule to uphold other federal spending programs. This opened the door to the horrendous fiscal problems the federal government faces today.

By any objective measure, the claim that Article I, Section 8, Clause 1 grants Congress power to spend on almost anything it wishes is a legal absurdity. First, this reading renders several other parts of the Constitution meaningless surplusage. If Congress can spend anything it wants on the common defense, then why have separate powers authorizing Congress to “support Armies” or “maintain a Navy?” If Congress can spend anything it wants to on the general welfare, then why have separate powers to “constitute tribunals inferior to the supreme Court” or “establish Post Offices?”

Second, the interpretation also renders meaningless some explicit limitations on other powers. For example, Clause 12 of the same section limits military appropriations under that Clause to two years. But if Congress can appropriate funds for the military under Clause 1, then it can evade the two year limitation.

Third, as noted above, this interpretation directly contradicts the statements of those who presented the Constitution to the American people. In addition to explaining that “the common Defence and general Welfare” language is a restriction, not a power, they also explained in detail that most governmental spending (including expenditures on social services) was to remain exclusively within the state sphere.

Such is the “constitutional” basis on which the Medicaid program rests.

For more details about this subject and the Constitution’s General Welfare Clause, together with extensive citation see my article here.

Next week: Why Obamacare’s expansion of Medicaid is unconstitutional even under modern Supreme Court cases.

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