Dr Timothy P. Roth is the A.B. Templeton Professor and Chairman of the Department of Economics & Finance, and recipient of the University of Texas at El Paso’s 2005 Distinguished Achievement Award for Research Excellence.
“If it is fair to say that the recent presidential campaign was not characterized by a paucity of “issues”, it is also fair to say that neither candidate had much to say about an important presidential prerogative, the nomination of Supreme Court Justices“.
As a citizen who has come to appreciate the role and importance of federalism and the separation of powers, I find this to be remarkable. As an economist who has experienced the palpable (and intended) tension between the legislative and executive “departments”, I find it troubling. The brute fact is that president Obama may, during his second term, have the opportunity to influence the course of the Supreme Court’s constitutional jurisprudence and, with it, the intertemporal path of what James Madison called “the rights of the people”. Central to the founders’ republican self-government project – what Madison called the “compound republic of America” – was the idea that “the power surrendered by the people, is first divided” between the federal and state governments, “and then the portion [of power] allotted to each [government is] subdivided among distinct and separate departments”. For Madison, Jefferson, Wilson, and others of the Founding generation, it was through federalism and the separation of powers that a “double security arises to the rights of the people. The different governments will control each other; at the same time that each will be controlled by itself.”
As president Obama begins his second term, he – and we, the members of the polity – should take account of two fundamental features of observable reality: first, federalism and the separation of powers – the key Madisonian “auxiliary precautions” – find expression in the Constitution’s General Welfare, Necessary and Proper, Commerce, and Legislative Powers Clauses. Second, the Supreme Court’s constitutional jurisprudence has, over more than seven decades, systematically eroded the force and effect of these “centinel[s] over the public rights”.
Both Madison, and Thomas Jefferson argued against an expansive reading of the Constitution’s General Welfare or Spending Clause. Characteristically, they argued that Congress is constrained to use permissible means to achieve permissible ends; ends that are limited by the federal government’s constitutionally enumerated powers. In sharp contrast, Supreme Court holdings have consistently deferred to Congress’s notion of the general welfare. I associate myself with former Supreme Court Justice Sandra Day O’Connor’s judgment that this judicial deference has given Congress the power to “invade [the] states’ jurisdiction and to become a parliament of the whole people, subject to no restrictions save such as are self-imposed.”
The Supreme Court’s Necessary and Proper Clause jurisprudence has largely focused on the constitutionality of the conditions imposed on the receipt of federal funds. At issue is whether the conditions are designed to achieve ends that are “necessary and proper for carrying into Execution” the federal government’s constitutionally enumerated powers.
The Court’s focus on the “conditioning of funds” is itself a reflection of its “great deference to Congress’s decision that a spending program advances the general welfare.” Indeed, the Supreme Court has never found a federal spending condition to be unrelated to the “federal interest for which the funds are expended.” That said, the Court has evinced a concern that a federal spending condition “might be so coercive as to pass the point at which ‘pressure turns into compulsion”’. Interestingly, until its June 28, 2012 holding in the “Obamacare” case, the Court had “never found a congressional condition to be coercive in this sense”.
If expansive readings of the General Welfare and Necessary and Proper Clauses have vastly expanded the scope and reach of federal power, the same is true of the Commerce Clause. It is not in dispute that the “Congress shall have Power…To regulate Commerce…among the several states”. What is in dispute is Supreme Court holdings that have expanded the reach of the federal government’s commerce power to intrastate activities.
At the heart of the Court’s “affecting commerce” doctrine is the so-called “rational basis test”. In a series of cases, the Court held that Congress had a “rational basis” for determining either that a regulated activity “affects” interstate commerce, or that there is a reasonable connection between the regulatory means and Congress’s asserted ends. The upshot is that, between 1942 and 1995, no federal law was found to be unconstitutional because it exceeded Congress’s regulatory power under the Commerce Clause. It is against this background that, on the one hand, Chief Justice Roberts, joined by Justices Scalia, Kennedy, Thomas and Alito concluded that the Affordable Health Care Act’s individual mandate is not a valid exercise of Congress’s power under the Commerce and Necessary and Proper Clauses. On the other hand, the Chief Justice, joined by Justices Ginsburg, Sotomayor, Breyer and Kagan concluded that “a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not [the Court’s] role to forbid it.” The result is that, despite a constitutional challenge mounted, among others by 26 states, a massive increase in federal health care regulation was found to be constitutional.
Finally, the Constitution’s Legislative Powers or Non-Delegation Clause vests all federal legislative power in the Congress of the United States. Yet, whereas in a 1932 case the Supreme Court declared that “the legislative power of Congress cannot be delegated” to the president or to administrative agencies, since 1935 the Court has approved “without deviation, Congress’ ability to delegate [legislative] power under broad standards”. According to the Court’s “fill up the details” theory, it is sufficient “that Congress set forth ‘intelligible principles’ or ‘standards’ to guide as well as limit the agency or official in the performance of its assigned task.” A second theory advanced by the Court holds that Congress may ‘legislate contingently”. Here, “Congress commands that … a statute be revived, suspended, or modified, or that a new rule be put into effect, upon the finding of certain facts by an executive or administrative officer”. Finally, whereas it generally requires that Congress provide standards that delineate broad policy objectives, the Court has sustained the delegation of congressional authority to express policy judgment.
The upshot of all of this is that the Constitution’s Legislative Powers or Non-delegation Clause has, over time, been interpreted to mean that virtually any congressional delegation of legislative power is constitutionally permissible. Thus, if the Court’s General Welfare, Necessary and Proper and Commerce Clause jurisprudence is corrosive of the Constitution’s federalism structure, its Non-delegation doctrine has eroded the separation of powers.
If, as Madison feared, failure to respect the Constitution’s “double security” has as its concomitant the erosion of the people’s rights, this phenomenon should have featured prominently in the presidential campaign. It remains now to be seen whether, given the opportunity, the president chooses to facilitate the secular drift toward an ever-expanding “regulatory state.