V. Congressional Power to Tax and Spend to Provide for the General Welfare

Having concluded that Congress has the power under the Commerce Clause to enact the Health Care Reform Act, it is unnecessary for the court to address the issue of Congress’s alternate source of authority to tax and spend under the General Welfare Clause. U.S. Const. Art. I, § 8, cl. 1. Plaintiffs also challenge the constitutionality of the tax imposed by the Act as being an improperly apportioned direct tax. However, Congress is authorized by the Commerce Clause to impose a sanction “as a means of constraining and regulating what may be considered by the Congress as pernicious or harmful to commerce.” Rodgers v. United States, 138 F.2d 992, 995 (6th Cir. 1943) (upholding penalty provision of Agricultural Adjustment Act for exceeding quota of permissible cotton sales as exercise of Congress’s power to regulate commerce, where purpose of statute was not levying a tax but regulating the production of cotton affecting interstate commerce).

The constitutional limits on taxes argued by plaintiffs relate to taxation generally for the purposes of raising revenue. While these might be legitimate concerns if Congress had to rely on its power conferred by the General Welfare Clause, such is not the case with regard to penalties imposed incidentally under the Commerce Clause. Id. In this case, the minimum coverage provision of the Health Care Reform Act contains two provisions aimed at the same goal. Congress intended to increase the number of insureds and decrease the cost of health insurance by requiring individuals to maintain minimum essential coverage or face a penalty for failing to do so. Because the “penalty” is incidental to these purposes, plaintiffs’ challenge to the constitutionality of the penalty as an improperly apportioned direct tax is without merit.

The significance of the Commerce Clause is described in the Supreme Court's opinion in Gonzales v. Raich, 545 U.S. 1 (2005):

The Commerce Clause emerged as the Framers' response to the central problem giving rise to the Constitution itself: the absence of any federal commerce power under the Articles of Confederation. For the first century of our history, the primary use of the Clause was to preclude the kind of discriminatory state legislation that had once been permissible. Then, in response to rapid industrial development and an increasingly interdependent national economy, Congress “ushered in a new era of federal regulation under the commerce power,” beginning with the enactment of the Interstate Commerce Act in 1887 and the Sherman Antitrust Act in 1890.

The Commerce Clause represents one of the most fundamental powers delegated to the Congress by the founders. The outer limits of the Interstate Commerce Clause power has been the subject of long, intense political controversy. Interpretation of the sixteen words of the Commerce Clause has helped define the balance of power between the federal government and the states and the balance of power between the two elected branches of the Federal government and the Judiciary. As such, it has a direct impact on the lives of American citizens.