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Your Health-Care Fine Relies on Flawed Ruling: Amity Shlaes

As the hearings over her confirmation move forward and the scrutiny of Elena Kagan intensifies, both parties seem convinced that the drama will benefit them.

Even white college-educated women are turning away from President Barack Obama, according to a July Washington Post/ABC News poll. The administration thinks that its strong support of Kagan, the educated feminist’s heroine, will help the president and fellow Democrats.

Republicans think that by grilling Kagan they please their anti-Obama constituents. Both parties are desperate: a Rasmussen poll published last week shows that only 23 percent of Americans believe their government rules with “the consent of the governed.”

But it’s not Supreme Court nominees who should receive so much national attention. Rather, it is certain Supreme Court decisions that need to go under the national microscope. Instead of a congressional hearing about Kagan, Congress should hold a hearing about past Supreme Court rulings that will shape many of that court’s future opinions.

One such case is Wickard v. Filburn. Wickard is the 1942 case that the Obama administration has cited as evidence of the constitutionality of penalties that will hit those who don’t buy insurance mandated by the new health-care law.

Scrutiny of the Wickard ruling and its abuses over the years does much to explain voters’ current disenchantment.

Regulating Commerce

The Constitution gives the federal government the power to regulate commerce “among the several states,” later known as interstate commerce. For the first 150 years of U.S. history, interstate commerce meant what it sounded like: business transactions involving companies in different states or a company operating in more than one state.

But in the 1930s, President Franklin Roosevelt’s administration sought repeatedly to widen that definition. Policy makers contended, wrongly, that raising crop prices would benefit the economy overall. Authorities such as Agriculture Department Secretary Henry Wallace therefore endeavored to drive up prices by making farmers curtail supply. The federal government fined farmers who grew more than prescribed amounts.

There was one farmer, however, whose wheat crop seemed clearly outside the definition interstate commerce. Roscoe Filburn, living in Ohio, grew wheat to feed his own animals on his own land. Yet when Filburn produced more than the allowable amount of grain, authorities demanded he pay the standard penalty for overproduction, 49 cents a bushel.

Landmark Ruling

By 1942, Wallace was vice president and had been replaced at the Agriculture Department by Claude Wickard. In the case Wickard v. Filburn, the Supreme Court endorsed the fine. Justice Robert Jackson maintained that Filburn’s wheat could be fined because its very existence had a “substantial economic effect” on the wheat market.

Betraying some wonder at this outcome, the New York Times noted that Jackson actually wrote in his opinion that Filburn might have won his case had he fed his animals unthreshed wheat. The act of threshing the wheat, Jackson said, was what made Filburn’s wheat part of the national wheat market.

Even in the 1940s, the Times wasn’t alone in sensing the absurdity of Wickard. Americans knew that limiting supply to drive up prices didn’t necessarily promote general economic growth. They recognized that the justices were allowing the old definition of commerce to be stretched like a rubber band. But Americans accept Supreme Court opinions more respectfully than the Ten Commandments.

Cynicism Rises

Wickard became established law. One administration after another has hidden behind the generous cover of the ruling when rewarding the farm vote with subsidies. There has been a cost beyond the dollars wasted: a rise in political cynicism. Americans see that to get votes the government will spend where spending doesn’t make sense.

They also see that Wickard routinely leads politicians to hypocrisy. President Obama has said repeatedly that he would like to save billions in the federal budget by trimming farm subsidies.

Achieving that is hard to do thanks to the established farm lobby that lives off revenue made possible by the Wickard ruling. Yet Obama won’t attack Wickard. That’s because many nonagricultural projects important to his party are legitimized by Wickard. Criticizing farm subsidies that flourished under Wickard, even as Obama’s lawyers lean on the ruling to defend the new health plan, is the very sort of inconsistency that puts off voters.

Political Foolishness

Democrats aren’t the only ones who make fools of themselves with Wickard. In recent decades two impulses have driven the Grand Old Party. The first is federalism, curtailing the power of the federal government and pushing back against efforts at government expansion such as Wickard. The second policy impulse is to push socially conservative legislation and to advance a family values agenda in court rulings.

The latter moved John Ashcroft, attorney general under George W. Bush, to defend an administration policy of enforcing a federal drug law that prohibited use of medical marijuana within the state of California. One user, Angel Raich, contended she couldn’t be prosecuted under federal drug laws because she, like the wheat farmer of yore, was consuming a plant grown in state. By assailing modern-day Filburns, the Bush administration made its emphasis on federalism look ridiculous.

It is time to focus not on justices but on the body of precedent they work from. Overturning Wickard is possible: the Supreme Court can do it. Better yet would be passage of a constitutional amendment that explicitly delineates limits to government intervention in states. Both parties will call such an endeavor difficult. But undertaking difficult tasks is what earning the “consent of the governed” is all about.

(Amity Shlaes, senior fellow in economic history at the Council on Foreign Relations, is a Bloomberg News columnist. The opinions expressed are her own.)

To contact the writer of this column: Amity Shlaes at amityshlaes@hotmail.com.

To contact the editor responsible for this column: James Greiff at jgreiff@bloomberg.net.

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