NARRATOR: Thanks for joining this episode of the No. 86 lecture series, which continues the conversation in the 85 Federalist Papers about how Federalism works. Today’s episode features Professor Steven G. Calabresi, the Clayton J. & Henry R. Barber Professor of Law at Northwestern Pritzker School of Law. He is Chairman of the Federalist Society's Board of Directors. As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker. - PUBLIUS: Are the powers enumerated in the Constitution an exclusive list? We’re here today with Professor Steven Calabresi who will explain how the enumerated powers of Congress have come to include anything deemed “appropriate” for the general welfare. How have Supreme Court rulings expanded the jurisdiction of the Commerce Clause and the Necessary and Proper Clause? STEVEN CALABRESI: Under American federalism, Congress has limited and enumerated powers and the principal enumeration of power is appears in Article One, Section Eight of the Constitution, which has 18 clauses, and those 18 clauses all enumerate different powers. The first power that's enumerated is the power to tax and spend to promote the general welfare. And that is a huge power, as we'll see in a minute. It's subject to some limitations, but Congress has the power to tax incomes, both employment incomes and inherited income and all other sources of income under the 16th Amendment. And Congress also has the power under the original constitution to impose tariffs or to impose sales taxes or even to impose a European style value added tax, which is essentially an elaborate form of a sales tax. So Congress has very broad powers of taxation. Congress also has power to spend to promote the general welfare. That language has been construed expansively by the Supreme Court since 1938, Spending to promote the general welfare was said to include in 1938 providing welfare payments to the unemployed and to the poor and providing retirement benefits to people who participated in the Social Security program. So, the power to spend as well as the power to tax is a very significant power. There are a number of other enumerated powers which are important. Congress has the power to adopt naturalization laws, laws specifying the process by which a noncitizen can become a citizen. Ironically, there is no enumerated power giving Congress control over immigration, but the Supreme Court has inferred that power from its reading of the Commerce Clause, which I'll talk about in a moment. PUBLIUS: Can you say more about what powers are enumerated? Are there other powers that are not listed in the Constitution but are presumed? STEVEN CALABRESI: Among the 18 enumerated powers, there are a couple that authorize criminal laws. Congress is allowed to punish counterfeiting. Congress is allowed to punish piracy and treason on the high seas. And Congress is allowed to punish violations of the law of nations. But even those powers are separately enumerated, it has been assumed since 1789, that Congress can, under the Necessary and Proper Clause, which I also will talk about in a minute, that Congress can under the Necessary and Proper Clause, adopt a whole host of federal laws, making it a federal crime, for example, to steal from the US mail or making it a crime to lie in federal court or before a Congressional committee when one has been subpoenaed and many, many other federal criminal laws as well. So it's probably fair to say that the 18 clauses listing federal powers, are examples of federal power, but they're certainly not an exclusive list of federal power. Congress has through its reading of the Commerce Clause and Necessary and Proper Clause as sanctioned by the US Supreme Court, Congress has gone well beyond the 18 enumerated powers. And among the examples of Congress going beyond that, that I would give, are the adopting of immigration laws, which began and at the federal level in around 1880. Prior to 1880, immigration law was entirely controlled by the state's ironically. Another example of Congressional power growth is Congress has the enumerated power to coin money, and yet since the Civil War, the federal government has issued paper money. This naturally led to a Supreme Court case, actually three Supreme Court cases which collectively are called the legal tender cases. And essentially in the legal tender cases, the Supreme Court concluded that Congress could print money as well as coining money because it was necessary and proper to promote the general welfare of the country to do so. So Congress clearly has the power to print money as well as the power to coin money, which is more evidence that the enumeration is exemplary rather than exclusive. An exemplary list would be a list that, for example, said, go to the grocery store and buy meat, vegetables, and other food items. An exclusive list would be a list that said, go to the store and buy salami, ham, and tuna fish. The listing of powers in Article One, Section Eight is exemplary, not exclusive, primarily because the final power, the 18th clause, gives Congress the power to pass all the laws that are necessary and proper for carrying into execution any of Congress's other enumerated powers. Congress has an enumerated power of course to create an army and a navy. It has been assumed correctly, I think under the Necessary and Proper Clause that given modern technology, Congress also has the power to create an air force. And if we need one space force. Obviously we can't maintain armies and navies given present technology without having an air force or a space force. So that's an example of a law that is necessary and proper to effectuate the other enumerated powers given the reality of the world we live in. And obviously the world we live in today has changed in many ways technologically and in size of population since 1789. Congress's power to set up the armed forces and to declare war is a very significant power. And as we saw, that provides a check on presidential power in that area, although that remains a contested area of constitutional law. PUBLIUS: What enumerated powers are the most contested? Is it difficult to determine the scope of an enumerated power? Is the meaning clear from the Constitution or has the meaning changed over time? STEVEN CALABRESI: The two enumerated powers in Article One, Section Eight that have generated the most Supreme Court case law and the most discussion of the Commerce Clause and the Necessary and Proper Clause. I'll talk about the Commerce Clause first, because the case law addresses it first and then discuss the Necessary and Proper Clause. But both clauses are of critical importance. Congress has the power under Article One, Section Eight, clause three to regulate commerce with foreign nations; among the several states; and with the Indian tribes. So Congress can enter into international agreements regulating commerce, like NAFTA, the North American Free Trade Zone Agreement. Congress can regulate interstate commerce as it's called, commerce among the several states. And of much less importance today, Congress can regulate commerce with the Indian tribes. So one of the first questions to arise, was what is commerce among the several states? And the first famous Supreme Court decision on this was written by John Marshall in a case called Gibbons against Ogden. And what happened in Gibbons against Ogden is that the state of New York gave Ogden a state monopoly, an exclusive state license to run a ferryboat, between Manhattan and New Jersey across the Hudson River. Gibbons decided he wanted to open a competing ferryboat and he got a license from the national government to engage in the coasting trade, which seemed to involve intercoastal communication. Gibbons opened up his ferryboat service to compete with Ogden. Ogden sued him for violating his New York state monopoly. The New York Court of Appeals ruled for Ogden and said the Ogden had the monopoly right to run a boat between Manhattan and New Jersey. And Gibbons appealed to the US Supreme Court, which unanimously reversed the Court of Appeals of New York and ruled for Gibbons. And Chief Justice Marshall, in Gibbons against Ogden said that commerce includes all ... What Marshall said was all commercial intercourse, meaning all contact back and forth across state lines, between people. And so Marshall's opinion in Gibbons against Ogden seems to be limited to a commercial context because there was buying and selling going on with respect to the ferryboat tickets. But it strongly implied that any time people are goods crossed over a state boundary line, there was federal power under the Commerce Clause to regulate that. The Supreme Court in 1903 in a case called Champion against Ames upheld a federal law that made it a crime to ship lottery tickets across a state line. The lottery tickets were not being bought or sold. They were simply being shipped across the state line. But the Supreme Court held that any time there's a state line crossing, the Commerce Clause is implicated. Now that's not necessarily persuasive if you just look at the Commerce Clause, because the word commerce comes from two Latin roots. Com, which means with and merce, which means to buy or sell other English words that derived from the Latin word merce are mercenary, someone you pay to be a soldier, mercantile, an economic policy that a government might pursue, market. Merchandise. It's pretty clear that commerce involved buying and selling and the Commerce Clause originally probably meant Congress had the power to regulate buying and selling among the states. What the Supreme Court eventually concluded in Champion against Ames in 1903, and then in the cases during the New Deal period was that any travel of persons across state boundary lines or of goods, possessions or property, had to be regulable onto the Necessary and Proper Clause for Congress to be able to carry into execution its power under the Commerce Clause. So since 1940 in the United States against Darby, it has been constitutional law that anytime there is a state line crossing, federal legislation is permissible. The federal courts eventually concluded that Congress had power to regulate immigration, in part because immigration involved people crossing an international boundary line and coming into the United States. And so Congress could control not only buying slaves and importing them into the United States, which would have been simply buying and selling, but simple travel into and out of the United States. So it's been settled law since the 1880s that Congress has power over the movement of peoples across international boundary lines and it's been settled law since 1940 that any crossing a property or of people across state boundary lines is regulable. PUBLIUS: You mentioned that the extent of the Necessary and Proper Clause has also been debated. Can you elaborate on that? STEVEN CALABRESI: Okay. So the 18th clause of Article One, Section Eight gives Congress all power that is necessary and proper for carrying into execution Congress's other enumerated powers, or the powers of the president and of the federal courts.This is a sweeping granted power and it has a separation of powers aspect to it, and even more importantly, it has a key federalism aspect to it. As a separation of powers matter, Congress can carry into execution the executive power of the president and it has done that by creating different cabinet departments and agencies, separating out their jurisdictions, specifying what principal officers they'll have and funding those cabinet departments and agencies. The president nominates and the Senate confirms the heads of cabinet departments and agencies, but Congress creates or abolishes cabinet departments and agencies. And I should note that that's a departure from the practice in England because in England in 1789, King George III still had the exclusive power to create and abolish offices. So this is a power that had belonged to George III that the framers basically gave to Congress under the Necessary and Proper Clause. Congress has regulated the federal courts under the Necessary and Proper Clause by, for example, first saying the Supreme Court would consist of six justices and then increasing that number to nine, second by creating first in 1789, 16 federal district judges. And today, about a thousand lower federal court judges on the courts of appeals in federal district courts. Congress carries into execution the judicial power by, for example, specifying in the statute that each term of the Supreme Court shall start on the first Monday in October. It's not an accident that the Supreme Court term starts on the first Monday in October. That's been federal law since the Judiciary Act of 1789. So the Necessary and Proper Clause does have a separation of powers aspect to it and it does give Congress checks and balances over both the executive branch and the judicial branch, but probably the most dramatic effect of the Necessary and Proper Clause is its effect with respect to federalism, and with respect to federalism, as I mentioned in discussing the Commerce Clause, the Commerce Clause and the Necessary and Proper Clause were read together in United States against Darby in 1940, to allow Congress to set minimum wage laws, not only for goods that are shipped in interstate commerce but also, for goods that are produced and consumed solely within one state. That was a departure from what Chief Justice Marshall had said in Gibbons against Ogden, which I talked about earlier. In Gibbons against Ogden, Marshall said there's some holy interstate commerce, which is not regulable under the Commerce Clause. That was good law in 1826. By 1940, in United States against Darby, the court concluded that the nation was so much of an interconnected economic hole, and that the 48 states, as there were then in 1940, only 48 states, were so much a part of one economy, that if Congress set a minimum wage for goods shipped in interstate commerce, it was necessary and proper for it also to set a minimum wage for goods that were produced in a state, and sold in the same state that they were produced in. PUBLIUS: Wasn’t there another case shortly after Darby that is even more notorious for its expansion of federal power? STEVEN CALABRESI: In Wickard against Filburn, in 1941, the Supreme Court went even further. Wickard against Filburn was a case where the federal government had decided to try to help farmers, as a result of the great depression, by forbidding them from growing crops. Now one might wonder how it helps farmers, to forbid them from growing crops, but Franklin D. Roosevelt and his advisors were not very good economists, and what they thought was, “If we forbid farmers from growing too many crops, prices will rise, and farmers will be wealthier,” so it's the national interest to forbid farmers from growing crops. In Wickard v. Filburn, in 1941, a farmer grew 22 acres of wheat on his farm when he was allowed to grow only 14 acres of wheat, and he was then fined by the US Department of Labor for violating the new deal statute regulating farm production. The farmer argued, “I'm simply growing wheat on my own land for the consumption of my own livestock on my land. I'm not selling the wheat to anyone. I'm not even selling the wheat in the state that I grew it in. I'm simply growing wheat on my own land, and feeding it to my own livestock on my own land.” The Supreme Court, citing the Necessary and Proper Clause, said, “The federal government has power, under the Necessary and Proper Clause, to tell farmers what they can grow, and how much they can grow on their own farms,” and because it concluded that the price of wheat nationwide would be affected by all the farmers, in the aggregate, who grew extra wheat on their own land, and since all that wheat in the aggregate would change the price of wheat for wheat that was bought and sold, therefore it must be the case that Congress can forbid the growing of wheat. The argument was that homegrown wheat overhangs the market for wheat that is bought and sold, and Congress can regulate any activity that overhangs a market. Well, this is a very questionable proposition. Congress can, under the Commerce Clause, regulate casinos, and the buying and selling of lottery tickets. Could Congress regulate church bingo games, or poker games held in one's house, on the ground that they overhang the market for commercial gambling? I would think the answer to that would be no, but Wickard suggests the answer to that might be yes. An even further ridiculous example, it was suggested by Professor Charles Fried at Harvard Law School, was that Congress clearly, under the Commerce Clause, can forbid and criminalize prostitution. That's because the buying or selling of sex is clearly commerce. Professor Fried then asked, “ Can Congress regulate all private sexual acts that overhang the market for prostitution? Surely the answer must be no, but Wickard v. Filburn suggests otherwise. Under Wickard v. Filburn, essentially anything is regulable under the Necessary and Proper Clause. That raises a question of, doctrinally, how did the Supreme Court get to the place that it reached in Wickard v. Filburn? And the answer is in a famous decision called McCulloch V. Maryland, decided in 1817 with the sole opinion by the court being written by none other than the great Chief Justice John Marshall, himself. PUBLIUS: Please briefly remind us of the issue in McCulloch v. Maryland and why it has had such an impact on subsequent interpretations of the Constitution. STEVEN CALABRESI: In McCulloch v. Maryland, what happened was that an institution called the bank of the United States, which had existed from 1791 until 1811, temporarily went out of existence because the Jeffersonian presidents had always thought that the bank of the United States was not authorized by the US constitution. The Jeffersonians believed this because James Madison, himself, remembered that, at the Philadelphia Constitutional Convention in 1787, there had been a proposal to give Congress the power to charter corporations, and the proposal was defeated because delegates from Pennsylvania and New York were afraid that federally chartered corporations would compete with Pennsylvania and the New York corporations. James Madison, remembering that, argued that a bill to incorporate a bank of the United States succeeded Congress's powers. Alexander Hamilton adamantly wanted to create a bank of the United States. He wanted to do that because King William the third of England had created a bank of England in the 1690s, and it had made England the leading financial power in the world in the 18th century. Alexander Hamilton dreamt that someday the United States would be the leading commercial power in the world, and Alexander Hamilton thought a bank of the United States was essential for that vision to be realized. The question of the constitutionality of the first bank of the United States was presented to George Washington, with secretary of state, Jefferson, and the attorney general both saying the bank of the United States was unconstitutional, and Alexander Hamilton arguing that it was perfectly constitutional, and it was good policy. President Washington sided with Alexander Hamilton. The first bank of the United States was created. It existed for 20 years, and it sunset out of existence in 1811. Once the bank sunset out of existence during the presidency of James Madison, the nation began to experience severe economic turmoil, particularly during the war of 1812, and so eventually, in 1816, a bill was passed by Congress, and this time signed by president James Madison, recreating a second bank of the United States, and Madison said that although he had originally been of the view that the first bank was unconstitutional, he thought that the question was now settled as a matter of precedent by president Washington, and he considered the constitutional question to be settled precedent, and he agreed as a policy matter that the second bank was a good idea, so the second bank came into existence. Many states were very opposed to the bank of the United States, and one state that was opposed to it was the state of Maryland, and Maryland enacted a special tax that applied only to the branch of the bank of the United States that was doing business in Maryland. It did not apply to any other banks in Maryland. It applied only to the bank of the United States branch in Maryland. The treasurer of the bank of the United States in Maryland, McCulloch, sued in the Maryland courts, arguing that singling out a federal corporation for a tax that wasn't payable by any other similar banks was unconstitutional, and the Maryland Supreme Court sided with the state of Maryland, so McCulloch appealed from the Maryland Supreme Court to the US Supreme Court, where he won in a unanimous decision by Chief Justice Marshall. Chief Justice Marshall used the opinion, not only to validate the constitutionality of the Bank of the United States, but also to read the Necessary and Proper Clause in an absurdly broad way. The first issue under the Necessary and Proper Clause was, was a bank of the United States necessary for carrying into executing Congress's other enumerated powers? The disagreement was that Maryland said necessary meant indispensable, and clearly the federal government could function without a bank of the United States, so the bank of the United States wasn't indispensable, but McCulloch said necessary meant useful to or convenient, and clearly it was useful to the federal government to have a bank of the United States, because then the government could collect taxes, and banks notes, and it could pay government salaries, and bank notes, and it could regulate commerce, and bank notes, and so forth, and so on. Chief Justice Marshall construed necessary to mean convenient or useful to, not indispensable. That was contrary to the meaning of the word necessary found in Samuel Johnson's dictionary of the English language in 1783, which is the dictionary the framers of Philadelphia would've consulted if they had looked up the word necessary when they were reading the constitution. If you look up the word necessary today, you'll find in dictionaries that, today, it means convenient to or useful for. That's because Chief Justice Marshall actually changed the meaning of the word with his opinion in McCulloch versus Maryland. It did not used to mean what it now means, but there's another clause that's relevant, and that is, a law has to not only be necessary to be authorized by the Necessary and Proper Clause, it also has to be proper to be authorized by the Necessary and Proper Clause, and the word proper arguably means appropriate to the level of government which is legislating, or not violating the separation of powers, or not violating individual rights. For example, Professor Gary Lawson at Boston University has argued that in the two years between 1789, when the constitution went into effect, and 1791, when the Bill of Rights was ratified, Congress could not have regulated freedom of speech, or of the press, or the free exercise of religion, because he would've argued it wouldn't be proper under the Necessary and Proper Clause to infringe on individual liberties in that way, and I think Professor Lawson is right. I think the word proper does have that meaning, and that's part of why the original framers of the constitution, including Alexander Hamilton, argued that the federal bill of rights was unnecessary, because Hamilton insisted that the Necessary and Proper Clause never authorized laws that abridged freedom of speech or of the press. This is most ironic because Hamilton was an ardent supporter in 1798 of the sedition act, which made it a crime to speak badly about president John Adams, which clearly violated the freedom of speech. Hamilton obviously was inconsistent in what he said during the ratification debates on the constitution and what he said in later life. PUBLIUS: McCulloch is frequently cited. What legacy has this case had? The decision to allow Congress to charter a national bank seems reasonable, where did things go wrong in the aftermath? STEVEN CALABRESI: Under the Necessary and Proper Clause, as interpreted in McCulloch, McCulloch ends with a sentence where it essentially says, let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate are permissible. Marshall essentially took a clause that said federal laws had to be necessary and proper, and changed it into a clause that said federal laws have to be appropriate, and that is a huge lowering of the standard, and a huge twist. Now, McCulloch is treated as a cornerstone of American constitutional law, and the new dealers love McCulloch against Maryland because of what it implied. It was Justice Felix Frankfurter's favorite case, and when Chief Justice Earl Warren was appointed Chief Justice, after serving as governor of California, and having run for vice president with Tom Dewey in 1948 as a liberal republican, Felix Frankfurter anxiously went to talk to the new Chief Justice Earl Warren about constitutional law, and he mentioned McCulloch v. Maryland, and Chief Justice Earl Warren had never heard of it, and Frankfurter was so alarmed that he immediately had the opinion delivered to Earl Warren's desk, and instructed him to read it before he did anything else because it was the lodestar for constitutional law. Well, it was the lodestar for the new deal, and for total national power, but it was not faithful constitutional interpretation. The Bank of the United States was probably constitutional, but the changing of the Necessary and Proper Clause into an appropriateness clause was an act of judicial ledger domain that was completely inappropriate. The question of the scope of the Necessary and Proper Clause came up most recently in a case called NFIB against Sebelius, in which former president Barack Obama's mandate that everyone buy health insurance was challenged on constitutional grounds, and the Supreme Court issued a very interesting and splintered series of rulings in NFIB against Sebelius. The far more liberal justices on the Supreme Court, including Justices Kagan, and Sotomayor, and Ginsburg, and Breyer, thought that the Affordable Care Act mandate was constitutional in every respect, and that, just as Congress could regulate commerce after it had occurred, they argued Congress could also force people to engage in commerce, i.e. force them to buy health insurance, and they basically made the same argument that Wickard against Filburn, the case about the farmer growing wheat on his farm, made. They said that if everybody is forced to buy health insurance, then the cost of health insurance will go down, because there'll be more people in the pool, and so this has a national effect, so it's within Congress's power. Congress can force you to buy health insurance. Four conservative Justices, Scalia, Thomas, Kennedy, and Alito, said, “Nonsense! Congress has never before forced someone to buy something that they didn't want to buy. If we allow Congress to force people to buy anything that they can regulate, Congress could force us to buy broccoli, or to buy memberships in fitness centers, because they're good for our health, and that lowers healthcare costs.” Congress has currently, under the Commerce Clause, forbidden the sale of kidneys, or organs, or human blood. Presumably, if Congress could compel you to buy anything it can prohibit you from buying, it could compel you to donate a kidney, or blood, or an organ. Scalia and the four conservative Justices were all of the view that the healthcare mandate clearly exceeded the Commerce Clause, and clearly exceeded the Necessary and Proper Clause. Chief Justice Roberts went right down the middle on this one. He sided with Scalia and the four conservatives on the Commerce Clause and the Necessary and Proper Clause, and Roberts's opinion is the controlling law, so I will briefly describe it here. First Robert says, “Under the Commerce Clause, Congress cannot force someone to buy something they don't want to buy. A Congress's power to regulate commerce presupposes that the commerce already exists, and doesn't include a power to compel one to enter into commerce.” Chief Justice Roberts also said that Congress could not, under the Necessary and Proper Clause, force one to buy things, because, he said relying on a passage of McCulloch v. Maryland that had been ignored since 1817, Chief Justice Marshall did hedge his opinion in McCulloch V. Maryland by saying, “If Congress were to pass some kind of law which was so great and independent of the existing enumerated powers, that it ought to have been a separately enumerated power, then it would be the painful duty of this tribunal to strike such a law down.” While Roberts said, “Under the Necessary and Proper Clause, the healthcare mandate was a claim of a great and independent power,” and so Roberts joined Scalia, and the four conservatives, and narrowed the Necessary and Proper Clause, so at least today the Necessary and Proper Clause is narrower than it was in 1940, in that today's case law says that, if Congress asserts a power that is so great and independent, that it ought to have been separately enumerated, it can't be upheld under the Necessary and Proper Clause. That may not sound like progress to those of you listening to this discussion, but that is actually progress doctrinally over Wickard v. Filburn in 1941, but Chief Justice Roberts said there was another way to uphold the mandate that people buy health insurance, and that was that Chief Justice Roberts decided to construe the mandate, to buy health insurance, to be a tax. Congress has the power, as I said earlier, to tax and spend to promote the general welfare, so if Congress thinks that compelling healthy people to buy health insurance that they don't need promotes the general welfare, it can create a tax incentive for them to do so, and Robert's pointed out that under Obamacare, the penalty for not buying health insurance was that one had to pay an extra amount on your income taxes every year. Essentially, Roberts argued that the affordable care act mandate was a tax, even though the Congress that passed it denied it was a tax, and even though president Obama, when he signed it, denied it was a tax, and he then upheld it under the 16th amendment as a tax on income. I think that Chief Justice Roberts gets an F on statutory construction, but he gets an A on his reading of the Commerce and Necessary and Proper Clauses, so it is a strangely mixed legacy, but the bottom line at the moment, under the Necessary and Proper Clause, is that there is an outer limit that, if Congress tries to do some great and independent thing that's so important that it ought to have been enumerated, it can't do that thing. NARRATOR: Thank you for listening to this episode of the No. 86 Lecture series: Continuing the Conversation in the 85 Federalist Papers about the proper structure of government. The spirit of debate of our Founding Fathers animates all of the No. 86 content, encouraging discussion and critical reflection relative to how each subject is widely understood and taught in law schools and among law students. Subscribe to the No. 86 Lecture series on your favorite podcast platform to have each episode delivered the moment it’s released. You can also go to fedsoc.org/no86 for lectures and videos on Federalism, Separation of Powers, the Judiciary and more. Thanks for listening. See you in class! - Transcript [for YouTube - no speaker names/verbatim] Thanks for joining this episode of the No. 86 lecture series, which continues the conversation in the 85 Federalist Papers about how Federalism works. Today’s episode features Professor Steven G. Calabresi, the Clayton J. & Henry R. Barber Professor of Law at Northwestern Pritzker School of Law. He is Chairman of the Federalist Society's Board of Directors. As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker. - Are the powers enumerated in the Constitution an exclusive list? We’re here today with Professor Steven Calabresi who will explain how the enumerated powers of Congress have come to include anything deemed “appropriate” for the general welfare. How have Supreme Court rulings expanded the jurisdiction of the Commerce Clause and the Necessary and Proper Clause? Under American federalism, Congress has limited and enumerated powers and the principal enumeration of power is appears in Article One, Section Eight of the Constitution, which has 18 clauses, and those 18 clauses all enumerate different powers. The first power that's enumerated is the power to tax and spend to promote the general welfare. And that is a huge power, as we'll see in a minute. It's subject to some limitations, but Congress has the power to tax incomes, both employment incomes and inherited income and all other sources of income under the 16th Amendment. And Congress also has the power under the original constitution to impose tariffs or to impose sales taxes or even to impose a European style value added tax, which is essentially an elaborate form of a sales tax. So Congress has very broad powers of taxation. Congress also has power to spend to promote the general welfare. That language has been construed expansively by the Supreme Court since 1938, Spending to promote the general welfare was said to include in 1938 providing welfare payments to the unemployed and to the poor and providing retirement benefits to people who participated in the Social Security program. So, the power to spend as well as the power to tax is a very significant power. There are a number of other enumerated powers which are important. Congress has the power to adopt naturalization laws, laws specifying the process by which a noncitizen can become a citizen. Ironically, there is no enumerated power giving Congress control over immigration, but the Supreme Court has inferred that power from its reading of the Commerce Clause, which I'll talk about in a moment. Can you say more about what powers are enumerated? Are there other powers that are not listed in the Constitution but are presumed? Among the 18 enumerated powers, there are a couple that authorize criminal laws. Congress is allowed to punish counterfeiting. Congress is allowed to punish piracy and treason on the high seas. And Congress is allowed to punish violations of the law of nations. But even those powers are separately enumerated, it has been assumed since 1789, that Congress can, under the Necessary and Proper Clause, which I also will talk about in a minute, that Congress can under the Necessary and Proper Clause, adopt a whole host of federal laws, making it a federal crime, for example, to steal from the US mail or making it a crime to lie in federal court or before a Congressional committee when one has been subpoenaed and many, many other federal criminal laws as well. So it's probably fair to say that the 18 clauses listing federal powers, are examples of federal power, but they're certainly not an exclusive list of federal power. Congress has through it's reading of the Commerce Clause and Necessary and Proper Clause as sanctioned by the US Supreme Court, Congress has gone well beyond the 18 enumerated powers. And among the examples of Congress going beyond that, that I would give, are the adopting of immigration laws, which began and at the federal level in around 1880. Prior to 1880, immigration law was entirely controlled by the state's ironically. Another example of Congressional power growth is Congress has the enumerated power to coin money, and yet since the Civil War, the federal government has issued paper money. This naturally lead to a Supreme Court case, actually three Supreme Court cases which collectively are called the legal tender cases. And essentially in the legal tender cases, the Supreme Court concluded that Congress could print money as well as coining money because it was necessary and proper to promoting the general welfare of the country to do so. So Congress clearly has the power to print money as well as the power to coin money, which is more evidence that the enumeration is exemplary rather than exclusive. An exemplary list would be a list that, for example, said, go to the grocery store and buy meat, vegetables, and other food items. An exclusive list would be a list that said, go to the store and buy salami, ham, and tuna fish. The listing of powers in Article One, Section Eight is exemplary, not exclusive, primarily because the final power, the 18th clause, gives Congress the power to pass all the laws that are necessary and proper for carrying into execution any of Congress's other enumerated powers. Congress has an enumerated power of course to create an army and a navy. It has been assumed correctly, I think under the Necessary and Proper Clause that given modern technology, Congress also has the power to create an air force. And if we need one space force. Obviously we can't maintain armies and navies given present technology without having an air force or a space force. So that's an example of a law that is necessary and proper to effectuate the other enumerated powers given the reality of the world we live in. And obviously the world we live in today has changed in many ways technologically and in size of population since 1789. Congress's power to set up the armed forces and to declare war is a very significant power. And as we saw, that provides a check on presidential power in that area, although that remains a contested area of constitutional law. What enumerated powers are the most contested? Is it difficult to determine the scope of an enumerated power? Is the meaning clear from the Constitution or has the meaning changed over time? The two enumerated powers in Article One, Section Eight that have generated the most Supreme Court case law and the most discussion of the Commerce Clause and the Necessary and Proper Clause. I'll talk about the Commerce Clause first, because the case law addresses it first and then discuss the Necessary and Proper Clause. But both clauses are of critical importance. Congress has the power under Article One, Section Eight, clause three to regulate commerce with foreign nations; among the several states; and with the Indian tribes. So Congress can enter into international agreements regulating commerce, like NAFTA, the North American Free Trade Zone Agreement. Congress can regulate interstate commerce as it's called, commerce among the several states. And of much less importance today, Congress can regulate commerce with the Indian tribes. So one of the first questions to arise, was what is commerce among the several states? And the first famous Supreme Court decision on this was written by John Marshall in a case called Gibbons against Ogden. And what happened in Gibbons against Ogden is that the state of New York gave Ogden a state monopoly, an exclusive state license to run a ferryboat, between Manhattan and New Jersey across the Hudson River. Gibbons decided he wanted to open a competing ferryboat and he got a license from the national government to engage in the coasting trade, which seemed to involve intercoastal communication. Gibbons opened up his ferryboat service to compete with Ogden. Ogden sued him for violating his New York state monopoly. The New York Court of Appeals ruled for Ogden and said the Ogden had the monopoly right to run a boat between Manhattan and New Jersey. And Gibbons appealed to the US Supreme Court, which unanimously reversed the Court of Appeals of New York and ruled for Gibbons. And Chief Justice Marshall, in Gibbons against Ogden said that commerce includes all ... What Marshall said was all commercial intercourse, meaning all contact back and forth across state lines, between people. And so Marshall's opinion in Gibbons against Ogden seems to be limited to a commercial context because there was buying and selling going on with respect to the ferryboat tickets. But it strongly implied that any time people are goods crossed over a state boundary line, there was federal power under the Commerce Clause to regulate that. The Supreme Court in 1903 in a case called Champion against Ames upheld a federal law that made it a crime to ship lottery tickets across a state line. The lottery tickets were not being bought or sold. They were simply being shipped across the state line. But the Supreme Court held that any time there's a state line crossing, the Commerce Clause is implicated. Now that's not necessarily persuasive if you just look at the Commerce Clause, because the word commerce comes from two Latin roots. Com, which means with and merce, which means to buy or sell other English words that derived from the Latin word merce are mercenary, someone you pay to be a soldier, mercantile, an economic policy that a government might pursue, market. Merchandise. It's pretty clear that commerce involved buying and selling and the Commerce Clause originally probably meant Congress had the power to regulate buying and selling among the states. What the Supreme Court eventually concluded in Champion against Ames in 1903, and then in the cases during the New Deal period was that any travel of persons across state boundary lines or of goods, possessions or property, had to be regulable onto the Necessary and Proper Clause for Congress to be able to carry into execution its power under the Commerce Clause. So since 1940 in the United States against Darby, it has been constitutional law that anytime there is a state line crossing, federal legislation is permissible. The federal courts eventually concluded that Congress had power to regulate immigration, in part because immigration involved people crossing an international boundary line and coming into the United States. And so Congress could control not only buying slaves and importing them into the United States, which would have been simply buying and selling, but simple travel into and out of the United States. So it's been settled law since the 1880s that Congress has power over the movement of peoples across international boundary lines and it's been settled law since 1940 that any crossing a property or of people across state boundary lines is regulable. You mentioned that the extent of the Necessary and Proper Clause has also been debated. Can you elaborate on that? Okay. So the 18th clause of Article One, Section Eight gives Congress all power that is necessary and proper for carrying into execution Congress's other enumerated powers, or the powers of the president and of the federal courts.This is a sweeping granted power and it has a separation of powers aspect to it, and even more importantly, it has a key federalism aspect to it. As a separation of powers matter, Congress can carry into execution the executive power of the president and it has done that by creating different cabinet departments and agencies, separating out their jurisdictions, specifying what principal officers they'll have and funding those cabinet departments and agencies. The president nominates and the Senate confirms the heads of cabinet departments and agencies, but Congress creates or abolishes cabinet departments and agencies. And I should note that that's a departure from the practice in England because in England in 1789, King George III still had the exclusive power to create and abolish offices. So this is a power that had belonged to George III that the framers basically gave to Congress under the Necessary and Proper Clause. Congress has regulated the federal courts under the Necessary and Proper Clause by, for example, first saying the Supreme Court would consist of six justices and then increasing that number to nine, second by creating first in 1789, 16 federal district judges. And today, about a thousand lower federal court judges on the courts of appeals in federal district courts. Congress carries into execution the judicial power by, for example, specifying in the statute that each term of the Supreme Court shall start on the first Monday in October. It's not an accident that the Supreme Court term starts on the first Monday in October. That's been federal law since the Judiciary Act of 1789. So the Necessary and Proper Clause does have a separation of powers aspect to it and it does give Congress checks and balances over both the executive branch and the judicial branch, but probably the most dramatic effect of the Necessary and Proper Clause is its effect with respect to federalism, and with respect to federalism, as I mentioned in discussing the Commerce Clause, the Commerce Clause and the Necessary and Proper Clause were read together in United States against Darby in 1940, to allow Congress to set minimum wage laws, not only for goods that are shipped in interstate commerce but also, for goods that are produced and consumed solely within one state. That was a departure from what Chief Justice Marshall had said in Gibbons against Ogden, which I talked about earlier. In Gibbons against Ogden, Marshall said there's some holy interstate commerce, which is not regulable under the Commerce Clause. That was good law in 1826. By 1940, in United States against Darby, the court concluded that the nation was so much of an interconnected economic hole, and that the 48 states, as there were then in 1940, only 48 states, were so much a part of one economy, that if Congress set a minimum wage for goods shipped in interstate commerce, it was necessary and proper for it also to set a minimum wage for goods that were produced in a state, and sold in the same state that they were produced in. Wasn’t there another case shortly after Darby that is even more notorious for its expansion of federal power? In Wickard against Filburn, in 1941, the Supreme Court went even further. Wickard against Filburn was a case where the federal government had decided to try to help farmers, as a result of the great depression, by forbidding them from growing crops. Now one might wonder how it helps farmers, to forbid them from growing crops, but Franklin D. Roosevelt and his advisors were not very good economists, and what they thought was, “If we forbid farmers from growing too many crops, prices will rise, and farmers will be wealthier,” so it's the national interest to forbid farmers from growing crops. In Wickard v. Filburn, in 1941, a farmer grew 22 acres of wheat on his farm when he was allowed to grow only 14 acres of wheat, and he was then fined by the US Department of Labor for violating the new deal statute regulating farm production. The farmer argued, “I'm simply growing wheat on my own land for the consumption of my own livestock on my land. I'm not selling the wheat to anyone. I'm not even selling the wheat in the state that I grew it in. I'm simply growing wheat on my own land, and feeding it to my own livestock on my own land.” The Supreme Court, citing the Necessary and Proper Clause, said, “The federal government has power, under the Necessary and Proper Clause, to tell farmers what they can grow, and how much they can grow on their own farms,” and because it concluded that the price of wheat nationwide would be affected by all the farmers, in the aggregate, who grew extra wheat on their own land, and since all that wheat in the aggregate would change the price of wheat for wheat that was bought and sold, therefore it must be the case that Congress can forbid the growing of wheat. The argument was that homegrown wheat overhangs the market for wheat that is bought and sold, and Congress can regulate any activity that overhangs a market. Well, this is a very questionable proposition. Congress can, under the Commerce Clause, regulate casinos, and the buying and selling of lottery tickets. Could Congress regulate church bingo games, or poker games held in one's house, on the ground that they overhang the market for commercial gambling? I would think the answer to that would be no, but Wickard suggests the answer to that might be yes. An even further ridiculous example, it was suggested by Professor Charles Fried at Harvard Law School, was that Congress clearly, under the Commerce Clause, can forbid and criminalize prostitution. That's because the buying or selling of sex is clearly commerce. Professor Fried then asked, “ Can Congress regulate all private sexual acts that overhang the market for prostitution? Surely the answer must be no, but Wickard v. Filburn suggests otherwise. Under Wickard v. Filburn, essentially anything is regulable under the Necessary and Proper Clause. That raises a question of, doctrinally, how did the Supreme Court get to the place that it reached in Wickard v. Filburn? And the answer is in a famous decision called McCulloch V. Maryland, decided in 1817 with the sole opinion by the court being written by none other than the great Chief Justice John Marshall, himself. Please briefly remind us of the issue in McCulloch v. Maryland and why it has had such an impact on subsequent interpretations of the Constitution. In McCulloch v. Maryland, what happened was that an institution called the bank of the United States, which had existed from 1791 until 1811, temporarily went out of existence because the Jeffersonian presidents had always thought that the bank of the United States was not authorized by the US constitution. The Jeffersonians believed this because James Madison, himself, remembered that, at the Philadelphia Constitutional Convention in 1787, there had been a proposal to give Congress the power to charter corporations, and the proposal was defeated because delegates from Pennsylvania and New York were afraid that federally chartered corporations would compete with Pennsylvania and the New York corporations. James Madison, remembering that, argued that a bill to incorporate a bank of the United States succeeded Congress's powers. Alexander Hamilton adamantly wanted to create a bank of the United States. He wanted to do that because King William the third of England had created a bank of England in the 1690s, and it had made England the leading financial power in the world in the 18th century. Alexander Hamilton dreamt that someday the United States would be the leading commercial power in the world, and Alexander Hamilton thought a bank of the United States was essential for that vision to be realized. The question of the constitutionality of the first bank of the United States was presented to George Washington, with secretary of state, Jefferson, and the attorney general both saying the bank of the United States was unconstitutional, and Alexander Hamilton arguing that it was perfectly constitutional, and it was good policy. President Washington sided with Alexander Hamilton. The first bank of the United States was created. It existed for 20 years, and it sunset out of existence in 1811. Once the bank sunset out of existence during the presidency of James Madison, the nation began to experience severe economic turmoil, particularly during the war of 1812, and so eventually, in 1816, a bill was passed by Congress, and this time signed by president James Madison, recreating a second bank of the United States, and Madison said that although he had originally been of the view that the first bank was unconstitutional, he thought that the question was now settled as a matter of precedent by president Washington, and he considered the constitutional question to be settled precedent, and he agreed as a policy matter that the second bank was a good idea, so the second bank came into existence. Many states were very opposed to the bank of the United States, and one state that was opposed to it was the state of Maryland, and Maryland enacted a special tax that applied only to the branch of the bank of the United States that was doing business in Maryland. It did not apply to any other banks in Maryland. It applied only to the bank of the United States branch in Maryland. The treasurer of the bank of the United States in Maryland, McCulloch, sued in the Maryland courts, arguing that singling out a federal corporation for a tax that wasn't payable by any other similar banks was unconstitutional, and the Maryland Supreme Court sided with the state of Maryland, so McCulloch appealed from the Maryland Supreme Court to the US Supreme Court, where he won in a unanimous decision by Chief Justice Marshall. Chief Justice Marshall used the opinion, not only to validate the constitutionality of the Bank of the United States, but also to read the Necessary and Proper Clause in an absurdly broad way. The first issue under the Necessary and Proper Clause was, was a bank of the United States necessary for carrying into executing Congress's other enumerated powers? The disagreement was that Maryland said necessary meant indispensable, and clearly the federal government could function without a bank of the United States, so the bank of the United States wasn't indispensable, but McCulloch said necessary meant useful to or convenient, and clearly it was useful to the federal government to have a bank of the United States, because then the government could collect taxes, and banks notes, and it could pay government salaries, and bank notes, and it could regulate commerce, and bank notes, and so forth, and so on. Chief Justice Marshall construed necessary to mean convenient or useful to, not indispensable. That was contrary to the meaning of the word necessary found in Samuel Johnson's dictionary of the English language in 1783, which is the dictionary the framers of Philadelphia would've consulted if they had looked up the word necessary when they were reading the constitution. If you look up the word necessary today, you'll find in dictionaries that, today, it means convenient to or useful for. That's because Chief Justice Marshall actually changed the meaning of the word with his opinion in McCulloch versus Maryland. It did not used to mean what it now means, but there's another clause that's relevant, and that is, a law has to not only be necessary to be authorized by the Necessary and Proper Clause, it also has to be proper to be authorized by the Necessary and Proper Clause, and the word proper arguably means appropriate to the level of government which is legislating, or not violating the separation of powers, or not violating individual rights. For example, Professor Gary Lawson at Boston University has argued that in the two years between 1789, when the constitution went into effect, and 1791, when the Bill of Rights was ratified, Congress could not have regulated freedom of speech, or of the press, or the free exercise of religion, because he would've argued it wouldn't be proper under the Necessary and Proper Clause to infringe on individual liberties in that way, and I think Professor Lawson is right. I think the word proper does have that meaning, and that's part of why the original framers of the constitution, including Alexander Hamilton, argued that the federal bill of rights was unnecessary, because Hamilton insisted that the Necessary and Proper Clause never authorized laws that abridged freedom of speech or of the press. This is most ironic because Hamilton was an ardent supporter in 1798 of the sedition act, which made it a crime to speak badly about president John Adams, which clearly violated the freedom of speech. Hamilton obviously was inconsistent in what he said during the ratification debates on the constitution and what he said in later life. McCulloch is frequently cited. What legacy has this case had? The decision to allow Congress to charter a national bank seems reasonable, where did things go wrong in the aftermath? Under the Necessary and Proper Clause, as interpreted in McCulloch, McCulloch ends with a sentence where it essentially says, let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate are permissible. Marshall essentially took a clause that said federal laws had to be necessary and proper, and changed it into a clause that said federal laws have to be appropriate, and that is a huge lowering of the standard, and a huge twist. Now, McCulloch is treated as a cornerstone of American constitutional law, and the new dealers love McCulloch against Maryland because of what it implied. It was Justice Felix Frankfurter's favorite case, and when Chief Justice Earl Warren was appointed Chief Justice, after serving as governor of California, and having run for vice president with Tom Dewey in 1948 as a liberal republican, Felix Frankfurter anxiously went to talk to the new Chief Justice Earl Warren about constitutional law, and he mentioned McCulloch v. Maryland, and Chief Justice Earl Warren had never heard of it, and Frankfurter was so alarmed that he immediately had the opinion delivered to Earl Warren's desk, and instructed him to read it before he did anything else because it was the lodestar for constitutional law. Well, it was the lodestar for the new deal, and for total national power, but it was not faithful constitutional interpretation. The Bank of the United States was probably constitutional, but the changing of the Necessary and Proper Clause into an appropriateness clause was an act of judicial ledger domain that was completely inappropriate. The question of the scope of the Necessary and Proper Clause came up most recently in a case called NFIB against Sebelius, in which former president Barack Obama's mandate that everyone buy health insurance was challenged on constitutional grounds, and the Supreme Court issued a very interesting and splintered series of rulings in NFIB against Sebelius. The far more liberal justices on the Supreme Court, including Justices Kagan, and Sotomayor, and Ginsburg, and Breyer, thought that the Affordable Care Act mandate was constitutional in every respect, and that, just as Congress could regulate commerce after it had occurred, they argued Congress could also force people to engage in commerce, i.e. force them to buy health insurance, and they basically made the same argument that Wickard against Filburn, the case about the farmer growing wheat on his farm, made. They said that if everybody is forced to buy health insurance, then the cost of health insurance will go down, because there'll be more people in the pool, and so this has a national effect, so it's within Congress's power. Congress can force you to buy health insurance. Four conservative Justices, Scalia, Thomas, Kennedy, and Alito, said, “Nonsense! Congress has never before forced someone to buy something that they didn't want to buy. If we allow Congress to force people to buy anything that they can regulate, Congress could force us to buy broccoli, or to buy memberships in fitness centers, because they're good for our health, and that lowers healthcare costs.” Congress has currently, under the Commerce Clause, forbidden the sale of kidneys, or organs, or human blood. Presumably, if Congress could compel you to buy anything it can prohibit you from buying, it could compel you to donate a kidney, or blood, or an organ. Scalia and the four conservative Justices were all of the view that the healthcare mandate clearly exceeded the Commerce Clause, and clearly exceeded the Necessary and Proper Clause. Chief Justice Roberts went right down the middle on this one. He sided with Scalia and the four conservatives on the Commerce Clause and the Necessary and Proper Clause, and Roberts's opinion is the controlling law, so I will briefly describe it here. First Robert says, “Under the Commerce Clause, Congress cannot force someone to buy something they don't want to buy. A Congress's power to regulate commerce presupposes that the commerce already exists, and doesn't include a power to compel one to enter into commerce.” Chief Justice Roberts also said that Congress could not, under the Necessary and Proper Clause, force one to buy things, because, he said relying on a passage of McCulloch v. Maryland that had been ignored since 1817, Chief Justice Marshall did hedge his opinion in McCulloch V. Maryland by saying, “If Congress were to pass some kind of law which was so great and independent of the existing enumerated powers, that it ought to have been a separately enumerated power, then it would be the painful duty of this tribunal to strike such a law down.” While Roberts said, “Under the Necessary and Proper Clause, the healthcare mandate was a claim of a great and independent power,” and so Roberts joined Scalia, and the four conservatives, and narrowed the Necessary and Proper Clause, so at least today the Necessary and Proper Clause is narrower than it was in 1940, in that today's case law says that, if Congress asserts a power that is so great and independent, that it ought to have been separately enumerated, it can't be upheld under the Necessary and Proper Clause. That may not sound like progress to those of you listening to this discussion, but that is actually progress doctrinally over Wickard v. Filburn in 1941, but Chief Justice Roberts said there was another way to uphold the mandate that people buy health insurance, and that was that Chief Justice Roberts decided to construe the mandate, to buy health insurance, to be a tax. Congress has the power, as I said earlier, to tax and spend to promote the general welfare, so if Congress thinks that compelling healthy people to buy health insurance that they don't need promotes the general welfare, it can create a tax incentive for them to do so, and Robert's pointed out that under Obamacare, the penalty for not buying health insurance was that one had to pay an extra amount on your income taxes every year. Essentially, Roberts argued that the affordable care act mandate was a tax, even though the Congress that passed it denied it was a tax, and even though president Obama, when he signed it, denied it was a tax, and he then upheld it under the 16th amendment as a tax on income. I think that Chief Justice Roberts gets an F on statutory construction, but he gets an A on his reading of the Commerce and Necessary and Proper Clauses, so it is a strangely mixed legacy, but the bottom line at the moment, under the Necessary and Proper Clause, is that there is an outer limit that, if Congress tries to do some great and independent thing that's so important that it ought to have been enumerated, it can't do that thing. Thank you for listening to this episode of the No. 86 Lecture series: Continuing the Conversation in the 85 Federalist Papers about the proper structure of government. The spirit of debate of our Founding Fathers animates all of the No. 86 content, encouraging discussion and critical reflection relative to how each subject is widely understood and taught in law schools and among law students. Subscribe to the No. 86 Lecture series on your favorite podcast platform to have each episode delivered the moment it’s released. You can also go to fedsoc.org/no86 for lectures and videos on Federalism, Separation of Powers, the Judiciary and more. Thanks for listening. See you in class!