Using The Affordable Care Act – What You Can Do (Part 1)

In 2012, the U.S. Supreme Court upheld key provisions of the Patient Protection and Affordable Care Act (I will call it Obamacare, since that is its title in everyday conversation). Now that it is law, too little has been said about how it affects you and me. I want to change that.

This is the first in a series of three posts to help you become a more informed user of the “new” medical care. In this Part, I present the basics of how Obamacare affects your medical care and health insurance, as of now. I also give suggestions on what you can do to make the best of it.

In my second Part, I will present how Obamacare affects groups you might be a part of. In that post, I will tell how the law affects you if you are in a union, if you work for a small business, if you work for a large corporation or for government, if you are retired, and groups like that.

In the third Part, I will present the basics of changes required by Obamacare that you can expect in coming years, including taxes, insurance premiums, health insurance coverage, and medical practice. Here’s the first Part:

Part 1: Obamacare’s Effects on You

If you are poor by Federal standards. If your reported income is less than 133% of the poverty level ($29,327 family of four in 2010), check with your State to see if you are eligible for Medicaid (“free” insurance). If you are, it’s probably a better deal than if you’re not on it now. Your State is one of two types:

Expanding. About 40 States will expand their Medicaid eligibility as of 2014 and your State might be one of them. Almost all of the additional cost to the States will come from the Federal Government until 2020.

Not Expanding. The rest of the States are not expanding Medicaid eligibility. Some of these choose not to spend the additional money required above the Federal amount to fund the expansion. Some also think the Federal funds will be cut off sooner than 2020 and refuse to take up the full cost. Other states already subsidize Medicaid above the 133% level and, therefore, will not get Obamacare payments. For those States not expanding, you will be put in an Obamacare health insurance exchange (a government-established health insurer’s list).

The Penalty (Tax) – To Pay or Not To Pay. Obamacare makes you pay a penalty if you don’t have health insurance (or Medicaid, see above). The penalty will be $95 per adult in 2014 and rise to $695 in 2016. The penalty for each uninsured child will be half that, so the penalty for a two adult, two child family will be about $300 in 2014 and $2,100 in 2016. The Court ruled that this is a tax and will be collected by the IRS.

No Need to Pay. If you have health insurance now, stick with it – you won’t have to pay. If you are on Medicaid or in a health insurance exchange (see above), stick with it – you won’t have to pay.

If You Pay. If you pay, you will still be uninsured. The penalty is designed to “force” you into health insurance. Will the IRS be able to collect? Congress will have to fund the thousands of new IRS agents needed, but the IRS may be able to take it from any tax refunds otherwise due to you.

Over-The-Counter (OTC) Medications. If you use a Health Savings Account (HSA) or a Flexible Spending Account (FSA) to buy over-the-counter medications, Obamacare prohibits that. You will have to get a prescription from your doctor to pay for them from those accounts.

Preventive Test Co-Pay. Obamacare has listed a number of preventive tests that must be paid for by your health insurance company without charging you co-pay, unless your insurance plan has been “grandfathered” out of the requirement. Check to find out.

Employer Personal Wellness Reward Programs. Obamacare authorizes employers to set up personal wellness reward programs under their health insurance plans. If your employer has one, you could end up paying up to 50% higher premiums and co-pays if you don’t meet the plan’s standards.

Savings Alert. If you think that you will not meet the standards, you can ask for a special exemption to opt out of the plan.

Pre-existing conditions. Obamacare now requires children with pre-existing conditions to be eligible for health insurance, but adults with pre-existing conditions are not mandated until January, 2014. In the meantime, there is a temporary high-risk insurance pool to bridge the gap.

Early Retirees. Obamacare has created incentives for employers to drop the health care coverage that they have been providing to those who retire before age 65. If this describes you, prepare to buy your health insurance through a state-based exchange (see above) until you’re 65 (when you get Medicare).

Medicare Advantage. Obamacare has created incentives for health insurers to drop out of the Medicare Advantage program. If you are using Medicare Advantage, look for an alternative, as it likely will be discontinued.

The “Rich” Pay More. If you are in the $200K/$250K and higher group, your Medicare taxes will go up on hospital insurance and investment income. Speak with your financial adviser.

Small Business Owner. Obamacare has created significant tax credits on a sliding scale for owners of businesses under 25 employees. Employers with 10 or fewer employees get the full credit. How long this credit will last is unknown.

New Hire Alert. Before hiring new employees, include this tax credit in your new hire calculations to see if you should hire at all and, if so, how many and at what hours/pay rate.

These seem to be the main Obamacare provisions that affect most of us. There are others, no doubt, that will come to light as the law is understood, interpreted, massaged by regulations, and, perhaps, amended. This entire area of public policy is likely to change, perhaps dramatically, as more people begin to find out what is in it, so attention to the news from Washington is strongly advised. Be an informed citizen.

DANGER! US Sovereignty At Risk June 3

DANGER, DANGER, DANGER.  On June 3, the UN General Assembly will present a treaty that threatens to take away our right to bear arms and to supersede the Second Amendment.  And, President Obama will, as part of that, hand over our sovereignty to the UN!

On Tuesday, April 2, 2013, the UN General Assembly approved a Global Arms Trade Treaty by a vote of 155 to 3 with 22 abstentions  The United States voted in favor. 

I was interested in finding out what we had agreed to.  After reading several accounts containing only vague summaries, I tried to look it up myself, but the UN is keeping it from the public.  Here’s what I learned:

  •  There is no Treaty as yet (at least that’s been released by the UN).  The UN membership could not agree on a text.  The vote was for a draft General Assembly Resolution to proceed with completing a treaty that could be offered for a vote.
  • ·The three votes against the draft Resolution were Iran, Syria and North Korea.  Abstainers included Russia, China, Columbia, Bolivia, Nicaragua, and…Cuba.
  • ·The Arms to be banned from trading include rockets, tanks, artillery, and… “certain small arms.”  CERTAIN SMALL ARMS – does that set off any bells?  Who will decide what “certain” means, I wonder?
  • ·The Treaty will be presented for signature on June 3, 2013 and will go into effect 90 days after the fiftiethth signature is applied.  So, less than one-third of member nations need to sign in order for the Treaty to be binding on all, including us.

So, what the will of the people prevents the Obama Administration from doing, he can get done through the back door.

How is this constitutional, you ask?  Here’s what the Constitution has to say:

 1.  “He (the President) shall have power, by and with the Advice and Consent of the Senate to make Treaties, providing two-thirds of the Senators PRESENT (my emphasis) concur; (Article II., Section 2., paragraph 2).

 2.  “The judicial power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made … under their Authority…” (Article III, Section 2, paragraph 1). 

 3.  “This Constitution, and the Laws of the United States which shall be made in pursuance thereof; AND ALL TREATIES MADE (my emphasis), … under the Authority of the United States, shall be the supreme Law of the Land; and Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the contrary notwithstanding” (Article VI, paragraph 2).

 Plain Talk

Here’s what it means:

 1.  The President can make treaties, but the Senate must approve them by a two-thirds vote of “Senators present.”  Not two-thirds of the total Senate, just of those present at the time of the vote.  Do you think that the Senate leadership would not look for a late-night chance to take a vote when known dissenters are out of the room? 

 2.  The Supreme Court has the power to review such treaties.  How long do you think that it would take for a case and appeal to survive delaying tactics and be taken up by the Court (if indeed the Court could even withstand the opposition of the Administration and vote in favor of hearing it)?  And, what are the chances that the Court would find the treaty unconstitutional, especially in light of their capitulation on Obamacare being a tax?

 3.  A treaty becomes the highest law, superseding all laws of every State. 

The only way out that I can see rests on the word “Authority.”  Does the President have the Authority to enter into a treaty that contradicts the Constitution (in this case the Second Amendment [“certain small arms”])?  Does the Senate have the Authority to concur in such a treaty?  How long would it take for these questions to be resolved ?

What is even more frightening is that all of the above may not matter.  As long as we are a member of the UN, we would be bound by this treaty, even if we voted against it.  The UN General Assembly has set the approval number so low, that the number of approving votes will be reached easily.  Then, our only choice will be quit the UN (fat chance) or defy the treaty.  Does anyone see that happening?    

Obama Challenges The Constitution

In answer to a debt limit question in his January 14 press conference, President Obama said, “Congress has to pay its bills. If they want to keep this responsibility …” Here was a thinly veiled threat that he would by-pass Congress and authorize a higher debt ceiling on his own.

But, there’s something worse afoot. By suggesting in his answer to the press conference question that Congress’ responsibility could be taken away, Obama spoke in contravention of the Constitution. As a purported Constitutional scholar, he should know better.

The responsibility to pay the nation’s bills is not Congress’ to give up or have taken away. The Constitution expressly gives that responsibility to Congress alone. Article I, Section 8 specifically states, “The Congress shall have power … to pay the Debts and provide for the common Defence and general Welfare of the United States…” And, Section 9 provides, “No money shall be drawn from the Treasury, but in Consequence of Appropriations made by law…” An act by the President to exceed a debt ceiling authorized by law would be in direct violation of these Constitutional provisions.

This isn’t the first time that Obama has opposed the Constitution. In a 2001 interview on Chicago’s NPR, in support of the use of the Constitution to redistribute wealth he said, “(The Constitution) Says what the states can’t do to you. Says what the federal government can’t do to you, but doesn’t say what the federal government or state government must do on your behalf.” Aside from a supposed Constitutional expert getting the concept of States’ Rights so totally wrong, Obama shows in this statement what powers he wants the Constitution to confer and they’re clearly beyond those set forth by the Founders.

Perhaps President Obama wants the American people to forget that he’s the one who is responsible for racking up much of the debt in the first place. Or, that the only budget he submitted to the Senate (he never submitted one to the House) was defeated unanimously. Or, that the Senate, controlled by his party, has not passed a budget in the entire four years of his Administration

Perhaps he doesn’t want the American people to know that, without an approved current budget, he is free to spend at the old rates, thereby creating the excess bills he insists on Congress’ paying. He claims to be open to negotiations, but refuses even to discuss the many spending proposals sent to him by the House.

The idea of the balance of powers, central to the concept of the Constitution, was set up to prevent the assumption of just such power by the President. Obama and other Presidents have taken unilateral action in the past, but never since FDR’s attempt to pack the Supreme Court has a President attempted to take for himself a power so basic to the operation of the nation itself.

When he was sworn in, President Obama promised to uphold the Constitution and will do so again in the swearing in for his second term. He would be coming perilously close to breaking that promise should he carry out the powers he threatens to wrench from Congress.

The Story of Stephen Hopkins – Determined To Live Free

Who was the only person to settle in both the Jamestown and Plymouth colonies? Stephen Hopkins

Stephen Hopkins was a clerk to a church minister in Winchester, England during the late 1500’s and early 1600’s. He was married and had three children.

Among Stephen’s church congregation were members of the Virginia Company – the group of adventurers who had established a settlement in Jamestown. A second voyage was planned and Stephen’s Virginia Company friends thought he would make a good clerk for the new Jamestown governor – Sir Thomas Gates – who was to go.

In June, 1609, Stephen joined the venture and sailed with Gates and other new settlers on the Sea Venture. He left behind his family, since Jamestown had not yet been made safe for them.

Sadly, the Sea Venture ran aground on Bermuda during a violent storm and the ship’s company was marooned. After a failed attempt to send a longboat to the mainland for rescue (in which all eight hands were lost), the remaining crew began to build more substantial boats that could take them to Jamestown safely.

During the construction period, Sir Gates governed the ship’s company as if he were already their Governor. Stephen objected, questioning Gates’s authority.

Stephen was arrested and tried for mutiny. He was convicted and sentenced to hang. While many of the ship’s company protested Stephen’s sentence, it wasn’t until he stood at the gallows that a pardon was granted. In his last words, it is reported that Stephen asked how they could make his wife a widow over such a trivial matter. And, it appears that he struck a deal never to criticize Gates again. It worked.

By May 10, 1610, the boats were ready and all hands set out for Jamestown. They arrived safely on May 21, without apparent further objection from Stephen. If this story sounds familiar, it is very much like the theme of Shakespeare’s The Tempest, published in November, 1611.

Stephen worked in Jamestown, dutifully sending his wages back to his wife in England. Then, in 1614 he got a letter from London informing him that his wife had died. He took the next ship back to reunite with his children and see to their continued growth. There he stayed until 1620, marrying his second wife Elizabeth, when the taste of freedom was again too strong to resist.

Stephen heard about the Mayflower voyage and, since his children were grown, he signed up to go. This time he was able to bring his wife along. After three brutal months at sea, the Mayflower arrived and the settlers prepared to disembark. Their last act before going ashore was to write the Mayflower Compact – a basic constitution for the Plymouth settlement. Stephen was one of the 41 who signed it.

Stephen’s familiarity with Native American ways and language from his time in Jamestown stood him in good stead in the years that followed. He was a member of many of the groups that explored the surrounding countryside and his house was the site of the first formal meeting with Massasoit, Chief of the Wampanoags.

Stephen took up the tanning trade (leather) and opened a shop to profit from his wares. He also served as an assistant to the Governor of Plymouth. He and Elizabeth lived happily together until the early 1640’s when she died. Stephen died a few years later in 1644.

Stephen Hopkins is the only known person to have settled in both Jamestown and Plymouth. He is a tribute to the determination to live in freedom that our ancestors fought so hard to achieve and preserve. We are indebted to him for his strength and perseverance.

Joe, the Plumber – Why Should He?

In the 2008 Presidential Campaign, Barack Obama met Joe The Plumber in the crowd and spent quite a bit of time with him. Joe told Mr. Obama that he would like to start a plumbing business, but was worried about the many obstacles to his doing so. Mr. Obama explained at great length the importance of businesses spreading their wealth around. Then, before Joe could respond further, Mr. Obama turned and left.

If Joe had had a chance to finish, he would have described the obstacles to starting his business and would have asked why he should go to all that trouble if the Government was going to take some of what he earned and give it to those who did not earn it?

Since Joe is not here to speak for himself, I will try to speak for him (having started three businesses of my own). Mind you, Joe has already gone through the training, apprenticeship, examinations, and expense of getting his Plumbing License – no small or inexpensive feat in itself.

First, Joe faces having to save about $200,000.00 to get started. Joe and his family are going to have to live more cheaply than they otherwise would be able to. If he can save $20,000 a year, it will take him 10 years; if he can save only $10,000, it will take him 20. If he is making $50,000 a year, say, working for another plumbing company, this is about how Joe and his family will have to live for all those years:

• No homeownership – can’t afford it. They will have to live in an apartment with rent of $1,000 or less.

• Entertainment. Forget it. No movie theaters, eating out, premium cable service, or cultural events. It’s picnics in the park and other free activities.

• Food. No special food or meals. No entertaining others at home. Buying basics in bulk will be the order of the day.

• Clothing. Only the bare necessities.

• Vacations. Joe will have no time for them, having to work the year round to get as much income as possible. The family will vacation at home.

• Cars. Keep the old ones running.

• College savings. What there is will have to go in the kitty. It’ll be Community College for the kids.

And, Joe is going to have to take as much overtime as he can get the whole way. Mind you, Joe will have earned and have been able to afford these things, if he weren’t saving for his dream and asking his family to deprive themselves for him.

After all that scrimping and saving, Joe now has his $200,000 and he’s ready to gear up to start. These will be his start-up expenses:

• Workshop (probably in a garage or basement): $10,000

• Plumbing truck, fitted out with signs, racks, tools and shelving: $50,000

• Equipment, welder, vices, handtrucks, pipecutters, etc.: $5,000

• Materials to start: $5,000

• Business space (rented or increased rent for space at home): $10,000 (first year)

• Printing, copying and advertising: $5,000

• Helper, total cost including health care, payroll taxes, etc.: $50,000

• Accounting and tax prep services (saved if his wife can do it – which keeps her from doing other income producing work, but is risky): $5,000.

That leaves $60,000 to cover emergencies, his own health care and payroll taxes, and his family living expenses. There will be no “profit;” only expenses.

It will take Joe two years to get his business up and running. The first year he will be getting his name out, asking for business, taking what jobs he can get, and maybe working on an hourly basis for someone else if things get tight. He will have to spend time drumming up business from builders, contractors and architects that he would otherwise have been able to spend plumbing. He will run through his $60,000 savings by the end of the year.

The second year will be make or break for Joe. It will be in the second year when he will learn if there is enough business for him to make a go of it. All his relatives and friends will have called upon him in the first year and he will be relying on the impersonal marketplace to sustain him from there on out. Joe will learn that he will have to work whenever the jobs call for it. There will be no regular hours; he will have to put in 50, 60, 70 hours a week to cover his costs and earn a little extra.

And, there is a chance that Joe’s business could fail and he could lose all of his $200,000. It will be a big risk. So, Joe will be motivated to work as hard as he can to make sure he makes it.

What will face Joe as he does his plumbing work for his customers? In addition to keeping his training and his plumbing license current, an additional expense, Joe will have to learn and obey all kinds of regulations and requirements which will cost him money, including:

• Plumbing and Building Code updates

• Environmental Protection regulations, including air quality and hazmat disposal

• Safety regulations (he’ll have to know the Federal Occupational Safety and Health Act backwards and forwards)

• State and Federal Labor laws

• State Sales Tax collection requirements

• State and Federal hiring and benefits laws, including Obamacare

At the end of the second year, Joe might earn $20,000 extra, if he’s lucky. Or, he might be broke and ashamed that he put his family through 12 to 22 years of misery so he could chase his dream.

But, let’s say that Joe makes it. Let’s say that after five years, he’s earning $250,000 a year above his expenses. Let’s say that he’s been able to hire 10 plumbers and buy 5 trucks. What’s in store for him? Why, spreading his wealth around, of course. Barack Obama proposes to tell him that there are limits on what he can earn. If he earns more, the Federal Government will take the rest and give it others – about 50% all told.

At this point, can we blame Joe if he asks if it’s worth it? Did those people to whom his earnings are being spread deny themselves a comfortable lifestyle in order to save the money? Did they take the risk of starting a business? Did they have the guts to put up all their savings; to bet on themselves with the chance of losing it all? Did they put in the hard work and long hours, year after year, to make the business grow; to build the business?

You can’t blame Joe if he gets discouraged. He could have taken the safe road and put that $200,000 in a mutual fund and been done with it. Why didn’t he? He didn’t do it just for the love of plumbing. If the chance for a better life weren’t there, he’d just keep working for someone else. No, he wanted the chance to succeed in business and to earn the kind of living that others in business earn.

Many people think that being “rich” is a condition that you are lucky enough to have; to have been born with or to have been “fortunate” enough to have been given. Nothing could be further from the truth. High earners stumble and fall and lose their money all the time. People don’t realize that there is risk in trying to make a better life for yourself. It takes a belief in yourself and in your dream, as well as guts, business smarts and hard work, year after year, to reach that level. And, as soon as you take it for granted, you can lose it all. Not many have that determination.

So, Joe may ask, “Why should I do that? Why bother?” He isn’t going to go through all that just because he loves plumbing. We’ve got to make sure he can make it all worthwhile for him and his family. And, the more we take from him and give to others, the less likely he is to want to do it. If enough of the Joe’s start pulling back, we will become a deteriorating nation. We can’t take Joe for granted.

Supreme Court Limits Commerce Clause Powers

[This is the third and last post on the Interstate Commerce clause and the limits on the power of the Federal Government deriving from it. The first post was the story of farmer Roscoe Filburn. The second was the story of how the Federal Government got the power to fine him for growing his own wheat.]

Congress and the Federal Government have used the Interstate Commerce clause to justify the control of nearly every aspect of our lives. Often, the Supreme Court has approved it.

After the Court upheld the fining of Roscoe Filburn for growing his own wheat, the Commerce clause has been used to authorize further powers.

In 1944, to remove interference in Federal control of interstate commerce by the states, the Court struck down an Arizona railroad safety law (Southern Pacific Co. v State of Arizona).

Going Filburn one better, the Court ruled in Gonzalez v Raich that the growing of ones own marijuana for medical purposes, even in a state that allowed it, interfered in the Federal Government’s goal of ending interstate commerce in the substance altogether.

The Supreme Court has twice used the Commerce clause to prohibit racial bigotry. In Katzenbach v McClung, the Supreme Court ruled that racial discrimination by a restaurant was a burden on interstate commerce and, therefore, the Civil Rights Act that prohibited it was constitutional.

In Heart of Atlanta Motel v United States, the Court found that racial discrimination by a hotel was constitutionally prohibited by the Civil Rights Act using the same interstate commerce argument.

It appeared that there was no limit on the power that Congress could exercise under the Commerce clause, until Alfonso Lopez, Jr. walked into his San Antonio high school with a pistol.

Alfonso was immediately arrested and charged under a Texas law prohibiting gun possession on school property. The next day, the Federal Government charged Alfonso with violation of the Guns-Free School Zones Act and Texas dropped their charges against him.

The case made it to the U.S. Supreme Court (US v Alfonso Lopez, Jr.) where the Government claimed that the prosecution of Alfonso and the Guns-Free School Zones Act were constitutional under the Interstate Commerce clause. They claimed that the gun would lead to violent crime which would create expenses harmful to interstate commerce. They also claimed that Alfonso’s school would be seen as a dangerous place, thus discouraging learning and the promotion of the interstate commerce that education would foster.

The Court said to the Federal Government, in effect, “you’ve gone too far.” They ruled that to have found for the Government would have required the Court to “pile inference upon inference in a manner that would convert congressional authority under the Commerce Clause to a general police power…” The Court went on to admit that “some of our prior cases have taken long steps down that road…but we decline here to proceed any further.”

The Lopez case set three limits to interstate commerce: 1. It must be a channel of interstate commerce; or 2. It must be an instrumentality (a means) of interstate commerce; or 3. It must be an activity that substantially affects or relates to interstate commerce.

Will these limits on Interstate Commerce hold up? Perhaps the opinion of the Court in the “Obamacare” case (National Federation of Independent Business v Sebelius) gives a clue, at least for this Court. While it was decided that the Government has the power to tax those who do not participate in the Plan, the Court said that, had the case come down to the Commerce clause, the penalty against non-participation would have been struck down. The Court’s reasoning was that the Government’s interstate commerce regulatory power cannot force an individual to buy when they choose not to buy.

The extent to which this limit on the Commerce clause is extended likely depends on the longevity of the sitting Justices during the current President’s term, and, on the extent to which the Justices withstand the forces urging them to yield.

The “Natural Progress of Things…”

[In my last post, I told the story of Roscoe Filburn, the Ohio farmer who was fined for growing his own wheat. In this post, I tell the story of how the Federal Government got the power to fine Roscoe. The last post in the series will tell the story of limitations finally being applied to that power.]

“The natural progress of things is for liberty to yield and government to gain ground.” Thomas Jefferson, letter to Edward Carrington, Paris, May 27, 1788.

Jefferson saw the growth of government as water collecting on a flat roof. It will find the slightest crack and, over time, work its way in with greater and greater consequences. That is how the Federal Government gained the power to fine Roscoe Filburn.

Before the Constitution, the Articles of Confederation had created a commerce environment which invited every State to discourage trade with other States in order to protect their own products. And, that’s what they did, at the expense of economic growth.

The Founders wrote the Interstate Commerce clause of the Constitution to put an end to that. This clause said simply, “The Congress shall have the power… to regulate commerce… among the several States…”

We know from the Federalist Papers and other writings that, by “commerce,” the Founders meant the transport or movement of goods and not their production. So, the Interstate Commerce clause gave Congress the power only to pass laws regulating transport between states.

After the Supreme Court gave itself power to interpret law and the Constitution in Marbury v. Madison, it wasn’t long before the first case under the Interstate Commerce clause came to them.

In 1808, the State of New York had granted to Robert Livingston and Robert Fulton (inventors of the steamboat) the sole right to ship goods to and from New York by water – a monopoly. Livingston and Fulton sold a franchise to Aaron Ogden and Thomas Gibbons in 1815 to operate steamboats across the Hudson River to New Jersey.

In 1818, Gibbons broke off from Ogden and began operating his own steamboat between New York and New Jersey in violation of the New York monopoly law. Ogden sued Gibbons and the case went to the Supreme Court.

The Supreme Court struck down the New York monopoly as a restraint of interstate commerce under the Interstate Commerce clause. In so doing, the Court ruled that the power to regulate interstate commerce is, “complete in itself… and acknowledges no limitations,” other than those spelled out in the Constitution. That was all Congress needed to expand its power in the ensuing years, like water into a roof crack.

The Northern Belle was a passenger steamboat that operated within Iowa as a private company in the 1860’s. It also carried products within Iowa that had been shipped from other states or were to be shipped to other states. Federal Government agents inspected those products as goods in interstate commerce and insisted that the vessel was subject to other regulations on interstate commerce. The Northern Belle company sued and the case reached the Supreme Court in 1870 in Northern Belle v Robson.

In Robson, the Supreme Court found in favor of the Federal Government and granted the inspection and regulation powers under the Interstate Commerce clause. The Court ruled that, despite operating only within the state, the Northern Belle’s transport of products that had come from other states or could go to other states meant that it had a potential impact on interstate commerce. So, interstate commerce then included the handling of anything produced in another state.

The Robson case opened the door for Congress to adopt more sweeping powers. In 1887, the Interstate Commerce Commission was created. Along with its creation, the law gave the Commission the power to force the railroads into an association for the purpose of regulating prices and practices.

Then, in 1890 Congress passed the Sherman Act, a law that prohibited companies from cooperating to set prices and create monopolies. It should be noted that the Sherman Act took no action against regulation and price fixing by the Interstate Commerce Commission. So, Congress could regulate commerce and fix prices, but private companies could not.

Now, it was not a straight line from there to Congressional omnipotence. In 1895 in US v EC Knight, the Supreme Court stopped the Federal Government from using the Sherman Act to prevent a merger of sugar refineries. And, in 1918 in Hammer v Dagenhart, the Court ruled that the Commerce clause didn’t extend to control of states in their use of police power over local manufacturing. But, the water kept searching for more cracks and, in 1937 it found another.

In NLRB v Jones and Laughlin Steel, the Supreme Court upheld the National Labor Relations Act and, in so doing, forced employers to engage in collective bargaining. While Jones and Laughlin made steel in-state, the Court ruled that the actions and materials necessary for that had an effect on interstate commerce. They ruled that having an effect on commerce meant “…tending to lead to a labor dispute burdening or obstructing commerce.”

The final straw leading to the fining of Roscoe Filburn came in 1942 with the Wrightwood Dairy case. The Secretary of Agriculture had set prices for milk sold strictly within a state. The Supreme Court upheld the Secretary’s action ruling that, “The marketing of intrastate milk which competes with that shipped interstate would tend seriously to break down price regulation of the latter.”

Wrightwood Dairy opened the way for the Federal Government to control all commerce and production. But, what about activities that are not commerce? That’s where Roscoe Filburn came in. He simply grew a little wheat for his own use and got fined for it because, in so doing, he removed himself from the commerce of buying from someone else, thus theoretically reducing demand and price (see my blog – The Story of Poor Roscoe Filburn).

Is there, then, no limit on the power of Congress to control our lives? In my last blog on the subject, I’ll tell the story of recent assumptions of power and of the first traces of the Supreme Court saying “far enough.”