• • •
The proposed amendment eschews the issue of delegation per se, the total reversal of which would seem impossible at this point, but importantly, it returns final decision-making authority respecting laws (regulations and rules) with significant economic impact to Congress, thereby restoring a critical element of separation of powers under the Constitution and reinvigorating representative government. The proposed amendment sunsets every executive federal department and agency and obligates Congress to determine the efficacy of each entity every three years. It also establishes a permanent joint committee, which makes final determinations respecting the most economically costly federal regulations. The proposed amendment does not prevent Congress from otherwise abolishing or creating federal departments or agencies, modifying their missions, or affecting their directions, policies, and funding. However, given Congress’s abandonment of its core constitutional duty, thereby gutting the fundamental nature of representative government, the proposed amendment is among the only ways to rebalance the legislative function of the federal government.
The proposed amendment embraces the Framers’ original plan: Congress legislates, not administrative agencies within the executive branch. It obligates Congress to undertake the duties intended by the Framers and set forth in the Constitution, prohibiting it from delegating and abdicating final authority over major laws.
CHAPTER SEVEN
* * *
AN AMENDMENT TO PROMOTE FREE ENTERPRISE
SECTION 1: Congress’s power to regulate Commerce is not a plenary grant of power to the federal government to regulate and control economic activity but a specific grant of power limited to preventing states from impeding commerce and trade between and among the several States.
SECTION 2: Congress’s power to regulate Commerce does not extend to activity within a state, whether or not it affects interstate commerce; nor does it extend to compelling an individual or entity to participate in commerce or trade.
THE CONSTITUTION’S COMMERCE CLAUSE states that Congress shall have the power “[t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”1 The proposed amendment focuses on that part of the clause respecting Congress’s power to regulate commerce among the several states and addresses the federal government’s ever-expanding involvement in and interference with private economic activity and property rights. It is at first essential to understand what the Framers meant by these words and the Framers’ purpose.
In 1996, the late constitutional scholar and Harvard law professor Raoul Berger explained that
[t]he focus on trade alone was not fortuitous; the Framers were fastidious in their choice of words. For them, “trade” did not, for example, include agricultural production, which plainly was “local.” In the Convention, George Mason said that the “general government could not know how to make laws for every part [state]—such as respects agriculture.” And [Alexander] Hamilton wrote in Federalist No. 17 that “the supervision of agriculture and of other concerns of a similar nature . . . which are proper to be provided for by local legislation, can never be desirable cares of a general jurisdiction.” In Federalist No. 12, he adverted to the “rivalship that once subsisted” between agriculture and commerce. . . . Hamilton referred separately in Federalist No. 36 to “agriculture, commerce, [and] manufactures” as “different . . . kinds” of “wealth, property, and industry,” not as fused in commerce. In sum, the Founders conceived of “commerce” as “trade,” the interchange of goods by one State with another.2
Berger added:
The Founders’ all-but-exclusive concern was with exactions by some states from their neighbors. [James] Madison said, “It would be unjust to the States whose produce was exported by their neighbours, to leave it subject to be taxed by the latter.” [James] Wilson “dwelt on the injustice and impolicy of leaving New Jersey[,] Connecticut &c any longer subject to the exactions of their commercial neighbours.” That the Commerce Clause was meant to remedy this mischief is clear. Madison stated that it was necessary to remove “existing & injurious retaliations among the States,” that “the best guard against [this ‘abuse’] was the right in the Genl. Government to regulate trade between State and State.” [Roger] Sherman stated that “the oppression of the uncommercial States was guarded agst. by the power to regulate trade between the States.” And Oliver Elseworth said that the “power of regulating trade between the States will protect them agst each other.” Given the jealous attachment to state sovereignty, the absence of objection that the Commerce Clause invaded State autonomy indicates that such an intrusion was simply unimaginable. [Thomas] Jefferson accurately reflected the Founders’ views when he stated in 1791 that “the power given to Congress by the Constitution does not extend to the internal regulation of the commerce of a state . . . which remains exclusively with its own legislature; but to its external commerce only, that is to say, its commerce with another state, or with foreign nations. . . . ” That no more was intended was made clear by Madison in a letter to J. C. Cabell: “among the several States” . . . grew out of the abuses of the power by the importing States in taxing the non-importing, and was intended as a negative and preventive provision against injustice among the States themselves, rather than as a power to be used for the positive purposes of the General Government. . . .3
In 2001, Commerce Clause expert and Georgetown University law professor Randy E. Barnett undertook an extensive examination of the original meaning of the Constitution’s Commerce Clause and the Framers’ intent. Having also returned to the Constitutional Convention and the Federalist Papers, as well as the state ratification debates, Barnett “found . . . that the term ‘commerce’ was consistently used in the narrow sense and that there is no surviving example of it being used in either source in any broader sense. The same holds true for the use of the word ‘commerce’ in the Federalist Papers.”4
Barnett wrote, “In Madison’s notes for the Constitutional Convention, the term ‘commerce’ appears thirty-four times in the speeches of the delegates. Eight of these are unambiguous references to commerce with foreign nations which can only consist of trade. In every other instance, the terms ‘trade’ or ‘exchange’ could be substituted for the term ‘commerce’ with the apparent meaning of the statement preserved. In no instance is the term ‘commerce’ clearly used to refer to ‘any gainful activity’ or anything broader than trade.”5 Barnett continued, “In none of the sixty-three appearances of the term ‘commerce’ in the Federalist Papers is it ever used to unambiguously refer to any activity beyond trade or exchange.”6 Furthermore, he wrote, “Having examined every use of the term ‘commerce’ that appears in the reports of the state ratification conventions, I found that the term was uniformly used to refer to trade or exchange, rather than all gainful activity.”7 In the end, writes Barnett, “if anyone in the Constitutional Convention or the state ratification conventions used the term ‘commerce’ to refer to something more comprehensive than ‘trade’ or ‘exchange,’ they either failed to make explicit that meaning or their comments were not recorded for posterity.”8
In 2002, the late constitutional scholar Robert H. Bork and attorney Daniel E. Troy, also examining the Constitution’s Commerce Clause, explained:
Early American writings distinguish “commerce” from the class of subjects to which it is separate but connected in two ways: either by a direct discussion of what is excluded from commerce, or by implication. Alexander Hamilton’s writings in The Federalist Papers provide many of these definitions by implication. Hamilton often included “commerce” in a list of concepts which are similar in one way (activities critical to the success of the nation, for instance), but distinct enough to call for separate identification, as in “the state of commerce, of arts, of industry.” These early discussions of the nature of the Union suggest that “commerce” does not include manufacturing, agriculture, labor, or industry. In short, “commerce” does not seem to have been used durin
g the founding era to refer to those acts that precede the act of trade. Interstate commerce seems to refer to interstate trade—that is, commerce is “intercourse for the purposes of trade in any and all its forms, including the transportation, purchase, sale, and exchange of commodities between the . . . citizens of different States.”9
In fact, time and again the Framers made clear their intentions. In Federalist 42, Madison stated, in part: “A very material object of this power was the relief of the States which import and export through other States from the improper contributions levied on them by the latter. Were these at liberty to regulate the trade between State and State, it must be foreseen that ways would be found out to load the articles of import and export, during the passage through their jurisdiction, with duties which would fall on the makers of the latter and the consumers of the former.”10 In Federalist 45, Madison wrote famously that “[t]he powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite.”11
For the Framers, promoting and securing commerce and trade were not matters of theoretical and academic debate but national survival. They were addressing a dire problem that threatened the existence of the country following the Revolutionary War. The young nation was weak economically. The country barely survived war with one of the world’s superpowers, Great Britain. The individual states had often functioned like individual countries and were given to frequent squabbles. Now the fledgling nation found itself surrounded by European powers in Canada, Florida, and Louisiana. In an age of mercantilism, Europe sought advantages in trade by excluding American businesses and promoting their own.12 The states themselves, although joined together in 1781 by the Articles of Confederation, sought to gain advantage over each other with tariffs and regulations.13 States even printed their own currency, which added to the confusion.14
It is difficult to see how America could have long survived under this type of system. Yet this was the state of American enterprise in the early days of the republic. As Associate Justice Joseph Story observed:
It is hardly possible to exaggerate the oppressed and degraded state of domestic commerce, manufactures, and agriculture, at the time of the adoption of the Constitution. Our ships were almost driven from the ocean; our work-shops were nearly deserted; our mechanics were in a starving condition; and our agriculture was sunk to the lowest ebb. These were the natural results of the inability of the General Government to regulate commerce, so as to prevent the injurious monopolies and exclusions of foreign nations, and the conflicting, and often ruinous regulations of the different States.15
Story’s commentaries on the Constitution are considered some of the most significant early works on the subject. It is important to note that Story, although writing in the 1800s, used the language typical of the time of the Constitution’s drafting and ratification.16 Commerce, manufacturing, and agriculture were separate and distinct areas of economic activity, as is plain from, among other things, their multiple references in the Federalist Papers.17 “Commerce” was not a catchall to describe all three. If commerce was not agriculture or manufacturing, then it would indicate that the Framers did not intend the federal government to regulate without severe and effective limits. The separation of the three concepts, in other words, indicates a significant and purposeful limitation to the commerce power.
Indeed, commerce was so important in the early days that it was a catalyst for the Constitutional Convention. In 1786, Virginia invited the other states to a meeting in Annapolis, Maryland, to deal with commercial issues. That September, several delegates met but realized that commerce could not be separated from larger issues of governance. They called for another convention and returned to their states.18 Congress agreed and, of course, in 1787 representatives convened in Philadelphia at what would later be known as the Constitutional Convention.
James Madison, among others, had been troubled by the many deficiencies in the Articles of Confederation, including their detrimental effect on commerce. In 1787, he wrote a critique of the Articles, listing their many “vices.” Within a section focusing on “Trespasses of the States on the rights of each other,” he identified how the individual states had been engaging in trade wars.
The practice of many States in restricting the commercial intercourse with other States, and putting their productions and manufactures on the same footing with those of foreign nations, though not contrary to the federal articles, is certainly adverse to the spirit of the Union, and tends to beget retaliating regulations, not less expensive & vexatious in themselves, than they are destructive of the general harmony.19
States with navigable ports extracted taxes from adjoining states, whose merchants were exporting their goods to foreign markets. States taxed imported goods from other states and, in some instances, at rates even higher than foreign countries. In the preface to the debates, Madison laid the problem bare:
[T]he States having ports for foreign commerce, taxed & irritated the adjoining States, trading thro’ them, as N.Y. Pena. Virga. & S—Carolina. Some of the States, as Connecticut, taxed imports as from Massts higher than imports even from G.B. of wch Massts. complained to Virga. and doubtless to other States. In sundry instances of as N.Y. N.J. Pa. & Maryd. the navigation laws treated the Citizens of other States as aliens.20
The Federalist Papers, designed to rally support behind state ratification, mentioned frequently the importance of a national commercial system without internal barriers. In Federalist 11, “The Utility of the Union in Respect to Commercial Relations and a Navy,” Alexander Hamilton wrote:
An unrestrained intercourse between the States themselves will advance the trade of each by an interchange of their respective productions, not only for the supply of reciprocal wants at home, but for exportation to foreign markets. The veins of commerce in every part will be replenished, and will acquire additional motion and vigor from a free circulation of the commodities of every part.21
A common thread in the critiques of the Articles of Confederation and the arguments in support of the Constitution is that the Framers wanted to promote commerce. The Commerce Clause was the solution to a specific problem: the erection of trade barriers that threatened commerce and trade. The Framers did not say that the Articles of Confederation were deficient because Congress lacked the power to set wages for workers or limit how much wheat a farmer could grow. If anyone suggested such a thing in Philadelphia, he might have been tarred and feathered. At the very least, the Commerce Clause would never have survived state ratification. Put another way, the Framers did not empower the federal government, in small ways and large, to control the economy for whatever good and promised ends federal officials might proclaim.
This understanding of the limited powers of the Commerce Clause was actually reflected in the decisions of the Supreme Court for most of our history—up to 1937. Although the Court struggled with various factual scenarios in applying the clause, and constructed different tests for that purpose, to its credit the Court mostly attempted to honor the text of the clause and the Framers’ intent.
In 1824, the Court first addressed the Commerce Clause in Gibbons v. Ogden. In that case, New York had granted exclusive navigation rights to its waterways to Robert R. Livingston and Robert Fulton for boats powered by “fire or steam.” Congress, however, had passed a law in 1793 regulating coastal trade. The Court, under Chief Justice John Marshall, considered whether the power to regulate commerce included the power to regulate navigation. While holding that it did, Marshall noted that Congress could regulate “navigation” because “[a]ll America . . . has uniformly understood, the word ‘commerce,’ to comprehend navigation. It was so understood, and must have been so understood, when the constitution was framed.”22 But the Court also noted that this power to regulate commerce “among the several states” did not extend to purely internal commerce.
Comprehensive as the word “among” is, it may very pro
perly be restricted to that commerce which concerns more States than one. . . . The genius and character of the whole government seem to be, that its action is to be applied to all the external concerns of the nation, and to those internal concerns which affect the States generally; but not to those which are completely within a particular State, which do not affect other States, and with which it is not necessary to interfere, for the purpose of executing some of the general powers of the government. The completely internal commerce of a State, then, may be considered as reserved for the State itself.23
New York’s attempt to grant a monopoly over navigation rights was struck down. The limitations on the Commerce Clause acknowledged by Gibbons v. Ogden were generally followed by the Court for well over one hundred years.
Even during the earliest days of the New Deal, the Supreme Court acknowledged the limits the Commerce Clause placed on Congress and the president. Congress had passed a number of laws and established several new agencies that centralized within the federal government decision-making on a broad spectrum of economic matters having nothing to do with commerce among the several states. In 1934, Congress passed the Railroad Retirement Act, which established compulsory retirement plans for railroad workers. The Court invalidated it in 1935 because Congress had no constitutional authority to regulate a business relationship between employer and employee. The Court wrote, “We feel bound to hold that a pension plan thus imposed is in no proper sense a regulation of the activity of interstate transportation. It is an attempt for social ends to impose by sheer fiat non-contractual incidents upon the relation of employer and employee, not as a rule of regulation or commerce or transportation between the States, but as a means of assuring a particular class of employees against old age dependency.”24
The Liberty Amendments: Restoring the American Republic Page 11