Resisting Obamacare with the Interstate Compact

On April 26, 1783, two weeks after Congress approved a preliminary peace treaty with England, the states of Pennsylvania and New Jersey entered into a compact over their shared use of the Delaware River. The waterway was an important shipping route, and any interference in its operation, either from dams or bridges, would harm both states.

Their agreement to preserve the river as a public highway was the first interstate compact in the new nation’s history (there were several in the colonial era), and it became federally recognized law. When the Constitution was ratified five years later, it formalized the status of such compacts in Article 1, Section 10:

No State shall, without the Consent of Congress . . . enter into any Agreement or Compact with another State.

The language is restrictive, but it gives the individual states an important power over the federal government: Two or more states may enter into a compact over a joint interest — the use of a shared natural resource, for example — and as long as that agreement is approved by Congress, its elements supersede federal law.

There are currently more than 200 interstate compacts in operation. While most involve the regulation of borders, waterways, transportation, and pollution, there’s no reason compacts can’t be used in other areas as well. Ted Cruz and Mario Loyola of the pro-liberty Texas Public Policy Foundation see broad potential:

In the decades ahead, interstate compacts could gain increasing use as a shield against federal overreach. With congressional consent, federalized interstate compacts could shield entire areas of state regulation from the power of the federal government.

In other words, an interstate compact would erect a regulatory wall around the member states, replacing the intrusive federal law with its own. While this is a largely unexplored use for the compact, Cruz and Loyola believe it offers a constitutional way to defend the states from an out-of-control national government.

Of course, they’ll need a test case.

When President Barack Obama signed the Patient Protection and Affordable Care Act (PPACA) last March, he both crowned and surpassed a period of gluttonous federal growth that stretches back to the Progressive Era. With the passage of the act, a sixth of the nation’s economy has come under the control of the federal government’s central planners.

While defunding the bill has proven impossible, repeal efforts have failed, and the nullification movement remains highly controversial, the creation of an interstate compact governing health care offers the most promising alternative. And so last week, the Health Care Compact Alliance, a non-partisan 501(c)(4) organization made up of citizen activists, released the Health Care Compact. This four-page document outlines the constitutional limits of the federal government as regards health care and shifts control back into the hands of participating states.

The legislatures of the Member States have the primary responsibility to regulate Health Care in their respective States . . . . Each Member State, within its State, may suspend by legislation the operation of all federal laws, rules, regulations, and orders regarding Health Care that are inconsistent with the laws and regulations adopted by the Member State pursuant to this Compact. Federal and State laws, rules, regulations, and orders regarding Health Care will remain in effect unless a Member State expressly suspends them pursuant to its authority under this Compact.

The compact returns regulatory authority over health care to the states, but it does not endorse any specific program or approach. While the legislatures of participating states commit to establish health-care regimes for their residents, the systems they institute will vary. Montana might choose a market-based approach, for example, while Vermont could opt for a single-payer system. In this way, both conservative and progressive states would benefit from participation in the Health Care Compact. And because state legislatures are smaller and closer to those whom they represent, constituents have greater influence over the kind of system their lawmakers choose.

Of course, a successful interstate compact needs more than just the participation of a few states — the Constitution requires the “consent of Congress” before such agreements take effect. But why would those in the federal government, who have worked so hard to grow its power, willingly surrender a portion of it? Because they may not have a political choice.

Almost every major poll taken since the passage of PPACA confirms its continuing unpopularity. A Rasmussen Reports survey released last week found that 56 percent of likely U.S. voters favor repealing the health-care law, while only 40 percent continue to support it. In Southern and Midwestern states, repeal has even greater approval. If a state legislature — compelled by constituent opinion — voted to participate in the Health Care Compact, that state’s federal officeholders would be in a bind. Were they to ignore the will of their state legislatures and the voters who sent them to Washington, D.C., in favor of protecting Obamacare, they’d make themselves inviting targets for a primary challenge (just ask Rep. Mike Castle, Sen. Bob Bennett, and Gov. Charlie Crist how that works). The self-preservation instinct is strong in career politicians, and it can sometimes be used for good.

That’s not to say the process will be easy. While an interstate compact requires the involvement of only two states, proponents of the Health Care Compact acknowledge that they’ll need at least 20 to provide enough political pressure to force Congress to act.

They’re well on their way to that goal: Both the Arizona Senate and the Montana House of Representatives have already approved it, and nine other states have bills either on the floor or in committee. As word spreads, others will no doubt join what Missouri Lieutenant Governor Peter Kinder calls “a well vetted, well thought out, legally sound approach to . . . devolving power to make health care decisions from an all powerful federal bureaucracy back to us folks in the states.”