Page 1 of 7 S.D. v. Dole S.D. v. Dole Supreme Court of the United States April 28, 1987, Argued ; June 23, 1987, Decided No. 86-260 Reporter 483 U.S. 203 *; 107 S. Ct. 2793 **; 97 L. Ed. 2d 171 ***; 1987 U.S. LEXIS 2871 ****; 55 U.S.L.W. 4971 SOUTH DAKOTA v. DOLE, SECRETARY OF TRANSPORTATION Judges: Rehnquist, C. J., delivered the opinion of the Court, in which White, Marshall, Blackmun, Powell, Stevens, and Scalia, JJ., joined. Brennan, J., post, p. 212, and O'Connor, J., post, p. 212, filed dissenting opinions. Opinion by: REHNQUIST Opinion [*205] [***176] [**2795] CHIEF JUSTICE REHNQUIST delivered the opinion of the Court. LEdHN[1A][ ] [1A] LEdHN[2A][ ] [2A]Petitioner South Dakota permits persons 19 years of age or older to purchase beer containing up to 3.2% alcohol. S. D. Codified Laws § 35-6-27 (1986). In 1984 Congress [***177] enacted 23 U. S. C. § 158 (1982 ed., Supp. III), which directs the Secretary of Transportation to withhold a percentage of federal highway funds otherwise allocable from States "in which the purchase or public possession . . . of any alcoholic beverage by a person who is less than twenty-one years of age is lawful." The State sued in United States District Court seeking a declaratory judgment that § 158 violates the constitutional limitations on congressional exercise of the spending power and violates the Twenty-first Amendment to the United States Constitution. The District Court rejected the State's claims, and the Court of Appeals for the Eighth Circuit affirmed. 791 F.2d 628 (1986). [****5] In this Court, the parties direct most of their efforts to defining the proper scope of the Twenty-first Amendment. Relying on our statement in California Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc., 445 U.S. 97, 110 (1980), that the "Twenty-first Amendment grants the States virtually complete control over whether to permit importation or sale of liquor and how to structure the liquor distribution system," South Dakota asserts that the setting of minimum drinking ages is clearly within the "core powers" reserved to the States under § 2 of the Amendment. 1 Brief for Petitioner 43-44. Section 158, petitioner claims, usurps [*206] that core power. The Secretary in response asserts that the Twenty-first Amendment is simply not implicated by § 158; the plain language of § 2 confirms the States' broad power to impose restrictions on the sale and distribution of alcoholic beverages but does not confer on them any power to permit sales that Congress seeks to prohibit. Brief for Respondent 25-26. That Amendment, under this reasoning, would not prevent Congress from affirmatively enacting a national minimum drinking age more restrictive than [****6] that provided by the various state laws; and it would follow a fortiori that the indirect inducement involved here is compatible with the Twenty-first Amendment. LEdHN[1B][ ] [1B]LEdHN[3][ ] [3]These arguments present questions of the meaning of the Twenty-first Amendment, the bounds of which have escaped precise definition. Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, 274-276 (1984); Craig v. Boren, 429 U.S. 190, 206 (1976). Despite the extended treatment of the question by the parties, however, we need not decide in this case whether that Amendment would prohibit an attempt by Congress to legislate directly a national minimum drinking age. Here, Congress has acted indirectly under its spending power to encourage uniformity in the 1 Section 2 of the Twenty-first Amendment provides: "The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited." Page 2 of 7 S.D. v. Dole States' [****7] drinking ages. As we explain below, we find this legislative effort within constitutional bounds even if Congress may not regulate drinking ages directly. LEdHN[4][ ] [4]HN1[ ] The Constitution empowers Congress to "lay and collect Taxes, Duties, Imposts, and Excises, to pay the Debts and provide for the common Defence and general Welfare of [***178] the United States." Art. I, § 8, cl. 1. Incident to this power, Congress may attach conditions on the receipt of [**2796] federal funds, and has repeatedly employed the power "to further broad policy objectives by conditioning receipt of federal moneys upon compliance by the recipient with federal statutory and administrative directives." Fullilove v. Klutznick, 448 U.S. 448, 474 (1980) (opinion of Burger, C. J.). See Lau v. Nichols, 414 U.S. 563, 569 (1974); Ivanhoe Irrigation Dist. v. McCracken, 357 U.S. 275, 295 (1958); Oklahoma [*207] v. Civil Service Comm'n, 330 U.S. 127, 143-144 (1947); Steward Machine Co. v. Davis, 301 U.S. 548 (1937). The breadth of this power was made clear in United States v. Butler, 297 U.S. 1, 66 (1936), [****8] where the Court, resolving a longstanding debate over the scope of the Spending Clause, determined that "the power of Congress to authorize expenditure of public moneys for public purposes is not limited by the direct grants of legislative power found in the Constitution." Thus, objectives not thought to be within Article I's "enumerated legislative fields," id., at 65, may nevertheless be attained through the use of the spending power and the conditional grant of federal funds. LEdHN[5][ ] [5]LEdHN[6][ ] [6]HN2[ ] The spending power is of course not unlimited, Pennhurst State School and Hospital v. Halderman, 451 U.S. 1, 17, and n. 13 (1981), but is instead subject to several general restrictions articulated in our cases. The first of these limitations is derived from the language of the Constitution itself: the exercise of the spending power must be in pursuit of "the general welfare." See Helvering v. Davis, 301 U.S. 619, 640-641 (1937); United States v. Butler, supra, at 65. In considering whether a particular expenditure is intended to serve general public purposes, courts should defer substantially to the judgment of [****9] Congress. Helvering v. Davis, supra, at 640, 645. 2 Second, we 2 The level of deference to the congressional decision is such have required that if Congress desires to condition the States' receipt of federal funds, it "must do so unambiguously . . . , enabl[ing] the States to exercise their choice knowingly, cognizant of the consequences of their participation." Pennhurst State School and Hospital v. Halderman, supra, at 17. Third, our cases have suggested (without significant elaboration) that conditions on federal grants might be illegitimate if they are unrelated "to the federal interest in particular national projects or programs." Massachusetts v. United States, 435 U.S. 444, 461 [*208] (1978) (plurality opinion). See also Ivanhoe Irrigation Dist. v. McCracken, supra, at 295, ("The Federal Government may establish and impose reasonable conditions relevant to federal interest in the [***179] project and to the over-all objectives thereof"). Finally, we have noted that other constitutional provisions may provide an independent bar to the conditional grant of federal funds. Lawrence County v. Lead-Deadwood School Dist., 469 U.S. 256, 269-270 (1985); [****10] Buckley v. Valeo, 424 U.S. 1, 91 (1976) (per curiam); King v. Smith, 392 U.S. 309, 333, n. 34 (1968). LEdHN[1C][ ] [1C]LEdHN[7A][ ] [7A]South Dakota does not seriously claim that § 158 is inconsistent with any of the first three restrictions mentioned above. We can readily conclude that the provision is designed to serve the general welfare, especially in light of the fact that "the concept of welfare or the opposite is shaped by Congress . . . ." Helvering v. Davis, supra, at 645. Congress found that the differing drinking [**2797] ages in the States created particular incentives for young persons to combine their desire to drink with their ability to drive, and that this interstate problem required a national [****11] solution. The means it chose to address this dangerous situation were reasonably calculated to advance the general welfare. The conditions upon which States receive the funds, moreover, could not be more clearly stated by Congress. See 23 U. S. C. § 158 (1982 ed., Supp. III). And the State itself, rather than challenging the germaneness of the condition to federal purposes, admits that it "has never contended that the congressional action was . . . unrelated to a national concern in the absence of the Twenty-first Amendment." Brief for Petitioner 52. Indeed, the condition imposed by that the Court has more recently questioned whether "general welfare" is a judicially enforceable restriction at all. See Buckley v. Valeo, 424 U.S. 1, 90-91 (1976) (per curiam). Page 3 of 7 S.D. v. Dole Congress is directly related to one of the main purposes for which highway funds are expended -- safe interstate travel. See 23 U. S. C. § 101(b). 3 [*209] This goal of the interstate highway system had been frustrated by varying drinking ages among the States. A Presidential commission appointed to study alcohol-related accidents and fatalities on the Nation's highways concluded that the lack of uniformity in the States' drinking ages created "an incentive to drink and drive" because "young persons commut[e] to border States where the drinking age is lower." Presidential Commission on Drunk [****12] Driving, Final Report 11 (1983). By enacting § 158, Congress conditioned the receipt of federal funds in a way reasonably calculated to address this particular impediment to a purpose for which the funds are expended. LEdHN[7B][ ] [7B] LEdHN[2B][ ] [2B]The remaining question [****13] about the validity of § 158 -- and the basic point of disagreement between the parties -- is whether the Twenty-first Amendment constitutes an "independent constitutional bar" to the conditional grant of federal funds. Lawrence County v. Lead-Deadwood [***180] School Dist., supra, at 269-270.Petitioner, relying on its view that the Twenty-first Amendment prohibits direct regulation of drinking ages by Congress, asserts that "Congress may not use the spending power to regulate that which it is prohibited from regulating directly under the Twenty-first Amendment." Brief for Petitioner 52-53. But our cases show that this "independent constitutional bar" limitation on the spending power is not of the kind petitioner suggests. United States v. Butler, supra, at 66, for example, established that HN3[ ] the 3 Our cases have not required that we define the outer bounds of the "germaneness" or "relatedness" limitation on the imposition of conditions under the spending power. Amici urge that we take this occasion to establish that a condition on federal funds is legitimate only if it relates directly to the purpose of the expenditure to which it is attached. See Brief for National Conference of State Legislatures et al. as Amici Curiae 10. Because petitioner has not sought such a restriction, see Tr. of Oral Arg. 19-21, and because we find any such limitation on conditional federal grants satisfied in this case in any event, we do not address whether conditions less directly related to the particular purpose of the expenditure might be outside the bounds of the spending power. constitutional limitations on Congress when exercising its spending power are less exacting than those on its authority to regulate directly. [*210] We have also held that a perceived Tenth Amendment limitation on congressional regulation of state affairs did not comitantly limit the range of conditions legitimately placed on federal [****14] grants. In Oklahoma v. Civil Service Comm'n, 330 U.S. 127 (1947), the Court considered the validity of the Hatch Act insofar as it was applied to political activities of state officials whose employment was financed in whole or in part with federal funds. The State contended that an order under this provision to withhold certain federal funds unless a state official was removed invaded its sovereignty in violation of the Tenth Amendment. Though finding that "the United States is not concerned with, and has no power to regulate, local political activities as such of state officials," the Court nevertheless held that the Federal Government "does have power to fix the terms upon [**2798] which its money allotments to states shall be disbursed." Id., at 143. The Court found no violation of the State's sovereignty because the State could, and did, adopt "the 'simple expedient' of not yielding to what she urges is federal coercion. The offer of benefits to a state by the United States dependent upon cooperation by the state with federal plans, assumedly for the general welfare, is not unusual." Id., at 143-144 (citation [****15] omitted). See also Steward Machine Co. v. Davis, 301 U.S., at 595 ("There is only a condition which the state is free at pleasure to disregard or to fulfill"); Massachusetts v. Mellon, 262 U.S. 447, 482 (1923). LEdHN[2C][ ] [2C]LEdHN[8][ ] [8]These cases establish that HN4[ ] the "independent constitutional bar" limitation on the spending power is not, as petitioner suggests, a prohibition on the indirect achievement of objectives which Congress is not empowered to achieve directly. Instead, we think that the language in our earlier opinions stands for the unexceptionable proposition that the power may not be used to induce the States to engage in activities that would themselves be unconstitutional. Thus, for example, a grant of federal funds conditioned on invidiously discriminatory state action or the infliction of cruel and unusual punishment would be an illegitimate exercise of the Congress' [*211] broad spending power. But no such claim can be or is made here. Were South Dakota to succumb to the blandishments offered by Congress and raise its drinking age to 21, the State's action in so doing would not violate the Page 4 of 7 S.D. v. Dole constitutional rights of anyone. [***181] [****16] LEdHN[2D][ ] [2D]Our decisions have recognized that in some circumstances the financial inducement offered by Congress might be so coercive as to pass the point at which "pressure turns into compulsion." Steward Machine Co. v. Davis, supra, at 590. Here, however, Congress has directed only that a State desiring to establish a minimum drinking age lower than 21 lose a relatively small percentage of certain federal highway funds. Petitioner contends that the coercive nature of this program is evident from the degree of success it has achieved. We cannot conclude, however, that a conditional grant of federal money of this sort is unconstitutional simply by reason of its success in achieving the congressional objective. When we consider, for a moment, that all South Dakota would lose if she adheres to her chosen course as to a suitable minimum drinking age is 5% of the funds otherwise obtainable under specified highway grant programs, the argument as to coercion is shown to be more rhetoric than fact. As we said a half century ago in Steward Machine Co. v. Davis: "Every rebate from a tax when conditioned upon conduct is in some measure a temptation. But to hold [****17] that motive or temptation is equivalent to coercion is to plunge the law in endless difficulties. The outcome of such a doctrine is the acceptance of a philosophical determinism by which choice becomes impossible. Till now the law has been guided by a robust common sense which assumes the freedom of the will as a working hypothesis in the solution of its problems." 301 U.S., at 589-590. LEdHN[1D][ ] [1D]LEdHN[2E][ ] [2E]Here Congress has offered relatively mild encouragement to the States to enact higher minimum drinking ages than they would otherwise choose. But the enactment of such laws remains the prerogative of the States not merely in theory [*212] but in fact. HN5[ ] Even if Congress might lack the power to impose a national minimum drinking age directly, we conclude that encouragement to state action found in § 158 is a valid use of the spending power. Accordingly, the judgment of the Court of Appeals is Affirmed. Dissent by: BRENNAN; O'CONNOR Dissent JUSTICE BRENNAN, dissenting. I agree with JUSTICE O'CONNOR that regulation of the minimum age of purchasers of liquor falls squarely within the ambit [**2799] of those powers reserved to the States by the Twenty-first Amendment. See post, at 218. Since [****18] States possess this constitutional power, Congress cannot condition a federal grant in a manner that abridges this right. The Amendment, itself, strikes the proper balance between federal and state authority. I therefore dissent. JUSTICE O'CONNOR, dissenting. The Court today upholds the National Minimum Drinking Age Amendment, 23 U. S. C. § 158 (1982 ed., Supp. III), as a valid exercise of the spending power conferred by Article I, § 8. But § 158 is not a condition on spending reasonably related to the expenditure of federal funds and cannot be justified [***182] on that ground. Rather, it is an attempt to regulate the sale of liquor, an attempt that lies outside Congress' power to regulate commerce because it falls within the ambit of § 2 of the Twenty-first Amendment. My disagreement with the Court is relatively narrow on the spending power issue: it is a disagreement about the application of a principle rather than a disagreement on the principle itself. I agree with the Court that Congress may attach conditions on the receipt of federal funds to further "the federal interest in particular national projects or programs." Massachusetts v. United States, 435 U.S. 444, 461 (1978); [****19] see Oklahoma v. Civil Service Comm'n, 330 U.S. 127, 143144 (1947); Steward Machine Co. v. Davis, 301 U.S. 548 (1937). I also subscribe to the established proposition [*213] that the reach of the spending power "is not limited by the direct grants of legislative power found in the Constitution." United States v. Butler, 297 U.S. 1, 66 (1936). Finally, I agree that there are four separate types of limitations on the spending power: the expenditure must be for the general welfare, Helvering v. Davis, 301 U.S. 619, 640-641 (1937), the conditions imposed must be unambiguous, Pennhurst State School and Hospital v. Halderman, 451 U.S. 1, 17 (1981), they must be reasonably related to the purpose of the Page 5 of 7 S.D. v. Dole expenditure, Massachusetts v. United States, supra, at 461, and the legislation may not violate any independent constitutional prohibition, Lawrence County v. LeadDeadwood School Dist., 469 U.S. 256, 269-270 (1985). Ante, at 207-208. Insofar as two of those limitations are concerned, the Court is clearly correct [****20] that § 158 is wholly unobjectionable. Establishment of a national minimum drinking age certainly fits within the broad concept of the general welfare and the statute is entirely unambiguous. I am also willing to assume, arguendo, that the Twenty-first Amendment does not constitute an "independent constitutional bar" to a spending condition. See ante, at 209-211. But the Court's application of the requirement that the condition imposed be reasonably related to the purpose for which the funds are expended is cursory and unconvincing. We have repeatedly said that Congress may condition grants under the spending power only in ways reasonably related to the purpose of the federal program. Massachusetts v. United States, supra, at 461; Ivanhoe Irrigation Dist. v. McCracken, 357 U.S. 275, 295 (1958) (the United States may impose "reasonable conditions relevant to federal interest in the project and to the over-all objectives thereof"); Steward Machine Co. v. Davis, supra, at 590 ("We do not say that a tax is valid, when imposed by act of Congress, if it is laid upon the condition that a state may escape [****21] its operation through the adoption of a statute unrelated in subject matter to activities fairly within the scope of national policy and power"). In my view, establishment [***183] of a minimum drinking [*214] age of 21 is not sufficiently related to interstate highway construction to justify [**2800] so conditioning funds appropriated for that purpose. In support of its contrary conclusion, the Court relies on a supposed concession by counsel for South Dakota that the State "has never contended that the congressional action was . . . unrelated to a national concern in the absence of the Twenty-first Amendment." Brief for Petitioner 52. In the absence of the Twentyfirst Amendment, however, there is a strong argument that the Congress might regulate the conditions under which liquor is sold under the commerce power, just as it regulates the sale of many other commodities that are in or affect interstate commerce. The fact that the Twenty-first Amendment is crucial to the State's argument does not, therefore, amount to a concession that the condition imposed by § 158 is reasonably related to highway construction. The Court also relies on a portion of the argument transcript [****22] in support of its claim that South Dakota conceded the reasonable relationship point. Ante, at 208-209, n. 3, citing Tr. of Oral Arg. 19-21. But counsel's statements there are at best ambiguous. Counsel essentially said no more than that he was not prepared to argue the reasonable relationship question discussed at length in the Brief for the National Conference of State Legislatures et al. as Amici Curiae. Aside from these "concessions" by counsel, the Court asserts the reasonableness of the relationship between the supposed purpose of the expenditure -- "safe interstate travel" -- and the drinking age condition. Ante, at 208. The Court reasons that Congress wishes that the roads it builds may be used safely, that drunken drivers threaten highway safety, and that young people are more likely to drive while under the influence of alcohol under existing law than would be the case if there were a uniform national drinking age of 21. It hardly needs saying, however, that if the purpose of § 158 is to deter drunken driving, it is far too over- and under-inclusive. It is over-inclusive because it stops teenagers from drinking even when they are not about to drive on [****23] interstate [*215] highways. It is under-inclusive because teenagers pose only a small part of the drunken driving problem in this Nation. See, e. g., 130 Cong. Rec. 18648 (1984) (remarks of Sen. Humphrey) ("Eighty-four percent of all highway fatalities involving alcohol occur among those whose ages exceed 21"); id., at 18651 (remarks of Sen. McClure) ("Certainly, statistically, if you use that one set of statistics, then the mandatory drinking age ought to be raised at least to 30"); ibid. (remarks of Sen. Symms) ("Most of the studies point out that the drivers of age 2124 are the worst offenders"). When Congress appropriates money to build a highway, it is entitled to insist that the highway be a safe one. But it is not entitled to insist as a condition of the use of highway funds that the State impose or change regulations in other areas of the State's social and economic life because of an attenuated or tangential relationship to highway use or safety. Indeed, if the rule were otherwise, the Congress could effectively regulate almost any area of a State's social, political, or economic [***184] life on the theory that use of the interstate transportation system [****24] is somehow enhanced. If, for example, the United States were to condition highway moneys upon moving the state capital, I suppose it might argue that interstate transportation is facilitated by locating local governments in places easily accessible to interstate highways -- or, conversely, that highways might become overburdened if they had to carry traffic to and from the Page 6 of 7 S.D. v. Dole state capital. In my mind, such a relationship is hardly more attenuated than the one which the Court finds supports § 158. Cf. Tr. of Oral Arg. 39 (counsel for the United States conceding that to condition a grant upon adoption of a unicameral legislature would violate the "germaneness" requirement). There is a clear place at which the Court can draw the line between permissible and impermissible conditions on federal grants. It is the line identified in the Brief for the [**2801] National Conference of State Legislatures et al. as Amici Curiae: [*216] "Congress has the power to spend for the general welfare, it has the power to legislate only for delegated purposes. . . . "The appropriate inquiry, then, is whether the spending requirement or prohibition is a condition on a grant or whether [****25] it is regulation. The difference turns on whether the requirement specifies in some way how the money should be spent, so that Congress' intent in making the grant will be effectuated. Congress has no power under the Spending Clause to impose requirements on a grant that go beyond specifying how the money should be spent. A requirement that is not such a specification is not a condition, but a regulation, which is valid only if it falls within one of Congress' delegated regulatory powers." Id., at 19-20. This approach harks back to United States v. Butler, 297 U.S. 1 (1936), the last case in which this Court struck down an Act of Congress as beyond the authority granted by the Spending Clause. There the Court wrote that "there is an obvious difference between a statute stating the conditions upon which moneys shall be expended and one effective only upon assumption of a contractual obligation to submit to a regulation which otherwise could not be enforced." Id., at 73. The Butler Court saw the Agricultural Adjustment Act for what it was -- an exercise of regulatory, not spending, power. The error in Butler was not the [****26] Court's conclusion that the Act was essentially regulatory, but rather its crabbed view of the extent of Congress' regulatory power under the Commerce Clause. The Agricultural Adjustment Act was regulatory but it was regulation that today would likely be considered within Congress' commerce power. See, e. g., Katzenbach v. McClung, 379 U.S. 294 (1964); Wickard v. Filburn, 317 U.S. 111 (1942). While Butler's authority is questionable insofar as it assumes that Congress has no regulatory power over farm production, [*217] its discussion of the spending power and its description of both the power's breadth and its limitations remain sound. The Court's decision in Butler also [***185] properly recognizes the gravity of the task of appropriately limiting the spending power. If the spending power is to be limited only by Congress' notion of the general welfare, the reality, given the vast financial resources of the Federal Government, is that the Spending Clause gives "power to the Congress to tear down the barriers, to invade the states' jurisdiction, and to become a parliament of the whole people, subject to no restrictions [****27] save such as are selfimposed." United States v. Butler, supra, at 78. This, of course, as Butler held, was not the Framers' plan and it is not the meaning of the Spending Clause. Our later cases are consistent with the notion that, under the spending power, the Congress may only condition grants in ways that can fairly be said to be related to the expenditure of federal funds. For example, in Oklahoma v. CSC, 330 U.S. 127 (1947), the Court upheld application of the Hatch Act to a member of the Oklahoma State Highway Commission who was employed in connection with an activity financed in part by loans and grants from a federal agency. This condition is appropriately viewed as a condition relating to how federal moneys were to be expended. Other conditions that have been upheld by the Court may be viewed as independently justified under some regulatory power of the Congress. Thus, in Fullilove v. Klutznick, 448 U.S. 448 (1980), the Court upheld a condition on federal grants that 10% of the money be "set aside" for contracts with minority business enterprises. But the Court found that the condition could [****28] be justified as a valid regulation [**2802] under the commerce power and § 5 of the Fourteenth Amendment. Id., at 476, 478. See also Lau v. Nichols, 414 U.S. 563 (1974) (upholding nondiscrimination provisions applied to local schools receiving federal funds). [*218] This case, however, falls into neither class. As discussed above, a condition that a State will raise its drinking age to 21 cannot fairly be said to be reasonably related to the expenditure of funds for highway construction. The only possible connection, highway safety, has nothing to do with how the funds Congress has appropriated are expended. Rather than a condition determining how federal highway money shall be expended, it is a regulation determining who shall be able to drink liquor. As such it is not justified by the spending power. Of the other possible sources of congressional authority for regulating the sale of liquor only the commerce Page 7 of 7 S.D. v. Dole power comes to mind. But in my view, the regulation of the age of the purchasers of liquor, just as the regulation of the price at which liquor may be sold, falls squarely within the scope of those powers reserved to the [****29] States by the Twenty-first Amendment. Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 716 (1984). As I emphasized in 324 Liquor Corp. v. Duffy, 479 U.S. 335, 356 (1987) (dissenting opinion): "The history of the Amendment strongly supports Justice Black's view that the Twenty-first Amendment was intended to return absolute [***186] control of the liquor trade to the States, and that the Federal Government could not use its Commerce Clause powers to interfere in any manner with the States' exercise of the power conferred by the Amendment." Accordingly, Congress simply lacks power under the Commerce Clause to displace state regulation of this kind. Ibid. The immense size and power of the Government of the United States ought not obscure its fundamental character. It remains a Government of enumerated powers. McCulloch v. Maryland, 4 Wheat. 316, 405 (1819). Because 23 U. S. C. § 158 (1982 ed., Supp. III) cannot be justified as an exercise of any power delegated to the Congress, it is not authorized by the Constitution. The Court errs in holding it to be the law of the land, and [****30] I respectfully dissent. References 45 Am Jur 2d, Intoxicating Liquors 23, 24, 28, 42, 267; 63A Am Jur 2d, Public Funds 52 USCS, Constitution, Art I, 8, cl 1; USCS, Constitution, Amendment 21; 23 USCS 158 US L Ed Digest, Intoxicating Liquors 12; Public Moneys 8 Index to Annotations, Intoxicating Liquors; Public Moneys Annotation References: Extent of state regulatory power under Twenty-first Amendment. 37 L Ed 2d 805. What constitutes violation of enactment prohibiting sale of intoxicating liquor to minor. 89 ALR3d 1256. End of Document Page 1 of 26 Nat'l Fed'n of Indep. Bus. v. Sebelius Supreme Court of the United States March 26, 2012, Argued. March 27, 2012, Argued. March 28, 2012, Argued; June 28, 2012, Decided * Nos. 11-393, 11-398 and 11-400 19 *; 132 S. Ct. 2566 **; 183 L. Ed. 2d 450 ***; 2012 U.S. LEXIS 4876 ****; 80 U.S.L.W. 4579; 2012-2 U.S. Tax Cas. (CCH) P50,423; 109 A.F.T.R.2d (RIA) 2012-2563; 53 Employee Benefits Cas. (BNA) 1513; 80 A.L.R. Fed. 2d 501; 23 Fla. L. Weekly Fed. S 480; 2012 WL 2427810 NATIONAL FEDERATION OF INDEPENDENT BUSINESS, et al., Petitioners v. KATHLEEN SEBELIUS, SECRETARY OF HEALTH AND HUMAN SERVICES, et al. DEPARTMENT OF HEALTH AND HUMAN SERVICES, et al., Petitioners v. FLORIDA et al. FLORIDA, et al., Petitioners v. DEPARTMENT OF HEALTH AND HUMAN SERVICES et al. Judges: Roberts, C. J., announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II, and III-C, in which Ginsburg, Breyer, Sotomayor, and Kagan, JJ., joined; an opinion with respect to Part IV, in which Breyer and Kagan, JJ., joined; and an opinion with respect to Parts III-A, III-B, and III-D. Ginsburg, J., filed an opinion concurring in part, concurring in the judgment in part, and dissenting in part, in which Sotomayor, J., joined, and in which Breyer and Kagan, JJ., joined [****13] as to Parts I, II, III, and IV, post, p. 589. Scalia, Kennedy, Thomas, and Alito, JJ., filed a dissenting opinion. Thomas, J., filed a dissenting opinion, post, p. 707. Opinion by: ROBERTS, GINSBURG Opinion * Together with No. 11–398, Department of Health and Human Services et al. v. Florida et al., and No. 11-400, Florida et al. v. Department of Health and Human Services et al., also on certiorari to the same court. [*529] [**2577] Chief Justice Roberts announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II, and III-C, an opinion with respect to Part IV, in which Justice Breyer and Justice Kagan join, and an opinion with respect to Parts III-A, III-B, and III-D. [*530] Today we resolve constitutional challenges to two provisions of the Patient Protection and Affordable Care Act of 2010: the individual mandate, which requires individuals to purchase a health insurance policy providing a minimum [*531] level of coverage; and the Medicaid expansion, which gives funds to the States on the condition that they provide specified health care to all citizens whose income falls below a certain threshold. We do not consider whether the Act embodies [*532] sound policies. That judgment is entrusted to the Nation's elected leaders. We ask only whether Congress has the power under the Constitution to enact the challenged provisions. [*533] In our federal system, the National Government possesses only limited powers; the States and the people retain the [****14] remainder. Nearly two centuries ago, Chief Justice Marshall observed that “the question respecting the extent of [*534] the powers actually granted” to the Federal Government “is perpetually arising, and will probably continue to arise, as long as our system shall exist.” McCulloch v. [***465] Maryland, 17 U.S. 316, 4 Wheat. 316, 405, 4 L. Ed. 579 (1819). In this case we must again determine whether the Constitution grants Congress powers it now asserts, but which many States and individuals believe it does not possess. Resolving this controversy requires us to examine both the limits of the Government's power, and our own limited role in policing those boundaries. The Federal Government “is acknowledged by all to be one of enumerated powers.” Ibid. That is, rather than granting general authority to perform all the conceivable functions of government, the Constitution lists, or enumerates, the Federal Government's powers. Congress may, for example, “coin Money,” “establish Post Offices,” and “raise and support Armies.” Art. I, § 8, cls. 5, 7, 12. The enumeration of powers is also a limitation of powers, because “[t]he enumeration presupposes something not enumerated.” Gibbons v. Ogden, 22 U.S. 1, 9 Wheat. 1, 195, 6 L. Ed. 23 (1824). [****15] The Constitution's express conferral of some powers makes clear that it does not grant others. And Page 2 of 26 the Federal Government “can exercise [*535] only the powers granted to it.” McCulloch,supra, at 405, 4 Wheat. 316, 4 L. Ed. 579 . Today, the restrictions on government power foremost in many Americans' minds are likely to be affirmative prohibitions, such as contained in the Bill of Rights. These affirmative prohibitions come into play, however, only where the Government possesses authority to act in the first place. If no enumerated power authorizes Congress to pass a certain law, that law may not be enacted, even if it would not violate any of the express prohibitions in the Bill of Rights or elsewhere in the Constitution. Indeed, the Constitution did not initially include a Bill of Rights at least partly [**2578] because the Framers felt the enumeration of powers sufficed to restrain the Government. As Alexander Hamilton put it, “the Constitution is itself, in every rational sense, and to every useful purpose, A BILL OF RIGHTS.” The Federalist No. 84, p. 515 (C. Rossiter ed. 1961). And when the Bill of Rights was ratified, it made express what the enumeration of powers necessarily implied: “The powers [****16] not delegated to the United States by the Constitution . . . are reserved to the States respectively, or to the people.” U.S. Const., Amdt. 10. The Federal Government has expanded dramatically over the past two centuries, but it still must show that a constitutional grant of power authorizes each of its actions. See, e.g., United States v.Comstock, 560 U.S. 126, 130 S. Ct. 1949, 176 L. Ed. 2d 878 (2010). The same does not apply to the States, because the Constitution is not the source of their power. The Constitution may restrict state governments--as it does, for example, by forbidding them to deny any person the equal protection of the laws. But where such prohibitions do not apply, state governments do not need constitutional authorization to act. The States thus can and do perform many of the vital functions of modern government--punishing street crime, running public schools, and zoning property for development, to name but a few--even though the Constitution's text does [*536] not authorize any government to do so. Our cases refer to this general power of governing, possessed by the States but not by the Federal Government, as the “police power.” See, e.g., United States v. Morrison, 529 U.S. 598, 618-619, 120 S. Ct. 1740, 146 L. Ed. 2d 658 (2000). [***466] “State [****17] sovereignty is not just an end in itself: Rather, federalism secures to citizens the liberties that derive from the diffusion of sovereign power.” New York v. United States, 505 U.S. 144, 181, 112 S. Ct. 2408, 120 L. Ed. 2d 120 (1992) (internal quotation marks omitted). Because the police power is controlled by 50 different States instead of one national sovereign, the facets of governing that touch on citizens' daily lives are normally administered by smaller governments closer to the governed. The Framers thus ensured that powers which “in the ordinary course of affairs, concern the lives, liberties, and properties of the people” were held by governments more local and more accountable than a distant federal bureaucracy. The Federalist No. 45, at 293 (J. Madison). The independent power of the States also serves as a check on the power of the Federal Government: “By denying any one government complete jurisdiction over all the concerns of public life, federalism protects the liberty of the individual from arbitrary power.” Bond v. United States, 564 U.S. 211, 222, 564 U.S. 211, 131 S. Ct. 2355, 2364, 180 L. Ed. 2d 269, 280 (2011) ). This case concerns two powers that the Constitution does grant [****18] the Federal Government, but which must be read carefully to avoid creating a general federal authority akin to the police power. The Constitution authorizes Congress to “regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Art. I, § 8, cl. 3. Our precedents read that to mean that Congress may regulate “the channels of interstate commerce,” “persons or things in interstate commerce,” and “those activities that substantially affect interstate commerce.” Morrison, supra, at 609, 120 S. Ct. 1740, 146 L. Ed. 2d 658 (internal quotation marks omitted). The power over activities that substantially affect interstate commerce can be expansive. That power has been held to [*537] authorize federal regulation of such seemingly local matters as a farmer's decision to grow wheat for himself and his [**2579] livestock, and a loan shark's extortionate collections from a neighborhood butcher shop. See Wickard v. Filburn, 317 U.S. 111, 63 S. Ct. 82, 87 L. Ed. 122 (1942); Perez v. United States, 402 U.S. 146, 91 S. Ct. 1357, 28 L. Ed. 2d 686 (1971). Congress may also “lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and [****19] general Welfare of the United States.” U.S. Const., Art. I, § 8, cl. 1. Put simply, Congress may tax and spend. This grant gives the Federal Government considerable influence even in areas where it cannot directly regulate. The Federal Government may enact a tax on an activity that it cannot authorize, forbid, or otherwise control. See, e.g., Page 3 of 26 License Tax Cases, 72 U.S. 462, 5 Wall. 462, 471, 18 L. Ed. 497 (1867). And in exercising its spending power, Congress may offer funds to the States, and may condition those offers on compliance with specified conditions. See, e.g., College Savings Bank v. Florida Prepaid Postsecondary Ed. Expense Bd., 527 U.S. 666, 686, 119 S. Ct. 2219, 144 L. Ed. 2d 605 (1999). These offers may well induce the States to adopt policies that the Federal Government itself could not impose. See, e.g., South Dakota v. Dole, 483 U.S. 203, 205-206, 107 S. Ct. 2793, 97 L. Ed. 2d 171 (1987) (conditioning federal highway funds on States raising their drinking age to 21). the moment may render a measure more or less wise, but cannot render it more or less constitutional.” Chief Justice John Marshall, A Friend of the Constitution No. V, Alexandria Gazette, July 5, 1819, in John Marshall's Defense of McCulloch v. Maryland 190-191 (G. Gunther ed. 1969). And there can be no question that it is the responsibility of this Court to enforce the limits on federal power [**2580] by striking down acts of Congress that transgress those limits. Marbury v. Madison,supra, at 175-176, 2 L. Ed. 60. The reach of the Federal Government's enumerated powers is broader [***467] still because the Constitution authorizes Congress to “make all Laws which shall be necessary and proper for carrying into Execution [****20] the foregoing Powers.” Art. I, § 8, cl. 18. We have long read this provision to give Congress great latitude in exercising its powers: “Let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional.” McCulloch, at 421, 4 L. Ed. 579 . I Our permissive reading of these powers is explained in part by a general reticence to invalidate the acts of the Nation's [*538] elected leaders. “Proper respect for a coordinate branch of the government” requires that we strike down an Act of Congress only if “the lack of constitutional authority to pass [the] act in question is clearly demonstrated.” United States v. Harris, 106 U.S. 629, 635, 1 S. Ct. 601, 27 L. Ed. 290, 4 Ky. L. Rptr. 739 (1883). Members of this Court are vested with the authority to interpret the law; we possess neither the expertise nor the prerogative to make policy judgments. Those decisions are entrusted to our Nation's elected leaders, who can be thrown out of office if the people disagree with them. It is not our job to protect the people from [****21] the consequences of their political choices. Our deference in matters of policy cannot, however, become abdication in matters of law. “The powers of the legislature are defined and limited; and that those limits may not be mistaken, or forgotten, the constitution is written.” Marbury v. Madison, 5 U.S. 137, 1 Cranch 137, 176, 2 L. Ed. 60 (1803). Our respect for Congress's policy judgments thus can never extend so far as to disavow restraints on federal power that the Constitution carefully constructed. “The peculiar circumstances of The questions before us must be considered against the background of these basic principles. In 2010, Congress enacted the Patient Protection and Affordable Care Act, 124 Stat. 119. [****22] The Act aims to increase the number of Americans covered by health insurance and decrease the cost of health care. The Act's 10 titles stretch [*539] over 900 pages and contain hundreds of provisions. This case concerns constitutional challenges to two key provisions, commonly referred to as the individual mandate and the Medicaid expansion. The individual mandate requires most Americans to maintain “minimum essential” health insurance coverage. 26 U.S.C. §5000A. The mandate does not apply to some individuals, such as prisoners and undocumented aliens. §5000A(d). Many individuals will receive the required coverage through their employer, or from a government program such as Medicaid or Medicare. See §5000A(f). But for individuals who are not exempt and do not receive health insurance [***468] through a third party, the means of satisfying the requirement is to purchase insurance from a private company. Beginning in 2014, those who do not comply with the mandate must make a “[s]hared responsibility payment” to the Federal Government. §5000A(b)(1). That payment, which the Act describes as a “penalty,” is calculated as a percentage of household income, subject to a floor based on a specified dollar amount [****23] and a ceiling based on the average annual premium the individual would have to pay for qualifying private health insurance. §5000A(c). In 2016, for example, the penalty will be 2.5 percent of an individual's household income, but no less than $695 and no more than the average yearly premium for insurance that covers 60 percent of the cost of 10 specified services (e.g., prescription drugs and hospitalization). Ibid.; 42 U.S.C. §18022. The Act Page 4 of 26 provides that the penalty will be paid to the Internal Revenue Service with an individual's taxes, and “shall be assessed and collected in the same manner” as tax penalties, such as the penalty for claiming too large an income tax refund. 26 U.S.C. §5000A(g)(1). The Act, however, bars the IRS from using several of its normal enforcement tools, such as criminal prosecutions and levies. §5000A(g)(2). And some individuals who are subject to the mandate are nonetheless exempt [*540] from the penalty--for example, those with income below a certain threshold and members of Indian tribes. §5000A(e). On the day the President signed the Act into law, Florida and 12 other States filed a complaint in the Federal District Court for the Northern District of Florida. [****24] Those plaintiffs--who are both respondents and petitioners here, depending on the issue--were subsequently joined by 13 more States, several individuals, and the National Federation of Independent Business. The plaintiffs alleged, among other things, that the individual mandate provisions of the Act exceeded Congress's powers under Article I of the Constitution. The District Court agreed, holding that Congress lacked constitutional power to enact the individual mandate. 780 F. Supp. 2d 1256 (ND Fla. 2011). The District Court determined that the individual mandate could not be severed from the remainder of the Act, and therefore struck down the Act in its entirety. Id., at 1305-1306. The Court of Appeals for the Eleventh Circuit affirmed in part and reversed in [**2581] part. The court affirmed the District Court's holding that the individual mandate exceeds Congress's power. 648 F.3d 1235 (2011). The panel unanimously agreed that the individual mandate did not impose a tax, and thus could not be authorized by Congress's power to “lay and collect Taxes.” U.S. Const., Art. I, § 8, cl. 1. A majority also held that the individual mandate was not supported by Congress's power to “regulate Commerce [****25] . . . among the several States.” Id., cl. 3. According to the majority, the Commerce Clause does not empower the Federal Government to order individuals to engage in commerce, and the Government's efforts to cast the individual mandate in a different light were unpersuasive. Judge Marcus dissented, reasoning that the individual mandate regulates economic activity that has a clear effect on interstate commerce. Having held the individual mandate to be unconstitutional, the majority examined whether that provision [***469] could be severed from the remainder of the Act. The majority determined [*541] that, contrary to the District Court's view, it could. The court thus struck down only the individual mandate, leaving the Act's other provisions intact. 648 F.3d, at 1328. Other Courts of Appeals have also heard challenges to the individual mandate. The Sixth Circuit and the D. C. Circuit upheld the mandate as a valid exercise of Congress's commerce power. See Thomas More Law Center v. Obama, 651 F.3d 529 (CA6 2011); Seven-Sky v.Holder, 661 F.3d 1, 398 U.S. App. D.C. 134 (CADC 2011). The Fourth Circuit determined that the AntiInjunction Act prevents courts from considering the merits of that question. [****26] See Liberty Univ., Inc. v. Geithner, 671 F.3d 391 (2011). That statute bars suits “for the purpose of restraining the assessment or collection of any tax.” 26 U.S.C. §7421(a). A majority of the Fourth Circuit panel reasoned that the individual mandate's penalty is a tax within the meaning of the Anti-Injunction Act, because it is a financial assessment collected by the IRS through the normal means of taxation. The majority therefore determined that the plaintiffs could not challenge the individual mandate until after they paid the penalty.1 The second [****27] provision of the Affordable Care Act directly challenged here is the Medicaid expansion. Enacted in 1965, Medicaid offers federal funding to States to assist pregnant women, children, needy families, the blind, the elderly, and the disabled in obtaining medical care. See 42 U.S.C. §1396a(a)(10). In order to receive that funding, States must comply with federal criteria governing matters such as who [*542] receives care and what services are provided at what cost. By 1982 every State had chosen to participate in Medicaid. Federal funds received through the Medicaid program have become a substantial part of state budgets, now constituting over 10 percent of most States' total revenue. The Affordable Care Act expands the scope of the 1 The Eleventh Circuit did not consider whether the AntiInjunction Act bars challenges to the individual mandate. The District Court had determined that it did not, and neither side challenged that holding on appeal. The same was true in the Fourth Circuit, but that court examined the question sua sponte because it viewed the Anti-Injunction Act as a limit on its subject matter jurisdiction. See Liberty Univ., 671 F.3d, at 400-401. The Sixth Circuit and the D. C. Circuit considered the question but determined that the Anti-Injunction Act did not apply. See Thomas More, 651 F.3d, at 539-540 (CA6); SevenSky, 661 F.3d, at 5-14 (CADC). Page 5 of 26 Medicaid program and increases the number of individuals the States must cover. For example, the Act [**2582] requires state programs to provide Medicaid coverage to adults with incomes up to 133 percent of the federal poverty level, whereas many States now cover adults with children only if their income is considerably lower, and do not cover childless adults at all. See §1396a(a)(10)(A)(i)(VIII). The Act increases federal funding to cover the States' costs in expanding [****28] Medicaid coverage, although States will bear a portion of the costs on their own. §1396d(y)(1). If a State does not comply with the Act's new coverage requirements, it may lose not only the federal funding for those requirements, but all of its federal Medicaid funds. See §1396c. Along with their challenge to the individual mandate, the state plaintiffs in the Eleventh Circuit argued that the Medicaid expansion exceeds Congress's constitutional powers. The [***470] Court of Appeals unanimously held that the Medicaid expansion is a valid exercise of Congress's power under the Spending Clause. U.S. Const., Art. I, § 8, cl. 1. And the court rejected the States' claim that the threatened loss of all federal Medicaid funding violates the Tenth Amendment by coercing them into complying with the Medicaid expansion. 648 F.3d, at 1264, 1268. We granted certiorari to review the judgment of the Court of Appeals for the Eleventh Circuit with respect to both the individual mandate and the Medicaid expansion. 565 U.S. 1033–1034, 132 S. Ct. 603, 181 L. Ed. 2d 420 (2011). Because no party supports the Eleventh Circuit's holding that the individual mandate can be completely severed from the remainder of the Affordable [****29] Care Act, we appointed an amicus curiae to defend that aspect of the judgment below. And because there is a reasonable [*543] argument that the Anti-Injunction Act deprives us of jurisdiction to hear challenges to the individual mandate, but no party supports that proposition, we appointed an amicus curiae to advance it.2 Before turning to the merits, we need to be sure we have the authority to do so. The Anti-Injunction Act provides that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.” 26 U.S.C. §7421(a). This statute protects the Government's ability to collect a consistent stream of revenue, by barring litigation to enjoin or otherwise obstruct [****30] the collection of taxes. Because of the AntiInjunction Act, taxes can ordinarily be challenged only after they are paid, by suing for a refund. See Enochs v. Williams Packing & Nav. Co., 370 U.S. 1, 7-8, 82 S. Ct. 1125, 8 L. Ed. 2d 292 (1962). The penalty for not complying with the Affordable Care Act's individual mandate first becomes enforceable in 2014. The present challenge to the mandate thus seeks to restrain the penalty's future collection. Amicus contends that the Internal Revenue Code treats the penalty as a tax, and that the Anti-Injunction Act therefore bars this suit. The text of the pertinent statutes suggests otherwise. The Anti-Injunction Act applies to suits “for the purpose of restraining the assessment or collection of any tax.” §7421(a) (emphasis added). [**2583] Congress, however, chose to describe the “[s]hared responsibility payment” imposed on those who forgo health insurance not as a “tax,” but as a “penalty.” §§5000A(b), (g)(2). There is no immediate reason to think that a statute applying to “any tax” would apply to a “penalty.” [*544] Congress's decision to label this exaction a “penalty” rather than a “tax” is significant because the Affordable Care Act describes many other [****31] exactions it creates as “taxes.” See Thomas More, 651 F.3d, at 551. Where Congress uses certain language in one part of a statute and different language in another, it is [***471] generally presumed that Congress acts intentionally. See Russello v. United States, 464 U.S. 16, 23, 104 S. Ct. 296, 78 L. Ed. 2d 17 (1983). II 2 We appointed H. Bartow Farr III to brief and argue in support of the Eleventh Circuit's judgment with respect to severability, and Robert A. Long to brief and argue the proposition that the Anti-Injunction Act bars the current challenges to the individual mandate. 565 U.S. 1033, 132 S. Ct. 603, 181 L. Ed. 2d 420 (2011). Both amici have ably discharged their assigned responsibilities. Amicus argues that even though Congress did not label the shared responsibility payment a tax, we should treat it as such under the Anti-Injunction Act because it functions like a tax. It is true that Congress cannot change whether an exaction is a tax or a penalty for constitutional purposes simply by describing it as one or the other. Congress may not, for example, expand its power under the Taxing Clause, or escape the Double Jeopardy Clause's constraint on criminal sanctions, by Page 6 of 26 labeling a severe financial punishment a “tax.” See Child Labor Tax Case, 259 U.S. 20, 36-37, 42 S. Ct. 449, 66 L. Ed. 817 (1922); Department of Revenue v.Kurth Ranch, 511 U.S. 767, 779, 114 S. Ct. 1937, 128 L. Ed. 2d 767 (1994). The Anti-Injunction Act and the Affordable Care Act, however, are creatures of Congress's own creation. How they relate to each other is up to Congress, and the best evidence [****32] of Congress's intent is the statutory text. We have thus applied the Anti-Injunction Act to statutorily described “taxes” even where that label was inaccurate. See Bailey v. George, 259 U.S. 16, 42 S. Ct. 419, 66 L. Ed. 816, 1922-2 C.B. 342, T.D. 3347 (1922) (Anti-Injunction Act applies to “Child Labor Tax” struck down as exceeding Congress's taxing power in Drexel Furniture). Congress can, of course, describe something as a penalty but direct that it nonetheless be treated as a tax for purposes of the Anti-Injunction Act. For example, 26 U.S.C. §6671(a) provides that “any reference in this title to 'tax' imposed by this title shall be deemed also to refer to the penalties and liabilities provided by” Subchapter 68B of the Internal Revenue Code. Penalties in Subchapter 68B are thus treated as taxes under Title 26, which includes the Anti-Injunction [*545] Act. The individual mandate, however, is not in Subchapter 68B of the Code. Nor does any other provision state that references to taxes in Title 26 shall also be “deemed” to apply to the individual mandate. Amicus attempts to show that Congress did render the Anti-Injunction Act applicable to the individual mandate, albeit by a more circuitous [****33] route. Section 5000A(g)(1) specifies that the penalty for not complying with the mandate “shall be assessed and collected in the same manner as an assessable penalty under subchapter B of chapter 68.” Assessable penalties in Subchapter 68B, in turn, “shall be assessed and collected in the same manner as taxes.” §6671(a). According to amicus, by directing that the penalty be “assessed and collected in the same manner as taxes,” §5000A(g)(1) made the Anti-Injunction Act applicable to this penalty. The Government disagrees. It argues that §5000A(g)(1) does not direct courts to apply the Anti-Injunction Act, because §5000A(g) is a directive only to the Secretary of the Treasury to use the same “ 'methodology and procedures' ” to collect the penalty that he uses to collect taxes. [**2584] Brief for United States 32-33 (quoting Seven-Sky, 661 F.3d, at 11). We think the Government has the better reading. As it observes, “Assessment” and “Collection” are chapters of the Internal Revenue Code providing the Secretary authority [***472] to assess and collect taxes, and generally specifying the means by which he shall do so. See §6201 (assessment authority); §6301 (collection authority). Section 5000A(g)(1)'s command [****34] that the penalty be “assessed and collected in the same manner” as taxes is best read as referring to those chapters and giving the Secretary the same authority and guidance with respect to the penalty. That interpretation is consistent with the remainder of §5000A(g), which instructs the Secretary on the tools he may use to collect the penalty. See §5000A(g)(2)(A) (barring criminal prosecutions); §5000A(g)(2)(B) (prohibiting the Secretary from using notices of lien and levies). The Anti-Injunction Act, by contrast, [*546] says nothing about the procedures to be used in assessing and collecting taxes. Amicus argues in the alternative that a different section of the Internal Revenue Code requires courts to treat the penalty as a tax under the Anti-Injunction Act. Section 6201(a) authorizes the Secretary to make “assessments of all taxes (including interest, additional amounts, additions to the tax, and assessable penalties).” (Emphasis added.) Amicus contends that the penalty must be a tax, because it is an assessable penalty and §6201(a) says that taxes include assessable penalties. That argument has force only if §6201(a) is read in isolation. The Code contains many provisions treating taxes [****35] and assessable penalties as distinct terms. See, e.g., §§860(h)(1), 6324A(a), 6601(e)(1)-(2), 6602, 7122(b). There would, for example, be no need for §6671(a) to deem “tax” to refer to certain assessable penalties if the Code already included all such penalties in the term “tax.” Indeed, amicus's earlier observation that the Code requires assessable penalties to be assessed and collected “in the same manner as taxes” makes little sense if assessable penalties are themselves taxes. In light of the Code's consistent distinction between the terms “tax” and “assessable penalty,” we must accept the Government's interpretation: Section 6201(a) instructs the Secretary that his authority to assess taxes includes the authority to assess penalties, but it does not equate assessable penalties to taxes for other purposes. The Affordable Care Act does not require that the penalty for failing to comply with the individual mandate be treated as a tax for purposes of the Anti-Injunction Page 7 of 26 Act. The Anti-Injunction Act therefore does not apply to this suit, and we may proceed to the merits. healthy individuals. See §§300gg, 300gg-1, 300gg-3, 300gg-4. III The guaranteed-issue and community-rating reforms do not, however, address the issue of healthy individuals who choose not to purchase insurance to cover potential [****38] health care needs. In fact, the reforms sharply exacerbate that problem, by providing an incentive for individuals to delay purchasing health insurance until they become sick, relying on the promise of guaranteed and affordable coverage. The reforms also threaten to impose massive new costs on insurers, who are required to accept unhealthy individuals but prohibited from charging them rates necessary to pay for their coverage. This will lead insurers to significantly increase premiums on everyone. See Brief for America's Health Insurance Plans et al. as Amici Curiae in No. 11393 etc. 8-9. The Government advances two theories for the proposition that Congress had constitutional authority to enact the individual [****36] [*547] mandate. First, the Government argues that Congress had the power to enact the mandate under the Commerce Clause. Under that theory, Congress may order individuals to buy health insurance because the failure to do so affects interstate commerce, and could undercut the Affordable Care Act's other reforms. Second, the Government argues that if the commerce power does not support the mandate, we should nonetheless uphold it as an exercise of Congress's power to tax. According to the Government, even if Congress lacks the power to direct individuals to buy insurance, the only effect of the individual mandate is to raise taxes on those who do not do so, and thus the law may be upheld as a tax. [**2585] [***473] A The Government's first argument is that the individual mandate is a valid exercise of Congress's power under the Commerce Clause and the Necessary and Proper Clause. According to the Government, the health care market is characterized by a significant cost-shifting problem. Everyone will eventually need health care at a time and to an extent they cannot predict, but if they do not have insurance, they often will not be able to pay for it. Because state and federal laws nonetheless require hospitals [****37] to provide a certain degree of care to individuals without regard to their ability to pay, see, e.g., 42 U.S.C. §1395dd; Fla. Stat. §395.1041 (2010), hospitals end up receiving compensation for only a portion of the services they provide. To recoup the losses, hospitals pass on the cost to insurers through higher rates, and insurers, in turn, pass on the cost to policy holders in the form of higher premiums. Congress estimated that the cost of uncompensated care raises family health insurance premiums, on average, by over $1,000 per year. 42 U.S.C. §18091(2)(F). In the Affordable Care Act, Congress addressed the problem of those who cannot obtain insurance coverage because of pre-existing conditions or other health issues. It did [*548] so through the Act's “guaranteedissue” and “community-rating” provisions. These provisions together prohibit insurance companies from denying coverage to those with such conditions or charging unhealthy individuals higher premiums than The individual mandate was Congress's solution to these problems. By requiring that individuals purchase health insurance, the mandate prevents cost-shifting by those who would otherwise go without it. In addition, the mandate forces into the insurance risk pool more healthy individuals, whose premiums on average will be higher than their health care expenses. This allows insurers to subsidize the costs of covering the unhealthy individuals the reforms require them to accept. The Government claims that Congress has power under the Commerce and Necessary and Proper Clauses to enact this solution. 1 The [****39] Government contends that the individual mandate is within Congress's power because the failure to purchase insurance “has a substantial and deleterious effect on interstate [*549] commerce” by creating the cost-shifting problem. Brief for United States 34. The path of our Commerce Clause decisions has not always run [***474] smooth, see United States v. Lopez, 514 U.S. 549, 552-559, 115 S. Ct. 1624, 131 L. Ed. 2d 626 (1995), but it is now well established that Congress has broad authority under the Clause. We have recognized, for example, that “[t]he power of Congress over interstate commerce is not confined to the regulation of commerce among the states,” but extends to activities that “have a substantial effect on interstate commerce.” [**2586] United States v. Darby, 312 U.S. 100, 118-119, 61 S. Ct. 451, 85 L. Ed. 609 (1941). Congress's power, moreover, is not limited to regulation of an activity that by itself substantially affects interstate commerce, but also extends to activities that Page 8 of 26 do so only when aggregated with similar activities of others. See Wickard, 317 U.S., at 127-128, 63 S. Ct. 82, 87 L. Ed. 122. Given its expansive scope, it is no surprise that Congress has employed the commerce power [****40] in a wide variety of ways to address the pressing needs of the time. But Congress has never attempted to rely on that power to compel individuals not engaged in commerce to purchase an unwanted product.3 Legislative novelty is not necessarily fatal; there is a first time for everything. But sometimes “the most telling indication of [a] severe constitutional problem . . . is the lack of historical precedent” for Congress's action. Free Enterprise Fund v. Public Company Accounting Oversight Bd., 561 U.S. 477, 505, 130 S. Ct. 3138, 3159, 177 L. Ed. 2d 706, 731 (2010) (internal quotation marks omitted). [*550] At the very least, we should “pause to consider the implications of the Government's arguments” when confronted with such new conceptions of federal power. Lopez, supra, at 564, 115 S. Ct. 1624, 131 L. Ed. 2d 626. The Constitution grants Congress the power to “regulate Commerce.” Art. I, § 8, cl. 3 (emphasis added). The power to regulate commerce presupposes the existence of commercial activity to be regulated. If the power to “regulate” something included the power to create it, many of the provisions in the Constitution would be superfluous. For example, the Constitution gives Congress the power to “coin Money,” in addition to the power to “regulate the Value thereof.” Id., cl. 5. And it gives Congress the power to “raise and support Armies” and to “provide and maintain a Navy,” in addition to the power to “make Rules for the Government and Regulation of the land and naval Forces.” Id., cls. 12-14. If the power to regulate the Armed Forces or the value of money included the power to bring the subject of the regulation into existence, [****42] the specific grant of 3 The examples of other congressional mandates cited by Justice Ginsburg, post, at 621, n. 10, 183 L. Ed. 2d, at 519 (opinion concurring in part, concurring in judgment in part, and dissenting in part), are not to the contrary. Each of those mandates--to report for jury duty, to register for the draft, to purchase firearms in anticipation of militia service, to exchange gold currency for paper currency, and to [****41] file a tax return--are based on constitutional provisions other than the Commerce Clause. See Art. I, § 8, cl. 9 (to “constitute Tribunals inferior to the supreme Court”); id., cl. 12 (to “raise and support Armies”); id., cl. 16 (to “provide for organizing, arming, and disciplining, the Militia”); id., cl. 5 (to “coin Money”); id., cl. 1 (to “lay and collect Taxes”). such powers would have been unnecessary. The language of the Constitution reflects the natural understanding that the power to regulate assumes there is already something to be regulated. See Gibbons, 22 U.S., at 188, 9 Wheat., at 188, 6 L. Ed. 23 (“[T]he enlightened patriots who framed our constitution, and the people who adopted it, must be understood to have employed words in their [***475] natural sense, and to have intended what they have said”).4 [**2587] [*551] Our precedent also reflects this understanding. As expansive as our cases construing the scope of the commerce power have been, they all have one thing in common: They uniformly describe the power as reaching “activity.” It is nearly impossible to avoid the word when quoting them. See, e.g., Lopez, supra, at 560, 115 S. Ct. 1624, 131 L. Ed. 2d 626 (“Where economic activity substantially affects interstate commerce, legislation regulating that activity will be sustained”); Perez, 402 U.S., at 154, 91 S. Ct. 1357, 28 L. Ed. 2d 686 (“Where the class of activities is regulated and that class is within the reach of federal power, the courts have no power to excise, as trivial, individual instances of the class” (emphasis in original; internal quotation marks omitted)); Wickard, supra, at 125, 63 S. Ct. 82, 87 L. Ed. 122 (“[E]ven if appellee's activity be local and though [****44] it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce”); NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 37, 57 S. Ct. 615, 81 L. Ed. 893 (1937) (“Although activities may be intrastate in character when separately considered, if they have such a close and substantial relation to interstate commerce 4 Justice Ginsburg suggests that “at the time the Constitution was framed, to 'regulate' meant, among other things, to require action.” Post, at 610, 183 L. Ed. 2d, at 512 (citing Seven-Sky v. Holder, 661 F.3d 1, 16, 398 U.S. App. D.C. 134 (CADC 2011); brackets and some internal quotation marks omitted). But to reach this conclusion, the case cited by Justice Ginsburg relied on a dictionary in which “[t]o order; to command” was the fifth-alternative definition of “to direct,” which was itself the second-alternative definition of “to regulate.” See id, at 16 (citing S. Johnson, Dictionary of the English Language (4th ed. 1773) (reprinted 1978)). It is unlikely that the Framers had such an obscure meaning in mind when they used the [****43] word “regulate.” Far more commonly, “[t]o regulate” meant “[t]o adjust by rule or method,” which presupposes something to adjust. 2 id., at 1619; see also Gibbons, 22 U.S., at 196, 9 Wheat., at 196, 6 L. Ed. 23 (defining the commerce power as the power “to prescribe the rule by which commerce is to be governed”). Page 9 of 26 that their control is essential or appropriate to protect that commerce from burdens and obstructions, Congress cannot be denied the power to exercise that control”); see also post, at 602, 611-613, 614-615, 618, 183 L. Ed. 2d, at 507, 513-514, 515, 517 (Ginsburg, J., concurring in part, concurring in judgment in part, and dissenting in part).5 [*552] The individual mandate, however, does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product, on the ground that their failure to do so affects interstate commerce. Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority. Every day individuals do not do an infinite number of things. In some cases they decide not to do something; in [***476] others they simply fail to do it. Allowing Congress to justify federal regulation by pointing to the effect of inaction on commerce would bring countless decisions an individual could potentially make within the scope of federal regulation, and--under the Government's theory--empower Congress to make those decisions for him. Applying the Government's logic to the familiar case of Wickard v. Filburn shows how far that logic would carry us from the notion of [****46] a government of limited powers. In Wickard, the Court famously upheld a federal penalty imposed on a farmer for growing wheat for consumption on his own farm. 317 U.S., at 114-115, 128-129, 63 S. Ct. 82, 87 L. Ed. 122. That amount of wheat caused the farmer to exceed his quota under a [**2588] program designed to support the price of wheat by limiting supply. The Court rejected the farmer's argument that growing wheat for home consumption was beyond the reach of the commerce power. It did so on the ground that the farmer's decision to grow wheat 5 Justice Ginsburg cites two eminent domain cases from the 1890s to support the proposition that our case law does not “toe the activity versus inactivity line.” Post, at 611, 183 L. Ed. 2d, at 512-513 (citing Monongahela Nav. Co. v. United States, 148 U.S. 312, 335-337, 13 S. Ct. 622, 37 L. Ed. 463 (1893), and Cherokee Nation v.Southern K. R. Co., 135 U.S. 641, 657-659, 10 S. Ct. 965, 34 L. Ed. 295 (1890)). The fact that the Fifth Amendment requires the payment of just compensation when the Government exercises its [****45] power of eminent domain does not turn the taking into a commercial transaction between the landowner and the Government, let alone a government-compelled transaction between the landowner and a third party. for his own use allowed him to avoid purchasing wheat in the market. That decision, when considered in the aggregate along with similar decisions of others, would have had a substantial effect on the interstate market for wheat. Id., at 127-129, 63 S. Ct. 82, 87 L. Ed. 122. Wickard has long been regarded as “perhaps the most far reaching example of Commerce Clause authority over intrastate activity,” Lopez, 514 U.S., at 560, 115 S. Ct. 1624, 131 L. Ed. 2d 626, but the Government's theory in this case would go much further. Under Wickard it is within Congress's power to regulate the market for [*553] wheat by supporting its price. But price can be supported [****47] by increasing demand as well as by decreasing supply. The aggregated decisions of some consumers not to purchase wheat have a substantial effect on the price of wheat, just as decisions not to purchase health insurance have on the price of insurance. Congress can therefore command that those not buying wheat do so, just as it argues here that it may command that those not buying health insurance do so. The farmer in Wickard was at least actively engaged in the production of wheat, and the Government could regulate that activity because of its effect on commerce. The Government's theory here would effectively override that limitation, by establishing that individuals may be regulated under the Commerce Clause whenever enough of them are not doing something the Government would have them do. Indeed, the Government's logic would justify a mandatory purchase to solve almost any problem. See Seven-Sky, 661 F.3d, at 14-15 (noting the Government's inability to “identify any mandate to purchase a product or service in interstate commerce that would be unconstitutional” under its theory of the commerce power). To consider a different example in the health care market, many Americans do not [****48] eat a balanced diet. That group makes up a larger percentage of the total population than those without health insurance. See, e.g., Dept. of Agriculture and Dept. of Health and Human Services, Dietary Guidelines for Americans 1 (2010). The failure of that group to have a healthy diet increases health care costs, to a greater extent than the failure of the uninsured to purchase insurance. See, e.g., Finkelstein, Trogdon, Cohen, & Dietz, Annual Medical Spending Attributable to Obesity: Payer-and [***477] ServiceSpecific Estimates, 28 Health Affairs w822 (2009) (detailing the “undeniable link between rising rates of obesity and rising medical spending,” and estimating that “the annual medical burden of obesity has risen to almost 10 percent of all medical spending and could Page 10 of 26 amount to $147 billion per year in 2008”). Those increased [*554] costs are borne in part by other Americans who must pay more, just as the uninsured shift costs to the insured. See Center for Applied Ethics, Voluntary Health Risks: Who Should Pay? 6 Issues in Ethics 6 (1993) (noting “overwhelming evidence that individuals with unhealthy habits pay only a fraction of the costs associated with their behaviors; most of the expense [****49] is borne by the rest of society in the form of higher insurance premiums, government expenditures for health care, and disability benefits”). Congress addressed the insurance problem by ordering everyone to buy insurance. Under the Government's theory, Congress could address the diet problem by ordering everyone to buy vegetables. See Dietary Guidelines, supra, at 19 (“Improved nutrition, appropriate eating behaviors, and increased [**2589] physical activity have tremendous potential to . . . reduce health care costs”). People, for reasons of their own, often fail to do things that would be good for them or good for society. Those failures--joined with the similar failures of others--can readily have a substantial effect on interstate commerce. Under the Government's logic, that authorizes Congress to use its commerce power to compel citizens to act as the Government would have them act. That is not the country the Framers of our Constitution envisioned. James Madison explained that the Commerce Clause was “an addition which few oppose and from which no apprehensions are entertained.” The Federalist No. 45, at 293. While Congress's authority under the Commerce Clause has of course expanded with [****50] the growth of the national economy, our cases have “always recognized that the power to regulate commerce, though broad indeed, has limits.” Maryland v. Wirtz, 392 U.S. 183, 196, 88 S. Ct. 2017, 20 L. Ed. 2d 1020 (1968). The Government's theory would erode those limits, permitting Congress to reach beyond the natural extent of its authority, “everywhere extending the sphere of its activity and drawing all power into its impetuous vortex.” The Federalist [*555] No. 48, at 309 (J. Madison). Congress already enjoys vast power to regulate much of what we do. Accepting the Government's theory would give Congress the same license to regulate what we do not do, fundamentally changing the relation between the citizen and the Federal Government.6 6 In an attempt to recast the individual mandate as a regulation To an economist, perhaps, there is no difference between activity and inactivity; both have measurable economic effects on commerce. But the distinction between doing something and doing nothing would not have [***478] been lost on the Framers, who were “practical statesmen,” not metaphysical philosophers. Industrial Union Dept., AFL-CIO v. American Petroleum Institute, 448 U.S. 607, 673, 100 S. Ct. 2844, 65 L. Ed. 2d 1010 (1980) (Rehnquist, J., concurring in judgment). As we have explained, “the framers of the Constitution were not mere visionaries, toying with speculations or theories, but practical men, dealing with the facts of political life as they understood them, putting into form the government they were creating, and prescribing in language clear and intelligible the powers that government was to take.” South Carolina v. United States, 199 U.S. 437, 449, 26 S. Ct. 110, 50 L. Ed. 261, 41 Ct. Cl. 503, T.D. 961 (1905). The Framers gave Congress the power to regulate commerce, not to compel it, and for over 200 years both our decisions and Congress's [****52] actions have reflected this understanding. There is no reason to depart from that understanding now. The Government sees things differently. It argues that because sickness and injury are unpredictable but unavoidable, “the uninsured as a class are active in the market for health care, which they regularly seek and obtain.” Brief [*556] for United States 50. The individual mandate “merely regulates how individuals finance and pay for that active participation--requiring that they do so through insurance, rather than through attempted self-insurance with the [**2590] back-stop of shifting costs to others.” Ibid. The Government repeats the phrase “active in the market for health care” throughout its brief, see id., at 7, 18, 34, 50, but that concept has no constitutional significance. An individual who bought a car two years ago and may buy another in the future is not “active in the car market” in any pertinent sense. The phrase “active in the market” cannot obscure the fact that most of those regulated by the individual mandate are not of commercial activity, Justice Ginsburg suggests that “[a]n individual who opts not to purchase insurance from a private insurer can be seen as actively selecting another form of insurance: self-insurance.” Post, at 612, 183 L. Ed. 2d, at 514. But “self-insurance” is, in this context, nothing more than a description of the failure to purchase insurance. Individuals are no more “activ[e] [****51] in the self-insurance market” when they fail to purchase insurance, post, at 613, 183 L. Ed. 2d, at 514, than they are active in the “rest” market when doing nothing. Page 11 of 26 currently engaged in any commercial activity involving health care, and that fact is fatal to the Government's effort to “regulate the uninsured as a class.” Id., at 42. [****53] Our precedents recognize Congress's power to regulate “class[es] of activities,” Gonzales v. Raich, 545 U.S. 1, 17, 125 S. Ct. 2195, 162 L. Ed. 2d 1 (2005) (emphasis added), not classes of individuals, apart from any activity in which they are engaged, see, e.g., Perez, 402 U.S., at 153, 91 S. Ct. 1357, 28 L. Ed. 2d 686 (“Petitioner is clearly a member of the class which engages in 'extortionate credit transactions' . . .” (emphasis deleted)). The individual mandate's regulation of the uninsured as a class is, in fact, particularly divorced from any link to existing commercial activity. The mandate primarily affects healthy, often young adults who are less likely to need significant health care and have other priorities for spending their money. It is precisely because these individuals, as an actuarial class, incur relatively low health care costs that the mandate helps counter the effect of forcing insurance companies to cover others who impose greater costs than their premiums are allowed to reflect. See 42 U.S.C. §18091(2)(I) (recognizing that the mandate would “broaden the health insurance risk pool to include healthy individuals, which will lower health insurance premiums”). [****54] If the individual mandate is targeted at a class, it is a class whose commercial inactivity rather than activity is its defining feature. [*557] The Government, however, claims that this does not matter. The Government [***479] regards it as sufficient to trigger Congress's authority that almost all those who are uninsured will, at some unknown point in the future, engage in a health care transaction. Asserting that “[t]here is no temporal limitation in the Commerce Clause,” the Government argues that because “[e]veryone subject to this regulation is in or will be in the health care market,” they can be “regulated in advance.” Tr. of Oral Arg. 111 (Mar. 27, 2012). The proposition that Congress may dictate the conduct of an individual today because of prophesied future activity finds no support in our precedent. We have said that Congress can anticipate the effects on commerce of an economic activity. See, e.g., Consolidated Edison Co. v. NLRB, 305 U.S. 197, 59 S. Ct. 206, 83 L. Ed. 126 (1938) (regulating the labor practices of utility companies); Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241, 85 S. Ct. 348, 13 L. Ed. 2d 258 (1964) (prohibiting discrimination by hotel operators); Katzenbach v. McClung, 379 U.S. 294, 85 S. Ct. 377, 13 L. Ed. 2d 290 (1964) [****55] (prohibiting discrimination by restaurant owners). But we have never permitted Congress to anticipate that activity itself in order to regulate individuals not currently engaged in commerce. Each one of our cases, including those cited by Justice Ginsburg, post, at 606-607, 183 L. Ed. 2d, at 510-511, involved pre-existing economic activity. See, e.g., Wickard, 317 U.S., at 127-129, 63 S. Ct. 82, 87 L. Ed. 122 (producing wheat); Raich, supra, at 25, 125 S. Ct. 2195, 162 L. Ed. 2d 1 (growing marijuana). Everyone will likely participate in the markets for food, clothing, transportation, shelter, or energy; that does not authorize [**2591] Congress to direct them to purchase particular products in those or other markets today. The Commerce Clause is not a general license to regulate an individual from cradle to grave, simply because he will predictably engage in particular transactions. Any police power to regulate individuals as such, as opposed to their activities, remains vested in the States. The Government argues that the individual mandate can be sustained as a sort of exception to this rule, because [*558] health insurance is a unique product. According to the Government, upholding the individual mandate would not justify mandatory [****56] purchases of items such as cars or broccoli because, as the Government puts it, “[h]ealth insurance is not purchased for its own sake like a car or broccoli; it is a means of financing health-care consumption and covering universal risks.” Reply Brief for United States 19. But cars and broccoli are no more purchased for their “own sake” than health insurance. They are purchased to cover the need for transportation and food. The Government says that health insurance and health care financing are “inherently integrated.” Brief for United States 41. But that does not mean the compelled purchase of the first is properly regarded as a regulation of the second. No matter how “inherently integrated” health insurance and health care consumption may be, they are not the same thing: They involve different transactions, entered into at different times, with different providers. And for most of those targeted by the mandate, significant health care needs will be years, or even decades, away. The proximity and degree of connection between the mandate and the subsequent commercial activity is too lacking [***480] to justify an exception of the sort urged by the Government. The individual mandate forces individuals [****57] into commerce precisely because they elected to refrain from commercial activity. Such a law cannot be sustained under a clause authorizing Congress to Page 12 of 26 “regulate Commerce.” 2 The Government next contends that Congress has the power under the Necessary and Proper Clause to enact the individual mandate because the mandate is an “integral part of a comprehensive scheme of economic regulation”--the guaranteed-issue and community-rating insurance reforms. Brief for United States 24. Under this argument, it is not necessary to consider the effect that an individual's inactivity may have on interstate commerce; it is enough that Congress [*559] regulate commercial activity in a way that requires regulation of inactivity to be effective. The power to “make all Laws which shall be necessary and proper for carrying into Execution” the powers enumerated in the Constitution, Art. I, § 8, cl. 18, vests Congress with authority to enact provisions “incidental to the [enumerated] power, and conducive to its beneficial exercise,” McCulloch, 17 U.S., at 418, 4 Wheat., at 418, 4 L. Ed. 579. Although the Clause gives Congress authority to “legislate on that vast mass of incidental powers which must be involved in [****58] the constitution,” it does not license the exercise of any “great substantive and independent power[s]” beyond those specifically enumerated. Id., 17 U.S., at 411, 421, 4 Wheat., at 411, 421, 4 L. Ed. 579. Instead, the Clause is “ 'merely a declaration, for the removal of all uncertainty, that the means of carrying into execution those [powers] otherwise granted are included in the grant.' Kinsella v. United States, 361 U.S. 234, 247, 80 S. Ct. 297, 4 L. Ed. 2d 268 (1960) (quoting VI Writings of James Madison 383 (G. Hunt ed. 1906)). As our jurisprudence under the Necessary and Proper Clause has developed, we [**2592] have been very deferential to Congress's determination that a regulation is “necessary.” We have thus upheld laws that are “ 'convenient, or useful' or 'conducive' to the authority's 'beneficial exercise.' Comstock, 560 U.S., at 133-134, 130 S. Ct. 1949, 1956, 176 L. Ed. 2d 878, 888 (quoting McCulloch, supra, at 413, 418, 4 Wheat., at 413, 418, 4 L. Ed. 579). But we have also carried out our responsibility to declare unconstitutional those laws that undermine the structure of government established by the Constitution. Such laws, which are not “consist[ent] with the letter and [****59] spirit of the constitution,” McCulloch, supra, at 421, 4 Wheat., at 421, 4 L. Ed. 579, are not “proper [means] for carrying into Execution” Congress's enumerated powers. Rather, they are, “in the words of The Federalist, 'merely acts of usurpation' which 'deserve to be treated as such.' Printz v. United States, 521 U.S. 898, 924, 117 S. Ct. 2365, 138 L. Ed. 2d 914 (1997) (quoting The Federalist No. 33, at 204 (A. Hamilton); (alterations omitted); see also New York, 505 U.S., at 177, 112 S. Ct. 2408, 120 L. Ed. 2d 120; Comstock, supra, at 153, 130 S. Ct. 1949, 1967, 176 L. Ed. 2d 878, 902(Kennedy, J., concurring in judgment) [*560] (“It is of fundamental importance to consider whether essential attributes of state sovereignty are compromised by the assertion of federal power under the Necessary and Proper Clause . . .”). Applying these principles, the individual mandate cannot be sustained under the Necessary and Proper Clause as an essential component of [***481] the insurance reforms. Each of our prior cases upholding laws under that Clause involved exercises of authority derivative of, and in service to, a granted power. For example, we have upheld provisions permitting continued confinement [****60] of those already in federal custody when they could not be safely released, Comstock, supra, at 129, 130 S. Ct. 1949, 176 L. Ed. 2d 878, 894; criminalizing bribes involving organizations receiving federal funds, Sabri v. United States, 541 U.S. 600, 602, 605, 124 S. Ct. 1941, 158 L. Ed. 2d 891 (2004); and tolling state statutes of limitations while cases are pending in federal court, Jinks v. Richland County, 538 U.S. 456, 459, 462, 123 S. Ct. 1667, 155 L. Ed. 2d 631 (2003). The individual mandate, by contrast, vests Congress with the extraordinary ability to create the necessary predicate to the exercise of an enumerated power. This is in no way an authority that is “narrow in scope,” Comstock, supra, at 148, 130 S. Ct. 1949, 1964, 176 L. Ed. 2d 878, 898, or “incidental” to the exercise of the commerce power, McCulloch, supra, at 418, 4 Wheat., at 418, 4 L. Ed. 579 . Rather, such a conception of the Necessary and Proper Clause would work a substantial expansion of federal authority. No longer would Congress be limited to regulating under the Commerce Clause those who by some preexisting activity bring themselves within the sphere of federal regulation. Instead, Congress could [****61] reach beyond the natural limit of its authority and draw within its regulatory scope those who otherwise would be outside of it. Even if the individual mandate is “necessary” to the Act's insurance reforms, such an expansion of federal power is not a “proper” means for making those reforms effective. The Government relies primarily on our decision in Gonzales v. Raich. In Raich, we considered Page 13 of 26 “comprehensive legislation [*561] to regulate the interstate market” in marijuana. 545 U.S., at 22, 125 S. Ct. 2195, 162 L. Ed. 2d 1. Certain individuals sought an exemption from that regulation on the ground that they engaged in only intrastate possession and consumption. We denied any exemption, on the ground that marijuana is a fungible commodity, so that any marijuana could be readily diverted into the interstate market. Congress's attempt to regulate the interstate market for marijuana would therefore have been substantially undercut if it could not also regulate intrastate possession and consumption. Id., at [**2593] 19, 125 S. Ct. 2195, 162 L. Ed. 2d 1. Accordingly, we recognized that “Congress was acting well within its authority” under the Necessary and Proper Clause even though its “regulation ensnare[d] [****62] some purely intrastate activity.” Id., at 22, 125 S. Ct. 2195, 162 L. Ed. 2d 1; see also Perez, 402 U.S., at 154, 91 S. Ct. 1357, 28 L. Ed. 2d 686. Raichthus did not involve the exercise of any “great substantive and independent power,” McCulloch, supra, at 411, 4 L. Ed. 579 , of the sort at issue here. Instead, it concerned only the constitutionality of “individual applications of a concededly valid statutory scheme.” Raich, supra, at 23,125 S. Ct. 2195, 162 L. Ed. 2d 1 (emphasis added). Just as the individual mandate cannot be sustained as a law regulating the substantial effects of the failure to purchase health insurance, neither can it be upheld as a “necessary and proper” component of the insurance reforms. The commerce power thus does not authorize the mandate. Accord, post, at 649-660, 183 L. Ed. [***482] 2d, at 537-544 (joint opinion of Scalia, Kennedy, Thomas, and Alito, JJ., dissenting). ordering individuals to buy insurance, but rather as imposing a tax on those who do not buy that product. The text of a statute can sometimes have more than one possible meaning. To take a familiar example, a law that reads “no vehicles in the park” might, or might not, ban bicycles in the park. And it is well established that if a statute has two possible meanings, one of which violates the Constitution, courts should adopt the meaning that does not do so. Justice Story said that 180 years ago: “No court ought, unless the terms of an act rendered it unavoidable, to give a construction to it which should involve a violation, however unintentional, of the constitution.” Parsons v. Bedford, 28 U.S. 433, 3 Pet. 433, 448-449, 7 L. Ed. 732 (1830). Justice Holmes made the same point a century later: “[T]he rule is settled [****64] that as between two possible interpretations of a statute, by one of which it would be unconstitutional and by the other valid, our plain duty is to adopt that which will save the Act.” Blodgett v. Holden, 275 U.S. 142, 148, 48 S. Ct. 105, 72 L. Ed. 206, 1928-1 C.B. 324 (1927) (concurring opinion). The most straightforward reading of the mandate is that it commands individuals to purchase insurance. After all, it states that individuals “shall” maintain health insurance. 26 U.S.C. §5000A(a). Congress thought it could enact such a command under the Commerce Clause, and the Government primarily defended the law on that basis. But, for the reasons explained above, the Commerce Clause does not give Congress that power. Under our precedent, it is therefore necessary to ask whether the Government's alternative reading of the statute--that it only imposes a tax on those without insurance--is a reasonable one. B That is not the end of the matter. Because the Commerce Clause does not support the individual mandate, it is necessary to turn to the Government's second argument: that the mandate may be upheld as within Congress's enumerated power to “lay and collect Taxes.” Art. I, § 8, cl. 1. The Government's tax power argument asks us to [****63] view the statute differently than we did in considering its commerce power theory. In making its Commerce Clause argument, [*562] the Government defended the mandate as a regulation requiring individuals to purchase health insurance. The Government does not claim that the taxing power allows Congress to issue such a command. Instead, the Government asks us to read the mandate not as Under the mandate, if an individual does not maintain health insurance, the only consequence is that he must make [*563] an additional payment to the IRS when he [**2594] pays his taxes. See §5000A(b) . That, according to the Government, means the mandate can be regarded as establishing a condition--not [****65] owning health insurance--that triggers a tax-the required payment to the IRS. Under that theory, the mandate is not a legal command to buy insurance. Rather, it makes going without insurance just another thing the Government taxes, like buying gasoline or earning income. And if the mandate is in effect just a tax hike on certain taxpayers who do not have health insurance, it may be within Congress's constitutional power to tax. [***483] The question is not whether that is the most Page 14 of 26 natural interpretation of the mandate, but only whether it is a “fairly possible” one. Crowell v. Benson, 285 U.S. 22, 62, 52 S. Ct. 285, 76 L. Ed. 598 (1932). As we have explained, “every reasonable construction must be resorted to, in order to save a statute from unconstitutionality.” Hooper v. California, 155 U.S. 648, 657, 15 S. Ct. 207, 39 L. Ed. 297 (1895). The Government asks us to interpret the mandate as imposing a tax, if it would otherwise violate the Constitution. Granting the Act the full measure of deference owed to federal statutes, it can be so read, for the reasons set forth below. C The exaction the Affordable Care Act imposes on those without health insurance looks like a tax in many respects. The [****66] “[s]hared responsibility payment,” as the statute entitles it, is paid into the Treasury by “taxpayer[s]” when they file their tax returns. 26 U.S.C. §5000A(b). It does not apply to individuals who do not pay federal income taxes because their household income is less than the filing threshold in the Internal Revenue Code. §5000A(e)(2) . For taxpayers who do owe the payment, its amount is determined by such familiar factors as taxable income, number of dependents, and joint filing status. §§5000A(b)(3), (c)(2), (c)(4). The requirement to pay is found in the Internal Revenue Code and enforced by the IRS, which-as we previously explained--must [*564] assess and collect it “in the same manner as taxes.” Supra, at 545546, 183 L. Ed. 2d, at 472. This process yields the essential feature of any tax: It produces at least some revenue for the Government. United States v. Kahriger, 345 U.S. 22, 28, n. 4, 73 S. Ct. 510, 97 L. Ed. 754, 1953-1 C.B. 456 (1953). Indeed, the payment is expected to raise about $4 billion per year by 2017. Congressional Budget Office, Payments of Penalties for Being Uninsured Under the Patient Protection and Affordable Care Act (rev. Apr. 30, 2010), in Selected CBO Publications Related to Health [****67] Care Legislation, 2009-2010, p. 71 (2010). It is of course true that the Act describes the payment as a “penalty,” not a “tax.” But while that label is fatal to the ap...
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