Chapter 3 Business and the Constitution Constitutions serve two general functions o 1 They set up the structure of government allocating power among its various branches and subdivisions o 2 They prevent government from taking certain actions especially actions that restrict individual or corporate rights An Overview of the U S Constitution o The constitution exhibits the principle of separation of powers by giving distinct powers to Congress the president and the federal courts o Article I of the constitution establishes a Congress composed of a Senate and House of Representatives gives it sole power to legislate at the federal level and sets out rules for the enactment of legislation Article 1 Section 8 also defines when congress can make law by stating its legislative powers the commerce tax and spending powers o Article II gives the president executive power the power to execute or enforce the laws passed by Congress Article II Section 2 lists other presidential powers including the powers to command the nation s armed forces and to make treaties o Article III gives the judicial power of the United States to the Supreme Court and the other federal courts later established by Congress also determines the types of cases the federal courts may decide o Besides creating a separation of powers Articles I II and III set up a system of checks and balances among Congress the president and the courts Article I gives the president the power to veto legislation passed by Congress but allows Congress to override such a veto by a two thirds vote of each House Article I and Article II provide that the president the vice president and other federal officials may be impeached and removed from office by a two thirds vote of the Senate Article II states that treaties made by the president must be approved by a two thirds vote of the Senate Article III gives Congress some control over the Supreme Court s appellate jurisdiction o The constitution recognizes the principle of federalism in the way it structures power relations between the federal government and the states o Article VI makes the Constitution laws and treaties of the United States supreme over state law This principle of federal supremacy may cause federal statutes to preempt inconsistent state laws The constitution also puts limits on the states lawmaking powers o Article V sets forth the procedures for amending the Constitution The Constitution has been amended 27 times The first 10 of these amendments comprise the Bill of Rights Restrict both federal and state government action because of their incorporation within the Due Process Clause of the 14th Amendment The Evolution of the Constitution and the Role of the Supreme Court o Written book law is less important than what public decision makers actually Constitutional law is evolving o Formal constitutional change can be accomplished only through the amendment do process o Under the power of judicial review courts can declare the actions of other government bodies unconstitutional How courts exercise this power depends on how they choose to read the constitution This means that courts have political power The Supreme Court s justices are to a considerable extent public policy makers o Legislators are chosen by the people whereas judges especially appellate level judges often are appointed not elected The Coverage and Structure of this Chapter o The US Constitution limits government regulatory power in two general ways 1 It restricts federal legislative authority by listing the powers Congress can exercise These are known as the enumerated powers Federal legislation cannot be constitutional if it is not based on a power specifically stated in the Constitution 2 The US Constitution limits both state and federal power by placing certain independent checks in the path of each In effect the independent checks establish that even if Congress has an enumerated power to legislate on a particular matter or a state constitution authorizes a state to take certain actions there still are certain protected spheres into which neither the federal government nor the state government may reach o A federal law must meet two general tests in order to be constitutional 1 It must be based on an enumerated power of Congress 2 It must not collide with any of the independent checks o Today the independent checks are the main limitations on congressional power State and Federal Power to Regulate o State Regulatory Power The US Constitution does not list the powers state legislatures can The US Constitution does place certain independent checks in the path of exercise state lawmaking Also declares that certain powers can be exercised only by Congress Police power a broad state power to regulate for the public health safety morals and welfare o Federal Regulatory Power Article I Section 8 of the U S Constitution specifies a number of ways in which Congress may legislate concerning business and commercial matters The Commerce Power o Article I Section 8 states that The Congress shall have power to regulate commerce among the several states o The original reason for giving Congress this power to regulate interstate commerce was to nationalize economic matters by blocking the protectionist state restrictions on interstate trade that were common after the Revolution o Commerce Clause serves as an independent check on state regulation that unduly restricts interstate commerce o The Commerce Clause is also a source of congressional regulatory power o Gives congress power to regulate commerce that occurs among the states Today the commerce clause serves as an all purpose federal police power enabling Congress to regulate many activities within a state s borders intrastate matters o How did this transformation occur The Supreme Court s conclusion that the power to regulate interstate commerce includes the power to regulate intrastate activities that affect interstate commerce o Article I Section 8 of the Constitution states that The Congress shall have power to lay and collect taxes duties imposts and excises o The main purpose of this taxing power is to provide a means of raising revenue for the federal government o The taxing power however may also serve as a regulatory o If taxing power regulation uses a federal club congressional spending power regulation employs a federal carrot o Article I Section 8 also gives Congress a broad ability to spend for the general welfare o Congress can use the spending power
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