Jack Goldsmith, Martin Lederman and several others have suggested that the Supreme Court could avoid difficult constitutional decisions about the separation of powers in foreign relations in Zivotofsky v. Clinton by finding the Jerusalem passport law exceeds Congress’s enumerated powers.
I think the Art. I arguments are strong, but moreover I can’t see striking a statute down for exceeding enumerated powers (and without any federalism element) as a narrower or easier way to decide the case than dealing with the separation of powers issues. Moreover, all the constitutional questions can be easily avoided: as the petitioners have argued, supported by numerous amici, the case does not involve a conflict about recognition, and thus does not require any constitutional ruling.
However, the always insightful Seth Barrett Tillman has identified what may be the clearest enumerated power: the Property Clause (Article IV, Section 3, Clause 2): “The Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States…”). While primarily designed for government lands, its text and application extends to movable property.
The passport is government property, as its contents themselves declare. (I had previously noted this to suggest a problem with standing on the plaintiff’s part, but even baillees can have sufficient common law interests in a thing to create standing even under the most restrictive notions.) Congress’s powers under the Property Clause are extensive, and not limited to implementing the direct purpose or function of the piece of property. (For example, the Northwest Ordinance did more than just provide a minimum government for the territory, but included a variety of unrelated and discretionary policy measures.) Gary Lawson has argued that the scope of “needful rules” gives even broader discretion than the capacious “necessary and proper.”
The fact that the president claims this particular piece of government property as an instrument of foreign relations hardly matters. Surely Congress can regulate the architecture and other features of embassies under the same power.