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Hello, thank you for being here today, for discussion slash debate on healthcare in America.
We've got a couple great speakers today, leaders in their field. But before we get started,
I want to announce a couple other events that we have coming up. On April 1st, Professor
Patrick Geary will be here to discuss the separation of church and state, and on April
20, former Solicitor General of Texas, the Honorable James C. Ho will be here to discuss
the pros and cons of birthright citizenship. So I hope all of you can make it for that
as well. I also like to thank Andy Albertson and Michelle Pang for helping to put this
event together, and the Federal Society National Organization for their support, as well as
the John Templeton Foundation for their special funding for today's event and for the lunch.
I'd also like to thank Professor Tachikawa, who's traveled here from Japan, probably for
the pizza, like most of you. But thank you for being here, Professor. I guess before
we get started, the way that this event will happen, both speakers, or each speaker will
take twelve minutes to present their side of affordable care or Obamacare, and each
will have six minutes to rebut the other's presumptions and premise. So to get started,
let me introduce our speakers. We have Ilya Shapiro with the Cato Institute in Washington,
D.C., by way of Canada and Russia. Mr. Shapiro is--
Ilya Shapiro: And Mississippi.
And Mississippi. Mr. Shapiro is a Senior Fellow at the Cato Institute and editor-in-chief
of the Cato Supreme Court Review. Before joining Cato, Mr. Shapiro was a special assistant
and advisor to the Multi-National force in Iraq on rule of law issues and has practiced
privately in international, political, commercial, and antitrust litigation. He's a regular contributor
to a variety of media, including the Washington Times, the LA Times, National Review online,
The Daily Show, or excuse me, The Colbert Report, Comedy Central, CNN, Fox News, et
cetera. Mr. Shapiro will be arguing in favor of the Constitution, liberty, freedom, and
all things sacred.
Not all things sacred. I only have 12 minutes.
12 minutes. 12 minutes' worth of all things constitutional. Professor Leflar, our very
own Professor Leflar here, is a leader in his field as well. Professor Leflar teaches
an introductory torts class as well as health policy, bioethics, products liability, and
a variety of other topics. Professor Leflar's CV is also extensive, and we all know he is
an institution here at Arkansas. So please, help me welcome our speakers today, and at
the conclusion of their presentations we'll open it up for questions to the audience.
[ Applause ]
Mr. Shapiro -- I'm sorry, Professor Leflar, you'll go first.
I'm gonna move over here so I can see his slides.
Well, thank you, Josh. Thanks to the Federalist Society for putting on this event, and to
our distinguished guest, Mr. Ilya Shapiro, for coming to Fayetteville. He had to come
through bad weather, a long delay in Chicago last night, and he got here for this healthcare
reform debate. We really appreciate your presence here. Mr. Shapiro is clearly one of the nation's
foremost and well-known critics of the new healthcare law. He speaks at law schools around
the country. He's written friend of the court briefs attacking the law, and he's also an
advocate at the state level. In fact, this January he submitted testimony in favor of
some unsuccessful legislation right here in Arkansas, to take Arkansas out of the individual
mandate. That was a bill officially titled the Arkansas Healthcare Freedom Act, but which
might better have been labeled the Arkansas Healthcare Freeloaders Protection Act. And
I'm going to have more to say about healthcare freeloaders in a few minutes. Healthcare reform
is a pretty complicated subject to cover in a single hour, much less 12 minutes, but here's
how I'm going to try to do it. I'm going to -- my first turn I'm going to speak to the
merits of the new law, the Patient Protection and Affordable Care Act, which I will call
by its acronym, PPACA. And first, since its content has been so widely misrepresented
and misunderstood, I'm going to briefly set out the facts about what the law does and
what its impact on Arkansas are going to be. Second, I'm going to address what everybody
wants to hear about, the part of the law that says, come 2014, people have to have health
insurance or pay a penalty or a tax. And I'll explain why that makes sense in terms of both
ethics and economics, and why people like Mr. Shapiro, who want to repeal it or strike
it down, are really lobbying and lawyering on behalf of the irresponsible freeloaders
who want to foist most of their healthcare expenses on the rest of us. And then third,
and this will probably come in my second turn up, I'll speak to the constitutional litigation
over the law as to which Mr. Shapiro is much more of an expert than I am. Now, here's how
the Federalist Society publicized this debate around the law school at least, and I love
this. I think it's hilarious. And I see a lot of law students here, so I guess it must
have been a pretty effective marketing tactic as well. But let's get real. Here is what
PPACA actually does. As most of you know, it has no socialism whatever in it. We are
not setting up a national health service where most doctors work for the government, as they
do in Britain. In fact, what we've got is an imperfect but more or less intelligent
set of middle-of-the-road policies, many of which the Republicans themselves used to espouse
before the Tea Party days. So the first thing that this law does, is it goes most of the
way toward addressing the worst disgrace of American healthcare, the fact that about 50
million Americans don't have health insurance. The law doesn't get us all the way there.
It only reaches about two-thirds, or not quite two-thirds of the uninsured. So we still won't
have caught up with western Europe or Japan or Taiwan or Australia or Canada, which all
have universal coverage. But it does get us most of the way there. In expanding coverage,
the emphasis is on primary care, preventive care, family medicine, the kind of care that
will save hospital bills in the long run. PPACA outlaws the cruelest practices of the
health insurance industry, practices like yanking away your insurance if you develop
a medical condition and need care, or saying, sorry, you've reached your annual limit or
your lifetime limit, and we're not going to cover the expensive surgery or the chemotherapy
that you need, or hiking premiums to unconscionable levels for people with medical needs. Every
other country, every other advanced country, bans those practices and now, finally, America
does, too. PPACA sets up an organized marketplace called the Exchange. So people who don't get
insurance through Medicare, Medicaid, or their employer, can comparison shop for their insurance
through private companies. The idea is like going to Expedia or Travelocity to get your
air tickets or your hotel. You go to the Exchange for your health insurance, and it's open both
to individuals and to small businesses. This is capitalism in action. It's better organized
and better regulated, so consumers and small businesses don't get screwed on individual
and small group policies, like is so common now. Now, expanding coverage to 32 million
Americans who don't have it, costs a lot of money -- roughly a trillion dollars over ten
years at a time of serious concern about the national deficit. But that cost is paid for.
Who pays? Well, most of the revenue comes from the wealthy people, couples that make
over 252 thousand a year. They get a zero point nine increase, nine percent increase
in Medicare withholding, a two point nine percent increase in unearned income tax; also,
the companies that will benefit from all the new customers; the drug companies, the medical
device companies, the health insurance industry, they have to pay in. The nonpartisan Congressional
Budget Office estimated that in the long run, this bill is better than revenue neutral.
It reduces the deficit. According to the CBO, scrapping the law would have the effect of
piling on more red ink by far onto the federal budget. This law is not perfect. It contains
many a compromise, like any complex law. But, I think it moves America in the right direction
toward giving every American the right to at least a fair basic level of healthcare.
Now, the Arkansas impacts. The law's nationwide benefits are evident, but the law disproportionately
helps states like Arkansas that have relatively low income and lots of small employers. Most
Arkansans in the private sector work in small businesses or for themselves, and most of
them don't have health insurance as a job benefit. Now, here's how Arkansas compared
with the rest of the country on health insurance through employment in 2005, and the numbers
are quite a bit lower now, in 2011. A lot of people have lost their employment coverage.
So, people have to go to the individual market, where premiums are much higher. You get a
worse deal for your money, if you can afford it at all, and the insurance companies often
yank the rug out from under you when you need care the most. Mr. Shapiro, we've got more
than half a million uninsured working-age people here in Arkansas, and most of those
uninsured people, two-thirds of them, are not unemployed; they're not welfare recipients.
These are people in families with full-time workers. So you might say, well, hey, they
can always go to Medicaid's, get their healthcare that way. Well, if you think that, sir, you
would be wrong. It's true that three-fifths of Arkansas children do get their healthcare
through Medicaid, through our Our Kids program. But, among adults, care for the blind and
disabled, you only qualify for Medicaid in Arkansas if you have income less than seventeen
percent of the federal poverty level. And for a family of four, that amounts to 3,750
dollars -- not per month; per year. So in Arkansas, if you're an adult and you have
an income, your family of four has an income of 4,000 per year, Mr. Shapiro, you are too
rich to qualify for Medicaid. Now, the health reform law is going to change all that. Instead
of qualifying for Medicaid at seventeen percent of federal poverty, it's going to be 133 percent
nationwide, about 29,000 dollars for a family of four. Now, there'll be federal assistance
with premiums for people with incomes above 29,000 dollars on a sliding scale. So basic
preventive care, affordable care, is going to be available to almost everyone. Right
now, five out of eight bankruptcies in the country are linked to medical bills. Under
PPACA, that will largely be a thing of the past. Now, we come to the most controversial
part -- the individual mandate. And first, I'm going to explain exactly what that is;
and second, I'm going to explain why it's there; third, I'll point out why Mr. Shapiro's
solution, trash the mandate, would simply protect healthcare freeloaders and would undercut
the whole structure of the law because of the operation of the vicious cycle of adverse
selection. Now, here's what the law actually provides. First of all, U.S. citizens, legal
residents, have to have healthcare coverage starting in 2014 or else they have to pay
-- you can call it a tax, a penalty, whichever. The amount of that is about 700 a year, up
to a max of 2,100 per family or two and a half percent of household income. Note that
that's a lot less than you got to pay for healthcare insurance. That's how you can have
the choice to go and pay that penalty instead. And the penalty phases in starting with 95
bucks in 2014, and then up to the rest of it in 2016. Now, so what you see is that mandate
is really the wrong word, because you can choose to pay the penalty. Insurance is not
compulsory. That's a point that critics of the law generally don't point out. So what
it is really is play or pay. It's your choice. But as an ethical matter, people ought to
play even if paying the penalty saves them money. And here's why. For me, the point is
personal responsibility. None of us can tell when we're going to be in a car crash or come
down with cancer or some other expensive chronic illness that we don't have the personal resources
to pay for, unless we're Bill Gates or somebody like that. Choosing not to buy health insurance
that'll cover the cost you can't afford if you fall ill is the ethical equivalent of
choosing not to buy the vehicle liability insurance that'll cover the cost you can't
afford if you hit somebody. Simple as that. Well, you might say even if I don't buy health
insurance, I can always go to the emergency room; get care there. Well, that's true, thanks
to the federal anti-dumping law. And lots of people do. More than half the acute doctor
care visits made by patients without health insurance were to emergency rooms. But that's
expensive, and that's not as good as regular primary care. You're missing the preventive
care that would have detected the cancer or the heart disease, so you wind up with expensive
hospital care and unnecessary illness and preventable death. And who pays for that expensive
hospital treatment that could have been avoided by proper preventive care? Well, the uninsured
do pay for some of it -- about a third. And the rest is paid by government, by charity,
by cost-shifting to insured patients; in other words, by the rest of us. We all pay for it
through higher premiums and taxes. So the people who don't buy health insurance are
foisting their bad luck or their failure to take care of themselves on the rest of us.
They're freeloaders. It's irresponsible. And this is the point that Republicans in the
1990's healthcare debate understood full well. This is the point that Republican Governor
Mitt Romney of Massachusetts fully understood when he put through that state's reform, including
the individual mandate. It's the point that Senator Charles Grassley, ranking Republican
member of the Finance Committee in the Senate, fully understood in his negotiations over
PPACA. Mr. Shapiro, I always believed that Libertarians did for individual responsibility,
but when you support the Arkansas Healthcare Freedom Act, when you seek the repeal or overturning
of the individual mandate, then what you're doing is you're protecting the freeloader's
right to burden the rest of us with their risks. As Governor Romney said when he signed
the Massachusetts law, a free ride on the government is not libertarian. So here's the
point. The ethical policy recognizes that we all need healthcare; everybody should chip
in. Those that have a hard time paying for all the premiums, well, we'll help them out
to some extent. I think that's the right thing to do. And Mr. Shapiro, I respect your right
to disagree, so have at it. I'll talk about the rest of these points on my second turn
up.
[ Applause ]
Well, thanks very much for having me. I don't have any PowerPoint slides. In fact, I consider
PowerPoint to be unconstitutional, and I hope all of you are enjoying your pizza. I know
that's why at least the law students among you are here, and I appreciate that. I remember
being a law student. Enjoy it while it lasts, because at some point in future you might
have to have salads for seven days before you're allowed to purchase a pizza, or something
like that. And also, it's very interesting having this debate at the University of Arkansas,
where my debate opponents name is on the law school, his father, but still, it's a little
intimidating, and of course, the place where the Clintons were on the faculty. Now, I was
in high school when HillaryCare was the issue. A lot of you, I guess, were in elementary
school. I barely remember what the issue was, but I thought, I'm thinking about the Democratic
primaries this last time around, and I thought that the Democrats did not choose the candidate
that wanted to have the trillion-dollar bailout of insurers and pharmaceutical companies,
impose all this complicated new regulation and whatnot. Maybe Hillary was elected, after
all. We kind of live in a bizarre universe. But look, I'm a simple constitutional lawyer.
I don't have the healthcare policy expertise or healthcare law expertise that Professor
Leflar does. In fact, I'll stipulate to every policy argument and healthcare regulatory
argument that he wants to make. You want to debate alternatives, policy alternatives to
ObamaCare, ask my colleague, Michael Cannon or Mike Tanner or any number of people across
the country who specialize in this sort of thing. This debate is not about healthcare;
it's about the Constitution. It's about the first principles under which we live. It's
about whether our federal government is one of delegated and enumerated and therefore
limited powers, or one of a general police power, like the states have. I'm sure one
of the few things that Professor Leflar and I will agree on here is that the status quo
is not acceptable; the horror stories about Arkansas children being covered and making
4,000 dollars a year -- all of that, that's bad. We shouldn't have a situation where that's
the case. The technical legal term for our existing pre-Obama care system is that it
sucks. That's the term of art that I would use. Now, that doesn't mean that anything
to replace it is either good policy or constitutional, and of course, those are two separate questions.
And it doesn't mean that the only alternatives are status quo, universal government single
payer, or ObamaCare. There are plenty of different policy proposals that have been on the table.
You can read Cato. If you don't like Cato, you can read other people. There's different
ways of reaching the goals of accessibility and coverage and cost control and all these
different things. We have a very perverted system. Nowhere in the world has your healthcare
been tied to your employer. That's dumb. It's an accident of history, because we had wage
and price controls during World War II, and employers to compete for workers, started
offering perks because they couldn't increase salaries, and one of those perks was healthcare.
And that's where it was built; get rid of that tax incentive for employers to do that
and you'll have a much more robust system for people to buy health insurance, just like
they buy car insurance. Your car insurance isn't tied to your employer; why should your
health insurance be? Which raises the point about the mandatory car insurance, just to
get that off the table. Two things there. First of all, it's states that impose that
requirement on you, not the federal government. Again, states have police powers to legislate
for the health, safety, and welfare and morals of their populace; federal government doesn't,
gets its powers, the enumerated, 18 enumerated powers in Article I Section 8 of the Constitution.
This is Cato Constitution, by the way. It's a two-for; you buy the Constitution, you get
the Declaration of Independence for free. And secondly, if you don't drive, or if you
don't drive on public roads, you don't have to buy car insurance, though. It's uncontroversial
that driving is a privilege, not a right, and it's a choice. Requiring, states requiring
someone to buy health insurance because they choose to drive is very different from the
federal government requiring you to buy health insurance because you're alive. And I'm glad
that all of you are here. I'm glad of the -- heartened by the continued sustained interest
in this debate across the country and the commentary and the e-mail exchanges that I
have, because you're clearly showing that you're wiser than Nancy Pelosi, who was asked
what she thought about the constitutional concerns, and the response of course, was,
are you serious? Because the Constitution is the last refuge of the scoundrel that doesn't
have any policy arguments to make. We're in a post-constitutional world, where Congress
doesn't have any limits, other than what it judges is in the general welfare. As John
Conyers called it, the good and welfare clause; if Congress thinks it's good, then it's obviously
constitutional, unless it makes the argument that it infringes one of these so-called fundamental
rights that take, five judges take a vote on the Supreme Court and then it becomes fundamental,
and so forth. And that's why this debate is about federal power rather than individual
rights, because the Court's jurisprudence forecloses a lot of the type of freedom of
contract and economic liberties and so forth, arguments that could be made on the right
side. Now, on the power side, I was heartened to see if any of you have read, skimmed at
least, Judge Vincent's decision in the Florida case last month, the 26-state lawsuit. There
are now 28 states challenging ObamaCare. Those 26 down there are plus Virginia on its own,
Oklahoma on its own. That's unprecedented. There's a lot of things unprecedented about
this case, but it's unprecedented to have a majority of states suing the federal government
for something like this, on a fundamental piece of domestic legislation. But you look
at the beginning of Judge Vincent's opinion. Before you even get into the legal analysis,
and he quotes from my favorite part of the Federalist papers, or maybe any part of political
theory. Federalist 51, right. If men were angels, we'd live in Utopia; we don't need
a constitution; we don't need anything; everybody's happy. If angels ruled over men, fine; we'd
have perfect government, good. Again, don't need a constitution, everything, we'd go about
our lives, but the angelic government would do everything right. But in the real world,
where it's men governing men, we first have to empower the government to govern in certain
legitimate areas, and then check it. Right, that's our whole theory. That's our whole
basis on which this republic was founded; checks and balances, separation of powers,
federalism. All these different concepts stem from the idea that we don't trust the government.
Yes, we need it, because the Articles of Confederation wasn't working; we need a central government
to protect the national defense, to regulate interstate commerce. Wait, what does that
mean? To make commerce regular. It turns out that states were putting up all sorts of protectionist
barriers to trade among themselves under the Articles of Confederation. So clearly, we
need a federal government to strike down those barriers. That's the basis of the Commerce
Clause. It wasn't an authorization for Congress to start regulating. That's changed; that's
shifted, but the original conception of the Constitution, one that survived even through
modern doctrine, is that we are a government, the Congress, the federal government has limited
powers, and it can't go beyond those. There has to be some limiting principles that's
left. The other powers are retained by the states and the people. If the individual mandate
at least -- there are other claims against ObamaCare -- but if the individual mandate
is allowed to stand, ladies and gentlemen, then there are no principled limits left on
federal power. You throw out the Constitution, and you leave it to Congress checking itself.
You throw out checks and balances, courts have no role because we have to defer to Congress,
and it's wise judgment of what its own powers are. Because what is the government's theory?
That two courts have accepted, right, the kind of score -- this isn't how we do law
-- but the score in the district courts are that two went for the government; two went
for the challengers, right, and those are now up on appeal. But the government's theory
that these two courts have accepted was that the decision not to purchase health insurance
is an economic one, that in the aggregate has a substantial effect on interstate commerce.
Well, that's not a limiting principle, because anything -- the decision to do or not do,
buy or not buy, anything, is an economic decision that in the aggregate has a substantial effect
on interstate commerce. My decision to fly here yesterday, my decision to not go to Starbucks
today; your decision to go to law school. What's more related to interstate commerce
than your decision to go to law, your choice of a profession? We have a big immigration
problem, right, so why don't we with one fell swoop solve that and solve the problem of
us having a too litigious society by saying, this half of the room, you no longer can go
to law school; you have to be gardeners, and this half has to be bus boys and then we deport
all the immigrants, and all these problems are solved, because Congress can regulate
these economic decisions that you're making. These are affirmative economic decisions.
This isn't sometime in the future that you'll need healthcare. You're already in law school
affecting the interstate economy. This goes beyond anything that Congress, the federal
government, has ever tried to do. Never, I repeat never -- and the CBO in 1994, when
it was evaluating HillaryCare, said this originally; don't take it from a Libertarian think tank
or what have you -- never has the federal government required people to buy a good or
service under the guise of regulating commerce. It's unprecedented. Think about the foundational
commerce clause cases, right. Wickard versus Filburn in 1942, the Agricultural Act setting
quotas for farmers to meet, grow their crops and they have to take them to market. And
this one farmer wanted to consume his wheat on his farm and not take it to market, and
he was set upon by federal agricultural agents and eventually fined. The Court okayed that,
because if all the farmers who are engaging in this sort of economic activity of farming
did this and didn't meet their quotas, didn't bring it to market, then that would have a
substantial effect in the aggregate on interstate commerce. But nobody had to buy wheat. You
could see Congress wanted us to support the wheat farmers or have wheat provision; everybody
has to buy wheat. Well, nobody had to become farmers. Fast forward to the '60s, the Civil
Rights Act, or the Civil Rights era, the Court decisions that if you run a hotel, you run
a restaurant, you have to serve people without regard to race and other various protected
classes. But nobody has to become a hotelier or restaurateur. And individuals in and of
themselves are not economic enterprises. Fast forward again to 2005, the most recent Commerce
Clause case. We move from wheat to weed, right, medicinal marijuana, the Raich case. There,
under the Controlled Substances Act, the national regulation of drugs, Congress wanted to come
in and shut down the personal growth and consumption of marijuana for medicinal uses -- legal under
California law, under the state law. And the Court okayed that, because they were engaged
in economic activity, growth and consumption, and if everybody did this, then that would
foil the again, the national regulatory scheme. But never under the guise of regulating Commerce,
having a national scheme, has Congress required people to engage in economic activity, to
go into the private marketplace and buy a particular product. This is very different
from single payer; this is very different from Medicare, which would be less problematic,
and probably under modern doctrine not problematic as a matter of constitutional law -- as opposed
to policy, which is a separate discussion, and then you don't want me here, because I'm
not a healthcare expert. I'm a constitutional lawyer. Whatever Congress does, whether it's
good policy or bad policy, it's a separate question of wherever it has -- whether the
Constitution grants it power to do that. Okay, so the Commerce Clause, as I said, you can't
justify it that way. This goes beyond the activity, inactivity, distinction. Just calling
it an economic decision swallows the hole that doesn't leave any sort of limiting principle.
Well, what about the necessary and proper clause, right, because Congress not only gets
to regulate commerce and establish post offices and raise armies, but it also gets to do things
that are necessary and proper for exercising those other enumerated rights -- enumerated
powers; excuse me. Well, it turns out that what we think of as the Commerce Clause doctrine,
the substantial effects test, the outermost bounds, under Raich, under Wickard, whatever
the collected wisdom, as cabined by Lopez and Morrison, the short-lived federalism revolution,
as I call it, failed insurrection -- that already discounts for the necessary and proper
clause. You can't just, as Chief Justice John Marshall said, you can't just build inference
upon inference and have this infinite causal chain. This is necessary to execute this,
which is necessary to execute this, which is necessary to execute this. Going back to
Wickard and the cases from the New Deal in the '40s, Darby and LRB, all these foundational
cases, they cite McCulloch versus Maryland; they don't cite Gibbons versus Ogden. They
weren't a redefinition of Commerce. They were a redefinition of what it means to be necessary
and proper, that you can effect, regulate local activity when it has a substantial effect.
And so you don't get a further necessary and proper extension; that's already included
there. Moreover, Congress can't create its own necessity. It can't rub Aladdin's lamp
and wish for infinite wishes, which is what the argument here is, right, because you can
imagine some sort of national regulation, be it of healthcare, be it of the auto industry,
be it of the housing industry, which would only work if -- insert your weird thing, the
housing market collapses, so in future, everybody has to buy a Fannie Mae approved certain type
of mortgage; you can't buy a house any other way, to protect our national system of housing
market. The next time the auto industry is in jeopardy, we have a regulation that works
only if people are required to buy a Chevy -- setting aside the issue of the government
owning GM and whatnot. The same thing here. There's a fundamental difference between having
the power to regulate an industry -- here, the healthcare industry, requiring coverage
of this and that, having certain accounting principles; in the auto industry, seatbelts
requirements, fuel emission standards -- and requiring you to buy that industry's product.
That's a qualitatively different thing. So just because a 1944 case said for the first
time -- and nobody's disputing this; nobody's challenging this, because who's attacking
ObamaCare -- said for the first time that Congress can regulate insurance, whereas before
it couldn't. Nobody's attacking that, but just because Congress can do that does not
follow that then Congress can do anything that has the word healthcare or health insurance
in the bill. And finally, it's been justified -- well, I'll finish with the proper prong
of necessary and proper. If you're curious or Professor Leflar raises the taxing power
issue, I think that's a red herring, because this is a penalty. Obviously when I tell you
to do something, I'm not taxing you; I'm mandating, I'm commanding that there's separate issues;
but why this isn't a tax, if it were a tax, why it's unconstitutional, et cetera, we can
get into that if you're interested. No court has accepted this theory than the ones that
ruled for the government. But on the proper prong of necessary and proper, just like the
federal government cannot commandeer state officials to do their bidding -- and for the
first time in 1992 the Court held this; there was never a state commandeering decision under
the Commerce Clause or Tenth Amendment before then -- this violates the proper prong of
necessary and proper, because again, there would be no limiting principle on federal
power, it destroys federalism, and Congress can't just go around commanding people to
do things under the guise of regulating commerce. It can in certain narrow contexts. We know
what mandates we have from the federal government -- serving our federal juries, filing and
paying your income taxes, registering for selective service and being drafted. Of course,
these are tied to selective, explicit exercises of enumerations of power, not Congress exercising
a power in some way to regulate commerce and then tying it to that. So if this is allowed
to stand, then we throw away the Constitution. I guess I'm out of a job, because there's
nothing to argue about any limits or anything, and it's not the republic that I recognize
even learning about even in my grade school in Canada. So thank you.
[ Applause ]
So Mr. Shapiro's passion carried him a little bit longer. We'll give you a few extra minutes.
No, that's fine. Thank you.
I'm going to begin by confessing that I'm no expert on constitutional law. I'm not a
constitutional lawyer, and Mr. Shapiro is far better grounded than I am in the arguments
and the precedents. So what I'd like to do here then as an amateur on that field, I'd
like to share with you a general and admittedly sketchy outline of what some of the country's
leading constitutional law scholars who favor PPACA are writing. None of this is original
on my part, but it does link to what I think is at least a sensible and defensible view
of our constitutional structure. Mr. Shapiro said this debate is not about healthcare;
it's about the Constitution. Well, it's about both. It's about whether the elected Congress
has the power to, through the democratic process, try to fix these difficult problems of the
healthcare system's serious deficiencies. And my position is that the PPACA should be
upheld as constitutional for two principled reason, quite apart from the substantive merits
or flaws of the law. First of all, the voters of the United States elected Obama and the
democratic Congress in November of 2008 to get healthcare reform done. And the legislative
process was a spectacularly intricate and delicate one, but ultimately they did the
job. This is how a republic works. No one is saying that Congress passed that law by
any kind of illegitimate procedure. They didn't; they followed the rules. And for unelected
federal judges, to strike down this law, at the least would be a profoundly disturbing
invasion of the democratic process. But Mr. Shapiro and his allies say Congress overstepped
the constitutional bounds here. He suggested that well, healthcare reform really does need
to happen; coverage really does need to be expanded. Well, so how are we going to accomplish
that? Are we going to let the states do it? Are we going to let the states finance it
because Congress doesn't have the power to do what it did? My response is that this is
a critical national problem, not one the individual states can handle, especially states like
Arkansas. And our constitution is explicitly designed to give Congress the tools to address
national problems. Now, let's break it down into the Constitution's specific grants of
Article 1 powers. As Mr. Shapiro pointed out, there are some different relevant provisions
in Article 1 Section 8. One is of course the power to lay and collect taxes to provide
for the general welfare of the United States. One is the power to regulate Commerce among
the several states, and then the power to make all laws which shall be necessary and
proper for carrying into execution the foregoing powers. Now, regarding the taxing power, I'm
not going to argue very much with Mr. Shapiro over that. There's little question that if
Congress had enacted a law instituting for example, a single payer system like Canada's,
and then paying for healthcare reform out of general revenue, and then covering the
cost by raising the income tax or the corporate tax or whatever other tax, well, Congress
would have had the power to do that under Article 1 Section 8 Clause 1. But instead,
instead of going to single payer, Congress decided to keep the private insurers at the
center of the system. And to pay for it, in addition to the increased -- under an income
tax and so forth, then to help pay for it through the play or pay individual mandate.
Now, does that count as a tax under the taxing power of Article 1? Congress didn't call it
a tax. I think probably they wanted to avoid the political fallout of saying that they
raised taxes. I don't know what the courts are going to decide on this, but as Mr. Shapiro
said, they pretty much focused on the other two, the Commerce Clause and the necessary
and proper clause. So let's go to the Commerce Clause. And we'll start right off with the
sharpest attack. Can Congress regulate the inaction of not buying health insurance? Can
Congress say to us, play or pay? Well, the first point to observe is -- again, being
no expert, but it seems to me this is an unplowed juridical fields. We don't have any direct
authority one way or the other. The Supreme Court has never suggested that inactivity
that a play or pay mandate is somehow foreclosed from general congressional authority over
economic matters relating to interstate commerce. Second, and Mr. Shapiro is candid enough to
say this, there's a strong argument that individual consumer's decisions not to buy health insurance
now, but rather to wait until they get sick of hurt and then try to pay the bills directly
then, those are economic decisions that in the aggregate, certainly do have a significant
effect on interstate commerce. In fact, it seems to me that that fact is indisputable.
Now, Mr. Shapiro and his colleagues raised the specter of government exercising unlimited
power over individual choice. And some of his colleagues suggest that the division between
acting and inaction is one good place to draw that line. But they would find a skeptic in
none other than Justice Scalia, who in a different healthcare context, had this to say: "It would
not make much sense to say that one may not kill one's self by walking into the sea, but
may sit on the beach until submerged by the incoming tide; or that one may not intentionally
lock oneself into a cold storage locker, but may refrain from coming indoors when the temperature
drops below freezing. Even as a legislative matter," Scalia says, "in other words, the
intelligent line does not fall between action and inaction." So the point is, what affects
Congress is a difficult line to draw, and a deferential court would honor reasonable
legislative judgments about when economic activity is or is not present. Finally, the
necessary and proper clause. Here, we go back to the reasons for the play or pay mandate.
Most importantly, besides the ethical reasons against freeloading that I was talking about,
are the economic reasons, and they're easy to understand. Requiring insurers to accept
all applicants, regardless of health condition, is a primary goal of the law. To put together
a big enough pot of money to cover the newly insured and the people that, under the present
flawed system, are denied coverage or cut off because of pre-existing conditions, well,
you got to have everybody paying in. You've got to include in the people that want to
freeload. You've got to include in the healthy, young people who think that they're invincible
and will never get sick or will never be in a car crash. If you don't include them all
in; if only the relatively unhealthy are in the insurance pool, then premiums go up, adverse
selection takes over, more people drop out, premiums go up more, and it's the death spiral
for cost control. That's just how the insurance industry, the insurance business works. So
in other words, if moving the country closer toward universal health insurance is a legitimate
national goal, and if we're going to keep a private health insurance industry in this
country, then a democracy's legislative choice to help finance achievement of that goal through
a play or pay mandate is a necessary and proper exercise of Congress's Article 1 power. Thanks.
[ Applause ]
First of all, I should have touched on this in my opening remarks, Professor Leflar said
that buying insurance under the mandate or the minimal coverage provision, isn't mandatory.
You have a choice. You can either buy it or pay the penalty. Well, I'm curious whether
you also have a choice when a mugger comes up to you and says, your money or your life.
We have a doctrine of unconstitutional conditions. We understand that at some point there's coercion.
Here, there's government coercion. What if you don't want to do either of those things?
And just because the government could raise income taxes or increase Medicare payroll
taxes and fund all sorts of different programs that way, does not mean that it can also force
you to buy health insurance or do something else. Each one of these is a different constitutional
analysis. And it matters, because the text of the Constitution, because without the government
getting its authority from the Constitution, then it gets it from the point of a gun, and
we just have a majority rule. We have to address Professor Leflor's political point, a hugely
unpopular bill from the very beginning, that caused Ted Kennedy's seat in Massachusetts
to go to a Republican, that caused the rise of the Tea Party movement. We've had such
a weird couple of years politically, ninety percent of which is tied to the unpopularity,
which unpopularity is tied to people understanding -- they're not just disagreeing with the policy,
but asking the question, where do you get the power to do this? There's a video of former,
thankfully, Congressman Phil Hare of Illinois, who was asked this -- one of these guerrilla
YouTube people. And he said, well, I don't care about the Constitution. I'm trying to
take care of my constituents' interests, not understanding the contradiction between those
two statements. Now, look. The threat to democracy, the threat to our system of government, and
rule by consent of the governed, does not come from courts striking down legislative
action. They come from any part of government not fulfilling its constitutional duties.
This whole debate about judicial activism just means a decision I disagree with. Conservatives
say X, Y and Z are judicial activist cases; liberals say A, B and C are. It doesn't mean
anything. For a judge to notice that Congress is going beyond its constitutional power and
do nothing about it, and do nothing, is judicial abdication. And if that's the position that
Professor Leflar or any of the other advocates for ObamaCare take, then I guess they're against
Marbury v. Madison and judicial review. What we're arguing is conflicting theories of the
Constitution. I think we should all agree that judges should strike down pieces of legislation
that are constitutional, either as going beyond the government's powers or violating individual
rights. And I think those two are two sides of the same coin. Necessarily, when the government
goes beyond its powers, it violates the retained rights. Necessarily, when rights are being
violated, government is doing something it doesn't have the power to do. On the death
spiral, freeloading, cost-shifting, these sorts of policy arguments. First of all, again,
to the extent they're valid policy concerns, that's a separate question from the constitutional
angle. Yes, of course, you cannot require insurers to cover people with pre-existing
conditions and not have, force healthy people to get into that same pool. I mean, by doing
that, you of course, eliminate the insurance industry. Our insurance industry with ObamaCare
is no longer insurance; it's publicly regulated payment shifting and redistribution, and I
don't know what you want to call it. Even before ObamaCare, our insurance industry was
more or less a public utility, with guaranteed rates of returns for insurers. Their lobbyists,
the big companies, they win either way. Don't worry or celebrate insurers or pharma getting
into the neck. They're wining regardless of what happens. But just because it's essential
to that particular scheme that Congress has designed to have the individual mandate doesn't
make the individual mandate constitutional, or necessary and proper, or any one of these
things. You could have -- this is where these broccoli or asparagus examples come up, right,
or the buying Chevy example that I gave. Let's say that -- well, studies show that, scientific
studies show, medical studies, that diet and exercise have a much greater effect on both
healthcare outcomes and on taxpayer spending on healthcare than the ownership rate of insurance
policies. So if anything, there's greater constitutional warrant to require people to
buy, name your X healthy product, whether it be broccoli, asparagus, some other vegetable
or some other thing -- or to join gyms. Now, there's a separate question about whether
Congress can then actually physically take that broccoli and shove it down your throat,
or force you to work out on that elliptical, chain you to it or something. That's a slightly
different question. But requiring to purchase that, I don't see a difference between, and
as I said, there's a greater warrant for that than for buying the insurance. Scalia's healthcare
opinion, I thought Professor Leflar was going to talk about his concurrence in the medicinal
marijuana case, which turns on activity and also turns on Scalia's drug war exception
of the Constitution. Based on what Scalia's done since, he is not a swing vote here. I
think he's firmly on the side of striking this down. And moreover, in the Koran case,
that particular individual euthanasia case and whatnot, there's no government coercion
there. It's a fundamental right case. It's analyzed completely differently. I guess I'll
clear up one other thing about necessary and proper, because I got into a little bit too
much legalese. When I was talking about those early wheat cases, Wickard, the New Deal cases,
why it's important that they were all citing Chief Justice Marshall's McCulloch opinion
rather than his Gibbons opinion is because the former is about necessary and proper while
the latter is about the Commerce Clause. So if you look at how Chief Justice Marshall
talks about for something to be necessary and proper, you don't evaluate whether something
is more or less necessary. In that scion of limited government, Alexander Hamilton agrees,
there has to be a line of justiciability. If you don't evaluate, well, that's necessary
enough. That's not what you do. You see whether something comes within the letter and spirit
of the Constitution, and precisely because there is no authorization for Congress to
mandate things under the guise of regulating interstate commerce. McCulloch versus Maryland
and all the necessary and proper cases going back to our founding, militate against upholding
the individual mandate. Again, I can't emphasize enough. This is not about healthcare. There's
lots of different markets that we can talk about, the food market, the housing market;
you need food and housing before you need healthcare, that Congress can do. There's
lots of different things that Congress can do in the national healthcare arena, but this
goes beyond any existing power under modern doctrine. And if this mandate is struck down,
no other law, no other opinion -- Wickard, Raich, nothing, needs to be struck down with
it, because this is so singularly beyond anything that's happened. This so singularly eviscerates
what remaining limits on federal power there are under modern constitutional law, that
really, this is a turning point. And I think people recognize this, the overwhelming unpopularity.
I think the latest poll -- just of the mandate, not ObamaCare altogether, but just of the
mandate, is seventy percent people against it. That might help steal the spine of some
judge or justice in the future. I can only hope.
[ Applause ]
We're going to go ahead and open it up for questions for anyone that's got a question
for these guys.
What you were talking about was very interesting, but the fact that we've got a table out here
that's stacked heart attack high with pizza, with white flour, bad fat, salt, processed
meat, says more about this issue than I think everything that you've said up here. Benjamin
Franklin said, "An ounce of prevention is worth a pound of cure," and that "a stitch
in time saves nine." You add up the fact that we can be healthy. Green tea is significant.
Apples, blueberries -- the simple things that are available to us right here at Wal-Mart,
everywhere, is significant. We don't need healthcare; we need to be healthy. Thank you.
If anyone--
And that's why I listen to my doctor rather than the government when I--
You can get seconds when it's over.
So why doesn't the state of Arkansas -- I was a resident of Massachusetts for eight
years prior to moving here. Why doesn't the state of Arkansas just do what Massachusetts
did on the state level instead of asking the national government to mandate it, if you
will?
Well, it's a reasonable question. The question is, why doesn't Arkansas, why don't the different
individual states do it on the state level and fix their healthcare systems on the state
level rather than leaving it to the federal government to accomplish? And there are a
couple of points that you got to make about that, because it cuts to the heart, really,
of Mr. Shapiro's entire argument. This is a federalism question, is this a matter for
Congress to take care of, for Congress to address as a national issue, or is it something
that is properly and necessarily left to the states? Good question. My answer to it would
be that healthcare, the healthcare problems that we have are irretrievably and inevitably
national in scope, and that a single state can't fix the problems in and of itself, particularly
states that have less resources, Arkansas being among those. We are left in Arkansas,
as I pointed out, with a terrible situation of more than half a million people without
basic health insurance. They cannot get it. And that foists burdens on all the rest of
us, the taxpayers and the people who are fortunate enough to have it. And these are issues that
single state-by-state solutions, although they can serve as guideposts for other states
-- Massachusetts has done so; Utah, Hawaii has done so -- they won't take care of the
whole national problem. And so, I think that part of what for example, the Commerce Clause
is all about, is saying to Congress, if it's a national problem, then you may address it
under interstate commerce, and you have the means, and they're generous means, through
the necessary and proper clause, to accomplish that in some kind of national light, in some
kind of reasonable way. Now, as Mr. Shapiro said, there are many possible approaches to
addressing those problems. Congress has chosen one among those approaches. As long as there's
a rational basis for proving that it's democratic choice of the people that we elected, then
the courts should not strike it down.
Well, this is why we're against RomneyCare and we don't hesitate in tweaking our friends
at the Heritage Foundation for inventing that, and it's probably why Mitt Romney's going
to have trouble in the Republican primaries the longer that this stays a salient issue.
But states -- as Romney said, and continues to say to try to kind of massage his points
-- states should have and do have flexibility to resolve their own policy issues as they
like. What's more local -- not even state, but local, than somebody going into their
doctor to have a check-up or somebody having a heart attack. That's very different than
regulating an industry. Just like states are the ones that criminalize *** and robbery
and *** and these sorts of things; not the federal government. Although the federal government
has overfederalized a lot of different laws. For example, the federal carjacking law. It
wasn't that carjacking was legal until Congress passed a law against it. It was always illegal
to use weapons to steal somebody's car and rough them -- not like any state allowed that.
But just like in the Morrison case in 2000, which struck down the Violence Against Women
Act, the theory there was that when women are threatened or attacked, assaulted, that
affects their productivity which affects interstate commerce. And the Court said, well, no, that's
not too attenuated from economic activity. So similarly here, this is properly under
the purview of the states, and then you got the issue of whether one of your individual
rights is to refrain from having -- that's a separate type of constitutional argument.
But states, yeah, absolutely, should have flexibility in this area as in many others
that they enjoy about how to regulate different aspects of policy. Just because they don't
doesn't mean that Congress says, oh, well, we see that these states are failing to do
anything, and therefore we get that power. It's not the way the Constitution works.
We've actually got the room for one minute, so we're going to have to wrap it up. But
I encourage you all to read--
Is somebody else coming into the room?
We've got a class here in just about ten minutes. But I encourage you all to read the recent
Florida opinion, and let us know on our Facebook page whether or not Professor Leflor's interpretation
of the Commerce Clause is true and correct. I think that the Florida judge had his own
theories on that, as did possibly the founders of this great nation. So thank you, all. Thank
you to the University of Arkansas School of Law, and to our guests.
[ Applause ]