[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
CONSTITUTIONALITY OF THE
INDIVIDUAL MANDATE
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
FEBRUARY 16, 2011
__________
Serial No. 112-5
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
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COMMITTEE ON THE JUDICIARY
LAMAR SMITH, Texas, Chairman
F. JAMES SENSENBRENNER, Jr., JOHN CONYERS, Jr., Michigan
Wisconsin HOWARD L. BERMAN, California
HOWARD COBLE, North Carolina JERROLD NADLER, New York
ELTON GALLEGLY, California ROBERT C. ``BOBBY'' SCOTT,
BOB GOODLATTE, Virginia Virginia
DANIEL E. LUNGREN, California MELVIN L. WATT, North Carolina
STEVE CHABOT, Ohio ZOE LOFGREN, California
DARRELL E. ISSA, California SHEILA JACKSON LEE, Texas
MIKE PENCE, Indiana MAXINE WATERS, California
J. RANDY FORBES, Virginia STEVE COHEN, Tennessee
STEVE KING, Iowa HENRY C. ``HANK'' JOHNSON, Jr.,
TRENT FRANKS, Arizona Georgia
LOUIE GOHMERT, Texas PEDRO PIERLUISI, Puerto Rico
JIM JORDAN, Ohio MIKE QUIGLEY, Illinois
TED POE, Texas JUDY CHU, California
JASON CHAFFETZ, Utah TED DEUTCH, Florida
TOM REED, New York LINDA T. SANCHEZ, California
TIM GRIFFIN, Arkansas DEBBIE WASSERMAN SCHULTZ, Florida
TOM MARINO, Pennsylvania
TREY GOWDY, South Carolina
DENNIS ROSS, Florida
SANDY ADAMS, Florida
BEN QUAYLE, Arizona
Sean McLaughlin, Majority Chief of Staff and General Counsel
Perry Apelbaum, Minority Staff Director and Chief Counsel
C O N T E N T S
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FEBRUARY 16, 2011
Page
OPENING STATEMENTS
The Honorable Lamar Smith, a Representative in Congress from the
State of Texas, and Chairman, Committee on the Judiciary....... 0
The Honorable John Conyers, Jr., a Representative in Congress
from the State of Michigan, and Ranking Member, Committee on
the Judiciary.................................................. 6
WITNESSES
The Honorable Kenneth T. Cuccinelli, II, Attorney General,
Virginia
Oral Testimony................................................. 8
Prepared Statement............................................. 11
Walter Dellinger, Professor, Duke University School of Law
Oral Testimony................................................. 17
Prepared Statement............................................. 19
Randy E. Barnett, Professor, Georgetown University Law Center
Oral Testimony................................................. 27
Prepared Statement............................................. 29
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Prepared Statement of the Honorable Lamar Smith, a Representative
in Congress from the State of Texas, and Chairman, Committee on
the Judiciary.................................................. 4
Prepared Statement of the Honorable Kamala D. Harris, Attorney
General of California, submitted by the Honorable Jerrold
Nadler, a Representative in Congress from the State of New
York, and Member, Committee on the Judiciary................... 46
Prepared Statement of John Kroger, Oregon Attorney General,
submitted by the Honorable Jerrold Nadler, a Representative in
Congress from the State of New York, and Member, Committee on
the Judiciary.................................................. 53
APPENDIX
Material Submitted for the Hearing Record
Prepared Statement of the Honorable Henry C. ``Hank'' Johnson,
Jr., a Representative in Congress from the State of Georgia,
and Member, Committee on the Judiciary......................... 97
Prepared Statement of Charles Fried, Beneficial Professor of Law,
Harvard Law School............................................. 100
American Constitution Society (ACS) for Law and Policy, Issue
Brief, The Health Care Lawsuits: Unraveling A Century of
Constitutional Law and The Fabric of Modern American
Government, Simon Lazarus, February 8, 2011.................... 106
Statement of Support from Legal Scholars......................... 133
Articles on Health Care Reform................................... 140
CONSTITUTIONALITY OF THE
INDIVIDUAL MANDATE
----------
WEDNESDAY, FEBRUARY 16, 2011
House of Representatives,
Committee on the Judiciary,
Washington, DC.
The Committee met, pursuant to call, at 9:35 a.m., in room
2141, Rayburn House Office Building, the Honorable Lamar Smith
(Chairman of the Committee) presiding.
Present: Representatives Smith, Sensenbrenner, Coble,
Gallegly, Goodlatte, Lungren, Chabot, Issa, Pence, Forbes,
King, Franks, Gohmert, Poe, Chaffetz, Reed, Griffin, Marino,
Gowdy, Ross, Adams, Quayle, Conyers, Nadler, Scott, Watt,
Lofgren, Jackson Lee, Waters, Cohen, Johnson, Quigley, Chu,
Deutch, and Wasserman Schultz.
Staff Present: (Majority) Allison Halataei, Deputy Chief of
Staff/Parliamentarian; Zachary Somers, Counsel; and Heather
Sawyer, Minority Counsel.
Mr. Smith. The Judiciary Committee will come to order.
Without objection, the Chair is authorized to declare recesses
of the Committee at any time. We welcome our panelists today as
well as all Members who are present in the room. I am going to
recognize myself for an opening statement, and then recognize
the Ranking Member for his opening statement.
As the Framers of the Constitution understood, Congress has
an independent duty to examine the constitutionality of the
legislation it considers. Ideally, we should assess the
constitutionality of legislation before it becomes law.
However, given the unprecedented nature of the health care
law's individual mandate, it is important that we examine its
constitutionality then though it has already been enacted.
The individual mandate, which requires all Americans to
purchase health insurance, is the foundation of the new health
care law. It is also, in my judgment, unprecedented. Twenty-
seven States are now challenging the constitutionality of the
new law. Two Federal district court judges have ruled that the
individual mandate is unconstitutional, two have determined
that it is not. Ultimately, it will, of course, be decided by
the Supreme Court.
The individual mandate requires Americans to purchase
health insurance from a private company. It does not matter
whether they want health insurance or can even afford it. Under
this law, Americans must either obtain insurance or pay a
penalty. But the Constitution, which creates a Federal
Government of limited, enumerated powers, does not necessarily
allow Congress to require individuals to purchase any good or
service including health insurance.
As Judge Vinson observed in his opinion in the Florida case
declaring the health care law unconstitutional, ``it is
difficult to imagine that a Nation which began, at least in
part, as a result of opposition to a British mandate imposing a
nominal tax on all tea sold in America, would have set out to
create a government with the power to force people to buy tea
in the first place.''
The Obama administration argues that the individual mandate
is either a law that is necessary and proper for the regulation
of interstate commerce or, alternatively, that the mandate is
constitutional because it is a tax.
The Administration's arguments are supported by neither the
original meaning of the Constitution nor Supreme Court
precedent.
The Constitution gives Congress the authority to regulate
economic activity, which includes everything from growing wheat
to managing a restaurant to running a Fortune 500 company. But
the current health care law wrongly assumes that Congress can
also regulate economic inactivity. Neither the Constitution nor
the Supreme Court has ever given Congress that authority.
There is a difference between regulating economic activity
that is ongoing and forcing Americans to engage in an economic
activity, in this case, purchasing health insurance. Part of a
free society means the freedom to choose not to do something.
Never before in America's history has Congress required people
to purchase a good or service simply because they live in the
United States, at least not until now.
If the commerce clause allowed Congress to regulate
inactivity, Congress could force Americans to buy anything that
might conceivably affect commerce in some way. If the housing
sector were struggling, Congress could force renters to
purchase a house. If the auto industry is on the verge of
collapse, Congress could force individuals who take public
transportation to purchase a car, or if falling citrus prices
were driving farmers into bankruptcy, Congress could force
consumers to purchase oranges.
The Administration asserts that the decision not to
purchase health insurance is unique because if Americans don't
purchase health insurance, the cost of their health care
shifted to the government. But the same can be said of every
other type of insurance that people choose not to purchase.
There is no end to the number of commercial transactions
Americans could be forced into if the commerce clause were as
broad as the Obama administration argues.
Because the Administration's commerce clause argument is
without legal precedent the Administration has argued that the
individual mandate is authorized by Congress' power to tax.
This argument, however, is an unpersuasive revisionist
justification for the mandate that was not raised until the
mandate was challenged in court.
The health care law explicitly calls the penalty imposed on
those who fail to purchase insurance a penalty not a tax. As
President Obama stated, the mandate is ``absolutely not a tax''
and ``nobody considers it a tax increase.'' Additionally the
mandate's penalty is not listed with the provisions of the
health care law intended to raise revenue for the government.
And the IRS is prohibited from seeking the same types of
punishment for failure to pay the penalty as it does for
failure to pay taxes.
The arguments in favor of the constitutionality of the
individual mandate are unconvincing and, if accepted, would
give the Federal Government almost unlimited power over
Americans' lives. In my opinion, the individual mandate is both
unprecedented and unconstitutional. We should question any law
that appears to violate the Constitution and common sense.
[The prepared statement of Mr. Smith follows:]
__________
Mr. Smith. That concludes my opening statement. I am very
pleased to recognize the Ranking Member the gentleman from
Michigan, Mr. Conyers, for his opening statement.
Mr. Conyers. Thank you very much, Chairman Smith. Good
morning, Members of the Committee and distinguished witnesses
present. We are here today to have a hearing on the
constitutionality of the individual mandate. You will note that
the term individual mandate does not appear anywhere in the
bill that is being claimed to have an unconstitutional
provision.
The Affordable Care Act includes the term minimum coverage
requirement in the bill. There is nothing--the term
``individual mandate'' does not appear.
Now, I enjoyed our first reading of the Constitution on the
floor in the Congress in all of my career here. I hope somebody
got more out of it than I did, because reading the Constitution
and understanding the Constitution are two different things. I
think you could be in about the sixth or seventh grade and you
can read clearly enough to read the Constitution. It does not
comport with your understanding of the Constitution. And that
is why Chairman Smith and I have talked about evening classes,
informal sessions with our colleagues here to talk with experts
about certain provisions of the law of the Supreme Court
decisions and the Constitution itself, and I encourage our
reading and negotiations on that.
Now, as a universal single-payer health care advocate, I
was not enthusiastic about all of the benefits that accrued to
the insurance industry under the Affordable Care Act. I
supported it nevertheless. And I assume because of that support
the insurance industry itself supports this so-called
individual mandate. I wonder how they feel about this assault
on that portion of the law.
Fortunately, the Chairman and his Committee did not say
that consequently that voids the whole Act itself. I hope he
didn't say that. I didn't interpret him to say that and he
doesn't say that.
And so I am struck by the partisan nature of the discussion
that is going on this morning here about constitutionality
because you see many years ago, my colleagues in the other
body, Senators Orrin Hatch and Senator Charles Grassley, along
with 18 other Republican colleagues, included the notion of an
individual mandate in their health care bill of 1993. And I
hope someone asks me to prove that because my staff has
researched this.
Now, in addition to that, we have other supporters on the
constitutional question who are not Democrats. Former
Massachusetts Governor Mitt Romney featured an individual
mandate as part of his successful health care reform law in
Massachusetts where it helped reduce insurance premiums by 40
percent while the national average has increased 14 percent.
Given this demonstrated success and the need to solve our
national health care crisis, one would hope that my friends on
the other side of the aisle would continue to embrace the idea
that has been brought forth by Republicans at a earlier period
of time. But unfortunately, they have taken a different course
and are now suggesting that the individual mandate is
unconstitutional.
Now I would like to cite the Constitution. Congress has the
clear power under article 1, section 8, clause 3 of the
Constitution, which gives us the authority to regulate commerce
between the States. And further, that power is augmented by
article 1, section 8, clause 18, which grants us discretion to
choose the ``necessary and proper'' means of achieving our
legitimate regulatory goals. And if I could just begin my
conclusion by explaining briefly why our authority here is
really beyond question. And I suppose that this hearing today
may conclusively determine that.
First, the core argument that is put forward by my friends
is that this regulates inactivity. Now what in the world does
that mean, to regulate inactivity? It requires us to accept
what really amounts to a complete fiction because we all
participate in the health care market. That is one statement I
can make. Everybody from the time they are born until the time
we leave this planet will participate in the health care market
one way or the other. No one can claim that they will never get
ill or get injured or get sick. We even promise emergency care
for all who need it. As a matter of fact, we passed a law to
say that emergency rooms must take in people who are ill and
don't have any insurance and don't have any visible means to
pay for the health care that they seek at a hospital.
The cost of uncompensated care in this country last year
was $43 billion. And those costs, of course, are shifted to
other Americans who pay higher taxes and increased fees for
medical care and insurance premiums. The individual mandate
recognizes the reality that we are all active in the health
care market and regulates how and when we pay for our health
care. Doing so is uncontrovertibly within the scope of
congressional power.
Now while some of my colleagues may think talking about
inactivity is an argument, I would counter with the statement
of former solicitor general Charles Fried, a Reagan appointee,
who said that in any event, it is irrelevant as a matter of
law. Solicitor General Fried is not a partisan supporter of the
Affordable Care Act. But he is a staunch defender of the
Constitution, and in his view, the individual mandate is fully
constitutional because Congress unquestionably has the power to
regulate the interstate health and insurance markets and the
discretion to choose the necessary and proper means of doing
so.
Solicitor General Fried has testified in the other body,
and I would ask unanimous consent to enter his statement into
the record.
Mr. Smith. Without objection.
Mr. Conyers. In conclusion, Chairman Smith and I thank you
for your generosity with the time. We have been hearing a lot
about individual liberty, the right to be let alone. But is it
really? For example, States can and do require citizens to
purchase car insurance. You have to have insurance to drive a
car. In Massachusetts, legislation signed by former Governor
Romney obligates that States' residents to purchase health
insurance.
There are many, many other laws that impose affirmative
obligations on our citizenry. We must pay taxes. We must send
our children to school and vaccinate them, we must contribute
to Medicare, and to Social Security, just to name a few in the
long list. So I am pleased to be here today to join in this
discussion with the Members of the Committee.
And I thank the Chairman for his generous allowance of
time.
Mr. Smith. Thank you, Mr. Conyers.
Without objection, other Members' statements will be made a
part of the record. We welcome our panelists today, and our
first witness is going to be introduced by the gentleman from
Virginia, Mr. Goodlatte.
Mr. Goodlatte. Thank you, Mr. Chairman, for holding this
hearing and affording me the opportunity to introduce our
attorney general, Congressman Forbes and Congressman Scott join
me in welcoming Ken Cuccinelli who was elected attorney general
of Virginia on November 3, 2009, and was sworn into office on
January 16, 2010.
In this position, he is responsible for overseeing the
Office of the Attorney General and its more than 300 attorneys
and support staff.
Prior to this, Attorney General Cuccinelli served in the
Senate of Virginia from August 2002 to January 2010.
As a State senator and private attorney, Attorney General
Cuccinelli worked to improve all levels of the Commonwealth
mental health system, first serving as a court-appointed
attorney for individuals in Virginia's involuntary civil
commitment process. After joining the Senate in 2002, he passed
legislation that has provided for more humane treatment of the
mentally ill and helped family members better cope with
treating their loved ones.
Best known nationally, however, for having brought the
first lawsuit challenging the constitutionality of the
individual mandate, a challenge which was successful at the
district level before Judge Henry Hudson in the Eastern
District of Virginia. That case is now on appeal.
Mr. Chairman, it is my pleasure to welcome a great leader
of the Commonwealth of Virginia.
Mr. Smith. Thank you, Mr. Goodlatte.
Our second witness is Walter Dellinger. Mr. Dellinger is
the head of appellate practice at O'Melveny & Myers and the
Douglas Maggs professor emeritus of law at Duke University Law
School. Mr. Dellinger served as assistant attorney general for
the Office of Legal Counsel from 1993 to 1996 and as acting
solicitor general from the 1996 1997 term of the U.S. Supreme
Court.
By our joint reckoning, he is making perhaps his 30th
appearance before Congress as a witness today, 30th or 31st,
something like that.
Our final witness is Randy Barnett. Mr. Barnett is the
Carmack Waterhouse professor of legal theory at the Georgetown
University Law Center. He has served as a visiting professor at
Northwestern and Harvard Law School and was awarded a
Guggenheim Fellowship in Constitutional Studies and has
authored over nine books and over 100 articles and reviews.
Each of the witness' statement will be made a part of the
record. We welcome you all and look forward to your 5 minutes'
worth of a statement after which we will need to move on to the
next witness.
We appreciate your presence and look forward to the
testimony, first of Attorney General of Virginia, Mr.
Cuccinelli.
TESTIMONY OF THE HONORABLE KENNETH T. CUCCINELLI, II, ATTORNEY
GENERAL, VIRGINIA
Mr. Cuccinelli. Thank you, Mr. Chairman and Members of the
Committee. I will not repeat my written testimony. In my oral
testimony, I would like to make three points to you all. The
first is that what the States are doing, and I will refer to
the States generically, there are dozens of cases running
challenging the individual mandate. My focus obviously being an
Attorney General is on the States' cases. What the States are
doing in challenging the individual mandate and which
ultimately will result in a request to the Supreme Court to
find that individual mandate unconstitutional, is very modest
from a legal perspective. We are not asking the Supreme Court
to change any law, to expand or contract any of its precedent,
simply to apply the existing law to deny the opportunity to the
Federal Government to massively expand its power to compel
American citizens to act.
The other side, the Federal Government, requires to prevail
an expansion, as noted by the judges that have even rules in
their favor, an expansion of the commerce clause power which is
already vast, as it stands under Supreme Court precedent right
now, the Federal Government requires that to be expanded yet
again, and further, in order to prevail in this case.
It is the Federal Government that is asking for a dramatic
change to the law, not the States that are challenging the
individual mandate. That is the first point I would like to
leave you with.
The second point is that this case, while it, of course,
deals with the legislation passed last year that the President
signed March 23 last year relating to health insurance, health
care and a variety of other things, the litigation is not so
much about health care as it is about liberty. And the reason
for that is that if the power that the Federal Government, for
the first time, is exercising in the legislation passed last
year is allowed to stand, then it can be applied across the
economy and across the lives of our citizens in ways that are
not part of the discussion now because they don't have anything
to do with health care.
The Chairman referenced ordering people to buy a car, to
eat asparagus or broccoli, the vegetable of discussion changes
day to day, those compulsions were addressed by judges in these
cases, they are very legitimate concerns, and until the United
States can articulate a constitutional boundary to the power
that it proposes the Federal Government has, it should lose in
the Supreme Court because of the vast expansion of Federal
power.
To give you one example, Professor Turley, here at George
Washington University, I am sure some of you are familiar with
him, in his first op-ed after this case was filed, he noted
that if the States lose this case, it is the end of federalism
as we have known it for over 220 years, the end of federalism.
Federalism, of course, is intended, in part, to protect the
liberty of citizens ultimately by the tension established by
the Federal and State governments.
And I would submit to you that the States that are
assaulting the individual mandate in court are doing exactly
what the Founders expected us to do, and that is, to check
Federal power when they overstep the boundaries of the
Constitution. That is exactly what we are doing in this case.
My third point is more historical. Whenever we deal with a
novel question of constitutional law, and this is an
unprecedented exercise of Federal power, and so the question
that the court is dealing with is novel, I would reference Mr.
Conyers' remarks about the inactivity, activity distinction,
that has never arisen before because no case the Supreme Court
has ever dealt with before has ever had to consider it because
Congress has never presumed to have the power to compel
Americans in the way done with the individual mandate.
In that sort of a circumstance, we do look back to the
founding period. We look back to the writing of the commerce
clause, and we look back to the context in which it was
written. What was the problem they were trying to solve? And if
you recall the colonial period, during that time, the colonists
engaged in boycotts of British goods. This began in the 1760's
with the Stamp Act and the follow-on Acts of taxation
primarily, but it also included the Intolerable Acts. And a
Massachusetts convention in 1768 determined to boycott British
goods until the Stamp Act was lifted and the duties imposed by
it were lifted.
Cross the water to Britain, King George III is furious
about this. In a mercantilist economic system, this hurts.
Merchants are hurting, his shippers are hurting, and at that
time, the solicitor general and attorney general by tradition
sat in the Parliament and the solicitor general was asked in
Parliament if what the colonists were doing was treason to
boycott British goods. And the solicitor general responded by
saying that while the colonists have come up to the line, they
have come to within a hair's breadth, they are within the law
to boycott British goods.
Now that didn't sit well with a lot of the powers that be
in Britain at the time. But the corollary of that is that they
could not compel colonists, subjects of the crown and
parliament, to purchase the goods of their choice. But we now
have a President and had a Congress that thinks that they can.
Thank you, Mr. Chairman.
Mr. Smith. Thank you Mr. Cuccinelli.
[The prepared statement of Mr. Cuccinelli follows:]
__________
Mr. Smith. And Mr. Dellinger.
TESTIMONY OF WALTER DELLINGER, PROFESSOR,
DUKE UNIVERSITY SCHOOL OF LAW
Mr. Dellinger. Thank you, Chairman Smith.
The provisions of the Affordable Care Act that are at issue
in this case are so clearly within the commerce power that
there are multiple ways that it is a perfectly unremarkable
application of Federal power. Yes, it does impose an
affirmative obligation, an affirmative obligation as an
alternative to paying a 2\1/2\ percent tax penalty, in order to
encourage Americans to have a minimum health coverage. It is as
Solicitor General Fried who served under Ronald Reagan, as Mr.
Conyers noted, so eloquently put it, this is a perfectly
routine application of Congress' power to regulate the
insurance market.
Now what is absolutely at stake in this litigation is the
provision of the health care law that for the first time
prohibits insurance companies from denying coverage to
Americans because of preexisting conditions, the provision that
for the first time prohibits insurance companies from denying
coverage to individuals because they have a child who is born
with a birth defect. This was a very important reform, to
ensure that Americans could obtain the health care coverage
they needed.
Of course, when you do that, you create the possibility
that people can say, well, I am going to wait to buy my
insurance when I am in the ambulance on the way to the hospital
because they can't turn me down. And therefore, it was clearly
reasonably adapted, reasonably related to use Justice Scalia's
language justifying the use of the necessary and proper clause,
it is reasonably adapted to the law that prohibits insurance
companies from denying coverage to individual Americans to
provide this financial incentive for Americans to maintain
minimum coverage.
That is all. It is perfectly unremarkable. It is clearly a
regulation of commerce as no one would doubt that Congress has
the authority to regulate the terms and conditions upon which
insurance is bought and sold and that this is a very essential
facilitation of the requirement that insurance companies not be
allowed to deny coverage.
What is striking about it is that is there something so
remarkable about this affirmative obligation that would mean
that it has to be accepted from what would otherwise be
Congress' power to regulate these commercial transactions. It
is actually no more intrusive than Medicare or Social Security.
All three of them, Medicare, Social Security and the minimum
coverage requirements that are called the individual mandate,
those three only apply to individuals that go into the economy,
the penalty provisions only apply if you go into the economy
and earn a sufficient amount, $18,000 for a couple, earn a
sufficient amount, that you have to file Federal income taxes.
If you go into the economy and do that, you are required to pay
7\1/2\ percent of your earnings into Social Security, 15
percent if you are self-employed. You are required to pay a
certain--to take care of your old age benefits, you are
required to pay a few percentage points for Medicare to provide
for health coverage after you are 65, and now you are required
to pay up to 2\1/2\ percent and an additional tax penalty to
provide for health care before you are 65, unless you are
maintaining minimum coverage.
The difference between this approach and what is done with
Social Security and Medicare, and the reason it was supported
for so long by so many conservatives, is it that offers more
choice. Instead of having a single monolithic governmental
provider, it allows people a choice among private providers of
insurance. That surely is a choice that Congress can make to
favor a market approach over a government bureaucracy approach.
Is this unprecedented? Has Congress ever ``regulated
inactivity''?
Congress of course has no free standing power to regulate
inactivity. It has a variety of powers which it can sometimes
use to impose affirmative obligations. That is what we are
talking about.
In 1792, months after the Bill of Rights was adopted,
Congress passed a law requiring every adult free male to
purchase a weapon, to purchase ammunition, to purchase a
knapsack. No one said, oh my goodness, this is a regulation of
inactivity, and if Congress could regulate that they could
regulate anything. The reason they didn't is that what it was
was the imposition of an affirmative obligation where Congress
has the authority to impose an affirmative obligation.
Now, let me go just right to the question of limits, first
of all, this doesn't implicate the Supreme Court's decision
limiting Congresses' power to regulate noneconomic local
matters, like street violence, or guns within schools--near
schools. Morrison and Lopez deal with different issues because
this regulates a matter that is entirely economic, entirely
commercial.
Secondly, does it allow Congress to require the eating of
asparagus or broccoli? I wanted to decide that with General
Cuccinelli about how many times the word ``broccoli'' would be
mentioned this morning. Of course it doesn't. The liberty
clause of the Constitution stands in the way of that kind of
imposition of activity on individuals.
Does it require the purchase of any other products? Can I
tell you if Congress can regulate this, anything that Congress
cannot regulate? I can tell you thousands of things Congress
cannot regulate after this is upheld. I brought the Yellow
Pages because if you want me to spend the next 3 days, I can
read every product that Congress would not have the power to
require you to purchase----
Mr. Issa. Mr. Chairman, has the opening statement
concluded?
Mr. Smith. Conclude your testimony.
Mr. Dellinger. I will. I will by saying that the
justification will be that Congress can require the purchase of
the unique product, which is one that no one can be assured
they will not use and which we have complete and total evidence
that when people are not insured, they transfer that cost to
other Americans, other people who are sick, or to taxpayers and
that is a unique situation where Congress can encourage people
to maintain minimum coverage. It would not be a precedent for
any of the parade of horribles that come marching through this
Committee room.
Thank you, Mr. Chairman.
Mr. Smith. Thank you, Mr. Dellinger.
[The prepared statement of Mr. Dellinger follows:]
__________
Mr. Smith. Mr. Barnett.
TESTIMONY OF RANDY E. BARNETT, PROFESSOR, GEORGETOWN UNIVERSITY
LAW CENTER
Mr. Barnett. Thank you, Mr. Chairman, and thank you to the
Members of the Committee.
Let me begin today with a thought experiment. Imagine that
I tell you 100 things that you may not do tomorrow. For
example, you may not run on a treadmill, you may not eat
broccoli, you may not buy a car, and 97 other specific things
that you can't do tomorrow. Now while your liberty would
certainly be restricted, there would still be an infinite
number of things that you may still do.
All right. Now suppose I tell you 100 things that you must
do tomorrow. You must run on a treadmill, you must eat
broccoli, you must buy a car and 97 other things. These 100
mandates could potentially occupy all your time and consume all
your money.
I offer this illustration to help you see why economic
mandates are so much more onerous than either economic
regulations or prohibitions, and why so dangerous an unwritten
constitutional power should not be implied. Now of course, we
all know that Congress may mandate the citizens register for
the military and serve if called, submit a tax form, fill out a
Census form and serve on a jury.
But each of these duties is necessary for the operation of
government itself, and each has traditionally been recognized
as duties that are inherent in being a citizen of the United
States. They are inherent in United States citizenship. In
essence, the mandate's defenders are claiming that because
Congress has the power to draft you into the military, it has
the power to make you do anything less than this, including
mandating that you send your money to a private company and do
business with it for the rest of your life.
To justify this claim of power, implied power, supporters
of the mandate say that health care is different or unique. But
a factual description of health care is not a constitutional
principle. It does not provide any principled line identifying
when economic mandates are constitutional and when they are
not. Once a power to conscript Americans to enter into
contracts with private companies is accepted here, the Supreme
Court will never limit it to any particular factual
circumstance in the future.
From now on, Congress would simply have the power to impose
economic mandates whenever it deems it convenient to its
regulation of the national economy. So when a defender of the
insurance mandate says health care is unique, you need to ask,
okay, but what is the constitutional limit on the power to
impose economic mandates?
Now some have responded that the commerce power is limited
by the protection of liberty in the due process clause. But law
professors know, even if the American people do not, that the
Supreme Court now limits the scope of the due process clause to
protecting only a very few specifically defined fundamental
rights, none of which would include a right to refrain from
doing business with private companies.
As important, claiming that commerce is limited only by the
due process clause or some other expressed prohibition in the
Constitution is really to claim that Congress' enumerated
powers in article 1 are unlimited except as they are qualified
by the Bill of Rights. Such a proposition has always been
rejected by the Supreme Court. As Chief Justice Rehnquist wrote
in Lopez v. United States, ``We start with first principles,
the Constitution creates a Federal Government of enumerated
powers.'' And then he went on to quote James Madison's
Federalist 45 and here is what Madison said, ``The powers
delegated by the proposed Constitution to the Federal
Government are few and defined. Those which are to remain in
State governments are numerous and indefinite.''
As I explained in my written testimony, existing Supreme
Court doctrine limits Congress to the regulation of economic
activity, and to date, has never sanctioned implied
congressional power to regulate inactivity. In other words, the
Supreme Court has said that Congress may go this far and no
farther. But even if it did, even if the Supreme Court were to
uphold this, each Member of Congress must still decide for him
or herself whether conscripting Americans to enter into
contractual relations with a private company is a proper
exercise of the commerce power.
In 2010, Congress claimed a power that had never before
been claimed, the power to mandate that every citizen enter
into a contractual relationship with a private company and do
business with it or another business like it for the rest of
their life. Had this ever been done before? Each of you would
know all the economic mandates that you must obey upon pain of
penalty to the IRS, you don't know of any such mandates because
this claim of power is literally unprecedented.
For this reason, if you conclude that economic mandates are
either unnecessary or improper and are therefore
unconstitutional and beyond your power to impose, this
conclusion would affect only one law ever enacted by this
Congress, the Affordable Care Act of 2010.
And this fact makes it much more likely that it will be
held unconstitutional by the Supreme Court.
Nothing in Judge Vinson's opinion in Florida imposes any
new limits on congressional power. For over 200 years, Congress
has gotten along without a power to mandate that every citizen
enter into a contractual relationship with a private company.
Congress has ample means to solve free rider problems by
regulating economic activity and devising tax and spending
schemes and does not need this new and dangerous power.
Because economic mandates are both an unnecessary and
improper means for regulating interstate commerce, the
individual insurance mandate is unconstitutional, and I believe
Congress should repeal it. Thank you.
Chairman Smith. Thank you, Mr. Barnett.
[The prepared statement of Mr. Barnett follows:]
__________
Mr. Smith. I will recognize myself for questions and Mr.
Cuccinelli, I would like to address my first question to you.
You mentioned that if the individual mandate is upheld, you
feel that it would be the end of federalism. I gather then that
you also feel that if Congress can require everyone to purchase
health insurance, that there is really no limit to Congress'
ability to regulate under the commerce clause. Is that the
case?
Mr. Cuccinelli. That is correct, Mr. Chairman. Once you
have allowed, sort of kicked open that door, there is no
articulable limit to that power. I am sure I could come up, as
Mr. Dellinger mentioned, with examples what I would call crumbs
off the table that might remain exclusively within the power of
the States, but we would have dramatically, dramatically
reduced that sphere.
Mr. Conyers, in is his opening remarks, referenced auto
insurance and the Massachusetts insurance example, both
legitimate examples, I hear questions about them all the time.
Massachusetts is a State. The Constitution as originally
written did not limit States. It limited the Federal
Government, and it is the Federal Government that has stepped
outside those boundaries. Massachusetts can do exactly what the
Federal Government attempted to do last year perfectly well
within its constitutional prerogative as a sovereign entity in
our constitutional system.
That is why federalism is so threatened by this legislation
is you completely gut that differential, the distinctive
authority and responsibility that was left to the States when
the Federal Government was limited by the enumerated powers.
And that is why the language of the 10th Amendment reads the
way it does, is that residual power which we typically refer to
as the police power is still left with States, and it would be
gutted if the individual mandate is allowed to stand.
Mr. Smith. Thank you, Mr. Cuccinelli.
Mr. Barnett, supporters of the individual mandate say we
don't need to worry because the due process clause puts a limit
on Congress' power. Do you buy that argument?
Mr. Barnett. Well, the due process clause does put a limit
on Congress' power and it puts a limit on the States power as
well. And if that is the only limit that is on the State and
Federal power, that means that Congress' power is the same as
the States' power, it is just as broad, if that is the only
limit, since it is the same limit on both entities. But we know
that that is not right that Congress has limited and enumerated
powers and the States' powers are broad and diverse. So that
can't be the only limit.
Essentially what argument says, Mr. Chairman, is that the
enumerated powers in article 1, section 8 are unlimited in and
of themselves, they are unlimited and they are only to be
qualified by the Bill of Rights or the due process clause. It
is like saying Congress' powers are unlimited unless they
violate free speech. It is the same kind of argument.
Mr. Smith. Mr. Barnett, one other question. Supporters of
the individual mandate also say that somehow health care is
unique and therefore we also don't need to worry about
excessive power residing in the hands of Congress.
Do you think that health care is so unique that that should
alleviate our concerns?
Mr. Barnett. Whether or not health care is unique, the
factual uniqueness of any particular market is not a
constitutional principle. And for 200 years, the Supreme Court
has declined to examine the factual reach of any particular
congressional law.
What they need is a firm line that they can judicially
administer, and they don't get into the factual details of this
circumstance versus that circumstance. So the problem with that
objection is it is not a constitutional limitation, it will
never be held as a constitutional limitation, so it don't solve
the basic problem.
Mr. Smith. Thank you, Mr. Barnett.
And the gentleman from Michigan, Mr. Conyers is recognized
for his questions.
Mr. Conyers. Thank you, Chairman Smith. First of all, I
want to thank the Attorney General Of Virginia for his
instructions. I will not debate this now because we are short
of time, but I wanted to just ask you this question: What is it
that two solicitor generals, Fried and Dellinger, don't
understand about the constitutionality of the issue that brings
us here this morning? What is it that they don't understand and
that you do understand? Could you explain that for me?
Mr. Cuccinelli. Mr. Conyers, they, along with many others,
we could pile the list of supporters of each position on a
scale and it would be a mile high, but the position they have
taken is accepting that there are not no limits but virtually
no limits on the commerce clause power of Congress.
And you commented earlier on the inactivity focus of us on
our attack on the individual mandate, if one can treat a
decision to do nothing as activity for purposes of Supreme
Court precedent, which even judges ruling in favor of the
Federal Government have had to make that logical leap, that is
the leap they have to make, they have to redefine words and
they have to have leaps of language and logic to prevail, and
they are willing to do that.
Mr. Conyers. I want to assure you that the sky is not
falling. I want to give you the assurance today that federalism
is probably alive and well before, during and after the Supreme
Court decision on this matter.
Now, Mr. Dellinger, do you have a response for Professor
Barnett in this discussion that we are having this morning?
Mr. Dellinger. Mr. Conyers, I believe that the fundamental
flaw in the critique of this legislation, the no-limits
critique, is it assumes that a decision by the Supreme Court
upholding this law would say that we are upholding this law
because in our opinion Congress can regulate anything it wants
or Congress can require the purchase of any product it wants,
but why in the world would you think that would be what the
Supreme Court would hold?
Whether a Supreme Court decision sustaining this minimum
coverage incentive or requirement would allow Congress to do
lots of other things when would entirely depend upon what the
Supreme Court gave as the reason. And I think, I can't, I am
sure there are ethical rules and criminal rules that prevent
Members of Congress and witnesses from wagering, but if there
weren't, I would wager that not only would this be upheld if it
gets to the Supreme Court, that is, if any of the courts of
appeal strike it down, which they may not, and I would wager
that--and I have sampled a lot of other Supreme Court experts,
I would wager that Chief Justice Roberts writes an opinion
upholding the law. And he is not going to write an opinion that
says, we are upholding this law because Congress can require
people to buy any product that Congress chooses or engage in
any exercise. They are going to uphold it by saying in this
case it is imminently intertwined with a fundamental part of
the interstate markets in health insurance and health care.
And here is what the opinion I expect by the chief justice
will cite. It will say that 94 percent of the long term
uninsured have actually utilized health services. It will say
that only one-third of the cost of health service is obtained
by the uninsured are paid for by the uninsured. Of hospital
costs, only 10 percent of the hospital costs obtained by the
uninsured are paid for by the uninsured. Ninety percent of
those costs are transferred to other Americans, other patients
who are sick, and to taxpayers.
And in those circumstances, when Congress is regulating a
market by prohibiting insurance companies from denying
coverage, it can surely create an incentive more, modest more
respecting of liberty than the way Medicare and Social Security
operate in order to encourage people to maintain minimum
coverage.
That is what the Supreme Court will say, and it won't be a
precedent for requiring any other obligation to purchase
anything whatsoever.
Mr. Conyers. Well, I want to assure you that as long as you
stay away from Internet gambling, wagers are probably permitted
in the Rayburn building. Thank you, Mr. Chairman.
Mr. Smith. Thank you, Mr. Conyers.
The gentleman from Virginia, Mr. Goodlatte, is recognized
for his questions.
Mr. Goodlatte. Thank you, Mr. Chairman.
Gentlemen, welcome. This is a very interesting discussion.
But Mr. Dellinger, I have to tell you that while the Supreme
Court can write anything they want to in their opinion, they
have historically done so from the perspective of what
parameters they are going to impose upon what Congress can do
based upon that decision and based upon the precedents that
have stood before them.
And quite frankly, I find it astonishing that you would
compare Social Security or Medicare or any other government
program which is funded through taxation, and then provided to
people who can choose to avail themselves of it or not as the
equivalent of mandating that individuals buy a private product
from a private company which the government is also going to
then mandate to that private company what has to be provided in
the product.
And I would yield first to the Attorney General and see if
he would like to address that point.
Mr. Cuccinelli. Thank you, Congressman.
I would note that every example that I have heard listed by
either Mr. Dellinger or Mr. Conyers, car insurance, Medicare,
Social Security the 1792 Militia Act that Mr. Dellinger was
referring to, all stand on their own constitutional footing and
it is not the commerce clause, or none of them. None of them.
They all have an independent power provided to Congress. The
Militia Act, if you read your article 1 section 8, you will see
it worded affirmatively that you may raise an army, that there
is vast authority over the militia and how it is to be governed
and utilized. That doesn't exist in commerce. You must regulate
something that already exists. They may not compel it into
being.
Car insurance we already talked about. That is within the
realm States. Medicare and Social Security as you note are
implemented using the taxing power, a broad though not
unlimited power of Congress.
The other example cited so far is for schooling which is
within the realm of the power of States, not the Federal
Government.
So none of the other examples are applicable. And I am one
of these--I was an engineer before I went to the dark side and
went to law school. So I had this logical training that forces
me to argue in certain ways, I would say. And all of the
discussion of the importance of the subject, I take for
granted. I agree this is important. The Supreme Court has
repeatedly noted that that doesn't matter, it doesn't matter.
What matters is are you within the boundaries of the
Constitution? And this isn't even close.
Mr. Goodlatte. Let me ask you about another argument that
has been made by the Justice Department in supporting their
case. They have argued that the individual mandate penalty is
constitutional as a tax.
And could you explain the problem with the argument that
the mandate's penalty is a tax.
Mr. Cuccinelli. First of all, let's note that this argument
really didn't exist until they began to worry we might actually
beat them.
Mr. Goodlatte. We were told here that it wasn't a tax.
Mr. Cuccinelli. Of course, and rather famously and
emphatically the President in the George Stephanopoulos
interview said the same thing. And that was cited by Judge
Vinson in his October 14 order in the Florida case. But it is
called a penalty. It had been called a tax in an earlier
version of the bill. That was changed to a penalty.
The Supreme Court has noted La Franca. There is a
distinction that matters between taxes and penalties. The
taxing power, as I already mentioned, is broad for you all, for
Congress. However, it is not unlimited either.
And the money you must pay if you fail to obey the
government dictate and buy their chosen health insurance is a
penalty. It is a punishment for failure to comply. That is a
penalty. It was called a penalty. It acts as a penalty. In form
and substance it is a penalty. To rename it after the fact in
court attacks doesn't change its form or its substance. And it
does not generally raise revenue as the money raised for
Medicare and Social Security do. That is why those stand just
fine. And it is an argument that not even the two judges who
have found the individual mandate constitutional have bought.
I would suggest to you that if all you have to do, and you
here as Congress, if all you have to do is penalize me some
amount of money if I don't obey whatever you put in the
legislation whatever the legislation can be and that can
survive under the taxing power, that is a truly radical
argument in terms of Federal power. That is radical. And it is
not being upheld by any judge anywhere. And playing along with
Mr. Dellinger's wagers, I bet you that not a single judge in
America upholds that argument. They may uphold the individual
mandate. It is going to be a close call. But they will not
uphold that taxing argument.
Mr. Goodlatte. Thank you, Mr. Chairman.
Mr. Smith. Thank you, Mr. Goodlatte.
The gentleman from New York, Mr. Nadler, is recognized for
his questions.
Mr. Nadler. Thank you. I agree with Mr. Cuccinelli. I don't
think anybody will uphold that argument because they will never
get to it because they will decide the case is valid, the law
is valid as an expression of Congress' power under the commerce
clause.
Before I begin my questioning, let me ask the Chairman for
unanimous consent to enter into the record the testimony
submitted for today's hearing by the attorneys general of
California and Oregon, Kamala Harris and John Kroger.
Like Attorney General Cuccinelli, they are involved in
legal challenges to the Affordable Care Act. But they defend
the constitutionality of the law and herald it as a much-needed
solution to their States' and our Nation's health care crisis.
Having their perspectives will be useful to our
consideration of this issue.
Mr. Smith. Without objection.
[The information referred to follows:]
__________
__________
Mr. Nadler. Thank you. I now would like to start the
questioning.
Let me ask Mr. Cuccinelli, a number of our laws impose
affirmative obligations on citizens. We must all pay taxes, buy
car insurance, send our children to school and vaccinate them.
Yet critics of the Affordable Care Act proclaim that this
law, not any of these other existing affirmative obligations,
signals the end of liberty as we know it. And they posit
various hypotheticals raising questions about government
forcing citizens to eat leafy greens or to exercise, both from
my perspective perhaps objectionable.
Can the States require residents to eat broccoli or require
them to exercise, Mr. Cuccinelli?
Mr. Cuccinelli. I am sorry, eat broccoli or----
Mr. Nadler. Can the States require, can the States, can
Virginia require someone to eat 2 ounces of broccoli a day?
Mr. Cuccinelli. I think they could certainly order people
to buy broccoli.
Mr. Nadler. Can they require them to eat broccoli?
Mr. Cuccinelli. I think that is a more difficult question.
Mr. Nadler. But they could require them to buy them?
Mr. Cuccinelli. And the Federal Government cannot.
Mr. Nadler. Now, presumably what you are saying is under
the police power, the State can order that?
Mr. Cuccinelli. That is correct.
Mr. Nadler. And the Federal Government doesn't have the
police power?
Mr. Cuccinelli. That is correct. Well----
Mr. Nadler. But if that is correct, if the State under
the, if the State can exercise its authority to order someone
to buy broccoli or to exercise, then the quarrel here is not
about individual liberty such as you talked about. It is not a
question of the liberty interests under the Fifth Amendment,
but it is a question of who gets to exercise that authority. If
the State can order it, then that is not protected by the Fifth
Amendment, or the 14th for that matter.
And the question then is, since somebody can order it, the
question is who can exercise the authority which concededly is
not limited by the liberty interest of the Fifth Amendment. And
so long as we act within an enumerated power, which I would
contend we do here, doesn't the supremacy clause answer that
question as well in favor of Congress?
Mr. Cuccinelli. Mr. Nadler, I would acknowledge that if you
take the broccoli example and say the State government can
order but the Federal Government cannot, that there is the
potential within each of the 50 States for the citizens there
to be burdened with that obligation.
Mr. Nadler. My question is not that. My question is: Isn't
your argument that the Congress is limited by a liberty
interest here negated, and that the question has nothing to do
with the liberty interest of the Fifth Amendment? The question
is simply one of how far the commerce clause power extends,
which is not a liberty question, but is an enumerated powers
questions, and the liberty question is, therefore, really a red
herring?
Mr. Cuccinelli. Yes, this case is about liberty and not
health care. And the reason that the distinction you are making
does not address that problem is that the Federal system of
sovereignty, States and Federal being separate and having
separate spheres of authority, is intended to be a structural
protection for liberty.
So the fact that the States still have this reservoir of
power and authority does not change the fact that the division
of that power and authority is a protection.
Mr. Nadler. Of course, that argument you have just made has
been specifically rejected numerous times under the supremacy
clause jurisprudence of the Supreme Court.
Mr. Cuccinelli. That is not correct, Congressman.
Mr. Nadler. I ask Mr. Dellinger briefly to comment on what
Mr. Cuccinelli just said, and on my contention, that if a State
can force you to eat broccoli, then it is not a question of
liberty, it is simply a question of whether Congress can to do
something under the commerce clause or not, there is no liberty
interest question here.
Mr. Dellinger. That is correct. I think there is no issue
of liberty in anything that the States can do and the Federal
Government can do. Let me give credit to the other side by
saying that there is the following question: What I think they
misnamed ``the regulation of inactivity'' is actually the
imposition of an affirmative obligation in an area where
Congress has power, jurisdictional authority to legislate.
Now, I think as Professor Barnett, who has been one of the
great advocate of----
Mr. Nadler. Let me interrupt you for a second because my
time is about to run out. This whole question of the inactivity
and the liberty interest of inactivity, et cetera, wasn't that
disposed of really by Wickard v. Filburn when the courts
specifically said, in 1942, I think it was, that the Federal
Government, under the commerce clause, could regulate the
private production of wheat for the farmer's own use, that that
affected interstate commerce, because if he didn't grow it, he
would buy it from someone else. And the court there is saying,
in effect, that Congress has the right to prevent an
inactivity, namely that he wouldn't buy it from someone else?
Mr. Dellinger. I think, yes, that essentially Wickard is a
case in which the court recognized that Congress is encouraging
people to make a purchase in interstate commerce who would have
preferred not to make such a purchase.
Mr. Smith. The gentleman's time has expired.
The gentleman from California, Mr. Lungren, is recognized.
Mr. Lungren. Thank you very much. And I hope my friend from
New York will pay as much attention to the opinion of this
attorney general from California as he does to the new one, but
I may be asking for too much.
You know, I am sorry, even though I went to law school at
Georgetown and practiced law and was attorney general and
argued a case before the Supreme Court, sometimes we seem to
make these things so esoteric that the average person is left
out. That is, only those of us with coats and ties on or judges
who are attorneys with robes on can really make sense of this.
I always thought that the intent of the Founding Fathers
was to have a limited government. And I always thought that one
of the defining issues of limited government was the power to
compel; that is compulsion. And what I don't understand, and
with due respect to you, Mr. Dellinger, because I respect you
and I have liked your opinions many other times, I don't
understand why you so easily find that the power of the Federal
Government in this instance is closer to the power to compel
one to defend the country, including compel performance in the
Armed Forces by way of a draft, as opposed to the liberty
interest that is explicitly expressed in the Fifth Amendment,
you can't be compelled to testify against yourself.
Now, I know we don't have a specific amendment that says
Congress cannot compel an individual to buy a product, but I
thought if there is any essence of the sense of liberty, it
would be that. And I am, well, put off a little bit by your
argument. It almost seems to me that you are saying because
there is a constitutional end, you can use a constitutional
means to get there. That the commerce clause is so elastic that
if there is any way we can shoehorn anything in, then Congress
can use the power of compulsion to do that. And your opening
statement was emotional about what we want to do about those
who have preexisting condition, but it didn't go to the
constitutional question of whether, therefore, we can do that.
I mean, as I have told my friends on this panel many times,
the Constitution is the truly inconvenient truth. You may want
to do it, but we don't have the right to do it. And I am really
surprised at this, and also your argument, and even Mr.
Cuccinelli's argument about the difference between the State
and the Federal Government. If you think about a liberty
interest and you read the 10th Amendment, the 10th Amendment
seems to say, at least to me, that there is a whole area of
activity that is left to the States and the sovereignty of the
people.
So if there is a liberty interest with respect to an
individual, the 10th Amendment says that is to be expressed and
protected by the sovereignty of the people within the States,
which would say that there is still a liberty interest, but the
concept of protecting it on the State level is left to popular
sovereignty. Now, I know that may not be the current thinking
with some, but can you help me with that? How do you so easily
find that we have the right to compel someone to act in this
way, to purchase a product, particularly when you say no one
can escape being part of the system and therefore everything I
do affects everybody else. Well, you know, there are people who
don't believe in doctors and don't go to doctors, and there are
people who are hermits who will never utilize these services.
And there are other ways to do this, by the way. One of the
ways you could do it, I am not saying it is the most practical
way, but you could say that we understand, for instance, young
people, we want to get young people in and they don't do it
because they make a bet that on average they are not going to
be sick like the rest of us, and that is a pretty good bet. But
when they lose it, they have to pay. One of the ways you could
do to incentivize young people to be part of it is say if, in
fact, you have an illness, if, in fact, you have an accident
and you are taken care of and there are bills that are
incurred, you will never be allowed to discharge that in
bankruptcy. That will follow you the rest of your life.
Now, that is one incentive, one way of doing it that
doesn't get into the question of the liberty interest.
And so, are you saying that ultimately as long as you can
shoehorn something within the commerce clause, we have no
protection against the government's compulsion? We have no
protection against the government's compulsion as long as
Congress decides that we are going to compel you in a certain
way?
Mr. Dellinger. Well, first of all, I want to correct one
statement you made. I have never taken a position that this is
in any way like the solemn responsibility Congress compels
sometimes for people to engage in military service. That is
not----
Mr. Lungren. That was my metaphor to say within those
parameters, on the one side we all recognize that in order to
have a government work, a society work, we can compel people.
On the other hand----
Mr. Conyers. Mr. Chairman, I ask unanimous consent that the
gentleman be given an additional minute.
Mr. Smith. Without objection.
Mr. Lungren. I am not saying you were, but I am trying to
say it seems to me those are the two edges of the question. I
think you easily go to the one side, and I would say I find it
very difficult to get that way.
Mr. Dellinger. Look, you said we ought to put this simply
so the people can understand it, and I agree. I think Ronald
Reagan's solicitor general was chosen by President Reagan
because he had a very good capacity to put things simply.
What Charles Fried said was this is a regulation of an
interstate commercial transaction. It is a requirement rather
than a prohibition, but it is still a regulation of commerce,
and Congress has the power. Now, the question is: Is it so
intrusive because it is an affirmative obligation? And I think
that is a serious question because affirmative obligations, as
Randy Barnett has noted, affirmative obligations are more
intrusive than negative prohibitions. So I think you could well
argue that just because something has some influence on
commerce, if it is an affirmative obligation, Congress needs to
have a better reason than that.
But unlike any of the thousand products mentioned here,
this is in the Yellow Pages or in the Sears catalog, this is a
product where Congress can simply say 94 percent of the people
have used health care for the long term uninsured, and we can,
therefore, create a financial incentive, that is all it is, a
financial incentive to participate.
Is that intrusive in liberty. Mr. Goodlatte said it was
astonishing that I would compare it to the use of the tax power
for Medicaid and Social Security.
What I find surprising is the notion that there is a
constitutional rule that the only way Congress could deal with
a situation like this would be to provide a monolithic
government provided, taxpayer-supported system, rather than
having the same kind of or even lesser incentive to purchase a
product in a private market. That seems unremarkable to me.
Mr. Smith. The gentleman's time has expired.
The gentleman from Virginia, Mr. Scott, is recognized.
Mr. Scott. Thank you, Mr. Chairman.
Welcome, Attorney General.
Mr. Dellinger, one of the things your testimony kind of
talked around it is about what do we call this thing? And it
has always intrigued me that the label is so important. People
pretty well accept the idea if you go to a gas station with a
credit card, it should be prohibited to charge you extra for
using the credit card. However, people think it ought to be
permissible to have a cash discount. So if there are two
prices, one a credit card price and then a lower cash price, if
you call it a penalty for using a credit card, that is bad. But
if you call it, the same differential, if you call it a cash
discount, then that should be permissible.
It seems to me that we are in the same situation on what we
call this thing. There is no mandate. If you don't have
insurance, you pay the tax. If everybody is paying the tax, if
we called this thing a tax credit for having insurance, would
that have made a difference because there is no mandate? It is
calling it a tax credit for having insurance, and that would
mean Mr. Cuccinelli couldn't label it a mandate and couldn't
label it a penalty. If you called it a tax credit, would that
have made a constitutional difference?
Mr. Dellinger. I don't think it should because even when
you consider it as a commerce clause matter, the fact that it
is clearly within commerce and would be unremarkable if it were
done unmistakably as a tax credit for having coverage rather
than an additional tax penalty for not having coverage, it
seems that is very deeply nonintrusive. Your notion about what
to call----
Mr. Scott. That is what we hear about. We hear about the
penalty, the mandate. If we called it a tax credit, would it
have made a difference?
Mr. Dellinger. It shouldn't. It just would have changed the
rhetoric.
Mr. Scott. Mr. Cuccinelli, would have made a difference if
we called it a tax credit?
Mr. Cuccinelli. As I mentioned earlier, if the structure is
as it is now in the bill and you changed the word ``penalty''
to ``negative tax credit'' or something, the substance is still
the same. It is the substance that the Supreme Court has looked
to historically. It does not operate as a tax; therefore, it is
not a tax. Therefore, it does not fall under the taxing and
spending power for the general welfare. It will have to survive
on some other basis.
Mr. Scott. You can get a tax credit for solar panels. You
don't have to buy a solar panel; but if you do, you get a tax
credit for it.
Mr. Cuccinelli. Well, the critical distinction in your
point, and it goes to the earlier sort of shift of Mr. Nadler
over to Wickard v. Filburn is yes, but if you compelled the
purchase of solar panels, we would be in a totally different
category. Much like the Wickard case----
Mr. Scott. We don't compel the insurance. If you don't have
insurance, you pay the extra tax. You don't have the tax credit
for insurance.
Mr. Cuccinelli. You do, in fact, compel it, and you provide
a punishment for those who don't obey the compulsion. The
Wickard case, the wheat case, I am sure you all are familiar
with, would have been like this legislation if Wickard was
compelled to grow wheat. He was not, but he chose to do so and,
therefore, was governed because his activities, voluntarily
engaged in, were subject to regulation under the commerce
clause.
Mr. Scott. You have labeled it a mandate when there is no
mandate. You don't have to buy insurance.
Mr. Cuccinelli. Well, if you don't, you are not obeying the
law.
Mr. Scott. You pay the extra penalty. If you don't have
insurance, you don't get the tax credit. And if we labeled this
a tax credit for having insurance, we wouldn't be here.
Mr. Cuccinelli. You still have the structural problem of
the legislation as it is. The words on it, if I could ask you
to set aside----
Mr. Scott. If it had a different differential, those
without insurance will pay a tax, and those with insurance get
a tax credit and will not have to pay that extra tax, would
that make a difference?
Mr. Cuccinelli. Well, you give tax credits for various
forms of insurance that are purchased, and at least that tax
credit standing on its own has never been challenged, so far as
I know.
Mr. Scott. So, Mr. Dellinger, if we labeled it different,
would we have a different conclusion?
Mr. Dellinger. I think your question very effectively
points out the fact that this simply isn't very intrusive. If
it is just the flip side of providing a tax credit, a modest
tax credit for maintaining insurance by having a set of modest
tax penalties for not maintaining insurance, how is this the
end of liberty as we know it?
Mr. Scott. Well, is it true there is not a mandate to have
insurance?
Mr. Dellinger. There is a freestanding requirement in the
bill, a requirement that everyone should have coverage unless
they already have Medicare or Medicaid or they are below the
poverty level. The penalty provision only applies to people who
engage in certain activities, which I will describe.
You can search the bill for the word ``individual
mandate.'' It nowhere appears.
Mr. Scott. So you have the difference, if we labeled it
``tax credit,'' we would have avoided a lot of this
controversy?
Mr. Dellinger. Absolutely. And it can't be that a mere
labeling like that is something on which turns some great issue
of liberty.
If you ask an ordinary person to say look, if you are
sitting out in the woods, you don't have to buy insurance
because there is no penalty that attaches to it. If you go to
work in the economy, they are going to deduct money for Social
Security for your old age. They are going to deduct money for
your Medicare for health care after you are 65, and they are
going to add a 2\1/2\ percent tax penalty to pay for coverage
before you are 65 unless you are maintaining minimum coverage.
No one is going to say well, gosh, one of those is the end
of liberty as we know it; and the other two are all right. In
fact, this argument sounds exactly like the arguments over the
challenge to Social Security. And those attacking Social
Security said, if Congress can mandate a requirement age of 65,
financial support for those over 65, they can set the
retirement age at 30, or 25. The Supreme Court said Congress is
never going to do that. That doesn't mean it is
unconstitutional.
People said when the minimum wage law was passed, that if
you could have a minimum wage of $10 an hour, why couldn't
Congress have a minimum wage of $5,000 an hour. Once again the
Court said Congress is never going to do that. That, I think,
hardly counts as an argument. No one would think of this as
unremarkable. No one is going with bayonets and force you,
force march you to some insurance agency. It is just a
financial incentive to maintain minimum coverage, as your
question points out.
Mr. Smith. The gentleman's time has expired.
The gentleman from Iowa, Mr. King, is recognized for his
questions.
Mr. King. Thank you, Mr. Chairman. I appreciate this
hearing today, and I think there has been a tremendous amount
of instructive testimony that has come out from each of you. I
look at the bookends, Mr. Cuccinelli and Mr. Barnett, have
made, I think, the arguments that I would be making. And so
rather than turn directly to either one of the gentlemen, I
would go to Mr. Dellinger who probably hasn't had quite enough
time to air his position.
I would first take it to this point as I listened to the
discussion about Wickard v. Filburn. I have a couple of follow-
up questions for you, Mr. Dellinger.
Do you believe that Wickard v. Filburn was justly and
rightly held?
Mr. Dellinger. I do.
Mr. King. Rather than go into my disagreement with that, I
think that expanded the commerce clause beyond the intentions
of the Founding Fathers or the concepts that we basically hold
today, then would you describe what you think, if ObamaCare is
upheld as constitutional and the provisions of the commerce
clause are, you might argue not expanded, I would argue they
would be expanded if that were the case, then what could be
constrained by the commerce clause? What type of activity would
be constrained and where would the boundaries be?
Mr. Dellinger. That is a very good question. It would
depend, of course, on the kind of opinion that the Supreme
Court wrote upholding the law.
In my view, the Supreme Court, in upholding it, will say
first of all, nothing we uphold today gives Congress any power
to regulate local noneconomic matters unless they have some
special showing of relation to interstate commerce. So nothing
we hold today undercuts United States v. Morrison, United
States v. Lopez, regulating local, noneconomic matters is
something Congress cannot generally do.
Secondly, they would say we think when Congress imposes
affirmative obligations, it has to show that is really tightly
related to--I expect them to say Congress has to show that
there is a substantial relationship to a regulation of
commerce. And a substantial relationship here would be that
this is part and parcel of a regulation of insurance contracts
that prohibits denial of coverage for preexisting conditions to
provide a financial incentive for people to participate. It
does not provide--our opinion today, they will say, does not
mean that Congress can simply require anyone to purchase
anything in order to stimulate the economy.
Mr. King. And then quickly, before I go to Mr. Barnett, can
you tell me, the distinction I just heard, the language used
``health care'' and ``health insurance'' and the distinction
between the two was blurred in your opening testimony. Can you
draw a distinction between the two?
Mr. Dellinger. I think both of those markets are markets
obviously which Congress can regulate under its commerce power.
They account for one-sixth of the national economy. Health care
is unique in that no one can decide not to utilize it. Health
insurance is how you pay----
Mr. King. Would you agree that is has been a practice to
conflate the two terms, and it makes it difficult sometimes for
us to sort the two when we use the term ``health care''
interchangeable with ``health insurance,'' and we should do a
better job of being careful how we use that terminology?
Mr. Dellinger. Yes.
Mr. King. Let me just make that a statement because the
clock is ticking, and I turn to Mr. Barnett.
Mr. Barnett, would you care to respond to the response that
you heard from Professor Dellinger?
Mr. Barnett. Yes. It is what I said in my opening
statement, Mr. King, and that is that we have heard no
constitutional principle.
The Supreme Court, if they uphold this bill, they will
write an opinion. They will talk a lot about how health care is
different. But then they will say we must defer to Congress's
assessment that this was necessary in order to impose insurance
requirements. So they will defer to you is basically how the
opinion will be written. They will not identify a limiting
principle, if they uphold this bill.
At least we have not heard from any of the proponents of
the bill a constitutional principle that the Supreme Court
could enunciate. If they say health care is different, what I
am saying to you is that never in the history of this country
has the Supreme Court gotten into a factual determination
saying well, okay, health care is different. That is okay. But
this other market for cars, let us say, that is different.
There is a constitutional difference between the two. They
haven't ever said that, and they are not going to say that.
Mr. King. And likely then, if the Supreme Court upholds,
then they would leave the discretion to Congress to define
because they would be reluctant to?
Mr. Barnett. I would just say that I bet you, Professor
Dellinger would take that bet, that he would not want to take
the bet that if the Supreme Court upholds the mandate, that
they won't say that in the future it is up to Congress to
decide whether to impose mandates.
Mr. King. General Cuccinelli.
Mr. Cuccinelli. Well, actually, Mr. Dellinger and I were on
a panel in October at the Washington Legal Foundation, and when
he was asked the principle at that time, he said the limits
would be political. And I agree with him. I think that is the
absolutely dead on, accurate, honest answer. And that means
majority rules. If that is the case, why have a constitution in
the first place?
Mr. King. I will accept that as a closing remark, and I
yield back the balance of my time.
Mr. Smith. Thank you, Mr. King.
The gentleman from Georgia, Mr. Johnson, is recognized for
his questions.
Mr. Johnson. Thank you, Mr. Chairman. I was in the process
of formulating my thoughts here.
Let me ask, or let me note the fact that Mr. Cuccinelli,
you have opined that States have the power to mandate that an
individual purchase insurance. That is what you said as far as
Massachusetts is concerned; is that correct?
Mr. Cuccinelli. Yes, sir, that is correct.
Mr. Johnson. And you have also stated that your State, the
State of Virginia, has the power to compel or mandate that its
citizens purchase broccoli?
Mr. Cuccinelli. I think that is probably correct, yes.
Mr. Johnson. And it can compel them to actually eat the
broccoli?
Mr. Cuccinelli. No, I didn't go there. I don't think so.
Mr. Johnson. Okay, just to purchase the broccoli. What
provision of the Virginia constitution would authorize the
State of Virginia to compel its citizens to purchase broccoli?
Mr. Cuccinelli. Congressman, you wouldn't find it in the
constitution of Virginia. The power resides with the States
best articulated in the 10th Amendment. It is a power not given
to the Federal Government; and, therefore, it is left to the
States and the people through the 10th Amendment.
Mr. Johnson. No, if the State has the power to compel its
citizens to purchase broccoli, where does it get that power
from? Is it an express power or is it an implied power in the
Virginia constitution?
Mr. Cuccinelli. It is not in the Virginia constitution. It
is a residual power remaining in the States because it was not
given from the States to the Federal Government when the
Constitution was written. So it stays with Virginia.
Mr. Johnson. Well, you realize that probably some
individuals in the State of Virginia would argue that since the
power to compel a citizen to purchase broccoli is not stated in
the constitution expressly, then it has been left to the people
themselves, that power? You realize that, correct?
Mr. Cuccinelli. I would agree with that statement with
respect to the Federal Constitution. But the State
constitutions, and Virginia in particular, lays out not only
what the governmental structure would be, but it is not
formulated like the Federal Constitution to be a specific list
of enumerated powers.
Mr. Johnson. And the Federal Government, I would argue to
you, because times have changed since the enactment of the
Constitution and its amendments, times have changed, things
have grown, the concerns and affairs of the government have
grown and expanded, both State and Federal, and they are much
more complicated now than they were back in the 18th century;
is that correct?
Mr. Cuccinelli. Absolutely undeniable, Congressman.
Mr. Johnson. And so, therefore, we have to have an ability
to interpret the Constitution with an understanding of how it
applies under current conditions; isn't that a reasonable
proposition? Or should we just stick with a strict authority or
strict interpretation of the Framers of the Constitution, what
they intended at the time? Because even the Supreme Court
didn't do that in its Citizens United case, did they?
Mr. Cuccinelli. Congressman, you are looking to change
interpretations with changing times, and I would suggest to you
that the proper course is to amend the Constitution if some
alternative power is believed to be more necessary or
appropriate to our time that was not originally granted to the
Federal Government when they enumerated powers in the
Constitution.
Mr. Johnson. If one of Virginia's citizens said that the
State of Virginia does not have the power to force me to
purchase broccoli unless it goes and gets a constitutional
amendment which would authorize it to do so, would that be
reasonable?
Mr. Cuccinelli. As a policy matter, perhaps not. But as a
constitutional matter, they could pursue that through the
general assembly. And if they got a bill, I suspect it would
stand up under the Virginia constitution.
Mr. Johnson. I believe what we are doing is we are arguing
for States rights when it is politically expedient to do so,
and then when the Federal Government wants to regulate
something like the ability of States to determine whether or
not damages in medical malpractice injuries should be capped or
not, then it is okay for the Federal Government to come into
that kind of a situation and legislate. And so it is politics.
And that is what we have here with this health care argument in
the courts.
And, unfortunately, due to the activities of a couple of
our Supreme Court Justices and how close they are to the Koch
brothers, I am disappointed at the specter of politics coming
into a decision by the U.S. Supreme Court on this very issue.
And with that, I will yield back the balance of my time.
Mr. Smith. The gentleman's time has expired.
Let me say to Members that one of our witnesses, Mr.
Cuccinelli, is going to have to leave in 15 minutes for a prior
engagement. We ought to have at least three more rounds of
questions.
Mr. Lungren. Parliamentary inquiry, Mr. Chairman.
Mr. Smith. The gentleman from California is recognized.
Mr. Lungren. I know under the rules of the House, one is
not allowed to call into question the motivation of a Member of
Congress in the House or the Senate or the President of the
United States. Does that rule of the House also refer to
members of the Supreme Court?
Mr. Smith. I think the gentleman may have referred to
politics, and I am not sure that accusing someone of politics
is impugning their character. So I would say it does not apply
in this case.
Mr. Lungren. Mr. Chairman, there was a particular reference
to particular individuals and decisions made by members of the
Supreme Court, and one would believe that was a question of
motivation. And I know my objection is not timely, but I
believe that the gentleman's words could have been taken down
under the ruling of the parliamentarian in past decisions.
Mr. Smith. As the gentleman stated, his objection is not
timely. In any case, I am sure that the gentleman from Georgia
did not intend to impugn the integrity of members of the
Supreme Court, either individually or in the whole.
If the gentleman from Georgia would want to comment on
that, he is welcome to. If not, we will move on to questions.
Mr. Johnson. I appreciate that, Mr. Chairman. Just to clear
it up, I did not comment about what the Supreme Court has
already ruled. It is what I fear that they may rule. But this
matter may not even get to the U.S. Supreme Court. We will have
to see.
Mr. Smith. We will now recognize the gentleman from
Indiana, Mr. Pence, for his questions.
Mr. Pence. Thank you, Mr. Chairman. I want to thank you for
calling this hearing on what I think is perhaps the most
important constitutional question since I arrived on the
Judiciary Committee in 2001. That is this question of whether
or not the Federal Government has the power under the
Constitution of the United States to order Americans to
purchase goods or services, whether they want them or need them
or not.
And I want to thank this panel: General Cuccinelli, who I
greatly admire for his thoughtful testimony; and Professor
Dellinger and Professor Barnett. This has been an important
discussion.
We have now added the Judiciary Committee to a chorus of
kitchen tables around America, small tables in diners over
coffee. This is an argument the American people are fully
engaged in, and I think it is an enormously important debate.
And the disposition of this debate I think will bear greatly on
the liberties of our people for generations to come.
Professor Dellinger held up the phone book and compared,
frighteningly, and began to recite various goods and services
that could never be compelled by the Federal Government. And
while that list may be long and I assume good faith by the
witness, I fear that list, what would be included is longer
than any American today would ever imagine. Meaning those
things that could be regulated.
I want to associate myself strongly with something that you
said, General Cuccinelli. You quoted Professor Jonathan Turley
who said if the States lose this case, it is the end of
federalism. Let me say that I think the effort by States like
yours, like my own beloved Indiana, 27 States in all,
challenging this unprecedented exercise of Federal power
represents potentially the rebirth of federalism in America. I
leave that maybe for another hearing, Mr. Chairman, but I think
something very special is happening in America today, and I
believe it is something that our Founders would have, as you
said, General Cuccinelli, I think they would have greatly
identified with the notion that States ought to, by definition,
they should feel obligated to defend the liberties of the
people and defend their own prerogatives as a means of ensuring
the ongoing vitality of the limited government enshrined in the
Constitution of the United States, and most especially, defined
in the 10th Amendment.
I want to say specifically on this issue of regulating the
market, and Professor Dellinger, I think you and I vigorously
disagree on this, but I have great respect for your career and
for your intellect. Let me just stipulate, you will never
convince me that the Constitution of the United States gives
this government the power to order Americans to buy health
insurance. You just will never convince me of that. So I don't
want you to spend a lot of energy on that. You don't even have
to come over here.
Mr. Dellinger. I was going to leave.
Mr. Pence. That is not going to happen. But it is important
to me to understand your thinking on this. You actually said
this fell, in your judgment, this individual mandate in this
legislation, fell within, I think you used the phrase ``routine
power to regulate the insurance market.'' This is a very
sincere question, and sometimes we do more posturing here, but
I would love to know your answer to this question, and that is:
How does regulating a market include compelling people to
participate in that market? It does seem to me that you make a
point that the commerce clause contemplates an orderly
regulation of the Federal Government and commerce between the
States. But is it your view that if the government has the
power to regulate the insurance market in this country, that by
definition that also includes the power to compel Americans to
participate in that market?
Mr. Dellinger. That is closer to General Charles Fried's
view from the Reagan administration that purely and simply,
just as the Supreme Court held in 1905, that prohibiting
interstate commerce was a regulation of commerce, prohibiting
the shipment of lottery tickets in that case, so you can either
prohibit a commerce or require commerce, either way you are
setting the rules for commerce, I don't think you need to, and
I don't think the Supreme Court would actually reach that
question because I think they would simply say regulating
existing insurance contracts by forbidding preexisting
condition denials, for example, is clearly a regulation of
commerce.
And the only question is this, to use the court's phrase,
Justice Scalia's phrase, reasonably related to that regulation.
And, secondly, that this is a market in which Americans will
already participate, cannot choose not to participate, and the
facts show very substantially transfer the costs to other
people.
Now, let me acknowledge that when I say this is a routine
application, I think you are right to raise a question about
that. Let me acknowledge that in the following sense. While it
is well within the commerce power, imposing affirmative
obligations may very well demand a stronger level of
justification. I think what the Supreme Court would say is
there are three limits on Congress's power. First is political.
That is, it is the only thing that prevents you from adopting a
minimum wage of $5,000 an hour.
Second, there are liberty clause objections and Bill of
Rights objections. And thirdly, where I think Congress is
imposing affirmative obligations, you might need a special
justification. You can't simply say making people buy something
will help that company, it would help the economy, therefore
they can willy-nilly buy something.
As Randy Barnett said, a Supreme Court decision upholding
this would talk a lot about the uniqueness of health care. It
is the one market where Federal law requires people to provide
you with a service whether you are going to pay for it or not
and transfer the costs to other people. Therefore, it is
uniquely one where you could justify requiring people to
maintain coverage.
Mr. Smith. The gentleman's time has expired.
The gentleman from North Carolina, Mr. Watt, is recognized.
Mr. Watt. Thank you, Mr. Chairman.
I actually wasn't intending to ask questions. I came back
to thank my good friend, Mr. Dellinger, and the other two
witnesses, of course, but my relationship with Mr. Dellinger
goes back a long, long ways to North Carolina.
But I can't resist the rare opportunity that I have to
agree with Mr. Pence on a couple of issues, the first of which
is this is important for the Judiciary to have the hearing
about, even though in no sense will we be the final word on
this. It is working its way up through the courts. There is
substantial division of opinion about it. And ultimately, it
will be decided by the United States Supreme Court. So I think
it is important for me to agree with Mr. Pence that this is an
important hearing for the Judiciary Committee to have. It is
important for me to agree with him that Mr. Dellinger has had a
long and very bright legal career, and we thank him for that.
And I hope we have some agreement on one other thing
because Mr. Pence and I, over the years, have had pretty strong
feelings about one thing, and one comment he made, the comment
that says you will never convince me that this is
constitutional, I have kind of been in that position one time
myself on the short end of a 434-1 vote on an issue that I
thought was unconstitutional and that the Supreme Court
ultimately disagreed with my view on. I hope that once the
Supreme Court, if it does say this is constitutional, maybe
that will convince him because I had to have an attitude
adjustment on that issue once the Supreme Court ruled. I had to
come back and vote for some things I had to implement, to vote
for funding for something that I had previously thought was
unconstitutional.
And I hope we have the agreement that his never, ever,
ever, Walter Dellinger won't convince me, also doesn't apply to
the Supreme Court because he is going to be out there possibly
in a very difficult position. Having been there myself, I can
attest to that.
With that, this has been a great hearing. I am glad I got
to hear the witnesses before I had to go off and hear witnesses
in another Committee. I am glad I got a chance to come back and
at least express my appreciation to the Chairman for having the
hearing and to position myself in a similar position at the
opposite end of a spectrum from Mr. Pence, but nevertheless,
the dilemma is the same. We try to do what we believe is
constitutional. There is no way we would have been able to
convince Mr. Pence, or others, that this was a constitutional
undertaking.
But at some point, the Supreme Court is going to resolve
this question, and we are all going to have to live with it one
way or another. And I hope that the American people and the
Congress will get on with it and hopefully provide health care
to all of the American citizens if that is the ultimate
outcome.
So with that, Mr. Chairman, I yield back the balance of my
time.
Mr. Smith. Thank you, Mr. Watt.
Mr. Cuccinelli, thank you for your testimony today. We
understand you have to leave.
Mr. Cuccinelli. May I just thank Congressman Watt for
something that in my own legislature in Richmond I don't always
see, and that is a commitment to upholding your oath. If you
think it is not constitutional, to voting against it. I do not
see that enough. I don't have--I am not here with you all, I am
in Richmond, but my friends don't always abide by that. They
kick it to the court. They say it is a decision for the court.
Read your oath, and I really appreciate, Mr. Watt, you
fulfilling that oath in the way.
Ms. Lofgren. Mr. Chairman?
Mr. Smith. The gentlewoman from California is recognized
out of order.
Ms. Lofgren. I appreciate that and I understand that the
attorney general has to leave. I did have questions for him,
and I am wondering if I may submit those questions to him in
writing and get his agreement to answer them.
Mr. Cuccinelli. Ma'am, absolutely. And if we can help any
of you all, even if you may not agree, we are happy to help
talk through subject matter with anyone of you all to try to be
as helpful as we can as you try to do your job as you see fit.
Ms. Lofgren. Thank you.
Ms. Wasserman Schultz. Mr. Chairman?
Mr. Smith. Let me say to all Members that it is a part of
our regular order of business that all Members have 5
legislative days to submit questions to the Chair, and we will
submit the questions to the witnesses and get their responses
in time to make them a part of the record.
Ms. Wasserman Schultz. Mr. Chairman.
Mr. Smith. The gentlewoman from Florida is recognized.
Ms. Wasserman Schultz. Mr. Chairman, Attorney General
Cuccinelli, I am the next Democrat to ask questions, and my
questions are of you. Do you have an extra couple of minutes?
Mr. Cuccinelli. I brought my running boots, so I can.
Ms. Wasserman Schultz. Thank you very much.
Mr. Smith. Actually the gentlewoman from Florida is not the
next Member to ask questions.
Ms. Wasserman Schultz. I said I am the next Democrat.
Mr. Smith. The gentleman from Arizona, Mr. Franks, is
recognized.
Mr. Franks. Mr. Chairman, because General Cuccinelli has
been so kind to stay a little longer, let me first start out,
thank you for reminding us of our oath. We take an oath, we
swear to uphold and defend the Constitution, not to adding the
words unless the Supreme Court thinks otherwise. I am grateful
to you because that is indeed one of the great geniuses of this
country is that when we with trifurcated this government, all
of us would have to have some tension between us, if necessary,
to maintain the great principles of the country, and I am
grateful to you, sir.
This debate over the individual mandate, I believe, is a
big one, Mr. Chairman. I know that Professor Dellinger has
expressed sort of the general thought here, and I will
paraphrase, that no one can escape being part of the system
when it comes to health care. I guess I am concerned because
if, indeed, the commerce clause in the Constitution can compel
us to buy a certain product, then I wonder what cannot be
reached within the framework of economy? Any inactivity or
activity, I wonder what could not be reached by the commerce
clause?
I just think that the Chairman put it so well in his
opening statement, those who threw the Boston Tea Party for
excessive taxation of tea, I wonder how they would respond if
their government told them they had to buy tea. I think that it
might have been an even more lively party.
Every exercise of Congress's power to regulate interstate
commerce has involved some form of action or transaction
engaged in by an individual or legal entity. The government's
theory that the decision not to buy insurance is an economic
one, would, for the first time ever, permit laws commanding
people, coercing citizens, to engage in economic activity.
According to Ilya Shapiro, he is senior fellow of
constitutional studies at the CATO Institute, under such a
reading which two judges have upheld, Congress would be the
sole arbiter of its own powers. The only check would be
political. The Federal Government would have plenary power,
plenary authority to compel activities, as we have heard,
ranging from eating spinach to joining gyms to lessen the
burden on the health care system, to coercing citizens to buy
GM cars as, perhaps, an auto bailout.
So, Mr. Barnett, how would you describe the breadth of what
I suggest is a power grab under the ObamaCare rubric?
Mr. Barnett. Well, as I said, Congress has never before
tried to impose an economic mandate on the people. So it is a
new power. It is a new claim of power. And they have been able
to get along without that power for over 200 years. So they are
not claiming the power to do other things, but they are
claiming the power to do this. And being able to make you do
something, being able to make you enter the marketplace rather
than regulate you after you voluntarily choose to enter the
marketplace is a vast expansion of congressional power,
especially when it claims the power to do so as long as it sees
a rational connection between this mandate and its regulation
of interstate commerce, or sometimes more broadly put, the
regulation of the national economy.
It is a vast claim of new power that will, after it is
recognized by the Supreme Court, if it ever is, will be solely
within Congress's discretionary power to exercise.
Mr. Franks. Mr. Chairman, I would just express a sense of
gratitude to the American people because the former Congress
seemed to be headed in a pretty dangerous direction. The
precedent that they were willing to set, if you look at the
original version of ObamaCare introduced by the former House
leadership, it would require families to purchase insurance
that the CBO estimated would be $15,000 a year annually. It
would require families to do that for the average family of
four.
First of all, I am wondering if that is what is considered
free insurance, $15,000 a year requirement.
Under the original version, the even worse potential
precedent that they were attempting to set, and it didn't pass,
I am grateful for that, but it is an indication of the, I guess
arrogance, is the word. The failure to purchase the insurance
would have resulted in not only civil penalties, but criminal
penalties. If the head of household chose a pay medical
expenses out of pocket rather than purchase health insurance,
the citizen could have been fined a quarter of a million
dollars or sentenced up to 5 years in prison.
I am wondering if that kind of provision could be in a
health care bill introduced in the Congress. If ObamaCare is
upheld, is there anything standing in the way of such a legal
scheme to be instituted in the future? And Mr. Barnett, I will
give you a shot at it.
Mr. Barnett. Congressman, that is a very good point. As Mr.
Dellinger has noted, there are two provisions of the current
Act. One is the requirement that every person have health
insurance, and the other is a monetary penalty for the failure
to. Those are two different provisions.
The issue is the constitutionality of the requirement. And
if that requirement is upheld, the Supreme Court will certainly
say that Congress has powers to enforce this requirement
however it wishes to. It has chosen in its first iteration to
enforce it as a monetary fine or penalty. In the words of the
statute, a penalty. That is what it chose to do so now. Only
applicable to people who pay taxes.
But there is no reason, there is no constitutional limit on
Congress's power to enforce the requirement, once the
requirement is upheld as a valid regulation of commerce. So you
are absolutely right. That parade of horribles, that parade of
severe penalties could easily be upheld once the precedent of
the requirement is set.
Mr. Smith. The gentleman's time has expired.
The gentlewoman from Florida, Ms. Wasserman Schultz, is
recognized for her questions.
Ms. Wasserman Schultz. Mr. Chairman, thank you.
Attorney General Cuccinelli, I appreciate your indulgence.
I will try to ask my questions rapid fire to get you on your
way.
You mentioned in your written testimony that you see no
constitutional problem with Congress taxing Americans to pay
for government-provided health care; is that right?
Mr. Cuccinelli. Yes, ma'am.
Ms. Wasserman Schultz. And you believe that Medicare is
constitutional?
Mr. Cuccinelli. Yes, ma'am.
Ms. Wasserman Schultz. And you believe that Social Security
is constitutional?
Mr. Cuccinelli. Yes, ma'am.
Ms. Wasserman Schultz. And that is because in your view
Congress is taxing the activity of working?
Mr. Cuccinelli. In the transaction, yes. Voluntarily
engaged in.
Ms. Wasserman Schultz. Right. So in your view, Congress can
tax labor in the present to pay for social welfare legislation
down the road, and you are fine with that?
Mr. Cuccinelli. The tax, what it goes for is irrelevant.
They have the taxing power.
Ms. Wasserman Schultz. But something that we can--the
concept of taxing labor in the present to pay for social
welfare down the road is something that you are fine with? You
think it is constitutional?
Mr. Cuccinelli. As a constitutional matter, yes.
Ms. Wasserman Schultz. Okay. Do you also believe that
Congress can regulate activities that substantially affect
interstate commerce as was decided in United States v. Lopez?
Mr. Cuccinelli. Yes.
Ms. Wasserman Schultz. Were you aware that in 2008 alone,
the uninsured, those who got sick or had an accident and
couldn't pay racked up $43 billion in health care costs?
Mr. Cuccinelli. I read that in briefs for well on a year.
Ms. Wasserman Schultz. Is $43 billion a lot of money to
you?
Mr. Cuccinelli. It is heck of a lot of money. It is more
than my State's budget.
Ms. Wasserman Schultz. It is not more than mine, but it is
certainly a lot of money. Do you conceive that $43 billion
worth of uninsured medical costs substantially affects
interstate commerce?
Mr. Cuccinelli. Yes, but it does not give you the ability
to compel people against their own desire to enter into a
market to address the problem.
Ms. Wasserman Schultz. No, no, no. Because in United States
v. Lopez, which you support, commerce that is substantially
affected, Congress has the ability to regulate. That is what
you stated.
Mr. Cuccinelli. Ma'am, if your assertion in that question
is that then they can do anything, then you have reduced the
necessary and proper clause to the necessary clause. Anything
necessary to regulate is therefore within Congress's power;
that is simply not the case.
Ms. Wasserman Schultz. No, the Supreme Court decided that
activities that substantially affect interstate commerce, which
you just acknowledged that $43 billion is substantially
affecting commerce, then by connecting those dots, then you
would agree that that kind of impact affects interstate
commerce significantly?
Mr. Cuccinelli. Not as you have phrased it.
Ms. Wasserman Schultz. Well, did you know that the average
family paid an extra $1,000 last year in their medical premiums
due to the cost of the uninsured?
Mr. Cuccinelli. Again, I read it in briefs over the last
year.
Ms. Wasserman Schultz. Do you pay for your own health care?
Mr. Cuccinelli. Yes.
Ms. Wasserman Schultz. Okay, wouldn't you like to have an
extra thousand dollars in your pocket?
Mr. Cuccinelli. I would like to have an extra thousand
dollars whether I paid for my health care or not.
Ms. Wasserman Schultz. So would we all. Do you think
American families would like to have that extra thousand
dollars in your budget each year?
Mr. Cuccinelli. Obviously.
Ms. Wasserman Schultz. You would do what with an extra
thousand dollars, invest in a bank, invest in stocks, make sure
that you could send your kids to college?
Mr. Cuccinelli. Or donate to a Republican in Florida. Who
knows.
Ms. Wasserman Schultz. You may have to look at a different
district than mine. You might be throwing money away if you do
that.
Mr. Cuccinelli. Freely and with no compulsion, you are
right.
Ms. Wasserman Schultz. I think we have established pretty
clearly that you acknowledge that $43 billion is a significant
amount of money, that it significantly affects interstate
commerce, and I think your arguments that somehow we are
regulate inactivity by your testimony and your answers to my
questions makes it pretty clear that the individual mandate is
constitutional.
Mr. Cuccinelli. No, actually your questions used the words
``activity'' in your presumption, and that is where you fail.
Ms. Wasserman Schultz. Well, $43 billion in expenditures is
activity.
Mr. Cuccinelli. People deciding not to do something is
inactivity. It is the state of doing nothing.
Ms. Wasserman Schultz. If they go to the emergency room----
Mr. Smith. Let the witness answer one question.
Ms. Wasserman Schultz. Oh, he answered a bunch. Thank you.
Mr. Cuccinelli. If you look at the argument that you are
talking about there, there are two, call them ``boxes.'' One is
the action of a transaction undertaken. The other is the
decision not to undertake a transaction. To do nothing. Now, if
doing nothing is regulatable under the commerce clause, it
literally has infinite reach. If something can be regulated,
that is everything.
Ms. Wasserman Schultz. Mr. Attorney General, individuals
who have to go to the emergency room to get their health care
which is part of that $43 billion is not inactivity. That is
activity that we all pay for.
Mr. Cuccinelli. You can regulate at that point.
Ms. Wasserman Schultz. So it substantially affects
interstate commerce.
Mr. Cuccinelli. And you can regulate at that point. And the
Federal Government, by its own law, has sold the treatment that
causes in part the costs you are identifying. So the Federal
Government has trapped itself into a financial corner and then
says hey, we are trapped into a financial corner, give us new
constitutional powers so we can get out. That doesn't hold
water.
Mr. Smith. The gentlewoman's time has expired.
Ms. Wasserman Schultz. And I do appreciate the Attorney
General's Indulgence. It was a pleasure bantering with you.
Mr. Cuccinelli. Yes, ma'am, for me as well.
Mr. Smith. Mr. Cuccinelli, we appreciate your being here.
The gentleman from Texas, Mr. Gohmert is recognized.
Mr. Gohmert. Thank you, Mr. Chairman.
I think most of us would agree, including General
Cuccinelli, that the right to regulate is far different from
the right to mandate. And, in fact, if this Congress did a
better job of regulating rather than trying to run people's
lives, this country would be a whole lot better off. And in
fact, if the Federal Government, for example, did a better job
of regulating fraud and illegal activity with regard to stocks,
than perhaps we wouldn't have the Madoffs out there taking
advantage of people. But this government has gotten so
interested in mandating and running people's lives, that we
have lost sight of the job that is really important and that
is, regulating, making sure there is a fair, level playing
field for people to play on. We have been so busy being players
on the field and referees that we have really skewed what the
original intent was of the Constitution.
And so we hear all this talk about car insurance. Let me
ask the witnesses, are you aware of any State in the Union in
the United States that mandates the purchase of car insurance
in order to reside in that State? Either.
Mr. Dellinger. No.
Mr. Gohmert. Because I keep hearing that brought up, car
insurance. States can mandate car insurance. But I know, as
smart as both of you are, you know that no State mandates the
purchase of car insurance unless a resident decides to take
advantage of the privilege of driving on the State's roadways,
correct?
Mr. Dellinger. That is correct. What is similar about that,
that particular mandate, is that the reason that it is one of
the rare items that people are compelled to purchase to operate
a motor vehicle is that no one can be assured that they are
just not going to have an accident and impose costs on other
people.
Mr. Gohmert. Well, there----
Mr. Dellinger. And so here as well no one can be ensured
that they are not going to use health care and put the cost on
other people.
Mr. Gohmert. Let's go back. I haven't asked about health
care yet, because I am wanting to go after this metaphor of car
insurance purchase.
The fact is there is not a State in this country that
requires anybody to purchase car insurance on themselves in
order to have the privilege of driving on the roads. Every
State that I am aware of requires the purchase of insurance to
protect against damaging someone else, but you don't have to
buy insurance to drive on a road to cover your own damages. So
that is another difference from car insurance. This is the
Federal Government going in and saying, for the first time
ever, we are requiring not only the purchase of a private
product, but we are requiring you to purchase a private product
that must be used on yourself.
That seems pretty significant.
Mr. Dellinger. What is similar is that, in both cases, the
cost is imposed on other people. When you have a car accident,
it imposes costs on other individuals. Liability insurance
means that there is going to be a way to pay those individuals.
When the uninsured use hospitalizations, they wind up
paying only 10 percent of----
Mr. Gohmert. Who is ``they'', sir?
Mr. Dellinger. The uninsured--the uninsured pay only 10
percent of the hospitalization costs that they use.
Mr. Gohmert. Do you know how much insurance companies pay
on the cash value of services that are rendered? I know from
some lawsuits in which I was involved you have got insurance
companies that pay about 10 percent of what someone who doesn't
have insurance has to pay. So there are all kinds of problems
with the system the way it is set up.
We could regulate that system. We could require free market
competition, which we don't have and can't have as long as
nobody really knows what insurance companies are paying, what
pharmaceuticals get paid, what somebody really could get away
with paying if they work out a deal with cash. Those are the
kind of things we ought to regulate, and then people don't have
to be paying for everybody else's.
But again I see I am running out of time.
But let me just say, with regard to my friend from Georgia
who brought up Supreme Court justices, I wish I had heard from
my friends across the aisle the sense of outrage and also from
Common Cause the kind of outrage they are expressing, and the
racial hatred they are stirring up by doing so, if they had
raised that kind of issue over an ACLU leader sitting in
judgment on cases involving the ACLU or a Supreme Court judge
who has been a solicitor general sitting on cases in which the
solicitor general was involved. I think it would have a lot
more credibility to raise it at this point.
And with that I yield back.
Mr. Smith. Thank you, Mr. Gohmert.
The gentleman from Florida, Mr. Deutch, is recognized.
Mr. Deutch. I thank you, Mr. Chairman.
First of all, Mr. Chairman, I would, as a Member of the
other side of the aisle, take offense to the suggestion that
those in my caucus are somehow stirring up racial hatred. I
think it is an inappropriate comment.
Mr. Gohmert. Would the gentleman yield?
Mr. Deutch. I will.
Mr. Gohmert. I didn't say that. I was redressing Common
Cause that stirred up demonstrations that created racial
epithets and threats to Supreme Court justices and their
family. I am not aware of anybody on the other side of the
aisle stirring up that kind of issue; and if I indicated that,
I did not intend to. I was referring to Common Cause. So thank
you.
I ask unanimous consent that he have additional time to
make up for what I said.
Mr. Smith. Without objection, the gentleman from Florida is
yielded 1 additional minute.
Mr. Deutch. Thank you, Mr. Chairman.
We have been able to do the one thing that all of us
believe in. With the General's departure, we have leveled the
playing field.
I have some questions for both of you.
Professor Dellinger, you spoke earlier about the fact
that--and we have now confirmed with the General--that it is
constitutional to require the purchase of old age survivors and
disability insurance, that being Social Security; it is
constitutional to make payments, health insurance payments,
throughout one's working life with those benefits to then be
paid out upon retirement, that is Medicare; so I would like to
understand then why this is different, but I would like to play
it in a different direction.
Professor Barnett, if the Federal Government enforced an
individual mandate by deducting premiums from Americans'
paychecks and providing individuals with a coupon to buy
private insurance that they would have to be required--mandated
to buy from a private insurance company, would that be
constitutional, in your opinion?
Mr. Barnett. Mr. Congressman, this actually gets back to
Mr. Scott's earlier question about labels making a difference.
I agree with you that labels make a big difference. And
Congress does have a tax power. It is the label given one of
your powers, the tax power. And when you exercise that power,
you can collect revenues, and then you can then spend those
revenues for the general welfare, to provide for the general
welfare and the common defense.
And the programs that you have just mentioned are an
exercise of that tax power, and the constraint on the tax power
that is provided for up till now is political. And that is the
reason why Congress doesn't like to exercise it so much.
Because when they do exercise the tax power they have to pay a
political price for doing so. So they might rather call it
something else. So labels actually do make a difference.
Mr. Deutch. So collecting taxes then and handing out
coupons and requiring that those coupons be spent in the
private market, that is acceptable. That is constitutional.
Mr. Barnett. That would be an exercise of your tax and
spending power, Congressman.
Mr. Deutch. And what if individuals have the option to
purchase publicly run health insurance in the exchange? I guess
the question is, would public ownership of a health plan affect
the interpretation of the constitutionality of the mandate?
Mr. Barnett. I think the simplest way to put this is, if
Medicare is constitutional, then Medicare for everyone is
constitutional.
Mr. Deutch. So single-payer clearly would be
constitutional?
Mr. Barnett. Yes.
Mr. Deutch. And would an even greater exercise then of a
single-payer financed through new taxes and automatically
provided to all Americans, that would clearly be
constitutional? If, instead of this, we had an additional tax
that was used to finance a publicly created entity to provide
health insurance, that is clearly constitutional?
Mr. Barnett. Yeah.
Mr. Deutch. So how much more government intervention is
required to make the Affordable Care Act constitutional?
Mr. Barnett. There is no principle of constitutional law
that measures the degree of intrusiveness of constitutional
power. You have a list of powers in article 1, section 8, and
some of them are very intrusive, and some of them are not. One
of the most intrusive powers you have is power of taxation.
That is the reason why the general public is very sensitive to
when you invoke that power. And candidates run for public
office pledging they won't invoke that power. So the label
makes a big difference in terms of the constraint on that
power, but you do have that power.
Mr. Deutch. Professor Dellinger, would you flesh out that
distinction between the Affordable Care Act provisions and the
proposed privatization of Medicare which would provide coupons
that would then be--would then mandate individuals to use those
coupons in the private market?
Mr. Dellinger. I think what is important about that example
is that, functionally, it would be the same and yet there would
be no doubt about one being valid. The rhetorical arguments
wouldn't even be available to challenge it. So you have to ask
whether it could possibly be some great incursion in liberty if
you are merely talking about the way in which you label
matters.
But I think your question leads to a more--an even more
profound point, which is much of the argument against the
purchase requirement or the requirement that you maintain
insurance is that it is novel.
Now, all new laws are novel. But this is novel for a
particular reason. This is really the first time for a major
social program that Congress has chosen a market approach,
giving American citizens greater choice and giving them the
choice among private providers, rather than doing it through an
imposition and a monolithic government bureaucracy. And that is
what is novel.
Mr. Deutch. Professor Dellinger, I am sorry. I am running
out of time.
Professor Barnett, the last question is, why shouldn't
Congress be able to require individuals to assume
responsibility for their own health care when their inaction on
the issue has a direct and negative impact on society?
You spoke earlier about the things that we politicians run
on. Well, a lot of us are run on individual responsibility. Why
shouldn't we be expected to impose some responsibility on
American citizens to take responsibility for themselves?
Mr. Barnett. You certainly may, Congressman, as long as it
is within one of the powers that is given to you by the
Constitution.
Mr. Deutch. Thank you.
Mr. Chairman, I yield back.
Mr. Smith. Thank you, Mr. Deutch.
The gentleman from Pennsylvania, Mr. Marino, is recognized.
Mr. Marino. Thank you, Mr. Chairman.
Gentlemen, I have to admit that my constitutional appetite
has been fully satisfied today with your discussions. I really
appreciate that.
Professor Dellinger, I am not a betting man, but I think I
am forced to take you up on your bet, not with who may write
the opinion but the outcome of it. We shall see.
Mr. Dellinger. We shall see. And I will send a note to your
constituents saying what a fine and outstanding person you are
if you prevail. And you can hold me up to ridicule if----
Mr. Marino. I would never do that. I respect your intellect
and your arguments here today.
This question is to both of you, but, please, Mr. Barnett,
would you start with this?
My question is, there was discussion about if the Supreme
Court does rule this is not unconstitutional and then sending
back to the Congress for further legislation as to how the
health care program would be implemented, the limitations, does
that not move the line, the scrimmage line down the field for
further issues concerning constitutionality of what Congress
can do as far as implementing any particular program or any
particular thought that a Congressman or woman has in mind
promoting their cause? Do you understand my question?
Mr. Barnett. Really, all that is at issue here,
Congressman, I believe, is whether the Constitution gives
Congress the power to impose economic mandates on the general
public. So that is what the Supreme Court is going to have to
decide one way or the other. And your guess is as good as mine
perhaps how they are going to rule.
If they should uphold the power for the first time to
impose economic mandates on the general public, then at that
point when Congress now has this new power that it has never
needed to exercise before, there is going to be an awful lot of
future litigation or at least future issues about when that
power can and should be employed and when it cannot be. But,
generally speaking, the Court will defer to Congress' judgment
about when it may exercise one of the powers that Court thinks
the Congress has. So once they have acknowledged this power,
chances are at that point it is just going to be a matter of
Congress to employ this new power that it has.
Mr. Marino. Professor Dellinger.
Mr. Dellinger. I think a lot of your colleagues have asked
questions in the following form: If this is upheld, then can't
Congress do anything? And the answer to that is, if the Supreme
Court were to uphold this requirement on the grounds that
Congress can do anything, then indeed Congress can do anything.
But they won't.
The reason Chief Justice Roberts will write the opinion is
because I think he will want to write a narrow opinion. He
won't want to say that the market alternatives are ruled out
and you can only use monolithic government alternatives. He
will write an opinion to say that this is upheld not because
Congress can use its commerce power to impose affirmative
obligations willy-nilly to purchase, but it is upheld because
of all the reasons we have said about the central role it plays
in avoiding the displacement of costs on to other citizens.
And if that is the opinion the Supreme Court writes, then
only things that fit within that parameter will be regulatable
by Congress, and I think that will be a very small set.
Mr. Barnett. Congressman, you have yet to hear from my
friend, Mr. Dellinger--and he truly is my friend, actually. It
is not just one of these things we just say to each other. We
have known each other for a long time--and you have yet to hear
from former Solicitor General Fried, who was my torts professor
in law school, any constitutional limitation, any
constitutional limitation on this new claim of a power to
impose economic mandates.
Yes, health care is unique. It is different. It is free
rider problems. It is this. It is that. Those are not
constitutional principles. I agree if the mandate is upheld,
the opinion will be written like that. But it will not impose
any future constraint on the use of this new power once it is
acknowledged. And that is why you are having this hearing,
because there is a lot at stake as to what is going to happen
going forward.
Mr. Marino. Gentlemen, thank you. I have no further
questions. I yield back my time.
Mr. Dellinger. Chairman Smith, I have my own individual
mandate that I may need a couple of minutes to take care of, if
that is possible. I trust Mr. Barnett not to say anything
completely dishonest while I am down the hall.
Mr. Smith. We have had a request for a 7th inning stretch,
and we will take 5 minutes to recess and then resume our
hearing.
[recess.]
Mr. Smith. The Judiciary Committee will resume our hearing;
and the gentlewoman from Texas, Ms. Jackson Lee, is recognized
for her questions.
Ms. Jackson Lee. Thank you very much, Mr. Chairman; and I
appreciate this hearing. It has been fascinating. And I am
disappointed not because I don't have two remaining stellar
witnesses but that the Attorney General would not allow me to
banter with him. But I hope as we go forward with our witnesses
we will be able to give all Members a chance to question all
witnesses and that their time will be accordingly.
This is an important issue, and I just want to start with
sort of a given constitutional premise from the Wickard-Filburn
case that indicates that even when a farmer grew his own wheat
for personal consumption it was discerned that it was
interstate commerce.
So I want to raise questions of policy and law, Mr.
Dellinger, because you have argued before the Supreme Court and
because we have two distinct positions, four courts, two
decisions, one, the Affordable Care Act is constitutional, and
then the second with two courts unconstitutional.
And I might make the point that there is certainly some
question as to the persuasion of the two courts that rendered
the decision that it was unconstitutional, so the Supreme Court
becomes even more important, and I think that is what the
Founding Fathers intended for us to do.
Let me just give you these numbers: 5.8 million Texans
without coverage, includes 1.5 million children. My State has
the highest rate of residents without health insurance, 26.8
percent. According to a Gallup poll, 16 percent of American
adults are without health insurance. Census numbers say that 46
million Americans in totality are uninsured, 41.5 percent
Hispanic Americans, and 19.9 percent of African Americans.
Those are policy questions.
And let me just ask this. As I reflect on Supreme Court
decisions through the ages or say in the last--since 1950, 1954
decision on Brown v. Board of Education, have lawyers made
policy arguments before the Supreme Court?
Mr. Dellinger. Well, I think the answer to that question is
yes. In many instances, lawyers in our system do argue what the
practical outcome would be of one decision or another. It is--
--
Ms. Jackson Lee. Along with the law. I understand.
Mr. Dellinger. Throughout, yes.
Ms. Jackson Lee. But, in fact, you can raise sort of the
irreparable harm potential from a policy perspective as you
make your arguments.
Mr. Dellinger. That is one kind of argument that people can
and have made. Yes.
Ms. Jackson Lee. Well, I would venture to say a State that
has some 26 percent or large numbers of unemployed, 5.8 million
and 26.8 percent, a Nation that has 41 percent Hispanic
uninsured and then a sizable number of African Americans, I
think we have a question of whether there has been irreparable
harm.
So let me just proceed with some of the questions.
I will ask you, Mr. Dellinger, if instead of the word
``penalty'' someone said you will get a ticket if you don't
have health insurance, would that have answered some of the
opponents' concern? Tickets, you got a parking ticket, you got
a lack of health insurance ticket. Are we in the business of
semantics? Do we need to say that you have a ticket, you get a
ticket when you don't have insurance?
Would that have answered this whole question of the
mandate? Are we playing semantics here?
Mr. Dellinger. I think that is a question better asked to
those who believe it is unconstitutional. I think it is--since
it is no more intrusive than Medicare or Medicaid as a
practical matter, I don't think the label matters, that it is
not constitutional in any respect.
Professor Barnett, if they impose a ticket on you, would it
be unconstitutional?
Ms. Jackson Lee. And before he answers the question, let me
also raise this question, and I am not being facetious. But
could I not be engaged in economic activity by actively not
getting insurance? Isn't it a fine line of semantics? And might
I just--let me just put this on the record so you both can
answer this.
Just a few years ago, a Republican, Senator Orrin Hatch,
supported the idea of mandates in the Republican proposal for
health insurance. In fact, as I understand it, he said, ``to
tell you what you have to buy even if you don't want to buy
it'' is a quote. And then their particular plan would have
required everyone to buy coverage, and it would have helped
them do so by giving them a health care credit, which was a
point made earlier.
So couldn't I actively not be insured, and isn't that
economic activity? Professor.
Mr. Barnett. I thought maybe I would add to our
conversation a definition of penalty and the definition of tax
that has been adopted by the Supreme Court in a 1996 case, and
here is how justice Souder defined those two terms: He said, if
the concept of penalty means anything, it means punishment for
an unlawful act or omission. So that is what a penalty is, the
substance, not the label, just the thing.
By contrast, he then described a tax as, quote, a pecuniary
burden laid upon individuals or property for the purpose of
supporting the government. That is a tax.
So it isn't just a matter of labels. It is a matter of
substance. And you have to ask yourself, is the penalty that is
called a penalty in the bill, is it a punishment for an
unlawful act or omission defined as failure to have health
insurance, or is it an enactment, a burden laid upon
individuals for the purpose of supporting the government?
Ms. Jackson Lee. I ask the gentleman for 15 additional
seconds.
Mr. Smith. The gentlelady is recognized for an additional
30 seconds.
Ms. Jackson Lee. I thank the gentleman.
And I would make the argument, one, that, instead, it is an
incentive to do right, that it is not penalizing you. Because
penalty is punishment. You are not punished if you have health
insurance, in fact. And so you are, in fact, incentivized to
have health insurance, rather than take the negative, which is
to suggest that because you have the penalty you are being
punished.
I am helping you. I am helping you not have 26 percent
uninsurance in the State of Texas. I am helping children be
insured. I am helping diverse minorities be insured.
And I know during the civil rights arguments, even though
we were arguing on the Constitution, there were many policy
statements being made. Do we want to live in a Nation that
discriminates against a person for the color of their skin?
In addition to the amendment constitutional argument, do we
want to live in a Nation where there are people who are
uninsured, causing catastrophic costs to the Nation and others
have to pay? I think that is a question that should be
considered by the courts.
And I also need to--I understand the Souder language, but I
also need to say whether or not it is more an incentive than it
is a punishment. I am more inspired by incentive, and I welcome
it being a parking ticket. We give parking tickets all the
time, and no one complains about being required to do the right
thing.
I yield back.
Mr. Smith. The gentlelady's time has expired.
The gentleman from South Carolina, Mr. Gowdy.
Mr. Gowdy. Thank you, Mr. Chairman.
I want to start by commending all three of the witnesses,
the two that are remaining and the Attorney General, for the
civility and the professionalism with which you disagree with
each other, which really is an example for all of us.
Professor Dellinger, was Morrison correctly decided?
Mr. Dellinger. Yes.
Mr. Gowdy. So Congress can mandate that the victim of
domestic violence purchase health insurance but cannot set a
forum in which she seeks justice for her injuries?
Mr. Dellinger. That is correct.
Mr. Gowdy. Help a guy that made a C in con law understand.
Mr. Dellinger. Well, the reason is that the Supreme Court
held in Morrison that local crime had only an attenuating
connection to national commerce.
Mr. Gowdy. But she has got injuries which will be treated
for at a hospital. So we can make her have health insurance for
her injuries, but we can't set the forum for the adjudication
of the underlying crime.
Mr. Dellinger. Correct.
Mr. Gowdy. What about Lopez?
Mr. Dellinger. That is because there is something different
about the health care market that you can't avoid participating
in it and transferring the costs to others.
And also what the Court was concerned about in Morrison and
in Lopez regulating guns near schools was that fact that, once
you got into the area of local crime, because all local crime
affects commerce in the sense that people who are crime victims
are less productive, there is no limit to what----
Mr. Gowdy. However, in Title XVIII you specifically have to
prove that the gun traveled in interstate commerce. In the
Hobbs Act, you have to prove that the good that was stolen from
the store in a Hobbs Act case traveled in interstate commerce.
Mr. Dellinger. Correct.
Mr. Gowdy. So you concede there are--that this language
``Congress shall have the power to regulate commerce among the
several States'' still means something.
Mr. Dellinger. Yes.
Mr. Gowdy. Can Congress mandate the purchase of dental
insurance if we show that overall dental health is tantamount
to overall dental health? Can we mandate the purchase of dental
insurance.
Mr. Dellinger. It would depend on what the Supreme Court
said in upholding the health care mandate.
Mr. Gowdy. Well, I am asking you. If you were on the
Supreme Court, you are advocating on behalf of the
constitutionality of this particular mandate.
Mr. Dellinger. If I were on the Supreme Court and asked to
pass on a mandate to purchase dental insurance, I would want to
know whether Congress had the same basis for showing that
people had no choice but to get dental care. And maybe that
showing could be made and that the cost of that care, when
obtained, was transferred to other taxpayers.
Mr. Gowdy. What about life insurance? Because we are all
going to die, and generational debt is a bad thing. Can
Congress mandate the purchase of life insurance?
Mr. Dellinger. I would assume that that is distinguishable.
Because there is no showing that if you don't buy life
insurance that the cost is going to be imposed on other
Americans.
Mr. Gowdy. Can you give me three examples where you would
find that Congress has exceeded its--that the commerce clause
is not as elastic as some of my colleagues believe it to be?
Mr. Dellinger. Yes.
Mr. Gowdy. I will just take three.
Mr. Dellinger. Congress cannot regulate that you eat
broccoli, that you go to a gym, or, in my view, that you
purchase a flat-screen television.
Mr. Gowdy. So you do not see much of a stretch between
mandating the purchase of health insurance and mandating other
things that contribute to good overall health like vision
insurance and dental insurance?
Mr. Dellinger. Contributing to overall health is a fine and
salutary objective, but it may be one that the Court would
think is a matter for local governments. This is a regulation
of an economic activity itself, and let me just give you one
example.
If the----
Mr. Gowdy. I will give you 10 seconds, because I have one
more chance to ask another law professor a question, and I have
never had this chance in my life.
Mr. Dellinger. Ask Professor Barnett again; and if I have a
moment, I will come back.
Mr. Gowdy. Some would argue that you gave the road map to
the opposition, so to speak, by your wonderful advocacy in
Raich. Am I correct pronouncing it?
Mr. Barnett. Raich. Angel Raich was my client.
Mr. Gowdy. And that is marijuana being sold, grown purely
within a State, and you convinced the Supreme Court that that
impacts--that Congress can regulate that. How is that not a
road map for the opposition?
Mr. Barnett. When you say I convinced the Supreme Court,
you mean I argued strenuously against that, and I only got
three votes, and I lost that case.
Mr. Gowdy. You lost it. Well then good. That makes me feel
better.
Mr. Barnett. It was Solicitor General Paul Clement who won
that case, and I failed to convince the Court.
Mr. Gowdy. In 10 seconds, if the Chairman will give me 10
seconds, how does Raich not carry the day on this issue?
Mr. Barnett. Because it would be as though Congress had
required that my client grow marijuana for medical purposes.
What they said is she couldn't grow it, and the majority of the
Court said she couldn't grow it. Because growing marijuana,
like growing any other good, is an economic activity and
therefore is something within Congress' power to reach,
economic activity. But they never said or intimated that
somehow Congress had the power to make her grow marijuana. That
would be a step that no one even imagined until last year was
something Congress would ever claim.
Mr. Smith. The gentleman's time has expired. Good question.
Thank you.
Mr. Issa, the gentleman from California, is recognized.
Mr. Issa. Thank you, Mr. Chairman.
The line of questioning has been interesting, and I
apologize I have been going in and out with another Committee.
But I am trying to understand something.
Mr. Barnett, you are a professor. Maybe you can help me.
There is a long history of States requiring insurance if you
want to drive an automobile, right? But even when they require
you to do that--I am a native of Ohio--they have held in those
States that, constitutionally, they can't make you buy the
insurance, but they can make you provide the equivalent of
insurance. So, in the case of Ohio, they can't make you buy
insurance. They can make you post a bond, show financial
ability to pay if you are in an accident, or buy insurance.
Is there anything in the Health Care Reform Act that is the
equivalent of that for people who say I can take care of my own
health care?
Mr. Barnett. Well there is an exemption in the Act for
people who have religious objections. So it is somehow not
necessary that they----
Mr. Issa. But being wealthy enough to pay for your own
health care is not a religion.
Mr. Barnett. No. No.
Mr. Issa. So we don't--in this Act, if there were no other
problem, we fail to observe people's right to pay out of their
pocket. In other words, we force them to enter into a
commercial relationship with a for-profit entity, an insurance
company.
Mr. Barnett. That is the mandate. Yes.
Mr. Issa. Is that enough to be unconstitutional, just
because we didn't leave them their individual liberty to simply
pay the doctor themselves?
Mr. Barnett. I think the way to simplify this, just for
purpose of understanding, whichever side of this you are on, is
that when you choose to engage in voluntary activity government
at the State and Federal level may regulate that activity that
you choose to engage in in a variety of ways. And the Federal
Government has some powers to regulate, State governments have
other powers to regulate. But there is just no dispute that if
you voluntarily decide to engage in activity the government can
tell you how to do it, like if you are going to drive a car,
you have to do it this way. You have to get a driver's license,
too, in addition to insurance. That is something else you have
to get.
Mr. Issa. So you agree that the Federal Government could
simply nationalize all insurance and take away from all States
the right to regulate insurance companies, eliminate 50 States'
insurance commissioners?
Mr. Barnett. The Supreme Court in 1944 said that insurance
was commerce, an interstate commerce, and that is the precedent
that we are living with. For 100 years before that, it denied
that is true. But now that is established law, and no one is
contesting that. So Congress can do, in regulating that
industry, whatever they can do in regulating any other
industry.
Mr. Issa. Here is a question I find amazing, and it is not
on the same topic as others.
So those who voted for ObamaCare--we will call those the
other side of the aisle and nobody on this side of the aisle--
they could have simply created 50 State complete over-the-
border selling, and they could have even taken it on to a 50
State common federalized system if they had wanted to. They
could have usurped all of the States and had anyone who is
licensed anywhere be licensed to the Federal Government and
therefore sell insurance in all 50 States and created
incredible competition on a national basis by having a single
standard, couldn't they?
Mr. Barnett. The reason why States still regulate insurance
is because Congress passed the McCarran-Ferguson Act in 1944.
After the Supreme Court said it was in your hands, then
Congress turned around and said we are going to preserve the
State system that had been up and running----
Mr. Issa. Right. But ObamaCare has partially preempted it.
It could have preempted that.
So I understand that when my colleagues on the other side
said they wanted to bend the health curve down, they wanted to
save money, and they wanted to find ways to have more
competition so that you wouldn't have just one choice in
Alabama or South Carolina, they could have done that very
easily because one law trumps the one before it. They would
simply amend that.
Mr. Barnett. Yes, Congressman.
Mr. Issa. So we didn't do the constitutional common 50
State insurance. We didn't put in any kind of a personal
responsibility alternative where you simply post a bond or
provide the proof that you can pay for it. We didn't do a lot
of things we could do. But we chose to mandate that you pay if
you don't pay. Is that right?
Mr. Barnett. Yes, Congressman.
Mr. Issa. Mr. Dellinger, you have done a wonderful job of
telling me how, you know, there are all these things that are
okay constitutionally. But what about that mandate that I pay a
private entity rather than, if you will, the personal
responsibility that was envisioned by our Founders? They
certainly did expect that George Washington could have a doctor
come in on his own, that he wouldn't have to buy something that
wasn't even available at the time, insurance, right?
Mr. Dellinger. Right.
Mr. Issa. Mr. Chairman, I thank you for this hearing.
Being the last on my side, I would assume that all that
could be said had already been said, but I found one little
piece that I thought hadn't, and I yield back.
Mr. Smith. Thank you, Mr. Issa, for your contribution.
Actually, you are next to last, because the gentlewoman from
Florida, Mrs. Adams, is recognized.
Mr. Issa. Sorry, only on my side.
Mrs. Adams. Thank you, Mr. Chairman.
And I will preface this by saying I come from Florida,
also; and I stood with our Attorney General then, Attorney
General McCollum, when he challenged this law when it was
signed into law. I agree with him. I believe that it is
unconstitutional, and I will go ahead and tell you up front.
I am trying to reconcile how you believe, Mr. Dellinger,
that if someone is sitting in their home and they are not
engaged in any activity how the Federal Government could then
force them to engage in this activity?
Mr. Dellinger. Well, the Federal Government, like the State
and local governments, has for more than 200 years sometimes
imposed affirmative obligations on individuals where they have
had power. Sometimes it is an important power like the militia
power where everyone was required sitting at home to go out and
buy a knapsack for their ammunition, the Congress in 1792.
Congress is never considered, quote, regulating an activity
when they impose an affirmative obligation and then they can
only impose an affirmative obligation where they already have
the power to do so.
Now, the penalty in this law does not apply to someone who
is just sitting at home. It is only when that person goes into
the national economy and earns $18,000 for a couple that they
are required to file a Federal income tax and make a 2\1/2\
percent additional penalty payment if they haven't maintained
minimum insurance coverage. Like you have to pay a couple
percentage points for Medicare coverage for when they are over
65, they have to pay 7\1/2\ percent for Social Security for
old-age assistance after they are 65.
Those are impositions that the government makes, the latter
two under the taxing power, but none of them seem particularly
extraordinary in terms of an incursion of liberty. And, in
fact, what is so----
Mrs. Adams. Let me stop you there. Because the knapsack and
the gun--I also am a staunch supporter of the Second Amendment,
and I understand that that was done so that we would have some
kind of protection to our country, and that is a constitutional
requirement that government provide for our safety and well-
being.
On that same inference that you are saying, so this person
who works, may not have a car, and so, therefore, under that
same analogy, there are car accidents, there are a lot of tort
actions, there is a lot of costs associated with those
accidents. Would you then say that we should maybe say that
everyone, no matter if they own a car or not, because you are
going to buy car insurance, so are you now saying that everyone
who owns a car, whether they own a car or not, should have to
pay car insurance so that everyone would be covered if
something were to happen in an accident?
Mr. Dellinger. No, I would not.
Mrs. Adams. Okay. You made a comment that kind of concerned
me. You said that no one can decide not to use health care. Do
you believe that everyone has to use health care?
Mr. Dellinger. No. What I mean by that--and that is a good
question. What I mean by that is, except for those who have
religious objections to health care----
Mrs. Adams. You didn't say that, though. You said--and you
said it right here in this hearing, and I wrote it down
verbatim because I thought that was unusual. You said, no one
can decide not to use it.
Mr. Dellinger. Yes, that is correct.
Mrs. Adams. So that concerns me also because----
Mr. Dellinger. May I----
Mrs. Adams. When I hear about the Federal Government taking
more and more liberty away from the American people or imposing
their will on the American people, when I heard that statement,
it made me concerned that you believe that no one can decide
not to use health care in America.
Mr. Dellinger. That is a statement of fact, Mrs. Adams, not
a statement of preference. That is to say, no one can be
assured if you are riding a bicycle, as I do, that you are not
going to be hit by a truck and wind up in the emergency room.
And when you do, under the Emergency Medical Treatment Act,
they are going to have to provide with you with treatment,
whether or not you are going to pay for it----
Mrs. Adams. If you get hit by the truck, hopefully they
have insurance. Because if you are driving that vehicle on a
city roadway or a city roadway or a county roadway or a Federal
roadway then in order to have the privilege of driving that
truck, you have to have insurance. So let's move on.
Mr. Dellinger. I was on a bicycle.
Mrs. Adams. I really am concerned about that statement, but
I am going to move on. Because there has been conversation
about choice, choice, here; and I would like to know from you
and Mr. Barnett how do you equate choice with mandate? How do
you bring those two together?
Mr. Dellinger. I bring them together in the following
sense, that one proposal for dealing with health care for the
last 40 years, one that Congress did not adopt, is simply to
extend Medicare from age 65 all the way down so that people
would be taxed out of their income to pay for Medicare. This
alternative adopted instead, Mrs. Adams, gave people more
choice among private providers, rather than having them limited
to a government provider.
Mrs. Adams. Mr. Barnett, quickly.
Mr. Barnett. This bill does give people the choice between
a congressionally mandated--between providers of
congressionally mandated health insurance policies. You no
longer have a choice--insurance companies no longer have a
choice on what terms to offer you and you no longer have a
choice on whether to do business with them. The only choice you
have is which insurance company you do business with. And that
is not really--that is a choice, but it is not the choices that
we started with.
Mrs. Adams. Thank you.
Mr. Smith. I thank the gentlewoman.
The gentleman from Arkansas, Mr. Griffin, is recognized for
his questions.
Mr. Griffin. I don't have any at this time.
Mr. Smith. That makes it easy.
We have concluded our hearing, and let me thank the
witnesses again for their testimony.
Without objection, all Members will have 5 legislative days
to submit additional questions for the witnesses, and we will
make their responses part of the record.
Also without objection, Members will have 5 legislative
days to submit additional materials for the record.
With that, again, thanks to the witnesses. We are
adjourned.
[Whereupon, at 12:23 p.m., the Committee was adjourned.]
A P P E N D I X
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Material Submitted for the Hearing Record
Prepared Statement of the Honorable Henry C. ``Hank'' Johnson, Jr., a
Representative in Congress from the State of Georgia, and Member,
Committee on the Judiciary
Prepared Statement of Charles Fried, Beneficial Professor of Law,
Harvard Law School
American Constitution Society (ACS) for Law and Policy, Issue Brief,
The Health Care Lawsuits: Unraveling A Century of Constitutional Law
and The Fabric of Modern American Government, Simon Lazarus, February
8, 2011
Statement of Support from Legal Scholars
Articles on Health Care Reform
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