“IS OBAMACARE UNCONSTITUTIONAL?”

INTRODUCTION BY:

TOM FITTON, PRESIDENT OF JUDICIAL WATCH

FEATURING:

CONGRESSMAN JIM SENSENBRENNER (R-WI) AND GEORGETOWN PROFESSOR OF LAW RANDY BARNETT

TUESDAY, MAY 11, 2010

TRANSCRIPT PROVIDED BY DC TRANSCRIPTION – WWW.DCTMR.COM

MR. TOM FITTON: Everyone, welcome. I’m Tom Fitton. I’m president of Judicial Watch. Judicial Watch is a conservative, nonpartisan educational foundation, dedicated to promoting transparency, accountability, and integrity in government politics and the law. And through our educational endeavors, Judicial Watch advocates high standards of ethics and morality in our nation’s public life and seeks to ensure that political and judicial officials obey the law and do not abuse the powers entrusted to them by the American people. Judicial Watch has not endorsed or opposed candidates for public office.

The passage of ObamaCare is seen by many as a fundamental threat to our

nation’s constitutional order. Here in Washington, we’re used to challenging legislation and policies on practical or philosophical grounds. But it’s relatively rare to have a wholesale challenge to a law based on the Constitution. And indeed, I can think of no other law in recent American history, maybe other than McCain-Feingold that has been so widely challenged on constitutional grounds.

The constitutional questions about ObamaCare are many. Does it violate

principles of federalism, at least certain areas of public policy to the sovereign states and not to the federal government? Does ObamaCare violate the Commerce Clause of the Constitution by giving the federal government the power to force citizens to buy health insurance?

At least 20 states are challenging the constitutionality of ObamaCare in federal

court. And as key parts of the law come into effect over the next few years, you can expect more challenges and it may be a decade or more before all the court challenges are resolved. Frankly, given its massive scope, one might expect never ending litigation related to ObamaCare. And it may even impact the pending nomination of Elena Kagan to the Supreme Court. What is Elena Kagan’s view on the scope of the Commerce Clause? Did the White House, as one report suggests, put her up specifically to check constitutional challenges to ObamaCare? These are the sorts of questions that are going to be raised, I think, during her confirmation hearings.

Now, I’ve just touch on the surface of the debate about the constitutionality of

ObamaCare and I’m going to leave it to our expert panelists here to delve deeper. Joining us – we’re honored to be joined by Congressman Jim Sensenbrenner, who

represents the Fifth Congressional District of Wisconsin. Jim was born in Chicago and later moved to Wisconsin with his family. And he graduated from the Milwaukee Country Day School and did his undergraduate studies at Stanford University, where he majored in political science. He then earned his law degree at the University of Wisconsin-Madison in 1968.

After serving ten years in the Wisconsin State Legislature, Jim ran for a U.S. House seat and was elected in November, 1978 and has been reelected ever since.

His current committee assignments in the House include serving on the

Committee on the Judiciary and the Committee on Science and Technology. And specifically he also serves as the ranking member on the Subcommittee on the Constitution, Civil Rights, and Civil Liberties. He is the former chairman of the House Judiciary Committee, and as a long-serving member, Jim has established a strong record on crime, intellectual property and constitutional issues.

Throughout his public life, Congressman Sensenbrenner has been at the forefront

of efforts to preserve the sanctity of life, eliminate wasteful government spending and protect the interests of the American taxpayer. He has regularly been cited by the National Taxpayers Union as one of the most fiscally responsible House members and is well known for completing his financial disclosure forms down to the penny. And I can tell you. Judicial Watch appreciates congressmen who pay attention to their financial disclosure forms.

Joining us also – we’re honored to be joined by Randy Barnett, who is the

Carmack Waterhouse Professor of Legal Theory at the Georgetown University Law Center, where he teaches constitutional law and contracts.

After graduating from Northwestern and Harvard Law School, he tried many

felony cases as a prosecutor in the Cook County States’ Attorney’s Office in Chicago. We can have a whole panel just on that. (Laughter.)

He has been a visiting professor at Northwestern and Harvard Law School. And

in 2008, he was awarded a Guggenheim Fellowship in Constitutional Studies. Professor Barnett’s publications include more than 90 articles and reviews, as

well as nine books, including – for the purposes of this discussion – Restoring the Lost Constitution: The Presumption of Liberty and The Structure of Liberty: Justice and the Rule of Law.

And in 2004, he appeared before the U.S. Supreme Court arguing the medical

marijuana case of Gonzalez v. Raich before the Supreme Court. And obviously, he’s a well-known figure as a legal commentator in the media,

appearing on various television programs and FOX News channel and NBC Nightly News. And he regularly writes for the Wall Street Journal. And Randy, you just told me you have blog, which – what’s –

MR. RANDY BARNETT: On the “Volokh Conspiracy,” a law blog. MS. FITTON: – the “Volokh Conspiracy.” So Mr. Sensenbrenner will go and

then Mr. Barnett will go. And then, we’ll discuss things here for a little bit at the table

and then we’ll open up our discussion to members of our audience. And I’d like to specifically welcome those of you who are viewing this via webcast. So we appreciate your input or feedback as a result of this as well.

So I’ll turn the microphone over to Congressman Sensenbrenner. REP. JAMES SENSENBRENNER (R-WI): Well, thank you very much, Tom.

And I think it is very important that Judicial Watch has put on this discussion today because the constitutional questions that have been posed by the passage of the ObamaCare legislation have to take front and center at least until the president leaves the White House because there will be no political relief from what is contained in ObamaCare that can pass over a veto until there is a different hand on the veto pen.

I do a lot of town meetings back home, maybe 130 or 150 of them a year. And

one of them this spring, a gentleman, got up and said what’s the role of the federal government? And my response was very simple and straightforward. The role of the federal government is what the Constitution says it is, no more and no less.

At the beginning of every term, each senator and representative takes an oath to

preserve, protect, and defend the Constitution against all enemies, foreign and domestic. I interpret that oath as requiring me to vote against legislation that I believe violates any of the clauses of the Constitution. Unfortunately, I don’t think a majority of my colleagues in the House of Representatives feel the same way I do. And I’d just point out that about a year ago, the House of Representatives passed an unconstitutional bill of attainder against people of one company who received executive bonuses. Even the president of the United States, who at one time was a con law professor, described it as a bill of attainder, but nobody even stopped and paused when the argument of the constitutionality of that legislation came up.

Now, with respect with the current health care debate. The supporters of

ObamaCare hide behind the presumption of constitutionality that attaches to all acts of Congress. And that simply means that if one wants to challenge the constitutionality of something that’s passed by Congress; they have the burden of proof to show that it is constitutional. And the Justice Department, and specifically Ms. Kagan’s Solicitor General’s Office, is hidebound to defend laws that have been passed by Congress.

I think people who are looking at this legislation think that the constitutional issue

is a slam dunk, that a court will quickly dismiss any challenge of it. And I’m afraid that if they look at those constitutional issues, they’re going to get their comeuppance and find out that there is a justiciable question, which we will find out when it reaches the Supreme Court of the United States.

Most of the attention, the lack of constitutionality, has been paid to the individual

mandate provisions of ObamaCare, which forces people to buy insurance from the insurance exchanges that are set up if they do not get qualified insurance policy through their employer. And I think that in thinking about these questions it’s instructive to go

back to the 1994 debate about HilaryCare, which never did pass the Congress of the United States. The Congressional Budget Office said that an individual mandate was an unprecedented form of federal action and that Congress has never forced people to buy any good or service as a condition of law for residents in the United States. And that is exactly the constitutional issue on the individual mandate that the courts are going to be called upon to decide.

This poses both Commerce Clause and Fifth Amendment problems. Now, let’s talk about the Commerce Clause first. The Supreme Court has been all

over the map in determining what the extent of the Commerce Clause is. There have been expansive cases. There have been restrictive cases. And I think that it’s very difficult to determine what trend the court’s taking on a Commerce Clause question, I think it largely depends upon how the majority of five or perhaps more feel the way it is. But there’re several things that I think come into play here.

In 1868, the Supreme Court held that insurance wasn’t commerce. Now, whether

or not Thad Preston will hold today is open to debate. But if Thad Preston is followed and not distinguished or overruled, that causes the argument because if insurance isn’t commerce, than the Commerce Clause can’t be used to create a regulator.

If the Supreme Court does distinguish or overrule the 1868 case, then the Obama

bill has got another problem. And that is, is that the insurance exchanges that are established by ObamaCare only have insurance pools that are within a state. The Republican alternative, which was rejected, allowed the insurance pools to be multistate or nationwide. If the insurance pools don’t cross state lines and the exchanges are set up within a state, then you don’t have any commerce, if insurance is commerce, crossing a state line. And that argument is going to have to be answered.

Now Commerce Clause has always been used to regulate economic activity. If

you look at the arguments of the Constitutional Convention, the framers did not want to have the 13 states establishing tariff barriers to try to keep goods and services produced in other states out. And that’s what intrastate and foreign commerce was given to the new federal government, specifically the Congress to regulate. But failing to buy insurance is economic inactivity, meaning there isn’t any economic activity and it will require major judicial activism, basically to turn around previous decisions 180 degrees because the regulation has always been the economic activity rather than the economic inactivities.

The argument that would be made against what I’ve just said is that no state must

participate in Medicaid, which is the condition of having these insurance exchanges. And that would cure the problem. But practically, that would be ineffective because if a state pulls out of Medicaid, its citizen will continue to be taxed basically to provide Medicaid services to other states. And that is certainly not a winning platform for any state legislator or governor to run up.

So I think that they painted themselves into a corner saying that the Commerce Clause actually authorizes what has been enacted into law in ObamaCare. So if you look at the arguments that have been made immediately after the passage of the bill, all of a sudden, rather than the penalty for not buying insurance through the individual mandate, being okay by the Commerce Clause, they’re starting to call it a tax. Well, the penalty is not called a tax in the text of the bill. There’re other provisions in the bill that are specifically stated imposing a tax. And I’ll give three examples of them.

One is the tax on Cadillac employer sponsored health care plans. The other is the

tax on tanning beds. And then there is a passive transaction tax. If you’re over a certain amount of income on sales and purchases, that triggers a capital gains tax. Every one of those in the Obama care bill states specifically that the bill imposes a tax on these types of transactions. There never is anything stated in that text of the bill that says that the penalty for not buying insurance under the individual mandate is a tax.

And I guess I can say, if it quacks like a tax, if it wattles like a tax, if it acts like a

tax, it’s a tax whether it’s called a tax or not called a tax. And this one is not called a tax. Now, finally, I think that the arguments that will be initially made by the

supporters of ObamaCare in choir are that nobody has standing to be able to mount a constitutional challenge. And if this forum were held four years ago, I would say they probably win on that issue. However, in the case of Massachusetts v. EPA, which interpreted the Clean Air Act as allowing the Environmental Protection Administration to regulate greenhouse gas emissions, there specifically they stated that the State of Massachusetts had standing to file this lawsuit and to win it in the Supreme Court in order to protect its citizens.

So I think the argument of standing is a bad argument if you don’t talk about

Massachusetts v. EPA. But if the Supreme Court ever says that Massachusetts v. EPA did not confer standing, then Massachusetts v. EPA ends up falling as well.

Now, in conclusion, in my opinion judicial action is the only way to stop

ObamaCare, at least until January 20th, 2013. And the reason for that is that political action will be impossible, even if the Republicans win control of both houses of Congress in the November election because any major change to ObamaCare, which is an entitlement program and in most cases not subject to annual appropriations by the Congress, will be vetoed by President Obama. So we have to put all of our eggs in the judicial basket and just to repeat, this is not a slam dunk that it’s going to get thrown out of car. I think there are enough legitimate judicial questions that have got to be litigated and resolved. And by bet is is that one of these arguments will end up getting five votes in the Supreme Court.

Thank you. MR. FITTON: Thank you, Congressman Sensenbrenner. Randy Barnett?

MR. BARNETT: Thank you, Tom, for inviting and thank you, Congressman, for those remarks. I – which I largely agree with, almost entirely agree with.

When we talk about whether something is constitutional or not constitutional,

there are three different senses of constitutional that people mean when they say this. And it’s important to keep these senses separate so that we don’t talk past each other. The first sense is whether something – the first sense depends on what the Constitution says and what the Constitution means. The second is what the Supreme Court has said and what the Supreme Court has meant. And the third sense is can you count to five votes. These are not the same things.

If you’re going to evaluate the constitutionality of the health insurance reform

measure that we’re calling ObamaCare under what the original Constitution says, this would not be a difficult case. Both the individual health insurance mandate and the various requirements that are imposed on states would be unconstitutional under the original Constitution, even as amended – the original meaning of the Constitution as amended. And in fact, I doubt there would be any constitutional scholars who would disagree with that claim. But that’s not the realm in which we are debating the constitutionality of this measure. We’re debating the constitutionality of this measure in the second and the third realms, which is what has the Supreme Court said about the Constitution and what the powers of Congress are, and what is our prediction about counting to five votes in the Supreme Court about a lawsuit.

So let me just talk a little bit about what the Supreme Court has said. Since the

New Deal, the Supreme Court has radically – has interpreted the Constitution as radically expanding the powers of Congress, particularly over the national economy. In a series of cases decided in the New Deal, it essentially held the Congress could regulate even activity that was not intrastate commerce in pursuit of its over intrastate commerce so long as that activity was economic in nature and had a substantial effect upon intrastate commerce. And this allowed Congress to regulate all kinds of economic activities that where wholly intrastate and not commerce itself. And one of the things you might be asking yourself is, well what is commerce? What would be economic and not commerce?

Well, the original meaning of commerce, which has never been formally changed

by the Supreme Court, concerned the buying and selling and trading and transportation of goods across state lines. It was trade. That’s what commerce meant. And the original meaning of commerce did not include, for example, such economic activities as farming or agriculture or manufacturing. Those were considered to be economic activities that were governed by the police powers of the various days. That’s the original meaning of commerce.

The Supreme Court’s never formally changed that meaning. What it did do is it

said that the Congress can reach activities that are not strictly speaking commerce, such as manufacturing and agriculture, and a variety of other economic activities that are existing within the states if those activities have a substantial effect upon intrastate

commerce. And that’s the power, other than the spending power, that Congress most often utilizes to regulate activities throughout the country.

So after the New Deal, what most law professors taught about the power of

Congress was that Congress could pretty much regulate whatever it chose to. And for about 50 or 60 years, that was largely the case. Congress not only thought it could regulate it – not only did law professors think that Congress could pretty much regulate whatever it wanted to, Congress thought it could regulate pretty much whatever it wanted to. And so in 1995, when Congress passed the Gun Free School Zone Act and that case went up to the Supreme Court and it was decided, law professors were shocked to discover that the Commerce Clause did have a limit, when it held that the Gun Free School Zone Act, which was an act that prohibited the possession of guns within 1,000 feet of a school throughout the country, exceeded the powers of Congress under its commerce power. And why was that? It was because the Supreme Court said you have to look at the class of activities that Congress is seeking to regulate and in the Gun Free School Zone Act the class of activities was the possession of guns within 1,000 feet of a school. That is not economic activity. It’s intrastate activity, but it’s not economic activity. And because it’s not economic activity, you don’t even ask whether it has a substantial effect on Congress – on commerce, intrastate commerce.

The Supreme Court said that it’s only when the intrastate activity is economic in

nature do we then allow Congress to reach it if it has a substantial effect on intrastate commerce. This was news to Congress. It was news to law professors and it was a big surprise.

And after Lopez v. United States, which is the name of the case, United States v.

Lopez, law professors thought, “well, you know, we’re not sure the Supreme Court really means this and in fact Congress had gotten so lazy in the 50 years preceding Lopez that it didn’t even make findings when it passed the Gun Free School Zone Act.” It said that having a gun within 1,000 feet of the school had a substantial effect on intrastate commerce. “So we predict,” said the law professors, “that if Congress were just to make findings that said that this intrastate activity had a substantial effect on Congress, then the Supreme Court would defer to that and would uphold any law, provided Congress jumped through the hoop of having hearings and having findings.”

So law professors, again, were really, really surprised in the year of 2000, when

the Violence Against Women Act was litigated and brought to the Supreme Court. And the Violence Against Women Act, part of it made – created a federal cause of action for what was called “gender-motivated violence.” And the Supreme Court struck that down as being beyond the power of a Congress to make under the Commerce Clause, notwithstanding the fact that there had been weeks and weeks of hearings and mountains and mountains of findings that said that Violence Against Women Act or gender-motivated violence had a substantial effect on intrastate commerce. And what the Supreme Court said in U.S. v. Morrison was that committing a crime against a woman, or committing a crime because you’re motivated by gender, which is what actually was – what the law addressed – was not economic activity. And because it was not economic

activity, it didn’t matter if it had a substantial effect on commerce. Congress still didn’t have the power to reach this wholly intrastate activity.

So this was a really big surprise now to law professors. And after this, lower

courts started to take this Commerce Clause idea a lot more seriously. And there started to be a lot more challenges, including, for example, the challenge that I was one of the lawyers to bring to the Controlled Substances Act and to the application of the Controlled Substances Act against cannabis or marijuana that was being used in California for medical purposes as authorized by state law. And I brought a law suit on behalf of Angel Raich and Diane Monson, which went to the Supreme Court and tested the limits of the Commerce Clause. And we argued that it was beyond the powers of Congress to reach this wholly intrastate noneconomic activity that was basically growing marijuana for your own use as authorized by state law for medical purposes.

And we went to Supreme Court and in 2005, we lost that case. We lost that case

six to three. We got the votes of Chief Justice Rehnquist and Justice Thomas and Justice O’Connor, but we lost the liberal side of the court and Justice Scalia and Kennedy. And we – and the court said the Congress did have the power to reach this wholly intrastate activity, but it’s very interesting to see how the majority of the court reasoned, why the majority of the court upheld this application of the Controlled Substances Act. They did so expressly because, based on a 1966 Webster’s Dictionary definition of economic that economic activity included the manufacturing or the production and distribution and possession of commodities. And since marijuana was a commodity, the production and possession of that commodity was economic in nature and therefore could reach it unlike the possession of a gun within 1,000 feet of a school, unlike the commission of gender-motivated violence. The growing and the possession of marijuana was economic in nature and Congress could reach it.

Well, after Raich turned away this Commerce Clause challenge, law professors

kind of went back to their original position. Congress can do whatever it wants. So they’ve totally reverted to their pre-Lopez view of what powers Congress has. And I believe this bill was passed more or less with that understanding in mind. But it turns out that if you actually look at what the individual mandate requires, it is not – it is doing something that has never been done before in this country, using the Commerce Clause power. Every other exertion of the Commerce Clause power that’s ever been done by Congress has been an exertion of power, of its power to regulate or prohibit. Never in the history of the country has that power been used to mandate that individuals enter into economic activity.

It’s been used to regulate economic activity. It’s been used to prohibit economic

activity, but it’s never been used to require that people who are not engaged in economic activity do so. That makes this something that has never been done before. And something that has never been done before, there’s another word for that, and that is “unprecedented.”

So something that’s never been done before and is unprecedented cannot possibly have been passed upon by the U.S. Supreme Court. There is no way that the Supreme Court has ever upheld such an act of claim of power because it’s never been attempted before. So this is going to be something that’s going to – to uphold this bill, to uphold this exertion of congressional power is going to require the Supreme Court to extend its Commerce Clause doctrine beyond anything it has ever ruled before, extend its doctrine beyond upholding Congress’ power to reach wholly intrastate economic activity that might have a substantial effect on commerce and allow Congress to reach wholly intrastate noneconomic non-activity or inactivity. And that’s something that it’s never done before. It’s something that I doubt that there are five votes to do, but there could be. There could be, but that gets into the fifth sense of constitutionality. And that’s counting to five.

Are there really five votes on the Supreme Court to extend Congress’ power

beyond where it’s ever gone before? So that’s – nobody knows for sure the answer to that question, but I do know this. It’s a very serious constitutional question. And it’s one that is not recognized or authorized by prior Supreme Court decisions. So at the very minimum, lower courts, who are bound to follow Supreme Court precedent have no authority to uphold this act. It should fall. They should actually strike this act down on the grounds that there’s no precedent to support this extension of power. And then it should go to the Supreme Court and it would be up to the Supreme Court to decide whether they wanted to extend the authorization to Congress to act in this way.

So let me just – I think I’m not going to talk the mandate that’s imposed on states

at this point. Maybe we’ll talk about this later, but let me just stop for a minute and ask what it is about a mandate that is different than a regulation or a prohibition because after all the Supreme Court is free to expand Congress’ power to allow a mandate like this if it wants to extend beyond its previous decisions. It’s always free to do so. It’s done it before in expanding Congress’ power. It could do it again. But why might it not want to do that and why does this mandate rub people the wrong way the way it does.

I think it’s useful for you to stop and think about that. First of all, you may not

believe my claim that it’s never been done before, but I can prove to you that it’s never been done before because if it had been done before, if Congress had mandated that every American citizen do something, enter into an economic relationship with a private company, you’d all know about a mandate that had been imposed on you. You all are residents of the United States. You would all know if Congress had imposed a mandate on you to enter into a relationship with a private company to engage in economic activity because you’d all have to do it upon paying a penalty collected by the IRS. Since none of you in this room know that you have undergone such a penalty before and had been subjected to such a mandate before, that’s proof that it’s unprecedented. Now, why would that be? Why in the – given all the powers that Congress has exerted, why would it be that Congress has never exerted this kind of power before? Well, part of the answer to that question might be the few areas where the government does mandate that we do things because it surely does. For example, it mandates that you register for the draft for Selective Service. It mandates that. It mandates that you sit on a jury if called for jury

duty. It mandates that. It mandates that you pay your taxes. It mandates that. So mandates are not unprecedented, but what do all these mandates have in common? These mandates have in common – this are mandates rooted in the duties of citizenship, in the duties that people have as citizens to their government in return for the protections that the government offers now.

So you have a mandate, you have a duty to participate in national defense. You

have a duty to participate in the administration of justice in the course of being a juror. You have a duty to pay your taxes to pay for the services that you receive and the protection that you receive from government. These are duties that you have under the Constitution. To uphold this duty would be saying that the duty to buy health insurance from a private company is just like these other duties. It’s a duty of the same order. It’s a political duty that you owe the state. And I don’t think it is. And I don’t think the Supreme Court will find that it is. I don’t think the American people believe that it is. And if it’s not a duty of that magnitude, if it’s not a duty of that order, then it’s an unconstitutional duty. And that’s the reason why it’s never been done before.

So why did Congress do it? If it’s never been done before, why did Congress do

it? Because this is how you do things on the cheap. This is how you offload cost and responsibility. It was also a payoff to the insurance business to try – because there’re a lot of mandates are being imposed on the insurance business, which can’t be challenged as unconstitutional, unfortunately, because of previous Supreme Court decisions. And so the way to compensate the insurance business for the requirements that are going to be imposed upon it is to give them a whole lot of new customers.

So what could Congress have done? Well, what Congress could have done is

they could have enacted a general taxing and spending scheme like Medicare. They could have had Medicare for everyone, otherwise known as a single payer option. And provided they didn’t require – they didn’t prohibit people from spending money on their own care, which of course Social Security doesn’t stop you from saving for your own retirement and Medicare doesn’t stop you from paying for your own doctors and buying supplemental insurance. As long as they didn’t stop you from doing that, the courts would have upheld that. But that would have required the Congress to raise taxes and then implement a spending program. And that’s not something that Congress wanted to do. There was barely enough votes to do this.

This is a way of offloading costs by making you give your money to this other

person over here, rather than you give your money to the government. And so that’s why they did what they did. And unfortunately for Congress, but I think fortunately for the American people, this is an unprecedented exercise of power. It is not justified by any prior Supreme Court precedent. And there’s good reason to believe that there might be five votes to strike it down as unconstitutional.

Thanks.

MR. FITTON: Thank you, Randy. Congressman, if the individual mandate is struck down, what is the practical effect, you think, on the legislation. This is a whole thing collapse or is it like one of those monsters from the movies, where you’ve cut an arm off or a leg off and it just keeps on moving?

REP. SENSENBRENNER: Well the office didn’t put a non-severability clause

in, which meant that if one part was held unconstitutional the whole thing would go down. However, if the individual mandate is struck down, it takes guts out of it. And if you look at what’s left without the individual mandate, somebody could go without insurance until they knew that they needed to have an expensive medical procedure. And then they could go into these exchangers or whatever the government option is, have them pay for the cost of the medical procedure. And when the procedure was done and all of the rehab following the procedure was completed, then they would simply drop the insurance.

Now, you can’t run insurance that way, when the only people who buy the

insurance are the ones that know they’re going to make a claim. I used the analogy back home. It’s kind of like not buying homeowner’s insurance and your house catches on fire and you call 911 to get the Fire Department over there to put it out. And then you call up the insurance agent and say, “I need a homeowner’s insurance policy effective to 12:01 AM today.” And you’ll probably get it if the insurance agent doesn’t hear the sirens in the background of the Fire Department coming.

So you just can’t run insurance when you people are going to make a claim and

without the individual mandate, in my opinion, the whole deck of cards goes down. MR. FITTON: Is that your view, Randy? MR. BARNETT: Well, yes, but you have to understand that that argument,

which is I think true, is a two-edge sword because that is going to be the argument that’s made on behalf of the constitutionality of this bill and that is – it’s going to the argue that Congress has the power to do whatever’s necessary to implement a national scheme of – a national regulatory scheme – in this case, it’s a regulatory scheme over the insurance business. And this is necessary. So it’s the very fact that the mandate is necessary for the various other mandates being imposed on the insurance companies to be viable. That is going to provide the basis for the justification of the constitutionality of this bill under the Necessary and Proper Clause which gives Congress the power to make all laws which shall be necessary and proper for carrying into execution its foregoing powers, which would include the Commerce Clause power.

So what’s the answer to that? The answer to that, first of all has to be – and once

again, this is unprecedented, never been done before and it’s going to require an extension of congressional power in order to do it for the first time. And the Necessary and Proper Clause has also never been used to do anything like this before.

So changing your focus from the Commerce Clause to the Necessary and Proper Clause doesn’t make it any less unprecedented. So that’s the first answer. But the second answer is going to have to be that even though these courts are extremely deferential to Congress’ judgment of whether something is necessary or not – and in fact, I think there’s a very strong argument that the Congressman has just made as to why the mandate is in fact necessary to this particular regulatory scheme. It’s not an implausible claim.

On the other hand, the Necessary and Proper Clause also requires that laws be

proper, not just necessary. And there have been instances when the Supreme Court has struck down a law over a claim that a law was necessary and proper and said the law was improper. And there aren’t many of them since the New Deal, but there are a couple. And both of them involve mandates. They involve, in this case, mandates on states. They said it’s improper under the Necessary and Proper Clause to mandate that a state legislature enact a law. That’s a commandeering of state legislatures. And they said it’s improper to mandate, for example, that state executive branch officials – in this case, it was county sheriffs – do background checks before gun purchases can be made. It was unconstitutional to mandate – that the federal government mandate local sheriffs perform this federal function.

So it was, in fact, a mandate that was held to be improper under the Necessary and

Proper Clause, but it was a mandate of states. It was not a mandate of individuals. But the fact that this is a mandate of individuals that’s never been done before once again goes back to the point I was making earlier, why are mandates different than other kinds of regulations. And I think that the answer to this Necessary and Proper Clause argument is that this is an improper mandate. It’s an improper commandeering of the general public is what it is, rather than an improper commandeering of the states.

REP. SENSENBRENNER: Well, let me say. I agree with everything Professor

Barnett said. The question that Tom, you asked was is what would happen if the individual mandate was struck down. And I answered that. But I think that there is a very essential distinction in terms of where the money goes and following the money is a lot of what commerce is all about. Social Security is a mandatory insurance program. It is funded by a tax that goes into the United States Treasury. And the benefits for Social Security and Medicare A come out of the United States Treasury, either as payments to eligible recipients or payments to hospitals. What goes on here is that there is a mandatory payment to a private corporation, which are these exchanges that are set up pursuant to the ObamaCare law. And there is a big difference between a tax that goes into the United States Treasury and benefits that are dispersed from the United States Treasury to people who are eligible and the payment that goes to a private corporation which in turn makes the dispersments out of the private corporation treasury to people who are eligible. And that’s a pretty big distinction that the court’s going to have to wrestle with.

MR. FITTON: What was the answer from the left, let’s nationalize insurance companies and make it a mandate that you buy government insurance since there’s no other type?

REP. SENSENBRENNER: Well that’s the single payer system that they have in

Canada and in a somewhat different form in the United Kingdom. And the Canadian government is limited to a certain percent of GDP how much they’re going to pay on health care and that system would have completely fallen apart had not 90 percent of the population of Canada living within a two-hour drive of the border. There’re a lot of Canadians that have to come to the U.S. for their health care simply because the waiting lists are far too long in their own country to get it.

MR. BARNETT: Well, I do think that there would actually – unfortunately, and

this is because of what the Supreme Court’s done since the New Deal – there would be fewer constitutional objections to such a program than there is to the individual mandate. So it’s sort of ironic and people who defend this bill say, “well, that should mean something.” But actually, I think it just means that the courts have given Congress too much power under their interpretation of the Constitution. And that’s not going to change any time soon. In fact, many conservatives on the court go along with this quite readily as well. It’s not just something confined to the liberal side of the court. But there’s no political will for that kind of thing. So here is where the political process would stop that sort of thing from happening.

MR. FITTON: What about – now, to date, I’m only aware of state government

challenges to ObamaCare. Let’s say there was a public interest group like Judicial Watch intercede in a constitutional challenge or even an individual citizen, do either of you have any ideas as to how such a challenge might be constructed and proceeded or when it would be right?

MR. BARNETT: Well, there already are individual challenges that have been

filed. So if you need to have one, if for any reason the state attorney generals don’t have standing to assert the rights of their citizens with respect to the mandate, there will be individual lawsuits that will provide that standing. maybe this is a good opportunity to talk a little bit about the other constitutional challenge that the states are bringing, which I think actually has a considerable amount of merit. They’re objecting to the mandates – and Congressman mentioned this earlier – this is actually a separate constitutional challenge – objecting to the mandates placed upon them to set up these insurance exchanges. And if they don’t set up these insurance exchanges, then they’re going to be forced to greatly increase the cost of coverage under Medicaid on to their states and if they don’t – to amount in excess of what they have to do today and in excess of what states do who set up the insurance exchanges. And if they don’t want to do that, they have to drop out of the Medicaid program and forgo all their Medicaid reimbursement from the federal government.

So they’re challenging that on the basis of the fact that that is an unconstitutional

commandeering of the state. And I already told you. The Supreme Court has prohibited

as improper prohibitions – commandeering of states legislatures requiring them to pass laws, which in fact is what this measure seems to require. Now, the defense of this measure – and it’s a pretty well recognized defense or theory – and that is the Congress is free, when it’s spending its money, to place conditions on the expenditure of this money. So when Congress decides to spend money on Medicaid, it is free to condition its Medicaid expenditures on requiring the states to do anything that’s really related to, in this case, what the expenditure’s for, which is for medical insurance or medical coverage. And setting up the insurance exchanges would be considered to be related to the expenditure and therefore constitutional.

Let me just stop for a minute and say this again. It means that because Congress

is just placing a condition on its money, it’s not directly commandeering the state. It’s simply saying, “if you want to take federal money, then you have to do it this way.” And that’s something that’s done all the time. That is the other great power that Congress exercises all the time. It’s how, for example, the speed limits got made, that nice, friendly 55 miles an hour, over state objections because highway funds were conditioned on them doing that, and how the drinking aged got raised to 21 throughout the country because highway funds were conditioned on states passing those laws. Okay, so that’s a well-established route for exercising congressional power. What’s wrong with it?

What’s wrong with it is that when the Supreme Court upheld, for example, the

mandate that states raise the drinking age to the age of 21 or lose their federal highway funds, what the Supreme Court said was is that this is not coercion on the states because only 5 percent of the highway funds were made conditioned on their raising the drinking age to 21. And because it’s only 5 percent of highway construction funds, therefore this is not coercive.

Well, this is an entirely different matter what we’re facing here. We’re talking

about the forfeiture of 100 percent of Medicaid funds, which is probably compensating states for their largest appropriation, a huge amount of state budgets. If that’s not coercive, it’s not clear that anything would be coercive. And so the South Dakota v. Dole case, which upheld the condition placed on highway funding – the condition that they raised – everybody raise up the drinking age to 21 – South Dakota v. Dole does not automatically sanction this kind of a condition placed on 100 percent of Medicaid funding. That would definitely be coercive. And if it’s coercive, then it is the mechanism by which the states are being commandeered and commandeering is improper as an interference with the authority of state.

This is a very serious challenge and that’s something that really only states can

bring and they would definitely have standing to bring that. REP. SENSENBRENNER: Let me say. I think the question involves whether a

court would see a plaintiff has standing. I believe that it is clearer, as a result of the Massachusetts v. EPA case, that states have standing, than it is whether an individual plaintiff, who claimed that he or she was financially or economically hurt as a result of the individual mandate, would have standing. The Supreme Court, when it wanted to

dodge, particularly controversial issues, have always hung their robes on the standing question.

It has been I think more and more apparent that the court has given state standing

as a result of federalism, beginning with a case in 1992, when the federal government tried to give title to nuclear wastes to the states. And New York challenged that and won. So as a result, no state ends up having title to nuclear waste. So there was a case where the state very clearly did have standing. And I think the combination of these two cases indicates that the states would have a better shot of winning constitutional challenge over standing than individuals would.

MR. FITTON: I have more questions, but I’m going to open it up to the floor and

share the wealth. We have a microphone. So if you could wait for the microphone and then identify yourself and direct your question or brief comment. We don’t have time for lengthy back and forth, so if you could keep anything you have to say succinct, I’d appreciate it. Yes, sir, right there.

Q: Stuart Reuter (sp). Two questions, one for our congressman. You mentioned

in your discussion that you thought there was a Fifth Amendment condition to the constitutionality, but you did not expand on that.

REP. SENSENBRENNER: Taking property without due process of law. Q: And the other would be something which I think is another tax you didn’t

mention, something about 3.8 percent on investments to go – REP. SENSENBRENNER: I did mention that and there the tax is specifically

headed imposition of tax. That’s the passive income. It’s not active income meaning wages.

MR. FITTON: I saw that the IRS commissioner was suggesting they could – this

mandate that has no enforcement mechanism in tax law, that they would enforce it by stealing people’s refunds or withholding a portion of their refunds. Does that raise any issues other than being a regular as a matter of the law? Does it raise any constitutional issue about –

MR. BARNETT: Well, the statute does not prohibit – the statute prohibits the

IRS from attaching leans against your property and a number of other mechanisms that it would normally use to enforce the tax law. It’s one of the reasons why we can tell that this is not a tax because it doesn’t use the normal enforcement mechanisms. But it does not prohibit the IRS, which is mandated – which is authorized to enforce it, from enforcing it with any other means it has, for example, withholding part of your refunds.

MR. FITTON: Any other questions or comments? Yes, right back here.

Q: Hi, I’m Diana Marrero with the Milwaukee Journal Sentinel. My question is what do you make of the argument that it could be seen as a tax refund for people who do choose to buy insurance and not necessarily a tax on people who don’t?

MR. BARNETT: It’s just – what the case law has shown over the years is that the

court will defer to how Congress characterizes its claim of powers. So if Congress claims to be exercising a tax power, the court’s not going to say, “oh, it’s really exercising its regulatory power under the Commerce Clause. And therefore, since it’s beyond its power under the Commerce Clause, we’re going to strike it down.” They used to, by the way, do that. They used to say, “no, this is not really a tax. It’s really a regulation of commerce. It’s beyond Congress’ power to do, therefore it’s unconstitutional.” But after the New Deal, it stopped doing that. It started saying that if Congress claims to be exercising its tax power and the measure has any revenue purpose whatsoever – it does have a purpose of raising revenue – we’re going to call it a tax and we’re not going to evaluate it under Congress’ commerce power.

However, this measure is not called a tax and it’s not justified as a tax. It’s

justified expressly in the statute as a regulation of commerce. And in the eight findings that support this regulation or this penalty and this mandate, none of them referred to any revenue raising purposes. And it’s not included in the portion of the bill that talks about revenue offsets, which is part of the way the bill got scored in Congress. You have to say how much revenue will it raise. This mandate, the penalty for this mandate isn’t even included amongst the revenue raising provisions of the bill, amongst all the other revenue raisings provisions of the bill. For all of these reasons, because the mandate was justified by Congress as a regulation of commerce, I believe that is how the court will evaluate it.

There is, once again, no precedent for the court going behind how Congress –

behind a measure that Congress characterizes as a regulation of commerce and say, “oh, well, even though Congress did that, if it had done it under its tax powers, then it would be constitutional. Therefore, we’re going to uphold this regulation of commerce” because it could have done this other way, there’s no authority for doing that and I don’t think that there’ll be five votes for doing that either in this case.

REP. SENSENBRENNER: If you take a look at the text of the bill, where there

are taxes, such as the tax on investment income, the tanning bed tax, it specifically says in the header of the section of the bill “imposition of tax,” and then it says what’s being taxed and what the rate is. The individual mandate was not so described. Now, I think that maybe in retrospect the sponsors of ObamaCare and the staffs that drafted it were having a problem because when the Joint Tax Committee released its after the passage of the bill report, it started talking about the individual mandate being a tax, but before that, nobody talked about it being a tax. They talked about it as an extension of the Congress’ regulatory power on intrastate commerce.

MR. BARNETT: So let me just – any of you who watched the James Bond

movie “Casino Royale” know about poker, a tell in poker, what a tell in poker is. And that is a tell sign of the behavior of the other side that they are sort of telegraphing that

they have a weaker hand than they claim to be having while they’re bluffing. I think this switch that the Joint Committee on Taxation, that the staff of the Joint Committee on Taxation did when they switched their justification of the mandate from the Commerce Clause to the tax power is a tell. It suggested them – it should suggest to you that all the breezy confidence that law professors and other experts have that this is a purely constitutional exercise of the commerce power, that they themselves do not feel so confident that it is or they wouldn’t in this document have failed to mentioned commerce at all. If you do a word search through that 157-page report, the word “commerce” does not appear. Instead, it is called an “excised tax” on persons who fail to get health insurance. That is a tell that they’re not confident of the Commerce Clause power theory at all and need to try to justify it as a tax. But that switch comes too late.

MR. FITTON: Congressman, I saw Congresswoman Debbie Wasserman Schultz,

who is a leader on the Democratic side of the aisle and a very smart person, spent five minutes talking about there’s no mandate. There’s no mandate.

REP. SENSENBRENNER: Well, I guess the point that I want to make is that if it

is a tax, you’ve got to call it a tax in the bill. And if you don’t call it a tax in the bill, then it isn’t a tax. And it wasn’t called a tax in the bill.

MR. FITTON: Any other questions or comments? Right in the center there. Q: Steve Chaff (ph) from Virginia. Thanks. Kind of a two-part here and my

intro into this is that freedom loving Americans, I mean millions of us, obviously are outraged by this federal power grab. So you’re seeing that vented through different things. You didn’t mention the congressman – congressional candidate Van Irion from Tennessee ObamaCare class action lawsuit, which I’ve joined and encourage all my friends to join. You have Governor Pataki, with Revere America, trying to gin up support to fight this thing. So do you see any synergies of all this public outrages?

And my second part – thanks for your comments, Professor, really insightful and

for yourself, Congressman – we’ve had Senator DeMint talk about defunding this, especially if we can get more – a majority in the House or Senate coming up. I was a little bit discouraged that you said there was no avenue due to the veto on Pennsylvania Avenue. It surely is maneuvering to put him in a box and help him before the American people veto something that they clearly want.

REP. SENSENBRENNER: Well, this is an entitlement program. An entitlement

program runs on autopilot until the basic statutory framework of the entitlement program is changed. And the three biggest entitlement programs up until now have been Social Security, Medicare, and Medicaid. And none of that is subject to annual appropriation by Congress. I guess that if the administration of this was defunded, then we would run the problem of a government shut down, and that was tried by then Speaker Gingrich in 1995. And it ended up resulting in the reelection of President Clinton.

MR. FITTON: And it’s no longer Speaker Gingrich. (Laughter.)

Q: (Off mike) – this is so outrageous that the things might go – (off mike). REP. SENSENBRENNER: Well, the thing sure is outrageous. And I hear that

from my constituents. But the point is, is elections have consequences. This is the law of the land. Aim your vituperation at the people who voted in favor of it, rather than crabbing at us who fought it for a year and lost at the last minute. And the best shot of stopping this thing is through the courts. And I will repeat that. And that’s why I’m supportive of the lawsuits that have been filed. And frankly that’s why I’m here today, rather than doing something else on the other end of Pennsylvania Avenue.

MR. BARNETT: I want to slightly disagree with that, not entirely disagree with

that. I think that you cannot separate politics from the courts. You cannot separate electoral activity and activism from the courts. And why is that? Well, that’s the third sense of constitutionality, counting to five votes.

One of the things that the supporters of this bill are depending upon is that the

Supreme Court generally defers to Congress, and especially defers to Congress when Congress has enacted something that’s very popular and that enjoys widespread support, or that’s considered to be necessary for the national security of the country. There’s all these imperatives that get brought to bear on the Supreme Court, which causes them to give the benefit of the doubt to their co-equal branch, the legislative branch of Congress.

Now, that’s all true, but that equation changes when a bill turns out either not to

be necessary to the security of the country or very, very unpopular. So the situation that the court would face when a challenge comes up there in two years – let’s say a year or two it takes to get there – the situation that the court would face, if they’re looking, for example, after Congress – one or both branches of Congress changed hands, flipped parties as a result of public objections to this measure. And perhaps there is a repeal bill that is enacted by both houses and vetoed by the president or is filibustered in the Senate. And that’s the political posture in which the court then takes up a constitutional challenge based on the serious arguments that I’ve outlined to you today. A court viewing or evaluating constitutionality under those circumstances, it would be much easier to count to five justices who would hold such a measure unconstitutional. And this works, by the way, in reverse.

When you’re running for Congress or you’re running for office, it’s very

important to be able to object to the unwise policy of the ObamaCare legislation, but it’s also very helpful to be able to object to the unconstitutionality of this bill and to vow to repeal an unconstitutional bill, not just an unwise bill. And if these arguments are serious, as I believe they are, that also gives congressmen something to run on. When they are running for reelection, it will give the next presidential candidates something to discuss in the next round of presidential debates. And that adds a dimension that wouldn’t be there if these bills were not unconstitutional. So the constitutional side plays into the political side. And the political side plays into the constitutional side. And the two cannot be entirely separated.

MR. FITTON: I thought we weren’t allowed to talk about judges being

politicians. (Laughter.) Let’s go to – we have time for few more questions. Yes, Fred. Wait for the microphone, Fred.

Q: Okay, sorry. With regards to the precedent that would be. So after individual

mandate is upheld, would there be – at that point, would there be anything that Congress could mandate you purchase?

MR. BARNETT: It would be difficult to find. Once the precedent is set – once

this line is crossed and now Congress can mandate that you engage in economic activity because doing so is necessary to a broader regulatory scheme, then so long as they enact a broad regulatory scheme, they can mandate you do anything. And that might, for example, include mandating that you – instead of paying you to buy – Cash for Clunkers, where they actually have to raise tax money and spend it to bribe you into buying a new car, it would be much cheaper for them just to mandate that you buy a new car. And even better, if they could mandate that you buy a car that’s owned – from a company that happens to be owned by the federal government. That would even be better and more likely in the interest of the national welfare, which is that you buy a GM car.

So you can understand how all of those things could also be necessary, too, as

long as they’re deemed to be proper. So it’s very important that we focus on the impropriety of this kind of law, not simply on its supposed necessity.

REP. SENSENBRENNER: Let me say. I bought a car last week and it was a

Ford. (Laughter.) And they didn’t take any TARP money. (Laughter.) Seriously speaking, the political process does work. And I remember being one of the small minority, in 1988, that voted against something they called catastrophic health insurance. Well, it was a catastrophe for senior citizens. Chairman Rostenkowski was chased down the street by a bunch of angry senior citizens. And the next year, it was repealed. So this is going to be a political debate. But my definition of enacting something into law is something that actually makes it into law, which requires either the signature of the president of United States or overriding a presidential veto.

Now, the cards are going to be – get way out there. And I agree with Professor

Barnett that counting to five votes is – they look at trends as closely as we do, even though our jobs are on the line every two years and theirs never are. But having said that, there’s no question in my mind that the vast majority of American people are furious at the enactment of this law. And when the debate started out, it was a 70 percent issue, and now it’s a 30 percent issue. And the president and those who have supported this legislation I think are realizing that a little bit of knowledge on the part of the American public is a very dangerous thing.

MR. BARNETT: There’s one other thing about the lawsuits and how they play

into the politics of the situation, is the lawsuits do keep the political issue alive. Otherwise, what supporters of all legislation count on is once the bill is passed, it’s done.

Now, you all are asked to move on. But as long as these lawsuits exist, provided they are based on real, solid constitutional analysis – if they’re frivolous lawsuits, this won’t work. But if they’re not frivolous, that does keep the issues alive, both – in the legal process, but also in the political process.

REP. SENSENBRENNER: But doesn’t that mean we have to pass it first so that

the people will find out what’s in it, Nancy Pelosi? (Laughter.) MR. FITTON: Any other questions? Q: Are you two the only two who’ve ever read the damn thing? (Laughter.) REP. SENSENBRENNER: I wasn’t given a chance to read 2,700 up on the

internet. I got good glasses, but they have a limit. But in terms of the explanation on how things work, no matter what kind of reiteration they had between the House bill and the Senate bill and the Senate bill and the reconciliation fix up bill, the basic parts of this bill remain the same. And that’s where the constitutional questions come up. It’s not how they tweak the language or how they try to cover over their mistakes in the reconciliation bill or subsequent Joint Tax Committee staff reports. The way it works is the way they intended it to work and that’s where the deficiencies are, both from a constitutional standpoint, as well as a policy standpoint.

MR. BARNETT: Let me – not for ending here – but let me just say. One of the

things that I think you have to keep in mind is that this bill, this scheme that’s created by this bill is really very messy and not – it is a good chance that it isn’t going to work very well, which I think was not wholly unintended. I think the true aim of people who supported this bill really was to get to a single payer provision. And to the extent this doesn’t work, then the solution is not going to be repealing. It’s going to be moving all the way to where they said you should go in the first place. So you need to keep that in mind. And I think you also need to keep in mind – I think supporters of this bill – supporters of this bill should certainly not count on the court upholding. But opponents of this bill should not count on the court striking it down. The smart money is always that the court will uphold an active Congress, not that it will strike it down because of the presumption of constitutionality that Congressman has already mentioned.

So you should not put your faith in the court if you opposed this bill to strike it

down in the court, even though I think there’s a good chance or a reasonable chance that they will. This has got to be, if you oppose this bill, a political question, a political matter to be continue – a discussion to be continued in the political sphere, even if that means passing a bill that gets – a repeal bill that gets vetoed and then becomes the basis for the next election.

This is a long process. Unfortunately, it’s not over or maybe fortunately it’s not

over. But it doesn’t – but do not rely and do not walk away from this program thinking that the courts are going to ride to your rescue because by and large, that is not the case. It’s not something you can count on.

MR. FITTON: Congressman, any final thoughts? REP. SENSENBRENNER: We have a time limit in the House. The clock runs

faster for Republicans than Democrats on the Speaker’s watch, so thank you for coming. S

MR. FITTON: Thank you. Thank you for coming as well. (Applause.) This will

be available on the internet for all time, on YouTube eventually. And again, I appreciate the valuable time given freely to us by the Congressman and Professor Barnett. Thank you all as well.

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