[Congressional Record Volume 158, Number 49 (Monday, March 26, 2012)]
[Senate]
[Pages S2015-S2017]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              HEALTH CARE

  Mr. KYL. Mr. President, as we know, today the Supreme Court began 
hearing arguments about the constitutionality of the affordable care 
act. It is one of the most critically important Supreme Court cases of 
our time. A Wall Street Journal editorial noted last Friday:

       Few legal cases in the modern era are as consequential, or 
     as defining, as the challenges to [this law]. . . . The 
     powers that the Obama administration is claiming change the 
     structure of the American government as it has existed for 
     225 years. . . . The Constitutional questions the Affordable 
     Care Act poses are great, novel, and grave.

  The editorial, entitled ``Liberty and ObamaCare,'' lays out the 
constitutional problems with the affordable health care act and focuses 
on the bill's centerpiece: the individual mandate to purchase health 
insurance. As the editorial notes, the case against this provision is 
anchored in ample constitutional precedent, and I quote their 
conclusion:

       The Commerce Clause that the government invokes to defend 
     such regulation has always applied to commercial and economic 
     transactions, not to individuals as members of society. . . . 
     The Court has never held that the Commerce Clause is an ad 
     hoc license for anything the government wants to do.

  I urge my colleagues to read this article, and I ask unanimous 
consent that it be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [The Wall Street Journal, Mar. 22, 2012]

                         Liberty and ObamaCare

       Few legal cases in the modern era are as consequential, or 
     as defining, as the challenges to the Patient Protection and 
     Affordable Care Act that the Supreme Court hears beginning 
     Monday. The powers that the Obama Administration is claiming 
     change the structure of the American government as it has 
     existed for 225 years. Thus has the health-care law provoked 
     an unprecedented and unnecessary constitutional showdown that 
     endangers individual liberty.
       It is a remarkable moment. The High Court has scheduled the 
     longest oral arguments in nearly a half-century: five and a 
     half hours, spread over three days. Yet Democrats, the 
     liberal legal establishment and the press corps spent most of 
     2010 and 2011 deriding the government of limited and 
     enumerated powers of Article I as a quaint artifact of the 
     18th century. Now even President Obama and his staff seem to 
     grasp their constitutional gamble.
       Consider a White House strategy memo that leaked this 
     month, revealing that senior Administration officials are 
     coordinating with liberal advocacy groups to pressure the 
     Court. ``Frame the Supreme Court oral arguments in terms of 
     real people and real benefits that would be lost if the law 
     were overturned,'' the memo notes, rather than ``the 
     individual responsibility piece of the law and the legal 
     precedence [sic].'' Those nonpolitical details are merely 
     what ``lawyers will be talking about.''
       The White House is even organizing demonstrations during 
     the proceedings, including a `` `prayerful witness' 
     encircling the Supreme Court.'' The executive branch is 
     supposed to speak to the Court through the Solicitor General, 
     not agitprop and crowds in the streets.
       The Supreme Court will not be ruling about matters of 
     partisan conviction, or the President's re-election campaign, 
     or even about health care at all. The lawsuit filed by 26 
     states and the National Federation of Independent Business is 
     about the outer

[[Page S2016]]

     boundaries of federal power and the architecture of the U.S. 
     political system.
       The argument against the individual mandate--the 
     requirement that everyone buy health insurance or pay a 
     penalty--is carefully anchored in constitutional precedent 
     and American history. The Commerce Clause that the government 
     invokes to defend such regulation has always applied to 
     commercial and economic transactions, not to individuals as 
     members of society.
       This distinction is crucial. The health-care and health-
     insurance markets are classic interstate commerce. The 
     federal government can regulate broadly--though not without 
     limit--and it has. It could even mandate that people use 
     insurance to purchase the services of doctors and hospitals, 
     because then it would be regulating market participation. But 
     with ObamaCare the government is asserting for the first time 
     that it can compel people to enter those markets, and only 
     then to regulate how they consume health care and health 
     insurance. In a word, the government is claiming it can 
     create commerce so it has something to regulate.
       This is another way of describing plenary police powers--
     regulations of private behavior to advance public order and 
     welfare. The problem is that with two explicit exceptions 
     (military conscription and jury duty) the Constitution 
     withholds such power from a central government and vests that 
     authority in the states. It is a black-letter axiom: Congress 
     and the President can make rules for actions and objects; 
     states can make rules for citizens.
       The framers feared arbitrary and centralized power, so they 
     designed the federalist system--which predates the Bill of 
     Rights--to diffuse and limit power and to guarantee 
     accountability. Upholding the ObamaCare mandate requires a 
     vision on the Commerce Clause so broad that it would erase 
     dual sovereignty and extend the new reach of federal general 
     police powers into every sphere of what used to be individual 
     autonomy.
       These federalist protections have endured despite the 
     shifting definition and scope of interstate commerce and 
     activities that substantially affect it. The Commerce Clause 
     was initially seen as a modest power, meant to eliminate the 
     interstate tariffs that prevailed under the Articles of 
     Confederation. James Madison noted in Federalist No. 45 that 
     it was ``an addition which few oppose, and from which no 
     apprehensions are entertained.'' The Father of the 
     Constitution also noted that the powers of the states are 
     ``numerous and infinite'' while the federal government's are 
     ``few and defined.''
       That view changed in the New Deal era as the Supreme Court 
     blessed the expansive powers of federal economic regulation 
     understood today. A famous 1942 ruling, Wickard v. Filburn, 
     held that Congress could regulate growing wheat for personal 
     consumption because in the aggregate such farming would 
     affect interstate wheat prices. The Court reaffirmed that 
     precedent as recently as 2005, in Gonzales v. Raich, 
     regarding homegrown marijuana.
       The Court, however, has never held that the Commerce Clause 
     is an ad hoc license for anything the government wants to do. 
     In 1995, in Lopez, it gave the clause more definition by 
     striking down a Congressional ban on carrying guns near 
     schools, which didn't rise to the level of influencing 
     interstate commerce. It did the same in 2000, in Morrison, 
     about a federal violence against women statute.
       A thread that runs through all these cases is that the 
     Court has always required some limiting principle that is 
     meaningful and can be enforced by the legal system. As the 
     Affordable Care Act suits have ascended through the courts, 
     the Justice Department has been repeatedly asked to 
     articulate some benchmark that distinguishes this specific 
     individual mandate from some other purchase mandate that 
     would be unconstitutional. Justice has tried and failed, 
     because a limiting principle does not exist.
       The best the government can do is to claim that health care 
     is unique. It is not. Other industries also have high costs 
     that mean buyers and sellers risk potentially catastrophic 
     expenses--think of housing, or credit-card debt. Health costs 
     are unpredictable--but all markets are inherently 
     unpredictable. The uninsured can make insurance pools more 
     expensive and transfer their costs to those with coverage--
     though then again, similar cost-shifting is the foundation of 
     bankruptcy law.
       The reality is that every decision not to buy some good or 
     service has some effect on the interstate market for that 
     good or service. The government is asserting that because 
     there are ultimate economic consequences it has the power to 
     control the most basic decisions about how people spend their 
     own money in their day-to-day lives. The next stops on this 
     outbound train could be mortgages, college tuition, credit, 
     investment, saving for retirement, Treasurys, and who knows 
     what else.
       Confronted with these concerns, the Administration has 
     echoed Nancy Pelosi when she was asked if the individual 
     mandate was constitutional: ``Are you serious?'' The 
     political class, the Administration says, would never abuse 
     police powers to create the proverbial broccoli mandate or 
     force people to buy a U.S.-made car.
       But who could have predicted that the government would pass 
     a health plan mandate that is opposed by two of three voters? 
     The argument is self-refuting, and it shows why upholding the 
     rule of law and defending the structural checks and balances 
     of the separation of powers is more vital than ever.
       Another Administration fallback is the Constitution's 
     Necessary and Proper Clause, which says Congress can pass 
     laws to execute its other powers. Yet the Court has never 
     hesitated to strike down laws that are not based on an 
     enumerated power even if they're part of an otherwise proper 
     scheme. This clause isn't some ticket to justify inherently 
     unconstitutional actions.
       In this context, the Administration says the individual 
     mandate is necessary so that the Affordable Care Act's other 
     regulations ``work.'' Those regulations make insurance more 
     expensive. So the younger and healthier must buy insurance 
     that they may not need or want to cross-subsidize the older 
     and sicker who are likely to need costly care. But that 
     doesn't make the other regulations more ``effective.'' The 
     individual mandate is meant to offset their intended 
     financial effects.
       Some good-faith critics have also warned that overturning 
     the law would amount to conservative ``judicial activism,'' 
     saying that the dispute is only political. This is reductive 
     reasoning. Laws obey the Constitution or they don't. The 
     courts ought to defer to the will of lawmakers who pass bills 
     and the Presidents who sign them, except when those bills 
     violate the founding document.
       As for respect of the democratic process, there are plenty 
     of ordinary, perfectly constitutional ways the Obama 
     Democrats could have reformed health care and achieved the 
     same result. They could have raised taxes to fund national 
     health care or to make direct cross-subsidy transfers to sick 
     people. They chose not to avail themselves of those options 
     because they'd be politically unpopular. The individual 
     mandate was in that sense a deliberate evasion of the 
     accountability the Constitution's separation of powers is 
     meant to protect.
       Meanwhile, some on the right are treating this case as a 
     libertarian seminar and rooting for the end of the New Deal 
     precedents. But the Court need not abridge stare decisis and 
     the plaintiffs are not asking it to do so. The Great 
     Depression farmer in Wickard, Roscoe Filburn, was prohibited 
     from growing wheat, and that ban, however unwise, could be 
     reinstated today. Even during the New Deal the government 
     never claimed that nonconsumers of wheat were affecting 
     interstate wheat prices, or contemplated forcing everyone to 
     buy wheat in order to do so.
       The crux of the matter is that by arrogating to itself 
     plenary police powers, the government crossed a line that 
     Justice Anthony Kennedy drew in his Lopez concurrence. The 
     ``federal balance,'' he wrote, ``is too essential a part of 
     our constitutional structure and plays too vital a role in 
     securing freedom for us to admit inability to intervene when 
     one or the other level of government has tipped the scale too 
     far.''
       The constitutional questions the Affordable Care Act poses 
     are great, novel and grave, as much today as they were when 
     they were first posed in an op-ed on these pages by the 
     Washington lawyers David Rivkin and Lee Casey on September 
     18, 2009. The appellate circuits are split, as are legal 
     experts of all interpretative persuasions.
       The Obama Administration and its allies are already 
     planning to attack the Court's credibility and legitimacy if 
     it overturns the Affordable Care Act. They will claim it is a 
     purely political decision, but this should not sway the 
     Justices any more than should the law's unpopularity with the 
     public.
       The stakes are much larger than one law or one President. 
     It is not an exaggeration to say that the Supreme Court's 
     answers may constitute a hinge in the history of American 
     liberty and limited and enumerated government. The Justices 
     must decide if those principles still mean something.

  Mr. KYL. Finally, continuing on the point about the argument on 
ObamaCare and referring to a different piece that appeared in the Wall 
Street Journal, I wanted to talk just a little bit in more detail about 
the justification of this mandate to purchase health insurance, the 
requirement that every individual in the United States be the recipient 
of a specifically defined policy by the U.S. Government.
  The rationale the government has provided is that if we do not do 
this, then free riders or people who do not have insurance but might 
get sick will end up shifting all of the burden of their care onto the 
rest of us, and therefore the government needs to regulate that by 
forcing everybody to buy insurance. On March 20 the Journal published a 
piece by Douglas Holtz-Eakin and Vernon Smith, a former CBO Director 
and an economics professor, respectively, which I think really debunks 
this argument on the merits. It explains the real reason this mandate, 
as well as a dramatic expansion of Medicaid, is unconstitutional. I 
just wanted to highlight the points they make.
  First, Holtz-Eakin and Smith address this individual mandate 
question. States, of course, have general police power to regulate the 
conduct of their citizens, but Federal power, by contrast, is very 
limited over individuals.
  The authors make the important point that heath care policy has 
traditionally been a State function. Health

[[Page S2017]]

care needs relate to individuals and vary from person to person and 
region to region. As a policy matter, States have a better 
understanding of what kind of improvements to health care access are 
needed.
  Here is what they wrote:

       The administration's attempt to fashion a singular, 
     universal solution is not necessary to deal with the 
     variegated issues arising in these markets. States have taken 
     the lead in past reform efforts. They should be an integral 
     part of improving the functioning of health-care and health-
     insurance markets.

  If the States have the legal power to address health issues and are 
better equipped to do so, then where does the justification for Federal 
jurisdiction come from? The authors note that the administration's 
argument is that the Federal Government mandate is needed to address 
the cost-shifting, the thing I talked about before. But they note that 
this is a red herring. ``In reality,'' the authors write, ``the mandate 
has almost nothing to do with cost-shifting.'' That is because, in 
actuality, the young and the healthy--the people who are not buying 
health insurance--aren't imposing much of a burden on the system 
because they do not get sick that often. They do not need as much 
insurance because they do not need as much health care. The authors say 
that ``the insurance mandate cannot reasonably be justified on the 
ground that it remedies costs imposed on the system by the voluntarily 
uninsured.'' In other words, as I said, there is not that much free-
riding going on.
  The authors conclude that the real purpose of the mandate is not to 
decrease the costs of uncompensated care, it is meant to force the 
young and the healthy to buy health insurance at rates far above the 
amount and scope of coverage they actually need because they are 
generally healthy individuals. But this extra money will help fund 
health insurance companies and therefore offset the huge increased 
costs imposed upon them by ObamaCare's many new regulations. This is 
the real reason for the individual mandate. In fact, as an amicus brief 
by over 100 economists points out, ``The [Affordable Care] Act is 
projected to impose total net costs of $360 billion on health insurance 
companies from 2012 to 2021.'' With the mandates, however, ``insurance 
companies can be expected to essentially break even.'' This is no 
coincidence.
  If this is the real justification for the mandate to purchase health 
care, I submit it should have been done through an enumerated power--
perhaps under the tax power of the Federal Government, which is at 
least one of the powers the Constitution explicitly provides.
  In any event, this individual mandate cannot be justified to regulate 
interstate commerce. The supporters of the mandate have therefore 
introduced a second argument. They say health care is just different 
from all other commerce. It is bigger. Everybody has to have health 
care--as if they did not have to have food on the table or shelter over 
their head or clothes on their back and so on. In any event, they say 
health care is different and somehow this difference gives Congress the 
right to force people to buy government-mandated health insurance under 
its power to regulate interstate commerce. But the argument that ``this 
particular market is just different'' is beside the point even if it 
were true because it does not articulate a constitutional limitation 
that is judicially enforceable.
  The question before the Court is whether there is any limit to 
Congress's power to regulate commerce. Obviously, the Framers would 
never have countenanced a Federal requirement to purchase a product so 
that the government could then regulate it. So what limit on 
constitutional power is suggested by the health care market? None. That 
is precisely the point. The government cannot draw a line, and, as a 
result, it would have to argue that there is no limit to its powers, 
and that, of course, would run counter to the reason the Framers put 
limitations into the Constitution.
  The individual mandate is not the only provision in ObamaCare that is 
constitutionally impermissible. The Medicaid expansion is also 
violative. While Congress has well-established power to use its purse 
strings to encourage the States to adopt certain Federal policies, it 
cannot force them or compel them to do so. ObamaCare's Medicaid 
expansion essentially coerces the States into complying with new 
Medicaid policies.
  This occurs in two different ways. First, if a State does not comply 
with the ObamaCare eligibility expansion, it would lose all of its 
Federal Medicaid funds--even for patient populations that the State had 
already covered long before ObamaCare was passed. Few if any States 
would be able to continue their existing Medicaid Programs if they lost 
all of this Federal funding.
  An amicus brief signed by over 100 economists examined Medicaid data 
to determine the economic impact of States losing all of their Medicaid 
funds, and it found that if States were forced to absorb Federal 
Medicaid expenditures into their own State budgets, ``the State's total 
budgetary expenditures would jump by 22.5 percent.'' In other words, 
there is no real choice. The options for States are to do as the 
Federal Government says or leave Medicaid, which by now is so engrained 
in the care for the indigent that unwinding it, in effect, 
disentangling it from existing Federal-State relationships, would be 
virtually impossible and would obviously jeopardize care for the 
population without other health coverage. This is coercion, plain and 
simple. It is unconstitutional.

  Second, ObamaCare expands Medicaid eligibility to everyone under 138 
percent of the Federal poverty level. For individuals who make less 
than 138 percent of the poverty level, ObamaCare provides no means for 
complying with the individual mandate other than enrolling in Medicaid. 
In their brief to the Supreme Court, the States suing over the Medicaid 
expansion said it best:

       When Congress mandates that Medicaid-eligible individuals 
     maintain insurance, but provides no alternative means for 
     them to obtain it, it is impossible to label the States' 
     participation in Medicaid voluntary.

  If it is the only way someone can get it, it is not voluntary.
  Well, ObamaCare, as a whole, cannot survive without these 
unconstitutional provisions, and these are the reasons I believe it 
will and can be struck down as unconstitutional.

                          ____________________