i'm much more sure of the proposition if you take out the hub, the spokes come with it. >> do you agree that as to standing it hardly matters whether you have standing specifically to raise the mandate, their individual plaintiffs who do, the states don't have to, and therefore it makes no real difference. we don't have to answer these academic and interesting question of whether the states can carry the call to new castle for individual. it doesn't matter here. >> you know, the only way -- >> does it matter to you. >> i want to agree with judge -- with general katyal on this by saying i don't think it matters. the only way it might matter is for the scope of an injunction. i'm much more heartedly looking toward to the day where it is the injunk. -- injunction. there's an argument attached to make it to everybody, you might want to say that everybody has standing. i would say for the reason that

i've just explained, the argument is not that difficult. because of the individual mandate. >> i understand that. i wasn't asking you to make the argument so much as whether you agree it doesn't matter. >> i don't think it matters for much. i think maybe the way the injunction could be written. i think right around that and not have to decide the issue. >> and back to the substantial effects for aggregation doctrine. is it grounded or necessarily invoke the proper clause? >> i don't know my answer is much different than katyals on that. >> i'm talking about the majority precedence. >> right. as the general said, justice scalia is so clear about that, it's just been necessary and proper. he's trying to project the majority. >> i'm asking the flip side.

can you get at it and articulate the doctrine into the commerce clause or do you have to bring in the necessary proper to have? not whether it can stand alone. that's my question. >> i find it preciously difficult to explain why it is the federal government gets to regulate substantial effects without relies at least in part on the necessary and proper clause. >> okay. that's what i thought. it's hard to read the cases to know what's going on. >> we thank you for your argument. we are going to take a 15 minute recess. then we'll hear from mr. carvin. court will be in recess. >> all rise. mr. carvin. we are now hear from you. >> chief judge, may it please the court, i represent the private appellatees. i'm like to start with the are

we regulate health insurance, payment, and does it matter? as a factual matter, it's undisputed it's only regulation of health insurance that's going on. you have to pay a penalty if you don't buy health insurance. they impose that without regards to whether you see a doctor or whether you ever fail to pay the doctor. now the government says -- one of our reasons for doing this is to make sure that doctors are paid when they provide service and i think that's obviously true as well. but it doesn't matter. because they are using an improper means to beneficially affect health care service. congress made explicit findings of violence against women that cause billions of dollars in increased medical cost. but the court said that's perfectly permissible, and the exact same goal that we are dealing with today is reducing medicare. we use improper means because they weren't regulating

commerce. here they aren't regulating commerce. because they aren't regulating -- i can't care how you phrase it, whether the inactivity or the economic decision to stay out of the commerce. the government's other point is there's a subset of the people that we are regulating under the individual mandate. and they do go to the doctor and they don't pay the doctor. and that is commerce effecting activity that's very negative. and that as well is true. it's irrelevant. it doesn't matter whether or not an improper classification happens to encompass people that they could have regulated. if that were true, lopez would have been decided entirely differently. and in lopez, at least 90% of the people had guns near schools, got those guns through interstate commerce. obviously a huge subset of the people being regulated in the lopez law would have been regulated under a proper commerce law. that one looked at whether the guns had gone through interstate

commerce. the court didn't say close enough for government work. it doesn't matter if it's over broad and improper because you are capturing things. they said, no, you can't capture things that are not commerce. because congress has not given the power to beneficially affect commerce. commerce is is -- congress is -- >> let me tell you many lopez doesn't get you very far. no location, single shot statute, and two years later commerce put in internet nexus and the law was upheld. do you follow me? >> i do. >> lopez doesn't help you. let's go to morrison. what part of lopez has anything to do with the case? >> what part of morrison? >> before that, what part of lopez could help you? >> the thesis of the government is this, if we over regulate, as

long as the people we do regulate engage in commerce, then it's okay. and my point is a very substantial subset of the people regulated in the lopez law were engaged in commerce. >> and that's the same thing here. the health insurance industry is in -- health insurance is in interstate commerce. >> yes. but the class of inactivity being regulated here is not buying insurance. >> how do you describe the unability to pay as an economic decision? >> your honor, my economic decision is to not buy insurance. the government is compelling me to make a decision that i don't want to make. which by the government own finding is economically disadvance to me. why? because the government -- the congress expressed finding is the individual mandate would lower everyone else's insurance premium.

as cbo said by 15 to 20%. the only way that my contract to insurance company can lower everybody else is if i've made a bad deal with the company. really the government is telling me the subset, we can require the buy class to subdice -- subsidize health insurance? >> do you agree if i went into a hospital i'd have to buy health insurance? >> that's exactly right. and the government says -- >> that's right. they could do that. you agree with that. you are talking about temporal issue. two months in advance or at the time of consumption. is that correct? >> couldn't agree me. >> okay. it's down to a temporal issue. >> let's talk about that.

every 22-year-old is going to enter the job market in the future. there's all kinds of restrictions that you can impose on employees to contribute to pensions and things like that. the only different requiring employees and requires college students to contribute to 401(k) is temporal. the real difference is the employee have entered the labor market and the students have not. if you give congress the power to regulate the people not in the relevant market, then you have given them the power to regulate everything. because lopez told us that things effecting commerce was too broad of an expension to give congress. now we are talking about -- >> why isn't everyone in the health care market because of the uniqueness of health care? >> again, your honor. uniqueness two points. that's factual of no

constitutional relevance. this is a smoking mirrors attempt to create a limiting principal. the judiciary can't tell congress if congress has the power to regulate purchases that they can only do it when it's unique. circumstances by definition could come under the commerce or necessary improper clause. as the government correctly points out, those policy decisions are difference substantial deference. what difference does it make if it's unique? no court has -- >> i suppose the point that judge's question is getting at is the difference it arguably makes is that we are faced with a real argument and not an substantial one that there is the grade of hypothetical problems right at the door step that if you do this then inevitably, they can do that as well. to which the answer that the question is suggesting is not so

fast. if, indeed, this is really different and unique, then you'll have nothing more than a holding that that is different and unique. and you take the next case at the next time in the cruisable of the next set of facts. if it isn't unique, if what's common to dominates over what's desperate with the other markets, then that maybe very germane to the trust of the argument that you have swept the door open and turned and enumerated and eliminated power into the police power. i would suggest to you whether or not this market is unique is an important part of the calculus. even though it requires that you look at the economic realities. >> and i have two points, judge marcus. one is even if it is factual and unique, that's for congress to decide. not the court. if they have to power to do it, they don't have to limit themselves under the commerce

power. number two, let's examine the next case. let's figure out how unique this really is. okay? they say it's unique because you have to enter the market and it involves cost shifting. because there's failure to pay; right? >> is it different from life insurance? >> for example international is it different from flood insurance? >> it's certainly not different for flood insurance for anybody that lives near water. not different than life insurance, taxes at death are inevitable. we know that everyone is going to eventually die. any time you fail to pay a server provider, you are shifting cost. you are shifting cost of the seller and obviously to his existing customers. >> right. that's true. >> i'm sorry. go ahead. that's certainly true in so far as it goes. but the additional point that's made is it's not just that you have cost shifting, it's that the market is arguably unique

because unlike a whole bunch of others, virtually everyone will find themselves in the unfortunately position of having to consume health care services. while other people might have to consume food and shelter just as surely as health care services, they don't involve cost shifting. here we know the hospitals and providers will not and cannot turn away someone knocking at the door with a stroke, a heart attack, or a gunshot wound. they say that's what makes it different. >> it's some moral imperative to provide sick people health care. i can't believe people think it's the same to feed starving or clothe naked people. the government can require

private individuals to provide those kinds of services in these unique circumstances. they can provide -- require doctors and insurance companies to provide free and below cost services in those circumstances. now how do we deal with that as a society for the past 220 odd years? we have dealt with it through the spending power. if i'm going to inscript one to serve another, then i will compensate him. because he's serving the public interest out of the publish treasury. congress didn't want to do that. instead, they conscripted my client and the people subject to bring them in to subsidize through the expensive insurance people yums to give the 28 to $39 billion a year subsidy to those people. that is not regulation of commerce, that is not the way we have traditionally done it throughout the history. we have done one of three things. we have said we are going to require you to provide service, but we will compensate you for

that. we compensate hospital through tax exemptions and -- >> you are really making policy arguments as opposed to constitutional arguments which is the problem with that type of argument. >> if i sounded like -- >> congress gets to make those decisions. we're looking at constitutionality whether it's at the outer edge and reaches beyond the commerce clause. that's really the issue. >> and, your honor, when we take the constitutional argument that is not commerce. because the regulating an economic decision to stay out of commerce, all i hear is policy arguments. they've got to solve the problem, don't they? and i am saying a) you are right. that is not a decision for the court. what's the best solution? the only question for the court is whether they are regulating commerce. i think they have more or less conceded that compelling people to buy health insurance is not regulating commerce. now i'm going on to the second argument. this will create a huge problem if we allow these people not to pay their doctor. i have three points. one is the subsidy that they are

mandating us is $28 to $39 million annually. if any kind of concern they have about uncompensated care under their own analysis. that is not my policy analysis. at most for all of the reasons that you went through with mr. katyal -- >> with all do respect, i don't think we concede the first point to not regulating commerce. let's go back to that. government suggests that the limiting principal here is that we are regulating economic activity. okay? i know you disagree with that characterization. my question to you is if in fact the regulating economic activity that substantially effects interstate commerce, then it's constitutional. is that right? >> that's a truism. as mr. clement pointed out, they are confusing what they have required -- >> what we are dealing with to try to focus the issue is whether they are regulating economic activity then? >> and i would say that sitting

in your living room and making an economic decision not to engage in the activity of purchasing health insurance cannot under plain english be economic activity. they try to twist it by selling when we compel you -- >> is it economic decision? >> yes, every decision not to buy something, not to buy a gun, not to buy a textbook is an economic decision. now if that gives congress the power to regulate, then they can tell local school boards, we're overriding your economic decision not to buy this kind and compel you to buy this kind. after all, the activity we are compelling is economics. purchasing textbooks, purchasing guns, purchasing the most basic requirements of child care. all of the sorts of things that we thought were reserved for the state as some kind of limiting principal in terms of what the insurance between the federal and state government is. >> is isn't the problem here

again when we talk about the mandate rather than the medicaid provision that's the collision of attention is not between the national sovereign commerce power on the one hand and the states police power. but rather than between the national sovereign power, isn't that the issue that we face with coercion of the medicaid provision? >> two answers. the reason that the economic liberty is important -- >> i'm not saying it isn't important. i'm just saying structurally the nature of the attention that your arguing is of a different character than the tension the supreme court was troubled about in lopez and morrison. where it was a collision between the national sovereign and the invasion of the states constitutional police power. here we're not really so much

concerned about the state police power as that residual clause in terms of individual liberty. whatever it means. isn't that the structural reality that we faced in regard to the mandate? or have i misapprehended it? >> i disagree for three reasons. the first reason is as we know, congress is limited to certain enumerated powers, not to protect the states, but as the court has said countless times to protect individual liberty against the centralized government possessing a political power. no, it is absolutely at the core of what lopez was saying was we can't give him the police power. why? because we don't want competition with states. no, because then there would be one centralized government with police powers. point two, they can only do thing that is are necessary and improper as a means to an end.

here they have taken an extraordinary new power. they have taken on themselves the power to compel contracts. that can't possibly be proper because a) it's not incidental to the commerce power. it's a power that's at least equal to that. number two, it's not appropriate. because it's not the sort of thing that the federal government doesn't regulating commerce. it's the kind of thing that states do when they are exercising their police power. and number three, it is at the outer most boundaries and raises the most serious kinds of due process in taking issues if a state was to compel somebody to buy a good that harms him disadvantageously. we know it needs to be within the spirit of the constitution. >> let me go back to my question. ask this to you in this manner, the same question that i had put to your colleague, mr. clement. have you liked the states abandoned the claim that there's a 5th amendment substantive due

process issue and or 10th amendment residual power to the people as well here? and it's just really what we have to focus on is the breath of the commerce power issue and that issue alone? >> yes and no. yes on substantive due process, no on the 10th amendment. the 10th amendment references the people as well as the state. and for all of the reasons that mr. clement articulated, if congress exceeds it's enumerated power, it is by definition invading the providences of respectably the states and the people. no, it is absolutely at the core of our case and i would say it's directly analogous to what the court found is proper in the necessary and improper clause in print. what states engage in law making, they have power to overrule that. it can preempt and conditionally preempt it. what can't it do? it can't tell the state to pass the law or enforce the law.

by the exact same reason and when someone enters commerce, commerce has power over what they can do. what can't they do? they can't compel them to engage in commerce and then assert a regulatory authority over it. and the court in prints found this distinction essential to the necessary and proper finding. >> accepting that as clearly true -- i think it is. you still have to apply the principal to the residual last clause in the amendment dealing with the people. that a similar kind of analysis ought to be adopted as to the people that the supreme court crafted and adopted as to powers reserved to the states -- >> you have to be -- >> you have the right to do that. you have to make that analog, you have to make that jump. and the question that i have is there is no case out there anywhere, is there, that has

done that? >> your honor -- >> at least not to say this ought not to be the first time. but this would be the first time, would it not? >> your honor, i must respectfully disagree again. i think lopez and morrison for all about individual liberty; right? they wouldn't have been concerned if the state and second amendment concerns aside passed the law regulating guns. they wouldn't have been concerned if the state had prohibited violence against women. >> i thought -- i'm sorry. i thought the problem in lopez that chief justice rehnquist was dealing with was that the national sovereign had presumed to be regulate in a holy noneconomic area. an area simply dealing with criminal conduct, possession of a gun within 1,000 feet of a school. and that the fear that animated

that opinion was a power federalism concern that the national sovereign was invading the state police power. >> your honor -- >> i'm not sure that you can make quite the same argument in quite the same way with respect to the individual. and i -- i'm not sure that i understand how you get around that issue. >> your honor, we're on the same page. that obviously we're concerned about the federal government asserting statelike police powers. the question is why. why do they care? the court has told us countless times because denying the federal government this kind of power is designed to insurance individual liberty. they have said that in every federalism and separation of powers case. the reason that we care is not because of some state legislature in georgia, it's because the citizens of georgia shouldn't be subject to a regime that by federalized government far away. so i don't disagree that the

problem -- the problem was them asserting the police power. but i don't think it's much of a conceptual leap to say the reason is because of infridges on individual liberty. and no, i don't believe that the notion that it was criminal was what motivated lopez and morrison. i take the supreme court at it's word. it's because it was noneconomic. everything effects economic activity is what the court was saying; correct? and if everything effects economic activity and you can use any means to effect economic activity, then you've exceeded the commerce power. my argument to you today is that is exactly the argument the government is making. we can get it noneconomic activity, inactivity of any kind, why? because we want to beneficially effect economic activity down the road. if things -- if congress has the power to beneficially effect economic activity, then it has the power to do anything.

because violence against women effects economics, guns in commerce, or out of commerce affects economic activity. so you need to come up with a limiting principal. i very much like mr. katyal to answer the question of what purchase the government could not compel under their theory. again, every compelled purchase is economic activity under their theory. every failure to pay down the road has a cost shifting as we just discovered. it may not be cost shifting to insurance, but it's cost shifting to the seller or other consumers of the goods. if they are allowed to create the extraordinarily unprecedented to compel people to engage in economic activity, even to the disadvantage, then it's very difficult to understand why they couldn't, for example, eliminate the restrictions in lopez and morrison. if that doesn't do it, the

comprehensive regulation does. >> in morrison there was a provision. there was a comprehensive regulatory scheme in morrison and the supreme court without a severability clause severed a narrow provision. i want to speak of it here. i understand what judge vincent did. he held the act in the unconstitutional. the plaintiffs support that position. assuming for the sake of argument that it were the mandate to be unconstitution nap why could it not be wholly severed from the legal matter? is there any health care provision that constitutional must fail? i know there's some arguments why it's essential, but constitutionally must fail? >> we are, well, of course, severallability never dealing with unconstitutional parallel. >> right. right. >> because you are always dealing with -- >> they are well established presumption without a

severability clause; correct? >> is that a presumption of severability which is weakened -- >> why did you not sever the mandates from the rest of the provisions of the act? i know that's a backup argument. tell me legally why you cannot do that. >> well, i'd like to take an opportunity to agree with the government on this point. of them or jusòy intertwined. >> all of them or just guaranteed issue and preexisting? >> guarantees and community rate was the statutory. >> no, preexisting is what he said. >> then he listed -- the other he listed what we call the community ratings. when you have the preexisting condition -- >> how about annual limits? does that fail? >> i don't think he conceded that. but necessarily, it does. for the same reason. >> you are saying all of the

health care reforms fail? >> i am saying this is a central part of the act. if you have taken -- this is the patient protection and affordable care act. >> tell me is that in anything written in the statute, don't get to the economic consequences, is there anything in the statute -- statutory language that intertwines to mandate in title 26 of the internal revenue code with title 24 where all of the health care reforms are? >> your honor, i don't know anything in the u.s. code that says we are intertwined if >> well, even closely related or anything? >> sure, in the findings they said -- >> i'm not statute now for the congressional findings. >> now i'm at a loss. if we're talking about the statutory provision that says i'm 7a and linked to 7b. it is not in this act. as far as i know, it's not in any act anywhere. the answer is no.

what the supreme court told us what we need to do is look at whether or not congress would have passed the law anyway, because the main purposes of the law is dominant -- >> it's impossible to tell if the congress passed the law -- >> we have better information here than we do with most laws because we know -- >> what is that information? >> we know speaking into the reality. we know the house passed a rule that said you can't change a comma in this law and that was the vote. we know that it was almost not passed because of very peripheral provisions involving abortion and all of the other things that bailed out various states. i won't use the terms that they ewe of viewed as essential to gets it through. in the more realistic revel, i've never seen the statute intertwined. : designed for the expressed purpose of compensating the

insurance companies for the cost. we are protecting patients on the one hand. we are compelling people to come to the individual insurance market. that is the operative assumption which every other part of the act was based on. that there would be affordable insurance out there. when you mandate employers to do it. when you put these taxes on companies. when you set of these health care exchanges. the dominant premise was that there would be affordable insurance out there. without the mandate, without the subsidy they are imposing on my client, $30 billion a year, none of this insurance is going to be affordable. congress would have never impose the requirements. >> would they bring healthy people into the market? the extension, your kid a large

pool of new consumers, healthy individuals. is that correct? is the answer yes? >> yes. >> there are provisions that will aid the insurance companies with regard to the insurance pool. >> maybe i did not understand the question. the requirement they can limit cost hertz the insurance companies. the requirement they have to ensure people up to 26 hurts them because they are adding new clients whose health-care expenses they have to pay. it is basically all additional cost. you have to expand your client pool. >> not bigger than the health market reforms. is that what you're saying? >> but the government said we will pick up the tab for a lot of people you do not want to ensure.

we're going to expand medicaid. that helps them. it is taking them off the doll. congress is trying sang, at this point you cannot afford the individual mandate. we're going to put you on the state one. again that is based on the assumption that there is universal coverage that tries down the insurance clause. they subsidize people for these health care exchanges. that number was set on the assumption that the health care costs would be driven down by conscripting young people to engage to their detriment which were dry everyone else -- >> healthy people can still buy catastrophic coverage. >> i do not think -- i still think of a 31-year-old as young.

they cannot buy a catastrophic insurance. what they call catastrophic is not anyone's normal idea of a catastrophic coverage. you have to have the health benefits of the savings act. there needs to be a number of benefits. the deductible includes the three primary physician visits per year. getting hit by lightning in a serious disease, what most people think of catastrophic. that is not an option available. that is part of the cruel irony of forcing them to buy this plan when it is economically disadvantageous. i see my time is running out. >> we thank you.

>> thank you. i have four points i would like to start with. the first is that the plaintiffs had made a major concession. the government can regulate to the point of fail. now the only dispute is about timing, the means congress chose. chose. congress has since -- substantial deference. their solution is to ban the an insured and leave waiting victim's at the door. that is what happens if people do not have money to pay under their system. it is proper for congress not to have to do that. congress is reacting to a real- world problem, a problem worth $43 billion in uncompensated care. they say other solutions exist.

as judge marcus points out, if anything, congress's means are far more rational. they decided to build the system. >> to say it is a temporal jump does not yield the inevitable conclusion that the jump is not a big deal. you understand? you can make the jump in a lot of different industries. your colleague throughout the question, mr. carvin, i think it is a fair question to ask, i wanted to ask it to you directly. if they can compel this, what purchase could they not compel? >> as i said earlier, we are not arguing that the failure to buy something is what causes the economic activity that congress

is regulating. he is looking at the wrong side of the transaction. he is looking at the means and saying if you can do that, the failure to buy something, it will always be commerce. that is not what congress said. congress said the status quo was once that was leading to cost shifting. you can imagine a president that forbade the government from forcing the purchase of a good in terms of a substantial commerce clause authority. it would not matter one bit. we're talking about the means. with respect to that, while there may be jumps in timing, in many circumstances this is not one of them. here health insurance is the way that most health care is paid for. 80% comes from non-out of pocket cost.

will congress decided to do -- >> it pays for a 37% of health care. medicaid, medicare, many other ways account for 70%. private health insurance pays for 30%. >> of course congress allows medicaid to be part of the solution. my only point is that congress was building on this existing apparatus. it was not a jump in some dramatic step. the incentives and other plans would not work. they knew that if they wanted to get rid of discrimination against those who have pre- existing conditions. the way to do that was to have a minimum coverage provision. there was not another option. they said the massachusetts solution was the way to do it.

if you are a truck driver, you have to have insurance. that brings me to my second point. about rates and how we were an instant away from the market there. i think that is right. millions of americans need health care. that is what makes this market unique. i take my friends do not disagree. one brief points to the rational decision to sell insurance. his answer here to you was, that was economic. the failure to buy something is not economic. this court dealt with and responded to -- >> they have not enter the

stream of commerce gap. >> exactly. this court dealt with that question in maxwell. the panel said that child pornography, it was not commercial. it was impossible to think of anything farther away from the commercial. then this court said where congress meant regulates activity, whether economic or not. so long as the ability do so undermines our ability to effectively -- >> that is the majority opinion. >> it is. >> let's go back to the question about making an individual purchase of anything. field for the energy example. consumption is a national

problem. it has life affects as well as does health care. everybody consumes energy on some level. by then, couldn't you require the purchase of certain types of cars or solar panels? once we go down this road, because there is a a health care problem, we are going to require you to purchase health insurance. >> absolutely not. >> and none of those car, theances, the ca food, you have a right to go in there. if you walk campanulas, you cannot say to give it to me. healthcare is different. it is why his question was correct to say. this is unique. that is what stops the slippery

slope. shifting have the cost here have here. >> can congress increases by >> can congress increases by passing a lawyer shop provide health care -- and pass a law providing an healthcare? >> on page 25, they say precisely that in responding to it. if you are worried about it, how can you increase your power to the activity? there will be no limits. that is exactly what this judge said in maxwell one. it took courage congress to paint with a factor brush. on page 25, it rejects that. it is up to congress.

>> let me ask a question about insurance generally. i agree with you that health insurance is unique to the extent that we really cannot predict when someone will need it. i think that it does differentiate health-insurance from other projects such as automobiles and so forth. i am not sure that makes health insurance unique. it isn't that really an aspect of the insurance industry as a whole? flood insurance, fire insurance, home insurance, life insurance, natural disaster insurance, although those pride for eventualities that are known. >> absolutely. >> how does that make health insurance unique from all the

other kinds of insurance? >> there is cost shifting here. someone else picks up the tab when you do not have insurance. that is why it is activity to not be insured. congress found specific findings of $1,000 a year to you and me. when they say it seemed unusual to compel the purchase of a good, i think that is a liberty of market. they did not have a president that says -- precedent that says the court can mix and match liberty concerns. >> why not? >> i think they both it dealt

with that. did they deal with them in separate places. >> the reality is that there is a powerful factual different between claiming there is some liberty interest to grow marijuana in your backyard in california and telling someone they have to buy a product they do not want to buy life insurance. it is critical. >> dealing with the forced detention of individuals after they served their sentence, the court said that is a due process challenge. we will not consider this with respect to it. i think there is clear guidance from the supreme court. the concerns are off the table. i know they tried to get a lot of rhetorical forest.

maybe the argument that violate the attention of ayn rand but not the united states. they also said congress had not done anything like this for 220 years. >> is that accurate? >> i do not want to quibble. >> congress has not done anything at all like this and 220 years. i do not know. is that accurate? >> here are some examples we think are close. the order people to have guns and knapsacks. >> it was not specifically pegs. this is just a question of books proper.

if i could spend a couple of minutes on the conversion. the first point is that even if you think that there is some coercion doctor, this is opposed. >> the supreme court has said there is. this case is not close to the line. did you do not hear a word in theargument about what district court pointed to. >> i do not understand what you just said. it seems to me that the supreme court of the united states says with respect to whether spending and taxing goes too far beyond the constitutional limits, that a limit provide it. it says we have a four part test

that we will apply. what is more on top of that, we are concerned about the problem of coercion. when it morphs into coercion, that may bring a bell that yields the conclusion that the legislation has gone too far. the federal government said he will deprive the status of dakota 5% of the money they would otherwise get. but i think it is forceful. maybe it is not. there is a specific statute that says congress reserves the right to "alter, amend, or appeal any

provision." states have been on notice. congress can change the rule. >> is it your view that all they have to do is to place tax legislation. we are giving you money. we reserve the right to change the terms and conditions and that it can never be the worst? >> that is precisely what they say with respect. they point to the specific statute. he can now change the rules. that is actually happened several times. conagra said the exact same thing it is doing today. you have to cover patients appeared in 1989, pregnant women and children under the age of

sex. same exact threat to the overall brand appeared >> it is not overall relevant to looking at overall coercion. -- the same exact a threat to the overall brand. overall relevant to looking at the overall coercion appeared >> it is the same threat the the -- coercion. it is the same threats. statue to 1396c says that if the state is the not meet the education requirement comment the secretary has a good there a long process over exactly what she will do. >> i understand this. i thought that what congress

said was you have got to increase your coverage to include 133% of the poverty level. in the past, you only had to go up to the poverty level but was 12,000 and change for individual. if you do not do that, we -- the power is there to cut the state's off from a dime from any medicaid coverage at all. what did they fall within the first hundred term or the 33%. -- whether they fall within the first 100% or the 33%. >> it is in the power. you also have lesser remedies available. >> what to be a lesser remedy?

>> partial withdrawals of funds as opposed to full. in the west virginia case, it said we should wait and let that process play out and see what the secretary does before getting into it. that makes sense. these days do not have to spend a dime for the expansion of medicare costs. >> your suggestion is to wait till another day. >> that is part of the answer. this is not even come close. >> u.s. and counsel for my purposes of the question that congress and the secretary says to the state of florida by way of example, if you do not to raise the eligibility pool to 133%, if you will not get a dime for medicaid.

we are cutting out what we did you which amounts to billions you which amounts to billions of dollars. would that be coercive? >> you have that statute. this is about eligibility to a program. it is our program. it is our dollars. >> i want to turn back to the enforcement mechanism. the government argues it. it is essential to the entire regulation. individuals have a choice.

the penalty is $95 to begin with. is this correct? >> yes. >> there may look at i'm not going to buy insurance to pay the penalty. there is no interest that accrues. accrues. there is no levy. my question is how is that penalty even more the medical bills? >> i do not think it'll be any different. how can that be so essential to

reducing unpaid medical bills? it is collectible. it is collectible. >> it'll cost more to pursue the lawsuit. >> we will make sure that the statute does not say 695. sometimes it can be more or less. >> for most wages adobe $6.90 -- it will be 695. >> this is the appropriate way of enforcing it. it would reduce days that are uninsured by millions and millions.

>> the cbo says even with this mandate 8 million will be exempt. out of that 8 million, only about 4 million will pay the penalty. that is how it works. >> i'm not sure if that is correct. it is a substantial number. there is no distinction in the wall that is more essential than the difference between a constitutional argument in a policy argument. much about what we heard about today, it they turned out to be

policy arguments. and do not think they go to the commerce clause. commerce clause. if they say congress cannot regulate, then on the grounds that it is not interstate commerce, i wondered what the limits are in future cases. >> thank you. i want to take this opportunity to thank all of you lawyers. this was very helpful to us. it was a very difficult case. it will certainly affect all of the citizens of our nation.

cass sunstein is the head of regulatory affairs. on tuesday, she talked about the administration's regulations on business saying they haven't heard of the economy. these comments came at a capitol hill from hosted by the brookings institution hamilton project. it's a half-hour. >> it's my pleasure to introduce cass sunstein, who is the administrator of the office of information and regulatory affairs were much more widely known as oira. we appreciate