there's even less reason to think obamacare will because it expands coverage to a group that is on average more affluent and therefore has a higher baseline access to care than the people in that oregon study. president obama has also claimed that imposing an individual mandate and the rest of the law shows that he cares. you may remember this, when he embraced that term we all use, obamacare. he said i don't mind people calling it that. it means obama cares. the underlying assumption, though, is that obamacare is compassionate and supporting it makes you a compassionate person. i want to warn any obamacare supporters out there that what i'm about to say may sting a little. but if you were a compassionate person, then you would support whatever policy saves the most lives or creates the most financial security with the several trillion dollars that obamacare spends. just as there's no solid

evidence that obamacare will save lives, there's even less reason to think that obamacare will save the maximum number of lives possible with the trillions of dollars that it spends. so, in fact, obamacare is not compassionate, and neither are you if you support it because by supporting obamacare rather than experiments that would show which policies saves the most lives per dollar spent, you're revealing you're willing to forgo more lifesaving uses of that money in order to get whatever other "x" factor obamacare delivers to you, whatever it brings you. you are literally willing to let some people die who might have been saved by more lifesaving uses of that money. obamacare's opponents have also advanced a myth about the individual mandate. they'll say it's the is centerpiece of obamacare. it is not. the centerpiece is the set of government price controls that obamacare imposes on health insurance, price controls that tell carriers they must charge

health and sick people of the same age the same premiums. they call these rating restrictions or community rating because they would rather the people not recognize them as price controls. these are so harmful the rest of obamacare including the individual mandate can be described as attempts to undo the damage these price controls cause. for example, these government price controls are so destabilizing they typically cause health insurance markets to collapse because they so dramatically increase premiums for healthy consumers that healthy people leave the market all together. the market for child-only health insurance policies has already collapsed in 17 states and is slowly collapsing in another 17 states because obamacare has already imposed these price controls on that market. the individual mandate is an attempt to undo the destabilizing effects of these government price controls by forcing healthy people to pay obamacare's inflated inhurns premiums. the mandate won't quite to the trick, though, because millions of households won't be able to

afford the coverage and would save thousands of dollars by dropping the coverage and paying the penalty. so the subsidies are a further attempt to undo the destabilizing effects of its price controls by bribing low-income people and healthy people to stay in the market. the employer mandate is an attempt to keep the cost of those subsidies down by preventing employers from dropping health benefits so their workers can take advantage of the subsidies. but the price controls don't just affect the healthy. they also hurt the sick because they literally force insurance carriers to compete to see who can provide the worst coverage for sick people. think about it. if a certain type of patient cost $1 million to insure and obamacare tells carriers they can only charge those patients a $10,000 premium, what happens to insurance carrier who is provide the best coverage to those million-dollar patients? that insurance scarier will attract every one of those million-dollar patients and go out of business because each of those patients will bring down

its bottom line by $990,000. obamacare's price controls literally create a race to the bottom because they force insurance companies to compete to see who can provide the worst coverage to the sick. and they do that -- insurance carriers will do so in hopes the sickest patients will choose their competitors and bring down those bottom lines. ian pearl is a victim of obamacare-style price controls. shelby rogers is another victim of obamacare-style price controls. their insurance companies competed to avoid them because they already operate in markets subject to obamacare-style price controls. obamacare includes more mandates and regulations than programs whose purposes is to stop insurance carriers from doing what the price controls force them to do to survive. obamacare creates three separate programs that attempt to tax all health plans and subsidize those to get the most ian pearls and the most shelby rogers.

obamacare regulates health insurance marketing, benefit design, network adequacy, plan offerings, each plan's service area, the amount the carriers spend on administration, all to try to prevent carriers from doing what its price controls reward them for doing. none of this will work any more than the individual mandate is going to work. the biggest of these programs is the so-called risk adjustment program, and as health economist henry aaron and austin frekt have explained, insurers have been able to outfox is best risk adjustment algorithms. i count at least 14 programs and regulations whose purpose is to fix or mitigate the damage done by the price controls. the mandate is not so much obamacare's centerpiece as merely one of a cascading series of efforts to prevent the catastrophic harm that the law's price controls would inflict. this brings me to what i think is the final and most brazen myth that supporters have peddled about the mandate.

that's the myth that an individual mandate promotes personal responsibility. if there are any supporters out there, this one might sting a little, too. the mandate does not promote personal responsibility. it promotes personal irresponsibility. obamacare supporters wanted to impose these government price controls on health insurance, the sort that causes health insurance markets to collapse, that causes insurers to compete to provide the worst care possible to the sick. supporters could have taken personal responsibility for that decision. they could have launched their own health insurance plan. that operates under those sorts of pricing schemes. or they could have tried to restabilize the market perhaps by personally subsidizing some people's premiums to try to keep them from leaving the market. but that's not what they did. instead, they imposed a mandate that forces us to pay with our money and freedom to fix a problem that they created with their price controls.

so the entire purpose of an individual mandate is to enable supporters to avoid taking responsibility for their decisions, and i defy you to find a more brazen example of personal irresponsibility. thank you. >> thank you, michael. thank you, ilya. it's a great pleasure to be here at the inaugural program at the cato institute's f.a. hayek auditorium. to see all of you out here, it's a beautiful facility. i hope to come here many times again in the future. it's also a great pleasure to be debating my friend, elizabeth wydra, someone whom i've debated this issue on numerous occasions in the past and someone with who i co-authored an amicus brief to the right to bear arms in chicago which the center supported in filing that brief. i think they're to be commended

for that act of commitment to the original meeting of the actual constitution. today i'm charged with giving you a briefing, an overview of the lawsuit that you're going to hear next week, a lawsuit that as ilya told you, is going to consume six hours after argument spread over three days. that's the longest argument time being allotted in 47 years. no matter how this case is decided, no matter how the court comes out, there's already been one claim that has been refuted by the fact that the court granted is six hours of oral argument over three days. that is the challenge to the affordable care act and the individual mandate is somehow frivolous or an easy case, which you actually still hear in the media, even this week. i can just assure you that the supreme court does not have to dedicate three days of oral argument and six hours of

argument to hear an easy case, to resolve an easy case, to dismiss a frivolous claim. but that is what 99.9% of my colleague law proefs were saying. when this challenge was first brought -- -- when these arguments were first made, when the challenge was first brought and all the way up to today. at the end of this talk i'm going to say a little about the spin you've been hearing or many have been hearing in the press this week about how the conservative justices on the court must rule if they're supposed to be consistent with the rulings that they've made in the past, which is complete myth in my view. but to begin with, i'm going to summarize the case and the arguments against the individual mandate. for those who don't follow this case as closely as we on this panel do, let me summarize how the arguments will go next week. monday the courts will hear 90 minutes of oral argument discussing the issue of the anti-tax injunction act, which is a provision of law which basically says that you can't challenge a collection of tax in

advance. you have to pay the tax then sue for a refund. the question whether that statute would apply to the penalty to enforce the individual mandate. the second day, tuesday, the court is going to hear oral argument for two hours about the constitutionality of the individual mandate, double the normal argument time devoted just to that single issue. wednesday in the morning the court's going to hear 90 minutes worth of oral argument on the sever rablt question, that is whether you strike down the individual mandate as unconstitutional, how much of the rest of the bill if any should be struck down. some of it or all of it? by the way, i represent the national federation of independent business to private parties that are challenging the mandate. we believe on that issue -- we agree with the district court that held if the mandate goes, the entire act must go. the government concedes if the mandate goes, the health insurance regulations that michael just told you about, they also are to go. and the court had to appoint an

amicus friend of the court to support the position the mandate can be struck down and the rest of the bill remains up and running. that argument is 90 minutes wednesday morning. wednesday afternoon, an important challenge to the constitutionality of the medicaid requirements being imposed on the states will be heard in the afternoon for one hour. that is the topic of this afternoon's panel here at the cato institute. in today's talk, i am not going to talk at all about the anti-injunction act. some of you will be relieved to hear that. i won't talk about severab severableability or the medicaid challenge. i'm going to lay out why it is at a fundamental level the individual insurance mandate is unconstitutional. as you can well imagine, this is a very technical issue involving a lot of precedents, the reasoning of a lot of cases, a lot of technical text, and

that's not something that can be effectively presented orally in what i probably have is about eight more minutes. so what i'm going to do instead is basically give you what i consider to be the four most salient reasons why this lawsuit, contrary to the opinions of the experts, this lawsuit did have legs and this lawsuit is serious, and this lawsuit is going to be a very difficult one, not an easy one for the supreme court to decide. and i'm going to make four points that will involve four words. they'll organize around four words. the first word is unprecedented. the second word is uncabined, which is a word that lawyers like to use to say unlimited. the third word is unnecessary. and the fourth word is dangerous. unprecedented. you've heard about unprecedented. you've heard the issue about unprecedented. this mandate, this claim of power by the united states congress, is literally without precedent, and what i mean by that, to translate this into ordinary language, is it has never been done before.

unprecedented. never in the history of the united states to enforce any other law has the congress claimed the power to require that all american citizens enter into contracts and do business with private companies. and they've certainly not claimed that under the commerce power, which is what they're doing now. this is an unprecedented act of power, and -- there's two ways of establishing that. one is i can ask all of you in this room to think of any other contract that the federal government requires you to enter into upon pain of a penalty payable to the irs. none of you can think of any, nor could your parents or grandparents because this has never been done before. and every court who has decided on this case has agreed with that. the courts that have struck the law down have said it was unprecedented and the courts that have upheld the law have said it's unprecedented. now, what difference does that make? it is true as defenders of the law say that just because something's never been done

before, that does not automatically mean it's unconstitutional. there's a first time for everything. before congress does something that's constitutional for the first time, we have to find it's constitutional. it means there's no direct authority that says that congress may do this. so that's true right off the bat. we're talking about what we call a case of first impression. the second thing is a proposition of law that justice scalia observed in the prince versus united states case, which involved the enforcement of the brady act. and what justice scalia said -- and in that case what congress was trying to do was force local sheriffs to do background checks on prospective gun purchasers even though local sheriffs worked for state, the counties of their state, not the federal government. what justice scalia said is that if for 200 years a power this attractive has gone unused by

congress, that is a pretty good argument that that power does not exist. and the same thing can be said about the individual insurance mandate. if for 230 years the congress has gone and solved all kinds of free rider problems and cost-shifting problems and we fought several major wars and wars on poverty and wars on drugs and done all of those things without having to impose an economic mandate in the past, even though that would be a very highly attractive power, rather than paying cash for your clunker, we could make you buy a new car. then we wouldn't have to pay any money out of the public treasury. even though that's attractive power, congress never exercised it. that's a good argument for why the power doesn't exist. there is a constitutional significance to the facttdented. second, the law is uncabined or unlimited. so far the government -- and this has been quite remarkable to me. in the two years in which this case has been argued and litigat litigated, the government and its defenders have been able to

come up with a single limiting principle on the exercise of the power to impose economic mandates on the people. oral argument in thecase, the s d.c. circuit court of appeals, the justices pressed the government attorney for ten long minutes for a single example of a mandate that the government would be unable to impose on its theory of why it can impose this mandate. and the government's attorney was unable to provide a single one. i was recently told by a reporter in a press conference when the justice department was filing their briefs in this case that reporters asked them what the limiting principle was for this power and the justice department lawyers were unable to answer their questions. the reporters repeatedly asked them this question and the justice department lawyers grew somewhat frustrated at the inability of the lawyers -- of the reporters to take no for an answer that we don't have an answer to the question of what the limiting principle is. >> it is just a fundamental principle of constitutional law that the federal government and the congress is one of limited and enumerated powers. unless you can state that limit,

then that's likely to be a losing argument in court. now, there is one thing that the defenders of the bill do say when the issue of limits come up. the government says this in their briefs and every defender of the bill will say this. i think elizabeth doesn't say this, so not necessarily from her but every other defender says this, and that is that somehow health care is different. there's something about the health care market, something about insurance, there's something -- distinctive about this particular thing and for that reason that distinguishes this from everything else. and whenever you hear anybody say that, which we have at you remember is -- and it's not true, but even if it were true, that would not provide a constitutional argument or limit. the response to that is, okay, fine, health care is different. what's your constitutional limit on the imposition of this power? and why is that? well, because the court is simply not the next time an economic mandate is being used

by congress going to have a fact-based inquiry in which they decide whether the next step of imposing an economic mandate is like this one, whether the next market is going to be sufficiently similar to the health care market in order to justify an economic mandate in the next case. that's because the supreme court doesn't get into factual inquiries like that and they won't in the future. this is just a smokescreen for having no limiting principle at all. if you don't have any limiting principle, then that means that upholding the mandate is going to pose a serious threat, in fact, going to end the system of -- the limbed and enumerated powers we've lived with in this country since founding. the third reason why there's a problem with this law is that it's unses. congress had powers that it could have used to accomplish very nearly what it was trying to accomplish here, not the same way. they didn't just have to change the name here or there. they had powerful powers, the ones they always use to subsidize activities that they don't have the power to command, and that is their taxing and

spending power. yet they chose not to use those powers. why is that? we know why. it was political. which is exactly the constraint that exists on the taxing power. and that is the president ran for office saying he would not raise taxes on people making less than $200,000, the democ t democrats in the senate, the 16 democrats in the senate were not prepared to support any kind of tax increase. and as a result they didn't use the power that they had for strictly political reasons to accomplish what they say they want to accomplish with this bill. because it's unnecessary, it is simply not a justification that -- in other words, it is not a justification that you have to use this mandate because it's the only means necessary when congress had the power that they could have exercised to solve this problem and yet chose not to. however, had they done that, it would have been a whole lot better than what they've now -- the power they're now trying to claim, which brings me to my final point that this particular power is dangerous. and why is that? because when congress tries to

incentivize americans to do what they want them to do but they don't have the power to command them to do, the only consequence of americans not doing what congress wants them to do is they have to forgo some kind of financial benefit. if you don't want to trade your clunker in, forgo the $5,000 we're willing to pay you in order to destroy that perfectly good car and drive business to the american car companies. and so that's what you have to give up. however, if this individual mandate is upheld as constitutional, even though in this case it's only being enforced by a monetary penalty, in the future, it could be enforced by the full panoply of enforcement mechanisms typically and historically used to enforce the commerce clause, up to and including imprisonment. this mandate might seem innocuous, but the next one doesn't have to be and that's why this power is is a lot more dangerous than the tax power would be. let me talk about the spin you've been hearing lately, at least in the last week, about why certain conservative

justices have to vote to uphold the mandate or they would be contradicting themselves. the first, the most ludicrous has to do with chief justice roberts who has to uphold it because he signed on to it. a sexual predators law that empowered the federal prison system to hold onto people who will were adjudicated to be sexually dangerous. could congress do that under in the opinion, there is narrowing language that says comestock -- the law in that case is actually a modest addition to existing power, an area the federal government has occupied for a long time and a state opt out. for any state that wants to reclaim their own prisoners, they're free to do so so it accommodates federalism. that's the opinion chief justice roberts signed onto. but notice this about t the comstock opinion, it had

limits in the text. but if you hear law experts talk about it now, they don't care about the limits, what was written into that opinion. they say congress can do anything under the necessary and proper clause. read comstock. that's what's going to happen if the supreme court tries to limit this power by the use of some sort of limits like health care is different. the final example i'll give is the one about justice scalia, who wrote a concurring before opinion in the case i brought to the supreme court, the medical marijuana case. i was disappointed in his vote and opinion, but in his opinion, which he concurred with the majority by jus cities stevens, justice scalia relied on the necessary and proper clause. because of what he said in that case, because the reaching of my client's marijuana being grown for her by caregivers privately and not commercially, because it was essential to the broader prohibition of interstate marijuana that they be able to reach that intrastate noneconomic activity, therefore

it was constitutional. let me say that again. he held it was okay to reach my client's marijuana because it was e sen toshl a broader regulation of interstate commerce, which was the prohibition of interstate marijuana. i could say more about what that means but i'm out of time. one thing about that opinion by justice scalia. the opinion, which was expressly about the necessary and proper clause, was only about the word "necessary" in the necessary and proper clause. the issue was whether essential to a broader regulatory scheme would be interpreted in the same deferential way as the word "necessary" has been interpreted in the past by the supreme court, meaning congress basically has discretion when it chooses means amongst the various means that might be convenient to its end. and justice scalia basically adopted that approach. much to our disappointment. but here's what that opinion said not one word about. it said not one word about the word "proper" in the necessary and proper clause. the necessary and proper says the congress shall have the power to make laws which shab

necessary and proper for its execution of foregoing powers. there's nothing in the case about proper. yet justice scalia himself said in the priest case to enforce local sheriffs to enforce-fed ral law, he said that was beyond the power of congress' commerce power to enact, and he said he called the necessary and proper clause that was being offered to defend that power the the last refuge of those who would defend the ultravirus powers of congress. and to that argument he said while that law may be necessary it is not a proper exercise of power. so if there's any justice on the supreme court that will be very capable of distinguishing his concurring opinion in raich from this case, it's the justice that has made the greatest use of the distinction between necessary and proper. how will he do that? because an individual mandate to make every man, woman, and child do business with a private company at the whim of congress, just because congress thinks

it's convenient to its regulation of interstate commerce, is not only unnecessary, as i've explained, it is also highly improper and for that reason unconstitutional. thanks. >> thank you so much for having me here. i am also honored to be part of the inaugural event in this wonderful new auditorium here at cato. and i also want to thank cato because i carry around in my purse all the time my pocket constitution, and while i heartily disagree on many issues with what cato thinks about what's inside the constitution, they have the best covers. this has lasted me for, like, ten years. so i'd like to carry around for my liberal brethren, you know.

cato, you got it right on the cover. let's talk about what's inside the constitution. in the affordable care act challenge in the supreme court, i am honored to represent more than 500 state legislators from every state in the union, the district of columbia, and puerto rico -- >> you beat me. i only represent 333. >> i know. believe me, we counted. and we filed in support of both the minimum coverage provision known here today, i suppose, as the individual mandate, and the medicaid expansion, which will provide coverage to approximately 16 million more low-income americans in the states. but as i was preparing these briefs, i came across a quote from the great chief justice marshall's opinion in gibbons versus ogden, which, having done these debates with randy before, immediately made me think of him. and here's the quote.

"powerful and ingenious minds" -- randy -- "taking as postyou louse that the powers expressly granted to the got of the union are to be contracted by construction into the narrowest possible compass and that the original powers of the states are retained if any possible construction will retain them may, by course of well-d digested but refined and metaphysical reasoning founded on these premises, explain away the constitution of our country and leave it a magnificent structure, indeed, to look at but totally unfit for use. they may so entangle and perplex the understanding as to obscure principles which were before thought quite plain and induce doubt where is, if the mind were to pursue its own course, none would be perceived." i think randy's arguments that you've heard here today and he's written in his briefs on behalf

of his compliants are very compelling. but i think they might be of the sort that chief justice marshall was warning us about when he spoke of the brilliant and clever advocates who are trying to convince us that basic principles are essentially controversial and um for grabs. and i think next week, when we hear paul clement stand up on behalf of the 26 states who have challenged the affordable care act, we'll more of this. paul clement is a brilliant, wonderful, gifted advocate. but before i get into why i think these arguments are not true to basic uncontroverted principles of the constitution, i want to talk a little bit about the affordable care act itself, because i -- i disagree with the characterization of the act that michael gave earlier, perhaps unsurprisingly. and while i am also myself nearly a simple constitutional lawyer, nobel prize-winning economists have disagreed with his take on the law and its

consequences. so i would take his presentation with a grain of spin -- i mean a grain of salt. i don't know why i said that. anyway, the act was a response to what i hope everyone would agree. it was a national crisis in the health care system. tens of millions of americans do not have health insurance either because they cannot afford the skyrocketing premiums, they would like to purchase insurance even at any price but are refused coverage because of pre-existing medical conditions, or simply because they choose not to purchase insurance and gamble that they will not need medical treatment beyond -- that costs more than what they have in their own pockets. these uninsured shift more than $43 billion a year to other market participants. this is in part