still affect how people behave and that will be detrimental. >> tim? >> well, i think the main point that i would want to emphasize is contrary to the characterization earlier, this isn't where the states are making a whole bunch of different arguments that aren't connected. what's actually happening is the question of whether or not this is voluntary. how do we determine whether something is voluntary? in your ordinary life, how would you determine whether a contract is voluntary? it's sort of a totality of the circumstances analysis, right? you would say there's all these different aspects involved in the deal to determine whether it's voluntary or not. here you have the individual map date combined with the increase in eligibility. you have the prohibition for states setting up alternatives if they opt out. the statute itself has no provisions providing for an alternative if states decide not to take the money and agree to the conditions. there's nothing in the statute as to what to do about that.

the statute locks into place the states' current medicaid eligibility requirements even if they already exceed federal standards. my wife is an attorney in arizona. arizona recently ep acted -- increased eligibility for medicaid beyond what was federally required. well, here comes the aca and locks it in at that current rate that was above what the federal government had previously required and now states can't change their minds even though that would have been perfectly legal to do so prior to that. of course as i said before, if states were to opt out, they would lose out on this money and still have to send their tax dollars to washington, d.c. when you add in all of those things, i think that's why these different factors, you put them altogether and what you have is something that is not a voluntary system but is a fundamental transformation of medicaid into a system where states are acting basically as arms of the federal government. >> can i respond to that? >> sure. >> and i think the basic simple point that i was making in response to what tim is saying

is that the theories about why this is a quote -- unconstitutionally, quote, coercive choice apply equally to every past expansion of medicaid and a whole raft of other major programs, which i ticked off. so it really -- it's just not as simple as that. and this is really a not very covert effort to repeal a lot of what has been done with the spending power in this country since the 1930s. and i would have gone to say it's not very covert. there is actually an explicit passage in the republican states' brief that states that the threat here -- the real threat here is not that

invalidating the aca's massive medicaid expansion will endanger other federal programs, but that approving it will endanger what the brief calls our basic federalist structure. of course our basic federalist structure is completely incompatible really with what the structure that we have had in place, at least since 1937. and frankly it's completely incompatible with the structure that the framers thought they were putting together. >> that's a remarkable concession. >> it seems to me -- >> he just said the constitution is incompatible with what's happened since the 1930s. well, we agree with that. >> i said it's incompatible, tim, with your version of what the constitution ought to mean. and i think that's true. many of the most distinguished people who have been associated with cato, my law school classmate richard epstein, for

example, have been very explicit about that, randy barnett, probably roger have been very explicit about that. it's very honorable to have the view the law ought to be changed in a major way. if that weren't true, we would never have had brown versus the board of education. the fact is, it is a radical change in what the law is. >> simon, you seem to be saying that it is not coercive for congress to say to a state that we're going to give back the money that we have extracted from your taxpayers if you will do this, that or the other thing. it seems to me that is the number of tnub of the matter. that strikes me as not very far removed from the mugger who says your money or your life. and the state says, look, we would prefer to keep the money ourselves in our state and do it our own way rather than to send it to you, the feds, and then have you turn around and give it back to us with strings

attached. >> can i respond to that? >> surely. i don't know that there is a response. >> i'm glad you made that remarkable point in just the form you did make it, because nothing could be further at odds with the framers -- what the constitution itself says and what the framers core objectives were when they gathered in philadelphia in 1787 to write the convention, and that was if they had any central aim, it was to create a federal -- a national government, robust and in particular financially independent enough to be successful both in terms of governing the 13 colonies and their people and in surviving in a hostile world dominated by britain and france.

so nothing was more important than assuring that the federal government clearly had the power to tax and spend, tax citizens directly without any interference from the states and spend to provide for the general welfare of the united states. and the experience that the colonial army had in being dependent upon handouts from the states to survive seared general washington and his colleagues. and so this power is enormously significant and that's why the word "tax" and similar words is all through the constitution. so i have to say, roger, this whole business about how somehow the state governments have first dibs in some way or another on the financial resources of their citizens and have some ability to veto what federal -- the

federal government is going to do with federal tax dollars really couldn't be more an thet cal to what the constitution says and what was intended to mean. >> what you said is perfectly correct when it comes to national defense. all right. let's go to the audience. please identify yourself and any affiliation you may have. >> hi. my name is melissa ortiz, which rhymes with quiz not to be confused with ortiz. i am the founder of of the common sense approach to disability issues. i have a couple of questions. my first question for everybody on that platform is did you or did you not read the legislation in its purest form, all 2,000 pages of it? >> no. >> no. >> absolutely not. >> nor did anyone in congress. >> well again, let me state that my name is melissa ortiz, and i

did, all 2,000 pages of it. and frankly, i am bothered by the fact that not only are we not discussing some things that need to be discussed -- i mean not just medicaid, medicare, that individual mandate, we need to be discussing why our government is allowed -- why people in our government are allowed to write legislation that focuses on outside issues instead of sticking with the main issue that they start out to write the legislation about. if you look at all 2,000 pages of the bill, there are things stuck in there that have nothing to do with health care but everything to do with the loss of individual freedom. and so i just want to challenge all of you to go read the legislation. so that being said, would you address -- let's see, let me address this idea. and i want to add to something that you said, mr. lazarus. it's also a comparison between

living in a socialist country and being free individuals in a free country. and i, for one, choose the latter. i can't say what anyone else in this room would choose. i want to be free. i don't want a government telling me every little thing i can do. and my question is this. with all of the county health programs out there, all of the charity clinics, doctors who if you ask are willing to help people that can't afford to pay for things, who maybe don't have insurance for whatever reason, doesn't this -- doesn't the overreach of obamacare duplicate a lot of those things? why or why not? >> i think that's directed to you, simon. >> it's directed to everybody. >> well, i'm not -- there's a lot of questions there so i don't know exactly how to proceed. but you made a remark that you prefer to live in a free country, not a socialist country. and i guess that was about the individual mandate or what was it about?

>> it's a comment -- over reaching comment about the state of affairs of the country today but specifically individual mandate, they can tell me -- that i have to buy health insurance, that i have to go to this doctor or that doctor. a free market economy i can choose where i can go and it takes decisions out of my hands. >> i'll respond to that one. i don't feel that i can be responsible for the state of affairs in the country generally. but i think that the problem with that point of view, which obviously a lot of people have an i understand it, is that every social insurance program, whether it's social security or medicare or similar programs that exist in other countries, whether they require -- whether they have government insurance or they require people to have -- or fund people to have

private insurance, whatever, they have to have some system for making sure that virtually all people who are ultimately going to draw on the pool of funds contribute regularly to it up front. otherwise it doesn't work. and so obviously we pay medicare taxes through our working lives in order to become eligible to take advantage of our funds when we retire. i haven't retired, but i am on medicare. now, in the affordable care act, the decision was made, actually as judge brett cavanaugh said in his rather interesting opinion in the d.c. circuit phase of this litigation that the affordable care act actually is moving in the direction of somewhat privatizing the social safety net and moving toward a universal insurance system but using private insurance market

and building on what we already have rather than simply extending medicare to everyone under 65 or doing something else to have a government insurance program. and once you do that, you still have this problem of insuring that eventual beneficiaries contribute to the pool. so that's what the mandate does. it really is no different from medicare taxes except if anything it's less coercive and it's really congress just making a choice of means. i don't really think that it's any more an interference with freedom than medicare taxes or any other kind of taxes are. but some of my colleagues here may disagree. >> let's have some quick answers and quick answers. yes. right there in the back. >> hi. trevor burress from the cato

institute. my question quick for mr. lazarus, is there such a thing as a coercion doctrine? >> that's a good question. what the questioner is referring to is the fact that the reference to coercion that has been made in the case law has been made in two cases, as tim indicated. the butler case in 1936 and the south dakota v. dole case in 1987. neither of these cases actually held that there is a doctrine of coercion. they refer to the possibility that a conditional grant might be made under terms that went from compulsion to coercion, but they didn't say anything about exactly what it meant. a number of courts of appeal have concluded that it doesn't really exist as a doctrine. no court has ever actually

applied it to hold that a traditional grant was unconstitutional. so one thing that these cases will decide is whether the doctrine actually exists as law or not and that in and of itself will be very important. the justice department is arguing that it actually doesn't or shouldn't. there's a good argument for that position. the states that i was talking about, the democratic states who support the medicaid expansion, argue that there should be a coercion doctrine. they're much more prostate interests in their orientation than the justice department is but they argue that it doesn't apply here so we'll find that out. >> sir, right here. >> my name is craig olson, i'm retired from the state department mostly. the preamble to the constitution states that one of the reasons that the constitution was created was to promote the general welfare, welfare.

article 1, section 8, says one of the reasons that you raise taxes is to provide for the general welfare. why isn't that in and of itself sufficient to make the affordable care act -- >> there's an easy answer. tim, what is it? >> well, i don't know if it's an easy answer. >> i'll give it if you don't. >> roger is my teacher. i would say the general welfare clause refers for one thing to the general welfare and not to the specific welfare and that a great many of the schemes that the federal government engages in through the spending clauses for the specific welfare. that's particularly the case with the statute that was enacted only by giving special kick backs to louisiana, nebraska, so forth and so on and the general welfare of the united states i think is articulated in the rest of the article where it says what the federal constitutional powers are. what's your answer, roger. >> well, the answer is, first, the general welfare clause in

the preamble is not law. the preamble is not cited, has never been cited as law. it is always cited as prek torre. look that word up, it's a good one. the general welfare clause of article up with, section 8, phrase 1, which is the taxing power, was held by all except hamilton to stand for the idea that it is the general phrase that is informed by the 17 enumerated powers that follow. in other words, you have -- there's nothing more common, madison said in federalist 41, than to state a general principle and then illustrate it underneath with the examples of how it is to be used. so therefore, the power to raise armies, the powers to create post roads, so on and so forth,

all of which in total constitute the general welfare. otherwise, as they went on to say, madison and jefferson and virtually everybody else, william drayton in 1828, if there were an independent power in congress to tax and spend for the general welfare, there would have been no point in having enumerated all of congress's discreet powers because since then money can be used to buy anything, congress could make an end run around the doctrine of enumerated powers and saying they were taxing and spending for the general welfare, which would be the open sesame which is the government we've got since 1937. >> and that is the point. you are exactly right. you have just stated what the law is. >> no, what the law became in 1937. >> and it has been since then, at least. in 1936 in the butler case that all of us have referred to, the court, and this was a pre-new

deal conservative court. it was not the court that flipped and became more liberal in 1937. the court goes through a discussion of this debate roger is referring to between hamilton and madison and concludes in a very scholarly way that the correct view, which was also recognized by justice joseph story, who was a great constitutional authority in the early 19th century, that the hamiltonian view that you've just referred to is in fact the correct view and it has been without any question the correct view now. so if you have to challenge that view to win this medicaid case, roger, you have to -- you have to bring about a massive constitutional counter revolution to do that. >> i'm prepared to do that. >> i'm sure you are. >> it's been said that this is a

covert attempt at restoring the constitution from the damage that was done to it in the 1930s. i don't want it to be covert at all. that's exactly the effort that i have in mind. >> that debate that you refer to in butler, the court came down on hamilton's side in dicta. it was only a year later in the social security case that the court elevated the dicta to the holding of the case after roosevelt there thenned to pack the court with six new members. the infamous court-packing scheme. with respect to the butler court coming down on hamilton's side, the only problem with that is that none of the other founding generation came down on the hamilton side. the debate arose over the introduction of his report on manufacturers in 1791 which was a national industrial policy which the congress immediately shelved because it was utterly contrary to the tenor and the language of the constitution.

the butler court in coming down on hamilton's side ignored that entire vision of the founding generation because it was enlightened by the new deal mindset. >> you should have filed an amicus brief with that case. >> this is why we choose roger as the moderator. >> i was in my infancy at that time, but for which i would have. all right, let's take just one more question and then we will call it to a conclusion. the gentleman right up here. if we could have a short question and a short answer. >> my name -- >> we're still working out the bugs. >> my name is larry borry. i'm an independent lobbyist.

could you please talk about the medicaid issue in light of the enumerated powers, and specifically as it relates to the tenth amendment. >> good question. whap who wants to tackle that first? >> unfortunately for us this new deal revolution that transformed the constitution from what it was into something completely different consisted in large part of ignoring the tenth amendment and referring to it as, quote, a truism. lawyers are the only people who can call something a truism and then ignore it. so what has -- of course that's a bit snide because what has happened is by expanding federal power, that just means the states don't have the power. because of the decisions that have expanded federal power under the commerce clause and other clauses of the constitution, that has left a much narrower scope for the tenth amendment to operate. what we need to do really is start looking at the bill of

rights the way the founders intended it not as being a substantive grant of particular rights or privileges or principles, but as a reiteration of principles that guide our interpretation of the constitution. the tenth amendment is there as a reminder. it's not supposed to create rights or anything, it's supposed to tell you the new deal court got it wrong. that's what the tenth amendment tells us. if we are going to be faithful to the constitution, have a truly living constitution as opposed to a constitution with all sorts of dead spots in it like the tenth amendment, like the public use clause of the fifth amendment, like the due process clause of the 14th amendment, if we're going to have a living constitution, we have to be informed of the principles of the tenth amendment and so forth and that has to take place in congress and in the court. we can't expect this system to run on its own. i think we should all be -- those of us who believe in the constitution as opposed to the 1930s, we should be celebrating

no matter how these cases come out because the debate we've seen over the past year has been enormously healthy for this country. we have seen ordinary americans discussing the constitution, analyzing what it means, debating about it amongst themselves and that is incredibly refreshing to a professional constitutional lawyer like myself. >> all right. let's have a good round of applause for our panel here. [ applause ] and thank you for joining us. thank you for our c-span audience for being with us and please come again.

and just a reminder that you can hear the supreme court oral arguments next week. there will be same-day audio distributed around 1:00 p.m. each day monday through wednesday. you can hear that right here on c-span 3. the road to the white house winds through louisiana this saturday, while next month sees voting in washington, d.c., maryland, wisconsin, connecticut, delaware, new york, pennsylvania and rhode island. the elections calendar in may includes indiana, north carolina and west virginia's primaries. and don't forget to make cspan.org your clearing house for all things related to the campaigns. watch the latest video of republican presidential candidates and president obama from the campaign trail. search the candidates on the issues section for video of the candidates' views on major ca campaign issues.

again, that's all at cspan.org/campaign2012. tuesday, timothy geithner testified before the house financial services committee on the stability of the international financial system. the european debt crisis and how it affects the u.s. was discussed during this two and a half hour hearing. chairman spencer bacchus and other republican committee members wrote a letter to secretary geithner earlier this year opposing increased contributions to the international monetary fund for the purpose of alleviating the european debt crisis. the treasury secretary last month indicated at a g-20 meeting that the u.s. did not intend to make additional imf contributions for that purpose. the imf meets in april for more talks on europe and other issues. representative jeb henserling h attend. it's about two hours and 40 minutes.

this hearing will come to order. the purpose of the hearing today is to receive the annual testimony of the secretary of treasury on the state of international -- the international financial system. the chair would note the very notable absence of our chairman today, chairman bacchus, who is undergoing a minor surgical procedure. he is expected to rejoin us tomorrow. he regrets his absence. pursuant to rule 3 f 2 of the rules of the committee for the 112th congress, the chair

announces the recognition of opening statements will be limited to the chair and ranking minority member of the full committee. and the chair and the ranking minority member of the subcommittee or their respective designees to a period not to exceed 16 minutes, evenly divided between the majority and minority. without objection, all members' written statements will be made a part of the record. the chair now recognizes himself for five minutes for an opening statement. clearly our economy is linked and intertwined with many others, especially europe's. almost all agree that europe's failure to adequately address its debt crisis can adversely affect our domestic economy. the president has gone as far as to say, quote, the biggest head wind the american economy is facing right now is uncertainty in europe. i respectfully disagree. given current domestic epo