are we talking about the same thing? >> if that's the provision. >> and here's what it says. it says the ek tear should notify the agency that further payments will not be made to the states or in its discretion that payments will be limited to categories under or parts of the staying plan, not affected by such failure. which it repeats until the secretary is satisfied that shall limit them to parts of the state plan. so redding that in your, i read that to say it's up to the secretary. whether they should refuse to fund the new people, the secretary will cut off funding for the new people, as is obvious the state doesn't want it. and whether the secretary can go

further. i could not find one case where the secretary ever did vote further. but i also would think the secretary could not go further where going further would be an unreasonable thing to do. so i want to know where this idea came from. it should say i don't want the new money. that the secretary would or could cut off the old money. from the very beginning of this litigation, we have point ed ou. but the fact that she could. >> now let me relieve you of that concern. that basic principle of

administrative law. and should a cost more money, then the secretary could show it was justified by being costly related. i read implicit in in the statute. does that relieve you? >> it doesn't for this reason. >> i didn't think it would. >> but here's the reason. one is, i don't know the opinion for that proposition. the basic point that government has had opportunities in every level of the system, and i suppose they'll have an opportunity today to say fear

not, states. >> because it could be that there is some money that would be saved in the program if the states take the new money, and if they don't take the new money, there is money that is being spent that wouldn't otherwise be spent. there could be something like tha that. >> do you agree the government has to act reasonably? do we strike down unreasonable statutes? my god. >> and justice scalia -- >> the executive has to act reasonably. that's certain in implementing a statute. but if the statute says in so many words that the secretary can strike the funding for the whole program, that's the law.

thgs not all hypothetical. there's a record. there's an exhibit 33 to our motion. but it's a letter from the secretary to arizona. when arizona floated the idea that it would like to withdraw from the chip program, a relatively small part of the program. and what arizona was told by the secretary is that if you withdraw from the chip program, you risk losing $7.8 billion, the entirety of the medicaid participation. see this is not something -- >> make me feel a little better, i want to pursue this for one more minute. there are cases and many of which justice scalia knows as well. which uses the same word as the statute.

and that doesn't mean the secretary can do anything he or she wants. but they are limited to arbitrary discretion in interpreting statutes, applying the statutes, et cetera. end of the argument. end of my question. respond as you wish. i think that really right here what we know to an absolute certainty is that this statute gives the secretary the right to remove all the state's funding under these programs. >> do you think the federal government couldn't if it chose congress say, the system doesn't work. we're just simply going to recall it.

it's not insistent with what we want to accomplish. we're just going to to do away with the system and start a new health care plan of some sorts. and states, you can take the new plan, you can leave them, we're going to give out 20% less. maybe 20% more, depending on what congress chooses. can congress do that? does it have to continue the old system? because what is what the states are relying upon. it's coercive to give them a new system. >> we're not saying we have a vested right to participate in the medicaid program. if the congress wanted to scrap the current system and have a new one, i'm not going to tell you there's no possibility of a coercione toit. >> i want to know how i draw the line.

think think usual definition of to coercion is i don't have a choice. they may not pay for something else. if they don't take medicaid, they may have to make cuts that their budget to other services they provide. it's a political choice of whether they choose to do that or not. but when we have limited the government not to spend money in the ways appropriate? >> i'm trying to answer that to. but what if congress tried to scrap this and start over? here's why it's fundamentally different and many coercive. congress is not saying they want to scrap the program. they don't have a single complaint with the way they're providing services to the visually impaired an disabled.

and that's whey it's questionable. if you don't take the new money we're going to take all the money you've been dependent on for 45 years and you're using to serve the visually impaired. >> may i ask you a question. you represent 26 states. >> that's right. >> but we're also told that will are other states that like this expansion. and they are very glad to have it. the relief is that never mind the states saying we think this is good you're saying because you represent a sizable number of states, you can destroy the whole program even though there

may be as many states that want it. that don't feel forced to say this is a good thing. >> justice ginsburg, that's right. but it shouldn't be a terrible concern. if congress wanted to do what it did in 1972, every state that thinks this is a great deal with sign up. what's telling here, though is 26 states who think that this is a bad deal for them actually are also saying that they have no choice but to take this. because they can't afford to have the entire participation in the 45-year-old program wiped out. they have to deal with the visually impaired. the disabled in their state. >> i didn't take the time to figure this out. maybe you did. is there any chance 26 states opposing it have republican governors.

is that possible? >> there's a correlation. >> let me ask you another thing. most colleges and universities are heavily dependent on the government to fund research programs and other things. that's been going on for a long time. and then title nine passes and he says to this fellow, if you want money for all the things you get it for, then you have to create an athletic program for girls. and the recipient says, i am being coerced. i can't give it up. isi' program i don't want. if your theory is any good, why

doesn't it work any someoneetng give up? >> well, justice ginsburg there's two reasons that might be different. one is this whole line of coercion only applies, is only relevant when congress tries to do something through the spending power it couldn't do directly. so i guess the question for this court would be whether or not section 5 of the 14th amendment allowed congress that. i imagine you think it did. but that's the nature of the question. one way around that would be if congress can do it directly, you don't have to ask if there is something special about spending power. that's how they resolved the fair case about fund iing. >> i'm trying to understand the coercion theory. istory of this country or the court any federal program struck down

because it was so good it becomes coercive to be in it. >> i also think it ma be spending on certain private universities is something that congress can do, and it doesn't matter if it's coercion. if they're trying to get the states to expand the medicaid programs. >> let's take public colleges. >> then there may be some limits on that. in that context, there might be some things they can't do. i don't think there's a disagreement that congress could not simply as a matter of direct legislation say states you must expand your medicaid programs. then i think we have to ask the question of whether or not it's coerci you asked where is the case that says we've crossed the line?

and this is the case. >> it doesn't apply well to t 1980 extension to children 0 to 6 years old. 1990 requiring the extension for children up to 18. all the prior extensions to me seem just as big an amount. just about as big in the number of people coming on. and they're all governed by the same statute that you're planing of here. >> justice, i don't think our position here would extend the 1984 amendments. tell you why. but here's reason why they're different. one major difference is the size of the program. the expansion is really breathtaking. medicaid served in 1984. the federal spending was a spade over $21 billion. right now it's $250 billion. and that's before the expansion on the statute. >> well, if you're right,

doesn't that mean that medicaid is unconstitutional now? >> not necessarily, justice kagan. we're not here with a one trick pony. we point to three statures. one is the size of the program. and if you want a gauge on the size of the program, the best place to look is the government's own number. footnote six. >> so when does a become too big? give me a dollar number. >> $3.3 trillion over the next ten years. >> the amount approximately if you look into it as a percentage of gdp, it's big. but it was about 2.0% of gdp. it will go up to 3% of gdp. now look at the kovrp rabble numbers, which i did look at, with the expansion that we're

talking about before. or even from 0 to 6. and while you can argue those numbers, it's pretty hard to arg argue. if i'm right on those numbers, or even roughly right, i don't guarantee them. then would you have to say, well, indeed. medicaid has been unconstitutional since 1964. and if not, why not? >> the answer is no. that's because we're here saying three things make this unique. >> what is it? i'm on pins and needles? >> one is the sheer size. two is it's uniquely tied to a mandate that is nonvoluntary. they've leveraged prior participation in the program notwithstanding that they've broken this out as a separately

segregated fund going guard. so suppose you have the current program and the congress wakes up and says we think there's too much fraud and abuse. and we're going to tie it to everything that's been there. unconstitutional? >> no, i think that's something congress could do directly. wouldn't have to limit that to the spending program. i think it's a statute, you know, it's in the criminal code. it may be tied to spending, but that's a provision i don't think is constitutional. >> i guess i don't get the idea. congress can legislate fraud and abuse restrictions in medicaid and congress can legislate coverage expansions in medicaid. >> i think there's a difference. but if i'm wrong and they have

to break down to remotely manageable pieces before the expansion, i don't think that would be the end of the world. but i would ask you to focus on ha is going on. these are people who are healthy, childless adults not covered with many states. we're going to have a separate program for how you get reimbursed. you get reimbursed differently. we can take away your participation in the program for the visually impaired and disabled. >> i'm not sure my colleagues have exhausted their questions. >> my greatest fear with your argument is the following. the bigger the problem, the more resources it needs, we're g of government in choosing how to

structure cooperative states. we're going to say the the federal government, the bigger the problem, the less your powers are. e thuse once you get that much program the way you want. it's our money. we're going to str to run the program ourself to prek all our interests. i don't see where to draw that line. the uninsured are a problem for stated only because they, too, politically, just like the federal government, can't let the poor die. and so to the extent they don't want to do that. it's because they feel comfortable to the citizenry. so if they want to do it their way, they have to spend the money to do it their way. if they don't want to do it the federal way. so i just don't understand the

logic of saying states, you're not entitled to our money. but once you start taking it, the more you take, the more power you you have. >> i think that sort of misdescribes what happens with medicaid. states were, as you suggest, providing for the poor and the visually impaired and the disabled, even before medicaid came along. then all the sudden the federal government says, look, we would like to help you with that, and we're going to give you money voluntarily. then over time gave more money with more conditions, and now they decide they're going to totally expand the program, and they say you have to give up even your prior program. we first came and offered you cooperation, we're now going to say you have to give that up if you don't take our new conditions. secondarily, i do think it's not when you get past a certain level it becomes coercive, per se. but when you get a program, and you're basically telling states that we're going to take away

$3.3 trillion over the next ten years that at that point it's okay to little more careful, that it not be so aggressively coercive. we're just telling you it's inceptionally important to draw that line and this is a case where it ought to be easy to establish a beach head, say that coercion matters, say there's three factors of this particular statute ma take it as obviously coercive of any piece of legislation you have ever seen and then you will have effectively instructed congress that there are limits and you have laid dunn some administratable rules. >> chief has said i can ask this. >> he doesn't always check first. >> as i recall your theory, it is that to determine whether something is coercive, you look to only one side, how much your

threatened with losing or offered to receive. and the other side doesn't matter. i don't think that's realistic. i mean, i think -- you know, the old jack benny thing, your money or your life, and he says i'm thinking, i'm thinking. it's funny because it's no choice. you know, your life -- it's just money. it's an easy choice. no coercion, right? right? now, whereas if the choice were your life or your wife's, that's a lot harder. now, is it coercive in both situations? >> well, yes, it is. >> really? >> i mean it's a tough choice. >> i thought you were going to say your money and your life. >> it is, but -- >> which way? >> i might have missed something

but both of those seem to be -- >> no, no, no. to say -- when you say you're coerced, it means you've been giving an offer you can't refuse. okay, you can't refuse your money or your life, but your life or your wife's? i could refuse that one. >> let's leave the wife out. >> mr. clemente, he's not going home tonight. >> i was going to say mrs. clemente -- >> i'm talking about my life. i'd say take mine, you know? >> i wouldn't do that either. >> it's enough prif volufrivoli while, but i want to make sure i understand where the meaningfulness of the choice is taken away. is it the amount that's being offered, that it's just so much money of course you can't turn it down or is it the amount that's going to be taken away if you don't take what they're offering? >> it's both, your honor.

there really is three strings in this bow. one is the sheer amount of money here makes it very, very difficult to refuse because it's not money that has come from some -- china or from, you know, the export tariffs like in the old day. it's coming from the taxpayers, so that's part of it. the fact they're being asked to give up their continuing participation in a program that they've been participating in for 45 years as a condition to accept the new program, we think that's the second thing -- >> why isn't that a consequence of how willing they have been since the new deal to take the federal government's money, and it seems to me that they have compromised their status as independent sovereigns because they are so dependent on what the federal government has done. they should not be surprised that the federal government, having attached -- they tied the springs, they shouldn't be surprised that the federal government isn't going to start pulling them. >> with all due respect, mr. chief justice, i don't think we can say that the states have gotten pretty dependent so lats

call this whole federalism thing off. i just think it's too important because, again, the consequence -- if you think about it, if the consequence of saying that we're not going to police the coercion line here shouldn't be that, well, you know, it's just too hard to we'll give the federal congress unlimited spending power. the consequence ought to be if you can't police this line, you ought to go back and reconsider your case that is say that congress can spend money on things it can't do directly. we're not asking you to go that far. we're simply saying that, look, your spending power cases absolutely depend on there being a line between co-certification co-certificatu >> could you tell me -- i don't understand your first answer to justice kagan. doesn't the amount of burden that the state undertakes to

meet the federal obligation count in this equation at all? >> it certainly can, justice sotomayor. i didn't mean to suggest in answering justice kagan's question that my case was no better than that hypothetical. i mean, but it's in the nature of things that i do think the amount of the money, even considered a loan, does make a difference, and it's precisely because it has an affect on their ability to raise revenue from their own citizens. so it's not just free money that they're turning down if they want to. >> if we go back to that era of matching what a state pays to what a state gets, florida loses. its citizens pay out much less than what they get back in federal subsidies of all kinds. so you can't really be making the argument that florida can't ask for more than it gives because it's really giving less than it receives. they don't really want to go back to that point, do you?

>> then i'll make that argument on behalf of texas. but it's not what my argument depends on, and that's the critical thing. it's one aspect of what makes this statute uniquely coercive. i think if you ask the question, what explains the idea that if you don't take this new money you're going to lose all your money under what you have been doing for 45 years to help out the visually impaired and disabled? nobody in congress wants the states to stop doing that. they're just doing it and it's purely coercive to condition the money. it's leverage, pure and simple. >> if the inevitable consequence of your position was that the federal government could just do this on its own, the federal government could have medicaid, medicare, and these insurance regulations, assume that's the truth, then how are the interests of federalism concerned if in florida or texas or some of the other objecting states there are huge federal

bureaucracies doing what this bill allows the state bureaucracies to do? i know you have thought about that. i'd just like your answer. >> the one word answer is accountability. if the federal government decides to spend money through federal instrumentalities and the citizen is hacked off about, it they can bring a federal complaint to a federal official working in a federal agency. what make this is so pernicious is that the federal government know that is the citizenry is not going to take lightly the idea that their huge new federal bureaucracies popping up across the country, and so they get the benefit of administering this program through state officials but then it makes it very confusing for the citizen who doesn't like this. do they complain to the state official because it's being administered by state official in a state building -- >> mr. clemente, that is very confusing because the idea behind cooperative federal/state programs was exactly a federalism idea. it was to give the states the ability to administer those programs. it was to give the states a great deal of flexibility in

running those programs and that's exactly what medicaid is. >> well, that's exactly what medicaid was. the question is what will it be going forward? and i absolutely take your point, justice kagan, cooperative federalism is a beautiful thing. mandatory federalism has very little to recommend it because it poses exactly -- >> cooperative federalism does not mean that there are no federal mandates and no federal restrictions involved in a program that uses 90% here, 100% federal money. it means there's flexibility built into the program subject to certain rules that the federal government has about how it wishes its money to be used. it's like giving a gift certificate. if i give you a gift certificate for one store, you can't use it for other stores. but still you can use it for all kinds of different things. >> but i absolutely agree if it's cooperative federalism and the states have choices, then that is perfectly okay. but when -- that's why voluntariness and coercion is so

important. because if you force a state to participate in the federal program, then -- i mean, as long as it's voluntary, then a state official shouldn't complain if a citizen complains to the state about the way the state is administering a federal program that it volunteered to participate in. but at the point it becomes coercive, then it's not fair to tell the citizen to campaign to the state official. they had no choice. but who do they complain to at the federal level? there's nobody there, which would be -- i'm not saying it's it's best solution to have federal stumentalities in every state but it's actually better than what you get when you have mandatory federalism and you lose the accountability that's central to the federalism provisions in the constitution. >> thank you, mr. clemente. general verrilli. >> mr. chief justice, and may it please the court, the afford care act's medicaid expansion provisions will provide millions of americans with the opportunity to have access to essential health care that they cannot now afford. it is an exercise of the spending clause