>> as folks continue to file in, we are waiting for the start of this discussion on the impact of the supreme court's decision yesterday on the nation's health care law. this is hosted by the heritage foundation this morning. we'll hear from texas attorney general gregg abbott. he speaks on behalf of the 26 states in the suit. and the national federation of independent business executive director karen harned will also be one of the speakers this morning. we expect this to go about an hour and a half. it will get under way in just a moment.

>> good morning, ladies and gentlemen. yesterday, we had a rather momentous decision of the supreme court, perhaps the most unusual aspect of it was the result was one that to the best of my knowledge, no one had predicted. today, we're going to talk about that, what its implications are, what are the next steps in dealing with the issue and talk

about a little bit of a critique of the decision itself. to do that, we have two of the people who were very intimately involved with the whole process of dealing with the issue of obamacare from the very start. attorney general gregg abbott, one of the outstanding state attorneys general of our country is with us today. his state of course was one of those that was contesting this invasion of the people's liberty and as the chief law enforcement officer of the state of texas, he has made protection of liberty, protection of the people of that state, his primary objective. he is a leader in the republican attorney generals association. he has been named the trial judge of the year in the past, his service on the bench. he has been made principal honoree from the federalist society, the texas journal of

law and justice and he has been active in many of these very important issues that we've faced as a conservative movement. joining him is karen harned. karen is the founder and executive director of the national federation of independent businesses, small business legal center. she also has been active in the fight for liberty and particularly the freedom of small businesses to do the job that they do so well for our country and that is to provide jobs, to provide products and services that the people want, and she has also been active in a number of these very important issues. she received her bachelor's degree from the university of oklahoma and her j.d. from george washington university law school. we're happy to have both of them. we'll start out by opening it up with gregg abbott. >> thank you, general. it's interesting as you're making the introductions, i was unaware, karen, until right now

about the texas/ou conflict we may have. great to see that once again, barack obama has been the great unifyer in this country. he has been able to bring texas and ou together at the same table fighting for the same cause as opposed to fighting against each other. but it's interesting, general, i would say that yesterday was a day full of surprises. one of the things that we were surprised about was not only the outcome of the case, but the way the case was decided, but i might also add we were surprised about the new role of the chief justice of the united states supreme court. i was in the courtroom yesterday when the decision was handed down and it was interesting, if you would, the roller coaster ride that we were all taken on. as the chief justice came in and began to read the opinion and began to go through in detail his analysis of the individual

mandate, and whether or not congress had the authority under the commerce clause to impose the individual mandate on all americans and to conclude that they do not, the congress acted in violation of the constitution in opposing the individual mandate and the commerce clause, i thought this is going to be a dramatic victory. then when he began to explain in more detail about the necessary and proper clause, you begin to say this is going to be not only a great victory, but a tidal wave movement that's going to change constitutional history. and it turned out to be right when the chief justice then pivoted to talk about the tax component of obamacare and suddenly recasting obamacare into a tax and spend provision, and you could tell as he began discussing the tax component of

the decision, there was a palpable movement in the courtroom, where people from row to row were suddenly in a state of confusion, shock, uncertainty and disbelief about what exactly they were hearing, and then you could tell some such as myself were dismayed and disappointed about the decision whereas others were overjoyed. well, there is a lot of take-aways that we can draw from the decision yesterday and what happened. what i want to do in the few minutes allotted to me is to quickly run through some of those. some of it i want to talk about some broader context, then i'll run through some of the more detailed aspects of the decision and then about some issues going forward. but for some background, i think one thing that's important to do is to put in context what

happened in the last 24 hours is something that had been developing for the last two and a half years. remember this. that is that we may have lost this case at the u.s. supreme court yesterday but in reality, almost all of america, whether you're lawyers, involved in policy, involved in politics, or the average person, they thought that we were going to lose the case long before it ever got to the u.s. supreme court. few people ever gave us very much chance at all that the case was ever going to make it to the high court. the outcome that we got yesterday was not the outcome that we wanted, but it far exceeds what anyone gave us any chance of achieving two years ago. so to trace back in time what happened two years ago, myself

and some other attorneys general, going back to the fall and winter of 2009, were deeply disturbed about how the country and the health care law seemed to be hijacked by what seemed to be accepted public bribery through things like the cornhusker kickback, tools that were used to extort money for a state in order to get a vote on the floor of the united states senate. we knew that this was not the pathway that we wanted to see america go down, so several state attorneys general joined together to inform congress that they could expect litigation on the health care reform law if it moves forward with things like the cornhusker kickback included. then about that same time, a lot of state attorneys general

benefited from research that was prepared by the heritage foundation. for me personally, it was the defining pivot moment when in reading the research, i began to be convinced that the individual mandate component of the health care bill was something that not only was contrary to the constitution, but something that must be vigorously contested if we're going to hold out any hope for the future of the constitution in this country. i called randy barnett, visited with him about the paper he had written along with several others, got better educated and gained insight from their perspective and as myself and my fellow state attorneys general learned more and studied more about this, drawing from the

insights and expertise and research from the heritage foundation, we decided that we were going to proceed forward with litigation. we couldn't have done it of course without a tremendous partner with nfib. for one, we questioned whether or not we would even have standing to bring a claim. nfib did and some people involved in small businesses in this country were able to step up and get involved also. so this was a true team effort that began on shaky grounds that even when we filed the lawsuit, we were ridiculed, criticized, condemned, given short shrift, mocked. we were told that the lawsuit was going to be quickly dismissed. there was no grounds whatsoever. everyone knows that since the time of fdr, the commerce clause

has been expanded and congress can do whatever they want to do, and all that tune changed when we finally got that federal district court ruling in florida agreeing with us that obamacare was unconstitutional. those attitudes changed even more when the federal court of appeals upheld that and then changed even more when the pundits saw the vigor that was used by the justices on the u.s. supreme court when we went through the three days of oral arguments. well, to go through some of the issues decided by the case real quick, and to put them also in this context, one is of course the individual mandate. the individual mandate for us was the focal point of this lawsuit. we thought that we were going to win or lose based upon the

individual mandate. we knew we had a mountain to climb because of past precedents. in fact, we were told by very knowledgeable legal scholars the individual mandate clearly was going to be upheld because if nothing else, the necessary and proper clause of the united states constitution. but the more we analyzed this and saw this, we knew that our fight was for a just cause because of that one very simple notion, and that is if congress can force you to buy product against your will, there will be no limits whatsoever to congressional power and it will fundamentally change the relationship between individuals and the federal government forevermore. so we were very pleased to see that the united states supreme court itself articulated the very positions that we had

maintained all along in arriving at its conclusion that in fact, congress had violated the constitution, trampled our individual rights by trying to impose the individual mandate. of course, that victory turned out to be a hollow victory because of what the remainder of the decision looked like. however, i think that we would be ignoring the shift in constitutional history that took place yesterday if we don't recognize some silver linings concerning the ruling on the individual mandate. one, it was a meaningful reining in of congress' authority under the commerce clause. it was a reining in that was unanticipated by scholars and pundits for the past two years, but it was a way that is going to give life and breath to

future potential legal challenges for acts by congress that are premised upon the commerce clause but also hamstring congress in the future when it concerns their exercise of authority based on the commerce clause. importantly, as i understand it, the ruling yesterday was the first time there had been a ruling that congress exceeded the commerce clause on a safety -- social safety net issue since the time of fdl. well, we won on the individual mandate. but of course we lost as it concerned congress' taxing authority. for me personally, and i think i can probably speak for probably everyone, this came as a total surprise for several reasons. one, congress didn't consider it to be a tax, so much so they

deleted any reference to the word tax from the legislation. two, the president insisted it was not a tax. three, no lawyer or party that i talked to in the case seemed to really think it was a tax. sure, the obama lawyers had to make the argument but it seemed pro forma, seemed like it was just a claim that they would throw in hoping that it would stick. then four, as far as i know, of all the different obamacare decisions that have been made across the country, the two that were made in lower courts in our case and as you know, there had been several other obamacare decisions in other courts around the country, no court, no judge anywhere at any time agreed that the obamacare law was a tax. so that made the decision that came out all the more surprising. but now we're going to have to

deal with the aftermath of the decision and this is going to be the biggest concern and biggest challenge going forward because now congress can tax inactivity. if you do something, congress can tax it. if you don't do something, congress can tax it. i can't remember, general meese, i should have researched this but you may remember from the time of ronald reagan, what was that phrase he used? his complaint about washington is if it moves, tax it, and the rest of it turned out to be humorous phrase. that's the way it used to be. if it moves, if it's involved in activity, they'll tax it. now reagan would be even more stunned to learn that it doesn't matter if you move or don't federal government is e taxed.

telling citizens now that you have an obligation to act, to engage in an activity, whether you want to or not and if you refuse to engage in that activity, you're going to be subject to a tax imposed by the irs. that fundamentally changes constitutional power in this country and it expands control of the federal government into our lives and into our wallets to a new and dangerous level. maybe more troubling is that the decision seems to distort and abandon conservative legal principles of deciding cases based upon what the law says as opposed to what policy decision a justice on the court may believe in.

the decision amounts to, in the words of justice kennedy, to judicial overreach. the thing that we all talked about publicly in condemning obamacare is that it was an unprecedented government overreach by congress trying to grab more power, trying to assert themselves more into our lives. completely unaware that the way this would end is by the judiciary exercising an unprecedented judicial overreach. amazingly, the president is claiming victory over this new tax mandate. the president is going to wind up having raised taxes dramatically over the middle class in america, the very constituency he promised he would not raise taxes on. the third issue was the medicaid expansion issue.

here again, we were completely surprised by this. this is an issue in which we had, we, the states who filed the lawsuit, had an unmitigated win. i got to tell you, in hindsight, now that the case is over, speaking for myself and maybe a few other state attorneys general, we thought we didn't have a chance to win this case. we inserted it in part to ensure that we had standing. we thought multiple times about abandoning the claim all together because of the magnitude of the legal challenge. policy wise, we knew we had to challenge the medicaid expansion mandate. legally, we thought it was a loser all along so we were stunned to learn that the u.s. supreme court agreed with us and that is congress violated the

constitution by coercing the states into expanding their medicaid programs against their will. as chief justice roberts put it, it was congress putting a gun to the heads of the states, forcing them to engage in conduct and importantly, recognizing that in doing so, it violates the sovereign rights of states. here again, as we go through the process of learning more about this case and applying this case in years to come, this is going to be one of the silver linings of an otherwise dark day in american judicial history, because this is a silver lining that once again, gives more power to states by recognizing and putting a stamp of approval on that state's sovereignty. it's also a meaningful turn with

regard to social safety net decision making coming out of the supreme court, because it's the first time that the supreme court put a limitation on the expansion of the medicaid system. well, let me just quickly touch on a few other topics that i know i need to pass the floor. one is some practical effects and i have no doubt that karen is going to talk more about some of the practical effects of obamacare. let me limit my comments about that to the state of texas, because my comments about this are based upon personal conversations that i've had with business men and women and physicians across the state. this decision that came out yesterday is going to hamper hiring by employers in the state of texas. before the decision came out,

businesses large and small across the state repeatedly told me they were afraid to hire because they were afraid of the effects of obamacare and the penalty they may have to pay, the regulations they may have to deal with, et cetera, and so they were refusing to hire because of the possibility that obamacare was going to be upheld. now that's a reality and i think you will continue to see a cap, a limitation, on the upside of the hiring going on in the state of texas which frankly, is better than hiring in most other states across the country. the uncertainty, ambiguity from this law is going to continue. one thing the court is supposed to be is resolve issues, provide clarity and in doing so, eliminate the uncertainty. we left the courtroom yesterday with very little more clarity and ongoing uncertainty, feeling that little was accomplished in yesterday's decision.

another problem that we're going to see from the practical level concerns physicians. i've talked to countless physicians in all corners across the state of texas who have told me that because of obamacare, they are going to get out of the practice of medicine. i have yet to find a single person and i challenge people in this room to identify anyone who says because of obamacare, they are going to get into the practice of medicine. you're not going to find it. this is the problem that it raises. what obamacare really is going to do, it's going to force more people into the public health care system at a time when there's going to be fewer physicians providing the health care for those people, so you have greater demand for services, less supply of people providing those services, you're going to have a lot of unmet health care needs. couple of other quick take-aways and that is the pundits were repeatedly wrong about what

happened in this case. at first they said there's no way this case will have any legs to it, we'll never make it past go, and they all predicted it was going to be 9-0, 8-1, 7-2 decision upholding congress' power under the commerce clause. then after oral arguments concluded, the pundits changed their tune and they all said that obamacare had transformed into a train wreck and then a plane crash for the obama administration and everyone ever since the oral arguments had been predicting that obamacare was going to be stricken down. the only issue was how bad the damage was. now the pundits were proved wrong again by what happened yesterday. so at a minimum, maybe another silver lining that can be taken away from the obamacare decision is that it will silence and humble some of the pundits out there.