from discrimination on the grounds of sexual orientation and gender identity. an additional three states that cover only sexual orientation. the eeoc recognized title vii prohibition on sex discrimination. lgtb and gender nonconforming people. in 2014 the president issued an executive order protect federal employee, federal contractors from discrimination. however, to ensure that workplace discrimination against lgbt employees is eradicated we need inclusion in federal legislation prohibiting employment discrimination. without establishing sexual orientation and gender identity as protected classes employers are likely to be unaware of their potential liability under federal law. lgtb and gender nonconforming employees are also likely unaware of their right to be free from discrimination on the job or take recourse.

passage of such legislation to prohibit on the basis of discrimination on the basis of sexual or orientation or gender identity in the same way that title vii of the civil rights act of '64 prohibits discrimination on the basis of race, color, religion, sex or national origin. in conclusion, workplace discrimination is a pervasive issue that prevents employees from meaningfully contributing their talents to our nation's workforce. workers who encounter anti-lgbt sentiments or actions are faced with a perilous choice of either hiding their lgtb identity in the workplace or risking discriminatory treatment and harassment by disclosing their lgtb identity. while eeoc protection take shape and agencies issue guidance it will take time for employers and employees to recognize the legal protection available. we hope that more data will be collected as we await a new legal precedent or legislation

will set this matter unequivocally in the path. on behalf of the task force i would like to thank the commission for this opportunity to provide a statement on the workplace discrimination faced by lgbt americans. >> thank you, miss simmons. miss >> it's an honor to be here. i'm winnie stackleberg. cap is an independent nonpartisan educational institution dedicated typical floifgs of all americans through progressive ideas and action. as an institution and as americans we believe in the right of all people to equal opportunity in society and equal protection of the laws. yet today in america it remains legal in 29 states to fire an individual because of their sexual orientation. in 32 states transgender americans like basic explicit protections from discrimination in the workplace. despite the historic progress we have seen on marriage equality,

in 16 states and counting same-sex couples can be legally married and legally fired for doing so all on the same day. workplace protections lie at the center of america's nondiscrimination laws. for marginalized communities these protections serve as an integral part of the american dream and a gateway to equal opportunity and financial stability. the lack of binding and enumerated federal employment protections for lesbian, gay bisexual and transgender workers remains central need for our commune in order combat the pervasive discrimination faced in all areas of life, including and particularly in employment. in june of 2013 the center for american progress in collaboration with our partners at the movement advancement project and the human rights campaign released a comprehensive report outlining the broken bargain for lgbt workers that leaves many unable to provide the basics for themselves and their families.

the report demonstrated what many of our families know too well that lgbt workers face serious barriers to both gaining and keeping a job due to discrimination based on sexual orientation and gender identity. among lesbian, gay, bisexual and transgender individuals between 11 and 28% reported being denied or passed over for promotion because of their sexual orientation while one in ten reported having been fired from a job in the last five years because of whom they loved. the rates of discrimination are even more alarming for transgender people. 47% of whom have reported being fired, not hired, or denied a promotion because of their gender identity. of that 47%, roughly half have reported being fired from a job, they already had because they were transgender. for lgbt americans with jobs

many report experiencing unequal pay due to their identity. gay and bisexual men make 10 to 32% less than straight men with similar backgrounds in comparable jobs. similarly transgender women see a dramatic pay decrease after transitioning, contributing to a poverty rate for transgender people that is significantly higher than the general population. while employment laws remain at the heart of our push for nondiscrimination protections, any discussion about ensuring fair and equal access to a job cannot be limited to protections in the workplace. the ability to find a work does not begin and end with the application process. it also includes the ability to gain a quality education in a safe school, secure stable housing, and have equal access to the goods and services that every american needs to live and thrive. this past december, my

colleagues at the center for american progress released a report entitled "we the people" which outlined the discrimination faced by lgbt people in employment, housing, education, credit and public accommodations. the report called on congress to join the growing number of states in passing a comprehensive lgbt nondiscrimination act which would provide protection based on sexual orientation and gender identity in vital aspects of life. lgbt americans are routinely denied shelter, more than half of lgbt students feel unsafe in their schools, and lgbt customers are too often refused equal access or treatment in our nation's marketplaces. without protections to combat these instances of discrimination, along with protection in employment, too many lgtb americans will be denied the basic tools necessary to gain employment.

despite these alarming instances of discrimination both in and outside of the workplace, considerable progress has been made on the federal level to utilize existing civil rights protections to combat discrimination against lgbt americans. two years ago the eeoc rightly determined that discrimination based on gender identity and employment constituted illegal sex discrimination under title vii. today the department of justice is utilizing that same rational to combat workplace discrimination by public employers. in the single largest expansion of lgbt workplace protections in our nation's history, president obama added sexual orientation and gender identity protections to the executive order banning discrimination by federal contractors. in the end whether we achieve these protections through the courts or through the legislature, or most likely through some combination of the two, the fact remains that the force of these laws relies on adequate resources, and tools

for those tasked with their enforcement. while many believe that discrimination is a relic of the past, the number of overall discrimination charges filed by the eeoc has reached historic levels. despite this increase in complaints, the eeoc has nearly a quarter fewer full time employees than it did 20 years ago. the same trend is occurring in many other offices charged with enforcing our nation's civil rights laws. many of these offices like the eeoc are already proactively protecting many in the lgbt community. the fact that they are doing so with diminishing staff is unacceptable, and as we continue to push congress to expand protections to include all americans, we also will push for the necessary appropriations needed to ensure that all current and future nondiscrimination protections are fully enforced.

in conclusion, as our report notes the american dream rests on the promise of a level playing field. a society where all people have equal access to the central pillars of opportunity. with the significant rates of discrimination faced by lgbt americans it's abundantly clear to ensure that level playing field lgbt americans both need and deserve the same protections that are currently afforded to all others. the time has come to ensure fairness and to fully fund that fairness for all americans regardless of their sexual orientation or gender identity. thank you very much. >> madam vice chair you have the first question on this panel. >> thank you very much, mr. chairman. thank you all for taking your time to be with us. my question is for miss simmons. as we look at existing workplace protections, which one day could include, we heard from an

earlier panel some of the numbers on the complaints regarding employment discrimination. some might describe those complaint numbers as rather small, others might call them miniscule. in your testimony you said that discrimination in employment is universal. you said that with workplace discrimination, it's a pervasive issue. address for me, please the argument that some might make that the figures that we have available don't support the rather strong description that you've given regarding the pervasiveness of discrimination. >> certainly. thank you so much for that question.

two key points, the data that i was offering in terms of near universal discrimination was from our national transgender discrimination survey and that was a survey that was limited to over 6,500 transgender individuals that were surveyed across the nation and across the u.s. territories. and so that was particular to transgender and gender nonconforming individuals. the second point with respect to the filings that were referenced from the department of labor, i think it's critical that we continue to examine the levels of the the filings and examine what types of discrimination are happening because the two aspects are happening simultaneously in terms of the public becoming aware of their rights and their ability to file such claims, and the ability for government agencies to be responsive,

government agencies such as department of labor to be responsive to the types of claims that are being filed. in addition i think that a point that was made earlier with respect to the marketplace is another clear indicator that the trend is moving in the direction of affording protection providing a safe work lays for lgbt employees and what we're simply looking for is a way to have the numbers go in an opposite direction in terms of the prevalence of discrimination by creating a workplace that's more affirming in support of lgbt individuals. >> thank you. >> commissioner achtenberg. followed by commissioner yaki. >> i have a question, there was reference there were over 50 studies of discrimination that

have been undertaken, the conclusion of which studies were that employment discrimination against lgbt people is significant and pervasive. in 2007 an analysis was done by the williams institute which drew the same conclusion. it's my understanding that for more than 40 years your organization has made available to lgbt people a nationwide advice and counselling line. i'm imagining you have gathered statistics over that period of time as well. could you discuss how the conclusions of the 50 studies and the williams institute analysis compares to the statistics that you have gathered over this period and

could you also identify the kinds of discrimination that your callers identify as pertinent to this particular inquiry that we're undertaking here? >> yes. thank you for that. what we see is very consistent with what the studies and the reports see and so to your question and also to vice chair's question, many of the calls that we get are from individuals in these 29 states where there are no protections. if they live in a state where there are protections, it's an easy answer for them. we encourage them to file a complaint. we refer them to attorneys that do lgbt employment discrimination cases. there is recourse they can take. then our resources really just to hook them up with the knowledge base and with someone who can be their advocate.

most of the calls we get are in states where there is no protection. it's only been recently, in light of the eeoc's macy ruling that we've seen an expansion of title vii perhaps being available as a vehicle. many, many times the most difficult answer we give to people when they call they say they suffered some adverse employment action is, i'm sorry, there is nothing we can do. there's no protection in your state. it doesn't mean it's even happening. i want to point out numbers are very significant. the nature is the whole gamut. most of the calls we get are probably along two tracks. either an employee is going along fine in their job, doing a good job, getting good performance reviews, doing well, being promoted, and then something happens where they are discovered to be lesbian, gay, bisexual or transgender. somebody sees a facebook post.

they do get married. and a couple of people in the office attend the wedding and then the rest of the office realizes, wait, we didn't know we had a gay or lesbian or bisexual person working for us. or in some other manner they come out to someone and then that's told to other people and then all of a sudden things go straight downhill. either they are fired outright or all of a sudden the performance evaluations, the documenting two minutes late, documenting bringing in coffee when you're not supposed to have coffee at your desk, all sorts of things start to happen and very soon they lose their jobs. or the second track that we see the most of is harassment on the job. and the irony here is that many employers will go through a very long period of either open harassment or death by a million cuts sort of negative adverse job actions thinking that they can't fire the individual simply based on their sexual orientation when they would be

perfectly free to do so. so many times the employee is tortured over a period of time, either harassed openly based on their sexual orientation or gender identity. this can take the tone of being actually anti-gay harassment or gay harassment and eventually they quit or are terminated from their jobs. we get about 7,000 calls a year. about 30% of those are employment related. the bulk of those are in either of one of those two broad scenarios. >> thank you. >> mr. yaki and followed by commissioner heriot. >> thank you, very much, mr. chairman. i want to thank the panel and the previous panel that appeared today and i want to apologize for my absence today but i've been knocked down by the flu and my doctors do not want me to travel. with that being said, this is an extremely important subject for me personally. it's something that i wanted the

-- when i was initially appointed to the commission over 10 years ago. i even campaigned, talked about how we could try to bring these types of issues before the commission, and it's taken a long road to get there and we're finally here and i want to thank all my colleagues for that. the question i have is directed to the panel from something that mr. clegg said. mr. clegg, thank you for being here. you and i quite vigorously spar at these hearings. but there's something you said. [ inaudible ] i wanted to go towards the legal

basis for the nondiscrimination act and the impact on interstate commerce. i would like to hear from the advocates on the panel today about why you believe that this does have a substantial impact on interstate commerce and justify the commerce clause in pushing forward these changes in the law. >> anybody want to start? >> more so than ever, our economy is interconnected. we no longer live in a world in which goods and services are produced in one particular area. they stay in that area. mom and pop shops are virtually a thing of the past when you're talking about production that is sole within a given area. that being said, even small businesses purchase their goods that they are selling to their customers from all over the world, not just from within the united states.

congress has had ample opportunity and has passed many laws that ensure nondiscrimination not only on the basis of race and sex, but also on the basis of religion and disability. the supreme court has weighed in on these issues time and time again and never has the court reached the conclusion that congress did not have a the right pass laws prohibiting discrimination in employment. as i mentioned in my testimony, just very recently, one of the most conservative members of our supreme court, justice alito found that there was a compelling government interest in having nondiscrimination laws in place in the employment arena. if he felt that that was not true or that congress did not have a right to pass these laws

to begin with, he had ample opportunity to do so. and instead we see the courts upholding these laws. >> anyone else? mr. clegg. you have the floor. >> i'll just refer to my written testimony and the cases that i cite there. supreme court said that there has to be a substantial effect on interstate commerce in order for the congress to pass a law under these circumstances. and as i read united states versus morrison and united states versus lopez, i think that congress is going to have a hard time meeting those standards. the kind of chain of events that miss warbelow pointed to is something that the supreme court warned about in its decision in morrison, and i would add also that with respect to the other enumerated power the congress

c.i.t.e.s. in enda, the fifth amendment or section 5 of the fifth amy, i think the florida case is a substantial hurdle for congress to clear. >> may i make a comment here as a nonlawyer on a panel of august lawyers and smart people. to go back and someone who was involved in 1996 during the senate debate around the employment nondiscrimination act, the vote was on september 10, 1996. someone along with my colleagues involved in the debate around enda the last time it was brought to senate and other debates, i think it is interesting to note that democrats and republicans in particular did not bring up the issues that mr. clegg is mentioning in terms of the constitutionality of the employment nondiscrimination

act. there may have been disagreements about the law and sexual orientation and gender identity and whether that's something that should be protected. when you go back and look at the record and the debate, it's something i'm all too familiar with, that we don't have this law on the books now, it was not part of the discussion in terms of the constitutionality in terms of employment protections and civil rights laws for congress. >> let me say, i don't doubt that. i think that unfortunately, congress -- and this is true both sides of the aisle -- frequently thinks that it can do whatever it wants. and i think that the sensitization of congress that you need power before you can act is something that has only recently taken hold, unfortunately. i remember just about the time that you're talking about, that time period. i was talking with a senate staffer about this problem, and

about enda. he said, well, you know, i think that we would have to be absolutely convinced that no court would uphold this before we would -- before we would hesitate to pass a statute like this. i thought that was an appalling mind-set for someone to have. i think that somebody -- and this is a congressional staffer. i think that the mind-set should be that unless a congressman believes himself that there will be a substantial effect on interstate commerce, he or she should not vote for the statute. it's not up to -- i don't think that the mind-set it's up to the courts to keep us honest and that therefore we're not going to worry if we have an

enumerated power or not. while widespread, it's not the right attitude and is the kind of attitude that i would warn against in this context. >> i would just like to say that i strongly disagree with the characterizations of this in the supreme court's position. first of all, the common cause has been widely used and has been recognized as widely used by congress. [ inaudible ] [ inaudible ] i think what you heard in the testimony here today and will hear later on there is not an isolated population. this is not a small population.

these are americans throughout every state in every community, in our room here today, who are part of the life blood of how this nation works and to say that to any section of that population, that you are not a welcome member or participant because of the way someone perceives who you are or who you are with can negatively impact your economic earnings, your ability to move freely between jobs, i think it's clearly within the purview of congress -- there's no -- [ inaudible ] >> justifying -- i don't believe that there's

this imaginary high bar here when in fact, even if there was a high bar, i think that high bar is easily cleared by the facts presented by the people here today and by the people who i've worked with over the years. and certainly the history of the common clause with regards to the civil rights act would want -- lead one to believe that this is nowhere near an insurmountable hurdle. what is more of a hurdle, more to the point some of the points you made in your testimony, some things you can't erase bigotry from the way people think. but what you can do is make sure that they act in a way that is nonbigoted towards these individuals, no matter what you're trying to change -- hearts and minds. >> okay, next we have commissioner kirsanow.

>> thank you, mr. chairman. i thank the panel for their esplanade it testimony. we've got outstanding panel here. i would note however that we strive on the commission to have balanced panels. we've been doing that for at least a dozen years now, and i'm a little chagrinned that we have a dramatic imbalance in terms of those who would support a broad or a federal statute and those who may be skeptical about the use of congressional power on a nationwide basis. and i think that derogates what every report or briefing we may have and that's unfortunate. it really affects the legitimacy of that. my question would be to mr. clegg. from a practical perspective, when we have employers dealing with new statutes there's always going to be some type of dislocation.

sometimes those dislocations are very much merited and they're doing to be merited in this circumstance if enda was passed. given that with erosions over the course of time to the course of at-will employment, two questions. to what extent to you see enda, or whatever iteration of enda we're at right now, having an impact on the nature of at-will employment? and second, how would this differ if at all from protections against race discrimination? >> well, one of the points that i make in my written testimony is that i'm afraid that -- and also i think i repeated it in my oral testimony -- is that i'm afraid that we're moving away from the general presumption that we ought to have, that

people should be able to use their private property in a way that they want to use their private property, and that employers should be able to make personnel decisions without interference from the government. this is something that goes along with at-will employment. and there should be a presumption against the government at any level stepping in and saying that, well, we know better than you whom you should hire and whom you should promote. and there should be an especially strong presumption against the federal government passing a law that second-guesses employers in this regard.

and one reason for that, i think you alluded to this in your question, is that the laws -- laws become reality in this area through litigation and regulation. and those are very expensive and distortive media. you know, you don't just pass a law and magically have the principle that you think is embodied in that law become reality. it has to become reality through a lot of bureaucrats, making a lot of decisions and bossing a lot of people around, and through a lot of lawyers and a lot of lawsuits and a lot of judges bossing a lot of people around. and this is a very

unsatisfactory way to do business in an economy that's supposed to be based on freedom and free markets. you know, i don't doubt that, you know, many times employers do things that a majority of americans might find to be unfair, or wrong-headed. but it doesn't follow from that, that therefore, there should be a federal law passed, saying that no employer shall ever do anything that is unfair or unwise. that law will have costs that are far higher than any benefits that it would have. and it's the same situation here in this specific instance. i think that the problems that

you will inevitably raise by, you know, passing a law that says that you can't discriminate on the basis of gender identity, and quote, gender identity means the gender-related identity, appearance, or mannerisms or other gender related characteristics of an individual with or without regard to the individual's designated sex at birth. well, you know, you just know that lawyers and bureaucrats are going to have a great time interpreting language like that. here's another part. >> do you say that as a lawyer and a former bureaucrat? >> i do. absolutely. i remember, this was the fair housing act one time, and y'all know about the fair housing act too. i remember, we were in a meeting and it was just what i described, mr. chairman. it was a bunch of us bureaucrats

sitting around, and we were writing regulations for -- i don't remember if it was the fair housing act or the housing part of the americans with disabilities act, but anyway, we were there and we were deciding, you know, what the rule should be for employers when it came to ramps and door knobs and sunken living rooms and all kinds of stuff like that. and it was appalling. you know, none of us knows -- at that table, knew anything about the business of how to build an apartment complex. why were we sitting around, you know, making up all these rules? it was just very scary. he's another part -- >> did i hear you say earlier in your testimony that you didn't have to have a familiarity with something in order to be able to do the job? >> well, no, i didn't say that. i said that you didn't think you had to be -- to put it bluntly, i don't think that you have to be a black person, in order to

be able to sell pepsis to a black person. and this notion that only members of a particular group can effectively market to members of that group is something that i have a problem with. >> but if you're a non-disabled person trying to figure out how a disabled person would be able to interact with their surroundings? >> it wasn't that we weren't disabled. although that's also, i think, a fair point. the problem is, we didn't know anything about building. that's the point that i'm making here. and the point, you know, likewise, we're not people -- i mean, we're not in the care-giving business. the hypothetical that i gave about a caregiver and whether people might have preferences about, you know, who is going to bathe them. you know, i think that those kinds of decisions should be made by people who are in the care-giving business, not by a

bunch of bureaucrats. here's another part of the -- of enda. and you tell me whether this belongs in the u.s. code. nothing in this act shall prohibit an employer from requiring an employee, during the employee's hours at work, to adhere to reasonable dress or grooming standards not prohibited by other provisions of federal, state or local law. provided that the employer permits any employee, who has undergone gender transition prior to the time of employment, and any employee who has notified the employer that the employee has undergone or is undergoing gender transition after the time of employment to adhere to the same dress or grooming standards as applied to the gender to whom the employee has transitioned or is transitioning. i don't think that that's the kind of micromanagement that congress should be putting into the u.s. code. to govern the grooming standards

and dress standards that hundreds and thousands of employers and hundreds of thousands of different workplaces have to commit every -- have to implement every day. i think that's a decision that ought to be left to individual employers in businesses. >> i just think you said earlier, though, people should be allowed to figure out what they do with their own private property. let's let the market decide. if we adhere to that, there would still be people today who would be considered property, and we wouldn't have fought a civil war to change what the market is. so i think there's an important role that government has to play in the regulation of how we interact with one another and the rights that are forfeited by individuals in the workplace.

>> absolutely. and i agree. you know, i talk in my written testimony about that. i think that the -- and commissioner kirsanow alluded to this also in his question. i think that the situation that was presented and is presented by race discrimination in this country is special and different. and i think that it makes all the sense in the world to, you know, draw distinctions between what was going on in this country with respect to racial discrimination and things like sexual orientation and gender identity. you know, racial discrimination presented an extraordinary situation, justifying departure from the usual free-market

presumptions. it was widespread, blatant, and often governmentally -- >> your microphone. >> i'm sorry. racial discrimination presented an extraordinary situation, justifying departure from the usual free-market presumptions. it was widespread, blatant, and often governmentally codified and mandated. it was ir raigs ration -- irational, dictated by no moral or religious convictions. it was a historic problem, national in scope, which was clearly not susceptible to state, local, or private resolution. discrimination against homosexuals is simply not in this league. >> i was wondering if anybody else on the panel would like to respond to mr. clegg's partial reading of enda and the dress code and things like that. >> i have one quick response. well, i guess two quick responses.

the first is even as a lawyer, i would love nothing more if we could pass a bill that said don't be mean and that would be sufficient to treat people fairly with a recognition of their humanity, but obviously we don't have that in our history and race discrimination is a perfect example of that. we're not dealing with a blank slate here. we have a number of states that have passed laws that prohibit discrimination based on gender discrimination using something like the definition that mr. clegg read. there hasn't been a huge flood of litigation nor has there been inane interpretations. what these laws do is they set a tone for how we think people should be treated on the job. and by existing, they stop the very discrimination that they're meant to redress. and then in extreme cases, people then are free and have the ability to bring cases.

the ability to answer the question, what kind of country do we want to live in, with a statute that says, we want to live in a country where people, all sorts of people, including people based on sexual orientation or gender, live free, honored for who they are and able to do their jobs to the highest of their ability. and their ability is what matters, not who they are. that seems to me to be a good thing for this country to do. >> anybody else? >> there's also a dramatic difference between regulating bad business decisions that impact only the employer. right, an employer who is foolish enough to require all of their employees to wear chartreuse uniforms. that's a bad employment decision that the government should not be engaged in. it's radically different when we're talking about bad employment decisions that have negative, life-long consequences for the individuals that they are choosing to fire, refuse to

hire, or fail to promote. there should be in our laws a do no harm principle. that's what non-discrimination laws in employment attempt to do. to create a level playing field that ensure that employment decisions are made on the basis of an employee's merits, talent, skills and background, rather than on who they are. >> the only thing i would add and i know this is a different context, not congress passing a law, but companies implementing their own non-discrimination policies as they relate to sexual orientation and gender identity. i'm often frustrated, not when people disagree with me, because that happens all the time. i have twin boys who are 12 and a half and they disagree with me all the time. that's okay. but it's when there are spurious arguments about why someone would disagree with me. that's what i find somewhat

unnerving. so to go back to, not the legislative language that mr. clegg referenced, but the business practices that large, medium, and small businesses today have adopted for good business reasons, because it makes sound sense to have a non-discrimination policy based on sexual orientation and gender identities, those business policies often mirror the language that mr. clegg referenced in terms of the employment and non-discrimination act. that is what a business used to describe and to define gender identity in that case. and what we see is not businesses falling all over themselves and not being able to figure out what the policy means, but rather providing a level playing field for all employees, that those gay, lesbian, bisexual, and transgender employees, it doesn't just benefit them, but it benefits the entire culture of the large, medium, and small business, because it says to any

employee that you're here to work and we're going to judge you on your skills and that's it. nothing irrelevant, but your job performance. and so i think, again, the employment practices and the employment policies, of non-discrimination, and they're by private companies, that they have to set their own playing field for their own companies, often mirror the language and what we don't see in those companies from major fortune 100 companies to small businesses around this country, is, we don't see the kind of interpretations that mr. clegg says will happen. >> is that like a meritocracy? >> kind of something like that. >> i think the problem, though, is that to the extent that that's true, you've undercut the argument for the necessity to pass this bill in the first place. and, you know, it's a rational

thing for all companies to do, to do the kinds of things that this bill requires. then you don't need to pass the bill. not passing it is not going to have a substantial effect on interstate commerce. discrimination is not going to have a substantial effect on interstate commerce, because companies are going to be taking steps to get rid of it anyway. i think there are going to be situations where taking sexual orientation into account is going to make sense. it may not be common. it may not be something that involves what most companies do. this is another problem with passing one size fits all federal legislation. it may be that people who make airplanes have no reason to consider, you know, sexual orientation. but people who are in the care-giving business, might want to consider sexual orientation.

it just depends. there's thousands of businesses out there, they're all different. and i don't think that we should be passing a federal, one size fits all bill in that situation. >> if i could just -- >> one size fits all and it seems to work. miss stachelberg. >> similar arguments to that were raised when president obama decided that he would considering lifting the ban on gays and lesbians serving openly in the military, one of our nation's largest employers. and people said, this shouldn't be a one size fits all. we have men and women in fox holes together. this is not what we should have. we should have people on submarines and sexual orientation will absolutely undermine morale and unit cohesion and we haven't seen that come to pass. >> i'm going to move on now. several commissioners want to ask questions. commissioner heriot. kladney, achentenberg. commissioner heriot. >> thank you, mr. chairman.

i guess i wanted to ask about this notion that this can be intercepted in unpredictable or counterproductive ways. you mentioned that some corporations have adopted similar language, but they get to interpret their own policies and they won't have that luxury if there's an congressional enactment. the chairman just mentioned that title 7 has worked out well. i guess i would disagree with that. we need title 7, but there are lots of ways in which it has been intercepted in unpredictable and counter productive ways, such as the difficulty that employers have in taking into consideration felony convictions by job applicants. i don't want that to occur here if enda is passed. because of the way that gender identity is defined in the current version, enda prohibits discrimination on the basis of, quote, gender related characteristics. can you give me some help on what that might mean?

for example, in the price water house case, we had a plaintiff who argued that she had not been promoted because she was, i guess we could call it, you know, she was pushy as a female, and she said that same characteristic would be regarded as assertiveness in a male. so is assertiveness, versus non-assertiveness, is that a gender-related characteristic. is it long hair versus short? what is a gender-related characteristic? employers are going to look at that and want some guidance as to what that means. anyone? >> well, if gender-related means gender correlated, which i think is certainly one way you could interpret this, then i agree that, you know, this is opening a real pandora's box.

you could probably find social scientists or statisticians that could find all kinds of characteristics that have some kind of correlation with gender, with sex. and if all of those are now characteristics that you can't discriminate on the basis of, then you've made it very hard for employers to make decisions on the basis of any characteristics at all. i mean, for instance, i should give you an example. criminal behavior. >> your mike went off again. >> i promise you, i'm not trying to turn you off. >> i wouldn't blame you. criminal behavior. i think that everybody would agree that men are more likely to commit crimes than women are. okay? so is criminal behavior a gender-related characteristic? well, it's certainly a gender-correlated characteristic. so does this now mean that employers can't discriminate at all, not just on the basis of

the disparate impact, but that it's disparate treatment now to discriminate against somebody on the basis that they have murdered their last employer? sounds like a reasonable interpretation of the definition of gender identity to me. of gender identity to me. >> but not a very reasonable example. >> well, tell us what -- >> i think that's a little bit ridiculous. i think what it means in terms of how we've seen it interpreted. what i understand that it means i wasn't involved in the drafting. but i understand it's very much along the price water house. it's draft, its presentation. it could be interpreted as characteristics involved in the price water house case, a woman that does not wear makeup, is not sufficiently feminine -- >> assertiveness is two sides of the same coin. would you say that's part of a gender-related characteristic, that men tend to be more assertive in certain situations and women are sometimes less

assertive in certain situations? what does it mean? people don't always con form to gender. [ laughter ] >> i feel like that's what this is trying to get to, is that, when one doesn't con form -- price water house stands for the theory and i feel like the language that gender-related characteristics is about ensconcing that, if someone either con forms to or does not con form to gender stereotypes, they will be protected. >> it doesn't say anything about gender stereotypes here. this is not title 7. see, that's the problem here. if assertiveness is something that is considered to be a more masculine characteristic, you know, calmness, less assertiveness, something considered to be more feminine, it looks to me that under enda, it doesn't matter who, you know, which person has the problem. a male job applicant could say i was rejected because i do con form to gender stereotypes and especially assertive.

hypermasculine. and yet there are lots of jobs where being hyper-assertive would be a very bad thing. >> i understand the hypothetical. it's not something we've seen in states that have had similar language. >> on the other hand, with title 7, it takes 50 years sometimes for these things to work themselves out. that's the thing about passing language, it becomes part of the law. it doesn't go away. >> but you do have case interpretations of state law language that is similar to this, that can be used to rebut a non-sense claim, for example. because, again, the good news is, this isn't a blank slate. it's not as if this the first incursion into understanding how we would protect transgender or gender non-con forming employees. we have a body of law and several years at least of

experience. >> but title 7 has been worked out perfectly, but it's very controversial. one of the things that developed quite late, sometimes 50 years after it passes. for example, right here, we've been told that title 7 can be used in terms of sexual orientation and gender identity. nobody would have thought that in 1964. and maybe that's the right way to interpret it, or maybe it's the wrong way. but it's wrong to suggest that the language is not going to be a problem, because it's not a problem now. that's not the way statutes work. >> i understand that, but i think it's more important in your considerations to address what is the real problem now that we are trying to ameliorate. >> i think that's the wrong approach. we have a problem, we have to

deal with it right now. let's go with whatever good language we have. we want good language. that won't be abused in the future. we want it to cover only the things we want it to cover. do we have that now? i would say, no. we don't know what gender-related characteristics are going to mean. don't we need to develop that? >> we have over 20 years of experience. minnesota adopted a law including sexual orientation and gender identity more than 20 years ago. and the reason that you're seeing sexual orientation and gender identity being incorporated into an interpretation of title 7 is because the similarity between sex discrimination and gender discrimination is bound up with one another. what is discrimination on the basis of sex is also discrimination on the basis of gender identity. >> 20 years, and one state like minnesota, is nothing. very, very, very small. when you multiply that over the

population of the united states of america, and you run it for 50 years, there are going to be a lot of cases. we want to get this right the first time. >> we've also been looking at legislation for more than 20 years to address discrimination. in congress, there's been ongoing conversations. this is not a new topic, not a new idea. we have changed language over time, hashed things out, based on best practices that we have seen in states, in municipalities. and laws are not static. they don't exist forever. while title 7 has not been amended, certainly congress has gone in and changed other statutes to deal with changes in interpretation, bad supreme court decisions, address additional statutes, to rectify those situations. it is not a static and permanent forever. >> as a -- again, a former bureaucrat, i will point out, when i was in the civil rights division at the justice department, it was rare that we

looked at how analogous state statutes had been interpreted in the state court. i think that commissioner heriot is right, the notion that you're going to be able to fix, vague, ambiguous, or problematic language, in a federal bill by saying that, oh, well, here's how the statute that was kind of worded the same way was interpreted by state courts in minnesota, is being way too optimistic about how this process works. >> well, i think what you're faced with is, do you respond to what you know and what we have experience with? or do you respond to what you fear? and there is a body of law, there's experience with cases that have been brought under the law and there is a problem that needs to be addressed.

i am -- i am perfectly willing, given my own organization's position on enda, to have another, you know, go at language that could be more clear, or could be more specific. but i feel like the language that you've got is based on significant experience of individuals who have been involved in litigating and involved in these cases and involved in this area of law for several decades. >> i'm going to move on, but if i have time, i'll come back. commissioner kladney. >> i guess i want to ask mr. clegg all the questions i had. but i will ask you, it seems to me that your agreement with commissioner heriot regarding language means you're trying to craft a bill under which there will be no litigation or definitions when in fact our entire judicial system on a day-to-day basis issues decisions and looks at statutes

and defines them every day. i mean, statutes that have been around 50 years or a hundred years. i mean, not just discriminatory statutes. labor law, tort law, contract law. i don't understand the objection, i guess. i mean, verbiage is verbiage and i understood when you were talking about the dress and all that. it wasn't that difficult for me. but that's what we do have courts for. and from your document, you obviously don't trust courts. you think they're liberal. i guess the roberts court must be too liberal for you. but my point being, is, don't you think that that's what lawyers and courts are for? i mean, the legislative process to be perfect is, i mean, they talked about stuffing a sausage. so i just asked you to define

why -- why you think that we shouldn't litigate these things and define them over time. >> well, i don't want to fix the statute. i don't want to pass the statute at all. >> well, that i understand. >> and i don't think that the reason that we have courts and lawyers is to figure out how companies ought to deal with employees who have this or that sexual orientation. i think that should be left to companies to do. i think there are some extraordinary situations where we have to have laws that tell employers things that they can do and can't do. i think we had to have a federal statute that told employees that they could not discriminate on the basis of race.

but those instances are rare. >> but aren't we protecting 5.4 million workers here, as opposed to the 600 complaints? i mean, who are we protecting? the 5.4 million lgbt workers or -- >> the question is whether this legislation has a substantial effect on interstate commerce. and actually, the number of employees who are going to be protected by this law is all of them. because it's not just discrimination against -- sexual orientation is described as being homosexual, bisexual, or heterosexual. so anybody can sue under this statute. if you have -- if you're

straight and you want a job in a gay book store and you don't get hired and you think the reason you weren't hired is because you were straight, you got a lawsuit too. so i don't think you can really put it in terms of the number of employees who are being protected from discrimination. potentially all employees are being protected from discrimination. the question is whether the underlying problem here is one that has an potential effect on interstate commerce, and whether there is -- whether circumstances are such that the only way to address this problem is through federal legislation. i think the answer is -- to both those questions is no. >> well, clearly when corporate america institutes their guidelines and rules and regulations, that's not really endorsable enforceable by the employee in most cases, is it? >> why does that matter? if the problem is discrimination against gays, if that's what's being asserted as the problem that is affecting interstate commerce, if that problem is

being alleviated by companies enacting unilateral policies, then what difference does it make whether there's a private right of action on it or not? >> it's not enforceable by the employee. you can have a rule and ignore the rule. >> you can have a law and ignore the law too. >> yeah, but then there's a remedy. we talk about remedies in the law, we don't just talk about rules. >> fine. my point is, there's slippage in both instances. just because you have a statute doesn't mean that you're not going to have any more discrimination. even if you can bring lawsuits. and i don't know, and different companies may structure these guidelines differently. if you were a company, you could structure so that, here's our

policy. if you're an individual and you think that your immediate supervisor has discriminated against you on the basis of sexual orientation, you can file a complaint with the hr department. things similar to that are done in this area already -- [ inaudible ] >> okay, thank you. sexual harassment, if you are sexually harassed by your immediate supervisor and, you know, you can -- most companies now have mechanisms where you can complain about that to some person other than your immediate supervisor. so i think if a company wanted to, it could set up protections against sexual orientation discrimination the same way. >> many of those cases still end up in the courts. >> yeah. >> so -- mr. kladney, any more

questions? >> i pass. >> commission achtenberg. miss warbelow and others if you care to comment, it's been asserted by those who oppose uniform federal standards that the adoption of same will lead to sexual harassment in the workplace as opposed to redress sexual harassment in the workplace. is it your interpretation of this proposed federal standard that this would be the case, and if you would comment as well on the issue of whether or not the existence of a uniform federal standard would prevent persons with a particular religious point of view from expressing that point of view in the workplace, because such a thing would then become defined, ipso facto, as creating a hostile work environment as some

opponents have argued. >> so there's absolutely no evidence, despite the fact that we have 21 states and the district of columbia that prohibit discrimination on the basis of sexual orientation that has led to any rise in sexual harassment. sexual harassment is a very real and pervasive problem. it is something that disproportionately affects women in the workplace. i did not come prepared with those statistics in terms of what we're discussing today. but we'd be happy to get those to you. to the extent that somebody who is straight is experiences sexual harassment from a colleague, who is gay, lesbian, or bisexual, they have remedy currently under title 7, and any decision of protection on the basis of sexual orientation as

mr. clegg pointed out, covers not only lgbt people, but straight people as well. so those individuals would have a remedy not only through their employers, but through the courts if it were a persistent problem. >> -- >> that's correct. the united states supreme court has already addressed the issue of sexual harassment between people of the same sex. in the oncale decision more than two decades ago and those are remedies that exist currently for individuals and this will not change those access to that remedy. >> so if they're the same sex or opposite sex, or if they're gay or straight, adoption of a uniform federal standard has no impact, is that -- >> that's correct.

with regards to sexual harassment, i do want to tease out as a little bit different from harassment on the basis of sexual orientation. so someone who's engaging in the behavior based on the sex of the individual and in sexual terms and sexual nature as opposed to an employee who is harassing another employee who is gay and using derogatory terms for someone who is gay in an attempt to drive them out of the workplace. >> and it would be the use of derogatory terms that would be addressed if we were to adopt the uniform federal standard? >> that's right.

the uniform federal standard would erase or at least give people remedy to address harassment that is based on the sexual orientation of the individual, rather than harassment that is just sexual in nature. and happens to occur between two people who are of the same sex. >> so calling someone a dike or a fag in the workplace? >> that's what this law would allow people to have a remedy for, if their employer refused to address. >> would you talk about then the relationship, if any, between that and the assertion that persons of a particular, deeply held religious belief would be -- have their first amendment rights circumscribed in the adoption of a uniform federal standard to protect lgbt in the workplace.

>> religious employees are already protected under title 7 and have the ability to make assertions about their religious beliefs in the workplace. i will say that there is a huge difference between asserting within the workplace an employee's opposition to marriage for same-sex couples or a belief that homosexuality is immoral, than calling someone dike or fag. that we can make distinctions between what is assertion of a person's religious beliefs and what is harassing behavior. now, certainly if an individual posts passage of a national federal standard for non-discrimination in the workplace were to target an lgbt individual, to enter their work space on a daily basis, or routine basis and say to them, i think you're going to burn in hell because you're gay, that

would create liability for the employer, and the employee would have ability to sue for harassment and discrimination in the workplace. but i think that we can draw and certainly the courts have shown the ability to make distinctions between what is an individual's assertion of their religious beliefs and where that steps into harassment and abuse of another employee. and we see this in the context of sex as well. we do have many individuals throughout the united states who have sincerely held religious beliefs that women don't belong in the workforce, that only certain types of activities are appropriate for women, that men deserve higher pay because they're head of household. we allow for religious individuals to express those views in limited ways in the

workplace. but when they are targeting an individual or they are acting in such a way, such as actually providing women with lower salaries, that result in harm to the individual, that is where we draw distinction. >> commissioner achtenberg, just to note, in my testimony, i talk about some of the ways that i think enda would complicate the sexual harassment issues and the two appendices i have are pieces from hans bader, the competitive enterprise institute and professor eugene volokh on some of the first amendment issues. >> i know you do, and i thoroughly reject the rationale proffered in those statements. >> now everybody else knows that too. >> thank you very much. commissioner narasaki. >> i join commissioner

achtenberg in her thorough rejection. >> add me as well. >> why are you having a briefing? >> because there are some actual serious issues about how you best implement this, and as you and i, who have debated many of these issues knows, there are a lot of gray areas, that even if you disagree on some things, hopefully we can find some common ground on others to improve the entire framework. so i think this is, in fact, a very important enterprise. i want to start by addressing commissioner kirsanow's concern regarding the makeup of the panel. i believe that staff did invite a broad range to be present and all commissioners are invited to present ideas for staff, of people to be invited and to help staff actual recruit people, and

of course, we ask many groups who are interested, and stakeholders who may be watching on air, to know that they have -- that they have -- is it 30 days? >> yes. >> trouble with the mike. it won't stay on. >> here. we have another. use this one for now. >> that we have 30 days for people to submit written comments. so if you're out there and you have a different view and you want to make sure that the commissioners and staff take that into account, please avail yourself of that opportunity. second, i know that there's joking about this, but i am concerned about disparagement of the dedicated staff at agencies as being nothing but ignorant bureaucrats. many come with a lot of life experience and of course we also have a process of consultation when we do regulations.

and we propose new policies that take into account input from employers and affected communities. so i don't want to leave the general public with the view that somehow bureaucrats put together laws that really are not based on any kind of reality. that is far from the case. as mr. clegg knows, doing regulations is a very long and painful process. so that is actual an over-simplification and a view that i don't subscribe to about how the government actually tries to play a helpful role on the issues that are important to everyone's day-to-day livelihood and nothing can be more important in the employment context. so, roger, i'm just curious, because your argument against covering lgbt people seems to also apply to religious discrimination. so is it the view of the center for equal opportunity that title 7 should, in fact, not be trying to stop discrimination based on religion?

>> no. i'm not sure how that follows. no, the center for -- >> because you argued that the lgbt status is not immutable, which i actually don't necessarily agree with. you argued that it impact -- >> i did not say that. >> well, in your comparison with lgbt q status and race, you try to draw this distinction about how race is very different. but title 7 covers more than race.

so i'm just trying to understand the boundaries of your argument because you try to make the point that we should not burden -- >> i'm not sure that you accurately characterized what i said. >> that's what i'm asking you. please characterize where i've gone astray. >> the center for equal opportunity does not object to the fact that title 7 makes it illegal to discriminate against employees on the basis of religion. and i don't see how there's an inconsistency between thinking that that kind of prohibition is acceptable in saying that we should not add an additional prohibition against discrimination on the basis of sexual orientation and gender identity. the reasons that i give for being opposed to enda, i think, would -- would not apply to discrimination on the basis of religion. so i'm --

>> i mean, i want to be clear that i think it's appropriate to cover religion. and the reason i'm asking you is because you put enormous trust in market -- in free market, to do the right thing, and you've made the statement that it's very clear in the case of race to you why title 7 is important. and i'm trying -- and the reasons you give are because of the long history that we've had with discrimination, which we've also had against lgbt people, but you make the argument that race is not an immutable characteristic, where it's more difficult -- >> i don't think i used the word immutable in my testimony.

>> well, that's how i interpreted it. i'm just trying to interpret why race is different from lgbt q status and also but yet the basis on which is different is the same reason that you could look at religion in terms of the smallness of the number of impact, whether or not government should be involved in that. so i just wanted to make sure i understood where you were coming from. i wanted to ask you whether --

whether if enda were to happen, so you've raised the issue of bona fide occupational qualification. right? and so i want -- >> not in those terms, no, i did not raise that. >> you did not raise the -- i thought you did in your testimony. >> well, i think it would be parallel to the bfoq language in title 7, which follows the prohibition in title 7, of discrimination on the -- well, it lists the kinds of discrimination that are illegal. but then it says that this is 703-e.

and it says that there's an exception where religion, sex, or national origin is a bona fide occupational qualification, reasonably necessary to the operation of that particular business or enterprise. >> and what kind of religious accommodation, if any, would you think would be appropriate? >> again, it would not be limited to religious context. i mean, i think that there could be other instances where there would need to be a bfoq for discrimination on the basis of sexual orientation, and i

describe some of those in my oral testimony. for instance, if you had a caregiver and the customer who was being given the caregiver said, you know, i'm really not comfortable. this is a very intimate situation. i'm going to be getting a bath by this person. i don't want the caregiver to be somebody that i think is going to -- you know, where sex is going to be an issue. where there's any likelihood of sexual attraction, you know, by the individual, to me. and so, i'm a straight male. therefore, i don't want women to be -- i mean, basically, i want a straight male to bathe me. and i don't want, you know, women to bathe me, because for privacy reasons and also because i don't want them to be attracted and i don't want a gay man to bathe me either. now, there's nothing religious about that. >> okay, do you have aging parents? >> yeah. >> i have a very aging mother, and if we dealt with all the people that she didn't want touching her, she would get no help at all.

>> -- think there should be a federal law that requires your mother to have to hire whomever -- >> my question is, would you say, if someone said, it's very intimate, that, gee, i don't want a white person touching me, would that -- would you feel like that was okay? >> well, that's a good question. but there is no bfoq for race in title 7. and the reason is because the people at the time that the statute was written were afraid that that exception would spoil the rule. i think that at the time that was a reasonable call. but there is a cost to that. >> and that's the point i'm trying to make here. can i ask the other panelists to answer the question about what kind of -- do they see whether

there's any room for a bfoq and what kind of bfoq would you think was appropriate if you felt one was going to be necessary. >> um, the only bfoq that we think would be appropriate would be one applied continuing to sex, but where gender identity treated consistently with the person's actual gender identity. a bfoq for prison guards that requires only men to be staffing male prisons, then you would need to hire a transgender man to staff or permit a transgender man to be a male prison guard. >> can you clarify for the record what you mean by a transgender man. >> an individual assigned female at birth and transitioned to male at some point in life. >> can you clarify that?

>> people transition in multiple ways but frequently individuals who are transgender take hormones consistent with the sex they have transitioned to and some also have surgery on their bodies to conform their bodies to the new presentation. >> so some that you would be considered to be transgender would not have any surgery and still have the biological equipment they had at birth. >> i can't hear her question, your mic is off. >> sometimes, it won't go on. sometimes it goes off. just to clarify, you would talk about a transgender man, someone with a female body or female organs but taken hormones to make them -- is that correct? >> yes. so they may have had some surgeries, they may have had some surgeries to have their bodies changed so that all of

their genitalia now appears male. others may have had some surgeries and not others. it varies a little bit from individual to individual. and in terms of medical best practices, it is absolutely best for individuals to be able to determine what level of surgery is right for them. >> and again to clarify for the record, would you include someone who has not had hormonal treatment or surgery, but dresses and otherwise identifies with the sex they were not born with? >> commissioner, i'll ask you not to ask any more questions because we're already over the panel time and i just want the panel to -- >> i just want to try to understand what the terms mean here. >> sure. so going back to the original question, we would support a very limited bfoq. >> wait, did you answer my question? >> i believe that i have. but -- >> but could somebody be transgender who had neither hormonal treatment but surgery treatment but in other ways they have expressed their -- their

gender identity as different from the one they were born with? >> typically we understand that be gender nonconforming. but different individuals do identify differently. >> but for the purposes of the law? >> i'm sorry, can i get my question done? >> let's just finish with the questions, commissioner narasake and any that want to answer that questions and then wrap it up. >> we would support a limited bfoq. it doesn't seem there is an appropriate arena in which someone would be rejected based on their sexual orientation or gender identity from engaging in employment context. the very narrow instance even with sex, there are very few legitimate bfoq's. >> and what will religious accommodation? >> with the bfoq? >> religious -- any exemption or accommodation of religious views? >> right.

so as i put in my both oral and written testimony, the title 7 standard is an ideal model and it allows religious employers, so those religious organizations to provide preference to their own religion and we have robust case law around the ministerial organizations as well. >> miss seidenberg any more questions. >> no. that was just the ministerial admission. >> and the only thing i would add is mr. clay said something earlier about working with young children, i wasn't quite sure whether the comment meant to suggest that -- >> i did not say that. i said adolescents. >> with adolescents. i wasn't sure whether it had something to do with the ability or inability to work with

adolescents. >> i think that i said -- >> i think that the medical profession and those who work with children from the pediatricians to the american psychological association to the american medical association and all of that have put those doubts to rest. >> all i was saying was that straight men are more likely to be attracted to adolescent females than gay men are. and that straight -- and gay men are more likely to be attracted to adolescent males than straight men are. >> well, i think miss stackleberg refuted that point. >> you think so. >> a very robust point. and including the rebust care for all. and we'll take a break for lunch and we'll return at 1:00 p.m. with panel number three. thank you. on our next washington

we'll return at 1:00 p.m. with panel number three. thank you. and a look at a tweet from national national journal about the first official candidate in the 2016 presidential race. ted cruz. the self-declared conservative champion according to "national journal." speaking earlier today about his religion and the promise of america, his stance on repealing the federal health care law, abolishing the irs, protecting the border, he released three ads today on his conservative record including one in spanish. here's his announcement from earlier. >> i believe in you. i believe in the power of millions of courageous conservatives rising up to

reignite the promise of america. and that is why today, i am announcing that i'm running for president of the united states. >> the "huffington post" pointing out that senator cruz is starting far behind in the polls. bill clinton polled at about 1.7% in 1991 when he was then governor of arkansas going on to win two terms as president. senator cruz pulling at 5.5%. you can read more of the huffington post and some of the poll numbers in the "washington post." and on capitol hill today, congress begins work on the 2016 budget. live now on our companion network, c-span 2. votes on amendments will be held after 5:30. and the house turns to its budget bill tomorrow. we'll have that live on c-span.

and at 3:00 eastern time, live coverage of supreme court justices anthony kennedy and steven breyer testifying on the supreme court's budget before a house appropriations subcommittee. on everything from salaries and expenses to how much it costs to maintain the building and the grounds. we'll have that live for you in about 30 minutes here on c-span 3. before that hearing, though a look at the affordable care act with an attorney from the republican national lawyers association policy conference. they met here in washington, d.c. last week. the theme, executive branch overreach. this is about half an hour. >> yeah. i'm really worried about that introduction for two reasons. because this is not going to be entertaining. and it's not going to be intellectually stimulating. the reason being this is

literally the simplest case i've ever done that anybody could ever do because the law is so clearly on our side in king versus burrwell. as you probably know the relevant provision says that the zip for exchanges are available on, quote, exchanges established by the state under section 1311. the obama irs reading that language says that means, of course, they're available on exchanges established by hhs under section 1321. so the issue is whether or not an hhs exchange under 1321 is a state established exchange under 1311. this is not a complicated question for the -- at least for the nonlegal mind. this would be relatively straightforward. and i mean that. if this was a mortgage deduction case. if this was -- no judge would

say, what are you talking about? it's only because we're in this political maelstrom involving the affordable care act that people are taking this argument seriously. i'm not going to bore you with walking through all the various statutory nuances of this. but i will give you the basic pitch on the other side is, oh, you're just ripping these words out of context. and what an extraordinarily odd place. why would they ever put, you know, a tax credit in the tax code? this is -- so you really can't take this language very seriously, and our response is normally tax credits are in the tax code. we're not hiding any elephants in mouse holes here. the only provision in the affordable care act is this section 36-b. that's the only provision in the act that even discusses the subsidies for the exchanges or that limits them. all of the limits on when subsidies are available are contained in 36-b.

for example, it's quite clear if you l bought insurance outside of an exchange, you can't get the subsidy. and so everybody seems to understand that. and it's found in the same provision. and naturally, of course, this would be the place it would be. as to context i can assure you, we did not stand up at the supreme court and say, please, just focus on these words and ignore the statutory context and the purposes of the act. i think we said approximately 7,000 times we implore you to look at the context of the overall act because in each and every particular of the structure and purposes of the act, reinforces our argument. the most obvious contextual point is section 1311 of the act says, states shall this is in the act. states shall establish the exchanges. so congress chose the strongest possible language it could to convey its deep desire for the

states to create these exchanges. so 36-b tells you that there are no subsidies available unless the states create the exchange. and 1311 tells you why. why would congress have done that? they did it because they needed to provide an incentive to the states to undertake the thankless task of creating these exchanges. the only one that would work would be saying if you don't do it, then your citizens don't get the subsidies. this is not some novel invention of the aca. this is medicaid. this is exactly how they get the states to participate in medicaid. they say if you don't do what we want, your citizens won't get the medicaid. this was a key part, as you know, of the aca, where they greatly expanded medicaid. my final boring contextual point is the government kept arguing because section 1321 says if the

states don't establish exchanges, then hhs shall establish such exchange. and they said see, it says such exchange. and we're like yes. it says such exchange. hhs will establish such exchange. but 36-b turns on who establishes the exchange. if it's the state, you get the subsidies. if it's hhs, you don't. if there's any ambiguity about when they use the word "such" whether they were trying to somehow magically transform hhs into the state, all you have to do is look at the context of the act and look at the provision dealing with territories. now, territories are also required to -- or authorized to establish such exchange. and immediately after they tell them to do that, it says and shall be treated as a state for these purposes. so we know that such does not --

and we know that congress knows how to treat a nonstate entity as a state entity in the aca when it wanted to do so. so the argument on the other side is we're taking this hyperliteral myopic approach and giving this effect to the text of the statute. and while you know, people like scalia might buy that argument no serious person can buy the argument. because after all, they look at other manifestations of congressional intent. most obviously legislative history. and there certainly is a fight between say scalia and breyer on whether or not clear text in the statutes can be affected by contrary legislative history. and my point has always been, however that debate is resolved, doesn't affect this case. because you can look through the volumes of legislative history surrounding the aca and you will not see a single expression by anyone anywhere suggesting that subsidies are available on

hhs established exchanges. so if you look at any legal materials that any justices ever looked at in any context to discern congressional intent, here's what you arrive at. clear text saying subsidies are only available on state exchanges, clear text explaining why subsidies are only available there so they can incentivize states and not a scintilla of legislative history. as i began this this is literally the easiest case that a federal court has ever entertained. the response, again, is well, secretly congress didn't intend this. and we know this because msnbc keeps telling us that congress didn't intend this. this is not only a legally irrelevant argument. it's difficult to hypothesize an argument that is more insulting. look, nobody in the world wants

to insult the democratic majority that enacted the aca more than i do. but think about how insulting this is to them. people, english-speaking people wrote the words established, an exchange established by the state under section 1311. according to my opponents they didn't intend to convey that thought. they can't explain to you why a rational person who intended for subsidies to be available on federally established exchanges ever would've written down those words. and more important, they're saying not only did they consciously write down the opposite of what they intended, it never even occurred to them that somebody might interpret the words established by the state to mean established by the state didn't occur to anybody to say, when we said state, we really meant hhs for some reason.

we did say the opposite of what we mean. this was just a giant mystery that existed throughout. this was some kind of scrivener's error. that's where the basic pitch of the opponent's. among the many problems the phrase appears 11 times in the aca. 11 times the phrase appears. it's not a scrivener's error. it's some kind of bizarre tourette's syndrome where they keep saying what they don't mean over and over again apparently without any ability to control this. so really what they're arguing and what everybody in the courtroom knew they were arguing was the naked policy argument. which is look. 37 states have said no to the irs's deal. not surprisingly since they would have gotten absolutely nothing out of it if for establishing the exchanges. which means 2/3 of the states

won't have these subsidies if you follow other rule of law. and this is really, really bad. and in addition to the fact, of course these policy arguments for the legislative branch not the judicial branch, irs caused this problem. if irs had told the states as the drafters of the act intended intended you only get the subsidies if you establish the exchanges. then just like medicaid, they would have established the exchanges. if they knew that billions of dollars would have been deprived to their citizens, then they would have done something about it. so now, irs has caused this problem. and they come into court and say, sorry you can't change what we have created through our lawless action. you must perpetuate it. which, to me is always like the criminal defendant who kills his parents and then pleads for mercy because he's an orphan right? he's the one that created the problem but nonetheless needs something.

i don't -- i don't know how this argument's going to be received. i've stopped making predictions a long time ago about how the court's going to behave in any circumstances, particularly with respect to this act. i will identify two or three things that came up in argument that may be of interest to you folks. the first one is justice kennedy did ask well, if they did condition the subsidies on them creating this exchanges isn't that unconstitutionally coercive activity use of the funding power? the government has not made this argument. no state that has a stake in this argument is in front of the court. so i don't think -- i certainly, obviously, think justice kennedy's taking this argument very seriously. but it doesn't have the normal prerequisites for him to actually opine on the constitutional issue. in addition to the absence of anybody arguing this or any

entity with a stake in this being in front of the court. he really -- to find this coercive -- to find this finding scheme is unduly coercive would require them to overturn the decision on medicaid from three years ago. clearly there, they did endorse a form of funding i.e., you can condition all new medicaid funding on the states upping their eligibility requirements, which is at least as problematic as anything involved here. and in the face of precisely the same kind of arguments that we were receiving. the hospitals came in then and said, listen, if you don't -- if you accept this argument and we don't get these medicaid funds, then we're going to go bankrupt. because the deal in the aca was, we get less money for serving poor people low-income people at our hospitals. and in exchange, we were going to get all of these increased medicaid funds. and if we don't get it we're going to go bankrupt.

i'll point out that 22 of the states have rejected this deal. the hospitals, actually, are doing a fine, but this is the exactly the kind of argument bothering justice kennedy in terms of the insurance companies. the other practical point was eight states filed a brief saying, look, we're going to reject this exchange deal regardless. the notion it's unduly coercive strikes me as odd. i don't think, therefore, that justice kennedy can reach the constitutional question. but what i don't think the liberals who have now embraced federalism for the first time understand is if he does this will result in a worse result than if we prevail on the statutory question. why is that? if he says conditioning medicaid funds, excuse me, conditioning subsidies on establishing the exchanges is no good, he is not going to say i'm, therefore going to extend subsidies to all 50 states.

he's going to say, no states get the subsidies because the deal was unconstitutional. how do i know that? because that's exactly what justice kennedy wrote in his nfib dissenting opinion. he said if the medicaid deal is too coercive, the answer is not to let medicaid funds go without the condition. the answer is to eliminate the subsidies entirely. so in these circumstances, people who are on the other side of the aisle who are taking heart from justice kennedy's opinion should be quite worried. in that regard, there's a milder form of the constitutional issue that might influence this decision. there's a cannon out there that interpret a statute one way that doesn't raise constitutional issues. but if you interpret it another way, it does. go with the one that doesn't raise the constitutional issues. so that would be marginally an argument for accepting the government's view of this to avoid the unconstitutional coercion point.

but two statements that justice kennedy made an argument itself. and a couple of other points, i think refute that will happen. first of all, in order to do that, you need an unambiguous interpretation of the statute that will avoid the question. and justice kennedy was pretty clear that he didn't think there was ambiguity. he also made and i think this is the key point. there's a basic separation of powers principle that you can't take money out of the federal treasury unless the custodians of the purse congress itself has expressly authorized the treasury to expend those moneys. so he said, therefore it needs to be very clear that these subsidies were available. and you would lose, you the government would lose if there was ambiguity. well, if you think about that, he can't therefore say because there's ambiguity in this statute, i am now going to expend subsidies to all 50 states when congress was clearly imposing some kind of condition

on them. in other words, he would be creating a huge separation of powers problem that he himself identified at the argument in order to solve the federalism concern he had. and the final point i did get to make to him in rebuttal was, there's no way to interpret the statute that doesn't raise a serious concern about infringing on state sovereignty. the government's version of the statute imposes a very serious federalism concern. why is that? the point i didn't make before is it's not just a question of subsidies. the employer mandate, the requirement that employers of certain sides provide insurance for their employees is tied to the subsidies. in other words, the employer doesn't have that obligation unless one of his employees goes out and reaches and gets one of these subsidies. so, if he's saying that now subsidies will be available in all 50 states, that would extend the employer mandate to all 50 states automatically. and the states would have no

ability to veto it, whereas they would under our interpretation. what he'd really be saying is the federal government's got the ability to tell states that they have to provide certain kind of health and insurance benefits to their own employees which is the core principle of federalism that you really shouldn't be able to tell the states how to conduct their relations with their own employees. so either way you interpret the statute raises these serious constitutional questions. in light of all that, what i think might happen and what i think would be a resolution that really would preserve justice kennedy's constitutional concerns but not affect the outcome of the case is to do what he's done in a number of other cases, including under the voting rights act. where he will join the proper in my view proper statutory interpretation holding of the court. but then write a separate concurrence saying, listen, this gives me grave constitutional concerns. and if and when a state wants to raise it, i will certainly

entertain it. other than that, you know, i'm not going to make any predictions about how the court is actually going to rule. these things always remind me of of you know, people are like gee, chief justice roberts didn't say a lot during the argument. and sort of like the old kremlinologists write. is gorbachev looking to his left at the general? and we're supposed to read the tea leaves. and i think it's generally a sucker's game. and in this context to try to discern these kind of tea leaves and make any sorts of predictions about how the justices are going to behave. so my bottom line is since for the reasons i've articulated we're clearly right on the merits. i expect a 9-0 victory in june. some of you who saw the argument who are tuned to nuance may have detected a certain skepticism by four of the justices about my argument. but nonetheless i think once they've read the briefs and considered the plain language of the statute, this will be a very short five-page unanimous

opinion in our favor. >> thank you michael. and since today's theme is the imperial presidency, i'm going to act imperially and we're going to extend lunch ten minutes and then we can take some questions, if anybody has them of michael. >> mike i was at the argument and i have to tell you, you did a fabulous job. and i've seen a lot of arguments at supreme court over the 14 years i've been in washington. i've never seen as sustained an assault by the liberals in any other cases they did in this. but my question is this, as you know, justice ginsberg let you get out one sentence of your start -- >> a really good sentence. >> yes, it was a good sentence.

before she brought up the issue of standing which was -- is such a settled issue that the government didn't even argue it in their brief. in fact, the first time this was brought up was a month before, i think, on msnbc, which is a good sign of what ginsberg reads. my question is i read that as a sign that the liberals are desperate because they've gauged how the other justices were feeling about the case and were hoping that if they could bring up the standing issue, it might dispose of the case without it being disposed of on the substantive grounds. i mean, is that -- do you think my reading it off on that? >> well, have i to disagree with your premise, which suggests that justice ginsberg was not fully receptive to my argument on the merits, as i just -- i just told you, she was on my side. sure. why are you -- it was bizarre really. every judge, including all the judges who had ruled against us

on the merits it was a very vanilla case of standing. nobody even disputed the government affirmatively dropped the argument when we got to the supreme court. msnbc gets involved. there was really no serious issue about it. in a way she was almost doing me a favor, i must say because i got to, i think, kill that standing issue in its crib right at the beginning of the argument so it didn't even come back. and even solicitor general ver verilli wasn't giving them anything on the standing argument. in terms of the vigor the candid exchange of viewpoints, yeah there was literally -- the justices were not only interrupting my answers they were interrupting their breather breatheren's questions. it was a very hot bench. i'm used to obviously, hostile questions. this one was maybe unique because for the first time i've ever seen chief justice roberts just on his own said, you get ten more minutes. he just gave us ten more minutes

because he knew it had been impossible for us to -- or for me to get any of my answers out. >> let me go to the dark side for a minute and just ask if the court somehow rules that the statute means what it doesn't say, are you able to discuss at all what you think that means for the law of -- laws of statutory and canon of statutory law in the future? >> well if they continue to interpret statutes the way that you would have to interpret this statute to mean north means south, black means white, then there will literally be no law in the united states, right? because it will be quite impossible for you to enact a law that binds the judiciary or

the executive agencies to mean what it says and says what it means. i take so will lasslace in the fact we lose, only in this case, only in this act and they'll revert when they like the result to honest, neutral interpretation of the law. but i think it really would be. i mean you know, there's a lot of, obviously, issues in terms of policy about the divide people about -- the policy implications of the affordable care act, but this case is about the rule of law. this case is about whether or not we are going to honestly and neutrally interpret an act of a co--equal branch or whether we're going to let policy concerns trump it. and there was a very revealing exchange, i think, during the argument where justice scalia said to solicitor general verilli who, by the way, did a fine job arguing it. it's a very able advocate. he made a real mistake because justice scalia said, look, if

these policy arguments are so convincing we have congress right across the street and they can fix it. and solicitor general said, this congress? which elicited this kind of snarkey laugh tefr. i was looking at chief justice roberts and some other justices and the solicitor general would say, your deference of congress turns on the partisan of who's leading that congress is extraordinarily insulting, something the court's never going to take seriously. and i thought they were blanching at -- at that notion. particularly since my own prediction is this congress will actually take steps in the wake of our victory. there have been numerous op-eds by senate and house leadership saying there's a way to fix this, a better way to fix it than is currently in the act. but there is a way to fix it. so, i'm hoping that that assurance that if they interpret the law to mean what

it says, won't result in these dire policy consequences, should be enough solace for them to do the right thing. >> one more question. >> you mentioned that the chief justice gave both sides ten more minutes, but there were -- there was no other case scheduled for that day. didn't that -- did that mean that they were anticipating they were going to give more time? >> no. but you're right. probably gave more flexibility right, because there was not another one. no, it was actually very strange. they had another argument scheduled, did you hear about this, a pro se case. and the guy was complaining, pro se meaning nonrepresented plaintiff, they couldn't find him. they accepted the case and then they said, i guess he's not going to be here so they canceled the argument. she's got one more. i don't know if you want to.

running out of time. >> a quickie. >> assuming you win and the rule of law prevails, a lot of people are going to lose subsidies, government subsidies. how do you see the implications of this playing out politically for the republicans and for the future of obamacare? >> right. so, look, let's put this in a bit of perspective. they are going to lose subsidies. the notion these subsidies are essential to health care is a little exaggerated, right? these subdy sidyes haven't been available for the last 15 months. these people would be in the exact same position they would have been at the end of 2014, which is not exactly medieval time where you saw sick people scatter add cross the sidewalks of d.c. i say that because it's important to recognize that nobody's arguing the absence of subsidies will drive up insurance premiums. what the proponents of the act are arguing, other proceed pents

make insurance so expensive preexisting conditions, those will drive up insurance premiums and we need the subsidies to offset them. i think the republican response at the federal level is the one i indicated a minute ago, which is as-f you've read these op-eds, thaurz a good way to get the people who need the money, the money. you give them a tax credit but you don't say to them, just by insurance on the exchange and don't buy all of this restricted insurance that the affordable care act -- under the affordable care act you can't buy catastrophic insurance. have you to buy mental health coverage, maternity, contra contraceptives contraceptives, all those kind of things. go out and bite insurance you want. and i think there's -- great deal. the point would be, people who need the help are getting it in the same way under this republican alternative, but they're getting it in a way that empowers the consumer to make the choices about the insurance that he or she likes best rather

than listening to what hhs thinks best. my own view is that should be amenable to a consensus of republicans in the house and senate. and i think it will be very difficult, not that he won't, i think it would be very difficult for president obama to say no because, after all, he would be saying, no, these people are not getting their needed moneys simply because they're not getting it in the way i want them to get it. i think that's very tough for him. and, of course, if he -- if they can't reach a compromise on the federal solution, then he -- prior to this, president obama's been perfectly amenable and easy to say, no, no, no we're not changing anything. if he maintains the status quo that exists after -- if we prevail in this case, then under his own predictions, there will be a meltdown on exchanges in 34 states, there won't be an employer mandate in 34 states, and i think he would view that as very detrimental to what i assume would be what he would

view as his legacy. so i think the normal option that the president's had thus far of just saying no may or may not be available to him. so it will be very interesting politics over the summer obviously. but i think the republicans have a relatively straightforward message that would appeal to people who think relatively low income people should get subsidies and those who think that the affordable care act goes about it in the wrong way. >> thank you. >> thanks. [ applause ] live now to house appropriations subcommittee, supreme court justices anthony kennedy and stephen breyer seated before this subcommittee to testify on the supreme court's budget on everything from salaries and expenses to how much it costs to maintain the building and the grountsdz. andrew crenshaw of florida chairing this committee.