they don't have a clue. bush should be in jail. i got plenty of people from texas there. rick perry has -- >> james, we're having trouble hearing you. i think your cell phone is break up. we'll let you go there. a couple more calls here. next up to our republican line. we'll show you the comments of rick perry. let's hear from ed. >> caller: as someone who started off as not appreciating mr. perry, i was challenge and

researched my way into admiring him. whether it's criminal justice reform or having the highest rate of success for education for minorities, for blacks, minormiehis panics hispanics and other minorities. he's man who has shown leadership and the ability to gather ideas around change. he causes people to follow and to move in a direction. >> ed you're calling us from wisconsin. how does rick perry stack up against your governor scott

walker? >> caller: honestly, i've watched walker since the '90s. i've had a lot of respect for things he's done in our state. when it comes down to it, at the end of the day nobody whether it's governor walker or any other person in this race on either side of the aisle has the experience and the leadership to cause people to move in a direction and accomplish great things. governor walker is great man but governor perry is arms and legs ahead of him in total accomplish m ment and proven leadership. >> let's hear others. welcome. >> caller: i'm 18 years old. my junior year of high school i started a clothing company with a few of my buddies. i wrote governor perry. i was a big backer when ever he

ran in 2012 and i wrote him a letter and i just let him know there's still young people out there that work hard for to grow a business. he actually wrote me back and wished me the best of luck and i've made pen pals with him and i believe his policies are the best for young people like me to eventually start a business. >> appreciate your comments. reminder we'll show the announcement again tonight. tonight you can count on it at 8:00 over on c-span. also this weekend more road to the white house coverage as we talk to potential 2016

democratic candidate jim webb. the former senator will be speaking to c-span. let's take you back now to addison airport north of dallas and the announcement from rick perry that he's entering the 2016 race. ♪ ♪

♪ [ cheers and applause ] >> thank you. thank you very much. i love you, honey. i was born five years after the end of a global war that killed more than 60 million people. i'm the son of a veteran of that war who flew 35 missions over war torn europe as a tail gunner on a b-17. [ cheers and applause ] when dad returned home and married mom, they started a life

together. they were tenet farmers. they were raised during a time of great hardship and had little expectation beyond living in piece, putting a roof over our heads and putting food on our table. home was a place called pan creek. too small to be called a town, but it was the center of my universe. for years we had an out house. mom bathe us on the back porch in a number two wash tub. she also hand sewed my clothes until i went off to college. i attended pan creek rural school grades 1 through 12. played six man football. was a member of the boy scout troop 48. became an eagle scout. i went off to texas a&m where i was a member of the corps

cadets. i got my degree in animal science. i was proud to wear the uniform of our country as an air force officer as an aircraft commander. after serving i returned home. i returned home to those rolling planes and big old sky of west texas and i returned to farming. there's no person on earth more optimistic than a dry land cotton farmer. we also know that a good rain just around the corner. the values learned on my family's cotton farm are timeless. the dignity of work the integrity of your word. responsibility to community.

the unbreakable bonds of family and duty to country. these are enduring values. not the product of some ideal past but a touch stone of american life in our small towns, in our largest cities in our booming suburbs. i've seen american life. i've seen it from the red dirt of a west texas cotton field, from a campus in college station, texas. from the elevated view of a cockpit. from the governor's office of the texas capital. [ cheers and applause ] i had the great privilege to serve a rural community in the texas legislature.

i know that america is experienced great change. what it means to be an american has never changed. all are created equal and en endowed by their creator. among these are life, liberty and the pursuit of happiness. [ cheers and applause ] our rights come from god, not from government. our people are not the subjects

of government but instead government is subject to the people. [ cheers and applause ] it's always been the case that there's been this social compact between one generation of americans and the next. to pass along interheritance of a stronger country. that's social compact. it's been protected at great sacrifice. it was never more clear to me when i took my father to american cemetery that overlooks the bluffs at omaha beach. on that setting there lies 9,000 graves including 45 pairs of brothers, 33 of whom are buried side by side. a father and a son two sons of

a president. they all traded their future for ours in a final act of loving sacrifice. that american cemetery is no accident that each headstone faces west. west over the atlantic towards the nation they defended. the nation they loved. the nation they would never come home to. it struck me as i to do in the midst of those heroes, that they look upon us in silent judgment. we must ask ourselves are we worthy of their sacrifice? the truth is we're at tend of an

era of failed leadership. we have been led by a divider who has sliced and diced the electorate. pitting american against american for political purpose. six years into this so-called recovery and our economy is barely growing. this winter it actually got smaller. our economic slowdown is not inevitable. it happens to be the direct result of bad economic policy. the president's tax and regulatory policies have slammed the door shut of opportunity for the average american who's trying to climb the economic ladder. resigning the middle class to stagnant wages, personal debt, to deferred dreams. weakness at home has led to weakness abroad.

the world has descended into a chaos of this president's own making. while his white house loyalist construct an alternative universe where isis is contained. ramadi is merely a setback. the nature of the enemy can't be acknowledged for fear of causing a fence. where the world's largest state sponsor of terrorism, the islamic republic of iran, can be trusted to live up to a nuclear agreement. no decision, no decision is done more harm than the president's withdrawal of american troops from iraq. let no one be mistaken, leaders of both parties have made grave mistakes. january 2009, when barack obama became commander in chief iraq

had been largely pacified. america had won the war but our president failed to secure the peace. how callous it seems now as cities once secured with american bluff are now being taken by america's enemy all because of a campaign slogan. i saw during vietnam a war where politicians didn't keep faith with the sacrifices and courage of america's fighting men. where men were ordered into combat without the full support of their civilian commanders. to see it happen again 40 years later because of political gainsmanship and dishonesty is a national disgrace.

me friends, we are a resilient country. you think about who we are. we've been through a civil war. we've been through two world wars. we've been through a great depression. we even made it through jimmy carter. we will make it through the obama years. we will do this. the fundamental nature of this country is our people never stay knocked down. we get back up. we dust ourselves off. we move forward, and you know what, we'll do it again. i want the share some important truce with my fellow americans today. we don't have to settle for a world in chaos in a america that

shrinks from its responsibilitys. we we don't have to apologize for western values. we don't have to accept slow growth that leaves behind the middle class that leaves millions of americans out of work. we don't have to settle for crumbling bur crumbling bureaucracies that harm our veterans. we have the power to make things new again. to project america's strength again and get our economy going again. that is exactly why today i am running for the presidency of the united states of america. [ cheers and applause ]

>> run rick run. run rick run. >> thank you. it's time. it's time. it's time to create real jobs, to raise wages to create opportunity for all. to give every citizen a stake in this country to restore hope, real hope. real hope to forgotten americans. there are millions of middle class families who have just given up hope of getting ahead. millions of workers who given up hope of finding a job. yeah, it's time for a reset.

time to reset the relationship between government and citizen. [ cheers and applause ] think of the arrogance of washington, d.c. representing itself as some beacon of wisdom with policies that are smothering this vast land with no regard to what makes each state and community unique. that's just wrong. we need to return power to the states and freedom to the individual. [ cheers and applause ] today our citizens and entrepreneurs are burdensed by overregulation and unspeakable debt. debts not just this physical nightmare. it's a moral failure. i want to speak to the millenials just a moment.

this massive debt that's passed on from our generation to yours. this is breaking of a social compact and you deserve better. i'm going to offer a responsible plan to fix the entitlement system and to stop this theft from your generation. [ cheers and applause ] to those americans drowning in personal debt, worker harder for wages that don't keep up with the rising cost of living, i came here today to say i hear you. i know you face rising hete inging health care costs rising day care costs, rising mountain student loan debt. i hear you and i'm going to do

something about it. to the one in five children in families who are on food stamps to the one in seven americans living in poverty, the one in ten workers who are unemployed or given up hope of findsing a job, i hear you. you are not forgotten. i'm running to be your president. [ applause ] for small businesses on main street, those that are struggling to get by, that are smothered by regulation, targeted by dodd/frank. i hear you. you're not forgotten. your time is coming. the american people, they see this game, where the insiders get rich, the middle class pays the tab. there's something wrong when the dow is near record highs and businesses on main street can't even get a loan.

since when did chapapitalism strangle our community banks? capitalism is not corporatism. it's not a guarantee of reward without risk. it's not about wall street at the expense of main street. the reason i'm running for president is i know for certain our country's best days lie ahead. there is nothing wrong in america today that a change in leadership will not make happen. [ applause ] we're just a few good decisions away from unleashing economic growth and reviving the american dream. we need to fix a tax code that's ridden with loopholes.

that sends jobs overseas and punishes success. we've got the highest corporate tax rate in the western world. it's time to reduce it bring home jobs lift wages for those working families. you realize by the time this administration has finished with its experiment in big government, they will have added almost 600,000 pages of the federal register. on my first day in office i will issue an immediate freeze on pending regulations from the obama administration. [ applause ] that same day that same day i will send to congress a comprehensive reform and roll back of job-killing mandates created by obamacare, dodd/frank and others. agencies will have to live under

strict regulatory budgets. haelt health insurers will have to earn the right to your money, instead of washington forcing you to hand it over. on day one i will also sign an executive order approveing the construction of the keystone pipeline. [ applause ] energy is vital to our economy and i might add, to our national security. on day one, i will sign an executive order authorizing the export of american natural gas and all freeing our european allies from the dependence of russia's energy supplies. vladimir putin juiceuses energy to hold our allies postage. here's the message. if energy is going to be used as a weapon, america will have the

largest arsenal. [ applause ] we will unleash an arab economic growth and limitless opportunity. we will rebuild american industry. we will lift wages for american workers. it can be done, because it has been done. in texas. [ applause ] during my 14 years as governor texas companies created almost 1/3 of all new american jobs. in the last seven years of my tenure, texas created 1.5 million new jobs. as a matter of fact, without texas, america would have lost 400,000 jobs.

we were the engine of growth because we had a simple formula. you control taxes and spending you implement smart regulations you invest in an educated work force, and you stop frivolous losses. texas now has the second highest high school graduation rate in the country. and it has the highest graduation rate for african-american and hispanic students. we led the nation in exports including high-tech exports. we passed historic tax relief. i'm proud to have signed balance budgets for 14 years. we not only created opportunity we stood for law and order. when there was a crisis at our border last year, and the president refused my invitation

to see that challenge that we faced, i told him mr. president, if you do not secure this border texas will. [ applause ] and because of that threat because of that threat that was posed by the drug cartels and those transnational gangs, i deployed the texas national guard. and the policy worked. apprehensions declined by 74%. if you elect me your president, i will secure that border. [ applause ] homeland security begins with border security. the most basic compact between a president and the people is to keep the country safe.

the great lesson of history as a strengthen resolve brings peace and order. weakness invites chaos and conflict. my very first act as president will be to rescind any agreement with iran that legitimizes their quest to get a nuclear weapon. [ applause ] now is the time. now is the time for clear sided, improved leadership. we see what happens when we elect a president based on media acclaim rather than a record of accomplishment. this will be a show me don't tell me, election, where voters look past the rhetoric to the real record. the question of every candidate

will be this: when have you led? leadership is not a speech on the senate floor. it's not what you say. it is what you have done. [ applause ] and we will not find the kind of leadership needed to revitalize the country by looking to the political class in washington. i've been tested. i've led the most successful state in america. i have dealt with crisis after crisis, from the deterioration of the space shuttle to the hurricane rita to the first diagnosis of ebola in america. i have brought together first responders, charities and people of faith to house and heal vulnerable citizens dealing with tragedy. the spirit of compassion

demonstrated by texans is alive all across america today. while we've experienced a deficit in leadership, among the american people, there is a surplus of spirit. among our great people, there is a spirit of selflessness that we live to make the world better for our children. not just ourselves, it was said that when king george iii asked what general washington would do upon winning the war, he was told that he would return to his farm and relinquish power. to that, the monarch replied, if he does that, he will be the greatest man of his age. george washington lived in the service of a cause greater than

self. [ applause ] you know if anyone is wondering if america still possesses the character of selfless heros, i'm here today to say yes. i'm surrounded by heros. they're in all generations. they're in all the different generations, but they're woven together by the same thread of selfless sacrifice. heros like medal of honor recipient mike thornton, who survived an ambush by enemies in vietnam. made it back to the safety of a water rescue, only to find out his fellow team member had been left behind. presumed dead. mike didn't leave. he returned through enemy fire. he retrieved lieutenant norris who was still alive. then he swam for two hours

keeping his wounded teammate afloat until they were rescued. [ applause ] heros like marcus latrel. [ applause ] he survived a savage attack in afghanistan, losing three teammates and 16 fellow warriors were shot down tryint to rescue him. he is not just a lone survivor. to anita and me he is a second son. [ applause ] and taya kyle who suffered the deep loss of her husband, chris, an american hero. when i think of taya kyle, i think of a brave woman who carries not just the lofty

burden of chris' legacy but the grief of every family who has lost a loved one to the great tragedy of this war or its difficult aftermath. [ applause ] anita and i want to thank taya for her tremendous courage. [ applause ] america is an extraordinary country. our greatness lies not in our government but in our people. each day, americans demonstrate tremendous courage. many of those americans have been knocked down, and they're looking for a second chance. let's give them that second chance. let's give them real leadership. let's give them a future greater than the greatest days of our past. let's give them a president who leads us in the direction of our highest dreams, our best dreams,

our highest hopes and our greatest promise. thank you, and god bless you! [ applause ] ♪ protest our border ♪ ♪ believe in the usa ♪ ♪ won't back up, don't back down ♪ ♪ i've been raised up to stand my ground ♪ ♪ take my job but not my guns ♪ ♪ for the good lord up above ♪ ♪ i ain't answer to no one ♪ >> can you give me a kiss? ♪ give me my right to vote ♪ ♪ tote the weapon of my choice,

don't sensor my choice ♪ ♪ hate me if you will, love me if you can ♪ ♪ i ain't backing down ♪ ♪ i ain't backing up ♪ ♪ if you think like i think crank it on up ♪ ♪ won't back up, don't back "t"own ♪ ♪ i've been raised up to stand my ground ♪ ♪ take my job but not my guns ♪ ♪ except for the good lord up above ♪ ♪ i ain't answer to no one ♪ rick perry heads to perry, iowa, first up on his now-announced campaign of 2016. here on c-span3 wanted to remind you we will reair tonight on c-span all of today's announcement from dallas. 8:00 eastern today. more road to the white house coverage coming up this weekend. join the conversation about your thoughts on rick perry and his announcement today. it's at facebook.com/c-span.

tweet us @c-span. more road to the white house coverage this weekend. conversation with jim webb, likely to enter the race. former virginia senator. sunday at 6:35 and 9:35 p.m. on c-span. looking at a live picture from legislative hall in dover, delaware delaware, where vice president biden in the center of your screen is greeting mourners. vice president biden's son, beau. the former attorney general for the state passed away last week from brain cancer. he's an iraq war veteran. 46 years of age. the vice president joined by his wife, jill, and joebeau biden's wife with their two children. live coverage here on c-span3.

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the funeral for joe biden's older son, beau biden will be saturday in delaware. this is legislative hall, where beau biden's body is lying in honor. former attorney general, served two terms in that role. iraq war veteran died last week from brain cancer at age 46. we continue to watch this over on c-span. you can follow it live there. and live through 5:00 p.m. eastern this afternoon on c-span.org as well. here on c-span3, shortly we're going to take you live to a hearing that's going to be looking at the health care

exchanges, the federal exchanges and subsidies. officials from the treasury department will be testifying late. later this month, the supreme court is expected to announce its decision on a case authorizing tax credits for the "t(urchase of health insurance in the federal exchanwj the hearing has been delayed for a series of votes on the senate floor. once it gets underway, we'll have it live for you on c-span3. in the meantime part of this morning's washington journal. >> welcome a republican of montana, serves on the armed services committee. the first navy sale eeal elected to the house in 2014. after part of operation iraqi freedom. deputy and acting commander, combined joint operations task force the i the arabian peninsula. awarded two bronze stars for

combat. what do you make of the strategy of isis in iraq and syria? >> it's evolving. i think we're in free fall in iraq. what's happened, we don't have a policy and a strategy in syria that has bled isis over to iraq. iraq now since we're only doing air operations alone and their not effective, eh iran playing a much bigger role. the militia that appears iranian influence influence, if not led, the senior military leaders from the guard are embedded. i think what we're seeing in the anbar province with the sunnis is they no longer view the centralized government as legitimate. we're seeing an uprising. the choices are a, if the sunnis fight with us, we're not giving them aid directly. the kurds are holding because they can't accommodate if they

move on mosul. can't accommodate the refugees. the eastern part, which is now influenced by iran i'm not sure how you remove the iranian influence so strong. at the end of the day i'm not sure we can repair iraq back to a centralized government that has legitimacy with the kurds and the sunni tribes. it's a problem in free fall. >> militarily what changes would you make? >> air operations alone was not effective effective. we had a number of hearings. the consensus was the same, the air raids alone would not be effective. at this point in time, our options are fewer. it's kind of playing a card game, where we're dealt cards and only have a few left. your opgopgs are limited. i think we need to arm the kurds

directly, support them. look for coalition with the sunnis, the tribes i fought with and see who will rise against isis. a problem is, if you take ground and we see that ground then to an ever-influencing iran what's the purpose? >> this is is usa today yesterday. bomb spotters. risk or reward. they report that deploying specialized troops to call in air strikes on islamic state targets with greater precision would rheeequire hundreds more to iraq and the likelihood of them being killed. you recommend more troops. >> let's look what happened if one of the special forces was captured. he'd be likely burned alive in a cage as we saw the jordanian pilot. if you put troops on the ground you have to support them. put a sufficient force that is capable

capable. that means intelligence. when you use air operations, you have to have an intelligence overlay to make sure we don't have collateral damage or at least mitigate the chance. when you put air operations with folks on the ground, you have to have sufficient force. we owe it to our troops if they get, god forbid one gets hurt, you have to get them out. you have to get them out to a place that's u.s. held. then if they run into problems what's called a quick reaction force. american armor. apaches going in and getting them. we don't want anotherbenghazi. it'll take a brigade. >> are you in support of a brigade brigade? >> if we have a plan, what we're going to do with syria and if we have a plan of what we're going to do in iraq, but just putting troops in without a

plan -- what's our in purpose? i think we owe it, any time you put troops on the ground, any time we put our forces make sure we have a plan. the right training, right rules of engagement to win successfully. up to this point, we have not had rules, engagement in my opinion, to win. >> you said let's arm the kurds directly. why not arm the sunnis directly? >> i think there's a lot of sunni tribes that will, that have fought. i think the sunni tribes. but we want to make sure they're selected sunni tribes that are on our side. that want to rise against isis. you have to be careful with see knee tribe -- sunni tribes. hold with a centralized government that's iranian influenced, and the centralized gormt is government is going to give support to the sunnis. that's not going to happen. >> what's the political solution?

if you look at the front page of the "new york times," isis making political games. the group of isis is staking claim as protecters of sunnis. if there are sunni area or troops that disagree with isis, they use violence against them. but in areas where sunnis are populated, isis is saying, we're the protector of sunnis. it's the shia government that you need to be weary of. >> this is what's happened because the shia government is more influenced by iran. this is a battle within islam as much as it's a battle between the east and west. that's why coalition forces were so critical at the beginning. lack of action has consequences. reaction to what we're seeing because we didn't get involved, it was at arm's reach. a coalition of 60 countries not capable of dealing with isis

directly, another vacuum was created and filled by iran. iran has larger ambitions, i think, to rekindle the power and prestige of persia. better than that, you have almost three different areas in iraq that are separating. i'm not sure without a policy on syria, without a policy on what is our in state in iraq, and how do you limit iran's influence, certainly, on top of this is the iranian nuclear negotiations. it's a non-starter to give a legal pathway for iran to have a nuclear weapon is reckless. i think congress stood up and said, absolutely not. you're going the have an arms race. on top of everything else, the problems are a direct threat to ourselves and allies. >> lines are lighting up to talk

to you. carl first from maryland, a democrat. >> caller: good morning. >> good morning. >> caller: first i'd like to ask, what would we do -- excuse me -- i can't hear you. >> we're listening, carl. you're on the air. >> caller: first of all, i would like to know what would we do if -- what would turkey do if we arm armed the kurds? could great up nato because turkey would be upset. possibly leave nato. i'd like to know, are we ready for this especially if turkey leaves nato, russia is flexing their muscles in the area. it could create a bigger problem than what we have right now. >> congressman? >> i don't think arming the kurds would effect turkey. in fact, i think turkey has -- is an advantaged position if

kurds remain strong. this is the reason. you have -- let's say that the kurds moved on mosul, or mosul was attacked. mosul is sunni. where would the refugees go? what we're seeing in turkey, 2 million refugees putting a lot of strain on the turkish economy that's not great. the refugees are not going to -- >> during an election. >> that's right. they're not going to go south into isis-held territory. they can't go to the shia area. the only area they can go is to the territory occupied by the kurds. i think arming the kurds, as we did in gulf one and gulf two is a prudent policy. the germans certainly are. the kurds, i think, are holding their position, their line. i think it's a prudent policy. the same with the sunni tribes. i was in fallujah. many of the sunni leaders, i knew. they're looking at the

centralized government now as iranian-influenced, as not a legitimate power. again, this is a battle within islam, as much as between east and west. the different sides of islam are sunni-shia sunni-shia. the radical islam that we see in isis or hezbollah. >> sean is next in portland, oregon, independent. go ahead. >> caller: thank you. with isis in the news constantly, and a lot of our congressmen going on to the news and telling us how isis is a danger and the white house obviously believes it's a danger, we're bombing them now, obviously, you're in the armed services committee. you're discussing this in congress. but i wonder why it is we don't see more -- especially considering so many republicans are going on television, saying how dangerous isis is, why we

don't see any movement toward votes to go to actual war legally against isis. thank you. >> well the president asked for a re-visit of the authority to go to war. he has that authority now. i don't think the problem is as much going to -- having the authority to fight isis. it's how we're going to fight isis. what we're going to do and what's the strategy. air operations alone has not been effective and won't be. it's not for me. general conway and the leaders that have fought there and have enormous amount of experience. air operations alone also when you don't put our troops on the ground or in a position to gather intelligence the air operations are not effective. there is an enormously complex scenario between the sunnis, the shias, the kurds the radical

islam and revenge, the overlay of the geography. i think isis, we hear about, i think, still it is iran at the center. we can't lose our eyes on watching iran. iran with a nuclear weapon i think, is still the largest threat in the area. most assuredly it will cause an arms race and you'll likely have saudi, perhaps jordan, turkey, all with nuclear weapons in an area that's unstable. that has ramifications not only for allies but still at home. >> when you were part of the navy seal team, what did you do in iraq? tell our viewers what your experience was like. what you were doing there. >> my period was 2004. during the beginning of the uprising and the surge. of course, we were looking for

insurgents. i think we made mistakes in the gulf one and gulf two. one of the mistakes i think we dismantled the iraqi army. that's what we're seeing today. the senior leadership in isis is former army leadership from the iraqi army. when we dismant mdled the army too soon, what we did is we had the unemployment lines filled with individuals that had, to a degree skills in insurgency. they had weapon familiarity. i think we didn't spend as much time looking at the sunni tribes and working with the sunni tribes. we did during the surge. early, we didn't. there was mistakes made. lastly, when it became stable, we decided to leave on a timeline. rather than leave on a condition, it formed a vacuum.

we watched isis go from a few hundred in syria to you know now, 35,000 controlling a lot of territory and expanding multinations. they're expanding in africa, as we've seen. they're here. it's a danger. you have hezbollah in south america, which is a problem. sometimes, what we face historically has been nation states, like iran like russia like china, as addversary or seem to be hostile. now, we're facing non-nation states where you have lawless arias,ir areas, which is a different set of problems. it is fixable but not unless we engage. >> we'll go to new orleans. charles, a republican. welcome to the conversation. >> caller: how you doing? i have a statement. i'm sitting here and listening, and i'm trying to process all of this -- what these politicians

are saying both republicans and democrats. of this isis issue, as if they're so moral and obligated to go around the world stamping out evil, yet, they refuse to speak up about the police brutality throughout this nation. not just against african-american but throughout this nation against people. i don't understand that. police officers are not a private force that we have to deal with. they're our government. yet, you all don't deal with your own issues and your own backyards. you get on -- >> charles, got your point. congressman, care to weigh in? >> i'm from montana. in montana the police do a great job. i'm concerned about the heavy handedness of some of our police in law enforcement. they have a tough job. i've never seen a time where it's more divisive in some communities. i think the solution can't come

from washington. the solution is community based. locally. this is where the one size fits all from washington, d.c. is not going to solve this problem. what makes sense sometimes in baltimore isn't going to make sense in billings, montana. i think a lot of the problems with law enforcement and communities has to be addressed locally. >> we're talking with congressman ryan zinke. served on arms services, ss sservices, first navy seal elected. isis closes the ramadi dam gates, cutting off water to towns. what's your reaction? >> not surprising. iraq is in free fall. this is the consequence of inabilityin inaction. the united states has a choice. you can go back to john f. kennedy in his inaugural

address, that we'd pay any price for freedom and liberty, and bear any burden. look how far that policy as a nation, this administration, has deviated from john f. kennedy. regardless of whether we like the role as nations leader, we are the world's leader. the world looks at what we do. when we don't act, it has consequences, as much as sometimes as when we do act. so being the world's leader has a great responsibility. >> how can we act on a political solution? fredricks tweets this, we can't turn iraq back to a centralized government. why is it that we would be responsible for their form of government? >> to a degree we went on in gulf two and we dismantled the saddam hussein regime. i think we bear some

responsibility to make sure it was stable. at least with our coalition and our allies. make sure that the iraqi people have every chance to be a dmom democracy and be a prosperous not failed state. to look at what happened, i think we didn't realize or didn't pay attention enough, or believe wrongly, that iran was going to be a responsible nation. and they're not. their continuing support of hezbollah, mention that iran would have a legal pathway to a nuclear weapon, again, i think that's the core issue. we can't allow iran to have a nuclear weapon. iraq unfortunately, i think, unless we stand up and have a policy of where we're going to gorks go, it will get worse. >> more calls.

go to washington, d.c. >> caller: hypothetical. difficult one. please be as specific as possible, since you possess a lot of knowledge for the audience. you're sitting in the oval office. the president has approved your request for a battalion with all the backup air support, intel et cetera. he asks you, what specific acts and policies do you recommend for syria, for iraq, for iran, both in terms of policies, in terms of actions ton ground, to support that battalion you recommend and to provide the context for those fighting troops to achieve what is necessary? what specifically do you recommend to the president in terms of actions and policy in syria, iraq, iran? thank you. >> well if we're going to defeat isis, it would take a

brigade. around 10,000 u.s. soldiers. america, i think, would support that provided you have a plan of what we're going to do. i think our challenge is, if we go against isis with american troops, you have to have the right training the right equipment and you have to have the right rules of engagement. rules of engagement is incredibly important. because you want to make sure that our troops don't have their hands tied behind their back. what i would advocate for is arm the kurds. i would embed with the sunni tribes that are willing to fight with us but only on the con dig that if we gain ground, that ground is not seeded to an iranian influenced central government. >> roy on twitter wants to know. what you are advocateing in iraq is a return to the bush-era policy of buying off the sunni

tribes with bribes for stability? >> i'm not sure bribes would be a correct phrase. do we want to degrade, and is the mission degrade and destroy isis? simply watching it occur doesn't -- is not going to be mission success. if we are going to as the president said, degrade and destroy isis, how do we do that? a policy of disengagement, a policy of watching from the horizon isn't working. this is what we're seeing. again, we've had a number of opportunities from the moment that isis was in syria we watched and did nothing. we didn't put a no fly zone. it isn't about aircraft, it's about isolating the problem. by inaction, again, the cards we have to play now are less. because you have now iran embedded in eastern iraq.

you have the sunni tribes that have disengaged. i'm not sure you can put it back without a policy of, this is what we want to do. the other point is this has to be a coalition effort. again, this is a battle within islam, as much as it is between east and west. islam has to take the majority share of the fight. >> congressman, it's a busy day on capitol hill. you have to run to go to some business of your own. the house is about to gavel in in 20 minutes. we're going the end is journal when they do that. we thank you and hope you come back and talk to our viewers longer next time. >> great to be here always. >> appreciate it. >> thank you. washington journal live every day at 7:00 a.m. eastern. we're live for a senate hearing on the health care federal exchanges and subsidies. officials from the treasury department and legal experts are expected to testify. later this month, the supreme

court is expected to announce its decision on a case challenging an irs rule authorizing tax credits for the purchase of health insurance in these federal exchanges. it should get underway shortly. there is a series of votes on the senate floor wrapping up. we see senator chris coons behind the chairs. the ranking democrat. senator coons of delaware. the chairman is senator ted cruz of texas. the hearing should get underway. the hill reports that house conservatives are heading its support for a temporary extension of obamacare subsidies. if the supreme court cripples the law as they set up a working group to develop their plan. the high court set to rule in a case which could invalidate subsidies for millions of people in 34 states using the federally-run marketplace. republicans need to be ready to address people losing their coverage but have yet to

coalesce around a plan. the article in the hill says now another proposal is in the works. members of the conservative house freedom caucus told the hill they're setting up a group of four to five lawmakers led by john fleming of louisiana. they'll develop a plan to influence the main house working group led by paul ryan of wisconsin and two other chairman, who is meeting in quote, secret. this will be a senate hearing. the oversight subcommittee. senator bloomingthal in the room.

hearing has come to order. welcome, everybody. welcome to the members of this committee. before we get to the substance of the hearing i want to take just a few minutes to discuss the empty table before us. it's a symbol for how little regard the obama administration seems to have for the american people. two weeks ago, this committee sent a letter to three current employees of the u.s. treasury department.

requesting their attendance here at this hearing. the talk about treasuries role in developing the obamacare exchange's subsidy rule, which is hurting millions of people across this country, and which is directly contrary to the statutory text of the underlying bill. specifically, this committee sent letters to mark mazer, assistant secretary for tax policy and treasury, emily the deputy assistant secretary and serving as the acting assistant secretary when the rule was written and finalized and cameron, who was the deputy tax legislative counsel for tre treasury. after these invitation letters were sent, the treasury department reached out to my staff. and indicated they did not intend to send any witnesses.

you know i would wrote our former attorney general eric holder, the first attorney general in the history of this country to be held in contempt of congress. these three empty seats demonstrate the ongoing contempt for congress. and for the american people that is manifested by the obama administration. for the treasury department to tell the united states senate they have no time, they will not even answer questions about how they created rule making and direct conflict with statutory text is the height of arrogance. the beginning of this hearing was to give them an opportunity to come and answer questions, to recognize the oversight responsibility given to the senate, given to congress by the

united states constitution. by their absence, i take it the administration is saying they are not subject to oversight. and yet, at the end of the day the american people provide the ultimate oversight. given that the administration refused to cooperate in this hearing, it is my hope that the full committee will take it to the next level. of invoking compulsory process, so that members of the executive branch will be made to answer, whether they tried to follow the law or whether they were instructed by political operatives to disregard the law in the interest of a political outcome. that's a question the executive needs to answer. and the purpose of this hearing is to begin getting to the

bottom of it. now, i can understand why the administration is reluctant to engage in this discussion. i can understand why both in substance, after over five years of obamacare, we have seen that millions of people are hurting under it. the american people were promised by the president, if you like your health insurance plan, you can keep your health insurance plan. well, millions of people discovered that promise was false. that it was knowingly deliberately false. as millions of americans had their health insurance plans cancelled. the president promised the american people, if you like your doctor, you can keep your doctor. that, too, we now know was a statement that was knowingly, deliberately false. today as a consequence of obamacare, millions of americans have lost their jobs have been

forced into part-time work, lost their health insurance, lost their doctors and are facing skyrocketing insurance premiums. i can understand why the administration would be reluctant to defend that record of merits. i can also understand why the administration does not want to answer questions about the underlying legal question. the statutory text is straight forward. and if the end of the day, it is not a complicated question what the administration did is took statutory language of an exchange established by a state, and through transmortification that would make harry houdini shake his head in wonderment, defined the federal government's exchange as an exchange established by a state.

the question this hearing and the next panel hopefully will get to is was that an attempt by an executive agency to follow the law? to carry out the president's constitutional obligation to take care that the laws be faithfully executed? or was it a deliberate effort to ignore the law, driven by political and partisan objectives, from political appointees at the treasury department and the white house? this was a question of exceptional importance. if the executive refuses to implement the laws that are passed by congress then the basic protections of our constitution become afen ral. that's the purpose of this hearing. i'm disappointed that the administration has chosen not even to engage in this conversation. with that, i'll recognize the

ranking member senator coons. >> thank you. senator cruz, i thought i'd open by commenting in this same room earlier today, we had a lengthy three-hour marmk up on patent litigation reform. at the conclusion of his remarks, i was compelled to whisper to my staff counsel that i thought senator cruz got it right. >> i hope that comment is not used against you in your next campaign. >> hopefully it will not. >> i hope it's not used against you in your campaign. >> i just mentioned at the outset, by way of saying while we found agreement on issues of the constitutionally protected right this morning, we will approach today's discussion and this hearing with a somewhat different perspective. i find it unremarkable that the witnesses requested for today

did not appear. the administration has ongoing litigation litigation before the supreme court which is expected to be resolved very soon. and it's my understanding that they were not comfortable sending a witness to the hearing under the circumstances. i find that unremarkable. congress has a way of compelling cooperation with oversight, which it has not done. so the simple fact is, we are left with a so-called hearing today about the rule making process in a senate judiciary subcommittee with witnesses who are not involved in the rule making process. it is my hope we'll move past this political theater and on or back to the substance of the judiciary committee. thank you. >> all right. we'll go ahead and give each senator a chance to make a brief opening statement before we move on to the next panel. the senator on this side of the

aisle, who was here next was senator sessions. >> thank you, mr. chairman. as a long-time practitioner in federal court, 15 years practicing before federal judges i developed such a great respect for those men and women who lead those courts. the judicial process that we do through, the legal process that we go through and in states all over the nation, we presume laws are past juries are told that executive enforces the laws, and the people expect that. that's the whole essence of the american legal system. and the president of the united states is, in fact the chief law enforcement officer in america. he has an absolute duty to see that laws are faithfully executed. i've seen in my time here presidents of both partiesy sies ak

yes, siring in policies they don't like. i don't believe we have ever seen a president of the united states who is so willing to just ignore plain law to advance a political agenda. this threatening law in america. american people acquiesce in court decisions every day. many of which they strongly disagree with. but they acquiesce because that's our system. part of their acquiescence is a grudging belief that somewhere, somebody is following through on legal procedures and what's happening to them in the courtroom is a result of a fair and decent process. i do believe senator cruz, that we're not in a healthy relationship right now. and if we get to the point where

the american people believe that the supreme court, five members out of nine, on the supreme court are just advocating and imposing views instead of faithfully following classical interpretive policies of law, then i think we have threatened the foundation of this republic. my full and firm belief is that the strength of this republic is founded on the anglo american rule of law which we basically inherited. we just celebrated the 800th anniversary of magna carta, and that's different from a lot of people. so, mr. chairman, thank you for hearing -- having this hearing, and i don't believe the president is entitled to do what he wants to no matter what the law says. >> thank you, senator sessions. senator blumenthal? >> thank you mr. chairman, and i want to join with my

colleague, senator coons, in expressing my appreciation for your very eloquent remarks this morning even though we voted on opposite sides of the issue. and for your having this hearing because i think it's a topic that well merits attention and scrutiny. if i had been asked for my advice by these witnesses and i wasn't i would have probably given them counsel that appearing here to talk about these issues literally on the eve, or perhaps a few days before the united states supreme court rules on almost directly related questions of law and possibly fact, would have been imprudent. and even foolhardy and might have been perceived as improper. the timing of this hearing in relation to the united states

supreme court decision predetermined the outcome of their appearing here. and i would respectfully suggest, mr. chairman, that these same witnesses be invited at some later point certainly consideration by the full judiciary committee of any compulsory process should await another invitation at a different time, and i do not mean to suggest that the empty table was used as a prop for an argument that may be misperceive misperceived but i would strongly urge that this committee revisit the potential testimony from these witnesses on another occasion. on the issue at hand contrary to the arguments of many partisan opponents, i firmly believe that the right decision will be to uphold this law both

the act itself and plainly overwhelming evidence from its consideration of passage demonstrate its nationwide scope. everybody involved understood when it was being debated and when it was being passed that tax credit would be available regardless of which government entity set up an exchange. the act simply would not have worked any other way. the financial support for yufl universal coverage would not have been there without this understanding. and so i welcome the scrutiny and oversight and hope that we will find a path where we can really on a very bipartisan basis work together. thank you, mr. chairman. >> thank you, senator blumenthal. senator hatch? >> well, thank you, mr. chairman. let me begin by thanking the chairman for conveneing what i consider to be an important hearing. i also want to say i'm

disappointed by the first panel's decision not to appear here today and testify. here we are investigating a hugely important issue, whether obamacare authorizes subsidies for federal health care plans purchased through the federal exchanges, and the administration's representatives won't even talk to us. you would think the administration would jump at this opportunity to tell the public how a determined that the tax of obamacare remains the exact opposite of what it says. how determined that established by state means established by the federal government. i can only conclude the administration's refusal to participate today means it has no good explanation. decided early on subsidies needed to be available in federal exchanges if law was to work the way the president envisioned and didn't particularly care what the statute actually said. so many things about this whole process are disturbing. you have a congress that passes a hugely consequential bill through a backwards legislative process after the people of

massachusetts, massachusetts, lkts elect a republican senator to stop the bill from moving forward. you have a president that then decides to rewrite the law through administrative fiats to say what he wishes it said rather than what congress actually wrote. you have a seen or administration official refusing to even show up to exflan how they arrived at their anti-textural reading of the statute. these are not the actions of an executive branch accountable to the rule of law. these are the actions of an executive branch willing to bend the law to suit political purposes. i've spoken many times about president obama's disturbing disregard for the rule of law of which the obamacare subsidy rule is just one example. last month i published an article with the ucla "law review" explaining how the president's rewriting of obamacare countervenes. after the court case challenging

the president's action. i'd like to quote from that article. "what's ultimately at stake here is president's obligation to follow the law. faced with a statute that doesn't operate quite the way he envisioned, president obama decided to disregard the parts of the law he doesn't like and instead implement a different statute. the constitution doesn't give the president leave to unilaterally rewrite laws. the power to amend laws lies with congress and until congress amends the statute, the president is bound to the text congress passed." now, i ask consent for the article to be entered into the record. >> without objection. >> i'm glad we have a second panel with us today who can talk about the administration's path to determining that subsidies can be offered on federally established exchanges. even though obamacare provides no such authority. now, i wish the administration would take this as seriously as we do. let me just say that that whole obamacare matter and heard all

sides and really got tremendously involved in it naturally because i've done an awful lot of health care legislation over my 39 years in the congress. and i have to say that one of the principle arguments was by some that -- that you know, that the -- the people would have to go the exchanges would have to be set up by the state. the argument behind it was that's the only way you're going to get people to really sign up for it because that's where the money goes. and that argument was used on more than one occasion and all i can say is i'm very concerned about this whole issue. the statute is unambiguous. it's amazing to me that we've come this far without somebody admitting that, hey, they made a mistake. and that we would have to rewrite the law so that you can

do what they've just unilaterally decided to do without any real legal authority to do it. thank you, mr. chairman. >> thank you senator hatch. senator whitehouse? >> thank you chairman. i want to echo the comments of my colleagues about the empty chairs here. senator blumenthal and i have both been the attorneys general of our states and we have had the obligation to provide advice to government officials on how to respond when their agency is the subject of ongoing litigation and i concur fully with the remarks of senator blumenthal and i concur fully with his recommendation that once that impediment is lifted the chairman should consider having the witnesses return. i think it could be a constructive hearing if it were not for that impediment which i think is a real and genuine one. in rhode island we aren't very

affected by king v. burrwell because we did set up a state exchange and our state exchange has been quite a success. we've just hit 500 businesses having achieved health care through our exchange which has a business plan as well as the individual plan. thousands of families have achieved coverage or major primary care practice groups are adapting the way in which they practice to take advantage of some of the innovation programs in the affordable care act. they are seeing better care for their patients. their patients are are seeing longer hours, simpler processes, more support for prevention and other types of less costly ways of dealing with people's health. so we're seeing really better care delivered in a less costly way that is simpler and clearer, less bedeviled by the confusion

and duplication that had been the hallmark of our health care system. through savings. put through the innovation center as an approved nationwide process because they were able to demonstrate to the actuary hundreds of millions of dollars in savings all accompanied by better simpler care for the individuals whom they serve. so i think we have a continuing process that we're obliged to pursue to make sure that the american health care system which remains by 30% to 50% more expensive per capita than all of the companies -- countries that we compete with, the other industrialized countries and i think that gives us an obligation to really try to keep our eye on the ball and to make

sure that we're reducing the cost of care while maintaining or actually likely even improving the quality of care that our people receive. there's absolutely no reason that we should continue to be the country that has the highest per capita costs in the developed world and yet has health care outcomes as measured by things like length of life that equate to countries like greece and croatia. we can do a lot better. the affordable care act is a tool that's already being proven to do a lot better, and in my view the exchanges are a tool for continuing to drive the health care system in that direction. away from duplication away from fee for service, away from

confusion. un unfortunately, behind the political language that -- and the political fights that have accompanied the affordable care act, there are just an awful lot of americans who, particularly those who have had a loved ones or who themselves, had a very serious illness and had to deal with the american health care system and they've seen firsthand what a complex, burdensome, inefficient, bedevilling system it was, and i think that particularly in this area of lowering costs byism proving quality of care, the affordable care act has made important breakthroughs. we want to encourage those breakthroughs to make us more internationally competitive and to provide a better human humane result frankly, for the people of the country, and at least in rhode island, i think state exchange is helping our state manage that problem and steer itself in that direction. so thank you very much for the time, and with my time expiring,

i'll yield back. >> thank you, senator whitehouse. i'll make a couple of observations and then we'll welcome the second panel. you know, one, when it comes to discussions of cost and limiting health care and health insurance cost, i think on the merits, obamacare has been an abject failure failure. president obama promised the american people if this law passed the average family would see a $2,500 decrease in health insurance premiums. i think you'll be hard pressed to find many families for whom that is the case. indeed, the average family in america under obamacare has not seen any health insurance premium decrease rather the average health insurance premium increase has been over $3,000. that's $5,500 difference out of hardworking americans who are struggling to pay the bills and they're discovering that under obamacare, they're getting less coverage for that. they have higher deduct bls, higher co-pays less coverage,

and they're paying more. i would also note that the administration's justification for not being here is the pendency of king v. burrwell and yet miss mcmann, one of the three witnesses who was called here today testified before the house oversight committee on july 31st 2013 while the case with the same underlying issue was pending. the record was open in that case, yet the administration sent a witness. and yet, here they're unwilling to answer those same questions about whether the administration is willing to comply with the law. the letter this committee sent to treasury secretary jack liu on may 27th without objection, i'm going to enter that letter into the record and i'll hold the record open for a week for any additional material senators would wish to enter. with that, i'd like to welcome the second panel to the table and we'll start immediately as soon as -- as soon as you can be

seated. i'd like to introduce briefly the members of the panel. we have mr. michael carvin, a partner at jones day.

he is the lead lawyer in king v. burrwell. and he has the ig no min yous distinct of being my very first boss in private practice which i'm sure many will hold him to account for all of the mistakes i've made since then. we've got mr. michael cannon who is the director of health policy studies at the cato institute. he's a learned and well-respected scholar on questions of economics and health care. we have professor andy graywall who's an associate professor of law at the university of iowa college of law in iowa city. we have miss elizabeth b.widra, chief counsel of the constitutional accountability center here in washington, d.c. and we have mr. robert winer who is a partner at arnold & porter.

i'd like to ask each of the witnesses to stand and be sworn in, please. will you raise your right hand? do you affirm the testimony you're about to give before the committee will be the truth, the whole truth, and nothing but the truth? so help you god. thank you very much. mr. carvin, we'll start with you. please turn your microphone on. >> is it on now? thank you. i was just talking about the importance of this hearing as a number of senators have already indicated while the policy issues here are obviously very important, i think the real issue for this hearing is the rule of law. is this going to be a nation govern by laws enacted by this body pursuant to constitutional prerogatives or unelected bureaucrats? and i think that that's exactly what happened in this case. i think this is an

extraordinarily simple case and i think the irs has not interpreted the law, but very dramatically revised the law and that's because law simply says that you receive subsidies on exchanges established by the state under section 1311 and the irs has transformed that into something that we receive subsidies on exchanges established by hhs under 1321. and anyone who speaks english knows that that's not a reasonable interpretation of that language. the proponents of the irs rule have argued they can't dispute that the plain language commands the opposite of what the rule says, so they try and change the subject. they say, well, you've ripped that language out of context, and that langeuage and the language is contrary to the underlying purpose of the statute. in reality neither of those is true. in fact, the context in which those words reside confirms in every way that the plain

language means exactly what it says, and following that plain language is really the only way to implement the broader purposes of the affordable care act. for example, in terms of context, it's argued that this is an unusual place to put a restriction on subsidies, but the reality is that section 36-b is the only provision in the act that deals with the availability of subsidies, and the reality is that it's the only restriction, for example, that makes it clear that you need to make a purchase off of an exchange in order to receive the subsidies. so far from being an unusual place to put the restrictions statutes the only logical place and context makes that clear. in terms of the statutes' broader purposes the plain text of section 13 11 of the act makes it clear a principle purpose of the act is ensure that states run these exchanges and not the federal government. indeed, it's stated in the

mandatory. the states shall establish and operate these exchanges. and one of the principle problems with the irs rule is it dramatically undermines that statutoryily stated purpose. since irs rule make the subsidies available regardless of whether states have established an exchange, it provides the states no incentives to undertake this difficult and arduous task. so the irs rule dramatically undermines one of the stated purposes of the aca which is to have states establish the exchanges. none of the proponents the rule can explain why any reasonable person, reasonable legislature, would have thought all the states or most of the states would have done this if they were provided no incentive to do so and they can't explain any incentive other than conditioning the subsidies. the notion that there's some purpose out there to have subsidies in all states is simply a fiction invented by the

obama administration. there's no text, there's no legislative history anywhere suggesting that congress intended to make subsidies available on exchanges that are established by hhs. therefore, the purpose argument is not any effort to discern congressional intent through any of the normal means of expressing legislative intent. it is actually a unilateral effort to impose the executive branch's own purposes in distinction to those of the legislature. we have a specific statutory provision that tells you what the limitation is in 36-b we have a specific statutory provision section 1311 that tellstell s you why they impose that and there's no legislative history which contradicts either of those statutoryily enacted text. so any legislative material that any justice on the supreme court has looked at, there is no purpose that would justify the irs' revision of the code. i think my final point i'll make is that the proponents of the

act can't even agree on the rationale behind why the irs' revision was okay. the solicitor general invented this term of art theory in the supreme court. you won't see that term of art theory anywhere in the irs' discussion of the rule at the time they did it. so this was a post hoc invention by the solicitor general that's not even consistent with what the irs came up with. the media explanation for all of this is a giant mistake that nobody really understood what was going on but neither the solicitor general, nor the irs has bought into this notion that this was simply a matter of oversight. so all of the very rationales that have been offered up for this bureaucratic rescission of the statutes' plain text are not only unpersuasive they're actually at odds with each other. thank you. >> thank you mr. carvin. mr. cannon? >> thank you, chairman cruz. thank you mr. chairman, ranking

member coons and members of the committee for the opportunity to discuss what we do know about how the irs developed its health insurance premium tax credit rule of may 23rd, 2012. that's the rule that's being challenged in king v. burrwell and it's the rule that implements the premium assistance tax credit provisions of the patient protection affordable care act of 2012. two federal courts have found that that rule expanded the reach of the aca's employer mandate beyond the clear limits congress imposed on the irs' authority. according to those courts, the irs is unlawfully subjecting more than 250,000 employers and 57 million workers to that tax. one of those workers is kevin pace. a jazz musician who is not far from here in northern virginia. according to the "washington post," pace lost $8,000 of income in the first year the irs unlawfully imposed that mandate on his employer. as a direct result of that mandate. according to one estimate, this

illegal tax reduces a typical affected worker's income by nearly $1,000 and has eliminated nearly a quarter million jobs. those federal courts likewise found the rule expanded the reach of the aca's individual mandate. subjecting an estimated 11 million taxpayers to a legal tax averaging $1200 each. whatever good the irs hopes to accomplish with the funds raised by these taxes is irrelevant. the authority to levy taxes and spend federal dollars rests with congress alone. in king v. burrwell, four virginia taxpayers allege this tax credit rule is subjecting them kevin pace, and 57 million other americans to illegal taxes. the supreme court heard oral arguments in march. a ruling for the challengers would invalidate that real, create an estimated 237000 jobs, free 57 million americans from illegal taxes and increase affected workers' earnings by nearly $1,000. now, my co-author, jonathan

adler, and i, have written at length about how neither the aca or legislative history provide support for the irs' participation of the statute. indeed, both the legislative history and the statute squarely foreclose the irs' interpretation. today for the remainder of my testimony i'd like to discuss the troubling picture that emerges from what little we know about how the irs developed this rule and why we know so little about how the irs developed this rule. the available evidence suggests irs officials recognize the aca did not give them authority to impose the taxes yet they impose these taxes anyway. treasury and irs officials perform little or no analysis of the aca and legislative history. they used legislation rejected by congress in order to support their theory of congressional intent and they failed to consider important dimensions of this issue. the irs' proposal to implement these taxes and subsidies in federal exchange states met immediate and sustained criticism including from some

members of this committee as far back as 2011. the administrative record offers no support or substantive explanation, no statutory support, the plain meaning of the tax credit eligibility requirement that recipients must enroll in health insurance through an exchange established by the state. the administrative record contradicts arguments the government offered before the supreme court and reveals those arguments to be posthoc rationalizations. mr. carvin mentioned the term of art argument the solicitor general made before the supreme court. what little we know about the administrative record shows that dispositively that the irs did not believe this was a term of art. the irs attempted to hide its actions and reasoning from congressional scrutiny. according to an article in the "washington post" which interviewed several members -- several officials at the

treasury department and irs who were involved in the development of this rule, one former official said, quote, the overriding concern was not generating negative news stories. the overingriding concern of the officials who wrote this rule was not the law but avoiding negative news stories. the irs continues to try to avoids scrutiny. in december of 2011, the then-ranking member of the senate nns committee, a member who's here today, senator hatch, sense a letter to the department of the treasury after the promulgation of this proposed rule and before it was finalized, disputing the legality of the rule and asking the treasury department to turn over all documents related to the development of this rule and the irs' reasoning behind this rule. the irs and the treasury department have been ignoring that request for 3 1/2 years. the irs is taxing and spending the american people's money without permission from or

accountability to congress. the american people need to know how this happened and that begins with transparency. i thank you very much for your time, and i look forward to your questions. >> thank you mr. cannon. professor grewal? >> thank you very much mr. chairman. i suspect if the irs had shown up today, it would tell you that it tried to carefully obey its statutory authority when it issued regulations under section 36-b. i want to explain why that's nearly impossible to believe. at the outset, i'll say i don't take any particular position on the king v.burwell issue and don't know whether obamacare is a good idea or bad idea. that's why i'm sitting here in the middle. but i do want to discuss three circumstances where other regulations under 36-b clearly contradict the legislative language. and if you think established by the state is clear,s you'll think these ones are very clear even offered a case of beer on twitter to anybody who could come up with some colorful

counterargument. in the first circumstance a statute plainly grants credits only to citizens when their income falls within a particular range. 100% to 400% of the relevant poverty line amount. irs doesn't like that result and potentially expanded credits to several million persons below the 100% amount. again, if you think established by the state is clear, a statute that refers to 100% to 400% is far clearer. and the second circumstance is the aca has two related provisions. one provision says that if you're a large employer and you offer health insurance to your employees, we want you to automatically enroll all those employees in coverage, and the department of regulations will issue regulations saying as much. if you're going to have a plan get everybody in there. as a sweetener to this the persons who are enrolled won't get credits under section 36-b buzz because they're going to be getting coverage under the employer plan. with no credits, that means

there's no penalties on employers when they automatically enroll employees in their existing plan. the irs does not like that result, and it has issued a regulation saying that in some circumstances, you will actually get a credit under section 36-b even though you are getting coverage by your employer and the employer will relatedly get hit with the penalty. the third category i want to discuss relates to unlawful aliens. congress recognizes that some very low-income persons who are here lawfully can't get medicaid. some states say, well, all right, you're not a citizen, but we'll help you but please wait five years before you apply for medicaid. the statute section 36-b says that, okay we'll help you out with credits on the federal -- sorry, on the state exchanges and arguably the federal exchanges. if you are here lawfully, you, yourself can get a credit for policies purchased on an exchange. the treasury has issued a regulation saying even if you are here unlawfully and you meet the income requirements, you are

eligible for a credit. the statute is very clear that says you must be here lawfully to get this benefit of this special rule. all of these three provisions may be good ideas in the abstract. i don't know. they seem reasonable on one level, but they clearly violate the relevant statutory language. in closing i just want to emphasize that as we talk about the pressurerytreasury expanding 36-b, we don't give enough attention to the fact that an expansion of 36-b means more penalties from employers. unlawful credits lead to unlawful penalty collections. the fact that the irs in expanding section 36-b is illegally collecting penalties from private businesses should receive more attention. thank you, mr. chairman. >> thank you, professor. miss wydra? >> thank you chairman cruz ranking member coons and members of the subcommittee for inviting me here to testify before you today. i must take issue i'm afraid

however, with the substantive premise of today's hearing. at least as reflected in its title which suggests that the treasury department rewrote the affordable care act when it ensured that tax credits would be available nationwide to all americans who need them. far from rewriting the statute, i would assert that the treasury department applied the aca according to its text statute design and purpose when it interpreted the act and made this rule. similarly, i must take issue, i'm afraid, with my esteemed colleague, mr. carvin. what you just heard him describe a few moments ago is not how statutory interpretation works. how you heard him describe the affordable care act is also not how anyone involved in enacting the statute understood the law to whork. republican and democratic members and staffers alike involved in drafting the law have made clear that no one understood the law to preclude tax credits for residents of states that opted to use the

federal fallback provided to them in the law instead of electing to set up an exchange for themselves. to the contrary, statements by members of congress at the time and reports drafted by committees and the cbo all assumed that tax credits would be available in every state on any exchange without making a distinction between state-run, and federally facilitated exchanges. did any members of congress stand up at that time and profess the vision of the tax credit provision that we heard mr. carvin and other critics of the treasury rule put forth? as mr. carvin had to admit when the supreme court asked him this very question? there were none. but i'd like to back up for a moment to talk about the language of the statute itself, because i think it's important to correct what i see as some mischaracterizations. as justice scalia reiterated last year, it is a fundamental cannon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.

in other words not plucking a forward phrase out of a statute and using it to defeat the very fundamental purpose of the entire act which in this case was to provide affordable health insurance for all americans. to help achieve this aim of broadening access to health care and insurance, the statute provides for the establishment of exchanges on which individuals can purchase quality affordable health insurance. section 1311 provides that "each state shall not later that january 1st 2014 establish an american health benefit exchange." the act clarifies, however, that there is "state flexibility in meeting this requirement." a state may elect to set up the exchange for itself or if a state chooses not to establish an exchange or cannot establish an exchange that meets the act's requirements, then hhs, according to the statute, shall establish and operate such exchange within the state. when the statute then uses the term an exchange is established by the state in the statute it refers to exchanges established

at the state level by the state as well as exchanges established at the state level by hhs standing in the shoes of the state. now, with respect to the eligibility for tax credits allowing individuals to afford to purchase insurance on these exchanges, the act expressly presents income level as the method by which an individual is determined to be eligible or not for tax credits not the entity which runs the health insurance exchange in that state. what about the phrase seized upon by critics of the treasury department's rule found in the provision for calculating the amount of the tax credit from -- who purchased a policy on an exchange established by the state? well, you could pluck a forward phrase out of moby dick and say it was a story about a sunday whale watching cruise. that's not how you read a book and not how the supreme court tells us you read a statute, either. reading the law to provide tax credits nationwide on both state-run and federally facilitated exchanges allows the provisions of the aca to work

harmoniously which is something the supreme court has told us clearly is something that should be a guidepost when we're reading statutes. in contrast the reading asserted by the king challengers would deny effects to the regulatory scheme by sub verting the act structure and design and basic purpose and rendering important provisions absurd. something the supreme court has told us we should avoid when reading statutes. i believe the interpretation of the law reflejted in the treasury rule making tax credits available nationwide to all americans who need them regardless of the state in which they live, accords with the plain text of the law and allows the law to work in the way that congress intended. interpreting section 36-b in this way allows the fundamental market reforms at the heart of the law to work in the way that they were intended and is the best interpretation of the law when you read the law according to way that the supreme court tells us we should read statutes. i'd be delighted to answer any questions the court has and, i

mean, the panel has. i'm used to being in front of judges. but thank you for your time and i'd be delighted to answer further questions. >> and i can promise you none of us will be wearing robes. mr. winer? >> thank you, mr. chairman, ranking member -- ranking member coons, for inviting me to testify today. let me say first i think it is wrong or at least premature to be talking about a violation of the rule of law by the treasury department when the supreme court may yet tell us, and i think will tell us shortly that they were right. second, i'd like to say the affordable care act in fact, is working. 14.1 million americans more have insurance than they did before. the rate of uninsured americans has dropped from 20% to 13%. health care price inflation is at its lowest level in 50 years

and the rate of increase in insurance premiums has declined. the third, the opponents of the aca in the king case would roll back this project and they contend that the treasury department charged with implementing congress' intent should have found that what congress intended to do was to enact a self-destructive statute, one that coerced states to set up their own exchanges by threatening if they did not to impose a federal backup system that didn't work. now, why would congress have done that when the whole point -- why would they have had a nonfunctional backup as a threat when the whole point of the backup was to ensure that the statute did work in those jurisdictions? and why would congress plant a time bomb in the statute, anyway? well the argument is that the

irs and the treasury department, those questions were off limits because the language was so clear that there was only one permissible interpretation. let me answer one more question, and that's why would the states have an incentive without the coercion to establish exchanges? and the states themselves asked -- answered that question in the very case that mr. carvin handled. when they amended the complaint in the nfib case, the state governments alleged the exchanges were coercive. why were they coercive? not because they threatened subsidies of the citizens of those states, that they didn't set up an exchange. they were coercive, the lawsuit said because the states would cede regulatory authority if the federal government established exchanges. that's not my position.

that is the state's position and that is their incentive along with a lot of grants to establish exchanges. now, the opponents really have to take the position that the statute has one and only one permissible reading because there is a strong presumption that you read statutes to be effective, that you read statutes in furtherance of their evident purpose. justice scalia says that in his book "unstatutory interpretation." and the argument here is that this self-emulating interpretation that the treasury department was so derelict in rejecting can prevail only if it is impossible to construe the statute any other way. it's crystal clear, they say, but no one at the time the statute was enacted was