who had a report of the biggest chunk of diseases related to the food system. [applause] >> it is true in this country as well. >> this >> it has the name jokes food. i think the junk food culture should go. you cannot just add one vitamin to it. that is not the way to solve it. we need to maximize nutrition while intensifying biodiversity instead of capital input. the higher cost of everything, education, agriculture, the cost of health while the lowering of incomes for everybody. we need the opposite. lowering the cost of production of food, access to health care,

access to education, while increasing the capacity of people to earn incomes. [applause] >> this is a question for you. what she articulated i would argue is a call for government action i think this is what should be rendered under the government. what do you think should be done given the growing inequality around the world? for the first time in 2011, more people lived in middle income countries and poor countries. how should our government in this country and around the world think about we calibrating -- re-calibrating for the private sector and

individuals? >> i am the senate on the panel. i think it will be hard in the united states for the government to play that robust role preparations dictate our policy making. [applause] >> this goes back to what mr. peterson was saying. there are lots of special interests in this town and not one sufficiently reflective of our views. that is also a challenge to us to think things should be different. >> we need everybody in this room to help champion public financing of elections, a constitutional amendment that says money is not a speech. the battle for the future of this country is hard to fight when we are outspent by

corporate and special interests. [applause] i will leave it at that for now. the work they do every day is how we revitalize the role of government in providing the basics needed in society and providing the structure of opportunity that enables me to sit in front of all the day, which has been great. i do not see it fundamentally changing until we change the system. >> i would also say require corporations to be more transparent about their budgets. those of us in washington would know there is a coca-cola factory the less polluting the water. that should be something we expect even if it is owned

through a subsidiary and held by a different company. we should have a more realistic view so we can make what we think are the right choices. i would be interested, what do you think the role of a middle- income country is? >> the whole question of closing the gaps of inequality. when you look at latin america, it is the most unequal part of the world. there's a lack of the right distribution. for the first time in ages because we have been able to have positive economic growth on a sustained basis, you begin to see that dropping. there is a huge function to this that comes the way taxation is done. a huge function in a way entitlement programs are delivered, measured, and the

quality institutions behind them. this is something that is extremely difficult to put together. it will be many years before governments have the capacity to deliver the things needed. we need to support governments in renewing institutions precisely for this purpose. i think the awareness and leadership of countries that this is what matters to drive the effort of come -- governments and build partnerships. the way to do is using the talent out there from everybody. in doing this kind of public- private partnerships, in delivering social services, i have seen very interesting cases in many countries in latin america. i think those are great

possibilities for the future. >> maybe we should learn something from you. given that the system of education takes decades to show results, how do we convince poor families that it is worthwhile and worth the investment? how do you convince the farmers to use the additional income from the crops your help them to plant to invest in their children and communities? >> there was the scholastic system of teaching. at a certain point, it fell out of relevance in new universities were created. >> maybe you can define that. >> all the learning was linked to the church. scholasticism as the word comes from that.

i have a feeling our university system is being squeezed into a very narrow teaching to turn human beings into raw material for the corporate machinery instead of four human potential. we need to pluralize and make public education again. that is why i have started an earth university. we have to have other initiatives of learning beyond the boards of universities. our farm is a new university. we need multi universities. that is why we have grandmothers' come to teach. we're taught to this respect the knowledge of our elders. at this the crisis, the elders have a lot to show. the elders of the indigenous

culture have the wisdom that we need desperately. i think we need to learn from every source. a plant, a seed, nature, the soil, they are all teachers. we have to make more teachers. >> a broader definition of education. for those of us with student loan debt, how do we continue this work, presumably the work you do, while meeting our basic needs? >> be very creative. personally, a year ago, that was something i worried about. how audacious to think i would move to another country and start a business without being from that country were speaking the language. i have been able to continue on

and rally support, get people behind me to believe in what i am doing. you have to think in short time increments. what will give me to next week, next month, next quarter and not what this will look like 20 years down the road. the creative -- be creative. >> i think that is great advice for any of us in what we may want to do. even this small businesses receive funding to get off the ground, how can start at compete with global mega companies? >> what you will see more and more in the world is how the change of the face in the global companies and how you have these evolutions of global companies. you see huge business is

developing -- business is developing as a result of the changes taking place in emerging countries. if you look at the top 100 corporations today and compare them to 20 years ago, they are very different. they will be even more different in a short time. the real possibility for emerging small businesses is to compete to serve problems. that vacuum exists in the huge space being developed that requires a totally new thinking of the way you do your traditional business. with the use of technology that is where i think the real possibilities are for the future. >> tamara, i want to be the last word.

he said you felt like you are the senate. i do not want you to think you are left with only cynicism. thankfully we have the highest number of students from outside the united states, the highest percentage of students from outside the united states that we have ever had here. [applause] more than 1/3 are from outside the state. we have close to 2/3 two are from the united states and even more here studying in the united states from abroad. i like you to comment on what cynthia just said. how would you recommend we leave here and try to figure out how to make a living while also paying off student loan debt, to navigate that balance for their own lives and for all of us? >> it is a hard balance. it is one of the reasons why many students get pulled into

careers they did not want to go into originally, because they pay so well. one thing i have loved about this conversation is by the moments when you cloud, there is a strong moral compass in this room. i am actually optimistic about the future, at least about this country. i want to be one of your honorary [unintelligible] i am in love with [unintelligible] [applause] i am not a personal finance expert. i loaded up on credit card debt as i tried to make ends meet after college. i did not even have student loan debt. i will say we need young people with your moral compass to solve these public problems. we desperately need you to run for office. [applause]

if your talents and passions leanness way, we desperately need to revolutionize the economics field. we need to go into economics. >> i just remember while you are talking about the leadership coming from young. we realize this neglect of the future is part of the tragedy. we are moving, the u.n., to create a commission for future generations and their rights. this will be part of those real plus 20 process. . hope all of you will join i >> as someone who recently lost her grandmother, i would join you in adopting her as a matriarchal figure. i would like to close harkening

back to what mr. peterson said, to have our voices heard, to hold corporations accountable, to hold academies' accountable, to hold public institutions and politicians accountable. to urge you not only to go into economics or to run for office, but to go work for walmart or coca-cola. the work in the corporate system to change the corporate system to help build better world we all want to live in. vendana, i think you have a lot of people coming and knocking on your door in delhi. please applaud our panelists. thank you all very much. [applause]

[captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute]

>> c-span will have more live coverage of the global university with the president and founder of the group, bill clinton. he will be interviewed by jon stewart about social issues here and abroad facing the next generation. that is scheduled to begin at 4:00 eastern time. you can watch it here on c-span. this weekend, c-span will reair the oral argument on the constitutionality of the health care law. today at 2:00 eastern, the law and whether it includes a tax. then whether the expansion is an intrusion on the states. then an argument on the constitutionality of the individual mandate.

can the rest of the law is still intact if the law is found to be unconstitutional? that will be on sunday starting at 4:25. you can watch them on-line or listen to them any time at c- span.org. whether the anti-injunction act was applicable to the case was the argument on the first day. if the court decides the penalty for failing to purchase health care insurance is a tax, the law could not be challenged until 2015. the solicitor general and challengers both agreed the anti-injunction act should not stop the supreme court from hearing the case. this is an hour and a half.

>> we will hear argument this morning in case number 11-398, department of health and human services v. florida. mr. long. >> mr. chief justice, and may it please the court. the anti-injunction act imposes a pay first, litigate later rule that is central to federal tax assessment and collection. the act applies to essentially every tax penalty in the internal revenue code. there is no reason to think that congress made a special exception for the penalty imposed by section 5000a. on the contrary, there are three reasons to conclude that the anti-injunction act applies here. first, congress directed that the section 5000a penalty shall be assessed and collected in the same manner as taxes. second, congress provided that

penalties are included in taxes for assessment purposes. and third, the section 5000a penalty bears the key indicia of a tax. congress directed that the section 5000a penalty shall be assessed and collected in the same manner as taxes. that derivative triggers the anti-injunction act which provides that "no suit for the purpose of restraining the assessment or collection of any tax may be maintained in any court by any person." >> well, that depends, as - as the government points out on whether that derivative is a directive to the secretary of the treasury as to how he goes about getting this penalty, or rather a directive to him and to the courts. all -- all of the other directives there seem to me to be addressed to the secretary.

why -- why should this one be directed to the courts? when you say in the same manner, he goes about doing it in the same manner, but the courts simply accept that -- that manner of proceeding but nonetheless adjudicate the cases. >> well, i think i have a three-part answer to that, justice scalia. first, the text does not say that the secretary shall assess and collect taxes in the same manner. it just says that it shall be assessed in the same manner as a tax, without addressing any party particularly. >> well, he's assessing and collecting it in the same manner as a tax. >> well, the assessment -- the other two parts of the answer are, as a practical matter, i don't think there is any dispute in this case that if the anti-injunction act does not apply, this penalty, the section 5000a penalty, will as a

practical matter be assessed and collected in a very different manner from other taxes and other tax penalties. there -- there are three main differences. first, when the anti-injunction act applies, you have to pay the tax or the penalty first and then litigate later to get it back with interest. second, you have to exhaust administrative remedies. even after you pay the tax you

can't immediately go to court. you have to go to the secretary and give the secretary at least 6 months to see if the matter can be resolved -- the taxpayer will be able to go to court any time without exhaustive administrating remedies. there will be none of the limitations that apply. >> why will the rule not be applicable? >> if the antiinjunction act does not apply, there is no prohibition on court's restraining the penalty. >> the courts are part of the exhaustion rule. i am not following it. you could do that as a matter of common law.

in the code itself, it is a central statute to litigation. the code says you must pay the tax first and litigate. in addition, it says you must -- >> about taxes. you must pay the tax first and then litigate. so that's the baseline. and then in addition it says you must -- i mean, it's not common law. it's in the code -- you must apply for a refund, you must wait at least 6 months. that's -- many of these provisions are extremely specific, with very specific time limits - >> they would apply even if the rule is not jurisdictional. the only difference would be that the court could enforce it or not enforce it in particular cases, which brings me to the davis case, which i think is your biggest hurdle. it's a case quite similar to this in which the constitutionality of the social security act was at issue, and the government waived its right to insist upon the application of this act. of course, if it's jurisdictional, you can't waive it.

so are you asking us to overrule the davis case? >> well, helvering v. davis was decided during a period when this court interpreted the anti-injunction act as simply codifying the pre-statutory equitable principles that usually but not always prohibited a court from enjoining the assessment or collection of taxes. so that understanding, which is what was the basis for the helvering v. davis decision, was rejected by the court in williams packing and a series of subsequent cases -- bob jones. and so i would say effectively, the davis case has been overruled by subsequent decisions of this court. >> mr. long, why don't we simply follow the statutory language? i know that you've argued that the davis case has been overtaken by later cases, but the language of the anti- injunction act is "no suit shall be maintained."

it's remarkably similar to the language in -- that was at issue in reed elsevier. "no civil action for infringement shall be instituted." and that formulation, "no suit may be maintained," contrasts with of the tax injunction act, that says the district court shall not enjoin. that tax injunction act is the same pattern as 2283, which says "courts of the united states may not stay a proceeding in state court." so both of those formulas, the tia and the no injunction against proceedings in state court, are directed to "court." the anti-injunction act, like the statute at issue in reed elsevier, says "no suit shall be maintained," and it has been

argued that that is suitor- directed in contrast to court- directed. >> right. well, i mean, this court has said several times that the tax injunction act was based on the anti-injunction act. you are quite right, the language is different. but we submit that the anti- injunction act itself, by saying that no suit shall be maintained, is -- is addressed to courts as well as litigants. i mean, after all, a case cannot go from beginning to end without the active cooperation of the court. >> but how is that different from no civil action for infringement shall be instituted -- "maintained and instituted"? anything turn on that? >> well, it's -- i mean -- perhaps a party could initiate an action without the act of cooperation of the court, but to maintain it from beginning to end again requires the court's cooperation.

and -- and even if -- i mean, if the court were inclined to say as an initial matter if this statute were coming before us for the first time today, given all of your recent decisions on jurisdiction, that you might be inclined to say this is not a jurisdictional statute. a lot of water has gone over the dam here. the court has said multiple times that this is a jurisdictional statute. congress has not disturbed those decisions. to the contrary - >> counsel - >> well, congress said that many times, but is there any case in which the result would have been different if the anti- injunction act were not viewed as jurisdictional but instead were viewed as a mandatory claims processing -- rule? >> there -- there are certainly a number of cases where the court dismissed saying it is jurisdictional. as i read the cases, i don't

think any of them would necessarily have come out differently, because i don't think we had a case where the argument was, well, you know, the government has waived this, so, you know, even -- if it's not jurisdictional - >> well, the clearest -- the clearest way of distinguishing between the jurisdictional provision and a mandatory claims processing rule is whether it can be waived and whether the court feels that it has an obligation to raise the issue sua sponte. now, if there are a lot of cases that call it jurisdictional, but none of them would have come out differently if the anti-injunction act were simply a mandatory claims processing rule, you have that on one side. and on the other side, you have davis, where the court accepted a waiver by the solicitor general. the sunshine anthracite coal case, where there also was a waiver, and, there's the williams packing case, which is somewhat hard to understand as viewing the anti-injunction act as a jurisdictional provision. the court said that there could be a suit if -- there is no way

the government could win, and the plaintiff would suffer irreparable harm. now, doesn't that sound like an equitable exception to the anti- injunction act? >> no. i think the -- i think the best interpretation of the court's cases is that it was interpreting a jurisdictional statute. and, indeed, in williams packing, the court said it was a jurisdictional statute. but, again, even if you have doubt about simply the cases, there is more than that because congress has -- has not only not disturbed this court's decision stating that the statute is jurisdictional, they've passed numerous amendments to this anti- injunction act. >> well, it seems - you can't separate those two points. the idea that congress has acquiesced in what we have said only helps you if what we have said is fairly consistent. and you, yourself, point out in your brief that we've kind of gone back and forth on whether this is a jurisdictional provision or not. so, even if congress acquiesced in it, i'm not sure what they acquiesced in. >> well, what you have said, mr. chief justice, has been

absolutely consistent for 50 years, since the williams packing case. the period of inconsistency was after the first 50 years, since the statute was enacted in 1867. and there was a period, as i said, when the court was allowing extraordinary circumstances exceptions and equitable exceptions, but then, very quickly, it cut back on that. and since - and since williams packing, you have been utterly consistent - >> well, even since williams packing, there was south carolina v. regan. and that case can also be understood as a kind of equitable exception to the rule, which would be inconsistent with thinking that the rule is jurisdictional. >> well, again, i mean, i think the best understanding of south carolina v. regan is not that its an equitable exception, but it's the court interpreting a jurisdictional statute as it would interpret any statute in light of its purpose, and deciding in that very special case, it's a very narrow exception, where the - >> mr. long, in bowles, the court looked to the long history of appellate issues as being jurisdictional, in its

traditional sense, not as a claim processing rule, but as a pure jurisdiction rule, the power of the court to hear a case. from all the questions here, i count at least four cases in the court's history where the court has accepted a waiver by the solicitor general and reached a tax issue. i have at least three cases, one of them just mentioned by justice kagan, where exceptions to that rule were read in. given that history, regardless of how we define jurisdictional statutes versus claim processing statutes in recent times, isn't the fairer statement that congress has accepted that in the extraordinary case we will hear the case? >> no.

no, justice sotomayor, because in many of these amendments which have come in the '70s and the '90s and the 2000's, congress has actually framed the limited exceptions to the anti-injunction act in jurisdictional terms. and it's written many of the express exceptions by saying notwithstanding section 7421 - prove doesn't that just that it knows that the court will impose a claim processing rule in many circumstances, and so, in those in which it specifically doesn't want the court to, it has to be clearer? >> well, but congress says, notwithstanding 7421, the court "shall have jurisdiction to restrain the assessment and collection of taxes in very limited" - >> could you go back to the question that justice alito asked. assuming we find that this is not jurisdictional, what is the parade of horribles that you

see occurring if we call this a mandatory claim processing rule? what kinds of cases do you imagine that courts will reach? >> right. well, first of all, i think you would be saying that for the refund statute, as well as for the anti-injunction act -- which has very similar wording, so if the anti-injunction act is not jurisdictional, i think that's also going to apply to the refund statute, the statute that says you have to first ask for a refund and then file, you know, within certain time -- so it would be -- it would be both of those statutes. and, you know, we are dealing with taxes here, if people - >> that wasn't my question. >> i'm sorry. >> my question was if we deem this a mandatory claim processing rule - >> right. >> what cases do you imagine courts will reach on what grounds?

assuming the government does its job and comes in and raises the aia as an immediate defense - >> well, that's - >> where can a court then reach the question, despite - >> that would certainly be the first class of cases, it occurs to me, where, if the government does not raise it in a timely way, it could be waived. i would think plaintiffs would see if there was some clever way they could get a suit going that wouldn't immediately be apparent that - >> assumes the lack of competency of the government, which i don't, but what other types of cases? >> mr. long, i don't think you are going to come up with any, but i think your response is you could say that about any jurisdictional rule. jurisdictional, what's going to happen is you are going to have an intelligent federal court deciding whether you are going to make an exception. and there will be no parade of horribles because all federal courts are intelligent. so it seems to me it's a question you can't answer. it's a question which asks "why

should there be any jurisdictional rules?" and you think there should be. >> well, and, justice scalia, i mean, honestly, i can't predict what would happen, but i would say that not all people who litigate about federal taxes are necessarily rational. and i think there would be a great - >> i just don't want you to lose the second half of your argument. and we have spent all the time so far on jurisdiction. and i accept, pretty much, i'm probably leaning in your favor on jurisdiction, but where i see the problem is in the second part, because the second part says "restraining the assessment or collection of any tax." now, here, congress has nowhere used the word "tax." what it says is penalty. moreover, this is not in the internal revenue code "but for purposes of collection." and so why is this a tax? and i know you point to certain sentences that talk about taxes

within the code -- >> right. >> and this is not attached to a tax. it is attached to a health care requirement. >> right. >> so why does it fall within that word? >> well, i mean, the first point is -- our initial submission is you don't have to determine that this is a tax in order to find that the anti- injunction act applies, because congress very specifically said that it shall be assessed and collected in the same manner as a tax, even if it's a tax penalty and not a tax. so that's one -- >> but that doesn't mean the aia applies. i mean -- and then they provide some exceptions, but it doesn't mean the aia applies. it says "in the same manner as." it is then attached to chapter 68, when that -- it that references that as "being the manner of." well, that it's being applied -- or if it's being collected in the same manner as a tax doesn't automatically make it a

tax, particularly since the reasons for the aia are to prevent interference with revenue sources. and here, an advance attack on this does not interfere with the collection of revenues. i mean, that's -- you have read the arguments, as have i. but i would like to know what you say succinctly in response to those arguments. >> so specifically on the argument that it -- it is actually a tax, even setting aside the point that it should be assessed and collected in the same manner as a tax. the anti-injunction act uses the term "tax." it doesn't define it. somewhat to my surprise, "tax" is not defined anywhere in the internal revenue code. in about the time that congress passed the anti-injunction act,

tax had a very broad definition. it's broad enough to include this exaction, which is codified in the internal revenue code. it's part of the taxpayers' annual income tax return. the amount of the liability and whether you owe the liability is based in part on your income. it's assessed and collected by the irs. >> there -- there is at least some doubt about it, mr. long, for the reasons that justice breyer said, and i -- i thought that we -- we had a principle that ousters of jurisdiction are -- are narrowly construed, that, unless it's clear, courts are not deprived of jurisdiction, and i find it hard to think that this is clear. whatever else it is, it's easy to think that it's not clear. >> well, i mean, the anti- injunction act applies not only to every tax in the code, but, as far as i can tell, to every tax penalty in the code.

>> mr. long, you -- you said before -- and i think you were quite right -- that the tax injunction act is modeled on the anti-injunction act, and, under the tax injunction act, what can't be enjoined is an assessment for the purpose of raising revenue. the tax injunction act does not apply to penalties that are designed to induce compliance with the law rather than to raise revenue. and this is not a revenue- raising measure, because, if it's successful, they won't -- nobody will pay the penalty and there will be no revenue to raise. >> well, in -- in bob jones the court said that they had gotten out of the business of trying to determine whether an exaction is primarily revenue raising or primarily regulatory. and this one certainly raises

-- is expected to raise very substantial amounts of revenues, at least $4 billion a year by the - >> but bob jones involved a statute where it denominated the exaction as a tax. >> that's - >> here we have one where the congress is not denominating it as a tax. it's denominating it as a penalty. absolutely- that's right, and that's obviously why, if it were called a tax, there would be absolutely no question that the anti- injunction act applies. >> absolutely. but even the section of the code that you referred to previously, the one following 7421, the aia, it does very clearly make a difference -- 7422 -- make a difference between tax and penalties. it's very explicit. >> yes, that's -- it does, that is correct, and there are many other places in the code where - >> the best collection i've

found in your favor, i think, is in mortimer caplin's brief on page 16, 17. he has a whole list. all right. so -- i got my law clerk to look all those up. and it seems to me that they all fall into the categories of either, one, these are penalties that were penalties assessed for not paying taxes, or, two, they involve matters that were called by the court taxes, or, three, in some instances they were deemed by the code to be taxes. now what we have here is something that's in a different statute that doesn't use the word "tax" once except for a collection device, and, in fact, in addition, the underlying aia reason, which is to say to the solicitor general, we don't care what you think, we, in congress, don't want you in court where the revenue of a state -- tax injunction act -- or the revenue of the federal government is at stake, and, therefore, you can't waive it. now i got that.

here it's not at stake and here are all the differences i just mentioned. so i ask that because i want to hear your response. >> well, i mean, there are penalties in the internal revenue code that you really couldn't say are related in any -- in any close way to some other tax provision. there is a penalty -- it's discussed in the briefs -- for selling diesel fuel that doesn't comply with epa's regulations, you know. so there are all kinds of penalties in the code, and i think it's - it could be - placeslong, aren't there in this act -- fees and penalties -- that were specifically put under the anti-injunction act? there is one on health care plans, there is one on pharmaceutical manufacturers, where congress specifically said the anti-injunction act is triggered for those.

it does not say that here. wouldn't that suggest that congress meant for a different result to obtain? >> well, i mean, congress didn't use the language the anti-injunction act shall apply - >> no, but it -- it in section 9008 and in section 9010 - >> right. >> it specifically referred to the part of the code where the anti-injunction act is. >> right, all of subtitle f, which picks up lots of administration and procedure provisions, but those -- those are fees, and they are not -- congress did not provide, you know, in the sections themselves that they should be paid as part of a tax return. so they were free-standing fees, and by using that subtitle f language, congress plugged in a whole set of rules for how to collect and administer the fees, and it went not just to assessment and collection -- and the irs has recognized this -- but to examination, privacy, a whole series of additional things. so i think it would be a mistake to look at that language

and say, "oh, here's congress saying they want the anti- injunction act to apply." they are actually doing more than that. and, yes, i grant you, you could look at section 5000a, the individual coverage requirement, and say, well, they could have been clearer about saying the anti-injunction act applied, and that's certainly true, but, again, they were trying to accomplish a lot. maybe - >> it's easier to talk about this case if we just forget the words "for the purpose of restraining assessment and collection." in a sense, that brings the jurisdictional question and justice breyer's question together. it seems to me -- maybe you could just comment on that language. is that sort of language usually contained in a jurisdictional provision? i mean, you often don't know the purpose of a suit until after the thing is underway. i can see it with malicious prosecution and some civil rights cases. does it strike you as somewhat

unusual to have this provision in a jurisdictional case? >> it does strike me, honestly, as a bit unusual, but this is an old statute. i mean, this -- the core language is essentially unchanged since 1867, and, you know, i think that's part of the explanation for it. and, again, it's, you know, become the center of a series of provisions that very carefully control the circumstances in which litigation about federal taxes can take place. >> mr. long, there's another argument that has been made that i would like you to address, and that is all this talk about tax penalties is all beside the point because this suit is not challenging the penalty. this is a suit that is challenging the must-buy provision, and the argument is made that, if, indeed, "must- buy" is constitutional, than these complainants will not resist the penalty.

so what they're seeking is a determination that that "must- buy" requirement, stated separately from penalty, that "must-buy" is unconstitutional, and, if that's so, that's the end of the case. if it's not so, they are not resisting the penalty. >> well, i think that argument doesn't work for two reasons. i mean, first, if you look at the plaintiff's own complaint, they clearly challenge both the minimum coverage requirement and the penalty. at page 122 of the joint appendix they challenge the requirement that the individuals obtain health care coverage or pay a penalty. >> why is that? >> if that's -- if that's the problem, it's easier to amend the complaint. they can just take that out of the complaint.

so it can't turn on that. >> well, yes, i mean, it's -- or another complaint would be filed, but, still, i think that's a serious problem. but even if they had filed a different complaint, i don't think you -- in this case i don't think you can separate the minimum coverage requirement from the penalty because the penalty is the sole means of enforcing the minimum coverage requirement. so -- so, first, i mean, i think these plaintiffs would not be satisfied if the court were to render a judgment saying the minimum coverage requirement is invalidated. the penalty, however, remains standing. anybody who doesn't have insurance has to pay the penalty. then they would have to pay a penalty equal to the cost of insurance and they wouldn't even have insurance. so i don't think that would be - >> well, they say they want to obey the law, and they say that your argument puts them in the position of having to disobey the law in order to obtain review of their claim. and what is your answer to that? >> well, i mean, first of all, i can't find that in the record, in their declarations. don't see a statement that they will, you know, never incur a

penalty under any circumstances. but -- but even if that were so, what this court has said in americans united is the anti- injunction act bars any suit, not just to enjoin the collection of your own taxes, but to enjoin the collection of anyone's taxes. and so even if it were really true that these plaintiffs were not interested in the penalty and would never pay the penalty, if they were to succeed in this case in striking down the minimum coverage requirement the inevitable result would be that the penalty would fall as well, because the government couldn't collect the penalty for failing to follow an unconstitutional requirement, and so it would still be barred because it would be a suit that would prevent the collection of some of the -- >> well, let me take us back to justice kennedy's question about the "for the purpose of" language. i take it you interpret the statute to mean the following.

"for the purpose of" means "having the effect of." is that correct? >> well -- well, i mean, this court in the bob jones case, where a similar kind of argument was being made by the plaintiff in that case, said, look, you know, where the -- where it's inevitable that this is what the suit is about, they're sort of two sides of the same coin, that clearly is a primary purpose of the suit. and it's -- and you can't by clever pleading get away from that. that's just the nature of the situation. >> but, mr. long, aren't you trying to rewrite the statute in a way? the statute has two sections. one is that you have to have insurance section and the other is the sanction. the statute has two different sets of exceptions corresponding to those two different sections. you are trying to suggest that the statute says, well, it's your choice. either buy insurance or pay a -- or pay a fee. but that's not the way the statute reads.

and congress, it must be supposed, you know, made a decision that that shouldn't be the way the statute reads, that it should instead be a regulatory command and a penalty attached to that command. >> well, i would not argue that this statute is a perfect model of clarity, but i do think the most reasonable way to read the entire statute is that it does impose a single obligation to pay a penalty if you are an applicable individual and you are not subject to an exemption. and the reason i say that, if you look at the exemptions from the penalty, the very first one is you are exempt from the penalty because you can't afford to purchase insurance. and it just doesn't seem reasonable to me to interpret the statute as congress having said, well, you know, this person is exempt from paying a penalty because we find they can't afford to buy insurance, however they still have a legal obligation to buy insurance.

that just doesn't seem reasonable. so i -- so i do think, although it's -- i certainly wouldn't argue it's clear -- that that's the best way to understand the statute as a whole. but again, i would say, you know, that's not essential to the question we're discussing now of whether the anti- injunction act applies. again, you know, i think - >> could you tell me why you think the solicitor general's reading creates a problem? >> well, in going back to -- so if the result were to say simply, this is not -- oh, i'm sorry. the solicitor general's reading. so now it's not - >> that it is a jurisdictional bar, but there's an exemption for those items that congress has designated solely as penalties that are not like taxes. >> right. well, i mean, i think the solicitor general's reading would probably create the fewest problems, as i understand

it. i mean, my -- my main objection to the solicitor general's reading is i don't think it makes a whole lot of sense. i mean, basically the solicitor general says every penalty in the internal revenue code, every other penalty in the affordable care act is -- >> but that's not -- that's carrying it too far, because he says if a penalty is designated as a tax by congress then it's subject to the aia, and that's most of the code, the tax code. and he says for those portions of the affordable care act that designate things as taxes, the aia applies. so it's only -- and i haven't found another statute. i'm going to ask him if there's another one. it's only for those statutes in which congress has designated something solely as a penalty. >> right. >> and not indicated that it is a tax. >> right. >> they don't fall within the aia. >> i think my -- my take on it is if you adopted the solicitor

general's approach there are probably three penalties for alcohol and tobacco-related offenses at 5114(c), 5684, and 5761 that i think would be very difficult to distinguish from this one, and possibly the 527(j) penalty for failure to disclose political contributions. if there are no further questions, i would like to reserve my time. >> thank you, mr. long. general verrilli. >> mr. chief justice and may it please the court. this case presents issues of great moment, and the anti- injunction act does not bar the court's consideration of those issues. that is so even though the anti-injunction act is a jurisdictional limit that serves what this court described in clintwood elkhorn as an exceedingly strong interest in protecting the financial stability of the federal government, and even though the minimum coverage provision of the affordable care act is an

exercise of congress's taxing power as well as its commerce power. congress has authority under the taxing power to enact a measure not labeled as a tax, and it did so when it put section 5000a into the internal revenue code. but for purposes of the anti- injunction act, the precise language congress used is determinative. and there is no language in the anti-injunction act -- excuse me, no language in section 5000a of the affordable care act or in the internal revenue code generally that provides a textual instruction that - >> general verrilli, today you are arguing that the penalty is not a tax. tomorrow you are going to be back and you will be arguing that the penalty is a tax. has the court ever held that something that is a tax for purposes of the taxing power under the constitution is not a tax under the anti-injunction

act? >> no, justice alito, but the court has held in a license tax cases that something can be a constitutional exercise of the taxing power whether or not it is called a tax. and that's because the nature of the inquiry that we will conduct tomorrow is different from the nature of the inquiry that we will conduct today. tomorrow the question is whether congress has the authority under the taxing power to enact it and the form of words doesn't have a dispositive effect on that analysis. today we are construing statutory text where the precise choice of words does have a dispositive effect on the analysis. >> well, general, you also have the bailey child labor tax cases, because there the court said that the tax, which was a prohibitory tax alone, was a tax subject to the aia, and then it said it was beyond the court's taxing power in a separate case, correct? >> yes. i do think, justice sotomayor, that, with respect to one of the arguments that my friend

from the nfib has made in of the brief, that bailey v. george is a significant problem because i think their argument on the constitutionality under the taxing power is essentially that the affordable care act provision is the same thing as the provision that was held unconstitutional in bailey v. drexel furniture company. >> that's a different issue. >> but on the same day - right, but on the same day as bailey v. drexel furniture, the court issued bailey v. george, which held that the anti-injunction act did bar a challenge to that provision, even though the court had concluded that it was invalid under the tax power. so -- and i think the reason for that has been -- is clear now after williams packing and bob jones, in that in order to find that the anti-injunction act doesn't apply to something that otherwise would be a tax that triggers it, you have to conclude essentially that there is no substantial argument that

can be made in defense of it as a tax. we don't have that here, so i don't think you can get around the anti-injunction act if the court were to read it, as the amicus suggest it should be read, on that theory. but -- >> mr. verrilli, a basic question about your argument. if you are right about the second part, that is for purposes of the statute, the anti-injunction statute, this penalty does not constitute a tax, then does the court need to decide whether the anti- injunction act in other cases where it does involve a tax is jurisdictional? >> no. i -- i apologize if i'm creating confusion about that, justice ginsburg. we think by far the better route here is to understand the statute as we have proposed that it be construed as not applying here. from the perspective of the united states -- and if i could, i'd like to take a minute on this -- the idea that the

anti-injunction act would be construed as not being a jurisdictional provision is very troubling, and we don't think it's correct. and i -- i would, if i could follow up on a question, justice ginsburg, that you asked mr. long in terms of the language of the anti-injunction act 7421(a), which can be found at page 16a of the appendix to our brief. i -- i'd ask the court to compare that to the language of the very next provision in the code, which is on the next page of our statutory appendix, 17a, which is the refund statute which we've talked about a little bit so far this morning, 7422(a). the refund statute this court held in dolan was jurisdictional, and the court in both dolan and brockamp held that the statute of limitations that applies to the refund statute cases is jurisdictional. the language in 7422(a) is virtually identical to the language in 7421(a) - >> that -- that is correct, although in the refund context,

you have the sovereign immunity problem, in which we presume that has not been waived. >> right. but i - 7421(a) -- were the same - >> the language is quite parallel. >> and -- originally, they were the same statutory provision. >> and -- originally, they were the same statutory provision. they were only separated out later. so i do think that's the strongest textual indication, justice ginsburg, that -- that 7421(a) is jurisdictional. >> but then, general, what i asked you is, if you're right that this penalty is not covered by section 7421, if you're right about that, why should we deal with the jurisdictional question at all? because this statute, correct, the way you reading - read it, doesn't involve a tax that's subject to the anti-injunction act. >> yes, that is exactly our position. and the reason we don't - >> so -- so you -- you agree that we would not -- if we agree with you about the correct interpretation of the statute, we need not decide the jurisdiction.

>> there would be no reason to decide the jurisdictional issue. >> don't you want to know the answer? [laughter] >> justice kennedy, i think we all want to know the answer to a lot of things in this case. but -- but i do -- i do think that the prudent course here is to construe the statute in the manner that we read it. >> but -- but you indicated -- there was a discussion earlier about why does the government really care, they have competent attorneys, et cetera. but -- and you began your argument by saying it would be very troubling to say that it's not jurisdictional. i'd like you to comment on that -- it's not for us to tell a party what's in its best interests. it would seem to me that there might be some instances in which the government would want to litigate the validity of a tax right away and would want to waive. but you say it's -- that's not true. that it's very troubling. >> i think there are two problems. one is the problem that justice scalia identified, that if it's not jurisdictional, then courts have authority to craft equitable exceptions. and it may seem from where we stand now that that authority

is or could be very, very tightly cabined, but if -- if this court were to conclude that it isn't jurisdictional, that does empower courts to find other circumstances in which they might find it equitable to allow cases to go forward in the absence of -- of - despite the existence of the anti- injunction act. and second, although i certainly am not going to stand up here and disparage the attorneys from the united states in the slightest, the reality is that if this isn't jurisdictional, then it's -- the argument -- it's open to the argument that it's subject to forfeiture by a simple omission in failing to raise it in an answer. and that -- and that's a troubling prospect. >> how, if you're troubled by - >> can i ask - >> justice ginsburg. >> how -- how likely is it -- i mean, the government is going to be defending these suits, how likely is it that the government will overlook the anti-injunction act? it seems to me that this is arming the government by saying

it's waivable at the government's option. >> that's -- that is not our assessment of the institutional interests of the united states, justice ginsburg. and we do think that the - the right way to go in this case is to read the statute as not applying to the minimum coverage provision of the affordable care act. >> it was -- it was the calculation of the interests of the united states that your predecessor made in the davis case. there, the -- the solicitor general exercised the authority that we sanctioned to waive the -- the anti-injunction act. and of course, that couldn't be done if it were jurisdictional. >> that's true, mr. chief justice. several points about that, though. we do agree with mr. long's analysis that davis occurred in -- during a time in -- which under the standard nut case, the court had interpreted the anti-injunction act as doing no more than codifying the traditional equitable principles

which allowed courts discretion to conclude that in certain circumstances, a case could go forward. williams packing repudiated that analysis, and bob jones v. simon again repudiated that analysis and said, no, we're no longer abiding by that. it is true that the davis case has not formally been overruled, but we do think it's fundamentally inconsistent with the court's understanding now of - >> davis was the case where a shareholder sues the corporation. >> yes. >> and the remedy is that the corporation shouldn't pay the money to the tax authority. now, it's a little technical, but that isn't actually an injunction against the tax authority collecting. he's not -- they're not restraining the collection of tax. they're saying to the taxpayer, don't pay it. >> yes. and - >> i don't know how far that gets you. >> well, in fairness, justice breyer, the united states did intervene in the -- in the davis case and was a party, and so -- not as far as i'd like, i

guess is the answer. >> don't do it again, because i think that goes too far. i don't think that's restraining the collection of a tax. it's restraining the payment of a tax. >> well - >> you -- you don't want to let that bone go, right? >> our view here is that it is jurisdictional. because it's jurisdictional as this court understands jurisdiction now, it's not waivable. and therefore, we don't think that -- that that part of the davis decision is good law. >> general, can i ask you about reed elsevier? justice ginsburg suggested that the language was very similar in reed elsevier as it is here, but there are even further similarities. reed elsevier pointed out that the provision in question wasn't in title 28. here, too, it's not in title 28. in reed elsevier, it was pointed out that the provision there had numerous exceptions to it. here, too, there are numerous

exceptions that we find that have been created by the courts over the years. in reed elsevier, the question was essentially one about timing. come to court after you file your registration. here, too, the question is one about timing. come to court after you make -- after you pay your taxes. so reed elsevier seems in multiple respects on all fours with this case. why is that wrong? >> i don't think so, justice kagan. first, we think -- i guess i'm repeating myself and i apologize, but -- we think the closest analogue is the very next provision in the united states code, 7422(a), which this court has held is jurisdictional, and is phrased in exactly the same way as 7421(a). in fact, as i said, they were the same provision back in the earlier days. that's the closest analogue. this isn't -- and it's actually 7422 that's a statute that says do something first. but this - this statute is just

a flat-out command that no suit shall be maintained to restrain - >> i take the point - >> the assessment or collection. >> but if you would comment on the similarities of reed elsevier to this case. how do you think it's different, if at all? >> well, because the -- the -- i think the best answer to that is there are no magic words. and that history and context matter, as the court said in henderson. and the history and context here is that 7422 and 7421 function together to protect an exceedingly strong interest that -- that the court has held with respect to 7422 sufficiently strong that it -- it explains the jurisdictional nature of that. the same interest applies here. this isn't just a matter of do x and then you can -- and then you can come to court. it's just a fundamentally different set of interests at stake. so we -- we do think that that makes a big difference. and - >> why, in reed elsevier, you were dividing jurisdiction from claims processing, says you have to register before you can sue.

there are a lot of things you have to do before you can sue. so why isn't reed elsevier like you have to pay a filing fee before you can file a complaint? >> it is -- we do think it's very much in -- in that nature and different from this case, your honor. and one -- one way i think it's helpful to -- to get at this is -- is to look at the history. we've cited a string of court of appeals cases in a footnote in our opening brief, and over time, it's been very consistent that the courts of appeals have treated the anti-injunction act as a jurisdictional provision. again, if the court agrees with our statutory construction, you don't need to reach this issue. but they have -- in fact, one of those cases, the hansen case, the district court in that case had dismissed the complaint under federal rule of civil procedure 12(b)(6). the court of appeals vacated and sent it back with instructions to dismiss under 12(b)(1), which is the subject matter jurisdiction provision. so i do think that, to the

extent this issue is before the court, it is jurisdictional, but it doesn't need to be before the court because of the statutory construction argument that we had offered. >> on your statutory construction argument, is there any other exaction imposed under the internal revenue codes that would not qualify as a tax for anti-injunction act purposes, or is 5000a just out there all by itself? allt's not quite out there by itself. there are other provisions that fall outside of subchapter b of chapter 68 and, therefore, wouldn't be governed by the instruction in section 6671(a), which answers the question about the applicability of the act for most penalties. the ones that we've identified, and i may be overlapping a little bit with mr. long here, one is 26 u.s.c. 857, which poses certain penalties in connection with the administration of real estate investment trusts.

there are provisions that mr. long identified in his brief, sections 6038(a) through (c) of the code, which impose certain penalties with respect to reporting requirements for foreign corporations. we have, in addition, in footnote 22 at page 36 of our brief, identified three provisions that mr. long also identified about -- about alcohol and tobacco. now - >> could we address, general, the question of whether there are any collateral consequences for the failure to buy -- to not buy health insurance? is the only consequence the payment of the penalty? the private respondents argue that there are other collateral consequences such as for people

on probation who are disobeying the law, if they don't buy health insurance they would be disobeying the law and could be subject to having their supervised release revoked. >> yes. that is not a correct reading of the statute, justice sotomayor. the only consequence that ensues is the tax penalty. and the -- we have made a representation, and it was a carefully made representation, in our brief that it is the interpretation of the agencies charged with interpreting this statute, the treasury department and the department of health and human services, that there is no other consequence apart from the tax penalty. and i do think, if i could talk for a couple of minutes about the argument that was discussed as to whether this can be conceived of as a suit just challenging the requirement, which is entirely stand-alone based on inferences drawn from the exemptions. i really don't think that's right. and if i could spend a minute on it, i think it's important.

the exemptions in section 5000a, it is true that there are two categories of exemptions. there are exemptions to the penalty and exemptions to the subsection (a) requirement. but the -- but i think, not only as a practical matter, but as a textural indication and even as a legal matter, they -- both function as exceptions to the requirement. first, as a practical matter, one of those exemptions is a hardship exemption. and if the court will just bear with me for one minute here, it's at page 11a of the appendix to our brief. it provides that a person can go to the secretary of hhs and obtain a hardship exemption for -- which would, as a formal matter here, excuse compliance with the penalty. it seems to me to make very little sense to say that someone who has gone to an official of the united states

and obtained an exemption would, nonetheless, be in a position of being a law breaker. we think another way in which you can get to the same conclusion slightly differently is by considering the provision on the prior page, 10a, which is 5000a -- 5000a(e)(3), members of indian tribes. members of indian tribes are exempt only from the penalty as a formal matter under the structure of the statute here, but, the reason for that is because members of indian tribes obtain their healthcare through the indian health service, which is a clinic-based system that doesn't involve insurance at all. it's an entirely different system. they were taken out of this statute because they get their healthcare through a different system. and it doesn't make any sense to think that persons getting their health care through the indian health service are violating the law because - exempt only from the penalty, but still under a legal obligation to have insurance, when the whole point of this is

that they're supposed to be in a clinic-based system. >> is your whole point that this was inartful drafting by congress. that, to the extent that there is an exemption under the penalty, it's an exemption from the legal obligation? >> i guess what i would say about it, your honor, is that the way in which this statute is drafted doesn't permit the inference that my friends from the nib are trying to draw from it. and there is an additional textural indication of that, which one can find at page 13 of our reply brief. this is a provision that is 42 u.s.c. a, section 18022(e). this is a provision that provides for a certification that certain individuals can get. and it's the paragraph starting with the words "other provisions," contains the quote. and it says, "an individual with a certification that the individual is exempt from the requirement under section 5000a, by reason of section

5000a(e)(1) of such code, is entitled to a certificate that allows for enrollment in a particular program for this category of people." but you can see here, congress is saying it's an exemption under 5000a(e)(1), which is the exemption from the penalty, and not the underlying requirement is, as congress says, an exemption from the requirement of section 5000a. >> sub-section a says directly, "an applicable individual shall ensure that the individual has the minimum essential coverage." and you are saying it doesn't really mean that, that if you're not subject to the penalty, you're not under the obligation to maintain the minimum essential coverage? >> that's correct. and we think that is what congress is saying, both in the provision i just pointed to, your honor, and by virtue of the way -- by virtue of the way the exemptions work. i just think that's the -- reading this in context, that is the stronger reading of the

statute. >> suppose it makes it easy for the government to drop the other shoe in the future, right? you have been under the law subject to this mandate all along. you have been exempt from the penalty, so all they have to do is take away the penalty. >> i don't -- i don't think so, mr. chief justice. i don't think it makes it easy for the government in the future. we think this is the fairest reading of the statute, that the -- that the - you cannot infer from the fact that someone is exempt from the penalty, that they are still under an obligation to have insurance. that's just not the fairest reading of the statute. >> could i - >> i'm sorry, go ahead. >> the nature of the representation you made, that the only consequence is the penalty, suppose a person does not purchase insurance, a person who is obligated to do so under the statute doesn't do it, pays the penalty instead, and that person finds herself in a position where she is asked the

question, have you ever violated any federal law, would that person have violated a federal law? >> no. our position is that person should give the answer "no." >> and that's because - >> that if they don't pay the tax, they violated a federal law. >> but as long as they pay the penalty - >> if they pay the tax, then they are in compliance with the law. >> why do you keep saying tax? >> if they pay the tax penalty, they're in compliance with the law. >> thank you. [laughter] >> thank you, justice breyer. >> the penalty. >> right. that's right. >> suppose a person who has been receiving medical care in an emergency room -- has no health insurance but, over the years, goes to the emergency room when the person wants medical care - goes to the emergency room, and the hospital says, well, fine, you are eligible for medicaid, enroll in medicaid. and the person says, no, i don't want that. i want to continue to get -- just get care here from the

emergency room. will the hospital be able to point to the mandate and say, well, you're obligated to enroll? >> no, i don't think so, justice alito, for the same reason i just gave. i think that the -- that the answer in that situation is that that person, assuming that person -- well, if that person is eligible for medicaid, they may well not be in a situation where they are going to face any tax penalty and therefore - >> no, they are not facing the tax penalty. >> right, right. >> so the hospital will have to continue to give them care and pay for it themselves, and not require them to be enrolled in medicaid. >> right. >> will they be able to take this out and say, well, you really should -- you have a moral obligation to do it. the congress of the united states has said, you have to enroll? no, they can't say? >> i do think it's -- i think it's certainly fair to say that congress wants people in that position to sign up for medicaid. i think that's absolutely right. and i think the statute is structured to accomplish that objective. but, the reality still is that the only consequence of noncompliance is the penalty.

>> general, but i thought the people who were eligible for medicaid weren't subject to the penalty. am i wrong? i could be just factually wrong. >> well, it all -- the penalty is keyed to income. >> yes. >> and it's keyed to a number of things. one is, are -- are you making so little money that you aren't obligated to file a tax return. and if you're in that situation, you are not subject to the penalty. it's also if the cost of insurance would be more than 8 percent of your income, you aren't subject to the penalty. so there -- there -- there isn't necessarily a precise mapping between somebody's income level and their medicaid eligibility at the present moment. that will depend on where things are and what the eligibility requirements are in the state. >> but those people below - >> but as a general matter, for people below the poverty line it's almost inconceivable that they are ever going to be subject to the penalty, and they would, after the act's medicaid reforms go into place, be eligible for medicaid. >> so is your point that the

tax -- so, what we want to do is get money from these people. most of them get the money by buying the insurance and that will help pay. but if they don't, they are going to pay this penalty, and that will help, too. and the fact that we put the latter in brings it within the taxing power. and as far as this act is concerned about the injunction, they called it a penalty and not a tax for a reason. they wanted it to fall outside that, it's in a different chapter, et cetera. is that what the heart of what you are saying? >> that's the essence they called it a penalty. they didn't give any other textural instruction in the affordable care act or in the internal revenue code or that that penalty should be treated as a tax for the anti- injunction act purpose. >> you agree with mr. long, and, in fact, you just agreed with justice breyer that one of the purposes of the provision is to raise revenue. >> it will -- well, it will raise revenue. it has been predicted by the cbo that it will raise revenue, your honor. but even though that's the case, and i think that would be true of any -- of any penalty, that it will raise some revenue, but even though that's the case,

there still needs to be textural instruction in the statute that this penalty should be treated as a tax for anti- injunction act purposes, and that's what is lacking here. >> after this takes effect, there may be a lot of people who are assessed the penalty and disagree either with whether they should be assessed the penalty at all, or with the calculation of the amount of their penalty. so under your interpretation of the act, all of them can now go to court? none of them are barred by the anti-injunction act? >> those are two different things, justice alito. i think for reasons that justice kennedy, i think, suggested in one of his questions to mr. long, all of the other doctrines that are an exhaustion of remedies and related doctrines would still be there. the united states would rely on them in those circumstances. and -- and so, i don't think the answer is that they can all go to court, no. >> well, why is it - >> two former -- two former commissioners of the irs have filed a brief saying that your interpretation is going to lead to a flood of litigation. are they wrong on that?

>> yes. we don't -- you know -- we've -- we've taken this position, after very careful consideration, and we've assessed the institutional interests of the united states and we think we are in the right place. >> but tell me something, why isn't this case subject to the same bars that - that you list in your brief? the tax court, at least so far, considers constitutional challenges to statutes, so why aren't we -- why isn't this case subject to a dismissal for failure to exhaust? >> because we don't - because the exhaustion would go to the individual amount owed, we think, and that's a different situation from this case. if the court has no further questions. >> thank you, general. >> thank you. >> mr. katsas. >> mr. chief justice, and may it please the court. let me begin with the question whether the anti-injunction act

is jurisdictional. justice ginsburg, for reasons you suggested, we think the text of the anti-injunction act is indistinguishable from the text of the statute that was unanimously held to be non- jurisdictional in reed elsevier. that statute said no suit shall be instituted. this statute says no suit shall be maintained. no - >> they are different things. this said the reed elsevier statute says immediately after instituted unless a >> unless the copyright is registered. and this goes -- this goes to the character of the lawsuit. the statute in reed elsevier says, register your copyright and then come back to court. >> why isn't that like a filing fee, before you can maintain a suit for copyright infringement, you have to register your copyright? >> it -- it's a precondition to filing suit. the -- the analogous precondition here is pay your

taxes and then come back to court. the point is - >> no -- that -- that -that's not true. the suit here has nothing to do with hearing the action. it has to do with a form of relief that congress is barring. it's not permitting -- it is not a tax case, you can come in afterwards. it's not permitting the court to exercise what otherwise would be one of its powers. >> it -- it has to be the same challenge, justice sotomayor, or else south carolina v. regan would say the anti-injunction act doesn't apply. you are right that once you file -- once you pay your taxes and then file the refund action, the act of filing the taxes converts the suit from one seeking prospective relief and to one seeking money damages. and in that sense, you could think of the statute as a remedial limitation on the courts. but whether you think of it as an exhaustion requirement or a remedial limitation, neither of those characterizations is

jurisdictional. in davis v. passman you said that a remedial limitation doesn't go - >> it does seem strange to think of a -- a law that says no court can entertain a certain action and give a certain remedy as merely a claim processing rule. what the -- the court is being ousted from -- from what would otherwise be its power to hear something. >> the suit is being delayed, i think is the right way of looking at it. the jurisdictional apparatus in the district court is present. prospective relief under 1331, money damages action under 1346. if the anti-injunction act were jurisdiction-ousting, one might have expected it to be in title 28 and to qualify those statutes and to use jurisdictional limits. >> how do you deal with this case and our gonzalez -- our

recent gonzalez case where we talked about - right. >> the language of the coa statute that no appeal will be heard absent the issuance of? >> gonzalez -- gonzalez v. thaler rests on a special rule that applies with respect to appeals from one article iii court to another. that's -- that explains gonzalez and it explains bowles before it. you have five unanimous opinions in the last decade in which you have strongly gone the other direction on what counts as jurisdictional. >> there is an argument that we should just simply say that bowles applies only to appeals, but we haven't said that. >> no, you came very close. in henderson, justice sotomayor, you said that bowles, which is akin to thaler is explained by the special rule and understandings governing appeals from one article iii court to another. and you specifically said that

it does not apply to situations involving a party seeking initial judicial review of agency action, which is what we have here. textile you're right, the in bowles and thaler are not terribly different, those cases are explained by that principle. under henderson it doesn't apply to this case. the text in this case speaks to the suit, the cause of action of the litigant. it doesn't speak to the jurisdiction or power of the court. the anti-injunction act is placed in a section of the tax code governing procedure. it's not placed in - >> counsel, all of those -all of that in particular - >> you did rely on that in reed elsevier as one consideration. >> and we haven't relied on it in other cases. >> and another -- another consideration in reed elsevier that cuts in our favor is the presence of exceptions. you said three in reed elsevier cut against jurisdictional

characterization. here there are 11. and - >> many of which themselves speak in very clear jurisdictional language. >> well, some of them have no jurisdictional language at all, and not a single one of them uses the word "jurisdiction" to describe the ability of the court to restrain the assessment and collection of taxes, which is what one would have expected - >> basically it begs the difference -- language is relevant, there are a lot of relevant things. but one thing that's relevant in my mind is that taxes are, for better or for worse, the life's blood of government. >> yes. >> and so what congress is trying to do is to say there is a procedure here that you go through. you can get your money back, or you go through the tax court, but don't do this in advance for the reason that we don't want 500 federal judge -judges substituting their idea of what is a proper equitable defense

of when there should be an exception made about da, da, da for the basic rule. no. okay? and so there is strong reason that is there. you tried to apply that reason to the copyright law. you can't find it. registration for the copyright register is not the life's blood of anything. copyright law exists regardless. so the reasoning isn't there. the language -- i see the similarity of language. i've got that. but it's the reasoning, the sort of underlying reason for not wanting a waiver here that -- that is -- has a significant role in my mind of finding that it is jurisdictional. plus the fact that we have said it nonstop since that northrop or whatever that other case is. >> justice breyer, as to reasoning, you -- you give an argument -- you give an argument why as a policy matter it might make sense to have a

non-jurisdictional statute. but of course this court's recent cases time and again say congress has to clearly rank the statute as non- jurisdictional in its text and structure. it seems to me a general appeal to statutory policies doesn't speak with sufficient clarity >> that's fine. i just wanted to ask the question in case you wanted to answer the policy question. >> as to policy -- as to policy i think helvering against davis is the refutation of this view. it is true that in most cases the government doesn't want and congress doesn't want people coming into court. but davis shows there may be some cases including, for instance, constitutional challenges to landmark federal statutes where the government sensibly decides that its revenue-raising purposes are better served by allowing a party to come into court and waiving its defense. that's what the solicitor general did in davis, and this

court accepted that waiver. as for prior cases, we have the holding in davis and the holding in all of the equitable exception cases like williams packing. the government - >> so why don't we say - why don't we say it's jurisdictional except when the solicitor general waives? >> you have used - >> why would that not promote congress's policy of insuring -- or congress, explicitly - >> it's jurisdictional except when the solicitor general waives it? >> yes. it's a contradiction in terms. i don't disagree. >> it is a contradiction in terms. all of your cases analyze the situation as if the statute is jurisdictional, then it's not subject to waiver. if you were to construe this as such a one-off unique statute, it seems to me we would still win because the solicitor general with full knowledge of the anti-injunction act argument available to him

affirmatively gave it up. this is not just a forfeiture where a government lawyer is -- through inadvertence fails to raise an argument. this is a case where the government - >> they raised it and then gave it up. >> they made it below. they know what it is. and not only are they not pursuing it here, they are affirmatively pursuing an argument on the other side. >> mr. katsas, is your basic position when we are talking about the jurisdiction of the district courts a statute has to say it's jurisdictional to be jurisdictional? >> i wouldn't go quite that far. i think at a minimum it has -- it has to either say that or at least be directed to the courts which is a formulation you have used in your cases and which is the formulation that congress used in the tax injunction act but did not use in this statute. >> well, how would -- i mean, i suppose one could try to make a distinction between this case and reed elsevier by focusing on the difference between instituting something and maintaining something, and

suggesting that instituting is more what a litigant does, and maintaining, as opposed to dismissing, is more of what judge does. >> i don't think so, justice kagan, because we -- we have an adversarial system, not an inquisitorial one. the parties maintain their lawsuits i think is the more natural way of thinking of it. if i could turn -- if i could turn to the merits question on the aia before my time runs out. the purpose of this lawsuit is to challenge a requirement -- a federal requirement to buy health insurance. that requirement itself is not a tax. and for that reason alone, we think the anti-injunction act doesn't apply. what the amicus effectively seeks to do is extend the anti- injunction act, not just to taxes which is how the statute is written, but to free-standing

nontax legal duties. and it's just - >> the whole point - the whole point of the suit is to prevent the collection of penalties. >> of taxes, mr. chief justice. >> well, prevent of the collection of taxes. but the idea that the mandate is something separate from whether you want to call it a penalty or tax just doesn't seem to make much sense. >> it's entirely separate, and let me explain to you why. >> it's a command. a mandate is a command. if there is nothing behind the command. it's sort of well what happens if you don't file the mandate? and the answer is nothing. it seems very artificial to separate the punishment from the crime. >> i'm not sure the answer is nothing, but even assuming it were nothing, it seems to me there is a difference between what the law requires and what enforcement consequences happen to you. this statute was very deliberately written to separate mandate from penalty in several different ways.

they are put in separate sections. the mandate is described as a "legal requirement" no fewer than 20 times, three times in the operative text and 17 times in the findings. it's imposed through use of a mandatory verb "shall." the requirement is very well defined in the statute, so it can't be sloughed off as a general exhortation, and it's backed up by a penalty. congress then separated out mandate exceptions from penalty exceptions. it defined one category of people not subject to the mandate. one would think those are the category of people as to whom congress is saying, you need not follow this law. it then defined a separate category of people not subject to the penalty, but subject to the mandate. i don't know what that could mean other than - >> why would you have a requirement that is completely

toothless? you know, buy insurance or else. or else what? or else nothing. >> because congress reasonably could think that at least some people will follow the law precisely because it is the law. and let me give you an example of one category of person that might be -- the very poor, who are exempt from the penalty but subject to the mandate. mr. long says this must be a mandate exemption because it would be wholly harsh and unreasonable for congress to expect people who are very poor to comply with the requirement to obtain health insurance when they have no means of doing so. that gets things exactly backwards. the very poor are the people congress would be most concerned about with respect to the mandate to the extent one of the justifications for the mandate is to prevent emergency room cost shifting when people receive uncompensated care.

so they would have had very good reason to make the very poor subject to the mandate, and then they didn't do it in a draconian way. they gave the very poor a means of complying with the insurance mandate, and that is through the medicaid system. >> mr. katsas, do you think a person who is subject to the mandate but not subject to the penalty would have standing? >> yes, i think that person would, because that person is injured by compliance with the mandate. >> what would that look like? what would the argument be as to what the injury was? >> the injury -- when that subject to the mandate, that person is required to purchase health insurance. that is a forced acquisition of an unwanted good. it's a classic pocketbook injury. but even if i'm wrong about that question, justice kagan, the question of who has standing to bring the challenge that we

seek to bring seems to me very different -- your hypothetical plaintiff is very different from the actual plaintiffs. we have individuals who are planning for compliance in order to avoid a penalty, which is what their affidavits say. and we have the states, who will be subject no doubt to all sorts of adverse ramifications if they refuse to enroll in medicaid the people who are forced into medicaid by virtue of the mandate. so we don't have the problem of no adverse consequences in the case. and then, we have the separate distinction between the question of who has article iii standing in order to maintain a suit and the question of who is subject to a legal obligation. and you've said in your cases that even if there may be no one who has standing to challenge a legal obligation like the incompatibility clause or something, that doesn't somehow convert the legal obligation into a legal nullity.

finally, with respect to the states, even if we are wrong about everything i've said so far, the states clearly fall within the exception recognized in south carolina v. regan. they are injured by the mandate because the mandate forces 6 million new people onto their medicaid rolls. but they are not directly subject to the mandate, nor could they violate the mandate and incur a penalty. >> could i just understand, mr. katsas, when the states say that they are injured, are they talking about the people who are eligible now who are not enrolled? or are they also talking about people who will become newly eligible? >> it's people who will enroll, people who wouldn't have enrolled had they been given a voluntary choice. >> but who are eligible now? >> that's the largest category. think there could be future eligibles who would enroll because they are subject to a legal obligation but wouldn't

have enrolled if given a voluntary choice. but i'm happy to -- i'm happy to focus on currently eligible people who haven't enrolled in medicaid. that particular class is the one that gives rise to, simply in florida alone, a pocketbook injury on the order of 500 to $600 million per year. >> but that does seem odd, to suggest that the state is being injured because people who could show up tomorrow with or without this law will -- will show up in greater numbers. i mean, presumably the state wants to cover people whom it has declared eligible for this benefit. >> they -- they could, but they don't. what the state wants to do is make medicaid available to all who are eligible and choose to obtain it. and in any event - >> why would somebody not choose to obtain it? why -- that's one puzzle to me. there's this category of people who are medicaid eligible. medicaid doesn't cost them anything. why would they resist enrolling?

>> i -- i don't know, justice ginsburg. all i know is that the difference between current enrollees and people who could enroll but have not is, as i said, on the -- is a $600 million delta. and - >> but it may be just that they haven't been given sufficient information to understand that this is a benefit for them. >> it's possible, but all we're talking about right now is the standing of the states. and the only arguments made against the standing of the states -- i mean, there is a classic pocketbook injury here. the only arguments made about -- against the standing of the states are number one, this results from third-party actions. that doesn't work, because the third-party actions are not unfettered in -- in the sense of lujan. they are coerced in the sense of bennett v. spear. those people are enrolling because they are under a legal obligation to do so. the second argument made against the states' standing is

that the states somehow forfeit their ability to challenge the constitutionality of a provision of federal law because they voluntarily choose to participate - >> i'm -- i'm a little bit confused. and this is what i'm confused about. there -- there is a challenge to the individual mandate. >> yes. >> all right. what is - the fact that the state is challenging medicaid, how does it give the state standing to challenge an obligation that is not imposed on the state in any way? >> the -- the principal theory for state standing is the states are challenging the mandate because the mandate injures them when people are forced to enroll in medicaid. now, it is true they are not directly subject to the mandate, but - >> yes. that's what i'm - >> okay. let me -- let me try to >> i'm confused by it. >> let me try it this way -- may i finish the thought? >> go ahead. >> in south carolina v. regan,

the state was not subject to the tax at issue. the state was harmed because -- as the issuer of the bonds, and the bond holders were the ones subject to the tax. so the state is injured not because it is the direct object of the federal tax, but because of its relationship to the regulated party as issuer/bond holder. >> thank you, mr. katsas. >> thank you, mr. chief justice. >> mr. long, you have 5 minutes remaining. >> everyone agrees that the section 5000a penalty shall be assessed and collected in the same manner as taxes. and the parties' principal argument why that does not make the anti-injunction act applicable is that, well, that simply goes to the secretary's activities. and i would simply ask, if --

if you look at chapters 63 and 64 of the internal revenue code which are the chapters on assessment and collection, they are not just addressed to the secretary. there are many provisions in there that are addressed to courts and indeed talk about this interaction, the very limited situations in which courts are permitted to restrain the assessment and collection of taxes. there was a statement made that there aren't -- and many of the exceptions to the anti- injunction act are in the assessment and collection provisions -- there was a statement made that none of these directly confer jurisdiction to restrain the assessment and collection of taxes. that's not true. in footnote 11 of our opening brief, we cite several. i'll simply mention section 6213 as an example. that says -- i quote, "notwithstanding the provisions of section 7421(a), the making of such assessment or the beginning of such proceeding or levy during the time that such

prohibition is enforced, may be enjoined by a proceeding in the proper court, including the tax court. the tax court shall have no jurisdiction to enjoin any action or proceeding or order any refund under this subsection unless a timely petition for redetermination of the deficiency has been filed, and then only in respect of the deficiency that is the subject of such petition." >> and all that's going to really what i think congress's intent was meant to be in sticking the collection thing into chapter 68, and - and it's certainly an argument in your favor. the -the over-arching thing in my mind is it's -- it's up to congress within leeway. and they did not use that word "tax," and they did have a couple of exceptions. and it is true that all this language that you quote -- you know, the first two sentences and so forth, it talks about the use of tax in the irc. it talks about the penalties and liabilities provided by this subchapter.

and we look over here and it's a penalty and liability provided by a different law, which says collect it through the subchapter, and it has nothing to do with the irc. see? so we've got it in a separate place, we can see pretty clearly what they're trying to do. they couldn't really care very much about interfering with collecting this one. that's all the statutory argument. are you following me? you see? i'm trying to get you to focus on that kind of argument. >> i mean, i think i'm following you, but -- but the fact that it's not in the particular subchapter for assessable penalties in my view makes no difference, because they said it's still clearly -- it's assessed and collected in the same manner as the penalty in that subchapter, and those penalties are collected in the same manner as taxes. >> yes, yes. >> and so that's -- i think it's - it's rather detailed, but i think it's a rather clear indication that the anti- injunction act applies. the -- the refund statute that

does specifically refer to penalties, that has nothing to do with this argument that it's assessed and collected in the same manner as a tax. that would simply go to the point that well, you can't just call it a tax, because they've referred to it as a penalty. and finally, on jurisdiction, you know, i think the key point is we have a long line of this court's decisions that's really been ratified by congress with all these exceptions in jurisdictional terms. as i read bowles and john r. sand & gravel, the -- the gist of these decisions was not any special sort of rule about appeals, it's that when we have that situation, which i would submit applies as much to federal taxes as it does to appeals from federal district courts when we have this degree of -- of precedent, including precedent from congress in the form of amendments to this anti-injunction act, that should be -- the presumption should be that this is jurisdictional.

if there are no further questions. >> mr. long, you were invited by this court to defend the proposition that the anti- injunction act barred this litigation. you have ably carried out that responsibility, for which the court is grateful. >> thank you. >> we will continue argument in this case tomorrow. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> this afternoon, more of this week's supreme court oral argument and whether the expansion of laws on medicaid is an intrusion of the state. tomorrow, two remaining arguments. the constitutionality of the individual mandate. later, if it is found unconstitutional, and the rest of the law stay intact? you can watch the argument any time at c-span.org.

a decision is not expected until late june or early july. coming up and about 50 minutes, the clinton global initiative university with bill clinton interviewed by comedian and talk-show host jon stewart. that is scheduled to begin in about 14 minutes. >> this week, republican study committee chairman jim jordan. he talks about why he supports paul ryan's budget which passed the house on thursday. >> there are a lot of things good about his budget. the fact that the policy statements with a incorporate ideas like welfare reform, medicare reform, sending that program back to the states where we think could better serve the recipients. a lot of good things in there.

a thousand times better than the president's budget which never gets to balance. the difference is we get to balance in a reasonable period of time in a time from we believe the american people think is common sense. five years for hours. 28 years for the other. we think it is important that we show what we think we really need to do. we do need to pass something. paul ryan's is a lot better than the president's. >> jim jordan also weighs in on campaign 2012. see the entire interview sunday at 10:00 a.m. and 6:00 p.m. eastern on c-span. >> in his weekly internet and radio address, president obama urged republicans to pass a bill that would make the wealthiest americans pay taxes.

he says the so-called profit rule would spur growth and reduce the deficit. then john boehner talked about the republican strategy to reduce gas prices and create jobs. >> hello. over the last few months, i've been talking about a choice we face as a country. we can either settle for an economy where a few people do really well and everyone else struggles to get by, or we can build an economy where hard work pays off again - where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same rules. that's up to us. today, i want to talk to you about the idea that everyone in this country should do their fair share. now, if this were a perfect world, we'd have unlimited resources. no one would ever have to pay any taxes, and we could spend as much as we wanted. but we live in the real world. we don't have unlimited resources. we have a deficit that needs to be paid down. and we also have to pay for investments that will help our economy grow and keep our

country safe: education, research and technology, a strong military, and retirement programs like medicare and social security. that means we have to make choices. when it comes to paying down the deficit and investing in our future, should we ask middle-class americans to pay even more at a time when their budgets are already stretched to the breaking point? or should we ask some of the wealthiest americans to pay their fair share? that's the choice. over the last decade, we've spent hundreds of billions of dollars on what was supposed to be a temporary tax cut for the wealthiest 2% of americans. now we're scheduled to spend almost a trillion more. today, the wealthiest americans are paying taxes at one of the lowest rates in 50 years. warren buffett is paying a lower rate than his secretary. meanwhile, over the last 30 years, the tax rates for middle class families have barely budged. that's not fair. it doesn't make any sense. do we want to keep giving tax

breaks to the wealthiest americans like me, or warren buffett, or bill gates -- people who don't need them and never asked for them? or do we want to keep investing in things that will grow our economy and keep us secure? because we can't afford to do both. now, some people call this class warfare. but i think asking a billionaire to pay at least the same tax rate as his secretary is just common sense. we don't envy success in this country. we aspire to it. but we also believe that anyone who does well for themselves should do their fair share in return, so that more people have the opportunity to get ahead - not just a few. that's the america i believe in. and in the next few weeks, members of congress will get a chance to show you where they stand. congress is going to vote on what's called the buffett rule: if you make more than $1 million a year, you should pay at least the same percentage of your income in taxes as middle class families do. on the other hand, if you make under $250,000 a year -- like 98% of american families do --

your taxes shouldn't go up. you're the ones struggling with the rising cost of everything from college tuition to groceries. you're the ones who deserve a break. so every member of congress is going to go on record. and if they vote to keep giving tax breaks to people like me -- tax breaks our country can't afford -- then they're going to have to explain to you where that money comes from. either it's going to add to our deficit, or it's going to come out of your pocket. seniors will have to pay more for their medicare benefits. students will see their interest rates go up at a time when they can't afford it. families who are scraping by will have to do more because the richest americans are doing less. that's not right. that's not who we are. in america, our story has never been about what we can do by ourselves -- it's about what we can do together. it's about believing in our future and the future of this country. so tell your members of congress to do the right thing. call them up, write them a letter, pay them a visit, and tell them to stop giving tax

breaks to people who don't need them and start investing in the things that will help our economy grow and put people back to work. that's how we'll make this country a little fairer, a little more just, and a whole lot stronger. thank you. thank you. >> one of the biggest challenges facing hardworking taxpayers right now is the pain at the pump. rising gas prices wreak all kinds of havoc on cash-strapped families, especially in this time when many are still asking, "where are the jobs?" going back to my days running a small business, i've heard plenty of politicians say they'll do something about energy, but never follow up. this has to change. the republican-led house is acting, approving a budget this week that removes government barriers to job creation, including policies that block american energy production and drive up gas prices. this budget now heads to the democratic-controlled senate, where it faces an uncertain fate. you see, the senate hasn't passed a budget in more than 1,000 days, a failure of leadership that has contributed

to washington's stimulus spending binge. the budget, i'm sorry to say, is just the tip of the iceberg. the senate has stalled dozens of house-passed bills, several of which would implement the republicans' all-of-the-above energy strategy to address rising gas prices and help create jobs. all of these energy bills passed with bipartisan support. many are backed by the president's own jobs council. about a month ago, during a meeting at the white house, i asked president obama to consider working with us on these proposals in light of his newfound support for an all-of- the-above energy strategy. the president, who has seen gas prices more than double on his watch, assured leaders in congress there was room for common ground. it was a new sign of hope, but unfortunately, only a brief one. in the weeks since our discussion, president obama hasn't spoken up about these bipartisan, house-passed energy bills, and gas prices continue to rise. about the only thing the president has pushed the senate

to do is to prevent construction of the keystone xl pipeline, a job-creating project that the american people strongly support. he personally lobbied senate democrats before the vote, and that may have made the difference. he also successfully urged senate democrats to take up energy tax legislation that won't lower the price of gas, and according to the non- partisan congressional research service, would actually make it more expensive. clearly the president has some sway over senate democrats. so today i'm challenging president obama to make good on his rhetoric and urge the senate to allow a vote on bipartisan, house-passed energy bills. let's seize on our common ground and move forward on a path to a real all-of-the-above energy strategy. in the meantime, the house will continue to act. this week, republicans launched the next phase of our american energy initiative focused on addressing rising gas prices. this phase includes proposals, for example, to responsibly

increase energy production on federal lands and freeze new refinery regulations that will hurt our economy. the pain at the pump is an urgent issue for hardworking taxpayers and it deserves the same urgency from leaders here in washington. the house is doing its part, but we can do a whole lot more if president obama steps up and heeds the will of the american people. thanks for listening. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> i am appearing here today as one spokesperson for the hundreds of thousands of marines and sailors, their families, and loyal civilian employees who are unknowingly exposed to horrendous levels of toxins through their drinking water in north carolina. >> the documentary chronicles a retired marine and his efforts to expose the truth of toxic drinking water.

he is joined by the film " the producer son day. >> one thing they have done is they have obfuscated the fax so much, they have told so many half truths and total lies, they omitted a lot of information to the media. now, if they were to sit down with me face to face, i could show them with their own documents and counter what they have been saying. they do not want to do that. >> more, sunday night at 8:00 eastern. >> now we will be taking you to george washington university in just a few minutes for continuing coverage of the clinton global initiative university. bill clinton will be interviewed by jon stewart. first an interview with a

washington reporter about the initiative. >> the fifth annual initiative this weekend, and daniel of "the washington post, " writing about it this week. what is its purpose? >> bill clinton came up with the idea five years ago. it brings world leaders together to talk about the big problems. to talk about the big problems. this is taking the same concept and applying it to colleges and college students. the first group gathered in new orleans after hurricane katrina. they looked at a whole bunch of different service projects. the idea is president clinton wanted to take these projects and help students figure out how to make them into reality. it is being more ambitious with the idea of community service which has caught on on college campuses.

>> aside from being the former president, what is his role with the initiative? is it fundraising? is there reaching out to the students attending? >> i think he sees this role of bringing all of these people together and creating the venue for it. the idea is these people need each other. you have a woman from new york university who is stitching dolls for kids who have night terrors. one student has you have a team that is working toward health care needs in sub- saharan africa. and the idea is to get all of these people in one room together and to learn from each other. bill clinton brings his name and credentials to the events. he sort of brings them altogether. >> do a number of these groups

lead with some funding from the group? >> i know that each participant has to have a commitment, and it has to be is this a big thing that addresses a known problem in some sort of novel way. i do not know that anybody is guaranteed any sort of funding or future for their project. the idea is to get these people together and to get them to learn how to make the thing actionable, basically. these are mostly students. they do not know how to be nonprofit directors, or how to launch a company. this is the idea, that they learn to come to do these things. >> he is with the "washington post" and you can read his report at washingtonpost.com. >> and we take you live now to the global initiative from george washington university here in d.c. actually, they are showing the work of the group before randazzjon stewart begins.

♪ >> ladies and gentlemen, please welcome the 42nd president of the united states, william jefferson clinton. [cheers and applause] 9 >> thank you very much. first, before i bring on john stewart, -- jon stewart, and i want to thank him for interviewing us. actually, i am a little hacked off. i thought he was going to interview me instead of me him. i want to start off with the cgiu commitment challenge, or as we call it, the cgiu commitment

bracket. as you know, the final four will be battling out for who plays in the jabeen should game monday night. -- the championship game monday night. while a lot of attention has been given to march madness, we wanted to solvcelebrate our own version. the voting open on tuesday, march 20, with the last finalist. the 2012 cgiu bracket has received almost 200,000 votes, that is more than twice as many as last year. [applause] and in our final four, bamboo spikes battled night monsters. million dollars dollars to on tracking cell phones. and finally, there were two, george washington university's

-- [cheers] -- bamboo spikes, and tracking cellphone. the polls closed an hour ago. we have our winner. panda, cycles. [cheers and applause] so, i want to invite to the stage of the group, all undergraduate here in george washington. [applause] bike.their bamboo b they are committed to creating a sustainable motorized alternative.

they will build it at a fraction of the market value cost, while comparable in quality. they also plan to implement a one to one model, donating one bicycle to bicycles for humanity for every bicycle sold. bicycles for humanity will coordinate with other organizations in africa to distribute the bicycles for free. the bicycles currently retails for about $4,500. but panda cycles will place their product at less than $300. by the end of 2013, the group plans to have sold two dozen, and to donate the same number to africa. if you will order more at a cheaper price, which could be good on any campus in america, we could have 2400. first, i've got to get the championship trophy here.

[cheers] [laughter] one thing i would like to see is, of it like to see these things made all over the world because you can plant bamboo in a way that is very good for the environment, maintain its topsoil, controls erosion. this might be the beginning of a sustainable level of of four people all over the world, thanks to this good idea. -- a sustainable living for people all over the world, thanks to this idea. let's give them at hand. [applause]

thanks, guys. test rides are available outside. [laughter] [cheers] our fifth cgiu meeting, i believe, has been a real success, and i hope you do, too. we had 915 new commitments made at the meeting, which now brings us to more than 4000 since the first meeting. i would like to ask you to add one more. jon and i were talking backstage about this, and he said, will probably get into this in the questions, perhaps, in a humorous way. he said, ok, all of you are overachievers. what about the other 11 million college students? what about the people who cannot bear to think of raising money? i promised a friend of mine that i would talk about this. this is something you can do on

every campus in america for free. and i want to talk to you about it. last year, 39,000 people in america ordaz died from drug overdoses. that is 1000 more than were killed in automobile accidents. increasingly, it is not about heroin or cocaine or crystal meth. it is about prescription drugs. mixed with alcohol. and people are dying in large numbers every year because they do not know that if you drink four or five years and then pop and rock to cotton, for example, it shuts down the part of your brain that tells your body to brief while you are asleep. -- your body to breathe while

you are sleeping in the last couple of months, two men that i knew personally died in their sleep. they were not addicts. they had no intent to die. they had no idea they were putting their lives at risk. no one had told them the simple biochemical impact of mixing a prescription drug with a couple of beers. this is happening all over the country. this is a simple thing that is claiming people's lives. it simply deadens the part of your brain that tells your body while you are asleep. if it happened at noon and semipaste out, the survival rate would be 100%. if it happens at night, you are alone and the mortality rate can be 100%. everyone of you can go back to your campuses and make sure every single student at every

college and university here represented knows that simple fact. no money and next to no time, and you can save a very large number of lives. [applause] and since we are in the middle of this health care debate, you might be interested to know that medical claims caused by prescription drug abuse are now $20 billion a year added to the nation's health-care bill. and since a lot of the people who make those claims are uninsured, that is part of the reason that those who do have insurance pay $1,000 more a year for their health insurance than they would if everybody in america have health insurance.

i asked you to think about this, and to take it seriously, not to be morbid, the father of my friend who died a said he was a good man and he would want his life to mean something. if we could save a few thousand lives because we understand the basic impact of what was essentially an accidental death, repeated over and over and over in this country all the time, we could do an enormous amount. please, when you go home, make sure every student at your school knows this. but if you do, you'll be doing a great thing. let me just say i want to welcome the people who are joining us live on the website at washingtonpost.com and comedy central. [laughter] i keep waiting for steven colbert to appear to demand

equal time. [applause] before i bring out jon stewart i want to briefly thank the people who make xcgiu possible. thank you, george washington, and dr. stephen now, you have been great. [applause] thanks to the peterson foundation, microsoft, peter roberts, a prospect fun, and booze allen hamilton, for sponsoring this and making this meeting possible. they could not be held without its sponsors. and finally, i want to thank all of you who came and participated, who committed. i am grateful that you came from as close as your own campus to as far away as nepal and

turkey, and china and elsewhere. you are very welcome here. we are very grateful to you. [applause] before i ever appeared on the jon stewart show, my daughter told me years ago when she was just a little older than you that more people in her generation got their news from jon stewart that from the network news. [applause] at first, i thought it sounded a little weird. but i can tell you now, i have been on jon stewart's show to talk about two of the three books i have written since i left the white house. he clearly had read them. he knew what the facts were. he had been well briefed. and every other time i've been on there, he really seemed to me to have put in more time and more preparation and ask more serious question, while poking a

little fun at me along the way, then anyone else who has interviewed me. in short, he has done what we need to do more of in our schools. he makes learning fun, and it is still learning. please welcome jon stewart. [cheers and applause] >> thank you very much. hello, how are you guys? how are you? [cheers] it is an absolute honor to be here. you know, it is funny -- >> [unintelligible hollering] >> you have assigned?

i cannot read them in any way. [laughter] as i went over a lot of the projects that these kids are doing, i cannot help but think about how much they remind me of me when i was their age. [laughter] i guess, just a commitment and dedication. no, i cannot tell you how incredibly impressed i am with the work you are doing and with the enthusiasm that you bring to it, and the passion and ingenuity. i made a wrong out of an apple wants. . once.g out of an apple wan i just know how difficult it can be. [laughter] and now i know i sure have used bamboo. included, that is how you get sponsors. [laughter] but i am honored to be here. president clinton is being very honest -- very modest.

he could have taken the route that some ex-president's take, you get a couple of speaking engagements and you get yourself a nice little manar and a pool. but his condition -- commitment to change the world and improving conditions around him has been very inspiring. i want to thank you for everything you have done as well. [applause] >> and i got a better deal. because.com i get to hang out with them. >> is kind of exciting. pryke it keeps me young, as long as i do not look in the mirror. -- >> it keeps me young, as long as i do not look in the mirror. >> it what did you learn this weekend from interacting with the students and some of the products -- projects that they are doing? what did you take away? >> two things. the one is, we have the largest number of non-american students here. people who are citizens of other countries, many of whom go to school in the united states, and

some came from around the world where they are in school. and i learned all over again that all of these young people, partly because of social media and internet communications in general, have a much more global perspective on a person to person basis than any other generation before. the second thing i learned is, every year, the commitments are getting better. they are thinking of things they can do that they really can do. and they understand and they do not overpromise. that is, these guys promised -- they're not or to promise they can build 20,000 bicycles, but they know they can build 24. they understand that the power of the idea rests in part on people replicating the idea, or putting money into what they're doing, so it can be done

everywhere else. but they are thinking about things that they can actually do that not only will help the people they set out to help, but help other people. i think that is really important. i mentioned when we opened that a couple of years ago, a commitment was made -- i confess, i did not notice at the time. and i am surprised, because i care about it. an undergraduate of vendor built who has now graduated -- of vanderbilt who has now graduated. he offers those who are just out of trees -- prison and training in marketing and making sure true they're upscale, good shirts, and people would buy them without knowing it. he knew he could do it with 20 people, so that's what he promised. if everybody in america had a similar plan to train? in may, the repeater rate would go way down.

-- train ex-inmates, the repeater rate would go way down. even though we like to say we are a country of second chances and almost everybody who goes to prison is going to get back out, the truth is, they wear a scarlet letter around their necks for the rest of their lives. it is not. we should try to put people back into productive life in america. that is the sort of thing that we see them do. [applause] >> is there a plan in any way to get -- you know, you've knowcgiu and it has taken -- you've got cgiu and the plan is to make its own entity. is there a plan to have an initiative where people can come in on a larger scale and come in and steal and exploit their ideas? [laughter] wait, that was subtexts. hold on, but so they can get a

sense of where they're going to go? >> last year, i started having a separate lunch with some of the students. i did that today. for the very first time, one of the students as the very same question, can we graduate our ideas up to cgi. and in june in jakarta we're having our second cgi, which i promise -- and in june in chicago we are having our second cgi, which i promised to continue having until we get our economy back to it's full capacity. these are great ideas if someone would support them.

we are trying to get these things take into cgi in new york in september. [applause] i'm embarrassed that we got all the way to the fifth cgiu and i never thought about it. you are always one step ahead of me. >> these kids are thinking when they get out of college that they would like to be employed, because it does not work that way anymore. it is a different world out there. you have been doing this five years. you have been "the most powerful man in the world what is the difference with the ability to affect -- "the most powerful man in the world." what is the difference with the ability to affect change through an ngo? i find there is an erosion of confidence in the government's ability to engage its own corruption, create change in the way you want, and yet, there has been an enormous energy toward these ngo's, toward the smaller

groups. at what has been your experience on both sides of it? >> one i took office as president, confidence in government was very low because the economy was very weak. when i left office, because we had a lot of jobs, because it was the only time out in 40 years when the bottom 20% earnings increase in percentage terms as much as the top 10%, and as many people moved out of poverty -- 100 times as many people moved out of poverty than in the previous 20 years. there was an increased level of confidence in government. the level of confidence in government people's sense of well-being and whether they can do better. but there is a difference. if your president, in theory, you're handling more money, and you can direct it to more places, and you can help more people.

for example, we gave out 2 million micro enterprise loans every year in -- all over the world. but you also had to deal with the things you did not expect to have to deal with, like the incoming fire in bosnia, kosovo, what have you. and you have to go through both congress and bureaucracies and deal with resistances in foreign countries. if you want a foundation -- or your like them with their ideas, you wake up and you start with one thing and you see how far you can walk in and out, how big you can make it. we started out with a very modest proposal with aids drugs, and out at our foundation, we negotiate contracts to give 4 million people, about half of all the people in poor countries in the world, the least expensive high- quality aids medicines. [applause]

any kind of non-governmental work gives you more flexibility and more creativity and ability to build from the ground up. it is hard to help as many people as you can help as president if things are going well and you're not spending your time bailing out a boat. but it is immensely personally rewarding. for example, a couple of years ago i visited this reforestation project where running in allawi through a young -- in mowlawi through a down mowlawian university graduate. the people chose in these three different villages the different kinds of trees they wanted to plant to get their carbon credits. and then decided they would keep only 55% of their income and give the other 45% to their fellow villagers to get them in the system. they have the sense that they needed to plant more trees.

they wanted to reverse global warming and preserve agriculture. it took an hour and a half to drive about 18 kilometers on this road to get there. but it was worth all of the money in the world to me to see one more time in one of boat poorest places on earth, and when that was -- and one of the poorest places on earth, and one that was hard to reach, and one and where they did not know me from adam. i get in your was not adam. i do not look that old. -- i guess they knew i was not adam. i do not look that old. [laughter] the intelligence and effort and social consciousness, in a way, are pretty much evenly distributed in investment and opportunity. it is a real inspiration to keep hitting it. >> you brought up mowlawi. corings up that you are doing cgi just for america.

there is the idea that we're going to do things like we are doing in allawi in places that are "third world" and underdeveloped. there is a program where we connect kids to each other through the internet and classrooms and other things. they connected kids in haiti with kids in harlem. the idea was, through art, to learn an uncertain -- an understanding of each other. they were stunned, because the project upseppa kids in harlem. because they felt from -- ups that the kids in harlem. because they felt from everything they have learned that there lot -- their lives would be far superior. and this was posed earthquake in haiti. but what they found was, the kids in harlem were suffering really badly as well. what do you do about in so- called developed countries, the intractable social problems of poverty?

and how do you attack them in the same creative ways that you can in countries like haiti? >> first, in my mind, the two problems -- i do not think we have to -- we should choose one over the other. that is, the united states does not spend a high percentage of its income on foreign assistance and for and development. if you ask people what we should spend, they say, between 5% to 15% of the budget. if you say, what do we stand? they say, 25% of the budget. the truth is, we spend 1% of the budget. >> you are saying people are what -- sometimes misinformed. [laughter] >> yes, and interestingly enough, these numbers have not changed in 20 years.

it does not matter how many times someone like me says it. people are somehow pre programmed to think we are putting all of this money into foreign assistance in america, when we are not. since we live in an interdependent world, since we need more customers, since america has only about 12% of its gdp a tide -- tied to exports, as compared to germinate, which has -- germany, which has 25%, they do even better than japan. we need to widen the circle to places like africa that feels a special tie to us. on the other hand, i think we need to go back and take a wac at american poverty, too, much harder. i personally believe we should reinvigorate the empowerment zones and grants.

i know the president has proposed this. and i proposed at the end of my term, and we passed a bill to try to make it possible for every area of the country to have an unemployment rate -- that has an unemployment rate above the national average or below a certain income rate, i think everyone of them should become a center for solar and wind power. [applause] all we have to do is build the transmission lines sufficient to carry the power back to the urban areas. we rank first or second in the world in every survey of potential to generate electricity from sun and wind. the problem is, with the exception of california and a few other places, the sun shines

brightest and the wind blows hardest where the people are not. we have 140 separate electrical grids that are connected. if we are about to have a brownout in washington d.c., in theory, they could bring power all the way from california to us. but as you go from one system to another, you lose a lot of power, or the distribution systems are inefficient. in wyoming, they're building a wind farm out. they're having to build their own transmission lines to connect it to california. this is a huge deal. if the government could do-, -- could do that, solar power has gone about as cheap as wind power. it will not be forever, but there is not a lot of overproduction. we could revolutionize the lives of native americans in a way that allows them to be self supporting, diversify their

economies, and lift themselves out of poverty. the same thing is true in the mississippi delta and the appellations -- in adel asia and in the inner city. in harlem and oakland and other cities, i run a mentor should program for the people in inner- city businesses with "inc" magazine. based pick their most successful small business people and -- they pick their most successful small business people and they bring them to work with our folks. you'd be surprised how many businesses we had in harlem that have not computerized their records and did not know how to manage their inventory and had not measured the changes in markets. they are no different than people anywhere. perfectly intelligent enough to make the most of the modern world if they know what their options are and they know what the benefits are. that is what i think is important. and i'm not surprised -- trust

me, most people living in haiti are still much worse off. we still have half a million people living in tents. although, they are moving them out pretty fast. but the haitians are incredibly gifted, creative, hard-working people who have never had a government or society worthy of them. [applause] >> if you are going in when you are for starting to unravel some of these issues and empower local populations, if you are going to rank where you need to attack first, is it order, corruption, health, all three at once? when you are stepping into an area and you want to unleash the type of creativity that you see here and in those communities, you have a hierarchy of issues that you feel like you have to walk through to get to that point? >> yes, but it depends. i have looked at them in three baskets when you're going into a

developing society. first, the number-one thing everyone in the world wants is ag said -- a decent job that pays a decent income. they want to be able to raise their kids in dignity. it will solve all lot of the other problems if they have that. but you also need to help them build systems that will make good behavior have predictable possible consequences. which is why -- predictable positive consequences. which is why our work on building school systems, and health care systems and water systems and energy systems. and to get all that done and ford to work, you have to honest, transparent government, that is also capable of providing security to the people. i see it in those three baskets. then i asked myself, what can i do the most on? in haiti, for example, i worked first on bringing investment in.

second on helping get money for health care systems and school systems and energy systems. and third on supporting the united nations peacekeeping force in trying to get order and in working with the donors to haiti to put every single red cent that went through the commission that i cochaired on the internet. here is how much canada gave. here is who got it. here's what they are supposed to do. and when it is over, you'll get a performance and accounting audit. all of that i think is important. meanwhile, we have got governments were willing to give money to the haitian government to rebuild. but you need to think of it in those three areas. and not every person will have the ability, even me -- i have a pretty wide portfolio and reach. i cannot do all those things in all the countries. we have an enormously gifted

group of people, over 1000 of them, working all over the world and increasing health access. we still will not go into any country unless the government invites us and signs a strict no correction pledge. i do not ask them to have no correction in an area that i'm not working in because i'm not president in. i do not have any control over that. but if somebody pays $500 for my $60 medicine that keeps children alive for years -- for a year, that will be known in 72 hours in some other country where people do not have the $500. if it happens there, you'll have seven or eight kids died for everyone life that we saved. i think the best that ngo's that are actually wanted by government can do is to say, when you are dealing with us, there has to be in a corruption pledge. and we have to be able to

enforce it and monitor it and report on it. i think that is really important. >> has there been something that you have seen through cgi, in the last five years that has, pound for pound, the most impact in terms of when you look back and think of a program, an initiative, a commitment, that for what was put into it gave you the results in a powerful way? >> i cannot say one over the other, but i can say that a lot of these -- all these programs that the students do, the ones that helped people in america and did what they were supposed to do probably have the most immediate impact. students that when home and organize the greening of their own campuses. maximize the retrofit of all the buildings, have more bicycles on

the campuses instead of cars. recycled all the waste. that is something where you can actually say, here we are, here we are a market in america, and we proved it was economical and we did not raise the tuition. instead, it lowered the utility bill of the college. that is something that has had a comprehensive impact. on the other hand, a lot of these commitments -- again, what we've got to do, and i need to help do a better job of getting other people to recognize the potential. we talked a little bit about the socket ba -- about the soccer ball one of my associates a designed ars ago tha soccer ball that would absorb the energy that was driven into

issacharoff -- into a soccer ball and to use it. it was a way of turning human heat energy into a way of making it usable. if you think of all the places in the world that can grow bamboo and where it grows and what it can do to reduce all kinds of other environmental problems, it has staggering potential. what i think we need to do is to do more to try to take these things to scale. we need to take those that prove to be extraordinarily successful and take them to cgi and say, instead of thinking of a new commitment, how about some of these? [applause]

>> how many people do you think cobbled up this weekend, just ballpark? -- coupled up this weekend, just ballpark? [laughter] how many do you think, about 100? oh, sorry. >> one of the promises to myself in my old age is i will try to find an opportunity every day for the rest of my life, even if i'm just saying it to myself on tuesday, i don't know, or i was wrong. know, or, i don't was wrong. i don't know. [laughter] [applause] >> i don't know. at yourways surprised ability to be tenacious, your ability to approach these

issues that are seemingly intractable. has your commitment ever wavered? has your commitment ever been challenged in a way -- not necessarily dark night -- knight of the soul, but i cannot keep banging my head against the wall? everybody will come up against seen the -- seemingly intractable issues. >> the closest i came was after the financial crisis in 2009. my foundation, you know, i did not have any private wealth when i left the white house. i was in debt. everything i do with my foundation comes from other people's contributions. thankfully, i make enough money where i can give to the foundation every year, too. but i did not for a while and

there was not enough to run it. we had a bad year in 2009 and i could not blame anybody. i had people who were giving me a million dollars or more a year who lost 75% of their net worth overnight. we had saved a small endowment -- and i do mean it small, about $27 million. we basically had a decision to make, are you going to shut down what you are doing in ethiopia where i had hundreds of employees trying to build clinics for people, because people are still dying anonymously in ethiopia. they just live out there somewhere and there are no clinics. or are you going to bet that you can come back and blow what you save? and i chose the latter course. i thought, if this does not turn around, i am one dead duck, because there is no way i will ever be able to do this. i was really worried.

i was afraid i could have another health problem. something could happen. i have all of these people's jobs and lives depending on me. what if i make the wrong call here? maybe i should cut back now? instead, i decided to roll the dice and try for one more year, and it worked out fine. but that was hard. and when you work at something and it does not work, that is tough. i had a much more ambitious plan trying to turn around businesses in inner-city areas and have them -- help them hire more people. we started off with a strategy to try to get consulting services across the board. it was highly expensive for the businesses. even the one of our sponsors and others were helping us, it just

did not work. and one of the businesses i helped to start failed, and i was personally involved with it. i am not big on -- i hate to fail. especially when somebody else gets hurt. those things are hard. but you just have to go on. how youot to figure out are going to keep score. if you're going to keep score, keep score -- if you're going to keep score in a way that you should not fail, then you should not play. the only way is if somebody is better off when you quit that when you started. [applause] and it is hard. i do not ever wish i were sitting on an island in the florida keyes somewhere, you know, going to play golf and drinking pina coladas. [laughter] because this is fun for me.

this is the most selfish thing i do. i love bringing all of these young people here. i love listening to their ideas. [applause] and i feel like i should pay for the privilege of doing it. it is fun. it is just that when you have more yesterday's than tamaras, you just hate to fail. -- more yesterday's than tomorrows, you just hate to fail. but you've got to keep banging your head against the wall, pushing the rocks up the hill. sometimes they get there. [applause] >> what i took away from that is that president bill clinton is going to start paying all of you for this privilege. i think that is what i took from it. [cheers] we have all of these students and all of this energy. i want to open it up to them to ask questions of you.

give some ideas that they have. >> i give you permission to ask questions of him. >> i will lie to you. [laughter] president bill clinton will not. i will. is there someone right there who has got a question here we go, right here. there you go. if you can, say your name and then whatever your question is. >> i am a student here at gw. what continues to inspire you in spite of the fact that there are so many problems out there? what continues to inspire you to do the great work you do? this is to both of you. >> i tell you what inspires me the most -- two things. one is, all cgi network.

cgi in september, cgiu, cgi for america -- there seems to be an unlimited number of people who care about other people and find meaning in life by doing something that helps other people do what they ought to do. i mean, you could not come here and listen to your ideas without being inspired. the other thing that inspires me i go out in the world and see the people we're working with. i will give you one simple example. it's when i made an africa trip a couple of years ago. i stopped to see one of our farm projects. we have our agricultural products -- projects in allawi and rwanda. i brought on a farm when i was a little boy. ines -- by love agriculture and i know farmers are equally intelligent everywhere in the world. family farmers take care of the

land and make the most of whatever they have. we are meeting with these 11 farmers and -- we were in tanzanian then, rural tanzania. and a page one -- and these people have little farms, average, one or 2 acres. they pick one person to be the spokesperson, the only woman. she was a widow with a 13-year- old son. her sole asset was a quarter acre of land. in the previous years she had made $80. she and her son, lived on $80 for year. we come in and give them better fertilizer and feed and seed and we take their products to market. the average african farmer loses one half of his or her income every year paying someone to take the food to market because none of them have the vehicles. it is scandalous.

we take the food to market. this woman made $400 the first year we worked with her. her income went up five fold. that is less than $2 a day. but to her, she was relatively rich because it was five times more than the year she -- the year before. i said, what is the best thing about it? and she said, my son finally gets to go to school. school was revenue base, and they have to pay tuition to send their kids to school. she was finally able to send her son to school. according [applause] peyer mdot -- [applause] i am about to go to vienna, to the oldest aids fund-raising initiative in europe, the eighth life ball. they support my foundation every year. every year, i see this couple who run along with a group of catholic nuns and one catholic

priest from brooklyn an orphanage in cambodia that they support and i support. we provide the pediatric aids medicine and keep 320 or more kids alive. and in my second book, the only picture in it is me holding this nine-month old boy whose parents had both died of aids, his father before he was born, and his mother slightly after he was born, and he's been raised as an orphan. he was about to die. he got this medicine. about a year later, somebody in california who worked at the orphanage came out to me when i was doing a book signing and said, i see you have his picture. here is him now. he is two. looking good. then they give me a picture of

him at age 5. looking good. i know when i go back and going to get another picture of this cambodian kids. he does not know me. but he is alive. that is the most meaningful thing in the world to me. it got only knows what he will make of his life, but i know he -- and god only knows what he will make of his life, but i know he will have a chance. [applause] >> if you were asking me, i would jessica mando. -- i would just say, ditto. [laughter] right over here. my group -- >> my group and i just went to the nabih note -- navajo nation and found out that most of the energy is generated off of their land.

what can we do to develop these extremely poor areas in the united states? >> first, i will go back to the energy. every indian nation in the west -- >> [unintelligible] >> your navajo? good for you. >> do you think anyone else is going to shout, "las vegas!" [laughter] >> i went to visit this very problem that you were talking about in my last term as president, where there was a young 13-year-old student who had won this great contest enterprise was her very own personal computer. except, in her home, she did not have an electrical outlet to plug into the computer -- to plug in the computer. my first suggestion is, right now, solar panels are the cheapest they have ever been.

this is what caused the failure of the famous solyndra company. they were designing a solar panel that was actually cylindrical, like this, and had a higher efficiency conversion rate, but had twice as much. like all electrical products, the price goes down as the volume sold goes up. they knew they were going to lose money. that is why the energy department gave them money. because it was technologically so much more efficient. after they did that, the chinese came in and offer $32 billion more in solar subsidies, which immediately collapsed the market, especially for the less efficient chinese products. instead of looking at a four- year latime loss, they were looking at a 10-year time loss, and nobody was willing to wait that long. that is really what happened.

as a result, these panels are cheap. i personally believe the federal government ought to have an initiative and local ngo's batu helped to make every one of these -- ought to help make everyone of these reservations self-sufficient with power. solar can do the same thing that sells phones did for communication. everyone of these buildings on reservations in the united states that will efficiently and with should have solar power. everyone of them that can generate wind power on side should have wind power. then you can have a simple battery that will give you a day or two of storage if the wind does not blow and the sun does not shine. i believe they ought to be able to export power. if they own coal plants, it is okay if they sell it, but the problem is they probably do not get much benefit from them. i do not know what the agreement

was when they gave permission to build the plant on the site. but energy independence would be a great place to start with diverse lot -- diversifying income of the native american reservations. [applause] >> over here. right there. yes, sir? >> my name is edward from the university of oxford in the uk. my question is, in africa, since president bill clinton pays a lot of visits to africa, i know that most of the people there, past and present, hold you in high regard. would you encourage presidents when they leave power to actually engage in similar initiatives? [cheers and applause] >> he hit a nerve. >> you know, there is a program

funded by a somali billionaire who made a lot of money in the cellphone business to actually give cash stipends to former presidents who were honest when in office and wish to do public service when they get out of office. is a great idea. i actually keep in touch with, for example, every year at the cgi -- almost every year -- two former african presidents come. donna has a pretty good record. they keep -- ghana has a pretty good record. they keep rolling over people in elections. ensign ago -- and senate all, they have an honest election honestsenegal, they had --

senagal, they had an honest election there as well i have done work with south africa, with the leader -- leaders there and with nelson mandela to bring education about aids. a lot of those people are still very vigorous, very interested. and of course, before mr. mandela got so frail, i supported all of his charitable work in south africa. i try to go every year on his birthday and see him and do some event that supports the do the work of the foundation, or the work of some other foundation that he supports. i think it is something that can make a real difference in africa. [applause] >> right there. the guy next to the guy in the

blue. [cheers] , ladies, please. he is not a piece of me. he has ideas. >> i come from the university of california pacific. this is my second conference at cgiu and i'm impressed with the commitments being made here. i get inspired as well and i made commitments to what i can. not to bring peace in afghanistan, because i cannot do that. my question is, all of these commitments that people make here, they go back to their countries and they have security to follow through on those commitments. when i make a commitment, my commitment is at risk, because it is not secure. if i make a commitment to go to kandahar or helmand, i am in danger of being attacked by the taliban. what can be done to bring peace,

in your opinion, having served as the united states president, and now with all of your success in mobilizing an army of change agents to do that in other countries? what can be done? because my dream, and i think everyone can hear that, that we should see on cnn, bbc, aljazeera, news about commitment, about changing the rules, not war. [cheers and applause] >> nicely done. [applause] >> afghanistan is a particularly difficult case for three reasons. one, there's the question of the capacity of the government and its allies, not just the united states, but the other countries that are there, to actually

create a secure environment. second, there is the alienation caused by the widespread corruption. and third, the most productive, most likely path to a less violent future on a daily basis would be some sort of agreement between the afghan government and the taliban, and most people question whether that can be done without the guarantees of the constitution for equal rights for women, and girls being severely eroded. we are in a terrible moral dilemma. you want fewer people to die and you want to stop the violence, and you do not think the government as currently constituted will ever fully be able to defeat the taliban and dominate the country. but if you make a deal under conditions of weakness, or

without guaranteed enforcement, you may be selling out the futures of countless women and girls. that is not the answer you want. and sometimes i get to say i do not know what i do not want to say it, but that is the truth. my experience has been working in other areas that were dominated by violence, nothing as bad as afghanistan but in different places. when the president was still in place and pakistan -- i had my differences with him. to his credit, we did support and a big press conference. the bouchard of government actually invited my foundation to provide the equipment and the

training. it was the first non african muslim neighborhood and ask us to come in. we have a problem here. will you help us? i feel that what we did do -- none of our people were ever heard there or anything. we were able to negotiate place by place security arrangements with the power that the that thought it was worth doing. my guess is given the conflicts of the taliban and government, in order for you to go safely there is probably a deal to become with somebody locally. it will probably have to be done that way. if you have the support of the right people and government, i

think it would make a difference. the united states has said we would be happy to support the resumption of the talks between the taliban and government but we do not want to sellout the future of everywoman and girl in afghanistan to make peace. it is a horrible dilemma. the best somebody like you can do -- and i applaud you for loving your country and making commitments to help it -- it maybe we can make a deal that would secure the safety and freedom of movement for the people involved in your commitment in the specific areas for the specific purposes you want. i have had some success in doing that in other countries. so far somebody promises they will do it, nobody has ever double crossed us get on a deal like that. [applause]

>> somebody give him a hard question. >> from rochester, new york. with the economic situation as it is, is a hearty enough to go to college and get a job at the graduate. it is even harder to graduate and try to start a business with humanitarian endeavors. how do you suggest we go ahead and try to help the world while at the same time keep our heads above water. >> i can take this one. i think you might want to host your own tv show. i have found the money terrific. we have a real broad platform. that is what i would recommend. you might want to help her in a more practical way. >> i want to compliment you on

inviting the competition. most people do not do that. here is my specific suggestion. you can find this out on the internet or you can contact my foundation and we will give you information. there are eight or 10 foundations in america whose specialty is funding other people's non-governmental activities. vital voices could help. the rockefeller foundation. there are other people that do it. there are foundations with a lot of money that are interested in doing this. assuming you could find somebody who likes her idea in this economy, it might be easier to start a business that is an nog

and to find a job that you find. i believe once we get the direct student loan program fully implemented in america for people who did not take bank loans over and above that -- all their loans came from the student loan program -- when that is fully implemented, and i think it will move it up until the implemented next year, from their forward i think you will have less pressure because everybody's loan obligation per year will be tied to your income. your loan payments will be a function of your job. your job is not have to become a function of your loan payments.

in 1993 my first year as president, i pass this as an option for all the colleges and banks went crazy because they had guaranteed loans. a lot of students took advantage of it. the students saved $9 billion and lower interest and repayment. the ones who joined it could pay back as a fixed percentage of their income and the taxpayers saved $4 billion. that is because when people can pay their loans, they do. when president obama was elected to give them a mandatory program to direct student loans. it took a few years to get implemented. when that is that i think it will change everything. i think a lot of young people like you will be able to say, you know, i always kind of wanted to teach school for a year or two but i cannot do it for life.

i have $50,000 in loans. it is totally irrelevant now. it will be capped as a percentage of your income. you might say, i will go teach on a native american reservations or add an inner- city school for a couple of years to see what it is like in the maybe i will go into business. you will be able to afford to do it because he will not be bankrupted by your own loan repayment obligations. you all remember that when you are going through this. [applause] >> my name is brittany king. i am a graduate student from houston, texas. >> from houston, texas? >> yes. my mother is a survivor of domestic abuse. i know when you came under earlier you said we in this room are overachievers. because of my past have not

always been that way. my first semester of college i failed out with everything else was facing. last night its sentiments a college's universal but opportunity is not. how'd we optimize the talent of those who do not have the same opportunity, somebody like me who has had to fight hard to be standing today with everything i have had to save. how do we make that something real question marks this is an excellent opportunity that i saw out. >> how did you get through it and how did you become a good student? did somebody help you? was that somebody back in your home? was it somebody on your college campus? how did you get to where you

are? >> i think because my daughter was so dependent on me as a single mother. looking into her face knowing we will make it. had she not been there, i may not be standing today. i think i always had an unwavering determination. i recognize that everybody may have that character trait. when i wake up and i see i still have the air to take breath, i say i have a purpose on this earth. i know there are those who might feel there is no purpose. i will say i have had -- i have had people who have come alongside me and encouraged me and told me to keep pushing. those were people i saw out. some people who saw my determination and resilience who helped me. for those who may not have that drive or motivation or a child saying, what are we going to eat tonight, what do we do for those people? >> that is a great question.

[applause] there has been an extraordinary amount of publicity given to the problem of abuse of children, both physical and sexual abuse in the past several months. not only the well known case at penn state but a major league baseball player has just written his memoirs about his own experience. the senator from massachusetts, scott brown, wrote a memoir about his own spirits. -- his own experience. i think one of the things you can do -- all of you can do is

to try to get the people who work with this to establish some kind of beachhead on every campus so people would have somebody who could get them over this. one of the things you have to do is get to the point where you either put it in a box somewhere or forgive somebody or go rein them out or what ever so they do not hold you prisoner anymore. your daughter basically -- is it your daughter or son? because you had to carry out her, you did not have the option -- care about her, you did not have the option of being a prisoner of your past. your daughter sets you free. with people who do not have children, they have to have something else that will set

them free. i will tell you an interesting story. the day nelson mandela was released from prison and early 1991. i got chelsea out of bed. she was somewhat younger than she is now. i sat her up on the kitchen counter and i told on the tip -- i turned on the television and i said, they are letting nelson mandela out of prison today. this might be the most important thing you ever see in terms of a political event. he walks down this dusty road, this dramatic gesture. he gets into a car. he drives out to freedom. before you know it, he is president. when mandela and i became friends, i said, you are a great man but you are also a canny

politician. it was smart to invite your jailers to the politician. it was essential to invite the party to put you in prison to be part of the government. tell me the truth. i told him about getting chelsea up to watch him. i said when you were watching -- walking down that road, did you not pay their debts again? he said, of course i did. i was full of hatred and fear. i had not been free and so long. i realized if i hated them after i got in that car and got through that gate, i would still be their prisoner. [applause] he smiled and said, i wanted to be free. i let it go.

he looked at me and said, so should you. so should everybody. in all these cases of childhood abuse, it is so caught up with things that are wrong, what should not happen to people, with the power of relationships are. it is so hard to let it go. there are people who do this all of the time. on every continent. think about what it is like in africa for all the children who are turned into soldiers. it is the cruelest of all kinds of child abuse, but in the end it is about a longer being a prisoner to it. you have to give people the strength of mind to look forward instead of backwards. your daughter set you free. [applause]

>> let me see if i can get somebody from up in the back. >> hello. i am an undergraduate at the university of pittsburgh. we have been talking a lot about how wonderful it is we are all getting off of our butts and committing ourselves to these events and we hold babies in africa and we sped off numbers about how well development has helped these countries. what about the negative impact of foreign aid? we have not heard a thing about that all weekend. >> she is talking about the negative impact. i think she is talking about people being sick of bono. are there any negative impacts to foreign aid? >> there can be negative impacts. there can be negative impact of

development. if foreign aid is not held accountable it can reinforce the status quo in a country and reinforce the amount of money for corruption. secondly, foreign aid can be a project the donor fills the country needs that the country has not bought into. in that case, it will be wasted money as soon as the money runs out, the project will vanish and will not have any lasting impact. foreign aid can be harmful if a country sees that less than half the money appropriated is being spent in the country on the people because the developed countries -- ngos are getting cut off the top. there are lots of problems with foreign aid. i spend a lot of time trying to help improve its impact.

obviously, i have a conflict with the united states now. i do not do that. i tried to help improve the impact of american foreign aid by seeing that a higher percentage of it is spent in the country on the people it was intended to reach. if we had a simple requirement like the health-care law that 85% of all the money that you pay and health care goes to your health care and said a profit for promotion, if 85% was all appropriated by every country had to be spent in the country was assigned to help in a way that was transparent, accountable, and honest, that would dramatically increase the impact of whatever dollars are appropriated by parliaments and congress around the world. let me also say that there can

be corruption and private development, too. that is the well-known resorts course. why do so many countries with oils, minerals wind up with average people pour and the economy polluted, because they pay off people who want to be paid off. they do not reinvest money into the country. one of the most rewarding things i do is work with canadian mining countries to pump money into funds in bolivia and peru to reinvest some of their profits into the areas where mining occurs to diversify the economy and strengthen society so when the mines play out the people are better off. every country in the world with mining or oil wells could have their money spent -- there is a reason why the income is twice that in any other despite it is

smaller. they put 100% of the money into a trance parent trust. the money goes into a trust. -- transparent trust. you know you can follow the money to see if it is in the trust. is spent to benefit the people and diversify the economy. that is all transparent. that could be the biggest boon to africa and normal ordinary people would see their incomes rise. we mostly just have climate change projects in nigeria. i go there once a year to a major press event where a nigerian press brings in all the people from different sections of the economy and bring some people like me to tell them that they should be honest and transparent because it would work better and point out how it is working in other places because if nigeria works, south

africa works, and you can avoid the worst of what is going on in the condo and give them a responsible path forward. the rest would have magnets that would develop more rapid and positive growth. there are problems with private development, they both need to be addressed in a way that benefits real people in the countries affected. >> right there in the baseball cap. >> i am putting a lot at risk for speaking right now. i have to bring up an issue i feel need to be addressed. during your presidency you sign significant legislation such as don't ask don't tell and the defense of marriage act. there is obviously a focus on alleviating poverty and making commitments to sustainability, education, health, and development. i identified as being a minority

because of my association with -- the make considerable differences both in america and across the world. they are still most at risk for teen suicides. what can we do to secure treatment for all americans? when will this country finally ruled that separate is an equal when it comes to the social institution of marriage. i will not ask my teacher leader to domestic partnership me. i am -- i refuse to be treated as a second-class citizen. [applause]

>> the answer to the gay marriage question is this. this supreme court is not even sure you should have to have health insurance. they are not about to say that you have a constitutional right to be married. they will say it is a matter of state law. but i think we are making progress there. my answer on the marriage issue is, i have changed my position and a lot of other people have. we got it in your. you have to keep working and you will get there. since you brought it up, i t why for doing it. i am always curious at house elected people's memories are. lgt community must wonder how i maintain support in the communities and so did those two things. here is why. i did not sign do not ask don't

tell until both houses of congress had voted by a veto- proof majority for a resolution saying if i kept trying to put gays in the military, they would go back to making it a crime. colin powell came to me and said, if you accept this, you are beat on this other thing. if you accept this, here is how we will enforce it. no gay person will be asked about his sexual orientation. getting the materials, going to gay bars out of uniforms, marching in gay pride parades out of the uniform, and none of that will be used to kick somebody out of the military. we will leave this alone if you agree to this. rather than go back to what happened, i agree to do it. what happened? the minute i left a broke every single commitment they made to

me. the reason i supported it in the first place was partly because and the first gulf war, the military allowed more than 100 gay members of the service to put their lives at risk in the 1991 knowing they were gay, waited until they put their lives at risk, waited until the war was over and kicked them out. it is true, i did it. if you understood what my options were, i am not sure i did the wrong thing. on the doma bill, the whole purpose was to keep the congress from voting out a constitutional amendment banning gay marriage in the u.s. constitution. if it got to the states it would almost certainly back then have secured the votes of three- quarters of the state legislatures and the country. it was a total calculation based on the ipods -- we may have been wrong, but most of the leaders of the gay community believe

that if we did not go along with that, the republican congress would put a gay marriage ban amendment to the federal constitution. they would get the votes in the house and the senate and they would send it to the states. i may have been wrong, but i think under the circumstances as we believed it would happen it was worth it. since then there has been steady, long the progress toward recognizing gay marriage. which i support. [applause] >> i am from california, which revisited when you were in office. my city is about 140,000 people

, and we last year were the sixth highest city per capita in homicide rates in the entire country. we have the highest incarceration rate per county in california of locking up youth under the age of 18. my question to you is how do be as students and youths who are trying to break down some of these barriers in trying to reduce the use recidivism rate and the incarceration rate, how do we break down some of the barriers that we confront with establishments like our local judges, our local district attorneys? >> let me ask you something. why do you think the incarceration rate is so high? why do you think the crime rate is so high? why do you think it happens? >> i think it is a two part

answer. one is because our lack of resources and our educational system in our area. the other is because our local district attorney has -- i will drop the hammer and three u. -- threw away the key -- mentality. >> what percentage involves drugs or guns? >> it is a very minimal amount. a lot of the times our youth is getting incarcerated because of what some people call crimes of passage. maybe sometimes under age drinking, smoking marijuana -- which is kind of like a life passage kind of crime. [laughter] >> let me ask you a question.

would you consider "dark side of the moon" by pink floyd a life passage crime. >> i have no idea what that is. [applause] >> i am so old. >> i am guessing that was something in the 1960's. >> yes. >> let me ask you a question. in my second term, we had a drop in not just the crime rate, but we really went after juvenile offenses and try to keep people out of prison. one thing that we did was to appropriate enough money for after-school programs for 1.5 million young people. i gather a lot of them have been cut now under all these financial constraints that california has been under.

i believe that we have to go back to turning the schools into community centers, leave them open every night and on the weekends. offer real support to kids. we also started something in philadelphia that eventually had half of a million kids in called "gear up." we would tell people in middle school they could go to college. we would tell them, you can go to college and here are with your benefits will be. we promise you right now if you do these things in school and follow this path. i think you have to figure out -- most people do not want to fail. most people want to succeed. first they do not think they will be able to so they do dumb things. they do not know how to.

i do not think there is a magic elixir here. i think you have to go child by child and figure out if they each need a mentor of some kind. then we need to put them on a path for the future by the time they are 13. they're probably not that many in detention under 13. i think somehow they have to be able to choose their schools over the street. i do not care how we find the money, we have to find a way to go back and find a way to turn the schools into community centers. let me give you one example. andre agassi, the famous tennis player, started a school at las vegas. he put it in the poorest

neighborhood in las vegas, one of the poorest and all of nevada. it was the first school in the entire county to receive an excellent rating from the state. they are open all the time, every night and every weekend. all of the parents, whether they are two parent or single working moms are invited to come into the schools. they give all of them computer training. they give the mailing with the teachers. they give the kids something to do at night and on the weekend. the school recognizes that the families are under enormous assault economic and otherwise. these kids are in trouble. they also start early preparing them either to move into a training program where they can get a decent job or go on to college. it has made a huge difference. andre agassi is not one of these

celebrities that has to have a charity so you can check the box and somebody else run said. he runs that school. he has people who do that, but he is heavily involved in it and the lives of the kids. it is stunning what happened once they went after every one of these kids one by one by one. they went after their families one by one. they made them all feel they had a home in the school and they were committed to their success. somehow we have to recreate that for everybody. when we leave here the basketball games are on tonight. [laughter] i want to say this because it relates. you have what maybe a fascinating game between kentucky and louisville.

louisville has all of these kids -- there is no way in the world should be in the final four. they have a great point guard. they did not expect to be there. the coach said an interesting thing that might relate to celinas. he said how did you do this? these kids had no business being in the final four. he said, everybody who plays this game wants to succeed. some do not believe they can. first everybody has to believe they can. then it turns out the one to succeed for different reasons. some want to make their mother's proud. some want to make their parents proud. someone to show their dad they are still good. some want to do it for teammates. people want to succeed for different reasons. you have to convince everybody that the only way you can

succeed in your own terms is if you are part of a team that is doing something bigger and better than you are. it was really smart -- somehow, all of these kids getting in trouble, they drift off. most of them are not bad kids. it is connected. they think life is a dead end anyway. we have to bring them back in. i have no better idea than what i have seen work in las vegas and several other places. you have to make the school the governing community institutions. when the economy picks up again, that is the first in congress ought to think about doing. you can give all the tests in the world and do this other stuff, but kids have to believe they can succeed. they want to believe they can succeed. they have to be given away to do it. their families have to be given a space to support them. i think putting everyone in jail -- there are too many people in jail in this country in my opinion. [applause] >> we have been given the all

clear sign. that is all the time that we have. i wanted to very briefly state what an honor it has been to be here. [applause] you know a lot of things. it is always a pleasure to hear you speak. i rarely have been in a room where i felt like i would like to work for each and every one of you. you are a pretty incredible group of individuals. i wish to the greatest success and all the commitments you have been working on. i want to thank president clinton. >> see you tomorrow morning. thank you very much. [applause] [captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute]

>> if you missed any of the conversation, we will show it again tonight at 9:55 eastern. today and tomorrow c-span is rearing the supreme court oral argument dealing with the constitutionality of the health care law. in just a moment the question about whether the expansion of medicaid is an intrusion on the state. tomorrow a look at the constitutional -- a look at the constitutionality of the individual mandate. the core's final argument on the law was about the expansion of medicaid. this case is on appeal from the 11th circuit in atlanta. that held two-one that congress

had overreached ruling the individual mandate unconstitutional. the medicaid expansion was permissible. this is one hour 25 minutes. >> we will continue argument this afternoon in case 11-400, florida v. department of health and human services. mr. clement. >> mr. chief justice, and may it please the court -- the constitutionality of the act's massive expansion of medicaid depends on the answer to two related questions. first, is the expansion coercive? and, second, does that coercion matter? >> mr. clement, can i ask you just a matter of clarification? would you be making the same argument if, instead of the federal government picking up 90% of the cost, the federal government picked up 100% of the cost? >> justice kagan, if everything else in the statute remained the

same, i would be making the exact same argument. >> the exact same argument. so that really reduces to the question of why is a big gift from the federal government a matter of coercion? in other words, the federal government is here saying, we are giving you a boatload of money. there are no -- there's no matching funds requirement, there are no extraneous conditions attached to it, it's just a boatload of federal money for you to take and spend on poor people's healthcare. it doesn't sound coercive to me, i have to tell you. >> well, justice kagan, let me --i mean, i eventually want to make the point where, even if you had a stand-alone program that just gave 100%, again, 100% boatload, nothing but boatload, why there would still be a problem. >> yes. i mean, you do make that argument in your brief, just a stand-alone program, a boatload of money, no extraneous conditions, no matching funds, is coercive?

>> it is. but before i make that point, can i simply say that you built into your question the idea that there are no conditions. and, of course, when you first asked, it was what about the same program with 100% matching on the newly eligible mandatory individuals, which is how the statute refers to them, and that would have a very big condition. and the very big condition is that the states, in order to get that new money, they would have to agree not only to the new conditions, but the government here is -- the congress is leveraging their entire prior participation in the program - >> well, let me give you a hypothetical, mr. clement. >> sure. >> now, suppose i'm an employer, and i see somebody i really like, and i want to hire that person. and i say, i'm going to give you $10 million a year to come work for me. and the person says, well, i -- you know, i've never been offered anywhere approaching $10 million a year. of course, i'm going to say yes to that. now we would both be agreed that that's not coercive, right? >> well, i guess i would want to know where the money came from. and if the money came from - >> wow. wow. i'm offering you $10 million a year to come work for me, and

you are saying that this is anything but a great choice? >> sure, if i told you, actually, it came from my own bank account. and that's what's really going on here, in part. and that's why it's not >> but, mr. clement - >> -- simply a matter of saying - >> mr. clement, can that possibly be? when a taxpayer pays taxes to the federal government, the person is acting as a citizen of the united states. when a taxpayer pays taxes to new york, a person is acting as a citizen of new york. and new york could no more tell the federal government what to do with the federal government's money than the federal government can tell new york what to do with the moneys that new york is collecting. >> right. and if new york and the united states figured out a way to tax individuals at greater than 100% of their income, then maybe you could just say it's two separate sovereigns, two separate taxes, but, we all know that in the real world, that to the extent the federal government continues to increase taxes, that decreases the ability of the states to tax their own citizenry, and it's a real tradeoff. >> is that a limit on the

federal government's power to tax? >> what's that? >> are you suggesting that at a certain point, the states would have a claim against the federal government raising their taxes because somehow the states will feel coerced to lower their tax rate? >> no, justice sotomayor, i'm not. what i'm suggesting is that it's not simply the case that you can say, well, it's free money, so we don't even have to ask whether the program's coercive. >> now, counsel, what percentage does it become coercive? meaning, as i look at the figures i've seen from amici, there are some states for whom the percentage of medicaid funding to their budget is close to 40% but there are others that are less than 10%. and you say, across the board this is coercive because no state, even at 10%, can give it up. what's the percentage of big gift that the federal government can give?

because what you're saying to me is, for a bankrupt state, there's no gift the federal government could give them ever, because it can only give them money without conditions. no matter how poorly the state is run, no matter how much the federal government doesn't want to subsidize abortions or doesn't want to subsidize some other state obligation, the federal government can't give them 100% of their needs. >> and, justice sotomayor, i'm really saying the opposite, which is not that every gift is coercive, no matter what the amount, no matter how small. i'm saying essentially the opposite, which is there has to be some limit. there has to be some limit on coercion. and the reason is quite simple, because this court's entire spending power jurisprudence is premised on the notion that spending power is different, and that congress can do things pursuant to the spending power that it can't do pursuant to its other enumerated powers precisely because the programs are voluntary. and if you relax that assumption that the programs are voluntary, and you are saying they are coercion, then you

can't have the spending power jurisprudence - >> what makes them coercive, that the state doesn't want to face its voters and say, instead of taking 10%, 20%, 30%, 40% of the government's offer of our budget and paying for it ourselves and giving up money for some other function? that's what makes it coercive - >> well - >> -- that the state is unwilling to say that? >> maybe i can talk about what makes it coercive by talking about the actual statute at issue here and focusing on what i think are the three hallmarks of this statute that make it uniquely coercive. one of them is the fact that this statute is tied to the decidedly nonvoluntary individual mandate. and that makes this unique, but it makes it significant, i think. i will continue. i thought you had a question. i'm sorry. the second factor, of course, is the fact that congress here made a distinct and conscious

decision to tie the state's willingness to accept these new funds, not just to the new funds but to their entire participation in the statute, even though the coverage for these newly eligible individuals is segregated from the rest of the program. and this is section 2001a3 at page 23a of the appendix to the blue brief. >> isn't that true of every medicaid increase? that each time -- i mean, and this started quite many years ago, and congress has added more people and given more benefits -- and every time, the condition is, if you want the medicaid program, this is the program, take it or leave it. >> no, justice ginsburg, this is distinct in two different directions. one is, in some of the prior expansions of the program, but not all, congress has made covering newly eligible individuals totally voluntary. if the states wants to cover the newly eligible individuals, they will get the money, but, if they don't, they don't risk any of their existing participation programs. the 1972 program was a paradigm of that. it created this 209(b) option for states to participate.

this court talked about it in the gray panthers case. there were other expansions that have taken place, such as the 1984 expansions, where they didn't give states that option, but, here's the second dimension in which this is distinct, which is, here, congress has created a separate part of the program for the newly eligible mandatory individuals. that's what they called them. and those individuals are treated separately from the rest of the program going forward forever. they are going to be reimbursed at a different rate from everybody who's covered under the preexisting program. now, in light of that separation by congress itself of the newly eligible individuals from the rest of the program, it's very hard to understand congress's decision to say, look if you don't want to cover these newly eligible individuals, you don't just not get the new money, you don't get any of the money under the - >> where does it say that? i'm sorry, where does it say that? >> it says -- well, it -- where does it say what, justice breyer? >> what you just said. you said, congress said, if you don't take the new money to

cover the new individuals, you don't get any of the old money that covers the old individuals. that's what i heard you say. >> right. >> and where does it say that? >> it says it -- there's two places where it says it. >> yeah, where? >> the 2001a3 makes it part of my brief. >> where is it in your brief? >> that's at page 23 a - >> in the blue brief? >> blue brief. >> 23a. okay. thank you. >> and this makes not the point about the funding cutoff. this makes the point just that these newly eligible individuals are really treated separately forevermore. >> i want the part about the funding cutoff. >> right. and there, justice breyer - >> and that cite section is what? >> i don't have that with me - >> well, i have it in front of me. >> great. perfect. thank you. >> and i will tell you what i have, what i have in front of me, what it says. >> right. >> and it's been in the statute since 1965. >> exactly. >> and the cite i have is 42 u.s.c. section 1396(c). so are we talking about the same thing? >> if that's the -- if that is

the provision that gives the secretary - >> yeah, okay. >> -- among other things -- >> and here's what it says at the end. >> -- the authority to cut off all participation in the program, yes. >> it says, "the secretary shall notify the state agency" -- this is if they don't comply -- "that further payments will not be made to the state or, in his discretion, that payments will be limited to categories under or parts of the state plan not affected by such failure, which it repeats until the secretary is satisfied that he shall limit payments to categories under or parts of the state plan not affected by such failure." so, reading that in your favor, i read that to say, it's up to the secretary whether, should a state refuse to fund the new people, the secretary will cut off funding for the new people, as it's obvious the state doesn't want it, and whether the secretary can go further.

i also should think -- i could not find one case where the secretary ever did go further, but i also would think that the secretary could not go further where going further would be an unreasonable thing to do, since government action is governed by the administrative procedure act, since it's governed by the general principle, it must always be reasonable. so i want to know where this idea came from that should state x say, "i don't want the new money," that the secretary would or could cut off the old money? >> and, justice breyer, here's where it comes from, which is from the very beginning of this litigation, we've pointed out that what's coercive is not the absolute guarantee that the secretary could cut off every penny, but the fact that she could. >> all right. now, let me relieve you of that concern, and tell me whether i have. that a basic principle of administrative law, indeed, all law, is that the government must act reasonably.

and should a secretary cut off more money than the secretary could show was justified by being causally related to the state's refusal to take the new money, you would march into court with your clients and say, "judge, the secretary here is acting unreasonably, and i believe there is implicit in this statute, as there is explicit in the ada, that any such cut-off decision must be reasonable." now, does that relieve you of your fear? >> it doesn't for this reason, justice - >> i didn't think it would. >> well, but here's the reason. here's the reason, justice breyer, it doesn't. one is, i mean, i don't know the opinion to cite for that proposition. second is, we have been making in this litigation since the very beginning this basic point, the government has had opportunities at every level of this system, and i suppose they will have an opportunity today to say, "fear not, states, if you don't want to take the new conditions, all you will lose is the new money."

>> and i said -- i said because it could be, you know, given the complexity of the act, that there is some money that would be saved in the program if the states take the new money, and if they don't take the new money there is money that is being spent that wouldn't otherwise be spent. there could be some pile like that. it might be that the secretary could show it was reasonable to take that money away from the states, too. >> mr. clement - >> but my point is, you have to show reasonableness before you can act. >> -- do you agree -- do you agree that the government has to act reasonably? do we strike down unreasonable statutes? my god! >> and, justice scalia, i mean - >> the executive has to act reasonably, that's certain, in implementing a statute, but, if the statute says, in so many words, that the secretary can strike the whole -- funding for the whole program, that's the law, unreasonable or not, isn't it? readat's the way i would

the law, your honor. >> yeah, but i have a number -- all right. >> and if i could just add one thing just to the discussion is the point that, you know, this is not all hypothetical. i mean, in -- there was a record in the district court, and there is an exhibit 33 to our motion to summary judgment. it is not in the joint appendix. we can lodge it with the court if you'd like. but it's a letter in the record in this litigation, and it's a letter from the secretary to arizona, when arizona floated the idea that it would like to withdraw from the chip program, which is a relatively small part of the whole program. and what arizona was told by the secretary is that if you withdraw from the chip program, you risk losing $7.8 billion, the entirety of your medicaid participation. so this is not something that we've conjured up - >> all right. >> mr. clement - >> to make you feel a little better, i want to pursue this for one more minute. there are cases, and many, of which justice scalia knows as well, which uses the holly hill, uses the same word as this statute -- in the secretary's discretion.

and in those cases, this court has said, that doesn't mean the secretary can do anything that he or she wants, but, rather, they are limited to what is not arbitrary, capricious, and abuse of discretion, in interpreting statutes, in applying those statutes, et cetera. end of my argument, end of my question. respond as you wish. [laughter] >> well, justice breyer, i'm not sure that the court's federalism jurisprudence should force states to defend on how a lower court reads holy hill. i think that, really, right here, what we know to an absolute certainty is that this secretary -- this statute gives the secretary the right to remove all of the state's funding under these programs. and think about what that is, just - >> mr. clement, do you think that the federal government couldn't, if it chose, congress, say, the system doesn't work. we are just simply going to rehaul it. it's not consistent with how --

what we want to accomplish. we're just going to do away with the system and start a new health care plan of some sort. and, states, you can take the new plan, you can leave them. we are going to give out 20% less, maybe 20% more, depending on what congress chooses. can congress do that? does it have to continue the old system because that is what the states are relying upon, and it's coercive now to give them a new system? >> justice sotomayor, we are not saying we have a vested right to participate in the medicaid program as it exists now. so, if congress wanted to scrap the current system and have a new one, i'm not going to tell you that there is no possibility of a coercion challenge to it, but, i'm not going to say that it - >> that's what i -- i want to know how i draw the line, meaning - >> well, can - >> -- i think the usual definition of coercion is, i

don't have a choice. i'm not sure what -- why it's not a choice for the states. they may not pay for something else. if they don't take medicaid, and they want to keep the same level of coverage, they may have to make cuts in their budget to other services they provide. that's a political choice of whether they choose to do that or not. but when have we defined the right or limited the right of government not to spend money in the ways that it thinks appropriate? >> well, justice sotomayor, before -- i mean, i will try to answer that question, too. but the first part of the question was, you know, what if congress just tried to scrap this and start over again with a new program? fundamentallys is different and why it's fundamentally more coercive, because congress is not saying, we want to scrap this program. they don't have a single complaint, really, with the way that states are providing services to the visually impaired and the disabled under pre-existing medicaid. and that's why it's particularly questionable why they are saying that if you don't take

our new money, subject to the new conditions, we are going to take all of the money you have previously gotten, that you have been dependent on for 45 years, and you are using right now to serve the visually impaired and the disabled - >> mr. clement, may i -- may i ask you -- question another line. you represent, what, 26 states? >> that's right, justice ginsburg. >> and we are also told that there are other states that like this expansion, and they are very glad to have it. the relief that you are seeking is to say the whole expansion is no good, never mind that there are states that say, we don't feel coerced, we think this is good. you are -- you are saying that because you represent a sizeable number of states, you can destroy this whole program, even though there may be as many states that want it, that don't feel coerced, that say --

think this is a good thing? >> justice ginsburg, that's right, but that shouldn't be a terrible concern because, if congress wants to do what it did in 1972 and pass a statute that makes the expansion voluntary, every state that thinks that this is a great deal can sign up. what's telling here, though, is 26 states, who think that this is a bad deal for them, actually are also saying that they have no choice but to take this because they can't afford to have their entire participation in this 45-year- old program wiped out, and they have to go back to square one and figure out how they are going to deal with the visually impaired in their state, the disabled in their state - >> mr. clement, i didn't take the time to figure this out, but maybe you did. is there any chance that all 26 states opposing it have republican governors, and all of the states supporting it have democratic governors? is that possible? >> there's a correlation, justice scalia. >> yes. [laughter] >> let -- let me ask you

another thing, mr. -- mr.clement. most colleges and universities are heavily dependent on the government to fund their research programs and other things, and that has been going on for a long time. and then title ix passes, and a government official comes around and say -- says to the colleges, you want money for your physics labs and all the other things you get it for, then you have to create an athletic program for girls. and the recipient says, i am being coerced, there is no way in the world i can give up all the funds to run all these labs that we have, i can't give it up, so i'm being coerced to accept this program that i don't want. why doesn't your theory -- if your theory is any good, why doesn't it work any time something -someone receives something that is too good to

give up? >> well, justice ginsburg, there is two reasons that might be different. one is, this whole line of coercion only applies -- is only relevant, really, when congress tries to do something through the spending power it couldn't do directly. so if congress tried to impose title ix directly, i guess the question for this court would be whether or not section 5 of the 14th amendment allowed congress to do that. question for this court would be whether or not the amendment allowed congress to do that. i imagine you might think that it did and that some might take issue with that. one way around that, if congress can do it directly, you do not have to ask if there is something special. that is a fair case about funding. >> i am trying to understand here. i know that there are -- there is a line between pressure and coercion. we have never had in the history of this country any federal

program shutdown. it becomes coercive to be in it. >> the second thing about my answer to the prior question, i also think it might be the spending on certain private universities are something that congress can do. it does not matter if it is coercion. if they're trying to get the states to expand their medicaid program -- there may be some limits on that. i am not sure. there may not be some things they can do. when we take the premise, which i don't think there's a disagreement, congress cannot simply say, states, you must expand your medicaid program. if we take that as a given, we have to ask the question of whether or not it is coercive. your second question, you ask, where is the case that says we have crossed that line? this is that case.

>> this applies as well to the 1980 extension. it requires the extension for children up to 18. all those prior extension seemed just as big in amount, just as big in the number of people on the road. they are all governed by precisely the same statute that you're complaining of here, which has been in the loss since 65 -- 1965. >> i am not saying that absolutely -- here are reasons why they're different. the expansion of medicaid since 1984 is breathtaking. the federal spending was a shade over $21 billion. right now, it is $250 billion. that is before the expansion. >> if you are right, doesn't that mean --

>> we are not here with a one- trick pony. this-she makes this uniquely coercive. . the best place to look is the government's own numbers. >> when did this program become too big? give me a dollar number. >> 3 trillion -- three trillion-- $3 trillion over the next three years. >> as a percentage of gdp, it was big. it will go to a little bit over 3% of gdp. now go look at the comparable numbers, which i did look at, for the expansion we were talking about before, the

expansion up to 18, or from 0 to 6. while you can argue those numbers, it is pretty hard to argue that they are roughly comparable as a percentage of the prior program or as a percentage of gdp. if i am right on those numbers, or even roughly right, i don't guarantee it, then, would you have to say, indeed, medicaid has been unconstitutional since 1964? if not, why not? >> the answer is no. we are here saying the three things that make the statute unique. >> what are your second and third? i want pins and needles. >> one is the sheer size. two is the fact that this is uniquely tied to an individual mandate that is decidedly not voluntary. they have leverage the prior participation in the program, not withstanding they have broken this out.

suppose you had the current program and congress wakes up tomorrow and says we think that there's too much fraud and abuse in the program, and we're going to put some new conditions on how the states use this money so we can prevent fraud and abuse, and we're going to tie it to everything that's been there initially. unconstitutional? >> no, i think that is constitutional because i think that's something that congress could do directly. it wouldn't have to limit that to the spending program. and i think 18 u.s.c. 666 is -- is a statute -- you know, it may -- it's in the criminal code. it may be tied to spending, but i think that's -- that's a provision that i don't think is constitutionally called into question. >> i guess i don't get the idea. i mean, congress can legislate fraud and abuse restrictions in medicaid, and congress can legislate coverage expansions in medicaid. >> well, justice kagan, i think

there's a difference, but if i'm wrong about that and the consequence is that congress has to break medicaid down into remotely manageable pieces as opposed to $3.3 trillion over 10 years before the expansion, i don't think that would be the end of the world. but i really would ask you to focus on specifically what's going on here, which is they take these newly eligible people -- and that's a massive change in the way the program works. these are people who are healthy, childless adults who are not covered in many states. they say, okay, we're going to make you cover those. we're going to have a separate program for how you get reimbursed for that. you get reimbursed differently from all the previously eligible individuals. but if you don't take our money, we're going to take away your participation in the program for the visually impaired and disabled. if i may reserve the balance of my time. >> well, i'm -- i'm not sure my colleagues have exhausted their questions, so - >> i guess my greatest fear, mr. clement, with your argument is the following -- the bigger the problem, the more resources it needs. we're going to tie the hands of the federal government in choosing how to structure a cooperative relationship with the states. we're going to say to the

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

can't -- you don't -- you're not entitled to our money, but once you start taking it, the more you take, the more power you have. >> well, justice sotomayor, a couple of points. one is, i actually think that sort of misdescribes what happened with medicaid. i mean, states were, as you suggest, providing for the poor and the visually impaired and the disabled even before medicaid came along. then all of a sudden, states - the federal government said, look, we'd like to help you with that, and we're going to give you money voluntarily. and then over time, they give more money with more conditions. and now they decide they're going to totally expand the program, and they say that you have to give up even your prior program, where we -first came in and offered you cooperation, we're now going to say you have to give that up if you don't take our new conditions. secondarily, i do think that our principle is not that when you get past a certain level, it automatically becomes coercive per se. but i do think when you get a program and you're basically telling states that, look, we're going to take away $3.3 trillion over the next 10 years, that at that point, it's okay to

insist that congress be a little more careful that it not be so aggressively coercive as it was in this statute. and i would simply say that -- we're not here to tell you that this is going to be an area where it's going to be very easy to draw the line. we're just telling you that it's exceptionally important to draw that line, and this is a case where it ought to be easy to establish a beachhead, say that coercion matters, say there's three factors of this particular statute that make it as obviously coercive as any piece of legislation that you've ever seen, and then you will have effectively instructed congress that there are limits, and you will have laid down some administrable rules. >> mr. clement, the chief has said i can ask this. >> he doesn't always check first. [laughter] >> as i recall your -- your theory, it is that to determine whether something is coercive, you look to only one side, how

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

>> and, well -- it is. but i mean -- i might have missed something, but both of those seem to be the hallmarks of coercion. [laughter] >> no, no, no. to say -- to say you're -- when you say you're coerced, it means you've been -- you've been given an offer you can't refuse. okay? you can't refuse your money or your life. but your life or your wife's, i could refuse that one. [laughter] going clement, he's not home tonight. [laughter] >> i'm talking about my life. i think -- take mine, you know? [laughter] >> i wouldn't do that either, justice. >> i won't use that as an example. forget about it. >> that's enough frivolity for a while. but i want to make sure i understand where the meaningfulness of the choice is taken away. is it the amount that's being offered, that it's just so much money, of course you can't turn it down, or is it the amount that's going to be taken away if you don't take what they're offering? >> it's both, your honor. and i think that that's -- i

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

states have gotten pretty dependent, so let's call this whole federalism thing off. and i just think it's too important, because, again, the consequence -if you think about it -- if -- the consequence of saying that we're not going to police the coercion line here shouldn't be that well, you know, it's just too hard, so we'll give the federal congress unlimited spending power. the consequence ought to be, if you really can't police this line, then you should go back and reconsider your cases that say that congress can spend money on things that it can't do directly. now, we're not asking you to go that far. we're simply saying that, look, your spending power cases absolutely depend on there being a line between coercion - >> but could you tell me - >> -- and voluntary action. >> i don't understand your first answer to justice kagan. you don't see there being a difference between the federal government saying we want to take care of the poor, states, if you do this, we'll pay 100% of your administrative costs. and you said that could be coercion. all right? burden the amount of that the state undertakes to

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

back to that point, do you? >> well, then i'll make that argument on behalf of texas. [laughter] >> but it's not -- it's not what my argument depends on, and that's the critical thing. it's one aspect of what makes this statute uniquely coercive. and i really think if you ask the question, what explains the idea that if you don't take this new money, you are going to lose all your money under what you have been doing for 45 years to help out the visually impaired and the disabled, nobody in congress wants the states to stop doing that. it is leverage, appearance simple. >> if the inevitable consequence of your position was the federal government could just do this on its own, the federal government could have medicaid and medicare. that would be true. if in florida, or texas or some

of the objecting states, there are huge federal bureaucracies. >> i would like to elaborate that the one word answer is accountability. if the federal government will spend your instrumentality and the citizens are hacked off the can bring a complete and what makes this so pernicious is that the federal government knows the citizenry will not take lightly . they get the benefit of administering these -- this program. it makes it confusing for the citizen because it is being administered by state officials. that is confusing. the idea behind cooperative federal state programs was exactly the federal was my idea. it was to give the states the ability to administer those programs, to give the states a

great deal of flexibility and that is exactly what medicaid is. >> that is what medicaid was. the question is, what will it be going forward? and i take the point, cooperative federalism is a beautiful thing. mandatory federalism has little to recommend it. it does not mean that there are no federal mandates and no federal restrictions involved in a program that uses 90% here, 100% federal money. it means this flexibility -- about how it wishes its money to be used. if i give you a gift certificate for one store you can i use it for other stores but still you can use it for all kinds of different things. >> i agree that if it is cooperative federalism and the states have choices, then that is perfectly ok. but when -- that is why

voluntary and portion is important. as long as it is voluntary, the state officials should not complain. about the way the state is administering a federal program. the point it becomes coercive, it is not fair to complain -- tell the citizen to complain to the state official. i'm not saying it is the best solution. but it is better than what you get when you have mandatory federalism and to use the accountability central to the provisions in the constitution. >> may it please the court. this will provide millions of records -- americans with the opportunity to have access to health care. it is an exercise in the

spending clause power that complies with all the limits set forth in the decision and the states do not contend otherwise. the states are asking this court to do something unprecedented which is to declare this a course of exercise. what do you think we meant in those prior cases where we said the federal government cannot be coerced. give us a hypothetical. >> i will be more precise about it. what the court said -- it is possible where there is coercion. i can think of something. one example i could think of them might serve would be the condition, the fundamental

transformation in the structure of state government in which the state did not have a choice but to accept it. and so anything else so long as -- >> you have to locate the state house in some other city. >> the conditions are real. none of those have addressed the coercion. it will be all right for the federal government to say same program. if you do not take it, you lose every federal dollar for every program. that would raise the germaneness issue. how does germaneness -- it gets

to be harder. that is germane. getting to do a -- >> your saying it will not fail. >> they're trying to get at the same thing. it is quite different here and i would like to if i could -- >> i am trying to understand. if you could accept the fact that there is a portion limit. the federal government money might take a back and that is the voluntary ness of your choice. it does seem -- we are assuming the federal government cannot do this. under the constitution. if it gets the state to agree to it, that it can. the karen stern is if you do not agree, you lose all your money,

whether that is saying dilatation in the constitution is largely meaningless. >> i do not think this is a case that presents the question. assume. the recognize any limitation on that concern? >> this isn't it needs to be considered an appropriate case and we acknowledge that. i do not think it is so dependent that is hard to say in the abstract that there is -- >> there is no such case as far as you know. >> i am not prepared to say right here. >> congress has authority to act. >> i do think it is important to

look at an issue like this. it has to be considered in the factual context. we have great news for you. we know that your expenditures on education are huge financial burden. we're going to take that off your shoulders. we will impose a special federal education tax which will raise the same amount of money as all the states now spend on education. we will give you a grant that is equal to what you spent on education last year. this is a great offer. we think you'll take it. but of course, if you take it, it will have some conditions. we will set rules on teacher tenure, collective bargaining, and curriculum, textbooks, and many other things. if you take it you have to follow out on all these things

trade if you leave it, you'll have to capture citizens and you have to pay the federal education tax. -- would that be the point where financial inducement is coercion? >> i do not think so. the argument the states are making is this is not a going in proposition. they're in a position where they do not have a choice because of everything that happened. >> if that is the case then there is nothing left. as a practical matter, i disagree. .

that is real and political constraints to operate. >> i would have thought there was a serious political scot constraint but that did not work. >> sometimes that will work. >> with respect to the situation like that one, the state has the education system and they can decide if they're going to go in. it is important to trace through medicaid. it is not the case that the norm here is that the federal government has offered to the states the opportunity to stay where they are or at another piece. we can debate that, in 1972, one way or another. starting with the 1984 expansion with respect to pregnant women

and infants, it was an expansion of the entire program. 1989, same thing. 1990, kids 6 to 18, same thing. every major expansion, same thing. i think the history of the program in the context of the article that preserves the right of the government a man -- to amend going forward, this is something -- the evolution of it. we heard the question whether or not the secretary would use this authority to the extent available. is there circumstances you are saying that would not be permissible? i can take all your money if you

do not make it. i win. every time it seems that would be the case. why should we not be concerned about the extent of authority that the government is exercising simply because they could do something less? we have to analyze the case on the assumption that is how it will be exercised. >> it would not be responsible of me to stand here in advance of any situation coming before the secretary and commit to how that would be resolved one way or another. >> i appreciate that. there are in the statute. i think it is real. i do think back to the circumstances non -- quex it has never been used. >> we just heard about today. there has never been -- it has never been used to cut off.

they're going to give in. there will go to this situation we have here. the state's argument is as they said in their briefs, they articulated it a little bit differently this afternoon. it is not what you stand to gain but we stand to lose. an important thing in evaluating that argument is truly 60% of medicaid expenditures are based on optional choices. i do not mean by the optional choices of the states to stay in the program. to expand the benefits and services. >> does that not require states

to keep at the existing level? this act phrases that so states cannot go back. >> there is the maintenance of effort provision until such time the medicaid expansion takes place and the exchanges are in place. that appear -- applies to the population. you can take anybody out. it does not apply to the optional benefits were the states to have flexibility. they can still reduce optional benefits that they're providing. also with respect to demonstration projects, they do not have to keep them in. there is also the state has a budgetary crisis, it can get a waiver as wisconsin did. that is a provision that does a that is a provision that does a