broun, upon which further proceedings were postponed and upon which the noes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: 13th amendment offered by mr. broun of georgia. the chair: a recorded vote has been requested. those in support of the request for a recorded vote will rise and be counted. a sufficient number having arisen, a recorded vote is ordered. members will record their votes by electronic device. this will be a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]

the chair: on this vote, the yeas are 172, the nays are 245, the nays are -- the amendment is not adopted. 249. the yeas are 172, the nays are 249. the amendment is not adopted. the unfinished business is the request for a recorded vote on the 14th amendment offered by the gentleman from georgia, mr. broun, on which further proceedings were postponed, on which the noes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: 14th amendment offered by mr. broun of georgia. the chair: a recorded vote has been requested. those in favor of a recorded vote will rise and remain standing. a sufficient number having risen, a recorded vote is

ordered. members will record their votes by electronic device. this is a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]

the chair: on this vote, the yeas are 172, the nays are 250. the amendment is not adopted. the unfinished business is the request for a recorded vote on the amendment offered by the gentleman from utah, mr. chaffetz, upon which the -- upon which further proceedings were postponed and on which the noes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: amendment offered by mr. chaffetz of utah. the chair: those in favor of a recorded vote will rise and remain standing. a sufficient number having risen, a recorded vote is ordered.

members will record their votes by electronic device. this is a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]

the chair: on this vote, the yeas are 157 --

the chair: on this vote, the yeas are 157, the nays are 267. the amendment is not agreed to. the unfinished business is the request for a recorded vote on the second amendment offered by the gentleman from california, mr. mcclintock, on which further proceedings were postponed and on which the noes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: second amendment offered by mr. mcclintock of california. the chair: a recorded vote has been requested. those in favor of a recorded vote will rise and remain standing. a sufficient number having risen a recorded vote is ordered. members will record their votes by electronic device. this is a two-minute vote. [captioning made possible by the national captioning

institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]

the chair: on this vote, the yeas are 240erk nays are 342, the amendment is not agreed to. the unfinished business is the request for a recorded vote on amendment number 11 prinned in the congressional record offered by the gentleman from california, mr. mcclintock, on which further proceedings were postponed and on which the noes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: amendment number 11 offered by mr. mcclintock of california. the chair: a recorded vote has been requested. those in favor of the request for a recorded vote will rise and remain standing. a sufficient number having risen, a recorded vote is ordered. members will record their votes by electronic device. this is a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]

the chair: on this vote the yeas are 123, the nays are 300. the amendment is not adopted. the unfinished business is the request for a recorded vote on the amendment offered by the gentleman from arizona, mr. flake, upon which the noes preconscious of which further proceedings were postponed and which the noes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: amendment offered by mr. flake of arizona. the chair: a recorded show the has been requested. those in support of the request for a recorded vote will rise and be counted. a sufficient number having arisen, a recorded vote is ordered. members will record their votes by electronic device. this will be a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or

commercial purposes is expressly prohibited by the u.s. house of representatives.]

the chair: on this vote the yeas are 178, the nays are 242. the amendment is not adopted.

for what purpose does the gentleman from iowa seek recognition? mr. latham: thank you, mr. chairman. i move the committee do now rise. the chair: the question is on the motion the committee rise. those in favor say aye. those opposed, no. the ayes have it. the motion is adopted. accordingly the committee does rise. the speaker pro tempore: mr. speaker. the chair: the committee of the whole house on the state of the union having had under consideration h.r. 5972 directs

me to report that it has come to nos remain title of the resolution thereon -- come to no resolution there on. the speaker pro tempore: the chair of the committee of the whole house on the state of the union reports that the committee has had under consideration h.r. 5972 and has come to no resolution thereon. the chair lays before the house the following enrolled bills. the clerk: h.r. 33, an act to amend the securities act of 1933, to specify when certain securities issued in connection with church plans are treated as exempted securities for purposes of that act. the speaker pro tempore: pursuant to clause 12-a of rule

it's been a flashpoint on capitol hill for a long time. and now the house is weighing in on whether to hold the attorney general in contempt over what they see as his stonewalling of information related to this operation. >> is it true that this would be the first ever vote of its kind? >> it would be. previous attorney general janet reno has been found in contempt by a congressional committee but it has never reached the floor of the house of representatives when it's involving an attorney general. so this would definitely be unprecedented. >> house republicans and the justice department have tried several times to reach a compromise to avoid the contempt vote. what exactly does each side want the other to do? >> well, house republicans led by house oversight and

government reform committee chair issa has demanded a long list of documents and the attorney general and the justice department have offered some of those documents, not all of those documents. and just last week, the night before the committee voted to hold the attorney general in contempt, mr. holder offered a briefing rather than a document that the republicans have been seeking. but mr. issa and the republicans on the house oversight committee found that not to be enough and went through at the committee level vote of contempt. >> we heard at least one democrat has announced he's likely to join republicans in favor of contempt who is he and how many others could defect from the party on this vote? and on top of that, would there be any republicans going across party lines? >> there may be a few republicans who cross party lines and vote no on the contempt resolution but much more likely is that democrats will vote yes on the resolution. i've heard that up to two dozen if not more democrats may join

on the contempt resolution and there is pressure on them from the conservative national riffle association, which is scoring this vote and has made clear that there would be repercussions from that organization if democrats would vote against the contempt resolution. >> if the votes are there to hold attorney general holder in contempt, what's likely to happen next? >> well, that's a little bit less clear. there are theoretically three options for the house to proceed. the first is considered very unlikely. that would be to use its own authority and pursue a process known as inherent contempt whereby the house could ask the sergeant at arms of its chamber to go and physically arrest the attorney general. that hasn't happened in either chamber since 1935 and people don't consider that very likely. the second more reasonable option is for the house to ask the justice department to formally charge mr. holder with contempt or find him in violation of a criminal statute

that carries a misdemeanor conviction, a fine of up to $1,000 and imprisonment of up to 12 months. but that is also unlikely since the justice department is run by mr. holder. the most likely outcome is that the house will ask a federal judge to enforce the subpoena that it has already issued against the attorney general and therefore get the courts involved and try to have him comply with their demands for information that way. >> will this resolution need approval from the senate to go into effect? >> it will not. it goes into effect on its own. each chamber is capable of holding someone in contempt on its own authority. >> very quickly, beyond the specifics of this case, what might the ripple effects be from a successful contempt vote on relations and future disagreements between the executive and legislative branches? >> well, it's a very big conflict between the two branches and this was sure to sure relations that were already sour in the last few months. this is an election year, of course, and no doubt

conservatives will point to this vote on the campaign trail in the months ahead, whereas the justice department and the president are likely to portray it as a purely political event. that argument could be made a little bit more complicated if a sizable number of democrats join with republicans on this vote. >> we'll talk with you again soon. >> thanks. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> that contempt of congress vote on attorney general holder is being held in the house tomorrow. also tomorrow, the supreme court will release the last of its decisions for the term. among them we expect a ruling on the constitutionality of the 2010 health care law. beginning at 10:00 a.m. eastern, we'll be live on c-span 3 with cameras outside the court as we await the justices' decision. if the court rules on health care, we'll open our phone lines to get your reaction. we'll also hear from members of congress and several supreme court reporters. that all begins at 10:00

tomorrow morning over on c-span 3. in march the u.s. supreme court heard oral arguments on health care law. next the arguments on whether congress can mandate americans buy health insurance under the commerce clause of the constitution. during this two-hour argument, justice anthony kennedy describes the individual mandate as unprecedented. >> we'll continue the argument this morning, the department of health and human services versus florida. >> mr. chief justice, it may please the court. the affordable care act addresses a fundamental and enduring problem in our health care system and our economy. insurance has become the predominant means of paying for health care in this country.

insurance has become the predominant means of paying for health care in this country. for most americans, for more than 08% of americans, -- 80% of americans, the insurance system does provide effective access. excuse me. but for more than 40 million americans who do not have access to health insurance, either through their employer or through government programs such as medicare or medicaid, the system does not work. those individuals must resort to the individual market and that market does not provide affordable health insurance. it does not do so because the multibillion-dollar subsidies their available for -- that are available for the employer market are not available in the

individual market. it does not do so because hipaa regulations that preclude discrimination against people based on their medical history do not apply in the individual market. that is an economic problem and it begets another economic -- >> what are the problems that the federal government can address directly? >> they can address it directly and they are addressing it directly through this act. by regulating the means by which health care -- by which health care is purchased. that is the way this act works. under the commerce clause, what congress has done is to enact reforms of the insurance market, directed at the individual insurance market, that preclude, that preclude discrimination based on pre-existing conditions. that require guaranteed issue community rating. and it uses -- and the minimum

coverage provision is necessary to carry into execution those insurance reforms. >> and you create congress -- commerce in order to regulate it? >> that's not what's going on here, justice kennedy. and we're not seeking to defend the law on that basis. in this case what is being regulated is the method of financing the purchase of -- purchase of health care. that itself is economic activity with substantial effects on interstate commerce. >> so any self-purchasing, anything i purchase, you know, if i'm in any market at all, my failure to purchase something in that market subjects me to regulation. >> no. that's not our position at all, justice scalia. in the health care market, the health care market is characterized by the fact that aside from the few groups that congress chose to exempt from the minimum coverage requirement, those who for religious reasons don't participate, those who are

incarcerated, indian tribes, virtually everybody else is either in that market or will be in that market and the distinguishing feature of that is that they cannot -- people cannot generally control when they enter that market or what they need had they enter that market. >> the segment seems to me would be true, say for the market in emergency services, police, fire, ambulance, roadside assistance, whatever. you don't know when you're going to need it, you're not sure that you will, but the same is true for health care. you don't know if you're going to need a heart transplant or if you ever will. so there's a market there. to some extent we all participate in it. so can the government require you to buy a cell phone because that would facilitate responding when you need emergency services? you can just dial 91 no matter where you are? >> no, i think that's different. i don't think we think of that as a market. this is a market. this is market regulation and in addition you have a situation in

this market, not only where people enter involuntarily as to when they enter and won't be able to control what they need, when they enter -- >> that's the same as in my hypothetical. you don't know when you're going to need police assistance. you can't predict the extent to emergency response that you'll need. but when you do, and the government provides it, i thought that was an important part of your argument. that when you need health care, the government will make sure you get it. >> well, when you need police assistance or fire assistance or ambulance assistance, the government is going to make sure, to the best extent it can, that you get it. >> i think the fundamental difference, mr. chief justice, is that that's not an issue of market regulation. this is an issue of market regulation. and that's how congress -- that's how congress looked at this problem. there is a market, insurance is provided through a market system. >> do you think -- think there's a market for burial services?

>> yes. >> i suppose that you and i walked around downtown washington at lunch hour and we found a couple of healthy young people and we stopped them and said, you know what you're doing? you are financing your burial services right now. because eventually you're going to die and somebody's going to have to pay for it and if you don't have burial insurance or you haven't saved money for it you're going to shift the cost to somebody else. isn't that a very artificial way of talking about what somebody is doing? if that's true why isn't it equally artificial to say that somebody who's doing absolutely nothing about health care is financing health care services? >> i think it's completely different. and the reason is that the burial example is not -- the difference is here you are regulating the method by which you are paying for something else. health care. and the insurance requirement, i

think the key thing here is my friends on the other side acknowledge that it is within the authority of congress, under article 1, under the congress power, to impose guaranteed issuing in community rating forms to end, to impose a minimum coverage provision. their argument is just that it has to occur at the point of sale. >> i don't see the difference. you can get burial insurance, you can get health insurance. most people are going to need health care. everybody is going to be buried or cremated at some point. >> one big difference is you don't have the cost shifting to other market participants. >> sure you do. if you don't have money then the state is going to pay for it. or a family member. >> that's the difference. it's a significant difference. that this -- in this situation one of the economic effects congress is addressing is that the many billions of dollars of uncompensated costs are transferred directly to other market participants. transferred directly to other market participants because

health care providers charge higher rates in order to cover the cost of uncompensated care and insurance companies reflect those higher rates in higher premiums which congress found translates to $1,000 per family -- >> isn't that really a small part of what the mandate is doing? you can correct me if these figures are wrong. but it appears to me that the c.b.o. has estimated that the average premium for a single insurance policy in the market will be roughly $5,800. in 2016. respondents, the economists who have responded estimate that a young healthy individual targeted by the mandate on average consumes about $854 in health services each year. so the mandate is forcing these people to provide a huge subsidy to the insurance companies. for other purposes, that the act wishes to serve. but if those figures are right, isn't it the case that what this mandate is really doing is not

requiring the people who are subject to it to pay for the services that they are going to consume, it is require them to subsidize services that will be received by somebody else? >> no. i think -- i do think that's what the respondents argue. it's just not right. i think it really gets to a fundamental problem. >> that insurance works. >> it is how insurance works. but the problem that they're identifying is not that problem. the guaranteed issue and community rating reforms do not have the effect of forcing insurance companies to take on lots of additional people who they then can't afford to cover because they tend to be the sick. and that is in fact the exact opposite is happens here. the rating reforms and do you so in the absence of a minute mum coverage provision, -- minimum coverage provision, it's not

that insurance companies take on more and more people and need a subsidy to cover it, it's that fewer and fewer people end up with insurance because the rates are not regulated. insurance companies, when they have to offer guaranteed issuing community rating, they're entitled to make a profit, they charge rates sufficient to cover only the sick population, because -- >> help me with this. assume for the moment that this is unprecedented. this is a step beyond what our cases have allowed, the affirmative duty to act, to go into congress. if that is so, do you not have a heavy burden of justification? i understand that we must presume laws are constitutional. but even so, when you are changing the relation of the individual to the government in this, what we can stipulate is, i think a unique way, do you not have a heavy burden of justification to show authorization under the

constitution? >> so, two things about that, justice kennedy. first, we think this is regulation of people's participation in the health care market. and all this minimum coverage provision does is say that instead of requiring insurance at the point of sale, that congress has the authority under the commerce power and necessary proper power to ensure that people have insurance in advance of the point of sale because of the unique nature of this market. because this is a market in which -- although most of the population is in the market, most of the time, 83% visit a physician every year, 96% over a five-year period. so virtually everybody in society is in this market. and you've got to pay for the health care you get. the predominant way in which it's paid for is insurance and the respondents agree that

congress could require that you have insurance in order to get health care or forbid health care from being provided -- >> why do you define the market that broadly? health care. it may well be that everybody needs health care sooner or later but not everybody need as heart transplant. not everybody needs a liver transplant. could you define the market, everybody has to buy food? sooner or later? so you define the market as food. therefore everybody's in the market. therefore you can make people buy broccoli. >> no. that's quite different. it's quite different. the food market, while it shares that trait that everybody's in it, is not a market in which your participation is often unpredictable and often involuntary. it is not a market in which you often don't know before you go in what you need and it is not a market in which if you go in and seek to obtain a product or

service you will get it even -- >> is that a principle basis for distinguishing this from other situations? i mean, you know, you could also say, well, the person subject to this has blue eyes. that would indeed distinguish it from other situations. is it a principle basis? it's a basis that explains why the government is doing this. but is it a basis which shows that this is not going beyond what the system of innumerated powers allows the government to do? >> yes. for two reasons. first, this is the test that this court has articulated is is congress regulating economic activity for the substantial effect on interstate commerce? the way in which this statute satisfies the test is on the basis of the factors that i have identified. >> i thought that your main point is that unlike food or any

other markets, when you make the choice not to buy insurance, even though you have every intent in the world to self-insure, to save for it, when a disaster strikes, you may not have the money. and the tangible result of it is we were told there was one brief that marlin hospital care bills 7% more because of these uncompensated costs, that families pay $1,000 more than they would if there were no uncompensated costs. i thought what was unique about this is it's not my choice whether i want to buy a product to keep me healthy, but the cost that i'm forcing on other people if i don't buy the product sooner rather than later. >> that is definitely a difference, that distinguishes this market and justifies this as a -- >> so if that is your

difference, if that is your difference, i'm somewhat uncertain about your answers to, for example, justice kennedy asked, can you under the commerce clause, congress create commerce for previously nonexistent? i thought the answer to that was , since mccullough vs. maryland, when the court said congress could create the bank of the united states, which did not previously exist, which job was to create commerce that did not previously exist, since that time the answer's been yes. i would have thought that your answer, can the government in fact require you to buy cell phones or buy burials, that if we proposed comparable situations, if we have, for example, a uniform united states system of paying for burial, such as medicare burial,

medicaid burial, chip burial, erisa burial, and emergency burial besides the side of the road and congress wanted to rationalize that system, wouldn't the answer be yes, of course they could? and the same with the computers. or the same with the cell phones. if you're driving by the side of the highway and there is a federal emergency service, just as you say you have to buy certain mufflers for your car that don't hurt the environment, you could -- i mean, you see, doesn't it depend on the situation? >> it does, justice breyer. and if congress were to enact laws like that we -- >> would be up here again. >> i would defend them on a rationale like that. but i do think we are advancing a narrower -- >> if the question is whether or not there are any limits on the congress clause -- commerce clause, can you identify for us some limits on the commerce clause? >> yes.

the rationale currently under the commerce clause that we're advocating here would not justify forced purchases of commodities for the purpose of stimulating demand. it would not justify purchases of insurance for the purposes -- in situations in which insurance doesn't serve as the method of payment. >> but why not? if congress says that interstate commerce is affected, isn't, according to your view, that the end of the analysis? >> no. we think that in a -- when congress -- the difference between those situations and this situation is that in those situations, your honor,ongress would be moving to create commerce. here congress is regulating existing commerce, economic activity that is already going on, people's participation in the health care market, and is regulating to deal with existing effects of --

>> that seems to me that it's a passage in your reply brief that i didn't quite grasp. it's the same point, you say, health insurance is not purchased for its own sake like a car or broccoli. it is a means of financing health care consumption and covering universal risks. well, a car or broccoli aren't purchased for their own sake either. they're purchased for the sake of transportation or in broccoli covering the need for food. i don't understand -- >> the difference, mr. chief justice, is that health insurance is the means of payment for health care. >> that's -- >> and broccoli is not the means of payment for anything else. >> but it's the means of satisfying the basic human need. insurance is the means of satisfying -- >> you think that's the difference between existing commerce, activity in the market already occurring, the people in the health care market purchasing, obtaining health care services, and the creation

of commerce. and the principle that we're advocating here under the commerce clause does not take the step of justifying -- >> can we go back to, justice breyer asked a question and he kind of interrupted your answer. to my question. and tell me if i'm wrong about this. i thought a major, major point of your argument was that the people who don't participate in this market are making it much more expensive for the people who do. that is they will get a -- a good number of them will get services that they can't afford when they need them and the result is that everybody else's premiums get raised so you not -- it's not your free choice just to do something for yourself. what you do is going to affect others, affect them in a major

way. >> that absolutely is a justification for congress' action here. existing economic activity that congress is regulating. >> you could say that about buying a car. if people don't buy cars, the price that those who do buy cars pay will have to be higher. so you can say in order to bring the price down, you are hurting these other people by not buying a car. >> that is not what we're saying. >> i thought it was. i thought you're saying other people are going to have to pay more for insurance because you're not buying it. >> no, it's because you're going into -- in the health care market, you're going into the market without the ability to pay for what you get. getting the health care service anyway is a result of the social norms that allow that to which we've obligated ourselves. >> don't obligate yourself to that. >> i can't imagine that that -- that the commerce clause would

forbid congress from taking into account this social norm. >> you can do it but does that expand your ability to issue mandates to the people? >> this is not a purchase mandate. this is a law that regulates the method of paying for a service that a class of people to whom it applies are consuming or will consume. >> general, i see or have seen three strands of arguments in your briefs. and one of them is echoed today. the first strand that i've seen is that congress can pass any necessary laws to affect those powers been its rights. i.e., because its made a decision that to affect mandatory issuance of insurance, that it could also oblige the mandatory purchase of it.

the second strand i see is self-insurance affects the market and so the government can regulate those who self-insure. and the third argument, this is a little different, is that what the government is doing, and i think it's the argument you're making today, that what the government is saying is if you pay for health -- if you use health services, you have to pay with insurance. because only insurance will guarantee that whatever need for health care that you have will be covered. because virtually no one perhaps with the exception of 1% of the population can afford the massive cost if the unexpected happens. this third argument seems to be saying, what we're regulating is

health care. and when you go for health services you have to pay for insurance. and since insurance won't issue at the moment that you consume the product, we can reasonably, necessarily tell you to buy it ahead of time because you can't buy it at the moment that you need it. is that -- which of these three is your argument? are all of them your argue snment i'm just not sure -- >> let me try to state it this way. the congress enacted reforms of the insurance market. the guaranteed issuing rating reforms. it did so to deal with a very serious problem that results in 40 million people not being able to get insurance and therefore not access to the health care market. everybody agrees in this case that those are within congress' article 1 powers. the minimum coverage provision

is necessary to carry those provisions into execution because without them, without those provisions, without minimum coverage, guaranteed issuing community rating will, as the experience of the state showed, make matters worse, not better. there will be fewer people covered, it will cost more. >> so on that ground you're answering affirmatively to my colleagues that have asked you the question, can the government force you into commerce? >> and there's no limit to that. >> no. because that's the first part of our argument. the second part of our argument is that the means here that congress has chosen, the minimum coverage provision, is a means that regulates -- that regulates economic activity, namely your transaction in the health care market, with substantial effects on interstate commerce and it's the conjunction of those two that we think provides the significantly secure foundation for this statute under the

commerce power. >> you've talked on a couple of times about other alternatives that congress might have had, other alternatives that the respondents suggest to deal with this problem. in particular the alternative of mandating insurance at the point at which somebody goes to a hospital or an emergency room and asks for care. did congress consider those alternatives? why did it reject them? how should we think about the question of alternative ways of dealing with these problems? >> i do think, justice kagen, that the point of difference between my friends on the other side is about one of timing. they've agreed that congress has article 1 authority to impose an insurance requirement or other penalty at the point of sale. and they've agreed that congress has the authority to do that, to achieve the same objectives that the minimum coverage provision and the affordable care act is designed to achieve. this is a situation in which we are talking about means. congress gets substantial

deference in the choice of means and if one thinks about the difference between the means they say congress should have chosen and the means congress did choose, i think you can see why it was eminently more sensible for congress to choose the means that it chose. >> i'm not sure which way it cuts. if the congress has alternately -- let's assume it could use the tax power to raise revenue and have a national health service, single payer. how does that factor into our analysis? in one sense it can be argued, this is what the government's doing, it ought to be honest about the powers that using and use the correct power. on the other hand it means that since the court can do it anyway, congress can do it anyway, we give a certain amount of latitude. i'm not sure which way the argument goes. >> let me try to answer that question, justice kennedy, and get back to the question you asked me earlier. do i think one striking feature of the argument here that this is a novel exercise of power is that what congress chose to do

was to rely on market mechanisms and efficiency and a method that has more choice than would the traditional medicare-medicaid-type model. so it seems a little ironic to suggest that that counts against it. but beyond that, in the sense that it's novel, this provision is novel in the same way or unprecedented in the same way that the sherman act was unprecedented when the court upheld it at the northern securities case, where the packers and stockyards act was unprecedented, when the court upheld it. or the national labor relations act was unprecedented when the court upheld it. or the dairy price supports. >> no, it's not. they all involved commerce. there was no doubt that what was being regulated was commerce. and here you're regulating somebody who isn't commerce. by the way, i don't agree with you that the relevant market here is health care. you're not regulating health care. you're regulating insurance. it's the insurance market that

you're addressing. and you're saying that some people who are not in it must be in it. and that's different from regulating in any manner commerce that already exists out there. >> to the extent that we're looking at the comprehensive scheme, justice can i ask -- scalia, it is regulating commerce that already exists out there. and the means in which that regulation is made effective here, the minimum coverage provision, is a regulation of which the people participate and the method of their payment in the health care market. that is what it is. and i do think, justice kennedy, getting back to the question you asked before, what matters here is whether congress is choosing a tool that's reasonably adapted to the problem that congress is confronting. and that may mean that the tool is different from a tool that congress has chosen to use in the past. that's not something that counts against the provision in a commerce clause. >> it's both necessary and

proper, what you just said address what's necessary. yes. necessary does not mean essential. just reasonably adapted. but in addition to being necessary, it has to be proper. and we've held in two cases that something that is reasonably adapted was not proper because it violated the sovereignty of the states. the argument here is that this also is maybe necessary but it's not proper because it violates an equally evident principle in the constitution which is that the federal government is not supposed to be a government that has all powers. that it's supposed to be a government of limited powers. and that's what all this questioning has been about. what is left, if the government can do this, what else can it not do? >> this does not violate the norm of proper as this court articulated and printed, or new

york, because it does not interfere with the states as sovereigns. this is a regulation that -- this is a regulation -- >> no, that wasn't my point. that is not the only constitutional principle that exists. this constitutional principle is the principle that the federal government is a government of innumerated powers. and that the vast majority of powers remain in the states and do not belong to the federal government. do you acknowledge that that's plausible? >> the way in which the court in these cases has policed the boundries of what's in the sphere, whether congress is regular lating economic activity with a substantial effect on interstate commerce. here i think it's impossible in view of our history to say that congress is invading the state sphere. this is a market in which 50% of the people in this country get their health care through

their employer. there's a massive federal tax subsidy of $250 million a year which makes that much more affordable. erisa and hipaa regulate that to make sure that the kinds of bans on pre-existing condition discrimination and pricing practices that occur in the individual market don't occur. >> i don't understand your point. whatever the states have chosen not to do, the federal government can do. >> not at all. >> it says the powers not given to the federal government are reserved to the states and the people. and the people are left to decide if they want to buy insurance or not. >> this is what the court has said, i think it would be a substantial departure from what the court has said, when congress is regulating economic activity with a substantial effect on interstate commerce that will be upheld. that's what's going on here. to embark on, i would submit

with all due respect, to embark on the kind of analysis that my friends on the other side suggest the court ought to embark on is to import lockner-style substantive due process. >> the key in lockner is we were talking about regulation of the states, right, and the states are not limited to enumerated powers. the federal government is. and it seems to me it's an entirely different question when you ask yours whether or not there are going to be limits on the federal power, as opposed to limits on the state, which was the issue in lockner. >> what i have -- i agree but what the court has said as i read the cases is the federal government stays in its sphere and the way the other was regulated. >> the reason this is concerning is pause it requires

the individual to do an affirmative act in the law of torts, our tradition, our law has been, you don't have the duty to rescue someone if that person is in danger. the blind man is walking in front of a car, you don't have a duty to stop him, absent some relation between you. so there are moral criticisms of that rule but that's generally the rule. here the government is saying that the federal government has a duty to tell the individual citizen that it must act and that is different from what we have in previous statements. it changes the relationship of the federal government to the individual in a very fundamental way. >> i don't think so, justice kennedy, because it is predicated on the participation of these individuals in the market for health care services. it happens to be that this is a market in which, aside from the groups that are exclude,

virtually everybody participates. but it is a regulation of their participation in that market. >> but it's critical how you define the market. if i understand the law, the policies you're requiring people to purchase involve -- must contain a provision for maternity and newborn care, pediatric services and substance use treatment. it seem it is me -- to me you cannot say that everybody is going to need substance use treatment, or pediatric services, and yet that is part of what you require them to purchase. >> it's part of what the statute requires the insurers to offer. i think because in trying to define minimum essential coverage. >> my theory is there's a market in which everybody participates because everyone might need a certain range of health care services. yet you're requiring people who are not -- never going to need pediatric or maternity services to participate in that market. >> with respect to what

insurance has to cover, your honor, i think congress is entitled to make judgments on what the appropriate scope of coverage here and the problem in this market is, you may think you're perfectly healthy and you may think you're being forced to subsidize someone else but this is not a market in which you can say there's an immutable class of healthy people being forced to subsidize the unhealthy. this is a market which n which you may be healthy one day and you may be a very unhealthy participant in that market the next day. that's a fundamental difference. >> that's not the question i was posing, that doesn't apply to a lot of what you're requiring people to purchase, pediatric services, maternity services. you cannot say everyone is going to participate in the substance use freement market. yet you require people to purchase insurance coverage for that. >> congress is enacting

economic regulation here. it has latitude to define essential, the attributes of essential coverage. that doesn't seem to me to implicate the question whether congress is engaging in economic regulation and solving an economic problem. >> are you denying this, if you took the group of people who are subject to the mandate and you calculated the amount of health care service this is whole group would consume and figured out the cost of an insurance policy so -- policy to cover the services that group would consume, the cost of that policy would be much, much less than the kind of policy that these people are going to be required to purchase on the -- under the affordable care act? >> well, while they're young and healthy, that would be true. but they're not going to be young and healthy forever. they'll be on the other side of the actuarial equation at some point and of course you don't know which among that group is the person who is going to be hit by the bus or get the

definitive diagnosis. >> you take into account some people will be hit by a busing some will be -- some people in that group will unexpectedly contract or be diagnosed with a disease that's very expensive to treat. if you take their costs and calculate that, that's a lot less than the amount they're going to be required to pay. you can't just justify this on the basis of their trying to shift their costs off to other people, can you? >> well, no. the people in that class get benefits, too, justice alito. they get the guaranteed issue benefit they would not otherwise have, which is an enormously valuable benefit and in terms of the subsidy rationale, i think it's -- it would be unusual to say that it's an illegitimate exercise of the commerce power for some people to subs dews others. telephone rates were set via the exercise of the commerce

pow for the a way in which some people paid rates much higher than their costs to subsidize -- >> only if you make phone calls. >> right but everybody, to live in the modern world, everyone needs a telephone. the same thing with respect, you know, dairy price supports, that the court upheld in wrightwood dairy and royal. you can look at those as forced transfers that, i suppose it's theoretically true you could raise your kids without milk but the reality is you have to go to the store and buy milk and as a result of the commerce power you're subsidizing someone else. >> in this cob text, the subsidizer is -- this subsidizers eventually become the subsidized. >> that's the point i was trying to make, wrussties kay began, you're young and healthy one day and not the next.

>> they're young and need the money now. when they think they have a substantial risk of incurng high medical bills, they'll buy insurance like the rest of us. i don't know why you think they're never going to buy it. >> that's the problem, justice scalia. that's exactly the experience that the states had that made the imposition of guaranteed rating not be -- be ineffect chal and highly counterproductive. rates in new jersey doubled or tripled, went from 180,000 people covered in this market to 80,000 people covered. in kentucky, virtually every insurer left the market. the reason is, when people have that guarantee that they can get insurance, they'll make the calculation that they won't get it until they're sick and need it system of the pool of people in the insurance market gets smaller and smaller. the rates you have to charge to cover them get higher and higher. it helps -- insurance covers

fewer and fewer people until the system ends of this is in the a situation in which you're forcing insurance companies to cover large numbers of -- >> you could solve that problem by not requiring the insurance company to sell it to somebody who has a condition that is going to require medical -- or at least not require them to sell it to him at a rate you sell to healthy people but you don't want to do that. >> that seems to me to say that congress -- that's the problem here. congress cannot solve the problem from standard economic regulation and i do not think that can be the premise of our understanding. >> whatever problems congress' economic regulation produces, whatever they are, i think congress can do something to counteract them. either requiring somebody to enter the insurance market -- >> it's not a problem of congress' creation. the problem is that you have 40

million people who cannot get affordable insurance through the means that the rest of us get affordable insurance. congress, after long study and careful deliberation and viewing the experiences of the states and the way they tried to handle this problem adopted a package of reforms, guaranteed issue on community rating and subsidies and minimum coverage provision are a package of reforms that solve that problem. i think it's highly artificial to do this -- view this as a problem of congress' own creation. >> is your argument limited to insurance? or means of paying for health care? >> yes, it's limited to insurance. >> why is that? congress could -- once you establish that you have market for health care, i would suppose congress' power under the commerce clause meant they had a broad scope in terms of how they regulate that market. and it would be going back to lockner if we were put in a position of saying, no, you can

use your congress power to regulate insurance, but you can't use your congress power to regulate this market in other ways. i think that would be a very significant intrusion by the court into congress' power. so i don't see how we can accept your -- it's good for you in this case, to say it's just insurance. but once we say trst a market and congress can require people to participate in it, as some would say, or as you would say, that people are already participating in it, it seems we can't say there are limitations of what congress can do under its commerce power, just like any other area, given the deference we accord to congress in this area, you can regulate that market in any rational way. >> this is insurance as a method of payment for health care services. >> exactly. we're worried that's the area congress has chosen to regulate. there's a health care market,

everybody is in it, we can regulate it and we're going to look at a particular serious problem, which is how people pay for it. next year, they could decide everybody is in this market, we're going to look at a different problem now. this is how we're going to regulate it. we could compel people to do things, purchase insurance in this case, something else in the next case, because you -- we've accepted the argument that this is a market in which everybody participates. >> mr. chief justice, let me answer that and then if i may i'd like to move to tax -- >> can i tell you what the something else is? so while you're answering it, the something else is, everybody has to exercise because there's no doubt that lack of exercise causes illness and that causes health care costs to go up. so the federal government says, everybody has to join an exercise club. that's the something else. >> no, the position we're taking here would not justify that rule, justice scalia because health club membership is not a means of payment for

con sums of anything in a market. >> that's exactly right. but it doesn't seem responsive to my concern that there's no reason, once we say this is within congress' congress power, there's no reason other than our own arbitrary judgment to say, all they can regulate is the med of payment. they can regulate other things that affect this now-conceded interstate market in health care in which everybody participates. >> i think it's common ground between us and the respondents that this is an interstate market in which everybody participates and they agree that congress could impose the requirement at point of sale. this is just a question of timing and whether the necessary and proper authority gives congress, because of the particular features of this market, the ability to impose the insurance -- the need for insurance, the maintenance of insurance before you show up to get health care rather than at the moment you get health care.

>> unless i'm missing something, i think you're just repeating the idea that this is the regulation of the method of payment. i understand that argument. and it may be a good one. what i'm concerned about is, once we accept the principle that everybody is in this market, i don't see why congress' power is limited to regulating the method of payment and doesn't include, as it does in any other area, what other area have we said congress can regulate this market but only with respect to prices, but only with respect to means of transport. no, once you're in the interstate commerce you can regulate it, pretty much all bets are off. >> we agree that congress can regulate this market. erisa regulate this is market, hipaa regulates the market. the market is regulated in significant ways already. i don't think that's the question, mr. chief justice. the question is, is there a limit to the authority we're advocating here in the commerce power?

yes, because we are not advocating for a power that would allow congress -- >> could you express your limiting principle as simply as you possibly can. congress can force people to purchase a product where the fail wrur to purchase a product has a substantial effect on interstate commerce if -- what? if this is part of a larger regulatory scheme? do we have anything more? >> we've got two and they're different. let me state them. first with respect to the comprehensive scheme. when congress is regulating, is enacting a comprehensive scheme it has the authority to enact, the necessary and proper clause gives it the authority to include regulation, including a regulation of this kind, if it is necessary to counteract risks attributable to the scheme itself that people engage in economic activity that would undercut the scheme. it's very much like wick ert in

that respect. with respect to the -- considering the commerce clause alone and not embedded in the conference scheme, congress can regulate the method of payment by imposing an insurance requirement in advance of the time in which the service is consumed when the class to which that applies either is or is virtually certain to be in that market when the timing of one's entry into that market and what you'll need when you enter that market is un-- uncertain and when you will get the care in that market, whether you can afford to pay for it or not and shift costs to other market parties papts. those are our views, though are the principles we're advocating for. it's the con juppings of the two of them here that makes this, we think a strong case under the commerce clause. >> could you turn to the tax

clause? >> yes. >> i have looked for a case that involved the issue of whether something nominated by congress as a penalty was nevertheless treated as a tax. except in those situations where the code itself or the stachulet itself said treat the penalty as a tax. do you know of any case where we've done that? >> i think i would point the court to the license tax case where it was denew mexico nated a fee, not a tax and the court upheld it as an exercise of the taxing pow for the a situation in which the structure of the law was very much like the structure of this raw, in that there was a separate stand-alone provision and a separate provision -- >> license fees, fees for a hunting license, everybody knows those are taxes. i don't think there's as much of a difference between a fee and a tax as there is between a penalty and a tax. >> and that -- i think -- i

think it's useful to separate this into two questions, one is the question of characterization, can this be characterized as a tax? and second is it a constitutional exercise of the power. with respect to characterization, this is in the internal revenue code, it is administered by the i.r.s., paid on rain shower form 1040 on april 15. >> but yesterday you told me, you listed a number of penalties that are enforced through the tax code that are not taxes and they're not penalties realed to taxes. >> they may still be exercises of the taxing power, justice ginsburg, as this is, and i think there isn't a case in which the court has, to my mind, suggested that anything that bear this is much of a tax can't be considered as an exercise of the taxing power. in fact, it seems to me the licensed tax cases point you in the opposite direction and

beyond that, it seems to me that the right way to think about this question is whether it is capable of being understood as an exercise of the -- >> he said it wasn't a tax, didn't he? >> justice scalia, two things about that, as it seems to me, what matters is what power congress is exercising. i think it's clear that they were exercising the tax power as well -- >> you're making two points, number one it's a tax and number two, even if it isn't a tax, it's within the taxing power. i'm addressing the first. >> the president said it wasn't a tax increase because it ought to be understood as an incentive to get people to have insurance. i don't think it's fair to infer from that whether it's an exercise of the tax power or not. >> taxes is to raise revenue, a tax is a revenue-raising device and the purpose of this is to get people into the health care

risk pool before they need medical care and so it will be successful if it doesn't raise any revenue. if it gets people to buy the insurance. that's what this penalty is -- this penalty is designed to affect conduct, the conduct is buy health protection, buy health insurance before you have a need for medical care. that's what the penalty is designed to do, not raise revenue. >> that is true, justice ginsburg. that is also true of the marijuana tax that was upheld in sanchez, that's commonly true of penalties under the code. they do, if they raise rev mue, they are exercises of the taxing power but their purpose is not to raise revenue, their purpose is to discourage behavior. the mortgage deduction works that way. when the mortgage deduction is, it's clearly an exercise of the taxing power. when it's successful, it raises less revenue for the federal

government. it's still an exercise of the taxing power. >> and those, one question, the determined efforts of congress not to refer to this as a tax made the difference? you're suggesting we should just look to the practical operation, we shouldn't look at labels and that seems right, except that here we have a case in which congress said, this is not a tax. the question is why should that be irrelevant? >> i don't think that's a fair characterization of the actions of congress here, justice kay began. on december 23, a point of constitutional order was called, two, in fact, with regard to this law. the floor sponsor, senator bachus, defended it in response to the taxing power, the senate voted on that proposition, the legislative history is replete with members of congress explaining that this law is constitutional as an exercise

of the taxing power. it was attacked as a tax by its opponents. i don't think this is a situation where you can say congress was avoiding any mention of the tax power. it would be one thing if congress explicitly disavowed an exercise of the tax power, but given that it hasn't done so, it seems to me that it's not only -- not only is it fair to read this as an exercise of the tax power but this court has an obligation to construe it as an exercise of the tax power. >> why didn't congress call it a tax, then? >> they thought of it as a tax, defended it in the tax power, why didn't they say it was a tax? >> they might have thought that calling it a penalty, as they did, would make it more effective in accomplishing its objectives. but it is in the internal revenue code, it is collected by the i.r.s. on april 15. >> that's the reason. they thought it might be more effective if they called it a penalty. >> there's nothing i know that

illuminates that. >> the problem goes back to the limiting principle. is there anything that raises revenue, congress can do? >> no. >> it has to be -- >> they -- i think of course the constitution imposes some, got to be uniform, can't be a tax on exports, if it's a direct tax, got to be important. it's aplayed from drexel furniture to the ranch, it can't be punishment, punitive in the eyes of the tax. the court has to look at, the sanction, how disproportionate it is to the conduct, and whether there's an administrative apparatus out there to enforce the tax. in the furniture case, the tax was 10% of the company's profits, even if they had only one child laborer for one day. there was a requirement and it

was enforced by the department of labor. it wasn't just collected by the internal revenue service. here we don't have any of those things. the penalty is calculated to be no more than, at most, the equivalent of what one would have paid for insurance you have foregone. there's no enforcement apparatus out there >> can a mandate be viewed as a tax if it imposes a requirement on people who are not subject to the penalty or tax? >> i think it could for the reasons i discussed yesterday. i don't think it can or should be read that way. but if there's any doubt about that, your honor if it is the view of the court that it expect be, then i think the right way to handle this case is by analogy to new york v. the united states where the court read the shall provision as setting the predicate and

then other provisions were incentives to get the predicate met. >> you're saying all the discussion we had earlier about how this is one big uniform scheme in the commerce clause, blah, blah, blah, it doesn't matter. this is a tax and the federal government could simply have said, without all of the rest of this legislation, could simply have said, everybody who doesn't buy health insurance at a certain age will be taxed so much money, right? >> if used -- it used its powers together to soft the problem of the market -- >> but you didn't need that it's a tax. raising money is enough. >> i reserve the balance of my time. >> thank you, general. we'll take a pause for a minute or so.

>> why don't we get started again. >> mr. clement yes. >> may it please the -- mr. clement. >> may it maze the court, it compels vips to enter commerce in order to better regulate commerce. the commerce clause gives congress the power to regulate existing commerce. it does not give congress the far greater power to compel people to enter commerce, to create commerce, essentially in the first place. when congress passed this statute, it made findings about why it thought it could regulate congress and it justifies it as a mandate of the economic decision to forgo the purchase of health insurance. that's a theory without any

limiting principles. >> do you accept the position that congress could say if you're going to consume health services, you must do so the health insurance. >> we say if you regulate the point of sale, you regulate commerce, that's within congress' power. >> so what do you do with the impossibility of buying insurance at the point of consumption? virtually you force insurance companies to sell it to you? >> a lot of today's discussions has been based on the only thing covered is emergency room visits but a lot of what's being covered is ordinary prevent i care and office visits.

those are things one can predict. there's a big part of the marget regulated that wouldn't pose the problem you are suggesting. even as to emergency room visits, it would be possible to regulate at that point. you could simply say, through some sort of mandate on the insurance companies, you have to provide people that come in, this will be a high risk pool, maybe you'll have to share it amongst yourselves but people have to sign up at that point and that would be regulating at the point of sale. ? now it seems as though you're talking about a matter of timing that congress can regulate the transaction and the question is, when does it make best sense to regulate that transaction? and congress surely has it within its authority to decide rather than at the point of sale, given an insurance-based mechanism, it's just a matter of timing. >> if congress tried to regulate at the point of sale, the one group it wouldn't

capture at all are the people who don't want to purchase health insurance and also have no plans of using health care services in the near term. congress very much wanted to capture those people. those people are essentially the golden geese that pay for the entire lowering of the premiums. >> would the government argument -- government's argument, maybe i'm not stating it accurately, it is true that the noninsured young adult is in fact an actuarial reality inso far as our allocation of health services, insoferse the way -- insoferse the person sitting at home doing nothing is an actuarial reality that must be measured for health insurance purposes. is that the argument? >> if it is, i think there's two problems with it. one is, as justice alito's

question suggested, somebody who is not in the insurance market is irrelevant as an actuarial risk. we could look at people not in the insurance market and find that they're relatively young, relatively healthy and they would have a certain pool of risks that would lead to lower premiums this epeople that would be captured by guaranteed rate and guaranteed issue and community ratings would presumably have a higher risk profile and higher premiums. one of the things congress sought to accomplish here was to force individuals into the insurance market to subsidize those that are already in it to lower the rates. that's not just my speculation, that's finding i at 43-a of the government's brief. >> doesn't that work -- that work the way social security does? let me put it this way, congress in the 1930's, saw a real problem of people needing to have old age and survivors' insurance.

and yet they did it through a tax. but they said, everybody has to be in it because if we don't have the helly in it, it's not going to be the money to pay for the one who become old or disabled or widowed. so they required everyone to contribute. it was a big -- there was a big fuss about that in the beginning because people said, maybe some people still do today, i could do much better if we government left me alone and i'd go into the private market and buy a policy and make a great investment and they're forcing me to pay for this social security i don't want. but that's constitutional. so if congress could see this as a problem where we need to have a group that will subsidize the ones who are going to get the medicine, it seems to me you're saying the

only way that can be done is if the government does it itself. can't involve the private market. can't involve the private insurers. if it wants to do this, social security is its model. government has to be the government takeover. we can't have the insurance industry in it. is that your position? >> i don't think it is, justice ginsburg. there are other options available, the most straightforward would be to figure out what amount of subsidy to the industry is necessary to pay for guaranteed issue and community rating. once we calculate the amount of that subsidy, we could have a tax that spreads through everybody to raise the rev mue to pay for that subsidy. that's the way we pay for most subsidies. >> could we have an exception? could the government say everybody pays a share of health care responsibility payment to offset the money we're forced to spend on health care, we, the government. but everybody who has an

insurance policy is exempt from that tax? could government do that? >> the government might be able to do that. it might raise issues about whether or not that would be a valid exercise of the taxing power. >> under what theory wouldn't it be? you get tax credits for having solar powered homes, we get tax credits for using fuel efficient cars, why couldn't we get tax credit for having health insurance and saving the government from caring for us? >> i think it would depend a little bit on how it was formlated but my concern would be, the constitutional concern, would be that it would just be a disguised impermissible direct tax. i don't want to suggest we get caught in the taxing power too soon but it is worth realizing the taxing power is limiting in the ability to impose clear taxes. the one thing they would have

proposed as a direct tax is a tax on not having something. the framing generation was undecided whether a tax on carolinas -- on carriages was a direct tax or not. but they would have agreed that a tax on not having a carriage would be a direct tax. >> can i go back a step in i don't want to get into a discussion of whether this is a good bill or not. some people think it's going to save a lot of money. some people think it won't. so i'm focusing just on the commerce clause. not on the due process clause. the commerce clause. i look back into history and i think if we look back into history, we see sometimes congress can create commerce out of nothing. that's the national bank, created out of nothing to create other commerce out of

nothing. i look back into history and i see it seems pretty clear that if there are substantial effects on interstate commerce, congress can act. i look at the person who is growing marijuana in her house or the farmer growing wheat for selling, is this commerce? it seems more commerce than marijuana. is it in fact a regulation? well, why not? if creating a bank is, why not this. and you say but one thing is different that is, you're making somebody do something. can't congress make people drive faster than 45, 40 miles per hour on a road? didn't they make that man growing his own wheat go out into the market and buy other

wheat for his cows? didn't they make mrs. -- if she married somebody who had marijuana in her basement, wouldn't she have to get rid of it? affirmative action. where does this distinction come from? it sounds like sometimes you can and sometimes you can't. what is argued here is there a large group -- what bt a a person we discover that a disease is sweeping the united states and 40 million people are susceptible of whom 10 million will die. can't the federal government say all 40 million get inoculation? so here we have a group of 40 million and 50% -- 57% of those people visit emergency care or other care which we're paying for, and 22% of those pay more than $100,000 for that. and congress says they're in the midst of this big thing. we just want to rationalize the

system they're already in so you've got the whole argument and i would like you to tell me, looking at those questions in reverse order -- it's one question. looking back at that history, can i concede you say to some people, go buy, why does that make a difference in materials of the commerce clause? >> let me start at the beginning of your question, mccullough. that was not a congress power case. >> no. >> it was -- the bank was not justified, the corporation was not justified as an exercise of the congress power. that's not a case that says it's ok to conjure up the banks as a result of the commerce power. what the court didn't say, they would have had a different reaction to, we're not going to just have the bank but force the citizenry to put their money in the bank.

because if we do that, we know the bank will be secure. i think the framers would have identified the difference between those two scenarios and i don't think the great chief justice would have said that forcing people to put their profits in theback of the united states was proper. i don't think you'll find a case like this i think it's telling that you won't. the regulation of the wheat market, all this effort to address a supply side and what producers could do, what congress was trying to do is support the price of wheat. much more efficient to just make everybody in america buy 10 loves of bread. that would have had a much more direct effect on the price of wheat in the prevailing market. but we didn't do that. we didn't say, when we had problems in the automobile industry, we're not going to squst give you incentives, cash for clunkers. we're going to have everybody over $100,000 has to buy a new car. >> mr. clement, the key to the government's argument to the

contrary is that everybody is in this market. it's all right to regulate wheat in that case because that's a particular market in which the farmer had been participating. everybody is in this market system of that makes it very different than the market for cars or the other hypotheticals you came up with. all they're regulating is how you pay for it. >> with respect, touf say what market are we talking about? the government this statute, undeniably operates in the health care insurance market. the government can't say that everybody is in this market. the whole problem is that everybody is not in that market and they want to make everybody get in that? >> doesn't that seem like cutting the bologna thin? health insurance exists only for the purpose of financing health care. the two are inextricably link wesmed don't get insurance to stare at the insurance certificate. we get it so that we can go and access health care.

>> i'm not sure shast right. i think what health insurance does and what all insurance does is it allowus to diversify risk. it's not just a matter of paying now instead of later. insurance is different than credit. insurance guarantees you an upfront, locked in payment you won't have to pay any more than that, even if you incur much greater expenses. in every other market we let people make the decision whether they're relatively risk averse, whether they're relativelien in risk averse. >> we don't in car insurance. meaning we tell people, buy -- not with, the states do, though you would -- i'll ask you the question, do you think that if some state december sided not to impose an insurance requirement that the federal government would be without power to legislate and require every individual to buy car insurance?

>> let me say this, yourself right that the states do it, which makes it different. >> they goes back to the substantive due process era. is this an argument that only the states can do this? even though it affects commerce, cars do affect commerce. are you arguing that the federal government is no longer permitted to regulate -- legislate in that area? >> i think you could make a different argument about cars than health insurance unless you tried to say -- >> i've never gotten into an accident, thankfully, and i hoeppner. the vast majority of people have never gotten into an accident where they've injured others. yet we pay for it dutifully every year on the possibility that at some point we might get into that accident. >> but justice sotomayor, there's lots of people in manhattan, for example that

don't have car insurance because they don't have cars. so they have the option of withdrawing from that market. it's not a direct imposition from the government. even the car market is different from this market, where there's no way to get outside of the regulatory web. that's, i think, one of the real problems with this. we take -- >> but you're -- the given is that virtually everyone, absent some intervention from above, meaning that someone's life will be cut short in a fatal way, virtually everyone will use health care. >> at some point that's right. all sorts of people will not, say, use health care in the next year, which is the relevant period for the insurance. >> do you think you can better than the actuary or better than the members of congress who worked on it, look at the 40 million people who are not insured and say which ones next year will or will not use, say, emergency care?

can you do that any better than if we knew that 40 million people were suffering, about to suffer, a contagious disease and only 10 million would get sick? we don't know which? >> of course not, justice breyer. but the point is once congress decides it's going to regulate, it is going to get all sorts of latitude to make the right judgments about actuarial predixes, which actuarial to rely on and which not to rely on. the question that's a proper question for this court, though, is whether or not for the first time ever in our history congress also has the power to compel people into congress because it turns out that would be a very efficient thing for purposes of congress optimal regulation for that market. >> this goes back to the chief justice's question, but of course the theory behind not just the government's case but the theory behind this law is that people are in this market right now and they're in this market because people do get sick and because when people

get sick, we provide them with care without making them pay. and it would be different, you know, if you were up here say, i represent a class of christian scientists, then you might be able to say, look, why are they bothering me? but absent that, you're in this market and you're an economic actor. >> justice kay began, once again, it depends on which market we're talking about. if we're talking about the health care insurance market? >> we're talking about the health insurance market designed to access the health care market. >> with respect to the health insurance market that's designed to have payment in the health market everybody is not in the market. that's the problem congress is trying to solve. they're trying to solve it through in-- if they were trying to solve it through incentives, we wouldn't be here. but they're trying to solve it in a way this no one has ever tried to solve it before, saying it would be so much more efficient -- >> but they're in the market in the sense that they're creating

a risk the market must account for. >> when i'm sitting in my house, deciding i'm not going to buy a car, i am causing the labor market in detroit to go south, i am causing maybe somebody to lose their job and for everybody to have to pay for welfare. so the cost shifting that the government tries to associate with this market, it's everywhere. more to the point, the rationale they think all the matly support this is legislation, look, it's an economic decision, once you make the economic decision, wing a gate the decision, there's your substantial effect on congress that argument works here, it works in every single industry. >> of course we do know that there are a few people, more in new york city, than there are in wyoming, who never will buy a car. but we also know here and we don't like to admit it that because we are human beings, we all suffer from the risk of getting sick and we also all know that we'll get seriously sick. and we also know that we can't

predict when and we also know that when we do, there will be our fellow taxpayers, through the federal government, who will pay for this if we do not buy insurance, we will pay nothing that happens with a large number of people in this group of 40 million, none of whom can be picked out in advance. now, that's quite different from the car situation and it's different in only this respect. it shows there is a national problem and it shows there is a national problem that involves money, cost, insurance. so if congress could do this, should there be a disease that strikes the united states, and they want everyone inoculated, even though 10 million will be hurt, it's hard for me to decide why that isn't interstate commerce, even moreso where we know it affects

everybody. >> well, justice breyer, there are other markets that affect everyone, transportation, food, burial services we don't like to talk about that either. there are also situations where there are many economic effects from somebody's failure to purchase a product. and if i could talk about the difference between the health insurance mark and the health care market, ultimately, i don't want you to leave here with the impression that anything turns on that. if the government decided tomorrow they've come up with a great -- some private company has come up with a great new wonder drug that would be great for everybody to take, would have huge health benefits for everybody and if everybody had to buy it, it would facilitate economies of scale and the price would be great, and force everybody in the health care mark to buy the wonder drug, i'd be make -- making the same argument. i would say that's not a power within the commerce pow ore they have federal government. it's smutch greater and would have been much more controversial. that's one of the important

things. in federal itself 45, madison says the commerce power, it's a new power, but not one anybody has apprehension about. the reason they didn't have apprehension, it only operated once people were already in commerce. you see that from the thoveks clause, the first kind of commerce they get to regulate is commerce with foreign nations. did anyone think the fledgling republic have the power to compel another country into commerce with us? i think if the framers understood the commerce power to include -- >> once again who is in commerce and when are they in commerce? if the effects of all these uninsured people is to raise everybody's premiums, not just when they get sick if they get sick, but right now, in theing a reget and they tell us to look at the aggregate and the aggregate of the uninsured people are increasing the

normal family premium, congress says, by $1,000 a year. those people are in commerce. they're making decisions that are affecting the price that everybody pays for this service. >> with all due respect, i don't think that's a limiting principle. my unwillingness to buy an electric car is forcing up the price of an electric car. if only more people demanded electric cars, there would be commerces of scale. >> this is very different and it's different because of the nature of the health care service. you are entitled to health care when you go to an emergency room, even if you can't pay for it. the difference between your hypotheticals and the real case is the problem of uncompensated care. >> first of all, i do think, this is not the only place where there's uncompensated care if i don't buy a car and somebody goes on welfare, i end up paying for that as well. but there's a real disconnect,

then, between that focus on what make this is different and the statute congress passed. if all we're concerned about is the cost sharing that took place because of uncompensated care in emergency rooms, presumably we'd have before us a statute that only addressed emergency care and catastrophic insurance coverage. but it covers everything, soup to nuts and all sorts of other thins. that gets at the idea that there's two kinds of cost shifting going on here. one is concern about emergency care and somehow somebody who gets sick will shift doses -- costs back to other policy areas. but there's a much bigger cost shifting going on here. that's what goes on when you force healthy people into insurance market precisely because they're helly and they're not likely to go to the emergency room. precisely because they're not likely to use the insurance they're forced to buy in the health care insurance. that creates a huge windfall, lowers the price of premiums and again, this isn't just some lawyer up here telling you that's what it does, trying to

second-guess the congressional economic decisions, this is congress' findings. findings on page 43-a of the apen dick to the government -- >> it sounds like you're debating the merits of the bill. there are four limiting principles, first the solicitor general came up with a couple, joiped, very narrow ones. you've seen in lopez this court say that congress cannot get into purely local affairs, particularly where they're noncommercial and the greatest limiting principle of all, which not too many accept is the limiting principle derived from the tact that members of congress are elected from states and did not -- and 95% of the layoff the united states state law. that's a principle enforced by the legislature. the other two are principles,

one in lopez and one you just heard. it seems to me they all eliminate the possibility and none of them eliminate the possibility that we're trying to take the 40 million people who do have medical cost, who do affect interstate commerce and provide a system that you may like or not like. >> let me take them in turn. i would encourage this court not to garcia-ize this clause and say it's up to congress to police -- >> that's exactly what justice marshall said in gibbons. he said that it is the power to regulate, the power like all others rested in congress is complete in itself, may be exercised to its utmost extent and acknowledges no limitations. other than those prescribed in the constitution, but there is no constriction in the -- set

forth in the constitution to regulating commerce. >> i agree 100%. i think that was the chief justice's point, once you open the door to compelling people into commerce you are not going to be able to stop that. >> i would like to hear you address justice breyer's other two -- >> the other two principles are lopez and this case really is not -- lopez is a limit on the affirmative exercise of people who are already in commerce. the question is, is there any other limit to people who aren't in commerce? i think this is the case that really asks that question. then the first point, which i was, i think the solicitor general's point, is with all due respect, simply a description of the insurance market. it's not a limiting principle. the justification for why this is a valid regulation of commerce is in no way limited to this market. it simply says these are economic decisions, they have an effect on other people my

failure to purchase in this market has a direct effect on others in this market, that's true of virtually every other market. >> and now maybe return to justice sotomayor's question. >> i'd be delighted to. you're right. once you're in the commerce power, there's not going to police that maybe to the lopez limit. that's why i think it's very important for this court to think seriously about taking an unprecedented step of staying -- saying that the commerce power includes not only the power to regulate and the rule by which congress is governed but -- commerce is governed but to go further, to say it's the power to compel people to br into commerce in the first place. i would say two brief things about the taxing power if i could. there are lots of rps this is not a tax. if it's a tax, it is a direct tax, article 1, section 9, clause 4, framers would have had no doubt that a tax on not

having something would be a forbidden direct tax. it violates that. the second thing is, i would urge ewe to read the license tax case which solicitor yen says is his best case for why you ignore the case that a tax is do de-nominated into something other. that's the case where the argument was because the federal government passed a license not a tax that somehow that allowed people to take actions that would have been unlawful under state law. that this was some special federal license to do something forbidden by state law. they looked beyond the label to preserve federalism there. what they're asking you to do here is the opposite, to look past labels to upend our basic federalist system. >> do you think the states could pass this man tate? >> i represent 26 states, i do think the states could pass this mandate. >> is there any other area of commerce, business, where we have held that there isn't

concurrence power between the state and the federal government to protect the welfare of commerce? >> i have to resist your premise, i didn't answer yes the states could do it because it would be a valid interstate commerce, but yes, they can do it because they have police putter. that's the difference between the states and the enumerated federal government on the other hand. >> thank you, mr. clement. >> mr. chief justice, i'd like to begin with the solicitor general's main premise, that they can compel the purr which is of health insurance in order to promote the health market because it will reduce uncompensated care. if you accept that argue you have to fundamentally alter the text of the constitution and

give congress plenary power. it doesn't matter whether this will promote health care by reducing uncompensated care. all that matters is whether the activity being regulated by the act negatively affects commerce or negatively affects commerce regulation so it's within the commerce power. if you agree with us that this is -- that this exceeds commerce power, the law doesn't become redeemed because it has beneficial policy effects in the health care market. in other words, congress does not have the power to promote commerce. congress has the power to regulate commerce. and if the power exceeds permissible regulatory authority, then the law is invalid. >> surely regulation includes the power to promote, since the new deal we've said regulation and agricultural products, congress has the power to

subsidize, limit production, all sorts of things. >> absolutely does. that's the distinction i'm trying to draw. when they're acting within their enumerated power, they're promoting commerce. but the solicitor yen wants to turn it into a different power. he wants to say we have the power to promote commerce, to regulate anything to promote commerce. if they can do that, they have the power to regulate everything. >> i don't think you're addressing their main point. which is that they're not creating commerce in health care. it's already there. we're all going to need some kind of health care, most of us will, at some point. >> i'd like to address that in two ways, if i could, mr. chief justice. in the first place, they keep playing mix and match with the statistics, they think 95% of us are in the health care market. but that's not the statistic, no one in congress or the solicitor general is arguing that going to the doctor and fully paying creates a problem.

the problem is uncompensated care. and they say the uncompensated care arises if you have some kind of catastrophe, hit by a bus, have some prolonged illness. what is the percentage of the uninsured that have those sorts of catastrophes? we know it's got to be a relatively small fraction. >> we don't know who they are? >> we don't know in advance but that doesn't change the basic principle that you are nonetheless forcing people for paternalistic reasons to go into the insurance market to ensure -- insure jens risk that they have made the voluntary decision that they are not going to. >> the problem is, they are making the rest of us pay for it because as much as they say, we're not in the market, we don't know when the time when they will be and the figures of how much more families are paying for insurance because people get sick, they may have

intended to get insurance, they may not have been able to meet the bills for cancer and the rest of us end up paying for it. people are getting cost-free health care and the only way to prevent that is to have them pay sooner, rather than later, pay up front. >> but my point is this, with respect justice ginsburg, conflicts the people who do result in uncomplicated care, those are people who default on their health care payment. that is an entirely different group of people, an entirely different activity than being uninsured. so the question is, whether or not you can regulate activity because it has a statistical connection to an activity that harms commerce. and my basic point to you is this, the constitution only gives congress the power to regulate things that negatively affect commerce or commerce regulation. it doesn't give them pe the power to regulate things that

are statistically connected. if they have that power then they have the power to leg late everything because erg in the aggregate is statistically connected to something that negative effects commerce and every compelled purchase promotes commerce. >> in your view -- i'm just picking on something. if it turned out there was some terrible epidemic sweeping the united states and we couldn't say that more than 40% or 50%, i can make the number as high as i want, but the -- you say the federal government doesn't have the power to get people inoculated, to require them to be inoculated? because that's just statistical. >> i think they must have dwded that issue, right? >> the answer to that yes or no? >> my answer is, no, they couldn't do it. >> they cannot require people even if this disease is sweeping the country to be inoculated? the federal government has no

power and if -- ok, fine. go ahead. >> may i please explain why? violence against women creates the same negative impression on fellow citizens as this disease. but -- and it has huge effects on the health care of our country. congress found that it increased health care costs by -- >> i agree with you that the majority thought that was a local matter. >> that's his point. >> i don't know why having the disease is any more local than beating up a woman. but my basic point is that notwithstanding its very profound effect on the health care market, this court said the activity being regulated, i.e. violence against women, is outside the commerce clause power. so regardless of whether it has beneficial bounds, we must say no. congress doesn't have that power. why not? because everything has downstream effects on commerce.

and every compelled purchase promotes commerce. by definition it helps the sellers and existing -- >> isn't there this difference between justice breyer's hypothetical and the law that we have before us here? in his hypothetical, harm to other people from the communicable disease is the result of the disease. it is not the result of something that the government has done. whereas here the reason why there's cost shifting is because the government has mandated that. it has required hospitals to provide emergency treatment and instead of paying for that through a tax, which would be borne by everybody, it has required that -- it has set up a system in which the cost is surpttishesly shifted to people who have health insurance and who pay their bills when they go to the hospital? >> that is exactly the government's argument. and it's an extraordinarily illogical argument. >> if that's so, let me change my example under pressure. and say that in fact it turns out that 0% -- 90% of all

automobiles driving interstate without certain equipment put up pollution which travels interstate. not 100%. maybe 60%. does the e.p.a. have the power then to say, you've got to have an antipollution device? it's statistical. >> yes. if you have a car they can require you to have -- >> then you're not going on statistics. you're going on something else which is what i'd like to know what it is. >> it's this. they can't require you to buy a car with an antipollution device. once you have entered the market and made a decision, they can regulate the terms and conditions of the car that you do. and they can do it for all sorts of reasons. what they can't do is compel you to enter the market. >> now -- now you've changed the ground of argument which i accept as totally legitimate. and then the question is, when you are born and you don't have insurance and you will in fact

get sick and will you in fact impose costs, have you perhaps involuntarily, perhaps simply because are you a human being, entered this particular market which is market for health care? >> if being born is entering the market, then i can't think of a more power congress can have because that means they can regulate every human activity from crade toll grave. i thought that's what distinguished the police power from the very limited commerce power. i don't disagree that giving the congress power to mandate property transfers from a to b would be a very efficient way of helping b and of accomplishing congress' objective. >> i don't want to forget her question. >> i've forgotten my question. >> i would say -- >> let me --

[inaudible] [laughter] >> what it means to be the junior justice. >> it seems very strange to me that there's no question we can have a social security system and besides all the people, i mean, forced to pay with something i don't want. and this, which seems to me, to try to get care for the ones who need it, by having everyone in the pool, but it's also trying to preserve a role for the private sector. for the private insurers. there's something very odd about that. the government can take over the whole thing and we are on it and that's fine. but if the government wants to preserve private insurers, can't do that. >> i don't think the test of a law's constitutionality is whether it adhere to the libertarian principles of the kato institute or the status principles of someone else.

i think the test of the law is not a policy question, it's whether or not the law is regulating things that negatively effect commerce or don't. since obviously the purchase of an item doesn't create the kind of effects on supply and he can manned that the market participants in wick ard and rage did it doesn't any in any way interfere with regulation of the insurance companies, i don't think it can -- >> i thought that wickard was you must buy. you have to go out in the market and buy that wheat that you don't want. >> let's be careful about what they were regulating. what they were regulating was the supply of wheat. it didn't in any way imply that they would could require every american to buy wheat. yes, one of the consequences of regulating local market participants is it will affect the supply and demand for the product. that's why you can regulate them. because those local market participants have the same affect on the interstate market

that a plaque market has on the legal market. but none that have is true. in other words, you can regulate -- [inaudible] but you can't regulate people who stay out of the liquor market because they don't have any negative effect on the existing market participants or on regulation. >> that's why i suggested that it might be different if you were raising an -- a challenge in presenting a class of people whom could you say clearly would not be in the health care market. but you're raising the challenge and we can't really know which of the many, many people that this law addresses. in fact will not participate in the health care law market and in fact will not impose cost on all the rest of us. so the question is, can congress respond to those facts, that we have no crystal ball, that we can't tell who is and isn't going to be in the health insurance market? and say, most of these people will be and most of these people

will thereby impose costs on the rest of us and that's a problem that we can deal with on a classwide basis? >> no, again, the people who impose the costs on the rest of us are people who engage in different activity at a time different which is the faulting -- which is defaulting on their health care payment. it's not the uninsured. you could regulate anybody if they've got a statistical connection to a problem. could you say, since we can regulate people who enter into the mortgage market and impose mortgage insurance on them, we can simply impose the requirements by private mortgage insurance on everybody, before they've entered the market, because we're doing it in this way before it develops. >> i don't think that's fair. not everybody is going to enter the mortgage market. the government's position is that almost everybody is going to enter the health care market. >> two points. one of which was already made, the health insurance market is different than the health care market. but let me take it on full stride.

i think everybody's in the milk market. i think everybody's in the wheat product market. but that doesn't suggest that the government compel to you buy five gallons of meat or five bushles of wheat. because they are not regulating commerce. whether you're a market participant or not, they are still requiring you to make a purchase that you don't want to do. and to get back to your facial example. >> it's true of almost every product. as directly or indirectly by government regulation. the government says, borrowing my colleague's example, you can't buy a car without the emissions control. i don't want a car with emission control. it's less efficient in terms of the horse power. but i'm forced to do too -- to do something i don't want to do by government regulation. >> are you not forced to buy a product you don't want. and i agree with you that since the government regulates all markets, there is no limiting

principle on their compelled purchase. when they put these environmental -- >> they force me to buy if i need pasturized goods, goods that don't have certain pest side but have others -- pest sidse but don't have others -- pesticides but don't have others. there is government compulsion because the government regulates so much. it's the condition of life that some may rail against. but -- >> let's think about it this way. when you've entered the marketplace they kim pose all sorts of restrictions on you. and they can impose, for example, all kinds of restrictions on states, after they've enacted laws. they can wipe out the laws, they can condition them. but what can't they do? they can't compel states to enact laws. they can't compel states to carry out laws and i'm arguing for precise thely same distinction. everyone intuitively understands that regulating participants after a and b have entered into a contract is fundamentally less intrusive than requiring --

>> the government regulate the manufacturing process. whether or not the goods will enter into interstate commerce, merely because they might statistically. there's all sorts of government regulation of manufacturing plants, of agricultural farms, of all sorts of activity that will be purely interesting -- interstate because it might affect interstate activity. >> i fully agree with you. >> how is that different from saying, you are self-insuring today, you're foregoing insurance, why isn't that a predecessor to the need that you're eventually going to have? >> the cases you refer to i think effectively eliminated the distinction between participants in the interstate market, vis-a-vis participants in the interstate market. none of those cases suggest that can you regulate people who are

outside of the market on both an interstate and intrastate level, by compelling them to enter into the market. >> the simplest counterexample for me to suggest is, you've undoubtedly read judge sutton's concurring opinion. he has about two pages, it seemed to me, of examples where everyone accepts the fact that under these kinds of regulations the government can compel people to buy things they don't otherwise want to buy. for example, he gives even in that farm case, the farmer was being forced to go out and buy grain to feed to his animals because he couldn't raise it at home. he goes through one example after another. so, what is your response to that which you've read? >> judge sutton is wrong in each and every example. there was no compulsion in rage for him to buy wheat. could he have gotten wheat

substitutes or not sold wheat which is actually what he was doing. there's a huge difference between conditioning regulation, i.e. conditioning access to the health care market and saying you must buy a product, and forcing to you buy a product. >> it was common ground that the requirement that the insurers, what was it, the community-based one and, they have to insure you despite your health status, can't refuse because of pre-existing conditions. the government tells us and congress determines that those two won't work unless you have the poll that will include the healthy. but -- so -- do you agree with

your colleague, that the community-based -- what's the name that they give to the other? >> guaranteed issue. >> yeah. that that is legitimate commerce clause legislation? >> oh, sure. and that's why -- but we don't in any way impede that sort of regulation. these nondiscrimination regulations will apply turnover insurance company just as congress intended, whether or not we buy insurance. >> what about the determination that they can't constantly work if people don't have to buy insurance until they are -- their health status is such that an insurance company just dealt with them on its will. i won't insure you because you're already sick. >> it will work just fine in ensuring that no sick people are discriminated against. when do you that -- why would they insure late early if they

can get protected when they insure late? >> we can't just force people to buy insurance to lower health insurance premiums but question do it because we've created the problem. congress has driven up the health insurance premiums and since the we've created that problem, that somehow gives us authority we wouldn't otherwise have. they can't possibly -- >> do you think that there's -- what percentage of the american people who took their son or daughter to an emergency room, and chathiled was turned away because the parent didn't have insurance, do you think there's a large percentage of the american population -- [inaudible] if they had an allergic reaction and a simple shot would have saved the child? >> one of the more misleading impressions that the government has made is we're somehow advocating that people get thrown out of emergency rooms or that this alternative that they've high pogget sized is

going to be enforced by throwing people out of emergency rooms. this alternative, i.e. condition access to health care on buying health insurance, is enforced in precisely the same way that the act does. you either buy health insurance our pay a penalty. of $695. you don't have doctors throwing people out on the street. so the only -- >> you say the penalty's ok but not the mandate? maybe i misheard you. >> no. they create this storm that says, look, the only alternative to doing the way we've done it, if we condition access to health care on buying health insurance, the only way you can enforce that is making sick people not get care. i'm saying, no, no. there's a perfectly legitimate way they could enforce their alternative, i.e. requiring you buy health insurance when you access health care, which is the same penalty structure that's in the act. there's no moral dilemma between having people have insurance and denying them emergency service.

congress has made a perfectly legitimate value judgment that they want to make sure that people get emergency care. since the founding, whenever congress has imposed that public responsibility on private actors, it is subsdiced it from the federal treasury. it has not con scripted a subset of the citizenry and made them subsidize the actors who are being hurt, which is what they're doing here. they're making young, healthy people subsidize insurance premiums -- [inaudible] nondiscrimination provisions -- [inaudible] and that is the fundamental problem. >> so i want to understand the choices you're saying congress has. congress can tax everybody and set up a public health care system. that would be ok? >> yes. tax power is --

[inaudible] >> ok. congress can -- are you taking the same position as your colleague? congress can't say we're going to set up a public health system but you can get a tax credit if you have private health insurance because you won't access the public system? are you taking the same position? >> i fully agree with my brother, that a direct tax would be unconstitutional. i don't think he means to suggest, nor do i, that a tax credit that exemptifies you buy insurance creates problems. congress incentivizes all kinds of activities. if they gave as you tax credit for buying insurance, then it would be our choice whether or not that makes economic sense. >> if a taxpayer fails to meet the requirement of having minimum coverage, then they are responsible for paying the shared responsibility payment. >> the difference is that the taxpayer's not give an choice. it's the difference between

banning cigarettes and saying, i'm going to enforce that legal ban through a $5 a pack penalty and saying, look, if you want to sell cigarette it's, fine, i'm going to charge you a tax at $5 a pack. >> i think that's what's happening, isn't it? i thought that everybody was paying, what is it, $10 a pack now? i don't even know the price. it's pretty high. i think everybody recognizes that it's all taxation for the purposes of dissuading to you buy it. >> that's precisely my point. and everyone intuitively understands that that system is dramatically different than saying cigarettes tomorrow are illegal. >> it is different. i agree with that. but you pointed out, and i agree with you on this, that the government set up these emergency room laws. the government set up medicaid. the government set up medicare. the government set up chip. and their 40 million people who don't have the plight of insurance. in that world the government has

set up commerce. it's all over the united states. and in that world of course the decision by the 40 million not to buy the insurance affects that commerce and sub stangsly so. so i thought the issue here is not whether it's a violation of some basic right or something to make people buy things they don't want, but simply whether those decisions of that group of 40 million people substantially affect the interstate commerce that has been set up in part by these other programs. that's the part of your argument i'm not hearing. >> it islear that the failure to buy health insurance doesn't affect anyone. defaulting on your payments to your health care provider does. congress chose for whatever reason not to regulate the harmful activity of defaulting on your health care provider. they use the 0% or whoever among the uninsured as a leverage to

regulate the 100% of the uninsured. >> i agree that that's what's happening here. and the government felt that that's because insurance market is unique and in the next case it will say the next market is unique. but i think it is true, as most question in life are matters of degree, in the insurance and health care world, both markets, two markets, the young person who is uninsured is uniquely approximately very close to affecting the rates of insurance and the cost of providing medical care in a way that is not true in other industries. that's my concern in the case. >> it would be perfectly fine if they allowed -- do you have risk for young people on the basis of their risk for disease. just like you judge flood

insurance on the homeowner's risk of flood. one of the issues here is not only that they're compelling us to enter into the marketplace, they're not -- they're prohibiting us from buying the only economically sensible product that we would want. catastrophic insurance. everyone agrees the only potential problem of the 30-year-old as he goes from a healthy 70% of the population to the unkwlealt 5%. and yet congress prohibits anyone over 30 from buying any kind of catastrophic health insurance. and the reason they do that is because they need this massive subsidy, justice aly theow, it's not other numbers. c.b.o. said that injecting my clients into the risk pool lowers premiums by 15% to 20%. so even if we were going to create exceptions for people that are outside of commerce and inside of commerce, surely we'd make congress do a closer nexus and say, look, we're really addressing this problem. we want these 30-year-olds to get catastrophic health insurance and not only did they

deprive them of that option and i think that illustrates the dangers of giving congress these powers because they can always leverage them. they can always come up with some public policy rationale that converts the power to regulate commerce into the power to promote commerce which as i was saying before is the one that i think is -- [inaudible] >> a large part of this argument has concerned the question of whether certain kinds of people are active participants in the market or not active participants in a market. and your test, which is a test that focuses on this activity, inactivity distinction, would force one to confront that problem all the time. now, if you look over the history of the commerce clause, what you see is that they were sort of unhappy periods, when the court used tests like this, direct versus indirect, commerce very surs manufacturing -- versus manufacturing, i think most people would say those things didn't work and the question is, why should this test, inactive versus active,

work any better? >> the problem you'll identify is exactly the problem you would create if you bought the government's bogus limiting principles. you'd have to draw the insurance industry, return you to the 1930's where they were drawing all these kinds of distinctions among industries, whereas our test is very simple. are you buying a product or is congress compelling to you buy a product? i can't think of a brighter line. if congress has the power to compel to you buy this product, then obviously they've got the power to provide you -- compel to you buy any product because any purchase is going to benefit commerce and this court is never going to second guess congress' policy judgments on how important it is this product versus that product. >> do you think that drawing a line between commerce and everything else that is not commerce is drawing an artificial line? like drawing a line between commerce and manufacturing? >> the words commerce and

noncommerce is a distinction that comes directly from the constitution. the framers consciously gave congress the ability to regulate commerce because that's not a particularly threatening activity that deprives you of individual freedom. if you were authorized to require a to transfer property to b, as the early cases put it, you have legislation which is against all reason. because everyone understands that regulating people who voluntarily enter into contracts and terms and conditions does not create the possibility of congress compelling wealth transfers among the citizenry and that is precisely why the framers denied them the power to compel commerce and precisely why they didn't give them that power. >> thank you, mr. carvin. general, you have four minutes remaining. >> thank you, mr. chief justice. congress confronted a grave problem when it enacted the affordable care act. the 40 million americans who

can't get health insurance and suffered from often very terrible consequences. now, we agree, i think, everyone arguing this case agrees that congress could remedy that problem by imposing insurance requirement at the point of sale. that won't work. the reason it won't work is because people will still show up at the hospital or at their physician's office seeking care without insurance, causing the cost shifting problem and the suggestion that they can be signed up for a high-risk pool at that point is utterly unrealistic. think about how much it would cost to get the insurance when are you at the hospital or at the doctor. it would be -- it would be unfathomably high, that will never work. congress understood that. it shows the means that will work. the means that it saw work in the states and in the state of massachusetts and that it had every reason to think would work on a national basis. that is the kind of choice of

means that mccullough says that the constitution leaves to the democratically accountable branches of government. there is no temple of limitation in the commerce clause. everyone subject to this regulation is in or will be in the health care market. they're just being regulated in advance. theags exactly the kind of thing that ought to be left to the judgment of congress. and the democratically accountable branches of government. and i think this is actually a paradigm example of the kind of situation that chief justice marshall envisioned in mccullough itself. that the provisions of the constitution needed to be interpreted in a manner that will allow them to be effective in deterioration the great crises of human affairs, that framers could not even envision. but if there's any doubt about that under the commerce clause, then i urge this court to uphold the minimum coverage provision as an exercise of the taxing

power. under new york against united states, this is precisely parallel situation. the court thinks there's any doubt about the ability of congress to impose the requirement in 5000-a, sub-a, it can be treated as the supplicant seeks accomplishment. and the court, as the court said in new york, has a solemn obligation to respect the judgments of the democratically accountable branches of government and because this statute can't be construed in a manner that allows it to be upheld in that way, i respectfully submit that it is this court's duty to do so. thank you. >> thank you, general. council, we'll see you tomorrow. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> and the court is -- supreme court is expected to deliver its ruling on the constitutionality of the 2010 affordable care act tomorrow. our coverage will be live starting at 10:00 a.m. eastern on c-span 3.

right now the u.s. house is in recess, as members attend the annual white house picnic. the event is hosted by the president and first lady and held on the white house lawn. members of the house and senate are invited to attend with their families. members will return here to the u.s. house at 8:15 eastern to continue work on amendments to the 2013 transportation and h.u.d. spending bill. live coverage here on c-span. >> i could have told you at the beginning of this year that here's how it would run. there would be a republican primary and the republicans would look enfeebled. that there would be a nominee and the republicans would then rally around that nominee and the true nature of the race would reveal itself which is that it was going to be close. i would tell thought media would eat that up and then say romney's surging, obama's flagging, this is a race, you know, and that is -- i'll tell

you what the next phase is going to be. the next phase is going to be the media's going to become more alert to the fact that governor romney has been completely evasive about his positions, has been all over the lot on many of them, and has tried to play a game of hide and seek with the american people. and i think that the news media will be challenged to challenge him, to be more forth coming. and then the story's going to be that for a while. this is the nature of this business. >> look behind the presidential election process when you want online with c-span's road to the white house and the c-span video library. >> tomorrow the house is scheduled to vote on a contempt of congress resolution against attorney generic holder for failing to comply with the subpoena for certain documents related to the fast and furious gun tracking program. and tomorrow as always we'll have live gavel to gavel coverage of the house here on c-span.

white house spokesman said today that house republicans have made the strategic choice to try to score political points with tomorrow's contempt account on general holder. this would be the first time a sitting attorney general is held in contempt of congress. this briefing is 15 minutes. >> good afternoon, ladies and gentlemen, thank you for being here on a glorious afternoon. i do not have any announcements to make at the top so i'll take your questions. associated press. >> thanks. on attorney general holder, the speaker has said that will go to a contempt vote tomorrow. there does not appear to be any signs of a last-minute -- [inaudible] so it seems like we've moved beyond hypothetical to this will happen tomorrow, there will be a vote. i know that the white house -- [inaudible] but i'm wondering if could you

speak to what -- [inaudible] for the country, for the white house, if any you see if in fact he's held in contempt. >> i can tell that you house republicans have made the strategic choice to try to score political points by focusing their time and attention on a law enforcement operation from 2009 that was botched and that everyone agrees was botched and it employed a flawed tactic and everybody agrees that it employed a flawed tactic. and they've made that choice rather than focusing on jobs and the economy. and with millions of americans still struggling to pay their bills, i cannot imagine this will sit well with most americans. you saw i think and it has been reported on that white house staffers met with committee members staff yesterday to try

to resolve this and there was an ample opportunity yesterday to resolve this as there has been in the past, when the attorney general met with the chairman. unfortunately the republicans have chosen politics and i say that not just using my own voice but i am quoting a leading house republican who described this process as politics. we, the justice department, has been extremely cooperative in providing thousands of pages of documents. the attorney general has appeared to testify at numerous times on this matter. and the chairman of the committee himself said on sunday that he has and there is no evidence of any white house involvement in this operation, this issue.

so it is unfortunate. we hope republicans change their minds as to what's the best thing to do for the american people. but we certainly understand or see and agree with the assertion by some, including a leading house republican, that this is politics. >> so, can you speak to whether a contempt vote of the attorney general in the house would have any substantive impact on how he does his job, the administration -- [inaudible] ? >> i would refer you to the department of justice for answers to questions like that. although that is a hype indicatecal -- hypothetical. the vote has not happened. what i can say i think some confidence is that it will be viewed for what it is if it takes place and that is as political theater.

an action taken by congress that does not respond to the most urgent priorities of the american people. and it's the kind of political gamesmanship that frustrates the american people so much. about what happens in washington. this is not why americans across the country go to the ballot box every other november, to elect members of the house. they don't do it so that the house, congress in general, engages in political gamesmanship and theater and launches fishing expeditions. they send them here to get work

done that's essential for the health of the american economy, for our national security, creation of jobs. and they send them for legitimate oversight. that's one of congress' responsibilities. and this administration has been enormously cooperative with congress in its legitimate oversight function and will continue to be so. >> one other question on syria. more violence today. [inaudible] a tv station, the government there blames rebels. assad has said yesterday, i believe, that the country's in a state of real war. i'm wondering if the white house agrees with that assessment -- [inaudible] >> i'll start with what you mentioned at the top. we condemn all acts of violence, including those targeting pro-regime elements and we call on all parties to cease acts of

hostility. this is in reference to your observation about the storming of a pro-assad tv station. in terms of assad's comments, his observation about the situation in syria is all the more profound because he created it. he caused it. the violence that is occurring there, the brutality that's being leveled against the syrian people is of his own doing. and, you know, we agree that the situation in syria is serious, it is dire, it is resulting in the tragic and unnecessary deaths of civilians and it is happening because of bashir al-assad's refusal to respond to the will of the syrian people,

refusal to step from power in order to give syria a chance for a better future. it is the result of his choice instead to try to cling on to power at all costs, to try to cling on to power by spilling the blood of innocent syrians. and we are working with our international partners to continue to pressure assad. we note the increasing number of defections that have taken place from the assad regime and the assad military. and we remain committed to a transition in syria that cannot, because of the choices he made, include assad. thanks. reuters. >> on the same topic. kofi annan has called a meeting

on saturday -- [inaudible] conditions in syria and his plans. i wondered if you could tell us what the united states hopes will happen there. >> we look forward to the june 30 meeting in geneva that you mentioned and we lock forward to it as an opportunity to press forward for syria's political transition. we are working full speed ahead on that transition at this critical juncture with our international partners. special envoy aunanimous has drafted a transition plan that we feel embodies the principles needed for any political transition in syria leading to a peaceful democratic and respective outcome that reflects the will of the syrian people. the sooner this transition happens the greater the chance we have of averting a lengthy and bloody sectarian civil war and the better we'll be able to help syrians manage a stable transition to democracy. this is a step toward the transition that has to take

place. but i would not speculate about or characterize on the outcome of the meeting that has not taken place yet. >> thank you. on health care and the supreme court tomorrow. the president yesterday, two days ago, vigorously defended the consumer aspect that are already -- [inaudible] he doesn't talk about the individual mandate in terms of the government changes. does the president think that popularity of those individual -- of those areas that he's been talking about is enough to justify the constitutionality of the whole act? and what should we expect tomorrow in terms of the presidential reaction? will the president make a statement after the court ruling? >> the constitutionality of the act depends not on public opinion of polls but on legal precedent. which is well established. the president has spoken to this

many. many, many legal scholars have spoken to it. several very prominent conservative jurists have ruled in favor of the constitutional -- constitutionality of the affordable care act because of their view of that precedent. the fact is the affordable care act gives hardworking, middle class families the security they deserve and we are confident that the law is constitutional. and i think that's what the president has been referring and that's why we're focused on implementing the law. we await the supreme court decision as does everyone. but while we do we continue to implement the law. and i would note that thanks to the affordable care act, 3.1 million more young adults who otherwise would have been uninsured have health insurance on their parents' plan. 5.3 million seniors with medicare have saved $3.7 billion on their prescription drugs and everyone on medicare can get preventive services like

mammograms for free, again because of the affordable care act and 54 million americans with private insurance can now receive many preventive services without paying co-payments or deductibles. since you mentioned it, the mandate, the individual mandate, is a product of a conservative think tank. it was adopted by many leaders in the republican party in the 1990's. it was adopted by and implemented by a republican governor in massachusetts. and while the president opposed it in the campaign, he in the process of crafting a health care reform bill in office was persuaded by experts in the field that it was the best and most efficient way to ensure that we can bring large number of people into and under coverage, getting insurance coverage, and to allow for the

-- to ensure that those with pre-existing conditions get health care coverage. and that was the impulse behind it. again, it's not about public opinion of polls, it's about policy. >> you mentioned that he had original opposition to the mandate. is the health policy team here at the white house prepared to work on a congressional fix quickly this year depending on what happens? >> i won't -- with just 20 hours left or so before we hear from the supreme court or before we expect to hear from the supreme court, speculate about hype thetthethcal scenarios. we await the decision as everyone does and i can simply point you to what the h.h.s. secretary, secretary sebelius, has said, that we are ready. we will be ready for the decision when it comes down. >> [inaudible] >> scheduling updates for you on that.

let me move. cheryl. >> thanks. would the president veto a bill that would delay the sequester -- [inaudible] >> that's a hypothetical. we have said that the president has put forward on numerous occasion, most recently in his budget, the kind of balanced plan that deals with our medium and long-term fiscal challenges while ensuring that we invest in areas like innovation, education, research and development, that reflects the consensus thinking of a broad array of experts and a broad mr. rahall: -- array of republicans and democrats, at least republican wloss aren't currently members of congress. and that is the right way to go. that's the way to deal with our fiscal challenges, that's the way to ensure that in dealing with our fiscal challenges we do not ask, as the republican plan

does, that the burden of meeting those challenges falls solely on middle class americans, seniors, the parents of children with disabilities, and others. it asks that everyone does their fair share and that everyone plays by the same set of rules and that's the president's position and has been for a long time. and that avenue remains open to congress to take. and again it bears remain peting that there is broad consensus on what the outlines of a comprehensive budget deal should look like. it must include spending cuts, it must include changes to our entitlement programs, to make them stronger, it includes -- and it must include revenues.

if it doesn't have all three legs of the stool, then it is likely to fall over because it relies too heavily on one or the other. in the case of the republican plan, it basically doubles down on the policies of the last -- of the first decade of this century, and the previous administration that said, the solution to our economic problems is simply to give more tax cuts to the wealthiest americans and tell wall street and insurance companies and everyone else that they can write their own rules and that everyone eventually will benefit. and the problem with that theory is that we've tried it and hasn't worked. it precipitated the worst economic crisis in our lifetimes. so the president's approach is clear. and he's not a lone voice out there saying that's the approach we need to take. the outliars here are members of the republican party in congress

who have refused almost unanimously to acknowledge that we need to include revenues as part of a broader package. >> national riffle association is encouraging members of congress to vote to hold the attorney general in contempt because they say fast and furious is part of the obama administration's anti-gun agenda. do you have a response to that? >> i'm not going to speculate about the outcome of a vote that we still hope doesn't happen because it should not. it's politics. and i think that in many ways your question reflects the politics of this. i would only say, as broadly, that the idea behind that thinking suggests that there was some grand plan behind the fast

and furious program when in fact everyone knows, the president did not know about this tactic until he heard about it through the media, the attorney general did not know about it, the tactic itself was employed by the previous administration in a different operation. this was a field office tactic that was flawed. and when the attorney general learned about it, he took action to ensure it was no longer used. and he directed the inspector general at the department of justice to investigate. so the premise behind the assertion falls apart upon even the bearest of -- barest of inquiry. >> you said in part the republicans' agenda to score some political points, did the president agree with former speaker nancy pelosi that this contempt vote is an effort to distract the attorney general and the justice department on

voting -- [inaudible] issues? >> i can't speculate about motivations except to point you to the words of observers as well as the leading house republican that this is about politics. i think you should ask those who are engaging in those politics. what we know is that this administration has been very cooperative with the legitimate oversight interests of congress. broadly speaking. and in regard to this matter. the department of justice provided enormous number of documents, provided hours and hours of testimony by the attorney general and other justice department officials. and twice now has made an effort to accommodate the interests of the chairman and leaders in the republican party on this matter. unfortunately they have shown very little interest in reaching a resolution. instead they've chose an path of political confrontation and

theater. which i think those of us who have been around for a while here recognize this for what it is. >> what is it? >> politics. as i said before -- >> the attorney general is going to be held in contempt of congress and you're saying it's for political points? >> that's how preposterous it is. because it's not about fast and furious. the operation itself, all of the documentation relating to the operation itself, prior to february 4 of last year, has been provided. the administration has endeavored to accommodate the committee and republican leaders in its request for further information. the assertion of privilege here has to do with the absolutely

necessary action that any president, any head of the executive branch must take in order to preserve the capacity of the executive branch, to engage in internal deliberations. both now and in the future, for every administration going forward, for every president of either party or some party in the future. >> has the -- is the president concerned at all the precedent this is going to set, the attorney general being held in contempt? has he been personally engaged at all? >> thith speaker of the house has made his position pretty clear on this. and it's highly political in nature. i haven't had the conversation about this with the president in the way that you framed it. i think he has absolute confidence in his attorney general and what you're hearing from me are the views of the president and the white house and the administration, that this is a political theater.

it is an unnecessary distraction from the work that congress should be doing for the american people and the economy, on jobs, and i think many americans, most americans will view it that way. >> one final question on health care. what does the supreme court strikes down the individual mandate but you a louis protection for pre-existing or allows the protection for those who have pre-existing conditions, what then? >> nora, i can't speculate on all the various things shah thank have been put forward by -- things that have been put forward by really smart people in the press and in the health care field and the legal field. i think we just have to wait for the decision and move forward after that.

>> is the contempt vote worth a stand on principle? >> i'm not sure i understand the question. >> last week you said that the reason that both of these documents in question were not being turned over was on principle. not because there was any sensitive material that was being released. so, the fact is that now you most likely will have this contempt vote. it was worth it? >> taking the position beyond -- into the future that will have to be evaluated in the future. it's absolutely worth the assertion of privilege that's necessary for any president of any party to preside over the executive branch and allow for the executive branch to have the kind of internal deliberations that it needs to have, had the response to congressional inquiries or media inquiries, the cooperation that's been extended to congs on -- to congress on this matter has been extensive. everything about the operation itself, who planned it, how the

tactic was employed and why, all of that has been provided in full to the committee. and again i would point to the chairman of the committee who said over the weekend that there is no evidence, he has -- after all this he has what we made clear at the beginning, no evidence, because there is no evidence of white house involvement in this. this is a field tactic that was a bad idea and everyone recognizes that it was a flawed tactic. beginning with the attorney general and the president. the attorney general, when he learned about it, put an end to it. its employment, its use. and instructed the inspector general of the department of justice to investigate it. and again we have endeavored to cooperate with the legitimate oversight interests of congress and will continue to do so.

but this is as, a leading house republican has described it, it is politics. it is not what the congress should be up to right now. we know that we have challenges still. we have economic challenges that need to be addressed. congress needs to finish work on the transportation bill, needs to take action to make sure that student loans, student loan rates don't double in a few days. it needs to have the capacity to act very quickly on measures the president's put forward that would put teachers back in the classroom or even more construction workers on the job. it would give homeowners across the country the ability to refinance their home at these historically low rates. these are things the american people care about, you know, the actions taken by -- for political reasons by members of the house that, you know, win

them spots on cable talk show, do not particularly interest, i think, the american people. and i think the highly political nature of this has been in evidence just by the actions and rhetoric that you see from congress, from republicans in congress on this. >> is there anything the white house is doing now in these final hours to try to -- [inaudible] ? >> i think you saw it was reported that several senior white house staff members as well as staff from the department of justice met with committee staff to try to resolve this. there was an opportunity to resolve this and i think it was rejected for political reasons. there is a desire -- there remains hope that republicans will change their mind, will reverse their decision, their strategic decision to try to score political points.

you remain hopeful that common sense reveils here. although you do have to look at the beginning of the year when republicans announced that one of their chief legislative and strategic priorities was to investigate the administration and damage the president politically. again, that is not the kind of use of congressional time and authority that most americans would support or endorse. they'd rather have their leaders in washington focus on the issues that matter most to them. like economic growth and job creation. >> you said you wouldn't talk about the president's schedule tomorrow, but what will be taking place tomorrow? is there a room that's set up to respond, rapid response, to whatever the decision will be tomorrow? anything that you can shed in terms of the behind the scenes that will be taking place. >> most of our communications >> most of our communications happen in my office so