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Experts Debate Congress' Authority Over Health Insurance

MICHEL MARTIN, host: I'm Michel Martin, and this is TELL ME MORE, from NPR News. The comments of a Toronto police officer have inspired thousands of women but not in the way he intended. A few months ago he told a university group that women would be safer from sexual attack if they avoided dressing a certain way. The young women not only took issue with his remarks, they founded a grass roots movement that is spreading across North America to challenge that attitude. We'll hear about this sartorial activism a little later in the program.

But first we return to one of the central achievements of the Obama administration that is still being fiercely opposed by those who consider it not an achievement but an albatross to the American economy. We're talking about that hard fought healthcare overhaul law as we've been reporting. A number of states are waging fierce legal battles against various components of the law which is called The Patient Protection and Affordable Care Act. In Atlanta yesterday Florida and 25 other states made their case to strike down the law before a three-judge federal appeals court panel.

And at the heart of the opposition for many opponents is the so-called individual mandate requiring that most Americans enroll in some form of health insurance by the year 2014. Whatever the eventual ruling by the Atlanta court lawyers expect the matter will eventually end up before the U.S. supreme court but we thought this was a good time to check in on the status of the legal challenges to the law and the substance of arguments behind them. We've called upon Caroline Fredrickson, she's the executive director of the American Constitution Society for Law and Policy which describes itself as countering the activist conservative legal movement.

Welcome, thanks for joining us.

CAROLINE FREDRICKSON: Thank you very much, Michel.

MARTIN: Also with us from the Cato Institute, that libertarian think tank, the director of health policy studies Michael F. Cannon. He's been with us from time to time to talk about the healthcare law. Welcome back, thanks for joining us once again.

MICHAEL CANNON: Thanks for having me.

MARTIN: So, a tough day - it seems like it was a tough day for the Obama administration and of course, we're always told you can't read too much into the questions the judge's ask of lawyers, but right off the bat the judges were saying that they knew of no case in American history where the courts had upheld the government's power to force someone to buy a product, and that product in this case being the health insurance law. So, could you just talk a little bit about that? Is their analysis correct ?

FREDRICKSON: Well, it's a very interesting kind of a question because it sort of avoids the main issue here which is that the Commerce Clause which is the authority under which Congress passed the healthcare law, says nothing about activity or inactivity. The touchstone really as it has been under Supreme Court precedent for decades and decades is that does this affect interstate commerce? And when you're talking about an industry that affects 17 percent of our economy it clearly does affect commerce.

It's clearly within the scope of the Commerce Clause. The real issue is does Congress have the power under the Commerce Clause to regulate the healthcare industry, one of the biggest industries of our entire economy?

MARTIN: And you say it does?

FREDRICKSON: Absolutely.

MARTIN: Michael, why don't we hear from you and then I'll play a couple of clips from the argument itself. What's your response to that?

CANNON: Well, the problem with that expansive view of the commerce power and this is the part of the Constitution that says that Congress will have the power to regulate commerce among the states, is it would give the government virtually unlimited control over the economy, unlimited power to force Americans to purchase any private product, and it's inconsistent with the entire structure - well not only the language of the Commerce Clause the plain language of the Commerce Clause but the entire structure of the Constitution.

What basically happened here is we had a president, we had a Congress who was committed to forcing Americans to purchase insurance. If they had tried to do this by expanding Medicare to everyone, their courts would have upheld it, but they knew that they couldn't do that politically. The American people didn't want them to do that. They wouldn't be able to get the votes in Congress. So what they did was they forced Americans to purchase a private product and they realized they had to come up with a constitutional justification for that, so they tried to shoe horn what they wanted to do, what they had already decided they were going to do, into this commerce power in the Constitution which clearly does not give Congress the power that they're claiming.

MARTIN: Let me just play a clip from arguments yesterday that's - again it was before the U.S. Court of Appeals for the 11th Circuit which is meeting in Atlanta. The three judges were apparently selected at random from the entire panel across the country. One newspaper described this as a clash of titans, and now we're going to hear former Solicitor General Paul Clement, he's representing the states to your point, Michael, this is the point that he was making. Here it is.

(Soundbite of court hearing)

PAUL CLEMENT: It boils down to the question of whether or not the federal government can compel an individual to engage in commerce the better to regulate the individual. They're not engaged in commerce. They're sitting in their living rooms. They're not doing anything.

MARTIN: Now, let's just play another clip from the other side. Here's acting Solicitor General Neal Katyal. He's arguing that the individual mandate is constitutional because all Americans will eventually need healthcare, so therefore everybody should pay. Here it is.

(Soundbite of court hearing)

NEAL KATYAL: Everyone is invariably consuming the good and it's a question of who's going to pay for it. It's about the failure to pay not the failure to buy.

MARTIN: One of the things that I think a lot of Americans have been puzzled by is this matter has already appeared before a number of lower courts and they split.


MARTIN: So, Caroline, why don't you help us understand why they split?

FREDRICKSON: Well, I mean, one hates to say it quite this way but, you know, unfortunately, an obvious fact is that they've divided based on who the appointing presidents were. And so those judges who were appointed by Republicans have found the law unconstitutional and those appointed by Democrats have found it constitutional. Now, obviously I, you know, I think there's more than just partisanship at issue here. I think there's actually ideological differences that undergird the different rulings.

And one of the things I'd like to do though is step back for a second because what I think is really ironic here is that this proposal, the mandate, is really the free market proposal and it was originally a Republican idea proposed in the early '90s as a counter to what people anticipated President Clinton's legislation to be, which would have been a single payer universal program like an expansion of Medicare.

And there was a group of Republican senators including, I think, Senator Larry Craig of Idaho, including Jessie Helms, and Trent Lott - not probably considered the most liberal members of the Senate - endorse legislation that included an individual mandate. And even in 2005 you had Mitt Romney signing legislation in Massachusetts that included an individual mandate. This was always touted as the free market alternative to a single payer.

MARTIN: Mitt Romney being the - he's a Republican who is now running for president who is the former governor of Massachusetts who signed a similar law in Massachusetts. Michael, what about that?

CANNON: Well, it's just nonsense to say that an individual mandate is a free market proposal when under an individual mandate the government is compelling people to participate in the marketplace, compelling people to purchase a product that is not - by definition that is not free. It's all tautological. It's really an odd point to make.

MARTIN: If you're just joining us you're listening to TELL ME MORE from NPR News. We're talking about the challenges to the Obama administration's signature healthcare overhaul bill and a number of states are challenging the law as unconstitutional. I'm joined by the Cato Institute's Director of Health Policy Studies Michael F. Cannon. He's here with us in our Washington, DC studios along with Caroline Fredrickson. She is the executive director of the American Constitution Society for Law and Policy.

Should the impact of the law matter and the impact of the law and its possible repeal matter? Michael, do you think? Or is - should it solely in your view be a philosophical argument?

CANNON: Is it...

MARTIN: Just hold on, just and the only reason I say this Judge Frank Hall repeatedly asked about the possible effect of the court striking down the individual mandate but upholding the rest of the law. And I'm wondering - I'm asking your opinion of whether you think that should matter.

CANNON: Well, I think that the fact that law is already increasing people's health insurance premiums that it is going to throw - will cause a third of employers to drop coverage according to a recent report. Those should not bear on the rulings on how judge's weigh whether or not Congress has the power to force people to purchase health insurance or not. Those are immaterial to that question. What the judges should be looking at is did the Framers, when they drafted the Constitution, gave Congress certain enumerated powers, include the power to compel people to purchase a private product.

Actually, they did if what you're talking about is private arms. In order to arm the militia, Congress has, under the militia clause of the Constitution, compelled private citizens to purchase firearms in order to defend the country.

MARTIN: Caroline?

FREDRICKSON: Well, it's very interesting that the one power that Congress has to affect Congress can't actually be used to engage in commerce. Under Supreme Court precedent, a longstanding nature, Congress can pursue policies that are appropriate under the commerce power, as long as the means that they choose are necessary and proper to the ends that are laid out.

And the ends that are laid out in the legislation are clearly within Congress's power. They want to lower the cost of health insurance. They want to provide more health insurance for more people. They want to ensure that people with preexisting conditions get covered. Those are all very legitimate ends. And I think it's - the ironic moment here is that Michael admits that Medicare is fully founded on the Constitution. So we can have a government-run universal program that Congress can pass, but you can't have a privately-run system that Congress can help regulate.

MARTIN: I just want to clarify for those who may be wondering what we're talking about here, Michael cited a study by MacKenzie and Company, the consulting firm, Republicans are circulating a study that predicts that up to 30 percent of companies will stop offering health insurance benefits, cut them, or reduce the number of employees who get them as a result of the law. And as you might imagine, there are counter studies that also say the effect is negligible and point to the number of Americans who will then be covered by health insurance who do not now have it.

And I would like you to address in the minute we have left if what question is likely to go to the Supreme Court, since all sides predict that it will. I'm interested to know what question you think is the one that will be before the court eventually. And of course I know you want to answer, Caroline.

CANNON: Right. I just want to clarify that I do not think Congress is authorized to create Medicare by the Constitution. It is authorized under the Supreme Court's constitutional jurisprudence, which has strayed from the plain meaning of the Constitution. The Constitution, you know, includes the words general welfare and that basically gives Congress the power to create any program it wants that the Congress thinks promotes the general welfare.

The problem with that interpretation of the Constitution is that if that's what the general welfare clause meant, then the other innumerated powers would be redundant. The Framers wouldn't have had to put them in. So that's clearly not what the general welfare clause means, nor is the necessary and proper clause. It's got this open-ended grant of power to Congress to do whatever they want.

MARTIN: Well, this suggests to me again why the matter is before the courts because you have two completely different interpretations of what this language is supposed to mean.

CANNON: Right. So, but even if you work within the Supreme Court's constitutional jurist prudence, ObamaCare goes too far. It claims the power for Congress that not even the Supreme Court has recognized that Congress has. It goes beyond what the Supreme Court has said, that commerce power of will - does encompass.

MARTIN: OK. I don't know if I have time for another bite of that apple. Caroline?

FREDRICKSON: Oh, I just say I think this - where this goes ultimately is that these arguments do lead to a challenge to Medicare and Social Security. And I think that's the real debate we're having here.

MARTIN: OK. Michael, what do you think the real debate is that we're having here?

CANNON: The debate we're having right now is about the commerce power. The other debate about Medicare and Social Security is - it has to do with a different part of the Constitution. This question is, does the commerce power give Congress the authority to force people to purchase a private product, and if there's a court to strike this law down, it will have zero effect on Medicare and Social Security.

MARTIN: All right. We'll have to leave it there for now. Michael F. Cannon is the CATO Institute's director of health policy studies. The CATO Institute is a libertarian think tank. Caroline Fredrickson is the executive director of the American Constitution Society for Law and Policy, which describes itself as countering the activist conservative legal movement. They were both here with us in our Washington, D.C. studios for a spirited discussion, but civil. And we appreciate that. Thank you both so much for joining us.

FREDRICKSON: Thank you, Michel.

CANNON: Thank you. Transcript provided by NPR, Copyright NPR.