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Ewan Watt:Ladies and gentlemen, thank you for joining us this evening. My name is Ewan Watt. I'm the manager of external affairs of the Charles Koch Institute. Before I introduce our guest, to thank the Kirby Center for their hospitality and letting us use this room this evening. And I also want to welcome fora.tv who are here recording our guest remarks and the Q & A. In addition, I want to acknowledge the Charles Koch Institute Alumni that have made it here this evening. The Institute is fast approaching a thousand alumni from its educational program, cap, keep, and liberty at work. The programs provide individuals who are passionate about liberty. The opportunity to become more effective advancing economic freedom and well-being throughout their careers. For those of you who might know someone interested in applying to these programs, you should have literature on your chairs or you can visit our website, charleskochinsitute.org. Writing in the descent in the 19934 case home building and loan versus [PH][Blaisedale]. Associate justice, George Sutherland penned that whether the legislation under review is wise or unwise is a matter with which we have nothing to do, whether it is likely to work well or work at all is in to question entirely irrelevant to the issue. The only legitimate inquiry we can have is whether its constitutional. If its not, its virtues. If it had any, you cannot save it. If it is, its faults cannot be invoked to accomplish [Static]. If the provisions of the constitution be not upheld when they pinch as well as when they comfort, they may as well be abandoned. Our special guest this evening has like his fellow Utah 80 years ago, built a career not just on dissecting the virtues of legislation and legal cases, but by asking the all important question, is it constitutional? In 2010, when he was running to be a nominee for the US Senate, he stated that just because the supreme, just because the Supreme Court says you can do it, doesnt necessarily mean its constitutional because not every entry to the constitution, not excess of power under the constitution can be remedied in court or well-being. There are limits to what the courts practically can or will do. Since entering the senate in 2011, he has become one of the most sought after and respected voices on constitutional law. And his first year of office, the weekly standard applauded him for his brilliant Socratic lecture on Obamacare and the constitutions commerce clause. Well, the Washington post, know that his ideas have one support from Americans who believe that the federal government has gotten too big and too expansive. A member of the Senate Judiciary Committee and a ranking member of its antitrust competition policy and consumer rights subcommittee, he's the author of a new book out of this past Monday when John Roberts was wrong about healthcare, a conservative critique of the Supreme Court Obamacare ruling. As part of the Charles Koch Institute's work to foster productive dialogue among diverse voices on critical topics, were pleased to host Senator Mike Lee. [Applause] Mike Lee:Thank you very much for that kind introduction and thanks so much for letting me come and speak here tonight. This is a great place. I always find comfort in that painting over there reminds me of the fact that these were breathing mortal human beings who set up our system of government and its good to see their pictures up there because it reminds us of the sense of accountability that we all have to keep the system of government running that they set in place for us. Id like to start my remarks this evening by talking a little bit about that system of government and what they put in place. I tend to believe that Justice [PH][Skuleah] is right. When he says as he does from time to time that every tinhorn dictator can have a constitution with the Bill of Rights. It doesnt make him the author of good government simply because he is authored or/is in possession of a Bill of Rights in this constitution. What really separates our constitutional system from others, is the mandarin wished that the constitution divides and separates powers. You see, our founding generation came from a background that caused them to acknowledge. There's great danger in excessive consolidation of power. They experience this with their own national government. It was the national government that was not based in Washington DC that didnt exist then. Washington DC, what we now call Washington DC, was then part of the colony of Maryland. Our national capital at the time of the revolution was of course based in London. And that was a national government that over time started to prove a certain tendency to tax us too much, to regulate us excessively. It was so distant from us that it was slow to respond to the needs of the citizenry. And after a while, we came to realize that this was a big problem and thats really what gave rise to the revolution. And so our founding fathers after an early instinctive experience with an intentionally very weak national government under the articles of confederation, realize that that government was too weak. They instinctively put in place this almost impudent national government that couldnt really do anything because they didn't trust national power. They realize that national governments are much more likely to become big and to become tyrants as they inevitably do unless you carefully cabin their power. But they went too far and they came up with a national government that couldnt really do anything. And so they finally got it right when they put together the constitution in that hot faithful summer of 1787 and they put together a list of powers that our national government would have and more importantly implicitly made clear that all powers not granted to the national government would be reserved to the states. That of course, that implicit assurance was made explicit several years later with the 10th amendment. But to the founders, this was their understanding from the very onset. Importantly, they divided power along two axes. First, along the vertical axis as I mentioned a minute ago, they recognize there needed to be a distinction between state power and federal power. And so they saida few things that our national government will do, a few things that are necessarily national in nature, they're unavoidably national in nature and that would include national defense, coming up with a system of weights and measures that would be uniformed. Regulating trade or commerce between the states and with foreign nations. Protecting trademarks and copyrights and patents, declaring war and all other things related to national defense including my favorite power, the power to grant letters of mark and reprisal, mark with a Q. I often thought that if my wife and I had another son, we have two sons named James and John and a daughter named Eliza. If we had another son, wed probably named him Mark and do it Mark with a Q just in my memory of favorite provision of Article 1 section 8. Now for those of you who are less than familiar with this provision, this is the one that basically gives congress the right by issuing a letter of mark and reprisal to give you a hall pass. In the name of the United States, it allows you to engage in state sponsored acts of piracy on the high seas and I dont know how long I'm going to serve in the senate but if its the last thing I do, I'm going to get my own letter of mark and reprisal. I'm going to be a pirate and you're all a judge. The point is, this was a limited list. It was necessarily decidedly limited. There was no power in that document for congress to enact good legislation generally. The power to enact good legislation generally was reserved to the states because they understood that if you gave congress general powers, general police powers as well call them, they would inevitably become abused. Its just a fact of life. If you feed a python, its going to continue to get bigger and bigger and so too with national governments, whether they're headed by a king on the one hand or an elected president on the other hand, or as it turns out by an elected president who thinks he's a king. You're going to have a degree of tyranny with the national government unless that power is carefully bridal. So thats the vertical access. Weve got power distinguished between state power, which is broad or James Madison defined that the powers of reserve to the states is numerous and indefinite. And he also described the powers that were given to the federal government as few and defined. So thats the vertical access. They also split up the power along the horizontal access, and they said that within the federal government, it would be essential that each branch exercised its own power. They recognize that potentially, likely the most dangerous branch of government would be the legislative branch because the legislative branch by definition has the power to make law to enact rules carrying the force of generally applicable law enforceable the power of the sovereign. And with that power comes some real potential danger. And so they recognize that there was a need to offset those unique dangers of the legislative branch by making sure that the legislative branch would be that most responsive to the electorate, the most closely connected to the voters. And so they set up a system in which one house would consist of people elected by the voters every two years. And in the senate, we have people elected every six years, initially of course, they were chosen by state legislators. They still call them elections, as article 1 section 2 makes clear. But initially, those were chosen by the state legislatures since the 17th amendment. Theyve been chosen by the people just like representatives are only by a state. It was very important to the founding generation that there would be a clear distinction between legislative power and non-legislative power for this very reason. The legislative power is so potentially dangerous and destructive to liberty and property and even to life that they wanted to make sure that those wielding it would be directly accountable at regular intervals to the people. And then of course, they set up the executive branch, whose job it is to carry out the laws to execute them, to enforce them, to implement them and the judicial branch to interpret the laws and in particular to the side cases in controversies where people couldnt agree as to what the proper interpretation of the law passed by congress was. So the whole system works well as long as we honor and respect that distribution of power, that allocation of power along the vertical access and along the horizontal access. What weve got today is a situation in which more or less for the last 75 years, weve been disregarding both the distribution of power along the vertical access and along the horizontal access, and in describing to you what happened when the supreme court decided the Obamacare case, the [???][0:12:12.2] all illustrate how both of these separation of power principles have been eroded rather dangerously. A lot of this started during the new deal era when President Franklin Roosevelt really wanted to expand the role of the federal government. The court initially stood in his way, threatened to pack the court and lo and behold, on April 12th 1937. The supreme court issued a case called the NLRB versus Jones and Loveland Steel but forever change or at least up to this point has still left significantly changed the power of congress. This was in some respects, as significant as an amendment of the constitution. But make no mistake, there had been no amendment proposed by the requisite 2/3 vote in both houses of congress nor had there been ratification of any constitutional amendment by ? of the states. In this instance, you had an amendment to the constitution rot by these lawyers wearing black robes just across the streets from where we now sit. And what the court said basically is that, you know, it would tolerate acts of congress. It would not interfere with. It would not invalidate an act of congress as being outside of congress authority under the commerce clause. So long as congress was attempting to regulate activity that when measured in the aggregate had a substantial effect on interstate commerce. The reason thats so significant is that when you hair backs the legalese, there are very few aspects of human existence that cannot be regulated under that framework. There are very few things that we do with human beings. They do not, in some way, when measured in the aggregate, have a substantial effect on interstate commerce. Even something as purely local and non-economic is the number of breaths I take in a minute, might well be said in some respect, to have a substantial effect on interstate commerce, especially when you replicate my breathing across every state. You figure the fact that I'm not the only one breathing in Utah. There are other people breathing in Utah and people are breathing in Alaska and people are breathing in Nevada and sometimes way too much in Nevada. But you get the idea. When you all of that up, it can be said to have a substantial effect on interstate commerce. So everything affects everything else. Everyone belongs to everyone else. Congress owns all of this as far as this legislative jurisdiction goes. Now, prior to the case that were talking about today, since 1937, the Supreme Court had identified something as being outside congress authority under the congress clause, under only two circumstances. Once in a case decided in 1995 called the United States versus Lopez, where the court invalidated provisions of a gun-free school zones act. The court said basically congress went outside its authority because the mere possession of a gun in a school zone is not economic activity. Its not interstate, its neither interstate nor commercial and therefore its not interstate commerce. Another way of reading that opinion is just to say that congress got really sloppy and wasnt careful about how it linked up gun possession to interstate commerce. But in any event, the court invalidated that act. Again in 2000, the Supreme Court in the case called the United States versus Morrison invalidated provisions of the Violence Against Women Act, recognizing that reprehensible as acts of women arethey are not by their very nature necessarily interstate acts nor are they commercial in nature. Consequently they're not per se, subject to the jurisdiction of the congress. Sobut beyond those two exceptions, congress had acted on a whole host of areas regulating almost every aspect of human existence without any real interference from the supreme court of the United States. And so between 1937 and 2012 when NFIB versus Sebelius was decided. The authority of congress had grown substantially and one could not say that federal power, federal law making power was in fact a power that affected things in a way that that you could describe as few and defined. You wouldnt say that powers of congress were truly few and defined as James Madison described them. They really were much more numerous and indefinite and this was significant. So we had an interesting case brought before the Supreme Court and NFIB versus Sebelius because congress perhaps in Bolden by many decades of the Supreme Court demonstrating such extreme deference to congress. Congress got in Bolden by this and congress said, well, look, lets shake things up a little bit. Lets see how far we can go. Lets pass a law, telling the American people that they have the bi-help insurance, not just any help insurance but that kind of help insurance the congress in its infinite wisdom deems necessary for every American to purchase. And lets use our old standby, the commerce clauses our bases for authority to do that and it will be awesome, it will be fun. Well tell everybody, theyve got to buy this kind of health insurance and we will penalize them under federal law if they dont. Some had suggested early on, well, maybe we should us the taxing pair, maybe we should convince them to do it, persuade them to do it by giving them a tax-based incentive to do it. Lets impose a tax on them if they refuse to buy the kind of health insurance that we suggest they need to buy that proposal was not very popular. And sometime between 2009 when the first idea was first raised in 2010 when the affordable care act was an act and that was dropped because they couldnt get enough votes even in an overwhelmingly democratic house and senate. It couldnt get enough votes to pass this as a tax. So they abandoned it, they opted it instead to utilize congress authority under the commerce clause, Article 1 Section 8 clause 3 to pass this in to law, to pass it as a penalty and thereby, you know, convince Americans that they had to buy health insurance. This appeared to be a pretty good opportunity for those who are concerned about the extent of congress power to make a challenge. And so a number of states as you know, a number of states as well as NFIB and some other groups filed suitthese lawsuits made their way all the way to the Supreme Court. The Supreme Court granted review, and the argument want something like this. The simple act or failure to act involves in not buying health insurance is not interstate in nature. Its not necessarily commercial in nature. In fact, its inaction, you're regulating inaction, that surely cannot be the proper subject of congress power to regulate interstate commerce. And thats more or less how the argument went. There was another very important component to the argument against Obamacare. The other component of it was unrelated to the commerce clause pointthat separate and apart from the commerce clause point that the affordable care act was unconstitutional because it required states to expand their Medicaid programs. Medicaid of course, is a state-by-state program but its federally funded. The states implement these programs and they do so with the significant amount of federal funds but they also use some state funds to back them. Obamacare required significant expansion of the state-by-state Medicaid programs and left the states basically no choice but to comply. So the challenge was also brought on this ground that this was an improper coercion of state authority. Congress doesnt have the power to commandeer the state legislative machinery for its own federal purposes. So the Supreme Court heard argument. I went to the arguments. I sat on the edge of my seat for every argument that I could hear and it was fantastic. I enjoyed every second of it. I had kind of an odd childhood. I started attending Supreme Court arguments when I was 10 years old. I think I was 30 before I realized that was kind of weird. But because of that, I had this sort of nostalgic feeling as I sat in the courtroom and watch these arguments. I watched every gesture, listen to every question, and I had my eye on some justices in particular especially Justice Kennedy. At the end of that week of arguments, I became overwhelmingly convinced that we were likely to win this, that we were likely to win it on two grounds. First that the spring port was likely to say, congress has no power under the congress clause to require you to buy a certain kind of health insurance under penalty and federal law, and it was also likely to say separate and apart from that, congress had overstepped its bounds by telling the states they must expand their Medicaid programs and they have no choice to do so. I was firmly convinced to this and I didn't expect to be convinced of it by the end of the arguments, but I was and I was thrilled, I was elated, I was ecstatic. It was almost difficult for me to sleep for the next three months because I couldnt wait for the Supreme Court to draw the line in the sand, a line that we had waited so long. A line that would perhaps signal that the Lopez and Morris and the cases I referred to a few minutes ago were not just blips on the radar screen, that there really is a limitation to congress power and that the court would be willing once again to protect those boundaries. So it waswith that kind of expectation that I showed up to the court on June 28th of 2012. I took my seat in the Supreme Court bar section. I still remember the Supreme Court bar having managed to go successfully from one hated profession, lawyer, to another even more hated profession, as a politician. Its interesting. My dad was a lawyer too. He had a little plaque in his office that said, Yes I'm a lawyer but dont tell me mother because she thinks I play the piano and a bordello. He also used to say its a shame when we allow an entire profession to be sullied on the basis of only 4 or 500,000 bad apples. In any event, so I'm sitting in the Supreme Court bar section of the courtroom. I'm looking around, I've got great anticipation, I know what I expect. The chief justice comes out and the justices theory lies from behind these red velvet curtains in the courtroom and the chief justice starts to read the opinion. The opinion of the court at the outset was very encouraging. The got right into after some brief introductory remarks and some other issues, got right into the commerce clause authority and you could almost cut with a knife the amount of emotional tension of the room. The heart of every conservative was rejoicing in that courtroom that day as the chief justice explained that congress did not in fact have the authority under the commerce clause to tell Americans they had to buy health insurance under penalty of federal law. You know, but for the fact that there are such strict rules of decorum in this room, they're confident there would have been high-fives, stones, pebbles and every other celebratory end zones sort of thing. You would've seen that in there that day. And then all of the sudden, the winds shifted andat least my sales lost their wind because all of the sudden, the chief justice said now we need to explain another argument raised by the government. Weve already concluded the congress doesnt have the authority under the commerce clause but thats not the end of our analysis. The government also argues that this can be sustained independently as a valid exercise of congress power to tax. And he then went on to explain that the court would and had, thereby did affirmed congress right to enact the individual mandate as an exercise of its power to tax. In doing this, he went through a lot of verbal gymnastics and he got through thatI'm going to return to that in a few minutes. After he left that point, he went on to explain that there was also a problem with the commandeering of the state legislative machinery that it was in fact a problem that congress told the states they had to expand their Medicaid programs, and that they had basically no choice to do that, that this was unconstitutional. So there again, our hearts were rejoicing. And there again, our hearts sank as conservatives when he went on to explain but have no fear, there's a way around this and he explained basically a [???][0:25:46.0] that Ill get back to in a few minutes, that would allow the court to leave Obamacare intact. As I went out of the courtroom that day, I immediately found myself surrounded by reporters, some of whom recognized me as a senator and as a senator who had previously heard for it in a Supreme Court Justice and they thought I might have something to say about the opinion and they were right. I did my best at first to try to put an optimistic spin on it, but I couldnt, because I could see that a great injustice had been done that day. And it was about that time that I decided that I wouldnt have to write something about this where this would require more than just a brief 30-second sound bite on an evening television show. But I needed to write something in which I could explain to the American people, to explain to a non-lawyer audience, why this opinion was so wrong and what happened. So I started writing something that became a book. It was released earlier this week. Its an eBook called Why John Roberts was wrong about healthcare, conservative critique of the Supreme Courts Obamacare ruling. In this book, I make two assertions of the outset. Number one, that Chief Justice Roberts, who joined with the courtsthe justices who are typically regarded as the courts four liberals. And Justice Ginsburg, Justice Brier, Justice [???][0:27:21.4] and Justice Keagan. He joined with them in reaching this conclusion that the individual mandate can somehow be sustained as a tax. That, I concluded and Ifor reasons, I explained in my book amounts to essentially a judicial rewrite of Obamacare, of the Affordable Care Act, because under about a centurys worth of jurisprudence of legal rules of court president from the Supreme Court. There is no way to read the language and act to buy congress in the individual mandate as a tax. There is a pretty well warrant set of cases that help us discern between a penalty and a tax and this one is a penalty. There's nothing about it that can be defended as a tax. So his decision to call it a tax was basically a judicial rewrite of what congress enacted. So that was one of the reasons that I decided to write this book is because I was so upset about the fact that the Chief Justice had gone through all these verbal gymnastics in order to call what was obviously a penalty, a tax. In order to call something that congress tried to push through initially as a tax but couldnt because it couldnt get the votes. So they passed it as a penalty as an exercise of congress commerce clause power. And now, having been unable to get the votes to do what would've made easier to sustain from a constitutional standpoint, congress was left up a creek without a paddle. But no worries because John Roberts and four other lawyers in black robes came to the rescue and said its okay, we will undo it for you, we will rewrite it for you as a tax, and then it will be sustained. I also explained in the book how the other aspect of the Supreme Courts ruling and that case would also amount it to a rewrite. And in some ways, the Medicaid expansion aspect of the Supreme Courts opinion is even worse. They're both bad and they're bad in different ways, but what the Supreme Court did with respect with the Medicaid expansion analysis, was to say, this is unconstitutional. The way congress wrote this, it is unconstitutional because it leaves the states with no option but to expand their Medicaid programs. Its just congress saying to the states, you do X, because we have to remember that the states are not political subdivision of the federal sovereign. The states are sovereign governments under themselves. They're limited purpose sovereigns because they're also subject to the sovereign authority of the United States as a whole. But they're not political subdivisions of the United States government. They have their own independent sovereign authority. So you can't just tell them, Do X and thats what congress had done and that, as 7 members of the Supreme Court including Chief Justice Roberts concluded was plainly unconstitutional. But then he said, dont worry, because were just going to read this as if it contained an opted out provision for the states. So that any state that doesnt want to expand its Medicaid program doesnt have to, and as long as we read it that way, then its constitutional. And so everybody can be happy and everybody can go home. So everybody have a great summer and then he walked away. So the problem that weve got there is that this is relatively unprecedented. This is not what the Supreme Court does. Its not what courts generally are supposed to do. When they find a provision of a particular statute unconstitutional. They then proceed with what's called the severability analysis. They undertake a series of analytical steps to figure out whether or not they can cut out the offending provisions. Cut out the part thats not constitutional and leave the rest intact. Sometimes they can and sometimes they can't. It depends on how divisible the offending provision is from the rest of it. I'm virtually certain from the way the opinion is written and from the facts and the law governing this particular case. It had Chief Justice Roberts proceeded to the severability analysis. He would've concluded and at least five members of the court would've concluded that this provision, the Medicaid expansion provision were not severable from the rest of the statute such that the rest of the statute would've had to go down. The unconstitutionality even just at the Medicaid expansion provisions would've been enough to sink the entire ship. So I think thats exactly what happened. He saw that that was going to happen and so he saved it by rewriting it. So the Chief Justice chose to rewrite Obamacare, not just once, but twice. And as a result, we now have on the books in its operation, in its practical application, an act of congress that was never passed. So its not just that nobody read it, its not just that congress didnt read Obamacare before they passed it, they didn't pass the actual law thats now in place because its been rewritten by 5 lawyers wearing black robes just across the street from us here. Thats wrong, thats a form of tyranny under our constitutional system. Thats not how this is supposed to operate. Now as I decided to write this book, I was haunted by a couple of things. One of them being my father who I eluded to earlier was himself a Supreme Court advocate and as I explained in the book, the last time I saw him argue in the Supreme Court of the United States. His opposing council was a bright young lawyer who was his friend, whose name was John Roberts. He and John Roberts were good friends and in fact when my dad won that case, John Roberts called him and said, Rex, I just wanted to congratulate you on the case and I wanted to tell you that my client came to me and asked why on earth, how on earth I could've lost that case 9-0? And I explained to the client, we lost it 9-0 because there were only 9 members on the court. This is indicative of the kind of personality this guy has. I have great respect for the Chief Justice and I know my dad did. The other thing you need to know about my dad is that, he was almost religious about his refusal to criticize what the Supreme Court did not just because he was a lawyer practicing before that court and you dont want to bite the hand that feeds. But also because of his deep respect and reverence for that court. I worry that my dad have died 17 years ago would be rolling over in his grave if he knew that his son had written a book calling out the Chief Justice of the United States by name criticizing him for an opinion. But here's how I justify it from my own mind. And dad, if you're listening, here's my justification. John Roberts did my job. I would not be criticizing him had he not treaded on my grass. He did my job and I'm going to call him out on it. What did he explained in the book? He is, in addition to what happened in the case and why it matters, why do we have to be concerned about it? I tried to analyze why it is that so many people were so quick to rush to praise it and try to explain what might have happened, what might have caused him to come to this conclusion. Because as Jen Crawfordhe's one of the leading supreme court followers in journalism, as she reported and as few other journalist reported last summer. There are widespread reports that the chief justice did in fact lean in the direction that I thought he was leaning at the conclusion of royal argument, and that when the 9 Justices met in conference and announced their votes, he was in fact planning to side with the four conserves on the court, Justice Skuleah, Justice Kennedy, Justice Tomas and Justice Aledo, that he did in fact vote that way but changed his vote a few weeks before the final judgment was handed down. And there are a number of theories out there about why he might have done that and I address those in my book why John Roberts was wrong about healthcare. One of the theories is that he did this in order to protect the institutional credibility of the court that he wanted to not allow the court under his watchs Chief Justice in the United States to become part as an institution that he wasnt comfortable with the perception of 5 Justices all appointed by a republican president voting against 4 Justices. All of them were nominated by a democratic president to invalidate President Obamas signature legislative accomplishment. And a lot people actually praised him for his willingness to Reach across the isle and reach this conclusion, because this was somehow a wise statesman-like act that would help preserve the courts institutional credibility. I find this argument very repugnant. I find it really disturbing. Because first of all, there is no isle on the bench at the Supreme Court, neither literally nor figuratively nor should there be. In fact once you're confirmed by the senate, there is no significance whatsoever to the partisan affiliation of the president who nominated you to that court. But more importantly, when you become a Justice on the Supreme Court of the United States or a judge in any of our federal courts for that matter. You take an oath and that oath requires you to disregard things like public perception, public perception of you, of your court, of your decisions, thats not supposed to factor into it. You're supposed to decide each case based on the law and the facts before you. So no matter how laudable people might want to make that kind of objective out to be, it isnt, not for a jurist. Perhaps you can make an argument that it would be if you're a senator or a congressman, you're doing something like that then. But it can never be what motivates you to do something if you're a jurist especially on that high court. Others had suggested that it might be more of an internal strategy; a strategy aimed it as colleagues, that this was his way of buying up influential capital within the Supreme Court among his colleagues. My wife sort of analogized this to rollover minutes its as though he viewed this as accumulating rollover minutes that he could use in a later month at another decision. A lot of people actually made this argument and praised him for it saying, this means were going to get a really, really conservative ruling in another case next term. Nonsense, thats not how the place works. And if it ever did work that way, heaven help us all. That too, if you were influenced by that, would result inwould be the product of an utter betrayal of its judicial oath, because here again, the perception of others whether inside the court or outside the court is not irrelevant, not even a permissible basis for making or influencing a decision within the Supreme Court of the United States or within any court for that matter. Before I open up for questions, I want to wrap up by analogizing this to a story from the bible. A lot of people when they think about judges, they think about the bible. When they think about Solomonthey think about Solomon as being the wise judge and everybody remembers the story of Solomon and the case that made him famous as a judge where he suggested that they split the baby in making a decision. The objective in that of course was not in fact to split the baby. He never intended to do that and how do you actually attempt that. I'm quite certain that neither of the parties before have would have gone home happy. No one would've gone home happy and everyone would've lost something that day. His purpose in doing that was to bring out the truth. You see, Solomon in that capacity was not sitting as an appellate court. He was sitting as a fact finder, almost akin to a jury. He was trying to bring out the truth in a particular case. It is not a good basis for judging. Too often however, judges in the federal system and/or state systems are tempted to Split the baby. What I mean by that is give all parties something that they can be happy about. Give all parties a piece of what they might have wanted in that case. But just like the litigants before Solomon. When you do that, when thats your objective, you often end up with a decision that is not only wrong but also that leaves no one with what they wanted, no one with what they deserve, no one with something thats even potable. In this case I can't be sure what exactly motivated Chief Justice John Roberts. Maybe it was the rollover minute theory. Maybe it was the concern for the institutional credibility of the court. Maybe he had something more to do with how people perceive him as a Chief Justice, with how historians would write about him, with how the mainstream media would report about the case. I dont know, I can't know, the only one who really knows that is John Roberts and Supreme Court Justices generally dont explain the rulings beyond the four corners of their own opinions. But what we do know is this, in this case he appears to have undertaken a Split the baby strategy. It didn't work. Its not just that it didnt work but it had amounted I believe to a betrayal of his judicial oath. He engaged in lawmaking and this is wrong. I attempt to explain in the book why this matters and what we can do about it, what some of the corrections can be, and I explain some legislative solutions to this problem one way or another. All of these solutions have to focus us back on maintaining this strict allocation of authority along the vertical axis, with power between the federal government and the state governments, and between the 3 branches of the federal government, to the extent that we can restore those separation principles. We will be more prosperous as a country and we can move forward. In the meantime, with this case, were left with a very bad ruling thats going to make a bad law even worse and even more difficult to implement. My hope is that as we all come to learn more about this case and what happened, it can be a great opportunity for us as a country, to have a renewed and long overdue dialogue about what the purpose of government is and at about how the government operates and about what our federal government needs to look like. So thank you very much for listening to me. [Applause] Mike Lee:You can ask me about anything you want, law, politics, religion, fashion, relationships, gardening, anything you wantquantum mechanics. Interviewer:Id like to ask about gardening. Mike Lee:Yes. Interviewer:But before we get to that, in the Supreme Court rulingpardon me if I mock up a couple of details herein the ruling, Justice Roberts made two points. He led with saying that if we have toif there's a way to save the law, we have to do it, and iflooking at the tax issue in the [???][0:43:33.4] case, all the arguments that made that a penalty rather than being a tax, if you invert them, make this a tax. Why is that reasoning so problematic? Mike Lee:Okay. So first of all, you're right in that he shorted out by saying, if there's a way to save it, we need to save it, and that is a very standard rule that the court applies. But therehas a very key distinction that we have to remember there, a very key limiting principle to that standard, which is, that whatever interpretation we end up has to be fairly possible based on the text. So that doesnt mean that you will go to any lengths, any at all lengths will be justified no matter what you do in order to make this happen. There has to be some fairly possible basis in the text for you to conclude that this is in fact a tax rather than a penalty. So what a hundred years worth of jurisprudence from the supreme court tells us, is that a penalty consists of a couple of things. First of all, youve got an affirmative obligation imposed by law and then in response to the violation of that law, youve got some financial exaction thats imposed in response to that, that bears noits not a generalized obligation to fund the government. A tax on the other hand is a generalized obligation to fund the government and is not triggered by a non-compliance with an affirmative legislative command. Interviewer:Hi, I'm JulieI'm here with Role Call. Could you tell me just a little bit about your decision to take time out of your busy schedule as a senator to come and speak on this particular subject to this particular crowd in this location? Mike Lee:Look, any time I get an invitation to speak at Hillsdale College, Ill take it. And if they tell me I can talk about the constitution and about NFIB versus Sebelius on top of that, I'm going to take it. So this was not a difficult hand-ringing decision for me. Interviewer:Hi there. Jordan Richardson from the Heritage Foundation, intern there. Some people have characterized this decision as a victory for the commerce clauses because it was limited and it did not say push the balance of the wicker case. Would you still say that even with a bad decision, its a victory for the commerce clause? Mike Lee:No. I'm not going to call it a victory in any respect. I will say I was glad to see that for only the third time in the last 75 years, the Supreme Court did identify something as beyond congress power under the commerce clause. I'm not going to call it a victory but its something. But the reason I won't call it a victory is because in order for it to be a victory in my mind, it had to be a victory for establishing some real limits on government power. This case did not limit government power. It expanded it, and it actually was worse than the status quo [???][0:46:56.4] because before this case, we at least had reason to believe that congress could act, it could pass a law and relying on the commerce clause and it would either satisfy the commerce clause, made it would either be considered about exercise the commerce clause or would not. If it were about exercise of the commerce clause, then it would be sustained. If not, then it wouldnt. But now, now were in a much worse position, because now, congress can be sloppy. It can purport to act under the commerce clause but not satisfy the commerce clauses very, very, loose restrictions. And then if the court concludes that congress hasnt done its job, the congress hasnt acted within its commerce clause power. The Supreme Court will do open-heart surgery on the legislation and will give it sort of a heart transplant and say I know this was passed as a commerce clause law. Were now making it a tax law and well do the surgery necessarily to do it. And here thats particularly significant because here, the Supreme Court did for congress, what congress was unable to attain the votes to do. There was no political will to do that for understandable reasons. And so congress didn't do it and so the Supreme Court did the dirty work for congress. Now, here's why thats especially bad. You know, the constitution makes clear that the power to tax is so significant that they're going to make sure that any legislation that raise taxes would have to start in the house of representatives because thats the part of the branch of governmentpart of congress, which is the branch most responsive to the people and its the part of congress, the house of congress most immediately responsible to the people because its members are elected by the people in 2-year increments. And so here, you had a tax increase that was not only not initiated in the House of Representatives, it was not initiated anywhere in congress, it was never enacted in congress. It was enacted by 5 lawyers wearing black robes who will never ever stand for election. So I won't call this a victory. Not even close to a victory. This was a huge crushing defeat for federalism and separation of powers. Interviewer:Hello, my name is Britney Hemseth. I'm an intern for Young Americans for Liberty. A resident of Utah and I intern for you actually in 2010 on the campaign. So, good to see you. Mike Lee:Good to see you. Interviewer:My question is, so the states are not required to expand Medicaid, but what else can the states do to inoculate themselves against Obamacare? Mike Lee:Okay. Soyeah, first and foremost, because of Chief Justice Roberts rewrites, they dont have to participate in the Medicaid expansion provisions. Let me deviate there for just a minute and say, even that is a problem. I mean, he solved one constitutional problem but he kind of created another one because congress created this in an effort to make it a cohesive whole, and the Supreme Court by rewriting that aspect of it through an off-balance. In other words, congress didn't factor in to the equation. And the CBO had no opportunity to calculate the financial implications of states having the ability to opted out of Medicaid expansion and that was a pretty significant part of this cohesive whole that they were trying to accomplish in healthcare reform. Beyond that, there's not a whole lot the states can do as far as just stepping outside of it. You know, there are things that they can refuse to do and I'm certain that there will be other circumstances in which states will see fit todepending on how the implemented regulations are written. To challenge those regulations are in some cases even challenge the underlying law based on the fear theory that something this law does amounts to unconstitutional coercion of state authority. Its going to take some time to see how that plays out and sees what they can do. Interviewer:Scott Tranker, Tax Foundation. I'm wondering what you think some of the implications might be of the new definition of penalty because it goes against decades and decades of jurisprudence. Mike Lee:Yeah, so its not really the new definition of penalty thats the problem. Its the new definition of tax that you can pass a penalty what under a hundred years where the president is unmistakably a penalty. What congress understood was a penalty. What most members of congress especially those who voted for it, and to some extent, even the White House still defends as a penalty is now a tax just because the supreme court wrote it that way. And by the way, I have to add here, it is significant that remember at the outset of the Supreme Court NFIB versus Sebelius ruling, it concluded that the individual mandate was not a tax for the purposes of the Anti-injunction Act, because how it had been a tax for purpose of the Anti-injunction Act, the Supreme Court would not have been able to review the case probably for at least another 2 years. So they had just concluded that its not a tax and that it said, but for other purposes, it is a tax. This is really, really, clever stuff. You could get tenure at Yale for insight like that, and yet thats what they did. Nobody really knows quite what to do with this new definition of tax because all kinds of penalties could now be construed as a tax and I dontI honestly havent thought about it enough to figure out how far reaching this is. I know only that a lot of lawyers are scrambling to try to figure out what the implications are and they're scratching their heads too. President has a question. Interviewer:I want to invite you to talk about the most fundament thing, something underneath all this. So you're going to have a constitution now, the court could've turned this down and the president couldnt have done anything if he had and we have separation of powers and we have stuff. But the constitution has evolved the whole lot, and because its evolved the whole lot, there's a lot more good the government can do because there's millions of people who dont have any healthcare and a lot of them, its not their fault. So, what about the argument of the good and justice, how do we serve that if the government is going to be hamstrung in the ways that you propose? Mike Lee:Okay. Very, very happy that you asked that question because that is one of the most important points that I make in why John Roberts was wrong about healthcare, is that the amount of good the government can do is not hindered by the restrictions placed on the government by the constitution. In fact, its enhanced. If we followed federalism more faithfully, if we recognize that there really is a distinction between state power and federal power, that federal power really is limited, that powers of congress are in fact few and defined and those reserved in the states are in fact numerous and indefinite. More Americans will get more of what they want from government. Just think about that for a minute. More Americans will get more of what they want from government. People ask me all the time, why is everything so contentious in Washington? Why is everybody always fighting? Why can't you get along? Why does it bring out so much emotion whenever you debate something in Washington? And the answer is simple, its really contentious because weve got way too much of your individual lives at stake. We have arrogated to ourselves so much authority that we have the power. We have the potential to impact every aspect of your life. And you're not always likely to get what you want from the government when you send it to this sort of mixing bowl over there. Look, there are regional differences in what people want out of their government. Let me give you an example. Is anybody here from Vermont? Vermont, the people in Vermont from what I understand are most of them or at least a very significant number of them are strongly in favor of having a single pair government-funded, government-operated healthcare system. And they have every right to want that. Its not really my thing. Its one of the reasons why I'm not likely to move to Vermont, not withstanding Ben and Jerrys Ice Cream. But I'm not likely to move to Vermont in part for that reason. But they wanted there and it may well work with the geography of Vermont. Its a relatively small stateI dont know much else about it but they probably could make it work for them. If they want to do that, I say let them knock themselves out. Let them do it. Let them do it to their hearts content. They could get there more completely, more quickly without the interference of a federal government intruding in all of these areas. They could get there much more quickly. Other states like mine, the state of Utah is not likely ever to get there, at least not in my lifetime. And you know, the people in Utah ought not have to live under the kind of government that the people in Vermont would choose for them. But the people in Vermont shouldnt have to live under the kind of government that the people in Utah might choose for them. So why not allow more decisions about government and its purpose and its function to be made it the most local level possible at least not at the national level because thats where we allow more people to get more of what they want out of government. Thats also where we have greater accountability and I think you could, in the aggregate, do a lot more good with government if you didn't consolidate all government at the national level. [Applause]