Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 IN THE SUPREME COURT OF THE UNITED STATES - - - - - - - - - - - - - - - - - -x NATIONAL FEDERATION OF INDEPENDENT : BUSINESS, ET AL., Petitioners v. KATHLEEN SEBELIUS, SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL. : : : : : No. 11-393 - - - - - - - - - - - - - - - - - -x and - - - - - - - - - - - - - - - - - -x FLORIDA, ET AL., Petitioners v. DEPARTMENT OF HEALTH AND HUMAN SERVICES, ET AL. : : : : : No. 11-400 - - - - - - - - - - - - - - - - - -x Washington, D.C. Wednesday, March 28, 2012 The above-entitled matter came on for oral argument before the Supreme Court of the United States at 10:19 a.m. APPEARANCES: PAUL D. CLEMENT, ESQ., Washington, D.C.; on behalf of 1 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Petitioners. EDWIN S. KNEEDLER, ESQ., Deputy Solicitor General, Department of Justice, Washington, D.C.; on behalf of Respondents. H. BARTOW FARR, III, ESQ., Washington, D.C..; for Court-appointed amicus curiae. 2 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ORAL ARGUMENT OF PAUL D. CLEMENT, ESQ. C O N T E N T S PAGE On behalf of the Petitioners ORAL ARGUMENT OF EDWIN S. KNEEDLER, ESQ. On behalf of the Respondents ORAL ARGUMENT OF H. BARTOW FARR, III, ESQ. For Court-appointed amicus curiae REBUTTAL ARGUMENT OF PAUL D. CLEMENT, ESQ. On behalf of the Petitioners 4 28 55 79 3 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 P R O C E E D I N G S (10:19 a.m.) CHIEF JUSTICE ROBERTS: We will continue argument this morning in Case Number 11-393, National Federation of Independent Business v. Sebelius and case 11-400, Florida v. The Department of HHS. Mr. Clement. ORAL ARGUMENT OF PAUL D. CLEMENT ON BEHALF OF THE PETITIONERS MR. CLEMENT: please the Court: If the individual mandate is unconstitutional, then the rest of the Act cannot stand. As Congress found and the Federal Government concedes, the community rating and guaranteed-issue provisions of the Act cannot stand without the individual mandate. Congress found that the individual mandate was essential to their operation. And not only can guaranteed-issue Mr. Chief Justice, and may it and community-rating not stand, not operate in the manner that Congress intended, they would actually counteract Congress's basic goal of providing patient protection but also affordable care. If you do not have the individual mandate to force people into the market then community rating and guaranteed-issue will cause the cost of premiums to 4 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 skyrocket. We can debate the order of magnitude of that but we can't debate that the direction will be upward. We also can't debate -- JUSTICE SOTOMAYOR: be true. Counsel, that may well The economists are going back and forth on that issue, and the figures vary from up 10 percent to up 30. We are not in the habit of doing the legislative findings. What we do know is that for those States that found prices increasing, that they found various solutions to that. In one instance, and we might or may not say that it's unconstitutional, Massachusetts passed the mandatory coverage provision. some of the other provisions. Why shouldn't we let Congress do that, if in fact, the economists prove, some of the economists prove right, that prices will spiral? What's wrong with But others adjusted leaving it to -- in the hands of the people who should be fixing this, not us? MR. CLEMENT: Well, a couple of questions -- First of all, a couple of responses, Justice Sotomayor. I think that it's very relevant here that Congress had before it as examples some of the States that had tried to impose guaranteed-issue and community rating and did not impose an individual mandate. 5 Alderson Reporting Company And Congress rejected Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that model. So your question is quite right in the saying that it's not impossible to have guaranteed-issue and community-rating without an individual mandate. it's a model that Congress looked at and specifically rejected. And then, of course, there is Congress's own finding, and their finding, of course, this is (i), which is 43(a)of the government's brief in the appendix, Congress specifically found that having the individual mandate is essential to the operation of guaranteed-issue and community-rating. JUSTICE SOTOMAYOR: essential to. That's all it said it's The But I mean, I'm looking at it. exchanges, the State exchanges are informationgathering facilities that tell insurers what the various policies actually mean. And that has proven to be a So cost saver in many of the States who have tried it. why should we be striking down a cost saver when if what your argument is, was, that Congress was concerned about costs rising? Why should we assume they wouldn't have passed that information? MR. CLEMENT: I think a couple of things. One, you get -- I mean, I would think you are going to have to take the bitter with the sweet. And if Congress -- if we are going to look at Congress's goal 6 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 of providing patient protection but also affordable care, we can't -- I don't think it works to just take the things that save money and cut out the things that are going to make premiums more expensive. minimum -- JUSTICE SOTOMAYOR: I want a bottom line is But at a why don't we let Congress fix it? MR. CLEMENT: Well, let me answer the bottom line question, which is, no matter what you do in this case, at some point there's going to be -- if you strike down the mandate, there is going to be something for Congress to do. The question is really, what task do Do you want to give Congress you want to give Congress. the task of fixing the statute after something has been taken out, especially a provision at the heart, or do you want to give Congress the task of fixing health care? And I think it would be better in this situation -- JUSTICE SOTOMAYOR: We are not taking -- If we strike down one provision, we are not taking that power away from Congress. Congress could look at it without the mandatory coverage provision and say, this model doesn't work; let's start from the beginning. it could choose to fix what it has. We are not Or declaring -- one portion doesn't force Congress into any 7 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 path. MR. CLEMENT: And of course that's right, Justice Sotomayor, and no matter what you do here, Congress will have the options available. So if you, if you strike down only the individual mandate, Congress could say the next day: Well, that's the last thing we ever wanted to do so we will strike down the rest of the statute immediately and then try to fix the problem. whatever you do, Congress is going to have options. question is -- JUSTICE SCALIA: Well, there is such a thing So The as legislative inertia, isn't there? MR. CLEMENT: That's exactly what I was going to say, Justice Scalia, which is, I think the question for this Court is, we all recognize there is legislative inertia. And then the question is: What is the best result in light of that reality? JUSTICE SOTOMAYOR: Are you suggesting that we should take on more power to the Court? MR. CLEMENT: No -- Because Congress would That's JUSTICE SOTOMAYOR: choose to take one path rather than another. sort of taking onto the Court more power than one I think would want. MR. CLEMENT: And I agree. 8 Alderson Reporting Company We are simply Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 asking this Court to take on straight on the idea of the basic remedial inquiry into severability which looks to be intent of the Congress -- JUSTICE SCALIA: you about that. Mr. Clement, I want to ask Why -- why do we look to the -- are you I thought sure we look to the intent of the Congress? that, you know, sometimes Congress says that these provisions will -- all the provisions of this Act will be severable. won't work. work. And we ignore that when the Act really When the remaining provisions just won't Now how can you square that reality with the proposition that what we're looking for here is what would this Congress have wanted? MR. CLEMENT: Justice Scalia. Well, two responses, We can look at this Court's cases on severability, and they all formulate the task a little bit differently. JUSTICE SCALIA: MR. CLEMENT: Yes, they sure do. And every one of them talks But here's, here's the about congressional intent. other answer -- JUSTICE SCALIA: right? MR. CLEMENT: That's true, but is it It is right. And here is how I would answer your question, which is, when Congress 9 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 includes a severability clause, it is addressing the issue in the abstract. It doesn't say: No matter which provisions you strike down, we absolutely, positively want what's left. JUSTICE SCALIA: All right. The consequence of your proposition, would Congress have enacted it without this provision, okay that's the consequence. That would mean that if we struck down nothing in this legislation but the -- what you call the corn husker kickback, okay, we find that to violate the constitutional proscription of venality, okay? (Laughter.) JUSTICE SCALIA: When we strike that down, it's clear that Congress would not have passed it without that. It was the means of getting the last And you are telling us necessary vote in the Senate. that the whole statute would fall because the corn husker kickback is bad. MR. CLEMENT: That can't be right. Well, Justice Scalia, I think it can be, which is the basic proposition, that it's congressional intent that governs. Now everybody on this Court has a slightly different way of dividing legislative intent. And I would suggest the one common brand among every member of this Court as I understand it is you start with the text. 10 Alderson Reporting Company Everybody can agree with Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that. JUSTICE KAGAN: with the text. So Mr. Clement, let's start Then you suggest, and I think that there is -- this is right, that there is a textual basis for saying that the guaranteed-issue and the community ratings provisions are tied to the mandate. And you said -- you pointed to where that was in the findings. Is there a textual basis for anything else, because I've been unable to find one. It seems to me that if you look at the text, the sharp dividing line is between guaranteed-issue and community ratings on the one hand, everything else on the other. MR. CLEMENT: Well, Justice Kagan I would be delighted to take you through my view of the text and why there are other things that have to fall. The first place I would ask you to look is finding J which is on the same page 43 A. And as I read that, that's a finding that the individual mandate is essential to the operation of the exchanges. But there are other links between guaranteed-issue and community ratings and the exchanges. And there I think it's just And the way that the exchanges are supposed to work. the text makes this clear is they are supposed to provide a market where people can compare community rated insurance. That's what makes the exchanges 11 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 function. JUSTICE KAGAN: Although the exchanges function perfectly well in Utah where there is no mandate. They function differently, but they function. And the question is always, does Congress want half a loaf. Is half a loaf better than no loaf? And on something like the exchanges it seems to me a perfect example where half a loaf is better than no loaf. exchanges will do something. that Congress envisioned. MR. CLEMENT: Well, Justice Kagan, I think The They won't do everything there are situations where half a loaf is actually worse and I want to address that. broadly. But before I do it -- But before I do that, if I could stick with just the exchanges. I do think the question that this Court is supposed to ask is not just whether they can limp along and they can operate independently, but whether they operate in the manner that Congress intended. And that's where I think the exchanges really fall down. Because the vision of the exchanges was that if you got out of this current situation where health insurance is basically individualized price based on individualized underwriting and you provide community ratings, then it's going to be very easy for people to 12 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 say okay, well this is a silver policy and this is a bronze policy and this is a gold policy and we can, you know, I can just pick which insurer provides what I think is going to be the best service based on those comparable provisions. JUSTICE KAGAN: Mr. Clement, you just said You say something which you say a lot in your brief. the question is the manner in which it would have operated. our cases. And I think that that's not consistent with And I guess the best example would be Booker where we decided not to sever provisions, notwithstanding that the sentencing guidelines clearly operate in a different manner now than they did when Congress passed them. than mandatory. MR. CLEMENT: Well, but Justice Kagan, I They operate as advisory rather mean I actually think Booker supports our point as well, because there are two aspects of the remedial holding of Booker. And the first part of it, which I think actually very much supports our point is where the majority rejects the approach of the dissent, which actually would have required nothing in the statute to have been struck, not a single word. But nonetheless this Court said, well, if you do that then all of the sentencing is basically 13 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 going to be done by a combination of the juries and the prosecutors and the judges are going to be cut out. And the Court said the one thing we know is that's not the manner in which Congress thought that this should operate. Now later they make a different judgment about the -- which particular provisions to cut out. But I do think Booker is consistent with this way of looking at it and certainly consistent with Brock, the opinion we rely on because there the Court only reached that part of the opinion after they already found that the must-hire provision operated functionally independent from the legislative detail, so -- JUSTICE GINSBURG: Mr. Clement, there are so I many things in this Act that are unquestionably okay. think you would concede that reauthorizing what is the Indian Healthcare Improvement Act changes to long benefits, why make Congress redo those? I mean it's a question of whether we say everything you do is no good, now start from scratch, or to say, yes, there are many things in here that have nothing to do frankly with the affordable healthcare and there are some that we think it's better to let Congress to decide whether it wants them in or out. So why should we say it's a choice between a 14 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 wrecking operation, which is what you are requesting, or a salvage job. And the more conservative approach would be salvage rather than throwing out everything. MR. CLEMENT: Well, Justice Ginsburg, two One, I do think there are kinds of responses to that. some provisions that I would identify as being at the periphery of this statute. And I'll admit that the case for severing those is perhaps the strongest. But I do think it is fundamentally different, because if we were here arguing that some provision on the periphery of the statute, like the Biosimilars Act or some of the provisions that you've mentioned was unconstitutional, I think you'd strike it down and you wouldn't even think hard about severability. What makes this different is that the provisions that have constitutional difficulties or are tied at the hip to those provisions that have the constitutional difficulty are the very heart of this Act. And then if you look at how they are textually interconnected to the exchanges, which are then connected to the tax credits, which are also connected to the employer mandates, which is also connected to some of the revenue offsets, which is also connected to Medicaid, if you follow that through what you end up 15 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 with at the end of that process is just sort of a hollow shell. And at that point I think there is a strong argument for not -- I mean, you can't possibly think that Congress would have passed that hollow shell without the heart of the Act. CHIEF JUSTICE ROBERTS: Well, but it would have -- it would have passed parts of the hollow shell. I mean, a lot of this is reauthorization of appropriations that have been reauthorized for the previous 5 or 10 years and it was just more convenient for Congress to throw it in in the middle of the 2700 pages than to do it separately. I mean, can you really suggest -- I mean, they've cited the Black Lung Benefits Act and those have nothing to do with any of the things we are talking about. MR. CLEMENT: Well, Mr. Chief Justice, they But I'm not here to tell tried to make them germane. you that -- some of their -- surely there are provisions that are just looking for the next legislative vehicle that is going to make it across the finish line and somebody's going to attach it to anything that is moving. I mean, I'll admit that. But the question is when everything else from the center of the Act is interconnected and has to go, if you follow me that far, then the question is 16 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 would you keep this hollowed-out shell? JUSTICE SOTOMAYOR: JUSTICE KENNEDY: Well, but it's not -- But I'm still not sure, what is the test -- and this was the colloquy you had with Justice Scalia with the corn husker hypothetical. So I need to know what standard you are asking me to apply. Is it whether as a rational matter separate parts could still function, or does it focus on the intent of the Congress? If you -- suppose you had party A wants proposal number 1, party B wants proposal number 2. Completely unrelated. is milk regulation. together. One is airline rates, the other And we -- and they decide them The procedural rules are these have to be They are both passed. Then one is voted on as one. declared unconstitutional. completely independently. The other can operate Now, we know that Congress would not have intended to pass one without the other. Is that the end of it, or is there some different test? Because we don't want to go into legislative history, that's intrusive, so we ask whether or not an objective -- as an objective rational matter one could function without -- I still don't know what the test is that we are supposed to apply. Justice Scalia asked. And this is the same question as Could you give me some help on 17 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that? MR. CLEMENT: Sure. Justice Kennedy, the reality is I think this Court's opinions have at various times applied both strains of the analysis. JUSTICE KENNEDY: And which one -- and what test do you suggest that we follow if we want to clarify our jurisprudence? MR. CLEMENT: I'm -- I'm a big believer in I would be perfectly objective tests, Justice Kennedy. happy with you to apply a more textually based objective approach. I think there are certain justices that are more inclined to take more of a peek at legislative history, and I think if you look at the legislative history of this it would only fortify the conclusion that you would reach from a very objective textual inquiry. But I am happy to focus the Court on the objective textual inquiry. CHIEF JUSTICE ROBERTS: understand -- JUSTICE KENNEDY: what? MR. CLEMENT: Is whether the statute can And that objective test is I don't operate in the manner that Congress -- that Congress intended. JUSTICE SOTOMAYOR: 18 Alderson Reporting Company No statute can do that, Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 because once we chop off a piece of it, by definition, it's not the statute Congress passed. something more than that. MR. CLEMENT: Justice Sotomayor, every one So it has to be of your cases, if you have a formulation for severability, if you interpret it woodenly it becomes tautological. And Justice Blackmun addressed this in footnote 7 of the Brock opinion that we rely on, where he says: Of course it's not just -- you know, it doesn't operate exactly in the manner because it doesn't have all the pieces, but you still make an inquiry as to whether when Congress links two provisions together and one really won't work without the other -- JUSTICE SOTOMAYOR: So what is wrong with the presumption that our law says, which is we presume that Congress would want to sever? simplest, most objective test? Wouldn't that be the Going past what Justice Scalia says we have done, okay, get rid of legislative intent altogether, which some of our colleagues in other contexts have promoted, and just say: Unless Congress tells us directly, it's not We should let them fix severable, we shouldn't sever. their problems. You still haven't asked -- answered me why in a democracy structured like ours, where each branch 19 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 does different things, why we should involve the Court in making the legislative judgment? MR. CLEMENT: Justice Sotomayor let me try to answer the specific question and then answer the big picture question. could do that. The specific question is, I mean, you You could adopt a new rule now that basically says, look, we've severed -- JUSTICE SOTOMAYOR: presume. cases -- - MR. CLEMENT: Right. But some would call that It's not a new rule. We We've rebutted the presumption in some JUSTICE SOTOMAYOR: judicial action. MR. CLEMENT: I think in fairness, though, Justice Sotomayor, to get to the point you are wanting to get to, you would have to ratchet up that presumption a couple of ticks on the scale, because the one thing -- JUSTICE SOTOMAYOR: that? MR. CLEMENT: Well, one thing that's wrong And what's wrong with with that, which is still at a smaller level, is that's inconsistent with virtually every statement in every one of your severability opinions, which all talk about congressional intent. JUSTICE KAGAN: 20 Alderson Reporting Company Well, it's not inconsistent Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 with our practice, right, Mr. Clement? I mean, you have to go back decades and decades and decades, and I'm not sure even then you could find a piece of legislation that we refused to sever for this reason. MR. CLEMENT: Justice Kagan. I don't think that's right, I think there are more recent examples. A great example I think which sort of proves, and maybe is a segue to get to my broader point, is a case that involves a State statute, not a Federal statute, but I don't think anything turns on that, is Randall against Sorrell, where this Court struck down various provisions of the Vermont campaign finance law. But there were other contribution provisions that were not touched by the theory that the Court used to strike down the contribution limits. at the end of the opinion said: But this Court There is no way to think that the Vermont legislator would have wanted these handful of provisions there on the contribution side, so we will strike down the whole thing. And if I could make the broader point, I mean, I think the reason it makes sense in the democracy with separation of powers to in some cases sever the whole thing is because sometimes a half a loaf is worse. And a great example, if I dare say so, is Buckley. In Buckley this Court looked at a statute that tried to, in 21 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 a coherent way, strike down limits on contributions and closely related expenditures. This Court struck down the ban on expenditures, left the contribution ban in place, and for 4 decades Congress has tried to fix what's left of the statute, largely unsuccessfully, whereas it would have I think worked much better from a democratic and separation of powers standpoint if the Court would have said: Look, expenditures are -- you can't limit expenditures under the Constitution; the contribution provision is joined at the hip. to actually fix the problem. JUSTICE KAGAN: JUSTICE BREYER: Mr. Clement -- Could I ask you one I take as a Give Congress a chance question, which is a practical question. given your answer to Justice Kennedy, you are saying let's look at it objectively and say what Congress has intended, okay? This is the mandate in the community, this is Titles I and II, the mandate, the community, pre-existing condition, okay? Here's the rest of it, you know, and when I look through the rest of it, I have all kinds of stuff in there. word of that, I promise. And I haven't read every As you pointed out, there is biosimilarity, there is breast feeding, there is promoting nurses and doctors to serve underserved areas, 22 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 there is the CLASS Act, etcetera. What do you suggest we do? I mean, should Should we appoint a special master with an instruction? we go back to the district court? most of these. to the SG. You haven't argued As I hear you now, you're pretty close I mean, you'd like it all struck down, but I don't we are supposed to apply the objective test. know if you differ very much. So what do you propose that we do other than spend a year reading all this and have you argument all this? MR. CLEMENT: Right. What I would propose is the following, Justice Breyer, is you follow the argument this far and then you ask yourself whether what you have left is a hollowed-out shell or whether -- JUSTICE BREYER: I would say the Breast Feeding Act, the getting doctors to serve underserved areas, the biosimilar thing and drug regulation, the CLASS Act, those have nothing to do with the stuff that we've been talking about yesterday and the day before, okay? So if you ask me at that level, I would say, sure, they have nothing to do with it, they could stand on their own. The Indian thing about helping the underserved Native Americans, all that stuff has nothing 23 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to do. Black lung disease, nothing to do with it, okay? So that's -- do you know what you have there? A total off-the-cuff impression. So that's why I am asking you, what should I do? MR. CLEMENT: What you should do, is let me say the following, which is follow me this far, which is mandatory, individual mandate is tied, as the government suggests, to guaranteed-issue and community rating, but the individual mandate, guaranteed-issue, and community rating together are the heart of this Act. what make the exchanges work. The exchanges in turn are critical to the tax credits, because the amount of the tax credit is key to the amount of the policy price on the exchange. The They are exchanges are also key to the employer mandate, because the employer mandate becomes imposed on an employer if one of the employees gets insurance on the exchanges. But it doesn't stop there. Look at the These are Medicare provision for DISH hospitals, okay? hospitals that serve a disproportionate share of the needy. This isn't in Title I. It's in the other part But it doesn't work that you had in your other hand. without the mandate, community rating and guaranteed-issue. JUSTICE ALITO: 24 Alderson Reporting Company Well, can I ask you this, Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Mr. Clement? MR. CLEMENT: JUSTICE ALITO: Sure. What would your fallback position be if -- if we don't accept the proposition that if the mandate is declared unconstitutional, the rest of the Act, every single provision, has to fall? Other -- proposed other dispositions have been proposed. There's the Solicitor General's disposition, the recommended disposition to strike down the guaranteed-issue and community rating provisions. One of the -- one amicus says strike down all of Title I, another one says strike down all of Title I and Title II. What -- what would you suggest? MR. CLEMENT: Well, I -- I think what I would suggest, Justice Alito -- I don't want to be unresponsive -- is that you sort of follow the argument through and figure out what in the core of the Act falls. And then I guess my fallback would be if what's left is a hollowed-out shell, you could just leave that standing. If you want a sort of practical answer, I mean, I do think you could just -- you know, you could use Justice Breyer's off-the-cuff as a starting point and basically say, you know, Title I and a handful of 25 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 related provisions that are very closely related to that are -- are really the heart of the Act -- CHIEF JUSTICE ROBERTS: MR. CLEMENT: Well, that's -- -- the bigger volume -- on the other hand -- I mean, you could strike one and leave the other, but at a certain point -- I'm sorry, Mr. Chief Justice. CHIEF JUSTICE ROBERTS: point. MR. CLEMENT: At -- at a certain point, I Finish your certain just think that, you know, the better answer might be to say, we've struck the heart of this Act, let's just give Congress a clean slate. If it's so easy to have that other big volume get reenacted, they can do it in a couple of days; it won't be a big deal. because it's very -- (Laughter.) MR. CLEMENT: -- well, but -- I mean, you If it's not, can laugh at me if you want, but the point is, I'd rather suspect that it won't be easy. Because I rather suspect that if you actually dug into that, there'd be something that was quite controversial in there and it couldn't be passed quickly -- CHIEF JUSTICE ROBERTS: MR. CLEMENT: But the -- the -- -- and that's our whole point. 26 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CHIEF JUSTICE ROBERTS: -- the -- the reality of the passage -- I mean, this was a piece of legislation which, there was -- had to be a concerted effort to gather enough votes so that it could be passed. And I suspect with a lot of these miscellaneous provisions that Justice Breyer was talking about, that was the price of the vote. Put in the Indian health care provision and I will vote for the other 2700 pages. Put in the black That's why lung provision, and I'll go along with it. all -- many of these provisions I think were put in, not because they were unobjectionable. So presumably what Congress would have done is they wouldn't have been able to put together, cobble together, the votes to get it through. MR. CLEMENT: Mr. Chief Justice. Well, maybe that's right, And I don't want to, I mean, spend all my time on -- fighting over the periphery, because I do think there are some provisions that I think you would make as -- as an exercise of your own judgment, the judgment that once you've gotten rid of the core provisions of this Act, that you would then decide to let the periphery fall with it. the periphery, that's fine. But if you want to keep What I think is important, though, as to the core provisions of the Act, which 27 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 aren't just the mandate community rating and guaranteed-issue, but include the exchanges, the tax credit, Medicare and Medicaid -- as to all of that, I think you do want to strike it all down to avoid a redux of Buckley. If I could reserve the remainder of my time. CHIEF JUSTICE ROBERTS: Mr. Clement. Mr. Kneedler. ORAL ARGUMENT OF EDWIN S. KNEEDLER ON BEHALF OF THE RESPONDENTS MR. KNEEDLER: Thank you, Mr. Chief Justice, Thank you, and may it please the Court: There should be no occasion for the Court in this case to consider issues of severability, because as we argue, the -- the minimum coverage provision is fully consistent with Article I of the Constitution. But if the Court were to conclude otherwise, it should reject Petitioners' sweeping proposition that the entire Act must fall if this one provision is held unconstitutional. As an initial matter, we believe the Court should not even consider that question. The vast majority of the provisions of this Act do not even apply to the Petitioners, but instead apply to millions of 28 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 citizens and businesses who are not before the Court -- CHIEF JUSTICE ROBERTS: proposal actually work? How does your Your idea is that, well, they I mean, do you can take care of it themselves later. contemplate them bringing litigation and saying -- I guess the insurers would be the most obvious ones -- without -- without the mandate, the whole thing falls apart and we're going to bear a greater cost, and so the rest of the law should be struck down. And that's a whole other line of litigation? MR. KNEEDLER: Well, I -- I think the continuing validity of any particular provision would arise in litigation that would otherwise arise under that provision by parties who are actually -- CHIEF JUSTICE ROBERTS: action is it? of action. MR. KNEEDLER: Well, in the first place, I But what cause of I've never heard of a severability cause don't -- the point isn't that there has to be a -- an affirmative cause of action to decide this. You could -- for example, to use the Medicare reimbursement issue is, one of the things that this Act does is change Medicare reimbursement rates. Well, the place where someone adjudicates the validity of Medicare reimbursement rates is through the special statutory 29 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 review procedure for that. And the same thing is true of the Anti-Injunction Act -- JUSTICE SCALIA: Mr. Kneedler, there -- there are some provisions which nobody would have standing to challenge. If the provision is simply an expenditure of Federal money, it -- it doesn't hurt anybody except the taxpayer, but the taxpayer doesn't have standing. That -- that just continues. Even though it -- it is -- it should -- it is so closely aligned to what's been struck down that it ought to go as well. But nonetheless, that has to continue because there's nobody in the world that can challenge it. Can that possibly be the law? MR. KNEEDLER: point, Justice Scalia. I think that proves our This Court has repeatedly said that just because there's -- no one may have standing to challenge -- and particularly like tax credits or taxes which are challenged only after going through the Anti-Injunction Act -- just because no one has standing doesn't mean that someone must. But beyond that -- JUSTICE SCALIA: But -- but those are The provisions that have been legitimately enacted. 30 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 whole issue here is whether these related provisions have been legitimately enacted, or whether they are so closely allied to one that has been held to be unconstitutional that they also have not been legitimately enacted. You -- you can't compare that to -- to cases dealing with a -- a statute that nobody denies is -- is constitutional. MR. KNEEDLER: This -- this case is directly In that case, parallel to the Printz case, in our view. the Court struck down several provisions of the Brady Act, but went on to say it had no business addressing the severability of other provisions that did not apply to the people before whom -- JUSTICE SOTOMAYOR: JUSTICE BREYER: this: But -- What he's thinking of is I think Justice Scalia is thinking, I suspect, of -- imagine a tax which says, this tax, amount Y, goes to purpose X, which will pay for half of purpose X. other half will come from the exchanges somehow. second half is unconstitutional. Purpose X can't The That possibly be carried out now with only half the money. Does the government just sit there collecting half the money forever because nobody can ever challenge it? You see, there -- if it were 31 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 inextricably connected, is it enough to say, well, we won't consider that because maybe somebody else could bring that case and then there is no one else? Is that -- MR. KNEEDLER: proper way to proceed. Severability -- JUSTICE GINSBURG: It's not a choice between Yes, we think that is the someone else bringing the case and a law staying in place. And what we're really talking about, as Justice Sotomayor started this discussion, is who is the proper party to take out what isn't infected by the Court's holding -- with all these provisions where there may be no standing, one institution clearly does have standing, and that's Congress. And if Congress doesn't want the provisions that are not infected to stand, Congress can take care of it. It's a question of which -- which side -- should the Court say, we're going to wreck the whole thing, or should the Court leave it to Congress? MR. KNEEDLER: We think the Court should One is the point leave it to Congress for two reasons. I'm making now about justiciability, or whether the Court can properly consider it at all. 32 Alderson Reporting Company And the second Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 is, we think only a few provisions are inseverable from the minimum coverage provision. I just would like to -- CHIEF JUSTICE ROBERTS: Before you go, Mr. Kneedler, I'd like your answer to Justice Breyer's question. I think you were interrupted before that -- MR. KNEEDLER: Yes. No. We -- we believe that in that case, the -- the tax -- the tax provision should not be struck down. In the first place, the Anti-Injunction Act would bar a -- a direct suit to challenge it. It would be very strange to allow a tax to be struck down on the basis of a severability analysis. Severability arises in a case only where it's necessary to consider what relief a party before the Court should get. The only party -- Suppose that there was -- JUSTICE ALITO: suppose there was a non-severability provision in -- in this Act. If one provision were to be held unconstitutional, then every single -- someone would have to bring a -- a separate lawsuit challenging every single other provision in the Act and say, well, one fell and the Congress said it's all -- it's a package, it can't be separated. That's your position? 33 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. KNEEDLER: The -- the fact that that's such a clause might make it easy doesn't change the point. Article III jurisdictional problems apply to easy questions as well as -- as hard questions. If I could just -- JUSTICE KENNEDY: But there's no Article III jurisdictional problem in Justice Alito's hypothetical, that this is a remedial exercise of the Court's power to explain the consequences of its judgment in this case. MR. KNEEDLER: But -- this Court had said that one has -- has to have standing for every degree of relief that -- that is sought. was Los Angeles v. Lyons. JUSTICE SCALIA: MR. KNEEDLER: JUSTICE SCALIA: Mr. Kneedler -- -- Daimler/Chrysler -- -- don't you think it's That was in Davis, that unrealistic to say leave it to Congress, as though you are sending it back to Congress for Congress to consider it dispassionately on balance, should we have this provision or should we not have provision? what it's going to be. That's not It's going to be, these provisions are in effect; even though you -- a lot of you never wanted them to be in effect, and you only voted for them because you wanted to get the heart of the -- the Act, which has now been cut out; but 34 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 nonetheless these provisions are the law, and you have to get the votes to overturn them. That's an enormously different question from whether you get the votes initially to put them into the law. What -- there, there is no way that this Court's decision is not going to distort the congressional process. Whether we strike it all down or leave some of it in place, the congressional process will never be the same. One way or another, Congress is going to have to reconsider this, and why isn't it better to have them reconsider it -- what -- what should I say -- in toto, rather than having some things already in the law which you have to eliminate before you can move on to consider everything on balance? MR. KNEEDLER: We think as a matter of judicial restraint, limits on equitable remedial power limit this Court to addressing the provision that has been challenged as unconstitutional and anything else that the plaintiff seeks as relief. JUSTICE KENNEDY: JUSTICE SOTOMAYOR: please -- CHIEF JUSTICE ROBERTS: JUSTICE KENNEDY: Justice Kennedy? Here the only -- But in restraint -- Mr. Kneedler would you When you say judicial restraint, you are echoing the earlier premise that it 35 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 increases the judicial power if the judiciary strikes down other provisions of the Act. might be quite the opposite. I suggest to you it We would be exercising the judicial power if one Act was -- one provision was stricken and the others remained to impose a risk on insurance companies that Congress had never intended. By reason of this Court, we would have a new regime that Congress did not provide for, did not consider. That, it seems to me can be argued at least to be a more extreme exercise of judicial power than to strike -- than striking the whole. MR. KNEEDLER: I -- I -- I think not -- I just don't accept the JUSTICE KENNEDY: premise. MR. KNEEDLER: I think not, Justice Kennedy and then I -- I will move on. But this is exactly the situation in Printz. The Court identified the severability questions that were -- that were briefed before the Court as important ones, but said that they affect people who are -- rights and obligations of people who are not before the Court. JUSTICE SOTOMAYOR: Mr. Kneedler, move away from the issue of whether it's a standing question or not. MR. KNEEDLER: Right. 36 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 JUSTICE SOTOMAYOR: Make the assumption that's an -- that this is an issue of the Court's exercise of discretion. Because the last two questions had to do with what's wise for the Court to do, not whether it has power to do it or not. MR. KNEEDLER: Right. That -- JUSTICE SOTOMAYOR: So let's move beyond the power issue, which your answers have centered on, and give me a sort of -- policy. And I know that's a, that's a bugaboo word sometimes, but what should guide the Court's discretion? MR. KNEEDLER: Well, we think that matters of justiciability do blend into -- JUSTICE SOTOMAYOR: Would you please -- I've asked you three times to move around that. MR. KNEEDLER: -- blend into, blend into discretion, and in turn blend into the merits of the severability question. And as to that, just to answer a question that, that several Justices have asked, we think that severability is a matter of statutory interpretation. It should be resolved by looking at the structure and the text of the Act, and the Court may look at legislative history to figure out what the text and structure mean with respect to severability. don't -- 37 Alderson Reporting Company We Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 JUSTICE SCALIA: to the Eighth Amendment? through these 2,700 pages? (Laughter.) JUSTICE SCALIA: the Court to do that? Mr. Kneedler, what happened You really want us to go And do you really expect Or do you expect us to -- to give this function to our law clerks? Is this not totally unrealistic? That we are going to go through this enormous bill item by item and decide each one? MR. KNEEDLER: Well -- I thought the answer was JUSTICE SOTOMAYOR: you don't have to because -- MR. KNEEDLER: Well, that is, that is the -- -- what we have to look JUSTICE SOTOMAYOR: at is what Congress said was essential, correct? MR. KNEEDLER: That is correct, and I'd also like to -- going -- I just want to finish the thought I had about this being a matter of statutory interpretation. The Court's task, we submit, is not to look at the legislative process to see whether the bill would been -- would have passed or not based on the political situation at the time, which would basically convert the Court into a function such as a whip count. That is not the Court's -- 38 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that -- given us. wouldn't it? JUSTICE KAGAN: be a revolution -- MR. KNEEDLER: JUSTICE KAGAN: And Mr. Kneedler, that would Yes. -- in our severability law, MR. KNEEDLER: JUSTICE KAGAN: It would. I mean, we have never suggested that we were going to say, look, this legislation was a brokered compromise and we are going to try to figure out exactly what would have happened in the complex parliamentary shenanigans that go on across the street and figure out whether they would have made a difference. Instead, we look at the text that's actually For some people, we look only at the text. It should be easy for Justice Scalia's clerks. (Laughter.) MR. KNEEDLER: I -- I think -- I think JUSTICE SCALIA: easy for my clerks. I don't care whether it's I care whether it's easy for me. (Laughter.) MR. KNEEDLER: that's exactly right. I think that -- I think As I said, it is a question of statutory interpretation. 39 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 line? that? CHIEF JUSTICE ROBERTS: what's exactly right? Well, how is that -- It's a question of statutory interpretation; that means you have to go through every line of the statute. I haven't heard your answer to Justice Scalia's question yet. MR. KNEEDLER: Well, I -- I think in this case there is an easy answer, and that is, Justice Kagan pointed out that, that the Act itself creates a sharp dividing line between the minimum coverage provision -- the package of -- of reforms: The minimum coverage provision along with the guaranteed-issue and community rating. That is one package that Congress deemed essential. CHIEF JUSTICE ROBERTS: Where is this line? How do you know I looked through the whole Act, I didn't read -- well -- MR. KNEEDLER: It is in -- Where is the sharp CHIEF JUSTICE ROBERTS: MR. KNEEDLER: It is in Congress's findings that the -- that the minimum coverage provision -- without it the Court -- the -- Congress said, in finding I, without that provision people would wait to get insurance, and therefore -- and cause all the adverse selection problems that arise. 40 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CHIEF JUSTICE ROBERTS: No, no. That -- that makes your case that the one provision should fall if the other does. It doesn't tell us anything about all the other provisions. MR. KNEEDLER: Well, I -- I think -- I think it does, because Congress said it was essential to those provisions, but it conspicuously did not say that it was essential to other provisions. CHIEF JUSTICE ROBERTS: JUSTICE ALITO: Well -- May I ask you about the argument that is made in the economists' amicus brief? They say that the insurance reforms impose 10-year costs of roughly $700 billion on the insurance industry, and that these costs are supposed to be offset by about 350 billion in new revenue from the individual mandate and 350 billion from the Medicaid expansion. Now if the 350 billion -- maybe you will disagree with the numbers, that they are fundamentally wrong; but assuming they are in the ballpark, if the 350 million from the individual mandate were to be lost, what would happen to the insurance industry, which would now be in the -- in the hole for $350 billion over 10 years? MR. KNEEDLER: I don't -- I mean, first of all, for the Court to go beyond text and legislative history to try to figure out how the finances of the 41 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 bill operate, it -- it's like being a budget committee. But -- but we think the, the economists had added up the figures wrong. If there is Medicaid expansion, the insurance -- and the insurance companies are involved in that, they are going to be reimbursed. CHIEF JUSTICE ROBERTS: isn't Medicaid expansion? But what if there We've talked about the individual mandate, but does the government have a position on what should happen if the Medicaid expansion is struck down? MR. KNEEDLER: We don't -- we don't think That could be But we don't think that that that would have any effect. addressed in the next argument. would have any effect on the -- on the rest of the -- on the rest of the Act. CHIEF JUSTICE ROBERTS: So if your -- the government's position is that if Medicaid expansion is struck down, the rest of the Act can operate -- MR. KNEEDLER: Yes. Yes. It's -- in the past Congress has expanded Medicaid coverage without there being -- it's done it many times without there being a minimum coverage provision. JUSTICE KENNEDY: But I still don't understand where you are with the answer to Justice Alito's question. 42 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Assume that there is a, a substantial probability that the 350 billion plus 350 billion equals 7 is going to be cut in half if the individual mandate is -- is stricken. possibility of that. Assume there is a significant Is it within the proper exercise of this Court's function to impose that kind of risk? Can we say that the Congress would have intended that there be that kind of risk? MR. KNEEDLER: Well, we don't think it's in the Court's place to look at the, at the budgetary implications, and we also -- JUSTICE KENNEDY: But isn't that -- isn't that the point then, why we should just assume that it is not severable? MR. KNEEDLER: No. If we -- if we lack the JUSTICE KENNEDY: competence to even assess whether there is a risk, then isn't this an awesome exercise of judicial power? MR. KNEEDLER: No, I don't -- To say we are doing JUSTICE KENNEDY: something and we are not telling you what the consequences might be? MR. KNEEDLER: No, I don't think so, because when you -- when you are talking about monetary consequences, you are looking through the Act, you are 43 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 looking behind the Act, rather than -- the Court's function is to look at the text and structure of the Act and what the substantive provisions of the Act themselves mean. And if I could go past -- Mr. Kneedler, can I -- can JUSTICE SCALIA: you give us a prior case in -- that -- that resembles this one in which we -- we are asked to strike down what the other side says is the heart of the Act and yet leave in -- as -- as you request, leave, in effect, the rest of it? Have we ever -- most of our severability cases, you know, involve one little aspect of the Act. The question is whether the rest. When have we ever really struck down what was the main purpose of the Act, and left the rest in effect? MR. KNEEDLER: example of that. I think Booker is the best In -- in Booker the mandatory sentencing provisions were central to the act, but the Court said Congress would have preferred a statute without the mandatory provision in the Act, and the Court struck that but the rest of the sentencing guidelines remained. JUSTICE SCALIA: I think the reason -- the reason the majority said that was they didn't think that what was essential to the Act was what had been stricken down, and that is the -- the ability of the judge to say 44 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 on his own what -- what -- what the punishment would be. I don't think that's a case where we struck -- where we excised the heart of the statute. You have another one? MR. KNEEDLER: JUSTICE SCALIA: is really -- MR. KNEEDLER: -- to our -- to our -- that There is no example -- There is no example. This we have found that suggests the contrary. JUSTICE SCALIA: first impression. This is really a case of I don't know another case where we have been confronted with this -- with this decision. Can you take out the heart of the Act and leave everything else in place? MR. KNEEDLER: I would like to go to the But what I'd like heart of the Act point in a moment. to say is this is a huge Act with many provisions that are completely unrelated to market reforms and operate in different ways. And we think it would be extraordinary in this extraordinary Act to strike all of that down because there are many provisions and it would be too hard to do it. JUSTICE BREYER: I don't think it's not uncommon that Congress passes an act, and then there are many titles, and some of the titles have nothing to do 45 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 with the other titles. That's a common thing. And you're saying you've never found an instance where they are all struck out when they have nothing to do with each other. My question is, because I hear Mr. Clement saying something not too different from what you say. He talks about things at the periphery. We can't reject or accept an argument on severability because it's a lot of work for us. That's beside the point. But do you think that it's possible for you and Mr. Clement, on exploring this, to -- to get together and agree on -- (Laughter) JUSTICE BREYER: -- I mean on -- on a list of things that are in both your opinions peripheral, then you would focus on those areas where one of you thinks it's peripheral and one of you thinks it's not peripheral. And at that point it might turn out to be At which far fewer than we are currently imagining. point we could hold an argument or figure out some way or somebody hold an argument and try to -- try to get those done. Is -- is that a pipe dream or is that a -- MR. KNEEDLER: that is realistic. I -- I -- I just don't think The Court would be doing it without the parties, the millions of parties -- 46 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 JUSTICE SCALIA: You can have a conference committee report afterwards, maybe. (Laughter) MR. KNEEDLER: No, it just -- it just is not But I would something that a court would ordinarily do. like -- JUSTICE SOTOMAYOR: the argument of -- of the heart? MR. KNEEDLER: Yes. Could you get back to JUSTICE SOTOMAYOR: do we want half a loaf or show. two analogies -- MR. KNEEDLER: Striking down the heart, I think those are the Right. And -- and -- and I would like to discuss it again in terms of the text and structure of the Act. We have very important indications from the structure of this Act that the whole thing is not supposed to fall. The -- the most basic one is, the notion that Congress would have intended the whole Act to fall if there couldn't be a minimum coverage provision is refuted by the fact that there are many, many provisions of this Act already in effect without a minimum coverage provision. Two point -- 2 and-a-half million people under 26 have gotten insurance by one of the insurance requirements. Three point two billion dollars -- 47 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 coverage. JUSTICE SCALIA: Anticipation of the minimum That's going to bankrupt the insurance companies if not the States, unless this minimum coverage provision comes into effect. MR. KNEEDLER: There is no reason to think The it's going to -- it's going to bankrupt anyone. costs will be set to cover those -- to cover those amounts. JUSTICE SOTOMAYOR: I thought that the 26-year-olds were saying that they were healthy and didn't need insurance yesterday. going to bankrupt the -- MR. KNEEDLER: Two and-a-half -- 2.5 million So today they are people would be thrown off the insurance roles if the Court were to say that. Congress made many changes to Medicare rates that have gone into effect for the Congress -- for the courts to have to unwind millions of Medicare reimbursement rates. Medicare has -- has covered 32 million insurance -- preventive care visits by patients as a result of -- of this Act. CHIEF JUSTICE ROBERTS: All of that was based on the assumption that the mandate was -- was constitutional. And if -- that certainly doesn't stop us from reaching our own determination on that. MR. KNEEDLER: No, what I'm saying is it's a 48 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 question of legislative intent, and we have a very fundamental indication of legislative intent that Congress did not mean the whole Act to fall if -- if -- without the minimum coverage provision, because we have many provisions that are operating now without that. But there's a further indication about why the line should be drawn where I've suggested, which is the package of these particular provisions. All the other provisions of the Act would continue to advance Congress's goal, the test that was articulated in Booker but it's been said in Regan and other cases. You look to whether the other provisions can continue to advance the purposes of the Act. Here they unquestionably can. The public health -- the broad public health purposes of the Act that are unrelated to the minimum coverage provision, but also that the other provisions designed to enhance access to affordable care. The employer responsibility provision, the credit for small businesses, which is already in effect, by the way, and affecting many small businesses -- JUSTICE SCALIA: But many people might not -- many of the people in Congress might not have voted for those provisions if -- if the central part of this statute was not adopted. 49 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. KNEEDLER: JUSTICE SCALIA: But that -- I mean, you know, you're -- to say that we're effectuating the intent of Congress is just unrealistic. Once you've cut the guts out of it, who knows, who knows which of them were really desired by Congress on their own and which ones weren't. MR. KNEEDLER: The question for the Court is Congress having passed the law by whatever majority there might be in one House or the other, Congress having passed the law, what at that point is -- is -- is the legislative intent embodied in the law Congress has actually passed? CHIEF JUSTICE ROBERTS: Well, that's right. But the problem is, straight from the title we have two complimentary purposes, patient protection and affordable care. And you can't look at something and say this promotes affordable care, therefore, it's consistent with Congress's intent. a balanced intent. Because Congress had You can't look at another provision and say this promotes patient protection without asking if it's affordable. So, it seems to me what is going to promote Congress's purpose, that's just an inquiry that you can't carry out. MR. KNEEDLER: No, with respect, I disagree, 50 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 because I think it's evident that Congress's purpose was to expand access to affordable care. discreet ways. It did it in It did it by the penalty on employers It did it It did it that don't -- that don't offer suitable care. by offering tax credits to small employers. by offering tax credits to purchasers. All of those are a variety of ways that continue to further Congress's goal, and -- and most of all, Medicaid, which is -- which is unrelated to the -- to the private insurance market altogether. And in adopting those other provisions governing employers and whatnot, Congress built on its prior experience of using the tax code, which it is -- for a long period of time Congress has subsidized -- JUSTICE KENNEDY: about the employers. I don't quite understand You're -- you are saying Congress mandated employers to buy something that Congress itself has not contemplated? I don't understand that. No. Employer coverage -- 150 MR. KNEEDLER: million people in this country already get their insurance through -- through their employers. What Congress did in seeking to augment that was to add a provision requiring employers to purchase insurance -- JUSTICE KENNEDY: Based on the assumption that the cost of those policies would be lowered by -- 51 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 by certain provisions which are by hypothesis -- we are not sure -- by hypothesis are in doubt. MR. KNEEDLER: No, I -- I -- I think any cost assumptions -- there is no indication that Congress made any cost assumptions, but -- but there is no reason to think that the individual -- that the individual market, which is where the minimum coverage provision is directed, would affect that. I would like to say -- I would point out why the other things would advance Congress's goal. The point here is that the package of three things would -- would be contrary -- would run contrary to Congress's goal if you took out the minimum coverage provision. And here's why -- and this is reflected in the findings: If you take out minimum coverage but leave in the guaranteed-issue and community-rating, you will make matters worse. Rates will go up, and people will be less -- fewer people covered in the individual market. JUSTICE ALITO: Well, if that is true, what is the difference between guaranteed-issue and community-rating provisions on the one hand and other provisions that increase costs substantially for insurance companies? For example, the tax on high cost health 52 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 plans, which the economists in the amicus brief said would cost $217 billion over 10 years? MR. KNEEDLER: Those are -- what Congress -- Congress did not think of those things as balancing insurance companies. Insurance companies are participants in the market for Medicaid and -- and other things. JUSTICE KENNEDY: But you are saying we have -- we have the expertise to make the inquiry you want us to make, i.e., the guaranteed-issue, but not the expertise that Justice Alito's question suggests we must make. MR. KNEEDLER: Well -- I just don't understand JUSTICE KENNEDY: your position. MR. KNEEDLER: -- that's because -- that's because I think this Court's function is to look at the text and structure and the legislative history of the law that Congress enacted, not the financial -- not a financial balance sheet, which doesn't appear anywhere in the law. And just -- JUSTICE GINSBURG: You are relying on Congress's quite explicitly tying these three things together. MR. KNEEDLER: We do. 53 Alderson Reporting Company That's -- that's -- Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and it's not just the text of the act, but the background of the act, the experience in the state, the testimony of the National Association of Insurance Commissioners. That's the -- that's the problem Congress was addressing. There was a -- there was -- a shifting of present actuarial risks in that market that Congress wanted to correct. And if you took the minimum coverage provision out and left the other two provisions in, there would be laid on top of the existing shifting of present actuarial risks an additional one because the uninsured would know that they would have guaranteed access to insurance whenever they became sick. It would make the -- it would make the adverse selection in that market problem even worse. And so what -- and Congress, trying to come up with a market-based solution to control rates in that market, has adopted something that would -- that would work to control costs by guaranteed-issue and community-rating; but, if you -- if -- if you take out the minimum coverage, that won't work. That was Congress's assumption, again, shown by the text and legislative history of this provision. And that's why we think those things rise or fall in a package because they cut against what Congress was trying to do. 54 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 All of the other provisions would actually increase access to affordable care and would have advantageous effects on price. Again, Congress was invoking its traditional use of the tax code, which has long subsidized insurance through employers, has used that to impose a tax penalty on employers, to give tax credits. done. And the other thing Congress has done, those preexisting laws had their own protections for guaranteed-issue and community-rating. Effectively, This is traditional stuff that Congress has within the large employer plans, they can't discriminate among people, they can't charge different rates. What Congress was doing, was doing that in the other market. If it can't, that's all that should be struck from the act. CHIEF JUSTICE ROBERTS: Mr. Kneedler. Mr. Farr? ORAL ARGUMENT OF H. BARTOW FARR FOR COURT-APPOINTED AMICUS CURIAE MR. FARR: please the Court: At the outset, I would just like to say, I think that the government's position in this case that 55 Alderson Reporting Company Thank you, Mr. Chief Justice and may it Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the community-rating and guaranteed-issue provisions ought to be struck down is an example of the best driving out the good; because, even without the minimum coverage provision, those two provisions, guaranteed-issue and community-rating, will still open insurance markets to millions of people that were excluded under the prior system, and for millions of people will lower prices, which were raised high under the old system because of their poor health. So even though the system is not going to work precisely as Congress wanted, it would certainly serve central goals that Congress had of expanding coverage for people who were unable to get coverage or unable to get it at affordable prices. So when the government -- JUSTICE GINSBURG: One of the points that Mr. Kneedler made is that the price won't be affordable because -- he spoke of the adverse selection problem, that there would be so fewer people in there, the insurance companies are going to have to raise the premiums. So it's nice that Congress made it possible for more people to be covered, but the reality is they won't because they won't be able to afford the premium. MR. FARR: Well, Justice Ginsburg, let me 56 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 say two things about that. First of all, when we talk about premiums becoming less affordable, it's very important to keep in mind different groups of people, because it is not something that applies accurately to everybody. For people who were not able to get insurance before, obviously, their insurance beforehand was -- the price was essentially infinite. not able to get it at any price. They were They will now be able to get it at a price that they can afford. For people who are unhealthy and were able to get insurance, but perhaps not for the things that they were most concerned about, or only at very high rates, their rates will be lower under the system, even without the minimum coverage provision. Also, you have a large number of people who, under the Act -- JUSTICE SCALIA: say -- I didn't follow that. MR. FARR: Excuse me, why do you Why? Because -- Why would their rates be JUSTICE SCALIA: lower? MR. FARR: Their rates are going to be lower than they were under the prior system because they are going into a pool of people, rather than -- some of whom 57 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 are healthy, rather than having their rates set according to their individual health characteristics. That's why their rates were so high. JUSTICE KAGAN: But the problem, Mr. Farr, isn't it, that they're going to a pool of people that will gradually get older and unhealthier. way the thing works. That's the Once you say that the insurance companies have to cover all of the sick people and all of the old people, the rates climb. More and more young people and healthy people say, why should we participate, we can just get it later when we get sick. So they leave the market, the rates go up further, more people leave the market, and the whole system crashes and burns, becomes unsustainable. MR. FARR: Well -- And this is not -- JUSTICE KAGAN: MR. FARR: Certainly. -- like what I think. What JUSTICE KAGAN: do I know? It's just what's reflected in Congress's findings, that it's look -- it looks at some states and says, this system crashed and burned. It looked at another state with the minimum coverage provision and said, this one seems to work. So we will package the minimum coverage provision with the nondiscrimination provisions. 58 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. FARR: Well, in a moment, I'd like to talk about the finding; but, if I could just postpone that for a second and talk about adverse selection itself. I think one of the misconceptions here, Justice Kagan, is that Congress, having seen the experience of the states in the '90s with community-rating and guaranteed-issue, simply imposed the minimum coverage provision as a possible way of dealing with that; and, if you don't have the minimum coverage provision, then, essentially, adverse selection runs rampant. But that's not what happened. Congress included at least half a dozen other provisions to deal with adverse selection caused by bringing in people who are less healthy into the Act. There are -- to begin with, the Act authorizes annual enrollment periods, so people can't just show up at the hospital. If they don't show up and sign up at the right time, they at least have to wait until the time next year. That's authorized by the Act. There -- with respect to the subsidies, there are three different things that make this important. generous. First of all, the subsidies are very For people below 200 percent of the federal poverty line, the subsidy will cover 80 percent, on 59 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 average, of the premium which makes it attractive to them to join. The structure of the subsidies, because their income -- they create a floor for -- based on the income of the person getting the insurance, and then the government covers everything over that. And this is important in adverse selection because if you do have a change in the mix of people, and average premiums start to rise, the government picks up the increase in the premium. The amount that the person who is getting insured contributes remains constant at a percentage of his or her income. And the third thing -- JUSTICE SCALIA: And there is nothing about That is federal support that is unsustainable, right? infinite. MR. FARR: Well, I mean, that's a fair point, Justice Scalia; although, one of the things that happens, if you take the mandate out, while it is true that the subsidies that the government provides to any individual will increase, and they will be less efficient -- I'm not disputing that point -- actually the overall amount of the subsidies that the government will provide will decline, as the government notes itself in its brief, because there will be fewer people 60 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 getting them. Some people will opt out of the system even though they are getting subsidies. But I would just like to go back for one more second to the point about how the subsidies are part of what Congress was using, because the other thing is that for people below 250 percent of the Federal poverty line Congress also picks up and subsidizes the out-of-pocket costs, raising the actuarial value. So you have all of that, and then you have Congress also, unlike the States establishing -- or I should be precisely accurate -- almost all the States, establishing an age differential of up to three to one. So an insurance company, for example, that is selling a 25-year-old a policy for $4,000 can charge a 60-year-old $12,000 for exactly the same coverage. The States typically in the 90s when they were instituting these programs, they either had pure community rating, where everybody is charged the same premium, everybody regardless of their age is charged the same premium. 1. Some states had a variance of 1.5 to Massachusetts, for example, which did have good subsidies, but their age band was two to one. So when Congress is enacting this Act, it's not simply looking at the States and thinking: Well, that didn't go very well; why don't we put in a minimum 61 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 coverage provision; that will solve the problem. Congress did a lot of different things to try to combat the adverse selection. Now, if I could turn to the finding, because I think this is the crux of the government's position and then the plaintiffs pick up on that, and then move --move from that to the rest of the Act. And it seems to me, quite honestly, it's an important part because that is textual. In this whole sort of quest for what we are trying to figure out, the finding seems to stand out as something that the Court could rely on and say here's something Congress has actually told us. But I think the real problem with the finding is the context in which Congress made it. quite clear. It's If the Court wants to look, the finding is on page 42 -- 43A, excuse me, of the Solicitor General's severability brief in the appendix. But the finding is made specifically in the context of interstate commerce. findings are in the Act at all. That is why the Congress wanted to indicate to the Court, knowing that the minimum coverage provision was going to be challenged, wanted to indicate to the Court the basis on which it believed it had the power under the Commerce Clause to enact this law. Why does that make a difference with respect 62 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to finding I, which is the one that the government is relying on, and in particular the last sentence, which says "this requirement is essential to creating effective health insurance markets in which guaranteed-issue and preexisting illnesses can be covered." The reason is because the word "essential" in the Commerce Clause context doesn't have the colloquial meaning. In the Commerce Clause context So that when one "essential" effectively means useful. says in Lopez, when the Court says section 922(q) is not an essential part of a larger regulatory scheme of economic activity, it goes on to say, in which the regulatory scheme would be undercut if we didn't have this provision. Well, if that's all Congress means, I agree with that. The system will be undercut somewhat if you It's like don't have the minimum coverage provision. the word "necessary" in the Necessary and Proper Clause clause. It doesn't mean, as the Court has said on It means numerous occasions, absolutely necessary. conducive to, useful, advancing the objectives, advancing the aims. And it's easy to see, I think, that that's what Congress -- JUSTICE SCALIA: 63 Alderson Reporting Company Is there any dictionary Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that gives that -- MR. FARR: I'm sorry, Justice Scalia? -- that definition of Just give me one JUSTICE SCALIA: "essential"? dictionary. MR. FARR: It's very imaginative. Well, but I think my point, Justice Scalia, is that they are not using it in the true dictionary sense. JUSTICE SCALIA: How do we know that? When people speak, I assume they are speaking English. MR. FARR: Well, I think that there are several reasons that I would suggest that we would know that from. themselves. The first is, as I say, the findings Congress says at the very beginning, the head of it, is Congress makes the following findings, and they are talking about the interstate -- you know, B is headed "Effects on the national economy and interstate commerce." So we know the context that Congress is talking about. It is more or less quoting from the Court's Commerce Clause statements. But if one looks at the very preceding finding, which is finding H, which is on 42 over onto 43, Congress at that point also uses the word "essential." In the second sentence it says "this requirement" -- and again we're talking about the 64 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 minimum coverage provision -- is an essential part of this larger regulation of economic activity, which is, by the way, an exact quote from Lopez, in which "the absence of the requirement undercuts Federal regulation," also an exact quote from Lopez. But what it is referring to is an essential -- an essential part of ERISA, the National Health Service Act and the Affordable Care Act. It can't possibly be, even the plaintiffs haven't argued, that those Acts would all fall in their entirety if you took out the minimum coverage provision. And as a second example of the same usage by Congress, the statute that was before the Court in Raich, section 801 of Title 21, the Court said that the regulation of intrastate drug activity, drug traffic, was essential to the regulation of interstate drug activity. Again, it is simply not conceivable that Congress was saying one is so indispensable to the other, the way the United States uses the term here, so indispensable that if we can't regulate the intrastate traffic we don't want to regulate the interstate traffic, either. The whole law criminalizing drug traffic would fall. So I think once you look at the finding for what I believe it says, which is we believe this is a 65 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 useful part of our regulatory scheme, which the Congress would think in its own approach would be sufficient -- JUSTICE SOTOMAYOR: Counsel, the problem I have is that you are ignoring the congressional findings and all of the evidence Congress had before it that community ratings and guaranteed-issuance would be a death spiral -- I think that was the word that was used -- without minimum coverage. Those are all of the materials that are part of the legislative record here. So even if it might not be because of the structure of the Act, that's post hoc evidence. Why should we be looking at that as opposed to what Congress had before it and use "essential" in its plain meaning: You can't have minimum coverage without what the SG is arguing, community ratings and guaranteed-issue. can't have those two without minimum coverage. MR. FARR: question. Well, I think that's a fair You But the idea that -- that all the information before Congress only led to the idea that you would have death spirals seems to me to be contradicted a little bit at least by the CBO report in November of 2009, which is about 4 months before the Act passed, where the CBO talks about adverse selection. Now, I want to be clear. This is at a time when the minimum coverage provision was in the statute, 66 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 so I'm not suggesting that this is a discussion without that in it. But nonetheless, the CBO goes through and talks about adverse selection, and points out the different provisions in the Act, the ones I have mentioned plus one other, actually, where in the first 3 years of the operation of the exchanges those insurance companies that get sort of a worse selection of consumers will be given essentially credits from insurance companies that get better selections. JUSTICE KENNEDY: So do you want us to write an opinion saying we have concluded that there is an insignificant risk of a substantial adverse effect on the insurance companies, that's our economic conclusion, and therefore not severable? say? MR. FARR: It doesn't sound right the way That's what you want me to you say it, Justice Kennedy. (Laughter.) MR. FARR: No, I -- But you don't want them Do you JUSTICE SOTOMAYOR: to say, either, that there is a death spiral. want -- you don't want us to make either of those two findings, I'm assuming? MR. FARR: That's correct. Now, I agree that there is a risk and the significance of it people 67 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 can debate. But what I think is --is lost in that question, and I didn't mean to be whimsical about it, I think what is lost in it a little bit is what is on the other side, which is the fact that if you follow the government's suggestion, if the Court follows the government's suggestion, what is going to be lost is something we know is a central part of the Act. I mean, indeed, if one sort of looks at the legislative history more broadly, I think much of it is directed toward the idea that guaranteed- issue and community rating were the crown jewel of the Act. The minimum coverage provision wasn't something that everybody was bragging about, it was something that was meant to be part of this package. agree with that. But the -- the point of it was to have guaranteed-issue and minimum coverage -- I mean, excuse me -- guaranteed-issue and community rating. And that's I -- under the government's proposal, those would -- would disappear. We would go back to the old system. And under what I think is the proper severability analysis, the -- the real question the Court is asking, should be asking, is, would Congress rather go back to the old system than to take perhaps the risk that you're talking about, Justice Kennedy. 68 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 out? CHIEF JUSTICE ROBERTS: You're -- you're Their -- referring to the government's second position. their first, of course, is that we shouldn't address this issue at all. MR. FARR: That's correct. I asked Mr. Kneedler CHIEF JUSTICE ROBERTS: about what procedure or process would be anticipated for people who are affected by the change in -- in the law, and change in the economic consequences. view on how that could be played out? Do you have a It does seem to me that if we accept your position, something -- there have to -- there has to be a broad range of consequences, whether it's additional legislation, additional litigation. Any thoughts on how that's going to play MR. FARR: Well, if the Court adopts the position that I'm advocating, Mr. Chief Justice, I think what would happen is that the Court would say that the minimum coverage provision, by hypothesis of course, is unconstitutional, and the fact of that being unconstitutional does not mean the invalidation of any other provision. So under the position I'm advocating, there would no longer be challenges to the remaining part of 69 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the Act. The -- CHIEF JUSTICE ROBERTS: But if the challenge is what we're questioning today, whether -- if you're an insurance company and you don't believe that you can give the coverage in the way Congress mandated it without the individual mandate, what -- what type of action do you bring in a court? MR. FARR: You -- if the Court follows the course that I'm advocating, you do not bring an action in court, you go to Congress and you seek a change from Congress to say the minimum coverage provision has been struck down by the Court, here is our -- here -- here's the information that we have to show you what the risks are going to be. make. One of the questions earlier pointed out that States have adjusted their systems as they've gone along, as they've seen things work or not work. You know, as I was talking earlier about the -- the different ratio for -- for ages and insurance. The States have tended to change that, because they've found that having too narrow a band worked against the effectiveness of -- of their programs. But they did -- Here are the adjustments you need to except for in Massachusetts, they didn't enact mandates. So to answer -- I think to answer your 70 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 question directly, Mr. Chief Justice, the position I'm advocating would simply have those -- those pleas go to Congress, not in court. Now, if one -- just -- just to discuss the issue more generally, if that's helpful, I -- I think that -- that if there were situations where the Court deferred -- let's say for discretionary reasons, they just said -- the Court said we're -- we're not going to take up the question of severability and therefore not resolve it in these other situations, it certainly seems to me that in enforcement actions, for example, if the time comes in -- in 2014 and somebody applies to an insurance company for a policy -- and the insurance company says, well, we're not going to issue a policy, we don't think your risks are ones that we're willing to cover, that -- it seems to me that they could sue the insurance company and the insurance company could raise as a defense that this provision, the guaranteed-issue provision of the statute, is not enforceable because it was inseverable from the decision -- from the provision that the Court held unconstitutional in 2012. JUSTICE SCALIA: Mr. Farr, let's -- let's consider how -- how your approach, severing as little as possible there -- thereby increases the deference that we're showing to -- to Congress. 71 Alderson Reporting Company It seems to me it puts Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Congress in -- in this position: full effect. This Act is still in There is going to be this deficit that used to be made up by the mandatory coverage provision. All that money has to come from somewhere. You can't repeal the rest of the Act because you're not going to get 60 votes in the Senate to repeal the rest. It's not a matter of enacting a new act. So the rest of You've got to get 60 votes to repeal it. the Act is going to be the law. So you're just put to the choice of I guess bankrupting insurance companies and the whole system comes tumbling down, or else enacting a Federal subsidy program to the insurance companies, which is what the insurance companies would like, I'm sure. Do you really think that that is somehow showing deference to Congress and -- and respecting the democratic process? It seems to me it's a gross distortion of it. MR. FARR: Well, Your Honor, the -- the difficulty is that it seems to me the other possibility is for the Court to make choices, particularly based on what it expects the difficulties of Congress altering the legislation after a Court ruling would be. I'm not aware of any severability decision 72 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that is -- JUSTICE SCALIA: my approach. No, I -- that wouldn't be My approach would say if you take the That heart out of the statute, the statute's gone. enables Congress to -- to do what it wants in -- in the usual fashion. And it doesn't inject us into the process of saying, "this is good, this is bad, this is good, this is bad." It seems to me it reduces our options the most and increases Congress's the most. MR. FARR: I guess to some extent I have to quarrel with the premise, Justice Scalia, because at least the -- the position that I'm advocating today, under which the Court would only take out the minimum coverage provision, I don't think would fit the description that you have given of taking out the heart of the statute. Now, I do think once you take out guaranteed-issue and community rating, you are getting closer to the heart of the statute. And one of the -- one of the difficulties I think with the government's position is that I think it's harder to cabin that, to draw that bright line around it. government thinks it is. I mean, to begin with, even the government 73 Alderson Reporting Company It's harder than the Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 seems to acknowledge, I think, that the exchanges are going to be relatively pale relatives of -- of the exchanges as they're intended to be, where you're going to have standardized products, everybody can come and make comparisons based on products that look more or less the same. But the other thing that's going to happen is with the subsidy program. The -- the way that the subsidy program is -- is set up, the subsidy is calculated according to essentially a benchmark plan. And this -- if the Court wants to look at the provisions, they're -- they begin at page 64A of the Private Plaintiffs' brief -- again, in the appendix. The particular provision I'm talking about's at 68A, but there's a -- there's a question -- you -- you're looking essentially to calculate the premium by looking at a -- at a standardized silver plan. First question, obviously, is, is there going to be any such plan if you don't have guaranteed-issue and community rating, if the plans can basically be individualized? But the second problem is that, in the provision on 68A, the -- the provision that's used for calculating the subsidy, what -- what is anticipated in the provision under the -- the Act as it is now, is that you do have the floor of the income, you 74 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 would -- you would take this benchmark plan, and the government would pay -- pay the difference. And as we talked about earlier, the benchmark plan can change for age, and -- and the provision says it can be adjusted only for age. So if in fact you even have such a thing as a benchmark plan anymore -- if the rates of people in poor health go up because of individual insurance underwriting, the government subsidy is not going to pay for that. JUSTICE KAGAN: Mr. Farr, I understood that the answer that you gave to Justice Scalia was essentially that the minimum coverage provision was not the heart of the Act. Instead, the minimum coverage provision was a tool to make the nondiscrimination provisions, community rating guaranteed-issue, work. So if you assume that, that all the minimum coverage is is a tool to make those provisions work, then I guess I would refocus Justice Scalia's question and say, if we know that something is just a tool to make other provisions work, shouldn't that be the case in which those other provisions are severed along with the tool? MR. FARR: No. I don't think so, because there are -- there are many other tools to make the same things work. That's I think the point. 75 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 them don't. And if one -- the case that comes to mind is New York v. the United States, where the Court struck down the take title provision but left other -- two other incentives essentially in place. Even without the minimum coverage provision, there will be a lot of other incentives still to bring younger people into the market and to keep them in the market. And if -- if my reading of the finding is correct, and that's all that Congress is saying, that this would be useful, it doesn't mean that it's impossible. JUSTICE BREYER: But would you -- I would just like to hear before you leave your argument, if you want to, against what Justice Scalia just said, let's assume, contrary to what you want, that the government's position is accepted by the majority of this Court. so we now are rid, quote, of the true "heart" of the bill. Now still there are a lot of other provisions And here like the Indian Act, the Black Lung Disease, the Wellness Program, that restaurants have to have a calorie count of major menus, et cetera. Now, some of them cost money. And there are loads of them. And some of Now, what is your argument that just because the heart of the bill is gone, that has nothing to do with the validity of these 76 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 other provisions, both those that cost money, or at least those that cost no money. Do you want to make an argument in that respect, that destroying the heart of the bill does not blow up the entire bill; it blows up the heart of the bill. I just would like to hear what you have to say about that. MR. FARR: Well, Justice Breyer, I think what I would say is if one goes back to the, what I think is the proper severability standard and say, would Congress rather have not -- no bill as opposed to the bill with whatever is severed from it. It seems to me when you are talking about provisions that don't have anything to do with the minimum coverage provision, there is no reason to answer that question as any other way than yes, Congress would have wanted the -- JUSTICE KENNEDY: or a hypothetical Congress? (Laughter.) MR. FARR: An objective Congress, Your The -- the real Congress Honor, not the -- specific not with a vote count. JUSTICE SCALIA: to that false choice? MR. FARR: Well -- You only have two choices, Why put -- why put Congress JUSTICE SCALIA: Congress. You have the whole bill or you can have, you 77 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 can have parts of the bill or no bill at all. false choice? MR. FARR: Why that I think the reason is because The Court severability is by necessity a blunt tool. doesn't have, even if it had the inclination, doesn't essentially have the authority to retool the statute -- JUSTICE BREYER: politics. I would say stay out of But the, the That's for Congress; not us. question here is, you've read all these cases, or dozens, have you ever found a severability case where the Court ever said: Well, the heart of the thing is gone; and, therefore, we strike down these other provisions that have nothing to do with it which could stand on their feet independently and can be funded separately or don't require money at all. MR. FARR: I think the accurate answer would I be, I am not aware of a modern case that says that. think there probably are cases in the '20s and '30s that would be more like that. If I could just take one second to raise the economist brief because Justice Alito raised it earlier. I just want to make one simple point. Leaving aside the whole balancing thing, if one looks at the economist brief, it's very important to note that when they are talking about one side of the balance -- if may I 78 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 finish. CHIEF JUSTICE ROBERTS: MR. FARR: Certainly. When they are talking about the balance, they are not just talking about the minimum coverage provision. They very carefully word it to say the minimum coverage provision and the subsidy programs. And then so when you are doing the mathematical balancing, the subsidy programs are extremely large. They -- in the year 2020, they are expected to be over $100 billion in that one year alone. So if you are Thank looking at the numbers, please consider that. you. CHIEF JUSTICE ROBERTS: Thank you, Mr. Farr. Mr. Clement, you have four minutes remaining. REBUTTAL ARGUMENT OF PAUL D. CLEMENT ON BEHALF OF THE PETITIONERS JUSTICE SOTOMAYOR: -- Amicis' point, he says that Congress didn't go into this Act to impose minimum coverage. They went into the Act to have a different purpose, i.e., to get people coverage jury when they needed it, to increase coverage for people, but this is only a tool. But other States -- going back to my original point, that are other tools besides minimum coverage that Congress can achieve these goals. 79 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 So if we strike just a tool, why should we strike the whole Act, when Congress has other tools available? MR. CLEMENT: Mr. Chief Justice, I will make four points in rebuttal, but I will start with Justice Sotomayor's question; which is to simply say this isn't just a tool; it's the principal tool, Congress identified it as an essential tool. tool to make it work. make it affordable. It's not just a It's a tool to pay for it, to And again, that's not my characterization; that's Congress's characterization in subfinding I on page 43a of the government's brief. Now, that bring me to my first point in rebuttal, which is Mr. Kneedler says quite correctly, tells this Court, don't look at the budgetary implications. The problem with that, though, is once it's common ground, that the individual mandate is in the statute at least in part to make community rating and guaranteed-issue affordable, that really is all you have to identify. That establishes the essential link You don't have to figure that it's there to pay for it. out exactly how much that is and which box -- I mean, it clearly is a substantial part of it, because what they were trying to do was take healthy individuals and put them into the risk pool, and this is quoting their finding, which is in order -- they put people into the 80 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 market "which will lower premiums." their intent was. So that's what So you don't have to get to the -- the final number. You know that's what was going on here, and that's reason alone to sever it. Now the government -- Mr. Kneedler also says there is an easy dividing line between what they want to keep and what they want to dish out. The problem with that is that, you know, you read their brief and you might think oh, there is a guaranteed-issue and a community rating provision subtitle in the bill. is not. To figure out what they are talking about you have to go to page 6 of their brief, of their opening severability brief, where they tell you what is in and what's out. And the easy dividing line they There suggest is actually between 300g(a)(1) and 300g(a)(2), because on community rating they don't -- they say that (a)(1) goes, but then they say (a)(2) has to stay, because that's the way that you'll have some sort of, kind of Potemkin community rating for the exchanges. But if you actually look at those provisions, (a)(2) makes all these references to (a)(1). work. Now, in getting back to the -- an inquiry 81 Alderson Reporting Company It just doesn't Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that I think this Court actually can approach, is to look at what Congress was trying to do, you need look no further than look than the title of this statute: Patient Protection and Affordable Care. I agree with Mr. Farr that community rating and guaranteed-issue were the crown jewels of this Act. to provide patient protection. affordable? They were what was trying And what made it If you strike down The individual mandate. guaranteed-issue, community rating and the individual mandate, there is nothing left to the heart of the Act. And that takes me to my last point, which is simply this court in Buckley created a halfway house and it took Congress 40 years to try to deal with the situation, when contrary to any time of their intent, they had to try to figure out what are we going to do when we are stuck with this ban on contributions, but we can't get at expenditures because the Court told us we couldn't? house. And for 40 years they worked in that halfway The Why make them do that in health care? choice is to give Congress the task of fixing this statute, the residuum of this statute after some of it is struck down, or giving them the task of simply fixing the problem on a clean slate. close choice. I don't think that is a If the individual mandate is unconstitutional, the rest of the Act should fall. 82 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Mr. Clement. CHIEF JUSTICE ROBERTS: Thank you, Mr. Farr, you were invited by this Court to brief and argue in these cases in support of the decision below on severability. You have ably carried out responsibility for which we are grateful. Case Number 11-393 is submitted. We will continue argument in Case Number 11-400 this afternoon. (Whereupon, at 11:49 a.m., the case in the above-entitled matter was submitted.) 83 Alderson Reporting Company Official - Subject to Final Review 84 A ability 44:25 able 27:13 56:24 57:6,9,9,11 ably 83:5 about's 74:14 above-entitled 1:21 83:10 absence 65:4 absolutely 10:3 63:21 abstract 10:2 accept 25:4 36:13 46:8 69:11 accepted76:16 access 49:18 51:2 54:13 55:2 accurate 61:11 78:16 accurately 57:5 achieve 79:25 acknowledge 74:1 act 4:13,16 9:8,9 14:15,17 15:12 15:20 16:5,14 16:24 23:1,17 23:19 24:10 25:6,18 26:2,12 27:22,25 28:19 28:24 29:22 30:3,21 31:12 33:11,19,22 34:25 36:2,4 37:22 40:8,16 42:15,18 43:25 44:1,2,3,8,11 44:13,17,19,24 45:13,16,17,20 45:24 47:15,16 47:19,22 48:20 49:3,9,13,15 54:1,2 55:16 57:17 59:15,16 59:20 61:23 62:7,20 65:8,8 66:11,22 67:4 68:7,11 70:1 72:1,5,7,9 74:24 75:13 76:19 79:19,20 80:2 82:6,10,25 action 20:13 29:16,17,20 70:7,9 actions 71:11 activity 63:13 65:2,15,17 Acts 65:10 actuarial 54:7,11 61:8 add 51:22 added42:2 additional 54:11 69:13,14 address 12:13 69:3 addressed19:7 42:13 addressing 10:1 31:12 35:17 54:6 adjudicates 29:24 adjusted5:13 70:17 75:5 adjustments 70:14 admit 15:7 16:22 adopt 20:6 adopted49:25 54:18 adopting 51:11 adopts 69:17 advance 49:9,12 52:10 advancing 63:22 63:23 advantageous 55:3 adverse 40:24 54:14 56:18 59:3,11,14 60:7 62:3 66:23 67:3 67:12 advisory 13:14 advocating 69:18 69:24 70:9 71:2 73:13 affect 36:20 52:8 affirmative 29:20 afford 56:24 57:10 affordable 4:22 7:1 14:22 49:18 50:16,17,21 51:2 55:2 56:14 56:17 57:3 65:8 80:9,18 82:4,8 afternoon 83:8 age 61:12,19,22 75:4,5 ages 70:20 agree 8:25 10:25 46:11 63:16 67:24 68:15 82:4 aims 63:23 airline 17:12 AL 1:4,8,12,16 aligned30:11 Alito 24:25 25:3 25:16 33:17 41:10 52:20 78:21 Alito's 34:7 42:25 53:11 allied31:3 allow33:12 altering 72:23 altogether19:19 51:10 Amendment 38:2 Americans 23:25 Amicis 79:18 amicus 2:6 3:10 25:11 41:11 53:1 55:21 amount 24:13,14 31:18 60:10,23 amounts 48:8 analogies 47:12 analysis 18:4 33:14 68:21 and-a-half 47:23 48:13 Angeles 34:13 annual 59:17 answer7:8 9:21 9:25 20:4,4 22:16 25:22 26:11 33:5 37:18 38:12 40:4,7 42:24 70:25,25 75:11 77:14 78:16 answered19:24 answers 37:8 anticipated69:7 74:24 Anticipation 48:1 Anti-Injunction 30:3,21 33:11 anybody 30:8 anymore 75:7 apart 29:8 appear 53:20 APPEARANC... 1:24 appendix 6:8 62:17 74:13 applied18:4 applies 57:5 71:12 apply 17:7,24 18:10 23:7 28:24,25 31:13 34:3 appoint 23:3 approach 13:21 15:2 18:11 66:2 71:23 73:3,3 82:1 appropriations 16:9 areas 22:25 23:18 46:15 argue 28:16 83:4 argued23:4 36:9 65:9 arguing 15:10 66:15 argument 1:22 3:2,5,8,11 4:4,8 6:19 16:3 23:10 23:14 25:17 28:10 41:11 42:13 46:8,19 46:20 47:8 55:20 76:13,24 77:3 79:16 83:8 arises 33:14 Article 28:17 34:3,6 articulated49:10 aside 78:22 asked17:25 19:24 37:15,19 44:7 69:6 asking 9:1 17:6 24:4 50:20 68:22,23 aspect 44:11 aspects 13:18 assess 43:17 Association 54:3 assume 6:20 43:1,4,13 64:10 75:16 76:15 assuming 41:18 67:23 assumption 37:1 48:22 51:24 Alderson Reporting Company Official - Subject to Final Review 85 54:22 assumptions 52:4,5 attach 16:21 attractive 60:1 augment 51:22 authority 78:6 authorized59:20 authorizes 59:17 available 8:4 80:2 average 60:1,8 avoid 28:4 aware 72:25 78:17 awesome 43:18 a.m 1:23 4:2 83:9 B B 17:11 64:16 back 5:5 21:2 23:4 34:18 47:7 61:3 68:20,23 77:8 79:23 81:25 background 54:2 bad 10:18 73:7,8 balance 34:19 35:14 53:20 78:25 79:4 balanced50:19 balancing 53:4 78:23 79:8 ballpark 41:19 ban 22:3,4 82:16 band 61:22 70:22 bankrupt 48:2,6 48:12 bankrupting 72:11 bar 33:11 BARTOW 2:5 3:9 55:20 based12:23 13:4 18:10 38:22 48:22 51:24 60:4 72:22 74:5 basic 4:21 9:2 10:20 47:18 basically 12:23 13:25 20:7 25:25 38:23 74:21 basis 11:4,8 33:13 62:23 bear 29:8 becoming 57:3 beginning 7:23 64:14 behalf 1:25 2:3 3:4,7,13 4:9 28:11 79:17 believe 28:22 33:8 65:25,25 70:4 believed62:23 believer18:8 benchmark 74:10 75:1,4,6 benefits 14:18 16:14 best 8:17 13:4,10 44:15 56:2 better7:17 12:6 12:8 14:23 22:7 26:11 35:11 67:9 beyond 30:23 37:7 41:24 big 18:8 20:4 26:14,15 bigger26:4 bill 38:9,21 42:1 76:18,24 77:4,4 77:5,10,11,25 78:1,1 81:11 billion 41:13,15 41:16,17,22 43:2,2 47:25 53:2 79:10 biosimilar 23:18 biosimilarity 22:24 Biosimilars 15:12 bit 9:17 66:21 68:3 bitter6:24 black 16:13 24:1 27:9 76:19 Blackmun 19:7 blend 37:13,16 37:16,17 blow77:4 blows 77:4 blunt 78:4 Booker13:10,17 13:19 14:8 44:15,16 49:10 bottom 7:6,8 box 80:21 Brady 31:11 bragging 68:13 branch19:25 brand 10:24 breast 22:24 23:16 Breyer22:14 23:13,16 27:6 31:16 45:23 46:13 76:12 77:7 78:7 Breyer's 25:24 33:5 brief 6:8 13:7 41:11 53:1 60:25 62:17 74:13 78:21,24 80:11 81:9,14 81:15 83:4 briefed36:19 bright 73:23 bring 32:3 33:21 70:7,9 76:6 80:12 case 4:4,5 7:10 15:7 21:8 28:15 31:9,10,10 32:3 32:9 33:9,14 34:9 40:7 41:2 44:6 45:2,10,11 55:25 75:20 76:1 78:10,17 83:7,8,9 cases 9:15 13:10 19:5 20:10 21:22 31:6 44:11 49:11 78:9,18 83:4 cause 4:25 29:15 29:16,20 40:24 caused59:14 CBO 66:21,23 67:2 center16:24 centered37:8 central 44:17 49:24 56:12 68:7 certain 18:11 26:6,8,10 52:1 C certainly 14:9 C 3:1 4:1 48:23 56:11 cabin 73:22 58:17 71:10 calculate 74:16 79:2 calculated74:10 cetera 76:21 calculating 74:23 challenge 30:6 call 10:9 20:12 30:14,19 31:25 calorie 76:21 33:12 70:2 campaign 21:12 challenged30:20 care 4:22 7:2,17 35:18 62:22 27:8 29:4 32:17 challenges 69:25 39:20,21 48:19 challenging 49:18 50:16,17 33:21 51:2,4 55:2 chance 22:11 65:8 82:4,19 change 29:22 carefully 79:5 34:2 60:8 69:8 carried31:22 69:9 70:10,21 83:5 75:4 carry 50:24 changes 14:17 bringing 29:5 32:9 59:15 broad 49:15 69:12 broader21:8,20 broadly 12:14 68:9 Brock 14:9 19:8 brokered39:9 bronze 13:2 Buckley 21:24 21:25 28:5 82:12 budget 42:1 budgetary 43:10 80:14 bugaboo 37:10 built 51:12 burned58:21 burns 58:14 business 1:4 4:5 31:12 businesses 29:1 49:19,21 buy 51:17 Alderson Reporting Company Official - Subject to Final Review 86 48:15 characteristics 58:2 characterization 80:10,10 charge 55:13 61:14 charged61:18 61:19 Chief 4:3,10 16:6 16:16 18:18 26:3,7,8,24 27:1,17 28:7,12 29:2,15 33:4 35:23 40:1,14 40:18 41:1,9 42:6,16 48:21 50:13 55:17,22 69:1,6,18 70:2 71:1 79:2,13 80:3 83:1 choice 14:25 32:8 72:10 77:22 78:2 82:20,24 choices 72:22 77:24 choose 7:24 8:22 chop 19:1 cited16:13 citizens 29:1 clarify 18:6 CLASS 23:1,19 clause 10:1 34:2 62:24 63:8,9,19 63:20 64:21 clean 26:13 82:23 clear 10:14 11:23 62:15 66:24 clearly 13:12 32:14 80:22 Clement 1:25 3:3 3:12 4:7,8,10 5:20 6:22 7:8 8:2,13,20,25 9:4,14,19,24 10:19 11:2,13 12:11 13:6,16 14:14 15:4 16:16 18:2,8,22 19:4 20:3,11,14 20:20 21:1,5 22:13 23:12 24:5 25:1,2,15 26:4,10,18,25 27:16 28:8 46:5 46:10 79:14,16 80:3 83:2 clerks 38:7 39:16 39:21 climb 58:9 close 23:5 82:24 closely 22:2 26:1 30:11 31:3 closer73:20 cobble 27:14 code 51:13 55:4 coherent 22:1 colleagues 19:20 collecting 31:24 colloquial 63:9 colloquy 17:4 combat 62:2 combination14:1 come 31:20 54:16 72:4 74:4 comes 48:4 71:12 72:12 76:1 commerce 62:19 62:24 63:8,9 64:18,21 Commissioners 54:4 committee 42:1 47:2 common10:23 46:1 80:16 community 4:15 4:24 5:24 11:5 11:11,20,24 12:24 22:18,19 24:8,9,23 25:10 28:1 40:11 61:18 66:6,15 68:10,18 73:19 74:20 75:15 80:17 81:11,18 81:21 82:5,9 community-rat... 4:19 6:3,11 52:16,22 54:20 55:11 56:1,5 59:8 companies 36:6 42:4 48:3 52:24 53:5,5 56:20 58:8 67:7,9,13 72:11,13,14 company 61:13 70:4 71:13,14 71:17,17 comparable 13:5 compare 11:24 31:6 comparisons 74:5 competence 43:17 completely 17:12 17:17 45:18 complex 39:11 complimentary 50:15 compromise 39:9 concede 14:16 concedes 4:14 conceivable 65:17 concerned6:19 57:13 concerted27:3 conclude 28:18 concluded67:11 conclusion 18:14 67:13 condition 22:20 conducive 63:22 conference 47:1 confronted45:12 Congress 4:14 4:17,20 5:15,22 5:25 6:4,9,19 6:25 7:7,12,13 7:13,16,21,21 7:25 8:4,5,9,21 9:3,6,7,13,25 10:6,14 12:5,10 12:19 13:14 14:4,18,23 16:4 16:11 17:9,17 18:23,23 19:2 19:12,16,21 22:5,11,17 26:13 27:13 32:15,16,17,21 32:23 33:23 34:17,18,18 35:9 36:6,8 38:16 40:12,22 41:6 42:20 43:7 44:18 45:24 47:19 48:15,17 49:3,23 50:3,6 50:8,9,11,18 51:12,14,16,17 51:22 52:4 53:3 53:4,19 54:5,7 54:16,25 55:3,7 55:9,14 56:11 56:12,22 59:6 59:13 61:5,7,10 61:23 62:2,12 62:14,20 63:16 63:24 64:14,15 64:19,23 65:13 65:18 66:1,5,12 66:19 68:23 70:5,10,11 71:3 71:25 72:1,16 72:23 73:5 76:9 77:10,15,16,17 77:19,21,25 78:8 79:19,25 80:2,6 82:2,13 82:20 congressional 9:20 10:21 20:24 35:7,8 66:4 Congress's 4:21 6:6,25 40:20 49:10 50:18,23 51:1,7 52:10,12 53:23 54:22 58:19 73:10 80:10 connected15:22 15:22,23,24 32:1 consequence 10:5,7 consequences 34:9 43:22,25 69:9,13 conservative 15:2 consider28:15 28:23 32:2,25 33:15 34:18 35:14 36:8 71:23 79:11 consistent 13:9 14:8,9 28:17 50:18 conspicuously 41:7 constant 60:11 Constitution 22:10 28:17 constitutional 10:11 15:17,19 31:8 48:23 consumers 67:8 Alderson Reporting Company Official - Subject to Final Review 87 contemplate 29:5 contemplated 51:18 context 62:14,19 63:8,9 64:18 contexts 19:20 continue 4:3 30:13 49:9,12 51:7 83:8 continues 30:9 continuing 29:12 contradicted 66:20 contrary 45:9 52:12,12 76:15 82:14 contributes 60:11 contribution 21:13,15,18 22:4,10 contributions 22:1 82:16 control 54:17,19 controversial 26:22 convenient 16:10 convert 38:24 core 25:18 27:21 27:25 corn 10:9,17 17:5 correct 38:16,17 54:8 67:24 69:5 76:9 correctly 80:13 cost 4:25 6:17,18 29:8 51:25 52:4 52:5,25 53:2 76:22 77:1,2 costs 6:20 41:12 41:14 48:7 52:23 54:19 61:8 Counsel 5:4 66:3 count 38:24 76:21 77:20 counteract 4:21 country 51:20 couple 5:20,21 6:22 20:17 26:15 course 6:6,7 8:2 19:9 69:3,20 70:9 court 1:1,22 4:11 8:15,19,23 9:1 10:22,24 12:16 13:24 14:3,10 18:16 20:1 21:11,14,15,25 22:3,8 23:4 28:13,14,18,22 29:1 30:17 31:11 32:20,21 32:22,25 33:16 34:10 35:17 36:7,18,19,21 37:4,22 38:6,24 40:22 41:24 44:18,20 46:24 47:5 48:15 50:7 55:23 62:11,15 62:21,23 63:11 63:20 65:13,14 68:5,22 69:17 69:19 70:7,8,10 70:12 71:3,6,8 71:21 72:22,24 73:14 74:11 76:2,16 78:4,11 80:14 82:1,12 82:17 83:3 courts 48:17 Court's 9:15 18:3 32:12 34:8 35:6 37:2,11 38:20 38:25 43:6,10 44:1 53:17 64:20 Court-appointed 2:6 3:10 55:21 cover48:7,7 58:8 59:25 71:16 coverage 5:13 7:22 28:16 33:2 40:9,10,21 42:20,22 47:20 47:22 48:2,4 49:4,16 51:19 52:7,13,15 54:8 54:21 56:4,13 56:13 57:15 58:22,24 59:9 59:11 61:15 62:1,21 63:18 65:1,11 66:8,14 66:16,25 68:12 68:17 69:20 70:5,11 72:3 73:15 75:12,13 75:17 76:5 77:13 79:5,6,20 79:21,22,25 covered48:19 52:18 56:23 63:6 covers 60:6 crashed58:21 crashes 58:13 create 60:4 created82:12 creates 40:8 creating 63:3 credit 24:13 28:3 49:19 credits 15:22 24:13 30:19 51:5,6 55:7 67:8 criminalizing 65:22 critical 24:12 crown 68:11 82:6 crux 62:5 64:3 degree 34:11 delighted11:14 democracy 19:25 21:21 democratic 22:7 72:17 denies 31:7 D Department 1:15 D 1:25 3:3,12 4:1 2:3 4:6 4:8 79:16 Deputy 2:2 Daimler/Chrys... description 34:15 73:16 dare 21:24 designed49:17 Davis 34:12 desired50:5 day 8:6 23:20 destroying 77:3 days 26:15 detail 14:13 deal 26:15 59:14 determination 82:13 48:24 dealing 31:7 dictionary 63:25 59:10 64:5,8 death 66:7,20 differ23:8 67:21 difference 39:13 debate 5:1,2,3 52:21 62:25 68:1 75:2 decades 21:2,2,2 different 10:22 22:5 13:13 14:6 decide 14:23 15:10,16 17:19 17:13 27:22 20:1 35:3 45:19 29:20 38:10 46:6 55:13 57:4 decided13:11 59:22 62:2 67:4 decision 35:6 70:20 79:21 45:12 71:20 differential 72:25 83:5 61:12 declared17:16 differently 9:17 25:5 12:4 declaring 7:25 difficulties 15:17 decline 60:24 72:23 73:21 deemed40:12 difficulty 15:19 defense 71:18 72:21 deference 71:24 direct 33:11 72:16 directed52:8 deferred71:7 68:9 deficit 72:2 direction 5:2 definition 19:1 directly 19:21 curiae 2:6 3:10 55:21 current 12:22 currently 46:18 cut 7:3 14:2,7 34:25 43:3 50:4 54:25 Alderson Reporting Company Official - Subject to Final Review 88 31:9 71:1 disagree 41:17 50:25 disappear 68:20 discreet 51:3 discretion 37:3 37:11,17 discretionary 71:7 discriminate 55:12 discuss 47:14 71:4 discussion 32:11 67:1 disease 24:1 76:19 dish24:19 81:8 dispassionately 34:19 disposition 25:8 25:9 dispositions 25:7 disproportionate 24:20 disputing 60:22 dissent 13:21 distort 35:6 distortion 72:18 district 23:4 dividing 10:22 11:10 40:9 81:7 81:16 doctors 22:25 23:17 doing 5:7 43:20 46:24 55:14,14 79:7 dollars 47:25 doubt 52:2 dozen59:13 dozens 78:10 draw73:23 drawn 49:7 dream 46:22 driving 56:3 drug 23:18 65:15 65:15,16,22 dug 26:21 D.C 1:18,25 2:3 2:5 E E 3:1 4:1,1 earlier35:25 70:16,19 75:3 78:21 easy 12:25 26:13 26:20 34:2,4 39:16,21,21 40:7 63:23 81:7 81:16 echoing 35:25 economic 63:13 65:2 67:13 69:9 economist 78:21 78:23 economists 5:5 5:16,16 41:11 42:2 53:1 economy 64:17 EDWIN 2:2 3:6 28:10 effect 34:22,23 42:12,14 44:9 44:14 47:22 48:4,16 49:20 67:12 72:2 effective 63:4 effectively 55:11 63:10 effectiveness 70:23 effects 55:3 64:17 effectuating 50:3 efficient 60:22 effort 27:4 Eighth 38:2 either61:17 65:22 67:21,22 eliminate 35:13 embodied50:11 employees 24:17 employer15:23 24:15,16,16 49:18 51:19 55:12 employers 51:3 51:5,12,16,17 51:21,23 55:5,6 enables 73:5 enact 62:24 70:24 enacted10:6 30:25 31:2,5 53:19 enacting 61:23 72:7,12 enforceable 71:19 enforcement 71:11 English64:10 enhance 49:17 enormous 38:9 enormously 35:2 enrollment 59:17 entire 28:19 77:4 entirety 65:10 envisioned12:10 equals 43:2 equitable 35:16 ERISA 65:7 especially 7:15 ESQ 1:25 2:2,5 3:3,6,9,12 essential 4:17 6:10,13 11:19 38:16 40:13 41:6,8 44:24 63:3,7,10,12 64:4,24 65:1,7 65:7,16 66:13 80:7,19 essentially 57:8 59:11 67:8 74:10,16 75:12 76:4 78:6 establishes 80:19 establishing 61:10,12 et 1:4,8,12,16 76:21 etcetera 23:1 everybody 10:21 10:25 57:5 61:18,19 68:13 74:4 evidence 66:5,11 evident 51:1 exact 65:3,5 exactly 8:13 19:10 36:17 39:10,24 40:2 61:15 80:21 example 12:8 13:10 21:7,24 29:21 44:16 45:5,6 52:25 56:2 61:13,21 65:12 71:11 examples 5:23 21:6 exchange 24:14 exchanges 6:14 6:14 11:19,21 11:22,25 12:2,7 12:9,15,20,21 15:21 24:11,12 24:15,17 28:2 31:20 67:6 74:1 74:3 81:21 excised45:3 excluded56:7 excuse 57:18 62:16 68:17 exercise 27:20 34:8 36:10 37:3 43:5,18 exercising 36:3 existing 54:10 expand 51:2 expanded42:20 expanding 56:12 expansion 41:16 42:3,7,9,17 expect 38:5,6 expected79:9 expects 72:23 expenditure 30:7 expenditures 22:2,4,9,10 82:17 expensive 7:4 experience 51:13 54:2 59:7 expertise 53:9 53:11 explain 34:9 explicitly 53:23 exploring 46:11 extent 73:11 extraordinary 45:20,20 extreme 36:10 extremely 79:8 F facilities 6:15 fact 5:16 34:1 47:21 68:4 69:21 75:6 fair 60:17 66:17 fairness 20:14 fall 10:17 11:15 12:20 25:6 27:23 28:20 41:2 47:17,19 49:3 54:24 65:10,23 82:25 fallback 25:3,19 falls 25:19 29:7 false 77:22 78:2 Alderson Reporting Company Official - Subject to Final Review 89 far 16:25 23:14 24:6 46:18 Farr 2:5 3:9 55:19,20,22 56:25 57:20,23 58:4,15,17 59:1 60:17 64:2,6,11 66:17 67:16,19 67:24 69:5,17 70:8 71:22 72:20 73:11 75:10,23 77:7 77:19,23 78:3 78:16 79:3,13 82:5 83:3 fashion 73:6 federal 4:14 21:9 30:7 59:24 60:15 61:6 65:4 72:12 Federation 1:3 4:5 feeding 22:24 23:17 feet 78:14 fell 33:23 fewer46:18 52:18 56:19 60:25 fighting 27:18 figure 25:18 37:23 39:10,12 41:25 46:19 62:10 80:20 81:13 82:15 figures 5:6 42:3 final 81:3 finance 21:12 finances 41:25 financial 53:19 53:20 find 10:10 11:9 21:3 finding 6:7,7 11:17,18 40:22 59:2 62:4,10,14 62:15,18 63:1 64:22,22 65:24 76:8 80:25 findings 5:8 11:7 40:20 52:14 58:20 62:20 64:13,15 66:4 67:23 fine 27:24 finish16:20 26:8 38:18 79:1 first 5:21 11:16 13:19 29:18 33:10 41:23 45:11 57:2 59:23 64:13 67:5 69:3 74:18 80:12 fit 73:15 fix 7:7,24 8:8 19:22 22:5,12 fixing 5:19 7:14 7:16 82:20,22 floor 60:4 74:25 Florida 1:12 4:6 focus 17:8 18:16 46:15 follow15:25 16:25 18:6 23:13 24:6 25:17 57:19 68:4 following 23:13 24:6 64:15 follows 68:5 70:8 footnote 19:8 force 4:24 7:25 forever31:24 formulate 9:16 formulation19:5 forth 5:5 fortify 18:14 found 4:14,17 5:10,10 6:9 gives 64:1 giving 82:22 go 16:25 17:20 21:2 23:4 27:10 30:12 33:4 38:2 38:9 39:11 40:3 41:24 44:4 45:15 52:17 58:12 61:3,25 68:20,23 70:10 71:2 75:7 79:19 81:14 goal 4:21 6:25 49:10 51:8 52:10,13 goals 56:12 79:25 goes 31:18 63:13 67:2 77:8 81:19 going 5:5 6:23,25 G 7:4,10,11 8:9 G 4:1 8:14 12:25 13:4 gather27:4 14:1,2 16:20,21 gathering 6:15 19:17 29:8 General 2:2 30:20 32:20 generally 71:5 34:21,21 35:6 General's 25:8 35:10 38:9,18 62:16 39:8,9 42:5 generous 59:24 43:3 48:2,6,6 germane 16:17 48:12 50:22 getting 10:15 56:10,20 57:23 23:17 60:5,10 57:25 58:5 61:1,2 73:19 62:22 68:6 81:25 69:15 70:14 Ginsburg 14:14 71:8,14 72:2,6 15:4 32:8 53:22 72:9 74:2,3,7 56:16,25 74:19 75:9 give 7:13,13,16 79:23 81:4 17:25 22:11 82:15 26:12 37:9 38:6 gold 13:2 44:6 55:6 64:4 good 14:19 56:3 70:5 82:20 61:21 73:7,8 given22:16 gotten27:21 39:15 67:8 47:24 73:16 governing 51:12 14:11 45:9 46:2 70:22 78:10 four 79:14 80:4 frankly 14:21 full 72:2 fully 28:16 function 12:1,3,4 12:4 17:8,22 38:7,24 43:6 44:2 53:17 functionally 14:12 fundamental 49:2 fundamentally 15:9 41:18 funded78:14 further49:6 51:7 58:12 82:3 government 4:14 24:7 31:23 42:8 56:15 60:6,9,20 60:23,24 63:1 73:24,25 75:2,9 81:6 government's 6:8 42:17 55:25 62:5 68:5,6,19 69:2 73:21 76:15 80:11 governs 10:21 gradually 58:6 grateful 83:6 great 21:7,24 greater29:8 gross 72:18 ground 80:16 groups 57:4 guaranteed 54:12 68:10 guaranteed-iss... 66:6 guaranteed-iss... 4:15,18,25 5:24 6:2,11 11:5,11 11:20 24:8,9,24 25:10 28:2 40:11 52:16,21 53:10 54:19 55:11 56:1,5 59:8 63:5 66:15 68:17,18 71:18 73:19 74:20 75:15 80:18 81:10 82:5,9 guess 13:10 25:19 29:6 72:10 73:11 75:18 guide 37:10 guidelines 13:12 44:21 guts 50:4 Alderson Reporting Company Official - Subject to Final Review 90 H H 2:5 3:9 55:20 64:22 habit 5:7 half 12:5,6,8,12 21:23 31:19,20 31:21,22,24 43:3 47:11 59:13 halfway 82:12,18 hand 11:12 24:22 26:5 52:22 handful 21:18 25:25 hands 5:18 happen41:20 42:9 69:19 74:7 happened38:1 39:10 59:12 happens 60:19 happy 18:10,16 hard 15:14 34:4 45:22 harder73:22,23 head 64:15 headed64:17 health 1:8,15 7:16 12:22 27:8 49:15,15 52:25 56:9 58:2 63:4 65:8 75:7 82:19 healthcare 14:17 14:22 healthy 48:10 58:1,10 59:15 80:23 hear 23:5 46:5 76:13 77:5 heard 29:16 40:4 heart 7:15 15:19 16:5 24:10 26:2 26:12 34:24 44:8 45:3,13,16 47:8,10 73:4,16 73:20 75:13 76:17,24 77:3,5 78:11 82:10 held 28:20 31:3 33:19 71:21 help 17:25 helpful 71:5 helping 23:24 HHS 4:6 high 52:25 56:8 57:13 58:3 hip 15:18 22:11 history 17:20 18:13,14 37:23 41:25 53:18 54:23 68:8 hoc 66:11 hold 46:19,20 holding 13:18 32:13 hole 41:22 hollow16:1,4,7 hollowed-out 17:1 23:15 25:20 honestly 62:8 Honor 72:20 77:20 hospital 59:18 hospitals 24:19 24:20 house 50:9 82:12 82:19 huge 45:17 HUMAN 1:8,16 hurt 30:7 husker10:9,18 17:5 hypothesis 52:1 52:2 69:20 hypothetical 17:5 34:7 77:17 I idea 9:1 29:3 66:18,19 68:10 identified36:18 80:7 identify 15:6 80:19 ignore 9:9 ignoring 66:4 II 22:19 25:13 III 2:5 3:9 34:3,6 illnesses 63:5 imaginative 64:4 imagine 31:18 imagining 46:18 immediately 8:8 implications 43:11 80:15 important 27:24 36:19 47:15 57:3 59:23 60:7 62:8 78:24 impose 5:24,25 36:5 41:12 43:6 55:6 79:19 imposed24:16 59:8 impossible 6:2 76:11 impression 24:3 45:11 Improvement 14:17 incentives 76:4,6 inclination 78:5 inclined18:12 include 28:2 included59:13 includes 10:1 income 60:4,5,12 74:25 inconsistent 20:22,25 increase 52:23 55:2 60:9,21 79:22 increases 36:1 71:24 73:10 increasing 5:10 independent 1:3 4:5 14:13 independently 12:18 17:17 78:14 Indian 14:17 23:24 27:8 76:19 indicate 62:21,22 indication 49:2,6 52:4 indications 47:16 indispensable 65:18,20 individual 4:12 4:16,17,23 5:25 6:3,9 8:5 11:18 24:7,9 41:15,19 42:8 43:3 52:6 52:6,18 58:2 60:21 70:6 75:8 80:16 82:8,9,24 individualized 12:23,24 74:21 individuals 80:23 industry 41:13 41:21 inertia 8:12,16 inextricably 32:1 infected32:12 32:17 infinite 57:8 60:16 information6:14 6:21 66:18 70:13 initial 28:22 initially 35:4 inject 73:6 inquiry 9:2 18:16 18:17 19:11 50:23 53:9 81:25 inseverable 33:1 71:20 insignificant 67:12 instance 5:11 46:2 instituting 61:17 institution 32:14 instruction 23:3 insurance 11:25 12:23 24:17 36:6 40:24 41:12,13,21 42:4,4 47:24,24 48:2,11,14,19 51:9,21,23 52:24 53:5,5 54:3,13 55:5 56:6,20 57:7,7 57:12 58:7 60:5 61:13 63:4 67:6 67:9,13 70:4,20 71:13,13,17,17 72:11,13,14 75:8 insured60:11 insurer13:3 insurers 6:15 29:6 intended4:20 12:19 17:18 18:24 22:18 36:6 43:7 47:19 74:3 intent 9:3,6,20 10:21,23 17:9 19:19 20:24 49:1,2 50:3,11 50:18,19 81:2 82:14 interconnected 15:21 16:24 interpret 19:6 interpretation 37:21 38:20 39:25 40:3 Alderson Reporting Company Official - Subject to Final Review 91 interrupted33:7 jury 79:21 interstate 62:19 Justice 2:3 4:3 64:16,18 65:16 4:10 5:4,21 65:21 6:12 7:6,19 8:3 intrastate 65:15 8:11,14,18,21 65:20 9:4,15,18,22 intrusive 17:21 10:5,13,19 11:2 invalidation 11:13 12:2,11 69:22 13:6,16 14:14 invited83:3 15:4 16:6,16 17:2,3,5,25 invoking 55:4 involve 20:1 18:2,5,9,18,20 44:11 18:25 19:4,7,14 involved42:4 19:18 20:3,8,12 involves 21:9 20:15,18,25 issue 5:6 10:2 21:6 22:13,14 29:22 31:1 22:16 23:13,16 36:23 37:2,8 24:25 25:3,16 68:10 69:4 71:5 25:24 26:3,7,8 71:14 26:24 27:1,6,17 issues 28:15 28:7,12 29:2,15 item38:9,9 30:4,17,24 i.e 53:10 79:21 31:15,16,17 32:8,10 33:4,5 J 33:17 34:6,7,14 J 11:17 34:16 35:20,21 jewel 68:11 35:23,23,24 jewels 82:6 36:13,15,22 job15:2 37:1,7,14 38:1 join 60:2 38:5,12,15 39:1 joined22:11 39:4,7,16,20 judge 44:25 40:1,5,7,14,18 judges 14:2 41:1,9,10 42:6 judgment 14:6 42:16,23,25 20:2 27:20,21 43:12,16,20 34:9 44:5,22 45:6,10 judicial 20:13 45:23 46:13 35:16,24 36:1,4 47:1,7,10 48:1 36:10 43:18 48:9,21 49:22 judiciary 36:1 50:2,13 51:15 juries 14:1 51:24 52:20 jurisdictional 53:8,11,14,22 34:3,7 55:17,22 56:16 jurisprudence 56:25 57:18,21 18:7 58:4,16,18 59:6 32:22 33:5,8 34:1,10,14,15 35:15,21 36:12 36:15,22,25 37:6,12,16 38:1 38:11,14,17 39:1,3,6,18,23 40:6,17,20 41:5 41:23 42:11,19 43:9,15,19,23 44:5,15 45:5,8 45:15 46:23 47:4,9,13 48:5 48:13,25 50:1,7 50:25 51:19 52:3 53:3,13,16 53:25 55:18 K 56:17 69:6 Kagan 11:2,13 80:13 81:6 12:2,11 13:6,16 know5:9 9:7 20:25 21:6 13:3 14:3 17:6 22:13 39:1,4,7 17:17,23 19:9 40:7 58:4,16,18 22:21 23:8 24:2 59:6 75:10 25:23,25 26:11 KATHLEEN 1:7 37:9 40:14 keep 17:1 27:23 44:11 45:11 57:3 76:7 81:8 50:2 54:12 Kennedy 17:3 58:19 64:9,12 18:2,5,9,20 64:16,18 68:7 22:16 34:6 70:19 75:19 35:20,23,24 81:4,9 36:13,15 42:23 knowing 62:21 43:12,16,20 knows 50:5,5 51:15,24 53:8 L 53:14 67:10,17 68:25 77:16 lack 43:16 key 24:13,15 laid 54:10 kickback 10:10 large 55:12 10:18 57:16 79:8 kind 43:6,8 81:21 largely 22:6 kinds 15:5 22:22 larger63:12 65:2 Kneedler2:2 3:6 laugh 26:19 28:9,10,12 Laughter10:12 29:11,18 30:4 26:17 38:4 30:16 31:9 32:5 39:17,22 46:12 60:14,18 63:25 64:2,3,7,9 66:3 67:10,17,20 68:25 69:1,6,18 70:2 71:1,22 73:2,12 75:10 75:11,18 76:12 76:14 77:7,16 77:21,24 78:7 78:21 79:2,13 79:18 80:3,4 83:1 justices 18:11 37:19 justiciability 32:24 37:13 47:3 67:18 77:18 law19:15 21:12 29:9 30:15 32:9 35:1,4,13 38:7 39:4 50:8,10,11 53:19,21 62:24 65:22 69:8 72:9 laws 55:10 lawsuit 33:21 leave 25:20 26:5 32:21,23 34:17 35:8 44:9,9 45:14 52:15 58:12,13 76:13 leaving 5:18 78:22 led66:19 left 10:4 22:4,5 23:15 25:20 44:14 54:9 76:3 82:10 legislation 10:9 21:3 27:3 39:9 69:13 72:24 legislative 5:7 8:12,16 10:23 14:13 16:19 17:20 18:12,13 19:19 20:2 37:23 38:21 41:24 49:1,2 50:11 53:18 54:23 66:9 68:8 legislator 21:17 legitimately 30:25 31:2,5 let's 7:23 11:2 22:17 26:12 37:7 71:7,22,22 76:14 level 20:21 23:22 light 8:17 limit 22:9 35:17 limits 21:15 22:1 Alderson Reporting Company Official - Subject to Final Review 92 35:16 limp 12:17 line 7:6,9 11:10 16:20 29:10 40:4,9,15,19 49:7 59:25 61:7 73:23 81:7,16 link 80:19 links 11:20 19:12 list 46:13 litigation 29:5,10 29:13 69:14 little 9:16 44:11 66:20 68:3 71:23 loads 76:23 loaf 12:6,6,6,8,8 12:12 21:23 47:11 long 14:17 51:14 55:5 longer69:25 look 6:25 7:21 9:5,6,15 11:10 11:16 15:20 18:13 20:7 22:9 22:17,21 24:18 37:23 38:15,21 39:8,14,15 43:10 44:2 49:11 50:16,19 53:17 58:20 62:15 65:24 74:5,11 80:14 81:22 82:2,2,3 looked6:4 21:25 40:15 58:21 looking 6:13 9:12 14:9 16:19 37:21 43:25 44:1 61:24 66:12 74:15,16 79:11 looks 9:2 58:20 64:21 68:8 12:19 13:8,13 14:4 18:23 19:10 March 1:19 market 4:24 11:24 45:18 51:10 52:7,19 53:6 54:7,15,18 55:14 58:12,13 76:7,8 81:1 markets 56:6 63:4 market-based 54:17 Massachusetts 5:12 61:21 M 70:24 magnitude 5:1 master23:3 main 44:13 materials 66:9 major76:21 mathematical majority 13:21 79:7 28:24 44:23 matter1:21 7:9 50:8 76:16 8:3 10:2 17:7 making 20:2 17:22 28:22 32:24 35:15 37:20 mandate 4:12,16 38:19 72:7 4:17,23 5:25 83:10 6:3,10 7:11 8:5 matters 37:12 11:6,18 12:4 52:17 22:18,19 24:7,9 mean 6:13,16,23 24:15,16,23 10:8 13:17 25:5 28:1 29:7 14:18 16:3,8,12 41:15,20 42:8 16:13,22 20:5 43:3 48:22 21:1,21 23:2,6 60:19 70:6 25:23 26:5,18 80:16 82:8,10 27:2,17 29:4 82:24 30:22 37:24 mandated51:17 39:7 41:23 44:4 70:5 46:13 49:3 50:2 mandates 15:23 60:17 63:20 70:24 68:2,7,17 69:22 mandatory 5:13 73:25 76:10 7:22 13:15 24:7 80:21 44:16,19 72:3 meaning 63:9 manner4:20 66:13 78:23 Lopez63:11 65:3 65:5 Los 34:13 lost 41:20 68:1,3 68:6 lot 13:7 16:8 27:5 34:22 46:8 62:2 76:6,18 lower56:8 57:14 57:22,23 81:1 lowered51:25 lung 16:13 24:1 27:10 76:19 Lyons 34:13 means 10:15 40:3 63:10,16 63:21 meant 68:14 Medicaid 15:25 28:3 41:16 42:3 42:7,9,17,20 51:8 53:6 Medicare 24:19 28:3 29:21,23 29:24 48:16,18 48:18 member10:24 mentioned15:13 67:5 menus 76:21 merits 37:17 middle 16:11 milk 17:13 million41:19 47:23 48:13,19 51:20 millions 28:25 46:25 48:17 56:6,7 mind 57:4 76:1 minimum 7:5 28:16 33:2 40:9 40:10,21 42:22 47:20,22 48:1,3 49:4,16 52:7,13 52:15 54:8,21 56:3 57:15 58:22,24 59:9 59:10 61:25 62:21 63:18 65:1,11 66:8,14 66:16,25 68:12 68:17 69:20 70:11 73:14 75:12,13,16 76:5 77:13 79:4 79:6,20,25 minutes 79:14 miscellaneous 27:5 misconceptions 59:5 mix 60:8 model 6:1,4 7:23 modern 78:17 moment 45:16 59:1 monetary 43:24 money 7:3 30:7 31:22,24 72:4 76:22 77:1,2 78:15 months 66:22 morning 4:4 move 35:14 36:16,22 37:7 37:15 62:6,7 moving 16:22 must-hire 14:12 N N 3:1,1 4:1 narrow70:22 national 1:3 4:4 54:3 64:17 65:7 Native 23:25 necessary 10:16 33:15 63:19,19 63:21 necessity 78:4 need17:6 48:11 70:14 82:2 needed79:22 needy 24:21 never29:16 34:23 35:9 36:6 39:7 46:2 new20:6,8 36:7 41:15 72:7 76:2 nice 56:22 nondiscriminat... 58:24 75:14 non-severability 33:18 Alderson Reporting Company Official - Subject to Final Review 93 73:18 80:15 ones 29:6 36:20 50:6 67:4 71:15 open56:5 opening 81:15 operate 4:19 12:18,19 13:13 13:14 14:5 17:16 18:23 19:10 42:1,18 45:18 operated13:9 14:12 operating 49:5 O operation 4:18 O 3:1 4:1 6:10 11:19 15:1 objective 17:21 67:6 17:22 18:9,10 opinion 14:10,11 18:15,17,20 19:8 21:16 19:17 23:7 67:11 77:19 opinions 18:3 objectively 22:17 20:23 46:14 objectives 63:22 opposed66:12 obligations 36:21 77:10 obvious 29:6 opposite 36:3 obviously 57:7 opt 61:1 74:18 options 8:4,9 occasion 28:14 73:9 occasions 63:21 oral 1:21 3:2,5,8 offer51:4 4:8 28:10 55:20 offering 51:5,6 order5:1 80:25 offset 41:14 ordinarily 47:5 offsets 15:24 original 79:24 off-the-cuff 24:3 ought 30:12 56:2 25:24 outset 55:24 oh 81:10 out-of-pocket okay 10:7,10,11 61:8 13:1 14:15 overall 60:23 19:18 22:18,20 overturn 35:2 23:21 24:1,19 P old 56:9 58:9 68:20,23 P 4:1 older58:6 package 33:23 once 19:1 27:21 40:10,12 49:8 50:4 58:7 65:24 52:11 54:24 note 78:24 notes 60:24 notion 47:18 notwithstanding 13:12 November66:21 number4:4 17:11,11 57:16 81:4 83:7,8 numbers 41:17 79:11 numerous 63:21 nurses 22:25 58:23 68:14 page 3:2 11:17 62:16 74:12 80:11 81:14 pages 16:12 27:9 38:3 pale 74:2 parallel 31:10 parliamentary 39:11 part 13:19 14:11 24:21 49:24 61:5 62:8 63:12 65:1,7 66:1,9 68:7,14 69:25 80:17,22 participants 53:6 participate 58:11 particular14:7 29:12 49:8 63:2 74:14 particularly 30:19 72:22 parties 29:14 46:25,25 parts 16:7 17:8 78:1 party 17:10,11 32:12 33:15,16 pass 17:18 passage 27:2 passed5:12 6:21 10:14 13:14 16:4,7 17:15 19:2 26:23 27:5 38:22 50:8,10 50:12 66:22 passes 45:24 path 8:1,22 patient 4:21 7:1 50:15,20 82:4,7 patients 48:20 PAUL 1:25 3:3 3:12 4:8 79:16 pay 31:19 75:2,2 75:9 80:8,20 peek 18:12 penalty 51:3 55:6 people 4:24 5:18 11:24 12:25 31:14 36:20,21 39:15 40:23 47:23 48:14 49:22,23 51:20 52:17,18 55:13 56:6,8,13,19 56:23 57:4,6,11 57:16,25 58:5,8 58:9,10,10,13 59:15,17,24 60:8,25 61:1,6 64:10 67:25 69:8 75:7 76:7 79:21,22 80:25 percent 5:6 59:24,25 61:6 percentage 60:11 perfect 12:7 perfectly 12:3 18:9 period 51:14 periods 59:17 peripheral 46:14 46:16,17 periphery 15:7 15:11 27:18,23 27:24 46:7 person 60:5,10 Petitioners 1:5 1:13 2:1 3:4,13 4:9 28:19,25 79:17 pick 13:3 62:6 picks 60:9 61:7 picture 20:5 piece 19:1 21:3 27:2 pieces 19:11 pipe 46:22 place 11:16 22:4 29:18,23 32:10 33:10 35:8 43:10 45:14 76:4 plain 66:13 plaintiff 35:19 plaintiffs 62:6 65:9 74:13 plan 74:10,17,19 75:1,4,6 plans 53:1 55:12 74:20 play 69:15 played69:10 pleas 71:2 please 4:11 28:13 35:22 37:14 55:23 79:11 plus 43:2 67:5 point 7:10 13:17 13:20 16:2 20:15 21:8,20 25:24 26:6,9,10 26:19,25 29:19 30:17 32:23 34:3 43:13 45:16 46:9,17 46:19 47:23,25 50:10 52:9,11 60:18,22 61:4 64:6,23 68:16 75:25 78:22 79:18,24 80:12 82:11 pointed11:7 22:23 40:8 70:16 points 56:16 67:3 80:4 policies 6:16 51:25 policy 13:1,2,2 24:14 37:9 Alderson Reporting Company Official - Subject to Final Review 94 61:14 71:13,14 political 38:23 politics 78:8 pool 57:25 58:5 80:24 poor 56:9 75:7 portion 7:25 position 25:4 33:25 42:9,17 53:15 55:25 62:5 69:2,11,18 69:24 71:1 72:1 73:13,22 76:16 positively 10:3 possibility 43:5 72:21 possible 46:10 56:22 59:9 71:24 possibly 16:3 30:15 31:22 65:9 post 66:11 postpone 59:2 Potemkin 81:21 poverty 59:25 61:7 power7:21 8:19 8:23 34:8 35:16 36:1,4,10 37:5 37:8 43:18 62:24 powers 21:22 22:8 practical 22:15 25:22 practice 21:1 preceding 64:22 precisely 56:11 61:11 preexisting 55:10 63:5 preferred44:18 premise 35:25 36:14 73:12 premium 56:24 60:1,10 61:19 61:20 74:16 premiums 4:25 7:4 56:21 57:2 60:8 81:1 present 54:7,11 presumably 27:12 presume 19:15 20:9 presumption 19:15 20:9,16 pretty 23:5 preventive 48:19 previous 16:10 pre-existing 22:20 price 12:23 24:14 27:7 55:3 56:17 57:8,9,10 prices 5:10,17 56:8,14 principal 80:6 Printz31:10 36:17 prior44:6 51:13 56:7 57:24 private 51:9 74:13 probability 43:2 probably 78:18 problem8:8 22:12 34:7 50:14 54:5,15 56:18 58:4 62:1 62:13 66:3 74:21 80:15 81:8 82:23 problems 19:23 34:3 40:25 procedural 17:14 procedure 30:1 69:7 proceed32:6 process 16:1 provision 5:13 35:7,8 38:21 7:15,20,22 10:7 69:7 72:17 73:7 14:12 15:11 products 74:4,5 22:11 24:19 program72:13 25:6 27:8,10 74:8,9 76:20 28:16,20 29:12 programs 61:17 29:14 30:6 33:2 70:23 79:6,8 33:9,18,19,22 promise 22:23 34:20,20 35:17 promote 50:22 36:4 40:9,11,21 promoted19:20 40:23 41:2 promotes 50:17 42:22 44:19 50:20 47:20,23 48:4 promoting 22:25 49:4,16,19 proper32:6,11 50:19 51:23 43:5 63:19 52:7,13 54:9,23 68:21 77:9 56:4 57:15 properly 32:25 58:22,24 59:9 proposal 17:11 59:11 62:1,22 17:11 29:3 63:15,18 65:1 68:19 65:11 66:25 propose 23:9,12 68:12 69:20,23 proposed25:7,7 70:11 71:18,19 proposition 9:12 71:20 72:3 10:6,20 25:4 73:15 74:14,22 28:19 74:22,24 75:5 proscription 75:12,14 76:3,5 10:11 77:13 79:5,6 prosecutors 14:2 81:11 protection 4:22 provisions 4:15 7:1 50:15,20 5:14 9:8,8,10 82:4,7 10:3 11:6 13:5 protections 13:11 14:7 15:6 55:10 15:12,17,18 prove 5:16,16 16:18 19:12 proven6:16 21:11,13,18 proves 21:7 25:10 26:1 27:6 30:16 27:11,19,22,25 provide 11:24 28:24 30:5,25 12:24 36:8 31:1,11,13 60:24 82:7 32:13,16 33:1 provides 13:3 34:22 35:1 36:2 60:20 41:4,7,8 44:3 providing 4:21 44:17 45:17,21 7:1 47:21 49:5,8,9 49:12,17,24 51:11 52:1,22 52:23 54:9 55:1 56:1,4 58:25 59:14 67:4 74:12 75:15,17 75:20,21 76:18 77:1,12 78:13 81:22 public 49:14,15 punishment 45:1 purchase 51:23 purchasers 51:6 pure 61:17 purpose 31:19 31:19,21 44:13 50:23 51:1 79:21 purposes 49:13 49:15 50:15 put 27:8,9,11,14 35:4 61:25 72:10 77:21,21 80:23,25 puts 71:25 Q quarrel 73:12 quest 62:9 question 6:1 7:9 7:12 8:10,15,16 9:25 12:5,16 13:8 14:19 16:23,25 17:24 20:4,5,5 22:15 22:15 28:23 32:19 33:6 35:3 36:23 37:18,19 39:24 40:2,5 42:25 44:12 46:5 49:1 50:7 53:11 66:18 68:2,22 71:1,9 74:15,18 75:18 77:14 78:9 80:5 Alderson Reporting Company Official - Subject to Final Review 95 questioning 70:3 questions 5:20 34:4,4 36:18 37:3 70:16 quickly 26:23 quite 6:1 26:22 36:3 51:15 53:23 62:8,15 80:13 quote 65:3,5 76:17 quoting 64:20 80:24 R R 4:1 Raich 65:14 raise 56:20 71:17 78:20 raised56:8 78:21 raising 61:8 rampant 59:12 Randall 21:10 range 69:12 ratchet 20:16 rated11:25 rates 17:12 29:23,25 48:16 48:18 52:17 54:17 55:13 57:14,14,21,23 58:1,3,9,12 75:7 rating 4:15,24 5:24 24:8,10,23 25:10 28:1 40:12 61:18 68:10,18 73:19 74:20 75:15 80:17 81:11,18 81:21 82:5,9 ratings 11:6,11 11:21 12:25 66:6,15 ratio 70:20 rational 17:7,22 reach 18:15 reached14:10 reaching 48:24 read 11:17 22:22 40:16 78:9 81:9 reading 23:10 76:8 real 62:13 68:22 77:16 realistic 46:24 reality 8:17 9:11 18:3 27:2 56:23 really 7:12 9:9 12:20 16:13 19:13 26:2 32:10 38:2,5 44:13 45:7,10 50:5 72:15 80:18 reason 21:4,21 36:7 44:22,23 48:5 52:5 63:7 77:14 78:3 81:5 reasons 32:23 64:12 71:7 reauthorization 16:8 reauthorized 16:9 reauthorizing 14:16 rebuttal 3:11 79:16 80:4,13 rebutted20:9 recognize 8:15 recommended 25:9 reconsider35:10 35:11 record 66:9 redo 14:18 reduces 73:9 redux 28:4 reenacted26:14 references 81:23 referring 65:6 69:2 reflected52:14 58:19 refocus 75:18 reforms 40:10 41:12 45:18 refused21:4 refuted47:21 Regan 49:11 regardless 61:19 regime 36:7 regulate 65:20 65:21 regulation 17:13 23:18 65:2,5,15 65:16 regulatory 63:12 63:14 66:1 reimbursed42:5 reimbursement 29:21,23,25 48:18 reject 28:18 46:7 rejected5:25 6:5 rejects 13:21 related22:2 26:1 26:1 31:1 relatively 74:2 relatives 74:2 relevant 5:22 relief 33:15 34:12 35:19 rely 14:10 19:8 62:11 relying 53:22 63:2 remainder28:6 remained36:5 44:21 remaining 9:10 69:25 79:15 remains 60:11 remedial 9:2 13:18 34:8 35:16 repeal 72:5,6,8 repeatedly 30:17 report 47:2 66:21 request 44:9 requesting 15:1 require 78:15 required13:22 requirement 63:3 64:25 65:4 requirements 47:25 requiring 51:23 resembles 44:6 reserve 28:6 residuum 82:21 resolve 71:10 resolved37:21 respect 37:24 50:25 59:21 62:25 77:3 respecting 72:16 Respondents 2:4 3:7 28:11 responses 5:21 9:14 15:5 responsibility 49:18 83:6 rest 4:13 8:7 22:20,21 25:6 29:9 42:14,15 42:18 44:10,12 44:14,20 62:7 72:5,7,8 82:25 restaurants 76:20 restraint 35:16 35:20,25 result 8:17 48:20 retool 78:6 revenue 15:24 41:15 review30:1 revolution 39:2 rid 19:18 27:21 76:17 right 5:17 6:1 8:2 9:23,24 10:5,18 11:4 20:11 21:1 21:5 23:12 27:16 36:25 37:6 39:24 40:2 47:13 50:13 59:19 60:15 67:16 rights 36:20 rise 54:24 60:9 rising 6:20 risk 36:5 43:6,8 43:17 67:12,25 68:24 80:24 risks 54:7,11 70:13 71:15 ROBERTS 4:3 16:6 18:18 26:3 26:8,24 27:1 28:7 29:2,15 33:4 35:23 40:1 40:14,18 41:1,9 42:6,16 48:21 50:13 55:17 69:1,6 70:2 79:2,13 83:1 roles 48:14 roughly 41:13 rule 20:6,8 rules 17:14 ruling 72:24 run 52:12 runs 59:12 S S 2:2 3:1,6 4:1 28:10 salvage 15:2,3 save 7:3 saver6:17,18 saying 6:2 11:5 22:16 29:5 46:2 Alderson Reporting Company Official - Subject to Final Review 96 46:6 48:10,25 51:16 53:8 65:18 67:11 73:7 76:9 says 9:7 19:9,15 19:18 20:7 25:11,12 31:18 44:8 58:21 63:3 63:11,11 64:14 64:24 65:25 71:14 75:5 78:17 79:19 80:13 81:6 scale 20:17 Scalia 8:11,14 9:4,15,18,22 10:5,13,19 17:5 17:25 19:18 30:4,17,24 31:17 34:14,16 38:1,5 39:20 44:5,22 45:6,10 47:1 48:1 49:22 50:2 57:18,21 60:14,18 63:25 64:2,3,7,9 71:22 73:2,12 75:11 76:14 77:21,24 Scalia's 39:16 40:5 75:18 scheme 63:12,14 66:1 scratch 14:20 Sebelius 1:7 4:5 second 31:21 32:25 59:3 61:4 64:24 65:12 69:2 74:21 78:20 SECRETARY 1:7 section 63:11 65:14 see 31:25 38:21 63:23 seek 70:10 seeking 51:22 seeks 35:19 seen 59:6 70:18 segue 21:8 selection 40:25 54:14 56:18 59:3,11,14 60:7 62:3 66:23 67:3 67:7 selections 67:9 selling 61:13 Senate 10:16 72:6 sending 34:18 sense 21:21 64:8 sentence 63:2 64:24 sentencing 13:12 13:25 44:17,20 separate 17:7 33:21 separated33:24 separately 16:12 78:15 separation 21:22 22:8 serve 22:25 23:17 24:20 56:12 service 13:4 65:8 SERVICES 1:8 1:16 set 48:7 58:1 74:9 sever 13:11 19:16,22 21:4 21:22 81:5 severability 9:2 9:16 10:1 15:15 19:6 20:23 28:15 29:16 31:13 32:7 33:13,14 36:18 37:18,20,24 39:4 44:10 46:8 62:17 68:21 71:9 72:25 77:9 78:4,10 81:15 83:5 severable 9:9 19:22 43:14 67:14 severed20:7 75:21 77:11 severing 15:8 71:23 SG 23:6 66:14 share 24:20 sharp 11:10 40:8 40:18 sheet 53:20 shell 16:2,4,7 17:1 23:15 25:20 shenanigans 39:11 shifting 54:6,10 show47:11 59:18 59:18 70:13 showing 71:25 72:16 shown 54:22 sick 54:13 58:8 58:11 side 21:19 32:19 44:8 68:4 78:25 sign 59:19 significance 67:25 significant 43:4 silver13:1 74:17 simple 78:22 simplest 19:17 simply 8:25 30:6 59:8 61:24 65:17 71:2 80:5 82:12,22 single 13:23 25:6 33:20,22 sit 31:23 situation 7:18 12:22 36:17 38:23 82:14 situations 12:12 71:6,10 skyrocket 5:1 slate 26:13 82:23 slightly 10:22 small 49:19,20 51:5 smaller20:21 Solicitor 2:2 25:8 62:16 solution 54:17 solutions 5:11 solve 62:1 somebody 32:2 46:20 71:12 somebody's 16:21 somewhat 63:17 Sorrell 21:11 sorry 26:6 64:2 sort 8:23 16:1 21:7 25:17,22 37:9 62:9 67:7 68:8 81:20 Sotomayor 5:4 5:21 6:12 7:6 7:19 8:3,18,21 17:2 18:25 19:4 19:14 20:3,8,12 20:15,18 31:15 32:11 35:21 36:22 37:1,7,14 38:12,15 47:7 47:10 48:9 66:3 67:20 79:18 Sotomayor's 80:5 sought 34:12 sound 67:16 speak 64:10 speaking 64:10 special 23:3 29:25 specific 20:4,5 77:20 specifically 6:4,9 62:18 spend 23:10 27:17 spiral 5:17 66:7 67:21 spirals 66:20 spoke 56:18 square 9:11 stand 4:13,16,19 23:23 32:17 62:10 78:14 standard 17:6 77:9 standardized 74:4,17 standing 25:21 30:6,9,18,21 32:14,14 34:11 36:23 standpoint 22:8 start 7:23 10:25 11:2 14:20 60:8 80:4 started32:11 starting 25:24 state 6:14 21:9 54:2 58:22 statement 20:22 statements 64:21 states 1:1,22 5:9 5:23 6:17 48:3 58:20 59:7 61:10,11,16,20 61:24 65:19 70:17,21 76:2 79:23 statute 7:14 8:8 10:17 13:22 Alderson Reporting Company Official - Subject to Final Review 97 15:7,11 18:22 18:25 19:2 21:9 21:9,25 22:6 31:7 40:4 44:18 45:3 49:25 65:13 66:25 71:19 73:4,17 73:20 78:6 80:17 82:3,21 82:21 statute's 73:4 statutory 29:25 37:20 38:19 39:25 40:2 stay 78:7 81:19 staying 32:9 stick 12:14 stop 24:18 48:23 straight 9:1 50:14 strains 18:4 strange 33:12 street 39:12 stricken36:5 43:4 44:24 strike 7:10,20 8:5,7 10:3,13 15:13 21:15,19 22:1 25:9,11,12 26:5 28:4 35:7 36:10 44:7 45:20 78:12 80:1,1 82:8 strikes 36:1 striking 6:18 36:11 47:10 strong 16:2 strongest 15:8 struck 10:8 13:23 21:11 22:3 23:6 26:12 29:9 30:11 31:11 33:10,13 42:10,18 44:13 44:20 45:2 46:3 55:15 56:2 70:12 76:2 82:22 structure 37:22 37:24 44:2 47:15,16 53:18 60:3 66:11 structured19:25 stuck 82:16 stuff 22:22 23:19 23:25 55:7 subfinding 80:11 submit 38:20 submitted83:7 83:10 subsidies 59:21 59:23 60:3,20 60:23 61:2,4,22 subsidized51:14 55:5 subsidizes 61:7 subsidy 59:25 72:12 74:8,9,9 74:23 75:9 79:6 79:8 substantial 43:1 67:12 80:22 substantially 52:23 substantive 44:3 subtitle 81:11 sue 71:16 sufficient 66:2 suggest 10:23 11:3 16:13 18:6 23:2 25:14,16 36:2 64:12 81:17 suggested39:8 49:7 suggesting 8:18 67:1 suggestion 68:5 68:6 suggests 24:8 talked42:7 75:3 talking 16:15 23:20 27:6 32:10 43:24 64:16,19,25 68:24 70:19 74:14 77:12 78:25 79:3,4 81:13 talks 9:19 46:7 66:23 67:3 task 7:12,14,16 9:16 38:20 82:20,22 tautological 19:7 tax 15:22 24:13 24:13 28:2 30:19 31:18,18 33:9,9,12 51:5 51:6,13 52:25 55:4,6,6 taxes 30:19 taxpayer30:8,8 tell 6:15 16:17 41:3 81:15 telling 10:16 43:21 tells 19:21 80:14 tended70:21 T term 65:19 T 3:1,1 terms 47:14 take 6:24 7:2 test 17:4,19,23 8:19,22 9:1 18:6,20 19:17 11:14 18:12 23:7 49:10 22:15 29:4 testimony 54:3 32:12,17 45:13 tests 18:9 52:15 54:20 text 10:25 11:3 60:19 68:24 11:10,14,23 71:9 73:3,14,18 37:22,23 39:14 75:1 76:3 78:20 39:15 41:24 80:23 44:2 47:14 taken7:15 53:18 54:1,22 takes 82:11 textual 11:4,8 talk 20:23 57:2 18:15,17 62:9 59:2,3 textually 15:20 45:9 53:11 suit 33:11 suitable 51:4 support 60:15 83:4 supports 13:17 13:20 suppose 17:10 33:17,18 supposed11:22 11:23 12:17 17:24 23:7 41:14 47:17 Supreme 1:1,22 sure 9:6,18 17:3 18:2 21:3 23:23 25:2 52:2 72:14 surely 16:18 suspect 26:20,21 27:5 31:17 sweeping 28:19 sweet 6:24 system56:7,9,10 57:14,24 58:13 58:21 61:1 63:17 68:20,24 72:11 systems 70:17 18:10 Thank 28:7,12 55:17 79:11,13 83:1 theory 21:14 thing 8:6,11 14:3 20:17,20 21:19 21:23 23:18,24 29:7 30:2 32:21 46:1 47:17 55:9 58:7 60:13 61:5 74:7 75:6 78:11 78:23 things 6:22 7:3,3 11:15 14:15,21 16:15 20:1 29:22 35:12 46:7,14 52:10 52:11 53:4,7,23 54:24 57:1,12 59:22 60:18 62:2 70:18 75:25 think 5:22 6:22 6:23 7:2,17 8:14,24 10:19 11:3,21 12:11 12:16,20 13:4,9 13:17,19 14:8 14:16,22 15:5,9 15:13,14 16:2,3 18:3,11,13 20:14 21:5,6,7 21:10,17,21 22:7 25:15,23 26:11 27:11,19 27:19,24 28:4 29:11 30:16 31:17 32:5,22 33:1,7 34:16 35:15 36:12,15 37:12,20 39:18 39:18,23,23 40:6 41:5,5 42:2,11,13 43:9 Alderson Reporting Company Official - Subject to Final Review 98 43:23 44:15,22 44:23 45:2,19 45:23 46:10,23 47:11 48:5 51:1 52:3,6 53:4,17 54:24 55:25 58:18 59:5 62:5 62:13 63:23 64:6,11 65:24 66:2,7,17 68:1 68:3,9,21 69:18 70:25 71:5,15 72:15 73:15,18 73:21,22 74:1 75:23,25 77:7,9 78:3,16,18 81:10 82:1,23 thinking 31:16 31:17 61:24 thinks 46:16,16 73:24 third 60:13 thought 9:6 14:4 38:12,18 48:9 thoughts 69:15 three 37:15 47:25 52:11 53:23 59:22 61:12 throw16:11 throwing 15:3 thrown 48:14 ticks 20:17 tied11:6 15:18 24:7 time 27:18 28:6 38:23 51:14 59:19,20 66:24 71:12 82:14 times 18:4 37:15 42:21 title 24:21 25:11 25:12,12,25 50:14 65:14 76:3 82:3 titles 22:19 45:25 45:25 46:1 today 48:11 70:3 73:13 told 62:12 82:17 tool 75:14,17,19 75:22 78:4 79:23 80:1,6,6 80:7,8,8 tools 75:24 79:24 80:2 top 54:10 total 24:3 totally 38:8 toto 35:12 touched21:14 traditional 55:4,7 traffic 65:15,21 65:22,23 tried5:23 6:17 16:17 21:25 22:5 true 5:5 9:22 30:2 52:20 60:19 64:8 76:17 try 8:8 20:3 39:10 41:25 46:20,20 62:2 82:13,15 trying 54:16,25 62:10 80:23 82:2,6 tumbling 72:12 turn 24:12 37:17 46:17 62:4 turns 21:10 two 9:14 13:18 15:4 19:12 32:23 37:3 47:12,23,25 48:13 50:14 54:9 56:4 57:1 61:22 66:16 67:22 76:3 unsuccessfully W 22:6 wait 40:23 59:19 unsustainable want 7:6,13,13 58:14 60:15 7:16 8:24 9:4 unwind 48:17 10:4 12:5,13 U upward 5:2 17:20 18:6 unable 11:9 usage 65:12 19:16 25:16,22 56:13,14 use 25:24 29:21 26:19 27:17,23 uncommon45:24 55:4 66:13 28:4 32:16 38:2 unconstitutional useful 63:10,22 38:18 47:11 4:13 5:12 15:13 66:1 76:10 53:9 65:21 17:16 25:5 uses 64:23 65:19 66:24 67:10,14 28:21 31:4,21 usual 73:6 67:20,22,22 33:20 35:18 Utah 12:3 76:14,15 77:2 69:21,22 71:21 78:22 81:7,8 V 82:25 wanted8:7 9:13 v 1:6,14 4:5,6 undercut 63:14 21:17 34:23,24 34:13 76:2 63:17 54:8 56:11 validity 29:12,24 undercuts 65:4 62:20,22 77:15 76:25 underserved wanting 20:15 22:25 23:17,25 value 61:8 wants 14:23 variance 61:20 understand 17:10,11 62:15 variety 51:7 10:24 18:19 73:5 74:11 42:24 51:15,18 various 5:10 6:15 Washington 1:18 18:3 21:11 53:14 1:25 2:3,5 vary 5:6 understood wasn't 68:12 vast 28:23 75:10 way 10:22 11:22 vehicle 16:19 underwriting 14:8 21:16 22:1 venality 10:11 12:24 75:8 32:6 35:5,9 unhealthier58:6 Vermont 21:12 46:19 49:20 21:17 unhealthy 57:11 58:7 59:9 65:3 uninsured54:12 view11:14 31:10 65:19 67:16 69:10 United1:1,22 70:5 74:8 77:15 violate 10:10 65:19 76:2 81:20 unobjectionable virtually 20:22 ways 45:19 51:3 vision 12:21 27:12 51:7 unquestionably visits 48:19 Wednesday 1:19 volume 26:4,14 14:15 49:14 Wellness 76:20 unrealistic 34:17 vote 10:16 27:7,9 went 31:12 79:20 77:20 38:8 50:4 weren't 50:6 unrelated17:12 voted17:15 we're 9:12 29:8 34:24 49:24 45:18 49:16 32:10,20 50:3 votes 27:4,14 51:9 64:25 70:3 71:8 35:2,3 72:6,8 unresponsive 71:8,14,15,25 25:17 we've 20:7,9 77:24 tying 53:23 type 70:6 typically 61:16 Alderson Reporting Company Official - Subject to Final Review 99 2 2 17:11 47:23 81:19,22 2,700 38:3 2.5 48:13 20s 78:18 X 200 59:24 x 1:2,9,11,17 2009 66:21 31:19,19,21 2012 1:19 71:21 2014 71:12 Y 2020 79:9 Y31:18 year 23:10 59:20 21 65:14 25-year-old 79:9,10 61:14 years 16:10 23:20 26:12 42:7 whatnot 51:12 whimsical 68:2 whip 38:24 willing 71:15 wise 37:4 woodenly 19:6 word 13:23 22:23 37:10 63:7,19 64:24 66:7 79:5 work 7:23 9:10 9:11 11:22 19:13 24:11,22 29:3 46:9 54:19 54:21 56:11 58:23 70:18,18 75:15,17,20,25 80:8 81:24 worked22:7 70:22 82:18 works 7:2 58:7 world 30:13 worse 12:12 21:23 52:17 54:15 67:7 wouldn't 6:20 15:14 19:16 27:13 39:5 73:2 wreck 32:20 wrecking 15:1 write 67:10 wrong 5:17 19:14 20:18,20 41:18 42:3 41:22 53:2 67:6 82:13,18 yesterday 23:20 48:11 York 76:2 young 58:9 younger76:7 $ $100 79:10 $12,000 61:15 $217 53:2 $350 41:22 $4,000 61:14 $700 41:13 1 1 17:11 61:21 81:19,23 1.5 61:20 10 5:6 16:10 41:22 53:2 10-year 41:12 10:19 1:23 4:2 11-393 1:5 4:4 83:7 11-400 1:13 4:6 83:8 11:49 83:9 150 51:19 250 61:6 26 47:24 26-year-olds 48:10 2700 16:12 27:9 28 1:19 3:7 3 3 67:5 30 5:7 30s 78:18 300g(a)(1) 81:17 300g(a)(2) 81:17 32 48:19 350 41:14,16,16 41:19 43:2,2 4 4 3:4 22:5 66:22 40 82:13,18 42 62:16 64:23 43 11:17 64:23 43a 62:16 80:11 43(a)of 6:8 5 5 16:10 55 3:10 6 6 81:14 60 72:6,8 60-year-old 61:14 64A 74:12 68A 74:14,22 7 7 19:8 43:3 79 3:13 8 80 59:25 801 65:14 9 90s 59:7 61:16 922(q) 63:11 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 IN THE SUPREME COURT OF THE UNITED STATES - - - - - - - - - - - - - - - - - x FLORIDA, ET AL. Petitioners v. DEPARTMENT OF HEALTH AND HUMAN SERVICES, ET AL., : : : : : No. 11-400 - - - - - - - - - - - - - - - - - x Washington, D.C. Wednesday, March 28, 2012 The above-entitled matter came on for oral argument before the Supreme Court of the United States at 1:00 p.m. APPEARANCES: PAUL D. CLEMENT, ESQ., Washington, D.C.; on behalf of Petitioners. DONALD B. VERRILLI, JR., ESQ., Solicitor General, Department of Justice, Washington, D.C.; on behalf of Respondents. 1 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ORAL ARGUMENT OF PAUL D. CLEMENT, ESQ. C O N T E N T S PAGE On behalf of the Petitioners ORAL ARGUMENT OF DONALD B. VERRILLI, JR., ESQ. On behalf of the Respondents REBUTTAL ARGUMENT OF PAUL D. CLEMENT, ESQ. On behalf of the Petitioners 3 39 79 2 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 P R O C E E D I N G S (1:00 p.m.) CHIEF JUSTICE ROBERTS: We will continue argument this afternoon in case 11-400 Florida v. Department of Health and Human Services. Mr. Clement. ORAL ARGUMENT OF PAUL D. CLEMENT ON BEHALF OF THE PETITIONER MR. CLEMENT: please the Court: The constitutionality of the Act's massive expansion of Medicaid depends on the answer to two related questions: First is the expansion coercive and Mr. Chief Justice, and may it second does that coercion matter. JUSTICE KAGAN: Mr. Clement, can I ask you Would you be making the just a matter of clarification? same argument if instead of the Federal government picked up 90 percent of the cost the Federal government picked up 100 percent of the cost. MR. CLEMENT: Justice Kagan, if everything else in the statute remained the same, I would be making the exact same argument. JUSTICE KAGAN: The exact same argument. So that really reduces to the question of why is a big gift from the Federal government a matter of coercion? 3 Alderson Reporting Company In Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 other words, the Federal government is here saying, we are giving you a boatload of money. There are no -- there's no matching funds requirement, there are no extraneous conditions attached to it, it's just a boatload of Federal money for you to take and spend on poor people's healthcare. me, I have to tell you. MR. CLEMENT: Well, Justice Kagan, let me -It doesn't sound coercive to I mean, I eventually want to make a point where even if you had a stand alone program that just gave 100 percent, again 100 percent boatload, nothing but boat load -- well, there would still be a problem. JUSTICE KAGAN: And you do make that argument in your brief, just a stand alone program, a boatload of money, no extraneous conditions, no matching funds, is coercive? MR. CLEMENT: It is. But before I make that point, can I simply say you built into your question the idea that there are no conditions. And of course, when you first asked it was what about the same program with 100 percent matching on the newly eligible mandatory individuals, which is how the statute refers to them. And that would have a very big condition. And the very big condition is that the States in order to get that new money, they would have to agree not only to the new 4 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 conditions but the government here is -- the Congress is leveraging their entire prior participation in the program -- JUSTICE KAGAN: hypothetical, Mr. Clement. MR. CLEMENT: JUSTICE KAGAN: Sure. Now, suppose I'm an employer Well, let me give you a and I see somebody I really like and I want to hire that person. And I say Im going to give you $10 million a And the person says well, I year to come work for me. -- you know, I've never been offered anywhere approaching $10 million a year, of course I'm going to say yes to that. Now we would both be agreed that that's not coercive, right. MR. CLEMENT: Well, I guess I would want to And if the money came know where the money came from. from -- JUSTICE KAGAN: Wow, wow. I'm offering you $10 million a year to come work for me and you are saying this is anything but a great choice? MR. CLEMENT: Sure, if I told you actually And that's what's it came from my own bank account. really going on here in part. -JUSTICE KAGAN: 5 Alderson Reporting Company And that's why it's not But, Mr. Clement -- Mr. Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Clement, can that possibly be. When a taxpayer pays taxes to the Federal government, the person is acting as a citizen of the United States. When a taxpayer pays taxes to New York, a person is acting as a citizen of New York. And New York could no more tell the Federal government what to do with the Federal government's money than the Federal government can tell New York what to do with the moneys that New York is collecting. MR. CLEMENT: Right. And if New York and the United States figured out a way to tax individuals at greater than 100 percent of their income then maybe you could just say it's two separate sovereigns and two separate taxes. But we all know that in the real world that to the extent that the Federal government continues to increase taxes that decreases the ability of the States to tax their own citizenry and it's a real tradeoff. JUSTICE SOTOMAYOR: Well, I would admit on the Federal government's power to tax. MR. CLEMENT: What's that. Are you suggesting that JUSTICE SOTOMAYOR: at a certain point the States would have a claim against the Federal government raising their taxes because somehow the States will feel coerced to lower their tax rate? 6 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 not. MR. CLEMENT: No, Justice Sotomayor, I'm What I'm suggesting is that it's not simply the case that you can say, well, it's free money, so we don't even have to ask whether the program's coercive. JUSTICE SOTOMAYOR: Now, counsel, what Meaning, as I look percentage does it become coercive? at the figures I've seen from amici, there are some states for whom the percentage of Medicaid funding to their budget is close to 40 percent, but there are others that are less than 10 percent. And you say, across the board this is coercive because no state, even at 10 percent, can give it up. What's the percentage of big gift that the Because what you're saying federal government can give? to me is, for a bankrupt state, there's no gift the federal government could give them ever, because it can only give them money without conditions. No matter how poorly the state is run, no matter how much the federal government doesn't want to subsidize abortions or doesn't want to subsidize some other state obligation, the federal government can't give them 100 percent of their needs. MR. CLEMENT: And, Justice Sotomayor, I'm really saying the opposite, which is not that every gift is coercive, no matter what the amount, no matter how 7 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 small. I'm saying essentially the opposite, which is There has to be some limit there has to be some limit. on coercion. And the reason is quite simple, because this Court's entire spending power jurisprudence is premised on the notion that spending power is different, and that Congress can do things pursuant to the spending power that it can't do pursuant to its other enumerated powers precisely because the programs are voluntary. you relax that assumption that the programs are voluntary, and you are saying they are coercion, then you can't have the spending power jurisprudence -- JUSTICE SOTOMAYOR: What makes them And if coercive; that the state doesn't want to face its voters and say, instead of taking 10, 20, 30, 40 percent of the government's offer of our budget and paying for it ourselves and giving up money for some other function? That's what makes it coercive -- MR. CLEMENT: Well -- -- that the state is JUSTICE SOTOMAYOR: unwilling to say that? MR. CLEMENT: Maybe I can talk about what makes it coercive by talking about the actual statute at issue here and focusing on what I think are the three hallmarks of this statute that make it uniquely 8 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 coercive. One of them is the fact that this statute is tied to the decidedly nonvoluntary individual mandate. And that makes this unique, but it makes it significant, I think. I will continue. question. I'm sorry. The second factor, of course, is the fact that Congress here made a distinct and conscious decision to tie the state's willingness to accept these new funds, not just to the new funds but to their entire participation in the statute, even though the coverage for these newly eligible individuals is segregated from the rest of the program. And this is section 2001A3 at I thought you had a page 23A of the appendix to the blue brief. JUSTICE GINSBURG: Medicaid increase? Isn't that true of every That each time -- I mean, and this started quite many years ago, and Congress has added more people and given more benefits -- and every time, the condition is, if you want the Medicaid program, this is the program, take it or leave it. MR. CLEMENT: No, Justice Ginsburg, this is One is, in some distinct in two different directions. of the prior expansions of the program, but not all, Congress has made covering newly eligible individuals 9 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 totally voluntary. If the states wants to cover the newly eligible individuals, they will get the money; but, if they don't, they don't risk any of their existing participation programs. The 1972 program was a paradigm of that. created this 209(b) option for states to participate. This court talked about it in the Gray Panthers case. There were other expansions that have taken place, such as the 1984 expansions, where they didn't give states that option; but, here's the second dimension in which this is distinct, which is, here, Congress has created a separate part of the program for the newly eligible mandatory individuals. they called them. And those individuals are treated separately from the rest of the program going forward forever. They are going to be reimbursed at a different rate from everybody who's covered under the preexisting program. Now, in light of that separation by Congress itself of the newly eligible individuals from the rest of the program, it's very hard to understand Congress's decision to say, look if you don't want to cover these newly eligible individuals, you don't just not get the new money, you don't get any of the money under the -- JUSTICE BREYER: 10 Alderson Reporting Company It That's what Where does it say that? Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 I'm sorry, where does it say that? MR. CLEMENT: It says -- well, it -- where does it say what, Justice Breyer? JUSTICE BREYER: What you just said. You said, Congress said, if you don't take the new money to cover the new individuals, you don't get any of the old money that covers the old individuals. heard you say. MR. CLEMENT: Right. And where does it say that? That's what I JUSTICE BREYER: MR. CLEMENT: places where it says it. JUSTICE BREYER: MR. CLEMENT: brief. JUSTICE BREYER: MR. CLEMENT: It says it -- there's two Yeah, where? The 2001A3 makes it part of my Where is it in your brief? That's at page 23 A -- In the blue brief? JUSTICE BREYER: MR. CLEMENT: Blue brief. 23A. Okay. Thank you. JUSTICE BREYER: MR. CLEMENT: about the funding cutoff. And this makes not the point This makes the point just that these newly eligible individuals are really treated separately forevermore. JUSTICE BREYER: 11 Alderson Reporting Company I want the part about the Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 funding cutoff. MR. CLEMENT: Justice Breyer -- JUSTICE BREYER: what? MR. CLEMENT: I don't have that with me -- Well, I have it in front of And that cite section is Right. And there, JUSTICE BREYER: me. MR. CLEMENT: Great. Perfect. Thank you. JUSTICE BREYER: And I will tell you what I have, what I have in front of me, what it says. MR. CLEMENT: Right. And it's been in the JUSTICE BREYER: statute since 1965. MR. CLEMENT: Exactly. And the cite I have is So are we talking about the JUSTICE BREYER: 42 U.S.C. Section 1396(c). same thing? MR. CLEMENT: If that's the -- if that is the provision that gives the secretary -- JUSTICE BREYER: MR. CLEMENT: Yeah, okay. -- among other things -- And here's what it says at JUSTICE BREYER: the end. MR. CLEMENT: -- the authority to cut off 12 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 all participation in the program, yes. JUSTICE BREYER: It says, "The secretary shall notify the state agency" -- this is if they don't comply -- "that further payments will not be made to the state or, in his discretion, that payments will be limited to categories under or parts of the state plan not affected by such failure, which it repeats until the secretary is satisfied that he shall limit payments to categories under or parts of the state plan not affected by such failure." So, reading that in your favor, I read that to say, it's up to the secretary whether, should a state refuse to fund the new people, the secretary will cut off funding for the new people, as it's obvious the state doesn't want it, and whether the secretary can go further. I also should think -- I could not find one case where the secretary ever did go further, but I also would think that the secretary could not go further where going further would be an unreasonable thing to do, since government action is governed by the Administrative Procedure Act, since it's governed by the general principle, it must always be reasonable. So I want to know where this idea came from that should state X say, "I don't want the new money," that the secretary would or could cut off the old money? 13 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Justice -- MR. CLEMENT: And, Justice Breyer, here's where it comes from, which is from the very beginning of this litigation, we've pointed out that what's coercive is not the absolute guarantee that the secretary could cut off every penny, but the fact that she could. JUSTICE BREYER: All right. Now, let me relieve you of that concern, and tell me whether I have. That a basic principle of administrative law, indeed, all law, is that the government must act reasonably. And should a secretary cut off more money than the secretary could show was justified by being causally related to the state's refusal to take the new money, you would march into court with your clients and say, "Judge, the secretary here is acting unreasonably, and I believe there is implicit in this statute, as there is explicit in the ADA, that any such cut-off decision must be reasonable." Now, does that relieve you of your fear? MR. CLEMENT: It doesn't for this reason, JUSTICE BREYER: MR. CLEMENT: I didn't think it would. Well, but here's the reason. Here's the reason, Justice Breyer, it doesn't. One is, I mean, I don't know the opinion to cite for that proposition. 14 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Second is, we have been making in this litigation since the very beginning this basic point, the government has had opportunities at every level of this system, and I suppose they will have an opportunity today to say, "fear not, States, if you don't want to take the new conditions, all you will lose is the new money." JUSTICE BREYER: And I said -- I said because it could be, you know, given the complexity of the act, that there is some money that would be saved in the program if the States take the new money, and if they don't take the new money there is money that is being spent that wouldn't otherwise be spent. could be some pile like that. It might be that the secretary could show it was reasonable to take that money away from the states, too. JUSTICE SCALIA: JUSTICE BREYER: Mr. Clement -- But my point is, you have There to show reasonableness before you can act. JUSTICE SCALIA: -- do you agree -- do you Do we agree that the government has to act reasonably? strike down unreasonable statutes? MR. CLEMENT: My God. And, Justice Scalia, I mean -- The executive has to act JUSTICE SCALIA: 15 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 reasonably, that's certain, in implementing a statute; but, if the statute says, in so many words, that the secretary can strike the whole -- funding for the whole program, that's the law, unreasonable or not, isn't it? MR. CLEMENT: the law, Your Honor. JUSTICE BREYER: number -- all right. MR. CLEMENT: And if I could just add one Yeah, but I have a That's the way I would read thing just to the discussion is the point that, you know, this is not all hypothetical. I mean, in -- there was a record in the district court, and there is an Exhibit 33 to our motion to summary judgment. in the joint appendix. if you'd like. It is not We can lodge it with the Court But it's a letter in the record in this litigation, and it's a letter from the secretary to Arizona, when Arizona floated the idea that it would like to withdraw from the CHIP program, which is a relatively small part of the whole program. And what Arizona was told by the secretary is that if you withdraw from the CHIP program, you risk losing $7.8 billion, the entirety of your Medicaid participation. conjured up -- JUSTICE BREYER: 16 Alderson Reporting Company So this is not something that we've All right. Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 JUSTICE KAGAN: JUSTICE BREYER: Mr. Clement -- To make you feel a little better, I want to pursue this for one more minute. There are cases and many, of which Justice Scalia knows as well, which uses the Holy Hill, uses the same word as this statute: In the Secretary's discretion. And in those cases this Court has said, that doesn't mean the Secretary can do anything that he or she wants, but rather, they are limited to what is not arbitrary, capricious, and abuse of discretion in interpreting statutes, in applying those statutes, et cetera. my argument; end of my question. (Laughter.) MR. CLEMENT: Well, Justice Breyer, I'm not End of Respond as you wish. sure that the Court's federalism jurisprudence should force States to defend on how a lower court reads Holy Hill. I think that really right here what we know to an absolute certainty is that this Secretary -- this statute gives the Secretary the right to remove all of the State's funding under these programs. what that is, just -- JUSTICE SOTOMAYOR: Mr. Clement, do you Think about think that the Federal Government couldn't, if it chose, Congress, say, this system doesn't work. simply going to rehaul it. 17 Alderson Reporting Company We are just It is not consistent with Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 how -- what we want to accomplish. We're just going to do away with the system and start a new health care plan of some sort. And States, you can take the new plan, We are going to give out 20 percent you can leave them. less, maybe 20 percent more, depending on what Congress chooses. Can Congress do that? Does it have to continue the old system because that is what the States are relying upon and it's coercive now to give them a new system? MR. CLEMENT: Justice Sotomayor, we are not saying we have a vested right to participate in the Medicaid program as it exists now. So if Congress wanted to scrap the current system and have a new one, I'm not going to tell you that there is no possibility of a coercion challenge to it, but I'm not going to say -- JUSTICE SOTOMAYOR: That's what I -- I want to know how I draw the line, meaning -- MR. CLEMENT: Well, can -- -- I think the usual I'm JUSTICE SOTOMAYOR: definition of coercion is, I don't have a choice. not sure what -- why it's not a choice for the States. They may not pay for something else. If they don't take Medicaid and they want to keep the same level of 18 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 coverage, they may have to make cuts in their budget to other services they provide. That's a political choice of whether they choose to do that or not. But when have we defined the right or limited the right of government not to spend money in the ways that it thinks appropriate? MR. CLEMENT: Well, Justice Sotomayor, before -- I mean, I will try to answer that question, too. But the first part of the question was, what if Congress just tried to scrap this and start over again with a new program? Here's why this is fundamentally different and why it's fundamentally more coercive, because Congress is not saying we want to scrap this program. They don't have a single complaint, really, with the way that States are providing services to the visually impaired and the disabled under pre-existing Medicaid. And that's why it's particularly questionable why they are saying that if you don't take our new money subject to the new conditions, we are going to take all of the money you have previously gotten, that you have been dependent on for 45 years and you are using right now to serve the visually impaired and the disabled -- JUSTICE GINSBURG: Mr. Clement, may I -- may You represent, I ask you -- question another line. 19 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 what, 26 States? MR. CLEMENT: Ginsburg. JUSTICE GINSBURG: And we are also told that That's right, Justice there are other States that like this expansion and they are very glad to have it. The relief that you are seeking is to say the whole expansion is no good, never mind that there are States that say, we don't feel coerced, we think this is good. You are -- you are saying that because you represent a sizeable number of States, you can destroy this whole program, even though there may be as many States that want it, that don't feel coerced, the States, thinking that this is a good thing? MR. CLEMENT: Justice Ginsburg, that's right, but that shouldn't be a terrible concern, because if Congress wants to do what it did in 1972, and pass a statute that makes the expansion voluntary, every State that thinks that this is a great deal can sign up. What's telling here, though, is 26 States, who think that this is a bad deal for them, actually are also saying that they have no choice but to take this because they can't afford to have their entire participation in this 45-year-old program wiped out, and they have to go back to square one and figure out how 20 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 they are going to deal with the visually impaired in their State, the disabled in their State -- JUSTICE SCALIA: Mr. Clement, I didn't take Is the time to figure this out, but maybe you did. there any chance at all that 26 States opposing it have Republican governors and all of the states supporting it have Democratic governors? MR. CLEMENT: Justice Scalia. JUSTICE SCALIA: (Laughter.) JUSTICE GINSBURG: Let -- let me ask you Most colleges and Yes. Is that possible? There's a correlation, another thing, Mr. -- Mr. Clement. universities are heavily dependent on the government to fund their research programs and other things. has been going on for a long time. And that And then Title IX passes, and a government official comes around and say -- says to the colleges, you want money for your physics labs and all the other things you get it for, then you have to create an athletic program for girls. And the recipient says, I am being coerced, there is no way in the world I can give up all the funds to run all these labs that we have, I can't give it up, so I'm being coerced to accept this program that I don't want. Why doesn't your theory, if your theory is 21 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 any good, why doesn't it work any time, something -- someone receives something that is too good to give up? MR. CLEMENT: Well, Justice Ginsburg, there One is this is two reasons that might be different. whole line of coercion only applies -- is only relevant, really, when Congress tries to do something through the spending power it couldn't do directly. So if Congress tried to impose Title IX directly, I guess the question for this Court would be whether or not Section 5 of the 14th Amendment allowed Congress to do that? I imagine you might think that it did and I imagine some of your colleagues might take issue with that, but that's -- that's the nature of the question. So one way around that would be if Congress can do it directly, you don't even have to ask whether there is something special about the spending power. That's how this Court resolved, for example, the Ferra case about funding to -- to colleges. JUSTICE GINSBURG: your coercion theory. I'm trying to understand I know that there are cases of ours that have said there is a line between pressure and coercion, but we have never had, in the history of this country or the Court, any Federal program struck down because it was so good that it becomes coercive to be in it. 22 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. CLEMENT: Well, Justice Ginsburg, I'm going -- to say the second thing about my answer to your prior question was just, I also think that, you know, it may be that spending on certain private universities is something again that Congress can do, and it doesn't matter whether it's coercion, but when they are trying to get the States to expand their Medicaid programs, that's -- JUSTICE GINSBURG: public colleges. MR. CLEMENT: Okay. Then there -- then Let's take -- let's take there may be some limits on that -- I mean, but again, I'm not sure even in that context there might not be some things Congress can do. It's a separate question. But once we take a premise, which I don't think there is a disagreement here, that Congress could not simply as a matter of direct legislation under the commerce power or something say, States, you must expand your Medicaid programs. If we take that as a given, then I think we have to ask the question about whether or not it's coercive. Now, you -- in your second question you ask, well, you know, I mean, where's the case that says that we've crossed that line. respectfully say. 23 Alderson Reporting Company And this is that case, I would Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Kagan. the program. JUSTICE BREYER: Then the government can reply as well to the 1980 extension to children 0 to 6 years old, 1990 requiring the extension for children up to 18, all those prior extensions to me seem just as big in amount, just about as big in the number of people coming on the rolls, and they are all governed by precisely the same statute that you are complaining of here, which has been in the law since '65. MR. CLEMENT: Justice Breyer, I don't think that our position here would necessarily extend to say the 1984 amendments, and let me tell you why. You know, I'm -- I'm I am not saying that absolutely that's guaranteed that's not coercive, but here's reasons why they're different. The one major difference is of the size of I mean, the expansion of Medicaid since Medicaid, circa, 1984 the 1984 is really breathtaking. Federal spending to the States was a shade over $21 billion. Right now it's $250 billion, and that's before the expansion under this statute. JUSTICE KAGAN: Well, if you are right, Mr. Clement, doesn't that mean that Medicaid is unconstitutional now? MR. CLEMENT: Not necessarily, Justice And again, it's because we are not here with a 24 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 one trick pony. One of the factors -- we point you to three factors that make this statute uniquely coercive. One of them is the sheer size of this program. And, you know, if you want a gauge on the size of this program, the best place to look is the government's own number. Footnote 6, page 73 -- JUSTICE KAGAN: become too big? So, when does a program I want you to give me a dollar number. $3.3 trillion over the next 10 MR. CLEMENT: years. That's -- that -- JUSTICE BREYER: I'll tell you this number, which I did look up, that the amount, approximately, if you look into it -- as a percentage of GDP, it's big, but it was before this somewhere about 2-point-something percent, fairly low, of GDP. It'll go up to something a And now go look at little bit over 3 percent of GDP. the comparable numbers, which I did look at, with the expansion that we're talking about before. The expansion from 0 to 18 or even from 0 to 6. And while you can argue those numbers, it's pretty hard to argue that they aren't roughly comparable as a percentage of the prior program or as a percentage of GDP. If I'm right on those numbers or even roughly right -- I don't guarantee them -- then would 25 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 you have to say, well, indeed, Medicaid has been unconstitutional since 1964. And if not, why not? MR. CLEMENT: The answer is no, and that's because we're here saying there are three things that make this statute unique. JUSTICE SCALIA: third? What are your second and I'm on pins and needles to hear your -- (Laughter.) MR. CLEMENT: One is the sheer size. Two is the fact that this statute uniquely is tied to an individual mandate which is decidedly nonvoluntary. three is the fact that they've leveraged the prior participation in the program, notwithstanding that they've broken this out as a separately segregated fund going forward, which is not -- JUSTICE KAGAN: So on the third -- on the And third, suppose you had the current program and Congress wakes up tomorrow and says "we think that there's too much fraud and abuse in the program, and we're going to put some new conditions on how the States use this money so we can prevent fraud and abuse, and we're going to tie it to everything that's been there initially." Unconstitutional? MR. CLEMENT: No, I think that is 26 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 constitutional because I think that's something that Congress could do directly. that to the spending program. It wouldn't have to limit And I think 18 U.S.C. 666 is -- is a statute -- it's in the criminal code, it may be tied to spending, but I think that's -- that's a provision that I don't think it's constitutional; I think it's called into question. JUSTICE KAGAN: idea. I guess I don't get the I mean, Congress can legislate fraud and abuse restrictions in Medicaid, and Congress can legislate coverage expansions in Medicaid. MR. CLEMENT: Well, Justice Kagan, I think there's a difference, but if I'm wrong about that and the consequence is that Congress has to break Medicaid down into remotely manageable pieces as opposed to $3.3 trillion over 10 years before the expansion, I don't think that would be the end of the world. But I really would ask you to focus on specifically what's going on here, which is they take these newly eligible people -- and that's a massive change in the way the program works. These are people who are healthy, childless adults who are not covered in many States. okay, we're going to make you cover those. They say We're going to have a separate program for how you get reimbursed 27 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 for that. You get reimbursed differently from all the But if you don't take previously eligible individuals. our money, we're going to take away your participation in the program for the visually impaired and disabled. If I may reserve the balance of my time. CHIEF JUSTICE ROBERTS: Well, I'm -- I'm not sure my colleagues have exhausted their questions, so -- JUSTICE SOTOMAYOR: I guess my greatest fear, Mr. Clement, with your argument is the following: The bigger the problem, the more resources it needs. We're going to tie the hands of the Federal government in choosing how to structure a cooperative relationship with the States. We're going to say to the Federal government, the bigger the problem, the less your powers are. Because once you give that much money, you can't structure the program the way you want. It's our money, Federal government. We're going to have to run the program ourself to protect all our interests. I don't see where to draw that line. The uninsured are a problem for States only because they, too, politically, just like the Federal government, can't let the poor die. And so to the extent they don't want to do that, it's because they feel accountable to their citizenry. And so if they want to do it their way, they have to spend the money to 28 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 do it their way, if they don't want to do it the Federal way. So I -- I just don't understand the logic of saying States, you can't -- you don't -- you're not entitled to our money, but once you start taking it, the more you take, the more power you have. MR. CLEMENT: couple of points. Well, Justice Sotomayor, a One is, I actually think that sort of I mean, misdescribes what happened with Medicaid. States were, as you suggest, providing for the poor and the visually impaired and disabled even before Medicaid came along. Then all of a sudden, States -- the Federal government says look, we'd like to help you with that, and we're going to give you money voluntarily. And then over time, they give more money with more conditions, and now they decide they're going to totally expand the program, and they say that you have to give up even your prior program, where we -- first came in and offered you cooperation, we're now going to say you have to give that up if you don't take our new conditions. Secondarily, I do think that our principle is not that when you get past a certain level, it automatically becomes coercive per se. But I do think when you get a program and you're basically telling States that look, we're going to take away $3.3 trillion 29 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 over the next 10 years, that at that point, it's okay to insist that Congress be a little more careful that it not be so aggressively coercive as it was in this statute. And I would simply say that -- we're not here to tell you that this is going to be an area where it's going to be very easy to draw the line. We're just telling you that it's inceptionally important to draw that line, and this is a case where it ought to be easy to establish a beachhead, say that coercion matters, say there's three factors of this particular statute that make it as obviously coercive as any piece of legislation that you've ever seen, and then you will have effectively instructed Congress that there are limits, and you have laid down some administrable rules. JUSTICE SCALIA: said I can ask this. CHIEF JUSTICE ROBERTS: check first. (Laughter.) JUSTICE SCALIA: As I recall your -- your He doesn't always Mr. Clement, the Chief has theory, it is that to determine whether something is coercive, you look to only one side, how much you're threatened with losing or offered to receive. other side doesn't matter. 30 Alderson Reporting Company And the Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 situations? I don't think that's realistic. I mean, I think, you know, the -- the old Jack Benny thing, Your Money Or Your Life, and, you know, he says "I'm thinking, I'm thinking." it's no choice. money. You know? It's -- it's funny, because Your life? Again, it's just I It's an easy choice. No coercion, right? mean -- right? Now whereas, if -- if the choice were your life or your wife's, that's a lot harder. Now, is it -- is it coercive in both MR. CLEMENT: (Laughter.) Well, yes. It is. JUSTICE SCALIA: MR. CLEMENT: Really? I would say that. It's a tough choice. JUSTICE SCALIA: And -- and -- JUSTICE KENNEDY: I thought you were going to say "this is your money and your life." (Laughter.) MR. CLEMENT: And well -- it is. But I mean -- I might have missed something, but both of those seem to be coercion. (Laughter.) JUSTICE SCALIA: 31 Alderson Reporting Company No, no, no. To say -- to Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 say you're -- when you say you're coerced, it means you've been -- you've been given an offer you can't refuse. life. one. (Laughter.) JUSTICE SOTOMAYOR: tonight. CHIEF JUSTICE ROBERTS: out of this -- JUSTICE SCALIA: I'm talking about my life. Let's leave the wife He's not going home Okay? You can't refuse your money or your But your life or your wife's, I could refuse that I think -- take mine, you know? (Laughter.) MR. CLEMENT: Judge. JUSTICE SCALIA: example. Forget about it. CHIEF JUSTICE ROBERTS: frivolity for a while. But I want to make sure I understand where the meaningfulness of the choice is taken away, is it the amount that's being offered, that it's just so much money, of course you can't turn it down, or is it the amount that's going to be taken away if you don't take 32 Alderson Reporting Company I wouldn't do that either, I won't use that as an That's enough Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 what they're offering? MR. CLEMENT: It's both, Your Honor. And I think that that's -- I mean, there really is -- I -- there really is, you know, three strings in this bow. mean, one is, the sheer amount of money here makes it very, very difficult to refuse, because it's not money that, you know, that's come from some -- you know, China or, you know, the -- the -- the export tariffs like in the old day. part of it. The fact that they're being asked to give up their continuing participation in a program that they've been participating in for 45 years as a condition to accept the new program, we think that's the second thing that's critical -- CHIEF JUSTICE ROBERTS: Well, why isn't that It's coming from the taxpayers, so that's I a consequence of how willing they have been since the New Deal to take the Federal government's money? And it seems to me that they have compromised their status as independent sovereigns because they are so dependent on what the Federal government has done, they should not be surprised that the Federal government having attached the -- they tied the strings, they shouldn't be surprised if the Federal government isn't going to start pulling them. 33 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. CLEMENT: With all due respect, Mr. Chief Justice, I don't think we can say that, you know, the States have gotten pretty dependent, so let's call this whole federalism thing off. it's too important. And I just think Because again, the consequence -- if you think about it -- if -- the consequence of saying that we're not going to police the coercion line here shouldn't be that well, you know, it's just too hard, so we'll give the Federal Congress unlimited spending power. The consequence ought to be, if you really can't police this line, then you should go back and reconsider your cases that say that Congress can spend money on things that it can't do directly. Now, we're not asking you to go that far. We're simply saying that look, your spending power cases absolutely depend on there being a line between coercion -JUSTICE SOTOMAYOR: MR. CLEMENT: But could you tell me -- -- and voluntary action. I don't understand your You don't see there JUSTICE SOTOMAYOR: first answer to Justice Kagan. being a difference between the Federal government saying we want to take care of the poor. States, if you do this, we'll pay 100 percent of your administrative 34 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 costs. And you said that could be coercion. All right. Doesn't the amount of burden that the State undertakes to meet the Federal obligation count in this equation at all? MR. CLEMENT: Justice Sotomayor. It -- it certainly can, I didn't mean to suggest in answering Justice Kagan's question that my case was no better than that hypothetical. I mean, but if in the nature of things that I do think the amount of the money even considered alone does make a difference, and it's precisely because it has an effect on their ability to raise revenue from their own citizens. So it's not just free money that they are turning down if they want to. It really is -- JUSTICE SOTOMAYOR: Counsel, if we go pack to the era of matching what a State pays to what a State gets, Florida loses. It's citizens pay out much less than what they get back in Federal subsidies of all kinds. So you can't really be making the argument that Florida can't ask for more than it gives, because it's really giving less than it receives. MR. CLEMENT: Well then -- You don't really want to JUSTICE SOTOMAYOR: go to that point, do you? MR. CLEMENT: Well, then I will make that 35 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 argument on behalf of Texas. (Laughter.) MR. CLEMENT: argument depends on. But it's not, it's not what my And that's the critical thing. It's one aspect of what makes this statute uniquely coercive. And I really think if you ask the question: What explains the idea that if you don't take this new money you are going to lose all your money under what you have been doing for 45 years to help out the visually impaired and disabled? Nobody in Congress They are just wants the States to stop doing that. doing it, and it's purely coercive to condition the money. It's leverage, pure and simple. JUSTICE KENNEDY: If the inevitable consequence of your position was that the Federal government could just do this on its own, the Federal government could have Medicaid, Medicare, and these insurance regulations. Assume that's true. Then how How are the are the interests of federalism concerned? interests of federalism concerned if in Florida or Texas or some other objecting States there are huge Federal bureaucracies doing what this bill allows the State bureaucracies to do. that. I know you have thought about I would just like your answer. 36 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. CLEMENT: I have, and I would like to elaborate that the one word answer is "accountability." If the Federal government decides to spend money through Federal instrumentalities and the citizenry is hacked off about it, they can bring a Federal complaint to a Federal official working in a Federal agency. And what makes this so pernicious is that the Federal government knows that the citizenry is not going to take lightly the idea that there are huge, new Federal bureaucracies popping up across the country. And so they get the benefit of administering this program through State officials, but then it makes it very confusing for the citizen who doesn't like this. Do they complain to the State official because it's being administered in the State official in a State building? JUSTICE KAGAN: Mr. Clement, that is very confusing because the idea behind cooperative Federal/State programs was exactly a federalism idea. It was to give the States the ability to administer those programs. It was to give the States a great deal And that's of flexibility in running those programs. exactly what Medicaid is. MR. CLEMENT: Medicaid was. Well, that's exactly what What will it be going The question is: 37 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 forward? Kagan. And I absolutely take your point, Justice Cooperative federalism is a beautiful thing. Mandatory federalism has very little to recommend it because it poses exactly the kind of accountability -- JUSTICE KAGAN: Cooperative federalism does not mean that there are no Federal mandates and no Federal restrictions involved in a program that uses 90 percent here, 100 percent Federal money. It means there is flexibility built into the program subject to certain rules that the Federal government has about how it wishes its money to be used. certificate. It's like giving a gift If I give you a gift certificate for one But still you store, you can't use it for other stores. can use it for all kinds of different things. MR. CLEMENT: I absolutely agree that if it's cooperative federalism and the States have choices, then that is perfectly okay. But when -- that's why Because if voluntariness and coercion is so important. you force a State to participate in a Federal program, then -- I mean, as long as it's voluntary then a State official shouldn't complain if a citizen complains to the State about the way the State's administering a Federal program that it volunteered to participate in. But at the point it becomes coercive, then it's not fair to tell the citizen to complain to the State official. 38 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 They had no choice. But who do they complain at the Federal level? There's nobody there, which would be -- I'm not saying it's the best solution to have Federal instrumentalities in every State, but it actually is better than what you get when you have mandatory federalism and you lose the accountability that is central to the federalism provisions in the Constitution. CHIEF JUSTICE ROBERTS: Clement. General Verrilli? ORAL ARGUMENT OF GENERAL DONALD B. VERRILLI, JR., ON BEHALF OF THE RESPONDENTS GENERAL VERRILLI: may it please the Court: The Affordable Care Act's Medicaid expansion provisions will provide millions of Americans with the opportunity to have access to essential health care that they cannot now afford. It is an exercise of the Mr. Chief Justice, and Thank you, Mr. Spending Clause power that complies with all of the limits set forth in this Court's decision in Dole, and the States do not contend otherwise. The States are asking this Court to do something unprecedented, which is, to declare this an impermissibly coercive exercise. 39 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 as you -- much more. JUSTICE SCALIA: What do you think we meant in those dicta in several prior cases where we've said that the Federal government cannot be coercive through the Spending Clause? What -- what do you think we were -- give us a hypothetical. GENERAL VERRILLI: Yes. First, if I could just try to be a little more precise about it, Justice Scalia. I think what the Court said in Steward Machine and in Dole is that it's possible that you might envision a situation in which there's coercion -- JUSTICE SCALIA: GENERAL VERRILLI: Okay. And the courts didn't say One example I But I can think of something. could think of that might serve as a limit would be a Coyle type situation, in which the condition attached was worth a fundamental transformation in the structure of State government in a situation in which the State didn't have a choice but to accept it. JUSTICE SCALIA: But -- and so -- Anything else, so long GENERAL VERRILLI: JUSTICE SCALIA: Well, but -- You are talking about situations where they have to locate their State house in some other city -- GENERAL VERRILLI: 40 Alderson Reporting Company Or you may have a Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 legislature -- JUSTICE SCALIA: And they have no choice. But short of that, they can make the State do anything at all? GENERAL VERRILLI: conditions are real. No, no. Dole -- the Dole The germaneness condition in Dole is real, for example, and so those -- CHIEF JUSTICE ROBERTS: addressed the coercion question. GENERAL VERRILLI: Right. So then you think it None of those have CHIEF JUSTICE ROBERTS: would be all right for the Federal government to say -- same program: leave it. States, you can take this or you can But if you don't take it, you lose every last dollar of Federal funding for every program. GENERAL VERRILLI: I think that would raise a germaneness issue, Mr. Chief Justice, but it's not what we have here. CHIEF JUSTICE ROBERTS: coercion question at all. GENERAL VERRILLI: think they are related. Well, but I think -- I But there's no I think that the germaneness inquiry in Dole really gets at coercion in some circumstances, and that's why I think they are related. But we don't have that here. 41 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 And if I could, I would like to address -- CHIEF JUSTICE ROBERTS: have that here. to coercive? GENERAL VERRILLI: harder to see what -- CHIEF JUSTICE ROBERTS: there's no -- GENERAL VERRILLI: What the connection is That's germane if Because it gets to be No, I know we don't How does germaneness get -- get between getting you to do A and the money you are getting for -- CHIEF JUSTICE ROBERTS: it is not germane. So it fails because But you are saying it would not fail because it was coercive. GENERAL VERRILLI: Why -- I think that -- as I said, I think they are really trying to get at the same thing, and I -- but I do think it's quite different here, and I would like to, if I could, take up each of the -- CHIEF JUSTICE ROBERTS: it's different here. No, I know -- I know I'm just trying to understand if you accept the fact or regarded as true that there is a coercion limit, or that once the Federal government -- once you are taking Federal government money, the Federal government money -- can take it back, and that 42 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 doesn't affect the voluntariness of your choice. Because it does seem like a serious problem. assuming under the Spending Clause the Federal government cannot do this. cannot do this. Under the Constitution it We are But if it gets the State to agree to And the concern is, if you can it, well, then it can. say: If you don't agree with this, you lose all your money, whether that's really saying the limitation in the Constitution is -- is largely meaningless. GENERAL VERRILLI: Well, but I don't think that this is a case that presents that question. CHIEF JUSTICE ROBERTS: know this. not. No, no, I know. I I don't know if I will grant it to you or Do you But let's assume it's not this case. recognize any limitation on that concern? GENERAL VERRILLI: I think the Court has said in Steward Machine and Dole that this is something that needs to be considered in an appropriate case. we acknowledge that. And But I do think it's so dependent on the circumstances that it's very hard to say in the abstract with respect to a particular program that there is a -- JUSTICE SCALIA: You can't imagine a case in which it is both germane and yet coercive, is what you are saying. There is no such case as far as you know. 43 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 context. act and -- GENERAL VERRILLI: Well, I am not prepared to -- to say right here that I can -- that -- JUSTICE SCALIA: surprise question, you know? GENERAL VERRILLI: Congress has authority to I wouldn't think that is a JUSTICE SCALIA: I can't think of one. I'm not blaming you for not thinking of one. (Laughter.) GENERAL VERRILLI: But I do think -- I really do think that it's important to look at this, an issue like this. If you are going to consider it, it has got to be considered in a factual context from which it arises. JUSTICE ALITO: Let me give you a factual Let's say Congress says this to the States: We have got great news for you; we know your expenditures on education are a huge financial burden, so we are going to take that completely off your shoulders; we are going to impose a special Federal education tax which will raise exactly the same amount of money as all of the States now spend on education; and then we are going to give you a grant that is equal to what you spent on education last year. Now, this is a great offer and we think you 44 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 will take it, but of course, if you take it, it's going to have some conditions because we are going to set rules on teacher tenure, on collective bargaining, on curriculum, on textbooks, class size, school calendar and many other things. So take it or leave it. If you take it, you have to follow our rules on all of these things. If you leave it, well, then you are going to have to fine -- you are going to have to tax your citizens, they are going to have to pay the Federal education tax; but on top of that, you were going to have to tax them for all of the money that you are now spending on education. Plus all of the Federal funds that you were previously given. Would that be -- would that reach the point -- would that be the point where financial inducement turns into coercion? GENERAL VERRILLI: JUSTICE ALITO: No. -- because they do, the No, I don't think so -- GENERAL VERRILLI: States do have a choice there, especially as a -- as a going-in proposition. The argument the States are making here is not that they're -- that -- this is not a going-in proposition. Their argument is that they're -- they are in a position where they don't have a choice because of everything that has happened before. 45 Alderson Reporting Company But -- Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 JUSTICE ALITO: You might be right. But if that is the case then there is nothing left -- GENERAL VERRILLI: JUSTICE ALITO: Well, but as a -- -- of federalism. As a practical matter, I First of all, as a GENERAL VERRILLI: disagree with that, Justice Alito. practical matter there is a pretty serious political constraint on that situation ever arising, because it's not like the Federal Government is going to have an easy time of raising the kinds of tax revenues that need to be -- needed to raised to work that kind of fundamental transformation, and that is real. And political constraints do operate to protect federalism in this area. JUSTICE SCALIA: I would have thought there was a serious political strain -- constraint on the individual mandate, too, but that didn't work. What you call serious political constraints sometimes don't work. GENERAL VERRILLI: But -- but with respect to a situation like that one, Justice Scalia, the -- the States have their education system, and they can decide whether they are going to go in or not. But here, of course, I think it's important to trace through the history of Medicaid. It, it is not a case, as my friend from the other side suggested, that the norm here is 46 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that the Federal Government has offered to the States the opportunity either to stay where they are or add the new piece. We can debate that proposition with respect to 1972 one way or another, the States have one view about that; we have a different one. But starting in the 1984 expansion, with respect to pregnant women and infants, it was an expansion of the entire program; States were given the choice to stay in the entire program or not. 1989 when the program was expanded to children under 6 years of age, under 133 percent of poverty, same thing. 1990, kids 6 to 18 and 100 percent In fact, every major expansion, of poverty, same thing. same thing. And so I just think the history of the program, and particularly when you read that in context of 42 U.S.C. 1304, which reserves the right of the Federal Government to amend the program going forward, shows you that this is something that the States have understood all along. This has been the evolution of it, and with respect to -- CHIEF JUSTICE ROBERTS: some assurance? Could you give me We heard the question about whether or not the Secretary would use this authority to the extent available. Is there circumstances where you are willing I'm thinking to say that that would not be permissible? 47 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 of the Arizona letter, for example. I mean, if I had the authority and I was in that position, I would use it all the time. made? You might -- you want some little change Well, guess what; I can take away all your money I win. Every time. It seems if you don't make it. that that would be the case. So why shouldn't we be concerned about the extent of authority that the government is exercising, simply because they could do something less? We have to analyze the case on the assumption that that power will be exercised, don't we? GENERAL VERRILLI: Well, Mr. Chief Justice, it would not be responsible of me to stand here in advance of any particular situation becoming -- coming before the Secretary of Health and Human Services and commit to how that would be resolved one way or another. But that -- CHIEF JUSTICE ROBERTS: that. No, I appreciate I appreciate that, but I guess -- GENERAL VERRILLI: That discretion is there in the statute, and I have every reason to think it is real, but I do think, getting back to the circumstances here -- JUSTICE KAGAN: been the history of its use? 48 Alderson Reporting Company Well, General, what's the -- Has the Secretary in fact Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ever made use of that authority? GENERAL VERRILLI: Kagan. It's never been used -- CHIEF JUSTICE ROBERTS: What about the That's correct, Justice Arizona letter we just heard about today? GENERAL VERRILLI: cut off -- CHIEF JUSTICE ROBERTS: threaten -- JUSTICE SCALIA: Of course not. Of course no States It's been used to It has never been used to CHIEF JUSTICE ROBERTS: would say okay, go ahead but -- make my day, take it away; they are -- they are going to give in. GENERAL VERRILLI: If we could go to the situation we have here, Mr. Chief Justice, this -- with respect to the Medicaid expansion, the States' argument is, as they said in their briefs, they articulated a little bit different this morning -- this afternoon. But as they said it in their briefs, was, it's not what you stand to gain, but what you stand to lose. But I think an important thing in evaluating that argument in this context is fully 64 percent of Medicaid expenditures in this country are based on optional choices; and I don't mean by that the optional choices of the States to stay in the program in '84 or '88 or 49 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 '89. But -- but States are given the choices to expand the beneficiaries beyond the Federal minimum and to expand services beyond the Federal minimum. JUSTICE KENNEDY: And just a small point, It -- does this and please correct me if I am wrong. Act not require States to keep at the present level their existing Medicaid expenditure? So some States may have been more generous than others in Medicaid, but this Act freezes that so the States can't go back. am I incorrect? GENERAL VERRILLI: than that, Justice Kennedy. It's much more nuanced There is something called a Or maintenance of effort provision which lasts until 2014, until such time as the Medicaid expansion takes place and the exchanges are in place. population. That applies to the It says with respect to the population, you It does not apply to the can't take anybody out. optional benefits where the States still have flexibility, they can still reduce optional benefits that they are now providing if they -- if they want to -- to control costs. They can also work on provider rates, there's also with respect to demonstration projects by which some States have expanded their populations beyond the required eligibility levels, they don't have to keep them in. 50 Alderson Reporting Company So -- and then there's Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 also, if the State has a budgetary crisis, it can get a waiver of that, as Wisconsin did. So that is a -- that's a provision I think that does a significant degree less than my friends on the other side have suggested in terms of -- in terms of its effect, and its effect beyond that is just temporary. I do think with respect to the -- the first of their three arguments for coercion, the sheer size argument, that it's very difficult to see how that is going to work; because if the question is about what you stand to lose rather than what you stand to gain, then it seems to me that it doesn't matter whether the Medicaid expansion is substantial or whether it's modest, or whether there is any expansion at all. States, for example -- the Federal Government, for example, could decide that under -- under the current system too much money has ended up flowing to nursing care and that money would be better serving the general welfare if it were directed at infants and children. But if the Federal Government said we are going to redirect the spending priorities of the Federal money that we are offering to you, the States could say well, Geez, we don't like that; we would like to keep spending the money the way we were, and we have no choice, because this has gotten too big for us to exit. 51 Alderson Reporting Company The And so Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 -- and in fact, it seems to me, standing here today before these expansions take place, under their theory, the provision is -- JUSTICE SCALIA: bigger the coercion. GENERAL VERRILLI: JUSTICE SCALIA: -- well -- The smaller what you are The smaller it, is the demanding of them, the bigger the coercion to go along. GENERAL VERRILLI: lose. The more they stand to And -- and so -- and then it -- I'm sorry, Justice Breyer. JUSTICE BREYER: I -- just before you leave that, I'd -- I'd appreciate it if you would expand a little bit on the answer to Justice Kagan's question. For the reason, when I read the cutoff statute, which as I said has been there since 1965 unchanged, it does refer to the Secretary's discretion to keep the funding, insofar as the funding has no relationship to the failure to comply with the condition. And as I read that, that gives the Secretary the authority to cut off all the money, but the State's refusal to accept the condition means they shouldn't have. But nothing there says they can go beyond that Now there is a sentence I thought they had to and cut off unrelated money. says maybe they could do that. 52 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 exercise that within reason. GENERAL VERRILLI: JUSTICE BREYER: reasonable. Well -- I don't know when it be So you have looked into it, and that's what I want to know. GENERAL VERRILLI: JUSTICE BREYER: Right. Is there -- I could find no instance where they went beyond the funds that were related to the thing that the State refused to do, or things affected by that. I would like you to tell me, when you looked into it, that what I thought of in this isolation chamber here is actually true. Or whether they have run around threatening people that we will cut off totally unrelated funds. What is the situation? GENERAL VERRILLI: I think the situation is generally as you have described it, but I do want to be careful in saying I -- I don't think it would be responsible of me to commit now that the Secretary would exercise the discretion uniformly in one way or another. CHIEF JUSTICE ROBERTS: Well, but that's just saying that when, you know, the analogy that has been used, the gun to your head, "your money or your life," you say well, there is no evidence that anyone has ever been shot. 53 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 GENERAL VERRILLI: But -- Well, it's because You don't have a CHIEF JUSTICE ROBERTS: you have to give up your wallet. choice. GENERAL VERRILLI: But that -- And you cannot CHIEF JUSTICE ROBERTS: represent -- you cannot represent that the Secretary has never said, "and if you don't do it, we are going to take away all the funds. " They cite the Arizona example; I suspect there are others, because that is the leverage. GENERAL VERRILLI: But it -- I'm not saying there CHIEF JUSTICE ROBERTS: is anything wrong with it. GENERAL VERRILLI: Chief Justice. CHIEF JUSTICE ROBERTS: It's not coercion, Mr. Wait a second. It's not -- it's not coercion -- well, I guess that's what the case is. It's not coercion -- GENERAL VERRILLI: It's not coercion. -- to say I'm going CHIEF JUSTICE ROBERTS: to take away all your funds, no matter how minor the infringement? GENERAL VERRILLI: JUSTICE BREYER: 54 Alderson Reporting Company But -- But of course -- But I don't know if that's Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 so. And all I asked in my question was I didn't ask you I wanted to know to commit the Secretary to anything. what the facts are. GENERAL VERRILLI: JUSTICE BREYER: I -- I wanted to know what you I wanted you to, in found in researching this case. other words, to answer the question the Chief Justice has: Is it a common thing, that that happens, that this Or isn't it? It's -- my understanding unrelated threat is made? GENERAL VERRILLI: is that these situations are usually worked out back and forth between the States and the Federal government. And I think that most -- JUSTICE BREYER: what those are. GENERAL VERRILLI: JUSTICE SCALIA: GENERAL VERRILLI: And I'm not. And who wins. Well, I think -- that's But -- And you are not privy to what I think is the problem here, Justice Scalia, is it seems to me we are operating under a conception that isn't right. The reason we have had all these Medicaid expansions and the reason seems to me why we are were where we are now and why 60 percent of what's being spent on Medicaid is based on voluntary decisions by the States to expand beyond what Federal law requires, 55 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 because this is a good program and it works. States generally like what it accomplishes -- JUSTICE KAGAN: JUSTICE ALITO: realistic? And the And, General Verrilli -- Is this discussion The objective of the Affordable Care Act is Now suppose that to provide near universal health care. all of the 26 States that are parties to this case were to say, well, we're not going to -- we're not going to abide by the new conditions. Then there would be a huge portion -- a big portion of the population that would not have healthcare, and it's a realistic possibility the Secretary is going to say, well, okay, fine, you know. We are going to cut off your new funds but we are not going to cut off your old funds and just let that condition sit there. GENERAL VERRILLI: Well, just as I can't make a commitment that the authority wouldn't be exercised, I'm not going to make a commitment that it would be exercised. But I do think that that -- to try and move away from the first of their argument, the sheer size argument, to the second one, which is that it's coercive by virtue of its relationship to the Affordable Care Act. I really think that that's a misconception and I would like to be able to take a minute and walk through and explain why that is. 56 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Kagan. JUSTICE KAGAN: General Verrilli, before you do that, I'm sorry, but in response to the Chief Justice's question -- I mean the money or your life has consequence because we are worried that that person is actually going to shoot. So I think that this question about are we -- what do we think the Secretary is going to do is an important one. And as I understand it, I mean when the Secretary withdraws funds, what the Secretary is doing is withdrawing funds from poor people's health care. And that the Secretary is reluctant and loathe to take money away from poor people's health care. And that It's that's why these things are always worked out. that the Secretary really doesn't want to use this power. And so the Secretary sits down with the State and figures out a way for the Secretary not to use the power. GENERAL VERRILLI: That is no -- CHIEF JUSTICE ROBERTS: GENERAL VERRILLI: No, what the -- That's correct, Justice I'm sorry -- Go ahead. CHIEF JUSTICE ROBERTS: GENERAL VERRILLI: That's another way of trying to say what I was trying to say to Justice Scalia earlier is that the States and the Federal government 57 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 share a common objective here, which is to get health care to the needy. And in the vast majority of instances they work together to make that happen. CHIEF JUSTICE ROBERTS: Well, but the question is not obviously the States are interested in the same objective and they have a disagreement or they have budget realities that they have to deal with. And States say, well, we are going to cut by 10 percent what we reimburse this for or that for and the Federal government says well, you can't. And no one is suggesting that people want to cut health care but they have different views about how to implement policy in this area. And the concern is that the Secretary has the total and complete say because the Secretary has the authority under this provision to say you lose everything. No one's suggested in the normal course that will happen, but so long as the Federal government has that power, it seems to be a significant intrusion on the sovereign interests of the State. Now I'm not -- it may be something they gave up many decades ago when they decided to live off of Federal funds. But I don't think you can deny that it's a significant authority that we are giving the Federal government to say that you can take away everything if 58 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the States don't buy into the next program. GENERAL VERRILLI: Well, but what I would say about that Mr. Chief Justice, is that we recognize that these decisions aren't going to be easy decisions in some circumstances. As a practical matter there may be circumstances in which they are very difficult decisions. But that's different from saying that they are coercive and that's different from saying that it's an unconstitutional -- JUSTICE BREYER: is it different? Why is it different? Why I mean, I thought it might be very unlikely that the State would ever say that the government -- the Federal government would say here's a condition that you have to have a certain kind of eyeglasses for people who don't see. And by the way if you don't do that we'll take away $42 billion of funding, okay? I thought such a thing would not happen. And I thought that if it tried to happen that it's governed by the APA and the person with eyeglasses would say it's arbitrary, capricious, abusive discretion. that's so, even though the statute says it's in the discretion of the Secretary but Mr. -- your colleague and brother says no, I'm wrong about the law there and moreover they would do it. 59 Alderson Reporting Company And That's what I'm hearing now, Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that they would do it and they do do it, and -- and, etc. So I would like a little clarification. GENERAL VERRILLI: In of the situation described in your hypothetical, Justice Breyer, the Secretary of health and human services would never do it. But with respect. JUSTICE SCALIA: a prediction, okay. GENERAL VERRILLI: Well, I think it would Could never do it or would have to satisfy the administrative procedure, that's a real constraint. When I don't what I don't feel able to do here is to say with respect to this Medicaid expansion. JUSTICE SCALIA: Are you willing to acknowledge that the Administrative Procedure Act is a limitation on the secretary's ability to cut off all the funds; she can't do it if it -- if that would be unreasonable? Are you willing to accept that? I wouldn't if I were you. GENERAL VERRILLI: So what I'm trying to do here is to -- is to suggest that the secretary does have discretion under the statute, and that that -- and that -JUSTICE SCALIA: Indeed, part of the That's what discretion is to cut off all of the funds. 60 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the statute says. GENERAL VERRILLI: -- and it is possible, But that doesn't and I'm not willing to give that away. make this -- JUSTICE KAGAN: But, General Verrilli, you are not willing to give away whether the APA would bar that; but, the APA surely has to apply to a discretionary act of the secretary. GENERAL VERRILLI: Justice Kagan, but -- JUSTICE BREYER: reluctant? GENERAL VERRILLI: I'm not trying to be reluctant. works. I'm not trying to be -- I understand how this What's making you I agree with that, I'm trying to be careful about the authority of the Secretary of Health and Human Services and how it will apply in the future. JUSTICE SCALIA: were you. I wouldn't worry a lot if I I don't know of any case that, where the secretary's discretion explicitly includes a certain act, we have held that, nevertheless, that act cannot be performed unless we think it reasonable. any case like that. Yes, when there is just a general grant of discretion, it has to be exercised reasonably. 61 Alderson Reporting Company I don't know But Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 maybe Justice Breyer knows such a case. JUSTICE BREYER: JUSTICE SCALIA: GENERAL VERRILLI: Yes, I do. Give it to me. If I could go back to the sheer size idea, there is, I think, another couple of points that are important in thinking about whether that's a principle courts could ever apply. Once you get into that business, in addition to the problem I identified earlier, that it basically means that Congress is frozen in place, based on the size of the program, you have got this additional issue of having to make a judgment about in what circumstances will -- will the loss of the federal funding be so significant that you would count it as -- coercive. JUSTICE KENNEDY: I suppose one test could be -- I just don't see that it would be very workable -- is whether or not it's so big that accountability is lost, that it is not clear to the citizens that the State or the Federal Government is administering the program, even though it's a state administrator. GENERAL VERRILLI: JUSTICE KENNEDY: GENERAL VERRILLI: from a withdrawal situation. Well, but I think -- I think that's unworkable. -- this is going to come Their argument's about it's what you stand to lose and with respect to 62 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 withdrawal. I mean, so, does it depend on -- is it an absolute or a relative number with respect to how much of the state budget? Is it a situation where you have to make a calculation about how hard would it be for that state to make up in state tax revenues the federal revenue they would lose? Does that depend on whether It just seems it's a high tax state or a low tax state. to me -- and then, what is the political climate in that state? It seems to me like -- JUSTICE KENNEDY: In your view, does federalism require that there be a relatively clear line of accountability for political acts? GENERAL VERRILLI: Justice Kennedy. But, here -- Is that subsumed in the Yes, of course, it does, JUSTICE KENNEDY: coercion test, or is that an independent? GENERAL VERRILLI: You know, here, the coercion test, as it's been discussed, I think, for example, in Justice O'Connor's dissent in Dole and in some of the other literature, does address federalism concerns in the sense of the Federal Government using federal funding in one area to try to get states to act in an area where the Federal Government may not have Article I authority. 63 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 doctrine? JUSTICE KENNEDY: GENERAL VERRILLI: Yes. But, as Your Honor suggested earlier, this is a situation in which, while it is certainly true that the Federal Government couldn't require the states, as the Chief Justice indicated, to carry out this program, the federal government could, as Your Honor suggested, expand Medicare and do it itself. JUSTICE KENNEDY: But do you think that there still is inherent and implicit in the idea of federalism, necessary for the idea of federalism, that there be a clear line of accountability so the citizen knows that it's the Federal or the State government who should be held responsible for a program? GENERAL VERRILLI: think the problem here is -- JUSTICE KENNEDY: And does coercion relate Certainly, but I to that, or is that a separate -- GENERAL VERRILLI: JUSTICE KENNEDY: Yes, but I think -- -- is that a separate GENERAL VERRILLI: Well, I think it relates to it in the opposite way that my friends on the other side would like it to, in that I think their argument is that it would subject us to such a high degree of 64 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 political accountability at the state level to withdraw ourselves from the program, that it's an unpalatable choice for us, and that's where the coercive effect comes from. And that's why I think -- JUSTICE KENNEDY: Well, but I think the answer would be that the state wants to preserve its integrity, its identity, its responsibility in the federal system. GENERAL VERRILLI: And it may -- and, of course, it may do so, and it can make -- JUSTICE SCALIA: May it do so? Doesn't the question come down to this -- maybe you can answer this yes. question simply: But -- but isn't the Is it conceivable to you, as it was evidently not to Congress, that any State would turn down this offer, that they can't refuse? Is it conceivable to you that any State would have said no to this program? Congress didn't think that, because some of its other provisions are based on the assumption that every single State will be in this thing. Now, do you -- can you conceive of a State saying no? And -- and if you can't, that sounds like coercion to me. GENERAL VERRILLI: I think -- I think Congress predicted that States would stay in this 65 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 program, but the -- prediction is not coercion. And the reason Congress predicted it, I think, Justice Scalia, is because the Federal government is paying 90-plus percent of the costs. It increases State costs -- So what do you predict? If JUSTICE SCALIA: you predict the same, that 100 percent of the States will accept it, that sounds like coercion. GENERAL VERRILLI: coercion. Prediction is not That's just an I disagree, Justice Scalia. assumption, and if it proves to be wrong, then Congress has time to recalibrate. And beyond that, I do think if -- I just want to go back to the other part of Your Honor's point -- that with respect to the relationship between Medicaid and the Act, and particularly the minimum coverage provision, my -- my friend Mr. Clement has suggested that you can infer coercion because with respect to the population to which the provision applies, if there's no Medicaid, there's no other way for them to satisfy the requirement. I want to work through that for a minute if I may, because it's just incorrect. First of all, with respect to anybody at 100 percent of the poverty line or above, there is an alternative in the statute. It's the exchanges with tax So credits and with subsidies to insurance companies. 66 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 with respect to that, the part of the population at 100 percent of poverty to 133 percent of poverty, the -- the statute actually has an alternative for them. For people below 100 percent of poverty, it -- it is true that there is no insurance alternative. But by the same token, there is no penalty that is going to be imposed on anybody in that group. To begin with, right now, the -- the level of 100 percent of poverty is $10,800. The -- the requirement for filing a Federal income tax return is $9,500. So anybody below $9,500, no penalty, because The they don't have to file an income tax return. sliver of people between $9,500 and $10,800, the question there is are they going to be able to find health insurance that will cost them less than 8 percent of their income. JUSTICE ALITO: Well, I'm not -- in selling If there this argument -- take the poorest of the poor. is no Medicaid program, then they're not going to get health care. Isn't that right? GENERAL VERRILLI: this -- JUSTICE ALITO: So Congress obviously Yes, that's true. But assumed -- it thought it was inconceivable that any State would reject this offer, because the objective of 67 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the Affordable Care Act is to provide near-universal care. And Medicaid is the way to provide care for at So it -- it just didn't And when -- least the poorest of the poor. occur to them that this was a possibility. when that's the case, how can that not be coercion? Unless it's just a gift. gift. Then it comes back to the question of whether you think it makes a difference that the money -- a lot of the money to pay for this -- is going to come out of the same taxpayers that the States have to tax to get their money. GENERAL VERRILLI: This is -- this is a -- Unless it's just purely a this is -- these are Federal dollars that Congress has offered to the States and said, we're going to make this offer to you, but here's how these dollars need to be spent. This is the essence of Congress's Article I authority under the General Welfare Clause and the Appropriations Clause. This is not some remote contingency, or an effort to leverage in that regard. This is how Congress is going to have the Federal government's money be used if States choose to accept it. Yes, it was reasonable for Congress to predict in this circumstance that the States were going 68 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to -- to take this money, because -- because it is an extremely generous offer of funds: the funding. 90-plus percent of States can -- can expand their Medicaid coverage to more than 20 percent of their population for an increase of only 1 percent -- CHIEF JUSTICE ROBERTS: deal -- GENERAL VERRILLI: -- of their funding. -- why do you care? If it's such a good CHIEF JUSTICE ROBERTS: If it's such a good deal, why do you need the club? GENERAL VERRILLI: Well, the -- the -- It's a good deal, CHIEF JUSTICE ROBERTS: take it. We're not going to -- if you don't take it, We're not going to -- That's a judgment for you're just hurting yourself. GENERAL VERRILLI: Congress to make about how the Federal -- how Federal funds are going to be used if States choose to accept them, and Congress has made that judgment. That's Congress's judgment to make, and it's -- it doesn't mean that it's coercive. CHIEF JUSTICE ROBERTS: 15 minutes. GENERAL VERRILLI: (Laughter.) JUSTICE KENNEDY: 69 Alderson Reporting Company You have another Lucky me. But the -- but the point Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 is -- but the -- the point is, there's -- there's no real -- JUSTICE SOTOMAYOR: JUSTICE KENNEDY: no realistic choice. Can we go back -- There's no real -- there's And There's no real choice. Congress does not in effect allow for an out -- opt out. We just know that. And it's -- GENERAL VERRILLI: JUSTICE KENNEDY: GENERAL VERRILLI: Kennedy -- JUSTICE KENNEDY: with that test. GENERAL VERRILLI: I would go back to the I recognize the problem No, I guess I -- -- it's substantial. I would go back, Justice fact that 60 percent of the Medicaid spending is now optional. It's -- it's a result of choices that States have made that -- it's expanded the -- JUSTICE KENNEDY: Even though they're now frozen in, per our earlier discussions, to a large extent. GENERAL VERRILLI: Well, no -- to a more -- much more modest extent was my point, Justice Kennedy. For example, optional services where a huge amount of money is spent -- more than $100 billion annually -- the 70 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 largest component of that is nursing home services. That remains optional. It's -- right now, once the minimum -- once the maintenance provision remains in place, States have the flexibility to that -- reduce those numbers. States have considerable flexibility now and going forward with respect to the way that money is spent. And I do think in terms of evaluating whether this expansion should be considered coercive has got to be evaluated against the backdrop of the fact that the States are generally taking -- are generally taking advantage of the opportunities of this statute to greatly expand the amount of money that the Federal government spends and the amount of money that they spend to try to make the -- the lives of their citizens better. I think -- JUSTICE KENNEDY: Of course, they have to do so by hiring a very substantial number of more employees. There will be State employees. There'll be substantial State administrative expenses that are not reimbursed. GENERAL VERRILLI: Well, but -- I would take Part of the issue with that, Justice Kennedy. Affordable Care Act is that it -- it provides for new streamlined eligibility processes to get people into the 71 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 system at a -- at a much faster and cheaper rate. are going to be costs to set that up. There But under the statute, the Federal government is going to pay 90 percent of those costs, the short-term set-up costs. And then all of the projections that we have seen suggest that the medium- to long-term costs once these changes are in place are going to be dramatically lower -CHIEF JUSTICE ROBERTS: GENERAL VERRILLI: side. CHIEF JUSTICE ROBERTS: Obviously, the And what if, Well, what -- -- on the administrative Federal government isn't bound to that. after the 90 percent, they say well, now -- from now on, we're going to pay 70 percent? What happens then? Where does that extra money come from? GENERAL VERRILLI: Well, I think -- then the States would have a choice at that -- at that point whether they were going to stay in the program or not. But that isn't what we have here, and -- CHIEF JUSTICE ROBERTS: There's no -- they can just bail out -- whenever the government reduces the amount of the percentage that it's going to pay, the States can say, that's -- that's -- GENERAL VERRILLI: 72 Alderson Reporting Company Well, I'm not saying it Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 would be an easy choice, Mr. Chief Justice. JUSTICE SCALIA: They'd have to bail out of Not just there. Right. That would be -- Medicaid, you're talking about. GENERAL VERRILLI: JUSTICE SCALIA: GENERAL VERRILLI: be the option. The option. Right. That that would They can leave Medicaid if they decide I'm not saying this that that isn't working for them. is an easy choice. I'm also not saying it would happen, because the Secretary does have this discretion -- CHIEF JUSTICE ROBERTS: has the discretion. Well, the Secretary We're talking about something else. We're talking about fiscal realities, and whether or not the Federal government is going to say we need to lower our contribution to Medicaid and leave it up to the States because we want the people to be mad at the States when they have to have all these budget cuts to keep it up, and not at the Federal government. GENERAL VERRILLI: That would be true, Mr. Chief Justice, whether this Medicaid expansion occurred or not. CHIEF JUSTICE ROBERTS: I know, but you've been emphasizing that the Federal government is going to pay 90 percent of this, 90 percent of this, and it's -- it's not something they can take to the bank, because 73 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the next day or the next fiscal year, they can decide we're going to pay a lot less. And you, States, are still on the hook, because you -- you don't -- you say it's not an easy choice. coercion. Medicaid. We can say -- ask whether it's You're not going to be able to bail out of You just have to pay more because we're going to pay less. GENERAL VERRILLI: Well, like I said, I -- I agree that it would be a difficult choice in some circumstances. But that is not to say it's coercion as And I a legal matter or even as a practical matter. think it would depend on what the circumstances were on how -- and I think trying to think about how a court would ever answer the question of whether it was coercive, it was too difficult as a practical matter for States -- JUSTICE SOTOMAYOR: to -- GENERAL VERRILLI: JUSTICE SOTOMAYOR: -- to withdraw. -- go back to that. General, I'm trying Because Justice Kennedy asked you whether there is -- I think he said it's -- it's coercion if no one can be politically accountable. I'm not sure how that could be practically politically accountable, because almost every gift -- if the terms are attractive, it would be 74 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 an unattractive political alternative to turn it down. Dole itself was one of those cases. I think every State raised the drinking age to 21; correct? GENERAL VERRILLI: Yes, Justice Sotomayor, and this argument was raised in Dole, and the Court rejected it as a -- JUSTICE SOTOMAYOR: I guess my point is that What can I political accountability has two components: do if I like something, and what can I do if I don't like something. And if people really like something like Medicaid, they were not going to let you drop it, correct. GENERAL VERRILLI: Well, the citizens of the State, but that's the citizen of the State acting -- JUSTICE SOTOMAYOR: Exactly. That's the whole point that's their choice, right? GENERAL VERRILLI: citizens of the State. -- in the capacity of the And I think that's why I get -- try to get back to the point, that's why I think this is wrong to think about this as coercion, because this is a program that works effectively for the citizens of the State, and States' governments -- and States governments think that and that's why it has expanded the way it has expanded, because it's providing an essential service for millions of needy citizens in these States. 75 Alderson Reporting Company It's Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 providing access to health care that they would not otherwise have. CHIEF JUSTICE ROBERTS: the Dole case. You mentioned the -- Now, what was the -- the threat in that case, raise your drinking age to 21 -- 21 or what? GENERAL VERRILLI: your highway funds. CHIEF JUSTICE ROBERTS: percentage? GENERAL VERRILLI: Seven percent, yes. Yes. It's a pretty Do you remember the Or lose a percentage of CHIEF JUSTICE ROBERTS: small amount. That is really apples and oranges when you are talking about lose all of your Medicaid funds or lose -- I thought it was 5, but 7 -- 7 percent of your highway funds. GENERAL VERRILLI: It's -- I think I agree with Your Honor, that it's -- that it's different, but I don't think that that makes coercion as -- as a legal matter. As I said, I think that this is a situation in which the -- if the States -- is it -- I'm saying it won't be an easy choice, but the States made the choice, they have made the choice. And -- They made a choice with Some governors rejected JUSTICE SOTOMAYOR: the stimulus bill, didn't they? the stimulus bill -- 76 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to that. it. GENERAL VERRILLI: correct, Justice Sotomayor. JUSTICE SOTOMAYOR: That is -- that's -- and some of -- some of their congressional or legislative processes overturned that -- GENERAL VERRILLI: JUSTICE SOTOMAYOR: That's right. -- and others supported The percentages were smaller, but it's always the preference of the voters as to what they want, isn't it? GENERAL VERRILLI: That is correct. What was the threat CHIEF JUSTICE ROBERTS: in the stimulus bill, what would the State lose? GENERAL VERRILLI: Mr. Chief Justice. CHIEF JUSTICE ROBERTS: Would anything be That answer I don't know, taken away or would it just lose the opportunity to get the money? GENERAL VERRILLI: I don't know the answer I don't know the answer to that. But if I may just say in conclusion that -- I would like to take half a step back here, that this provision, the Medicaid expansion that we are talking about this afternoon, and the provisions we have talked about yesterday, we have been talking about them in terms of their effect as measures that solve problems, 77 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 problems in the economic marketplace, that have resulted in millions of people not having health care because they can't afford insurance. There is an important connection, a profound connection between that problem and liberty. And I do think it's important that we not lose sight of that. That in this population of Medicaid eligible people who will receive health care that they cannot now afford under this Medicaid expansion, there will be millions of people with chronic conditions like diabetes and heart disease, and as a result of the health care that they will get, they will be unshackled from the disabilities that those diseases put on them and have the opportunity to enjoy the blessings of liberty. And the same thing will be true for -- for a husband whose wife is diagnosed with breast cancer and who won't face the prospect of being forced into bankruptcy to try to get care for his wife and face the risk of having to raise his children alone and I can multiply example after example after example. In a very fundamental way this Medicaid expansion, as well as the provisions we discussed yesterday, secure of the blessings of liberty. And I think that that is important as the Court's considering these issues that that be kept in mind. 78 Alderson Reporting Company The -- the Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Congress struggled with the issue of how to deal with this profound problem of 40 million people without health care for many years, and it made a judgment, and its judgment is one that is, I think, in conformity with lots of experts thought, was the best complex of options to handle this problem. Maybe they were right, maybe they weren't, but this is something about which the people of the United States can deliberate and they can vote, and if they think it needs to be changed, they can change it. And I would suggest to the Court with profound respect for the Court's obligation to ensure that the Federal Government remains a government of enumerated powers, that this is not a case in any of its aspects that calls that into question. That this was a judgment of policy, that democratically accountable branches of this government made by their best lights, and I would encourage this Court to respect that judgment and ask that the Affordable Care Act, in its entirety, be upheld. Thank you. CHIEF JUSTICE ROBERTS: Thank you, General. Mr. Clement, you have 5 minutes. REBUTTAL ARGUMENT OF PAUL D. CLEMENT ON BEHALF OF THE PETITIONERS MR. CLEMENT: Thank you, Mr. Chief Justice 79 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and may it please the Court: Just a few points in rebuttal. First of all we talked a lot about the sort of hallmark of coercion, your money or your life, with somebody with a gun. I would respectfully suggest that it is equally coercive or certainly not uncoercive if I say your money or your life, and by the way, I have discretion as to whether or not I will shoot the gun. the coercion. I also don't think this is a discretion that the Secretary would ever be able to exercise. And the I don't think that eliminates reason is, we disagree on the details, but the Solicitor General and I agree that over the years Congress has had different approaches to expanding Medicare. Sometimes, as in 1972, it makes the expansion voluntary; that's also by the way that happened with the stimulus funds, which were voluntary funds. You didn't lose all your Medicaid funds, which is why 17 States could say no. Sometimes they take the voluntary approach. Sometimes, as in 1984, they take the mandatory approach. If the Secretary exercised the discretion to say you know what, it really isn't reasonable for you to have to give up your funding for the visually impaired and the disabled just to cover these newly eligible people, so we will make it voluntary; we'll make that 80 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 discretionary -- that would essentially be creating -- converting a 1984 amendment approach to a 1972 amendment approach, and I just don't think that is the kind of discretion that the Secretary has, with all due respect. Now moving on to the next point, Justice Alito, your hypothetical I think aptly captures the effect on this, based on the fact that these tax dollars are being taken from the State's tax base, and it's not like Steward Machine, where the Federal Government would say, and oh, by the way, if you don't take the option we are giving you, we are going to have a Federal substitute that will go in and we will take care of the unemployed in your States. Here if you don't take this offer we are giving you, your tax dollars will fund the other 49 States and you will get nothing. But of course, this situation is much more coercive even than your hypothetical, because it is tied directly to the mandate. It's also tied to the -- to participation in So it is as if there was yet the preexisting program. another program for post-secondary education; they gave them exactly your option -- option -- and then they also said, oh, and by the way; you not only -- not get these funds, but you lose the post-secondary fund as well. It's really hard to understand tying the 81 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 preexisting participation in the program as anything other than coercive. The Solicitor General makes a lot of the fact that there are optional benefits under this program. Well, guess what? After the Medicaid expansion there will be a lot less opportunity for the States to exercise those options, because one of the things that the expansion does -- precisely because the expansion is designed to convert Medicaid into a program that satisfies the requirement of the minimum essential cover of the individual mandate, things that used to be voluntary will no longer be voluntary. example is prescription coverage. The perfect It's a big part of the benefits that some States but not all provide voluntarily now. It will no longer be voluntary after the expansion, because the Federal Government has deemed that prescription drugs to be part of the minimal essential health coverage that everybody in this country must have after the manned date. So that option that the State has is being removed by the expansion itself. The Chief Justice made the point -- JUSTICE GINSBURG: Mr. Clement, may I ask It one question about the bottom line in this case? sounds to me like everything you said would be to the effect of, if Congress continued to do things on a voluntary basis, so we are getting these new eligibles, 82 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and say States, you can have it or not, you can preserve the program as it existed before, you can opt into this. But you are not asking the Court as relief to say, well, that's how we -- we -- that's how we cure the constitutional infirmity; we say this has to be on a voluntary basis. Instead, you are arguing that this whole Medicaid addition, that the whole expansion has to be nullified; and moreover, the entire health care act. Instead of having the easy repair, you say that if we accept your position, everything falls. MR. CLEMENT: Well, Justice Ginsburg, if we can start with the common ground that there is a need for repair because there is a coercion doctrine and this statute is coercion, then we are into the question of remedy. And we do think, we do take the position that you describe in the remedy, but we would be certainly happy if we got something here, and we got a recognition that the coercion doctrine exists; this is coercive; and we get the remedy that you suggest in the alternative. Let me just finish by saying I certainly appreciate what the Solicitor General says, that when you support a policy, you think that the policy spreads the blessings of liberty. But I would respectfully suggest that it's a very funny conception of liberty that forces somebody to purchase an insurance policy 83 Alderson Reporting Company Official - Subject to Final Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 whether they want it or not. And it's a very strange conception of federalism that says that we can simply give the States an offer that they can't refuse, and through the spending power which is premised on the notion that Congress can do more because it's voluntary, we can force the States to do whatever we tell them to. That is a direct threat to our federalism. Thank you. CHIEF JUSTICE ROBERTS: Clement. Thank you, Mr. And thank you, General Verrilli, Mr. Kneedler, Mr. Carvin, Mr. Katsas, and in particular, of course, Mr. Long and Mr. Farr. The case is submitted. (Whereupon, at 2:24 p.m., the case in the above-entitled matter was submitted.) 84 Alderson Reporting Company Official - Subject to Final Review 85 A abide 56:9 ability 6:15 35:11 37:20 60:16 able 56:24 60:11 67:14 74:5 80:11 abortions 7:20 above-entitled 1:12 84:15 absolute 14:4 17:18 63:3 absolutely 24:12 34:17 38:1,15 abstract 43:21 abuse 17:10 26:20,22 27:9 abusive 59:21 accept 9:10 21:24 33:14 40:18 42:22 52:22 60:18 66:7 68:22 69:17 83:10 access 39:19 76:1 accomplish18:1 accomplishes 56:2 account 5:22 accountability 37:2 38:4 39:7 62:17 63:13 64:12 65:1 75:8 accountable 28:24 74:23,24 79:16 acknowledge 43:19 60:15 act 13:21 14:9 15:10,20,22,25 44:6 50:6,9 56:5,23 60:15 61:8,21,21 63:23 66:14 68:1 71:24 79:19 83:8 acting 6:2,4 14:14 75:14 action 13:20 34:20 acts 63:13 actual 8:23 Act's 3:11 39:17 ADA 14:16 add 16:9 47:2 added9:18 addition 62:8 83:7 additional 62:11 address 42:1 63:21 addressed41:9 administer37:20 administered 37:15 administering 37:11 38:22 62:19 administrable 30:15 administrative 13:21 14:8 34:25 60:10,15 71:20 72:10 administrator 62:20 admit 6:18 adults 27:23 advance 48:14 advantage 71:12 affect 43:1 afford 20:23 39:20 78:3,8 Affordable 39:17 56:5,23 68:1 71:24 79:19 afternoon 3:4 49:18 77:23 age 47:10 75:3 76:5 agency 13:3 37:7 aggressively 30:3 ago 9:18 58:22 agree 4:25 15:21 15:22 38:15 43:5,7 61:9 74:9 76:16 80:13 agreed5:13 ahead 49:12 57:22 AL 1:3,7 Alito 44:15 45:18 46:1,4,6 56:4 67:17,23 81:6 allow70:6 allowed22:10 allows 36:23 alternative 66:24 67:3,5 75:1 83:19 amend 47:17 amendment 22:10 81:2,2 amendments 24:11 Americans 39:18 amici 7:7 amount 7:25 24:5 25:12 32:23,25 33:5 35:2,9 44:21 70:24 71:13,14 72:23 76:12 analogy 53:22 analyze 48:10 annually 70:25 answer3:12 19:8 23:2 26:4 34:22 36:25 37:2 52:14 55:7 65:6 65:13 74:14 77:13,18,19 answering 35:7 anybody 50:17 66:22 67:7,11 APA 59:20 61:6 61:7 APPEARANC... 1:15 appendix 9:15 16:14 apples 76:12 applies 22:5 50:15 66:18 apply 50:17 61:7 61:17 62:7 applying 17:11 appreciate 48:18 48:19 52:13 83:21 approach 80:19 80:20 81:2,3 approaches 80:14 approaching 5:12 appropriate 19:6 43:18 Appropriations 68:19 approximately 25:12 aptly 81:6 arbitrary 17:9 59:21 area 30:6 46:14 58:13 63:23,24 argue 25:20,21 arguing 83:6 argument 1:13 2:2,5,8 3:4,7,17 3:22,23 4:14 17:12 28:9 35:19 36:1,4 39:13 45:21,23 49:16,21 51:9 56:20,21 64:24 67:18 75:5 79:23 arguments 51:8 argument's 62:24 arises 44:14 arising 46:8 Arizona 16:17,17 16:20 48:1 49:5 54:9 Article 63:25 68:17 articulated49:17 asked4:20 33:11 55:1 74:21 asking 34:15 39:24 83:3 aspect 36:5 aspects 79:14 assume 36:19 43:14 assumed67:24 assuming 43:3 assumption 8:10 48:10 65:19 66:10 assurance 47:22 athletic 21:20 attached4:4 33:22 40:15 attractive 74:25 authority 12:25 44:5 47:23 48:2 48:8 49:1 52:21 56:17 58:15,24 61:15 63:25 68:18 automatically 29:23 available 47:24 B B 1:18 2:6 39:13 back 20:25 34:12 35:18 42:25 Alderson Reporting Company Official - Subject to Final Review 86 48:22 50:9 55:11 62:4 66:12 68:8 70:3 70:11,15 74:20 75:19 77:21 backdrop 71:10 bad 20:21 bail 72:22 73:2 74:5 balance 28:5 bank 5:22 73:25 bankrupt 7:15 bankruptcy 78:18 bar 61:6 bargaining 45:3 base 81:8 based49:23 55:24 62:10 65:19 81:7 basic 14:8 15:2 basically 29:24 62:9 basis 82:25 83:6 beachhead 30:10 beautiful 38:2 becoming 48:14 beginning 14:2 15:2 behalf 1:16,19 2:4,7,10 3:8 36:1 39:14 79:24 believe 14:15 beneficiaries 50:2 benefit 37:11 benefits 9:19 50:18,19 82:3 82:13 Benny 31:2 best 25:5 39:4 79:5,17 better17:3 35:8 39:6 51:18 71:16 beyond 50:2,3,24 51:6 52:23 53:8 55:25 66:11 big 3:24 4:23,24 7:13 24:5,5 25:8,13 51:25 56:10 62:17 82:12 bigger28:10,14 52:5,8 bill 36:23 76:24 76:25 77:12 billion 16:22 24:19,19 59:16 70:25 bit 25:16 49:18 52:14 blaming 44:8 blessings 78:14 78:23 83:23 blue 9:15 11:18 11:19 board 7:11 boat 4:12 boatload 4:2,5 4:11,15 bottom 82:22 bound 72:13 bow33:4 branches 79:16 break 27:14 breast 78:16 breathtaking 24:17 Breyer10:25 11:3,4,10,13 11:16,18,20,25 12:3,4,7,10,13 12:16,21,23 13:2 14:1,6,21 14:23 15:8,19 16:7,25 17:2,14 24:1,9 25:11 52:11,12 53:3,7 54:25 55:5,14 59:10 60:4 61:11 62:1,2 brief 4:14 9:15 11:15,16,18,19 briefs 49:17,19 bring 37:5 broken26:15 brother59:24 budget 7:9 8:16 19:1 58:7 63:4 73:17 budgetary 51:1 building 37:16 built 4:18 38:9 burden35:2 44:18 bureaucracies 36:23,24 37:10 business 62:8 buy 59:1 53:18 61:15 carry 64:6 Carvin 84:11 case 3:4 7:3 10:7 13:17 22:17 23:23,24 30:9 35:7 43:11,14 43:18,23,25 46:2,24 48:6,10 54:19 55:6 56:7 61:19,23 62:1 68:5 76:4,5 79:14 82:22 84:13,14 cases 17:4,7 22:20 34:13,16 40:2 75:2 categories 13:6 13:9 causally 14:11 central 39:8 certain 6:22 16:1 C 23:4 29:22 C 2:1 3:1 38:10 59:14 calculation 63:5 61:20 calendar 45:4 certainly 35:5 call 34:4 46:18 64:4,15 80:6 called10:14 27:7 83:16,20 50:12 certainty 17:18 calls 79:14 certificate 38:12 cancer78:16 38:12 capacity 75:17 cetera 17:11 capricious 17:10 challenge 18:16 59:21 chamber53:12 captures 81:6 chance 21:5 care 18:2 34:24 change 27:20 39:17,19 51:18 48:3 79:10 56:5,6,23 57:10 changed79:10 57:12 58:2,12 changes 72:7 67:20 68:1,2,2 cheaper72:1 69:9 71:24 76:1 check 30:19 78:2,8,11,18 Chief 3:3,9 28:6 79:3,19 81:13 30:16,18 32:9 83:8 32:19 33:16 careful 30:2 34:2 39:10,15 41:8,11,17,19 42:2,7,12,20 43:12 47:21 48:12,18 49:4,8 49:11,15 53:21 54:2,6,13,16 54:17,21 55:7 57:2,20,22 58:4 59:3 64:5 69:6 69:9,12,21 72:9 72:12,21 73:1 73:11,20,22 76:3,8,11 77:11 77:14,15 79:21 79:25 82:20 84:9 childless 27:22 children24:2,3 47:10 51:19 78:19 China 33:7 CHIP 16:18,21 choice 5:20 18:22,23 19:2 20:22 31:5,6,8 31:16 32:22 39:1 40:18 41:2 43:1 45:20,24 47:8 51:24 54:4 65:3 70:5,5 72:18 73:1,9 74:4,9 75:16 76:21,21,22,23 choices 38:16 49:24,24 50:1 70:17 choose 19:3 68:22 69:17 chooses 18:6 choosing 28:12 chose 17:23 chronic 78:10 circa 24:17 circumstance 68:25 Alderson Reporting Company Official - Subject to Final Review 87 circumstances 41:24 43:20 47:24 48:22 59:5,6 62:12 74:10,12 cite 12:4,16 14:25 54:9 citizen6:3,4 37:13 38:21,25 64:12 75:14 citizenry 6:16 28:24 37:5,8 citizens 35:12,17 45:9 62:18 71:15 75:13,18 75:21,25 city 40:24 claim 6:22 clarification 3:16 60:2 class 45:4 Clause 39:21 40:4 43:3 68:18 68:19 clear 62:18 63:12 64:12 Clement 1:16 2:3 2:9 3:6,7,9,15 3:20 4:8,17 5:5 5:6,15,21,25 6:1,9,20 7:1,23 8:19,22 9:22 11:2,9,11,14 11:17,19,21 12:2,6,9,12,15 12:19,22,25 14:1,19,22 15:18,24 16:5,9 17:1,14,22 18:11,20 19:7 19:24 20:2,15 21:3,8,13 22:3 23:1,11 24:9,22 24:24 25:9 26:4 26:10,25 27:12 28:9 29:7 30:16 31:12,15,21 32:14 33:2 34:1 34:20 35:5,22 35:25 36:3 37:1 37:17,24 38:15 39:11 66:15 79:22,23,25 82:21 83:11 84:10 clients 14:13 climate 63:9 close 7:9 club 69:10 code 27:4 coerced6:24 20:9,13 21:21 21:24 32:1 coercion 3:14,25 8:3,11 18:16,22 22:5,20,22 23:6 30:10 31:6,23 34:7,17 35:1 38:18 40:10 41:9,20,23 42:23 45:16 51:8 52:5,8 54:15,18,19,20 63:17,19 64:17 65:23 66:1,7,9 66:16 68:5 74:5 74:10,22 75:20 76:18 80:3,9 83:13,14,18 coercive 3:13 4:6 4:16 5:14 7:4,6 7:12,25 8:14,18 8:23 9:1 14:3 18:9 19:13 22:24 23:21 24:13 25:2 29:23 30:3,12 30:23 31:10 36:6,13 38:24 39:25 40:3 42:4 42:14 43:24 56:22 59:8 62:14 65:3 69:20 71:9 74:15 80:5 81:17 82:2 83:18 colleague 59:23 colleagues 22:12 28:7 collecting 6:8 collective 45:3 colleges 21:13 21:18 22:18 23:10 come 5:10,19 33:7 62:23 65:12 68:11 72:16 comes 14:2 21:17 65:4 68:8 coming 24:6 33:9 48:14 commerce 23:18 commit 48:16 53:19 55:2 commitment 56:17,18 common55:8 58:1 83:12 companies 66:25 comparable 25:17,21 complain 37:14 38:21,25 39:2 complaining 24:7 complains 38:21 complaint 19:15 37:6 complete 58:14 completely 44:19 complex 79:5 complexity 15:9 complies 39:21 comply 13:4 52:19 component 71:1 components 75:8 compromised 33:19 conceivable 65:14,17 conceive 65:21 conception 55:20 83:24 84:2 concern 14:7 20:16 43:6,15 58:13 concerned36:20 36:21 48:7 concerns 63:22 conclusion 77:20 condition 4:23,24 9:20 33:13 36:13 40:15 41:6 52:19,22 56:15 59:14 conditions 4:4,15 4:19 5:1 7:17 15:6 19:20 26:21 29:15,20 41:6 45:2 56:9 78:10 conformity 79:4 confusing 37:13 37:18 Congress 5:1 8:7 9:9,18,25 10:12 10:19 11:5 17:24 18:5,7,13 19:10,14 20:17 22:6,7,10,14 23:5,14,16 26:18 27:2,9,10 27:14 30:2,14 34:9,13 36:11 44:5,16 62:10 65:15,18,25 66:2,10 67:23 68:14,21,24 69:16,18 70:6 79:1 80:13 82:24 84:5 congressional 77:4 Congress's 10:21 68:17 69:19 conjured16:24 connection 42:9 78:4,5 conscious 9:9 consequence 27:14 33:17 34:5,6,11 36:16 57:4 consider44:12 considerable 71:6 considered35:10 43:18 44:13 71:9 considering 78:24 consistent 17:25 Constitution 39:9 43:4,9 constitutional 27:1,6 83:5 constitutionality 3:11 constraint 46:8 46:16 60:11 constraints 46:13,18 contend 39:23 context 23:13 44:13,16 47:15 49:22 contingency 68:20 continue 3:3 9:6 18:8 continued82:24 continues 6:14 Alderson Reporting Company Official - Subject to Final Review 88 continuing 33:12 contribution 73:15 control 50:21 convert 82:8 converting 81:2 cooperation 29:19 cooperative 28:12 37:18 38:2,5,16 correct 49:2 50:5 57:18 75:3,12 77:2,10 correlation 21:8 cost 3:18,19 67:15 costs 35:1 50:21 66:4,4 72:2,4,4 72:6 counsel 7:5 35:15 count 35:3 62:14 country 22:23 37:10 49:23 82:17 couple 29:8 62:5 course 4:19 5:12 9:8 32:24 45:1 46:23 49:10,11 54:24 58:17 63:14 65:10 71:17 81:16 84:11 court 1:1,13 3:10 10:7 14:13 16:12,14 17:7 17:16 22:9,17 22:23 39:16,24 40:8 43:16 74:13 75:5 79:11,18 80:1 83:3 courts 40:12 62:7 Court's 8:5 17:15 39:22 78:24 79:12 cover10:1,22 11:6 27:24 80:24 82:10 coverage 9:12 19:1 27:11 66:15 69:4 82:12,17 covered10:18 27:23 covering 9:25 covers 11:7 Coyle 40:15 create 21:20 created10:6,12 creating 81:1 credits 66:25 criminal 27:4 crisis 51:1 critical 33:15 36:4 crossed23:24 cure 83:4 current 18:14 26:18 51:16 curriculum 45:4 cut 12:25 13:13 13:25 14:5,10 49:7 52:21,24 53:13 56:13,14 58:8,12 60:16 60:25 cutoff 11:22 12:1 52:15 cuts 19:1 73:17 cut-off 14:16 D D 1:16 2:3,9 3:1 3:7 79:23 date 82:18 day 33:9 49:12 74:1 deal 20:19,21 21:1 33:18 37:21 58:7 69:7 69:10,12 79:1 debate 47:3 decades 58:22 decide 29:16 46:21 51:16 73:7 74:1 decided58:22 decidedly 9:3 26:12 decides 37:3 decision 9:10 10:22 14:16 39:22 decisions 55:24 59:4,4,7 declare 39:25 decreases 6:15 deemed82:15 defend 17:16 defined19:4 definition 18:22 degree 51:4 64:25 deliberate 79:9 demanding 52:8 Democratic 21:7 democratically 79:16 demonstration 50:22 deny 58:23 Department 1:6 1:19 3:5 depend 34:17 63:2,7 74:12 dependent 19:22 21:14 33:20 34:3 43:19 depending 18:5 depends 3:12 36:4 describe 83:16 described53:17 60:4 designed82:8 destroy 20:11 details 80:12 determine 30:22 diabetes 78:10 diagnosed78:16 dicta 40:2 die 28:22 difference 24:15 27:13 34:23 35:10 68:9 different 8:6 9:23 10:17 19:12 22:4 24:14 38:14 42:17,21 47:5 49:18 58:12 59:7,8,10 59:11 76:17 80:14 differently 28:1 difficult 33:6 51:9 59:6 74:9 74:15 dimension 10:11 direct 23:17 84:7 directed51:19 directions 9:23 directly 22:7,8 22:15 27:2 34:14 81:18 disabilities 78:12 disabled19:17 19:23 21:2 28:4 29:11 36:11 80:24 disagree 46:6 66:9 80:12 disagreement 23:16 58:6 discretion 13:5 17:6,10 48:20 52:17 53:20 59:21,23 60:22 60:25 61:20,25 73:10,12 80:7 80:10,21 81:4 discretionary 61:8 81:1 discussed63:19 78:22 discussion 16:10 56:4 discussions 70:20 disease 78:11 diseases 78:13 dissent 63:20 distinct 9:9,23 10:11 district 16:12 doctrine 64:21 83:13,18 doing 36:10,12 36:13,23 57:9 Dole 39:22 40:9 41:5,5,6,23 43:17 63:20 75:2,5 76:4 dollar 25:8 41:15 dollars 68:14,16 81:8,15 DONALD 1:18 2:6 39:13 dramatically 72:7 draw18:19 28:19 30:7,8 drinking 75:3 76:5 drop75:11 drugs 82:16 due 34:1 81:4 D.C 1:9,16,19 E E 2:1 3:1,1 earlier57:25 62:9 64:3 70:20 easy 30:7,9 31:6 Alderson Reporting Company Official - Subject to Final Review 89 46:9 59:4 73:1 73:9 74:4 76:21 83:9 economic 78:1 education 44:18 44:21,22,24 45:10,12 46:21 81:21 effect 35:11 51:5 51:6 65:3 70:6 77:25 81:7 82:24 effectively 30:14 75:21 effort 50:13 68:20 either32:14 47:2 elaborate 37:2 eligibility 50:24 71:25 eligible 4:21 9:13 9:25 10:2,13,20 10:23 11:23 27:19 28:2 78:7 80:24 eligibles 82:25 eliminates 80:8 emphasizing 73:23 employees 71:19 71:19 employer5:7 encourage 79:18 ended51:17 enjoy 78:14 ensure 79:12 entire 5:2 8:5 9:11 20:23 47:7 47:8 83:8 entirety 16:22 79:19 entitled29:5 enumerated8:8 79:13 envision 40:10 equal 44:23 equally 80:5 equation 35:3 era 35:16 especially 45:20 ESQ 1:16,18 2:3 2:6,9 essence 68:17 essential 39:19 75:24 82:9,17 essentially 8:1 81:1 establish30:10 et 1:3,7 17:11 evaluated71:10 evaluating 49:21 71:8 eventually 4:9 everybody 10:18 82:17 evidence 53:24 evidently 65:15 evolution 47:19 exact 3:22,23 exactly 12:15 37:19,23,24 38:4 44:21 75:15 81:22 example 22:17 32:17 40:13 41:7 48:1 51:15 51:16 54:10 63:20 70:24 78:20,20,20 82:12 exchanges 50:15 66:24 executive 15:25 exercise 39:20 39:25 53:1,20 80:11 82:6 exercised48:11 56:18,19 61:25 80:21 exercising 48:8 exhausted28:7 Exhibit 16:13 existed83:2 existing 10:4 50:7 exists 18:13 83:18 exit 51:25 expand 23:7,18 29:16 50:1,3 52:13 55:25 64:7 69:3 71:13 expanded47:9 50:23 70:18 75:23,24 expanding 80:14 expansion 3:12 3:13 20:5,7,18 24:16,20 25:18 25:19 27:16 39:17 47:6,7,12 49:16 50:14 51:13,14 60:13 71:9 73:20 77:22 78:9,22 80:15 82:5,7,8 82:15,19 83:7 expansions 9:24 10:8,9 27:11 52:2 55:22 expenditure 50:7 expenditures 44:18 49:23 expenses 71:20 experts 79:5 explain 56:25 explains 36:8 explicit 14:16 explicitly 61:20 export 33:8 extend 24:10 extension 24:2,3 extensions 24:4 extent 6:14 28:23 47:23 36:16,17,22 37:3,4,6,6,7,8 37:10 38:6,7,8 38:10,19,23 39:2,4 40:3 41:12,15 42:23 42:24,25 43:3 44:20 45:10,12 F 46:9 47:1,17 face 8:14 78:17 50:2,3 51:15,20 78:18 51:21 55:12,25 fact 9:2,8 14:5 57:25 58:9,18 26:11,13 33:11 58:23,24 59:13 42:22 47:12 62:13,19 63:6 48:25 52:1 63:22,23,24 70:16 71:10 64:4,6,13 65:8 81:7 82:3 66:3 67:10 factor 9:8 68:14,21 69:16 factors 25:1,2 69:16 71:13 30:11 72:3,13 73:14 facts 55:3 73:18,23 79:12 factual 44:13,15 81:9,12 82:15 fail 42:13 federalism17:15 fails 42:12 34:4 36:20,21 failure 13:7,10 37:19 38:2,3,5 52:19 38:16 39:7,8 fair 38:24 46:4,13 63:12 fairly 25:15 63:21 64:11,11 falls 83:10 84:2,7 far 34:15 43:25 Federal/State Farr 84:12 37:19 faster72:1 feel 6:24 17:2 favor 13:11 20:8,13 28:24 fear 14:18 15:5 60:11 28:9 Ferra 22:17 federal 3:17,18 figure 20:25 21:4 3:25 4:1,5 6:2,5 figured6:10 6:6,7,14,19,23 figures 7:7 57:16 7:14,16,19,21 file 67:12 17:23 22:23 filing 67:10 24:18 28:11,13 financial 44:18 28:17,21 29:1 45:15 29:12 33:18,21 find 13:16 53:7 33:22,24 34:9 67:14 34:23 35:3,18 fine 45:8 56:12 48:8 70:21,23 extra 72:16 extraneous 4:4 4:15 extremely 69:2 eyeglasses 59:15,20 Alderson Reporting Company Official - Subject to Final Review 90 finish83:20 first 3:13 4:20 19:9 29:18 30:19 34:22 40:6 46:6 51:7 56:20 66:22 80:2 fiscal 73:13 74:1 flexibility 37:22 38:9 50:19 71:4 71:6 floated16:17 Florida 1:3 3:5 35:17,20 36:21 flowing 51:17 focus 27:18 focusing 8:24 follow45:6 following 28:9 Footnote 25:6 force 17:16 38:19 84:6 forced78:17 forces 83:25 forever10:16 forevermore 11:24 Forget 32:18 forth 39:22 55:12 forward 10:16 26:16 38:1 47:17 71:7 found 55:6 fraud 26:20,22 27:9 free 7:3 35:13 freezes 50:9 friend 46:24 66:15 friends 51:4 64:23 frivolity 32:20 front 12:7,11 frozen62:10 70:20 fully 49:22 46:19 48:12,20 function 8:17 48:24 49:2,6,14 fund 13:13 21:15 50:11 51:18 26:15 81:15,24 52:6,9 53:2,6 fundamental 53:16 54:1,5,12 40:16 46:11 54:15,20,24 78:21 55:4,10,16,18 fundamentally 56:3,16 57:1,18 19:12,13 57:21,23 59:2 funding 7:8 11:22 60:3,9,20 61:2 12:1 13:14 16:3 61:5,9,13,24 17:20 22:18 62:4,21,23 41:15 52:17,18 63:14,18 64:2 59:17 62:13 64:15,19,22 63:23 69:3,8 65:9,24 66:8 80:23 67:21 68:13,18 funds 4:3,16 9:11 69:8,11,15,23 9:11 21:22 70:9,11,15,22 45:13 53:8,14 71:22 72:10,17 54:9,22 56:13 72:25 73:4,6,19 56:14 57:9,10 74:8,17,19 75:4 58:23 60:17,25 75:13,17 76:6 69:2,17 76:7,13 76:10,16 77:1,6 76:15 80:16,17 77:10,13,18 80:18 81:24 79:21 80:13 funny 31:4 83:24 82:2 83:21 further13:4,16 84:10 13:17,18,19 generally 53:17 future 61:17 56:2 71:11,11 generous 50:8 G 69:2 G 3:1 germane 42:7,13 gain 49:20 51:11 43:24 gauge 25:4 germaneness GDP 25:13,15 41:6,17,22 42:3 25:16,23 getting 42:10,11 Geez51:23 48:22 82:25 general 1:18 gift 3:24 7:13,15 13:22 39:12,13 7:24 38:11,12 39:15 40:6,12 68:6,7 74:25 40:21,25 41:5 Ginsburg 9:16 41:10,16,21 9:22 19:24 20:3 42:5,9,15 43:10 20:4,15 21:12 43:16 44:1,5,10 22:3,19 23:1,9 45:17,19 46:3,5 82:21 83:11 girls 21:20 give 5:4,9 7:12 7:14,16,17,22 10:10 18:4,9 21:22,23 22:2 25:8 28:15 29:14,15,17,19 33:11 34:9 37:20,21 38:12 40:5 44:15,23 47:21 49:13 54:3 61:3,6 62:3 80:23 84:3 given9:19 15:9 23:19 32:2 45:13 47:8 50:1 gives 12:20 17:19 35:20 52:20 giving 4:2 8:17 35:21 38:11 58:24 81:11,15 glad 20:6 go 13:15,17,18 20:25 25:15,16 34:12,15 35:15 35:24 46:22 49:12,14 50:9 52:8,23 57:22 62:4 66:12 70:3 70:11,15 74:20 81:12 God 15:23 going 5:9,12,23 10:16,17 13:19 17:25 18:1,4,15 18:16 19:20 21:1,16 23:2 26:16,20,22 27:19,24,24 28:3,11,13,18 29:14,16,19,25 30:6,7 31:18 32:7,25 33:24 34:7 36:9 37:9 37:25 44:12,19 44:20,23 45:1,2 45:8,8,9,11 46:9,22 47:17 49:13 51:10,20 54:8,21 56:8,8 56:12,13,14,18 57:5,6 58:8 59:4 62:23 67:6 67:14,19 68:10 68:15,21,25 69:13,14,17 71:7 72:2,3,7 72:15,19,23 73:14,23 74:2,5 74:6 75:11 81:11 going-in 45:21 45:23 good 20:7,9,14 22:1,2,24 56:1 69:6,10,12 gotten19:21 34:3 51:25 governed13:20 13:21 24:6 59:20 government 3:17 3:18,25 4:1 5:1 6:2,6,7,14,23 7:14,16,19,21 13:20 14:9 15:3 15:22 17:23 19:5 21:14,17 24:1 28:11,14 28:17,22 29:13 33:21,22,24 34:23 36:17,18 37:3,8 38:10 40:3,17 41:12 42:23,24,25 43:4 46:9 47:1 47:17 48:8 51:15,20 55:12 57:25 58:10,18 Alderson Reporting Company Official - Subject to Final Review 91 58:25 59:13,13 62:19 63:22,24 64:4,7,13 66:3 71:14 72:3,13 72:22 73:14,18 73:23 79:13,13 79:17 81:10 82:15 governments 75:22,22 government's 6:6,19 8:16 25:5 33:18 68:22 governors 21:6,7 76:24 grant 43:13 44:23 61:24 Gray 10:7 great 5:20 12:9 20:19 37:21 44:17,25 greater6:11 greatest 28:8 greatly 71:13 ground 83:12 group 67:7 guarantee 14:4 25:25 guaranteed 24:13 guess 5:15 22:8 27:8 28:8 48:4 48:19 54:18 70:9 75:7 82:4 gun 53:23 80:4,8 H hacked37:5 half 77:21 hallmark 80:3 hallmarks 8:25 handle 79:6 hands 28:11 happen58:3,17 59:18,19 73:9 happened29:9 45:25 80:16 happens 55:8 72:15 happy 83:17 hard 10:21 25:21 34:8 43:20 63:5 81:25 harder31:9 42:6 head 53:23 health 1:6 3:5 18:2 39:19 48:15 56:6 57:10,12 58:1 58:12 60:5 61:16 67:15,20 76:1 78:2,8,11 79:3 82:17 83:8 healthcare 4:6 56:11 healthy 27:22 hear 26:8 heard 11:8 47:22 49:5 hearing 59:25 heart 78:10 heavily 21:14 held 61:21 64:14 help 29:13 36:10 high 63:8 64:25 highway 76:7,15 Hill 17:5,17 hire 5:8 hiring 71:18 history 22:22 46:24 47:14 48:25 Holy 17:5,16 home 32:7 71:1 Honor 16:6 33:2 64:2,7 76:17 Honor's 66:13 hook 74:3 house 40:23 huge 36:22 37:9 44:18 56:9 70:24 human1:7 3:5 48:15 60:5 61:16 hurting 69:14 husband 78:16 hypothetical 5:5 16:11 35:8 40:5 60:4 81:6,18 I idea 4:19 13:23 16:17 27:9 36:8 37:9,18,19 62:5 64:10,11 identified62:9 identity 65:7 Im 5:9 imagine 22:11,12 43:23 impaired19:17 19:23 21:1 28:4 29:11 36:11 80:23 impermissibly 39:25 implement 58:13 implementing 16:1 implicit 14:15 64:10 important 30:8 34:5 38:18 44:11 46:23 49:21 57:7 62:6 78:4,6,24 impose 22:8 44:20 imposed67:7 inceptionally 30:8 includes 61:20 income 6:11 67:10,12,16 inconceivable 67:24 incorrect 50:10 66:21 increase 6:15 9:17 69:5 increases 66:4 independent 33:20 63:17 indicated64:6 individual 9:3 26:12 46:17 82:10 individuals 4:22 6:10 9:13,25 10:2,13,15,20 10:23 11:6,7,23 28:2 inducement 45:16 inevitable 36:15 infants 47:7 51:19 infer66:16 infirmity 83:5 infringement 54:23 inherent 64:10 initially 26:23 inquiry 41:23 insist 30:2 insofar 52:18 instance 53:8 instances 58:3 instructed30:14 instrumentaliti... 37:4 39:5 insurance 36:19 66:25 67:5,15 78:3 83:25 integrity 65:7 interested58:5 interests 28:19 36:20,21 58:19 interpreting 17:10 intrusion 58:19 involved38:7 isolation 53:12 issue 8:24 22:12 41:17 44:12 62:11 71:23 79:1 issues 78:25 It'll 25:15 IX 21:16 22:8 J Jack 31:2 joint 16:14 JR 1:18 2:6 39:13 Judge 14:14 32:15 judgment 16:13 62:12 69:15,18 69:19 79:3,4,15 79:18 jurisprudence 8:5,12 17:15 Justice 1:19 3:3 3:9,15,20,23 4:8,13 5:4,7,18 5:25 6:18,21 7:1,5,23 8:13 8:20 9:16,22 10:25 11:3,4,10 11:13,16,18,20 11:25 12:3,4,7 12:10,13,16,21 12:23 13:2 14:1 14:6,20,21,23 15:8,18,19,21 15:24,25 16:7 16:25 17:1,2,4 17:14,22 18:11 18:18,21 19:7 19:24 20:2,4,15 21:3,9,10,12 Alderson Reporting Company Official - Subject to Final Review 92 22:3,19 23:1,9 24:1,9,21,24 25:7,11 26:7,17 27:8,12 28:6,8 29:7 30:16,18 30:21 31:14,16 31:18,25 32:7,9 32:11,16,19 33:16 34:2,19 34:21,22 35:6,7 35:15,23 36:15 37:17 38:1,5 39:10,15 40:1,8 40:11,19,22 41:2,8,11,17 41:19 42:2,7,12 42:20 43:12,23 44:3,7,15 45:18 46:1,4,6,15,20 47:21 48:12,18 48:24 49:2,4,8 49:10,11,15 50:4,12 52:4,7 52:11,12,14 53:3,7,21 54:2 54:6,13,16,17 54:21,25 55:5,7 55:14,17,19 56:3,4 57:1,18 57:20,22,24 58:4 59:3,10 60:4,7,14,24 61:5,10,11,18 62:1,2,3,15,22 63:11,15,16,20 64:1,5,9,17,20 65:5,11 66:2,5 66:9 67:17,23 69:6,9,12,21 69:25 70:3,4,10 70:11,13,19,23 71:17,23 72:9 72:12,21 73:1,2 73:5,11,20,22 74:17,20,21 75:4,7,15 76:3 76:8,11,23 77:2 77:3,7,11,14 77:15 79:21,25 81:6 82:20,21 83:11 84:9 Justice's 57:3 justified14:11 K Kagan 3:15,20 3:23 4:8,13 5:4 5:7,18,25 17:1 24:21,25 25:7 26:17 27:8,12 34:22 37:17 38:2,5 48:24 49:3 56:3 57:1 57:19 61:5,10 Kagan's 35:7 52:14 Katsas 84:11 keep 18:25 50:6 50:25 51:23 52:17 73:18 Kennedy 31:18 36:15 50:4,12 62:15,22 63:11 63:15,16 64:1,9 64:17,20 65:5 69:25 70:4,10 70:12,13,19,23 71:17,23 74:21 kept 78:25 kids 47:11 kind 38:4 46:11 59:14 81:3 kinds 35:19 38:14 46:10 Kneedler84:10 know5:11,16 6:13 13:23 14:24 15:9 16:11 17:17 18:19 22:20 23:3,23 24:11 25:4 31:2,3,5 32:12 33:4,7,7 33:8 34:3,8 36:24 42:2,20 42:20 43:12,13 43:13,25 44:4 44:17 53:3,5,22 54:25 55:2,5 56:13 61:19,22 63:18 70:7 73:22 77:13,18 77:19 80:22 knows 17:4 37:8 62:1 64:13 L labs 21:19,23 laid 30:15 large 70:20 largely 43:9 largest 71:1 lasts 50:13 Laughter17:13 21:11 26:9 30:20 31:13,20 31:24 32:6,13 36:2 44:9 69:24 law14:8,9 16:4,6 24:8 55:25 59:24 leave 9:21 18:4 32:9 41:14 45:5 45:7 52:12 73:7 73:15 left 46:2 legal 74:11 76:18 legislate 27:9,10 legislation 23:17 30:13 legislative 77:4 legislature 41:1 letter16:15,16 48:1 49:5 let's 23:9,9 32:9 34:3 43:14 44:16 level 15:3 18:25 29:22 39:3 50:6 65:1 67:8 levels 50:24 leverage 36:14 54:11 68:20 leveraged26:13 leveraging 5:2 liberty 78:5,14 78:23 83:23,24 life 31:3,5,9,19 32:4,4,11 53:24 57:3 80:4,7 light 10:19 lightly 37:9 lights 79:17 limit 8:2,2 13:8 27:2 40:14 42:23 limitation 43:8 43:15 60:16 limited13:6 17:9 19:5 limits 23:12 30:15 39:22 line 18:19 19:25 22:5,21 23:24 28:19 30:7,9 34:7,12,17 63:12 64:12 66:23 82:22 literature 63:21 litigation 14:3 15:2 16:16 little 17:2 25:16 30:2 38:3 40:7 48:3 49:18 52:14 60:2 live 58:22 lives 71:15 load 4:12 loathe 57:11 locate 40:23 lodge 16:14 logic 29:3 long 21:16 38:20 40:19 58:18 84:12 longer82:11,14 long-term 72:6 look 7:6 10:22 25:5,12,13,16 25:17 29:13,25 30:23 34:16 44:11 looked53:4,11 lose 15:6 36:9 39:7 41:14 43:7 49:20 51:11 52:10 58:16 62:25 63:7 76:6 76:13,14 77:12 77:16 78:6 80:17 81:24 loses 35:17 losing 16:22 30:24 loss 62:13 lost 62:18 lot 31:9 61:18 68:10 74:2 80:3 82:2,5 lots 79:5 low25:15 63:8 lower6:24 17:16 72:7 73:14 Lucky 69:23 M Machine 40:9 43:17 81:9 mad73:16 maintenance 50:13 71:3 major24:15 47:12 majority 58:2 making 3:16,21 Alderson Reporting Company Official - Subject to Final Review 93 15:1 35:19 45:22 61:11 manageable 27:15 mandate 9:3 26:12 46:17 81:19 82:10 mandates 38:6 mandatory 4:21 10:13 38:3 39:6 80:20 manned82:18 march1:10 14:13 marketplace 78:1 massive 3:11 27:20 matching 4:3,15 4:21 35:16 matter1:12 3:14 3:16,25 7:18,19 7:25,25 23:6,17 30:25 46:5,7 51:12 54:22 59:5 74:11,11 74:15 76:19 84:15 matters 30:10 mean 4:9 9:17 14:24 15:24 16:11 17:7 19:8 23:12,23 24:16 24:22 27:9 29:9 31:1,7,22 33:3 33:5 35:6,8 38:6,20 48:1 49:24 57:3,8 59:11 63:2 69:19 meaning 7:6 18:19 meaningfulness 32:22 meaningless 43:9 means 32:1 38:8 52:22 62:10 meant 40:1 measures 77:25 Medicaid 3:12 7:8 9:17,20 16:22 18:13,25 19:17 23:7,19 24:16,17,22 26:1 27:10,11 27:14 29:9,11 36:18 37:23,25 39:17 46:24 49:16,22 50:7,8 50:14 51:13 55:21,24 60:12 66:14,18 67:19 68:2 69:3 70:16 73:3,7,15,20 74:6 75:11 76:13 77:22 78:7,9,21 80:18 82:4,8 83:7 Medicare 36:18 64:8 80:14 medium 72:6 meet 35:3 mentioned76:3 million5:9,12,19 79:2 millions 39:18 75:25 78:2,9 mind 20:8 78:25 mine 32:12 minimal 82:16 minimum 50:2,3 66:15 71:3 82:9 minor54:22 minute 17:3 56:25 66:20 minutes 69:22 79:22 misconception 56:24 misdescribes 29:9 missed31:22 modest 51:14 70:23 money 4:2,5,15 4:25 5:16,16 6:7 7:3,17 8:17 10:2,24,24 11:5 11:7 13:24,25 14:10,12 15:7 15:10,11,12,12 15:16 19:5,19 19:21 21:18 26:21 28:3,15 28:17,25 29:5 29:14,15 31:3,6 31:19 32:3,24 33:5,6,18 34:14 35:9,13 36:9,9 36:14 37:4 38:8 38:11 42:10,24 42:25 43:8 44:22 45:11 48:4 51:17,18 51:21,24 52:21 52:24 53:23 57:3,12 68:10 68:10,12,22 69:1 70:25 71:7 71:13,14 72:16 77:17 80:4,6 moneys 6:8 morning 49:18 motion 16:13 move 56:20 moving 81:5 multiply 78:20 N N 2:1,1 3:1 nature 22:13 35:9 near 56:6 near-universal 68:1 necessarily 24:10,24 necessary 64:11 need46:10 68:16 69:10 73:14 83:12 needed46:11 needles 26:8 needs 7:22 28:10 43:18 79:10 needy 58:2 75:25 never5:11 20:7 22:22 49:3,6 54:8 60:5,7 nevertheless 61:21 new4:25,25 6:4 6:5,5,7,8,9 9:11 9:11 10:24 11:5 11:6 13:13,14 13:24 14:12 15:6,6,11,12 18:2,3,10,14 19:11,19,20 26:21 29:20 33:14,18 36:8 37:10 47:3 56:9 56:13 71:24 82:25 newly 4:21 9:13 9:25 10:2,13,20 10:23 11:23 27:19 80:24 news 44:17 nonvoluntary 9:3 26:12 norm 46:25 normal 58:17 notify 13:3 notion 8:6 84:5 notwithstanding 26:14 nuanced50:11 nullified83:8 number16:8 20:11 24:5 25:5 25:8,11 63:3 71:18 numbers 25:17 25:20,24 71:5 nursing 51:17 71:1 O O 2:1 3:1 objecting 36:22 objective 56:5 58:1,6 67:25 obligation 7:21 35:3 79:12 obvious 13:14 obviously 30:12 58:5 67:23 72:12 occur 68:4 occurred73:20 offer8:16 32:2 44:25 65:16 67:25 68:16 69:2 81:14 84:3 offered5:11 29:18 30:24 32:23 47:1 68:15 offering 5:18 33:1 51:22 official 21:17 37:6,14,15 38:21,25 officials 37:12 oh 81:10,23 okay 11:20 12:21 23:11 27:24 30:1 32:3 38:17 40:11 49:12 56:12 59:17 60:8 old 11:6,7 13:25 18:8 24:3 31:2 33:9 56:14 Alderson Reporting Company Official - Subject to Final Review 94 once 23:15 28:15 29:5 42:23,24 62:8 71:2,3 72:6 one's 58:16 operate 46:13 operating 55:20 opinion 14:24 opportunities 15:3 71:12 opportunity 15:4 39:19 47:2 77:16 78:13 82:5 opposed27:15 opposing 21:5 opposite 7:24 8:1 64:23 opt 70:6 83:2 option 10:6,10 73:5,7 81:11,22 81:22 82:18 optional 49:23 49:24 50:18,19 70:17,24 71:2 82:3 options 79:5 82:6 oral 1:12 2:2,5 3:7 39:13 oranges 76:12 order4:24 ought 30:9 34:11 ourself 28:18 overturned77:5 O'Connor's 63:20 P P 3:1 pack 35:15 page 2:2 9:15 11:17 25:6 Panthers 10:7 paradigm10:5 part 5:23 10:12 11:14,25 16:19 19:9 33:10 60:24 66:12 67:1 71:23 82:12,16 participate 10:6 18:12 38:19,23 participating 33:13 participation 5:2 9:12 10:4 13:1 16:23 20:24 26:14 28:3 33:12 81:19 82:1 particular30:11 43:21 48:14 84:11 particularly 19:18 47:15 66:14 parties 56:7 parts 13:6,9 pass 20:17 passes 21:17 PAUL 1:16 2:3,9 3:7 79:23 pay 18:24 34:25 35:17 45:9 68:10 72:3,15 72:23 73:24 74:2,6,7 paying 8:16 66:3 payments 13:4,5 13:8 pays 6:1,3 35:16 penalty 67:6,11 penny 14:5 people 9:19 13:13,14 24:5 27:20,22 53:13 58:11 59:15 67:4,13 71:25 73:16 75:10 78:2,7,10 79:2 79:8 80:24 people's 4:6 57:10,12 percent 3:18,19 4:11,11,21 6:11 7:9,10,12,22 8:15 18:4,5 25:15,16 34:25 38:8,8 47:10,11 49:22 55:23 58:8 66:4,6,23 67:2,2,4,9,15 69:2,4,5 70:16 72:4,14,15 73:24,24 76:10 76:14 percentage 7:6,8 7:13 25:13,22 25:22 72:23 76:6,9 percentages 77:8 perfect 12:9 82:11 perfectly 38:17 performed61:22 permissible 47:25 pernicious 37:7 person 5:9,10 6:2 6:4 57:4 59:20 PETITIONER 3:8 Petitioners 1:4 1:17 2:4,10 79:24 physics 21:19 picked3:18,19 piece 30:12 47:3 pieces 27:15 pile 15:14 pins 26:8 place 10:9 25:5 50:14,15 52:2 62:10 71:4 72:7 places 11:12 plan 13:6,9 18:2 18:3 please 3:10 39:16 50:5 80:1 Plus 45:12 point 4:9,18 6:22 11:21,22 15:2 15:19 16:10 25:1 30:1 35:24 38:1,24 45:15 45:15 50:4 66:13 69:25 70:1,23 72:18 75:7,16,19 81:5 82:20 pointed14:3 points 29:8 62:6 80:2 police 34:7,12 policy 58:13 79:15 83:22,22 83:25 political 19:2 46:7,12,16,18 63:9,13 65:1 75:1,8 politically 28:21 74:23,24 pony 25:1 poor 4:6 28:22 29:10 34:24 57:10,12 67:18 68:3 poorest 67:18 68:3 poorly 7:18 popping 37:10 population 50:16 50:16 56:10 66:17 67:1 69:4 78:7 populations 50:24 portion 56:10,10 poses 38:4 position 24:10 36:16 45:24 48:2 83:10,15 possibility 18:15 56:11 68:4 possible 21:7 40:9 61:2 possibly 6:1 post-secondary 81:21,24 poverty 47:11,12 66:23 67:2,2,4 67:9 power6:19 8:5,6 8:7,12 22:7,16 23:18 29:6 34:10,16 39:21 48:10 57:15,17 58:18 84:4 powers 8:8 28:14 79:13 practical 46:5,7 59:5 74:11,15 practically 74:24 precise 40:7 precisely 8:9 24:7 35:11 82:7 predict 66:5,6 68:25 predicted65:25 66:2 prediction 60:8 66:1,8 preexisting 10:18 81:20 82:1 preference 77:9 pregnant 47:6 premise 23:15 premised8:5 84:4 prepared44:1 prescription 82:12,16 Alderson Reporting Company Official - Subject to Final Review 95 present 50:6 presents 43:11 preserve 65:6 83:1 pressure 22:21 pretty 25:20 34:3 46:7 76:11 prevent 26:22 previously 19:21 28:2 45:13 pre-existing 19:17 principle 13:22 14:8 29:21 62:7 prior5:2 9:24 23:3 24:4 25:22 26:13 29:18 40:2 priorities 51:21 private 23:4 privy 55:14 problem4:12 28:10,14,20 43:2 55:19 62:9 64:16 70:13 78:5 79:2,6 problems 77:25 78:1 procedure 13:21 60:10,15 processes 71:25 77:4 profound 78:4 79:2,11 program4:10,14 4:20 5:3 9:14 9:20,21,24 10:5 10:12,16,18,21 13:1 15:11 16:4 16:18,19,21 18:13 19:11,14 20:12,24 21:20 21:24 22:23 24:16 25:3,4,7 25:22 26:14,18 26:20 27:3,21 27:25 28:4,16 28:18 29:17,18 29:24 33:12,14 37:12 38:7,9,19 38:23 41:13,15 43:21 47:7,9,9 47:15,17 49:25 56:1 59:1 62:11 62:20 64:6,14 65:2,18 66:1 67:19 72:19 75:21 81:20,21 82:1,4,8 83:2 programs 8:9,10 10:4 17:20 21:15 23:7,19 37:19,21,22 program's 7:4 projections 72:5 projects 50:23 proposition 14:25 45:21,23 47:3 prospect 78:17 protect 28:18 46:13 proves 66:10 provide 19:2 39:18 56:6 68:1 68:2 82:13 provider50:21 provides 71:24 providing 19:16 29:10 50:20 75:24 76:1 provision 12:20 27:6 50:13 51:3 52:3 58:16 66:15,17 71:3 77:22 provisions 39:8 39:18 65:19 77:23 78:22 public 23:10 reach 45:14 read 13:11 16:5 47:15 52:15,20 reading 13:11 reads 17:16 real 6:13,16 41:6 41:7 46:12 48:22 60:11 70:2,4,5 realistic 31:1 56:5,11 70:5 Q realities 58:7 question 3:24 73:13 4:18 9:7 17:12 really 3:24 5:8 19:8,9,25 22:8 5:23 7:24 11:23 22:13 23:3,14 17:17 19:15 23:20,22 27:7 22:6 24:17 35:7 36:7 37:25 27:18 31:14 41:9,20 43:11 33:3,4 34:11 44:4 47:22 35:14,19,21,23 51:10 52:14 36:7 41:23 55:1,7 57:3,5 42:16 43:8 58:5 65:12,14 44:11 56:23 67:14 68:8 57:14 75:10 74:14 79:15 76:12 80:22 82:22 83:14 81:25 questionable reason 8:4 14:19 19:18 14:22,23 48:21 questions 3:13 52:15 53:1 28:7 55:21,22 66:2 quite 8:4 9:18 80:12 42:17 reasonable 13:22 14:17 R 15:16 53:4 R 3:1 61:22 68:24 raise 35:12 41:16 80:22 44:21 76:5 reasonableness 78:19 15:20 raised46:11 75:3 reasonably 14:9 75:5 15:22 16:1 raising 6:23 61:25 46:10 reasons 22:4 rate 6:25 10:17 24:13 72:1 rebuttal 2:8 rates 50:22 79:23 80:2 pulling 33:25 purchase 83:25 pure 36:14 purely 36:13 68:6 pursuant 8:7,8 pursue 17:3 put 26:21 78:13 p.m1:14 3:2 84:14 recalibrate 66:11 recall 30:21 receive 30:24 78:8 receives 22:2 35:21 recipient 21:21 recognition 83:17 recognize 43:15 59:3 70:13 recommend 38:3 reconsider34:13 record 16:12,15 redirect 51:21 reduce 50:19 71:4 reduces 3:24 72:22 refer52:17 refers 4:22 refusal 14:12 52:22 refuse 13:13 32:3,3,4 33:6 65:16 84:3 refused53:9 regard 68:20 regarded42:22 regulations 36:19 rehaul 17:25 reimburse 58:9 reimbursed 10:17 27:25 28:1 71:21 reject 67:25 rejected75:6 76:24 relate 64:17 related3:13 14:12 41:22,24 53:9 relates 64:22 relationship Alderson Reporting Company Official - Subject to Final Review 96 28:12 52:18 56:22 66:13 relative 63:3 relatively 16:19 63:12 relax 8:10 relevant 22:5 relief 20:6 83:3 relieve 14:7,18 reluctant 57:11 61:12,14 relying 18:9 remained3:21 remains 71:2,3 79:13 remedy 83:15,16 83:19 remember76:8 remote 68:19 remotely 27:15 remove 17:19 removed82:19 repair 83:9,13 repeats 13:7 reply 24:2 represent 19:25 20:11 54:7,7 Republican 21:6 require 50:6 63:12 64:5 required50:24 requirement 4:3 66:19 67:10 82:9 requires 55:25 requiring 24:3 research 21:15 researching 55:6 reserve 28:5 reserves 47:16 resolved22:17 48:16 resources 28:10 respect 34:1 43:21 46:19 47:3,6,20 49:16 50:16,22 51:7 60:6,12 62:25 63:3 66:13,17 66:22 67:1 71:7 79:11,18 81:4 respectfully 23:25 80:5 83:23 Respond 17:12 Respondents 1:20 2:7 39:14 response 57:2 responsibility 65:7 responsible 48:13 53:19 64:14 rest 9:14 10:16 10:20 restrictions 27:10 38:7 result 70:17 78:11 resulted78:1 return 67:10,12 revenue 35:12 63:7 revenues 46:10 63:6 right 5:14 6:9 11:9 12:2,12 14:6 16:8,25 17:17,19 18:12 19:4,5,22 20:2 20:16 24:19,21 25:24,25 31:6,7 35:1 41:10,12 44:2 46:1 47:16 53:6 55:21 67:8 67:20 71:2 73:4 73:6 75:16 77:6 79:7 risk 10:3 16:21 78:19 ROBERTS 3:3 21:18,21 23:23 80:21 81:4 28:6 30:18 32:9 26:19 29:13 secretary's 17:6 32:19 33:16 31:3 44:16 52:17 60:16 39:10 41:8,11 50:16 52:23,25 61:20 41:19 42:2,7,12 58:10 59:22,24 section 9:14 12:4 42:20 43:12 61:1 83:21 84:2 12:17 22:9 47:21 48:18 Scalia 15:18,21 secure 78:23 49:4,8,11 53:21 15:24,25 17:4 see 5:8 28:19 54:2,6,13,17 21:3,9,10 26:7 34:22 42:6 51:9 54:21 57:20,22 30:16,21 31:14 59:15 62:16 58:4 69:6,9,12 31:16,25 32:11 seeking 20:7 69:21 72:9,12 32:16 40:1,8,11 seen 7:7 30:13 72:21 73:11,22 40:19,22 41:2 72:5 76:3,8,11 77:11 43:23 44:3,7 segregated9:13 77:15 79:21 46:15,20 49:10 26:15 84:9 52:4,7 55:17,19 selling 67:17 rolls 24:6 57:24 60:7,14 sense 63:22 roughly 25:21,25 60:24 61:18 sentence 52:24 rules 30:15 38:10 62:3 65:11 66:2 separate 6:12,13 45:3,6 66:5,9 73:2,5 10:12 23:14 run 7:18 21:22 school 45:4 27:25 64:18,20 28:18 53:13 scrap 18:14 separately 10:15 running 37:22 19:10,14 11:24 26:15 se 29:23 separation 10:19 S second 3:14 9:8 serious 43:2 46:7 S 2:1 3:1 10:10 15:1 23:2 46:16,18 satisfied13:8 23:22 26:7 serve 19:23 satisfies 82:9 33:14 54:17 40:14 satisfy 60:10 56:21 service 75:24 66:19 Secondarily services 1:7 3:5 saved15:10 29:21 19:2,16 48:15 saying 4:1 5:20 secretary 12:20 50:3 60:5 61:16 7:14,24 8:1,11 13:2,8,12,13 70:24 71:1 18:12 19:14,19 13:15,17,18,25 serving 51:18 20:10,22 24:12 14:4,10,11,14 set 39:22 45:2 26:5 29:4 34:6 15:15 16:3,16 72:2 34:16,23 39:4 16:20 17:8,18 set-up 72:4 42:13 43:8,25 17:19 47:23 Seven76:10 53:18,22 54:13 48:15,25 52:20 shade 24:18 59:7,8 65:22 53:19 54:7 55:2 share 58:1 72:25 73:8,9 56:12 57:6,9,9 sheer25:3 26:10 76:20 83:20 57:11,14,15,16 33:5 51:8 56:21 says 5:10 11:2 58:14,15 59:23 62:5 11:11,12 12:11 60:5,21 61:8,16 shoot 57:5 80:8 12:23 13:2 16:2 73:10,11 80:11 short 41:3 Alderson Reporting Company Official - Subject to Final Review 97 short-term 72:4 shot 53:25 shoulders 44:20 show14:11 15:15 15:20 shows 47:18 side 30:23,25 46:25 51:4 64:24 72:11 sight 78:6 sign 20:19 significant 9:4 51:3 58:19,24 62:14 simple 8:4 36:14 simply 4:18 7:2 17:25 23:17 30:5 34:16 48:9 65:14 84:2 single 19:15 65:20 sit 56:15 sits 57:15 situation 40:10 40:15,17 46:8 46:20 48:14 49:15 53:15,16 60:3 62:24 63:4 64:3 76:19 81:17 situations 31:11 40:23 55:11 size 24:15 25:3,4 26:10 45:4 51:8 56:21 62:5,11 sizeable 20:11 sliver67:13 small 8:1 16:19 50:4 76:12 smaller52:4,7 77:8 Solicitor 1:18 80:12 82:2 83:21 solution 39:4 solve 77:25 somebody 5:8 80:4 83:25 sorry 9:7 11:1 52:10 57:2,21 sort 18:3 29:8 80:3 Sotomayor 6:18 6:21 7:1,5,23 8:13,20 17:22 18:11,18,21 19:7 28:8 29:7 32:7 34:19,21 35:6,15,23 70:3 74:17,20 75:4,7 75:15 76:23 77:2,3,7 sound 4:6 sounds 65:22 66:7 82:23 sovereign 58:19 sovereigns 6:12 33:20 special 22:16 44:20 specifically 27:18 spend 4:5 19:5 28:25 34:13 37:3 44:22 71:15 spending 8:5,6,7 8:12 22:7,16 23:4 24:18 27:3 27:5 34:9,16 39:21 40:4 43:3 45:12 51:21,23 70:16 84:4 spends 71:14 spent 15:13,13 44:24 55:24 68:17 70:25 71:8 spreads 83:22 square 20:25 stand 4:10,14 48:13 49:20,20 51:11,11 52:9 62:25 standing 52:1 start 18:2 19:10 29:5 33:24 83:12 started9:18 starting 47:5 state 7:12,15,18 7:21 8:14,20 13:3,5,6,9,12 13:15,24 20:18 21:2,2 35:2,16 35:16 36:23 37:12,14,15,15 38:19,20,22,25 39:5 40:17,17 40:23 41:3 43:5 51:1 53:9 57:15 58:20 59:12 62:19,20 63:4,6 63:6,8,8,10 64:13 65:1,6,15 65:17,20,21 66:4 67:25 71:19,20 75:3 75:14,14,18,22 77:12 82:19 states 1:1,13 4:24 6:3,10,16 6:22,24 7:8 10:1,6,10 15:5 15:11,16 17:16 18:3,8,23 19:16 20:1,5,8,11,13 20:14,20 21:5,6 23:7,18 24:18 26:21 27:23 28:13,20 29:4 29:10,12,25 34:3,24 36:12 36:22 37:20,21 38:16 39:23,23 41:13 44:16,22 45:20,21 46:21 47:1,4,8,18 49:11,16,25 50:1,6,7,9,18 50:23 51:15,22 55:12,25 56:2,7 57:25 58:5,8 59:1 63:23 64:5 65:25 66:6 68:11,15,22,25 69:3,17 70:17 71:4,6,11 72:18 72:24 73:16,17 74:2,16 75:22 75:22,25 76:20 76:21 79:9 80:18 81:13,16 82:6,13 83:1 84:3,6 state's 9:10 14:12 17:20 38:22 52:21 81:8 status 33:19 statute 3:21 4:22 8:23,25 9:2,12 12:14 14:15 16:1,2 17:6,19 20:18 24:7,20 25:2 26:6,11 27:4 30:4,11 36:5 48:21 52:15 59:22 60:22 61:1 66:24 67:3 71:12 72:3 83:14 statutes 15:23 17:11,11 stay 47:2,8 49:25 65:25 72:19 step 77:21 Steward 40:8 43:17 81:9 stimulus 76:24 76:25 77:12 80:16 stop 36:12 store 38:13 stores 38:13 strain 46:16 strange 84:1 streamlined 71:25 strike 15:23 16:3 strings 33:4,23 struck 22:23 structure 28:12 28:16 40:16 struggled79:1 subject 19:19 38:9 64:25 submitted84:13 84:15 subsidies 35:18 66:25 subsidize 7:20,20 substantial 51:13 70:10 71:18,20 substitute 81:12 subsumed63:16 sudden29:12 suggest 29:10 35:6 60:21 72:6 79:11 80:5 83:19,24 suggested46:25 51:5 58:17 64:3 64:7 66:16 suggesting 6:21 7:2 58:11 summary 16:13 support 83:22 supported77:7 supporting 21:6 suppose 5:7 15:4 26:18 56:6 62:15 Supreme 1:1,13 Alderson Reporting Company Official - Subject to Final Review 98 sure 5:6,21 17:15 77:23 80:3 16:10 20:14 71:16 72:17 top 45:10 18:23 23:13 talking 8:23 21:13 23:2 31:2 74:12,13,13,22 total 58:14 28:7 32:21 12:17 25:18 33:14 34:4 36:4 75:2,18,19,20 totally 10:1 74:23 32:11 40:22 38:2 42:17 75:23 76:16,18 29:16 53:14 surely 61:7 73:3,12,13 47:11,12,13 76:19 78:6,24 tough 31:16 surprise 44:4 76:13 77:22,24 49:21 53:9 55:8 79:4,10 80:8,10 trace 46:23 surprised33:22 tariffs 33:8 59:18 65:20 81:3,6 83:15,22 tradeoff 6:17 33:24 tax 6:10,16,19 78:15 thinking 20:14 transformation suspect 54:10 6:24 44:21 45:9 things 8:7 12:22 31:4,4 44:8 40:16 46:12 system15:4 45:10,11 46:10 21:15,19 23:14 47:25 62:6 treated10:15 63:6,8,8 66:24 26:5 34:14 35:9 thinks 19:6 20:19 11:23 17:24 18:2,8,10 18:14 46:21 67:10,12 68:12 38:14 45:5,7 third 26:8,17,18 trick 25:1 51:17 65:8 72:1 81:7,8,15 53:10 57:13 thought 9:6 tried19:10 22:8 taxes 6:2,4,13,15 82:7,10,24 31:18 36:24 59:19 T 6:23 think 8:24 9:5 46:15 52:25 tries 22:6 T 2:1,1 taxpayer6:1,3 13:16,18 14:21 53:11 59:11,18 trillion 25:9 take 4:5 9:21 taxpayers 33:9 17:17,20,23 59:19 67:24 27:16 29:25 11:5 14:12 15:6 68:11 18:21 20:9,21 76:14 79:5 true 9:16 36:19 15:11,12,16 teacher45:3 22:11 23:3,16 threat 55:9 76:4 42:22 53:12 18:3,24 19:19 tell 4:7 6:5,7 23:20 24:9 77:11 84:7 64:4 67:5,21 19:20 20:22 12:10 14:7 26:19,25 27:1,3 threaten49:9 73:19 78:15 21:3 22:12 23:9 18:15 24:11 27:5,6,7,12,17 threatened30:24 try 19:8 40:7 23:9,15,19 25:11 30:6 29:8,21,23 31:1 threatening 56:19 63:23 27:19 28:2,3 34:19 38:25 31:2 32:12 33:3 53:13 71:15 75:19 29:6,20,25 53:10 84:6 33:14 34:2,4,6 three 8:24 25:2 78:18 32:12,25 33:18 telling 20:20 35:9 36:7 40:1 26:5,13 30:11 trying 22:19 23:6 34:24 36:8 37:9 29:24 30:8 40:4,8,13,14 33:4 51:8 42:16,21 57:24 38:1 41:13,14 temporary 51:6 41:11,16,21,22 tie 9:10 26:23 57:24 60:20 42:18,25 44:19 tenure 45:3 41:22,24 42:15 28:11 61:13,14,15 45:1,1,5,6 48:4 terms 51:5,5 42:16,17 43:10 tied9:3 26:11 74:13,17 49:12 50:17 71:8 74:25 43:16,19 44:3,7 27:5 33:23 turn 32:24 65:15 52:2 54:9,22 77:25 44:10,11,25 81:18,19 75:1 56:24 57:11 terrible 20:16 45:17 46:23 time 9:17,19 21:4 turning 35:13 58:25 59:16 test 62:15 63:17 47:14 48:21,22 21:16 22:1 28:5 turns 45:16 67:18 69:1,13 63:19 70:14 49:21 51:3,7 29:15 46:10 two 3:12 6:12,12 69:13 71:22 Texas 36:1,21 53:16,18 55:13 48:3,5 50:14 9:23 11:11 22:4 73:25 77:21 textbooks 45:4 55:18,19 56:19 66:11 26:10 75:8 80:19,20 81:11 thank 11:20 12:9 56:23 57:5,6 Title 21:16 22:8 tying 81:25 81:12,14 83:15 39:10 79:20,21 58:23 60:9 today 15:5 49:5 type 40:15 taken10:8 32:22 79:25 84:8,9,10 61:22 62:5,21 52:1 U 32:25 77:16 theory 21:25,25 62:22 63:19 token67:6 81:8 unattractive 75:1 22:20 30:22 64:9,16,19,22 told 5:21 16:20 takes 50:14 unchanged52:16 52:2 64:24 65:4,5,18 20:4 talk 8:22 They'd 73:2 65:24,24 66:2 tomorrow26:19 uncoercive 80:6 talked10:7 unconstitutional thing 12:18 13:19 66:11 68:9 71:8 tonight 32:8 Alderson Reporting Company Official - Subject to Final Review 99 24:23 26:2,24 59:9 understand 10:21 22:19 29:3 32:21 34:21 42:21 57:8 61:14 81:25 understanding 55:10 understood 47:19 undertakes 35:2 unemployed 81:13 uniformly 53:20 uninsured28:20 unique 9:4 26:6 uniquely 8:25 25:2 26:11 36:5 United1:1,13 6:3 6:10 79:9 universal 56:6 universities 21:14 23:4 unlimited34:9 unpalatable 65:2 unprecedented 39:24 unreasonable 13:19 15:23 16:4 60:18 unreasonably 14:14 unrelated52:24 53:14 55:9 unshackled 78:12 unwilling 8:21 unworkable 62:22 upheld 79:20 use 26:21 32:16 38:13,14 47:23 48:2,25 49:1 57:14,16 21:1 28:4 29:11 uses 17:5,5 38:7 36:11 80:23 usual 18:21 voluntarily 29:14 usually 55:11 82:14 U.S.C 12:17 27:3 voluntariness 47:16 38:18 43:1 voluntary 8:9,11 V 10:1 20:18 v 1:5 3:5 34:20 38:20 vast 58:2 55:24 80:15,17 Verrilli 1:18 2:6 80:19,25 82:11 39:12,13,15 82:11,14,25 40:6,12,21,25 83:6 84:5 41:5,10,16,21 volunteered 42:5,9,15 43:10 38:23 43:16 44:1,5,10 vote 79:9 45:17,19 46:3,5 voters 8:14 77:9 46:19 48:12,20 W 49:2,6,14 50:11 52:6,9 53:2,6 Wait 54:17 53:16 54:1,5,12 waiver51:2 54:15,20,24 wakes 26:19 55:4,10,16,18 walk 56:25 56:3,16 57:1,18 wallet 54:3 57:21,23 59:2 want 4:9 5:8,15 60:3,9,20 61:2 7:19,20 8:14 61:5,9,13 62:4 9:20 10:22 62:21,23 63:14 11:25 13:15,23 63:18 64:2,15 13:24 15:5 17:3 64:19,22 65:9 18:1,18,25 65:24 66:8 19:14 20:13 67:21 68:13 21:18,24 25:4,8 69:8,11,15,23 28:16,23,25 70:9,11,15,22 29:1 32:21 71:22 72:10,17 34:24 35:13,23 72:25 73:4,6,19 48:3 50:20 53:5 74:8,19 75:4,13 53:17 57:14 75:17 76:6,10 58:11 66:12,20 76:16 77:1,6,10 73:16 77:9 84:1 77:13,18 84:10 wanted18:14 vested18:12 55:2,5,6 view47:4 63:11 wants 10:1 17:8 20:17 36:12 views 58:12 65:6 virtue 56:22 visually 19:16,23 Washington 1:9 1:16,19 way 6:10 16:5 19:15 21:22 22:14 27:20 28:16,25 29:1,2 38:22 47:4 48:16 51:24 53:20 57:16,23 59:15 64:23 66:18 68:2 71:7 75:23 78:21 80:7,16 81:10 81:23 ways 19:6 Wednesday 1:10 welfare 51:19 68:18 went 53:8 weren't 79:7 we'll 34:9,25 59:16 80:25 we're 18:1 25:18 26:5,20,22 27:24,24 28:3 28:11,13,17 29:14,19,25 30:5,7 34:7,15 34:16 56:8,8 68:15 69:13,14 72:15 73:12,13 74:2,6 we've 14:3 16:23 23:24 40:2 wife 32:9 78:16 78:18 wife's 31:9 32:4 willing 33:17 47:24 60:14,18 61:3,6 willingness 9:10 win 48:5 wins 55:17 wiped20:24 Wisconsin 51:2 wish17:12 wishes 38:11 withdraw16:18 16:21 65:1 74:19 withdrawal 62:24 63:1 withdrawing 57:10 withdraws 57:9 women47:6 word 17:5 37:2 words 4:1 16:2 55:7 work 5:10,19 17:24 22:1 46:11,17,18 50:21 51:10 58:3 66:20 workable 62:16 worked55:11 57:13 working 37:6 73:8 works 27:21 56:1 61:15 75:21 world 6:13 21:22 27:17 worried57:4 worry 61:18 worth40:16 wouldn't 15:13 27:2 32:14 44:3 56:17 60:19 61:18 wow5:18,18 wrong 27:13 50:5 54:14 59:24 66:10 75:20 X x 1:2,8 13:24 Y Yeah 11:13 12:21 16:7 Alderson Reporting Company Official - Subject to Final Review 100 44:24 74:1 years 9:18 19:22 24:3 25:10 27:16 30:1 33:13 36:10 47:10 79:3 80:13 yesterday 77:24 78:23 York 6:4,5,5,7,8 6:9 $ $10 5:9,12,19 $10,800 67:9,13 $100 70:25 $21 24:19 $250 24:19 $3.3 25:9 27:16 29:25 $42 59:16 $7.8 16:22 $9,500 67:11,11 67:13 0 0 24:2 25:19,19 1 1 69:5 1:00 1:14 3:2 10 7:10,12 8:15 25:9 27:16 30:1 58:8 100 3:19 4:11,11 4:21 6:11 7:22 34:25 38:8 47:11 66:6,23 67:2,4,9 11-400 1:4 3:4 1304 47:16 133 47:10 67:2 1396(c) 12:17 14th 22:10 15 69:22 17 80:18 18 24:4 25:19 27:3 47:11 1964 26:2 1965 12:14 52:16 1972 10:5 20:17 47:4 80:15 81:2 1980 24:2 1984 10:9 24:11 24:17,17 47:6 80:20 81:2 1989 47:9 1990 24:3 47:11 2 2-point-somet... 25:14 2:24 84:14 20 8:15 18:4,5 69:4 2001A3 9:14 11:14 2012 1:10 2014 50:13 209(b) 10:6 21 75:3 76:5,5 23 11:17 23A 9:15 11:20 26 20:1,20 21:5 56:7 28 1:10 3 3 2:4 25:16 30 8:15 33 16:13 39 2:7 4 40 7:9 8:15 79:2 42 12:17 47:16 45 19:22 33:13 36:10 45-year-old 20:24 49 81:15 5 5 22:9 76:14 79:22 6 6 24:3 25:6,20 47:10,11 60 55:23 70:16 64 49:22 65 24:8 666 27:3 7 7 76:14,14 70 72:15 73 25:6 79 2:10 8 8 67:15 84 49:25 88 49:25 89 50:1 9 90 3:18 38:8 72:4 72:14 73:24,24 90-plus 66:3 69:2 Alderson Reporting Company