Mandeville, LA – Exclusive Transcript – Yesterday, I’m sure you have seen some or all of the president’s wielding of his scepter at his press conference yesterday, asserting he was granting all these insurers and the states this power to alter their plans and basically I guess to ignore what is actually in the Affordable Care Act. I asked you in an email exchange: Is there any precedent for this? Has any president done anything remotely like this? Your answer to that query is? Check out today’s transcript for the rest…
Begin Mike Church Show Transcript
Mike: Let’s go to the Dude Maker Hotline, Professor Dr. Kevin Gutzman, author of James Madison and the Making of America is on the hotline. Kevin, good morning to you. How are you?
Kevin Gutzman: Good morning, Mike, very well. How are you?
Mike: I am very well, very well. Is it cold up in Connecticut today?
Mike: You live in Connecticut. What do you mean colder than it ought to be?
Gutzman: Well, I grew up way south of Connecticut and I’m basically cold ten months of the year around here. This is one of those months.
Mike: Yesterday, I’m sure you have seen some or all of the president’s wielding of his scepter at his press conference yesterday, asserting he was granting all these insurers and the states this power to alter their plans and basically I guess to ignore what is actually in the Affordable Care Act. I asked you in an email exchange: Is there any precedent for this? Has any president done anything remotely like this? Your answer to that query is?
Gutzman: Not that I can think of, but that’s not a dispositive answer. However, I think it’s notable that the Affordable Care Act includes all kinds of dates by which this will be done and dates on which that will be done. The president has been issuing waivers ever since the law was adopted. As far as I can tell, he’s not actually authorized under the statute to do that. It’s a very odd thing. Of course, the other notable component of what he did yesterday is, he seems either to be totally oblivious to the way the economy actually works or he thinks that his audience is oblivious to the way the economy actually works.
What I mean there is, say you’ve already told the insurance company: On X date, you have to get rid of all plans that don’t meet the following specifications. Everyone has to be covered for ADD pills and lactation services and so on. Then you send out notes to your hundreds of thousands or even millions of subscribers saying: At the end of the year, due to the PPACA, your plan is going to be cancelled. Then the president, after you’ve done this, after you’ve spent years preparing to comply and then told your policyholders their plans are being cancelled, the president comes out and just on a whim says: Oh, by the way, we’re not going to enforce that for another year.
He thinks, or at least he’s giving the impression of thinking, that this means that all those people are now going to have the same policies for another year. Of course, the companies have already cancelled the policies. The idea that all these people are going to seamlessly head right back into the same policies strikes me about as naïve as thinking from now on we’re not going to penalize anybody who employs somebody for 30 hours a week or more and doesn’t give them insurance without having people decide what I need to do is cut all my part-time workers to 29 hours per week or fewer, which, of course, is exactly what a lot of businesses did in response to the new penalty.
It’s just another manifestation of the seeming ignorance of economics that marks this administration. Of course, I’m not really distinguishing it too much from the previous administration. It’s just painful because what it means, I think, is another year of uncertainty throughout the labor market. We’re told this is one main reason why people aren’t hiring anybody. Basically if you hire somebody now, you don’t actually have any way of deciding how much that hire is going to cost your business. A logical response is not to hire anybody. It’s crazy.
Mike: It is certainly crazy and there is certainly some uncertainty. This has caused some instability. I think the biggest part about this that is troubling and someone or some entity is going to have to address, if the president keeps asserting this authority — even Howard Dean yesterday said: I’m trying to figure out myself where the president thinks he has this writ of authority or writ of power that he can do this. If the president continues to assert this, as the president before him did with all these other various acts and signing statements. I guess this is going to be an executive order. To tell you the truth, I really don’t know. There was one part of the press conference where he alluded to: We’re going to have to wait and see what Congress does. Wait a minute, you just said everybody can keep their plans, but you’re not going to sign something if Congress sends it over and you don’t like it. Which is it here?
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I think what we’re seeing here is something that James Madison — you can comment on this because you know him far better than I — said was happening under the Articles of Confederation, which was there was legislative chaos. What we needed was a strong, what did he call it, energetic government to deal with all the things like this administration and the previous one and all the other ones that had to deal with $3.8 trillion are trying to deal with. So let’s get together, centralize, and have this new government consecrated under this thing called the Constitution. The Constitution was supposed to fix the chaos that was allegedly occurring, and there was some, under the Articles of Confederation. What’s going to fix the chaos that’s now occurring under the Constitution?
Gutzman: Well, one reason why Madison described the situation that way is the state governments were adopting economic measures that he thought were obviously bound to have negative consequences. The Constitution banned states from printing money, making anything but gold or silver legal tender, and otherwise borrowing and printing money. Of course, now we see that despite the fact that the Constitution doesn’t say it can do those things, the federal government is in the business of constantly borrowing money and printing new paper money and so on. What can we do about it? That’s the question.
Basically the constitutional system assumes that the Congress will watch the president’s behavior with a jealous eye and the president will watch the Congress’s behavior with a jealous eye. This also is based on the idea that there won’t be political parties. Once you introduce political parties into the equation, then everybody knows it’s impossible for a justice of the Supreme Court to be impeached or removed from office for abusing his position. There will always be at least a rump of senators who approve of that behavior. And it’s impossible for the president to be removed from his position through impeachment because everybody knows there will always be a rump of senators to protect him.
Essentially, the president can get away with this kind of legislative behavior that he was involved in yesterday. There’s no chance that Congress will remove him for usurping congressional authority, even though what needed to happen, according to the system, for there to be this major change in the statute, is Congress pass a new statute. On every level, it’s a lamentable situation. Woods and Gutzman wrote a book called Who Killed the Constitution? Here’s another illustration of the fact that the system that the Constitution supposedly adopted or established isn’t even used anymore. It’s not that it’s abused; it’s just completely ignored. The president can say: I’m not going to allow Congress to legislate on these matters. I’m going to veto anything they do. Then I’ll just declare that the law doesn’t mean what it says because I find that politically convenient. Nothing can happen to him.
Mike: That is quite a shock to the system. It would seem as though those are the actions that a monarch would undertake. I don’t even know if there are monarchs that would be so brazen and bold as to say — I don’t know the history of the House of Stewart or the House of Windsor enough to comment on it, but [mocking] “You guys can pass all the laws you want in the House of Commons and send them to the Lords, but it doesn’t matter. I’m not going to listen. I have a tin in a deaf ear and I’m invading France tomorrow and taking over their healthcare system.”
Gutzman: Surely it is true that the current dynasty in England has never behaved this way. In fact, in theory, the kings of England had veto power in practice. None since Queen Anne has exercised it. People are used to the idea that the British monarchy just didn’t involve in the legislative process this way. On the other hand, it is true that the Constitution gave the president a veto power. He was supposed to be involved in the legislative process, but the way he was supposed to be involved in the legislative process was not by declaring: Here’s my legislative preference and I’m just going to declare that’s a law. The only way you can make me stop doing this is, if you can get two-thirds in each house to agree to impeach and remove me, which, as I said before, is almost always impossible to do. It’s not the way the system is supposed to work but there you go. The president and the Democrats a month ago, two months ago were saying amending the Patient Protection and Affordable Care Act in any way was completely unacceptable. Apparently what they meant was unless it’s done by the president unilaterally, in which case that’s the way the system is going to work.
Mike: That is a salient point there. That is precisely what they said. Obama himself even said: If you touch one hair on my baby’s head, if you harm one hair on my baby Obamacare’s head and send it over to me, I’m going to veto it. I am not going to allow you. Even this week, you would have heard the exact same thing coming out of the mouths of Harry Reid and those same members in the Senate, of Steny Hoyer and Nancy Pelosi, [mocking] “We’re not going to allow the Republicans to gut the Affordable Care Act. It’s working for millions of people.” Well, it may be working for millions, but last time I checked, there are 309 million. That leaves about 307 million people out either in the dark, because we simply don’t’ know, or out in the cold, because you simply can’t get it. No matter how you describe it, it is, as you said, lamentable.
Moving on. People are asking me and demanding that I propose [mocking] “You’re a radio host. You need to get out there and propose solutions and stop whining about it.” I don’t just whine about it. I do propose solutions. This is where maybe there is an opportunity — the intelligencia of the entire known universe that has any shred of intellectual honesty left in them would have to recognize that this is a governmental and legislative debacle here. If they work in government, they may be foresworn to not admit it or say it, but you have to recognize it.
It would seem to me that one of the things that could be done and that I would advocate to be done is exactly what’s happening in Louisiana, and exactly what’s happening in Texas with Governor Perry, and in a few other states, with those governors instructing and telling their legislatures: Look, this thing is coming. It’s going to be an absolute disaster for our citizens, even if they’re successful in implementing it. If we’re stupid enough to buy into the notion that there’s just going to be a fountain of paper money as far as the eye can see, that it’s going to be worth something, and it’s going to come our way to pay for all this, and it’s not going to cost us anything, then woe to us.
What ought to happen here is that maybe for the first time — I can’t remember an incident in my adult life where this actually happened and resulted in a positive result, maybe you can. Maybe for the first time in our adult lives, maybe our state legislators, in concert with some — this won’t happen across all states but maybe in a few — will band together and say: Look, they did this. This was a mistake. There are too many mistakes here. We have to act in order to protect our citizens, otherwise we’re going to have all sorts of problems that we’re going to have to deal with here. We must then provide, and I don’t mean through the exchanges, a way forward using our own ingenuity — if you can use that word in politics today — and the power that is granted to us or that we reserved under the Tenth Amendment. I don’t even think that has to take the form of nullifying or interposing so much as it just has to take the form of: We don’t care what you say. Go get a judge and try to stop us. We’re going to do this. Is that a course of action?
Gutzman: What exactly would you have them do? That’s what I don’t quite understand.
Mike: I don’t know.
Gutzman: They don’t have to comply by creating state exchanges. The problem is, of course, the individual mandate is going to be enforced by the Internal Revenue Service. There’s really no way for a state to interpose to prevent the operation of the Internal Revenue Service. I don’t know exactly what they can do about that. Also, the Democrats have a solution in mind to this strategy, and that is they’re hoping — you can find it all over the internet — that as soon as they can legalize several million illegal alien Mexicans in Texas, Texas will flip to a blue state and soon we’ll have the fiscal policy of Illinois.
Mike: Won’t that be great. I’m sure that Texas will love for that to happen. One of the things they could do, and I don’t know how far this has to go or what actually has to happen for this to occur, and Virginia actually has this on the books, I believe. This is part of the Louisiana Medical Freedom Act, which was passed in 2010 as a reaction to the Affordable Care Act. You can’t come in here and make anyone in this state buy an insurance policy. I have a meeting Wednesday with my state representative, John Schroder. I asked John Schroder, last time I saw him I said: How are you going to enforce that? He just looked at me with a blank stare and went: Wh, wh, what do you mean how? Why do we have to enforce it? I said: That statute says if I live in this state, I claim residence and am a citizen here, I am protected by the government of this state from the garnishing of wages or whatever actions the federal government wants to take. They can’t force me to buy a policy. How are you going to enforce that? He could not answer the question. When you asked me: What do you want them to do? You have to figure out a way, number one, to resist the exchange, and number two, to protect the citizenry from the mandate. I suppose there is no precedent for that, is there?
Gutzman: As I understand it, the only power that the federal government has been given to enforce the mandate is to withhold money that you otherwise would receive in refunds when you file your annual tax return. In other words, if you arrange your tax payments every year so that at the end you won’t be expecting a refund, then they won’t have anything to enforce on you. On the other hand, if you arrange your tax payments across the year so that you’re supposed to receive a refund, then they can deduct the penalty for not complying with the individual mandate from your refund. One way to avoid complying with the individual mandate would be perpetually to arrange your tax payments so that you’re never anticipating a refund from the IRS. That’s the only mechanism or means I know of at the moment.
Basically, I don’t think that it’s going to be possible to avoid the effects of the Patient Protection and Affordable Care Act. In every state, insurance companies are being told: Look, in order to be in compliance with federal law, you have to have only plans that have the following kinds of coverage. Again, if you’re a 70-year-old woman, you have to be covered for ED pills. If you’re a celibate, unmarried 23-year-old man, you have to be covered for lactation services. Even if you aren’t paying into the individual mandate, you’re still going to be affected by the fact that there aren’t going to be any insurance plans available to you that don’t comply with Obamacare.
Mike: Final question: Let’s say I refuse to buy a policy, refuse to take that order, and then I refuse to take the fine. Let’s say I go 1099 on everything I do, so I’m not even filing. All I’m doing is compiling a tax return at the end of the year and there’s a zero balance. I don’t owe and they don’t owe me. IRS comes along and says: Mr. Church, you’re dead meat, pal. We’re coming to get you. They start sending me letters telling me they’re going to garnish my wages, seize my bank account, they’re going to take my flat panel TV and auction it off. They’re going to force me to comply with this act or they’re going to get me into a court and convict me, I guess, in a federal court or in front of an IRS tribunal. They’re going to enforce that part of the mandate. At that point, when I have been ordered under threat of loss of life and some liberty, now do I have “standing”?
Gutzman: Well, yes, you would, but as I understand it, the only enforcement means the law gives the executive branch is to withhold money from your tax refunds. You don’t have to look forward to garnishment of wages and threats of jail and so on. If you don’t have a refund coming, there’s no mechanism for them to enforce the individual mandate against you. Again, though, you’re going to be suffering under Obamacare because you’re not going to be able to buy insurance that doesn’t cover you for abortion services and lactation services and ED pills and all this other stuff that the various corporations and interest groups like Planned Parenthood that are constituencies of the Democrat Party were included in the Obamacare legislation. Everybody in America has to be covered for ED pills, even if they’re female. Everybody in America has to be covered for lactation services even if they’re not women of childbearing age. That’s one-size-fits-all and that’s what you get.
Mike: There is one other thing that we could consider. Number one, we could try to get you a job at UT. Number two, Louisiana and Texas combined have all the oil, natural gas, seafood, cows to eat, and agriculture we’ll ever need. We could just start ignoring them.
Gutzman: Well, you have to persuade these companies to do that. I don’t know. It’s hard to forecast what the response of people is going to be when this actually hits. My understanding is that while this year the notices went out to people who had individual insurance policies, next year is when the employee insurance policies begin to be regulated by Obamacare. I am not looking forward happily to learning how that’s going to affect my bank account.
Mike: Yes, mine either. Professor Kevin Gutzman, author of James Madison and the Making of America, you’re still working on your Jefferson book now?
Gutzman: I am indeed, yes, proceeding along very nicely.
Mike: We look forward to that. We’ll talk again real soon. Thanks for being with us today, as always.
Gutzman: You’re welcome, Mike.
End Mike Church Show Transcript