Latest / rationally BASED / Episode 24 | Welfare Fraud and the Constitution

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Episode 24 | Welfare Fraud and the Constitution · rationally BASED

• 0:00
  SPEAKER_01: Welcome back to Rationally Based, a podcast about law and politics on the edge.
• 0:03
  SPEAKER_01: Catherine, Josh, what's on deck?
• 0:05
  SPEAKER_00: Well, today we're talking about the fraud scandals that we are seeing everywhere in the news.
• 0:09
  SPEAKER_00: Welfare fraud, Medicaid fraud, fake businesses, etc.
• 0:12
  SPEAKER_00: Federal spending just getting sucked up into grift.
• 0:15
  SPEAKER_02: But we're going deeper by diving into the constitutional and philosophical basis for these federal spending programs that are now getting defrauded.
• 0:22
  SPEAKER_02: Does the constitution permit government spending at the federal level?
• 0:27
  SPEAKER_02: And do we want a society with all this government spending?
• 0:30
  SPEAKER_00: First, we'll talk about all the welfare fraud and the cases in the news today as the Trump administration tries to fight it.
• 0:35
  SPEAKER_00: Second, are federal welfare programs even constitutional?
• 0:39
  SPEAKER_00: Third, do welfare programs at some limit undermine the foundations of a free society?
• 0:44
  SPEAKER_00: You will not want to miss this discussion.
• 0:46
  SPEAKER_01: Let's dive in.
• 1:01
  SPEAKER_01: I'm your host, Elon Warman, a law professor at the University of Minnesota Law School.
• 1:04
  SPEAKER_00: And I'm Catherine Johnson with Center of the American Experiment.
• 1:07
  SPEAKER_02: And I'm Josh Kleinfeld, Rau's Professor of Law at the George Mason Scalia School of Law.
• 1:11
  SPEAKER_01: As always, hit that like and subscribe button.
• 1:13
  SPEAKER_01: We could really use that early support.
• 1:15
  SPEAKER_01: Super helpful.
• 1:15
  SPEAKER_01: Uh, what should we start with today?
• 1:17
  SPEAKER_00: Well, let's start with the huge scandals we see going on right now with fraud, especially since right now we are all in the state of Minnesota.
• 1:25
  SPEAKER_00: Welcome to Minnesota, everyone, which unfortunately has become known recently as kind of like the fraud headquarters.
• 1:32
  SPEAKER_02: Or it's quality learing.
• 1:34
  SPEAKER_02: At the output, it was all I could think about.
• 1:36
  SPEAKER_00: Yeah.
• 1:36
  SPEAKER_00: Yeah, our quality learing.
• 1:38
  SPEAKER_00: So I think people are pretty familiar with a lot of the fraud scandals going on right now here in Minnesota.
• 1:43
  SPEAKER_00: We've seen Ohio and also California, of course.
• 1:47
  SPEAKER_00: Um, just to give you a sense of scale, here in Minnesota, the most credible estimate that has come out of the Department of Justice of the overall scale is nine billion stolen.
• 1:56
  SPEAKER_00: Um, but to set up our discussion, I think it's also worth reminding people that this isn't just a state issue.
• 2:01
  SPEAKER_00: So obviously, as a Minnesotan, I care about this very deeply, but it does not just affect Minnesotans or Ohioans, Ohioans or Californians.
• 2:11
  SPEAKER_00: Um, the fraud includes a significant amount of federal taxpayer money.
• 2:14
  SPEAKER_00: Often these programs include both a mix of state and federal dollars.
• 2:18
  SPEAKER_00: So that's how Medicaid works.
• 2:20
  SPEAKER_00: For example, those funds are matched.
• 2:23
  SPEAKER_00: So every dollar that's spent out of Medicaid is like a little over half state funding, I believe, and then a little under half uh federal funding.
• 2:31
  SPEAKER_00: Another example of this is actually um kind of how we saw the whole fraud issue break open, especially here in Minnesota, was the free food programs the federal government implemented um over COVID.
• 2:42
  SPEAKER_00: Basically, the idea was kids aren't going to be in school getting lunch from their schools.
• 2:47
  SPEAKER_00: So they decided to work with all of these different nonprofits, organizations, and create all of these food distribution sites so that in theory kids could keep getting lunch while they were learning from home during COVID.
• 3:01
  SPEAKER_00: What ended up happening was groups like Feeding Our Future started setting up these huge networks of false distribution centers where a single kid never walked through the doors, but then they would file claims to Minnesota's Department of Education claiming to be feeding thousands of children.
• 3:17
  SPEAKER_00: Um and that was an interesting one because the way it was administered was these were all federal dollars.
• 3:23
  SPEAKER_00: It came out of the federal child nutrition programs, but it was administered by the states here in Minnesota.
• 3:28
  SPEAKER_00: Our Department of Education administered it, and they did just a really terrible job.
• 3:34
  SPEAKER_00: Obviously, no one checked in on any of these locations.
• 3:36
  SPEAKER_00: It went on for years.
• 3:38
  SPEAKER_00: Um, when it was, you know, some whistleblowers spoke up, they were all shut down by people in our government and said, no, no, keep sending out the checks.
• 3:46
  SPEAKER_00: So in addition to that now, this whole thing is broken open.
• 3:49
  SPEAKER_00: We've seen things like overbilling, uh, billing for services that people never received, daycare fraud, autism fraud, um, where there's not a single child being helped who actually has autism in the building.
• 4:02
  SPEAKER_00: Or yeah, even just simple overbilling, um, billing the government for more than you really than the services you really administered.
• 4:10
  SPEAKER_00: Also, fraud tourism is a new one in Minnesota that's popped up.
• 4:13
  SPEAKER_00: Kind of my favorite little thing.
• 4:14
  SPEAKER_00: They keep finding out that people have been coming from all over the country to commit fraud in Minnesota since it's just so dang easy.
• 4:21
  SPEAKER_01: And there are no other reasons to want to come to Minnesota.
• 4:24
  SPEAKER_00: Okay, that is so rude and untrue.
• 4:27
  SPEAKER_02: So not getting in on that one.
• 4:29
  SPEAKER_00: My point being the issue of fraud in Minnesota impacts the entire nation, not just one state.
• 4:36
  SPEAKER_00: We should all care about it, and the federal government should care about it because it's a lot of uh federal taxpayer dollars.
• 4:42
  SPEAKER_02: And it goes beyond the federal tax dollars or wasteful spending.
• 4:46
  SPEAKER_02: Uh there's also an emotional cultural impact of all this fraud that is just corrosive for the country.
• 4:53
  SPEAKER_02: So, and and I have to say, I'm psychologically, I am not immune from this.
• 4:58
  SPEAKER_02: I feel it acutely.
• 5:00
  SPEAKER_02: Uh it's just maddening to see all these people getting rich by evading the rules.
• 5:05
  SPEAKER_02: And when you start to see it and sort of soak in it for a while, it's not an occasional thing.
• 5:10
  SPEAKER_02: It just seems to be the way certain states do business.
• 5:12
  SPEAKER_02: You feel like a sucker for following the rules and earning whatever income you naturally earn instead of the many millions they're securing by sort of flouting the rules and getting away with it because the people in charge of enforcing the rules don't seem to care.
• 5:27
  SPEAKER_02: Uh, and then as that starts to happen, a sort of alienation sets in and a cynicism.
• 5:32
  SPEAKER_02: There's actually a um social science category for thinking about this.
• 5:37
  SPEAKER_02: And the category is social trust.
• 5:39
  SPEAKER_02: So social trust is this absolutely essential, intangible asset in any society.
• 5:46
  SPEAKER_02: It's like this reserve currency that allows you to uh deal with any, first of all, to work with each other economically across differences, so that in high trust societies, economies work more smoothly and efficiently because people can trust each other, and um uh solve collective action problems and um have sort of a reserve for addressing all sorts of social, cultural, political problems that might arise.
• 6:10
  SPEAKER_02: Societies that have high degrees of social trust uh uh have more prosperous economies and better functioning systems of law.
• 6:20
  SPEAKER_02: And societies with low social trust lack those things.
• 6:23
  SPEAKER_02: And I think this kind of fraud, besides wasting a lot of money, has an absolutely nuclear bomb effect on social trust.
• 6:32
  SPEAKER_02: We become alienated, we stop trusting one another, we stop trusting our government, we're left to our own devices, and uh we think the only way to get ahead is to rip the country off.
• 6:41
  SPEAKER_02: So there's there's obviously there's the waste side, but there's this other side where it's an attack on the foundations of American culture.
• 6:48
  SPEAKER_00: Totally.
• 6:49
  SPEAKER_00: And there's an element too that's racial here in Minnesota where uh one of the communities that's been really disproportionately involved in committing fraud is the Somali community.
• 6:57
  SPEAKER_00: Well, now you have um a lot of people who are upset with a specific community.
• 7:02
  SPEAKER_00: It causes these racial divisions.
• 7:03
  SPEAKER_00: Of course, when you look at it, you know, the percentage of people in the Somali community who have actually been convicted of committing fraud is a very small percentage, but you can't help but see the people that are going to jail for fraud and think, hmm, there's something going on there.
• 7:16
  SPEAKER_00: And that causes so much discontent among a population.
• 7:19
  SPEAKER_00: I think you're completely right.
• 7:20
  SPEAKER_01: Well, this goes to the social trust point, I think.
• 7:22
  SPEAKER_01: Social trust is built up over a long period of time.
• 7:26
  SPEAKER_01: This idea that, you know, you don't just defraud the government and you don't just pay bribes for things and you don't defraud your fellow citizens, that can take generations.
• 7:33
  SPEAKER_01: It can take a thousand years, you know, uh to build uh and uh develop.
• 7:37
  SPEAKER_01: And you have uh this ties into immigration, which we can talk about a little bit later.
• 7:41
  SPEAKER_01: But this is one of the problems with immigration without assimilation is you know, they can come here for the fraud tourism or whatever it is, which I just heard for the first time uh uh today, right?
• 7:51
  SPEAKER_01: And so this I kind of have a dark thought about this because one thing that people have commented on is to perpetuate fraud on this kind of scale, everyone has to be in on it, like the autism type situation.
• 8:01
  SPEAKER_01: You have to get parents to pretend that their kids are autistic.
• 8:04
  SPEAKER_01: And so you have, you know, dozens and dozens of people, no one blowing the whistle about this, and they all just think uh it's okay, which actually just gives me a dark thought about election fraud, which is not something I want to do right here.
• 8:17
  SPEAKER_01: But think about it like how does something like this happen?
• 8:20
  SPEAKER_01: Well, when you have an election machine where everybody, you know, a hundred people who are all machine politics operatives in the big city think that this is actually okay, uh, then they're gonna be able to pull it off because nobody thinks that it's wrong to do the thing in question.
• 8:33
  SPEAKER_01: And this is how election fraud could happen uh in uh big cities where, you know, there isn't a single Republican election worker, you know, who would blow the whistle on something.
• 8:42
  SPEAKER_01: And actually it's much harder to detect.
• 8:43
  SPEAKER_01: At least this fraud was detected.
• 8:45
  SPEAKER_01: One last point about uh the spending, you said nine billion.
• 8:47
  SPEAKER_01: I think it was Stephen Miller.
• 8:49
  SPEAKER_01: I didn't check fact check uh the his his point here or his claim here, but he said like we could balance the budget uh if fraud weren't uh taken into account, if we just like solved the fraud problem.
• 8:58
  SPEAKER_01: I don't know if that's true, uh, but clearly it's not just nine billion, it's nine billion in Minnesota, right?
• 9:03
  SPEAKER_01: Uh huge, huge, huge problem.
• 9:05
  SPEAKER_00: Yeah, it's such a good point because you know you hear about when people bring up conspiracy theories or something like, oh, we we never landed on the moon.
• 9:12
  SPEAKER_00: Well, the response automatically a lot of people have, which I think is correct, is well, someone would have said something.
• 9:17
  SPEAKER_00: Like there's too many people involved in landing on the moon, right?
• 9:20
  SPEAKER_00: Like someone would have blown the whistle.
• 9:22
  SPEAKER_00: But then you look at these networks that we have in Minnesota that are that are showing that there are hundreds of people involved and just pretending that their kids have autism so they get these kickbacks.
• 9:31
  SPEAKER_00: And it's like, hmm, it makes you rethink some things.
• 9:33
  SPEAKER_03: It does.
• 9:34
  SPEAKER_00: So before we get to the constitutional question, um, there have been lawsuits, of course, trying to stop the Trump administration's efforts to turn off this spigot because of the widespread fraud.
• 9:44
  SPEAKER_00: Because the question is like, what can the federal government do about this fraud?
• 9:48
  SPEAKER_00: It obviously is in the states here, but like I said, it really impacts the federal government.
• 9:53
  SPEAKER_00: In Minnesota, we've had a hard time getting elected art officials to care at all about the fraud.
• 9:57
  SPEAKER_00: They're kind of pretending now that it's an election year, but they historically have not at all cared.
• 10:00
  SPEAKER_00: In fact, it's been politically maybe helpful for them, even you could argue, to um perpetuate this fraud.
• 10:06
  SPEAKER_00: But on the national level, we have a president and an administration that I think cares about fraud and wants to do something about it.
• 10:11
  SPEAKER_00: So, what can they do about it?
• 10:13
  SPEAKER_00: Well, there are two separate lawsuits um that have been brought against the Trump administration for trying to stop this funding.
• 10:21
  SPEAKER_01: Because what people How dare they try to stop the fraud?
• 10:24
  SPEAKER_01: Right, exactly.
• 10:25
  SPEAKER_01: How dare they?
• 10:26
  SPEAKER_00: Because what people like Dr.
• 10:27
  SPEAKER_00: Oz has have done is he said, I'm withholding some of this Medicaid spending until you do something about the fraud issue because this money is just going out the window.
• 10:36
  SPEAKER_00: So what the states have responded by um filing lawsuits.
• 10:40
  SPEAKER_00: So in one of them, incl uh states including New York, Minnesota, California, uh, plaintiffs have secured a preliminary injunction against the Trump administration.
• 10:49
  SPEAKER_00: And a second lawsuit filed here in Minnesota by Keith Ellison, specifically against specifically against Dr.
• 10:56
  SPEAKER_00: Oz, the head of uh Centers for Medicaid and Medicare Services, for deferring nearly$260 million in payments to Minnesota under the Medicaid program until Minnesota proved they weren't paid out in fraudulent claims.
• 11:10
  SPEAKER_00: Dr.
• 11:10
  SPEAKER_00: Ozz actually came to Minnesota and like saw the fraudulent buildings where they claimed there was a ton of services being given.
• 11:16
  SPEAKER_00: And there's clearly like no one in any of these buildings.
• 11:18
  SPEAKER_00: So he knows firsthand.
• 11:19
  SPEAKER_00: Um fortunately, the Minnesota case drew a Trump-appointed judge here in Minnesota.
• 11:23
  SPEAKER_00: And so he actually applied some law and denied the preliminary injunction.
• 11:28
  SPEAKER_00: So let's start with that one, maybe the pro the Minnesota lawsuit.
• 11:31
  SPEAKER_00: It has a bunch of um administrative law issues.
• 11:34
  SPEAKER_00: Thankfully, you two are experts in that because I am not.
• 11:37
  SPEAKER_00: So why don't one of you tell us what happened here?
• 11:39
  SPEAKER_01: Well, I'll take a stab at it.
• 11:41
  SPEAKER_01: Josh, do you actually teach administrative law now?
• 11:42
  SPEAKER_02: Or I haven't taught it yet.
• 11:44
  SPEAKER_02: Um, I I teach uh leg reg, legislation or regulation, which kind of touches on administrative law issues.
• 11:49
  SPEAKER_02: And I've of course I've been chief counsel of the Department of Education.
• 11:52
  SPEAKER_02: So that was like a year of intensive administrative law, but I don't teach administrative law.
• 11:58
  SPEAKER_01: So you've been at the brunt of the law fair against uh Oh my god.
• 12:01
  SPEAKER_02: I have experienced this so intensively.
• 12:02
  SPEAKER_02: And what you were saying about it is so like it's like you do anything, anything you were elected to do, and immediately you're sued by a consortium of blue states.
• 12:14
  SPEAKER_02: And you do, you know, it's like you the feeling is you can't move, you can't pour yourself a glass of water or or change the paper towel brand or something like that without getting sued by a consortium of blue states.
• 12:28
  SPEAKER_02: And this toxic combination of um forum shopping and partisan district court judges just creates this situation where you I mean, really what was happening in the Trump administration when I was in there for about 15 months was we were fighting the ghost of the Biden administration.
• 12:46
  SPEAKER_02: Every president projects their power forward through their judges, right?
• 12:50
  SPEAKER_02: I remember my father on the Ninth Circuit saying that he felt like, and it was in the 19, it was in the 2000s when he said that, he said he's still fighting Carter because there are Carter-appointed judges on the Ninth Circuit.
• 13:02
  SPEAKER_02: And we were just fighting Biden, who had lost the election, Kamala Harris had lost the election, but we were fighting him in the form of his district court judges because the legal system is being used not just to uphold the law, but to fight the uh an already lost electoral fight.
• 13:20
  SPEAKER_02: So it's maddening.
• 13:21
  SPEAKER_02: Yeah.
• 13:22
  SPEAKER_01: And it's um so here on the rationally based podcast, we always come back to the judges.
• 13:28
  SPEAKER_01: Who is a greater threat to the republic?
• 13:30
  SPEAKER_01: Judges or Trump?
• 13:31
  SPEAKER_01: And the answer is obviously the judges, uh, which uh watch episode 7.5 for a longer take uh about that.
• 13:37
  SPEAKER_01: But okay, so what's going on here is as Catherine set it up, basically the way it works is these federal programs are shared, the costs are shared, the burden is shared between the states and the federal government.
• 13:48
  SPEAKER_01: And so every quarter, the federal government looks at okay, how many Medicaid claims have you paid out?
• 13:53
  SPEAKER_01: How many TANF claims have you paid out?
• 13:55
  SPEAKER_01: The New York case has a few other welfare programs, and then they anticipate the federal share for the next quarter.
• 14:00
  SPEAKER_01: So what the Trump administration did in these cases is it looked at these welfare programs, looked at the prior quarter of claims, and assessed in the Minnesota case, for example, that something like$260 billion in claims were likely fraudulent, or they weren't satisfied that they weren't fraudulent.
• 14:13
  SPEAKER_01: So they deducted that$260 billion from the calculation of their anticipated share for the next quarter.
• 14:19
  SPEAKER_01: And so they were sued.
• 14:20
  SPEAKER_01: And in Minnesota, uh the preliminary injunction was denied uh because they drew a reasonable judge, and in New York it was granted.
• 14:27
  SPEAKER_01: Uh, but it's the same issue uh in both cases.
• 14:30
  SPEAKER_01: So issue number one, which we don't have to spend too much time on, but it relates to this judicial power question not only do you have to have standing and an injury, right, to invoke the judicial power, but the in administrative law context, you can only sue over final agency actions.
• 14:43
  SPEAKER_01: You have to wait for the agency to finish its decision-making process, for the agencies to actually have legal effect.
• 14:49
  SPEAKER_01: And the two judges, the New York judge and the Minnesota judge, came to different conclusions as to whether there was final agency action here.
• 14:55
  SPEAKER_01: Think about it this way: if you're applying for welfare benefits and you've never received any benefits yet, and the government says, look, we think we're gonna deny you, but here's the process.
• 15:04
  SPEAKER_01: You can still fill out this, this paperwork, you can submit more documentation.
• 15:07
  SPEAKER_01: Is that final agency action?
• 15:09
  SPEAKER_01: Probably not.
• 15:10
  SPEAKER_01: They haven't done a final decision, right?
• 15:13
  SPEAKER_01: But what if you're already receiving the benefits and then all of a sudden they take the money away from you and say, but you can challenge a taking away from you?
• 15:21
  SPEAKER_01: Well, it feels like final agency action for the period of time that you lose the money.
• 15:25
  SPEAKER_01: Well, what about if um it's a quarterly review process?
• 15:29
  SPEAKER_01: And in this case, they stop the money for the particular quarter uh until you satisfy them.
• 15:34
  SPEAKER_01: Is that final agency action?
• 15:36
  SPEAKER_01: Because you've been relying on the money and now the spigot closes.
• 15:39
  SPEAKER_01: And so it's actually a really hard intellectual question.
• 15:42
  SPEAKER_01: Uh, my sense is it's not final agency action, but it's actually a close question uh in this case.
• 15:47
  SPEAKER_01: And so the judges um diverged on this particular uh question, quirk of administrative law.
• 15:52
  SPEAKER_01: The more interesting though, is something called a pretext.
• 15:56
  SPEAKER_01: Uh and so this goes to the merits of the claim.
• 15:59
  SPEAKER_01: So in administrative law, the Administrative Procedure Act, the APA, authorizes courts to set aside agency action that is arbitrary or capricious.
• 16:08
  SPEAKER_01: What does this basically mean?
• 16:10
  SPEAKER_01: It means that the agency has to engage in reason decision making.
• 16:14
  SPEAKER_01: It has to show that what it's doing is authorized by the statute, it has to show that it's uh, you know, it has to analyze any facts that are relevant to the policy making question.
• 16:24
  SPEAKER_01: If you're making a regulation, you have to take public comments and you have to consider the relevant comments or the notice and comment process, and you have to show that your rule is or your regulation is rationally connected, you know, to the facts uh that you found, to the law, and so on.
• 16:37
  SPEAKER_01: Your your policy has to be a product of reasoned decision making, in other words.
• 16:41
  SPEAKER_01: So the APA uh gives judges the power to ensure that that reasoning process has been undertaken by the agency.
• 16:50
  SPEAKER_01: This is very different.
• 16:51
  SPEAKER_01: Do you remember the episode with Jonathan Green a few weeks back?
• 16:54
  SPEAKER_01: Where in Israel it's judges just weigh for themselves what they think the reasonable answer is.
• 16:59
  SPEAKER_01: You you can't in America well, I say you can't, but liberal judges do it all the time.
• 17:04
  SPEAKER_01: Some people will argue conservative judges do too, but liberals do it all the time.
• 17:07
  SPEAKER_01: You're not supposed to supplant your the agency's judgment with your judgment as the judge.
• 17:12
  SPEAKER_01: You just have to show that there isn't a clear error of judgment, right, on the part of the agency and so on.
• 17:17
  SPEAKER_01: Well, what the New York judge said is there is no rational reason to withhold the funds that have been given.
• 17:23
  SPEAKER_01: Like, hello, like the fraud, isn't that like a rational reason?
• 17:27
  SPEAKER_01: It's purely partisan political purposes to punish the blue states.
• 17:31
  SPEAKER_01: Therefore, it isn't a product of reasoned decision making.
• 17:33
  SPEAKER_01: It is purely to uh uh for on the pretextual that the the administrative law stuff, it's all pretextual for nothing more than a partisan political attack on blue states, and therefore it's not a product of reasoned decision making.
• 17:46
  SPEAKER_01: And in Minnesota, the answer is you know the judge didn't put it in these terms, but I'll put it in these terms.
• 17:52
  SPEAKER_01: Like, look, maybe there's just more fraud in blue states.
• 17:56
  SPEAKER_01: But the point is, this whole pretext stuff is actually really difficult intellectual question, right?
• 18:01
  SPEAKER_01: You want a new administration elections to have consequences, you want agencies to be able to change their policy views.
• 18:08
  SPEAKER_01: But the theory of administrative law is you're allowed to do that, you're allowed to change priorities based on the new administration as long as you show that your policy choices are consistent with the statute and well-reasoned and consistent with the facts, right?
• 18:19
  SPEAKER_01: And Josh, you probably had on the ground experience with those.
• 18:21
  SPEAKER_02: Oh, absolutely.
• 18:22
  SPEAKER_02: I mean, um the pr the pretext question is really hard.
• 18:27
  SPEAKER_02: There are contexts in the law where we really care about whether the governmental actor or the um uh institutional actor is acting on the base of pretext.
• 18:37
  SPEAKER_00: I mean, think about like Can you can you really quickly define pretext in this case?
• 18:41
  SPEAKER_00: Yes.
• 18:41
  SPEAKER_02: Uh the way I think of a pretext is your stated reason, your public justification for what you're doing isn't the real reason, the motivated reason for what you're doing.
• 18:49
  SPEAKER_00: Oh, so your political retribution, they think, is like the real reason that Exactly, exactly.
• 18:54
  SPEAKER_02: So real reason versus stated reason.
• 18:56
  SPEAKER_02: So there are contexts in which in the law we absolutely care about whether your reason is pretextual.
• 19:02
  SPEAKER_02: Um if I'm an employer and um uh I say I didn't hire you because you're not a good doctor, lawyer, or violinist, or professor, or whatever, but really I didn't hire you because you're black or Jewish or a woman, that would be a pretextual claim of reason.
• 19:18
  SPEAKER_02: And that's absolutely illegal under the Civil Rights Act.
• 19:21
  SPEAKER_02: Uh with with the government, uh too, with the federal government, we um we want there to be a certain transparency of reasons, but it's complicated because uh these statutes give grants of authorities to agencies, like the EPA has a lot of authority to define the conditions of clean air and clean water and enforce those provisions.
• 19:43
  SPEAKER_02: And when you elect a Republican administration, they were elected partly because they're less environmentalists than a Democrat administration, and they're entitled to have a different view of the statute.
• 19:53
  SPEAKER_02: Or the Trump administration has a very different view of the Civil Rights Act than the Biden administration did, or the Voting Rights Act.
• 19:59
  SPEAKER_02: So there are these changes that are consistent with, like just, as you said, Elon, elections having consequences.
• 20:06
  SPEAKER_02: So here's my take on it.
• 20:08
  SPEAKER_02: The statutes undergirding these federal uh spending programs allow you to care about fraud.
• 20:17
  SPEAKER_02: You are allowed, like the federal government.
• 20:19
  SPEAKER_02: So surprise, surprise, you're allowed to care about whether massive amounts of money are being stolen based on fraudulent claims.
• 20:25
  SPEAKER_02: That is totally legitimate under the statute.
• 20:27
  SPEAKER_02: What the New York judge was doing was saying, you say that you care about fraud, but really I know what's in your heart, Mr.
• 20:34
  SPEAKER_02: Trump and President Trump and whole Trump administration.
• 20:37
  SPEAKER_02: What's in your heart is that you just don't like blue states and you're trying to get them back.
• 20:41
  SPEAKER_02: That is not what pretext is supposed to mean.
• 20:44
  SPEAKER_02: First of all, it's not true.
• 20:45
  SPEAKER_02: I mean, I I can say with all sincerity, I was in the Trump administration.
• 20:49
  SPEAKER_02: I cared about fraud, and so did lots of other people around me because it's just natural to care about it.
• 20:54
  SPEAKER_02: And so it's not a pretext.
• 20:56
  SPEAKER_02: It's not a pretext for a reason, and it's a reason it's officially given in the statute.
• 21:00
  SPEAKER_02: There's nothing wrong with that reason.
• 21:03
  SPEAKER_00: And that's insane.
• 21:04
  SPEAKER_00: I'm sorry.
• 21:04
  SPEAKER_00: That is so crazy.
• 21:05
  SPEAKER_00: I don't understand.
• 21:06
  SPEAKER_00: There's like a mind-reading element here where the judge is like, actually, I know better than you and what you're thinking.
• 21:11
  SPEAKER_00: Like, that is so weird.
• 21:12
  SPEAKER_01: And they're not supposed to mind read in that sense.
• 21:14
  SPEAKER_01: And it's supposed to be very rare where you can even allow for like a deposition of an official.
• 21:19
  SPEAKER_02: Really, what it is, Ilan, is you said, you know, our arbitrary capricious review is nothing like Israel's reasonableness review.
• 21:26
  SPEAKER_02: Not so.
• 21:26
  SPEAKER_02: Our arbitrary and capricious review is not like Israel's reasonableness review because our district court judges are more restrained than their judges.
• 21:34
  SPEAKER_02: There's no real difference.
• 21:36
  SPEAKER_02: I mean, honestly, this like minor verbal difference between arbitrary capricious and reasonableness, these uh very technical questions of like how much difference are the difference?
• 21:46
  SPEAKER_02: No, the difference is personnel.
• 21:48
  SPEAKER_02: It's the it's the difference is how district judges behave.
• 21:51
  SPEAKER_02: And some of our district judges today are behaving more like the activist Israeli judiciary than the traditions of the American judiciary.
• 22:00
  SPEAKER_02: But it's not our doctrine that makes us different.
• 22:01
  SPEAKER_02: It's the judges that make us different.
• 22:03
  SPEAKER_01: Yeah, I mean, I I I get it.
• 22:06
  SPEAKER_01: But even Jonathan Green in that episode said that there is like a legitimate place for a kind of reasonableness review where if the agency action is so unreasonable, it can't possibly have been the legislature's intent to delegate that kind of authority, right?
• 22:20
  SPEAKER_01: And I buy that policing on the boundaries, things that are so unreasonable it couldn't possibly have been delegated.
• 22:25
  SPEAKER_01: Yeah, I do too.
• 22:26
  SPEAKER_01: But you think the arbitrary and capricious standard, which I interpret as that, you think that it is too loosey-goosey or too undefined that it allows, especially progressive judges, to play the role of general arbiters of reasonableness.
• 22:39
  SPEAKER_01: That's your view.
• 22:40
  SPEAKER_02: That's my view.
• 22:40
  SPEAKER_02: Yeah, absolutely.
• 22:41
  SPEAKER_02: So so, you know, is there a defensible intellectual distinction between policing the outer boundaries of reasonableness and just substituting your judgment for the elected officials and their direct appointees?
• 22:54
  SPEAKER_02: Absolutely.
• 22:55
  SPEAKER_02: There's a legitimate intellectual distinction there.
• 22:58
  SPEAKER_02: Is that what's driving the differences between judicial behavior and the one system and the other?
• 23:03
  SPEAKER_02: No.
• 23:04
  SPEAKER_02: It's what's driving that difference in behavior is who gets appointed to the court and how much power do they have.
• 23:10
  SPEAKER_02: And what we're seeing is we're seeing, especially just imagine the following.
• 23:15
  SPEAKER_02: Imagine that district court judges were being just as activists, these sort of binary uh district court judges were being this activist and were striking down, you know, saying we've read the mind of the Trump administration, and really they claim to be doing fraud, really, they're trying to punish blue states.
• 23:30
  SPEAKER_02: And imagine the Supreme Court affirmed them because a few historical contingencies had gone differently.
• 23:35
  SPEAKER_02: And Mayor Garland was on the court, and we didn't have uh the the court we do.
• 23:40
  SPEAKER_02: Uh then it would there wouldn't be that much airspace between our system and the Israeli at all.
• 23:44
  SPEAKER_01: Gosh, this is coffee, it's not whiskey.
• 23:45
  SPEAKER_01: So, like uh careful what you say here.
• 23:47
  SPEAKER_01: Yeah, okay, I'll say one last thing.
• 23:49
  SPEAKER_01: Uh I mean, this has been a sobering uh speaking of alcohol, uh, conversation um about uh arbitrary and capricious review in the role of the judiciary.
• 23:55
  SPEAKER_01: This whole pretext thing, Catherine, by the way, do you remember the census case?
• 23:59
  SPEAKER_01: You were probably what in high school?
• 24:00
  SPEAKER_01: No, you were in college, uh in 2019, 2020.
• 24:03
  SPEAKER_01: Oh, yeah.
• 24:04
  SPEAKER_01: Uh that's where the this pretext comes from, right?
• 24:06
  SPEAKER_01: I mean, it's it's always been understood in administrative law that pretext is okay.
• 24:11
  SPEAKER_01: I I want to be clear about that point.
• 24:12
  SPEAKER_01: Until the Trump census case with Chief Justice Roberts joining the liberals in 2020 or 2019, whenever that case was.
• 24:19
  SPEAKER_00: Wait, so it was okay to say one thing but mean another thing?
• 24:23
  SPEAKER_01: Thank you for asking it that way.
• 24:25
  SPEAKER_01: Yes, kind of, right?
• 24:27
  SPEAKER_01: The the theory of administrative law until 2019, and I still think today, was that you can have pretextual reasons in the sense that the real deciding factor, the real reason something happens as opposed to something else happening, is because you have a different philosophy and you have a different belief and you have different policy priorities.
• 24:46
  SPEAKER_01: As long as you can justify those priorities on the basis of the statute, if it's supported by the facts, it's supported by good reasons.
• 24:53
  SPEAKER_01: It doesn't matter if the agency chose one, ultimately chose one course of action versus the other because of political pressure from a member of Congress or from the president.
• 25:02
  SPEAKER_01: That doesn't matter.
• 25:03
  SPEAKER_01: It does, there's a famous case called Sierra Club v.
• 25:06
  SPEAKER_01: Castle in the DC Circuit, where even the liberal DC Circuit said elections have consequences, presidents are the head of the administrative state.
• 25:13
  SPEAKER_01: And as long as they show that their policy choices are within the scope of Congress's delegated authority, what Congress delegated to the agency, it's okay to do X rather than Y because of your political preferences and so on.
• 25:26
  SPEAKER_01: This was understood to be okay.
• 25:28
  SPEAKER_00: Yeah, that seems like very democratic.
• 25:30
  SPEAKER_00: Like that's why we vote.
• 25:31
  SPEAKER_00: That's like the point of democracy, right?
• 25:33
  SPEAKER_00: And so now they need to carry out the will of the people.
• 25:35
  SPEAKER_00: That seems to make sense to me.
• 25:36
  SPEAKER_01: Except democracy, as we learned, is substantive democracy for some people, which means democracy is whatever the progressives want and the judges will help them get there, right?
• 25:44
  SPEAKER_01: Which is kind of what happens.
• 25:45
  SPEAKER_01: Well, what happened in the census case?
• 25:47
  SPEAKER_01: The census case, the Trump administration wanted to add a citizen citizenship question to the 2020 census.
• 25:52
  SPEAKER_01: Is there any question that the constitution allows the inclusion of a citizenship question?
• 25:55
  SPEAKER_01: Of course it does.
• 25:56
  SPEAKER_01: Does Congress's statute, which allows them to ask multiple kinds of questions, whatever they really it delegates discretion to the Secretary of Commerce to come up with questions?
• 26:03
  SPEAKER_01: Obviously, it allows them to do it.
• 26:06
  SPEAKER_01: But because the reasons they gave for doing it under the Administrative Procedure Act was like, oh, we need to enforce the voting rights act.
• 26:12
  SPEAKER_01: And it's like, well, the citizenship question really would doesn't relate clearly to voting rights questions.
• 26:17
  SPEAKER_01: The court basically said it's pretextual.
• 26:19
  SPEAKER_01: So so the chief and the liberals at the time said uh that that that this was pretextual.
• 26:25
  SPEAKER_01: And the dissenters were like, no, like this is blank blanket discretion.
• 26:30
  SPEAKER_01: There could be any reason under the statute to include a citizenship question.
• 26:33
  SPEAKER_01: Maybe, maybe it would have come out differently if they had just said, we think it's important to know who are citizens in this country, because maybe it'll be important for immigration legislation.
• 26:42
  SPEAKER_01: So we're gonna ask the question if they had just said that, instead of said something that didn't seem true to be the underlying motive, maybe it would have gone different.
• 26:49
  SPEAKER_01: And I don't know, do we feel okay about that?
• 26:51
  SPEAKER_01: That just be truthful about the reasons motivating you and then we'll let it fly.
• 26:55
  SPEAKER_01: I don't know.
• 26:55
  SPEAKER_01: The whole thing is pr seemed preposterous to me.
• 26:57
  SPEAKER_01: But again, just to kind of put a pin on this part of the conversation, the whole point historically is that elections have consequences.
• 27:04
  SPEAKER_01: As long as you can show that your policy is consistent with the statute and reason decision making, it's okay if the ultimate deciding factor is that you have a different philosophy or a different view as to what the policy uh should be.
• 27:15
  SPEAKER_01: But here, apparently, if your philosophy uh is that blue states commit more fraud, that is not good enough.
• 27:22
  SPEAKER_01: And so I think the Trump administration, of course, will win this eventually.
• 27:25
  SPEAKER_01: Uh, but as a famous judge on the Ninth Circuit once said, the Supreme Court can't catch them all.
• 27:30
  SPEAKER_01: And not my dad.
• 27:31
  SPEAKER_01: That was not, that was not, I'm looking at Josh, but it was not his dad.
• 27:34
  SPEAKER_01: It was his call, his dad's colleague, Stephen Reinhardt anyway.
• 27:37
  SPEAKER_01: So that's the administrative law download for the day.
• 27:39
  SPEAKER_01: So thank you for going down that rabbit hole with me.
• 27:41
  SPEAKER_02: Okay, so part of what we do on the Rationally Based podcast is dig deeper to the constitutional substance underneath current events.
• 27:50
  SPEAKER_02: All of these current controversies are about people ripping off federal spending and maybe states deliberately turning a blind eye to the grift.
• 27:57
  SPEAKER_02: But underlying that grift is that we have in this country all of these massive federal spending programs.
• 28:04
  SPEAKER_02: It's a huge source of federal power.
• 28:06
  SPEAKER_02: Um, and what's the constitutional basis for all that spending?
• 28:09
  SPEAKER_02: Where does the federal government get that authority?
• 28:11
  SPEAKER_02: So, two foundational principles of all constitutional law.
• 28:16
  SPEAKER_02: The federal government is a government of enumerated powers.
• 28:19
  SPEAKER_02: So anything it does must be supported by a specific grant of power in the Constitution, and a corollary principle that you must be able to trace any action of the federal government to some grant of authority in the Constitution.
• 28:32
  SPEAKER_02: Usually it's some bit of text, it's some clause.
• 28:35
  SPEAKER_02: And that means that if the federal government has a spending program, you have to be able to look back to the Constitution for the basis of that spending.
• 28:41
  SPEAKER_02: If there's Social Security spending, well, what's the basis in the Constitution for the Social Security spending?
• 28:46
  SPEAKER_02: If there's Medicare spending, what's the basis in the Constitution for the Medicare spending?
• 28:50
  SPEAKER_02: Um The key clause is, well, traditionally the key clause.
• 28:54
  SPEAKER_02: I think Elon might have something to say about this, but the traditional Oh, I sure do have something to say about this, Joshua, but go on.
• 29:00
  SPEAKER_02: The key clause traditionally is Article I, Section 8.
• 29:03
  SPEAKER_02: These are the first words of the section laying out Congress's enumerated powers.
• 29:07
  SPEAKER_02: And here's what it says.
• 29:08
  SPEAKER_02: I'll read it in full and then I'll read it with ellipses.
• 29:11
  SPEAKER_02: The Congress shall have power to lay and collect taxes, duties, impost, and excises to pay the debts and provide for the common defense and general welfare of the United States.
• 29:22
  SPEAKER_02: That's known as the spending clause or the taxing and spending clause.
• 29:26
  SPEAKER_02: And after those opening words, Article 1, Section 8 lays out all the enumerated power.
• 29:31
  SPEAKER_02: So, you know, to regulate commerce, to declare war, to constitute tribunals inferior to the Supreme Court.
• 29:37
  SPEAKER_02: So let me read that again with some ellipses, just so you can hear the keywords.
• 29:41
  SPEAKER_02: The Congress shall have power to provide for the general welfare of the United States.
• 29:48
  SPEAKER_02: That has traditionally been understood to be some sort of grant of spending authority.
• 29:52
  SPEAKER_02: But here's the critical question.
• 29:54
  SPEAKER_02: And it's been a controversy for 200 plus 250 years.
• 29:57
  SPEAKER_02: It's been a controversy since the founding.
• 30:00
  SPEAKER_02: To spend for what?
• 30:01
  SPEAKER_02: Since the founding, there have been two views.
• 30:04
  SPEAKER_02: First is Congress can spend for the purpose of accomplishing the enumerated powers that follow.
• 30:10
  SPEAKER_02: So Congress can spend for the purpose of declaring war or prosecuting a war.
• 30:15
  SPEAKER_02: Congress can spend for the purpose of constituting tribunals inferior to the Supreme Court, or for the purpose of regulating commerce.
• 30:22
  SPEAKER_02: The other view is that the two are independent.
• 30:25
  SPEAKER_02: So Congress can just spend for the general welfare.
• 30:28
  SPEAKER_02: So it has a series of enumerated powers where it has, you could say, coercive power, but its spending power is perfectly general.
• 30:34
  SPEAKER_02: It could, you know, it could spend on podcasts if it wanted.
• 30:37
  SPEAKER_02: Actually, I kind of like that idea.
• 30:38
  SPEAKER_02: It should spend on podcasts.
• 30:40
  SPEAKER_01: Certainly one podcast.
• 30:41
  SPEAKER_02: One podcast, one in particular.
• 30:43
  SPEAKER_02: Bill of a tainder for us.
• 30:45
  SPEAKER_02: Madison and Hamilton disagreed about this.
• 30:48
  SPEAKER_02: Madison was of the enumerated powers views.
• 30:50
  SPEAKER_02: Congress can spend only for purposes of the enumerated powers.
• 30:53
  SPEAKER_02: Hamilton was of the general welfare view.
• 30:56
  SPEAKER_02: Congress can spend in general on whatever it wants.
• 30:58
  SPEAKER_02: It's been a textual ambiguity since the founders.
• 31:01
  SPEAKER_02: And there are major national interests at stake here because the federal government spends on lots of things beyond the enumerated powers.
• 31:07
  SPEAKER_02: Take the examples we're talking about: Social Security, Medicare, Medicaid.
• 31:12
  SPEAKER_02: Those are, I think aside from defense, those are the three biggest pots of federal money.
• 31:16
  SPEAKER_02: They're the whole, they're the core of the social, the federal social safety net.
• 31:21
  SPEAKER_02: And Congress is spending on them.
• 31:23
  SPEAKER_02: The federal government is spending on them, but it doesn't go to any of the enumerated powers, at least in no obvious way.
• 31:30
  SPEAKER_02: So this is one of the chief sources of federal power.
• 31:33
  SPEAKER_02: In some domains, like national defense, the federal government commands.
• 31:38
  SPEAKER_02: But in in others, the federal government purchases influence.
• 31:42
  SPEAKER_02: And this is a case of purchasing influence over the states.
• 31:45
  SPEAKER_02: So, Ilan, you have a constitutional argument about this in your book.
• 31:49
  SPEAKER_02: It's a controversial argument.
• 31:51
  SPEAKER_02: It's an interesting argument.
• 31:52
  SPEAKER_02: You argue, in effect, that these federal spending programs, the welfare programs, are unconstitutional.
• 31:58
  SPEAKER_02: Fill us in.
• 32:00
  SPEAKER_01: Based.
• 32:01
  SPEAKER_01: Oh, oh, it's based.
• 32:02
  SPEAKER_01: Do you remember when I posted on X about this after the Nick Shirley thing, a professor at Harvard Law School?
• 32:08
  SPEAKER_01: Do you remember what he called?
• 32:09
  SPEAKER_01: He said it was uh con artist constitutionalism, what I was doing.
• 32:15
  SPEAKER_01: But you call it.
• 32:16
  SPEAKER_02: You and Madison.
• 32:18
  SPEAKER_02: You and Madison, by the way, because Madison agreed with you.
• 32:20
  SPEAKER_01: And Jefferson, and actually everybody except Alexander Hamilton, until James Monroe agreed with me about this.
• 32:26
  SPEAKER_00: Why didn't they solve this problem?
• 32:28
  SPEAKER_01: Well, uh, so one possibility is they didn't realize they were doing an irreducible ambiguity.
• 32:34
  SPEAKER_01: And so then they just sort of fought about it.
• 32:36
  SPEAKER_01: But um, I actually think the answer is different, Catherine.
• 32:39
  SPEAKER_01: I think, and I'll get to Josh's answer because I actually disagree with some of the lead-up that he said.
• 32:44
  SPEAKER_01: I don't think there's a spending clause.
• 32:45
  SPEAKER_01: And I think um he actually already omitted a part of the clause that's important.
• 32:50
  SPEAKER_01: And so he already had ellipses.
• 32:51
  SPEAKER_02: Would you agree with me that what I stated was the conventional wisdom?
• 32:56
  SPEAKER_01: Yes, and the wrong and wrong.
• 32:58
  SPEAKER_02: Conventional but wrong.
• 32:59
  SPEAKER_02: That could have been another name for this podcast.
• 33:01
  SPEAKER_01: Conventional but wrong.
• 33:02
  SPEAKER_01: Nope, convention unconventional but right.
• 33:04
  SPEAKER_01: That's really what we are.
• 33:06
  SPEAKER_01: Uh but to answer Catherine's question, I think the power to spend independently of the enumerated powers proved to be too attractive of a power for early Congresses.
• 33:16
  SPEAKER_01: Who doesn't want to spend on their pet projects to help their pet constituencies?
• 33:20
  SPEAKER_01: It became a very powerful, um, uh too too powerful to to resist.
• 33:25
  SPEAKER_01: But for many decades, they did resist it.
• 33:26
  SPEAKER_01: And I'm happy kind of, you know, from you remember from the chapter, I went through some uh examples um of this.
• 33:31
  SPEAKER_01: But I do not believe that there is a spending clause or a general welfare clause in the Constitution.
• 33:37
  SPEAKER_01: The clause that Josh read is nothing but a power to tax.
• 33:42
  SPEAKER_01: And the specific proviso about providing for the general welfare is the purpose for which taxes may be laid.
• 33:49
  SPEAKER_01: So let me explain, let me read the full, and maybe I'll get our producer to mark the time here so that he knows to put the text up uh for our YouTube audience.
• 33:58
  SPEAKER_01: If you're not following us on YouTube, uh, you should.
• 34:00
  SPEAKER_01: Here is the full clause.
• 34:02
  SPEAKER_01: The Congress shall have power to lay and collect taxes, duties, imposts, and excises, comma, to pay the debts and provide for the common defense and general welfare of the United States, semicolon.
• 34:13
  SPEAKER_01: But all duties, imposts, and excises shall be uniform throughout the United States.
• 34:17
  SPEAKER_01: So this all has to do with a pesky little comma.
• 34:21
  SPEAKER_01: Okay?
• 34:21
  SPEAKER_01: It says the Congress shall have power to lay and collect taxes, comma, to pay the debts and provide for the common defense.
• 34:27
  SPEAKER_01: So there are two possible interpretations.
• 34:29
  SPEAKER_01: If this had been a semicolon, does anybody doubt this would be two different powers, right?
• 34:33
  SPEAKER_01: Congress shall have the power to lay and collect taxes, semicolon, and it shall have power to pay the debts and provide for the common defense in general welfare, right?
• 34:40
  SPEAKER_01: But it doesn't have a semicolon.
• 34:42
  SPEAKER_01: Now, if it didn't have a comma or a semicolon, if it didn't have any punctuation, it just said Congress shall have power to lay and collect taxes to pay the debts and provide for the common defense.
• 34:51
  SPEAKER_01: Does anybody doubt that it would be a single power to tax?
• 34:54
  SPEAKER_01: It would be the power to raise money via taxation for certain purposes.
• 34:59
  SPEAKER_01: But because it has so it would be a limitation on the power to tax, but because it has a comma, we've now created this ambiguity.
• 35:06
  SPEAKER_01: Let me suggest to you it is the power to tax, and that is all that this provides.
• 35:10
  SPEAKER_01: It is the power to raise money by taxation for certain purposes only.
• 35:14
  SPEAKER_01: Now, what do you do with that money?
• 35:17
  SPEAKER_01: That money can be spent pursuant to the enumeration of powers under the necessary and proper clause.
• 35:22
  SPEAKER_01: So you can spend the money.
• 35:24
  SPEAKER_01: But the point is, this is a taxation clause.
• 35:26
  SPEAKER_01: It's the power to raise money by taxation, but it has to be for national purposes.
• 35:30
  SPEAKER_01: What does that mean, by the way?
• 35:31
  SPEAKER_01: It has to be for national purposes.
• 35:32
  SPEAKER_01: What work does this limitation do?
• 35:34
  SPEAKER_01: Okay.
• 35:35
  SPEAKER_01: Well, you can't tax um all products made with child labor at a rate of 100%.
• 35:41
  SPEAKER_01: That isn't for to raise money.
• 35:43
  SPEAKER_01: It's not for the purpose of raising revenue for national purposes.
• 35:46
  SPEAKER_01: It's a regulatory objective because you have some regulatory objective outside the enumerated powers.
• 35:50
  SPEAKER_01: You can't use your taxing power outside the you know the purposes of providing for the general welfare and common defense.
• 35:57
  SPEAKER_00: Do we do stuff like that all the time, though?
• 35:58
  SPEAKER_00: Yes.
• 35:58
  SPEAKER_00: Okay.
• 35:59
  SPEAKER_01: But that's a separate question, Catherine.
• 36:01
  SPEAKER_01: Yes, we in fact do tax.
• 36:03
  SPEAKER_01: And you disagree with that.
• 36:03
  SPEAKER_01: Okay.
• 36:04
  SPEAKER_01: I disagree with that, right?
• 36:05
  SPEAKER_01: So look, obviously, we tax things with the incidental consequence that it's going to reduce its incidence by making it more expensive.
• 36:12
  SPEAKER_01: So we tax whiskey rather than milk because we'd rather discourage whiskey.
• 36:16
  SPEAKER_01: But as long as the purpose is to raise revenue, which will then be spent in pursuance of the enumerated powers, right?
• 36:21
  SPEAKER_01: As opposed to like, we don't like whiskey, and therefore we're taxing whiskey, right?
• 36:25
  SPEAKER_01: Uh then it's okay.
• 36:26
  SPEAKER_01: Then it's a tax, not for a regulatory purpose, but it's a tax for the purpose of raising money in pursuit of uh national uh welfare, which uh again, so if it's just a power to tax, the power to spend comes from elsewhere.
• 36:39
  SPEAKER_01: This is this is the setup of the consequences, right?
• 36:41
  SPEAKER_01: This is these are the implications.
• 36:42
  SPEAKER_01: If this is just for the power to tax, the number one question I get is well, then what do they do with the money?
• 36:47
  SPEAKER_01: Well, this is just a power to raise money.
• 36:50
  SPEAKER_01: It is not a power to spend money.
• 36:51
  SPEAKER_01: It's a power to raise money for certain purposes.
• 36:53
  SPEAKER_01: But the power to spend so I I'm trying to do it.
• 36:57
  SPEAKER_02: You provide for the common defense in general welfare doesn't mean to spend money for the common defense in general welfare?
• 37:03
  SPEAKER_02: Correct.
• 37:03
  SPEAKER_02: It is the purpose for which you can raise money.
• 37:06
  SPEAKER_02: You can you can collect taxes for the purpose of um common defense and general welfare.
• 37:13
  SPEAKER_02: You can't raise But this clause is not the clause that gives you the power to spend on those things.
• 37:18
  SPEAKER_02: Okay.
• 37:19
  SPEAKER_02: So this is not the spending clause, despite its ordinary name.
• 37:23
  SPEAKER_01: Correct.
• 37:23
  SPEAKER_01: There is no spending clause in the constitution.
• 37:25
  SPEAKER_00: Well, so they can't.
• 37:26
  SPEAKER_01: Stop calling it that, Joshua.
• 37:27
  SPEAKER_01: Okay.
• 37:28
  SPEAKER_01: There's a taxing clause.
• 37:29
  SPEAKER_01: So this is the this is what the this is what the progressives do.
• 37:32
  SPEAKER_01: They use language to dull our minds and dull our census.
• 37:35
  SPEAKER_02: By calling this the spending clause, okay, but that's a little unfair because I'm not a progressive and I'm not trying to dull anyone's mind.
• 37:41
  SPEAKER_01: Usually, Joshua is what I'm trying to say.
• 37:45
  SPEAKER_01: That's fire.
• 37:46
  SPEAKER_02: Um so Congress does spend money and surely can spend money pursuant to its enumerated powers.
• 37:52
  SPEAKER_02: Where would you locate that power?
• 37:54
  SPEAKER_01: The necessary and proper clause.
• 37:55
  SPEAKER_02: So fill us it.
• 37:56
  SPEAKER_01: The final clause in Article I, Section Eight of the Constitution, this is clause 19, gives Congress the power to make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers granted by this constitution in the government of the United States or in any department or officer thereof.
• 38:11
  SPEAKER_01: In other words, Congress can establish an executive department and fund for government officers.
• 38:15
  SPEAKER_01: It can establish a post road pursuant to Article I, Section 8, clause whatever, five or six, and it can fund the Postal Service.
• 38:21
  SPEAKER_01: It can raise a military and provide for the common defense through paying for the military.
• 38:27
  SPEAKER_01: Because spending is an implied power.
• 38:29
  SPEAKER_01: It's an incidental power.
• 38:30
  SPEAKER_01: If you have the power to raise an army, you can spend money to pay for that army.
• 38:35
  SPEAKER_01: No one has to specify a power to spend.
• 38:37
  SPEAKER_01: But the power to tax, remember, Catherine, is the power to destroy our famous pillow.
• 38:42
  SPEAKER_00: Yeah, we have to put that on a pillow still.
• 38:43
  SPEAKER_01: From Marbury v.
• 38:44
  SPEAKER_01: Madison, uh McCollag v.
• 38:46
  SPEAKER_01: Maryland, excuse me.
• 38:46
  SPEAKER_01: The power to tax is the power to destroy.
• 38:48
  SPEAKER_01: The Articles of the Confederation did not have a power to tax.
• 38:51
  SPEAKER_01: And so what they said is the new national government will have a power to tax, but you can only raise revenue.
• 38:57
  SPEAKER_01: It can only be for the purpose of raising revenue for national purposes.
• 39:00
  SPEAKER_01: That's it.
• 39:01
  SPEAKER_01: But it doesn't give independent power to spend.
• 39:03
  SPEAKER_01: That comes from somewhere else.
• 39:04
  SPEAKER_01: This is a taxing clause.
• 39:05
  SPEAKER_02: Now.
• 39:06
  SPEAKER_02: And by the way, just a very clear practical implication of what you're saying is if you can, if Congress can do that which is necessary and proper to effectuate the enumerated powers.
• 39:18
  SPEAKER_02: And one of the things that's necessary and proper for the effectuation of those enumerated powers is to spend money on those enumerated powers.
• 39:25
  SPEAKER_02: It's very clear it cannot spend money beyond the enumerated powers.
• 39:28
  SPEAKER_02: So it can go, it could spend money to regulate commerce, it can spend money to raise an army, it can spend money to have a postal service, but it cannot spend money on Elan's theory to have a welfare state, to have social security, to have Medicare.
• 39:43
  SPEAKER_02: So the reason this is so controversial is it's it's sort of a settled matter of American law and American national preferences as we've known it, that we have a what the Germans call a Socialstadt, a uh um um a social safety uh Socialstadt.
• 40:01
  SPEAKER_02: It's a German.
• 40:02
  SPEAKER_02: It's uh it just means a social state and it it it contr it captures.
• 40:06
  SPEAKER_02: Sorry, we won the war.
• 40:07
  SPEAKER_02: We're speaking English.
• 40:08
  SPEAKER_03: Oh god, go on, go ahead.
• 40:09
  SPEAKER_02: I uh yeah, so be it.
• 40:10
  SPEAKER_02: Um uh I got um a lot of education in Germany, and so sometimes I sort of flip to their concepts where their concepts seem clearer, and they have this very clear concept that like part of the social contract is economic interdependence.
• 40:22
  SPEAKER_02: So the things like social security and welfare and Medicaid and Medicare and so on are all rolled into this concept of the Socialstadt for the Germans.
• 40:30
  SPEAKER_02: So that's what we've got too.
• 40:32
  SPEAKER_02: We've got it federally, and you're saying this entire federal regime is unconstitutional because all the constitution permits is not general spending on the public welfare, however Congress might define it.
• 40:44
  SPEAKER_02: It's spending persuad to the enumerated powers, and there's no enumerated power that captures, you know, the problem of old old people being impoverished be for lack of social security or uh facing high health bills that they can't afford, or just generally the problem of poverty.
• 41:00
  SPEAKER_01: Right.
• 41:00
  SPEAKER_01: At the federal level.
• 41:01
  SPEAKER_01: At the federal level.
• 41:02
  SPEAKER_01: You can at the state level.
• 41:03
  SPEAKER_01: You can at the state level, under my view.
• 41:05
  SPEAKER_01: So let me make the textual case.
• 41:06
  SPEAKER_01: So I joked, not joked, I was dead, deadly serious, that Joshua already omitted some part of the clause.
• 41:12
  SPEAKER_01: And it is a clause that's set at the very end, which says, but all duties imposed excises shall be uniform throughout the United States.
• 41:19
  SPEAKER_01: How can this be two separate clauses followed by a limitation on only one of the clauses, right?
• 41:25
  SPEAKER_01: The fact that it says the Congress shall have power to lay and collect taxes to pay the debts and provide for the common defense and general welfare, but all taxes shall be uniform, suggests to me that this is all about taxation.
• 41:35
  SPEAKER_01: It'd be super weird to have a c to have like a spending clause secretly nestled into the taxing clause, followed by a modification of the taxing clause.
• 41:43
  SPEAKER_00: Yes, I that that yeah.
• 41:45
  SPEAKER_01: Are you following that?
• 41:46
  SPEAKER_01: I follow that.
• 41:46
  SPEAKER_00: That's been your strongest argument so far to me.
• 41:48
  SPEAKER_01: That doesn't make any sense.
• 41:50
  SPEAKER_01: Good.
• 41:50
  SPEAKER_01: Yes.
• 41:51
  SPEAKER_01: Okay, another, Catherine.
• 41:53
  SPEAKER_01: Why would you have to specify a power to pay the debts?
• 41:57
  SPEAKER_01: Right?
• 41:57
  SPEAKER_01: If this is a power to spend, then it's a power to pay the debts, right?
• 42:00
  SPEAKER_01: Well, the very next clause of Article 1, Section 8 gives Congress power to borrow money on the credit of the United States.
• 42:05
  SPEAKER_01: Presumably, borrowing money implies repaying it.
• 42:09
  SPEAKER_01: Because if you're not borrowing, if you don't repay it, then you're not borrowing money.
• 42:12
  SPEAKER_01: You're stealing.
• 42:14
  SPEAKER_01: Right?
• 42:15
  SPEAKER_01: So Congress already has the power to pay the debts in the next clause.
• 42:18
  SPEAKER_01: So if this was a separate power, it would be the most clear case of utter idiocy and redundancy in the constitutional text.
• 42:25
  SPEAKER_01: So that doesn't make any sense, right?
• 42:28
  SPEAKER_01: Um the other question is if it's truly an independent power to spend, Joshua, which I think is Josh's view, by the way, I think it's your view, but maybe I'm convincing you otherwise.
• 42:37
  SPEAKER_01: Why would it be limited to spending?
• 42:39
  SPEAKER_01: Why is the power to provide for the general welfare limited to a power to spend for the general welfare?
• 42:44
  SPEAKER_01: If it's really a power to provide for the general welfare, why isn't that a regulatory power to do whatever you think is in the general welfare?
• 42:50
  SPEAKER_01: And if that's true, then the entire enumerated powers collapse.
• 42:53
  SPEAKER_01: Then we don't have an enumeration because the enumeration is superfluous.
• 42:57
  SPEAKER_01: And nobody at the founding took that view, right?
• 43:00
  SPEAKER_01: And so it's starting to add up.
• 43:02
  SPEAKER_01: It's starting to add up.
• 43:04
  SPEAKER_01: It's starting to add up from a textual perspective only.
• 43:06
  SPEAKER_02: Um wait, wait, is there any other perspective?
• 43:09
  SPEAKER_02: There is another perspective.
• 43:10
  SPEAKER_02: I mean, this is bananas.
• 43:12
  SPEAKER_02: I okay, so so here's a way of running a country.
• 43:15
  SPEAKER_02: You have um uh a constitution, and there are two views about what one of its clauses mean from the jump, from like 1789.
• 43:24
  SPEAKER_02: And the two sides fight it out and fight it out.
• 43:26
  SPEAKER_02: And then uh in the Whoa, whoa, whoa, whoa, whoa, let me have a chance.
• 43:30
  SPEAKER_01: There aren't two views.
• 43:30
  SPEAKER_01: There weren't two, it wasn't Hamilton had the view that you esbessed as this independent power to spend for the general welfare.
• 43:36
  SPEAKER_01: Most people thought it was taxing, it was just a taxing power at the time, right?
• 43:40
  SPEAKER_02: Yeah.
• 43:41
  SPEAKER_02: Well, we had uh in the very early days of the new republic, we had a much more federalist system than we had after the Civil War and after the 20th century, right?
• 43:49
  SPEAKER_02: Yep.
• 43:49
  SPEAKER_02: Uh but we have now had um I I mean the very broad conception of the federal spending power came into being around 1936.
• 44:00
  SPEAKER_02: And uh was part of the New Deal, and uh has led to us having a federal welfare state for a hundred years.
• 44:08
  SPEAKER_02: Now, here's a way of running a country.
• 44:10
  SPEAKER_02: Some uh professor with tenure says, I discovered something about the history, and I have this very good way of reading the grammar, which of course everyone could have read for 300 years.
• 44:19
  SPEAKER_02: Uh, but I have this very good way of reading the grammar, and isn't that persuasive?
• 44:23
  SPEAKER_02: And then the court says, that is persuasive.
• 44:25
  SPEAKER_02: What fabulous scholarship.
• 44:27
  SPEAKER_02: Let's get rid of the entire social security system.
• 44:30
  SPEAKER_02: Let's get rid of the entire federal welfare system.
• 44:33
  SPEAKER_02: Let's, you know, the American people have decided on this repeatedly.
• 44:37
  SPEAKER_02: I mean, that's why the Trump administration is not itself trying to get rid of the social security system.
• 44:41
  SPEAKER_02: The American people have said by stable supermajorities for a hundred years that they don't want old age to be a sentence of potential poverty.
• 44:51
  SPEAKER_02: They don't want to be facing their medical bills entirely on their own.
• 44:54
  SPEAKER_02: They want to socialize those costs.
• 44:56
  SPEAKER_02: But we could say, oh, this is a really good book.
• 44:59
  SPEAKER_02: Let's overthrow a hundred years of uh statutory law and the constitutional reading on which it's based.
• 45:06
  SPEAKER_02: That's a terrible way of running a democracy.
• 45:08
  SPEAKER_02: That's not how we should do it.
• 45:09
  SPEAKER_02: Catherine, defend me.
• 45:11
  SPEAKER_00: Two things.
• 45:11
  SPEAKER_00: I think, first of all, part of your argument is kind of like a settled science argument, like, well, it's settled science.
• 45:17
  SPEAKER_00: It's the lessons of history.
• 45:18
  SPEAKER_00: You know what was a settled science was like lobotomies, you know, is the is the common example.
• 45:22
  SPEAKER_00: Like, just because it's a settled thing, it's how we've been living, doesn't mean it's right.
• 45:27
  SPEAKER_00: It doesn't mean it's correct.
• 45:28
  SPEAKER_00: So we can still go back, I think, if we were wrong the whole time and there were negative consequences.
• 45:33
  SPEAKER_00: We've had hugely negative consequences as a result of the welfare state.
• 45:37
  SPEAKER_00: On the other hand, I think you have a good point about, you know, people have voted for this.
• 45:41
  SPEAKER_00: That's clearly true.
• 45:42
  SPEAKER_00: Um, if people have voted for Social Security, they've voted to give themselves more free money from the government.
• 45:48
  SPEAKER_00: But when something like money is involved in your vote and we essentially have politicians buying votes, is that a free democracy?
• 45:55
  SPEAKER_00: To me, that is just muddying the waters to a point where that is not a clear democracy because your votes are being bought with literal money.
• 46:04
  SPEAKER_01: So, in other words, of course the American people support a system in which they can just tax other people and take their money from them.
• 46:10
  SPEAKER_01: Yeah.
• 46:11
  SPEAKER_01: And is that like a healthy democracy, which maybe goes to our last topic, which we wanted to talk about, right?
• 46:15
  SPEAKER_01: Uh, in terms of whether a welfare system is even good for uh a democratic society.
• 46:20
  SPEAKER_01: I'm more on the skeptical side.
• 46:21
  SPEAKER_01: I think Catherine's on my side on this.
• 46:23
  SPEAKER_01: I think Josh is on uh the other side.
• 46:24
  SPEAKER_01: What makes us rational and not just base is that we want to interrogate and investigate.
• 46:29
  SPEAKER_01: We're not all going to agree, you know, about certain things.
• 46:31
  SPEAKER_01: But Josh, let me push you about this because this hits a little close to home and our audience is probably chuckling.
• 46:36
  SPEAKER_01: Because Josh has just described like my MO in scholarship.
• 46:39
  SPEAKER_01: Is I literally say, hey, everybody's been wrong about this.
• 46:42
  SPEAKER_01: Not usually a hundred years, but like 50 years, you know, since the 1980s, there's been conventional wisdom about like incorporation of the Bill of Rights.
• 46:48
  SPEAKER_01: And I say, hey, everyone's been wrong about this.
• 46:50
  SPEAKER_01: Here's why.
• 46:50
  SPEAKER_01: Well, let me ask you a question, which I know we've asked on other episodes as well, or uh we'll talk about it also in future episodes.
• 46:58
  SPEAKER_01: But what about birthright citizenship, right?
• 47:00
  SPEAKER_01: I'm I mean, so what I've done, right, is I'm people consider me the guy who basically said, uh, I'm willing, based on some arcane pieces of argumentation and evidence in the historical record, going back to the 12th century and the safe conducts from Henry I and Henry II and going back to Magna Carta is willing to undo a century of conventionalism on birthright citizenship.
• 47:20
  SPEAKER_01: But you're okay with my view about that.
• 47:23
  SPEAKER_01: Why?
• 47:23
  SPEAKER_02: Well, I always admire your work.
• 47:26
  SPEAKER_02: Um, very diligent scholar.
• 47:28
  SPEAKER_02: And that's all we have time for.
• 47:29
  SPEAKER_01: That's all we have time for to do.
• 47:30
  SPEAKER_02: Okay, go on.
• 47:31
  SPEAKER_02: Um, I hate the Arcana in that argument as well as your others.
• 47:34
  SPEAKER_02: This thing about, oh, what about Henry the whatever and the common law of this and the safe path?
• 47:39
  SPEAKER_02: I just don't believe.
• 47:40
  SPEAKER_02: And and by the way, it's very common among constitutional scholars, uh constitutional law scholars.
• 47:46
  SPEAKER_02: And um, it's looked on, I think, with a great deal of skepticism by legal scholars from literally every other field of law.
• 47:53
  SPEAKER_02: Because we see them playing these um arcane historical games, and it looks to us like uh uh just a bad way to run a democracy.
• 48:03
  SPEAKER_02: But in this, I really disagree with that.
• 48:04
  SPEAKER_01: No, no, I want to both sides playing the game, and maybe that's why you're at the end of the day.
• 48:07
  SPEAKER_02: Well, both sides play the game because um because those are sort of the rules of the game.
• 48:11
  SPEAKER_02: Right, but well, but what I mean is like the arcana, the historical arcana and the textual arcana.
• 48:14
  SPEAKER_02: But but let me tell you what I think is different about that case, and I I do think there's a distinction.
• 48:19
  SPEAKER_02: Um the practical effect of your birthright citizenship would be to say, well, here's something where a decision of the utmost consequence has been taken away from the democracy.
• 48:29
  SPEAKER_02: It's been taken away from the people.
• 48:31
  SPEAKER_02: There's been a stable constitutional rule because of judicial decisions that says if you're born on the soil, you're an American citizen, no matter what the American people might want or what they're uh they might vote for.
• 48:42
  SPEAKER_02: Uh, what your scholarship would do is take two plausible readings of the clause and say, okay, let's have the plausible reading that supports democratic decision making.
• 48:53
  SPEAKER_02: In this case, you're doing the opposite.
• 48:55
  SPEAKER_02: Two plausible readings of the spending taxing clause.
• 48:58
  SPEAKER_02: Do I have to call it taxing clause now?
• 49:00
  SPEAKER_02: Because you do?
• 49:00
  SPEAKER_01: Correct.
• 49:00
  SPEAKER_01: Well, that's because what it is it's a deontologically about taxation, Josh.
• 49:04
  SPEAKER_02: The beginning of Article 1, Section 8, the clause we're debating, you've got two plausible readings.
• 49:10
  SPEAKER_02: One would let the American people discover the lessons of history like they don't want to be impoverished in old age and vote in through stable supermajorities, the kind of social security regime they want.
• 49:20
  SPEAKER_02: The other would take it away from them by the actions of professors and judges.
• 49:24
  SPEAKER_02: And professors and judges shouldn't have that kind of power.
• 49:26
  SPEAKER_01: So let me say, unless Catherine wants to defend me, which I always love when she says things like, that was fire.
• 49:32
  SPEAKER_01: You know, um, a few things, the birthright citizenship thing.
• 49:35
  SPEAKER_01: So it actually like your point works against the conventionalism there because they're using all this historical arcana to debilitate and you know the the American people from being able to take action based on a problem that a hundred years ago, a thousand years ago.
• 49:48
  SPEAKER_01: Yeah.
• 49:49
  SPEAKER_02: The three most beautiful words in the Constitution are we the people.
• 49:53
  SPEAKER_02: It is first and foremost a document for democratic decision making.
• 49:56
  SPEAKER_02: It is secondarily a series of set asides from democratic control.
• 50:00
  SPEAKER_01: I half agree with that.
• 50:02
  SPEAKER_01: The other half being the fact that we are a compound republic.
• 50:05
  SPEAKER_01: That simply saying it's one thing if the constitution takes away something from the democratic process at the federal level, that's very different from saying that it takes that away from the state level.
• 50:14
  SPEAKER_01: So in my view, the states aren't, you know, um incapacitated or debilitated from uh being able to pass abortion laws of their choice.
• 50:22
  SPEAKER_01: There are some in the conservative movement who would like to say that they are because of the pro the understanding of um protection, fetal personhood and so on.
• 50:32
  SPEAKER_01: And in my view, states can uh uh have welfare programs, which they did.
• 50:36
  SPEAKER_01: And, you know, God forbid that we sort of experiment in the provision of welfare programs.
• 50:39
  SPEAKER_01: Now it's tricky uh because there's a ridiculous Supreme Court case that said if you move to California the next day, they must give you welfare benefits if you qualify, which is of course obscene.
• 50:48
  SPEAKER_01: You can't have a federal system where states do different things.
• 50:52
  SPEAKER_01: If the second you hit hard times, you can just move to the state that you never contributed taxes to.
• 50:56
  SPEAKER_01: Well, the way they handled this historically was you had a place of legal settlement.
• 51:00
  SPEAKER_01: And it was a considered the place where you've paid taxes, where you had family support, where you're from, where you've resided a certain period of time.
• 51:07
  SPEAKER_01: And they were those community obligated to pay for your welfare if you fell on hard times.
• 51:11
  SPEAKER_01: And I think California should be able to say no.
• 51:13
  SPEAKER_01: Like if you come here, we would have a generous welfare program, but if you come here, uh you can't qualify for the first five years that you're here or something like that.
• 51:20
  SPEAKER_01: And so I don't wanna I don't want to disable the democratic process, Josh, but I do think there are some things that are better done at the federal versus the uh the state level.
• 51:28
  SPEAKER_01: Now, to be again, in my defense, like I'm not saying that judges should take my book and just run with it, right?
• 51:34
  SPEAKER_01: I d I do think your view, the conventional view, is within the range of plausible meanings, right?
• 51:39
  SPEAKER_01: But I do think that welfare is enervating.
• 51:42
  SPEAKER_01: I I think it it diminishes the spirit uh of independence that is absolutely necessary for a free people.
• 51:48
  SPEAKER_01: And so if I add a constitutional argument uh in the arsenal to say not only does this diminish and enervate the American spirit and American independence necessary for a free people, but it was also a constitutional usurpation uh by Congress, then I that's just another argument for the people to debate over.
• 52:06
  SPEAKER_01: Uh and so I uh Can I say one other thing too?
• 52:09
  SPEAKER_00: Because uh Josh, you said what how is that conservative?
• 52:12
  SPEAKER_00: And I think like that is kind of how I actually define both of my views on those things is what are you trying to conserve?
• 52:18
  SPEAKER_00: And I think in the birthright example, we're trying to conserve our people, you know, the people, the American people, and who our nation is going to be moving forward.
• 52:27
  SPEAKER_00: I think that's huge.
• 52:28
  SPEAKER_00: And then when it comes to the welfare issue, I agree with you, Elon, I think it's a huge impediment to freedom.
• 52:33
  SPEAKER_00: You know, you become a slave to the government when you are existing solely because of government money.
• 52:38
  SPEAKER_00: And so to me, you're conserving that freedom that we were founded on.
• 52:41
  SPEAKER_00: And that is of the utmost importance to me.
• 52:44
  SPEAKER_00: And I agree with you that, you know, within the states, experimenting with welfare is um is certainly on the table.
• 52:50
  SPEAKER_00: But to me, I think your initial objection to what I said is exactly why I believe those things, because it goes to what I believe in conserving.
• 52:59
  SPEAKER_01: Well, so what did you learn?
• 53:01
  SPEAKER_01: What do you take away, Josh, from your German education here?
• 53:04
  SPEAKER_01: I feel like you're a product of the German welfare state.
• 53:07
  SPEAKER_02: Come now.
• 53:08
  SPEAKER_01: So do you do it?
• 53:09
  SPEAKER_02: First of all, I grew up in Fairbanks, Alaska.
• 53:11
  SPEAKER_02: It was guns, trucks, and churches as far as the eye can see.
• 53:14
  SPEAKER_02: I mean, I I spent a few years in Germany.
• 53:15
  SPEAKER_02: I'm glad I learned some German philosophy, but I'm I'm an American.
• 53:18
  SPEAKER_01: Okay, all right, fair enough.
• 53:19
  SPEAKER_01: Fair enough.
• 53:20
  SPEAKER_01: Uh so I guess my question is do you disagree?
• 53:22
  SPEAKER_01: So you seem to really care about the fact that Americans want this.
• 53:26
  SPEAKER_01: And also I think on the substantive merits, I it sounds to me as you believe that at least social security, old age pension, old age insurance is important uh for the health of American democracy.
• 53:37
  SPEAKER_01: And I don't know that I agree with that.
• 53:39
  SPEAKER_01: And on the rational disagree.
• 53:41
  SPEAKER_01: So go.
• 53:42
  SPEAKER_02: I I do love the fact that on this podcast we are not all preaching with one voice.
• 53:46
  SPEAKER_02: As you can see, we have vigorous disagreements about constitutional interpretation, about uh good policy.
• 53:51
  SPEAKER_02: But listen, it used to be that getting old was terrifying, not just because of the prospect of your own mortality, but the prospect of your poverty, right?
• 54:02
  SPEAKER_02: You get fired from your job or become unable to work it anymore.
• 54:05
  SPEAKER_02: And then you better hope that one of your kids has a the love and b the money to support you.
• 54:11
  SPEAKER_02: And if not, why not up?
• 54:13
  SPEAKER_02: There used to be, there used to be, well, what if you didn't have the children?
• 54:17
  SPEAKER_02: Or what if they don't have the money?
• 54:19
  SPEAKER_02: It used to be that, and as much as you might say, it would be just wonderful to have those strong families where children had to support their parents.
• 54:26
  SPEAKER_02: It used to be that the streets were littered with old people, right?
• 54:30
  SPEAKER_02: And what happened?
• 54:32
  SPEAKER_02: Well, uh, the whole Western world hated living that way.
• 54:37
  SPEAKER_02: And there was uh revolutionary pressure as early as 1848 in Europe over this very issue.
• 54:43
  SPEAKER_02: And uh uh Bismarck in Germany um uh took uh a page from the socialist playbook and said, okay, I'm gonna hold the socialists at bay by creating Social Security and creating some minimal welfare provisions.
• 54:58
  SPEAKER_02: And he put those in place, and that's how he and and that enervated the socialist movement by creating these things and then they spread like wildfire.
• 55:05
  SPEAKER_02: Why did they spread like wildfire?
• 55:06
  SPEAKER_02: Because they were really good inventions.
• 55:08
  SPEAKER_02: Why have they become the subject of stable supermajorities in America for over a hundred years?
• 55:13
  SPEAKER_02: Because people really don't want to uh uh they really do want to socialize the risks of poverty and old age and ill health.
• 55:23
  SPEAKER_02: And that is a perfectly reasonable thing for them to do.
• 55:26
  SPEAKER_02: And I guess I really think this is the verdict of history.
• 55:29
  SPEAKER_02: And what you two are not taking on board is the verdict of history.
• 55:33
  SPEAKER_02: We have had communal experience with this as Americans and as members of the Western world.
• 55:37
  SPEAKER_02: We found a better way, and you're trying to undo that for the sake of uh, I don't know, a more self-reliant and spirited and familial uh uh culture.
• 55:47
  SPEAKER_02: And y, you know, I I do think there's all sorts of things wrong with our current welfare system, but I don't think it makes people unfree or or destroys familial obligation.
• 55:59
  SPEAKER_02: It just preserves sort of um insurance against risk.
• 56:05
  SPEAKER_00: I might have a compromise, um, which is that I would be much more on board with uh Social Security and welfare in general if we had really closed borders, if we did not have the immigration crisis we see now.
• 56:18
  SPEAKER_00: And I think maybe that's why, as you say, it has worked well in the past, but now what we see is people immigrating to America and immediately getting on our welfare and never coming off.
• 56:29
  SPEAKER_00: And now, when does that end?
• 56:30
  SPEAKER_00: How, what percentage of the entire world are we supposed to support with our tax dollars?
• 56:35
  SPEAKER_00: But if we have closed borders, if we had a true American country and culture and heritage that cared about each other and looked out for each other, that's heartwarming to me and I like that.
• 56:45
  SPEAKER_00: But I do not feel like we should be supporting the entire world like we are now.
• 56:50
  SPEAKER_00: People come here and they never get off welfare.
• 56:53
  SPEAKER_00: And you see that certain ethnic percentage, the percentage of certain ethnic groups that are on welfare is extremely high.
• 57:00
  SPEAKER_00: I think Hispanics, it's like 70%.
• 57:02
  SPEAKER_00: It's really crazy.
• 57:04
  SPEAKER_00: And so to me, that is a huge problem.
• 57:06
  SPEAKER_00: And it incentivizes then things like illegal immigration.
• 57:10
  SPEAKER_00: It incentivizes lower wage immigrants who are not going to be able to succeed in America, but are going to be able to come here and they can't fail because they immediately can hop on a welfare program easily and be on it indefinitely.
• 57:23
  SPEAKER_00: And I don't feel like that is a sustainable system.
• 57:26
  SPEAKER_00: And that system is, to me, a little bit more recent now that we have this huge immigration crisis.
• 57:31
  SPEAKER_01: So I'm gonna play the role for a change of the most based, maybe.
• 57:35
  SPEAKER_01: What is the based view here, actually?
• 57:36
  SPEAKER_02: See, I'm really agree with you.
• 57:38
  SPEAKER_02: Listen, I'm not really in agreement with the pre with President Trump.
• 57:41
  SPEAKER_02: He's not fighting social security.
• 57:43
  SPEAKER_01: I am more Catholic.
• 57:44
  SPEAKER_01: I am more Catholic than the Pope in this regard.
• 57:47
  SPEAKER_01: I am more MAGA than the Peter.
• 57:48
  SPEAKER_01: I don't think you can I I just don't think that that um you're right.
• 57:52
  SPEAKER_01: It's not MAGA, but is is based MAG?
• 57:53
  SPEAKER_01: Is based and MAGA the same thing?
• 57:55
  SPEAKER_01: That's an interesting.
• 57:56
  SPEAKER_01: I think they overlap.
• 57:57
  SPEAKER_01: They overlap a little bit.
• 57:58
  SPEAKER_01: It's a Venn diagram, but it's not complete.
• 57:59
  SPEAKER_01: No.
• 57:59
  SPEAKER_01: But I I think I don't think it's based to oppose Social Security.
• 58:02
  SPEAKER_01: Fair.
• 58:03
  SPEAKER_01: Okay.
• 58:03
  SPEAKER_01: I think it's I think it is based, and I think it's based to support it.
• 58:06
  SPEAKER_01: But okay, so I don't think so.
• 58:07
  SPEAKER_01: Based is the wrong dimension, I think, to argue here, right?
• 58:10
  SPEAKER_01: Fair.
• 58:11
  SPEAKER_01: So let me let me let me uh propose my non-compromising position.
• 58:15
  SPEAKER_01: Though maybe I'm ready to compromise at the end.
• 58:17
  SPEAKER_01: Like, I mean, one question I have for you, uh Joshua, is whether you just like social security, but would you get rid of all the other stuff like Medicare, Medicaid, uh TANIF?
• 58:25
  SPEAKER_02: No, you know, this is this has all I will try to control the abuses.
• 58:29
  SPEAKER_02: I think that I think they are being abused.
• 58:30
  SPEAKER_02: Okay.
• 58:31
  SPEAKER_02: But I I think the I what I really think is that A, the American people have the right to decide that they want a welfare state broadly defined and to have it have these dimensions that have survived the test of time.
• 58:42
  SPEAKER_02: And I think that those of us who, you know, are independent political thinkers should heed the verdict of history on these matters and see the wisdom in what the American people have have chosen.
• 58:53
  SPEAKER_01: Okay.
• 58:53
  SPEAKER_01: So here's my here's my reaction.
• 58:55
  SPEAKER_01: And I feel very strongly about this.
• 58:57
  SPEAKER_01: So I think political freedom is based on really sort of two conditions, and and they they sort of interlate.
• 59:03
  SPEAKER_01: One is it requires a moral people and it requires an independent people.
• 59:06
  SPEAKER_01: And what are sort of two institutions uh that help both this independence and the creation, sort of this this cultivation of of moral citizens who can engage in self-government?
• 59:16
  SPEAKER_01: One is the family, and the other is simply economic freedom and economic independence, which I mean to treat as an institution.
• 59:23
  SPEAKER_01: You need economic freedom in order to have political freedom.
• 59:26
  SPEAKER_01: Why?
• 59:26
  SPEAKER_01: Because if, you know, take it to the extreme, if the government controlled the means of production and decided who gets what, and everybody was dependent on the government, well then you'd better tow the party line.
• 59:35
  SPEAKER_01: It doesn't give you independence if your livelihood is based on is dependent on government, handouts from the government.
• 59:42
  SPEAKER_01: So political freedom, and Milton Friedman famously made this point, and I'm not a libertarian or you know, by by any means, but that that that is an important point.
• 59:49
  SPEAKER_01: Families are also important pockets of independence.
• 59:52
  SPEAKER_01: You know, thank goodness for the marital privilege.
• 59:54
  SPEAKER_01: You know, spouses can talk to each other in secret, they can tell their family things, and no one has to rat each other out, right?
• 1:00:01
  SPEAKER_01: You can have independent views in privacy of your home, and of course, the family is where it also sort of you can raise and rear children and create moral citizens.
• 1:00:09
  SPEAKER_01: What does this have to do with welfare?
• 1:00:10
  SPEAKER_01: I think welfare diminishes, undermines, enervates both pillars of a free society.
• 1:00:16
  SPEAKER_01: It diminishes economic independence and it creates dependence on the government, which I think undermines political freedom.
• 1:00:22
  SPEAKER_01: And I do think it undermines family because it undermines this idea of obligation, this idea that you don't need to have children to take care of you in old age, that your children aren't going to be obligated to take care of you.
• 1:00:33
  SPEAKER_01: I mean, and so I think it undermines uh the importance of the family as the first and foremost welfare institution.
• 1:00:38
  SPEAKER_01: And it is a welfare institution.
• 1:00:40
  SPEAKER_01: You're right that there's always circumstances, there's always bad luck, there's there's always contingent uh occurrences.
• 1:00:45
  SPEAKER_01: But when you go to the altar, right?
• 1:00:47
  SPEAKER_01: You know, you don't say um uh till love do us part or to, you know, it's not it's like health and health sickness or health for richer or poorer.
• 1:00:55
  SPEAKER_01: It's a welfare institution, it's a healthcare institution.
• 1:00:58
  SPEAKER_01: The family is the first and foremost institution of welfare in American society.
• 1:01:02
  SPEAKER_01: And I think having this welfare state creates this, these, this, these it undermines terribly these conditions of a free society.
• 1:01:09
  SPEAKER_01: Now you said the test of time.
• 1:01:11
  SPEAKER_01: Maybe, maybe you're right that um uh this certain progressive policies like old age pension in Germany, which by the way, the retirement age was like 70 in a time where almost nobody lived to be 70, but it mitigated the rigors, it it mitigated on the margins the causes of the revolution of 1848, right?
• 1:01:30
  SPEAKER_01: And so it nipped, was able to kind of mitigate the rigors of it, right?
• 1:01:34
  SPEAKER_01: And maybe some elements of the social security welfare state in the New Deal mitigated the rigors of whatever came before, right?
• 1:01:41
  SPEAKER_01: But the modern welfare state as we know it is a product the earliest of the great society, I think.
• 1:01:46
  SPEAKER_01: And I think it's gonna be very hard to turn back the clock, which for the reasons Catherine said, which is once you're on welfare and once you can tax, convince the government to use its coercive power to tax other people in order to give you money, like who's gonna vote against that if you're one of the people that Mitt Romney called takers?
• 1:02:02
  SPEAKER_01: And wasn't he right about that?
• 1:02:04
  SPEAKER_01: So I don't know.
• 1:02:05
  SPEAKER_01: I feel pretty and so the last point of defense is I don't disagree on the democracy thing, but why not send it back to the states and let them experiment with these ideas?
• 1:02:13
  SPEAKER_01: But I don't know, Catherine, last word on social security, welfare.
• 1:02:17
  SPEAKER_00: Well, just one more thing to your point about the family.
• 1:02:19
  SPEAKER_00: I mean, consider the way that welfare programs have been used to diminish the family, for example, in the black community, the ways that welfare that benefited single moms led to the lack of marriages, especially within the black community, and it has caused enormous problems for them.
• 1:02:35
  SPEAKER_00: So it's not just that welfare is obviously a good, it can be a huge negative.
• 1:02:40
  SPEAKER_00: And so I think that's just one other thing I would bring up because I think that family point is um is especially important, Deal.
• 1:02:46
  SPEAKER_02: Josh.
• 1:02:48
  SPEAKER_02: The the American people for a hundred years have they they have they these are 300 million people who have experienced family life, they have had children in uh with a view towards supporting them in old age, message to their children, you must support us in old age, lived in a world where you no longer have to do that because of legal change, and chosen the latter.
• 1:03:11
  SPEAKER_02: They've chosen the world.
• 1:03:12
  SPEAKER_02: So what are you seeing that they all missed?
• 1:03:15
  SPEAKER_02: Uh I mean, why not take this is not physics where you just know more physics than them.
• 1:03:21
  SPEAKER_02: They see the economic incentives and the familial effects just as clearly as you.
• 1:03:25
  SPEAKER_02: So what do you think you're seeing that they're missing?
• 1:03:28
  SPEAKER_01: Well, I think it's a mutually reinforcing effects, right?
• 1:03:30
  SPEAKER_01: So there may have been causes that led to people wanting to adopt social security, but the adoption of social security might then exacerbate certain things and trends that led to the problem in the first place, such as degradation of family or so on.
• 1:03:43
  SPEAKER_01: So, in other words, like suppose there was a problem under the old view.
• 1:03:46
  SPEAKER_01: Okay, one possible way to solve it is a federal social security problem.
• 1:03:49
  SPEAKER_01: Another way to solve it is a state social security system.
• 1:03:52
  SPEAKER_01: Another way to solve it is through charitable organizations that take care of families, uh, or you know, something uh of that nature.
• 1:03:59
  SPEAKER_01: Nobody uh it is a classic, like you know, government supplants charity whenever it kind of steps in here.
• 1:04:05
  SPEAKER_01: Uh so I'm willing to grant that there was a problem with people getting old who, for one reason or another, their children died, their children didn't have the resources, whatever.
• 1:04:14
  SPEAKER_01: Like there were there there was a problem.
• 1:04:15
  SPEAKER_01: There was a problem.
• 1:04:16
  SPEAKER_01: It doesn't follow that social security as it currently exists or the vast expansion of welfare, which is really what I dislike, you know, since the uh Great Society program, hasn't exacerbated certain trends and conditions that are only going to lead to more poverty and more dependence on the state that may not exist without the incentives that Catherine mentioned.
• 1:04:35
  SPEAKER_02: Well, there, I I just I could I completely agree.
• 1:04:38
  SPEAKER_02: That something's out of hand.
• 1:04:39
  SPEAKER_00: This is like a phenomenon that I don't know the name for, but for you personally, you're like, well, I want the$2,000 a month or whatever, but I do know that there's going to be negative societal impacts.
• 1:04:48
  SPEAKER_00: But for me personally, I will benefit enough that it makes me want to vote for it.
• 1:04:52
  SPEAKER_00: Don't you think that's sort of a phenomenon that's happening here?
• 1:04:54
  SPEAKER_02: Yeah, but I think what's happening there is people are saying, listen, this is a policy that has benefits and costs for me and for others, and it's worth it.
• 1:05:01
  SPEAKER_02: Right?
• 1:05:01
  SPEAKER_02: So let me give ground on this in this respect, but maybe it's not really giving ground at all.
• 1:05:06
  SPEAKER_02: Um, we do have a uh one thing we've seen emerge in quite recently is an incredibly dramatic collapse in the birth rate, right?
• 1:05:17
  SPEAKER_02: Um, where I I'd have to check my numbers here, uh, but uh um it was at 2.1 throughout the uh late 20th century in America, which was already pretty low by historical standards, it was barely replacement level.
• 1:05:32
  SPEAKER_02: And then in the 2000s, it's declined precipitously and it's at like 1.3, right?
• 1:05:36
  SPEAKER_02: So we're way now.
• 1:05:38
  SPEAKER_02: I am quite sure that if you had to depend on your children to support you in old age, people would have more children, right?
• 1:05:44
  SPEAKER_02: So is there a relationship between Social Security and other forms of welfare benefits and the declining birth rate?
• 1:05:51
  SPEAKER_02: No doubt, right?
• 1:05:53
  SPEAKER_02: So I'll just give grounds on that.
• 1:05:55
  SPEAKER_02: And if you think, well, the birth rate is the most important thing, let's get rid of social security in order to make people so desperate that they have lots of children that they don't actually want so that they can support them, have their children support them in old age.
• 1:06:09
  SPEAKER_02: I just don't think that's the path of it.
• 1:06:10
  SPEAKER_00: You need to get Elon Musk on this.
• 1:06:12
  SPEAKER_00: He would be so on board from that very perspective.
• 1:06:15
  SPEAKER_00: His number one thing is declining birth rate.
• 1:06:17
  SPEAKER_01: Well, one way to encourage it is um to give parents the power to cast votes on behalf of their children, a proposal that our own Joshua Kleinfeld of the Rationally Based Podcast has proposed with a Harvard Law uh professor, uh Steven Sachs, uh, in a very prominent article that we'll talk about someday.
• 1:06:31
  SPEAKER_01: So let me close this out since we are running out of time.
• 1:06:33
  SPEAKER_01: And I'd like to remind our audience that this discussion was supposedly based not just on the fraud that's going on, but the chapter of my book, which you can get on Amazon, The Constitution of 1789, a new introduction, the last chapter of which makes this argument about the taxing clause, which a professor at Harvard Law School has said is the equivalent of con artist constitutionalism.
• 1:06:52
  SPEAKER_01: I probably put that blurb on the back of the book as an endorsement, uh as a reason uh to buy the book.
• 1:06:57
  SPEAKER_01: But in all seriousness, you can get the book on Amazon.
• 1:07:00
  SPEAKER_01: And we hope that you enjoyed this really wide ranging conversation.
• 1:07:02
  SPEAKER_01: This was a lot of fun.
• 1:07:03
  SPEAKER_01: And don't forget to hit that like and subscribe button.
• 1:07:05
  SPEAKER_01: You can follow us on Substack, rationabase.com, and we'll see you next time.