FOX News "Fox News Sunday" - Transcript

Interview

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GOV. BOB MCDONNELL, R-VA.: No, I don't think so. I think there's differences in the federal judiciary about interpreting the United States Constitution. This is a novel question.

And the question is whether or not the United States Congress, under the tax and spend clause or the commerce clause, can force a citizen in Virginia or any other state to buy a good or a service -- in this case, a health insurance policy and, if you don't, to exact a penalty, a fine.

And Judge Hudson -- and this is the first case brought by a state, Virginia. The other cases were private sector folks that brought the actions. He said that no, choosing to not participate in commerce -- that is, to not buy an insurance policy -- is not commerce. And in fact, the fine that's enacted is a penalty, not a tax, and so Congress can't do it.

I think Judge Hudson is right. And I certainly hope he'll be vindicated by the U.S. Supreme Court as this moves along. There are many other cases, but I think this is the first one they've got it right.

WALLACE: We're going to get to the practical effects in a -- in a moment. Judge Hudson ruled against, as we say, the key provision of health care reform. And Republicans are promising once they take control of the House that they're going to do everything they can to block the implementation, spending for the implementation, of health care reform. Given all of these different tracks, how much trouble is "Obamacare" in right now?

MCDONNELL: Well, I think it's in a fair amount of trouble. But the big trouble right now, honestly, is for the governors in the states, Chris. We've had provisions we've already had to implement over the last four or five months. We've done that because it is the law of the land.

But over the next three years, getting ready for the major implementation in January of 2014 -- there's three years plus of work that we need to do to implement health care exchanges and all these other things that cost tens of billions of dollars -- millions of dollars to the states. So that's why I think this thing needs to get done.

I am strongly in support of having this fast-tracked to the United States Supreme Court. Let's create finality for businesses, for citizens, and for everybody about is it constitutional or not, so everybody knows how to govern themselves.

So that's the big issue for me, is get it resolved quickly by fast-tracking it to the United States Supreme Court. I've written letters to every governor in the country asking them to join us in fast-tracking this and any of the other cases so we can get it to the Supreme Court. Everybody knows they're the final arbiter of the Constitution. That's where it's going to end up.

WALLACE: I mean, we might want to point this out for people who have not been following it closely. You are pressing to skip going to the intermediate step, the Fourth Circuit...

MCDONNELL: Right.

WALLACE: ... Court of Appeals, and go straight to the Supreme Court, which would speed this up by a matter of years. The Justice Department...

MCDONNELL: Right.

WALLACE: ... announced, however, right after they want to go through the normal process and go to the Fourth Circuit. Is this really a battle about whether or not you're going to be able and other opponents are going to be able to kill "Obamacare" before it gets rolling?

MCDONNELL: No. I think this is a question about whether or not we should have certainty and finality and predictability for the American people.

I mean, why tie this up with three years of litigation if we can have a joint motion between the Justice Department, the Commonwealth of Virginia, and the other cases to have the U.S. Supreme Court resolve this as the final arbiter of the United States Constitution?

Because it's going to take a tremendous amount of money that could be wasted in the states and by the federal government in setting things up that ultimately might be stricken. So this should not be political.It's about finality that everybody wants, Chris, because there's disagreement about the underlying policy.

Let's let the U.S. Supreme Court say is it constitutional or not. I think that's fair, and I hope most people would like to get this done and not tie it up in another year and a half or two of litigation that could be avoided.

WALLACE: Governor, let's talk about the practical effect now. The White House says if you end the individual mandate, because that would provide for a lot more customers that would obviously give money to the insurance company -- if you end the individual mandate then insurance companies will not have the money they need to stop things like denying coverage to people with preexisting conditions or charging different rates to people who have different states of health.

Do you really want to block those kinds of reforms that a lot of people support?

MCDONNELL: Well, this legal case, Chris, is not about the underlying policy. It's about whether or not when you adopt a policy can you do it in a way that's unconstitutional. And the answer is clearly, clearly no.

Listen, every governor, I think, supports these ideas of finding a way to increase access, reduce costs, and do something about the one-sixth of the American people that have no insurance. But you can't do it in a way that violates the tax and spend clause or the commerce clause of the Constitution.

So that's why the Republicans in Congress are saying, "Let's go back and repeal and then reauthorize in a way that makes sense." And that's up to the Congress to figure out how to do that. We've got other initiatives we've working at the state level...

WALLACE: But let me...

MCDONNELL: ... but ultimately you've got to follow the law.

WALLACE: But let me ask you -- I know -- I take your point. The Constitution is the Constitution. But let me ask you as a practical matter, about a million people in Virginia are uninsured. That's about 15 percent of your state's population.

If you kill what is called "Obamacare," how do you get those million people coverage?

MCDONNELL: Well, the numbers are actually -- when you strip it down to -- into people that choose not to do it, or have individual medical savings accounts, or on other types of programs, on Medicaid or different things like that, the numbers actually go down quite a bit.

We are working on a number of free market solutions that we can use to improve the number of people in individual medical savings account.We think the Congress ought to pass a bill to allow more portability across state lines. We ought to have more flexibility in the Medicaid program instead of all these mandates.

"Obamacare" is going to cost us $2 billion, Chris, by 2022 in unfunded mandates -- same thing with other states, significant...

WALLACE: But...

MCDONNELL: ... things, so...

WALLACE: ... you know, the individual...

MCDONNELL: ... we need to have flexibility for the states.

WALLACE: But if I may, Governor, the CBO, the Congressional Budget Office, talks about -- this basic Republican plan you're talking about would only extend coverage to 3 million people, as opposed to the 30 million under "Obamacare."

MCDONNELL: The fact is a lot of people that don't have insurance are getting it right now. They're not denied in the emergency rooms. They're generally not denied by doctors. It's not a pretty system, but the idea that people are not getting health care particularly for critical needs is just -- is just not the case.

I think we do need to improve the system, but let's do it with more free market decisions and not with federal mandates on the states that take away our flexibility and violate the Constitution. That's the problem, and I think that hopefully Congress -- going back with a new Congress and a split legislature can find a bipartisan way to get this done in a better way.

WALLACE: Finally, let's talk about the legal issue, the underlying legal issue that's involved here. You argue, and Justice -- or, rather, Judge Hudson agreed, that the government can't force an individual to buy a private product, that you can't legislate or mandate inactivity, if you will.

MCDONNELL: Right. That's right.

WALLACE: Supporters of health care reform, though, say that nobody is a bystander when it comes to health care reform because eventually everybody is going to need it, and so by going without health insurance and having either eventually to pay for it out of pocket or to shift the cost through uncompensated care to all the rest of us, that is, in fact, an economic activity.

MCDONNELL: Yeah. Well, they're flat wrong. Chris, if this decision doesn't go the way I think Judge Hudson has ruled, there are no limits, I think, left to federal power.

If you say that you must buy -- if the federal government can tell a citizen of the United States, "You must buy a product of insurance," or a car, or a watermelon, or whatever it happens to be, "and if you don't, we're going to fine you," then what are the limits left on the commerce clause?

I think Judge Hudson's got it -- got it correct. The irony also is the Justice Department is now saying, "Well, it's a tax," which of course the president and the Congress said, "No, it's not a tax, it's a -- it's a -- it's a penalty." And of course, now they argued in the legal briefs that it's a tax for purposes of a legal argument. Judge Hudson said, "No, it's not. It is, in fact, a penalty."

So I think it fails on both of those arguments. And to the -- enact the laudable goal of expanded coverage at lower cost, let's just do it in a way that's bipartisan and that's constitutional, and not force these billions in unfunded mandates on the states. That's the problem.

WALLACE: Governor McDonnell, we're going to have to leave it there. We want to thank you so much for coming in today. And we will stay on top of this story, sir.

MCDONNELL: OK, Chris. Good to be on with you.

WALLACE: Up next, our Sunday panel on the lame duck session of Congress that has turned out to be surprisingly active.

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