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Ron Paul's Freedom Report
A publication of the Foundation for Rational Economics and Education
Volume 4, No. 7 SEPTEMBER 2000
On Monday, July 10, Dr. Paul addressed the House to point out fundamental misconceptions contained in Senate Concurrent Resolution 129 (S. Con. Res. 129), a Sense of Congress Regarding Importance and Value of Education in United States History. This bill, sponsored by Senator Joseph I. Lieberman, was introduced in the Senate on June 30, where it was given speedy, unanimous consent. Subsequently, S. Con. Res. 129 was received in the House where identical language was introduced for approval as House Concurrent Resolution 366 (H. Con. Res. 366). Dr. Paul's remarks, taken from the Congressional Record, are reprinted here with only cosmetic changes in format as an open letter to Senator Lieberman, who now seeks the second highest political office in the land as the Democratic candidate for Vice President of the United States.
"A Republic, Not A Democracy"
Congressman Ron Paul
July 10, 2000
Dear Senator Lieberman:
I write to address two shortcomings of S. Con. Res 129. I am certainly in agreement with the sentiments behind this resolution. The promotion of knowledge about, and understanding of, American history are among the most important activities that those who wish to preserve American liberty can undertake. In fact, I would venture to say that through my work with various educational organizations, I have done as much, if not more, than any other member of Congress to promote the study of American history.
Unfortunately, while I strongly support efforts to increase the American public's knowledge of history, I cannot support a resolution claiming to encourage Americans to embrace their constitutional heritage while its very language showcases a fundamental misunderstanding of the beliefs of America's founders and the drafters of the United States Constitution. Popular acceptance of this misunderstanding of the founders' thoughts is much more dangerous to American liberty than an inability to name the exact date of the Battle of Bunker Hill.
In particular, the resolution refers to American "democracy" and the "democratic" principles upon which this country was founded. However, this country was founded not as a democracy but as a constitutional republic.
Senator, the distinction between a democracy and a republic is more than just a matter of semantics. The fundamental principle in a democracy is majority rule. Democracies, unlike republics, do not recognize fundamental rights of citizens (outside the right to vote) nor do they limit the power of the government. Indeed, such limitations are often scorned as "intrusions on the will of the majority." Thus in a democracy, the majority, or their elected representatives, can limit an individual's right to free speech, defend oneself, form contracts, or even raise one's children. Democracies, unfortunately, recognize only one fundamental right: the right to participate in the choosing of their rulers at a pre-determined time.
In contrast, in a republic, the role of government is strictly limited to a few well-defined functions and the fundamental rights of individuals are respected. A constitution limiting the authority of central government and the Bill of Rights expressly forbidding the federal government from abridging the fundamental rights of a people are features of a republican form of government. Even a cursory reading of the Federalist Papers and other works of the founders shows they understood that obtaining the consent of 51 percent of the people does not in any way legitimize government actions abridging individual liberty.
The confusion over whether America is a democracy, where citizens' rights may be violated if the consent of 51 percent of the people may be obtained, or a republic, where the federal government is forbidden to take any actions violating a people's fundamental rights, is behind many of the flawed debates in this Congress. A constitutionally literate Congress that understands the proper function of a legislature in a constitutional republic would never even debate whether or not to abridge the right of self-defense, instruct parents how to raise and educate their children, send troops to intervene in distant foreign quarrels that do not involve the security of the country, or even deny entire classes of citizens the fundamental right to life.
Secondly, it is not the proper role of the United States Congress to dictate educational tenets to states and local governments. After all, the United States Constitution does not give the federal government any power to dictate, or even suggest, curriculum. Instead the power to determine what is taught in schools is reserved to states, local communities, and above all, parents.
In conclusion, by mistaking this country's founding as being based on mass democracy rather than on republican principles, and by ignoring the constitutionally limited role of the federal government, this resolution promotes misunderstanding about the type of government necessary to protect liberty. Such constitutional illiteracy may be more dangerous than historical ignorance, since the belief that America was founded to be a democracy legitimizes the idea that Congress may violate people's fundamental rights at will. I, therefore, encourage you and all my colleagues to embrace America's true heritage: a constitutional republic with strict limitations on the power of the central government.
For liberty,
Ron Paul, Member
U.S. House of Representatives
(H. Con. Res. 366 was agreed to by voice vote on July 10, 2000)
[THURSDAY, JUNE 29, 2000]
Providing for Consideration of H.R. 1304,
Quality Health-Care Coalition Act of 2000
[Editor's note: before a bill comes to the Floor for a vote, the conditions under which it will be allowed to come forward must be agreed to by a vote. Those conditions, which include the amount of time allocated for debate, who controls that time, and other factors, are known as the "rule." A bill can come to the floor without a rule for speedy action, in which case it is said that the rule is suspended, and such bills are referred to as suspension bills and are on the suspension calendar. The process of gaining acceptance for the rule is itself a chance to initiate debate, and Dr. Paul does not hesitate to use such opportunities to begin to frame his argument, as indicated in this important instance.]
(Dr. Paul addresses the House)
Mr. Speaker, I rise in strong support of the rule. It is an imperfect rule, but this bill needs to be brought to the floor.
H.R. 1304 is the only bill that I have seen in the last 3 years, probably in the last 30 years, that would move us in a proper direction for health care in this country.
For 30 years now we have moved in [one] direction; not toward socialized medicine - we do not have socialized medicine, we have a mess. We have a monster we created called "medical management" - we have moved toward corporate medicine.
Who are the greatest opponents of H.R. 1304? The HMOs {health maintenance organizations] and the insurance companies.
All we are asking for is the return of a little bit of freedom to the physician, that is, for the right of the physician to freedom of contract, to associate. We are asking for no special powers, no special privileges, only trying to balance, just to a small degree, the artificial power given to the corporations who now run medicine, who mismanage medicine - who destroyed the doctor-patient relationship.
Mr. Speaker, this [bill] has given me a small bit of hope. I am thankful the leadership was willing to bring this bill to the floor tonight. We should go through, get the rule passed, and vote on this. This is the only thing that has offered any hope to preserve and to restore the doctor-patient relationship which we need desperately.
We do not need to support the special corporate interests [that are opposing this bill] who get the money. The patient does not get the care. The doctors are unhappy. The hospitals are unhappy. And who lobbies against this? Corporate interests. [We are moving toward] total destruction of the doctor-patient relationship.
All we ask for is the freedom to associate and the freedom to contract. If they do not want to become a union, doctors do not have to. Doctors had the power to become unions in the 19th century, but under ethical conditions they did not. Nobody [will be telling] doctors that they have to if we remove this obstacle.
[Thursday, June 29, 2000 - continued]
Statement of Dr. Paul during debate on H.R. 1304,
the Quality Health-Care Coalition Act of 2000
(Dr. Paul addresses the House)
Mr. Chairman, I am pleased to take this opportunity to lend my support to H.R. 1304, the Quality Health Care Coalition Act, which takes a first step towards restoring a true free-market in health care by restoring the rights of freedom of contract and association to health care professionals.
Over the past few years, we have had much debate in Congress about the difficulties medical professionals and patients are having with Health Maintenance Organizations (HMOs). HMOs are devices used by insurance industries to ration health care.
How We Got Into This Mess
While it is politically popular for members of Congress to bash the HMOs and the insurance industry, the growth of the HMOs are rooted in past government interventions in the health care market though the tax code, the Employment Retirement Security Act (ERISA), and the federal anti-trust laws. These interventions took control of the health care dollar away from individual patients and providers, thus making it inevitable that something like the HMOs would emerge as a means to control costs.
Many of my well-meaning colleagues would deal with the problems created by the HMOs by expanding the federal government's control over the health-care market. These interventions will inevitably drive up the cost of health care and further erode the ability of patents and providers to determine the best health treatments free of government and third-party interference. In contrast, the Quality Health Care Coalition Act addresses the problems associated with HMOs by restoring medical professionals' freedom to form voluntary organizations for the purpose of negotiating contracts with an HMO or an insurance company.
As an OB-GYN with over 30 years in practice, I am well aware that young physicians coming out of medical school feel compelled to sign contracts with HMOs that may contain clauses compromising their professional integrity. For example, many physicians are contractually forbidden to discuss all available treatment options with their patients because the HMO gatekeeper has deemed certain treatment options too expensive.
In my own practice, I have tried hard not to sign contracts with any health insurance company that infringed on my ability to practice medicine in the best interests of my patients, and I have always counseled my professional colleagues to do the same. Unfortunately, because of the dominance of the HMO in today's health-care market, many health-care professionals cannot sustain a medical practice unless they agree to conform their practice to the dictates of some HMO.
One way health-care professionals could counter the power of the HMOs would be to form a voluntary association for the purpose of negotiating with an HMO or an insurance company. However, health-care professionals who attempt to form such a group run the risk of persecution under federal anti-trust laws. This not only reduces the ability of health- care professionals to negotiate with HMOs on a level playing field, it (like existing antitrust laws) is an unconstitutional violation of medical professionals' freedom of contract and association.
The Folly of Federal Anti-Trust Laws
Under the United States Constitution, the federal government has no authority to interfere with the private contracts of American citizens. Furthermore, the prohibitions on contracting contained in the Sherman antitrust laws are based on the flawed economic theory that federal regulators can improve upon market outcomes by restricting the rights of certain market participants deemed too powerful by the government.
In fact, anti-trust laws harm consumers by preventing the operation of the free-market, causing prices to rise, quality to suffer, and, as is certainly the case with the relationship between the HMOs and medical professionals, favoring certain industries over others. In fact, Mr. Speaker, I would hope that my colleagues would see the folly of antitrust laws and support my Market Process Restoration Act (H.R. 1789), which repeals all federal antitrust laws.
By restoring the freedom of medical professionals to voluntarily come together to negotiate as a group with HMOs and insurance companies, this bill removes a government-imposed barrier to a true free market in health care. I am quite pleased that this bill does not infringe on the rights of health-care professionals by forcing them to join a bargaining organization against their will. Contrary to the claims of some of its opponents, H.R. 1304 in no way extends the scourge of federally-mandated compulsory unionism to the health-care professions. While Congress should protect the right of all Americans to join organizations for the purpose of bargaining collectively, Congress also has a moral responsibility to ensure that no worker is forced by law to join or financially support such an organization.
Medical Saving Accounts
Mr. Chairman, it is my hope that Congress will follow up on its action today by empowering patients to control their health care by providing all Americans with access to Medical Saving Accounts (MSAs) and large tax credits for their health care expenses. Putting individuals back in charge of their own health-care decisions will enable patients to work with providers to ensure that they receive the best possible health care at the lowest possible price. If providers and patients have the ability to form the contractual arrangements that they find most beneficial to them, the HMO monster would wither on the vine without the imposition of new federal regulations on the insurance industry.
In conclusion, Mr. Chairman, I urge my colleagues to support the Quality Health Care Coalition Act and restore the freedom of contract and association to America's health- care professionals. Antitrust laws are no more legitimate or constitutional in the health-care market than they are on the software market. Therefore, I hope my colleagues will not just pass this bill but will also support my Market Process Restoration Act and exempt all Americans from antitrust laws.
I also urge my colleagues to join me in working to promote a true free market in health care by putting patients back in charge of the health-care dollar through means such as Medical Savings Accounts (MSAs) and individual health- care tax credits.
(On June 30, H.R. 1304 passed by a vote of 276 to 136 and was sent to the Senate.)
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