Tag: Obamacare

Wash. Post, CBS, NBC Should Disclose Receipt of ObamaCare Subsidies

It’s not an easy period for major media organizations, what with all this creative destruction revamping that sector of the economy.  So the Washington Post Co. couldn’t help but be pleased when it received a $570,000 bailout from ObamaCare’s Early Retiree Reinsurance Program.  That program allows the Obama administration to run up the national debt another $5 billion by doling out cash to corporations that provide retiree health benefits.   The CBS Corporation received more than $720,000.  General Electric, a part owner of NBC Universal, Inc., cleared nearly $37 million.

Since The Washington Post, CBS News, NBC News, and MSNBC have now received subsidies (the latter two indirectly) from this very controversial law, their reporters should disclose that fact to their audiences when reporting on ObamaCare.  A disclaimer like this should suffice: “The Washington Post Corporation has received subsidies under the health care law.”  That would be consistent with how NBC discloses its relationship with General Electric:

Oh, and kudos to the marketing whiz who decided to call all these ObamaCare spending programs “slush funds.”

Does Virginia Even Have Standing to Challenge Obamacare?

As I described yesterday in the context of Cato’s latest brief, Virginia’s challenge to the constitutionality of the individual mandate is now on appeal before the Fourth Circuit (the federal appellate court that covers Maryland, Virgnia, and the Carolinas).   Before the court even considers the constitutional merits, however, it must confirm that the state has standing to bring the lawsuit in the first place. 

Indeed, two amicus briefs filed by some law professors argue that the state does not have the legal power to challenge the constitutionality of Obamacare.  But Pacific Legal Foundation attorney and Cato adjunct scholar Timothy Sandefur filed a brief responding to those briefs and arguing that Virginia does have standing to bring the case.

Here’s the issue:  Article III of the Constitution only lets federal courts hear “cases and controversies,” which means that a plaintiff – whether an individual, a state, a corporation, or any other entity – must have been actually harmed in a way that courts can address.  For example, courts can’t review abstract political arguments or give advisory opinions.  Here, Virginia argues that it’s been injured because it passed a Health Care Freedom Act that prevents citizens from being forced to buy health insurance – which is obviously in conflict with the individual mandate.

The professors say, in contrast, that states can’t pass laws that conflict with federal law as a means of getting in court and challenging the constitutionality of the federal law.  They point to Massachusetts v. Mellon, a 1923 decision that said states don’t have the “duty or power to enforce … [citizens’] … rights in respect of their relations with the Federal Government.  In that field it is the United States, and not the State, which represents them as parens patriae….”  They argue that the “the state’s interest in enforcing its legal code must necessarily give way to federal law whenever a conflict arises,” and that “[m]anufacturing a conflict with federal law cannot of itself create an interest sufficient to support standing.”

PLF’s brief explains, however, that states have had the power to do precisely that since at least McCulloch v. Maryland, the 1819 case that upheld the constitutionality of the national bank (and which is central to the Necessary and Proper Clause analysis at the heart of the larger constitutional debate over Obamacare).  In McCulloch, Maryland passed a law taxing the bank simply to give it the ability to challenge the bank’s creation in the Supreme Court.  Although the Court found the bank constitutionally kosher, it never denied that the state couldn’t raise its claims.  And the Supreme Court has allowed states in many other cases to challenge federal laws that intrude on their constitutionally retained sovereignty.

In South Dakota v. Dole (1987), for instance, the Court allowed the state to challenge the constitutionality of laws that infringed on the power to regulate alcohol consumption (by tying federal highway funds to states’ raising their drinking age to 21) – a power that the Twenty-First Amendment leaves to states.  If states can defend powers retained by the Twenty-First Amendment, why can’t they defend powers retained by the Tenth Amendment? 

And states should have the power to bring these lawsuits, because the Founders intended for states to serve as a check against Congress going beyond its constitutional authority.  In Federalist 46, for example, Madison assured skeptics that states would have “means of opposition” against federal overreaching, and those means would include “the embarrassments created by legislative devices.”  States are supposed to defend their turf in the federal constitutional scheme.  As for cases like Mellon, PLF argues that these cases involved “political questions” and so were not rulings about standing: in those cases the states weren’t really exercising their sovereign powers.  But in this case, Virginia has clearly exercised its sovereignty by passing the Health Care Freedom Act.

Interestingly, one reason PLF argues that states should have standing to bring these cases is because there’s some question whether individual citizens are allowed to bring Tenth Amendment challenges.  That question will be resolved this term in Bond v. United States, a case in which Cato filed an amicus brief in December.  If individuals are hard-pressed to defend the federalist structure, then states certainly should be able to.

In short, PLF’s brief (which was also filed on behalf of Americans for Free Choice in Medicine and Matt Sissel, PLF’s client in a different Obamacare case) makes a complicated but crucial argument supporting states’ ability to defend federalism by challenging the constitutionality of federal overreaching.  More at PLF’s blog.

Cato’s Latest Obamacare Brief: Congress Cannot ‘Commandeer the People’

A recent poll showed that 22% of Americans believe Obamacare has been repealed and 26% aren’t sure.  Yet here at Cato, we’re all too aware that the massive, unconstitutional, and fundamentally unworkable overhaul of our health care system still looms on the horizon.

While two lower courts have struck down Obamacare in whole or in part, three others have ruled it constitutional, including a D.C. District Court opinion that claimed for the federal government the right to regulate the “mental activity” of decision-making.  As litigation progresses to the appellate level, this latter decision has proven to be more a hindrance to Obamacare’s supporters than a help, its Orwellian pronouncement being hard to ignore while the government downplays the significance of the power Congress is asserting.  Nevertheless, Obamacare’s constitutionality—with a focus on the individual health insurance mandate—remains an open question until ruled upon by the Supreme Court. 

Cato’s latest amicus brief is in the Fourth Circuit, in the case brought by Virginia Attorney General Ken Cuccinelli.  In this case, unlike in the Sixth Circuit (in which we also filed a brief), it is the federal government that appealed an adverse district court decision that struck down the individual mandate.  In our brief, joined by the Competitive Enterprise Institute and Prof. Randy Barnett (the intellectual godfather of the Obamacare legal challenges, and also a Cato senior fellow), we argue that the outermost bounds of existing Commerce Clause jurisprudence prevent Congress from reaching intrastate non-economic activity regardless of whether it substantially affects interstate commerce.  Nor under existing law can Congress reach inactivity even if it purports to act pursuant to a broader regulatory scheme.  

Allowing Congress to conscript citizens into economic transactions is not only contrary to existing Commerce and Necessary and Proper Clause doctrine—as broad as that doctrine is—but it would fundamentally alter the relationship between the sovereign people and their supposed “public servants.”  The individual mandate “commandeers the people” into Congress’s brave new health care world.  If Obamacare is allowed to stand, the only limit on federal power will be Congress’s own discretion.

The case will be argued before the Fourth Circuit in Richmond on May 10.  Read more from Prof. Barnett on Obamacare here and check out the half-day event we recently held on the legal and economic problems with the law.  Finally, though his name isn’t on our brief because he hasn’t yet become a member of the bar, many thanks to legal associate Trevor Burrus for his work on it.

Friday Links

  • They passed the bill, and now we’re finding out what’s in it.
  • We’re finding out that the war in Libya could really be about protecting European interests.
  • In Atlas Shrugged, Ayn Rand described a world in which government both partly produced and partly subsidized goods; we’re finding out she wasn’t far off the mark.
  • We’re finding out that “American exceptionalism” is a cloak for military adventurism.
  • The longer America fights a war on drugs, the more we find out about how detrimental it is to our fiscal outlook:


ObamaCare Implementation: What Rivkin Said, and Why

A couple of people have asked me about a comment David Rivkin made at Cato’s recent conference on the first anniversary of ObamaCare.

Rivkin is representing the 26 states suing to overturn ObamaCare in Florida v. HHS, the case in which a federal judge declared ObamaCare unconstitutional and void. In his most recent ruling in that case, Judge Roger Vinson allowed the Obama administration to keep implementing and enforcing the law, in part because the fact that most of the plaintiff states are also implementing the law “undercut” their request that he stop the Obama administration from doing so.  I (and others) have been urging states to follow the lead of Republican governors Rick Scott (FL), Sean Parnell (AK), and Bobby Jindal (LA) by refusing and returning all Obama funds and refusing to implement any type of health insurance “Exchange.”

According to Politico, when asked about the impact of states implementing the law, Rivkin said:

The decision to take money or not take money is a quintessentially political decision that does not impede legal claims… If a given state wants to continue complying with Obamacare and receiving money, that’s not impairing our ability to challenge the law.

Consider that answer in context.  Rivkin is representing 26 states, and as their attorney he has a duty to them.  Asking him if plaintiff states implementing ObamaCare are undermining the lawsuit is basically to ask, “Aren’t 23 of your clients making your job harder?”  What should he have said?  Yes?  Of course not.  As a good lawyer should, he responded that those states are doing nothing to inhibit his ability to litigate the case.  He said nothing about whether those states’ actions could affect the outcome of his case (which they might), nor the likelihood that the law will be repealed (which they obviously do).  On those questions, he’s the wrong guy to ask.

Monday Links

  • A year later, Obamacare makes Pennsylvanians say “no thank you.”
  • In a peculiar set of responses to inquiries about Libya, the Obama administration makes “kinetic military action” against the English language.
  • Full or substantial government health insurance makes for an inefficient and expensive health care system.
  • Emotionalism as democratic waves spread across the Middle East makes incoherent foreign policy.
  • As long as big ticket items continue to make the cut, our fiscal house will remain in disarray.
  • If you didn’t get a chance to celebrate Earth Hour Cato-style over the weekend, check out this clip of senior fellow Jerry Taylor making the case against “green” subsidies:


Friday Links

  • When is an entitlement not an entitlement, but a command? When a federal judge contradicts herself, of course.
  • As the Arab League’s influence over its own member states wanes, of course they support the creation of an international no-fly zone over Libya.
  • Of course, there’s really no such thing as a “Social Security trust fund.”
  • Should the United States and Saudi Arabia remain allies? Of course—but Washington should probably re-think the terms of the partnership.
  • Of course, when George W. Bush was president, you couldn’t go anywhere in Washington without seeing an anti-war protest. Where have they all gone?