Tag: Obamacare

The New York Times Undermines its Narrative

The New York Times has an odd story today on campaign finance on its front page. The story argues that organizations which do not have to identify their donors are sponsoring ads that criticize candidates for office. Complaints about secrecy notwithstanding, the third paragraph of the story discloses one of the major contributors to a group and reveals his putative interests in becoming involved. It also goes into great detail about the donor, his political associates, and even meetings his associates attended and what decisions were made therein. Later parts of the story recount the already disclosed names of supporters of Karl Rove’s efforts in this cycle. True, the story does not reveal everything the reporters believe should be disclosed about donors. But the groups and their donors are hardly secret given what is revealed in the story itself.

The story also cannot get its story straight. The Times’ reporters evidently wanted to fit what they have found into a standard, “special interest” template: the organization in question - the American Future Fund - as a front for energy interests. The story also says the group has sponsored ads on general themes like too much spending,  Obamacare, and another stimulus. But the reporters are determined to see “suggestions of an energy-related agenda,” their own reporting notwithstanding. This forcing of facts into a template comes along with a recognition that the politics of energy and ethanol have become more complicated making it difficult to say what interests are actually being advanced in the American Future Fund effort.

So the story discloses, while decrying secrecy, and both asserts and denies the domination of special interests. In the end, the story holds fast to a simple, conventional theme which is then undermined by its reporting. We should admire, I guess, that the Times’ reporters were willing to undermine their own narrative. But why not just embrace complexity? They are writing the first, not the final, draft of history.

The story also reports that donors desire anonymity because they wish to avoid taking sides in political disputes in public. The story does not say why they desire to avoid taking sides. Perhaps a quick call to the Koch family or George Soros might have provided an answer to that question.

Pelosi Had to Pass ObamaCare So She Could Find out What’s In It

Bloomberg’s Caroline Baum has a great column on ObamaCare.  It leads off with House Speaker Nancy Pelosi’s oft-repeated remark, “We have to pass the bill so that you can find out what is in it.

Truer words were never spoken.  Heck, ObamaCare gives HHS Secretary Kathleen Sebelius so much arbitrary power to reshape the health care sector that Congress had to pass the law so that Pelosi could find out what is in it.

Baum explains why such discretionary power is dangerous:

Discretion may be the better part of valor, but it’s not something businesses can rely on for planning purposes. Corporations are already hunkered down because of (take your pick) weak demand, hurt feelings as a result of presidential persecution, or uncertainty over future health-care costs and tax rates. It won’t help business confidence to learn the HHS secretary can make and break rules on a case-by-case basis.

“The secretary can decide what you have to purchase, but if you are in a presidential swing state, the secretary has the authority to undo everything she just did,” Cannon says.

Wait, how’d that last sentence get in there?  Anyway, read the whole thing.

Michigan Court Wrong on Obamacare, Even Exceeds Its Own Powers

The passage of Obamacare heralded an important discussion on whether the Constitution places any effective limits on federal power and, in particular, where Congress gets the constitutional warrant to require every person to enter the private marketplace and buy a particular good or service.  This is a healthy discussion to have, including in the courts.  

Today’s ruling in Michigan, dismissing the Thomas More Law Center’s challenge to the individual mandate, while disappointing to those of us who believe that the government lacks the power to commandeer people to engage in transactions – “economic mandates,” as it were – is but one of many legal decisions we can expect on the way to the Supreme Court’s ultimate resolution of this important issue.  Indeed, this summer we saw a ruling by a federal judge in Virginia allowing that state’s legal challenge to the individual mandate and other aspects of the health care legislation to proceed.  And last month, a federal judge in Florida heard arguments in a similar lawsuit brought by 20 other states – a decision on which we can expect later this fall.  Other serious cases continue in Arizona, Missouri, Ohio, the District of Columbia, and elsewhere.

Perhaps most notable about the Michigan opinion, however, is the scant space spent on the serious Commerce Clause arguments on which hundreds of pages have been filed in these cases by top lawyers, legal experts, and academics (including Cato – yes, I’m heavily vested in this litigation).  After granting that the plaintiffs had standing and that the case was ripe for adjudication, and rejecting the government’s odd Anti-Injunction Act defense, Judge Steeh takes only seven and a half pages to reject the plaintiffs’ arguments – half of which is spent reciting existing doctrine.  It is as if the court merely issued a “placeholder” opinion, pending a “real” resolution on appeal.

And the novel conclusion we gain from this curt disposition is that Congress can now regulate people’s “economic decisions,” as well as do anything that is part of a “broader regulatory scheme.”  If the Supreme Court eventually upholds the kind of reasoning Judge Steeh used here, nobody would ever be able to claim plausibly that the Constitution limits federal power.  Finding the individual mandate constitutional would be the first interpretation of the Commerce Clause to permit the regulation of inactivity – requiring an individual to engage in economic activity. 

The federal government would then have wide authority to require Americans engage in activities of its choosing, from eating spinach and joining gyms (in the health care realm) to buying GM cars.  Or, under Judge Steeh’s “economic decisions” theory, Congress could tell people what to study in school or what job to take.  That may be the unfortunate state of the law in a few years – once the Supreme Court has weighed in, and I doubt it would ever go so far in any event – but it is not up to district courts to extend constitutional doctrine on their own.

How ObamaCare Is Destroying Consumer Protections

In this morning’s Charlotte Observer, I explain how ObamaCare is destroying consumer protections.  Exhibit A is Blue Cross Blue Shield of North Carolina’s decision to refund $156 million to its policyholders:

BCBSNC’s refunds show that ObamaCare is leaving seriously ill patients with less protection, not more. Health insurance was hardly perfect before ObamaCare, but BCBSNC’s policyholders had insurance that had pre-funded many of their future medical bills.

Now, ObamaCare has effectively transferred those reserves from the sick to the healthy. Seriously ill policyholders now have less protection against BCBSNC reneging on its commitments to them. Competition used to discourage skimping; ObamaCare rewards it.

Due to space considerations, the editors dropped the parts where I explain (A) how research by Harvard economist (and sometime Obama advisor) David Cutler shows that under ObamaCare’s price controls, insurers must compete to avoid the sick, and (B) that ObamaCare is blocking further innovations – such as those foreseen by University of Chicago economist John Cochrane – that would provide even greater protection to the sick.

Giving Power to Experts Is No Way to Reform Health Care

In the latest Cato Policy Report, Cato adjunct scholar Arnold Kling’s essay on the (mis)rule of experts explains why ObamaCare will fail:

Despite the many pages contained in the health care legislation that Congress enacted, the health care system that will result is for the most part to be determined. The design and implementation of health care reform was delegated to unelected bureaucrats, as was done in Massachusetts.

In Massachusetts, the promises of proponents have proven false, and the predictions of skeptics have been borne out. Costs have not been contained; they have shot up. Emergency room visits have not been curtailed; they have increased. The mandate to purchase health insurance has not removed the problem of adverse selection and moral hazard; instead, thousands of residents have chosen to obtain insurance when sick and drop it when healthy. The officials responsible for administering the Massachusetts health care system are no longer talking about sophisticated ways of making health care more efficient.

Instead, they are turning to the crude tactic of imposing price controls.

Once again, we have legislators putting unrealistic demands on experts. This results in the selection of experts with the greatest hubris, shutting out experts who appreciate the difficulty of the problem. When the selected experts find that their plans go awry, they take out their frustrations by resorting to more authoritarian methods of control.

With ObamaCare, that dynamic took hold before the law even took effect.

Yes, Virginia, Congress Is Not Santa Claus and Is Bound by the Constitution

The legal battle against Obamacare continues. In June, a district court in Richmond denied the government’s motion to dismiss Virginia’s lawsuit (in opposition to which Cato filed a brief).  Despite catcalls from congressmen and commentators alike, it seems that there is, after all, a cogent argument that Obamacare is unconstitutional!  

Having survived dismissal, both sides filed cross motions for summary judgment—meaning that no material facts are in dispute and each side believes it should win on the law.  Supporting Virginia’s motion and opposing the government’s, Cato, joined by the Competitive Enterprise Institute and Georgetown law professor (and Cato senior fellow) Randy Barnett, expands in a new brief its argument that Congress has gone beyond its delegated powers in requiring that individuals purchase health insurance.

Even the cases that have previously upheld expansive federal power do not justify the ability to mandate that individuals buy a product from a private business.  Those cases still involved people that were doing something—growing wheat, running a hotel, cultivating medical marijuana.  The individual mandate, however, asserts authority over citizens that have done nothing; they’re merely declining to purchase health insurance.  This regulation of inactivity cannot find a constitutional warrant in either the Commerce Clause, the Necessary and Proper Clause, or Congress’s taxing power.  Such legislation is not “necessary” to regulating interstate commerce in that it violates the Supreme Court’s distinction between economic activity (which often falls under congressional power as currently interpreted) and non-economic activity (which, to date, never has), it is not “proper” in that it commandeers citizens into an undesired economic transaction.  

Finally, the taxing power claim is a red herring: (a) neither the mandate nor the penalty for not complying with the mandate is a tax, and is not described as such anywhere in the legislation; (b) even if deemed a tax, it’s an unconstitutional one because it’s neither apportioned (if a direct tax) nor uniform (if an excise); (c) Congress cannot use the taxing power to enforce a regulation of commerce that is not authorized elsewhere in the Constitution.

The district court will hear arguments on the cross-motions for summary judgment in Virginia v. Sebelius later this month and we can expect a ruling by the end of the year. 

Obamacare delenda est.