Topic: Government and Politics

How to Repeal ObamaCare through the Same Process that Gave Us ObamaCare

From my latest at Darwin’s Fool:

Republicans won an impressive number of victories last night, including a larger and more conservative House majority and enough wins to give the GOP at least a 52-seat majority in the Senate. As Jeffrey Anderson and Robert Laszewski have noted, Republicans made ObamaCare a major issue in the election  (the New York Times’ denials notwithstanding). Senate Republicans will fall several seats short of the 60-vote super-majority needed to overcome a Democratic filibuster of an ObamaCare-repeal bill, though. ObamaCare opponents are therefore debating whether and how Republicans could repeal some or all of the law via the Senate’s “budget reconciliation” process, which allows certain legislation to pass the Senate with only 51 votes. Some opponents have proposed getting around these difficulties by getting rid of the filibuster entirely. I think there’s a more prudent, targeted way Republicans could put ObamaCare repeal on the president’s desk, give Democrats a taste of their own majoritarian medicine, and convince Senate Democrats of the virtues of restoring the filibuster on legislation and judicial nominations.

It goes like this…

Read the whole thing.

Three Quick Thoughts on the Election’s Implications for the Judiciary

#1: Justice Ruth Bader Ginsburg may be reconsidering her decision not to retire. President Obama or a future President Hillary Clinton will have much less leeway with replacing her in a Republican-controlled Senate.

#2: There will be very few lower court judicial confirmations. Those that get through will be completely uncontroversial. Forget the nuclear option that removed judicial filibusters. At this point, with no political capital, President Obama will only get a small number of milquetoast nominees through the Senate.

#3: Expect even more litigation regarding executive actions. With no chance of getting his expansive regulatory project through Congress, President Obama will increasingly use the executive branch–particularly the EPA, the IRS, and HHS–to advance his policy agenda. That is good news only for litigators.

Midterm Impact on Financial Regulation

With Republicans taking the majority (but far short of control at 60) in the Senate and increasing their majority in the House, the regulation of our financial markets may see renewed attention, with particular focus on reforming Dodd-Frank. My former employer Senator Richard Shelby takes the Chair on the Senate Banking Committee, while Congressman Jeb Hensarling retains his leadership role on House Financial Services.

In my nearly twenty years following financial services, we have not had two chairmen more skeptical of government oversight of our financial markets. While neither could be called “libertarian,” both are suspicious of big government as well as big finance.  Both agree that “Too Big To Fail” is a real issue and one created by the actions of government, not the market.

Sen. Shelby, for instance, has repeatedly said “no one is too big to fail” - what he means here is that no company should be getting a bailout.  It was for that reason he led the charge in the Senate against the TARP, and also for that reason he voted against the Chrysler Bailout in 1979.  Shelby also led the efforts to reform Fannie Mae and Freddie Mac, warning years before their failure of the various flaws inherent in a mortgage model of privatized gains and socialized losses.  Shelby also tried to bring more competition to the credit rating agencies, passing legislation in 2006 to reduce barriers to entry in that market.

The above, however, should not be read to overstate the case.  Both Rep. Hensarling (who apparently had a subscription to the Cato Journal in college) and Sen. Shelby would like to see the federal safety net behind our financial markets reduced, allowing a greater role for market discipline.  Perhaps even more rare in D.C., they both believe their chairmanships come not just with privilege but great responsibility.  If it were simply up to these two to agree, I have confidence that our system of financial regulation would be greatly improved, reducing bailouts and increasing stability.  

But it isn’t up to these two. There are numerous protectors of the status quo in both major political parties.  Both would also have to reach agreement with the Obama Administration, which seems quite comfortable with bailouts and regulatory discretion.  Ultimately, the many obstacles our Founding Fathers wisely put in place for legislation will prove too high for Shelby and Hensarling to implement all but modest reform.  

But at least financial regulation is unlikely to get any worse.

The 2014 Marijuana Ballot Initiatives

In yesterday’s election, Alaska (52-48%), Oregon (54-46%), and the District of Columbia (69-31%) all passed ballot initiatives that legalize marijuana under state (district) law.  This comes on top of the 2012 legalizations in Colorado and Washington.

Florida’s medical marijuana law failed, but only because it was a constitutional amendment and therefore needed 60 percent support to pass; 58 percent of voters endorsed the measure.

Two big tests remain for marijuana legalization. In 2016, another 5-10 states will consider legalization (plausibly Arizona, California, Delaware, Hawaii, Maine, Maryland, Massachusetts, Montana, Nevada, New York, Rhode Island, and Vermont).  If legalization is successful in most of these states, the pressure for federal legalization will ramp up.

In January 2017, the country will have a new president. That person could order the Attorney General to enforce federal prohibition regardless of state law. That seems unlikely if more states legalize and public support expands.

But until federal law explicitly legalizes marijuana, the risk of interference continues.

Every Middle East Mistake Causes the United States to Intervene Again

Washington again is at war in the Middle East. Unfortunately, pressure for military intervention will grow with Republican control of the Senate.

The likely result of any new conflicts will be similar to America’s past interventions. The United States will be intervening again in a few years to try to clean up the mess it is creating today.

The United States is not bombing the Islamic State out of necessity. Rather, Washington is acting in response to past mistakes. ISIL exists only because the Bush administration invaded Iraq.

The Obama administration’s decision to attack the Islamic State makes no policy sense. So far, ISIL has focused on creating a quasi-government in the Middle East and has not targeted America.

Of course, the Islamic State killed two U.S. citizens who fell into its hands in truly monstrous behavior. But these murders are no different than similar barbarities committed by others around the globe. Such personal tragedies are no reason to go to war.

If successful in creating a viable “caliphate,” ISIL’s leaders might turn towards terrorism, but doing so would risk their quasi-state by bringing America’s wrath down upon it. Moreover, Iraq demonstrated the foolishness of launching preventive wars based on fantasies disguised as forecasts. The United States is more likely to turn the Islamic State to terrorism now by making war on it, encouraging it to retaliate.

Perhaps the worst aspect of Washington’s policy is absolving nearby states of their responsibility to destroy ISIL. These countries will not act if the United States bails them out.

Harry Reid’s Nuclear Implosion

How sweet it is. Less than a year ago—on November 21st, to be exact—Harry Reid went nuclear. As he’d threatened, in order to get a few of President Obama’s D.C. Circuit Court nominees past a Republican filibuster—staged because that court for years had had more judges than its workload required—Reid unleashed what had come to be called “the nuclear option.” He ended the availability of the filibuster for most executive branch nominations, not by the two-thirds vote that Senate rules had long required but by a simple majority. With yesterday’s mid-term election results now in, it looks like Reid will have enjoyed his win for less than a year. As I wrote at the time, here, here, and here, stating the obvious, what goes around comes around.

Not that he didn’t get some substantive results over that short period, mind you: After a D.C. Circuit panel struck a major blow against Obamacare in July, for example, followed only hours later by a Fourth Circuit decision going the other way, thus setting up a circuit split suited for Supreme Court resolution, the full DC Circuit, on which Obama’s new appointees were now sitting, vacated the panel’s decision just six weeks later, thus removing the circuit split. The Supreme Court is likely to take up the issue in time in any event, as other circuits weigh in on it. But timing is important on a matter like this. We’ll see.

The larger issue, however, is that there will be other nominations over the next two years, and not only for life-time appointments on our federal courts. There is, for example, a looming vacancy at the Department of Justice: Attorney General Eric Holder has said he will stay on until his successor is confirmed. Among those under serious consideration for that post is one Thomas Perez, whose stints as the current secretary of labor and, before that, as assistant attorney general for civil rights have raised enough concerns to keep the new Republican Senate Judiciary Committee’s staff occupied for some time.

And where will those remaining Democratic senators who voted for Harry Reid’s nuclear option be sitting? Why on the minority side, watching Republicans enjoy their newly acquired power not only to hold and control hearings but, should a Republican win the White House in 2016, to confirm nominees by the vote of a mere majority—all because of Harry’s hubris. But it wasn’t Harry’s alone. As the Wall Street Journal editorializes this morning, after his victory speech following his 2012 re-election, President Obama walked off the stage and made separate calls to Nancy Pelosi and House Democratic campaign chairman Steve Israel, telling them “he would spend the next two years helping Democrats retake the House in 2014.” In politics as in life, hubris has its price. We will now have a proper vetting of the president’s nominees, and that is good.

The Endangered Species Act Isn’t Meant to Ignore the Human Species

While California endures its worst drought in a century, a small, finger-sized fish with no known redeemable qualities, the delta smelt, has become the centerpiece of extensive litigation. The U.S. Fish and Wildlife Service (FWS) classifies the delta smelt as “threatened,” and since 2008 it has said that large amounts of water should not be pumped out of the delta smelt’s habitat—the wetlands north of San Francisco—and into the state’s drought-stricken central and southern regions.

That “imported” water from northern California has become vital to the state’s important agricultural business, and the FWS’s decision has substantially harmed California’s farms, farm-laborers, and millions of others dependent on the water supply. In short, in order to protect the 3-inch fish, the state has pumped billions of gallons of water straight into the ocean rather than using it to help California’s struggling farmers.

The farmers, represented by the Pacific Legal Foundation, filed a lawsuit in response to these draconian measures to save the irrelevant fish. The farmers argued that the FWS should not have ignored the harsh financial and human costs of the FWS’s “reasonable and prudent alternatives” to pumping water out of the northern wetlands. The U.S. Court of Appeals for the Ninth Circuit disagreed, holding that the FWS’s decisions deserve deference and that the “FWS is not responsible for balancing the life of the delta smelt against the impact of restrictions” on water pumping. Congress, wrote the court, has already decided that the FWS should protect endangered species “whatever the cost.”

In an attempt to get the Supreme Court to review their case, the farmers argue that the circuit court misread the history of the Endangered Species Act (ESA) and should not have ignored the economic impact of so-called “reasonable and prudent alternatives.” Cato, joining the National Federation of Independent Business, filed a brief in support of their petition. We argue that the ESA has changed since the Supreme Court ruled, in 1978, that species must be protected “whatever the cost.”

The ESA has been amended many times and now commands the FWS to take “into consideration the economic impact” of its proposals. Moreover, the 1978 case that required species to be protected “whatever the cost” has been limited by subsequent decisions.

Finally, we argue that the Ninth Circuit’s decision is in conflict with the Fourth Circuit, which in 2013, vacated an FWS determination because it failed to take into account the economic impact of the reasonable and prudent alternative. This conflict between circuits should be rectified by the Supreme Court, and the ESA should be rightly interpreted as requiring the FWS to take into account the economic impacts of its decisions.

No offense to the delta smelt, but we prefer human beings.

The Supreme Court will decide whether to take the case of Stewart & Jasper Orchards v. Jewell later this year or early in 2015.