Topic: Government and Politics

Ohio, Missouri Introduce the Health Care Freedom Act 2.0

By
Michael F. Cannon

Ohio Reps. Ron Young (R-Leroy Twp.) and Andy Thompson (R-Marietta), and Missouri Sen. John Lamping (R-St. Louis County), have introduced legislation—we call it the Health Care Freedom Act 2.0—that would suspend the licenses of insurance carriers who accept federal subsidies through one of the Patient Protection and Affordable Care Act’s (PPACA) health insurance Exchanges. At first glance, that might seem to conflict with or otherwise be preempted by the PPACA. Neither is the case. Instead, the HCFA 2.0 would require the IRS to implement the PPACA as Congress intended.

Here’s why. Under the PPACA, if an employer doesn’t purchase a government-prescribed level of health benefits, some of its workers may become eligible to purchase subsidized coverage through a health insurance “exchange.” When the IRS issues the subsidy to an insurance company on behalf of one of those workers, that payment triggers penalties against the employer. Firms with 100 employees could face penalties as high as $140,000.

Congress authorized those subsides, and therefore those penalties, only in states that establish a health insurance Exchange. If a state defers that task to the federal government, as 33 states including Missouri and Ohio have done, the PPACA clearly provides that there can be no subsidies and therefore no penalties against employers. The IRS has nevertheless announced it will implement those subsidies and penalties in the 33 states that have refused to establish Exchanges. Applying those measures in non-establishing states violates the clear language of the PPACA and congressional intent. See Jonathan H. Adler and Michael F. Cannon, “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA,” Health Matrix: Journal of Law-Medicine 23 (2013): 119-195.

Whether legal or illegal, those penalties also violate the freedoms protected by the Health Care Freedom Amendment to Ohio’s Constitution, and Missouri’s original Health Care Freedom Act, which voters in each state ratified by overwhelming majorities. The Ohio (HB 91) and Missouri (SB 473) bills would protect employers and workers from those penalties, and thereby uphold the freedoms enshrined in Missouri statute and Ohio’s Constitution, by suspending the licenses of insurance carriers that accept those subsidies.

The question arises whether the PPACA would preempt such a law. It does not. The HCFA 2.0 neither conflicts with federal law, nor attempts to nullify federal law, nor is preempted by federal law.

The HCFA 2.0 concerns a field of law—insurance licensure—that has traditionally been a province of the states under their police powers. In preemption cases, courts “start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.” Wyeth v. Levine, 129 S. Ct. 1187, 1194-95 (2009). Courts then must determine whether the state law in question is nevertheless trumped by express or implied federal preemption.

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Topics: 
General, Government and Politics, Health Care, Law and Civil Liberties

According to Washington Post Exposé, People Who Utilize Tax Havens Are Far More Honest than Politicians

By
Daniel J. Mitchell

Using data stolen from service providers in the Cook Islands and the British Virgin Islands, the Washington Post published a supposed exposé of Americans who do business in so-called tax havens.

Since I’m the self-appointed defender of low-tax jurisdictions in Washington, this caught my attention. Thomas Jefferson wasn’t joking when he warned that “eternal vigilance is the price of liberty.” I’m constantly fighting against anti-tax haven schemes that would undermine tax competition, financial privacy, and fiscal sovereignty.

Even if it means a bunch of international bureaucrats threaten to toss me in a Mexican jail or a Treasury Department official says I’m being disloyal to America. Or, in this case, if it simply means I’m debunking demagoguery.

The supposedly earth-shattering highlight of the article is that some Americans linked to offshore companies and trusts have run afoul of the legal system.

Among the 4,000 U.S. individuals listed in the records, at least 30 are American citizens accused in lawsuits or criminal cases of fraud, money laundering or other serious financial misconduct.

But the real revelation is that people in the offshore world must be unusually honest. Fewer than 1 percent of them have been named in a lawsuit, much less been involved with a criminal case.

This is just a wild guess, but I’m quite confident that you would find far more evidence of misbehavior if you took a random sample of 4,000 Americans from just about any cross-section of the population.

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Topics: 
Government and Politics, International Economics and Development, Tax and Budget Policy

Thatcher: Anecdotes From a Biographer

By
Walter Olson

Her greatness as a political leader aside, and her penetrating moral critique of socialism and communism (so closely intertwined with that greatness) also aside, Margaret Thatcher was almost infinitely quotable.  On the economic folly she fought so tenaciously: “The problem with socialism is that you eventually run out of other people’s money.”  On popularity: “If you just set out to be liked, you would be prepared to compromise on anything at any time, and you would achieve nothing.” On productiveness and the charitable instinct: “No one would remember the Good Samaritan if he’d only had good intentions; he had money as well.” On the hostile press: “If my critics saw me walking over the Thames they would say it was because I couldn’t swim.” And many others, some of the best collected at the U.K. Spectator. 

If you have time to read only one longer Thatcher article today, you could do worse than this terrific, anecdote-filled 2011 Vanity Fair piece by her biographer Charles Moore. Like so many others, Moore is fascinated by Thatcher’s force of personality, which so often drew adjectives like “steely” and “indomitable.” Thatcher, like Ronald Reagan, was entirely willing to reinvent herself on a personal level more than once, in the “self-made” manner that is often seen as particularly American. Thus as she approached the world stage, she studied how to dress and speak the part, taking lessons (at the suggestion of Sir Laurence Olivier) from the speech coach at the National Theater. 

Pro-intellectual, Thatcher was one of the first to spot the potential of think tanks: 

Her greatest political mentor, Sir Keith Joseph, was almost perfect in her eyes, being intellectual, good-looking, Jewish, and upper-class [four categories she approved of]. … He diagnosed — and blamed himself for — a British postwar disease of socialism, state intervention, debauched currency, weakened incentives, and overly powerful trade unions. The Tories, he declared, had been complicit in all of this… They must devise a new strategy, he said, and he set up a think tank, called the Centre for Policy Studies, to do so. Margaret Thatcher became its vice chairman and his disciple.

Thatcher made many mistakes, but often learned from them and eventually revised her views, as when she concluded that she had been too enthusiastic about the project of European integration: “We have not successfully rolled back the frontiers of the state in Britain only to see them re-imposed at a European level, with a European super-state exercising a new dominance from Brussels.”

“I am extraordinarily patient, provided I get my own way in the end,” Thatcher memorably remarked. And mostly she did, to the benefit of Britain and the world.

Topics: 
General, Government and Politics

Margaret Thatcher: A Brief Personal Recollection

By
Marian L. Tupy

For many people, Margaret Thatcher’s resignation (and now her death) will be one of those moments that they will never forget. Like the Kennedy assassination for the previous generation, many will always remember what they were doing when they heard the sad news.  

It was November 22, 1990 and I was about to leave my parents’ apartment in Zilina, Czechoslovakia, to meet a friend. Walking out of the door, I heard the radio announce the shocking news - Margaret Thatcher has resigned. How could it be? Wasn’t she a great success at home and a titan on the world stage? To us – the people of Eastern Europe who were enjoying their first year of freedom – she was much more than the first female British Prime Minister.  

She was an outspoken voice against communist oppression and a fearless promoter of the free markets. The communist media in Eastern Europe (and socialist media in Britain, one might add) spewed poison against her with obsessive regularity. For us that was very reassuring: if they hated her, she must have been good.  

Growing up behind the Iron Curtain, I never thought I would leave my hometown, let alone travel abroad and meet her. But meet her I did. It was October 5, 2002 and I was on a layover in London. Next day, I would board a plane for Washington and begin my work at the Cato Institute.  

My friends - Roger Bate, now at the AEI, and Richard Tren, now at the Searle Foundation – invited me to a dinner celebrating the launch of the Frederic Bastiat prize for free market journalism. One of the winners, coincidentally, was Amity Shlaes, whom I will have the pleasure of introducing at a Cato event this Thursday.   As Margaret Thatcher arrived – descending the stairs together with Denis - there was a sudden hush followed by great applause. By that time, she no longer made speeches and her public appearances were increasingly rare. Still, her presence added gravitas to the proceedings and launched a great prize that continues to this day.  

My friend Veronique De Rugy sat next to Mrs. Thatcher throughout the dinner and so, at some point, I walked over to say hello. Thatcher shook my hand and asked where I was from. When I said that I came from Czechoslovakia, she seemed genuinely delighted. I reminded her that people of Eastern Europe had a genuine affection for her and were grateful for what she did to bring about the end of communism. “You know,” I said, “the communists really hated you.” “Good, good,” she laughed, “I’m glad they did.” Then she gave me one of her piercing looks and said, “We won in the end.”

Yes you did, Margaret.

Topics: 
General, Government and Politics

Spinning the News

By
David Boaz

A headline in Roll Call, the newspaper and website that has been “the source for news on Capitol Hill since 1955,” over an article by long-time journalist and editor David Hawkings, reads

D.C. Could Take Lessons From Hartford on Gun Control Deal

What’s the lesson? That when legislators buckle down and work hard, they can pass “the strongest gun control law in the nation.”

This reflects two articles of faith that seem to be devoutly held by mainstream journalists:

1. Passing laws is good. Passing more laws is better. The purpose of a legislative body is to pass laws.

2. Gun control is good.

On the first point, just consider the large number of stories, especially this past December and January, on “the least productive Congress in history.” The assumption is that “productivity” for Congress is passing laws—laws that in most cases will raise taxes, raise spending, increase regulation, and/or intrude the federal government into more aspects of our lives. 

As for gun control, the enthusiasm of the national media for such measures is pretty obvious. I was struck by NPR’s hourly news roundup last week, which began: 

More than 100 days after the shootings in Newtown, Connnecticut, that killed a total of 28 people including 20 elementary school students, Congress has still not passed new gun registration legislation.

“What are they waiting for?” the news anchor implies. I suppose the news report could have begun:

Just five years after the Supreme Court ruled that the Second Amendment protects the individual’s right to bear arms, members of Congress are seeking to pass gun control legislation.

But I’m not holding my breath. It’s just a reminder that the language used even in straight news stories can frame the issue in the minds of readers and listeners.

Topics: 
General, Government and Politics, Law and Civil Liberties

A Bait-and-Switch Budget Plan?

By
Daniel J. Mitchell

Are we about to see a new kinder-and-gentler President Obama? Has the tax-and-spend president of the past four years been replaced by a fiscal moderate? That’s certainly the spin we’re getting from the White House about the president’s new budget. Let’s look at this theme, predictably regurgitated in a Washington Post report.

President Obama will release a budget next week that proposes significant cuts to Medicare and Social Security and fewer tax hikes than in the past, a conciliatory approach… [T]he document will incorporate the compromise offer Obama made to House Speaker John A. Boehner (R-Ohio) last December in the discussions over the “fiscal cliff”—which included $1.8 trillion in deficit reduction through spending cuts and tax increases. …[U]nlike the Republican budget that passed the House last month, Obama’s budget does not balance within 10 years.

Since America’s fiscal challenge is the overall burden of government spending, I’m not overly worried about the fact that Obama’s budget doesn’t get to balance. But I am curious whether he truly is proposing a “conciliatory” budget. Are the tax hikes smaller? Are the supposed spending cuts larger? Actually, there are no genuine spending cuts, since the president’s budget is based on dishonest baseline budgeting. At best, we’re simply talking about slowing the growth of government.

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Topics: 
Government and Politics, Tax and Budget Policy

Politico Has Been Reading My Email

By
Michael F. Cannon

From today’s Politico Pulse:

OBAMACARE LAWSUIT RECRUITMENT 101: START WITH THE INTERNS - Cato Institute’s libertarian mastermind Michael Cannon appealed to former interns of the right-leaning group to join an “exciting” legal challenge to Obamacare. Cannon is among the top proponents of a legal theory that suggests the health law forbids federal subsidies to people accessing insurance through a federally run insurance exchange.

—”To see if you might qualify, have a look at this checklist,” Cannon writes in a “Dear former Cato Intern” letter. “There are income criteria, plus you must live in one of 33 states, prefer to purchase no health insurance (or low-cost catastrophic insurance), et cetera. If you believe you meet the criteria for at least one of the three categories, email me … to learn more about how you can get involved in this exciting legal challenge, and jump on this chance to make history. Feel free to forward this email to others who may be interested.” The checklist: http://bit.ly/12lJ8Yb.

Thanks, guys. Might as well tell everybody, now. (And “right-leaning”? Seriously?)

Topics: 
Government and Politics, Health Care, Law and Civil Liberties

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