Archives: 11/2012

Operating an ObamaCare ‘Exchange’ Would Violate Ohio’s Constitution

Unconfirmed reports indicate Ohio officials are considering implementation of an ObamaCare health insurance “exchange.” That would be very interesting if true, because operating an ObamaCare exchange would violate the state’s constitution.

Section 21 of the Ohio Constitution provides:

No federal, state, or local law or rule shall compel, directly or indirectly, any person, employer, or health care provider to participate in a health care system…

“Compel” includes the levying of penalties or fines.

In order to operate an exchange, Ohio employees would have to determine eligibility for ObamaCare’s “premium assistance tax credits.” Those tax credits trigger penalties against employers (under the employer mandate) and residents (under the individual mandate). In addition, Ohio employees would have to determine whether employers’ health benefits are “affordable.” A negative determination results in fines against the employer. These are key functions of an exchange.

Ergo, if Ohio passes a law establishing an exchange, then that law would violate the state’s constitution by indirectly compelling employers and individual residents to participate in a health care system. That sort of law seems precisely what Section 21 exists to prevent.

As I explain in a recent column, 13 other states have passed statutes or constitutional amendments (Alabama, Arizona, Georgia, Idaho, Indiana, Kansas, Louisiana, Missouri, Montana, Oklahoma, Tennessee, Utah, and Virginia) that bar state employees from carrying out these essential functions of an ObamaCare exchange.

The ObamaCare Rebellion Turns Exchange ‘Deadline’ into a ‘Rolling Deadline’

The Obama administration had set a deadline of November 16 for states to signal whether they would create their own health insurance “exchanges,” or let the federal government do it.

But the federal government is so desperate to have states do the heavy lifting, and so few states are interested, that for some time (most recently in a National Review Online column that posted yesterday) I have been predicting the Obama administration would push back that deadline. It seems I was right. Well, today’s CQ Healthbeat reports:

The federal government is likely to extend the Nov. 16 deadline for states to decide whether they will run their own health insurance exchanges, according to several state officials. … Instead, HHS officials are expected to set a new deadline for states that want to operate the marketplaces alone but have a rolling deadline with ongoing discussions for states that are interested in a partnership.

What is the difference between a “rolling deadline” and no deadline?

It’s “the REAL ID rebellion“ all over again.

Post-Election Recap: Expanding Liberty, Not Government Mandates, Is the Actual Way Forward

The 2012 presidential election was long, but thankfully it’s over. Promoting liberty is a long-run strategy, and perfect policies are not adopted overnight. Thus we should celebrate when society makes incremental progress in the right direction, and help course-correct when society gives in to the tempting calls of coercion and mandates to get its way. Ultimately it’s freedom, not government mandates and laws, that truly move us forward.

At the state level, there were several wins for property rights and contract law. Contract law moved forward as Maine, Maryland, and Washington state expanded contract rights to include same-sex marriage. This is significant because it is the first time that voters rather than lawmakers or courts extended these rights. Minnesota voters also rejected a proposed state constitutional amendment that would have defined marriage as a heterosexual union. (Previously, voters in more than 30 states have approved constitutional bans on gay marriage.) Perhaps President Obama’s “evolution” on this issue helped move it forward.

Colorado and Washington enhanced property rights as they became the first states to legalize marijuana for recreational use. This will help put pressure on highly ineffective and destructive federal law that currently classifies cannabis as an illegal narcotic. This demonstrates the power and importance of federalism—allowing states to have different laws than the federal government—to help move other states and the federal government forward. If it weren’t for federalism, we’d probably have to wait until the central government in Washington woke up to the realization that the drug war has been a failure.

In a win for taxpayers, Michigan voters defeated, 58% to 42%, a state constitutional amendment that would have prohibited the legislature from ever enacting a law that would curb the powers of public employee unions. Had the amendment passed, it would have enshrined the inherent conflict of interest that exists between public sector unions and the elected officials they help to elect who also negotiate their pay; Wisconsin-style reforms would not be possible.

Despite the hopes of the Washington Post, Virginians passed, 82% to 18%, a state constitutional amendment that further bolsters property rights in the state. The amendment was in a direct response to the controversial Kelo v. City of New London Supreme Court decision that allowed government to seize private property and then award it to another private entity. The amendment prohibits property takings for private enterprise or economic development, restricting takings to public use. It also increases the amount the state government may have to compensate property owners in eminent domain cases, disincentivizing eminent domain further.

Another interesting development is that Democratic Senate candidates who ran on the rhetoric of fiscal conservatism beat out Republican conservatives who delved into divisive, and at times asinine, social issues. Take for example, Indiana Democrat Joe Donnelly, Missouri Democrat Claire McCaskill, and Wisconsin Democrat Tammy Baldwin, who beat out Republicans Richard Mourdock, Todd Akin, and Tommy Thompson.

Although the pundits will continue to debate for weeks the primary reasons for President Obama’s reelection, one important reason he won was by preaching the politics of inclusivity:

It doesn’t matter whether you’re black or white or Hispanic or Asian or Native American or young or old or rich or poor, able, disabled, gay or straight, you can make it here in America if you’re willing to try.

Inclusivity is a winning strategy. Unfortunately, and ironically, exit polls reveal this was one of the most polarized electorates. Rather than President Obama winning modest margins across all different demographic and political groups, he won big among some and Romney won big among others.

Obama’s good intentions notwithstanding, his “Forward!” policies are unlikely to deliver on their promises of upward economic mobility or inclusivity. However, the principles of freedom can and do bring people together because it does not require the force to take from one to give to another: it offers all individuals the equal opportunity to be free. And as it turn out, this equal opportunity to be free unleashes the ingenuity of human potential as individuals strive to pursue their happiness, driving real progress of economic growth, technological advancement, and social tolerance

It has been left to libertarians to explain concretely and specifically how expanding individual freedom, not government mandates and rules, helps each and everyone one of us personally and thus as a society as a whole. Freedom is what truly moves all of us forward.

A version of this blog post appeared at

Breaking: Democracy Survives Unregulated Political Speech

As John Samples observes, this week’s election does not seem to have borne out fears that the Citizens United decision would wreck American democracy and usher in a new age of corporate feudalism. In an article headlined “Little to Show for Cash Flood by Big Donors,” the New York Times concludes that the end result of all those massive independent expenditures by superPACs was that “the nation’s megadonors returned home with lighter wallets and few victories.”

The strange thing is that proponents of campaign finance regulation, who typically profess great faith in democracy, would have expected otherwise.

In a way, concerns about the deleterious influence of political spending would be a more natural fit for libertarians or conservatives. We, after all, are the ones who are often skeptical about the “wisdom of crowds” in politics, because we recognize that most voters are rationally ignorant about the wide range of complex policy areas over which our massive modern federal government exercises control. We are the ones who worry that well-intentioned laws and regulations will end up being drafted and implemented in ways that suit the interests of well-heeled lobbyists, while ordinary citizens are busy paying attention to their jobs and families. So you might well expect us to be worried about voters being unduly influenced by slickly produced 30-second TV spots, even if respect for the principle of free political speech ultimately trumps those fears.

Yet the progressives who were most alarmed about the consequences of Citizens United normally purport not to share this view. They advocate greater government control over a far broader sphere of American life, on the premise that the power of government is more accountable to the public, and more likely to promote broad public interests, than unregulated private power. Implicit in this view is a fairly optimistic assumption about the capacity of the average citizen to monitor a vast and complex centralized bureaucracy, and to ensure that government power really is used to promote the general welfare rather than line the pockets of concentrated interests.

This assumption strikes me as rather obviously and dramatically inconsistent with a view on which Satan himself can buy election to federal office by running enough television commercials. If voters were truly that gullible and easily led, why on earth would you expect them to make wise decisions once the ads were pulled from the air? On this view, demanding regulation of political speech would be a little like mandating big orange “Point this end forward” stickers on handguns.

While I’m not nearly as optimistic as progressives when it comes to holding the federal leviathan accountable, I don’t think voters are complete lemmings. Advertising can be crucial for building awareness, but the industry’s history is littered with brilliant ad campaigns that weren’t good enough to save products consumers didn’t like. Political ads, too, can serve an important function by drawing public attention to issues and arguments—but especially in an age of unprecedented access to information, they can’t make citizens buy what’s being offered.  This time, obviously, voters weren’t buying, but that doesn’t mean they should be prevented from hearing the argument. It’s a mystery why avowed believers in democracy would ever have thought otherwise.

I Agree with Stuart Butler

ObamaCare is far from settled law. Here’s an excerpt from Butler’s blog post for the Journal of the American Medical Association:

President Obama’s narrow victory has left proponents of the Affordable Care Act (ACA) breathing a collective sigh of relief, believing that the legislation is safe. It’s true, of course, that the election’s outcome has ended the prospect of a new administration using Republican majorities in both chambers and the budget reconciliation process to force outright repeal. But the reality of the economic and political situation means the core elements of the ACA remain very much in play.

The primary reasons for this are the continuing problems with the federal budget deficit and the national debt and the worrying long-term weakness of the economy. Add to that the increasing skepticism that the ACA’s blunt tools will slow costs.

Let’s remember that the most important provisions of the ACA, such as penalties for Americans lacking insurance and firms not offering it, the expansion of Medicaid, and the heavily subsidized exchange-based coverage, do not go into effect until 2014. Meanwhile, new taxes on self-employment and limits on flexible spending accounts are scheduled to go into effect next year, just as Congress will be trying to boost employment growth. Additionally, lawmakers will be desperately searching for ways to delay or cut spending to deal with the deficit. That adds up to 2013 being a year for buyer’s remorse in Congress and around the country.

Read the whole thing.

The Post-Mortem Begins

Today POLITICO Arena asks

What’s wrong with the GOP?

My response:

What’s wrong with the GOP? To generalize in a short post, let’s start by noting that many 2012 races, including for president, were close. We’re a deeply divided country, with two very different visions of the proper role of government. That’s a constant today. But it means that elections turn on getting “undecideds,” without such views, to one side or the other. Cynical? No. That’s the world as it is. For most people, politics isn’t the whole of life.

So how do you reach those people? As compared to the finely-honed Obama machine, Republicans were asleep at the switch, stuck in “old media.” They’ve got to recognize that for many Democrats, politics is everything. Part-timers in the mechanics of the game will lose every time.

But once you reach the undecideds, there’s the message – and the messenger. In too many GOP primaries it’s been a bland establishment incumbent against an unschooled or inept upstart – a disaster-in-waiting either way. The party simply has to put more effort into finding smart, credible candidates, people far more conversant with political issues than those who sought to be even at the top of the ticket this time around. Romney was a decent enough man, and he ran a credible campaign, but he was no natural politician with a deep understanding of the issues of the day. How much worse it often was down ticket. And it’s not simply knowledge of issues; it’s also the message itself, as with immigration, and how to frame issues in ways that reach those undecided.

America remains a center right country. Far more people want to be independent than dependent on government, as Obama’s “Life of Julia” would have us believe. Candidates who can communicate that kind of message, as Ronald Reagan did, will be successful with all but those for whom the absence of politics and political power would mean an empty life.

Why a Good Year for Peanut Farming Is Bad News for Taxpayers

The NY Times reports on how well peanut growing has gone this year:

In Georgia, where nearly half of the nation’s peanuts are grown, the annual fall harvest has yielded a record amount of big, shell-filling kernels that farmers say taste better than average.

“I’ll just say that the farmers of Georgia have been blessed with weather conditions,” said Armond Morris, who planted about 1,000 acres near Tifton, Ga., and serves as the chairman of the Georgia Peanut Commission.

“We had rain at the right time and didn’t have but three or four days that were 95 degrees,” he said.

Although the harvest is just winding down, the national peanut crop report from October showed that more than 6.1 billion pounds will be harvested this year, compared with about 3.6 billion last year. The yields are especially good in Alabama, Florida, Mississippi and Georgia, where the main crop is a variety called runner peanuts.

So that’s good news for taxpayers right?  No need to bail out struggling farmers whose crops have been ruined by drought?  A good time to end farm subsidies? Unfortunately, it’s quite the opposite:

… there is still a record supply of peanuts on the market, which means farmers will not see high prices to match their yields.

Although some early contracts assured growers of close to $700 a ton, those kinds of deals are long gone, said Patrick Archer, the president of the American Peanut Council, adding that growers will be lucky to get $400.

As a result, many farmers are likely to turn to the federal government to keep the bottom from falling out of the peanut market. Instead of selling their crops right away, they will store shelled nuts in refrigerated warehouses and take government loans, betting that prices will rise within nine months and that their peanuts will bring enough to repay the loans.

If prices stay low on the open market, the government will buy the peanuts for less than it cost to produce them but at a rate that will allow farmers to recoup some of their expenses.

Sigh.  Is there any market situation that doesn’t result in subsidies to agriculture?