With the possible exception of the Scottish parliamentarian George Galloway (here he is saluting Saddam Hussein), no other politician in modern-day Britain has been as staunchly socialist as the former mayor of London, Ken Livingstone (a.k.a. “Red Ken”). The bane of Lady Thatcher in the 1980s and a fan of Hugo Chavez in the 2000s, “Red Ken” has been a poster child for the British left for decades. As far as he was concerned, no taxes were too high, no government intervention in the economy too excessive. It was with some glee, therefore, that I read that Red Ken is also a bit of a tax dodger – using apparently legal but not very “lefty” ways to limit his tax exposure. But wait, there is more… Ken has recently attacked the plans of the Conservative government to make the National Health Service (NHS is a monopoly public health provider) a little less socialist. “The people of our capital city deserve top quality care and demand our health care should not be broken up, sold off or be privatized by the back door,” he wrote. Lo and behold, it turns out that Red Ken has been benefiting from private health care for some years. Even by the low standards of contemporary politics, this is an extraordinary degree of hypocrisy.
Cato at Liberty
Cato at Liberty
Topics
Health Care
Politico: Opponents Are Winning the Debate over ObamaCare ‘Exchanges’
Politico has a great story about how free-market groups are defeating ObamaCare Exchanges at the state level:
Conservatives like John Graham of the Pacific Research Institute have also been touring states with the platform provided by the American Legislative Exchange Council to help kill off state-based exchanges, a key piece of health reform that will help millions of people purchase insurance coverage — often with federal subsidies — starting in 2014.
“Our approach has to be absolute noncollaboration, civil disobedience — well, not civil disobedience but resistance … by whatever means,” said Graham.
Two years into the law’s implementation, conservative emissaries have contributed to impressive stats. Almost all red states are holding off on exchange legislation at least until the Supreme Court decides on the Affordable Care Act, and in most of those states, exchange-building legislation has crawled to a stop.
I have to point out three problems with the story, though. First, the Cato Institute and I are libertarian, not conservative.
Second, the article identifies Cato, ALEC, and AFP as being “funded partly by the Koch brothers.” Even though these groups have no direct or indirect financial interest in this issue, and even though Cato currently receives no funding from the Kochs, and even though Cato is currently fighting a hostile takeover attempt by the Kochs, I guess that’s a fair categorization. What isn’t fair is how the article fails to disclose that Leavitt Partners has a direct financial interest in this issue: Leavitt is getting paid by states to help implement Exchanges. (See “Health Exchanges: A New Gold Mine,” Politico, June 27, 2011.) It would have been nice if the article mentioned that all the moneyed interests – including health insurance carriers and many Chambers of Commerce – are on the pro-Exchange side. But it at least should have mentioned Leavitt’s financial interest.
Third, I’m not sure what basis there is for saying “most legal experts think” the federal government can offer tax credits and subsidies in federal Exchanges. My co-author Jonathan Adler and I have been following that debate closely. Only a handful of scholars have even commented on the issue, and they are fairly evenly split. If I’m unaware of others who have weighed in, I’d like to hear about them.
Related Tags
That’s Not a Limiting Principle, Charles Kolb Edition
Charles Kolb is president of the Committee for Economic Development and was a domestic policy adviser to Bush the Elder. Over at Huffington Post, he articulates why (he thinks) the Constitution’s Commerce Clause empowers Congress to force people to purchase health insurance, but not broccoli. That is to say, he offers (what he thinks is) a limiting principle that (he thinks) would enable the Supreme Court to uphold ObamaCare’s individual mandate, but still leave some constraints on Congress’s ability to force people to buy things. Like broccoli.
Yet Kolb’s proposed limiting principle is no more a limiting principle than Harvard law professor Noah Feldman’s proposed limiting principle, because the two make the same argument. Almost verbatim. So rather than regurgitate my response to Feldman, I’ll just link to it.
Okay, I’ll regurgitate this part:
Like every other so-called limiting principle offered by ObamaCare’s defenders, Feldman’s[/Kolb’s] has no basis in the Constitution or any other law. It is a post hoc rationalization, made by people who are shocked to find themselves before the Supreme Court, defending the constitutionality of their desire to bully others into submission.
Couldn’t resist.
Related Tags
Simplicity, Please
Today, L. Gordon Crovitz penned “Complexity Is Bad for Your Health” in the Wall Street Journal. It is a most edifying article about the difficulties facing the Supreme Court as it tries to figure out what the concoction termed “ObamaCare” is all about. Justices — from Breyer to Scalia — have made it clear that the only thing that is “clear” is that Congress and the White House paid a visit to Rube Goldberg before they passed the Patient Protection and Affordable Care Act Law in 2010.
Most of what passes for “getting something done” in Washington, D.C. usually amounts to making things so complex that no one — not even the authors — can grasp the nettle. But, that’s the objective of complexity — to conceal the truth, to deceive.
Related Tags
Yes, Ms. Pelosi, We’ve Been Serious the Whole Time
The start of my latest Obamacare op-ed, hot off the pixels:
“Can you create commerce in order to regulate it?” With those words, Justice Anthony Kennedy sent the legal establishment reeling.
Was the Supreme Court really taking seriously the preposterous claims of the Tea Party-inspired hacks who were suing the federal government? Was there really a chance that five justices, acting as would-be partisan hacks themselves, would throw out President Obama’s signature achievement? Could Obamacare, which name everyone is now allowed to use because the administration itself has adopted it, really fall on some technicality about mandating economic activity rather than regulating it when it occurs?
In a word, yes.
Read the whole thing at CNN.com.
EMTALA and the Good Samaritan
A final thought in this “Obamacare-at-the-Court” week: Does the Emergency Medical Treatment and Active Labor Act (EMTALA) make something like Obamacare’s mandate not only inevitable but legitimate? Enacted in 1986, EMTALA requires hospitals to provide care to anyone needing emergency treatment regardless of citizenship, legal status, or ability to pay. It’s often cited as the very reason we have to have Obamacare’s individual mandate, to cover the costs of providing for the uninsured indigent. As the Washington Post editorialized this morning, “If you end up in the emergency room, you will be cared for, as federal law demands. The government, already deeply involved in regulating the health-care market, has a legitimate interest in encouraging you to prepare for such an eventuality.”
Fair enough, but it must do so by constitutional means, and that’s just the problem here. Not every means that would solve a problem is authorized by our Constitution for limited government. In truth, however, the constitutional problem begins with EMTALA itself: neither the taxing nor the commerce power, if understood as the pre-New Deal Court understood it, authorizes Congress to compel hospitals to be Good Samaritans. In a free society, health care is no different than any other product or service: If you need or want it, you pay for it, failing which you don’t get it.
But the Constitution aside, that’s not how, “as a society,” we decided to go about things in 1986. (See here for a better way to serve the indigent.) We imposed the burden of providing such services on hospitals, which in turn shifted the costs mainly to those of us who do pay for the services we receive. To that complex system of “private” socialization Obamacare would add yet another layer of even more complex “public” socialization, the individual mandate being only one element in the mix. Needless to say, under neither arrangement is efficiency or the wise use of resources the goal.
So let’s go back to EMTALA and the Good Samaritan to see if there might be a better way. Traditional Anglo-American law has never compelled anyone to come to the aid of another unrelated person. We’re free to be Good Samaritans—that’s virtuous—but we don’t have to be. If we do aid another, however, we cannot then turn around and charge that person for the “service” we provided, however much it might be “decent” in turn for that person to compensate us for our troubles and losses. But here, we as a society are compelling hospitals to be “Good Samaritans.” In other words, we, not the hospitals, are the “virtuous” ones. Well if that’s the case, then we can’t really ask the hospitals to bear the costs of “our” virtue; nor, for the same reason, is it proper for the hospitals to shift the costs to only those who already pay for their services. Rather, if we, “as a society,” want to be virtuous in this way, then we, as a whole society, should bear the costs.
Much as with the Fifth Amendment’s Takings Clause, if we want lovely views or wildlife habitat that can be had only by restricting the property rights of certain private owners, we should be prepared to bear, as a society, the losses those owners suffer in the value of their property, which we can do by taxing ourselves—on budget—and compensating those owners accordingly. Here too, if we don’t want indigent people turned away at the emergency room door, then we have to be prepared to compensate the hospitals for the losses they incur as a result. At the least, “we” can then monitor those costs directly to determine whether we’re getting our money’s worth and, if not, address that through the political system, at least in principle, which is not possible now under our complex cost-shifting arrangements.
In fact, the way it’s done now is massively inefficient. Not that providing for indigent care through general taxation would be a model of efficiency either, as compared, in all likelihood, to private charity; but at least it would more equitably distribute the costs, and it would surely be more efficient than the inscrutable arrangements Obamacare would impose on our already far too complex health care payment system.
Interestingly, evidence for a more efficient (and equitable) system was put forward by no less than the judges in the 11th Circuit whose decision found its way to the Supreme Court this week. For it turns out that the uninsured cost-shifting problem—the basic rationale for Obamacare—has been vastly overstated. In 2008, the court reported, the uninsured paid on average 46 percent of their healthcare costs. Third parties paid another 26 percent of those costs. That’s 72 percent. In fact, what we’re talking about here amounts to a paltry 1.7 percent of our total healthcare expenditures. To address that, Obamacare would federalize the entire health care system. If we’re not prepared to leave that small amount to charity—the best solution—far better would it be to pick up the tab “as a society,” through taxes, and leave the rest of us free to buy health care like we buy any other product or service, in the market, whether with or without insurance, as we wish. Why throw all of us in the common pot when a far simpler solution is readily at hand? Only those who love power could think otherwise.
Are Individual Mandate Critics Showing ‘Bad Faith’?
Paul Krugman is the latest to suggest that advocates of personal Social Security accounts are guilty of hypocrisy in criticizing the constitutionality of Obamacare’s individual insurance mandate. After all, they contend, are not personal account supporters arguing in favor of a federal government mandate that individuals purchase a specific commercial product (i.e., stocks, bonds, mutual funds, or whatever)?
No doubt, there is a superficial similarity. But the analogy significantly misses what personal account proponents are calling for. If there was no current Social Security program and the government were simply to mandate that individuals purchase some form of commercial retirement savings product, that would indeed be analogous to the health insurance mandate, and would be unconstitutional for the same reasons. However, Americans are currently paying a Social Security payroll tax. What personal account advocates propose is simply a tax credit against that tax if individuals contribute to a personal account. That the credit would be equal to the size of the contribution is structurally irrelevant.
The government uses credits to incentivize behavior all the time. For example, it offers a tax credit for the purchase of the Chevy Volt. That may be bad policy, but it is generally agreed to be constitutionally permissible. It is, however, very different from a mandate that every American buy a Volt. Similarly, Congress would have been on much stronger constitutional ground if it had imposed a tax on all Americans to fund uncompensated care, and then offered a credit to anyone who obtained insurance. The same individuals would end up paying the penalty/tax as under Obamacare, but the structure would have been less offensive to the Constitution. The federal government clearly has the power to tax, and it can offer tax credits and deductions. Congress chose not to do it that way for political reasons—they didn’t want to be accused of raising taxes. But political expediency does not justify an unprecedented expansion of federal power.
And, while on the subject of Social Security, it should be noted that several individual mandate defenders—including Justice Ginsburg—have likened it to Social Security, saying that if the government can make us participate in Social Security, why can’t it make us buy health insurance? But in the case of Helvering v. Davis, the Supreme Court ruled that Social Security was constitutional precisely because it was not insurance and did not require citizens to buy a product. Rather, the Court held that the Social Security tax was simply a tax, authorized by the Constitution’s taxing power. Social Security benefits are simply a government spending program, authorized under the General Welfare clause, and unrelated to the tax itself. As the Court pointed out, “The proceeds of both the employee and employer taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way.” One may disagree with the Court’s expansive interpretation of the General Welfare clause in this case, but it clearly distinguishes Social Security (and Medicare or even a single-payer health care system) from the individual mandate constitutionally.
Some might say that these distinctions are just quibbles or nit-picking. But how government does things matters. Constitutional limits are there for a reason. We are, after all, a government of laws, not of men.