January 2012

Attorney Generals Challenge ObamaCare; New Health Care Law Increases State Budget Deficits, Imposes Marriage Penalties

by Hans Bader on March 24, 2010 · 2 comments

in Deregulate to Stimulate, Economy, Features, Health and Illness, Healthcare, Insurance, Legal, Nanny State, Personal Liberty, Politics as Usual, Regulation, Sanctimony, Zeitgeist

Virginia Attorney General Ken Cuccinelli and a dozen other attorneys general have filed lawsuits challenging the new health care law signed by President Obama.  Cuccinelli rightly argues that Congress lacks the power to force people to buy health insurance under the Constitution’s Commerce Clause, which only gives it the power to regulate interstate commerce, not to force people to buy products they don’t want.

As a news story notes, in Supreme Court rulings issued in 1995 and 2000, “the high court said the commerce clause is limited to economic activities that substantially affect interstate trade.”  (I was an attorney in the latter ruling, United States v. Morrison (2000).)  As UPI notes, “the weight of Supreme Court jurisprudence seems to favor a Commerce Clause challenge” to the health care legislation.

Earlier, Senator Orrin Hatch argued that the “individual mandate” in the healthcare bill legislation, which forces people to buy health insurance, is unconstitutional.  Florida Attorney General Bill McCollum likewise questioned whether it is constitutional to force people to do so.   McCollum and other attorneys general, like Washington’s Rob McKenna (R) and Louisiana’s James “Buddy” Caldwell (D), are now challenging ObamaCare in court as well.

This so-called “individual mandate” is unprecedented and appears to exceed Congress’s power under the Commerce Clause of the Constitution.  As the Congressional Budget Office noted in 1994, “A mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action. The government has never required people to buy any good or service as a condition of lawful residence in the United States.”

The individual mandate does not regulate activities, much less economic activities, but rather inactivity, by penalizing those who decline to buy health insurance. That exceeds Congress’s poers under the Supreme Court’s Morrison ruling, as I explained earlier.

The health care legislation also contains potentially unconstitutional racial preferences for minority applicants, and lower standards for treatment of patients in predominantly-minority institutions.  These drew criticism from the Civil Rights Commission.

ObamaCare discriminates against married people, containing massive marriage penalties.  If you get married, your income will be hit by ObamaCare’s increased tax rates a lot faster than if you just live together without getting married.  Under the bill, you will give up your right to federal health care subsidies at a lower income level if you are married than if you are an unmarried couple.  For many “low-income and middle-income couples, it could mean a hike of $2,000 or more in annual insurance premiums the moment they say ‘I do.’”  (While Obama won the 2008 election, he narrowly lost among married people.). The new tax on investors is a classic example of the marriage penalty, since it kicks in at a lower income level if you are a married couple than if you are an unmarried couple.

ObamaCare would also impose many middle-class tax increases, such as taxes on uninsured individuals, on cosmetic surgery, on medical devices, and on certain health care plans.

Governors of both political parties assail the health-care bill as a job-killer that will drive up state deficits, increase taxes, and harm the economy.  The governors of New York and California warned that “their states will be crushed by billions in new costs.”  Virginia’s governor says the new law will cost Virginia at least a billion dollars.

Tax experts say it would dangerously expand the power and responsibilities of the IRS.  The new version of the health care bill increases cuts to Medicare Advantage by billions of dollars.

The Washington Post falsely claims that the CBO says the health care bill will save $1.2 trillion over its second decade, but the CBO says the figure is not from it (it’s from congressional Democrats).  Amazingly, the CBO, under orders from Democratic leaders, has understated the bill’s cost for the first decade by including the present fiscal year — in which ObamaCare is not yet law and thus has no costs — while excluding its last year from cost calculations.  The result was to reduce the projected price tag for the bill from $1.2 trillion to $940 billion.

While the CBO has scored the health care bill as not increasing the federal deficit, thanks to the many tax increases in the bill, it has done so only by accepting many accounting gimmicks that even pro-Obama journalists have admitted conceal the bill’s enormous cost and the fact that it will massively increase the deficit.  The New York Times‘ David Brooks, once a staunch Obama supporter, now says the bill’s drafters were “corrupted by power” and calls arguments for the bill “unbelievable” and “insane.”  The Atlantic’s Megan McArdle, who also voted for Obama, says that the bill “is a fiscal disaster waiting to happen.”

The Congressional Budget Office, which would not question Obama’s gimmicks to lowball the cost of his health care plan, nevertheless admits that “President Obama’s policies would add more than $9.7 trillion to the national debt over the next decade.”

There are $3,000,000,000,000 in tax increases in Obama’s budget.  But he’s spending money at such a furious pace that the deficit will skyrocket anyway: “The president’s budget would borrow 42 cents for each dollar spent in 2010,” and “double the national debt over the next decade.”  Obama recently ran up the largest budget deficit in history, by a huge margin.

ObamaCare would reduce medical innovation, raise taxes, drive up insurance premiums, and break campaign promises.  It  would cut the quality of  care, while imposing restrictions that failed when tried at the state level.  It ignores advice from experts about how to cut costs.

U.S. media ignoring my Prius hoax expose, but overseas . . .

by Michael Fumento on March 24, 2010 · 1 comment

in Odds & Ends

Mentions of my Forbes.com expose of the Prius hoax are almost entirely absent from U.S. newspapers, notwithstanding my numerous national TV appearances discussing it and countless radio shows. As I noted, Sikes’s claims regarding why he refused to put his care into neutral – claims he made at a press conference that’s on the Web and in a CNN interview that’s also on the Web – are alone enough to show he’s flat-out lying.

Yet four four days after my piece appeared, the Washington Post declared “Sikes said he tried to free his gas pedal with his hand but did not say whether he put the car in neutral.”
One of my readers sent a letter by the email correcting the story, but the Post did not run it.

Two days after my article appeared, the “car expert” for the San Jose Mercury-News, Gary Richards, wrote about the alleged difficulty of putting the Prius into neutral. In fact, with the shifter right next to the steering wheel and requiring only a flick of the finger, it’s one of the easiest shifter conceivable. But as I wrote to him, by focusing on the alleged difficulty of shifting he misled his readers into thinking Sikes had tried when, again, his reasons for not trying destroy his story. I’ll be writing more anon about our exchange.

And yet my article was reprinted in newspapers all over Canada, and written about in other. And it’s also reached at least as far as Norway.

Wrote the Dagbladet, “As Forbes commentator Michael Fumento points out, this pedal is pretty difficult to reach with your hand in a Prius (or any other car) without removing both your eyes, head and the rest of your body from their normal driving position in the driver’s seat. It is simply not possible the way Sikes explains in his story.” It adds, “Raising doubt about wild Toyota adventures, “experts doubt the Prius accident in the US.” And regarding Norway’s own “runaway Prius accident” (the car smashed into a guard rail at 94 mph), neither in Norway has any fault of the car been found.”

This is not the case of “A prophet is not without honor, save in his own home.” (Although trust me, I have repeatedly experienced that throughout my career!) It’s a terrible reflection on the U.S. media, as indeed was my very expose of the Prius hoax and the entire witch hunt attitude our media have had towards Toyota.

Trade still has some support

by Fran Smith on March 24, 2010

in International, Trade

Some politicians haven’t yet abandoned free trade, even in the face of widespread demagoging on the issue.  As Scott Lincicome notes, five Republican Members of Congress joined together in a March 22 letter to Majority Leader Steny Hoyer (D-MD) to request that the Administration submit three pending trade agreements to Congress for a vote.  The letter points out that the Free Trade Agreements with Panama, Colombia, and South Korea have been languishing for several years since they were signed.   The letter offers a strong defense of trade and doesn’t just focus on the benefits of exports:

“Trade agreements bolster American exports, create jobs, and keep the United States competitive in an increasingly global market.  In fact, according to the U.S. Trade Representative, ‘U.S. manufacturing exports support nearly six million jobs including one in six manufacturing jobs.’  Furthermore, trade agreements forge alliances in politically important regions, and encourage competition and innovation, which yield higher quality goods at lower prices for consumers.  President Obama put it best in his recent State of the Union Address: ‘If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores.’”

The letter was signed by Representatives Tom Price (GA), Charles W. Dent (PA), Wally Herger (CA), Mark Steven Kirk (IL), and Kevin Brady (TX).  Now, if only some Dems would join in to make these same arguments.

Liberty Activists get a Black Eye, Keep on Fighting

by Jonathan Moore on March 24, 2010 · 1 comment

in Healthcare, Insurance, Legal, Odds & Ends, Regulation

As would be expected in the face of recently passed health care legislation this sweeping and controversial, pro-liberty citizens have been stepping out to oppose the bill.  One of the unusual tactics they have used is to turn to their state legislatures for what they see as protection from the encroachments on their liberties from the federal government. Legislation declaring a state’s opposition in one way or another to items in the federal health reform has been introduced in 37 states. Many states have even passed this legislation, and had it signed into law by their governors.

A hearing was recently held on one of these pieces of legislation, Maryland House Bill 603, the Health Care Freedom Act of 2010.  This bill would add an amendment to the Maryland constitution making it so that no person in Maryland would have to comply with an individual mandate to purchase health insurance, and that no person in Maryland will have to pay fees or penalties for refusing to buy health insurance. In short, it would preserve the freedom of Marylanders to contract with doctors they want to contract on their own terms, if they choose to do so.

There was much talk at the hearing about the Constitution, individual rights, and sovereignty of the states. One of the individuals providing testimony in favor of the bill at the hearing was Mark Kreslins, who leads a citizens’ political organization in Frederick, Maryland, known as We Surround Them (WST). WST is an organization dedicated to returning government to what they believe is the original intent of the Founding Fathers as enshrined in the founding documents of American.

They believe that the Constitution limits the federal government to 17 defined powers in Article 1, Section 8. Any government action which extends beyond the enumerated powers in Article 1, Section 8, is thus unconstitutional. They believe that the Constitution reserves the vast majority of state power for the states. The states, after all, existed before the federal government, and created it for clearly defined purposes. And the 10th Amendment to the Constitution states that all powers not delegated to the federal government are reserved to the states, or to the people. If the federal government was created with the intention that it have essentially limitless power to do as it wishes, then the 10th Amendment seems to be a nonsensical inclusion into the Constitution.

Mr. Kreslins testified that an individual mandate would be an unconstitutional exercise of federal authority, as the Constitution never gives the federal government the authority to mandate that all people buy insurance, and that it is the responsibility of the states to stand up for their sovereign rights, and to stand up for the rights of their citizens to own their own property and to do with it what they wish. It is thus entirely within the states’ authority, according to him, to refuse to obey this unconstitutional action on behalf of their citizens.

Many prominent constitutional scholars agree with state legislatures that an individual mandate for health insurance would exceed the power given to the federal government in the Constitution. For instance, Heritage Foundation legal scholars and well-known legal scholar Randy Barnett (who was a lead attorney in the Gonzales v. Raich case before the Supreme Court in 2005), have argued that the individual mandate is not only an unprecedented (few would debate this), but also an unconstitutional exercise of federal power.

Citizens fighting for individual liberty have gained some powerful allies in many state legislatures. The constitutional logic for state sovereignty is far from universally accepted by constitutional scholars. It will likely take a Supreme Court case to decide whether these nullification attempts will succeed in shielding state citizens from the most far reaching aspects of health care reform. But pro-liberty activists have not given up, even after passage of the vast health care reform bill.

In the spirit of full disclosure, Mark Kreslins is the author’s future father-in-law, the primary reason why the author was at the hearing at all.

Can 30 Million Frenchmen (and Women) Be Wrong?

by Marlo Lewis on March 24, 2010 · 2 comments

in Global Warming

“France today abandoned all plans to introduce a carbon fuel tax aimed at combating global warming,” the Daily Mail reports. The article continues:  

 
The policy u-turn will be viewed as a huge disappointment to the green lobby around the world.

 
Many had hoped that if a major western economy like France took the lead in taxing harmful emissions, then other countries would follow suit. 

 
But the scrapping of the tax plan was announced by Prime Minister Francois Fillon who said it could only be introduced across Europe so as to ‘avoid harming the competitiveness of French companies’.

He told a meeting of MPs in Parliament that the priority for the country was getting its stagnating economy working again following the international financial crisis.

Last year President Nicolas Sarkozy said a tax on the use of oil, gas and coal would make his country one of the greenest in the world.

 
It was provisionally set at pounds 15 per per tonne of emitted carbon dioxide (CO2), and would apply to homes as well as businesses. 

 
Mr Sarkozy said money from the new tax – which would amount to some pounds 4billion a year – would be spent on green initiatives.

But there was stiff opposition from across the political spectrum, with critics saying the tax was just a ploy to boost ailing state finances. 

 
In polls, two-thirds of French voters said they were opposed to the new levy, fearing they would struggle to pay higher bills. The government was forced to amend its proposals after they were rejected by the high court in December.

France has 44.4 million registered voters, and polls indicate that two-thirds are opposed to carbon taxes. Can 30 million Frenchmen (and women) be wrong?

The article concludes by noting that, “Mr Fillon told the meeting of MPs today that the government’s priorities were now ‘growth, jobs, competitiveness and fighting deficits’.” Now, if we could only get Sens. Kerry, Graham, and Lieberman to smell the coffee! They too would drop their proposal for “linked fees” (i.e. carbon taxes) like yesterday’s french fries.

State Attorneys General Do Good (For Once), Hit Obamacare with Lawsuits

by Christine Hall on March 23, 2010 · 1 comment

in Healthcare, Legal, Personal Liberty, Regulation

On the heels of the health insurance takeover staged by the House of Representatives this week, a handful of state attorneys general have filed lawsuits challenging its constitutionality.

This is amazing, because normally one hears from state AGs when they’re doing something horrid, like shaking down businesses, re-regulating industries (cigarettes, accounting firms – remember?), and, on occasion, illegally engaging ladies of the night.  So, it’s especially heartening to see some attorneys general doing something good, for a change.

“The Constitution nowhere authorizes the United States to mandate, either directly or under threat of penalty, that all citizens and legal residents have qualifying health care coverage,” the lawsuit filed by 12 (so far) of the attorneys general argues, in part.  The AGs argue, specifically, that the “individual mandate” exceeds Congress’s power under the Commerce Clause of the Constitution.

The outcome is far from certain.  My colleague Hans Bader, for example, harbors doubts as to whether the Commerce Clause argument will win over a majority of justices on the U.S. Supreme Court.

The lawsuit further argues, in part, that the bill violates the 10th Amendment, which reserves powers not delegated to the federal government by the Constitution, nor prohibited to the States, to the States or to the people.   The argument is that the federal government lacks authority in the Constitution to force states to carry out mandats without reimbursing them for costs.

Virginia’s attorney general has filed a similar, separate lawsuit, because the federal law conflicts with the the state’s own Virginia Healthcare Freedom Act.

Florida Attorney General Bill McCollum is taking the lead in the lawsuit, which has been planned in the months leading up to final passage of the bill.  He’s joined by attorneys general from South Carolina, Nebraska, Texas, Michigan, Utah, Pennsylvania, Alabama, South Dakota, Idaho, Washington, Colorado and Louisiana – all Republicans, but for Louisiana Democrat James “Buddy” Caldwell.

The Obama Department of Justice has announced it will defend the health care bill against the state lawsuits.  Whatever the outcome, these attorneys general deserve kudos and praise for taking decisive action against a manifestly unjust – and harmful – power grab by President Obama and his fellow Democrats in Congress.

Tea Party antipathy

by Fran Smith on March 23, 2010

in Odds & Ends, Politics as Usual

In Cato’s blog today Roger Pilon takes up the Democratic left’s broad characterization of Tea Party protestors as unruly and misguided because of the taunts of a few reacting to Sunday’s health care vote. Pilon’s main points are three: (1) Pundits are making claims about some protestors’ actions in certain cases without a “shred of evidence”;  (2) even if the allegations are true, the whole Tea Party movement shouldn’t be condemned for the actions of a few; (3) and Pilon’s ending point:

“The symbolism of the Democratic left’s hostility to the ‘tea baggers’ should not go unnoticed.  The tea party movement’s roots are in the American Revolution.  These ordinary Americans are protesting the Washington ’Establishment’ – which presently is the Democratic juggernaut - much as American Patriots were protesting the oppressive British Establishment that was ‘eating out their substance’ with ‘a long train of abuses and usurpations.’  The Democratic left should think long and hard about those parallels.  The times they are a-changin’.”

I’ll second that and also offer some observations of the Democratic lefts’ behavior that was found wanting on a much larger scale.  Remember Inauguration Day, January 20, 2009, with some in the liberal media overcome by emotion as they watched the huge crowds hailing the incoming president?  Was I (no fan of the Bush Administration) the only one discomfited by the crescendo of boos and cat-calls that greeted President Bush and Vice President Cheney (in a wheelchair) as they took their places for the swearing-in of President Obama?  Using the logic of the Tea Party critics, one could say that those hundreds of thousands showing such disrespect tainted all the Obama supporters as a boorish, mean-spirited mob.  But one wouldn’t say that, of course, if one were in sympathy with their sentiments or if one realized that those were individuals acting independently or if one believed in free speech.

Human Achievement of the Day: An Olive Branch from Treehugger?

by Michelle Minton on March 23, 2010

in Odds & Ends

CEI appreciates the virtual knuckle-bump we received from the folks over at Treehugger.com for our Human Achievement Hour efforts. Lloyd Alter’s post declares that “The Competitive Enterprise Institute Finally Gets It Right!” and, without any irony, that we have “seen the light”.

“After all these years of fighting for incandescent light bulbs, gas guzzling cars and bottled water, The Competitive Enterprise Institute has finally had an idea we can get behind…”

Unfortunately, while the article praises our positioning of the advancement of technology as the way to solve environmental problems, it mischaracterizes what CEI does and the ideas behind Human Achievement Hour. I’d even go so far as to say that the post turns a blind eye to the real meaning of environmentalism as a philosophy that places value of nature apart from and above human life.

“I don’t know what brought about this transformation; There never was an organization so devoted to fighting new technology and innovation as was the CEI…”

Alter’s confusion about CEI’s approach to technological progress comes from three apparent flaws in his logic. First, he assumes that CEI has ever been for or against certain products. The second, is that new technology is “discovered” by an individual without the need or benefits of prior experimentation and discoveries.  The last assumption is that environmentalists generally have human life as the basis of their philosophy.

“…this is an organization that has fought technology and innovation every step of the way. They even make a symbol out of an inefficient, hundred year old incandescent bulb, as if they were proud of their old, wasteful ways”

lightbulbanHell yes! You’re damn right we’re proud of the incandescent light bulb and any environmentalist claiming to be a fan of the “green” compact fluorescent light bulbs (CFL) should be proud of the incandescent bulb too. Without Edison’s production and popularization of incandescent lights there would be no CFL.

One of the earliest fluorescent lamps was actually created by Thomas Alva Edison. Though his design was never put into production as is not the one modern CFLs are based on, without the success of Edison’s electricity delivery system we wouldn’t have fluorescent bulbs. Based on his success with the incandescent lamp, Edison was able to found and sustain the company, General Electric, that created and now produces the lauded compact fluorescent lights greens love so much. Without Edison, without the popularity of his invention and the wide-spread success of his “wasteful” technology, we wouldn’t have the “environmentally friendly” technology that environmentalists want government to force us all to use. That is the point of HAH–it is about the fundamental freedom for humans to freely use their minds. People need to be free to use and create things that others may consider dirty or wasteful before we can get to the technologies that are “cleaner”.

It isn’t this bulb over that bulb or this industry versus that one. Though it might seem like it at times, we don’t oppose products, we object to government policies, mandates, tariffs, taxes, and bans–any intervention in the market place that seeks to deter or encourage consumer choice. What we want is freedom for consumers to choose the best products based on their own judgment (no matter how flawed) and we want the Edisons of today to be free to create the inventions of the future.

“They are having a party in Arlington, VA during Earth Hour to celebrate their alternative (in a smoking room, yet) to “celebrate the inventions of human ingenuity that make all of our lives better.” There is not a TreeHugger around who wouldn’t want to do that. But we have a conflict that night; 34 people have signed up for their party, while 5,638,090 have signed up for Earth Hour. We will stick with the crowd.”

Mr. Alter, you are free to stay on the green bandwagon; it is your right to turn off the lights if you’d like, but know that belonging to the mob with the greatest numbers does not make you correct (and how much energy do you think it took to create the internet and takes to keep it running?)

Also, during your hour of darkness, remember that there are places in the world where electricity is not  switch away, where they don’t have the right to freely offer or consume goods, where they don’t have a right to express themselves, where every hour of every day is Earth Hour. Whether it is explicit or not, that is the world environmentalism wants all humanity to live in. Those who celebrate Human Achievement Hour aren’t doing so because we like our hybrids, or our iPhones, we are celebrating the freedom that is necessary for humans to survive and create the products and services that make our world better and, in some cases, cleaner.

Though I recognize the scheduling conflict, I sincerely encourage you Mr. Alter and anyone interested in honest intellectual discussion about this issue to come out to RiRa in Arlington, VA on Saturday. A free market for ideas is just as important as a free market for goods.

The Social Evolution of Markets

by Marc Scribner on March 23, 2010

in Culture, Economy, International, Trade, Zeitgeist

Socialists and other collectivists frequently argue that markets are inherently “inhumane” and “unjust,” among other things. Free-market advocates generally dismiss these claims on their face as inconsistent with reality and human nature. Collectivists then often respond by making ridiculous appeals to tribalism and defunct ancient societies. (ED: Why did these societies fail?) Repeat, repeat, repeat.

A new study (subscription required) published in Science aims to shed light on this issue, and the authors come to a surprising (for some) conclusion: human society evolved to foster the sort of anonymous trust characterizing market interactions, and that this in turn enforces a standard of equity. Until about 10,000 years ago, human beings were organized in familial units or tribal societies where members were protected and cared for, but outsiders violently shunned. Treating non-kin badly was not just a common practice; it was necessary in order to sustain the primitive social order. Odds are that the outsiders were gunning for you just as much as you were gunning for them.

The researchers found that adopting markets and setting a wider playing field, so to speak, based on shared ground rules was vastly more successful than the tribal system, and it spread fast. Once people discovered mutually beneficial trade with strangers was possible, they tossed aside their previous norms because kin- or tribe-based social interactions were incredibly limiting. And because everyone shared a common set of basic values (reinforced by the spread of global religions and population growth), fairness as defined by the society increased.

This gradual process continues to this day, say the authors, which will likely lead to a more complex, yet still fairer society in the future.

Maybe There’s Hope for Health Care Repeal

by Angela Logomasini on March 23, 2010

in Healthcare

Rarely, if ever, does Congress ever undo bad legislation, which makes the future of health care look rather grim. However, there is at one positive precedent. In 1989, Congress repealed the the Medicare Catastrophic Coverage Act because of protests by angry senior citizens. Check out this YouTube video of a righteous crowd of senior citizens following then Ways and Means Chairman Dan Rostenkowski into his car protesting that law. David Hyman notes on the Volokh Conspiracy noted back in August:

Representative Rostenkowski got out of the car and ran a block, chased by the crowd. He was then picked up by his car and whisked away. The incident resulted in front page coverage nationwide. The TV news ran footage of Rostenkowski fleeing from his constituents. Rostenkowski reportedly asked his press secretary whether the issue would go away in a few days, and was told “Let me put it this way Congressman. When you die, they will play this clip on television.” Three months later, the Medicare Catastrophic Coverage Act was repealed.

Today’s health care issue may have different angles, but surely there are plenty angry people to step up to the plate. So many people have so much to lose with this new law.

Image credit: Taken from the Volokh Conspiracy post where Hyman notes that this picture “appeared in Newsweek and the Chicago Sun Times, and was taken by Tom Cruze”

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