In the American Spectator, CEI Vice President for Strategy Iain Murray and Geoffrey McLatchey explain why the Senate should be skeptical of the United Nations Convention on the Rights of Persons with Disabilities, which fell six votes short of the 67 needed for ratification last December. As they note, “the treaty would enable an enormous increase in the potential power of UN bureaucrats over the American people and undermine national sovereignty.” Moreover, although “CRPD proponents argue that it merely reiterates existing U.S. disability law,” this is simply false, based on the treaty’s plain language.
It also delegates authority to a UN committee, they note, resulting in a “loss of U.S. sovereignty.” UN committees like to define free speech as discrimination against minority groups in violation of international treaties, making it dangerous to ratify such treaties. For example, the U.N. Committee on the Elimination of Racial Discrimination has ruled Germany violated international law by not prosecuting a former legislator for remarks to a scholarly journal about Turkish-immigrant welfare recipients that were deemed racially offensive. The UN committee ruled Germany’s failure to prosecute the speaker violated the International Convention on the Elimination of All Forms of Racial Discrimination.
As Murray and McLatchey point out, “Under CRPD Article 34, U.S. policy would be subject to the ‘Committee on the Rights of Persons with Disabilities,’ a U.N.-appointed panel consisting of 12 ‘experts.’ The history of other UN bodies [such as] the Human Rights Council — which includes countries with a long history of human rights abuses and hostility toward the United States — is not encouraging. And the Convention’s vague language — such as defining disabilities as ‘an evolving concept’ — suggests the Committee will have ample opportunity to redefine terms to America’s disadvantage.”
Subjecting American policies to the UN is a bad idea, especially given many UN officials’ anti-American ideologies. Such hostility is illustrated by the disturbing remarks blaming America for the Boston terrorist bombing by “Richard A. Falk, the U.N. ‘human rights’ official and Princeton professor. . . .Commenting on the Boston bombing, Falk wrote, “Should we not all be meditating on W.H. Auden’s haunting line: ‘Those to whom evil is done/do evil in return’?” “The American global domination project is bound to generate all kinds of resistance in the post-colonial world.”
As Murray and McLatchey note, “The CRPD also requires the United States to set up a propaganda agency. Yes, you read that right. Article 8 states that signatories must take “immediate and effective measures…to raise awareness throughout society, including at the family level, regarding persons with disabilities, and to foster respect for the rights and dignity of persons with disabilities.” It becomes the federal government’s duty to “combat stereotypes… in all areas of life” by “initiating and maintaining effective public awareness campaigns.”
We previously explained how the CRPD could harm small business and civil liberties at this link. Cato Institute legal analyst Walter Olson highlighted troublesome provisions in the treaty in an article in The Daily Caller, and a followup analysis at Cato at Liberty. As Olson pointed out, other mandates in the treaty that go beyond current U.S. law include costly “requirements for ‘guides, readers and professional sign language interpreters” for facilities that currently don’t require them. As I previously noted, this would appear to partly override the Supreme Court’s decision in Southeastern Community College v. Davis (1979) limiting the degree of accommodation that can be imposed. They also seem to impose new insurance mandates that call into question fundamental actuarial principles used by prudent insurers.
If the Conservative Political Action Conference’s (CPAC) organizers wanted a speaker or panel on the causes of the financial crisis and what to do about too-big-to-fail financial insitutions, they could have chosen from among many conservative and libertarian experts who not only issued prescient warnings about government policies that egged on reckless behavior through subsidies, regulations, and flawed monetary policies, but also offered detailed free-market solutions to prevent future financial crises and taxpayer-funded bailouts
Such experts include John Allison, president and CEO of the Cato Institute, former chairman and CEO of BB&T Corp, and author of The Financial Crisis and Free Market Cure; Peter Wallison, counsel to the Reagan White House in the 1980s, co-director of the American Enterprise Institute’s program on financial policy studies, member of the Congressionally chartered Financial Crisis Inquiry Commission, and author of the new book Bad History, Worse Policy: How a False Narrative About the Financial Crisis Led to the Dodd-Frank Act; and Fred Smith, founder and chairman of the Competitive Enterprise Institute, where I work, and board member of CPAC’s parent organization, the American Conservative Union.
All of them sounded the alarms about the dangers of the government-sponsored housing enterprises Fannie Mae and Freddie Mac and mandates such as the Community Reinvestment Act, which encouraged banks to lower standards for borrowers in the name increasing home ownership. In congressional testimony in 2000, Smith warned that if anything goes wrong with the entities, taxpayers could be on the hook for “$200 billion tomorrow.” At the time, his warning was dismissed as exaggerating Fannie and Freddie’s risk, but it turns out he actually underestimated the amount for which taxpayers would later be on the hook.
Yet for CPAC’s single event on the financial crisis , held today, featured none of these experts. Instead, the sole speaker was Federal Reserve Bank of Dallas President Richard Fisher, who also has been a longtime Democratic operative with a decidedly big-government approach to financial regulation. Trying to appeal to the conservative audience, Fisher opened his speech with an anecdote about meeting President Ronald Reagan in 1984. He didn’t mention his having served in the Carter and Clinton administrations or his unsuccessful 1994 run as a Democrat against Sen. Kay Bailey Hutchison (R-Texas), in which he took standard liberal positions, including opposing school vouchers and supporting the Clinton “assault weapons” ban.
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On Friday, November 16, Hostess Brands announced it was shutting down operations after the Bakers, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), which rejected the company’s last contract offer in September, announced it would go on strike. (Today, the two parties entered into a last-ditch negotiation effort today to avoid liquidation.)
The same day, the Pension Benefit Guaranty Corporation (PBGC), the federally created agency that insures private sector pensions, announced that its deficit had increased from $26 billion to $34 billion over the past year.
Then yesterday, Hostess announced that it would pass off its pension liabilities to the PBGC.
If this looks like an oncoming slow-motion train wreck, that’s because it is — and taxpayers are standing on the tracks.
Hostess has about $2 billion in unfunded pension liabilities, which would add even more red ink to the PBGC’s already strained books. If a growing number of companies shed their pension liabilities on to the PBGC — a possibility given the American economy’s continuing weakness — the threat of a taxpayer bailout will only grow. AP’s Marcy Gordon notes, “If the trend continues, the agency could struggle to pay benefits without an infusion of taxpayer funds.”
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In the wake of Hurricane Sandy, many reminisce of 2005′s Hurricane Katrina. With at least a dozen East Coast states in a declared state of emergency, many look toward the Obama administration and FEMA for assistance. With whispers of the incalculable amount of damage done to the East Coast, few bring up the debt that FEMA has incurred, much from the FEMA-administered National Flood Insurance Program.
The National Flood Insurance Program (NFIP), with the Flood Disaster Protection Act, has made the purchase of flood insurance mandatory in certain areas. NFIP under-cuts private flood insurance companies by offering a lower, government-subsidized price for flood insurance.
NFIP is around $18 billion in debt, even before the financial effects of Sandy are counted.
Many homeowners don’t realize that flood insurance is not part of the typical homeowners insurance policy and needs to be purchased separately. Those who know may opt not to purchase it because flood insurance can be just as much as homeowners insurance.
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In a move that seems to have surprised many observers, the Supreme Court today upheld nearly all of the Patient Protection and Affordable Care Act by a 4+1 to 4 majority (I’ll explain the math below). Chief Justice John Roberts, who wrote the Court’s opinion, joined with the four liberal justices in affirming the individual mandate and essentially all of the Medicaid provisions. The Court’s three reliable conservatives, plus Justice Kennedy, wrote in dissent that the entire law should be ruled invalid. The opinions can be read in their entirety here.
Addressing the question of the individual mandate, Roberts agreed that the mandate was not a proper exercise of Congress’s commerce power:
“The power to regulate commerce presupposes the existence of commercial activity to be regulated. … As expansive as this Court’s cases construing the scope of the commerce power have been, they uniformly describe the power as reaching “activity.” … The individual mandate, however, does not regulate existing commercial activity. It instead compels individuals to become active in commerce bypurchasing a product, on the ground that their failure to do so affects interstate commerce. Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority.”
That’s the good news. A majority of the Supreme Court Justices recognize that Congress’s commerce power is not totally unbridled. Predictably, Justice Ruth Bader Ginsburg wrote a concurring opinion expressing her belief that the mandate WAS in fact a constitutional exercise of the commerce power (explaining the 4+1 majority I mentioned above). Although Justices Breyer, Sotomayor, and Kagan concurred with parts of Roberts’s majority opinion, they concurred with Ginsburg on the extent of Congress’s commerce power.
The four-Justice majority also rejected the government’s backup argument that the mandate could be justified under Article I, Section 8, Clause 18 (what grade schoolers are taught is the “elastic clause”) as “necessary and proper” for effectuating the rest of the Affordable Care Act:
“The individual mandate … vests Congress with the extraordinary ability to create the necessary predicate to the exercise of an enumerated power and draw within its regulatory scope those who would otherwise be outside of it. Even if the individual mandate is “necessary” to the Affordable Care Act’s other reforms, such an expansion of federal power is not a “proper” means for making those reforms effective.”
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The Supreme Court upheld the health care bill, as you’ve no doubt heard by now. Over at The Daily Caller, I add a few quick thoughts about how Randy Barnett’s Commerce Clause argument also applies to Congress’ taxation power, on the Court’s reluctance to check the other branches’ excesses, and how happy rent-seeking insurance companies must be right now.
Read the whole thing here.
At Bloomberg News, Andrew Puzder, CEO of CKE Restaurants, Inc., explains how the 2010 healthcare law is preventing jobs from being created and resulting in layoffs.
For example, Puzder notes, CKE Restaurants, which operates Hardee’s and Carl’s Jr. restaurants, “will have to cut spending on new restaurant construction,” in order to “offset higher health-care expenses,” even though “building new restaurants is how” the company creates jobs. Puzder argues that the increase in the company’s healthcare costs will “more than consume” the amount it ”spent on new restaurant construction last year, leaving nothing for growth.” It “will also need to reduce” its “capital spending,” even though such spending creates jobs and enables the restaurant company to improve its infrastructure and maintain its business. Thus, its “ability to create new jobs could vanish.”
Puzder also points to the similar situation of “Grady Payne, chief executive officer of Connor Industries Inc., a supplier of cut lumber and assembled wood products” with 450 employees, who has laid out the unpleasant options facing “his company under the health-care law, each of which would cost $1 million or more,” which is “‘more than the company makes.’ [Payne] concluded that his company’s goals have turned “from ‘hire-and-grow’ to ‘cut-and- survive.’”
Puzder also documents the complaints of Victoria Braden, the president and CEO of Braden Benefits Strategies Inc., “a corporate employee-benefits adviser”:
“[Braden] said adoption of the law led to immediate job cuts at her company as she scaled back an expansion into a new line of business. Obamacare ‘is devastating to my business, expensive for me and my clients to administer, and works against our goals of helping businesses to expand, and putting people back to work,’ she said.”
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“Federal payments required by President Barack Obama’s health care law are being understated by as much as $50 billion per year because official budget forecasts ignore the cost of insuring many employees’ spouses and children, according to a new analysis. The result could cost the U.S. Treasury hundreds of billions of dollars during the first ten years of the new health care law’s implementation,” notes the Daily Caller. “The Congressional Budget Office has never done a cost-estimate of this [because] they were expressly told to do their modeling on single [person] coverage,” and “the Joint Committee on Taxation directed the Congressional Budget Office to ignore family members when determining whether employees actually pay more than 9.5 percent of their household income on insurance” and thus qualify for government subsidies.
This is just the latest of many ways that Obamacare has been discovered to cost more than predicted. Earlier, the CBO hiked its estimate of Obamacare’s costs by $115 billion, showing that the health care law would not, in fact, cut the deficit as promised. Later, it became apparent that the cost estimate for Obamacare had been artificially reduced through double-counting of revenues.
Then, it became apparent that the cost of Obamacare’s Medicaid expansion provisions had been radically underestimated. It turned out that its Medicaid expansion provisions, in addition to covering many poor or near-poor people, could also add up to five million early retirees to state Medicaid rolls. That financial risk was overlooked in the Medicaid actuary’s earlier estimate. As he conceded in January 2011, that “estimated increase in Medicaid enrollment is based on an assumption that Social Security benefits would continue to be included in the definition of income for determining Medicaid eligibility. If a strict application of the modified adjusted gross income definition is instead applied, as may be intended by the Act, then an additional 5 million or more Social Security early retirees would be potentially eligible for Medicaid coverage.” More recently, he said the stricter standard was “expected” to apply under the 2010 healthcare law, causing “significantly higher” Medicaid costs for states. See True Cost of PPACA (Patient Protection and Affordable Care Act): Effects on the Budget and Jobs (March 30 testimony to Congress).
Obamacare is also harmful to the economy, medical innovation, and the healthcare system. Earlier, I discussed some of the bad effects of Obamacare on patients, employers, consumers, and the insurance market. I filed an amicus brief on behalf of state legislators explaining why Obamacare is unconstitutional under the Tenth Amendment and exceeds Congress’s power under the Commerce Clause.
According to several Gulf Coast legislators, the idea of adding wind insurance to the National Flood Insurance Program is not going to happen anytime soon. The “Taylor bill,” named for the Rep. Gene Taylor of Mississippi, failed to pick up support despite several attempts by Taylor — a result that made all free-market supporters and anyone not wishing to pay for beach homes in Florida breathe a sigh of relief. Recently, in an interview with the Mobile Press-Register, Mississippi Republican Rep. Steven Palazzo, who defeated Taylor in the 2011 midterm elections, confirmed that he is not going to support the idea of adding wind coverage to NFIP: ”If that (Taylor) bill would have a chance of passing, I would support it. I would endorse it… I think that ship has sailed.”
Rep. Jo Bonner, from Mobile, also stated that he thought it was “highly unlikely” that Taylor’s proposal would be adopted.
Even former Rep. Gene Taylor himself expressed doubts that his proposed expansion of the national insurance program would go far, giving it a “snowball’s chance in hell.” The National Flood Insurance Program (NFIP), which insures about 5.5 million Americans, is in serious trouble and has been for decades. Currently, the program — which is part of FEMA — is more than $18 billion in debt and is set to expire in September 2011. Part of the reason for NFIP’s dire situation can be attributed to Hurricanes Rita and Katrina, but the core problem is that insurance can’t operate when it is run by politicians (who, by their nature, care more about their popularity than the fiscal solvency of an insurance program). First of all, the maps that are used to set rates on policies are severely out-of-date. This means that homes that appear to be sitting in a place where they are not likely to flood actually could be in high-risk areas. The program undercharges these policyholders and thereby doesn’t have the money to cover the losses. Attempts to update the maps have been met with resistance because the result will be that some folks will find out that they are now in flood zones (as if they didn’t know already from annual flooding) and end up with higher rates.
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