unconstitutional

Obamacare’s Costs Rise, as Obama Backers Get Preferential Treatment

by Hans Bader on March 7, 2011 · 1 comment

in Economy, Features, Healthcare, Politics as Usual, Regulation

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The cost of Obamacare continues to explode and exceed its sponsors’ predictions. HHS Secretary Kathleen Sebelius has now admitted to double-counting in the Obamacare budget, using the same $500 billion twice, first “to sustain” the existing Medicare program and then to “pay for” brand new Obamacare entitlements. Last year, the CBO hiked its estimate of Obamacare’s costs by $115 billion, even as many of its promised benefits failed to materialize.

Obamacare was supposed to save patients money by curbing insurance company profits and expanding state Medicaid programs to cover millions more people. (This expansion was criticized by state officials, including a few Democrats such as former Tennessee Gov. Phil Bredesen, who called it “the mother of all unfunded mandates.” Bredesen’s health care legal advisor concluded that Obamacare’s Medicaid-expansion provisions were unconstitutional.)

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Dodd-Frank Financial “Reform” Violates Property Rights and Equal-Protection Guarantees

by Hans Bader on January 9, 2011 · 2 comments

in Bailout Watch, Economy, Legal, Property Rights, Regulation

Last week, I described how the Dodd-Frank financial “reform” law passed last summer violates constitutional separation-of-powers safeguards by giving unaccountable bureaucrats the power to seize companies and legislate through administrative fiat.  But that is not the only way Dodd-Frank violates the Constitution.  It also violates property rights and equal-protection guarantees.

For example, it contains racial preferences that were criticized by members of the U.S. Commission on Civil Rights. It “imposes race and gender employment quotas on the financial industry,” noted economist Diana Furchtgott-Roth in the Washington Examiner. Its ”Section 342 states that race and gender employment ratios must be observed by all government agencies that regulate the financial sector, as well as private financial institutions that do business with the government.”

This unconstitutional requirement is the brainchild of Los Angeles Congresswoman Maxine Waters, the Castro-loving, left-wing ideologue who earlier praised the Los Angeles race riots that destroyed scores of Korean-owned businesses as an “uprising” against injustice. Waters once told a CEO in a public Congressional hearing, “This liberal will be all about socializing . . . .uh, uh . . . would be about, basically, taking over and the government running all of your companies.”

Law Professor Richard Epstein notes that Dodd-Frank is also an unconstitutional “taking” of private property, since it deliberately forces certain banks to process debit card transactions at a loss. (That provision is being challenged in a lawsuit called TCF Bank v. Bernanke. Debit cards did not contribute to the financial crisis in any way, but Dodd-Frank regulates them at the behest of large businesses that objected to being charged any fee by banks for processing debit card payments. Thanks to Dodd-Frank, some customers will now be charged annual fees for their debit cards.)

Dodd-Frank itself contains little “reform,” reinforcing the very features of the status quo that spawned the financial crisis.  Congressional Democrats blocked a GOP amendment that would have reformed the government-sponsored mortgage giants, Fannie Mae and Freddie Mac, and the Obama administration lifted a $400 billion limit on bailing them out and showered their executives with $42 million in pay — even though Treasury Secretary Geithner has admitted that “Fannie and Freddie were a core part of what went wrong” in the financial crisis.

Fannie and Freddie helped spawn the mortgage crisis by buying up risky mortgages and repackaging them as prime mortgages, thus creating an artificial market for junk: “From the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime.”

At the direction of the Obama administration, Freddie Mac ran up more than $30 billion in losses to bail out mortgage borrowers, some of whom had high incomes. Federal regulators sought to make Freddie Mac hide the resulting losses from the SEC and the public.

Dodd-Frank is not unique in containing racial preferences. Many bills backed by Obama are riddled with racial set-asides, including the health care law passed last year. Obamacare has attracted criticism from the U.S. Commission on Civil Rights for containing both racial preferences and lower standards for treatment in predominantly-minority institutions, potentially harming both white applicants and minority patients. This racial discrimination appears to violate court rulings like the Supreme Court’s Adarand decision, and the Rothe and Western States Paving decisions issued by the federal appeals courts.

Obamacare Makes State Budget Problems Worse

by Hans Bader on December 21, 2010 · 1 comment

in Healthcare, Legal, Regulation

Obamacare is making state budget problems much worse, as governors now lament. Earlier, CEI filed an amicus brief in Florida v. HHS on behalf of two governors explaining how the radical changes to state Medicaid programs resulting from Obamacare violated limits on congressional power under the Constitution’s spending clause. Some of the fiscal burdens Obamacare imposes on states are obviously huge, while many others are ambiguous, unpredictable, and contingent on bureaucratic caprice, and uncertain future events.

Governors like Phil Bredesen (D-Tenn.) and Donald Carcieri (R-R.I.) warned earlier about the crippling costs of Obamacare to state budgets, but they were ignored by Obama and Congressional Democrats in their headlong rush to pass the health care bill. An adviser to Gov. Bredesen, James Blumstein (a professor of constitutional and health care law at Vanderbilt), argues that Obamacare is a violation of constitutional limits on Congress’s power under the spending clause.

Senate Leaders Violate Constitution in Pushing Through Costly Food Safety Modernization Act

by Hans Bader on December 2, 2010 · 3 comments

in Health and Illness, Legal, Nanny State, Personal Liberty, Precaution & Risk, Regulation

The House and Senate passed different versions of the Food Safety Modernization Act, which would ratchet up costly regulations of farms and food processing.  (Greg Conko explains how the bill’s expensive and cumbersome red tape might thwart “firms from developing innovative new processes and practices that could deliver real food safety improvements.”)   But as Conko and law professor Jonathan Adler have separately noted, there is a constitutional problem with the bill.  As Conko notes, the “user fees added to the Senate version run afoul of a constitutional requirement that tax measures originate in the House.

Similarly, Professor Adler notes “that the Senate’s failure to follow constitutionally prescribed procedures could doom the food safety bill.   The bill includes fee provisions that constitute taxes and the Constitution requires that all tax bills originate in the House of Representatives, and it looks unlikely that House Dems will let the slip pass.  Based on what Walter Olson has written about the bill, this could be a good thing.”

The House version of the bill would “drive out of business local farmers and artisanal, small-scale producers of berries, herbs, cheese, and countless other wares, even when there is in fact nothing unsafe in their methods of production,” warned legal commentator Walter Olson at Overlawyered.   I earlier discussed the harms likely to result from the bill, and false claims made by the bill’s defenders, here.

Obamacare Results in 47 Percent Premium Hike

by Hans Bader on October 17, 2010

in Healthcare, Insurance, Politics as Usual, Regulation

Obamacare has just led to a 47 percent increase in some health insurance premium rates in Connecticut:

The state’s largest insurer has been approved to raise health premium rates by 41 percent to 47 percent for some of its policies sold to individual buyers, in the largest price hikes yet seen in Connecticut since the adoption of national health care reform… The reason for the increases is the new federal health reform mandates, according to Anthem and the state Department of Insurance.

This is the exact opposite of what Americans were promised by the sponsors of Obamacare, which was deceptively billed as the Affordable Care Act.

Earlier, a judge in Florida refused to dismiss a constitutional challenge to Obamacare.

Obamacare includes major tax increases such as new taxes on investors and a $60 billion excise tax on health insurers that will be passed on to consumers.  It has already resulted in higher costs for major employers, and the elimination of high-quality health care plans. Insurance regulators in Connecticut had previously approved other premium increases.

The higher costs of Obamacare are one factor in why employers are reluctant to hire. Last month, 95,000 jobs disappeared as more jobs were eliminated than created in the American economy.

Judge Rejects Obama Administration’s Motion to Dismiss Challenge to Obamacare

by Hans Bader on October 15, 2010 · 1 comment

in Healthcare, Insurance, Legal, Regulation

A judge in Florida has rejected the Obama administration’s motion to dismiss challenges to Obamacare brought by 20 state attorneys general and the National Federation of Independent Business. U.S. District Judge Roger Vinson found that the attorneys general had made a plausible argument that Obamacare is in excess of Congress’s power under the Commerce Clause and in violation of the Tenth Amendment — indeed, he said it wasn’t even “a close call.”

The judge gave a green light to a challenge to Obamacare’s requirement that all citizens buy federally-regulated health insurance — the so-called “individual mandate.”  “While the novel and unprecedented nature of the individual mandate does not automatically render it unconstitutional,” Judge Vinson observed, “there is perhaps a presumption that it is.”  This means at the very least that “the plaintiffs have most definitely stated a plausible claim with respect to this cause of action.”

The judge also allowed the state attorney generals to challenge Obamacare’s Medicaid expansion provisions under the Tenth Amendment.

We earlier explained why the individual mandate contained in Obamacare is unconstitutional because it exceeds Congress’s power under the Commerce Clause. We joined an amicus brief filed by the Cato Institute supporting Virginia’s challenge in a case pending in Richmond, which you can find here. The judge in the Virginia case also rejected the federal government’s motion to dismiss the lawsuit.  Three former U.S. attorneys general, William Barr, Ed Meese, and Dick Thornburgh, also filed a brief challenging Obamacare in that case.

Briefs in many constitutional challenges to Obamacare can be found at this website.

At the ACA Litigation Blog, Brad Joondeph summarizes the Florida judge’s ruling, noting:

After laying out the competing arguments as to whether [the individual mandate, contained in Section 1501(b) of Obamacare,] is within Congress’s commerce power, he states as follows: ‘At this stage in the litigation, this is not even a close call.’ Judge Vinson goes on to explain that the individual mandate is ‘simply without prior precedent’ (p.61), and that, unlike statutes upheld by the Supreme Court in prior Commerce Clause decisions cited by the federal government (such as Heart of Atlanta Motel and Wickard), this regulation ‘is not based on an activity that [people] make the choice to undertake’ (p.63). In other words, Judge Vinson sees this as a regulation of inactivity, and thus one that is qualitatively different from prior uses of the commerce power (as augmented by the Necessary and Proper Clause). Moreover, he finds it highly salient that those regulated by 1501 (that is, all legal residents) have not taken some sort of voluntary action (such as entering the motel business, or growing wheat, for example) before being subjected to the provision’s requirement. Seeing the minimum coverage requirement in these terms, I think, is probably going about 75 percent of the way towards finding it unconstitutional. Mind you, Judge Vinson concludes by stating that he is holding only that the states have ‘stated a plausible claim.’ (p. 64). But the reasoning behind his conclusion–not to mention the modifier ‘most definitely’ that precedes it–gives one the sense that, following the coming motions for summary judgment, the odds are in favor of the court declaring the minimum coverage provision unconstitutional.

Republicans Will Lose Many Seats in Congress Due to Right-Wing Paranoia About the Census

by Hans Bader on March 31, 2010

in Legal, Nanny State, Personal Liberty, Politics as Usual, Precaution & Risk, Privacy, Zeitgeist

Republicans will lose many seats in Congress due to right-wing paranoia about the census and refusal to fill out Census forms, gloats the liberal web site Daily Kos. The number of congressional districts a state gets is based on how many of its citizens return completed Census forms.  Because voters in conservative states are completing and returning Census forms at lower rates than voters in liberal states, conservative states will lose many seats in the House of Representatives that they would otherwise gain due to increases in their population.

Republican-leaning “Red States” will also lose out on billions of dollars in federal funds, which are apportioned based largely on population.

Unlike many things the federal government does, the Census is expressly authorized by the explicit language of the Constitution.  (As a believer in free markets, limited government, and the Constitution, I have criticized some of the legislation backed by the Obama administration as being unconstitutional and beyond Congress’s enumerated powers.  But the Census and the questions it asks are perfectly constitutional, even though some of those questions may seem unnecessary.)

A few white Census respondents are stupidly listing their race as “human” or “some other race” rather than white.  Many commenters at the conservative website Free Republic say they will just refuse to report their race on their Census forms, viewing it as irrelevant.

This inaccurate reporting of racial information may unintentionally prolong racial set-aside programs that are obsolete and no longer necessary.  By making the white percentage of the population appear smaller than it in fact is, such responses can make it easier for the federal government to get away with racial quotas, which are based on so-called disparity studies, which measure the supposed gap between racial percentages in the population and racial percentages in awards of government contracts.  Under Supreme Court rulings like the 1987 Paradise decision, quotas are supposed to be used only as a “last resort” and for no longer than absolutely necessary.  But faulty Census data can give them a new lease on life, even when they serve no valid purpose, and enforce, rather than remedy, discrimination.

Experts Question Enormous Cost and Constitutionality of Healthcare Legislation

by Hans Bader on January 13, 2010 · 1 comment

in Health and Illness, Healthcare, Insurance, Legal, Nanny State, Politics as Usual, Precaution & Risk, Regulation

The health care legislation backed by the president and congressional leaders will increase Americans’ health care costs by more than $200 billion, concludes an expert at the federal Centers for Medicaid and Medicare Services.

Earlier, Senator Orrin Hatch (R-Utah), a lawyer, argued that the “individual mandate” in the health care bill legislation, which forces people to buy health insurance, is unconstitutional.  Florida Attorney General Bill McCollum likewise is questioning whether it is constitutional to force people to do so.

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.”

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.

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 powers under the Supreme Court’s Morrison ruling, as I explained earlier.

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

Most Americans oppose the health care legislation. It would reduce lifesaving medical innovation, raise taxes, drive up insurance premiums and the deficit, break many campaign promises, and impose heavy burdens on state budgets.  It  would also jeopardize the quality of medical care for many, while imposing restrictions that failed when tried at the state level, and ignoring advice from federal and academic experts, and lessons from countries with universal health care, about how to keep costs down.

Legal Experts and Civil Rights Commission Attack Obama Health-Care Plan As Unconstitutional

by Hans Bader on August 18, 2009 · 5 comments

in Healthcare, Insurance, Legal, Personal Liberty, Politics as Usual, Regulation, Sanctimony

Constitutional law professor Rob Natelson argues that Obama’s health-care plan is unconstitutional in four different ways. The U.S. Commission on Civil Rights says that the racial preferences and quotas contained in ObamaCare are likely unconstitutional.

Professor Natelson says that ObamaCare is unconstitutional because:

“1. It is not based on any enumerated power of Congress, not even on a very expansive reading of the power to regulate interstate commerce.

2. It relies on Excessive Delegation of the type held unconstitutional in Schechter Poultry.

3. It violates Substantive Due Process, and interferes with doctor-patient medical decisions to a vastly greater extent than did the laws declared unconstitutional in Roe v. Wade.

4. It violates the Tenth Amendment by commandeering state governments.”

(However, commenters in response to Professor Natel’s post argue that by the time any challenge to ObamaCare reaches the Supreme Court, Obama will have packed the court with liberal justices who are unsympathetic to such arguments).

The U.S. Commission on Civil Rights has criticized the racial preferences in the health-care bill backed by Obama, saying that they are likely unconstitutional under the Supreme Court’s Adarand decision, which subjected race-based affirmative action to “strict scrutiny” and barred federal racial preferences absent evidence that they are needed to remedy intentional past discrimination by the government. (In cases like Rothe Development Corp. v. Department of Defense and the Western States Paving case, the courts have sometimes struck down federal affirmative-action plans sponsored by liberal lawmakers, citing the Supreme Court’s Adarand decision. ObamaCare goes even further in mandating the use of race than past affirmative action plans.)

Fact checkers say Obama is lying about health care. ObamaCare will cost far more than its predicted trillion-dollar price tag.

One of Obama’s own advisers says the Obama Administration’s health-care plan will harm people with insurance while raising their taxes. Obamacare will take away 5 important freedoms, notes a CNN commentary. It will also destroy many affordable health-care plans while breaking Obama’s campaign promises.