Here’s a story not getting much attention, but is indicative of how President Obama tends to use executive power when he can’t get his way with Congress. Rule by executive fiat.
What am I talking about? As you may recall, Obama made appointments to the National Labor Relations Board (NLRB) during a supposed Congressional recess. Except it wasn’t really a recess. Congress was not between sessions (that constitutes a recess), but was instead it was on an intrasession break, one of many Congress takes during any session. Never have those been considered recesses of the type in which recess appointments could be legally made.
That is until this administration. That’s precisely how the vacant slots on the NLRB were filled with Obama appointees.
Over the past year, Cablevision has been in the midst of a brutal public battle with the Communication Workers of America over pay for technicians and allegations of union-busting. In May, Cablevision sought the intervention of an appeals court to stay proceedings at the NLRB, and now, the company is hoping that the high court will take up the issue of the NLRB’s authority.
The point, of course, isn’t particularly about the dispute. It’s one in a long line of management and labor disputes. The question is whether or not the NLRB is legally constituted given the way the appointments were made. It’s about the rule of law. When citizens see the government flout the law or ignore it, it doesn’t set a good precedent. Yet that’s precisely what has happened in this case.
And that’s what Cablevision is questioning. How is there legitimacy in an illegally appointed board? And why, should their rulings be obeyed, given the circumstances of the board’s recent constitution. Here’s the point:
“The role of Congress is to ensure a balanced NLRB and the Obama Administration bypassed Congress in order to stack the NLRB in favor of Big Labor. Two different federal courts — the D.C. Circuit and the Third Circuit — have established that the NLRB is illegally constituted and has no authority to take action. The NLRB continues to ignore these rulings, and we ask the Supreme Court to compel the NLRB to immediately halt its unlawful proceedings against Cablevision.”
Shades of Hugo Chavez’s Venezuela – Chavez kept the institutions of a democracy, but he packed them with his loyal appointees that shared the same ideology and agenda. With what has happened with the IRS and the EPA, etc, that’s not as big a stretch as one might imagine.
Niall Ferguson has a piece in the Wall Street Journal which talks about the growth of regulation within the nation. He starts with a quote from de Tocqueville in which de Tocqueville marvels at how Americans manage to self-regulate through associations. He then notes that de Tocqueville wouldn’t recognize the US if he were to suddenly come back. It looks too much like Europe.
Regulation has crept in to help smother us all the while the culture has changed to where Americans seem to no longer look to each other to solve problems, but instead look to government.
Regulations are simply a symptom of this business and autonomy killing movement. And their growth track pretty well with our demise:
As the Competitive Enterprise Institute’s Clyde Wayne Crews shows in his invaluable annual survey of the federal regulatory state, we have become the regulation nation almost imperceptibly. Excluding blank pages, the 2012 Federal Register—the official directory of regulation—today runs to 78,961 pages. Back in 1986 it was 44,812 pages. In 1936 it was just 2,620.
True, our economy today is much larger than it was in 1936—around 12 times larger, allowing for inflation. But the Federal Register has grown by a factor of 30 in the same period.
The last time regulation was cut was under Ronald Reagan, when the number of pages in the Federal Register fell by 31%. Surprise: Real GDP grew by 30% in that same period. But Leviathan’s diet lasted just eight years. Since 1993, 81,883 new rules have been issued. In the past 10 years, the “final rules” issued by our 63 federal departments, agencies and commissions have outnumbered laws passed by Congress 223 to 1.
Right now there are 4,062 new regulations at various stages of implementation, of which 224 are deemed “economically significant,” i.e., their economic impact will exceed $100 million.
The cost of all this, Mr. Crews estimates, is $1.8 trillion annually—that’s on top of the federal government’s $3.5 trillion in outlays, so it is equivalent to an invisible 65% surcharge on your federal taxes, or nearly 12% of GDP. Especially invidious is the fact that the costs of regulation for small businesses (those with fewer than 20 employees) are 36% higher per employee than they are for bigger firms.
Got that? 224 new regulations which will have an economic impact that will “exceed $100 million” dollars. Negatively of course. That was the purpose of having regulations rated like that – to understand the probable negative economic impact. And we have 224 in the hopper, in a very down economy, which will exceed the negative $100 million dollar mark. What are those people thinking? Or are they? Indications are they give it no thought when these new regulations are proffered. They just note the cost and move on. No skin of their rear ends.
And if you think that’s bad, just wait:
Next year’s big treat will be the implementation of the Affordable Care Act, something every small business in the country must be looking forward to with eager anticipation. Then, as Sen. Rob Portman (R., Ohio) warned readers on this page 10 months ago, there’s also the Labor Department’s new fiduciary rule, which will increase the cost of retirement planning for middle-class workers; the EPA’s new Ozone Rule, which will impose up to $90 billion in yearly costs on American manufacturers; and the Department of Transportation’s Rear-View Camera Rule. That’s so you never have to turn your head around when backing up.
Yes, that’s right, they’re hardly done. In fact, they’re not even slowing down. The accumulation of power within the central government – the ability to intrude in almost every aspect of your life – is attempting to reach warp speed.
Finally, as if what I’ve noted isn’t enough, we have another costly travesty in the gestation stage, i.e. the “Gang of 8′s” immigration bill. From PowerLine:
The CBO confirms that the bill provides for a vast influx of new, legal immigration. The Senate Budget Committee says:
CBO projects 16 million new immigrants will be added by 2033 on top of the current law projected flow of 22 million and that 8 million illegal immigrants will be granted permanent status – for a total of 46 million legal immigrants, including a doubling of guest workers to 1.6 million in a single year.
Contrary to the claims of the bill’s sponsors, this influx will be overwhelmingly low-skilled. The CBO says:
[T]he new workers would be less skilled and have lower wages, on average, than the labor force under current law.
The result is that unemployment will increase, and wages will be driven down, for America’s existing blue collar work force:
Taking into account all of those flows of new immigrants, CBO and JCT expect that a greater number of immigrants with lower skills than with higher skills would be added to the workforce, slightly pushing down the average wage for the labor force as a whole… However, CBO and JCT expect that currently unauthorized workers who would obtain legal status under S. 744 would see an increase in their average wages.
Terrific: the only ones who would gain would be those who came here illegally, while native born workers would suffer. The CBO report continues:
[T]he average wage would be lower than under current law over the first dozen years. … CBO estimates that S. 744 would cause the unemployment rate to increase slightly between 2014 and 2020.
Ruinous? Along with everything else, pretty much.
To say America has lost it’s way is, well, an understatement. We aren’t close to being what was envisioned at our founding and we’re almost kissing cousins of that which our Founders attempted to keep us from becoming – today’s Europe.
Unfortunately, that ruinous drift and over reliance on government seems to be fine for all too many of those who call themselves Americans today.
Finally figuring it out? Or finally admitting it?
Sixteen Democratic senators who voted for the Affordable Care Act are asking that one of its fundraising mechanisms, a 2.3 percent tax on medical devices scheduled to take effect January 1, be delayed. Echoing arguments made by Republicans against Obamacare, the Democratic senators say the levy will cost jobs — in a statement Monday, Sen. Al Franken called it a “job-killing tax” — and also impair American competitiveness in the medical device field.
The senators, who made the request in a letter to Senate Majority Leader Harry Reid, are Franken, Richard Durbin, Charles Schumer, Patty Murray, John Kerry, Kirsten Gillibrand, Amy Klobuchar, Joseph Lieberman, Ben Nelson, Robert Casey, Debbie Stabenow, Barbara Mikulski, Kay Hagan, Herb Kohl, Jeanne Shaheen, and Richard Blumenthal. All voted for Obamacare.
In the letter they say:
“The medical technology industry directly employs over 400,000 people in the United States and is responsible for a total of two million skilled manufacturing jobs,” the senators wrote in a December 4 letter to Reid. “We must do all we can to ensure that our country maintains its global leadership position in the medical technology industry and keeps good jobs here at home.”
For whatever reason, however, these 16 can’t seem to understand how what they’re claiming here applies across the board to all taxes. That is, they’re job killers. ObamaCare’s taxes and mandates are particularly pernicious because they have many companies trying to figure out how to avoid them and that will mean fewer jobs, not more and certainly more costs in general.
But then no one ever said our political leadership was particularly sharp. After all, somehow Maxine Waters is about to become the ranking member (senior Democrat) on the House Financial Services committee and Harry Reid remains the Majority Leader in the Senate.
Of course ObamaCare is full of job killing taxes as we’ve all become aware, and many of them will hit this year. Add those to the “fiscal cliff” tax increases as well as sequestration and you can bet the Dems will see their “pro-choice” agenda fulfilled this next year – any developing economic recovery will be quickly aborted as exactly all the wrong things government can do to kill such a recover are done.
From Professor Luigi Zingales:
“There is not a well-understood distinction between being pro-business and being pro-market. Businessmen like free markets until they get into a market; once they are in it they want to block entry to others. Pro-marketeers want free markets at all times. The more conservative pro-marketeers are fearful of criticising business, because they assume they will be seen as criticising the free market. But we need to stand up and criticise business when business is not helping the cause of free markets.”
We talk a lot about crony capitalism. Well what the good professor is talking about when he says that businessmen like free markets until they get in one and then they try to “block entry to others” is part of what we’re talking about.
One aspect of cronyism is where businesses attempt to use the power of government, if they can so influence it, to give their company sweetheart regulations, raise artificial barriers to entry and to otherwise impede competitors to the point that they have an advantage. I’d like to say advantage in the “market”, but the market, at that point, no longer exists as a free one. It is now a distorted market due to government cronyism.
That’s something that badly needs to stop. Whether at this point that’s even possible and if it is, how we’d actually go about it are some interesting questions to discuss.
However, the primary point is being pro-business does not necessarily being pro-market and it certainly doesn’t mean you are necessarily for free markets.
We need to change the way we discuss this. We nee to talk about free markets and roundly condemn any business that attempts to use the coercive power of government to it’s advantage in markets as well as condemning those in government who use its power for such things.
The editors of the Washington Examiner consider the probable effects of the new CAFE standards (being imposed by the EPA now instead of NHTSA) and ask a pertinent question:
Getting from the current 35 mpg CAFE standard to 54.5 can be achieved by such expedients as making air conditioning systems work more efficiently. We have a bridge in Brooklyn to sell to anybody who thinks that’s even remotely realistic. There is one primary method of increasing fuel economy — weight reduction. That in turn means automakers will have to use much more exotic materials, including especially the petroleum-processing byproduct known as “plastic.” But using more plastic will make it much more difficult to satisfy current federal safety standards. The bottom-line will be much more expensive vehicles and dramatically fewer kinds of vehicles.
Total costs, as calculated by the EPA, will exceed $157 billion, making this by far the most expensive CAFE rule ever. For comparison, the previous rule in 2010 cost $51 billion, according to the EPA. But the EPA doesn’t include this fact in its calculation: Annual U.S. car sales are 14-16 million units, yet over time, this rule will remove the equivalent of half a year’s worth of buyers. Will that be when the EPA takes a cue from Obamacare and issues an individual mandate that we all must buy Chevy Volts?
I’m just curious, for those who support the individual mandate dictated by Obamacare, what is the argument that such an electric car mandate isn’t possible? If the federal government can force us to purchase insurance from the companies it allows to offer the product based on the idea that health care is a national issue, how is promoting cleaner air and more energy security not the same thing? Indeed, it would seem that the arguments are even stronger for forcing everyone to buy electric cars if furthering the “common good” is the only real restriction on federal power.
So what is the difference from a legal, constitutional standpoint? Is there one?
As Bruce points out below, the failure of the Super Committee should come as no surprise to anyone who was paying attention. Even where committees arrive at an agreed solution, it rarely ever gets implemented. What’s worse, in this case, the Super Committee was operating under the sword of automatic spending cuts to domestic and military programs should it fail to arrive at a consensus — i.e. no side had any incentive to deliver more or less than what would automatically go into place anyway. Of course, Pres. Obama running a re-election campaign based on a “do nothing” Congress certainly didn’t inspire his Democratic brethren on the Super Committee to find common ground either.
But these aren’t the real reasons for the Super Committee failure. Instead, as Jeb Hensarling (R-TX) writes in the Wall Street Journal today, the underlying problem is one of ideological impasse:
Ultimately, the committee did not succeed because we could not bridge the gap between two dramatically competing visions of the role government should play in a free society, the proper purpose and design of the social safety net, and the fundamentals of job creation and economic growth.
For the members of the Super Committee, the choice seemed to be between raising taxes on a small percentage of earners and making no cuts or reforms to the shibboleths of Medicare and Social Security, or reducing taxes and modestly curbing entitlements at some point in the future. In other words, it was a choice between expanding or slightly retarding the growth of government. However, it’s not just the specifics that make compromise difficult, if not impossible. Where one side believes that government is always the answer to what ails us, and the other (at least nominally) operates from the premise that individual effort leads to greater prosperity for all, there is only so much compromise that can be reached between the two. Eventually, government will be either too small or too big for the other side to bear.
This is the crucible in which somehow a compromise was to be reached on federal spending.
As it stands now, government spending is equal to about 35% to 40% of GDP, while our national debt is around 100% of GDP. At the federal level, we are borrowing 40 cents of every dollar that we spend, and entertaining trillion dollar plus deficits year after year for as long as we can reasonably forecast. This is the vision of those who see government as playing the primary role in most every aspect of society since it costs a lot of money to execute that vision. Yet, despite the fact that government has done nothing but grow over the past sixty years, they are convinced that anything smaller than what we currently have will lead to economic and social ruin. To be sure, after finally getting the government foot in the door of universal health care, the liberal base is not about to countenance any willing walk-back on those gains. The Democrats on the Super Committee were well aware of this, and that accepting changes to Medicare and Social Security or any other dearly loved social program would result in a deep backlash from those who believe that all of life is dependent on government.
Opposing that vision are those who think that government should be smaller and less intrusive, especially with respect to our economy. They look at our ever-growing debt and anemic, if not illusory, economic gains and see nothing but trouble down the road we’re traveling. Unfortunately, while total government spending is often publicly recognized as the problem, too many of these visionaries think that simply reducing tax rates will flood the federal coffers and all will be right with world. It’s true that raising taxes in a declining or struggling economy will tend to exacerbate, not alleviate, the problem. But Republicans on the committee also know that their base stand ready to punish any member who suggests raising taxes, now or in the future, regardless of the fact that the spending cuts necessary to get our debt problems under control simply aren’t feasible. And they won’t have much better luck at the ballot box if they even hint at reforming Medicare or Social Security.
Even where they are willing to take that chance, however, the Democrats can’t politically afford to compromise:
The Medicare reforms would make no changes for those in or near retirement. Beginning in 2022, beneficiaries would be guaranteed a choice of Medicare-approved private health coverage options and guaranteed a premium-support payment to help pay for the plan they choose.
Democrats rejected this approach but assured us on numerous occasions they would offer a “structural” or “architectural” Medicare reform plan of their own. While I do not question their good faith effort to do so, they never did.
Republicans on the committee also offered to negotiate a plan based on the bipartisan “Protect Medicare Act” authored by Alice Rivlin, one of President Bill Clinton’s budget directors, and Pete Domenici, a former Republican senator from New Mexico. Rivlin-Domenici offered financial support to seniors to purchase quality, affordable health coverage in Medicare-approved plans. These seniors would be able to choose from a list of Medicare-guaranteed coverage options, similar to the House budget’s approach—except that Rivlin-Domenici would continue to include a traditional Medicare fee-for-service plan among the options.
This approach was also rejected by committee Democrats.
The Congressional Budget Office, the Medicare trustees, and the Government Accountability Office have each repeatedly said that our health-care entitlements are unsustainable. Committee Democrats offered modest adjustments to these programs, but they were far from sufficient to meet the challenge. And even their modest changes were made contingent upon a minimum of $1 trillion in higher taxes—a move sure to stifle job creation during the worst economy in recent memory.
Even if Republicans agreed to every tax increase desired by the president, our national debt would continue to grow uncontrollably. Controlling spending is therefore a crucial challenge. The other is economic growth and job creation, which would produce the necessary revenue to fund our priorities.
Meanwhile, we operate under a tax system that is so heavily skewed towards the highest income producers that our government is dependent on about five percent of the taxpayers for a majority of its revenue, and only a quarter of all tax payers for more than 85% of that revenue. To the Democrats, this is apparently a good start. Republicans, on the other hand, see an unfair system that, if properly reworked, could raise even more revenue. Either way the spending, and thus the government, grows.
The definition of “priorities” is the real sticking point. It means either that everything from price and income support to cradle-to-grave health care is a priority, or that only the basic structural necessities of national defense, courts of law and last-resort safety nets qualify. There has been a great deal of compromise on that definition over the past several decades (albeit, always resulting in an expanding government), but it seems that we’ve finally reached the limit where any further acquiescence by one side results in unbearable loss to the other side. It’s difficult to see how we can successfully move forward as a unified country with such diametrically opposed visions for the role of government. Indeed, maybe we can’t for very much longer.
It might come as a surprise to some, but the bill Democrat Representative Jan Schakowsky (IL) plans to introduce as a jobs bill is long on borrowing money we don’t have and funneling that money through ineffective government programs. Apparently they still don’t get it.
The member of the Congressional Progressive Caucus would spend $227 billion dollars and, best case, create 2.2 million jobs (or, again best case, a little over $108,000 a dollar a job). Her plan reads like something from the Franklin Roosevelt administration:
Under her plan, the following policies would be implemented:
- The School Improvement Corps would create 400,000 construction and 250,000 maintenance jobs by funding positions created by public school districts to do needed school rehabilitation improvements.
- The Park Improvement Corps would create 100,000 jobs for youth between the ages of 16 and 25 through new funding to the Department of the Interior and the USDA Forest Service’s Public Lands Corps Act. Young people would work on conservation projects on public lands including the restoration and rehabilitation of natural, cultural, and historic resources.
- The Student Jobs Corps would create 250,000 more part-time work study jobs for eligible college students through new funding for the Federal Work Study Program.
- The Neighborhood Heroes Corps would hire 300,000 new teachers, 40,000 new police officers and 12,000 new firefighters.
- The Health Corps would hire at least 40,000 health care providers, including physicians, nurse practitioners, physician assistants, nurses, and health care workers to expand access in underserved rural and urban areas.
- The Child Care Corps would create 100,000 jobs in early childhood care and education through additional funding for Early Head Start.
- The Community Corps would hire 750,000 individuals to do needed work in communities, including housing rehab, weatherization, recycling, and rural conservation.
Perusing the list, there’s absolutely no possible threat of waste, fraud and abuse, is there? 750,000 people hired to “work in the community” doing “recycling” and “rural conservation?” “Weatherization”? Nope, no chance of waste, fraud and abuse, none at all.
Of course, nowhere in there other than initially, is there any mechanism to fund the “jobs” created in the future. They’d last as long as the $227 billion did and then the jobs would go away. That would include the teachers, police officers and firefighters. Those are simply in the plan to make it sound more acceptable. If the localities who will get the teachers, police and firefighters funded by this boondoggle can’t afford to hire them now, chances are very good they won’t be able to keep them when the money runs out.
The jobs listed are also mostly make work jobs on make work projects that might be nice to have done, but aren’t going to contribute to the private economy (the actual engine of the economy) in any meaningful way. Nothing is really “produced”, no wealth is created, no revenue – other than salaries – is taxable.
And finally, which health care providers is “Health Corps” going to hire? There’s a shortage of health care providers in the private market. Why in the world would they leave that to work for government in “underserved rural and urban areas?”
It is clear with Rep. Schakowsky’s proposal that the Progressive side of the aisle still don’t get it. How much louder do the American people have to shout to be heard?
Cut spending. Make government smaller. Make government less costly.
Rep. Schakowsky and the Progressives are still stuck in the 20th century. We’re already living the Raw Deal thanks to spendthrifts like her.
Since the tragedy in Arizona, where nineteen people were shot (including U.S. Congresswoman Gabrielle Giffords) and six murdered, talk of “civility” has been plentiful. The right side of the political spectrum was called to the mat for using such horrible words as “target” and “socialism” and having the temerity to employ Hitler/Nazism comparisons in protest signage (that, the truth be told, they weren’t even carrying). Sarah Palin and the Tea Party movement were specifically denigrated for employing uncivil “eliminationist” rhetoric that was directly responsible for Mr. Jared Lee Loughner pulling the trigger in that awful event on January 8, 2011.
The gross mendacity (and unintentional preterition) of these charges against the right generally, and the Tea Partiers specifically, is bad enough. That they are leveled with abject hypocrisy is even worse. But politics is not a sport well-played in a tit-for-tat fashion. Everyone is guilty of hyperbole and hypocrisy at some point, regardless of political afflialiation.
What’s truly galling is the way that “civility” is suddenly determined by the language an opponent employs. Civility has nothing to do with words, but instead, everything to do with action. On that score, Democrats are behaving in as uncivil a manner as is possible.
A civilized nation conducts itself according to a defined, written, universally applicable and executable set of laws. Adherence to such laws are the immutable backbone of any society capable of survival. Wanton disregard of such laws inexorably leads to chaos and tyranny. Ergo, “civility” does not depend on people speaking nicely about one another, but upon everyone playing by the same rules.
The current flouting of the legal process in Wisconsin and now Indiana, (and what previously occurred in Texas), is the true definition of uncivil. Ignoring and actively undermining the electoral process is the epitome of “uncivil” action. Whatever harsh words may or may not have been spoken before, civility is still entirely dependent upon the process for determining the course of action in pursuit of public goals. Running away in avoidance of legislative duties smacks of cowardice and worse. It uproots the civil process.
A common observation of the democracy holds that voting is simply a proxy for violence. Fleshed out a bit, the process of electoral action is made in lieu of battle. We could decide the course of society based on bloody battle alone, and let might make right. Instead, civil societies have chosen to allow the consent of the governed to rule, the best of which societies have done so through a responsive and accountable republic. When the governors cease to heed to will of the governed, however, civil society becomes endangered and trouble is inevitable.
No less than Thomas Jefferson warned of the dangers in pursuing “uncivil” means of governance in the “shot across the bow” leading to the American Revolution, entitled “A Summary View of the Rights of British America” (emphasis added):
And this his majesty will think we have reason to expect when he reflects that he is no more than the chief officer of the people, appointed by the laws, and circumscribed with definite powers, to assist in working the great machine of government erected for their use, and consequently subject to their superintendance …
To remind him that our ancestors, before their emigration to America, were the free inhabitants of the British dominions in Europe, and possessed a right, which nature has given to all men, of departing from the country in which chance, not choice has placed them, of going in quest of new habitations, and of there establishing new societies, under such laws and regulations as to them shall seem most likely to promote public happiness. That their Saxon ancestors had under this universal law, in like manner, left their native wilds and woods in the North of Europe, had possessed themselves of the island of Britain then less charged with inhabitants, and had established there that system of laws which has so long been the glory and protection of that country … Their own blood was spilt in acquiring lands for their settlement, their own fortunes expended in making that settlement effectual. For themselves they fought, for themselves they conquered, and for themselves alone they have right to hold …
But that not long were they permitted, however far they thought themselves removed from the hand of oppression, to hold undisturbed the rights thus acquired at the hazard of their lives and loss of their fortunes. A family of princes was then on the British throne, whose treasonable crimes against their people brought on them afterwards the exertion of those sacred and sovereign rights of punishment, reserved in the hands of the people for cases of extreme necessity, and judged by the constitution unsafe to be delegated to any other judicature. While every day brought forth some new and unjustifiable exertion of power over their subjects on that side the water, it was not to be expected that those here, much less able at that time to oppose the designs of despotism, should be exempted from injury. Accordingly that country which had been acquired by the lives, the labors and the fortunes of individual adventurers, was by these princes at several times parted out and distributed among the favorites and followers of their fortunes; and by an assumed right of the crown alone were erected into distinct and independent governments
Jefferson later simplified his empirical understanding of how societies work with the infamous quote: “The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”
Another way of comprehending the principle is that a nation of laws only survives as long as the laws are adhered to. Every sovereign, whether composed of one or many, can only retain the authority entrusted to it by the people for as long as it respects that trust. Once it strays, enough to undermine the confidence of the governed, those “sacred and sovereign rights of punishment” will come into play. While such an extreme consequence may be remote at this time, there is no good that can come from enacting the foundations for its execution.
When the basis of a democratic republic — i.e. the electoral process — is entirely ignored and, worse, evaded as a politically inconvenient nuisance to the preferred outcomes of the very people entrusted with the public duty to uphold the republic, is there any doubt that it will fall?
Civility in our political language is certainly useful and desirable, if not actually attainable. In contrast, civility – i.e. respect for the process and outcomes thereof – is the sine qua non of our democratic institutions. While we may prefer the former, we really must insist on the latter.
There is a new opinion from U.S. District (DC) Judge Kessler ruling that the individual mandate imposed by ObamaCare is constitutional. The primary importance of the ruling is that it is squarely at odds with the Judge Vinson opinion from the District of Florida on one key issue: that deciding not to purchase something is an “activity” that can be regulated under the Commerce Clause. I’m still going through it, and will have more to say, but a few things really leaped out at me.
(1) Kessler places a lot of emphasis on the “free riders” who consume medical services but don’t pay for them. According to the judge, these free rider problems are illuminated by the congressional findings found in the Affordable Care Act (at pp. 39-40):
The findings on this subject could not be clearer: the great majority of the millions of Americans who remain uninsured consume medical services they cannot pay for, often resulting in personal bankruptcy. In fact, the ACA’s findings state that “62% of all personal bankruptcies are caused in part by medical expenses.” ACA § 1501(a)(2)(G), as amended by § 10106. Of even greater significance to the national economy is the fact that these uninsured individuals are, in fact, shifting the uncompensated costs of those services–which totaled $43 billion in 2008–onto other health care market participants, as well as federal and state governments and American taxpayers. See ACA §§ 1501(a)(2)(F), (G),as amended by § 10106; Thomas More Law Ctr., 720 F.Supp.2d at 894.
Because of this cost-shifting effect, the individual decision to forgo health insurance, when considered in the aggregate, leads to substantially higher insurance premiums for those other individuals who do obtain coverage. According to Congress, the uncompensated costs of caring for the uninsured are passed on by health care providers to private insurers, which in turn pass on the cost to purchasers of health insurance. “This cost shifting increases family premiums by on average over $1,000 a year.” ACA §1501(a)(2)(F), as amended by § 10106. Thus, the aggregate effect on interstate commerce of the decisions of individuals to forgo insurance is very substantial.
There are many problems with these “findings” chief among which is an innumeracy problem. According to the first two quoted sentences, we are supposed to infer that 62% of all personal bankruptcies are made up of those “who remain uninsured” and “consume medical services they cannot pay for.” Indeed, according to Kessler’s understanding of the findings, the foregoing population is the “great majority of Americans who remain uninsured.” The only problem is, even if we assume that the 62% statistic is correct (which is a stretch), the number of personal bankruptcies every year does not even reach 2 million. Indeed, 2009 saw personal bankruptcies soar by 32% … to 1.41 million. Sixty-two percent of that is just 874,200, which is far, far fewer people than the “great majority of the millions of Americans who remain uninsured.”
(2) Another glaring issue is that the “cost-shifting” complained of is entirely the fault of the federal government, not “free riders,” thanks to Congress passing EMTALA in 1986, pursuant to which practically every hospital in the nation was forced to accept any and every patient who requested “emergency services.” In short, Congress created the free riders with this legislation.
Now let’s follow the logic here: (a) hospitals refuse to treat patients who can’t afford their medical services, therefore Congress must force hospitals to treat regardless of ability to pay (i.e. costs shifted to hospitals); (b) Patients who can’t afford the medical services, but who hospitals must treat, raise costs of medical services, which are mostly paid by insurers who raise their rates and pass them on to paying patients (i.e costs shifted to service-providers, then insurers, then paying patients); (c) insurance costs are entirely too high because uninsured patients, who can’t afford insurance or medical services, but whom hospitals must treat anyway, which drives up the costs of services and therefore the costs of insurance, and therefore Congress must force everyone to buy insurance (i.e. costs shifted from paying patients to those who can’t afford services or insurance); (d) because some people can’t afford insurance, they must be subsidized in their mandated purchase of insurance by taxpayers (i.e. costs re-shifted back to paying patients).
Putting it all together, according to Kessler’s opinion, Congress must be able to force individuals to purchase insurance because individuals who can’t afford insurance, but still consume health services (thanks to Congress), are causing the health insurance market to become distorted. (Oh, and by the way, those who can afford insurance are going to have to subsidize those who can’t and are therefore responsible for this whole mess in the first place.) Does that make any sense?
(3) The one other thing that really struck me as worrisome is Kessler’s emphasis on the infamous Wickard v. Filburn case (at p. 40):
In this case, the link [between the activity and the market being regulated] is strikingly similar to that described in Wickard: individuals are actively choosing to remain outside of a market for a particular commodity, and, as a result, Congress’s efforts to stabilize prices for that commodity are thwarted. As Wickard demonstrates, the effects of such market-distorting behavior are sufficiently related to interstate commerce to justify Congress’s efforts to stabilize the price of a commodity through its Commerce Clause power.
This is the reasoning underpinning Kessler’s holding (at p. 38) that “[b]oth the decision to purchase health insurance and its flip side–the decision not to purchase health insurance–therefore relate to the consumption of a commodity: a health insurance policy.” In this view, any decision made about an arguably economic subject, even the decision not to participate in a market concerning that economic subject, is subject to regulation by Congress.
Accordingly, should Congress decide to regulate the market for U.S automobiles, your decision to not purchase a vehicle can be regulated and even penalized by federal law. In fact, if Kessler’s view of the Constitution is correct, then Congress could require that you purchase a GM or Chrysler vehicle in order to stabilize the price of that commodity. Or perhaps, because of free rider problems, you can be penalized for choosing not to have children who would grow up, enter the labor force and pay the Social Security and Medicare taxes necessary to support you in your older years. If Kessler is correct, then the only limit on Congressional power is the inability to conjure up a market to be regulated, since any decision (participate/not participate) will have a substantial effect on that market when considered in the aggregate.
I would submit that this cannot be the correct view. The Commerce Clause power has already been distended far beyond what was intended when it written. If the Supreme Court adopts this decision, or something similar, the Congress would effectively have carte blanche to regulate whatever it desires.
In any event, those three things stood out to me. I’ll try to have some more on the opinion itself by tonight.
Rasmussen says it’s Republican governor Scott Walker:
A sizable number of voters are following new Wisconsin Governor Scott Walker’s showdown with unionized public employees in his state, and nearly half side with the governor.
A new Rasmussen Reports national telephone survey finds that 48% of Likely U.S. Voters agree more with the Republican governor in his dispute with union workers. Thirty-eight percent (38%) agree more with the unionized public employees, while 14% are undecided.
Thirty-eight percent (38%) of voters think teachers, firemen and policemen should be allowed to go on strike, but 49% disagree and believe they should not have that right. Thirteen percent (13%) are not sure.
Public employee unions have long been strong supporters, financially and otherwise, of Democratic Party candidates, so it’s no surprise that 68% of Democrats support the union workers in the Wisconsin dispute. Sixty-eight percent (68%) of Republicans and 56% of voters not affiliated with either of the major political parties side with the governor. [emphasis mine]
The bold line is key. I find nothing particularly surprising about either of the percentages from Democrats polled or Republicans. But again this indicates that the Democrats have lost the independent vote and lost it significantly. Public opinion, based on this poll, is definitely with the Governor.
What is playing out in Wisconsin has been recognized by unions as a hill they must die on or suffer the probably irreversible consequences of losing political power. They also understand the potential reaches far outside Wisconsin. If Wisconsin goes, others could follow:
“Some of the labor people are saying, ‘It’s the beginning of the fight back,’” said a top labor official. “But if the labor movement rallies and gets run over in Wisconsin, it opens [the gates] in every state” for governors to start pushing harder to curtail labor rights.
“Not every state’s going to roll back collective bargaining,” the official — who, like many, spoke off the record to avoid undermining the protests — added, but said it could open the gates for union losses on various fronts, like benefits.
Don’t be fooled – this isn’t just about “benefits”. It is about power, politics and money. The mix of those three have given public sector unions a synergy that has allowed them, in many places, to hand pick Democratic representatives, have them elected and then have them do the union’s business. It is a pernicious and non-competitive arrangement that is finally, because of the financial downturn, coming to light.
But the unions have a problem. They haven’t been able to sell the emotional argument (benefits) and they certainly aren’t about to try to explain the real reason they’re fighting this (power and money). So what they’re having to deal with the the public’s perception, formed over many years in Wisconsin, that the public sector costs too much, has to be cut and that includes public sector employee benefits as well:
But this fight isn’t at the time or place of the unions’ choosing. Hostility to public-sector workers, including teachers, is at an all-time high amid a recession and a new national mania for curbing the tide of fiscal red ink. Walker appears to have a firm legislative majority on his side.
And labor is struggling to explain — and convince a voting public that has inched away from the concept of unions as a bedrock American institution over the years — that while it’s willing to be flexible on Walker’s demands for cost control, his attempts to change the rules governing public unions are a matter of institutional life and death and union principle. Labor hopes the public will see Walker’s attempt to use a budget gap to reshape labor-management relations as an overreach. But for many people watching from afar, the details of what Walker wants to accomplish have gotten lost, and the fight is playing out as yet another in a long string of recent state-based brawls over the high cost of the public sector.
So public sector unions have a heck of a PR problem not only in Wisconsin, but if the Rasmussen poll is to be believed, throughout the US. Nationally that could mean this:
Bradley Tusk, a former Illinois deputy governor and New York Mayor Mike Bloomberg’s 2009 campaign manager, said that if Walker succeeds in the fight, “this will be portrayed as a major change toward fiscal sanity and protecting taxpayers.”
“The average voter will never feel any pain from it,” he added, “so the high ground shifts away from labor. That puts Obama and other Democrats in the position of being forced further to the left, or moving more toward the GOP position and risking losing support from labor. … This almost creates some of the problems that a primary forces on the challenger.”
And the union’s “winning strategy” to counter that?
As a broader issue, in other states, national union officials think they’ve found a winning strategy in shifting the fight off government and slamming Wall Street, armed with repeated polls that show anti-financial industry sentiment at an all-time high.
Apparently, however, union officials don’t understand that it isn’t an “either/or” situation. The public blames both for different reasons. But more importantly, the public realizes “what is, is” and you deal with it. Whether they believe (or not) that Wall Street is to blame, that doesn’t change the fact that the problem (budget deficit) has to be confronted and solved and part of the solution has to be borne by public sector employees.
Norman Adler, a longtime lobbyist for public sector labor unions in New York, says the unions have to fight – that this is not something they can walk away from. And, if they lose in Wisconsin, they “have to reconfigure their tactics and move on.” But, he says:
“Labor pretty much lost the PR fight a number of years ago,” he said, suggesting the true targets of opportunity at the moment are state lawmakers who are “on the fence,” and can be swayed because they’re worried about getting elected back home. “And I think their position is that they have to show political muscle here.”
Translation: this could get even nastier.
Watch for it.