Free Markets, Free People

Constitution

Observations: The QandO Podcast for 01 Apr 12

This week, Michael, and Dale talk about the Supreme Court arguments on Obamacare.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.

Observations: The QandO Podcast for 15 May 11

In this podcast, Bruce, Michael, and Dale discuss the Indiana Supreme Court’s Ruling on the 4th Amendment, and this week’s political stories.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.

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Judge Kessler: Mandate Constitutional Because of “Free Riders”

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.

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Boom! Flap, flap, flap … ObamaCare has a flat (update)

I’ve been waiting on this one and today a US District Judge in Virginia issued his ruling about  ObamaCare:

A federal judge in Virginia has declared the Obama administration’s health care reform law unconstitutional.

U.S. District Judge Henry Hudson is the first judge to rule against the law, which has been upheld by two others in Virginia and Michigan.

Virginia Attorney General Ken Cuccinelli filed the lawsuit challenging the law’s requirement that citizens buy health insurance or pay a penalty starting in 2014.

He argues the federal government doesn’t have the constitutional authority to impose the requirement.

I’m not sure the AP description is entirely accurate.  I believe he ruled only the individual mandate was unconstitutional.  However, I don’t believe he ruled the entire law unconstitutional. 

Here’s Bloomberg’s report:

U.S. District Judge Henry Hudson in Richmond, Virginia, said today that the requirement in President Barack Obama’s health-care legislation goes beyond Congress’s powers to regulate interstate commerce. While severing the coverage mandate, which was to become effective in 2014, Hudson didn’t address other provisions such as expanding Medicaid.

Hudson, appointed by President George W. Bush found the minimum essential coverage provision of the act “exceeds the constitutional boundaries of congressional power.”

Regardless, if the ruling stands, it cripples ObamaCare.  The mandate is one of the principle ways that the administration and Democrats “justified” the cost of the law.   And by the way:

Constitutional scholars said unless Congress changes the law, its fate on appeal will probably hinge on the views of the U.S. Supreme Court’s more conservative members.

Hello lame duck Congress?   That’s not going to happen in the 111th and it certainly won’t happen 112th.

Oh, this is going to be fun to watch.   More to come as it continues breaking.

UPDATE:  Pertaining to the “severability” argument put forward in the comment section, Judge Hudson said specifically when talking about the individual mandate:

"The Court will sever only Section 1501 [the individual mandate] and directly-dependent provisions which make specific reference to 1501.

 

~McQ

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Federal Judge: HCR Mandate is Constitutional

U.S. District Court Judge George Steeh has ruled that the individual mandate to purchase health insurance is a constitutional exercise of Congress’ power under the commerce clause.

The plaintiffs have not opted out of the health care services market because, as living, breathing beings, who do not oppose medical services on religious grounds, they cannot opt out of this market…

As inseparable and integral members of the health care services market, plaintiffs have made a choice regarding the method of payment for the services they expect to receive. The government makes the apropos analogy of paying by credit card rather than by check. How participants in the health care services market pay for such services has a documented impact on interstate commerce…

Obviously, this market reality forms the rational basis for Congressional action designed to reduce the number of uninsureds.

The Supreme Court has consistently rejected claims that individuals who choose not to engage in commerce thereby place themselves beyond the reach of the Commerce Clause. See, e.g., Raich, 545 U.S. at 30 (rejecting the argument that plaintiffs’ home-grown marijuana was “entirely separated from the market”); Wickard, 317 U.S. at 127, 128 (home-grown wheat “competes with wheat in commerce” and “may forestall resort to the market”); Heart of Atlanta Motel v. United States, 379 U.S. 241 (1964) (Commerce Clause allows Congress to regulate decisions not to engage in transactions with persons with whom plaintiff did not wish to deal).

The logical extensions of this ruling, if it were to stand, are obvious.  For instance, since everyone inevitably dies, Congress can require you to purchase life insurance, or a pre-paid funeral services.  Similarly, we all eat, wear clothes, etc.

Essentially, this decision gives power the Congress to regulate practically any area of human necessity.

Here’s something I’ve been re-reading a lot, lately:

Prudence, indeed, will dictate that governments long established should not be changed for light and transient causes; and accordingly all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security.

Congress: Making A Bad Idea Permanent

You have to hand to Harry Reid. His lack of respect for the Constitution is rather pedestrian by Democrat standards these days, but he is positively the Thomas Alva Edison of inventive ways to flout it:

If ever the people of the United States rise up and fight over passage of Obamacare, Harry Reid must be remembered as the man who sacrificed the dignity of his office for a few pieces of silver. The rules of fair play that have kept the basic integrity of the Republic alive have died with Harry Reid. Reid has slipped in a provision into the health care legislation prohibiting future Congresses from changing any regulations imposed on Americans by the Independent Medicare [note: originally referred to as "medical"] Advisory Boards, which are commonly called the “Death Panels.”

It was Reid leading the Democrats who ignored 200 years of Senate precedents to rule that Senator Sanders could withdraw his amendment while it was being read.

[...]

Section 3403 of Senator Harry Reid’s amendment requires that “it shall not be in order in the Senate or the House of Representatives to consider any bill, resolution, amendment, or conference report that would repeal or otherwise change this subsection.” The good news is that this only applies to one section of the Obamacare legislation. The bad news is that it applies to regulations imposed on doctors and patients by the Independent Medicare Advisory Boards a/k/a the Death Panels.

Section 3403 of Senator Reid’s legislation also states, “Notwithstanding rule XV of the Standing Rules of the Senate, a committee amendment described in subparagraph (A) may include matter not within the jurisdiction of the Committee on Finance if that matter is relevant to a proposal contained in the bill submitted under subsection (c)(3).” In short, it sets up a rule to ignore another Senate rule.

These provisions were pointed by Sen. Jim DeMint on the Senate floor last night:

Meh. It’s an old Constitution anyways, and it’s not like we’ve really been using it. Heck, I’ll bet most people don’t even know what’s in that old rag, and those are just ones in Congress.

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Podcast for 19 Jul 09

In this podcast, Bruce, Michael, Bryan, and Dale engage in the usual libertarian carping about government, and whether or not we “owe” the GOP something.  We don’t, by the way.

The direct link to the podcast can be found here.

Observations

The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2007, they can be accessed through the RSS Archive Feed.

Podcast for 24 May 09

In this podcast, Bruce and Dale discuss discuss the president’s announcement of legal indefinite detention, and the economy.

The direct link to the podcast can be found here.

Observations

The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2007, they can be accessed through the RSS Archive Feed.

The 10th Amendment Movement Continues To Grow

And it’s about time:

State governors — looking down the gun barrel of long-term spending forced on them by the Obama “stimulus” plan — are saying they will refuse to take the money. This is a Constitutional confrontation between the federal government and the states unlike any in our time.

In the first five weeks of his presidency, Barack Obama has acted so rashly that at least 11 states have decided that his brand of “hope” equates to an intolerable expansion of the federal government’s authority over the states. These states — “Washington, New Hampshire, Arizona, Montana, Michigan, Missouri, Oklahoma, California…Georgia,” South Carolina, and Texas — “have all introduced bills and resolutions” reminding Obama that the 10th Amendment protects the rights of the states, which are the rights of the people, by limting the power of the federal government.

Although critics have panned these refusals as sour grapes by Republicans or attempts to thwart President Obama’s stimulus of the economy, in fact it is a fight the states should have undertaken years ago.

One reason is many of the laws passed at a federal level mandate funds be provided for the program at a state level as well. I’d be interested in anyone who can find Constitutional backing for such a requirement by the federal government, but it is what has happened in the past.

Secondly, there’s the matter of law. Much of what is driving this 10th Amendment movement is the realization that the Fed is attempting to extend its control deeper and deeper into the states. Many are driven by what some would call “wedge issues”, but as Bryan points out in his “MYOB” post, states more accurately reflect their citizenry than does the federal government and the imposition of “one-size-fits-all” legislation, especially when it exceeds the constitutional reach of the Federal government, is something to be resisted:

For example, Family Security Matters reports that Missouri’s “House Concurrent Resolution 0004 (2009) reasserts its sovereignty based on Barack Obama’s stated intention to sign into law a federal ‘Freedom of Choice Act’, [because] the federal Freedom of Choice Act would nullify any federal or state law ‘enacted, adopted, or implemented before, on, or after the date of [its] enactment’ and would effectively prevent the State of Missouri from enacting similar protective measures in the future.”

The resolution in Montana grew out of concerns over coming attacks on the 2nd Amendment, thus its preface describes it as, “An Act Exempting From Federal Regulation Under The Commerce Clause Of The Constitution Of The United States A Firearm, A Firearm Accessory, Or Ammunition Manufactured And Retained In Montana.”

New Hampshire’s resolution actually references certain federal actions that would be nullified within that state were they pushed by Obama’s administration, according to americandaily.com. Among these are “Any act regarding religion; further limitations on freedom of political speech; or further limitations on freedom of the press, [and any] further infringements on the right to keep and bear arms including prohibitions of type or quantity of arms or ammunition.

I sincerely hope this trend continues and that we see some states challenge the Federal government in court over 10th amendment issues in an effort to stop the mandates and the attempts to modify or change state law.

For those who have forgotten what the 10th Amendment says or aren’t familiar with it, it reserves to the states and people those powers not explicity delegated the federal government:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

I’d also remind everyone that the 10th amendment is a part of the Constitution known as the “Bill of Rights”. As we’ve all observed over the years, the rights of states have been all but rendered null and void. To regain a semblance of the federalism under which the nation was founded, movements like this are not only critical but necessary. It is one very important way we can curb the growth of the Federal government – assuming the Supreme Court agrees (which is not at all a given) since I’m sure this argument will eventually end up being settled there.

~McQ