California’s Water-Liu
Over the last year and a half, I’ve blogged many times about Berkeley law professor Goodwin Liu, the controversial nominee to the Ninth Circuit, the federal appellate court with jurisdiction over the western states and territories. Here’s an op-ed I published in the wake of that nomination — which happened to coincide with Obamacare’s enactment. And here’s a taste of what I wrote when Republicans filibustered Liu, which ultimately led him to withdraw:
I’m not going to weigh in here on the issue of whether judicial nominees ought to be filibustered in general . . . but if ever there were an “extraordinary circumstance” fitting into the Gang of 14 agreement that broke the judicial logjam under President Bush, this is it.
As I blogged last year, Liu is, without exaggeration, the most radical nominee to any position that President Obama has made. He believes in constitutional positive rights — not that the welfare state and all its accompanying entitlements (and then some) are a good idea, but that they are constitutionally required.
Well, today Liu finally reached the bench, being confirmed to the California Supreme Court. This is an unfortunate development for the citizens of California, to be sure, but, as I tweeted earlier today, at least Liu’s damage will be limited to that irredeemable state.
Of course, a state supreme court justice may be an attractive choice for appointment to the U.S. Supreme Court, particularly given that we haven’t had a state jurist appointed since President Reagan tapped Sandra Day O’Connor in 1981. And Liu would be the first Asian-American on the highest court in the land, which could further tempt Barack Obama or a future Democratic president to select him. Such are the stakes for every presidential election until the 40-year-old Liu is deemed too old for elevation.
Nearly Two-Thirds of ObamaCare’s Supposed Beneficiaries Think It Won’t Help Them
Here are a few takeaways from the Kaiser Family Foundation’s most recent monthly poll.
1. Nearly Two Thirds of ObamaCare’s Supposed Beneficiaries Think It Won’t Help Them.
ObamaCare‘s actual beneficiaries are politicians, government bureaucrats, insurance companies, drug manufacturers, etc.—but that’s another blog post for another time.
The law’s supposed beneficiaries are the uninsured. Yet 61 percent of them think the law will either not help them or will hurt them (see pie chart below). The main takeaway: Congress can repeal ObamaCare and its supposed beneficiaries won’t even care.
2. Some of the Uninsured Who Think ObamaCare Will Help Them Are Wrong.
One respondent said that under ObamaCare, you “can go to the doctor with no problems, unlike now you have to worry about insurance and bills.” Yeah. Good luck with that.
3. ObamaCare Is Less Popular than Ever.
In August 2011, support for ObamaCare hit an all-time low in the KFF poll:
Constitutional Structure Matters: A Response to Larry Tribe
SCOTUSblog’s symposium on the constitutionality of Obamacare — to which I contributed, as did Bob Levy – provides a glimpse at the astonishing views of the law’s supporters. It particularly shows how divorced the legal academy’s leading lights are not only from basic constitutional text and structure, but from jurisprudential reality.
Most prominently, in responding to the Eleventh Circuit’s decision striking down the individual mandate (and to Richard Epstein’s symposium essay), storied Harvard professor Laurence H. Tribe criticizes the court for “reflecting what appears to be a widely held public sentiment” that Congress cannot “mandate that individuals enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die.” That sentiment is a problem, according to Tribe, because it elevates form over substance. That is, just as it has done with Social Security, Congress could (under modern jurisprudence, which is wrong as a matter of first principle but not at issue in the Obamacare lawsuits) levy another income or payroll tax and use that revenue to provide health insurance and/or care for otherwise uninsured individuals:
Put otherwise, Congress may undoubtedly use its taxing power to mandate that individuals pay for coverage supplied by private insurers, so long as it acts in two steps: step 1, impose a tax, and step 2, use the proceeds of the tax to fund privately provided health insurance for each individual. If Congress may accomplish this objective in two steps, why not in one? No federalism or liberty-related concern, whether the dignity of the states or that of individuals, is served by denying Congress that authority.
Tribe’s reasoning echoes Justice Breyer’s reason (in dissent) for rejecting the notion that the Takings Clause applies when the Government orders an individual to pay another individual, in the case of Eastern Enterprises v. Apfel:
The dearth of Takings Clause authority is not surprising, for application of the Takings Clause here bristles with conceptual difficulties. If the Clause applies when the government simply orders A to pay B, why does it not apply when the government simply orders A to pay the government, i.e., when it assesses a tax?
But there is a very good reason why courts should deny Congress the power to compel individuals to purchase products from private parties or, for that matter, the power to order A to pay B — even if a similar result could be accomplished through the taxing power: political accountability. As Georgetown law professor (and Cato senior fellow) Randy Barnett explains:
Like mandates on states, economic mandates undermine political accountability, though in a different way. The public is acutely aware of tax increases. Rather than incur the political cost of imposing a general tax on the public using its tax powers, economic mandates allow Congress and the President to escape accountability for tax increases by compelling citizens to make payments directly to private companies.
Indeed, scholars as diverse as Richard Epstein and Cass Sunstein have argued that the Takings Clause requires just compensation precisely to preserve political accountability in the provision of public goods. As Justice Scalia explained in the case of Pennell v. City of San Jose:
The politically attractive feature of regulation is not that it permits wealth transfers to be achieved that could not be achieved otherwise; but rather that it permits them to be achieved “off budget,” with relative invisibility and thus relative immunity from normal democratic processes.
Under modern jurisprudence, essentially the only check on Congress’s taxing and spending powers under the General Welfare Clause (as opposed to its regulatory power under the Commerce Clause) is political. So yes, Professor Tribe, there is a constitutional reason for depriving Congress of the power to do in one step what it could surely do in two other steps: to maintain that remaining constitutional qua political check. Indeed, the very reason why Congress adopted the individual mandate was because it lacked the political will — it feared political accountability too much — to impose single-payer universal coverage, where the government would first impose a tax on everyone and then provide health care (at this point it’s no longer “insurance”) to everyone.
To accomplish the same result without having to impose significant new taxes — as President Obama famously promised there would not be – Congress tried to evade political accountability through the individual-mandate mechanism. That’s why the Eleventh Circuit wisely declined to grant Congress the power to move a significant part of its spending “off budget” and “mandate that individuals enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die.”
Cato legal associate Chaim Gordon co-authored this blogpost.
$154 Million Medicaid Fraud Settlement a Sign of Govt Failure, Not Success
The federal government, four states, and a whistleblower have extracted a $154 million settlement from Par Pharmaceuticals for fraudulently inflating the prices it charges Medicaid, according to the Associated Press.
With Medicare and Medicaid losing roughly $100 billion each year to fraud and other improper payments, however, the fact that a paltry $154 million settlement is news can only mean that federal and state governments are not even trying to combat fraud in any serious way. As I explain in this video, that’s because politicians have almost zero incentive to do so — which makes massive amounts of fraud an inherent part of these programs:
Under ObamaCare, Medicare and Medicaid fraud will only get worse.
Supreme Court Should Review Obamacare Case Now
I’m glad Trevor Burrus took the laboring oar in pointing out highlights from an Eleventh Circuit opinion that, as he put it, “is not only exhaustive, it is convincing.” I’ve been swamped with editing the Cato Supreme Court Review and preparing for our Constitution Day conference, so have had little time to put words on paper (or even on screen) after my initial statement.
I did put together one op-ed, however, that ran today in Politico. Here’s an excerpt:
By [striking down the individual mandate], the court — including, for the first time, a judge appointed by a Democratic president — reaffirmed that the Constitution places principled limits on federal power. It rejected the government’s argument for a situational limit on Congress’s regulatory authority based on the idea that health care is “unique,” and somehow different both from other products that everyone consumes (like food, clothing and shelter) and other types of insurance against unpredictable events (like death, disability and natural disasters).
The government’s position failed to sway the court because it did not suggest a constitutional interpretation of the commerce power. Indeed, factors like the inevitability and unpredictability of treatment, the requirement that hospitals treat people with emergency medical conditions and the high cost of advanced care “speak more to the complexity of the problem being regulated than the regulated decision’s relation to interstate commerce. They are not limiting principles, but limiting circumstances.”
I conclude that now that we have two thorough circuit court opinions going in opposite directions, there’s no reason to wait any further: The government should file for, and the Supreme Court should grant, a petition for certiorari (review). Any delay by the government would be base political strategery, an attempt to push the eventual Court decision — whatever it is — past the November 2012 presidential election.
‘The Constitution Requires Judicial Engagement, Not Judicial Abdication,’ Writes the 11th Circuit, and Then Leads by Example
On Friday, when the 11th Circuit struck down the individual mandate portion of ObamaCare, a trip to the Supreme Court became all but assured. Previously, although Supreme Court review was highly probable even if a circuit split didn’t develop, there was still an outside chance that the Court would deny review if all circuit courts upheld the law. Now, the Court is essentially obliged to take the case. This is reason enough to be happy about the decision.
As I work my way through the opinion, I become even happier. The opinion is not only exhaustive, it is convincing. If Congress oversteps the outer limits of its power, the court explains, then “the Constitution requires judicial engagement, not judicial abdication.” Thus, we are given over 200 pages of “judicial engagement”: the law is thoroughly explained, the Supreme Court precedents are summarized, and every major counter-argument is addressed. Moreover, the opinion adds nuance to certain arguments that were either not discussed in the briefs or discussed in a subtly different way. I will highlight some of those nuances below.
The opinion describes “two broad limitations on congressional power under the Commerce Clause.” The first is an “accommod[ation] of the Constitution’s federalist structure” that “preserve[s] ‘a distinction between what is truly national and what is truly local.’” The second is that courts should “not interpret the Commerce Clause in a way that would grant to Congress a general police power, ‘which the Founders denied the National Government and reposed in the States.’”
Both of these limitations are indisputable aspects of the existing case law. They are also too often ignored. By enumerating these limitations, the 11th Circuit opinion makes them even more explicit, almost turning them into factors of a legal test. And this is the right way to conceive of them. Those of us who oppose the mandate have constantly reiterated that, if this is allowed, there is nothing left that Congress may not do. Those who support the mandate have either pushed back against this characterization and argued that “health care is special” (in other words, “just this once, we swear”), or they have accepted the new scope of congressional power with a shrug, arguing that existing Supreme Court cases validate the individual mandate, even if this gives Congress unlimited power.
Friday’s opinion unequivocally asserts that such a result is unacceptable. If the current tests of congressional power under the Commerce Clause—specifically the “substantial effects” test articulated in Wickard v. Filburn—are so broad that there is no limitation other than the whims of Congress, then it is time for the Supreme Court to explain whether this constitutionally perverse result is, in fact, where we now stand. Otherwise, the 11th Circuit is obliged to uphold the original principles of the Constitution—that Congress’s powers are “few and defined”—against an unprecedented law that would undermine this founding tenet.
11th Circuit Finds ObamaCare’s Individual Mandate Unconstitutional
Here’s the meat of the majority opinion:
We first conclude that the Act’s Medicaid expansion is constitutional. Existing Supreme Court precedent does not establish that Congress’s inducements are unconstitutionally coercive, especially when the federal government will bear nearly all the costs of the program’s amplified enrollments.
Next, the individual mandate was enacted as a regulatory penalty, not a revenue-raising tax, and cannot be sustained as an exercise of Congress’s power under the Taxing and Spending Clause. The mandate is denominated as a penalty in the Act itself, and the legislative history and relevant case law confirm this reading of its function.
Further, the individual mandate exceeds Congress’s enumerated commerce power and is unconstitutional. This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives. We have not found any generally applicable, judicially enforceable limiting principle that would permit us to uphold the mandate without obliterating the boundaries inherent in the system of enumerated congressional powers. “Uniqueness” is not a constitutional principle in any antecedent Supreme Court decision. The individual mandate also finds no refuge in the aggregation doctrine, for decisions to abstain from the purchase of a product or service, whatever their cumulative effect, lack a sufficient nexus to commerce.
The individual mandate, however, can be severed from the remainder of the Act’s myriad reforms. The presumption of severability is rooted in notions of judicial restraint and respect for the separation of powers in our constitutional system. The Act’s other provisions remain legally operative after the mandate’s excision, and the high burden needed under Supreme Court precedent to rebut the presumption of severability has not been met.
Here is my colleague Ilya Shapiro’s statement on the ruling.
Medicare Fraud: Et Tu, Reverend?
From today’s Los Angeles Times:
On Tuesday, a jury found [south Los Angeles pastor Christopher] Iruke, his wife and an employee who worked for the couple guilty of healthcare fraud and conspiracy to commit fraud…
Authorities said Iruke and associates often supplied power wheelchairs to Medicare patients perfectly capable of walking on their own —including one who did jumping jacks to show agents he never needed one. Also among the patients Iruke and his associates filed reimbursement claims for were two people who were deceased, according to court papers…
After purchasing the wheelchairs at about $900 wholesale and paying for the prescriptions, he pocketed the remainder of about $6,000 in taxpayer money he received as Medicare reimbursements, according to court documents. The pastor operated four medical equipment supply companies between May 2002 and September 2009 as part of the scheme, according to authorities.
In all, Iruke’s companies filed for $14.2 million in claims and received about $6.6 million in reimbursements.
The money funded a lavish lifestyle, including several luxury cars, international travel, and about half a million dollars of remodeling on his Baldwin Hills home, prosecutors contended in trial…
The case was brought as part of a federal strike force on Medicare fraud, which has resulted in charges against more than 1,000 people across the country who billed the program $2.3 billion, according to a Department of Justice press release.
Apologies for the long excerpt, but this stuff is fascinating for several reasons. The ease with which these folks defrauded Medicare. The vast gulf between the market price for a wheelchair ($900) and what Medicare pays ($6,000) — which practically begs people to defraud the program. The fact that DOJ pats itself on the back for nabbing the perpetrators of $2.3 billion of fraudulent billings even though that represents a much smaller number of fraudulent payments, which in turn account for a teeny-tiny share of the official estimate that Medicare loses $48 billion to fraud and other improper payments per year, which itself understates the extent of fraud in the program.
As I explain in this article and the below video, the extent of Medicare and Medicaid fraud is truly mind-blowing.
ObamaCare will bring even more fraud. And efforts to combat Medicare, Medicaid, and ObamaCare fraud will always be inadequate until Congress reforms or scraps these entitlement programs.
Kansas Returns a $32 Million ObamaCare Grant, Plus More Bad News for ObamaCare
The debt deal was none too kind to ObamaCare. Here’s more bad news for this misguided law:
- Kansas becomes the second state (after Oklahoma) to return to the federal government one of ObamaCare’s lavish “Early Innovator Grants.” Coming from Secretary of Health and Human Services Kathleen Sebelius’s home state, that’s gotta hurt.
- The latest ObamaCare eruption shows the law could cost $50 billion more per year than advertised. If anyone but the government sold you something like this, we’d put them in jail.
- Many of the same Democrats who said it wasn’t a benefit cut when ObamaCare ratcheted down the price controls that government uses to pay health care providers now say it is a benefit cut when states do that.
An Unprecedented Expansion of Federal Power
That’s how I describe the individual mandate in my contribution to SCOTUSblog‘s online symposium on Obamacare, which Trevor Burrus has already highlighted. Here’s an excerpt:
All the Obamacare legal challenges boil down to Congress’s authority – or lack thereof – to require people to buy private insurance. Although unfortunately not dispositive of modern judicial decisions, the text of the Constitution demands that the Supreme Court strike down the individual mandate as an unconstitutional exercise of Congress’s power to regulate interstate commerce. Finding the mandate constitutional would be the first interpretation of the Commerce Clause to permit the regulation of inactivity – in effect requiring an individual to engage in an economic transaction.
Moreover, upholding Obamacare would grant the federal government wide latitude to mandate that Americans engage in activities of its choosing. An expansive holding here would fundamentally alter the relationship between the government and the people. If the challenges fail, there will be no principled limits on federal power.
I go on to describe the current state of play at the appellate and outline what we can expect going forward, as well as providing links to useful resources on this issue. Read the whole thing.
Commerce Clause Abuse, Non-Obamacare Division
The federal government is currently engaged in a misguided attempt to use a noneconomic statute — the Endangered Species Act — to regulate under its Commerce Clause authority a noneconomic activity, the potential “take” of the noncommercial, wholly intrastate delta smelt. Acting under this purported authority, the U.S. Fish and Wildlife Service issued an opinion in 2008 that requires a reduction of critical water deliveries in California for the alleged benefit of the threatened delta smelt species. The delta smelt-based water cutbacks have resulted in substantial hardship to farmers and other water users in Southern California and the San Joaquin Valley.
In 2009, the Pacific Legal Foundation filed a lawsuit contending that regulation of the delta smelt is not a valid exercise of the Commerce Clause. The district court and the Ninth Circuit Court of Appeals disagreed. Cato joined Chapman University’s Center for Constitutional Jurisprudence and former attorney general Edwin Meese in filing a brief that supports PLF’s request for Supreme Court review.
We argue that the Court should take this case in order to delineate the constitutional distinction between federal and state power and protect the states’ exclusive police power to regulate and advance the health, safety, and welfare of the people. Specifically, our brief argues: (1) that the federal government’s regulation of a wholly intrastate, noncommercial species exceeds Congress’s powers under the Commerce Clause; (2) the expansive application of the ESA to the delta smelt, because it is noncommercial species that doesn’t travel across state lines, intrudes on the core police powers reserved to the states; and (3) that the Supreme Court should repudiate the aggregation principle of Wickard v. Filburn (the 1942 wheat-farming case central to the Obamacare litigation). Striking down the expanded interpretation of the ESA at issue here is not enough.
If left untouched, the Ninth Circuit decision opens the door to unlimited and abusive assertions of power by an assortment of federal agencies. The Court needs to reinforce and rebuild the limits of the Commerce Clause and to reign in a federal government that continues to believe that the Constitution sets no bounds on its power.
The name of the case is Stewart & Jasper Orchards v. Salazar. The Supreme Court will decide this fall whether to hear it.
Conservatives, Tea Partisans Still Really, Really Angry about ObamaCare
Or at least, that’s what The Daily Caller says a Republican pollster says:
A year may have passed since Obamacare passed, but conservatives are still angry as hell about it.
Expect the legislation to play a large role in the 2012 elections, according to John McLaughlin, who recently conducted a series of focus groups for the research group Resurgent Republic. The group is run by some of the country’s best-known Republicans.
“My guess it it’s going to be a big election issue next year,” McLaughlin said in an interview…
When it comes to President Obama’s health care law among these voters, the perception of these voters has hardly changed: the intensity remains strong and they still want it repealed, McLaughlin said.
ObamaCare‘s overall numbers don’t look any better, either.
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