“Preposterous”: The Lethal Legal Threat To Obamacare That Could Land This Week And End It All
With all the headline grabbing going on over the SCOTUS Hobby Lobby decision, many pundits have not been paying much attention to another case set for a decision from the influential D.C. Court of Appeals as soon as this week—a decision that could, realistically, finish off Obamacare once and for all.
In Halbig v. Burwell, a challenge has been lodged by opponents of the Affordable Care Act who argue that the language of the law restricts government provided subsidies to state operated exchanges only—meaning that the premium subsidies being offered to qualified purchasers in the 34 states where the federal government is operating the healthcare exchanges, are illegal under the law.
The plaintiffs in the case explain their position as follows:
“The premium-assistance tax credit provisions of the PPACA clearly, consistently, and unambiguously authorize tax credits only in states that establish a health insurance “exchange” that complies with federal law. Specifically, Section 36B authorizes tax credits for the purchase of qualifying health insurance plans only in exchanges “established by a state under Section 1311…The IRS rule, by contrast, purports to authorize tax credits in Exchanges that are neither “established by the State” nor “established . . . under Section 1311.” This it cannot do. Because the language of the PPACA speaks directly to the question at issue, the IRS has no authority to provide tax credits in federal exchanges, nor is the IRS due deference in its interpretation of the Act.”
While it is generally agreed that the Congressional leaders who wrote the PPACA intended the premiums to be available via all health insurance exchanges—whether operated by the state itself, or the federal government in the instance of states not setting up their own exchanges—the plaintiff argues that the statutory language is clear and must be interpreted and enforced per the clear statement of the law.
If you think that those attempting to undo Obamacare are making a far-fetched argument—and a ruling from the Court of Appeals holding that the premium supports were only meant for state run exchanges would, in all likelihood, irrevocably tank the law—you are not alone.
Federal District Court Judge Paul Friedman held that the plaintiff’s claims were “unpersuasive” and that, since the federally run exchanges are created and operated on behalf of the states that chose not to do so, the federally operated exchanges were intended by Congress to be treated as state operated exchanges.
However, there are more than a few highly qualified legal experts who are not so sure that Judge Friedman got this right and believe that the result could be very different in the Court of Appeals.
Jonathan Turley—the widely respected constitutional law expert, television analyst and professor of law at George Washington University Law School—notes:
“Of all the challenges since the individual mandate, this is the one that presents the most mortal threat to the act. If this case were decided on the basis of the statutory language, the advantage goes to the challengers. If the court is willing to broaden its interpretation then the administration may have an edge. It depends entirely on how the panel structures its analysis.”
Put another way, the language pretty clearly says one thing even if the intent was something else.
So, should the D.C. Court of Appeals be willing to review the legislative history—and the Friend of the Court brief submitted and signed by the Congressional leaders responsible for drafting the law which purports to inform the Court of their actual intent—or give plain meaning to what the statute actually says?
As Sahil Kapur reports , two members of the three judge panel hearing the case appeared, in oral arguments, to have considerable sympathy for the anti-Obamacare point of view.
Points out Judge A. Raymond Randolph, appointed to his seat by President George H.W. Bush, “If the legislation is just stupid, I don’t see that it’s up to the court to save it. ” Meanwhile, Judge Thomas Griffith, a George W. Bush appointee, was a bit more reserved in his take on the case but did not fail to point out that there was a special burden on the Obama Administration (defending the action) to prove that the statutory language does not mean what it appears, on its face, to mean.
Only Democratic appointee, Judge Harry T. Edwards, took the position that the plaintiff’s claims were “preposterous”.
Should we get a decision in favor of the challenger here, Obamacare bashers might wish to withhold their enthusiasm as the Obama Administration will surely exercise its right to appeal the three judge panel’s ruling to the full D.C. Court of Appeals via an en banc motion.
Given that the full D.C. Court of Appeals includes seven Democratic appointees and only four Republican appointees, a vote of the entire court could well result in a very different decision.
By: Rick Ungar, Op-Ed Contributor, Forbes, July 7, 2014
“Beliefs, Facts And Money”: Conservative Delusions About Inflation
On Sunday The Times published an article by the political scientist Brendan Nyhan about a troubling aspect of the current American scene — the stark partisan divide over issues that should be simply factual, like whether the planet is warming or evolution happened. It’s common to attribute such divisions to ignorance, but as Mr. Nyhan points out, the divide is actually worse among those who are seemingly better informed about the issues.
The problem, in other words, isn’t ignorance; it’s wishful thinking. Confronted with a conflict between evidence and what they want to believe for political and/or religious reasons, many people reject the evidence. And knowing more about the issues widens the divide, because the well informed have a clearer view of which evidence they need to reject to sustain their belief system.
As you might guess, after reading Mr. Nyhan I found myself thinking about the similar state of affairs when it comes to economics, monetary economics in particular.
Some background: On the eve of the Great Recession, many conservative pundits and commentators — and quite a few economists — had a worldview that combined faith in free markets with disdain for government. Such people were briefly rocked back on their heels by the revelation that the “bubbleheads” who warned about housing were right, and the further revelation that unregulated financial markets are dangerously unstable. But they quickly rallied, declaring that the financial crisis was somehow the fault of liberals — and that the great danger now facing the economy came not from the crisis but from the efforts of policy makers to limit the damage.
Above all, there were many dire warnings about the evils of “printing money.” For example, in May 2009 an editorial in The Wall Street Journal warned that both interest rates and inflation were set to surge “now that Congress and the Federal Reserve have flooded the world with dollars.” In 2010 a virtual Who’s Who of conservative economists and pundits sent an open letter to Ben Bernanke warning that his policies risked “currency debasement and inflation.” Prominent politicians like Representative Paul Ryan joined the chorus.
Reality, however, declined to cooperate. Although the Fed continued on its expansionary course — its balance sheet has grown to more than $4 trillion, up fivefold since the start of the crisis — inflation stayed low. For the most part, the funds the Fed injected into the economy simply piled up either in bank reserves or in cash holdings by individuals — which was exactly what economists on the other side of the divide had predicted would happen.
Needless to say, it’s not the first time a politically appealing economic doctrine has been proved wrong by events. So those who got it wrong went back to the drawing board, right? Hahahahaha.
In fact, hardly any of the people who predicted runaway inflation have acknowledged that they were wrong, and that the error suggests something amiss with their approach. Some have offered lame excuses; some, following in the footsteps of climate-change deniers, have gone down the conspiracy-theory rabbit hole, claiming that we really do have soaring inflation, but the government is lying about the numbers (and by the way, we’re not talking about random bloggers or something; we’re talking about famous Harvard professors.) Mainly, though, the currency-debasement crowd just keeps repeating the same lines, ignoring its utter failure in prognostication.
You might wonder why monetary theory gets treated like evolution or climate change. Isn’t the question of how to manage the money supply a technical issue, not a matter of theological doctrine?
Well, it turns out that money is indeed a kind of theological issue. Many on the right are hostile to any kind of government activism, seeing it as the thin edge of the wedge — if you concede that the Fed can sometimes help the economy by creating “fiat money,” the next thing you know liberals will confiscate your wealth and give it to the 47 percent. Also, let’s not forget that quite a few influential conservatives, including Mr. Ryan, draw their inspiration from Ayn Rand novels in which the gold standard takes on essentially sacred status.
And if you look at the internal dynamics of the Republican Party, it’s obvious that the currency-debasement, return-to-gold faction has been gaining strength even as its predictions keep failing.
Can anything reverse this descent into dogma? A few conservative intellectuals have been trying to persuade their movement to embrace monetary activism, but they’re ever more marginalized. And that’s just what Mr. Nyhan’s article would lead us to expect. When faith — including faith-based economics — meets evidence, evidence doesn’t stand a chance.
By: Paul Krugman, Op-Ed Columnist, The New York Times, July 6, 2014
“It’s Time For Progressives To Reclaim The Constitution”: Challenging Conservative Claims About What The Constitution Really Demands
You cannot talk for very long to a conservative these days without hearing the words “constitutional” and “constitutionalist.”
Formulations such as “I am a constitutional conservative” or “I am a constitutionalist” are tea party habits, but they are not confined to its ranks. Many kinds of conservatives contend that everything they believe is thoroughly consistent with the views and intentions of our 18th-century Founders.
Wielding pocket-sized copies of the Constitution, they like to cite it to settle political disputes. Writing in the YG Network’s recently issued conservative manifesto, “Room to Grow,” Ramesh Ponnuru argues that there is a new and salutary “popular interest in constitutionalism.”
“Instead of treating the Constitution as the property of lawyers and judges,” he notes, “it proposes that legislators, and even citizen-activists, have an independent duty to evaluate the constitutionality of legislation.”
One plausible progressive response is to see Ponnuru’s exercise as doomed from the start. The framers could not possibly have foreseen what the world would look like in 2014. In any event, they got some important things wrong, most glaringly their document’s acceptance of slavery.
Moreover, because the Constitution was written primarily as a foundation for government, it can answer only so many questions. David Strauss of the University of Chicago Law School authored a book called “The Living Constitution” to make plain that there is a lot more to this concept than its detractors suggest. He notes that “a great part of the framers’ genius lay exactly in their ability to leave provisions general when they should be left general, so as not to undermine the document’s ability to serve as common ground.”
The problem with “originalists,” Strauss says, is that they “take general provisions and make them specific,” even when they’re not. One might add that the originalists’ versions of specificity often seem to overlap with their political preferences.
Nonetheless, progressives should take Ponnuru’s proposal seriously and think constitutionally themselves. In doing so, they would challenge conservative claims about what the Constitution really demands.
In the May issue of the Boston University Law Review, Joseph R. Fishkin and William E. Forbath of the University of Texas School of Law show that at key turning points in our history (the Jacksonian era, the Populist and Progressive moments and the New Deal), opponents of rising inequality made strong arguments “that we cannot keep our constitutional democracy — our republican form of government — without constitutional restraints against oligarchy and a political economy that maintains a broad middle class, accessible to everyone.”
Their article is called “The Anti-Oligarchy Constitution,” though Forbath told me that he and Fishkin may give the book they’re writing on the topic the more upbeat title “The Constitution of Opportunity.” Their view is that by empowering the wealthy in our political system, Supreme Court decisions such as Citizens United directly contradict the Constitution’s central commitment to shared self-rule.
“Extreme concentrations of economic and political power undermine equal opportunity and equal citizenship,” they write. “In this way, oligarchy is incompatible with, and a threat to, the American constitutional scheme.”
While their overarching vision contrasts sharply with Ponnuru’s, they make a similar critique of what they call an excessively “court-centered” approach to constitutionalism. “Constitutional politics during the 19th and early 20th centuries” was very different and the subject of democratic deliberation. In earlier eras, they say, the Constitution was seen as not simply permitting but actually requiring “affirmative legislation . . . to ensure a wide distribution of opportunity” and to address “the problem of oligarchy in a modern capitalist society.”
The authors remind us of Franklin Roosevelt’s warning that “the inevitable consequence” of placing “economic and financial control in the hands of the few” would be “the destruction of the base of our form of government.” And writing during the Gilded Age, a time like ours in many ways, the journalist James F. Hudson argued that “imbedded” in the Constitution is “the principle” mandating “the widest distribution among the people, not only of political power, but of the advantages of wealth, education and social influence.”
The idea of a Constitution of Opportunity is both refreshing and relevant. For too long, progressives have allowed conservatives to monopolize claims of fealty to our unifying national document. In fact, those who would battle rising economic inequalities to create a robust middle class should insist that it’s they who are most loyal to the Constitution’s core purpose. Broadly shared well-being is essential to the framers’ promise that “We the people” will be the stewards of our government.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, July 6, 2014
“The Limits Of Corporate Citizenship”: Why Walgreen Shouldn’t Be Allowed To Influence U.S. Politics If It Becomes Swiss
Dozens of big U.S. corporations are considering leaving the United States in order to reduce their tax bills.
But they’ll be leaving the country only on paper. They’ll still do as much business in the U.S. as they were doing before.
The only difference is they’ll no longer be “American,” and won’t have to pay U.S. taxes on the profits they make.
Okay. But if they’re no longer American citizens, they should no longer be able to spend a penny influencing American politics.
Some background: We’ve been hearing for years from CEOs that American corporations are suffering under a larger tax burden than their foreign competitors. This is mostly rubbish.
It’s true that the official corporate tax rate of 39.1 percent, including state and local taxes, is the highest among members of the Organization for Economic Cooperation and Development.
But the effective rate – what corporations actually pay after all deductions, tax credits, and other maneuvers – is far lower.
Last year, the Government Accountability Office, examined corporate tax returns in detail and found that in 2010, profitable corporations headquartered in the United States paid an effective federal tax rate of 13 percent on their worldwide income, 17 percent including state and local taxes. Some pay no taxes at all.
One tax dodge often used by multi-national companies is to squirrel their earnings abroad in foreign subsidiaries located in countries where taxes are lower. The subsidiary merely charges the U.S. parent inflated costs, and gets repaid in extra-fat profits.
Becoming a foreign company is the extreme form of this dodge. It’s a bigger accounting gimmick. The American company merges with a foreign competitor headquartered in another nation where taxes are lower, and reincorporates there.
This “expatriate” tax dodge (its official name is a “tax inversion”) is now at the early stages but is likely to spread rapidly because it pushes every American competitor to make the same move or suffer a competitive disadvantage.
For example, Walgreen, the largest drugstore chain in the United States with more than 8,700 drugstores spread across the nation, is on the verge of moving its corporate headquarters to Switzerland as part of a merger with Alliance Boots, the European drugstore chain.
Founded in Chicago in 1901, with current headquarters in the nearby suburb of Deerfield, Walgreen is about as American as apple pie — or your Main Street druggist.
Even if it becomes a Swiss corporation, Walgreen will remain your Main Street druggist. It just won’t pay nearly as much in U.S. taxes.
Which means the rest of us will have to make up the difference. Walgreen’s morph into a Swiss corporation will cost you and me and every other American taxpayer about $4 billion over five years, according to an analysis by Americans for Tax Fairness.
The tax dodge likewise means more money for Walgreen’s investors and top executives. Which is why its large investors – including Goldman Sachs — have been pushing for it.
Some Walgreen customers have complained. A few activists have rallied outside the firm’s Chicago headquarters.
But hey, this is the way the global capitalist game played. Anything to boost the bottom line.
Yet it doesn’t have to be the way American democracy is played.
Even if there’s no way to stop U.S. corporations from shedding their U.S. identities and becoming foreign corporations, there’s no reason they should retain the privileges of U.S. citizenship.
By treaty, the U.S. government can’t (and shouldn’t) discriminate against foreign corporations offering as good if not better deals than American companies offer. So if Walgreen as a Swiss company continues to fill Medicaid and Medicare payments as well as, say, CVS, it’s likely that Walgreen will continue to earn almost a quarter of its $72 billion annual revenues directly from the U.S. government.
But as a foreign corporation, Walgreen should no longer have any say over the size of those payments, what drugs they cover, or how they’re administered.
In fact, Walgreen should no longer have any say about how the U.S. government does anything.
In 2010 it lobbied for and got a special provision in the Dodd-Frank Act, limiting the fees banks are allowed to charge merchants for credit-card transactions — resulting in a huge saving for Walgreen. If it becomes a Swiss citizen, the days of special provisions should be over.
The Supreme Court’s “Citizens United” decision may have opened the floodgates to American corporate money in U.S. politics, but not to foreign corporate money in U.S. politics.
The Court didn’t turn foreign corporations into American citizens, entitled to seek to influence U.S. law and regulations.
Since the 2010 election cycle, Walgreen’s Political Action Committee has spent $991,030 on federal elections. If it becomes a Swiss corporation, it shouldn’t be able to spend a penny more.
Walgreen is free to become Swiss but it should no longer be free to influence U.S. politics.
It may still be the Main Street druggist, but if it’s no longer American it shouldn’t be considered a citizen on Main Street.
By: Robert Reich, The Robert Reich Blog, July 6, 2014
“Running Ethically In Mississippi”: With So Much At Stake, Can Travis Childers Walk The Tightrope?
Travis Childers, who served as a Democrat in Congress from May 13, 2008 to January 3, 2011, was never my kind of Democrat, but I am okay with that. I would not expect great things from him if he were to win a six-year term in the U.S. Senate representing the state of Mississippi. On most contentious issues, I’d expect him to vote with the Republicans in a (probably) vain effort to save his hide in his bid for reelection.
What interests me about this race is the ethics. It’s pretty clear that the Republican Party is badly split between supporters of incumbent Thad Cochran, who is a decent fellow, and his challenger state Sen. Chris McDaniel, who runs in neo-confederate circles and has the support of an extreme Tea Party faction. This wedge pre-exists anything Childers might do to exploit it. If Childers can convince a significant percentage of McDaniel supporters to vote for him, he can actually win this seat, but it is not clear how he can go about doing that without leveraging the racism that is at the core of opposition to Cochran.
Cochran was expected to lose his run-off with McDaniel but exceeded expectations by convincing a not inconsiderable number of black voters to back him. The Tea Party faction is claiming that a lot of these black voters violated the law by voting in the Republican run-off after voting in the Democratic primary. That issue can be settled in court, but regardless of legal merits, Cochran’s open solicitation of black votes is seen as dirty pool by McDaniel’s supporters who think that a Republican primary should be decided by exclusively Republican voters regardless of what the law specifies.
Travis Childers has the option of exacerbating this racial tension for his own political advantage, but this would be the wrong thing to do. Yet, if he doesn’t do it, he will almost certainly lose. In fact, even if he does do it, he will probably lose.
Democrats in Washington are watching the feud cautiously, not yet convinced it will put even Mississippi in play. The Democratic nominee, Mr. Childers, has raised little money and was always seen as a good candidate against Mr. McDaniel but as a marginal one against Mr. Cochran.
Conservative activists are not so sure. Dwayne Hall, vice president of the Miller County Patriots, a Tea Party group in Texarkana, Ark., says he has set up a Google alert for the McDaniel-Cochran fight and emails his network of fellow activists all the news from Mississippi.
“I’m no longer a member of the Republican Party, and I’d expect a lot of my fellow patriots to resign, too,” he said, adding: “I’m perfectly willing to do a protest vote in November if that’s my best option. I’m keeping that option open.”
So, how can Childers convince people like Dwayne Hall to advocate on his behalf without dirtying himself with the racial politics of it all? Childers needs to nurture that “protest vote,” but he doesn’t want to shame himself in the process. So far, he’s walking the tightrope.
The turmoil has given Mr. Cochran’s Democratic challenger, former Representative Travis Childers, an opening to exploit the divide in what is otherwise seen as a race in which he trails badly. “Senator Cochran does not have the confidence of his state, let alone his own party,” Mr. Childers said.
It won’t be easy to maintain that kind of balance with so much at stake. I hope Childers will be able to look back at his campaign and be proud of how he ran it regardless of the outcome.
By: Martin Longman, Washington Monthly Political Animal, July 6, 2014
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