Wall Street Journal

Explaing Judge Vinson’s ObamaCare ruling

In an recent editorial at the Wall Street Journal, Randy Barnett and Elizabeth Price Foley explained Monday’s ruling by Judge Roger Vinson:

Judge Vinson flatly rejected the administration’s attempt to escape the restrictions of the Commerce Clause by appealing to the Necessary and Proper Clause. His decision acknowledges that, while reforming an insurance market is a regulation of commerce, Congress cannot artificially create its own “free rider” crisis in the insurance market and then use that crisis to justify an otherwise unconstitutional mandate as “necessary and proper” to save the market from collapse.

This novel use of the Necessary and Proper Clause, if allowed to stand, would fundamentally transform our constitutional scheme from limited to unlimited federal power, narrowing the scope of individual liberty. In Judge Vinson’s words, “the more harm the statute does, the more power Congress could assume for itself under the Necessary and Proper Clause. This result would, of course, expand the Necessary and Proper Clause far beyond its original meaning, and allow Congress to exceed the powers specifically enumerated in Article I.”

One crucial difference between the Florida and Virginia decisions relates to the breadth of the remedy. While both courts agreed that the individual mandate was unconstitutional, the Virginia decision merely declared the mandate alone to be unconstitutional—the rest of ObamaCare was unaffected. But Judge Vinson concluded that the individual mandate could not be “severed” from the rest of the law, and so the entire law must be struck down.

WSJ on ObamaCare ruling

The Wall Street Journal had a great review yesterday of Judge Roger Vinson’s ruling in Florida v. United States Department of Health and Human Services noting that it returns the Commerce Clause back to the original intent of the Founding Fathers:

At the heart of the states’ lawsuit is the individual mandate, which requires everyone to purchase health insurance or be penalized for not doing so. “Never before has Congress required that everyone buy a product from a private company (essentially for life) just for being alive and residing in the United States,” Judge Vinson writes.

Congressional Democrats and the Obama Administration justified this coercion under the Commerce Clause, so it is fitting that Judge Vinson conducts a deep investigation into its history and intent, including Madison’s notes at the Constitutional Convention and the jurisprudence of the fourth Chief Justice, John Marshall. The original purpose of the Commerce Clause was to eliminate the interstate trade barriers that prevailed under the Articles of Confederation—among the major national problems that gave rise to the Constitution.

The courts affirmed this limited and narrow understanding until the New Deal, when Congress began to regulate harum-scarum and the Supreme Court inflated the clause into a general license for anything a majority happened to favor.

Illinois increases income taxes by 66%

In order to deal with a $15 billion budget shortfall, lawmakers in Illinois yesterday passed a stunning 66% increase in the state’s income tax:

Democrats in the Illinois Legislature on Wednesday approved a 66 percent income-tax increase in a desperate and politically risky effort to end the state’s crippling budget crisis.

The increase now goes to Democratic Gov. Pat Quinn, who supports the plan to temporarily raise the personal tax rate to 5 percent, a two-thirds increase from the current 3 percent rate. Corporate taxes also would climb as part of the effort to close a budget hole that could hit $15 billion this year.

The higher taxes will generate about $6.8 billion a year, Quinn’s office said — a major increase by any measure. In percentage terms, 66 percent might be the biggest increase any state has adopted while grappling with recent economic woes.

It will be coupled with strict 2 percent limits on spending growth. If officials violate those limits, the tax increase will automatically be canceled. The plan’s supporters warned that rising pension and health care costs probably will eat up all the spending allowed by the caps, forcing cuts in other areas of government.

Because of the state legislature’s fiscal profligacy, taxpayers of Illinois are now on the hook. Not only that, as the Wall Street Journal notes, job creators aren’t happy about the tax hikes:

The new corporate tax rate would bring the total percentage Illinois corporations pay on income, including a separate personal property replacement tax, to 9.5%, one of the highest in the nation.

Ron Paul endorses Jeb Hensarling

According to the Wall Street Journal, Rep. Ron Paul (R-TX), who is set to head a key subcomittee on monetary policy, has endorsed Rep. Jeb Hensarling for chair of the House Republican Conference:

Republican Rep. Ron Paul of Texas is a father of the Tea Party movement – literally, after his son, Rand Paul, won a contentious GOP primary in Kentucky and was subsequently elected the state’s next senator.

So, his endorsement Tuesday of fellow Texas Rep. Jeb Hensarling to chair the Republican Conference should quiet some voices in the tea party movement who would rather see Minnesota Rep. Michele Bachmann picked for the No. 4 leadership post in the House.

Mr. Paul’s endorsement letter to Mr. Hensarling is short and to the point: “As a fellow Texan I am pleased to announce my support for your candidacy as chairman of the House Republican Conference. I believe you have a unique opportunity to guide the conference to support concrete legislation that reduces the size and scope of the federal government.”

As I said on Monday, Hensarling is more serious about policy, and while I don’t agree with him on everything, he is more consistent than Bachmann, who has little to no public support from her colleagues in her bid. Even Rep. Paul Broun, a very conservative/constitutionalist Republican from my home state of Georgia, is backing Hensarling.

Reagan Democrats making a comeback?

Are the Reagan Democrats back? That’s the topic of discussion in this video from the Wall Street Journal as James Freeman and Matt Kaminski discuss the race for United States Senate and Governor in Pennsylvania where Republicans are reversing the trend toward Democrats that had been seen in the last two cycles.

H/T: Club for Growth

Home Depot co-founder slams Obama

In an op-ed at the Wall Street Journal, Ken Langone, co-founder of Home Depot, takes issue with the anti-business rhetoric coming from President Barack Obama:

Although I was glad that you answered a question of mine at the Sept. 20 town-hall meeting you hosted in Washington, D.C., Mr. President, I must say that the event seemed more like a lecture than a dialogue. For more than two years the country has listened to your sharp rhetoric about how American businesses are short-changing workers, fleecing customers, cheating borrowers, and generally “driving the economy into a ditch,” to borrow your oft-repeated phrase.

My question to you was why, during a time when investment and dynamism are so critical to our country, was it necessary to vilify the very people who deliver that growth? Instead of offering a straight answer, you informed me that I was part of a “reckless” group that had made “bad decisions” and now required your guidance, if only I’d stop “resisting” it.
[…]
A little more than 30 years ago, Bernie Marcus, Arthur Blank, Pat Farrah and I got together and founded The Home Depot. Our dream was to create (memo to DNC activists: that’s build, not take or coerce) a new kind of home-improvement center catering to do-it-yourselfers. The concept was to have a wide assortment, a high level of service, and the lowest pricing possible.

We opened the front door in 1979, also a time of severe economic slowdown. Yet today, Home Depot is staffed by more than 325,000 dedicated, well-trained, and highly motivated people offering outstanding service and knowledge to millions of consumers.

Spending Explosion: Congress increased spending by 21.4% in last two years

We often ride Republicans here for the out of control spending of the past, but according to the Wall Street Journal, the Democratic-controlled Congress has increased spending by 21.4% over the last two years:

Spending rolled in for the year that ended September 30 at $3.45 trillion, second only to 2009’s $3.52 trillion in the record books. But don’t think this means Washington was relatively less spendthrift. CBO reports that the modest overall spending decline results from three one-time events.

The costs of TARP declined by $262 billion from 2009 as banks repaid their bailout cash, payments to Fannie Mae and Freddie Mac were $51 billion lower (though still a $40 billion net loser for the taxpayer), and deposit insurance payments fell by $55 billion year over year. “Excluding those three programs, spending rose by about 9 percent in 2010, somewhat faster than in recent years,” CBO says.

Somewhat faster. You’ve got to laugh, or cry, when a 9% annual increase qualifies as only “somewhat faster” than normal.

What did Washington spend more money on? Well, despite two wars, defense spending rose by 4.7% to $667 billion, down from an annual average increase of 8% from 2005 to 2009.

Once again domestic accounts far and away led the increases. Medicaid rose by 8.7%, and unemployment benefits by an astonishing 34.3%—to $160 billion. The costs of jobless insurance have tripled in two years. CBO adds that if you take out the savings for deposit insurance, funding for all “other activities” of government—education, transportation, foreign aid, housing, and so on—rose by 13% in 2010.

The Club for Growth goes after Blue Dog Democrats

The Club for Growth has declared war on Blue Dog Democrats, launching a new website called The Blue Dog Report, which documents the fiscal profligacy of these so-called “deficit hawks.” Chris Chocola, president of the Club for Growth, accompanied the launch of the new site with an editorial in the Wall Street Journal:

Every year since 2007, the Democratic advantage in the House has been fewer than the number of seats held by Blue Dogs: If they had wanted to, the Blue Dogs could have made themselves masters of the House. They could have held an effective veto over any bill they pleased, insisting that Mrs. Pelosi, Majority Leader Harry Reid and even President Obama himself heed their call for fiscal responsibility.

Instead, the Blue Dogs became Mrs. Pelosi’s lap dogs, voting with her 80% of the time on economic issues. Every one of them voted for the bailout of Fannie Mae and Freddie Mac. Sixty-three percent voted for the $700 billion Troubled Asset Relief Program; 91% voted for the stimulus package in February 2009; 85% voted for the cash-for-clunkers program; 74% voted for President Obama’s debt-tripling 2010 budget; 73% voted for the auto bailout; and 54% voted for the federal takeover of health care.

The evidence is overwhelming: The Blue Dogs are not fiscal conservatives, and only a few can credibly claim even to be fiscal moderates.

Consider the Blue Dogs’ signature legislative priority: “paygo,” the pay-as-you-go rule requiring the House to offset any new spending and tax cuts with spending cuts or tax increases elsewhere in the budget. In 2007, to much Blue Dog fanfare, House Democrats established paygo as a standing rule of the House.

Doctor shortage to get worse, insurers consolidate as a result of ObamaCare

As if you needed us to point out another draw back of ObamaCare, Reuters reports that the doctor shortage will be made worse by President Barack Obama’s health care “reform” law:

The U.S. healthcare reform law will worsen a shortage of physicians as millions of newly insured patients seek care, the Association of American Medical Colleges said on Thursday.

The group’s Center for Workforce Studies released new estimates that showed shortages would be 50 percent worse in 2015 than forecast.

“While previous projections showed a baseline shortage of 39,600 doctors in 2015, current estimates bring that number closer to 63,000, with a worsening of shortages through 2025,” the group said in a statement.

Additionally, the Wall Street Journal reports that another insurer, Principal Financial, will stop offering health insurance policies as a result of ObamaCare:

Des Moines, Iowa,-based Principal took in about $1.6 billion worth of health-insurance premiums last year but says it now wants to focus on its asset management, retirement and life insurance businesses. New sales of Principal’s health insurance will cease immediately and it will cut about 150 related positions.

Principal primarily provides plans for small businesses, covering about 14,000 employer groups. Its membership has been declining over the past couple years but the business remained profitable, said Dan Houston, president of Principal’s retirement, insurance and financial services businesses.

McDonald’s may drop health coverage due to ObamaCare

The Wall Street Journal reported yesterday that McDonald’s, the internationally known burger restaurant, may drop health insurance coverage for employees due to the new regulations placed on them through ObamaCare:

McDonald’s  Corp. has warned federal regulators that it could drop its health insurance plan for nearly 30,000 hourly restaurant workers unless regulators waive a new requirement of the U.S. health overhaul.

The move is one of the clearest indications that new rules may disrupt workers’ health plans as the law ripples through the real world.

Trade groups representing restaurants and retailers say low-wage employers might halt their coverage if the government doesn’t loosen a requirement for “mini-med” plans, which offer limited benefits to some 1.4 million Americans.

McDonald’s is dismissing the report, claming that they will seek a waiver from from the Department of Health and Human Services, exempting them from from mandates that may drive up costs.

Over at the Cato Institute, Michael Cannon explains that “[t]hese are the health plans (and the workers) that are seeing the highest premium increases under ObamaCare” and and expresses concern:

 
 


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