The Real Trouble with the Birth-Control Mandate

by John H. Cochrane at http://www.cato.org/publications/commentary/real-trouble-birthcontrol-mandate

When the administration affirmed last month that church-affiliated employers must buy health insurance that covers birth control, the outcry was instant. Critics complained that certain institutions should be exempt as a matter of religious freedom. Although the ruling was meant to be final, presidential advisers said this week that the administration might look for a compromise.

Critics are missing the larger point. Why should the Department of Health and Human Services (HHS) decree that any of us must pay for “insurance” that covers contraceptives?
I put “insurance” in quotes for a reason. Insurance is supposed to mean a contract, by which a company pays for large, unanticipated expenses in return for a premium: expenses like your house burning down, your car getting stolen or a big medical bill.
Insurance is a bad idea for small, regular and predictable expenses. There are good reasons that your car insurance company doesn’t add $100 per year to your premium and then cover oil changes, and that your health insurance doesn’t charge $50 more per year and cover toothpaste. You’d have to fill out mountains of paperwork, the oil-change and toothpaste markets would become much less competitive, and you’d end up spending more.
How did we get to this point? It all leads back to the elephant in the room: the tax deductibility of employer-provided group insurance.
If your employer pays you $100 less in salary and buys $100 of group insurance for you, you don’t pay taxes on that amount. Hence, the more insurance costs and covers, the less in taxes you seem to pay. (Even that savings is an illusion: The government still needs money and raises overall tax rates to make up the difference.)
To add insult to injury, this tax deduction does not apply to portable, guaranteed-renewable individual insurance. You don’t get the tax break if your employer gives you the $100 and you buy a policy—a policy that will stay with you if you get sick, leave employment or get divorced. The pre-existing conditions crisis is largely a creature of tax law. You don’t lose your car insurance when you change jobs.
Why did HHS add this birth-control insurance mandate—along with “well-woman visits, breast-feeding support and domestic-violence screening,” and “all without charging a co-payment, co-insurance or a deductible”—to its implementation of a provision of the new health-care reform law? “Because it promotes maternal and child health by allowing women to space their pregnancies,” says the HHS advisory panel. Because these “historic new guidelines” will make sure “women have access to a full range of recommended preventive services,” says the original HHS announcement. To “increase access to important preventive services,” echoes White House Press Secretary Jay Carney.
Notice the doublespeak confusion of "access" and "cost." I have "access" to toothpaste because I have two bucks in my pocket and a competitive supplier. Anyone who can afford a cell phone can afford pills or condoms.
Poor women who can't afford birth control are a red herring in this debate. HHS isn't limiting this mandate to the poor anyway. We all have to pay. The very poor typically don't have employer-provided health insurance in the first place. "Allowing women to space their pregnancies"? Was there some sort of federal ban on birth control before this?
It's not about "access" and it's not about "insurance." It's because Americans, when paying even modest co-payments, choose to spend their money on other things. They prefer a new iPod to a "wellness visit" to the doctor. As the HHS unwittingly admits: "Often because of cost, Americans used preventive services at about half the recommended rate."
Remember, we're supposed to be worrying about skyrocketing health-care expenses. Doubling the number of wellness visits and free pills sounds great, but who's going to pay for it? There is a liberal dream that by mandating coverage the government can make something free.
Sorry. Every increase in coverage means an increase in premiums. If your employer is paying for your health insurance, he could be paying you more in salary instead. Or, he could be lowering prices and selling his product to you and all consumers more cheaply. Someone is paying. Not even HHS tries to claim that these "recommended preventive services" will lower overall costs.
Here's a good mandate: Let's mandate that every time a government official says that the government is going to "help" some category of voter, he or she has to say who they are going to hurt in the same sentence. Because it has to be someone.
But what about the fact, you may ask, that unwanted children are a burden on society as well as to their mothers? Perhaps there is a social interest in subsidizing birth control? Perhaps there is—but if so, this is an awful way to do it.
The minute pills are "free," under insurance, the incentive for drug companies to come up with cheaper versions vanishes. So does their incentive to develop safer, more convenient, male-centered or nonprescription birth control. And by making pills free but not condoms, the government may inadvertently be contributing to an increase in sexually transmitted diseases.
The taxes and spending we argue about are the tip of the iceberg. Salting mandated health insurance with birth control is exactly the same as a tax—on employers, on Catholics, on gay men and women, on couples trying to have children and on the elderly—to subsidize one form of birth control.
If the government wants to subsidize birth control, OK, pass an explicit tax, and sensibly subsidize all birth control. And face the voters on it. The tax rate and spending debates that occupy the media are a small part of the effective taxes and spending that the government achieves by these regulatory mandates.
There is also the issue of religious freedom. Our nation is divided on social issues. The natural compromise is simple: Birth control, abortion and other contentious practices are permitted. But those who object don't have to pay for them. The federal takeover of medicine prevents us from reaching these natural compromises and needlessly divides our society.
The critics fell for a trap. By focusing on an exemption for church-related institutions, critics effectively admit that it is right for the rest of us to be subjected to this sort of mandate. They accept the horribly misnamed Patient Protection and Affordable Care Act, and they resign themselves to chipping away at its edges. No, we should throw it out, and fix the terrible distortions in the health-insurance and health-care markets.
Sure, churches should be exempt. We should all be exempt.

Team O's Denial on College-Cost Crisis

by Neal McCluskey at http://www.cato.org/publications/commentary/team-os-denial-collegecost-crisis

Want to do exactly the wrong things to fix US higher education? You can't do much better than the recent offerings from Education Secretary Arne Duncan. To a system blackout-drunk on taxpayer money, the Obama administration would deliver even more booze while only whispering about tough love.

Speaking at a Nov. 29 Las Vegas gathering of financial-aid administrators, Duncan addressed exploding college costs, a problem highlighted by Occupy Wall Street protesters angry over rising student debt. He lauded loan forgiveness and repayment reduction, and exhorted colleges to do, well, something to become more efficient.
While trumpeting the bogus claim that the average college graduate will earn $1 million more over his lifetime than someone with just a high-school diploma, he didn't even hint that taxpayer-funded student aid (including easily forgiven loans) enables schools to blithely raise their prices.
In short, Duncan said all the wrong things.
Start with the "million-dollar jackpot." While there is an average net gain for those who actually complete four-year degrees, the "$1 million prize" doesn't factor in lost earnings while in college, the high cost of schooling or other variables. Include those, and the average lifetime premium is probably closer to $300,000. And, by definition, roughly half of all grads won't even hit that average.
Yet the real problem is this: Only about 57 percent of people who start four-year programs finish within six years, and most of the remaining 43 percent will probably never graduate. So lots of people will gamble for $1 million, but few will win.
Of course, the jackpot isn't the only reason millions keep paying even as tuition skyrockets. There's something even bigger: ever-expanding government aid.
Between 1985 and 2010, inflation-adjusted federal student aid rose from about $30 billion to about $140 billion, a 367 percent leap. Pell Grants alone ballooned from $8.1 billion in 1985 to $41.7 billion in 2011.
Add various tax credits and deductions to that, and it's no wonder college prices have inflated even faster than health care: Government has ensured that ever-higher bills can be paid.
But hasn't the real culprit been declining state support for colleges, forcing schools to raise prices? Duncan cited that one, too; it's another dodge.
Consider: State funding doesn't much affect private colleges, yet their tuitions perpetually boom. Plus, while public institutions do raise their prices when state support falls, they also raise them when support is rising.
Anyway, state and local support hasn't been gutted. From 1985 to 2010, inflation-adjusted state and local funding rose from about $54 billion to $75 billion. Support only appears to drop when looked at on a per-pupil basis, because higher-education enrollment has also ballooned.
Which brings up the last point: The Obama administration has set the goal of leading the world in the percentage of the population possessing a college degree.
But the reality is that we've already got armies of people in college who'll never finish. There's little reason to think we could get even more people in and through.
But there's a plan to deal with that — sort of. Duncan says the administration will "challenge" schools to improve their graduation rates. Great.
Colleges' most likely response will be to run warm bodies through to graduation, while giving them few if any college-level skills. Indeed, we've been seeing this for years, with literacy for degree-holders dropping and earnings for people with only a bachelor's degree falling, too.
Ultimately, none of Duncan's prescription will make college much cheaper or more effective. Only taking the jet fuel — federal student aid — out of college pricing, and being frank about the real value of higher education, could do that.
But Duncan didn't even hint at such things — because that would really be tough love.

The Only Reality That Matters to Obama Is Political

by Neal McCluskey at http://www.cato.org/publications/commentary/only-reality-matters-obama-is-political

Watch President Obama rail about the rich and brandish his Buffett Rule and it's hard not to see class warfare.

Look at the spending the president proclaims is most important, however especially on education and you might conclude that he isn't prosecuting a class war. He's just giving up on reality.
First of all, it's tough to argue that the wealthy don't pay their fair share in taxes. According to the Tax Foundation, the oft-maligned 1 percent earn 17 percent of the nation's adjusted gross income, yet pay 37 percent of federal taxes. The top 5 percent garner 32 percent of all income, yet furnish 59 percent of taxes.
The rich are paying more than their fair share. Another tough argument is that the spending priorities the president is determined to protect are really so critical at all. In the business world, few would pass an honest cost-benefit analysis. A perfect case in point is education.
As Mr. Obama insisted in a speech at Florida Atlantic University recently, it is investments ... in things like education and research and health care ... that lead to strong and durable economic growth.
Here's where one wonders whether the president is a class warrior, or someone who's just given up on grappling with reality. As reflexively good as investing in education sounds, the overwhelming evidence shows that federal education spending is a colossal waste.
Begin with Head Start, the federal government's signature, $8.1 billion prekindergarten program. According to the most recent federal assessment, it's an investment black hole, producing no lasting gains.
Then there's elementary and secondary education, which has seen inflation-adjusted federal largess leap from $33 billion in 1970 to $115 billion in 2010. Meanwhile, scores for 17-year-olds on the National Assessment of Educational Progress the socalled nation's report card have been wearing cement shoes, climbing not at all.
Finally there's higher education, where surely more federal dough is needed. After all, prices are hurtling toward the moon and no can be expected to pay without help.
The problem is, federal investment has been a leading cause of, not cure for, rampant inflation.
Schools simply couldn't keep raising prices if students couldn't pay them, but for decades Washington has ensured that they could pay ever more.
Between 1970 and 2010, according to the College Board, inflation-adjusted federal aid took off right along with college prices, launching from $18 billion in 1970 to $169 billion in 2010.
Of course, enrollment increased markedly in that time. But that's largely been bad news, with lots of people lacking either the ability or desire to do college work enrolling, taking on debt, but never finishing.
According to the latest federal figures, 43 percent of first-time, full-time college students in four-year programs don't graduate within six years, and most of those will never finish. Worse, 72 percent of students in two-year programs don't complete within three years. Add to that the one-third of bachelor's holders who are in jobs that don't require the degree, and massive over-consumption not underinvestment is clearly our biggest college problem.
Given the horrendous federal education track record not to mention the nearly $16 trillion national debt there's no reasonable way to conclude that yet more federal outlays are needed.
But let's be fair: President Obama almost certainly knows that. He's a smart guy, and this information is pretty easy to find.
The fact is, the president is being very realistic about this — politically realistic. Throw all the tax and education reality you want at him, as long as voters believe the rich are getting away with taxation murder, or that more money for education necessarily means better education, the president would be politically crazy not to do what he's doing.
Polling suggests he's on target. A recent survey of swing-state voters commissioned by the College Board found that 67 percent think that education is extremely important, placing it just behind jobs and the economy and government spending. Most also feel education needs greater funding, including student aid. And it doesn't hurt that focusing on aid curries favor with both Occupy Wall Street types and middle-class voters staring down tuition bills.
So is the president engaging in class warfare? Seems so. Is he ignoring the waste of federal education policy? Absolutely. Has he given up on reality? No way it's just that it's political reality that matters.

Obama's Odd Sense of Fairness

by Richard W. Rahn at http://www.cato.org/publications/commentary/obamas-odd-sense-fairness

President Obama keeps demanding that the rich pay more because “it is only fair.” In his State of Union address, he said millionaires should pay a minimum of 30 percent of their income in taxes. The 30 percent number seems to have come from divine inspiration rather than an exercise in logic.

In fact, the very rich pay far more in taxes than the relatively low nominal numbers they report on their tax returns. Many very wealthy people obtain most of their income from dividends, capital gains and interest on tax-free state and municipal bonds. The actual tax rate Mitt Romney, Warren Buffet and most other wealthy people pay on dividends, when correctly calculated, is about 52 percent, as reported by the Organization for Economic Cooperation and Development (OECD), which includes the federal and state corporate-level-profits tax burden, plus federal and state taxes on dividends. My Cato colleague, Chris Edwards, who prepared the accompanying chart, notes: “Just about every industrial country provides relief for the double taxation of corporate equity, either by having a lower personal rate on dividends, a personal tax credit for dividends or a lower corporate-level tax. Despite the 2003 dividend tax cut, the overall U.S. rate of dividends... is still the fourth-highest among the 34 high-income nations of the OECD.”
Mr. Obama seems to think it is “fair” to tax the same income multiple times, at a total effective rate of more than 50 percent.
Capital gains are taxed at 15 percent but will be subject to a higher rate as a result of revenue provisions in Obamacare. Now the president seems to be proposing that the rate be doubled to 30 percent, given his comments in his State of the Union address. Over the past half-century, the United States has raised and lowered the capital-gains tax rate many times. When rates went up, revenues went down and vice versa, because for the most part, people can choose when to take their capital gains or losses. Virtually all independent economic studies and even a U.S. Treasury study show that a capital-gains tax-rate increase will almost certainly be a big revenue loser and job killer and will depress economic growth. When Mr. Obama was asked about this during his first presidential campaign, he acknowledged that a capital-gains tax increase might lose revenue, but he wanted it anyway because of “fairness.”
So, according to the president, it is “fair” that everyone has to pay higher taxes or have fewer government services in order to make sure that high-income earners pay an increased rate of tax for risking their capital and creating jobs. This is perhaps the best description of “Alice in Wonderland” economics.
As with dividends and capital gains, interest is also subject to multiple levels of taxation, and so the nominal tax rate on it is far lower than the properly measured real rate. Many wealthy people buy state and local government bonds, which are tax free but normally have a lower rate of interest. The reason state and local governments are allowed to issue tax-free bonds is to enable them to have access to low-rate capital for building schools, roads, bridges, etc. To force high-income people to pay higher tax rates, this “tax preference” would need to be abolished, resulting in much higher interest-rate costs for state and local governments, which, in turn, would mean fewer new schools and highway improvements. I expect that many in the president’s political base who want more schools would not view this required tax change as being “fair.”
The federal government admits that hundreds of billions of taxpayer dollars are wasted through fraud and mismanagement. Medicare fraud alone costs tens of billions of dollars each year. Nevertheless, somehow the president thinks it is more “fair” to enact job-destroying tax increases rather than insisting that officials in his own administration clean up the fraud and waste or lose their jobs, as would happen in any private company.
Much of the president’s mental confusion about what is “fair” seems to stem from viewing people as “classes” rather than individuals. The American Constitution is all about protecting individual (not class) liberties and rights. If you think the “rich should pay more,” then you are thinking in class terms. Assume for the moment there are two individuals, each 45 years old with the same IQ, who went to the same college and dental school and are equally skilled dentists in private practice. However, one is married with four children in expensive colleges, and thus chooses to work 60 hours per week. The other dentist has no children and chooses to work just 30 hours per week and thus makes half as much. The president thinks it is “fair” to tax the industrious dentist at a higher tax rate. (Note: the bottom 50 percent of taxpayers pay just 2.3 percent of federal income tax, and the top 1 percent of taxpayers pay 36.7 percent, more than twice their share of earning.)
Those who are mentally mature enough to understand that people change their behavior in response to economic incentives and penalties and who view their fellow citizens as individuals rather than impersonal members of a class will have a very different notion of what “tax fairness” means than those who are not so mentally mature. By the way, did you see the report from the University of Minnesota’s Smart Politics that “President Obama’s 2012 State of the Union address rated at an 8th-grade comprehension level using the Flesch-Kincaid readability test, the third-lowest score of any State of the Union address since 1934”?

Did Chief Justice Roberts save the Supreme Court?

I just saw that there are plenty of articles about "Did Chief Justice Roberts save the Supreme Court?".

I find this completely absurd.  Apparently if the court ruled against the Affordable Care Act, the public would lose all support for the Supreme Court and the Obama administration would start working on ignoring the Supreme Court ruling and dismantling their power.

Even stranger, all of these articles and videos seem to have a Democratic slant, praising Roberts for saving the court.  And these same Democratic leaning pundits are positing that the Democrats would work on dismantling the court if they 'lost'.  I'm really shocked by that.  The Democrats got their Act upheld, albeit not in the manner they wanted, and their supporters say that "It's a good thing it happened like this because we would have ignored it if it went the other way."

Hopefully I'm reading too much into that....

Democrats And Republicans Together Assault Our Liberty

by Doug Bandow at http://www.cato.org/publications/commentary/democrats-republicans-together-assault-our-liberty

The race for the Republican Party presidential nomination is essentially over. The GOP apparently has decided Mitt Romney is the answer. Unfortunately, that means the question must be pretty dumb.

Not that Barack Obama is a better answer. Both Romney and Obama are enthusiastic advocates of America’s bipartisan statist consensus. More government, all the time and in most every way.
The United States government was created as an institution of limited, enumerated powers with a duty to preserve individual liberty. Those who wrote the Constitution and the citizens who ratified that document vigorously debated what authority was to be placed into whose hands.
However, the Leviathan which now exercises its power around the globe has far outstripped its intended role. The so-called Anti-Federalists, who opposed the Constitution, were proved right. The government created would eventually slip its constitutional fetters. Indeed, today the Constitution has virtually no relevance to federal operations. Presidents and Congresses do what they want with nary a nod to the national government’s legal charter. The court challenge to ObamaCare may be the last gasp of those seeking to preserve the original design of limited, enumerated powers.
Over the last half century the rise of America’s welfare/warfare state has been inexorable. And bipartisan. Although politicians on both sides of the aisle like to pose as defenders of constitutional liberties, leaders of both parties have consistently supported more expansive government. Despite the odd exception here or there, members of America’s political class have enthusiastically promoted the relentless growth of government.
This year will be no different.
Most Democrats don’t even voice the verities of limited government and individual liberty. Their answer to every problem is to raise taxes. In their view, there is no human vice which should not be fixed by the national government. Moreover, government is supposed to enrich business and every other interest group.
Democrats also believe in international social engineering—through war, if necessary. There may be a few genuine pacifists on the Left, but they possess no political power, while the Lyndon Johnsons, Bill Clintons, and Barack Obamas bomb, invade, and occupy other nations whenever the Zeitgeist strikes.
Only in one area does the Democratic Party seemingly believe in freedom: to have sex. People can be prohibited from smoking, making contracts, and speaking incorrectly. Their money can be seized and wasted for the most bizarre and ludicrous purposes. People can be conscripted and forced to kill. However, Americans must be allowed to have sex, preferably with publicly subsidized contraceptives. That is, for Democrats, the essence of a free society.
President Obama enthusiastically and eloquently represents the modern Democratic Party.
Most Republicans, in contrast, chatter endlessly about their commitment to limited government and individual liberty. And the majority of Republicans prefer not to raise taxes. But there the differences with Democrats end. When it comes to most practical policies, the disagreements quickly vanish into nothingness.
For Republicans, only a few human vices should not be fixed by the national government. Like smoking. But Uncle Sam should crusade against other drugs, battle the scourge of pornography, and make us all moral. Moreover, government is supposed to enrich business and other favored interest groups, only those which contributed to the GOP instead of the Democratic Party.
Republicans who denounce welfare at home ironically insist on it abroad—defending prosperous and populous allies lest the Europeans, Japanese, and South Koreans, for instance, be forced to defend themselves. The GOP also believes in international social engineering—through war, if necessary. The Neoconservatives are Wilsonians on steroids, with leaders like Sen. John McCain who rarely find a country that they do not want to bomb, invade, and occupy. The lack of any conceivable national interest only excites the martial fervor of the Republican Sofa Samurai, most of whom consciously avoided military service. Like former Vice President Dick Cheney, who famously said that he had “other priorities” during the Vietnam War. As, apparently, did Mitt Romney.
When it comes to sex the Republican Party is divided. A few members actually don’t believe it is the government’s business. However, the GOP is full of leaders with multiple marriages engaging in multiple affairs who lecture everyone else about the importance of sexual morality. Some true believers advocate sending cops into bedrooms to monitor who is having what kind of sex with whom and spending tax dollars to promote chastity and marriage. At least the GOP has come to understand the principle of individual liberty when it comes to forcing others to subsidize law students who want to have sex without paying for contraceptives.
Mitt Romney is an exemplary symbol of the modern Republican Party.
On what issue do Obama and Romney disagree?
President Barack Obama is a big spender par excellence. On no program does he not want to spend money and his latest budget, presented as an exercise in fiscal restraint, would more than double the accumulated deficit over the coming decade. He masterminded a federal takeover of people’s health care futures and his bureaucratic army of paternalists continues to press to turn individuals’ lives over to the state.
The president believes in the same approach overseas: continued nation-building in Afghanistan, militarized social engineering inLibya, perpetual alliances in Asia and Europe, and foreign “aid” all over. Despite occasionally verbalizing concern over maltreatment of West Bank Palestinians, the president has effectively turned his Mideast and especially Iran policy over to Israel. Finally, the administration continues to play global meddler. Indeed, as Washington’s debt soars the administration sends Treasury Secretary Timothy Geithner to lecture the Europeans about dealing with their financial crisis.
As Massachusetts governor, Mitt Romney was a middling big spender, earning a “C” on the Cato Institute’s gubernatorial spending rating. As such, he fits well within GOP tradition: President George W. Bush was a true big spender, increasing outlays on virtually every program, creating the largest expansion of the welfare state (the Medicare drug benefit) in four decades, implementing massive bailouts of Wall Street, banks, and industry, wasting cash on an ineffective “stimulus” program, and squandering a surplus which had been projected to run into the trillions over the following decade. Although candidate Romney talks about cutting spending, he backed the 2008 financial bailouts, defends the Ponzi Social Security system, and refuses to identify meaningful cuts in the $3.6 trillion federal budget.
As Massachusetts governor, Mitt Romney masterminded a state takeover of people’s health care futures, while advocating expansion of that policy to the national level. He did nothing as governor to suggest that he would halt the federal government’s pervasive assault on individual liberty. To the contrary, he backed a state mandate for contraception benefits like President Obama’s national rule.
Finally, Mitt Romney is an even more rabid adventurer overseas, supporting (at least until recently) misbegotten nation-building in Afghanistan, proposing to meddle in the Syrian imbroglio, and breathing fire not only against Iran but also China and Russia. Moreover, Romney explicitly promised to subcontract U.S. Mideast policy to Israel’s Benjamin Netanyahu, saying that he would do nothing without the latter’s approval. Romney appears determined to turn the secretary of state into an even bigger pest than normal by telling everyone everywhere how they should behave; worse, he apparently believes that the rest of the world actually would supinely comply with his dictates. Mitt-World: Washington’s fondest fantasies magically transformed into reality.
This is not the first election in which the choices are atrocious. The main difference between the major party candidates in 2008 was that Barack Obama appeared to be more determined to spend money but less enthusiastic about global war-making. Sen. John McCain admitted that he knew nothing about economics; his main foreign policy program was to kill foreigners, at least those who resisted Washington’s demands.
In 2004 President George W. Bush had proved himself to be a big spender and incompetent war-monger, but Sen. John Kerry was an even bigger spender and was only against the Iraq war, not foolish wars in general. Four years before that Vice President Al Gore looked to be the bigger spender and more avid war-monger, but President Bush seized those mantles once inaugurated.
And so it goes throughout much of America’s recent history.
Only one thing is clear about the 2012 race. Neither President Barack Obama nor former Governor Mitt Romney can be trusted with Americans’ liberties. Both are likely to be big spenders bent on promiscuous and dangerous war-making abroad. Romney is more likely to articulate the principles of a free society, but he also is more likely to disappoint those who actually believe in the principles of a free society.
Both candidates have spent their careers promoting America’s bipartisan statist consensus. Never mind what they say. Watch what they do. They are dedicated to expanding government all the time and in every way.
And so it will continue unless the American people take charge. As long as they elect profligate warrior wannabes, their liberties and lives will be at risk. Americans have the power “to begin the world over again,” Ronald Reagan often said, quoting Thomas Paine. Now would be a good time for them to renew their political system.

Cato Scholars React to ObamaCare Ruling

from http://www.cato-at-liberty.org/cato-scholars-react-to-obamacare-ruling/

A Taxing Decision

by Trevor Burrus at http://www.cato.org/publications/commentary/taxing-decision

In upholding Obamacare as a tax, the Supreme Court, led by the politically astute Chief Justice Roberts, took the safest route around a thorny issue. Both sides, arguably, got something they want. The chief justice strongly endorsed the argument that Congress is not allowed to compel people into commerce in order to regulate them under the Commerce Clause. President Obama and his supporters get to claim victory too. The end result, however, is the same. It makes no difference whether it is under the taxing power or the commerce power, Congress can now compel non-purchasers to become purchasers.

The chief justice's opinion upholding the mandate as a tax stresses the supposed "choice" that individuals face when confronted with the penalty for not having health insurance. "The mandate is in effect just a tax hike on certain taxpayers who do not have health insurance," the chief justice writes, and he acknowledges that many Americans may make a "reasonable financial decision to make the payment rather than purchase insurance."
Although this sounds rather unobtrusive, Roberts misses the fundamental argument against upholding the mandate under the taxing power: Congress did not frame the penalty as a tax, and they did not do so, of course, because they did not want to be accused of raising taxes. As the admirable dissent from Justices Scalia, Thomas, Alito, and Kennedy makes clear, "The issue is not whether Congress had the power to frame the minimum coverage provision as a tax, but whether it did so." The Supreme Court holds today that, unbeknownst to them, Congress passed a substantial tax hike.
Some may dismiss this as a mere drafting error and argue that the language Congress uses is not crucial to whether something is a tax for the purposes of the Constitution. This is true, but only to an extent. A tax has always been considered a government exaction with the primary purpose of raising revenue. Although taxes can be used to change behavior, it is not their primary purpose. Penalties, on the other hand, are designed to change behavior. Presumably, Congress would prefer that everyone comply with the law, pay no penalties and thus raise no revenue.
If I park in a "no parking zone" and get a ticket, can I just call that a "tax" that I pay for choosing to park there? Are speeding fines now just taxes on "moving fast."
No, because words matter. "Tax" is a bad word, and for good reason. The American people — the same people who fought a war over "no taxation without representation" — understand that, in the words of Chief Justice John Marshall, "the power to tax is the power to destroy." We also understand the many possibilities of government abuse of taxation. There is a reason that President Obama explicitly said that the mandate was not a tax: because he knew the American people would have been mad.
So should we be mad now? We should be upset that the court did not perform its constitutional duty to strike down the law as it is written, and not to effectively rewrite the statute into a more politically palatable form. We should be upset that the court gave Congress yet one more tool for their ever-increasing bag of regulatory tricks that they can use to whip the American people into shape. And we should expect more such "taxes" to come from future Congresses. How could they resist? There are millions of inactive people out there just waiting to become revenue sources.
During his confirmation hearing, the chief justice famously described his judicial style as "minimalist." He claimed that he would not decide more than the issue before him. He claimed that he would not use the court in an "activist" fashion that disrupts the democratic process. Here, he proved how honest he was. Sometimes, however, the court must act with determination to stop Congress from radically overstepping the boundaries of the Constitution and transforming the United States into something fundamentally different. If they don't, who will?
And let's not forget one last thing: the individual mandate is one of the biggest gifts, if not the biggest gift, ever given by a government to a private industry. To get the government to compel the purchase of your product is the ultimate dream of every businessman. Today, the court rubber stamps the shared complaints of the Tea Party movement and the Occupy Wall Street movement — that the government is too intertwined with big business — and emboldens future Congresses to try other crony capitalist schemes.

It Now Falls to Congress

by Roger Pilon at http://www.cato.org/publications/commentary/it-now-falls-congress

ObamaCare was a mistake from the start, a massive effort by the federal government to take over and control one-sixth of the economy — indeed, the part that concerns the most complex and intimate details of life, our health. It’s the most ambitious example to date of the political hubris progressives have displayed for over a century now, the belief that government can solve all of our problems.

Today, the Supreme Court had an opportunity to put a brake on that hubris. Four justices, led by Justice Kennedy, would have done so. But Chief Justice Roberts joined the four justices who are Exhibit A of the modern hubris, writing for the Court to uphold almost all of this monstrous intrusion on our liberty and on the very theory of the Constitution. And he did so on the flimsiest of rationales for deciding a constitutional question — precedent. If precedent carried the weight Roberts gave it today, we’d still be riding in segregated trains and sending our children to segregated schools.
So let’s look a bit more closely at this decision — which, to be clear, will take some time to fully digest. The Court rejected the administration’s main argument for the individual mandate, based on Congress’s power to regulate interstate commerce: "The power to regulate commerce presupposes the existence of commercial activity to be regulated." But that’s a slim victory for those of us who’d argued that “not buying insurance” is not an act of commerce. How often does Congress try to regulate “non-commerce” under its power to regulate interstate commerce? As best anyone could tell, this was the first time Congress had ever tried such an expansion of its power.
And because there’s no “commerce,” the Court rejected the parasitic Necessary and Proper Clause argument, too, which affords Congress the means to carry out its other powers.
But Robert’s bought the administration’s second fallback argument — that the penalty for not buying insurance is a tax, even though the administration abandoned that argument during the course of litigation, and even though calling it a “tax” would seem to implicate the Anti Injunction Act, which would preclude the Court from even deciding this case until someone was forced to pay the tax, which won’t happen for another couple of years. Yet the Court apparently brushed aside that AIA impediment — talk about lawlessness — in its rush to uphold ObamaCare.
And so there’s your foundation for the decision: the individual mandate is constitutional based on Congress’s power to tax: Congress can “tax” those who don’t buy government approved health insurance. Don’t ask what kind of a “tax” that is! It’s not an income tax. Nor is it a duty, impost, or excise tax, the only kinds of taxes recognized under the Tax Clause of the Constitution, where Roberts purports to rest Congress’s power; and it certainly isn’t “uniform throughout the United States,” as is required for those taxes. It’s sui generis, which is a polite way of saying it’s unconstitutional — if we take the Constitution seriously.
But that’s just the problem, isn’t it? As James Madison, the principal author of the Constitution, Thomas Jefferson, and virtually everyone else at the Founding made clear, the power to tax, the first of Congress’s 18 enumerated powers, like the power to borrow, Congress’s second enumerated power, was designed to enable Congress to obtain the funds needed to carry out its other enumerated powers or ends. It was not, as Madison made clear in Federalist 41, and often on the floor of Congress, an independent power to tax for any purpose at all. Search as you will through those 18 enumerated powers and you will find no power to enact ObamaCare or anything like it. And please don’t say that the taxing power serves the commerce power which in turn authorizes the individual mandate, because the Court nixed that second leap today.
But all of that was lost in 1937 when the New Deal Court, cowed by Roosevelt’s infamous Court-packing threat, suddenly “found” that Congress had an independent power to tax and spend for the “general welfare,” a power that had escaped the Court’s attention for 150 years. That’s the “precedent” for today’s decision — which, like the precedent itself, turn’s the Constitution on its head, giving us effectively unlimited government.
It will fall to Congress, then, to undo this monstrosity, if it can. Under the Constitution, as written, health care would be provided like any other service that’s stayed largely free from government control. But starting with World War II wage-and-price controls and the tax advantages that were given to employer-provided health insurance, it’s been one government intrusion after another and a textbook example of how government can completely mess up what free markets plus voluntary charity can efficiently order while respecting the rights and dignity of people in the process. That’s a vision, the Founders’ vision, that Congress can restore, even if this Court has failed to do its part today.

Yes, the Federal Government Has a Broad Power to Tax, but that’s Different from Having a Green Light to Spend

Posted by Daniel J. Mitchell at http://www.cato-at-liberty.org/yes-the-federal-government-has-a-broad-power-to-tax-but-thats-different-from-having-a-green-light-to-spend/


I’m not a lawyer, or an expert on the Constitution, though I sometimes play one on TV.
But I can read, and I’ll agree with my friends on the left that the federal government has a broad power to tax. I wish the 16th Amendment had never been ratified, but its language gives the federal government a green light to rape and pillage.

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

That being said, the power to tax is not the same as the power to spend. And at the risk of sounding old fashioned, my big objection to the Obamacare decision is that health care is not listed as one of the federal government’s enumerated powers in Article I, Section VIII of the Constitution.
Sadly, that horse got out of the barn many decades ago, culminating in a horrible 1942 Supreme Court decision that said a man couldn’t grow crops on his own land to feed his own animals for consumption by his own family.
But let’s look at the bright side. Even though the Obamacare case was decided incorrectly, at least the judiciary is beginning to reconsider these issues, thanks in large part to the work of the Cato Institute’s legal scholars and adjunct legal scholars.
P.S. While the federal government has a broad power to tax, I should add that this doesn’t – or at least shouldn’t – vitiate other provisions of the Constitution. This is why it is so disappointing that we’ve seen the erosion of key civil liberties such as the presumption of innocence and the 4th Amendment’s protection against unreasonable searches and seizures.

Supreme Court Unlawfully Rewrites Obamacare to Save It; Four Votes (Led by Kennedy) to Strike It

Posted by Ilya Shapiro at http://www.cato-at-liberty.org/supreme-court-unlawfully-rewrites-obamacare-to-save-it-four-votes-led-by-kennedy-to-strike-it/


Today’s baby-splitting decision rewrites the Affordable Care Act in order to save it. It’s certainly gratifying that a majority rejected the government’s dangerous assertion of power to require people to engage in economic activity in order to then regulate that activity. That vindicates everything that we who have been leading the constitutional challenge have been saying: The government cannot regulate inactivity.  It cannot, as Chief Justice Roberts put it, regulate mere existence.
Justifying the individual mandate under the taxing power, however, in no way rehabilitates the government’s constitutional excesses.  As Justice Kennedy said in summarizing his four-justice dissent from the bench, “Structure means liberty.” If Congress can slip the Constitution’s structural limits simply by “taxing” anything it doesn’t like, its power is no more limited than would it be had it done so under the Commerce Clause.  While imposing new taxes may be politically unpopular and therefore harder to do than creating new regulations, that political check does not obviate constitutional ones—and in any event, Congress avoided even that political gauntlet here by explicitly structuring the individual mandate as a commercial regulation.
Nor does the Court vindicate its constitutional sleight-of-hand by rewriting the Medicaid expansion to tie only new federal funding to an acceptance of burdensome and fundamentally transformative regulations.  While correct on its face—and a good exposition of the spending power and what strings the federal government can attach to its funds—that analysis is relevant to a hypothetical statute, not the one that Congress actually passed.  Moreover, allowing states to opt out of the new Medicaid regime while leaving the rest of Obamacare in place throws the insurance market into disarray, increases costs to individuals, and gives states a different Hobson’s choice—different but no less tragic than the one it previously faced. As Justice Kennedy wrote in dissent, while purporting to apply judicial modesty or restraint, the Court’s rewriting of the law is anything but restrained or modest.
In short, we have reaped the fruits of two poisonous trees of constitutional jurisprudence:  On the one (liberal activist) hand, there are no judicially administrable limits on federal power.  On the other (conservative pacifist) one, we must defer to Congress and presume (or construe) its legislation to be constitutional.  It is that tired old debate that produces the Frankenstein’s monster of today’s ruling.  What judges should be doing instead is applying the Constitution, no matter whether that leads to upholding or striking down legislation.  And a correct application of the Constitution inevitably rests on the Madisonian principles of ordered liberty and limited government that the document embodies.
In any event, the ball now returns to the people, who opposed Obamacare all along, and whence all legitimate power originates.  It is ultimately they who must decide—or not—to rein in the out-of-control government whose unconstitutional actions have taken us to the brink of economic disaster.

The Affordable Care Act

For those of you reading this post far after it was published, let me put you in the moment.  This morning, the Supreme Court ruled that the Affordable Care Act was constitutional.  And so I would like to offer my thoughts in a rambling post.

"The Federal Government does not have the power to order people to buy health insurance. Section 5000A would therefore be unconstitutional if read as a command. The Federal Government does have the power to impose a tax on those without health insurance. Section 5000A is therefore constitutional, because it can reasonably be read as a tax," Roberts said in his opinion

“The Framers created a Federal Government of limited powers, and assigned to this Court the duty of enforcing those limits. The Court does so today. But the Court does not express an opinion on the wisdom of the Affordable Care Act. Under the Constitution, that judgment is reserved to the people.”

“It is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income, but choose to go without insurance.  Such legislation is within Congress’ power to tax."

I think that having health insurance is a good idea.  I also think that the health care system is "broken", in that the current situation is not good for people getting insurance and it is not unreasonable to imagine it getting better.

I also believe people should have the liberty to do stupid stuff.  And that includes not getting health insurance and then having to deal with the high costs of something actually happening.  I also think that health insurance companies are businesses, and while they should work on improving their product and trying to increase their business, they are also entitled to have a profit and should be able to avoid things that take away from their profit.  And if the customers become unhappy with how that last part is working out, they can switch to another health insurance company, or if none meet their needs, then to start a new company.  It's called capitalism - if there is a need in the market, it will be filled.  And remember, an insurance company is basically betting on people not to get sick.  They love people that will pay for insurance but end up never using it.  With enough people like that, the company won't be dragged under when paying for people who do get sick and require costly treatments.

And so it shouldn't be surprising that I am not a fan of the Affordable Care Act.  Forcing people to do something good is still forcing them to do something.  Let people make up their own mind.  Let people be stupid.  On a side note, I'm not a fan of employer-provided healthcare.  It is a remnant of WWII wage-freezes.  During WWII, wages that companies offered were frozen, so businesses could not offer better salaries to lure better employees.  To get around that, they offered healthcare benefits.  So why do I dislike this?  Because I want to choose my healthcare, not have it chosen for me by an employer.

The arguments for the Affordable Care Act illustrate how much it expands the power of the federal government.  The commerce clause?  If you are participating in interstate commerce, you can be regulated; if you are not participating, you can be forced to participate and be regulated.  The necessary and proper clause?  Granted, Congress thinks almost everything it does falls under that clause.  I found those constitutional arguments to be unconvincing.  In fact, it only serves to illustrate how much power the federal government wants to give itself.  But that's the subject of another rambling.

And before finishing with how the case was decided, some stuff on what both major parties have been saying leading up and following this.

The court is failing in its duty if it rules against this reform which was passed by a majority of Congress.
-The court's duty is to determine if it follows the Constitution.  If the majority passes something that is unconstitutional, the court should rule against it.

If the act is affirmed/ruled against, it is because of the political interests of the liberal/conservative justices.
-Every ruling is due to the particular method of interpretation of all of the judges.

"means now for the first time in the history of the country, Congress can force Americans to purchase any product, any service."
-Not technically true.  You can still choose to not buy anything, including health insurance.  It's just that you pay an additional tax if you do not purchase.

"For us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase," Obama said, noting that "right now everybody in America, just about, has to get auto insurance. Nobody considers that a tax increase. People say to themselves, that is a fair way to make sure that if you hit my car, that I'm not covering all the costs."
-Not the best analogy.  It's more like damaging your own car, with no other people involved, and having the choice to pay for it out of pocket or through an insurance company that would then increase your premiums.  No, I don't like that analogy either....  Health insurance doesn't compare too well to auto insurance.

"[...]I will do on the first day if elected president of the United States, and that's to repeal Obamacare"
-Presidents don't repeal things on their own.  Congress does that.  I should do a ramble on the increase in Executive power sometime.

 "The president of the United States himself, promised up and down that this bill was not a tax,"
-Actually completely true.

It turns out that the Supreme Court agreed that those two arguments didn't hold water.  Instead the ACA is upheld as a tax.  Which is what many supporters of the ACA had been arguing it was not.  Because it would sound bad during elections.  And expanding Congress's power would sound good....

Because nobody was really arguing that it was a constitutional tax, I am not as familiar with the Taxing and Spending Clause and the history of its interpretation.

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

There is the clause and I'm sure I'll see plenty of articles discussing it shortly.  But looking at Wikipedia, it looks like this case is similar to taxing to indirectly regulate - which was struck down in Bailey v. Drexel Furniture Co. and then reaffirmed in US v. Butler.

"To say that the Individual Mandate merely imposes a tax is not to interpret the statute but to rewrite it," Scalia said in dissent. "Imposing a tax through judicial legislation inverts the constitutional scheme, and places the power to tax in the branch of government least accountable to the citizenry."

Considering this expanded power to tax the people, it makes me wonder what the limits are to this power.   Look at the previous post.  Where is the line?  I have no idea, and that makes me quite worried.

What’s Next After the Obamacare Ruling?

Posted by Chris Edwards at http://www.cato-at-liberty.org/whats-next-after-the-obamacare-ruling/


With the Supreme Court ruling on President Obama’s health care law, everyone is wondering what’s next for big government. Here are some ideas for federal policymakers to consider:
Federal Broccoli Act of 2013: Eat your broccoli, else pay the IRS $1,000.
Federal Recycling Act of 2014: Fill your blue box and put on the curb, else pay the IRS $2,000.
Federal Green Car Act of 2015: Make your next car battery powered, else pay the IRS $3,000.
Federal Domestic Jobs Act of 2016: Don’t exceed 25 percent foreign content on family consumer purchases, else pay the IRS $4,000.
Federal Obesity Act of 2017: Achieve listed BMI on your mandated annual physical, else pay the IRS $5,000.
Federal National Service Act of 2018: Serve two years in the military or the local soup kitchen, else pay the IRS $6,000.
Federal Housing Efficiency Act of 2019: Don’t exceed 1,000 square feet of living space per person in your household, else pay the IRS $7,000.
Federal Population Growth Act of 2020: Don’t exceed two children per couple, else pay the IRS $8,000.

Congress: ‘It’s Not a Tax.’ SCOTUS: ‘Yes It Is.’

Posted by Michael F. Cannon at http://www.cato-at-liberty.org/congress-its-not-a-tax-scotus-yes-it-is/


The Supreme Court ruled that ObamaCare’s individual mandate is not constitutional under the Commerce Power, which was how Congress framed the mandate to avoid a political backlash from calling it a tax. Congress and the president swore up and down that the mandate was not a tax. Yet the Court upheld the mandate as a valid use of that disavowed taxing power. What Congress said the individual mandate is, the Court said is not constitutional. What Congress said the mandate is not, the Court ruled is constitutional. Everybody got that?
Where does that leave us?

1. The Supreme Court just enacted a law that Congress never would have passed.
2. The Court just told Congress it is okay to lie to the people to avoid political accountability.

5 Ways to Solve Health Care

by Michael D. Tanner at http://www.cato.org/publications/commentary/5-ways-solve-health-care

Sometime this month, the Supreme Court will issue its ruling on the constitutionality of the Patient Protection and Affordable Care Act (aka ObamaCare). The justices, of course, have many options. They could strike down the law in its entirety or uphold all of it. They could strike down just parts of it, most likely the individual insurance mandate and/or the requirement that states expand their Medicaid programs, while upholding the rest. They could even decide not to decide, ruling that the law is not "ripe" for a challenge until the mandate goes into effect in 2014.

But one thing is certain, no matter how the Court decides: The battle over health care reform is far from over.
If the Court upholds the law or at least major parts of it, Republicans will still seek its repeal legislatively. And, if the Court strikes down large parts of President Obama's signature legislative accomplishment, the administration is unlikely to shrug its shoulders and forget about it.
Most importantly, regardless of the Court's decision, the problems with our health-care system are not going away.
The US health-care system has much to recommend it. We produce most of the research, innovation and technology that improves health care throughout the world. Americans have more choice of physicians and treatments than patients in other countries. And if you are sick, your chances of survival are far better in this country than elsewhere.
But one only has to open their latest insurance bill to see that the cost of health care is still going up. On average, health insurance in New York now costs nearly $6,000 for an individual and $16,000 for a family, more in New York City. Premiums are expected to rise by 8.2% this year, increasing faster than wages.
At the same time, too many Americans remain uninsured. Although the number of uninsured is often exaggerated by critics of the system, approximately 50 million Americans could be without health insurance at any given time, 2.7 million of them in New York.
Even if ObamaCare is fully implemented, as many as 23 million Americans would still lack health insurance by 2020.
What then should we do to reform health care? Here are five ideas:
1. Make health insurance personal and portable
Nothing would do more to fix our health-care system than moving away from a system dominated by employer-provided health insurance and instead making health insurance personal and portable, controlled by the individual rather than government or an employer. There is, after all, no logical reason for an individual to receive health insurance through their job. We don't receive most other types of insurance — auto, homeowners, life — in that way.
Employer-based health insurance is an anomaly that grew out of unique historical circumstances during World War II. Despite the widespread entry of women into the labor force during the war, the shift of men from private employment to the military created a labor shortage. At the same time, wage controls prevented employers from competing for available workers by raising salaries. In an effort to circumvent the regulations and compete for available workers, employers began to offer non-wage benefits, including health insurance.
In 1953, the IRS ruled that employer-provided health insurance was not part of wage compensation for tax purposes. This means that if a worker is paid $40,000, but their employer also provides an insurance policy worth $16,000, the worker pays taxes on just the $40,000 in wages. If, however, instead of providing insurance, the employer gave the worker a $16,000 raise — allowing the worker to purchase his or her own insurance — the worker would have to pay taxes on $66,000, a tax hike of as much as $2,400. This puts workers who buy their own insurance at a significant disadvantage compared to those who receive insurance through work.
Employment-based insurance distorts our health-care system in several ways. Most significantly, it hides much of the true cost of health care to consumers, thereby encouraging over consumption. If workers believe someone else is paying for their health care, they have less incentive to be frugal consumers. People naturally eat more at the all-you-can-eat buffet, than if they have to pay a la carte.
Basing insurance on employment also means that if you lose your job, you are likely to end up uninsured. Worse, once you've lost insurance, it can be hard to get new coverage, especially if you have a pre-existing condition.
Changing from employer to individual insurance requires changing the tax treatment of health insurance. Employer-provided insurance should be treated the same as other compensation for tax purposes: that is, as taxable income. To offset the increased tax, workers should receive a standard deduction, a tax credit, or expanded Health Savings Accounts (HSAs), regardless of whether they receive insurance through their job or purchase it on their own.
As a result of this shift in tax policy, employers would gradually substitute higher wages for insurance, allowing the worker to shop for the insurance policy that most closely matched his or her needs. That insurance would be more likely to be true insurance, protecting the worker against catastrophic risk, while requiring out-of-pocket payment for routine, low-dollar costs, and it would belong to the worker, not the employer, meaning that workers would be able to take it from job to job and would not lose it if they became unemployed.
And, since workers could maintain continuous coverage, the issue of preexisting conditions becomes far less of a problem.
Putting workers in charge of their own insurance would significantly reduce the cost of insurance. A study by Stephen Parente of the University of Minnesota suggests that making this change would increase the number of people with health insurance by 21-27 million, nearly as many as projected under ObamaCare.
2. Increase competition and break up insurance cartels
Putting purchasing power in the hands of consumers is only half of market-based reform. We also need to increase competition in the insurance market. Today, for example, people can't purchase health insurance across state lines. This effectively creates near monopolies in many states with only a handful of insurance companies controlling the vast majority of a state's market. For example, in New York, just two insurers, GHI and Empire Blue Cross, represent 47% of the market. In New Jersey, a single insurer, Horizon Blue Cross and Blue Shield, controls 43% of the market. And in Connecticut, Wellpoint holds an astounding 55%.
Nationwide, there are more than 1,300 insurance companies, including some 500 nonprofit, cooperative and mutual insurers. Consumers should be able to buy insurance from any of them, forcing insurers to compete on price and service.
And because different states have very different regulations and mandates, costs can vary widely depending on where you live. These regulations are a major reason why New York and New Jersey have some of the nation's highest insurance premiums. But with consumers able to escape those costly regulations by purchasing insurance elsewhere, states would be forced to evaluate whether their regulations offered true value or simply reflected the influence of special interests.
3. Empower non-physician medical professionals
It's not just the insurance industry that needs more competition. Consumers should also have more choice of health-care provider. Nurse practitioners, physician assistants, midwives, naturopaths, chiropractors, and other non-physician medical professionals should have far greater ability to treat patients. This means rethinking medical licensure and "scope of practice" laws, which too often reflect the power of special-interest lobbies intent on preventing competition, rather than protecting public health and safety.
New York, for example, has some of the nation's tightest restrictions on non-physician medical professionals. But there is no evidence that these rules make New Yorkers safer or healthier. On the other hand, it does make health care more expensive. It is time to ease those regulations to permit more competition and choice.
4. Have seniors make their own medicare decisions
While much of the debate over health-care reform focuses on private health insurance, it is important to remember that half of all health-care spending is done by the federal government. And the 800-pound gorilla of the American health-care system is Medicare.
Medicare was essentially modeled after a 1965 Blue Cross insurance plan, and has not been substantially updated since. It pays doctors on the basis of how much treatment they provide, not on whether that treatment is effective. In fact, if the treatment makes you sicker, and you have to receive additional treatment, the doctor gets paid more. At the same time, physicians are reimbursed at such low rates per procedure that some costs are shifted onto privately insured workers, while physicians are beginning to drop out of the system.
Worse, because of changing demographics, and because most seniors receive far more in Medicare benefits than they pay in Medicare taxes and premiums, the program is threatening to bankrupt the country. Even if one accepts the most optimistic estimates for Medicare's finances, the program faces future shortfalls of more than $56 trillion. Other estimates suggest that the program's unfunded liabilities could actually reach as much as $125 trillion.
The Obama administration's answer is to empower an unelected board, the Independent Payment Advisory Board (IPAB), to further reduce physician payments. This could lead to more physicians refusing to see Medicare patients, and possibly even some hospitals closing. The president would also rely on comparative effectiveness research to weed out ineffective or overly expensive treatments. We've seen some of this recently in recommendations for men to skip prostate screenings, or for women to delay mammograms.
A better answer would be to have the government set a fixed amount per recipient that it is willing to spend on Medicare. Then instead of directly paying hospitals and physicians, the government should turn that money over to the recipients themselves, as a voucher to help them purchase private health insurance. Lower-income seniors and those with higher health-care costs because of illness could receive a bigger subsidy.
Seniors could use these vouchers, combined with whatever they wish to spend of their own money, to choose an insurance plan that has a cost and mix of benefits that best meets their needs. Rather than the government imposing cuts from above or rationing care, seniors could decide for themselves if they wanted to pay for services over and above a minimum set of benefits.
5. Let states experiment with Medicaid
The government's other big health care program is Medicaid. Like Medicare, its costs are exploding, posing serious threats to both the national and state budgets. Medicaid costs New York taxpayers more than $15.9 billion annually. At the same time, the program is notorious for providing poor care. Because reimbursements are so low, nearly a third of primary-care physicians will not accept Medicaid patients, driving recipients to hospital emergency rooms for treatment. In fact, Medicaid patients are more likely to end up in emergency rooms than are those with no insurance at all.
Congress should follow the lead of the successful Clinton-era welfare reform and return funding and responsibility for the program to state governments in the form of a block grant. This would allow states to treat Medicaid like other welfare programs, imposing work requirements, time limits, and tougher eligibility requirements. States could experiment with new delivery and reimbursement models, including subsidizing private insurance for the poor. Finally, a block grant would cap Medicaid spending and end the practice of states leveraging federal funding to expand their programs beyond what they can afford.
The Supreme Court's decision will clearly not be the last word on ObamaCare or health-care reform. As the debate goes forward, it's important to remember that there are alternatives — alternatives based on free-markets and consumer choice.

You Will Now Be Required to Pay for the New York Times

Posted by Andrew J. Coulson at http://www.cato-at-liberty.org/you-will-now-be-required-to-pay-for-the-new-york-times/


Fretting that Americans are not sufficiently well educated about the government’s perspectives on policy and the world, the President today introduced the Affordable News act. This legislation will make New York Times subscriptions vastly cheaper than they are today, by taxing everyone who does not already subscribe to the paper.
Just kidding…. For now, anyway.

Partially Reining in Administrative Agencies

Posted by Trevor Burrus at http://www.cato-at-liberty.org/partially-reining-in-administrative-agencies/

Today, the Supreme Court decided Christopher v. SmithKline Beecham Corp. The case concerns whether the Department of Labor can change a 70-year old regulation essentially on a whim. Cato joined the Washington Legal Foundation in a brief that urged the Court to affirm the Ninth Circuit’s holding that administrative agencies are not allowed to enact massive regulatory changes without sufficient notice. Today, the Supreme Court did just that.
For over 70 years, the Department of Labor (DOL) has exempted “outside salesmen” from overtime-pay requirements. Such traveling salesmen typically do not punch a clock and often put in more than 40 hours per week. The pharmaceutical industry uses traveling pharmaceutical sales representatives (PSRs) to demonstrate to doctors the benefits of various prescription medications. While these PSRs do not make direct sales, the DOL has long regarded the PSRs as “outside salesmen” who do not qualify for overtime pay. In 2009, however, the DOL filed an amicus brief in a Second Circuit case announcing they had changed the classification—for the first time, PSRs would not be exempt from overtime-pay requirements. The move was unexpected, to say the least. There are currently approximately 90,000 PSRs in the country, and such a significant rule change threatened to alter the pharmaceutical industry’s entire way of doing business.
But the high costs are only a small part of the problem. In our brief, we argued that allowing administrative agencies to promulgate a major rule changes in amicus briefs as part of a litigation strategy would give them even more arbitrary power than they already have. Courts already give agencies so-called Auer deference in interpreting their own regulations, but this would be taking that deference too far. Justice Samuel A. Alito, writing for five justices (Scalia, Thomas, Kennedy, and Chief Justice Roberts),  agreed:

In this case, there are strong reasons for withholding the deference that Auer generally requires. Petitioners invoke the DOL’s interpretation of ambiguous regulations to impose potentially massive liability on respondent for conduct that occurred well before that interpretation was announced. To defer to the agency’s interpretation in this circumstance would seriously undermine the principle that agencies should provide regulated parties “fair warning of the conduct [a regulation] prohibits or requires.” . . .  Indeed, it would result in precisely the kind of “unfair surprise” against which our cases have long warned…Our practice of deferring to an agency’s interpretation of its own ambiguous regulations undoubtedly has important advantages, but this practice also creates a risk that agencies will promulgate vague and open-ended regulations that they can later interpret as they see fit, thereby “frustrat[ing] the notice and predictability purposes of rulemaking.” Talk America, Inc. v. Michigan Bell Telephone Co., 564U. S. ___, ___ (2011) (SCALIA, J., concurring)

The citation to Justice Scalia’s opinion in Talk America is interesting because in it Scalia expresses well-founded doubt that Auer should still be the law:

[W]hen an agency promulgates an imprecise rule, it leaves to itself the implementation of that rule, and thus the initial determination of the rule’s mean­ing. And though the adoption of a rule is an exercise of the executive rather than the legislative power, a properly adopted rule has fully the effect of law. It seems contrary to fundamental principles of separation of powers to per­mit the person who promulgates a law to interpret it as well. “When the legislative and executive powers are united in the same person, or in the same body of magis­trates, there can be no liberty; because apprehensions may arise, lest the same monarch or senate should enact ty­rannical laws, to execute them in a tyrannical manner.” Montesquieu, Spirit of the Laws bk. XI, ch. 6, pp. 151–152 (O. Piest ed., T. Nugent transl. 1949).
Deferring to an agency’s interpretation of a statute does not encourage Congress, out of a desire to expand its power, to enact vague statutes; the vagueness effectively cedes power to the executive. By contrast, deferring to an agency’s interpretation of its own rule encourages the agency to enact vague rules which give it the power, in future adjudications, to do what it pleases. This frustrates the notice and predictability purposes of rulemaking, and promotes arbitrary government.

Although SmithKline Beechum Corp. does not overturn Auer, it shows that Auer deference rests on a shaky footing with the current Court. Perhaps we’ll see an end to this unduly deferential standard in the near future.

Censoring Ray Bradbury

Posted by David Boaz at http://www.cato-at-liberty.org/censoring-ray-bradbury/


Ray Bradbury has died at 91. Far be it from me to try to assess the work of the great author of Fahrenheit 451 and The Martian Chronicles. I’ll just quote Gerald Jonas in the New York Times:

By many estimations Mr. Bradbury was the writer most responsible for bringing modern science fiction into the literary mainstream. His name would appear near the top of any list of major science-fiction writers of the 20th century, beside those of Isaac Asimov, Arthur C. Clarke, Robert A. Heinlein and the Polish author Stanislaw Lem.

Like most libertarians — which in this case probably includes a lot of liberals and conservatives — I’m a great fan of the anti-censorship novel Fahrenheit 451. But a story that doesn’t get much attention — it’s not in the Times obituary — is how Fahrenheit 451 itself was censored, by people who no doubt thought they had the best of intentions. When he discovered what had been done, he wrote this Coda to the 1979 Del Rey edition. It’s worth reading today. What Bradbury said then is still true: “There is more than one way to burn a book. And the world is full of people run­ning about with lit matches.”
In memoriam, Ray Bradbury’s Coda:

About two years ago, a letter arrived from a solemn young Vassar lady telling me how much she enjoyed reading my experiment in space mythology, The Martian Chronicles.
But, she added, wouldn’t it be a good idea, this late in time, to rewrite the book inserting more women’s characters and roles?
A few years before that I got a certain amount of mail concerning the same Martian book complaining that the blacks in the book were Uncle Toms and why didn’t I “do them over”?
Along about then came a note from a Southern white suggesting that I was prejudiced in favor of the blacks and the entire story should be dropped.
Two weeks ago my mountain of mail delivered forth a pipsqueak mouse of a letter from a well-known publishing house that wanted to reprint my story “The Fog Horn” in a high school reader.
In my story, I had described a lighthouse as hav­ing, late at night, an illumination coming from it that was a “God-Light.” Looking up at it from the view-point of any sea-creature one would have felt that one was in “the Presence.”
The editors had deleted “God-Light” and “in the Presence.”
Some five years back, the editors of yet another anthology for school readers put together a volume with some 400 (count ‘em) short stories in it. How do you cram 400 short stories by Twain, Irving, Poe, Maupassant and Bierce into one book?
Simplicity itself. Skin, debone, demarrow, scarify, melt, render down and destroy. Every adjective that counted, every verb that moved, every metaphor that weighed more than a mosquito—out! Every simile that would have made a sub-moron’s mouth twitch—gone! Any aside that explained the two-bit philosophy of a first-rate writer—lost!
Every story, slenderized, starved, bluepenciled, leeched and bled white, resembled every other story. Twain read like Poe read like Shakespeare read like Dostoevsky read like—in the finale—Edgar Guest. Every word of more than three syllables had been ra­zored. Every image that demanded so much as one instant’s attention—shot dead.
Do you begin to get the damned and incredible picture?
How did I react to all of the above?
By “firing” the whole lot.
By sending rejection slips to each and every one. By ticketing the assembly of idiots to the far reaches of hell.
The point is obvious. There is more than one way to burn a book. And the world is full of people run­ning about with lit matches. Every minority, be it Baptist / Unitarian, Irish / Italian / Octogenarian / Zen Buddhist, Zionist/Seventh-day Adventist, Women’s Lib/ Republican, Mattachine/ Four Square Gospel feels it has the will, the right, the duty to douse the kerosene, light the fuse. Every dimwit editor who sees himself as the source of all dreary blanc-mange plain porridge unleavened literature, licks his guillotine and eyes the neck of any author who dares to speak above a whisper or write above a nursery rhyme.
Fire-Captain Beatty, in my novel Fahrenheit 451, described how the books were burned first by minori­ties, each ripping a page or a paragraph from this book, then that, until the day came when the books were empty and the minds shut and the libraries closed forever.
“Shut the door, they’re coming through the win­dow, shut the window, they’re coming through the door,” are the words to an old song. They fit my life-style with newly arriving butcher/censors every month. Only six weeks ago, I discovered that, over the years, some cubby-hole editors at Ballantine Books, fearful of contaminating the young, had, bit by bit, censored some 75 separate sections from the novel. Students, reading the novel which, after all, deals with censorship and book-burning in the fu­ture, wrote to tell me of this exquisite irony. Judy-Lynn Del Rey, one of the new Ballantine editors, is having the entire book reset and republished this summer with all the damns and hells back in place.
A final test for old Job II here: I sent a play, Leviathan 99, off to a university theater a month ago. My play is based on the “Moby Dick” mythology, dedi­cated to Melville, and concerns a rocket crew and a blind space captain who venture forth to encounter a Great White Comet and destroy the destroyer. My drama premieres as an opera in Paris this autumn.
But, for now, the university wrote back that they hardly dared do my play—it had no women in it! And the ERA ladies on campus would descend with ball-bats if the drama department even tried!
Grinding my bicuspids into powder, I suggested that would mean, from now on, no more productions of Boys in the Band (no women), or The Women (no men). Or, counting heads, male and female, a good lot of Shakespeare that would never be seen again, especially if you count lines and find that all the good stuff went to the males!
I wrote back maybe they should do my play one week, and The Women the next. They probably thought I was joking, and I’m not sure that I wasn’t.
For it is a mad world and it will get madder if we allow the minorities, be they dwarf or giant, orangu­tan or dolphin, nuclear-head or water-conversation­ist, pro-computerologist or Neo-Luddite, simpleton or sage, to interfere with aesthetics. The real world is the playing ground for each and every group, to make or unmake laws. But the tip of the nose of my book or stories or poems is where their rights end and my territorial imperatives begin, run and rule. If Mor­mons do not like my plays, let them write their own. If the Irish hate my Dublin stories, let them rent type-writers. If teachers and grammar school editors find my jawbreaker sentences shatter their mushmilk teeth, let them eat stale cake dunked in weak tea of their own ungodly manufacture. If the Chicano intel­lectuals wish to re-cut my “Wonderful Ice Cream Suit” so it shapes “Zoot,” may the belt unravel and the pants fall.
For, let’s face it, digression is the soul of wit. Take philosophic asides away from Dante, Milton or Ham-let’s father’s ghost and what stays is dry bones. Laur­ence Sterne said it once: Digressions, incontestably, are the sunshine, the life, the soul of reading! Take them out and one cold eternal winter would reign in every page. Restore them to the writer—he steps forth like a bridegroom, bids them all-hail, brings in variety and forbids the appetite to fail.
In sum, do not insult me with the beheadings, finger-choppings or the lung-defiations you plan for my works. I need my head to shake or nod, my hand to wave or make into a fist, my lungs to shout or whis­per with. I will not go gently onto a shelf, degutted, to become a non-book.
All you umpires, back to the bleachers. Referees, hit the showers. It’s my game. I pitch, I hit, I catch. I run the bases. At sunset I’ve won or lost. At sunrise, I’m out again, giving it the old try.
And no one can help me. Not even you.