Tag Archive for ObamaCare

Union Sues ObamaCare Program in California to Axe Kaiser Permanente from List of Twelve Qualified Health Plans

On August 7, Covered California – the program of the California Health Benefit Exchange established by the California Patient Protection and Affordable Care Act to implement the federal Patient Protection and Affordable Care Act (aka ObamaCare) – announced that it had executed agreements with twelve insurance companies in its market for individuals.

But wait! On September 4, the National Union of Healthcare Workers (NUHW) sued the California Health Benefit Exchange for the purpose of disqualifying Kaiser Permanente from participation in the program. (See National Union of Healthcare Workers v. California Health Benefit Exchange.) Of course, the lawsuit against Kaiser isn’t really about health care: it’s about union organizing.

There has been surprisingly little news coverage of this lawsuit, with the Sacramento Business Journal being the only news source with firsthand reporting on it. (See “Union Seeks to Block Kaiser from Health Benefit Exchange.”) Perhaps the topic is too complex or obscure, or perhaps news organizations are hesitant right now to show weaknesses in ObamaCare.

However, I reported on the lawsuit in my September 10, 2013 article in www.UnionWatch.orgUnion Files Lawsuit Exploiting ObamaCare in California for Organizing Purposes. I introduce the article by directing readers to “Add ObamaCare to the list of laws that California unions are exploiting for ‘corporate campaign’ strategies to coerce labor agreements or exert pressure during labor disputes.”

What Happened to the Pacific Research Institute? California Needs a Policy Institute That Inspires and Dominates Intellectual Discussion about an Alternative Way to Govern the State

The leftist magazine Mother Jones published an article today (July 19, 2012) critical of the President and CEO and the operations of the Pacific Research Institute, a free market think tank based in San Francisco. I am an Adjunct Fellow in Labor Studies at the Pacific Research Institute, although I probably won’t be after I post this commentary on my Dayton Public Policy Institute blog.

Here’s my perspective on this matter.

Once innovative, creative, and on the cutting edge of policy initiatives, many American free market think tanks in 2012 appear to be developing into a stagnant, protective, incestuous club of interlocking directorates and eccentrics who enjoy socializing in urban intellectual salons. This culture will react strongly against any outside pleas to reform the remnants of their comfortable “movement.” No version of the Tea Party has yet emerged among free market-oriented intellectuals to topple the decaying edifice and energetically rebuild it with fresh thinking and ambitious strategic planning.

The Pacific Research Institute perhaps excels among the thousands of people and organizations in this country who are trying to make a living pontificating about Obamacare. But is there any unique angle or aspect about Obamacare that still remains to be chewed on? While bashing Obamacare attracts attention and excitement, even I’m tired of it – I change the radio station whenever a talk show host begins rehashing it. (I recommend reading the June 28, 2012 U.S. Supreme Court decision and dissent in National Federation of Independent Business v. Sebelius for fresh, thoughtful perspectives on Obamacare.)

Meanwhile, the State of California and many of its local governments are careening toward bankruptcy while most citizens of the state are wringing their hands in helplessness. Almost everyone in this state knows something is terribly wrong (even the union officials and the union-backed politicians know it), but the state utterly lacks a recognized free market organization with a message that can effectively subvert the entrenched, self-preserving syndicate of politicians, big corporations, unions, and media. Some sort of intellectual force needs to develop and advance a thoughtful, principled alternative to the current way in which the state is governed.

The people of California desperately need a strong, vocal, prominent free market policy institute that not only identifies the numerous economic and governance problems in the State of California, but also proposes audacious, concrete long-term solutions that ordinary citizens can understand and support. The Pacific Research Institute in San Francisco should have that role. It has not held it for many years.

My Early Background with the Pacific Research Institute

I first met a Pacific Research Institute policy analyst – former Director of the Center for Enterprise and Opportunity Katherine Post – in Washington, D.C. in the mid-1990s. I was surprised and impressed to learn that a free market think tank was based in San Francisco.

When I began government affairs work for Associated Builders and Contractors in California in 1997, the Pacific Research Institute’s Senior Fellow in Education Studies Lance Izumi was one of the first people I met in the public policy arena. In the early 2000s, the Pacific Research Institute recognized my professional expertise on complex and costly construction labor issues and designated me as their one and only fellow in Labor Issues. I saw Milton Friedman at the institute’s 25th anniversary gala in San Francisco in September 2004.

The Pacific Research Institute especially took an interest in my lonely work researching and exposing a taxpayer-funded union propaganda program at the University of California, established in 2000 with $6 million in direct funding in the California state budget signed by Governor Gray Davis. I worked extensively on this and other labor issues with the Pacific Research Institute’s former Business and Economic Studies Director Lawrence McQuillan (now chief economist at the Illinois Policy Institute) and also with its former Editorial Director Lloyd Billingsley (author of Hollywood Party: How Communism Seduced the American Film Industry in the 1930s and 1940s).

Selected twice by the Pacific Research Institute for its Golden Fleece Award, the University of California Labor Program was an especially appropriate state issue for the Pacific Research Institute to examine and expose. Other than my employer (Associated Builders and Contractors), no other prominent organization in California was taking a leadership role in publicly criticizing the University of California Labor Program, even as the Labor Program grew to serve as the intellectual foundation of the California Labor Federation‘s political agenda at the California State Legislature and at California local governments. (The Howard Jarvis Taxpayers Association did include the program in its lists of unnecessary, wasteful, inappropriate government programs, but it necessarily had to focus on a thousand other examples of California fiscal foolishness.)

While independent free market-oriented think tanks such as the Pacific Research Institute rely on corporations, foundations, and individuals to fund their policy research, the California Labor Federation and the State Building and Construction Trades Council of California simply obtained taxpayer funding to start and maintain what should have been their own self-funded research and marketing program. To add insult to injury to California taxpayers, the Labor Program was hosted at the University of California, so union officials and their academic sycophants could add a degree of credibility to their phony and biased reports, web sites, and news releases by stamping the respected UC logo and name on them.

Neither Associated Builders and Contractors nor I had any sort of written or unwritten financial agreement with the Pacific Research Institute for any of its research and exposure concerning the UC Labor Program. The Pacific Research Institute staff was outraged about the taxpayer funding for the program and filled a policy vacuum by investigating it and reporting on it for several years, thus providing a valuable service to California taxpayers and businesses.

In 2002, I Propose to the Pacific Research Institute That It Establish the Nation’s First Free Market-Oriented Labor Studies Center

Here are a few excerpts of my October 10, 2002 memorandum to Pacific Research Institute officials, entitled “Proposal for Labor Studies Center at the Pacific Research Institute.”

New Union Think Tank Challenges Free Market Economics in California

At the request of the California Labor Federation, the California state legislature has provided a total of $17 million in the past three state budgets to establish and operate a “Multi-Campus Research Unit for Labor Studies” at U.C. Berkeley and UCLA. With taxpayer funding and the academic credibility of the University of California behind it, this “union think tank” has quickly become a powerful political tool for organized labor.

An Orange County Register editorial describes this union think tank as “a thinly veiled payoff to organized labor activists.” As cited in the same editorial, Associated Builders and Contractors contends that “studies and papers produced by this union think tank lack academic merit but make useful propaganda for the unions to advance their political agenda at the state and local levels.”

Legislators and news media now regularly cite the dozens of studies already produced by the union think tank, including studies on living wage and the supposed negative impact on the poor that would result from the breakup of Los Angeles. Directors for the union think tank have essentially become the media spokespeople for the union political agenda, displacing the angry rhetoric of union lobbyists with the calm impartiality of supposedly thoughtful university intellectuals. As one union leader said when presenting a union think tank study during a recent Antioch City Council meeting, “It’s from a college. Written by a doctor.”

There’s a Vacuum Where Opposing Views Should Be Heard

California lacks a clear voice from the free market perspective on the immediate labor issues before state and local governments. Responses from industry representatives and elected officials to union initiatives have often been lackluster or even apologetic. Unions and their Democrat supporters portray industry positions on proposed legislation as self-interested and motivated by corporate greed, and there lacks an alternative source of information to back industry positions.

On the national level, many of the intellectual champions of free market economics against the unions during the union heyday of the 1950s and 1960s have retired or died … compared to the prolific union think tank, output is minimal.

Pacific Research Institute Can Fill the Vacuum and Provide Balance

For a few years now, I’ve seen the need for an intellectual operation in California to challenge some of the unions’ academic production that is blindsiding business associations and interest groups. For example, when the UCLA union think tank and the California Research Bureau simultaneously issued studies in the fall of 2001 to support a Project Labor Agreement (PLA) for construction of U.C. Merced, opponents of PLAs lacked opposition studies. Studies and comments against the union political agenda from outside the political world could provide some balance on labor issues in the media and in Sacramento.

I believe that creating a Labor Studies Center at the already established Pacific Research Institute could be a solution. I have not been able to identify a purely research-oriented free market institute for Labor Studies anywhere in the country.

Although my proposal sparked some interest at the Pacific Research Institute, especially after the October 2003 recall of Governor Gray Davis and replacement with Arnold Schwarzenegger, the Labor Studies Center was never established, and the country still lacks anything like it.

My Relationship Fades with the Pacific Research Institute

On August 30, 2009, the San Jose Mercury-News published an opinion piece written by me under my title of Adjunct Fellow in Labor Studies at the Pacific Research Institute. It exposed the documented behind-the-scenes politics leading to a decision at the highest levels of the University of California administration to divert $4 million from other purposes to the University of California Labor Program, which had its annual budget appropriation vetoed by Governor Schwarzenegger in 2008. This op-ed stirred up a lot of controversy.

But the Pacific Research Institute seemed to be retreating from important issues at the state level. I was quoted and cited as a source in a comprehensive report released by the Pacific Research Institute in March 2011 outlining weaknesses and proposing solutions concerning California’s public records access laws (Bringing More Sunshine to California: How to Expand Open Government in the Golden State). I was disappointed at how little attention the Pacific Research Institute received for this well-documented, thoughtful report about another policy arena in which California governance is failing.

Then the Pacific Research Institute laid off some people I knew, and subsequently a few others I knew left for other employment – some to other states. The Pacific Research Institute was ditching California policy issues, while its staff – highly informed Californian policy experts – was simply moving out of the state for better opportunities. (Good riddance, I’m sure many leaders in this state are saying about those departures as they eagerly anticipate the bounty from higher tax rates on the people who are left.)

I’m guessing the unflattering profile in Mother Jones magazine will not alter the priorities of the Pacific Research Institute. I’m now waiting for the emergence of a new free market think tank, based near the state capitol in Sacramento and influential in changing the hopes and plans of the people of California. It would be ideal to see the Pacific Research Institute revitalized to tackle this ambitious project, but I expect someone outside of the traditional culture of free market think tanks will need to start it from scratch.

Join the Movement to Encourage Americans to Read the U.S. Supreme Court Dissent in the Obamacare Case

It’s good to see other people have the same idea that I had after reading the dissent in the U.S. Supreme Court’s 5-4 decision on June 28, 2012 in National Federation of Independent Business v. Sebelius to uphold Obamacare. I took a hint from the statement in the dissent about the American people’s ignorance of the U.S. Constitution:

Structural protections—notably, the restraints imposed by federalism and separation of powers—are less romantic and have less obvious a connection to personal freedom than the provisions of the Bill of Rights or the Civil War Amendments. Hence they tend to be undervalued or even forgotten by our citizens.

That afternoon, I posted A Readable, Categorized List of Principles from the ObamaCare Supreme Court Dissent Against “Whatever-It-Takes-to-Solve-a-National Problem Power” of the Federal Government with a list of excerpts “most understandable and relevant to the ordinary American citizen.”

Today in http://www.breitbart.com/Big-Government, a conservative law professor named Ken Klukowski (who filed an amicus brief to the U.S. Supreme Court in the Obamacare case) writes the following in his article The Great Dissent Part I: Four Justices in Obamacare Make Case for Constitutional Conservatism:

The dissent in NFIB v. Sebelius, written jointly by Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas, and Samuel Alito, is one of the finest judicial opinions I’ve ever read, if not the single finest. That this opinion was only one vote shy of being a majority opinion that would bind the government and the nation going forward is a tragedy of Shakespearean magnitude. We came within a single vote of winning it all.

Klukowski posted another article on Big Government on June 28 titled “One of the Worst Supreme Court Decisions in American History.” He intends to publish a series of articles explaining “some of the most consequential aspects of that decision, mostly quoting relevant parts of the decision that will have lasting consequences for the country.”

I hope this series of articles circulates widely. If Americans are going to rediscover the original and proper purpose of the United States Constitution, the key excerpts from this case need to be spread far and wide.

The issue isn’t whether or not health care reform is needed or if Obamacare would be an effective solution to problems with the health care system. The issue is that the federal government is now being allowed to expand its powers beyond those granted by the U.S. Constitution, under the rationale that the federal government needs to do whatever it takes to solve national problems.

A Readable, Categorized List of Principles from the ObamaCare Supreme Court Dissent Against “Whatever-It-Takes-to-Solve-a-National Problem Power” of the Federal Government

I’m not a Constitutional lawyer. What could I possibly add to the frenzied national discussion about the U.S. Supreme Court’s decision today (June 28, 2012) in National Federation of Independent Business v. Sebelius that the Congressional approval of the “Patient Protection and Affordable Care Act” (hereafter referred to as ObamaCare) does not violate the United States Constitution?

Well, I see that four of the Supreme Court Justices (Scalia, Thomas, Alioto, and Kennedy) left a message for me and for all ordinary American citizens who understand the traditional meaning and purpose of the Constitution. (Read The Federalist Papers here.) These justices want us to do something. Read the except below from their dissent (the emphasis added is mine):

The Constitution, though it dates from the founding of the Republic, has powerful meaning and vital relevance to our own times. The constitutional protections that this case involves are protections of structure. Structural protections—notably, the restraints imposed by federalism and separation of powers—are less romantic and have less obvious a connection to personal freedom than the provisions of the Bill of Rights or the Civil War Amendments. Hence they tend to be undervalued or even forgotten by our citizens. It should be the responsibility of the Court to teach otherwise, to remind our people that the Framers considered structural protections of freedom the most important ones, for which reason they alone were embodied in the original Constitution and not left to later amendment. The fragmentation of power produced by the structure of our Government is central to liberty, and when we destroy it, we place liberty at peril. Today’s decision should have vindicated, should have taught, this truth; instead, our judgment today has disregarded it.

Actually, it’s not just the responsibility of the Court to teach otherwise; it’s the responsibility of the People. As the preamble to the Constitution states, “We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.”

So I’ll do my duty as part of We the People by categorizing and listing below some key points made in the dissent. I used my own discretion to determine which excerpts were most understandable and relevant to the ordinary American citizen.

To make the statements clear to the ordinary citizen, I’ve eliminated case citations and replaced jargon, technical terms, and abbreviations. For once, we need a dissent in a U.S. Supreme Court decision that’s read by the People rather than just law students.

THE TRUE MEANING AND PURPOSE OF THE CONSTITUTION

The U.S. Constitution Sets Limits on the Power of the Federal Government Over States and Individuals

What is absolutely clear, affirmed by the text of the 1789 Constitution, by the Tenth Amendment ratified in 1791, and by innumerable cases of ours in the 220 years since, is that there are structural limits upon federal power—upon what it can prescribe with respect to private conduct, and upon what it can impose upon the sovereign States. Whatever may be the conceptual limits upon the Commerce Clause and upon the power to tax and spend, they cannot be such as will enable the Federal Government to regulate all private conduct and to compel the States to function as administrators of federal programs.

There is a 220 Year History of Debate Over How Much Power the Federal Government Has to Promote the General Welfare

No one has ever doubted that the Constitution authorizes the Federal Government to spend money, but for many years the scope of this power was unsettled. The Constitution grants Congress the power to collect taxes to provide for the general Welfare of the United States, and from the foundation of the Nation sharp differences of opinion have persisted as to the true interpretation of the phrase “the general welfare.” [James] Madison, it has been said, thought that the phrase amounted to no more than a reference to the other powers enumerated in the subsequent clauses of the same section, while Hamilton maintained the clause confers a power separate and distinct from those later enumerated [and] is not restricted in meaning by the grant of them. The Court resolved this dispute … the Madisonian view would make Article I’s grant of the spending power a “mere tautology.” To avoid that, [the Court] adopted Hamilton’s approach and found that “the power of Congress to authorize expenditure of public moneys for public purposes is not limited by the direct grants of legislative power found in the Constitution.” Instead, the spending power’s “confines are set in the clause which confers it, and not in those of section 8 which bestow and define the legislative powers of the Congress.” The power to make any expenditure that furthers “the general welfare” is obviously very broad, and shortly after … the Court gave Congress wide leeway to decide whether an expenditure qualifies. Since that time, the Court has never held that a federal expenditure was not for “the general welfare.”

The Constitution Sets Limits on the Authority of the Federal Government, So It’s Not Acceptable to Give the Federal Government Control Over Everything, Even If It Solves Problems and Does Wonderful Things

[The Obama Administration’s] exposition of the wonderful things the Federal Government has achieved through exercise of its assigned powers, such as “the provision of old-age and survivors’ benefits” in the Social Security Act, is quite beside the point. The issue here is whether the federal government can impose the Individual Mandate through the Commerce Clause. And the relevant history is not that Congress has achieved wide and wonderful results through the proper exercise of its assigned powers in the past, but that it has never before used the Commerce Clause to compel entry into commerce.

[The Constitution] enumerates not federally soluble problems, but federally available powers. The Federal Government can address whatever problems it wants but can bring to their solution only those powers that the Constitution confers, among which is the power to regulate commerce. None of our cases say anything else. Article I contains no whatever-it-takes-to-solve-a-national problem power.

Past Courts Have Concluded that Congress Has the Authority for a Lot of Taxing and Spending  to Provide What the Constitution Calls the “General Welfare” (But ObamaCare Takes This Concept a Lot Further) 

As for the constitutional power to tax and spend for the general welfare: The Court has long since expanded that beyond (what Madison thought it meant) taxing and spending for those aspects of the general welfare that were within the Federal Government’s enumerated powers. Thus, we now have sizable federal Departments devoted to subjects not mentioned among Congress’ enumerated powers, and only marginally related to commerce: the Department of Education, the Department of Health and Human Services, the Department of Housing and Urban Development. The principal practical obstacle that prevents Congress from using the tax-and-spend power to assume all the general-welfare responsibilities traditionally exercised by the States is the sheer impossibility of managing a Federal Government large enough to administer such a system. That obstacle can be overcome by granting funds to the States, allowing them to administer the program. That is fair and constitutional enough when the States freely agree to have their powers employed and their employees enlisted in the federal scheme. But it is a blatant violation of the constitutional structure when the States have no choice.

There Is Still a Residual Idea in the United States that There Are Limits to the Power of Federal Government

The [Obama Administration] was invited to suggest [to the U.S. Supreme Court] what federal controls over private conduct (other than those explicitly prohibited by the Bill of Rights or other constitutional controls) could not be justified as necessary and proper for the carrying out of a general regulatory scheme. It was unable to name any. Whereas the precise scope of the Commerce Clause and the Necessary and Proper Clause is uncertain, the proposition that the Federal Government cannot do everything is a fundamental precept.

THE NATURE OF THE “PATIENT PROTECTION AND AFFORDABLE CARE ACT” (ALSO KNOWN AS OBAMACARE) APPROVED BY THE FEDERAL LEGISLATIVE BRANCH (CONGRESS)

The ObamaCare Law Is an Over-Weighted Christmas Tree Reflecting Reprehensible Examples of Brazen Political Deals and Other Nonsense

The bill is over 900 pages long. Its regulations include requirements ranging from a break time and secluded place at work for nursing mothers, to displays of nutritional content at chain restaurants. The Act raises billions of dollars in taxes and fees, including exactions imposed on high-income taxpayers, medical devices, and tanning booths. It spends government money on, among other things, the study of how to spend less government money.. And it includes a number of provisions that provide benefits to the State of a particular legislator. For example, [one provision] extends Medicare coverage to individuals exposed to asbestos from a mine in Libby, Montana. Another provision increases Medicaid payments only in Louisiana. Such provisions validate the Senate Majority Leader’s statement, “I don’t know if there is a senator that doesn’t have something in this bill that was important to them…[And] if they don’t have something in it important to them, then it doesn’t speak well of them. That’s what this legislation is all about: It’s the art of compromise.”

There is no reason to believe that Congress would have enacted [the numerous unrelated provisions in the ObamaCare bill] independently. The Court has not previously had occasion to consider severability in the context of [a huge bill like ObamaCare], which includes not only many provisions that are ancillary to its central provisions but also many that are entirely unrelated—hitched on because it was a quick way to get them passed despite opposition, or because their proponents could exact their enactment as the quid pro quo for their needed support. When we are confronted with such a so called “Christmas tree,” a law to which many non-germane ornaments have been attached, we think the proper rule must be that when the tree no longer exists the ornaments are superfluous. We have no reliable basis for knowing which pieces of the Act would have passed on their own. It is certain that many of them would not have, and it is not a proper function of this Court to guess which. To sever the statute in that manner ‘would be to make a new law, not to enforce an old one. This is not part of our duty. This Court must not impose risks unintended by Congress or produce legislation Congress may have lacked the support to enact. For those reasons, the unconstitutionality of both the Individual Mandate and the Medicaid Expansion requires the invalidation of the [law’s] other provisions.

[Regarding a comparison of ObamaCare withholding Medicaid to the states to the 1980s law withholding certain federal funding from states that did not enact a minimum drinking age of 21 years old]…the total amount that the States would have lost if every single State had refused to comply with the 21-year-old drinking age was approximately $614.7 million—or about 0.19% of all state expenditures combined. South Dakota stood to lose, at most, funding that amounted to less than 1% of its annual state expenditures. Under [ObamaCare], by contrast, the Federal Government has threatened to withhold 42.3% of all federal outlays to the states, or approximately $233 billion. South Dakota stands to lose federal funding equaling 28.9% of its annual state expenditures. Withholding $614.7 million, equaling only 0.19% of all state expenditures combined, is aptly characterized as “relatively mild encouragement,” but threatening to withhold $233 billion, equaling 21.86% of all state expenditures combined, is a different matter…

When Congress Approved ObamaCare as a Way to Solve a Legitimate National Problem, It Exceeded Its Authority Granted by the Constitution, and the U.S. Supreme Court Should Have Invalidated the Entire Law

Congress has set out to remedy the problem that the best health care is beyond the reach of many Americans who cannot afford it. It can assuredly do that, by exercising the powers accorded to it under the Constitution. The question in this case, however, is whether the complex structures and provisions of the Patient Protection and Affordable Care Act [hereafter referred to as ObamaCare] go beyond those powers. We conclude that they do…The Act before us here exceeds federal power both in mandating the purchase of health insurance and in denying non consenting States all Medicaid funding. These parts of the Act are central to its design and operation, and all the Act’s other provisions would not have been enacted without them. In our view it must follow that the entire statute is inoperative.

IMPLICATIONS OF THE OBAMACARE DECISION ON INDIVIDUAL RIGHTS

Because the Supreme Court Found That ObamaCare Does Not Violate Individual Rights When It Penalizes Individuals for Choosing Not to Participate in a Transaction, the Federal Government Can Essentially Compel All Human Activity Not Protected in the Bill of Rights (Examples Given: Eating Broccoli, Growing Wheat, and Buying American Cars)

[The Obama Administration argues that] the failure to enter the health-insurance market, unlike the failure to buy cars and broccoli, is an activity that Congress can “regulate.” (Of course one day the failure of some of the public to purchase American cars may endanger the existence of domestic automobile manufacturers; or the failure of some to eat broccoli may be found to deprive them of a newly discovered cancer fighting chemical which only that food contains, producing health-care costs that are a burden on the rest of us—in which case, under the theory of Justice Ginsburg’s dissent, moving against those inactivities will also come within the Federal Government’s unenumerated problem solving powers.)

Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority. Congress already possesses expansive power to regulate what people do. Upholding ObamaCare under the Commerce Clause would give Congress the same license to regulate what people do not do. The Framers knew the difference between doing something and doing nothing. They gave Congress the power to regulate commerce, not to compel it. Ignoring that distinction would undermine the principle that the Federal Government is a government of limited and enumerated powers. The individual mandate thus cannot be sustained under Congress’s power to “regulate Commerce.”

 [The federal government mandate for individuals to have health insurance] threatens constitutional order because it gives such an expansive meaning to the Commerce Clause that all private conduct (including failure to act) becomes subject to federal control, effectively destroying the Constitution’s division of governmental powers. Thus the dissent, on the theories proposed for the validity of the Mandate, would alter the accepted constitutional relation between the individual and the National Government. The dissent protests that the Necessary and Proper Clause has been held to include the power to enact criminal laws, the power to imprison, and the power to create a national bank. Is not the power to compel purchase of health insurance much lesser? No, not if (unlike those other dispositions) its application rests upon a theory that everything is within federal control simply because it exists.

If this provision [the federal government mandate for individuals to have health insurance] “regulates” anything, it is the failure to maintain minimum essential coverage. One might argue that it regulates that failure by requiring it to be accompanied by payment of a penalty. But that failure—that abstention from commerce—is not “Commerce.” To be sure, purchasing insurance is ”Commerce”; but one does not regulate commerce that does not exist by compelling its existence.

…the main objection many have to the Mandate is that they have no intention of purchasing most or even any of such goods or services and thus no need to buy insurance for those purchases. The Government responds that the health-care market involves “essentially universal participation.” The principal difficulty with this response is that it is, in the only relevant sense, not true. It is true enough that everyone consumes “health care,” if the term is taken to include the purchase of a bottle of aspirin. But the health care “market” that is the object of the Individual Mandate not only includes but principally consists of goods and services that the young people primarily affected by the Mandate do not purchase. They are quite simply not participants in that market, and cannot be made so (and thereby subjected to regulation) by the simple device of defining participants to include all those who will, later in their lifetime, probably purchase the goods or services covered by the mandated insurance. Such a definition of market participants is unprecedented, and were it to be a premise for the exercise of national power, it would have no principled limits.

…the decision to forgo participation in an interstate market is not itself commercial activity (or indeed any activity at all) within Congress’ power to regulate. It is true that, at the end of the day, it is inevitable that each American will affect commerce and become a part of it, even if not by choice. But if every person comes within the Commerce Clause power of Congress to regulate by the simple reason that he will one day engage in commerce, the idea of a limited Government power is at an end.

…to say that the failure to grow wheat or the refusal to make loans affects commerce, so that growing and lending can be federally compelled, is to extend federal power to virtually everything. All of us consume food, and when we do so the Federal Government can prescribe what its quality must be and even how much we must pay. But the mere fact that we all consume food and are thus, sooner or later, participants in the “market” for food, does not empower the Government to say when and what we will buy. That is essentially what this Act seeks to do with respect to the purchase of health care. It exceeds federal power.It is true enough that Congress needs only a “‘rational basis’ for concluding that the regulated activity substantially affects interstate commerce. But it must be activity affecting commerce that is regulated, and not merely the failure to engage in commerce. And one is not now purchasing the health care covered by the insurance mandate simply because one is likely to be purchasing it in the future. Our test’s premise of regulated activity is not invented out of whole cloth, but rests upon the Constitution’s requirement that it be commerce which is regulated. If all inactivity affecting commerce is commerce, commerce is everything…By parity of reasoning the failure to buy a car can be called participation in the non-private-car-transportation market. Commerce becomes everything.

…to say the failure to grow wheat (which is not an economic activity, or any activity at all) nonetheless affects commerce and therefore can be federally regulated, is to make mere breathing in and out the basis for federal prescription and to extend federal power to virtually all human activity.

IMPLICATIONS OF THE OBAMACARE DECISION ON STATES’ RIGHTS

ObamaCare Effectively Uses the Power of the Federal Government to Compel Actions from the States and Undermine Their Traditional Authority Under the Constitution

ObamaCare gives the Secretary of Health and Human Services the authority to penalize States that choose not to participate in the Medicaid expansion by taking away their existing Medicaid funding. The threatened loss of over 10 percent of a State’s overall budget is economic dragooning that leaves the States with no real option but to acquiesce in the Medicaid expansion.

In crafting [ObamaCare], Congress clearly expressed its informed view that no State could possibly refuse the offer…Congress never dreamed that any State would refuse to go along with the expansion of Medicaid. Congress well understood that refusal was not a practical option…The Medicaid Expansion therefore exceeds Congress’ spending power and cannot be implemented.

 [The] practice of attaching conditions to federal funds greatly increases federal power…This formidable power, if not checked in any way, would present a grave threat to the system of federalism created by our Constitution.

If Congress’ Spending Clause power to pursue objectives outside of Article I’s enumerated legislative fields is “limited only by Congress’ notion of the general welfare, the reality, given the vast financial resources of the Federal Government, is that the Spending Clause gives “power to the Congress to tear down the barriers, to invade the states’ jurisdiction, and to become a parliament of the whole people, subject to no restrictions save such as are self-imposed.”… “[T]he Spending Clause power, if wielded without concern for the federal balance, has the potential to obliterate distinctions between national and local spheres of interest and power by permitting the Federal Government to set policy in the most sensitive areas of traditional state concern, areas which otherwise would lie outside its reach.”

Recognizing this potential for abuse, our cases have long held that the power to attach conditions to grants to the States has limits. For one thing, any such conditions must be unambiguous so that a State at least knows what it is getting into. Conditions must also be related “to the federal interest in particular national projects or programs,” and the conditional grant of federal funds may not “induce the States to engage in activities that would themselves be unconstitutional.” Finally, while Congress may seek to induce States to accept conditional grants, Congress may not cross the “point at which pressure turns into compulsion, and ceases to be inducement.”

When federal legislation gives the States a real choice whether to accept or decline a federal aid package, the federal-state relationship is in the nature of a contractual relationship. And just as a contract is voidable if coerced, “the legitimacy of Congress’ power to legislate under the spending power . . . rests on whether the State voluntarily and knowingly accepts the terms of the ‘contract.’” If a federal spending program coerces participation the States have not “exercised their choice”—let alone made an “informed choice.” Coercing States to accept conditions risks the destruction of the “unique role of the States in our system.” “The Constitution has never been understood to confer upon Congress the ability to require the States to govern according to Congress’ instructions.”

When a heavy federal tax is levied to support a federal program that offers large grants to the States, States may, as a practical matter, be unable to refuse to participate in the federal program and to substitute a state alternative. Even if a State believes that the federal program is ineffective and inefficient, withdrawal would likely force the State to impose a huge tax increase on its residents, and this new state tax would come on top of the federal taxes already paid by residents to support subsidies to participating States. Acceptance of the Federal Government’s interpretation of the anti-coercion rule would permit Congress to dictate policy in areas traditionally governed primarily at the state or local level.

Under the Court Reasoning That Concludes ObamaCare Is Authorized by the Constitution, the Federal Government Could Take Control of Public Schools

Suppose, for example, that Congress enacted legislation offering each State a grant equal to the State’s entire annual expenditures for primary and secondary education. Suppose also that this funding came with conditions governing such things as school curriculum, the hiring and tenure of teachers, the drawing of school districts, the length and hours of the school day, the school calendar, a dress code for students, and rules for student discipline. As a matter of law, a State could turn down that offer, but if it did so, its residents would not only be required to pay the federal taxes needed to support this expensive new program, but they would also be forced to pay an equivalent amount in state taxes. And if the State gave in to the federal law, the State and its subdivisions would surrender their traditional authority in the field of education.

NEW DEFINITIONS OF A TAX AND NEW TAXING AUTHORITY TO THE JUDICIAL BRANCH

Now the Federal Government Can Consider Financial Penalties (Fines) for Violating the Law as Taxes

Our cases establish a clear line between a tax and a penalty: “[A] tax is an enforced contribution to provide for the support of government; a penalty . . . is an exaction imposed by statute as punishment for an unlawful act.” In a few cases, this Court has held that a “tax” imposed upon private conduct was so onerous as to be in effect a penalty. But we have never held—never—that a penalty imposed for violation of the law was so trivial as to be in effect a tax. We have never held that any exaction imposed for violation of the law is an exercise of Congress’ taxing power—even when the statute calls it a tax, much less when (as here)the statute repeatedly calls it a penalty. When an act  “adopt[s] the criteria of wrongdoing” and then imposes a monetary penalty as the “principal consequence on those who transgress its standard,” it creates a regulatory pen­alty, not a tax. So the question is, quite simply, whether the exaction here is imposed for violation of the law. It unquestionably is.

Now the Judiciary Branch (the Courts) Has the Power to Tax as Well as the Legislative Branch

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.

This Penalty or Fine That’s Now Considered to be a Tax Opens Up an Unprecedented, Obscure, and Strange Issue About the Meaning of the U.S. Constitution

Finally, we must observe that rewriting [the federal penalty for not having individual health insurance] as a tax in order to sustain its constitutionality would force us to confront a difficult constitutional question: whether this is a direct tax that must be apportioned among the States according to their population.

PUBLIC EMPLOYEE UNIONS HAVE THEIR OWN INTERPRETATION OF THE CONSTITUTION

Some Labor Unions Think the U.S. Constitution Is About Allowing State Public Employees to Run Government Programs Instead of Federal Employees. If Adopted, This Interpretation Would Lead to the End of Government Officials Being Accountable to the People for Their Policy Decisions

[The Service Employees International Union] argues that forcing state employees to implement a federal program is more respectful of federalism than using federal workers to implement that program. They note that Congress, instead of expanding Medicaid, could have established an entirely federal program to provide coverage for the same group of people. By choosing to structure Medicaid as a cooperative federal-state program, they contend, Congress allows for more state control. This argument reflects a view of federalism that our cases have rejected—and with good reason. When Congress compels the States to do its bidding, it blurs the lines of political accountability. If the Federal Government makes a controversial decision while acting on its own, it is the Federal Government that makes the decision in full view of the public, and it will be federal officials that suffer the consequences if the decision turns out to be detrimental or unpopular. But when the Federal Government compels the States to take unpopular actions, it may be state officials who will bear the brunt of public disapproval, while the federal officials who devised the regulatory program may remain insulated from the electoral ramifications of their decision. For this reason, federal officeholders may view this departure from the federal structure to be in their personal interests…as a means of shifting responsibility for the eventual decision. And even state officials may favor such a departure from the constitutional plan, since uncertainty concerning responsibility may also permit them to escape accountability. If a program is popular, state officials may claim credit; if it is unpopular, they may protest that they were merely responding to a federal directive.

CONCLUSIONS ABOUT THE HORRIBLE DECISION OF THE SUPREME COURT MAJORITY

[The 5-4 decision to uphold Obamacare] amounts instead to a vast judicial overreaching. It creates a debilitated, inoperable version of health-care regulation that Congress did not enact and the public does not expect. It makes enactment of sensible health-care regulation more difficult, since Congress cannot start afresh but must take as its point of departure a jumble of now senseless provisions, provisions that certain interests favored under the Court’s new design will struggle to retain. And it leaves the public and the States to expend vast sums of money on requirements that may or may not survive the necessary congressional revision.

[The 5-4 decision to uphold Obamacare] does not even have the merit of avoiding constitutional difficulties. It creates them. The holding that the Individual Mandate is a tax raises a difficult constitutional question (what is a direct tax?) that the Court resolves with inadequate deliberation. And the judgment on the Medicaid Expansion issue ushers in new federalism concerns and places an unaccustomed strain upon the Union. Those States that decline the Medicaid Expansion must subsidize, by the federal tax dollars taken from their citizens, vast grants to the States that accept the Medicaid Expansion. If that destabilizing political dynamic, so antagonistic to a harmonious Union, is to be introduced at all, it should be by Congress, not by the Judiciary.

The values that should have determined our course today are caution, minimalism, and the understanding that the Federal Government is one of limited powers. But the Court’s ruling undermines those values at every turn. In the name of restraint, it overreaches. In the name of constitutional avoidance, it creates new constitutional questions. In the name of cooperative federalism, it undermines state sovereignty.