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Monday, January 31, 2011

Health insurance law is in trouble

To those of us who wanted a public option, the health care law passed by Congress last year was a bitter disappointment. Now another judge has held it unconstitutional.

Are we supposed to be outraged by the court's holding? Given our belief that the Democratic Congress should have spent more time on goals like rolling back the obscene Bush tax cuts, we're just not feeling all that upset.

Comments (25)

If you look at the ruling, or excerpts from it then the ruling looks fairly strong for two points.

The first is that the Judge rather strongly argues that the Commerce Clause does not empower the Federal Government to force citizens to buy something. Obviously this will be the position of at least four Supreme Court Justices.

The second problem is that in what can only be called an act of Legislative Malfeasance the Congress did not include a "Severability Clause" in the legislation. This clause is normally present and states that if one provision of the law is ruled invalid, that affects only that provision and not the rest of the law. By failing to include this provision, which one can assume was one of pure idiocy by the Democrats who wrote it, if any provision of the bill is ruled unconstitutional the Court can, if they want to, throw out the entire bill.

Anyone think Scalia and Company won't just do that?

"...federal Judge Roger Vinson used Mr. Obama‘s own position from the 2008 campaign against him...he was at that time strongly opposed to the idea, stating that, ‘If a mandate was the solution, we can try that to solve homelessness by mandating everybody to buy a house,’”

Read it and weep Jack.

The top 1% of income earners now pay more taxes than the bottom 95% Maybe we can tax success out of existence?

The healthcare law does indeed have a severability clause - see Title II, Subtitle F, section 255. The (mostly) lawyers who wrote the law are not idiots. The judge simply states in his opinion that he cannot seperate out the individual mandate from the rest of the law under the severability clause (because, according to him, the mandate is so entwined in the law as to make it unseperatable), therefore he is throwing out the entire law. Fortunately, two other federal judges who have upheld the law were smart enough to be able to do so. The score now is 2-2, so who knows what will happen when it gets to the Supreme Court. Perhaps it will be declared unconstitutional; then the country can go back to the good ole days of denied coverage for pre-existing conditions, lifetime benefit caps, and best of all, making sure all those disgusting poor people don't have healthcare coverage.

Maybe our state government, which hasn't done anything interesting or useful snice about 1970, could give us a single payer system.

"The top 1% of income earners now pay more taxes than the bottom 95% "
The anti tax zealots always find a way to ignore FICA when it suits the lie of the moment.

The top 1% of income earners now pay more taxes than the bottom 95%

That's because the top 1% make more money than the bottom 95%... or pretty close to it.

People like Paul Sorenson who make this argument immediately reveal themselves to be not worthy of taking seriously. The progressive income tax is approaching its 100th birthday. There's a reason for that.

We should celebrate. Under our federalist sysTem with a government of limited, enumerated powers, it is true that the Feds can't force you to buy health insurance and reMain within the Constitution.

Besides, when this turkey crashes, we are not going to go backWatds, unless every Dem simply follows Obama's lead in folding Before the cards are dealt. When the big court kills this thing, then we can get a real national health plan, Medicare For All, with none of the legal hassles.

In the 1970s, the 2nd amendment was a legal backwater, with few legal precedents and not much interest. That changed when the NRA went radical... from a 19th century how-to-aim-your-rifle organization to a zealot-driven political organization.

Some say that the recent constitutional attacks on the Obama health care stuff, the EPA, clean water/air, etc, and overall revivalism in commerce clause (etc) attacks are akin to such 2nd amendment fulmination.

Indeed, just as the "well-regulated" part has apparently been stripped from the 2nd amendment, expect, in a decade or so, the rallying cry for the latter-day teabaggers to be on this-or-that about the severely restricted commerce clause. Roberts court uber alles!

The current reading of the Commerce Clause is at least a decade old. The rallying cry, if there is one, is now, not 10 years from now.

It will all come down, once again, to what Justice Anthony Kennedy thinks.

Didn't the Senate just relax nomination rules to limit blocks of judicial nominees? (Not sure if this went through.) If so, we can only hope that Obama is able to play the field with (slightly) less conservative lower courts.

Since the rumor on Kennedy, fairly or not, is that he browses the Web to taste international judicial opinion before opining, maybe more lower court judges like Goodwin Liu might prompt him leftwards.

Supreme Court justices aren't influenced by lower court judges. They're their bosses.

Indeed, just as the "well-regulated" part has apparently been stripped from the 2nd amendment, expect, in a decade or so, the rallying cry for the latter-day teabaggers to be on this-or-that about the severely restricted commerce clause. Roberts court uber alles!

Posted by PJB | January 31, 2011 11:35 PM

Sigh. Well-regulated did not mean rules and regulations aka laws. It meant a regular, effective militia (and no thats not the National Guard). Tis funny how we seemed to get along fine with few if any ownership restrictions until 1934. The NFA was born out of prohibition causing gangster turf wars and the early ATF tax men.

I'm quite happy with this ruling but it ain't over yet. The last thing I want is more government involvement in my healthcare.

Well I did not read the entire law, so if there is a "serverability clause" I stand corrected. Here is a news report from Slate that I relied upon, but once again despite many examples I may once again have to be reminded about the accuracy of the Net.

"The bill passed by the House and Senate did not include a severability clause. Most big pieces of legislation include such a clause, which typically explains that "invalidity or unenforceability of one or more provisions of this Agreement shall not affect any other provision of this Agreement."

So how did the Democrats fumble this? Shortly after Monday's decision, a few liberal attorneys got on the phone for a call with reporters, sponsored by the Center for American Progress and the American Constitution Society. I asked Neera Tanden, who's now the chief operating officer at CAP but who was a senior adviser at the Department of Health and Human Services during the passage of the bill, why there was no severability clause.

"One of the reasons there was not was that there was a keen understanding in the process that courts generally have a deferential view of severability and try to make the rulings have the least impact," she said. "And that took the pressure off the severability clause."

That was the thinking at the time from plenty of experts. Two months ago, Washington and Lee University law professor Timothy Jost told Brian Beutler—one of the first reporters to notice the severability slip-up—that it was unlikely that a lower court would void the entire health care bill if it voided the mandate, because "the normal rule is that partial invalidation is the required course."* Today, his optimism left tattered on Judge Vinson's carpet, Jost intimated that the Senate had made a mess of things."

The last thing I want is more government involvement in my healthcare.

Well, lucky you: it's the last thing you're going to get. They call it 'Medicare'. If that frightens you, you should perhaps look up a death panel about the time you hit 65.

Allan L., a major source of funding in the Obamacare bill was cuts in Medicare. Yep, throw that baby out with your bathwater, why don't you.

As for that taking Medicare when 65, with the nanny-state "protection" covering kids under parental policies until they are 26 years old, I for one probably won't be going on the Medicare I've paid for for decades before I'm 80 years old, if I live that long.

There are all sorts of adverse, unintended consequences in this spaghetti mess, control-freak inspired bill. If you want a clue as to how the law is going to unfold go back to Jack's recent post about Hanford. Look at the warring panels, conflicting bureaucracies and mistaken experts, and the costs spiraling beyond reason. The health care law has parallel flaws. It's a Rube Goldberg contraption that will collapse upon the people its intended to serve in innumerable ways.

I think the proper term is "Romneycare" — it seems to be working ok in Mass. It's not ideal. But to your specific points: (a) the planned Medicare cuts mostly remove generous subsidies to the drug and insurance companies — subsidies that figure to sink this country's economy if they are not addressed -- and (b) if allowing people to buy and pay for health coverage for children up to age 26 is nannyism to you, I guess the healthi insurance "industry" can be happy that your views didn't get in the way of their objectives for expanding their markets through this bill. I"m no big defender of the ACA. A single payer system would have been much better. But a lot of moronic ideas and superstitions stand in the way of that.

Allan L., you're right that it's Romneycare --- but there are two relevant points to be made about that:

One, when did it become the job of supposedly liberal Democratic presidents to pass GOP policies like NAFTA and Romneycare.

Two, states may do wHat the Feds may not in our system, where states have plenary powers, able to pass any laws for the health, safety, aNd welfare of the people, while the Feds were given only specifically Enumerated powers, and the whole thing was sold as being a gooD idea because the ninth and tenth amendments ensured that the federal government couldn't grab a bunch of additional powers.

If we want national health insurance, and we should, We have a proven and constitutional model, Medicare. What we do not need is the federal government Enshrining the power of the insurance lobby into the federal Rules.

I think the dems passed what they could. I think the individual mandate is a bad idea, but not unconstitutional. There is no slippery slope here.

That's because the top 1% make more money than the bottom 95%... or pretty close to it.

Per IRS statistics for 2008 (most recent year available at with the closest available breakdowns:

The bottom 96.93% of returns filed (those with reported AGI of $200K or less) accounted for 70.2% of all reported AGI. Those same returns accounted for almost 48% of total income tax.

The top 0.6% of returns filed (reported AGI of $500K or more) accounted for a little less than 18% of all reported AGI, but paid a little more than 33% of total income tax.

In short, the top 1% don't make anything like "more than the bottom 95% or pretty close to it". In fact, from IRS data, the top 3% make less than half what the bottom 97% make, yet they do pay more income tax than the bottom 97%. And that top 0.6% pay almost TWICE as big a slice of the income tax pie proportionate to their slice of the income pie.

Yes, this conveniently excludes FICA -- which complicates matters quite a bit, for a number of reasons not least of which is that those dedicated taxes finance a separate system outside of the regular federal budget.

But my point is that arguments for making the income tax system MORE progressive (e.g., by eliminating the "obscene" Bush tax cuts only for high-income filers) based on an idea that the top x% aren't paying their "fair share" just aren't supported by the facts.

Those same returns accounted for almost 48% of total income tax.

So, to you, 48% is "pretty close" to 5%, in describing total tax burden? And you're complaining because the top earners pay more of their income in income tax than the rest? That describes a progressive system, doesn't it?

Leaving out the FICA tax because it's "too complicated" or a "different bucket" is much too convenient. For an employed taxpayer with earnings of $110K or less, the FICA burden is about $14,500 or 13%. For earnings of twice that amount, it's the same number, or half the percentage. Unless it's two wage earners in the household. In that case, they pay twice as much as the single, higher-paid worker. Earn a million bucks? The FICA burden drops to about 2% or less. As for the buckets, the government has been dipping in them all to find operating money.

Sorry, Allan, you lost me there. Where did the "5%" come from, and where do you think I compared that to the 48% figure?

My primary point was simply to dispute the original claim that Jack made, which I cited at the beginning of my comment. The top 1% do not have anywhere near the income that the bottom 95% have, which was the implied justification for the top 1% paying so much of the income tax burden. Incidentally, Paul Sorensen is also incorrect in claiming that the top 1% pay more in taxes than the bottom 95%, as the IRS figures I cited make clear.

A secondary point, given Jack's opinion that the Bush tax cuts should be rolled back "for the rich", is that our system is pretty damn progressive as it is. When 18% of the income is burdened with 33% of the income tax load, even with the Bush tax rates in effect, I'd say that "the rich" are already paying more than their fair share.

Yes, FICA is complicated both from the tax revenue standpoint as well as from the benefit distribution standpoint. The contribution cap is in place largely because it is at least nominally a separate system, and there is a corresponding benefit cap. You are absolutely right that the feds have effectively pulled money out of every conceivable pot they could find, so treating SS separately from the rest of the federal budget is a massive accounting shell game anyhow.

Lest you think I'm one of these knee-jerk anti-tax types, here's my prescription for changes to the system:

1) Eliminate FICA as a separate payroll tax, and roll it into the federal income tax (both corporate and individual). Adjust rates/brackets as needed to transfer equivalent revenue from FICA to income tax.

2) Eliminate the SS trust fund and roll it into the general budget.

3) Means-test SS benefits, as with any other welfare program.

4) Once the above changes have been implemented, as additional revenue is needed then taxes should be raised across the board and not only on any one part of the income spectrum (the amount of the increase need not be equal across the board, but everyone should share in any increased burden of government).

That scheme would doubtless be to my personal detriment (while I am solidly in that bottom 97%, I do currently benefit from the SS cap, and with any luck would not meet the means test for future SS benefits under my plan) but I thoroughly believe that it would be a much more fair system.

And I also realistically understand that it would be politically impossible to achieve; the SS means test is a non-starter and merging the accounting for SS with the general federal budget would make our true federal financial situation too apparent for the comfort of those in charge.

So given the system that we have currently, if income tax revenues need to be raised (and I do believe that they do), they should be raised from everyone. Roll back the Bush cuts across the board, not just for the rich. The rich already contribute far out of proportion relative to their income.

BTW, just to compare the current Bush tax structure to the Clinton tax structure that preceded it, I went back to look at the same numbers for 1999 (height of the Clinton boom years, and full Clinton rates in effect).

For TY 1999, the closest I could get to the top 1% given the reported breakdowns was the top roughly 0.5% (at that time, incomes over $200K).

So here's the difference:

YEAR                            1999     2008
Approx. Top % 0.5% 0.6%
Approx. Share of Income 15.2% 17.8%
Approx. Share of Income Tax 29.4% 33.3%

Bottom line, the "rich" under the Bush tax system already face roughly the same tax burden proportionate to their share of the income as they did under the Clinton tax system.

Good discussion, David, thank you. I won't rehash a lot of what is already far downstream in the web currents, but if you go back to the top, you'll see where the 5% came from and how I might have misunderstood that you were defending that number.

I agree with much, if not all, of what you say. I'm somewhat troubled by the idea of means testing social security, because it then becomes a welfare program and vulnerable to attack from the right as such. As the program is structured, the payments to those who don't need them are not a meaningful fiscal burden and a reasonable price to pay for the ability to characterize the system as something other than the welfare that it really is. The other side of the same coin is that, unless the means testing cuts deeply, it doesn't make much difference to the fiscal profile.

The irony here, of course, is that conservatives are trying to kill a plan that is fundamentally conservative and pro-free market. It's deliberately structured to shield the health insurance industry from being wiped out of existence under a single payer plan -- which polls show has had consistent majority support for decades. If this law goes away, you can bet demands for single payer (i.e., opening up Medicare to everyone) will be back with a vengeance.

This isn't to say I support the ruling. For all its flaws, the Obama plan is much better than the status quo and replacing it with single-payer may take several years, during which time many thousands will die needlessly from lack of affordable care.


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