Monday, December 13, 2010

Virginia Judge Rules Mandatory Health Insurance Unconstitutional; also: Obama Tax Deal Update & WikiLeaks

In This Issue:

- Virginia Judge Rules Mandatory Health Insurance is Unconstitutional

- Two Articles From Dean Baker at CEPR on Tax Deal

- Black Caucus Opposes Tax Deal, Wants Relief for 99ers

- Entertaining Video--Ellsberg Talks WikiLeaks on "The Colbert Report"


Virginia Judge Rules Mandatory Health Insurance is Unconstitutional

This is one aspect of "Obamacare" that got stuck in the craw of many across the political spectrum, including myself.

Virginia health-care ruling strikes down key provision of Obama's plan
By Rosalind S. Helderman
Washington Post Staff Writer
Monday, December 13, 2010; 2:39 PM

RICHMOND - A federal judge in Virginia ruled Monday that a key provision of the nation's sweeping health-care overhaul is unconstitutional, the most significant legal setback so far for President Obama's signature domestic initiative.

U.S. District Court Judge Henry E. Hudson found that Congress could not order individuals to buy health insurance.

In a 42-page opinion, Hudson said the provision of the law that requires most individuals to get insurance or pay a fine by 2014 is an unprecedented expansion of federal power that cannot be supported by Congress's power to regulate interstate trade.

"Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market," he wrote. "In doing so, enactment of the [individual mandate] exceeds the Commerce Clause powers vested in Congress under Article I [of the Constitution.]

Hudson is the first judge to rule that the individual mandate is unconstitutional. He said, however, that portions of the law that do not rest on the requirement that individuals obtain insurance are legal and can proceed. Hudson indicated there was no need for him to enjoin the law and halt its implementation, since the mandate does not go into effect until 2014.

See original article for all.

December 13, 2010
Judge Voids Key Element of Obama Health Care Law
New York Times

A federal district judge in Virginia ruled on Monday that the keystone provision in the Obama health care law is unconstitutional, becoming the first court in the country to invalidate any part of the sprawling act and ensuring that appellate courts will receive contradictory opinions from below.

Judge Henry E. Hudson, who was appointed to the bench by President George W. Bush, declined the plaintiff’s request to freeze implementation of the law pending appeal, meaning that there should be no immediate effect on the ongoing rollout of the law. But the ruling is likely to create confusion among the public and further destabilize political support for legislation that is under fierce attack from Republicans in Congress and in many statehouses.

In a 42-page opinion issued in Richmond, Va., Judge Hudson wrote that the law’s central requirement that most Americans obtain health insurance exceeds the regulatory authority granted to Congress under the Commerce Clause of the Constitution. The insurance mandate is central to the law’s mission of covering more than 30 million uninsured because insurers argue that only by requiring healthy people to have policies can they afford to treat those with expensive chronic conditions.

The judge wrote that his survey of case law “yielded no reported decisions from any federal appellate courts extending the Commerce Clause or General Welfare Clause to encompass regulation of a person’s decision not to purchase a product, not withstanding its effect on interstate commerce or role in a global regulatory scheme.”

Judge Hudson is the third district court judge to reach a determination on the merits in one of the two dozen lawsuits filed against the health care law. The others — in Detroit and Lynchburg, Va. — have upheld the law. Lawyers on both sides said the appellate process could last another two years before the Supreme Court settles the dispute.

Find entire article here.

Obama Tax Deal Update

Two Articles From Dean Baker at CEPR

The Tax Deal and the Apocalypse

To be an important person in Washington these days requires a solid record of failure. That is why we have 25 million people unemployed, underemployed or out of the labor force altogether. And those who got us into this disaster are still overwhelmingly the ones calling the shots. So people who want a realistic assessment of what the defeat of this tax package means for the economy may not want to rely on the usual suspects.

Dean Baker
Truthout, December 13, 2010

See article on original website

The proponents of the tax deal that President Obama and the Republicans negotiated last week have gotten out their TARP and Iraq War hysterics. All the important people are now telling us that if Congress doesn’t approve the package it will be the end of the world!!!!!

To be an important person in Washington these days requires a solid record of failure. That is why we have 25 million people unemployed, underemployed or out of the labor force altogether. And those who got us into this disaster are still overwhelmingly the ones calling the shots. So people who want a realistic assessment of what the defeat of this tax package means for the economy may not want to rely on the usual suspects.

As I have noted before, the major risk of this deal is that it would undermine Social Security. The deal temporarily lowers the Social Security tax by 2 percentage points. In principle the tax rate will go back to its current rate after the end of next year.

However, several prominent Republicans have already made it clear that they will call the expiration of this tax cut a tax increase. And they will point out that it is an extremely regressive tax increase that disproportionately hits low and moderate-income workers.

At the end of the 2011 the unemployment rate is virtually certain to be well above 8.0 percent and quite likely above 9.0 percent. In this context does anyone seriously believe that President Obama will refuse to go along with efforts by the Republicans in Congress to continue the tax cut beyond the scheduled deadline?

If the payroll tax is indefinitely lowered by 2.0 percentage points, then Social Security’s finances will appear much more shaky. As it stands, Social Security is fully funded through the year 2037, but that doesn’t keep the Washington Post and National Public Radio from running endless scare stories about the program’s funding crisis.

If the payroll tax is permanently reduced by 2.0 percentage points it would double the program’s projected 75-year shortfall. This would give far more ammunition to the Social Security fear mongers.

While Obama’s deal ostensibly provides for general revenue to be placed into the trust fund to make up the lost payroll tax revenue, there is little reason to believe that this funding would persist beyond the first year. Again, does anyone believe that President Obama will stand up for Social Security on this point?

In short, this deal is a very large first step toward cutting and/or privatizing Social Security. If the President wants to remove this risk he can simply arrange to have the exact same tax cut given to workers from general revenue. There is no legitimate reason for the Republicans to reject this change in structure, unless their intent is to destroy Social Security.

It’s really that simple. The structure of the deal would be changed unless the point is to undermine Social Security.

What about the threatened apocalypse if we don’t do the deal? Well, the deal would provide a net stimulus to the economy and also give money to unemployed workers who really need it. Not getting this boost would be bad news.

But it is hard to stomach the whining from people who were too damned lazy or incompetent to think about the consequences of the collapse of an $8 trillion housing bubble. These workers are unemployed because the folks calling the shots messed up.

In other words, the reason that we have 25 million people unemployed or underemployed is that people like Ben Bernanke, Timothy Geithner and Larry Summers messed up royally on their jobs. Fortunately for the folks on top, employment is not dependent on performance.

More to the point, this will not be our last chance to extend unemployment benefits or get additional stimulus. Unemployment benefits are hugely popular across the political spectrum. Even conservatives understand that the reason people are unemployed is because the economists messed up, not that the workers themselves lack the necessary skills or desire to work.

Congress will feel considerable pressure to extend benefits. In the same vein, the Republicans in Congress know that they will be evaluated in large part on the state of the economy in 2012. This means that they will have incentive to support additional stimulus, under whatever name they choose to give it.

In short, the train is not leaving the station. If this deal goes down, there will be other deals in the months ahead.

Remember, it was the Gingrich Congress that gave workers the first increase in the minimum wage in more than 15 years. They needed something to show for the 1996 elections. This Republican Congress is likely to feel the same pressure. [Bold Emphasis Added]


Social Security Tax Cut: A Deal Breaker

Dean Baker
The Hill, December 9, 2010

In principle there is nothing wrong with financing a portion of Social Security benefits with money from general revenue. This was in fact the original intention of President Roosevelt when he designed the program. However, the fact is that the program has always been financed exclusively by the Social Security tax that is taken from workers’ wages. This makes the tax regressive, but it has the advantage that workers can quite legitimately say that they have paid for their benefits. This will be to some extent less true if a portion of the funding comes from general revenue rather than payroll taxes. In short, getting funding from general revenue opens a new line of attack on the program.

The prospect of this tax cut being the basis for a renewed attack on Social Security could be dismissed if the program had defenders in high places, but this does not appear to be the case. Most of the Republicans would almost certainly like to privatize Social Security.

Unfortunately, the Obama Administration cannot be counted on to defend the program either. In fact, top officials in the administration seem to view attacks on Social Security and its supporters as a way to prove their manhood. President Obama’s decision to appoint two arch-enemies of Social Security to chair his Fiscal Responsibility commission certainly does not inspire confidence among supporters of Social Security.

In short, supporters of Social Security have good reason to oppose the tax deal. It is easy to have the same stimulus with an expanded version of President Obama’s Making Work Pay tax cut. Supporters of Social Security should reject the latest deal and tell President Obama to stand behind his own tax cut. This is what presidents are supposed to do.

See entire article on original website
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of False Profits: Recovering from the Bubble Economy. He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues.

Black Caucus Opposes Tax Deal, Wants Relief for 99ers

December 12, 2010 - by Donny Shaw

Hot on the heels of Rep. Sheila Jackson-Lee’s [D, TX-18] statement Thursday on the House floor that an extension of unemployment insurance for 99ers should be added to Obama’s tax deal, the Congressional Black Caucus has announced that adding 99ers relief is essential for winning the support of their members.

“The CBC has reached a consensus on three areas that we believe we can unite behind, ”">Rep. Bobby Scott [D, VA-3] said at a press conference on Friday. “First, we support the 13-month extension of unemployment insurance benefits, but we all agree that we also ought to extend benefits for the so-called 99ers — those who are exhausting the benefits they have.”
View the full press conference here.

The deal brokered by Obama and congressional Republicans would extend the four tiers of unemployment benefits that expired on December 1st, but would not create a new tier of benefits for those who have moved through those tiers and are still unemployed. The four tiers provided up to 99 weeks of benefits in some states, and we’re now more than 99 weeks out from the brunt of the ‘08 financial crisis. That means that, before the tiers expired, a wave of people who lost their jobs as a direct result of Wall Street recklessness and regulatory incompetence began being dropped off the backend of the federal insurance programs. There’s no official estimate of how many 99ers there are already, but most estimates put the number around 5 million.

The Congressional Black Caucus has 42 members, which might not be enough to force a change in the tax deal. If all House Republicans vote for the bill, only 39 Democratic votes would be needed to secure passage. In September, 31 conservative Blue Dog Democrats wrote a letter to the leadership advocating for all of the Bush tax cuts to be extended, so they can be counted as likely yeses. According to the Wall Street Journal, the Obama Administration is currently working to round up the final votes they need by lobbying lame duck Democrats in the House who lost re-election in November and are no longer accountable to voters.

Ultimately, whether or not additional weeks for 99ers can be added to the bill is up to Speaker Rep. Nancy Pelosi [D, CA-8] and the House Democratic leadership. The Senate is expected to pass the bill early this week, and Pelosi and crew have the choice of passing it as is, or passing it with an amendment. Even if Pelosi goes with an amendment, it’s possible that it would address other items — the estate tax or the length of the extension of the existing unemployment tiers — and not seek to add anything for the 99ers. As the WSJ reports today, Pelosi is “walking a perilous path” by attempting to satisfy her Democrats, who strongly oppose the deal, while at the same time trying to shepherd some form the deal into law so the tax cut debate is not pushed back to the next, more Republican, session of Congress.

See article for other links.

Video--Ellsberg Talks WikiLeaks on "The Colbert Report"

Daniel Ellsberg on Colbert Report: Julian Assange is Not a Criminal Under the Laws of the United States

"[Daniel's segment starts at 4:06]

ELLSBERG: Julian Assange is not a criminal under the laws of the United States. I was the first one prosecuted for the charges that would be brought against him. I was the first person ever prosecuted for a leak in this country—although there had been a lot of leaks before me. That’s because the First Amendment kept us from having an Official Secrets Act. . . . The founding of this country was based on the principle that the government should not have a say as to what we hear, what we think, and what we read. . . .

If Bradley Manning did what he’s accused of, then he’s a hero if mine and I think he did a great service to this country. We’re not in the mess we’re in, in the world, because of too many leaks. . . . I say there should be some secrets. But I also say we invaded Iraq illegally because of a lackof a Bradley Manning at that time."


Billy Bragg and Wilco-- "The Unwelcome Guest"
By Woodie Guthrie

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