Americans were warned about Obamacare -- despite vigorous efforts to suppress the warnings

Michelle Malkin

U.S. Secretary of Health and Human Services Kathleen Sebelius is allergic to the truth. She is the ruthless enforcer of Obamacare's Jenga tower of lies upon lies upon lies. Now that this fatally flawed government edifice is collapsing, you can expect Sebelius to do what she has done her entire career: blame, bully and pile on more lies.

Three years ago, when insurers and other companies had the audacity to expose Obamacare's damage to their customers and workers, Sebelius brought out her brass knuckles. Remember? As I reported at the time, the White House coordinated a demonization campaign against Anthem Blue Cross in California for raising rates because of the new mandate's costs. Obama singled out the company in a "60 Minutes" interview, and Sebelius sent a nasty-gram demanding that Anthem "justify" its rate hikes to the federal government.

A private company trying to survive in the marketplace was forced to "explain" itself to federal bureaucrats and career politicians who have never run a business (successful or otherwise) in their lives. Sebelius went even further. She called on Anthem to provide public disclosure of how the rate increases would be spent -- a mandate that no other private companies must follow.

In an even more heavy-handed effort to suppress criticism, Sebelius wrote America's Health Insurance Plans (AHIP), the national association of health insurers, "calling on their members to stop using scare tactics and misinformation to falsely blame premium increases for 2011 on the patient protections in the Affordable Care Act." The threatening cease-and-desist letter commanded: "I urge you to inform your members that there will be zero tolerance for this type of misinformation and unjustified rate increases. ... Simply stated, we will not stand idly by as insurers blame their premium hikes and increased profits on the requirement that they provide consumers with basic protections."

The speech-stifling gag order declared war on every opponent of Obamacare who dared to question the administration's phony claims of cost-savings or expanded access. When McDonald's notified the feds that it might have to cancel health insurance plans for 30,000 workers because of Obamacare's effective prohibition on low-cost plans, Sebelius slammed The Wall Street Journal for reporting the story. She then rushed to issue McDonald's an Obamacare waiver, the first of thousands to quell criticism and bleeding.

Health care policy analyst Merrill Matthews points out that Sebelius cracked her whip against health insurer Humana even before the law had passed. When the insurer warned seniors that an Obamacare proposal to cut reimbursements could harm their Medicare Advantage benefits and coverage, Sebelius demanded that the company "suspend potentially misleading mailings to beneficiaries about health care and insurance reform."

The warning, of course, proved true. In September 2010, Harvard Pilgrim Health Care canceled MA policies covering 22,000 seniors precisely because of Obamacare rules on reimbursements and MA-style plans.

Sebelius' power-mad partner on Capitol Hill, Henry Waxman, targeted companies including Deere, Caterpillar, Verizon and ATT in a brass-knuckled effort to silence companies speaking out about the cost implications and financial burdens of Obamacare. After the firms reported write-downs related to the Obamacare mandate (disclosures that are required by law), Waxman scheduled an inquisition hearing to berate them publicly. After the Democrats' own congressional staff pointed out that the companies "acted properly and in accordance with accounting standards" in submitting filings that were required by law, Waxman called off the hounds.

It was a temporary reprieve. Caught with their pants down on the Obamacare website abomination and unable to stifle the cries of millions of Americans who are unable to keep the plans and doctors they like, Sebelius and her corrupt company are now blaming insurers, contractors and customers for the Obama administration's ideological mess. In short: They lied, but for your own good. Culture of Corruption 101.

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Federal officials seek to impose racial preferences on banks and financial sector under Dodd-Frank Act

At the National Review, Roger Clegg discusses the racial “diversity quotas” that may result from a proposed regulation under the 2010 Dodd-Frank Act, which expanded federal control over banking.  That law contains racial diversity mandates drafted by Congresswoman Maxine Waters, a Castro-loving, left-wing ideologue who called the Los Angeles race riots that destroyed many Korean-owned shops an “uprising” against injustice. Waters once told a CEO in a Congressional hearing, “This liberal will be all about socializing . . . .uh, uh . . . would be about, basically, taking over and the government running all of your companies.”

As Clegg points out, the proposed racial “diversity” regulation is legally dubious, and even more burdensome to regulated businesses than one would have expected:

Today a number of Obama administration agencies with financial-sector regulatory responsibilities have jointly published in the Federal Register a proposed “Policy Statement Establishing Joint Standards for Assessing the Diversity Policies and Practices of Entities Regulated by the Agencies.”  The statement comes as a result of Section 342 of the Dodd-Frank legislation, which requires these agencies each to “establish an Office of Minority and Women Inclusion” that, in turn, is to develop diversity and inclusion standards for workplaces and contracting.

The proposed statement is even worse than the bill itself, since it aggressively applies not only to the agencies themselves but also to all those regulated by it, and repeatedly insists on the use of “metrics” and “percentage[s]” (i.e., numerical quotas) to ensure compliance. And while the statute at least cautions that diversity efforts are to be undertaken “in a manner consistent with the applicable law” . . . there is no such nod in the proposed statement, nor is there any mention of stopping or preventing discrimination – the only possible [constitutional] justification for consideration of race, ethnicity, and sex in hiring, promotion, and contracting.

As Clegg (who served as Associate Deputy Attorney General and Acting Assistant Attorney General) notes, the statutory provision that led to these proposed racial preferences was “criticized by the Wall Street Journal, four members of the U.S. Commission on Civil Rights, Diana Furchtgott-Roth,” and other lawyers and economists. (The Dodd-Frank Act was passed along party lines by a Democratic Congress with President Obama’s backing.) Clegg wrote a “short summary of Section 342 here, and Christopher Byrnes wrote a much more comprehensive analysis of the statute, here. Comments on the proposed statement are due by Christmas Eve.”

Racial preferences don’t have to rise to the level of racial quotas to violate the Constitution; milder racial preferences can be illegal as well, as is illustrated by the D.C. Circuit Court of Appeals’ decision in Lutheran Church—Missouri Synod v. FCC (1998), which struck down the FCC’s attempt to pressure broadcasters to hire more minorities and women to promote “diversity.”  While the courts have countenanced the use of race to promote “diversity” in the college setting, they have often refused to allow the use of race to promote “diversity” in the employment setting (see court rulings such as Lutheran Church v. FCC, 141 F.3d 344 (D.C. Cir. 1998); Messer v. Meno, 130 F.3d 130 (5th Cir. 1997); and Taxman v. Board of Education of Piscataway, 91 F.3d 1547 (3rd Cir. 1996)). Similarly, the D.C. Circuit earlier declared unconstitutional the FCC’s use of gender in awarding broadcast licenses in order to promote “diversity,” in Lamprecht v. FCC, 958 F.2d 382 (D.C. Cir. 1992).

Since a desire for “diversity” is not sufficient reason to use race or gender in hiring, it is unconstitutional for this proposed Dodd-Frank regulation to require banks to use such “diversity . . . considerations in both employment and contracting,” including “hiring, recruiting, retention and promotion.”  Such a requirement runs afoul of the Constitution even when it does not require a bank to hire a specified percentage of minority employees.

While it is unclear how much this “diversity” requirement will actually increase minority representation, it is clear that from the length and complexity of the proposed rule that it will impose substantial compliance costs on banks (you can find the proposed regulation implementing the diversity requirement at this link).

The proposed rule also requires the use of racial “diversity” considerations in contracting. But contracts cost far more when they are awarded based on race, rather than to the lowest bidder. Even fairly mild racial preferences impose substantial costs on businesses and taxpayers.

For example, in the Domar Electric case, Los Angeles accepted a bid for almost $4 million to complete a contract rather than the lowest bid of approximately $3.3 million, at a cost to taxpayers of more than $650,000. The lowest bidder was rejected solely because it failed to engage in affirmative action in subcontracting. California’s Proposition 209 later limited this sort of racial favoritism by banning racial preferences in state government programs, saving taxpayers money. A number of state affirmative-action programs have since been struck down under Prop. 209, saving taxpayers millions of dollars. (I cite the Domar case because it involved an affirmative-action program that has been depicted by supporters as unobjectionable and unburdensome because it did not mandate racial quotas or fixed percentages. Racial quotas can lead to even larger disparities between the lowest bid and the bid accepted by the government, resulting in much higher costs to taxpayers).

I wrote earlier about how provisions of the Dodd-Frank Act violate equal protection guarantees and property rights at this link.

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Racial Preferences in Obamacare, and Discrimination, Too, Based on Weird Ideology

The Daily Caller has an interesting story about race-conscious provisions and racial preferences contained in Obamacare. It’s a subject that has received remarkably little attention, even though the U.S. Commission on Civil Rights concluded back in 2009 that the healthcare bill was racially discriminatory, in two ways. First, the law is filled with “sections that factor in race when awarding billions in contracts, scholarships and grants” and give “preferential treatment to minority students for scholarships.” Second, as an African-American member of the Commission noted, it ”creates separate and unequal operating standards for long-term care facilities that serve racial and ethnic minorities.” By granting HHS “the discretion to waive substantial penalties . . . for failing to report elder abuse and other crimes committed against residents of long-term care facilities that serve racial and ethnic minorities,” it ”could increase the probability that residents of such facilities won’t receive the same level of protection as residents of nursing homes that serve non-minority populations.”

As the Daily Caller notes, some of these racial preferences reflect a weird theory promoted by certain Obamacare architects: that the healthcare system should promote “racial concordance,” a fancy word for “pairing patients and doctors of the same race, a goal toward which the law channels taxpayer dollars.” The idea is that patients do better with doctors of the same race. But this motivation for using race conflicts with Supreme Court rulings, which reject such racial pairing as a reason for using race.

While the Supreme Court has allowed the government to use race in hiring or admissions for certain other reasons (to remedy the effects of the government’s own past discrimination, and, in the college setting, to promote diversity in admissions), it has rejected using race for reasons like this. In its decision in Wygant v. Jackson Board of Education (1986), the Supreme Court rejected using race to give minority students teachers of their own race. It observed that pairing people by race perpetuates, rather than dismantles, segregation: “Carried to its logical extreme, the idea that black students are better off with black teachers could lead to the very system the Court rejected in Brown v. Board of Education,” the Supreme Court noted. (Indeed, defenders of segregation had once defended having all-black and all-white schools precisely in order to provide role models for minority students.) Earlier, in its Bakke decision, the Supreme Court expressed skepticism about the value of providing minority physicians for minority patients, refusing to allow a state university to give minority applicants a racial preference in admissions to medical school in order to give minority patients access to physicians of the same race, and ruling that the university had “not carried its burden of demonstrating that it must prefer members of particular ethnic groups over all other individuals in order to promote better health care delivery to deprived citizens.”

The Daily Caller argues that “Obamacare seeks to segregate patients, doctors by race.” While this may be painting with too broad a brush, Obamacare does not seem to rely on the justifications for using race that have been blessed by the Supreme Court, like remedying the present effects of the federal government’s own past discrimination against minorities. This is fatal, because an improper motivation for using race taints an otherwise valid affirmative-action program, under Supreme Court decisions like Shaw v. Hunt. Even if the government had discriminated against minorities in the past, and the effects of that discrimination lingered today, that could only justify using race in minorities’ favor if remedying their effects was Obamacare’s “actual purpose” for using race, and its use of race cannot be justified if such a remedial rationale “did not actually precipitate the use of race.” (See Shaw v. Hunt, 517 U.S. 899, 908 n.4, 910 (1996)).

Regardless of Obamacare’s motive for using race, its racial preferences and discrimination are unconstitutional under existing precedent. Any federal discrimination against minorities in healthcare is either too isolated, or too far in the past, to support the use of racial preferences in the present. Even a history of discrimination against minorities by the government cannot justify the use of race now unless the discrimination is recent. (See, e.g., Brunet v. Columbus, 1 F.3d 390 (6th Cir. 1993) (discrimination that occurred 17 years ago does not support affirmative action today); Hammon v. Barry, 813 F.2d 412 (D.C. Cir. 1987).)

Moreover, to justify racial preferences, the discrimination against minorities must have been “intentional,” not merely “disparate impact” (“disparate impact” is a race-neutral practice that disproportionately weeds out minority applicants, like a standardized test that more blacks flunk than whites). See People Who Care v. Rockford Board of Education, 111 F.3d 538, 534 (7th Cir. 1997); Builders Association of Chicago v. County of Cook, 256 F.3d 642, 644 (7th Cir. 2001).

In 2009, the U.S. Commission on Civil Rights criticized the racial preferences in the healthcare bill, saying that they were likely unconstitutional under the Supreme Court’s 2000 Adarand decision, which subjected race-based affirmative action to “strict scrutiny” and barred federal racial preferences absent evidence that they are needed to remedy intentional past discrimination by the government. In cases like Rothe Development Corp. v. Department of Defense and the Western States Paving case, the courts have sometimes struck down federal affirmative-action plans sponsored by liberal lawmakers, citing the Supreme Court’s Adarand decision. ObamaCare goes even further in mandating the use of race than past affirmative action plans.

Racial preferences are not limited to Obamacare. Earlier, we wrote about unconstitutional requirements that banks and financial institutions use race in hiring and contracting, requirements contained in a recent proposed regulation to implement the 2010 Dodd-Frank Act.

Obamacare contains not only racial discrimination, but also other kinds of discrimination, such as massive marriage penalties that discriminate against married people. The healthcare law also contains huge work disincentives for some people. It has also reduced hiring and resulted in employers replacing full-time employees with part-time workers, driving even unions that once backed it to seek its repeal or replacement. It has also caused layoffs in the medical device industry.

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