Wednesday, March 21, 2018

States Win Another Big Case Against Obamacare

Hans von Spakovsky

In a decision that has gotten almost no media attention, six states led by Texas have won another round against the Obama administration implementation of Obamacare.

Judge Reed O’Connor, a federal judge in Texas, threw out the Obama administration’s imposition of a federal fee or tax on states as a condition of continuing to receive Medicaid funds. O’Conner ruled March 5 that the fee violates the non-delegation doctrine of the Constitution and the requirements of the Administrative Procedure Act.

The 2010 Obamacare law imposed a “health insurance providers fee” on medical insurers to help pay for the subsidies provided by the federal government to individuals purchasing health insurance. However, the law specifically exempted states from having to pay this fee.

Texas and the other states who filed this lawsuit against the federal government in 2015 provide a majority of Medicaid services for their residents by contracting with, and paying a monthly fee to, managed care organizations, which then provide health care to eligible Medicaid beneficiaries.

The Centers for Medicare & Medicaid Services, a component of the Department of Health and Human Services, must approve all such state contracts for health care services. In 2014, the agency promulgated a regulation that requires that states pay managed care organizations an “actuarially sound rate.”

However, the regulation delegates the decision of what is an “actuarially sound rate” to a private organization, the Actuarial Standards Board, which sets practice standards for private actuaries.

Ignoring the statutory exemption from paying the fee that was provided to the states in the Obamacare law, the Actuarial Standards Board enacted a rule stating that the “actuarially sound rate” paid by the states to their Medicaid-managed care organizations must include their portion of the health insurance providers fee.

The Center for Medicare & Medicaid Services refused to approve any state contract that did not comply with this requirement.

We are talking substantial sums of money here. According to the judge in this case, Texas alone appropriated $244 million to pay this fee in fiscal years 2016 and 2017. Other states in the lawsuit “likewise provide Medicaid to millions of their citizens at the cost of a considerable portion of their annual budgets.”

O’Connor found that over “the next decade, the federal government will collect between $13 and $14.9 billion” from all 50 states paying the fee. According to the IRS, Congress placed a moratorium on the fee for 2017 and 2019, but not for 2018. So the fee remains on the books.

While the court found that the health insurance providers fee, which O’Connor labeled a “tax,” is constitutional, the regulation issued by the Centers for Medicare & Medicaid Services that delegated “to a private entity the authority to decide who must pay this tax” violates the non-delegation doctrine.

O’Connor goes through a very interesting and illustrative history of the non-delegation doctrine, which “remains a cornerstone in the constitutional architecture of free government” to the frustration of “modern liberals.”

In essence, the non-delegation doctrine “stems from the very first clause of the Constitution, which reads: ‘All legislative Powers … shall be vested in a Congress of the United States.’” Thus, Congress cannot delegate or transfer to others its “essential legislative function.”

This “structural feature of the Constitution … exists to protect democratic deliberation, executive accountability, and individual liberty.” The framers “enshrined” this doctrine in “our charter because the framers, drawing from the deep wells of their Western heritage, recognized it as an axiom of just government.”

The most difficult determination of whether the non-delegation doctrine has been violated is when courts are reviewing the actions of federal agencies under their authorizing statutes. In those cases, “courts must distinguish between unlawful delegation of legislative power and lawful delegation of policy judgement,” according to O’Connor. It “is inherently difficult to draw this distinction and identify an unlawful legislative delegation by Congress to an executive agency.”

However, this case does not present such a dilemma concluded O’Connor because here, the power to determine whether a tax should be imposed was delegated to a private party. In such cases, “there is not even a fig leaf of constitutional delegation.”

While legislative delegations to executive agencies “threaten liberty by undermining democratic accountability … legislative delegations to private entities are even more dangerous” because they “create a double layer of unaccountability.”

The legislative power of Congress has been passed “to an unelected agency, and then by the agency to an unelected private entity.” And that “private entity is not subject to term limits, appropriations, impeachment, or removal, and neither holds a commission nor takes an oath to uphold the Constitution.”

In addition to this constitutional violation, O’Connor found that the imposition of this tax violated the Administrative Procedure Act, which governs the promulgation of rules and regulations by federal agencies.

According to O’Connor, the tax went beyond the statutory authority of the Obamacare law: “there is no genuine dispute of material fact that [the regulation] is ‘in excess of statutory jurisdiction, authority, or limitations, or short of statutory right.’”

This ruling wipes out the ability of the federal government to collect billions of dollars from the states that it has been using to subsidize Obamacare. And this is not the end of the story.

A new lawsuit has just been filed—in the same federal court where O’Connor presides—by 20 states alleging that Obamacare is no longer constitutional because the tax cut bill signed into law by President Donald Trump on Dec. 22, 2017, eliminated the tax penalty imposed on individuals who don’t comply with the individual mandate.

Because the Supreme Court only upheld Obamacare as constitutional based on the taxing authority of Congress, the states argue that its constitutional underpinning is gone.

Piece by piece, year by year, Obamacare is slowly being taken apart by both litigation and legislation like the 2017 tax cut bill that eliminated the tax penalty on the individual mandate.

But members of Congress would do well to return to their abandoned effort to repeal Obamacare in its entirety in order to provide Americans with a replacement that supports their needs.



Mike Pompeo might be the only guy Trump trusts

The busiest guy in Washington, DC, right now is Mike Pompeo. Shuttling from the halls of Congress to CIA headquarters in Langley and, soon enough, back across the Potomac to Foggy Bottom, the former congressman from Kansas and current secretary of state-designate is rapidly becoming the Henry Kissinger of the Trump administration — the man for all jobs, in all seasons.

Pompeo’s long-bruited selection to replace Rex Tillerson is an inspired choice. He’s a rising star with an impeccable résumé (graduated first in his class at West Point, degree from Harvard Law, military vet), a no-nonsense manner and a capacity to get things done. Even better, he’s fully in synch with President Trump’s foreign-policy goals and outlook, which sees China, not Russia, as America’s principal global competitor, views the Iran nuclear deal as subject to immediate renegotiation or cancellation and is ready to go nose-to-nose with North Korea’s Kim Jong-un.

At State, Pompeo, who in just 14 months has helped refocus the CIA from its partisan activism under former chief John Brennan and back toward dispassionate information gathering, will pick up where Tillerson left off, continuing to streamline and downsize the bloated diplomatic ranks and bring the notoriously independent department, heavily populated with anti-Trump personnel, back under some semblance of White House control. Historically, State has always been far to the left of any given administration, even liberal ones — it sees its job as representing the world to America, instead of vice versa — and it’s long past time it was reined in.

Most important, Pompeo shares Trump’s politically incorrect vision for America’s place in the world — assertive, confident and indifferent to international opinion when it doesn’t suit America’s best interests. Like his boss, Pompeo would rather be respected, and even feared, than loved. In a world where America is surrounded by enemies, the days of “soft power” are over. Blunt talk from America’s top diplomat is going to be the norm, not the exception.

And so the Trump housecleaning continues. The recent personnel changes predictably have some squawking about “chaos” in the White House, but in this case one man’s chaos is another’s reorganization. Trump entered office with no experience in politics and no DC Rolodex — who can be surprised that it’s taken him a year to finally find his footing?

Further, White House staff shuffles — economic adviser Gary Cohn is out, former FBI deputy director Andrew McCabe was cashiered on Friday, two days short of retirement, and there are once again widespread reports that National Security Adviser H.R. McMaster will soon be forced to step down — are nothing new. Ronald Reagan’s second term was highlighted by the job switch between Treasury Secretary Don Regan and Chief of Staff James Baker, and even Barack Obama’s administration saw turnovers in the chief of staff, communications director, press secretary and national security adviser, among other posts. They too were accused of “chaos” by their political opponents at the time.

Trump may be acting more quickly than his predecessors, but given the exigencies, why wait? The president has already announced his intent to run again in 2020, so the faster the better.

With Pompeo’s elevation to indispensable-man status, look for the Trump White House to become even more direct in pursuit of its international and domestic goals. For one thing, the elevation of Gina Haspel, Pompeo’s deputy at CIA, would ensure that the agency remains on course. Within the intelligence community, Haspel is regarded as a consummate professional, and the only surprise is that after keeping a very low profile for her entire career, she’s willing to enter the public arena. You can bet that her support for rendition and enhanced interrogation techniques will become a major issue in her Senate confirmation hearings. Look for her to finally put the argument to rest with a spirited defense of America’s fight against Islamic terrorism.

Confirmation hearings for Pompeo are scheduled for next month, and they could be rocky. Already, gadfly Sen. Rand Paul has said he’ll vote against Pompeo, which means the nominee will need at least some Democratic support to win his vote in the Senate. And coming on the heels of a string of election losses in Alabama, Virginia and last week in Pennsylvania, the administration has been forced on the defensive as it heads into the midterms later this year.

Still, Trump and Pompeo are unlikely to be swayed by transient public opinion or the carping of the Democrats and the dwindling ranks of the “never Trumpers” on the right. The job of the secretary of state — like that of all Cabinet appointees — is to serve the president honestly and forthrightly and let the voters decide how they like it at the next election. By that standard, Mike Pompeo is just the man for the job.



The absurd Haaretz

Haaretz is well-known as Israel's version of the NYT but sometimes they get so absurd as to be amusing.  The opening salvo of one of their recent stories is below.  It accuses Trump of being a DANGER to Israel:

Netanyahu Puts Israel’s Fate in Hands of U.S President Dubbed ‘Serious Threat to National Security’

Trump’s dismissal of Tillerson and McCabe marked by vindictive cruelty that borders on sadism

Prime Minister Benjamin Netanyahu told the security cabinet last week that he believes U.S. President Donald Trump intends to abandon the Iran nuclear deal in May. His tone, presumably, was approving.


One wonders what you have to do for Haaretz to see you as a friend of Israel.  You can't be a conservative, obviously.  They are all "Nazis"


Prominent Scot defends Russian broadcaster

Alex Salmond’s defence of Russia Today will have delighted the Kremlin regardless of whether he has editorial independence on his chat show, an expert on the country has said.

Robert Orttung, a professor at George Washington University’s Elliott School of International Affairs, said that Moscow was getting “bang for their buck” out of RT’s relationship with Mr Salmond.

He defended the channel on his weekly chat show but the former MP was facing renewed calls to cut ties with the channel. Mr Salmond said that he had never been told what to say on his show, and claimed RT was not a propaganda station. He also compared it to the BBC, ITV and Sky, saying all had breached the Ofcom code on occasion.



Israel destroys new Hamas tunnel in Gaza

The Israeli military said Sunday it destroyed a tunnel built by the Hamas militant group.

Lieutenant Colonel Jonathan Conricus, a military spokesman, said the tunnel was intended to connect to an old one that Israel partly destroyed in the southern Gaza Strip during the 2014 war. He said it appeared to be the first case of Hamas trying to ‘‘recycle’’ part of its devastated network.

Conricus said Israel has been following Hamas’s progress for some time and that the targeted tunnels will now be impossible to rebuild. Conricus called it a ‘‘futile effort’’ by the Islamic militants and a waste of resources that could be used to aid Gaza residents.



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