Tax Deal Pases Senate 81-19

The Senate just approved the tax deal by an 81 to 19 margin, and now the bill will move to the House of Representatives, where it will have to overcome opposition within the Democratic caucus.

I don’t have the official final roll call yet, but among those voting no were generally a coalition of conservatives and liberals: Jeff Bingaman, Tom Coburn, Jim Demint, John Ensign, Russ Feingold, Kirsten Gillibrand, Kay Hagan, Tom Harkin, Jeff Merkley, Bernie Sanders, Jeff Sessions, George Voinovich, Mark Udall and Tom Udall.

Tone Deaf Democrats

Whatever else you want to say about the omnibus spending bill, from a purely political perspective, it’s a pretty amazing example of how out of touch Democrats are with the spirit of the times. A little over a month after they took a “shellacking” at the polls, they decided to introduce a $1.2 trillion spending bill, with thousands of earmarks, including $8 million for the Edward M. Kennedy Institute for the Senate. It’s a rich target for Republicans to show themselves as opposed to government spending at a time when the Democratic strategy was supposed to be about portraying them as fiscal frauds.

Coburn Files Amendments Proposing $156 Bln in Spending Cuts to Pay for Tax Bill

Sen. Tom Coburn this morning filed ammendments cutting spending by $156 billion to offset the new spending in the tax deal negotiated beteen President Obama and Republicans. Coburn was one of just five Republicans to vote against the tax deal on Monday. You can read the amendments here.

Among the savings he proposes:

– A congressional pay freeze and a 15 percent reduction in Congress’ budget;

– A freeze on how much can be spent on the salaries for federal employees and a reduction in the number of government bureaucrats;

– Limiting the amount that the government can spend on printing, travel, and new vehicles;

– Selling unneeded and excess federal property;

– Stopping unemployment benefit payments to jobless millionaires;

– Collecting unpaid taxes owed by federal employees and members of Congress;

– Consolidating duplicative government programs;

– Preventing fraud within federal health care programs;

– Streamlining Defense spending and reducing foreign aid, including voluntary contributions to the United Nations.

Here’s video of Coburn explaining his move:

UPDATE: The amendment failed 47 to 52.

What Carter Learned

Asked about his biggest failure as president, Jimmy Carter offered the following:

“I guess my biggest failure was not getting re-elected. And I learned two things; one is that you ought not to ever let American hostages be held for 444 days in a foreign country without extracting them. I did the best I could, but I failed.”

Seriously, it took losing the presidency to learn this? Via Political Wire, which posted video.

Liberals Mull ObamaCare Without The Mandate

It’s long been accepted as a given in health care policy circles that if the government is going to force insurers to offer coverage to those with pre-existing conditions, they’re also going to have to require that everybody purchase insurance. Without a mandate, you end up with the infamous “death spiral” — healthy people forgo purchasing coverage because they know they can wait until they get sick, leaving insurers with sicker beneficiaries, which drives up premiums and causes more healthy people to exit the market, and so on.

In the wake of yesterday’s court decision declaring the mandate unconstitutional, liberals have begun to discuss strategies in the event that this aspect of the law gets overturned by the Supreme Court. Both Ezra Klein and Brian Beutler have weighed in, saying there would be ways to modify the mandate. Each of them pointed toward this proposal by Paul Starr for an “opt out” provision. The idea would be that any uninsured American could choose to opt out of the mandate, but only after agreeing to forgo federal subsidies to purchase insurance on government-run exchanges for five years, during which time they would not be guaranteed coverage were they to get a pre-existing condition. 

The problem with this proposal — setting aside any legal or ideological issues — is that I don’t see how it would do much to solve the “death spiral” problem. The mandate is mostly aimed at making sure that healthy individuals join the risk pool to offset the cost of covering those with pre-existing conditions. If the “opt out” were simply added to the existing law, this group would now have three choices: A) “opt out” and maintain the status quo B) pay small penalty, which guarantees you the ability to purchase insurance if you get sick or C) shell out thousands of dollars a year on premiums. I think it’s fair to assume that most people in this group would choose either A or B, since the first option woud leave them no better or worse off, and the second option would promise them greater protection for a small fee.

Starr himself anticipated this criticism in a NY Times op-ed, to which he responded: “The more sensible approach would be to provide a five-year opt-out without penalties and, after a transitional period, to set stiffer annual fines for those who want to keep open the alternative of buying guaranteed coverage at any time.”

The problem is that to change the incentive structure, you’d really have to make the fines approach the actual cost of insurance. And even if you did that, healthy people would still be able to choose the status quo, which most of them are still likely to do — or at least enough of them so as to still cause the “death spiral.” This is especially true for those making over $43,320, who would not qualify for any government subsidies anyway. And keep in mind that as the Congressional Budget Office has explained, premiums are going to shoot up for those in the individual market not receiving government subsidies, because the national health care law is imposing all sorts of requirements on what benefits insurers must cover.

The individual mandate is one of the most unpopular elements of the health care law, and Democrats would have jumped at the chance to remove it if there was a viable alternative. But there’s a reason why they kept it in, and why President Obama, who strongly opposed the mandate during the campaign season, had to embrace it. The bottom line is that ObamaCare — particularly the guaranteed coverage for those with pre-existing conditions — unravels in the absence of a mandate.

ObamaCare’s Legal Setback

Nationwide protests were “Astroturf.” Polling was to get better once Congress passed a bill. And the new law was supposed to boost Democrats’ electoral chances in November. Throughout their campaign for national health care, liberals tried to convince us that opposition was a joke, only to be proven dramatically wrong each and every time.

This Monday, a federal judge punctured another liberal fantasy — that constitutional challenges to ObamaCare were frivolous exercises that would be laughed out of courtrooms.

In a 42-page decision, U.S District Court Judge Henry Hudson ruled that the health care law’s requirement that individuals purchase insurance “exceeds the constitutional boundaries of congressional power,” rejecting the Obama administration’s argument that the Commerce Clause gave it the authority to compel the purchase of coverage as part of a larger health care regulatory scheme.

“This case isn’t about health insurance, it isn’t about health care, it’s about liberty,” Virginia Attorney General Ken Cuccinelli, who was mocked by liberals in March when he launched a lawsuit against the law, told TAS in a phone interview Monday evening.

If courts ultimately uphold the individual mandate, Cuccinelli argued, it will give the federal government unprecedented power over Americans’ lives. The mandate is also being challenged in a separate lawsuit filed by 20 states led by Florida.

“If the feds win this case, they can do anything,” he said. “They can force people to buy cars, asparagus — the list goes on and is infiniteâ€_. It is no underestimation to say that it (would be) the end of federalism. That nothing the federal government does (would be) limited by enumerated powers.”

Given the uncertainty that is hanging over states as a result of the pending constitutional challenges, Cuccinelli is in talks with the U.S. Department of Justice to join together in urging the U.S. Supreme Court to expedite hearing the case. But the Obama administration is likely to appeal the decision to the Fourth Circuit.

While that court was once considered one of the most conservative appeals courts in the nation, three recent Obama appointees have tilted the balance, and Democratically appointed judges now outnumber Republican ones by an 8-to-5 margin. Typically, the court hears cases in three-judge panels, but it also has the option of hearing them as a whole, or en banc.

“My focus is on the end point,” Cuccinelli explained, asked about the composition of the Fourth Circuit. “I don’t mind losing everything except the last one.â€_ One way or the other, it’s going to be tight. I think it’s going to be close at the Supreme Court as well.”

Unlike other types of lawsuits, this one doesn’t involve depositions, discovery and witnesses. “This is a pure legal debate,” he said. “And the universe of available legal argument is pretty well known at this point. We may reformulate it for different panels, for the Fourth Circuit. But the contours of the legal argument are pretty well settled at this point. Nobody is going to say, ‘Aha, I found the silver bullet case!’ That isn’t going to happen at this point. It’s a matter of how the judges along the way — by that I mean moving up the appellate chain — respond to the same type of arguments you saw in the District Court.”

While Hudson (a George W. Bush appointee) held that the individual mandate “exceeds the Commerce Clause powers vested in Congress under Article I,” two other district court judges (appointed by Bill Clinton) have upheld the individual mandate as constitutional, arguing that not purchasing health insurance is an “economic decision” and therefore fair game for regulation under the Commerce Clause.

Speaking of one of the decisions, by U.S. District Court Judge George Steeh of the Eastern District of Michigan, Cuccinelli said, “It adopts such a leap of logic and language, to reach the conclusions that judge reaches, that I hope other judges read it and go, ‘Whoa, this is what it takes for these guys to win? I don’t want to sign on to this.'”

Congressional power under the Commerce Clause has been greatly expanded by courts from its original meaning in the Constitution, but the individual mandate takes things to a whole new level by saying that it gives the federal government the right to compel the purchase of something. That’s why Cuccinelli believes that the mandate can be struck down without overturning prior Supreme Court rulings.

“It is quite an incredible leap to go from regulating actual voluntary activity that affects commerce, to say that doing nothing, and the accumulation of people doing nothing, affects commerce in the sense that if they did something, the market would look different,” he said.

Cuccinelli argued that those who may favor expanding federal power now because they support the health care law may one day find that it comes back to haunt them.

“How much would the folks who voted for this bill appreciate a mandate that every American buy a gun?” he asked, laughing heartily. “And not whatever you want, we’re going to have a government-approved list of guns. And they’re going to be ugly, mean-looking guns that normally these people would try to ban.”

Assuming that the case travels through the typical appeals process, Cuccinelli estimated that it would be roughly two years before the Supreme Court issues a decision. The individual mandate component of the law is scheduled to go into effect on January 1, 2014. For now, he says he’s “cautiously optimistic.”

Randy Barnett Says Court Decision Against ObamaCare is a Game Changer

Georgetown Law Professor Randy Barnett, who has been a leading legal critic of the national health care law, said today’s ruling against the individual mandate changes the dynamics of the effort to overturn the legislation.

“This was a huge day,” Barnett told me in a phone interview. “The government needed to run the table on all of these cases to survive, and it failed. It basically needed all the judges to say it was constitutional, and as soon as they had one that said it wasn’t, then we have a different game.”

First, he said, “It changes the posture, because now this will go to the Court of Appeals, and the Court of Appeals is going to have to reverse this judge.”

But in the more immediate term, it will impact a similar suit against ObamaCare brought by 20 states led by Florida, he predicted. U.S. District Court Judge Roger Vinson, of the Northern District of Florida, is scheduled to hear arguments on Thursday.

Barnett explained that had today’s decision gone the other way, the Obama administration would have been able to argue that three judges had upheld the law, but now the state of Florida can point to a case in which the law was ruled unconstitutional.

The ruling also gives more cover to Vinson. “Judge Vinson now is not going to be standing alone against Congress if he should decide it’s unconstitutional,” Barnett said.

Going forward, Barnett said, if one of the appeals’ courts decides that the law in unconstitional, it’s almost garunteed to go to the Supreme Court. If the law is upheld in appeal, then it would take four Supreme Court justices who want to weigh in on the issue to bring it before the court, which he believes is likely anyway.

But he doesn’t expect the Supreme Court to weigh in on an expidited basis, bypassing the appeals’ courts. He said as a case moves up the food chain, the quality of the arguments and analysis improves, so the Supreme Court tends to wait until wait for the appeals’ court to have its say so that the case is more fully formed by the time it reaches the highest court. “I’d be surprised if they want to jump the gun on this,” he said.

Barnett also emphasized that in his preliminary ruling on the Florida case, Vinson rejected the argument that Congress had the constitutional authority to impose a mandate under its taxing power. That argument was also rejected by Judge Henry Hudson in his decision today.

“Basically, every court has rejected the tax power argument,” Barnett said. “I never thought that argument was going anywhere, and it hasn’t gone anywhere. This is another sign that this thing is going to have to rise or fall on the Commerce Clause and Necessary and Proper Clause. And the tax power thing is going to be gone.”

Tax Deal Moves Ahead in Senate, 83-15

The U.S. Senate on Monday voted to move forward on the tax deal cut by President Obama and Republicans, 83-15. It will now move on to the House of Representatives.

While the outcome of today’s vote was never in doubt, the overwhelming margin makes it a lot harder for House Democrats to seriously resist the bill. As Democratic Rep. Chris Van Hollen said, their caucus had strong reservations about the deal, especially on the estate tax, but, “We’re not going to hold this thing up at the end of the dayâ€_”

Van Hollen seemed to be suggesting House Democrats may hold a symbolic vote on estate taxes, but then another vote to approve the package as is and send it to the president.

There are other issues Democrats still have to or would like to tackle — a year-end spending bill, the START treaty and “Don’t Ask Don’t Tell.” The longer they stall on the tax vote, the less chance they have of dealing with those priorities.

Also, now that the Senate has approved the deal, House Democrats have very little leverage. When the Republican majority comes in next month, they would immediately vote to approve the deal, which we now know would coast through the Senate, and then be signed by the president. The problem with that option is that it would create a number of logistical hurdles for the IRS, and it’s extremely difficult to write tax legislation retroactively.

There’s no official roll call yet, but by my count, Democrats voting no: Sens. Jeff Bingaman, Russ Feingold, Pat Leahy, Kirsten Gillibrand, Bernie Sanders, Mark Udall, , Sherrod Brown, Kay Hagan and Carl Levin, Frank Lautenberg,

Republicans voting no: John Ensign, Tom Coburn, George Voinovich, Jeff Sessions, and Jim DeMint.

Anti-ObamaCare Lawsuit Could Advance to Less Favorable 4th Circuit

While conservatives are celebrating today’s ruling against ObamaCare’s individual mandate, should the Obama administration appeal today’s decision to the Fourth Circuit, as widely assumed, it will face a much more favorable venue thanks to recent appointments by President Obama that have tilted the balance of the once-conservative court.

During the Bush era, the Fourth Circuit developed a reputation as the most conservative in the nation, in large part because it sided with the administration on a number of key national security decisions, particularly involving terorist detainees.

But the balance has shifted dramatically since then, and currently Democratic appointees outnumber Republicans by an 8-to-5 margin, with two vacancies remaining.

At the start of the Obama administration, Republicans had the slight edge over Democrats, 6-to-5.  In July of last year, chief judge and Republican appointee Karen Williams had to step down due to early onset of Alzheimer’s. Since then, Obama has been able to get three of his nominees to the court confirmed — Judges Andre Davis, Barbara Keenan and James Wynn.

The appeals court is already on track to hear an appeal of another anti-ObamaCare lawsuit, brought by Liberty University, which was dismissed by a Clinton appointee, Judge Norman Moon, earlier this month.

No matter what happens with either case at the appeals court level, however, the issue will likely have to be resolved by the U.S. Supreme Court.