Category Archives: Health Care

James Madison on Obamacare

Obamacare is being threatened yet again as a new mistake is discovered in the 2,000 page bill.

States could dodge a key part of the health care reform law because of a little-noticed mistake in the lengthy bill, according to a white paper by conservative health care experts Michael Cannon and Jonathan Adler.

A missing word in the law’s definition of a health insurance exchange could prevent the federal government from doling out crucial subsidies to aid middle class and lower-income people in buying insurance in states that refuse to set up their own exchanges. (Only 14 states are close to setting up exchanges so far. The federal government will set up back-up exchanges in states that don’t have their own by 2014.) If Cannon and Adler are right, the federal government would also not be able to fine large employers in states without exchanges if their lack of coverage leads employees to buy insurance in a federal exchange.

The law defines a health insurance exchange as a “governmental agency or nonprofit entity that is established by a state” in one section of the law, and then says later that individuals who participate in exchanges under that definition are eligible for subsidies. Because the law only says a “state” and not “a state or the federal government,” Cannon and Adler argue that the federal government cannot legally dole out subsidies or tax breaks to people who buy insurance from federal exchanges.

All this reminds me of what James Madison wrote in Federalist No. 62:

It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood.

Our Founding Fathers would be appalled at 2,000 page bills that are rushed through Congress without a single Congressman reading it before voting nor the President before signing it.

Supreme Court approves of unlimited taxes

Logic holds that taxes cannot exceed the value of the thing being taxed. Income taxes cannot exceed 100%, though FDR wanted them to. Sales taxes can never exceed 100% because the value of the good must make up a certain percentage of the cost. Property taxes can never exceed the value of the property because the value of the property would immediately fall to zero and there would be nothing to tax.

But with today’s Supreme Court ruling on Obamacare, in which non-activity is being taxed, there is no limit to the taxes that could, in theory, be imposed. The government could, if it wanted to, implement a tax of whatever it wants, let’s say one million dollars per person, for not buying health insurance, or not buying a house, or not buying something else.

Alexander Hamilton argued that the Constitution should not limit the power to tax or the power to spend. He wrote in his Report on Manufactures:

The power to raise money is plenary and indefinite; and the objects to which it may be appropriated are no less comprehensive than the payment of the public debts, and the providing for the common defence and general welfare. The terms “general welfare” were doubtless intended to signify more than was expressed or imported in those which preceded; otherwise numerous exigencies incident to the affairs of a nation would have been left without a provision. The phrase is as comprehensive as any that could have been used.*

Nevertheless, he and all the other Founding Fathers understood that there are natural limits to taxation, as Alexander Hamilton explained in Federalist No. 21:

It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, “in political arithmetic, two and two do not always make four.” If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.

Unlike Hamilton’s and the Founder’s system of relying primarily but not exclusively on consumption taxes, we now have a system wherein a tax can exceed a person’s income or net worth and be totally “constitutional.” The Obamacare penalty, I mean tax, can be set at whatever dollar level the politicians choose regardless of income or wealth. Or they can enact other similar taxes for not purchasing a given good or service. They have paved the way for unlimited taxes .

* For those who argue that this gives the government unlimited power, Hamilton added:

A power to appropriate money with this latitude which is granted too in express terms would not carry a power to do any other thing, not authorised in the constitution, either expressly or by fair implication.

– Michael E. Newton is the author of the highly acclaimed The Path to Tyranny: A History of Free Society’s Descent into Tyranny and Angry Mobs and Founding Fathers: The Fight for Control of the American Revolution. He is currently writing a book about Alexander Hamilton.

George Washington speaks up against ObamaCare Exemptions

As the Department of Health and Human Services grants another exemption to part of Obamacare, this time to the American Association of Retired Persons (AARP), I am reminded of what George Washington said:

Tranquillity reigns among the people, with that disposition towards the general government, which is likely to preserve it. They begin to feel the good effects of equal laws and equal protection.

Until we return to a system of “equal laws and equal protection,” there will be no tranquility among the people and the people will not have a positive disposition towards government.

If Obamacare is so great, why all the exemptions?

According to the latest report:

HHS posted 126 new waivers on Friday, bringing the total to 1,040 organizations that have been granted a one-year exemption from a new coverage requirement included in the healthcare reform law enacted almost a year ago.

About 2.6 million people are covered by the waivers, representing less than 2 percent of privately insured individuals, according to HHS.

With 2.6 million people now exempt from Obamacare, we are are getting close to my goal of 300 million exemptions.

How to repeal Obamacare without repealing it!

So far, more than 700 organizations have received waivers on Obamacare.

Assuming a new President is elected in 2012, this President can simply hand out 300,000,000 waivers. Problem solved!

Michelle Obama’s War

Michelle Obama recently said:

Childhood obesity isn’t just a public health threat, it’s not just an economic threat, it’s a national security threat as well.

Previously, we had heard that our deficit was a national security issue:

The record U.S. budget deficit and debt should be viewed as a growing national security concern, U.S. Secretary of State Hillary Clinton told lawmakers yesterday.

“We have to address this deficit and the debt of the U.S. as a matter of national security, not only as a matter of economics,” Clinton said in testimony to the House Appropriations Subcommittee on State, Foreign Operations and related programs.

Why must everything be a national security issue? And if these things really are national security issues, why are they announcing it to our enemies? And if our enemies already know this, do these Washington bureaucrats think we, the American people, are too stupid to realize it for ourselves?

I explain this obsession in The Path to Tyranny in a section about War Powers:

Seeing the usefulness of war to expand government and gain powers not enumerated in the Constitution, politicians and bureaucrats often use war terminology to advance their agendas. The War on Drugs, War on Poverty, and War on Cancer were not real wars, but by creating a sense of urgency, proponents of these issues hoped to receive government funding before public sentiment shifted to other causes. Many argue the War on Terrorism should also be on this list of fictitious wars, but it at least involves real military conflict. To some extent, the War on Drugs also requires military support, but it remains primarily a job for law enforcement and public education. The wars on poverty and cancer though require neither the military nor law enforcement and, therefore, the use of the war metaphor is simply a deceptive tool used to gain support for increased government spending.

The same could be said about the two “wars” above. While our deficit may in fact be an immediate national security issue, the use of this “war metaphor” will simply be used to force higher taxes upon the people or reductions in promised benefits (social security) to pay for these new “wars.” It is a stretch to claim childhood obesity is a national security issue. It is a serious problem and is symptomatic of our society, but it in itself is not a national security issue, though its underlying causes (consumerism, laziness, lost productivity, increased health-care costs) may themselves indirectly affect national security.

Don’t let the politicians trick you with their use, rather misuse, of words.

President Obama: The Health Care Tyrant

The incoming governor of South Carolina challenged President Obama to repeal the health care bill. TheSunNews.com reports:

Obama rejected Haley’s request to repeal the health care bill – but said he’d consider letting states opt out of its mandates if they ran exchange programs, banned insurance firms from denying coverage of pre-existing conditions and enabled people to pool together for better rates.

Now, I must admit that I did not read the 2,600 page health care bill, so I don’t know if there is a provision that allows the President to issue such exemptions under those terms. Either way, this is very disturbing.

According to this story which is based on Nikki Haley’s comments afterward (there is no way to know what exactly the President said), President Obama “said he’d consider letting states opt out of its mandates…” He apparently is under no obligation to do so even if a state complies with his demands.

According to Obamacare or the government interpretation and enforcement of it, the President has dictatorial powers. The President can grant exemptions to whomever he pleases and deny exemptions to others who comply with the very same provisions.

We have already seen the government issue exemptions for individual corporations, but I was under the impression that there were strict rules to follow and those who follow those rules and apply for an exemption would get one. But now, at least with the states and maybe on the corporate side as well, the exemptions require Presidential approval and the President can make up his own rules.

Hail to the Health Care Tyrant!