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How Is The Health Care Bill Unconstitutional? Let Me Count The Ways

December 23, 2009 By: Phred Category: Uncategorized

I have written previously about my opinion of the Democrats’ health care bills.  I have also written about the economic problems which this bill will cause.  I have questioned the need for this bill by dispelling the myth that 47 million Americans do not have health insurance because they cannot afford it.  Additionally, I have written about the declines in quality of health care that are sure to come following the enactment of these plans.

One thing I have not written much about is the legality of passing this type of health care reform.

The Constitution is the supreme law of the land.  No matter how much we all want a new law, regulation, or program, this new law, regulation, or program is illegal if not authorized by the Constitution.  The rule of law is the idea that leaders and government officials must follow the law just as common people must follow the law.  If our leaders violate the Constitution while pursuing reforms. they are violating the rule of law.

Although a majority (or at least a plurality) of Americans have opposed the Democrats’ health care plan in EVERY SINGLE POLL on the issue for over a month now, a bill has passed the House of Representatives and a similar bill will almost certainly pass the Senate this Thursday.  However, the popularity or unpopularity of a law has no bearing on its Constitutionality.

The first problem with this bill is the “insurance mandate.”  If this bill is enacted into law, all Americans who can afford to purchase health insurance but fail to do so are subject to a fine of $750.  Failure to pay this fine will lead to a prison sentence.  One obvious question here is why, if health insurance is so good and vital do people have to be threatened with jail time for not purchasing it? More troubling than this question is the legal basis for imposing such a mandate on Americans.

There is no historical precedent for this type of mandate.  A similar insurance mandate was considered in a 1994 health care bill which prompted CBO analysts to write: “A mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action. The government has never required people to buy any good or service as a condition of lawful residence in the United States.”

More importantly though, there is not a Constitutional precedent for an insurance mandateRead the entire Constitution as many times as you like: you will find nothing in the document which grants the government the right to force citizens to purchase a privately produced product.  Article I, Section 8 of the US Constitution lists the “enumerated powers” of Congress.  There is absolutely no mention of anything even remotely relating to a) the right of Congress to enact laws regarding health care b) the right of Congress to force Americans to buy a product from a private company under penalty of fine or imprisonment.

Liberals will likely argue that Congress does have the power to enact this type of mandate (and this health care bill as a whole) by citing three clauses within Article 1, Section 8: the “general welfare clause,” the “commerce clause,” and the “necessary and proper clause.”  Here is why they are wrong on all three points.

The “general welfare” clause of the Constitution reads as follows:

“The Congress shall have power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States…”

Liberals see the phrase “general Welfare of the United States” to mean that Congress has the right to provide for the good and welfare of citizens of the United States.  This is an incorrect and dangerous view of the Constitution.  The Constitution was written to create a new federal government by mutual consent of independent States.  Thus, the name United States meant just that–States which were united as partners in a common government.

The meaning of this clause in the Constitution therefore means that Congress has the power to provide for the “general welfare of the States.”  By no means does this clause imply that Congress has the right to provide for the “general welfare of all American citizens.”  Such a power was neither written, nor implied in this clause.

But dont take my word for it.  The “Father of the Constitution,” James Madison agreed with my sentiments when he said:

“If Congress can employ money indefinitely to the general welfare, and are the sole and supreme judges of the general welfare, they may take the care of religion into their own hands;they may appoint teachers in every State, county and parish and pay them out of their public treasury;they may take into their own hands the education of children,establishing in like manner schools throughout the Union;they may assume the provision of the poor;they may undertake the regulation of all roads other than post-roads;in short, every thing, from the highest object of state legislation down to the most minute object of police,would be thrown under the power of Congress…. Were the power of Congress to be established in the latitude contended for, it would subvert the very foundations, and transmute the very nature of the limited Government established by the people of America.”

The “commerce clause” of the Constitution reads as follows:

“The Congress shall have power… To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”  The interpretation of this clause has been widened greatly over the years, helping nationalists as well as socialists consolidate power on the federal level.  However, even given the wide interpretation of this clause, Congress lacks the power to nationally mandate health care.

I (as well as many others) previously advocated allowing consumers to purchase insurance plans across state lines.  The reasoning here was that allowing a national insurance market to emerge would increase competition and lead to more insurance carriers, lower costs, and better products (as it has done in many other industries).  However, Congress long ago prohibited the slae of insurance plans across state lines.

This measure is one of the primary reasons why health care costs are out of control, making it one of the primary reasons why the system is broken, in turn making it one of the primary reasons why the Democrats are attempting to nationalize health care.

However, this measure is also a major reason why it is unconstitutional for Congress to nationalize health care.  Yes, Congress does have the right to regulate commerce between the states.  However, Congress has no power whatsoever to regulate commerce within an individual state.  By refusing to allow insurance companies to compete across state lines, Congress has lost any legal right it would have to regulate health care.

Thus, Congress has created a sort of legal “catch-22.”

Perhaps the most common excuse that big government proponents use to enact statist policies is the “necessary and proper clause” of the Constitution.  The “necessary and proper clause” reads as follows:

The Congress shall have power…  To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.”

Liberals (and conservatives when it is convenient for them) tend to stop paying attention to this clause after the word “proper” and interpret it to mean that Congress has the power to do as it wishes, as long as the measure is both necessary and proper.  This is not true.  As clearly stated above, Congress can only [legally] pass laws which are necessary and proper to executing the powers listed in Article 1, Section 8 of the Constitution.

But, even if this clause does allow Congress to pass any law that is both “necessary and proper,” the insurance mandate is still an unconstitutional violation of this clause.  For a law to meet the qualifications in the above clause, the law would have to be both “necessary,” and “proper.”

The fact of the matter is that this mandate is not “necessary.”  Many people are uninsured by choice.  They have the means to purchase insurance but for whatever reason choose not to.  I wrote about this more extensively here.  But here are a few quotes:

“A lot of other people are also voluntarily uninsured.  For example, about 9 million people (more than one in five of the uninsured) are eligible for employer insurance and decline to enroll even though the employer share of the premium is usually nominal.”

“The largest increase in the number of uninsured in recent years has occurred among higher-income families.”

“Further, over the past decade, the number of uninsured increased by 54% in households earning between $50,000 and $75,000 and by 130% among households earning $75,000 or more.  By contrast, in households earning less than $50,000 the number of uninsured decreased approximately 3%.”

What the above quotes indicate is that many people who do have the financial ability to purchase health care coverage decline to do so.  These people would prefer to use their money to purchase other items, or to save.  For these people, it is NOT necessary that they have health insurance.

Two further reasons why this bill is unconstitutional are found in the Constitution in Article I, Section 9.

One clause in Section 9 reads as follows:

“No Bill of Attainder or ex post facto Law shall be passed.” A bill of attainder is a law which targets a specific group of people.  Requiring individuals to purchase health insurance under penalty of fine or imprisonment violates this prohibition by directly targeting those who choose not to purchase insurance.

I spoke with Dr. Robert Levy, Chairman of the Cato Institute, and the legal scholar behind the D.C. v. Heller case.  I asked Dr. Levy if the proposed individual mandate constitutes a violation of the Constitutional prohibition on bills of attainder.  His response is below (all emphasis added by me):

“As you correctly note, Article I, sec. 9 of the Constitution forbids the federal government from enacting bills of attainder – broadly defined as legislative acts, civil or criminal, that inflict punishment without a judicial trial.  The most egregious bills of attainder designate by name the parties to be punished.  But the Supreme Court has also invalidated legislation where the names are omitted, yet could be ascertained without great difficulty. See, e.g., United States v. Brown, 381 U.S. 437 (1965) (federal crime for member of Communist party to serve as officer of labor union).

Legislative bodies are supposed to enact general rules, broadly applicable, that grant rights, impose obligations, or prohibit acts.  The judiciary then decides whether specific persons are entitled to a right or bound by an obligation or prohibition.  In carrying out their function, courts have to follow prescribed procedures — e.g., jury trials and rules of evidence — that are not applicable to legislatures. That’s why the Bill of Attainder Clause was included in the Constitution — to prevent legislatures from punishing identifiable persons or groups without giving them an opportunity to defend themselves.

For the Bill of Attainder Clause to be successfully invoked, a court would have to conclude that it was the legislature’s intent to punish rather than to regulate for a legitimate political purpose.  In my view, the prospects for a successful bill of attainder challenge to the insurance mandate are negligible – but only because the Supreme Court is less attentive than you and I to the Constitution.

Besides the insurance mandate, this bill fails on several other Constitutional grounds.  The 10th Amendment reads as follows: 

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” This expressly means that all powers not mentioned in Article 1, Section 8 of the Constitution belong to the states or the people.  Thus, because health care is not mentioned in the Constitution, this power belongs to individual states.

While this provision would allow states to create their own state run health acre plans, it would not allow states to require insurance mandates, nor would it allow them to ban the provision of private health insurance.  According to Article 1, Section 10 of the Constitution, “No State shall… pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts.” The prohibition on laws impairing the obligation of contracts means that no state can interfere with the rights of citizens to enter into private contracts with insurance providers (or with any other business).

Finally, as mentioned above Congress has already declared that health insurance is not classified as interstate commerce.  Remember that by denying insurance providers the right to sell insurance across state lines, they have made health care an intrastate issue, rather than an interstate issue.  Congress simply does not have the power to regulate intrastate commerce.

The fact of the matter is that no matter how badly liberals want this bill to pass, it is unconstitutional.  Congress does not have the legal power to enact this law.

I hate to even bring this up, but there is one way that the Democrats could pass a bill of this magnitude legally; they would need to amend the Constitution to grant Congress the right to provide health care.

Illinois Congressman Jesse Jackson, Jr. has proposed such an amendment.  While I would oppose the ratification of this amendment, its ratification would at least lay the legal grounds under which the government could provide health care.  Until such an amendment passes, the federal government’s legislation regarding health care is in direct violation of the Constitution, and as such, should be ignored or nullified by the States.

Americanly Yours,

Phred Barnet

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Our Perverse Government’s Perverse Actions Lead To Perverse Incentives

October 27, 2009 By: Phred Category: Uncategorized

How exactly did we get to the point where government owned banks started charging credit card holders fees for paying off their balances every month?

The government passed laws like the Community Reinvestment Act which essentially mandated banks to loan to people who would not have been able to obtain loans otherwise.  Then, the government and the Federal Reserve created money out of thin air and lent it to banks at absurdly low rates.  Flush with new and cheap money, these banks massively increased their lending to “sub-prime” borrowers (begin bubble).  With the money supply growing at unprecedented rates in the 1990’s and this decade, there was always enough money for banks to make loans.  Borrowers were able to take out second mortgages at very low rates.  Home builders rapidly built houses to meet soaring (bubble-induced) demand.

As with all bubbles, this one burst, leaving home builders unable to sell newly built houses and borrowers unable to meet their obligations.  Banks had sold off the rights to their lender’s payments so they would have more money to make new loans.  This left the banks in the same boat as homeowners who could not make their payments.  But, while homeowners and home builders had to file for bankruptcy and sell off their assets to pay their debts, the banks used their lobbyists, fear, and their ownership of the Federal Reserve to convince our government to bal them out.

The government and the Federal Reserve then printed up a bunch of money–they simply created it out of thin air–and gave it to the banks in exchange for ownership.

This happened on October 3rd, 2008.  I can understand the government’s perverse rationale that led it to bail out these banks.  What I can not understand is why, over a year later, the government continues to own large stakes in these banks.

The government has now taken to regulating the salaries of banking officials, as well as the actions and practices of these banks.

So, it comes as no surprise to the observant that the government would use its power and control to create perverse incentives.

Bank of America and Citigroup–two firms now under the ownership of the federal government have begun implementing new fees.  These fees are not on late payments, gong over one’s credit limit, or cash advances.  Instead, these government owned banks have announced fees for customers who regularly pay off their balances.  Customers who leave monthly balances on their cards will not be charged the fees.

A fee is similar to a tax (especially if t is levied by a government owned entity).  Both taxes and fees use pricing to create incentives to change behavior.

Because Bank of America and Citigroup are owned by the government, a fee on those who pay off their balances regularly can be viewed as a tax on them.  Because those who leave monthly balances on their cards are exempt from these fees, this can be viewed as a subsidy for those who leave balances.

Our government is creating perverse and dangerous incentives: they are incentivizing debt and discouraging good and proper financial habits.

But, you cant hardly be surprised by this.  After all:  our perverse government’s perverse actions do tend to lead to perverse incentives.

Americanly Yours,

Phred Barnet

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Praise Where Praise Is Due

October 23, 2009 By: Phred Category: Uncategorized

I have rarely praised President Obama or even agreed with his policies.  This is not because of a knee-jerk partisan reaction, but rather because of genuine economic and philosophical opposition to nearly every policy enacted and/or championed by this administration.

As I dont hesitate to criticize the President’s bad policies, I must also praise those that I do agree with.  This week, President Obama announced this week that his administration will no longer prosecute violators of federal marijuana policy unless they are violating federal as well as State laws.

This is a big step in the right direction.  For decades now, the federal government has perpetuated a “war on drugs.”  This war has criminalized substances and by this action has created a new class of criminals.  It has forced the production, distribution, and use of these substances underground, contributing greatly to the rise in gang violence throughout the nation.  This war has led to the arrest of millions of Americans, violating their individual liberties and often their property rights in the process.  This war has shattered families.  Finally, this war has cost billions directly (through increased policing and incarceration costs), as well as indirectly (by incarcerating members of society and therefore removing their productive capabilities).

Many States now allow the use and sale of marijuana for medical purposes.  It is simply morally wrong for the government to outlaw any substance which has the potential to ease the pain and suffering of people with chronic illnesses including cancer.

I am pleased that President Obama is following the 10th Amendment on this issue.  The 10th Amendment reads as follows:  “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” There is absolutely no provision in the US Constitution which gives the federal government the power to regulate drugs, meaning that control over this issue rests with individuals or the States.  President Obama has decided not to uphold an unconstitutional law.  I support this.

However, I would urge President Obama to reread the 10th Amendment, and then take further action.  Rather than not enforcing federal law, President Obama should immediately call for the repeal of all federal laws involving the using, cultivation, or distribution of marijuana within one’s own State.  These laws are unconstitutional and violate the spirit, as well as the letter of the Constitution.

Furthermore, President Obama should repeal all federal drug laws involving the using, cultivation, or distribution of any drug within one’s own State.  Let the people decide what should be allowed in their own areas.  A national one size fits all policy for drugs is not only unconstitutional, but it also violates the rights of individuals and communities to decide what is appropriate for themselves.

Additionally, it appears that there may be some confusion about the President’s new policy.  Just yesterday, the DEA arrested 18 Americans in California for violating federal laws regarding the cultivation of marijuana.  I know that the President’s policy was just announced this week, but this arrest seems to be in violation of this new policy.  Federal laws regarding marijuana must be repealed if this type of confusion is to be avoided in the future.

I also urge the President to use his pardoning power to grant full pardons to anyone who has been arrested and incarcerated for violating the laws that he is no longer enforcing.  I would also urge him to go further and pardon all people who have been arrested under federal laws for any drug crime which was non violent and did not involve selling these substances to minors.

Finally, I must once again praise President Obama for adhering to the 10th Amendment of the Constitution on this issue.  However, I must urge him to respect and follow the Constitution and the 10th Amendment on more issues in the future.  It is unreasonable for President Obama to respect the legally defined distinction between State and federal powers on this issue while ignoring them on a slew of other issues.

Americanly Yours,

Phred Barnet

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Cash For Seniors

October 15, 2009 By: Phred Category: Uncategorized

For the first time in almost 35 years, there will be no cost of living increase in Social Security payments.  In the predictable “something must be done about this [so called] problem” mentality of this administration, President Obama has proposed sending $250 checks to over 50 million seniors to help them cope with their financial woes.

The problem here is that there is a very good and simple reason why there is not going to be an increase in Social Security payments: prices have dropped by 2.1% since the fall of 2008, meaning that the money that seniors already get from Social Security actually buys more goods and services than it did last year.  On top of this, the Social Security Administration has already given seniors a large increase in their payments this year: in January, seniors received a 5.8% boost in their payments, the largest increase since 1982.

Once again, President Obama is using misguided “logic” to support his own political goals.  Social Security payments are indexed to price inflation, however, they are not allowed to be decreased, meaning that a decrease in prices actually makes seniors much better off.

I understand that many seniors are suffering in this recession.  Many have lost a great deal of their savings due to the collapse in stock prices.  However, Congress decided over three decades ago that Social Security payments would be linked to the cost of living.  Besides the obvious reason of guaranteeing seniors a livable income, Congress likely had another reason for guaranteeing the benefits: they wanted to take the decision out of the hands of the political process.  Right or wrong, it will be very difficult for members of Congress to vote against the $250 payment for seniors.  For one, seniors are a vulnerable group, many of whom are living only on their fixed Social Security payments.  Seniors also vote–a lot.  As a group, they historically have the highest rates of voter turnout.

I firmly believe that this bill should be voted down.  For one, President Obama’s proposal to send checks to seniors  is addressing a problem that doesnt actually exist: seniors can buy more for their money than they could a year ago.  Additionally, these payments will cost roughly $13,000,000,000 [$13 billion] in money that the government does not have.  The money being spent on this non-existent problem will have to be expropriated from hard working citizens or printed out of thin air (devaluing the savings and earnings of anyone who does not receive a payment).

This “something must be done” mentality is flat out wrong.  Many supporters of the bailouts, stimulus, and other interventionist policies defend them not on moral or economic grounds, but rather defend them by saying that “at least they are trying something.”  This mentality has brought this once great Nation to the brink of bankruptcy and has brought government regulation into nearly every single aspect of daily life.  We can only hope that enough members of Congress will do the right thing and oppose these payments.

Americanly Yours,

Phred Barnet

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S. 604 Phonebomb Call List For Week Of 10/12

October 12, 2009 By: Phred Category: Uncategorized

We are making good progress towards getting this bill more support.  We have to keep up the effort!  The Senate is still preoccupied with the health care debate, but a vote is expected on that issue soon, meaning that there will be more time for Senators to focus on passing S 604.

In case you didnt notice, I put up an entire section devoted to this bill.  You can find it right under the Americanly Yours logo, or by clicking here.

If you use Facebook or GMail, please consider adopting the following messages as your “status” daily.  Even if you are not willing to make these messages your status, please consider calling the Senators.  This is very important!

Status for Monday, October 12:

S. 604 (The Audit the FED Bill) Now has the support of 31 Senators! Victory is within reach. Lets target 1 Democrat and 1 Republican today and bombard them with calls to get their support. Democrat: Mary Landrieu (LA) (202) 224-5824. Republican: Michael Enzi (WY) (202) 224-3424. It literally takes less than 2 minutes to call! PLEASE REPOST!!!

Status for Tuesday, October 13:

S. 604 (The Audit the FED Bill) Now has the support of 31 Senators! Victory is within reach. Lets target 1 Democrat and 1 Republican today and bombard them with calls to get their support. Democrat: Kristen Gillibrand (NY) (202) 224-4451. Republican: George LeMieux (FL) (202) 224-3041. It literally takes less than 2 minutes to call! PLEASE REPOST!!!

Status for Wednesday, October 14:

S. 604 (The Audit the FED Bill) Now has the support of 31 Senators! Victory is within reach. Lets target 1 Democrat and 1 Republican today and bombard them with calls to get their support. Democrat: Tim Johnson (SD) (202) 224-5842. Republican: Richard Lugar (IN) (202) 224-4814. It literally takes less than 2 minutes to call! PLEASE REPOST!!!

Status for Thursday, October 15:

S. 604 (The Audit the FED Bill) Now has the support of 31 Senators! Victory is within reach. Lets target 1 Democrat and 1 Republican today and bombard them with calls to get their support. Democrat: Tom Udall (NM) (202) 224-6621. Republican: Olympia Snowe (ME) (202) 224-5344 . It literally takes less than 2 minutes to call! PLEASE REPOST!!!

Status for Friday, October 16:

S. 604 (The Audit the FED Bill) Now has the support of 31 Senators! Victory is within reach. Lets target 1 Democrat and 1 Republican today and bombard them with calls to get their support. Democrat: Jay Rockefeller (WV) (202) 224-6472 . Republican: Susan Collins (ME) (202) 224-2523. It literally takes less than 2 minutes to call! PLEASE REPOST!!!

Americanly Yours,

Phred Barnet

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