Tag Archives: Lee Casey

Alito Teases a Judicial Revolution

By David B. Rivkin Jr. and Lee A. Casey

23 June 2019 in the Wall Street Journal

The Supreme Court’s decision last week in Gundy v. U.S. was deceptively anticlimactic. The vote was 5-3, but there was no majority opinion and the decision made no new law. Justice Samuel Alito’s lone concurrence, however, suggested that a major break with precedent—and a return to the Constitution’s original meaning—will soon be in the offing.

The Constitution’s first clause after the Preamble states: “All legislative Powers herein granted shall be vested in a Congress of the United States.” Since 1935 the justices have ignored that provision and permitted lawmakers to delegate their authority to the executive branch. At issue in this case was a provision of the Sex Offender Registration and Notification Act of 2006, or Sorna, that directed the attorney general to “specify the applicability” of the law’s registration requirements to offenders, like Herman Gundy, whose crimes predated the act. Mr. Gundy, who was sentenced to 10 years in prison for failing to register, claimed this delegation was illegitimate.

The case was heard four days before Justice Brett Kavanaugh’s confirmation. Had Justice Alito dissented, the resulting 4-4 split would have upheld the lower court’s ruling against Mr. Gundy without any opinion being issued. Instead, Justice Alito joined his four liberal colleagues in rejecting Mr. Gundy’s appeal but said he was prepared to switch sides: “If a majority of this Court were willing to reconsider the approach we have taken for the past 84 years, I would support that effort.” A dissent from Justice Neil Gorsuch, meanwhile, set forth the case for nondelegation.

In their quest to control governmental power and protect individual liberty, the Framers separated federal power among three branches of government. As Justice Gorsuch notes, they also “went to great lengths to make lawmaking difficult,” requiring consent of both houses of Congress and the president, or legislative supermajorities. The veto was the executive branch’s only role in the legislative process.

That was deliberate. Justice Gorsuch quotes Montesquieu, who was quoted by James Madison in Federalist No. 47: “There can be no liberty where the legislative and executive powers are united in the same person, or body of magistrates.”

For more than a century after its creation, the high court actively policed the separation of executive and legislative powers, requiring Congress to make the hard, politically risky policy decisions and permitting only limited delegation of operational details. But in the 1930s, under pressure to uphold the vast delegations of the New Deal, the justices changed course and held that delegation was permissible so long as an “intelligible principle” could be discerned to govern how that power was exercised.

Gundy offered an excellent opportunity to begin reasserting the original constitutional design. Sorna’s delegation of power was extreme. While setting up an elaborate registration system for sex offenders convicted after its enactment, the law granted the attorney general “authority to specify the applicability of the requirements of this subchapter to sex offenders convicted before the enactment of this chapter.” A single official in the executive branch was given the power to impose requirements carrying severe criminal penalties on more than 500,000 Americans, and then to carry them out.

Justice Elena Kagan, who wrote the plurality opinion, struggled mightily to find an intelligible principle. She wrote that the court had interpreted Sorna as requiring applicability “to all pre-Act offenders as soon as feasible.” But as Justice Gorsuch noted, that language appears neither in the statute nor in the Justice Department’s implementing regulations.

Justices Gorsuch’s and Alito’s opinions, together with Justice Kavanaugh’s strong separation-of-powers jurisprudence as an appellate judge, suggest that a majority of justices are prepared to reimpose proper constitutional restraints on congressional delegations. All they need is a suitable case.

Messrs. Rivkin and Casey practice appellate and constitutional law in Washington. They served in the White House Counsel’s Office and Justice Department under Presidents Reagan and George H.W. Bush.

Source: https://www.wsj.com/articles/alito-teases-a-judicial-revolution-11561317002

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A Facebook Deal That Needs Unfriending

Time to end class-action settlements that only reward lawyers, not plaintiffs.

By David B. Rivkin Jr. and Lee A. Casey 

The Supreme Court will soon decide whether to hear a case that could determine the future of particularly abusive class-action settlements. Not abusive in the usual sense, where a class of injured plaintiffs is awarded an exorbitant amount. Instead, these settlements are abusive in that absolutely nothing goes to the injured plaintiffs. At issue is whether federal courts may approve such agreements rewarding lawyers and defendants, leaving plaintiffs out in the cold.

The case is Marek v. Lane, and it arose out of Facebook’s notorious 2007 “Beacon” program. Beacon gathered and published information about Facebook users’ other Internet activities as an advertising and marketing tool, invading the privacy of millions. It may also have violated a number of state and federal laws, including the 1988 Video Privacy Protection Act, which includes a liquidated-damages provision of $2,500 for each offense. A class-action suit was filed in 2008 on behalf of as many as 3.6 million injured social networkers.

Embarrassed (if unrepentant) and under media pressure, Facebook entered settlement negotiations, ultimately agreeing to pay $9.5 million. Of this, about $3.1 million (later reduced to $2.3 million) would go to the class-action lawyers, and the rest would be used to create a Digital Trust Foundation, controlled in part by Facebook. The DTF would sponsor programs and education regarding online threats to personal information and identity—including through funding consumer groups, such as the Electronic Frontier Foundation, that Facebook already supports and are often allied with Facebook on matters of regulation and public policy. Members of the class of injured plaintiffs, meanwhile, would get nothing and, unless they took action to “opt-out” of the settlement, their individual claims would be forever barred.

Such arrangements, through which a class recovery is diverted to purposes other than actually compensating the claimants, are known as “cy pres” awards, a term derived from the French legal expression cy pres comme possible (as near as possible). The idea is that where a court cannot directly achieve some remedial goal, such as meaningful payments to the injured parties, it may adopt other measures that, as nearly as possible, have the same compensatory result.

Cy pres remedies are very much an exception in the law, and are ordinarily subject to significant judicial policing due to the risk that defendants and class-action attorneys will use cy pres to cut a deal that benefits them both but gives plaintiffs little or nothing. For this reason, federal courts carefully assess whether proposed settlements are “fair, reasonable, and adequate” to the injured class members. A cy pres award can be approved only if a court finds that granting the recovery to a third party best advances member interests.

The Facebook settlement, however, provides zero benefit to class members. Breaking with all the other appeals courts to consider cy pres settlements, in February the U.S. Court of Appeals for the Ninth Circuit upheld a ruling that an award of millions to a foundation controlled in part by Facebook was good enough because it was not entirely “unrelated to the class’s interests.”

Yet the Ninth Circuit’s six dissenting judges wrote: “The DTF can teach Facebook users how to create strong passwords, tinker with their privacy settings, and generally be more cautious online, but it can’t teach users how to protect themselves from Facebook’s deliberate misconduct. Unless, of course, the DTF teaches Facebook users not to use Facebook. That seems unlikely.”

Nevertheless, both the trial court and the Ninth Circuit Court of Appeals approved this agreement, without assessing the value of class members’ claims. The agreement did not even forbid Facebook from reinstituting a program identical to Beacon under a different name in the future and injuring class members in the exact same fashion. If that’s “fair, reasonable, and adequate,” then anything goes.

The Ninth Circuit’s decision opens new vistas in class-action litigation, where lawyers (in the form of fat fees) and defendants (in the form of resolving expensive lawsuits on the cheap) could reap rich rewards simply by stiffing those actually injured. Sadly, even courts have been known to get in on the action by helping to choose the institutions or causes to receive cy pres payments—including awards to the alma mater of a plaintiffs’ lawyer, in one case, and to schools where judges either taught or served as a trustee, in others.

Only the Supreme Court can remedy this, by hearing Marek v. Lane and reversing a decision that carries the real and immediate danger of promoting significant abuse nationwide. Class actions should compensate the victims of genuine injuries, not promote some social good as defined by lawyers, defendants and judges.

Messrs. Rivkin and Casey served in the U.S. Justice Department under Presidents Reagan and George H.W. Bush. They are partners in the Washington, D.C., office of Baker & Hostetler LLP, representing claimants opposed to the Facebook settlement and who are now seeking Supreme Court review.

Sourcehttp://online.wsj.com/article/SB10001424052702303796404579101271549128990.html#articleTabs%3Darticle

The True Lesson of the IRS Scandal

There should be less federal regulation of political speech.

By David B. Rivkin Jr. and Lee A. Casey

President Obama and his political allies have dismissed as “phony scandals” mounting evidence that the Internal Revenue Service and other federal agencies hindered and punished conservative advocacy groups. Meanwhile, efforts are under way to impose even more regulation on core political speech.

The government’s abuses are very real, but the scandal’s lessons are not appreciated: The federal regulation of political speech has already gone further than can be justified by existing law, let alone the Constitution.

The debate about political speech has so far focused on a particular type of nonprofit entity: social-welfare organizations exempt from federal income tax under section 501(c)(4) of the Internal Revenue Code. A group qualifies for this exempt status if it is “operated exclusively for the promotion of social welfare.” This means its efforts cannot inure to the benefit of specific individuals, members or private clubs.

On Wednesday, Rep. Chris Van Hollen (D., Md.) filed a federal lawsuit seeking to force the IRS to tighten the eligibility rules for politically active groups seeking 501(c)(4) status. Yet “social welfare” is a capacious term that includes many policy and political goals—from preserving historic battlefields to repealing laws for or against same-sex marriage.

The IRS has long recognized this by permitting such groups, if consistent with their stated social-welfare purpose, to engage primarily or even wholly in public-issue advocacy or lobbying. In other words, they are permitted to engage in political speech directed at government officials. At the same time, however, the IRS says that political campaign activities cannot account for more than half of a 501(c)(4)’s expenditures. But the statute itself contains no such limitation. In short, the IRS effectively robs social-welfare organizations of one half of their potential political speech.

This distinction between lobbying and election advocacy is entirely arbitrary. Electing candidates who support an organization’s principles and goals may be the most effective (and in some cases the only) means of achieving that organization’s social-welfare purpose. Yet the IRS rules here are consistent with the federal government’s overall approach to regulating elections since at least the 1970s. Bizarre as it may be in the world’s leading democracy, federal election laws treat the most effective form of political speech as the most disfavored. Stricter regulations like those sought by Rep. Van Hollen and others would only worsen the problem.

Until recently, the Supreme Court largely supported this system, interpreting the Constitution’s free-speech guarantees to permit these limitations in order to avoid corruption or its appearance. Even so, the court rejected efforts to control political activities, including expenditures, in support of a candidate but made independently of a candidate’s own campaign organization. The exception was corporations, which could not make independent expenditures.

In Citizens United v. FEC (2010), a majority of the court more sensitive to the First Amendment invalidated restrictions on independent political campaign expenditures by corporations, associations and labor unions. Since Citizens United, the use of 501(c)(4) organizations to engage in political speech has burgeoned—largely because such groups need not disclose their donors as purely political organizations still must. Calls for the IRS to close this supposed “loophole” also have multiplied.

That is a bad idea, not supported by the statutory language, and it is unconstitutional to boot. Although the Supreme Court has held that there is no duty to subsidize political speech through tax exemptions, there is no plausible basis on which the IRS (or Congress) can limit tax-exempt status to groups that eschew independent campaign spending while permitting other forms of political speech, such as lobbying.

Where the potential for corruption—for example, giving money to a candidate in exchange for favors—is absent, as the Citizens United ruling found with regard to independent expenditures, treating one form of political speech differently than others is not rational. It fails even the most deferential judicial review standard, much less the more exacting compelling governmental interest ordinarily applied under the First Amendment. The IRS-created 50% limit is vulnerable to challenge on the same grounds. It should make no difference under the existing statutory language what form the political speech of a 501(c)(4) takes; the organization should be able to spend 100% of its funds on independent campaign spending.

There also are sound policy reasons to cut 501(c)(4)s loose from such regulations. Such groups allow ordinary people to compete with the better-funded media industry, political parties, celebrities and other wealthy players, in the marketplace of ideas. Constraining the activities of 501(c)4s would not, as “progressives” claim, protect the little guy and level the playing field. Instead it would protect entrenched interests and, most of all, incumbents who can raise money simply because they hold public office.

Congress could abolish the 501(c)(4) status entirely. However, neither the IRS nor Congress can produce a result in which some groups, whose social-welfare purposes can be advanced through nonpolitical speech (such as promoting botany or historical research), can use 100% of their resources to do so, while others groups, whose social-welfare purposes can be advanced only through political speech, cannot.

To conclude otherwise would enable the government to engage in content-based restrictions on speech that have always been viewed as the most insidious violation of the First Amendment. The Supreme Court also has long made clear that Congress cannot deploy tax subsidies as a means of suppressing “dangerous ideas.”

The IRS scandal is a moment of reckoning. It offers the country a unique opportunity to free a substantial portion of political speech from government regulation.

This is an opportunity not to be wasted. Republicans should broaden their oversight inquiries into the constitutional and statutory basis on which the IRS has limited 501(c)(4) expenditures in the past—and force the agency to justify any plans it has to continue or expand those limits.

Messrs. Rivkin and Casey served in the Justice Department during the Reagan and George H.W. Bush administrations. They are partners in the Washington, D.C., office of Baker & Hostetler LLP.

Source: http://online.wsj.com/article/SB10001424127887323477604579001263134291446.html

Why the President’s ObamaCare Maneuver May Backfire

By postponing the employer mandate, Obama has given millions of Americans the legal standing to sue.

By  DAVID B. RIVKIN JR. AND LEE A. CASEY

President Obama’s announcement on July 2 that he is suspending the Affordable Care Act’s employer health-insurance mandate may well have exposed his actions to judicial review—even though that is clearly what he sought to avoid.

The health-care reform law’s employer mandate requires businesses with more than 50 employees to provide a congressionally prescribed set of health-insurance benefits or pay a penalty calculated at about $2,000 per employee. The law was to take effect on Jan. 1, 2014, but Mr. Obama has “postponed” its application until 2015. His aim, the administration said, was to give employers more time to comply with the new rules. But it was also seen as a way to avoid paying at least part of ObamaCare’s mounting political price in the 2014 congressional elections.

Whatever the reason, the president does not have the power to stop the implementation of a law. If there is one bedrock constitutional legal principle, it is that the president must “faithfully execute” federal statutes. He cannot suspend laws he dislikes on policy grounds or because he fears their political consequences.

Mr. Obama, however, has made a habit of exercising an unlawful suspending power, refusing to enforce selected federal laws, including various provisions of the immigration laws against young, undocumented aliens; work requirements enacted as part of the 1996 federal welfare reform law; and the testing accountability provisions of the No Child Left Behind education law.

One key problem with suspension power—aside from the fact that it destroys the balance of power between the two political branches—is that, when skillfully exercised, it sidelines the judiciary. The Constitution requires that a party commencing litigation must have what is commonly called “standing,” i.e., the party must have suffered or will suffer a legal injury that a court can redress. A determined president can head off litigation by effectively rewriting federal statutes in ways that do not create individual injuries so no party has standing.

By suspending the Affordable Care Act’s employer insurance mandate, however, the president has potentially given millions of Americans the necessary standing to challenge his conduct. This is because the Affordable Care Act is a highly integrated law, with many of its key provisions dependent on each other. In addition to the employer mandate, the law also contains an “individual mandate,” requiring most Americans to sign up for a required level of health-insurance coverage or pay a penalty.

The individual mandate was one of the core parts of the Affordable Care Act considered by the Supreme Court in the 2012 case of NFIB v. Sebelius, where the court upheld the statute against constitutional attack. Throughout that litigation, the Obama administration portrayed the individual mandate as an “integral part of a comprehensive scheme of economic regulation” that included the employer insurance mandate, which was intended to give millions of Americans a way of meeting their new obligation to have health insurance. In other words, suspending the employer insurance mandate prevents the individual insurance mandate from working the way Congress intended.

Like the employer mandate, the individual mandate by law will take effect in January 2014 (unless the president postpones that as well). Individuals who will then have to buy their own health insurance will arguably have suffered an injury sufficient to give them standing to sue.

Once in court, these litigants can argue that the very integrated nature of the Affordable Care Act would make it unlawful to apply one part against them, while suspending another section. They can also argue that only Congress can determine whether, once a statute is fundamentally changed post-enactment, it should survive or fall.

This inquiry usually arises when courts, having invalidated on constitutional grounds part of a statute, must determine whether or not Congress would have wanted the valid remaining parts of the law to remain in effect. The relevant constitutional doctrine is called “severability.”

As the Supreme Court noted in the leading severability case, Ayotte v. Planned Parenthood of Northern New England (2006), the ultimate fate of the revised statute is decided based on the “legislative intent.” In the case of the Affordable Care Act, if the courts were, for example, to determine that the employer insurance mandate is unconstitutional, the well-established severability analysis would lead them to conclude that the individual mandate (and likely the entire law) must also fall because Congress did not intend those provisions to operate in the absence of the employer insurance mandate. The president’s suspension of that part of the law, therefore, should also produce the same result, rendering the remainder of the statute unenforceable.

This argument should find favor with judges who are weary of the use of suspension power that improperly aggrandizes presidential authority, diminishes congressional power, and denies the judiciary an opportunity to have its say. Courts would have to conclude that the whole statute must fall while the president’s suspension is in effect. While reaching this conclusion, they might also declare the suspension itself unconstitutional. Both results would mark a significant win for the American people.

Source: http://online.wsj.com/article/SB10001424127887323368704578596360026187772.html?mod=wsj_streaming_stream

The IRS and the drive to stop free speech

Such a scandal was bound to happen after the government started trying to rule the expression of political views.

By David B. Rivkin and Lee A. Casey

The unfolding IRS scandal is a symptom, not the disease. For decades, campaign-finance reform zealots have sought to limit core political speech through spending limits and disclosure requirements. More recently, they have claimed that it is wrong and dangerous for tax-exempt entities to engage in political speech.

The Obama administration shares these views, especially when conservative, small-government organizations are involved, and the IRS clearly got the message. While the agency must be investigated and reformed, the ultimate cure for these abuses is to unshackle political speech by all groups, including tax-exempt ones, from arbitrary and unconstitutional government regulation.

Beginning in March 2010, the IRS engaged in an unprecedented campaign of harassment against conservative groups, either through denials or delays in approving their tax-exempt-status applications, or through endless and burdensome audits.

In notable contrast, liberal and “progressive” organizations got approvals with remarkable speed. The most conspicuous example involves the Barack H. Obama Foundation, which was approved as tax exempt within a month by the then-head of the IRS tax-exempt branch, Lois Lerner. From media reports and firsthand accounts, we also know that the IRS disproportionately audited donors to conservative causes and leaked confidential tax information concerning conservative groups in violation of federal law.

This IRS politicization is not an isolated problem. It is an inevitable result of the broader efforts to regulate and, in fact, suppress political speech.

The IRS crackdown on tax-exemption approvals for conservative groups was directed at nonprofit social-welfare groups, often called 501(c)(4)s after the Internal Revenue Code section granting them tax-exempt status. Such groups do not have to disclose their donors and are exempt from most taxation, although donations to them generally aren’t tax deductible.

Social-welfare organizations are permitted to engage in a range of political activities promoting their causes or beliefs, so long as these activities aren’t their “primary purpose.” This has been generally understood to mean that they must spend less than 50% of their total resources on political activities.

The IRS had little interest in 501(c)(4) political activities until the 2002 McCain-Feingold campaign-finance reform. That law barred dedicated political-advocacy groups from soliciting and spending soft money—funds that aren’t subject to tight federal campaign-contribution limits and are used for issue advocacy and party-building.

This IRS restraint was doubtless reinforced by the fact that virtually all politically active (c)(4)s, mostly labor and environmental groups, were ideologically liberal and their activities were not attacked in the mainstream media or by the political establishment. Meanwhile, Republicans financed their political activities largely through candidate-specific campaigns and party and congressional committees.

Yet McCain-Feingold had the unintended effect of making 501(c)(4) political activities far more important than they had been, since the law’s ban on soft money doesn’t apply to such groups. Thus, it prompted the creation of conservative 501(c)(4)s—although there is little hard evidence of improper political activities by any such groups, whether liberal or conservative.

The Supreme Court’s 2010 decision in Citizens United further increased the importance of the groups by invalidating the restrictions against much political speech by corporations. This freed 501(c)(4) groups, which ordinarily are organized as corporations, to engage in the express advocacy of political causes and candidates.

The Obama administration made clear its deep dislike of Citizens United and of the various new conservative groups spawned by the “tea party” movement. The IRS bureaucrats took the hint. No express order from senior administration officials would have been necessary. Like other federal enforcement agencies, the IRS has always been well-attuned to even subtle guidance from the White House, Congress and the political establishment.

Thus, the IRS crackdown on conservative organizations was a direct and inevitable consequence of political and policy messaging by the Obama administration, and by the campaign-finance reformers who share these views. Congressional Democrats are also to blame, since many of them have publicly—as with Max Baucus, chairman of the Senate Finance Committee, which oversees the IRS—or privately urged the IRS to go after conservative tax-exempt organizations.

Ignoring their own share of responsibility, campaign-finance reformers and their allies are now pressing to broaden the IRS crackdown to apply to all tax-exempt organizations. In their view, the problem is not only with express political advocacy, but with all tax-exempt activities that might have political overtones, or be related to political issues. Indeed, many argue that such organizations should be conspicuously apolitical.

This is wrong as a matter of law and policy. Congress doesn’t have to provide tax-exempt status to social-welfare organizations, but having done so it cannot discriminate by the kind of advocacy in which such groups engage. To say that such activities can have no political implications is an insult to common sense. In a vibrant democracy, every major policy debate has political implications.

The spirited debate about policy issues should be at the core of social-welfare organizations. Politics is how we govern ourselves and political speech is essential to self-governance. The fact that 501(c)(4) group contributors aren’t subject to campaign disclosure requirements is a good thing.

There is nothing inherently evil about anonymous political speech. It is firmly anchored in our political and legal culture and was used by the Framers during the founding. Hamilton, Madison and Jay published their Federalist Papers under a pseudonym. The fact that the IRS was able to target conservative donors—similar to the way donors to the NAACP were targeted at the height of the civil-rights battles—shows how disclosure can lead to speech-suppressing government actions.

The courts have long held that the IRS cannot use subjective, “value-laden” tests in administering nonprofit status. As the Court of Appeals for the D.C. Circuit stated in one leading case, Big Mama Rag, Inc. v. United States (1980): “although First Amendment activities need not be subsidized by the state, the discriminatory denial of tax exemptions can impermissibly infringe free speech.”

The proper lessons of the unfolding IRS scandal are twofold. First, any effort to have the IRS police advocacy activities of social-welfare organizations is bound to be clumsy and prone to degenerate into either selective or broad witch hunts. Second, the remedy is not to further limit political speech by nonprofit entities—which would certainly raise significant constitutional issues—but to encourage such speech by imposing fewer restrictions.

Messrs. Rivkin and Casey served in the Justice Department during the Reagan and George H.W. Bush administrations. They are partners in the Washington, D.C., office of Baker & Hostetler LLP.

Source: http://online.wsj.com/article/SB10001424127887323582904578489690187015294.html

The opening for a fresh ObamaCare challenge

By defining the mandate as a tax, one that will not be uniformly applied, the Supreme Court ran afoul of the Constitution.

By DAVID B. RIVKIN, JR. AND LEE A. CASEY

ObamaCare is being implemented, having been upheld as constitutional by the Supreme Court in June in a series of cases now known as National Federation of Independent Business v. HHS. It is becoming increasingly clear, however, that the court took a law that was flawed but potentially workable and transformed it into one that is almost certainly unworkable. More important, the justices also may have created new and fatal constitutional problems.

ObamaCare, or the Affordable Care Act, was conceived as a complex statutory scheme designed to provide Americans with near-universal health-care coverage and to effectively federalize the nation’s health-care system. The law’s core provision was an individual health-insurance purchase mandate, adopted by Congress as a “regulation” of interstate commerce. The provision required most Americans to buy federally determined minimum health-care insurance, or to pay a penalty more or less equivalent to the cost of that coverage.

Equally important were provisions requiring creation of state-run health-care insurance exchanges (where middle-income earners could obtain the prescribed coverage) and an expanded Medicaid program (also administered by the states) to cover people with incomes up to 133% (later upped to 138%) of the federal poverty level. An income of up to $31,809 for a family of four would qualify for Medicaid. States that failed to join in the Medicaid expansion were threatened with the loss of all federal Medicaid dollars, nearly a quarter of all state expenditures.

In the ObamaCare ruling, the Supreme Court correctly held that Congress could not impose the individual mandate as a constitutional regulation of interstate commerce and that Congress could not constitutionally use its spending power to coerce the states to expand Medicaid. Rather than strike down the law, however, the court construed the insurance-purchase mandate and its penalty as a “tax” on the failure to have health insurance. The justices also interpreted the Medicaid-expansion requirements as optional—permitting states to opt out of these provisions while staying within the traditional Medicaid program. Given that interpretation, the court’s majority upheld the statute as constitutional.

The court’s determination to preserve ObamaCare through “interpretation” has exacerbated the law’s original flaws to the point that it has become palpably unworkable. By transforming the penalties for failing to comply with the law’s requirements into a “tax,” the court has given the public a green light to ignore ObamaCare’s requirements when it is economically beneficial. Law-abiding individuals, who might otherwise have complied with the law’s expensive purchase mandate to avoid being subjected to financial penalties, can simply now choose to pay a tax and not sign up for coverage. There is certainly no stigma attached to simply paying a tax, and noncompliance with the law’s other requirements—such as those imposed on employers—is arguably made more attractive on the same basis. This effect fundamentally undercuts Congress’s original purpose, which was to expand health-care coverage to the greatest number of people, not to improve federal revenues.

Similarly, having reviewed the likely costs and benefits, states are now taking advantage of the court-granted flexibility. Seven states, including Texas, Mississippi and Georgia, have so far opted out of the Medicaid-expansion provisions, and eight (with more certain to come) are refusing to create the insurance exchanges, leaving this to a federal bureaucracy unequipped to handle these new administrative burdens. As a result, a growing number of low-income Americans will be unable to obtain the free or cost-effective insurance that Congress originally meant them to have, although they remain subject to the mandate-tax.

Policy problems aside, by transforming the mandate into a tax to avoid one set of constitutional problems (Congress having exceeded its constitutionally enumerated powers), the court has created another problem. If the mandate is an indirect tax, as the Supreme Court held, then the Constitution’s “Uniformity Clause” (Article I, Section 8, Clause 1) requires the tax to “be uniform throughout the United States.” The Framers adopted this provision so that a group of dominant states could not shift the federal tax burden to the others. It was yet another constitutional device that was simultaneously designed to protect federalism and safeguard individual liberty.

The Supreme Court has rarely considered the Uniformity Clause’s reach, but it cannot be ignored. The court also refused to impose meaningful limits on Congress’s power to regulate interstate commerce for decades after the 1930s, until justices began to re-establish the constitutional balance in the 1990s with decisions leading up to the ObamaCare ruling this summer. And although the court has upheld as “uniform” taxes that affect states differently in practice, precedent makes clear that a permissible tax must “operate with the same force and effect in every place where the subject of it is found,” as held in the Head Money Cases (1884). The ObamaCare tax arguably does not meet this standard.

ObamaCare provides that low-income taxpayers, who are nevertheless above the federal poverty line, can discharge their mandate-tax obligation by enrolling in the new, expanded Medicaid program, which serves as the functional equivalent of a tax credit. But that program will not now exist in every state because, as a matter of federal law, states can opt out. The actual tax burden will not be geographically uniform as the court’s precedents require.

Thus, having transformed the individual mandate into a tax, the court may face renewed challenges to ObamaCare on uniformity grounds. The justices will then confront a tough choice. Having earlier reinterpreted the mandate as a tax, they would be hard-pressed to approve the geographic disparity created when states opt out of the Medicaid expansion. But that possibility is inherent in a scheme that imposes a nominally uniform tax liability accompanied by the practical equivalent of a fully off-setting tax credit available only to those living in certain states. To uphold such a taxing scheme would eliminate any meaningful uniformity requirement—a result that the Constitution does not permit.

ObamaCare was always a poorly conceived and constitutionally deficient statute. The Supreme Court’s ruling upholding the law has simply made it worse. In the future, that decision is likely to be seen as a prime reason that the federal courts should judge and never legislate—even in the cause of rescuing an otherwise unconstitutional law from oblivion.

Messrs. Rivkin and Casey are lawyers in the Washington, D.C., office of Baker & Hostetler LLP. They pioneered the constitutional arguments against the individual mandate and represented 26 states in challenging ObamaCare before the trial and appellate courts.

A version of this article appeared December 6, 2012, on page A17 in the U.S. edition of The Wall Street Journal, with the headline: The Opening for a Fresh ObamaCare Challenge.

Source: http://online.wsj.com/article/SB10001424127887324705104578151164101375482.html?mod=djemEditorialPage_h

Not just the Middle East: Obama foreign policy record is appalling

The organizing principle of the administration’s foreign policy is one of weakness and passivity, coupled with a conspicuous rhetorical abdication of American leadership, write David Rivkin and Lee Casey.

by David B. Rivkin, Jr. Lee A. Casey | September 21, 2012 4:45 AM EDT

A few days ago on The Daily Beast, Leslie Gelb praised President Obama’s handling of the unfolding crisis in the Middle East last week and evidently discerns no connection between the ensuing wave of anti-American violence and the broader parameters of American foreign policy. He is wrong on both counts. The administration’s crisis management has been mediocre. Even more fundamentally, the current assault on America’s position in the Middle East is attributable not to the trailer for an obscure anti-Muslim movie, but to Obama’s own foreign-policy failures.

The administration’s crisis-management strategy continues to emphasize its regret about that film, Innocence of Muslims. This was manifest not only in the original (and subsequently retracted) statement from our embassy in Cairo, but in all statements by Secretary of State Hillary Clinton and the president. But deploring efforts to denigrate Muslim religious beliefs is only the first half of the sentence. The administration should have also robustly propounded its commitment to the virtues and values of free expression in a free society, and why this must necessarily encompass offensive speech. Whenever the White House mentions the First Amendment these days, it is done mostly in a defensive mode, by way of explaining (almost in sorrow) to the Muslim world why the U.S. government cannot legally suppress anti-Muslim films rather than a compelling explanation of why such films should not be suppressed. As Clinton stated on Sept. 14, “I know it is hard for some people to understand why the United States cannot or does not just prevent these kinds of reprehensible videos from ever seeing the light of day.” But simply saying that free speech is enshrined in our Constitution “is not enough” the administration must explain why that is a good thing to which they too should aspire.

The administration also has failed to tell the Muslim world that Western critics of religion, far from singling out Islam, regularly unleash a torrent of offensive speech directed at Christianity and Judaism. In addition, no senior administration official has seen fit to elucidate any historical perspective on America’s relationship with the Islamic world, including our unparalleled record of support for Muslim causes. Brief references to U.S. support for the Libyan revolution is not sufficient” this must be at the center of our message to the Muslim world. America and its NATO allies have spent their own blood and treasure to protect Muslims facing slaughter and oppression in places ranging from Afghanistan to Bosnia to Kosovo to Iraq.

Equally lacking has been any public manifestation of the administration’s anger about the anti-American demonstrations that have taken place over the last week. Simply condemning violence is not enough. The administration must make clear that there can be no justification for any protests against America as a country simply because some private Americans have exercised their First Amendment rights in an offensive manner. And Washington’s failure to do so is viewed as the ultimate manifestation of American guilt, thus enflaming, rather than calming, the situation.

The administration has also conspicuously failed to criticize publicly President Mohammed Morsi and other Arab leaders, whose responses to the anti-American demonstrations have been slow, equivocal, and relatively ineffective. Indeed, to this day Morsi has condemned violence but endorsed the anti-American protests from which it ensues. The fact that the Egyptian prosecutor-general has found time to indict several American citizens, allegedly associated with the production of an anti-Islamic film, is both a violation of international law and a sign of disrespect for the United States.

The ultimate irony for an administration oft-praised for superior rhetoric is that in today’s tightly knit global environment, words have palpable consequences.

Morsi’s behavior is particularly deplorable because the U.S. was instrumental in bringing him to power, first by easing out President Hosni Mubarak and later by playing the leading role in restraining the Egyptian military during the post-Mubarak transition. The fact that Morsi has unimpeachable Islamic credentials, and is therefore in an excellent position to both speak out forcibly and act robustly against anti-Americanism, makes the administration’s failure to call him to account all the more glaring.

But all of this flawed crisis management pales in comparison with the administration’s strategic failures. The organizing principle of the administration’s foreign policy is one of weakness and passivity “whether in dealing with Russia, China, or Venezuela” coupled with a conspicuous rhetorical abdication of American leadership, evident in speeches by the president, secretary of state, and other administration officials. The ultimate irony for an administration oft-praised for superior rhetoric is that in today’s tightly knit global environment, words have palpable consequences.

This overarching problem is accentuated by the fact that everybody in the Middle East “our friends, foes, and folks in between” has correctly concluded that the administration has begun America’s disengagement from the region, on a scale unseen since the days of the British withdrawal from “East of Suez”. This has manifested itself in virtually every facet of our Middle East policy, from our failure to maintain any American military presence in Iraq and the consequent loss of diplomatic and economic influence in Baghdad; to Washington’s unwillingness to rally the American public to support our military efforts in Afghanistan and its repeated snubs of our strongest traditional Middle East ally, Israel; to our leading from behind on Libya and the total failure to lead from any direction on Syria; and last but not least, to our timidity in confronting the Iranian nuclear weapons program. As a result, the Middle East elites and the proverbial “Arab street” have concluded that the U.S. is a waning power, Israel’s future is one of a besieged state that someday may disappear from the regional chessboard, and Iran has an excellent chance of becoming a regional hegemon, to be feared and placated.

These are self-inflicted wounds. The American disengagement has not been caused by military defeat or some adverse international developments that we have tried but failed to stop, but by an administration that has profoundly misunderstood the kind of world we live in, the types of threats we confront, and what constitutes vital American interests. The administration has amassed not just a middling or even moderately bad foreign-policy record, but an appalling one. It is this record that is shaping the way the governments in the Middle East are handling the anti-American unrest. Unless the record is decisively reversed, it will lead to many disastrous developments down the road.

Source: http://www.thedailybeast.com/articles/2012/09/21/not-just-the-middle-east-obama-foreign-policy-record-is-appalling.html