Tuesday, April 10, 2012

Obamacare-American Bar Association Statement

President Obama's grossly misleading and inaccurate statement on the Supreme Court's judicial review of Obamacare stunned many in the legal world, including the American Bar Association, whose president, William T. Robinson III, put out this statement (via Volokh Conspiracy):
Re: President Obama’s remarks on upcoming U.S. Supreme Court ruling on national health care

President Barack Obama’s remarks on Monday speculating about the Supreme Court’s potential decision in the health care legislation appeal are troubling. Particularly worrisome was his suggestion that the court’s decision in this case could serve as a “good example” of what some commentators have cited as “judicial activism or a lack of judicial restraint” by an “unelected group of people.”

We’re gratified that the president recast his remarks Tuesday. He clarified appropriately that “the Supreme Court is the final say on our Constitution and our laws, and all of us have to respect it.”

Federal judges are, by design, not elected officials. Article II of our Constitution reserves for the president the authority to appoint Supreme Court justices and all other officers of the United States with the advice and consent of the Senate. In fact, President Obama himself has offered more than 123 nominations for Article III judgeships, including two lifetime appointments to our nation’s highest court.

The legitimacy of judicial review was settled more than 200 years ago in the landmark case Marbury v. Madison, which established such review as a key safeguard of the separation of powers doctrine. The Framers of our Constitution clearly understood that an independent judiciary is critical to the maintenance of our democracy and freedom.

It is incumbent on all of our elected officials—including those aspiring to hold office—to continually demonstrate that the courtroom is not a political arena. It is a measure of a free society that individuals are able to openly disagree with court decisions, but we should expect our leaders to refrain from partisan statements aimed at judges fulfilling their constitutional role and responsibilities.

Monday, April 9, 2012

Thursday, April 5, 2012

Student Loan Debt Blame

"Who is to blame for soaring U.S. student loan debt," asks Fox Business News' Elizabeth MacDonald, "that now surpasses credit card and auto-loan debt, at an estimated $1 trillion, according to the Consumer Financial Protection Bureau?" Could it be the colleges? Consider this:
  • More than 75 colleges and universities sit on record endowments in the tens of billions of dollars from donations made by people who believe their money is going towards cutting tuition costs. ... But one estimate shows that colleges only spend an average of about 3% of their endowments on tuition.
  • Census data show that, as of 2005, colleges and universities employed more than 675,000 full-time faculty members — but 756,000 administrators, counselors, accountants, alumni relations officials, and attorneys, among others. Between 1976 and 2007, the proportion of administrators to students doubled at colleges nationwide.
  • As part of their collective flight from reality, too many colleges have locked themselves into a vicious cycle where "you raise tuition, so you can give out more aid, so you can raise tuition," Jacqueline E. King, director of federal policy analysis at the American Council on Education, a Washington education lobby group, has said. "Institutionally based financial aid accounts for about one-third of all the increases in tuition," David L. Warren, president of the National Association of Independent Colleges and Universities has said. "It's the driving force behind rising fees."
Or how about the government, "whose well-meaning student aid fuels higher tuition costs which relies on more student aid"?
  • The College Board estimates more than $60 billion in financial aid—most of it from the federal government—is annually available to students as of a few years ago. But 60% of that aid was in the form of loans, up from 40% in 1980.
  • Mark Zandi, chief economist at Moody's Analytics, has said government loans and subsidies are not cost-effective for taxpayers because "universities and colleges just raise their tuition. It doesn't improve affordability and it doesn't make it easier to go to college."
  • The dilemma, say economists, is a simple supply and demand problem. Colleges can "raise tuition because they can," David Breneman, dean of the Curry School of Education at the University of Virginia, has said. When the government subsidizes something, producers respond by raising prices to soak up as much of the subsidy as they can.
The danger here is taxpayers could be on the hook for belly flopping student loans," writes MacDonald, "since eight in 10 of these loans are government-issued or guaranteed, a support that increased after the government stepped in to help this market after it iced over during the financial crisis in 2008."

What's Next if Obamacare Goes Down?

NRO's Kathryn Jean Lopez interviews health care expert Sally C. Pipes on the Future of Health Care Reform in America, whether Obamacare stays or goes. Pipes, who will be a featured speaker at the Institute's Western Women's Summit this month in Santa Barbara CA, is the author of "The Pipes Plan: The Top Ten Ways to Dismantle Obamacare." 

Obamacare-Gitmo Parallel

"If the Court does end up striking down the mandate," wrote Orin Kerr last week at the legal blog, the Volokh Conspiracy, "this will be the second consecutive presidency in which the Supreme Court imposed significant limits on the primary agenda of the sitting President in ways that were unexpected based on precedents at the time the President acted. Last time around, it was President Bush and the War on Terror. ... If the mandate gets struck down, we’ll get a replay with the politics reversed. Just substitute Obama for Bush, health care reform for the War on Terror, the individual mandate for Gitmo, and Wickard for Eisentrager. "

Kerr dives into the legal weeds (for non-lawyers anyway) to argue here and here that "there's a lot in the comparison, in part because the debate over both policies boils down to judicial deference versus constitutional norms seen as embedded in the text."

Kerr notes that Charles Lane picked up the same theme in a Washington Post article this week:
As policies, Obamacare and George W. Bush’s war on terror have almost nothing in common. They do not address the same subject matter.

Yet from the Supreme Court’s perspective, they pose practically the same question: How much more authority over individuals can the federal government assume, consistent with the Founders’ notion of limited and enumerated powers?

During the 20th century, the court stretched that concept to accommodate the rise of both a large domestic regulatory and welfare apparatus and of a permanent military and intelligence establishment. That seemed necessary and proper in view of the social problems of a modern urban society and the external threats of Nazism and communism.

In fact, the welfare state and the national security state grew up together. The New Deal’s twin was World War II; the Great Society accompanied the Cold War. The federal government’s expansion has protected us from old age, poverty and external threats — while burdening us with taxes, bureaucracy and a certain amount of official snooping.

The Bush administration took Sept. 11, 2001, as an opportunity to win additional national security powers for the federal government. The Obama administration saw the Great Recession as an opportunity for a New Deal-like expansion of health care and other domestic programs.

Consequently, the court has had to decide whether to allow further growth of the national security state and the welfare state — or to push back, lest these twin leviathans smother individual freedom.

Obamacare an Indictment of Progressivism

The Left's Obamacare argument—in and out of court—sounds to John Hayward "like an excellent argument in favor of rejecting 'progressivism' root and branch. It contains no hint of self-determination, liberty, or the consent of the governed. The inability of Big Government to correct even its most ghastly errors is a stunning indictment of the entire liberal project..."

Who Really Gets Those Tax Breaks?

Liberals claim the wealthy get all the tax breaks, but our Swiss cheese-like tax code dispenses goodies to all income groups, including lower-income taxpayers. First, who pays? Thanks to an already heavily progressive tax code, in FY2009:
  • the top 1% of earners paid ONE-THIRD (36.7%) of all federal income taxes collected;
  • the top 10% of earners paid over TWO-THIRDS (70.5%) taxes collected; and
  • the top 50% of earners paid almost ALL (97.8%) taxes collected.
Who gets? In FY 2011, tax breaks "amounted to over $1 trillion," among them:*
  • $100 billion to low-income taxpayers through three "refundable" tax breaks: the Earned Income Tax Credit, the Refundable Child Care Credit, and the Making Work Pay tax credit;
  • $109.3 billion to earners with company benefits for tax-free employer-provided health insurance;
  • $42 billion to taxpayers for deductions to offset state and local taxes paid; and
  • $76 billion to homeowners for mortgage-interest deductions.
The $1 trillion figure "is why many deficit reduction plans want to shrink them," writes Diana Furchtgott-Roth, a former chief economist of the U.S. Labor Department.
Those on the left of the political spectrum seek to eliminate tax expenditures as a way of raising revenue. Those on the right want to lower tax rates, keeping revenue collected by the federal government at the same level as it stands now.

The soundest way to reduce our deficit is through fundamental tax reform, which generates the economic growth that powers our economy. This means a revenue-neutral plan to get rid of tax expenditures [i.e., breaks] and to lower tax rates, without raising overall levels of taxation. Raising taxes by eliminating tax expenditures, without a commensurate decline in tax rates, will only reduce economic growth.
*See Furchtgott-Roth's three page report and chart for a breakdown of these and other tax breaks.