I just won 2013 New York Book Festival Honorable Mention for “Pilgrims To Patriots, A Grandfather Tells The Story” in the Wild Card Category. I am honored to be in such rarefied company. Check out the Sneak Preview above to get a peek at the story.
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Using the Affordable Care Act – What You Can Do (Bonus)
This is the Bonus segment in my series on how the Affordable Care Act impacts all of us.
In the course of researching this series, I came across a number of additional subjects that I would like to pass along, so I have added this Bonus posting. In this Bonus, I will cover subjects such as what was left out or struck out of the Obamacare Bill, whose idea was Obamacare in the first place and who wrote it, what is the ultimate goal of Obamacare, and what’s being done to implement it.
What Was Left Out of the Affordable Care Act?
• Tort Reform. If one of the main goals of Obamacare is to reduce the cost of health care, one would think that Tort Reform would have been a part of it. Civil suits and their attendant multimillion dollar awards against doctors have forced health care costs to increase significantly. First, the cost of malpractice insurance has become prohibitively expensive. Second, in an effort to avoid tort action, doctors have ordered redundant and unnecessary tests and performed defensive procedures. Such protective practices increase the costs of care, in some cases substantially. One would have thought that Tort Reform would have been included in the Bill. Until, that is, we acknowledge that health care tort awards support a good segment of the trial lawyers’ incomes. Is it too cynical to note that trial lawyers contribute heavily to the Democratic Party?
• The Public Option. “The Public Option” has come to be thought of as a government takeover of the health insurance industry. It is not, at least in so far as the Affordable Care Act is concerned. “The Public Option” in the latter sense was the establishment of a government insurance operation that would compete with private insurers. Opponents objected that, through subsidies and price fixing, a government insurance operation would put the private insurers out of business and that government-run insurance operations and premiums would then bloat beyond what the private insurers could have provided. As such, “The Public Option” was seen as an indirect takeover. Unable to overcome these fears, Congressional Democrats took it out of the Bill.
• State Low Cost Options. Many know that some years ago Massachusetts adopted a health insurance law similar to Obamacare. A much more modest plan exists in the State of Utah. A number of States lobbied to be free to set up their own plans in an effort to learn what approach works best for them. They were denied. Instead, Obamacare centralizes comparative effectiveness research in a new agency – the Patient Centered Outcomes Research Institute. This Institute will be able to conduct its own studies and to fund and oversee studies in higher education and in non-academic research settings.
• Exemptions. A number of exemptions to Obamacare penalties have already been cited in the form of waivers, most notably to unions and select corporations. Many more were written right into the Law, including:
Sufferers of financial hardship (defined as cost of insurance to them as being over eight percent of their income).
The very poor (defined as having income below the tax filing minimum).
Those who are uninsured for a brief time (defined as three months or less).
Persons having religious objections.
Members of Congress and their staffs (see below).
The President and his family.
Whose Idea Was This Anyway?
The Administration won’t say whose idea this was nor who wrote the Bill. This shouldn’t be a surprise to those who recall that Congressional Democrats wouldn’t even allow the Bill to be read until after it was passed. There are three likely sources of the Bill:
1. Jacob S. Hacker for George Soros’ Economic Policy Institute. Hacker is a Yale professor who in 2001 delivered a report titled “Health Care for America” to Soros’ Agenda for Shared Prosperity. This report is said to be the blueprint for Obamacare. Then, in 2003, Hacker produced a new plan that was proposed to be the National Healthcare Insurance Act of 2005.
2. Jonathan Gruber for Massachusetts. Gruber is an MIT professor of economics who conceived and drafted the legislation for the Massachusetts law. Under contract with the U.S. Health and Human Services Department, Gruber also conducted the economic analysis of the Obamacare Bill.
3. Liz Fowles for Senator Max Baucus, (D) Montana. Fowles is said to be the author of the actual Obamacare legislation. Baucus is the Chairman of the Senate Finance Committee from which the Bill came. Fowles was Chief Counsel to the Committee from 2001 to 2005. Then, she was Vice President for Public Policy at Wellpoint, one of the nation’s largest private health insurers. In 2008, she went back to Baucus’ staff. In November, 2008, she delivered to the Committee an 87 page whitepaper which is said to have been the blueprint for the actual Bill. Thereafter, she supervised the Bill writing team. She is now said to be working directly for President Obama, although a return to the private sector again may be in the offing.
Implementation of Obamacare.
Implementation efforts have been underway to one degree or another in the Administration as well as in the States. Although very little of the mechanics have been made known, these are some key observations:
• New Government Agency. $400 million has been allocated for the creation of the new government agency to implement Obamacare – the Centers for Medicare and Medicaid Services. Among many other duties, the Centers will operate call centers and outreach services to inform the public of their rights and requirements. The Centers will also process applications for state exchanges.
• Selling Obamacare. The Department of Health and Human Services has hired the advertising agency of Weber Shandwick to promote the law and the exchanges. The original contract of $20 million has been expended and an additional $11 million has now been granted. In addition, George Soros is reported as has given $5 million for advertising.
• “Navigators.” Due to the complexity of Obamacare and the unlikelihood that the public will understand it, the State of California has announced that it will hire and train some 21,000 “navigators.” These will be outreach workers who will counsel the public and usher them through the process. It is likely that at least some other states will be required to do the same kind of thing.
• Set Up of the Exchanges. The state of progress in setting up exchanges is in flux. Not all states have made a final decision as to whether or not they will operate their own exchanges or turn this over to the federal government. Few states have made significant announcements beyond the participation/nonparticipation level. The U.S. Department of Health and Human Services has been preparing to take over the set up of state exchanges since 2010, but can do little until each State makes its official announcement. Since the factors affecting each State’s needs vary significantly, it is expected that extreme confusion is likely in the early implementation period.
Goals of Obamacare. The stated goals of Obamacare have been:
• Assure that as many of the estimated 31 million uninsured people as possible become insured.
• Add benefits and protections to those already insured and the newly insured.
• Reduce the costs of medical care.
• Reduce the costs of Medicare and Medicaid.
• Reduce the costs of insurance premiums.
I leave it to the reader to deduce what the unstated goals may be and to assess whether the goals are met and whether it will have been worth the trip.
Current Events. These are some of the latest developments in the Obamacare story, as of this writing:
• Estimated costs of Obamacare to the average family are going up. Instead of going down, as advocates of Obamacare predicted, the Congressional Budget Office’s estimate in 2012 was $2,000 more per year than they are now paying. On April 30, 2013, Elizabeth Colbert, Democratic Representative from South Carolina estimated the cost now to be $4,000 per year more than they are now paying.
• Congress is in the process of or has already passed an exemption from Obamacare for itself, their staffs and the President and his family (see above).
• Congress has granted health insurance companies an anti-trust exemption (citation needed).
• The first rollout of Obamacare application forms brought howls of complaint – it’s length rivaled the tax forms and it was too complex to understand. This week a revised version was released. It was down to five pages, minimum, for single people and 24 pages for families. It still requires the reporting of all family finances, so applicants will be urged to gather past years’ income tax returns, pay stubs and family financial records before starting to fill it out.
• Senator Max Baucus, the purported supervising author of Obamacare, abruptly announced his retirement from the Senate last week, citing Obamacare as a “train wreck.” President Obama replied, “All major legislation is a train wreck when first implemented.” Cynics expect to see Baucus turn up in the Public Policy department of one health insurance company or another or as a lobbyist for the health insurance industry.
This ends my series on Obamacare. This is as simple as I can make it. The law has been reduced to 907 pages (from the 2,700 page Bill) while the regulations have grown to 15,000 pages, so far. There are other provisions that will come to light as the law is understood, interpreted, massaged by regulations, and, perhaps, amended. This entire area of public policy is likely to change, perhaps dramatically, as more people begin to find out what is in it, so attention to the news from Washington is strongly advised. Be an informed citizen.
Using The Affordable Care Act – What You Can Do (Part 3)
This is the third in my three part series on how the Affordable Care Act impacts all of us.
In this Part, I present the changes required by Obamacare that you can expect in coming years, including taxes, insurance premiums, health insurance coverage, and medical practice. Here’s the third Part:
Part 3: Coming Changes
o Children no longer rejected for pre-existing conditions.
o Children up to 26 can be carried under parents’ policy.
o Lifetime limits on insurance plan benefits lifted.
o Phase-in of annual benefits limit removal.
o Policy cancellation for frivolous reasons ended.
o Small business tax credit of 35% begins.
o Medicare prescription “donut hole” phasing out.
o HSAs and FSAs prohibited from paying for OTC drugs.
o Income tax deduction threshold for medical expenses rises from 7.5% to 10%.
January 1, 2014 – D DAY!
o Medicaid eligibility rises to 133% of federal poverty line.
o Health exchanges open for business in participating States.
o Penalty (max. $285 in 2014) for not having insurance kicks in.
o Adults no longer rejected for pre-existing conditions.
o Adults under 30 eligible for low cost catastrophic insurance through State exchanges (cheap way to avoid Penalty).
o “Essential Health Benefits” must be covered in new insurance plans.
o Small business tax credit increases to 50%.
o Penalty for not having insurance goes up to max. of $975.
o Small business tax credit expires; small businesses must pay full employer costs.
o Independent Payment Advisory Board begins cost cutting proposals.
o Penalty for not having insurance goes up to max. of $2,085.
o States can open exchanges to large businesses (over 100 employees).
o Independent Payment Advisory Board proposals can be implemented.
o 40% tax on premium insurance plans begins.
o Medicare prescription “donut hole” disappears.
• New Taxes (not including cuts to Medicare spending).
Penalty for not having insurance (described above and in Pts. 1 & 2).
Penalty on employers for not providing insurance (eligible companies).
Medicare payroll tax increase on high earning employees from 1.45% to 2.35%, totaling 3.8%.
New Medicare tax on investment income and home sales of high earners (transfer tax) of 3.8%.
New fees on health insurance and pharmaceutical companies totaling CBO estimated $107 billion over next ten years.
40% tax on premium health insurance plans (described above and in Pts. 1 & 2).
Penalty for HSA and FSA OTC drug purchases increased from 10 to 20%.
New excise tax on medical devices of 2.3% (from tongue depressors to MRIs). Expected to impact negatively investment in R & D.
Medical expense income tax deduction threshold raised from 7.5% to 10%.
New tax of 10% on tanning services.
• Insurance Premiums.
Insurance premiums are rising for almost every group. The Kaiser Foundation reported an increase of 9% from 2010 to 2011. The CBO estimate of the impact of Obamacare on premiums over all groups is a $2,000 increase.
Employers pay 70% of the total cost of their employee health insurance plans, on average. Premium increases will cost them far more than they will cost their employees. Using the CBO estimate as a basis, it will be a $5,000 increase on employers’ premiums, bringing the average well above $15,000 per employee. Employers are weighing the advantages of dropping health insurance as an employee benefit and paying the $2,000 penalty instead.
• Health Insurance Coverage.
As of January 1, 2014 all new insurance plans, of any kind, must cover “essential health benefits.” The problem is that this term has not yet been defined. In November, 2012 the Department of Health and Human Services issued a list of ten general benefit categories, but gave no specifics as to each. The concern has not been allayed that insurance plans will be reduced over time to include only “essential health benefits” when end-of-life decisions are being made on allowable services.
• Health Insurance Companies.
Health insurance companies appear to be the big winners in Obamacare, at least in the short run. While the debate before its passage suggested that Obamacare might put them out of the health insurance business, and that might still be a long term objective, the addition of up to 30 million new government subsidized and/or guaranteed and/or mandated policy holders appears to have changed these companies from opponents to strong supporters.
• Drug Companies.
The big drug companies will also win under Obamacare. The additional 30 million in insured plus the additional drugs for existing policy holders motivated them to agree to the $107 billion in taxes (see above) and the additional rebates to Medicaid recipients.
• Health Insurance Exchanges.
Exchanges are proposed to be central “stores” in each State where people without insurance at their job can go to look at their options and to buy. Obamacare requires that there be an exchange in each State, but it does not require that each State provide one. A State may choose not to set up its own exchange, in which case the Federal Government’s exchange will be substituted.
Several States have announced that they will not set up their own exchanges. One objection is that the Federal Government doesn’t know what will constitute an acceptable exchange, so States would have to guess only to be found inadequate after the fact. Another objection is that the Federal Government cannot predict how much State exchanges will cost each State. And, the biggest objection appears to be that the States will have to carry the full costs of subsidies as the Obamacare subsidies are withdrawn, either as scheduled or before.
The participation of States in providing exchanges continues to change as the Federal Government tries to flesh out the plan and make adjustments. The deadline of 2014 appears to be in jeopardy for any quality solution.
• Medical Practice.
It appears that doctors will be the big losers in Obamacare – the profession that we least want to be damaged. They will be flooded with new patients whose requirements will challenge their schedules. They will receive lower fees for service, in many cases much lower. Their administrative costs and time requirements will multiply. They will still be liable for malpractice claims and malpractice insurance rates as before. The estimates of doctors leaving the profession appear to be real.
Nurses, physicians’ assistants and allied health professionals will be winners in Obamacare. As attempts are made to force down the costs of health care, more procedures will be allocated to the technical level of the hierarchy from the doctoral level. It remains to be seen whether this will impact the quality of care. The doctors say yes; the nurses and physicians’ assistants say no.
Hospitals and related facilities also stand to lose under Obamacare. Reductions in Medicare rates will decrease their income. While increasing the numbers of insured is designed to lower the demand for emergency room care, the theory is up against the tendency of people to continue their habits. The same can be said for community health centers which are designed to relieve the burden of illegal aliens and other uninsured on emergency rooms, but whose impact is speculative.
These seem to be the main Obamacare provisions that will affect us in the future. There are others, no doubt, that will come to light as the law is understood, interpreted, massaged by regulations, and, perhaps, amended. This entire area of public policy is likely to change, perhaps dramatically, as more people begin to find out what is in it, so attention to the news from Washington is strongly advised. Be an informed citizen.
In the course of researching this series on Obamacare, I came across a number of additional subjects that I would like to pass along, so I am adding a Bonus posting. In this Bonus I will cover subjects such as what was left out or struck out of the Obamacare Bill, whose idea was Obamacare in the first place and who wrote it, what is the ultimate goal of Obamacare, and what’s being done to implement it. This Bonus will be my next post.
Using The Affordable Care Act – What You Can Do (Part 2)
This is the second in my three part series on how the Affordable Care Act impacts all of us.
In this Part, I present how Obamacare affects groups of which you might be a part.
In the third Part, I will present the basics of changes required by Obamacare that you can expect in coming years, including taxes, insurance premiums, health insurance coverage, and medical practice. Here’s the second Part:
Part 2: Obamacare’s Effects on Groups Affecting You
• Seniors. Senior citizens are significantly affected by Obamacare, good and bad.
Good. Medicare coverage for prescription drugs and some preventive care programs has been increased.
Age-based health insurance premiums have been capped.
Bad. Medicare payments have been reduced by over $700 billion through 2022 to help pay for Obamacare.
The Medicare Advantage program has been effectively eliminated (see my Part 1).
Obamacare’s Independent Payment Advisory Board is given broad power to cut the Medicare budget and withhold approvals for individual treatments.
Price discrimination on premiums against seniors will continue under Obamacare, but the differential will be capped at no more than three times the rate charged the middle-aged.
• Children. Obamacare does not have much of an effect on the situation for children one way or the other since children are already guaranteed health insurance under Medicaid (if not covered under a parent/family plan).
Good. Private insurance plans can no longer reject coverage to children with pre-existing conditions.
• Ages 18 – 29. People in this age range are affected positively and negatively by Obamacare.
Good. The age of single children eligible for their parents’ health care plan coverage is now 26 (up from 18), as they now must be covered as dependent children, as long as that plan covers dependent children. Bad news accompanies this provision, though (see below).
More people in this age range will end up being covered by health insurance.
Bad. Dependent children up to age 26 will not be covered: 1. If the parent is retired and under 65; 2. If the parent is already on Medicare; or 3. If the dependent child is able to get health insurance through their employer.
People in this age range are least likely to want health insurance. They will pay at least $2,000.00 either through the penalty (see my Part 1) or through the health insurance that they are coerced to buy in avoidance of the penalty.
• Currently Insured. Obamacare has pluses and minuses for the currently insured.
Good. The policy holder will have new benefits (see this Part and Parts 1 and 3).
Bad. Your premiums will increase.
Your employer’s premiums will increase. This may force your employer to discontinue providing health insurance.
If you make non-allowable health care purchases using a Health Savings Account, the penalty will go up to 20%.
If you have a Flexible Spending Account, your employer will be allowed to contribute no more than $2,500.00.
Medicare benefits will be cut and Medicare reimbursement rates will be cut, forcing some plans and providers to stop providing care to Medicare recipients.
So many more people will be on Medicaid that providers will likely be overwhelmed and availability and quality of care will likely be compromised.
• Currently Uninsured. Overall, Obamacare is good for people who now have no insurance and want to be insured.
Good. Low income earners will be able to get health insurance through Medicaid or a subsidized plan through a State or Federal Exchange.
High income earners will be able to get health insurance through an Exchange at a rate lower than what they would be able to get as individuals shopping on the open market for themselves alone.
Bad. Only if you don’t want to have health insurance (see my Part 1).
• Taxpaying Public. Obamacare imposes a number of new taxes over and above the penalties it imposes. These taxes are estimated at over $400 billion in the next ten years.
Capital Gains. An additional 3.8% on capital gains for families earning $250,000 and above. While the gain is offset at least in part by the homeowner’s exemption, the effective rate goes from 15% to 18.5% when you sell your house.
Medicare. Tax rate goes from 1.45% to 2.3% for higher earning families.
Premium Insurance Plans. A tax of 40% will be applied to the premiums of premium health plans, regardless of income level.
• Middle Class. The impact of Obamacare on the middle class will depend on the income level of each family. On average, it is estimated that health insurance premiums will go up by $2,500.00 (Congressional Budget Office).
• Unemployed. Those looking for work are likely hurt by Obamacare. With the costs of Obamacare to them as yet uncertain, employers have reported being reluctant to hire more employees.
• Illegal Aliens. Obamacare has increased the funding of community health centers that illegal aliens use for health services. Illegal aliens will be unable to participate in the health insurance exchanges, Medicare or Medicaid. However, neither will they be subject to the individual mandate (penalty).
• Large companies. Large cost increases have led to waivers granted to selected companies. These waivers are short term and the costs may encourage many companies to drop insurance and pay the $2,000.00 penalty as the cheaper alternative. On the other hand, in order to compete for the best employees, some companies may keep health insurance and adjust pay rates accordingly.
• Small business. Small businesses are defined by Obamacare as 25 or fewer employees (down from the traditional 50). Those companies will benefit in the short term from the tax credit (see my Part 1). Once the credit expires, they will have to depend on the health insurance exchanges to reduce costs. Exchange-based health insurance policies will be transferable from one employer to another.
• Union members. Of the over 1,600 waivers granted by the Administration, nearly 1,000 have gone to unions. These waivers have buffered union members from increases in insurance premiums. These waivers expire in 2014 and, unless they are extended, union members will be faced with the same cost increases as non-union workers.
• Doctors. Despite public support by the AMA, doctors as a larger group suffer under Obamacare. Rates for Medicare services are reduced, but more importantly, Obamacare imposes a different payment system (Accountable Care Organizations) that would replace the current system. Polls have shown that up to 40% of doctors would retire and/or get out of the patient care business.
• Patients. With fewer doctors and up to 30 million additional patients seeking service, quality of care is likely to go down, waiting times are likely to go up and approvals of treatment are likely to be withheld.
• Allied Health Professions. Their jobs will be harder, but more secure and better paying. The demand for lower cost service providers will increase as doctors leave the profession or forego routine procedures. However, Obamacare will impose additional documentation requirements on the support teams.
• End of Life. Obamacare’s program for end-of-life care (CLASS) had to be scrapped because of costs. Nursing homes were the winners, as were their residents. CLASS called for a stitched-together plan that would have kept more people at home… and away from needed 24/7 supervision and emergency care.
These seem to be the main Obamacare provisions that affect most of the groups with which we are associated. There are others, no doubt, that will come to light as the law is understood, interpreted, massaged by regulations, and, perhaps, amended. This entire area of public policy is likely to change, perhaps dramatically, as more people begin to find out what is in it, so attention to the news from Washington is strongly advised. Be an informed citizen.
Using The Affordable Care Act – What You Can Do (Part 1)
In 2012, the U.S. Supreme Court upheld key provisions of the Patient Protection and Affordable Care Act (I will call it Obamacare, since that is its title in everyday conversation). Now that it is law, too little has been said about how it affects you and me. I want to change that.
This is the first in a series of three posts to help you become a more informed user of the “new” medical care. In this Part, I present the basics of how Obamacare affects your medical care and health insurance, as of now. I also give suggestions on what you can do to make the best of it.
In my second Part, I will present how Obamacare affects groups you might be a part of. In that post, I will tell how the law affects you if you are in a union, if you work for a small business, if you work for a large corporation or for government, if you are retired, and groups like that.
In the third Part, I will present the basics of changes required by Obamacare that you can expect in coming years, including taxes, insurance premiums, health insurance coverage, and medical practice. Here’s the first Part:
Part 1: Obamacare’s Effects on You
• If you are poor by Federal standards. If your reported income is less than 133% of the poverty level ($29,327 family of four in 2010), check with your State to see if you are eligible for Medicaid (“free” insurance). If you are, it’s probably a better deal than if you’re not on it now. Your State is one of two types:
Expanding. About 40 States will expand their Medicaid eligibility as of 2014 and your State might be one of them. Almost all of the additional cost to the States will come from the Federal Government until 2020.
Not Expanding. The rest of the States are not expanding Medicaid eligibility. Some of these choose not to spend the additional money required above the Federal amount to fund the expansion. Some also think the Federal funds will be cut off sooner than 2020 and refuse to take up the full cost. Other states already subsidize Medicaid above the 133% level and, therefore, will not get Obamacare payments. For those States not expanding, you will be put in an Obamacare health insurance exchange (a government-established health insurer’s list).
• The Penalty (Tax) – To Pay or Not To Pay. Obamacare makes you pay a penalty if you don’t have health insurance (or Medicaid, see above). The penalty will be $95 per adult in 2014 and rise to $695 in 2016. The penalty for each uninsured child will be half that, so the penalty for a two adult, two child family will be about $300 in 2014 and $2,100 in 2016. The Court ruled that this is a tax and will be collected by the IRS.
No Need to Pay. If you have health insurance now, stick with it – you won’t have to pay. If you are on Medicaid or in a health insurance exchange (see above), stick with it – you won’t have to pay.
If You Pay. If you pay, you will still be uninsured. The penalty is designed to “force” you into health insurance. Will the IRS be able to collect? Congress will have to fund the thousands of new IRS agents needed, but the IRS may be able to take it from any tax refunds otherwise due to you.
• Over-The-Counter (OTC) Medications. If you use a Health Savings Account (HSA) or a Flexible Spending Account (FSA) to buy over-the-counter medications, Obamacare prohibits that. You will have to get a prescription from your doctor to pay for them from those accounts.
• Preventive Test Co-Pay. Obamacare has listed a number of preventive tests that must be paid for by your health insurance company without charging you co-pay, unless your insurance plan has been “grandfathered” out of the requirement. Check http://epss.ahrq.gov to find out.
• Employer Personal Wellness Reward Programs. Obamacare authorizes employers to set up personal wellness reward programs under their health insurance plans. If your employer has one, you could end up paying up to 50% higher premiums and co-pays if you don’t meet the plan’s standards.
Savings Alert. If you think that you will not meet the standards, you can ask for a special exemption to opt out of the plan.
• Pre-existing conditions. Obamacare now requires children with pre-existing conditions to be eligible for health insurance, but adults with pre-existing conditions are not mandated until January, 2014. In the meantime, there is a temporary high-risk insurance pool to bridge the gap.
• Early Retirees. Obamacare has created incentives for employers to drop the health care coverage that they have been providing to those who retire before age 65. If this describes you, prepare to buy your health insurance through a state-based exchange (see above) until you’re 65 (when you get Medicare).
• Medicare Advantage. Obamacare has created incentives for health insurers to drop out of the Medicare Advantage program. If you are using Medicare Advantage, look for an alternative, as it likely will be discontinued.
• The “Rich” Pay More. If you are in the $200K/$250K and higher group, your Medicare taxes will go up on hospital insurance and investment income. Speak with your financial adviser.
• Small Business Owner. Obamacare has created significant tax credits on a sliding scale for owners of businesses under 25 employees. Employers with 10 or fewer employees get the full credit. How long this credit will last is unknown.
New Hire Alert. Before hiring new employees, include this tax credit in your new hire calculations to see if you should hire at all and, if so, how many and at what hours/pay rate.
These seem to be the main Obamacare provisions that affect most of us. There are others, no doubt, that will come to light as the law is understood, interpreted, massaged by regulations, and, perhaps, amended. This entire area of public policy is likely to change, perhaps dramatically, as more people begin to find out what is in it, so attention to the news from Washington is strongly advised. Be an informed citizen.
DANGER! US Sovereignty At Risk June 3
DANGER, DANGER, DANGER. On June 3, the UN General Assembly will present a treaty that threatens to take away our right to bear arms and to supersede the Second Amendment. And, President Obama will, as part of that, hand over our sovereignty to the UN!
On Tuesday, April 2, 2013, the UN General Assembly approved a Global Arms Trade Treaty by a vote of 155 to 3 with 22 abstentions http://www.reuters.com/article/2013/04/03/us-arms-treaty-un-idUSBRE9310MN20130403. The United States voted in favor.
I was interested in finding out what we had agreed to. After reading several accounts containing only vague summaries, I tried to look it up myself, but the UN is keeping it from the public. Here’s what I learned:
- There is no Treaty as yet (at least that’s been released by the UN). The UN membership could not agree on a text. The vote was for a draft General Assembly Resolution to proceed with completing a treaty that could be offered for a vote.
- ·The three votes against the draft Resolution were Iran, Syria and North Korea. Abstainers included Russia, China, Columbia, Bolivia, Nicaragua, and…Cuba.
- ·The Arms to be banned from trading include rockets, tanks, artillery, and… “certain small arms.” http://www.un.org/disarmament/ATT/. CERTAIN SMALL ARMS – does that set off any bells? Who will decide what “certain” means, I wonder?
- ·The Treaty will be presented for signature on June 3, 2013 and will go into effect 90 days after the fiftiethth signature is applied. So, less than one-third of member nations need to sign in order for the Treaty to be binding on all, including us.
So, what the will of the people prevents the Obama Administration from doing, he can get done through the back door.
How is this constitutional, you ask? Here’s what the Constitution has to say:
1. “He (the President) shall have power, by and with the Advice and Consent of the Senate to make Treaties, providing two-thirds of the Senators PRESENT (my emphasis) concur; (Article II., Section 2., paragraph 2).
2. “The judicial power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made … under their Authority…” (Article III, Section 2, paragraph 1).
3. “This Constitution, and the Laws of the United States which shall be made in pursuance thereof; AND ALL TREATIES MADE (my emphasis), … under the Authority of the United States, shall be the supreme Law of the Land; and Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the contrary notwithstanding” (Article VI, paragraph 2).
Here’s what it means:
1. The President can make treaties, but the Senate must approve them by a two-thirds vote of “Senators present.” Not two-thirds of the total Senate, just of those present at the time of the vote. Do you think that the Senate leadership would not look for a late-night chance to take a vote when known dissenters are out of the room?
2. The Supreme Court has the power to review such treaties. How long do you think that it would take for a case and appeal to survive delaying tactics and be taken up by the Court (if indeed the Court could even withstand the opposition of the Administration and vote in favor of hearing it)? And, what are the chances that the Court would find the treaty unconstitutional, especially in light of their capitulation on Obamacare being a tax?
3. A treaty becomes the highest law, superseding all laws of every State.
The only way out that I can see rests on the word “Authority.” Does the President have the Authority to enter into a treaty that contradicts the Constitution (in this case the Second Amendment [“certain small arms”])? Does the Senate have the Authority to concur in such a treaty? How long would it take for these questions to be resolved ?
What is even more frightening is that all of the above may not matter. As long as we are a member of the UN, we would be bound by this treaty, even if we voted against it. The UN General Assembly has set the approval number so low, that the number of approving votes will be reached easily. Then, our only choice will be quit the UN (fat chance) or defy the treaty. Does anyone see that happening?
Obama Challenges The Constitution
In answer to a debt limit question in his January 14 press conference, President Obama said, “Congress has to pay its bills. If they want to keep this responsibility …” Here was a thinly veiled threat that he would by-pass Congress and authorize a higher debt ceiling on his own.
But, there’s something worse afoot. By suggesting in his answer to the press conference question that Congress’ responsibility could be taken away, Obama spoke in contravention of the Constitution. As a purported Constitutional scholar, he should know better.
The responsibility to pay the nation’s bills is not Congress’ to give up or have taken away. The Constitution expressly gives that responsibility to Congress alone. Article I, Section 8 specifically states, “The Congress shall have power … to pay the Debts and provide for the common Defence and general Welfare of the United States…” And, Section 9 provides, “No money shall be drawn from the Treasury, but in Consequence of Appropriations made by law…” An act by the President to exceed a debt ceiling authorized by law would be in direct violation of these Constitutional provisions.
This isn’t the first time that Obama has opposed the Constitution. In a 2001 interview on Chicago’s NPR, in support of the use of the Constitution to redistribute wealth he said, “(The Constitution) Says what the states can’t do to you. Says what the federal government can’t do to you, but doesn’t say what the federal government or state government must do on your behalf.” Aside from a supposed Constitutional expert getting the concept of States’ Rights so totally wrong, Obama shows in this statement what powers he wants the Constitution to confer and they’re clearly beyond those set forth by the Founders.
Perhaps President Obama wants the American people to forget that he’s the one who is responsible for racking up much of the debt in the first place. Or, that the only budget he submitted to the Senate (he never submitted one to the House) was defeated unanimously. Or, that the Senate, controlled by his party, has not passed a budget in the entire four years of his Administration
Perhaps he doesn’t want the American people to know that, without an approved current budget, he is free to spend at the old rates, thereby creating the excess bills he insists on Congress’ paying. He claims to be open to negotiations, but refuses even to discuss the many spending proposals sent to him by the House.
The idea of the balance of powers, central to the concept of the Constitution, was set up to prevent the assumption of just such power by the President. Obama and other Presidents have taken unilateral action in the past, but never since FDR’s attempt to pack the Supreme Court has a President attempted to take for himself a power so basic to the operation of the nation itself.
When he was sworn in, President Obama promised to uphold the Constitution and will do so again in the swearing in for his second term. He would be coming perilously close to breaking that promise should he carry out the powers he threatens to wrench from Congress.
The Story of Stephen Hopkins – Determined To Live Free
Who was the only person to settle in both the Jamestown and Plymouth colonies? Stephen Hopkins
Stephen Hopkins was a clerk to a church minister in Winchester, England during the late 1500’s and early 1600’s. He was married and had three children.
Among Stephen’s church congregation were members of the Virginia Company – the group of adventurers who had established a settlement in Jamestown. A second voyage was planned and Stephen’s Virginia Company friends thought he would make a good clerk for the new Jamestown governor – Sir Thomas Gates – who was to go.
In June, 1609, Stephen joined the venture and sailed with Gates and other new settlers on the Sea Venture. He left behind his family, since Jamestown had not yet been made safe for them.
Sadly, the Sea Venture ran aground on Bermuda during a violent storm and the ship’s company was marooned. After a failed attempt to send a longboat to the mainland for rescue (in which all eight hands were lost), the remaining crew began to build more substantial boats that could take them to Jamestown safely.
During the construction period, Sir Gates governed the ship’s company as if he were already their Governor. Stephen objected, questioning Gates’s authority.
Stephen was arrested and tried for mutiny. He was convicted and sentenced to hang. While many of the ship’s company protested Stephen’s sentence, it wasn’t until he stood at the gallows that a pardon was granted. In his last words, it is reported that Stephen asked how they could make his wife a widow over such a trivial matter. And, it appears that he struck a deal never to criticize Gates again. It worked.
By May 10, 1610, the boats were ready and all hands set out for Jamestown. They arrived safely on May 21, without apparent further objection from Stephen. If this story sounds familiar, it is very much like the theme of Shakespeare’s The Tempest, published in November, 1611.
Stephen worked in Jamestown, dutifully sending his wages back to his wife in England. Then, in 1614 he got a letter from London informing him that his wife had died. He took the next ship back to reunite with his children and see to their continued growth. There he stayed until 1620, marrying his second wife Elizabeth, when the taste of freedom was again too strong to resist.
Stephen heard about the Mayflower voyage and, since his children were grown, he signed up to go. This time he was able to bring his wife along. After three brutal months at sea, the Mayflower arrived and the settlers prepared to disembark. Their last act before going ashore was to write the Mayflower Compact – a basic constitution for the Plymouth settlement. Stephen was one of the 41 who signed it.
Stephen’s familiarity with Native American ways and language from his time in Jamestown stood him in good stead in the years that followed. He was a member of many of the groups that explored the surrounding countryside and his house was the site of the first formal meeting with Massasoit, Chief of the Wampanoags.
Stephen took up the tanning trade (leather) and opened a shop to profit from his wares. He also served as an assistant to the Governor of Plymouth. He and Elizabeth lived happily together until the early 1640’s when she died. Stephen died a few years later in 1644.
Stephen Hopkins is the only known person to have settled in both Jamestown and Plymouth. He is a tribute to the determination to live in freedom that our ancestors fought so hard to achieve and preserve. We are indebted to him for his strength and perseverance.
Joe, the Plumber – Why Should He?
In the 2008 Presidential Campaign, Barack Obama met Joe The Plumber in the crowd and spent quite a bit of time with him. Joe told Mr. Obama that he would like to start a plumbing business, but was worried about the many obstacles to his doing so. Mr. Obama explained at great length the importance of businesses spreading their wealth around. Then, before Joe could respond further, Mr. Obama turned and left.
If Joe had had a chance to finish, he would have described the obstacles to starting his business and would have asked why he should go to all that trouble if the Government was going to take some of what he earned and give it to those who did not earn it?
Since Joe is not here to speak for himself, I will try to speak for him (having started three businesses of my own). Mind you, Joe has already gone through the training, apprenticeship, examinations, and expense of getting his Plumbing License – no small or inexpensive feat in itself.
First, Joe faces having to save about $200,000.00 to get started. Joe and his family are going to have to live more cheaply than they otherwise would be able to. If he can save $20,000 a year, it will take him 10 years; if he can save only $10,000, it will take him 20. If he is making $50,000 a year, say, working for another plumbing company, this is about how Joe and his family will have to live for all those years:
• No homeownership – can’t afford it. They will have to live in an apartment with rent of $1,000 or less.
• Entertainment. Forget it. No movie theaters, eating out, premium cable service, or cultural events. It’s picnics in the park and other free activities.
• Food. No special food or meals. No entertaining others at home. Buying basics in bulk will be the order of the day.
• Clothing. Only the bare necessities.
• Vacations. Joe will have no time for them, having to work the year round to get as much income as possible. The family will vacation at home.
• Cars. Keep the old ones running.
• College savings. What there is will have to go in the kitty. It’ll be Community College for the kids.
And, Joe is going to have to take as much overtime as he can get the whole way. Mind you, Joe will have earned and have been able to afford these things, if he weren’t saving for his dream and asking his family to deprive themselves for him.
After all that scrimping and saving, Joe now has his $200,000 and he’s ready to gear up to start. These will be his start-up expenses:
• Workshop (probably in a garage or basement): $10,000
• Plumbing truck, fitted out with signs, racks, tools and shelving: $50,000
• Equipment, welder, vices, handtrucks, pipecutters, etc.: $5,000
• Materials to start: $5,000
• Business space (rented or increased rent for space at home): $10,000 (first year)
• Printing, copying and advertising: $5,000
• Helper, total cost including health care, payroll taxes, etc.: $50,000
• Accounting and tax prep services (saved if his wife can do it – which keeps her from doing other income producing work, but is risky): $5,000.
That leaves $60,000 to cover emergencies, his own health care and payroll taxes, and his family living expenses. There will be no “profit;” only expenses.
It will take Joe two years to get his business up and running. The first year he will be getting his name out, asking for business, taking what jobs he can get, and maybe working on an hourly basis for someone else if things get tight. He will have to spend time drumming up business from builders, contractors and architects that he would otherwise have been able to spend plumbing. He will run through his $60,000 savings by the end of the year.
The second year will be make or break for Joe. It will be in the second year when he will learn if there is enough business for him to make a go of it. All his relatives and friends will have called upon him in the first year and he will be relying on the impersonal marketplace to sustain him from there on out. Joe will learn that he will have to work whenever the jobs call for it. There will be no regular hours; he will have to put in 50, 60, 70 hours a week to cover his costs and earn a little extra.
And, there is a chance that Joe’s business could fail and he could lose all of his $200,000. It will be a big risk. So, Joe will be motivated to work as hard as he can to make sure he makes it.
What will face Joe as he does his plumbing work for his customers? In addition to keeping his training and his plumbing license current, an additional expense, Joe will have to learn and obey all kinds of regulations and requirements which will cost him money, including:
• Plumbing and Building Code updates
• Environmental Protection regulations, including air quality and hazmat disposal
• Safety regulations (he’ll have to know the Federal Occupational Safety and Health Act backwards and forwards)
• State and Federal Labor laws
• State Sales Tax collection requirements
• State and Federal hiring and benefits laws, including Obamacare
At the end of the second year, Joe might earn $20,000 extra, if he’s lucky. Or, he might be broke and ashamed that he put his family through 12 to 22 years of misery so he could chase his dream.
But, let’s say that Joe makes it. Let’s say that after five years, he’s earning $250,000 a year above his expenses. Let’s say that he’s been able to hire 10 plumbers and buy 5 trucks. What’s in store for him? Why, spreading his wealth around, of course. Barack Obama proposes to tell him that there are limits on what he can earn. If he earns more, the Federal Government will take the rest and give it others – about 50% all told.
At this point, can we blame Joe if he asks if it’s worth it? Did those people to whom his earnings are being spread deny themselves a comfortable lifestyle in order to save the money? Did they take the risk of starting a business? Did they have the guts to put up all their savings; to bet on themselves with the chance of losing it all? Did they put in the hard work and long hours, year after year, to make the business grow; to build the business?
You can’t blame Joe if he gets discouraged. He could have taken the safe road and put that $200,000 in a mutual fund and been done with it. Why didn’t he? He didn’t do it just for the love of plumbing. If the chance for a better life weren’t there, he’d just keep working for someone else. No, he wanted the chance to succeed in business and to earn the kind of living that others in business earn.
Many people think that being “rich” is a condition that you are lucky enough to have; to have been born with or to have been “fortunate” enough to have been given. Nothing could be further from the truth. High earners stumble and fall and lose their money all the time. People don’t realize that there is risk in trying to make a better life for yourself. It takes a belief in yourself and in your dream, as well as guts, business smarts and hard work, year after year, to reach that level. And, as soon as you take it for granted, you can lose it all. Not many have that determination.
So, Joe may ask, “Why should I do that? Why bother?” He isn’t going to go through all that just because he loves plumbing. We’ve got to make sure he can make it all worthwhile for him and his family. And, the more we take from him and give to others, the less likely he is to want to do it. If enough of the Joe’s start pulling back, we will become a deteriorating nation. We can’t take Joe for granted.
Supreme Court Limits Commerce Clause Powers
[This is the third and last post on the Interstate Commerce clause and the limits on the power of the Federal Government deriving from it. The first post was the story of farmer Roscoe Filburn. The second was the story of how the Federal Government got the power to fine him for growing his own wheat.]
Congress and the Federal Government have used the Interstate Commerce clause to justify the control of nearly every aspect of our lives. Often, the Supreme Court has approved it.
After the Court upheld the fining of Roscoe Filburn for growing his own wheat, the Commerce clause has been used to authorize further powers.
In 1944, to remove interference in Federal control of interstate commerce by the states, the Court struck down an Arizona railroad safety law (Southern Pacific Co. v State of Arizona).
Going Filburn one better, the Court ruled in Gonzalez v Raich that the growing of ones own marijuana for medical purposes, even in a state that allowed it, interfered in the Federal Government’s goal of ending interstate commerce in the substance altogether.
The Supreme Court has twice used the Commerce clause to prohibit racial bigotry. In Katzenbach v McClung, the Supreme Court ruled that racial discrimination by a restaurant was a burden on interstate commerce and, therefore, the Civil Rights Act that prohibited it was constitutional.
In Heart of Atlanta Motel v United States, the Court found that racial discrimination by a hotel was constitutionally prohibited by the Civil Rights Act using the same interstate commerce argument.
It appeared that there was no limit on the power that Congress could exercise under the Commerce clause, until Alfonso Lopez, Jr. walked into his San Antonio high school with a pistol.
Alfonso was immediately arrested and charged under a Texas law prohibiting gun possession on school property. The next day, the Federal Government charged Alfonso with violation of the Guns-Free School Zones Act and Texas dropped their charges against him.
The case made it to the U.S. Supreme Court (US v Alfonso Lopez, Jr.) where the Government claimed that the prosecution of Alfonso and the Guns-Free School Zones Act were constitutional under the Interstate Commerce clause. They claimed that the gun would lead to violent crime which would create expenses harmful to interstate commerce. They also claimed that Alfonso’s school would be seen as a dangerous place, thus discouraging learning and the promotion of the interstate commerce that education would foster.
The Court said to the Federal Government, in effect, “you’ve gone too far.” They ruled that to have found for the Government would have required the Court to “pile inference upon inference in a manner that would convert congressional authority under the Commerce Clause to a general police power…” The Court went on to admit that “some of our prior cases have taken long steps down that road…but we decline here to proceed any further.”
The Lopez case set three limits to interstate commerce: 1. It must be a channel of interstate commerce; or 2. It must be an instrumentality (a means) of interstate commerce; or 3. It must be an activity that substantially affects or relates to interstate commerce.
Will these limits on Interstate Commerce hold up? Perhaps the opinion of the Court in the “Obamacare” case (National Federation of Independent Business v Sebelius) gives a clue, at least for this Court. While it was decided that the Government has the power to tax those who do not participate in the Plan, the Court said that, had the case come down to the Commerce clause, the penalty against non-participation would have been struck down. The Court’s reasoning was that the Government’s interstate commerce regulatory power cannot force an individual to buy when they choose not to buy.
The extent to which this limit on the Commerce clause is extended likely depends on the longevity of the sitting Justices during the current President’s term, and, on the extent to which the Justices withstand the forces urging them to yield.