Freedom Line Blog

Though Obamacare’s individual mandate barely survived the Supreme Court last year, there’s no guarantee that some of the law’s other elements will be so lucky.

Last week, Tim explained that litigation challenging the health law’s federal subsidy structure is proceeding toward the Court. If the Court’s four consistent conservatives and swinger Anthony Kennedy stay true to the text, citizens in 34 states won’t be eligible for subsidies that make Obamacare-approved insurance plans (somewhat) more affordable.

Another series of cases challenge the controversial ‘HHS mandate’ that requires all non-houses of worship to provide employees with access to contraceptives and abortion-related services; despite the objecting employer’s religious beliefs. Appellate level decisions are split between the government and private business, meaning the Court is very likely to decide the issue as a way to provide continuity throughout the nation.

If recent trends hold, the Supreme Court will hear oral arguments in both lines of litigation sometime next spring, releasing a high-profile opinion in mid-summer.

As long as Obamacare is the law of the land, there will be no end to the headaches it creates.

The United States keeps shooting itself in the proverbial foot with our foolishly high and complex corporate tax rate.  Fully 31 of the world’s 34 leading economies have lowered their corporate tax rates since 1997 alone, but the U.S. is not among them.  Consequently, as all other competitor countries lower their rates, corporations flee for better shores, never to return.  And with those corporations go critical American jobs.

Maintaining a federal corporate tax rate of 35% in addition to various state corporate taxes – the highest in the developed world – doesn’t just impede American businesses.  The code is also riddled with Byzantine loopholes that warp decisionmaking and dictate winners and losers.  And contrary to popular myth, most of those loopholes aren’t accessible to most companies.  To the contrary, new research by PricewaterhouseCoopers (PwC) reveals that the effective tax rate for corporations was 36.2% from 2004 – 2010.  Stripping out many of the false assumptions of the GAO report that claimed an effective U.S. rate of approximately 13%, the PwC report is a devastating indictment of our tax code that highlights its unfair and punitive nature.

Our economy continues to struggle, and with so much regulatory uncertainty and chaos in Washington it would be nice to focus on something on which everyone sees eye-to-eye.  Reforming the corporate tax rate is precisely that sort of bipartisan solution, something widely acknowledged by both sides as the correct move.  Even President Obama, whose policies have done so much to impede economic and job growth, has gone out of his way to emphasize that reality.  We simply must reduce corporate tax rates and reform our tax code so that our economy isn’t permanently crippled by it.  Although pronouncements of the downfall of the United States are greatly exaggerated, it would be wise for us to avoid heading down that path due to outdated corporate tax policies that nobody supports.

The time for reduction and reform is now, before it really is too late.

This week’s edition of the Liberty Update, CFIF’s weekly e-newsletter, is out. Below is a summary of its contents:

Lee:  ObamaCare Implosion May Cement Obama’s Status among the Worst Presidents in History
Senik:  In Defense of American Exceptionalism
Ellis:  HHS Wants to Change Your “Health-Relevant Behavior”

Video:  How to Lose Friends & Alienate People
Podcast:  How Federal Spending and Government Waste Impact Economic Growth
Jester’s Courtroom:  This Lawsuit Ain’t Talkin’ ‘Bout Love

Editorial Cartoons:  Latest Cartoons of Michael Ramirez
Quiz:  Question of the Week
Notable Quotes:  Quotes of the Week

If you are not already signed up to receive CFIF’s Liberty Update by e-mail, sign up here.

In this week’s Freedom Minute, CFIF’s Renee Giachino discusses how President Obama’s foreign policy has changed America’s standing in the world:  Our enemies no longer fear us and our allies no longer trust us.

Dr. Peter Vincent Pry, Executive Director of the Task Force on National and Homeland Security, discusses the dramatic increase in cyber activity targeting U.S. computers and systems and the potential impact a nuclear or natural electromagnetic pulse catastrophe could have on America.

Listen to the interview here.

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

Earlier this year, the National Endowment for the Arts announced it was giving away almost $4 million of taxpayers’ hard-earned cash to artists, museum, theaters and other arts organizations it deemed particularly deserving.

One of the groups that snagged a federal handout was Freewaves, a Los Angeles-based outfit that creates media art using video, the Internet and mobile devices. The NEA gave Freewaves $25,000 to make two-minute art videos to play on buses in L.A. County. The unfortunate bus riders are subjected to ridiculous clips such as “Streaming (Tautological Transmissions),” which shows a loop of a ping pong ball floating in a stream and “Can You See Me,” a video of a girl’s blinking eye.

It’s hard to imagine that taxpayers are getting any value at all out of paying to screen videos such as these on public transportation.

Regrettably, the taxpayer-funded handouts to Freewaves didn’t stop with the NEA’s $25,000 grant. The California Arts Council, Los Angeles County Arts Commission, City of Los Angeles Department of Cultural Affairs and Pasadena Art Alliance all gave Freewaves lumps of cash recently – and all four of those organizations are partially funded by federal tax dollars.

When it’s not assaulting the senses of L.A. bus riders, Freewaves uses tax dollars to feature controversial videos such as “Between,” which is currently on the home page of the group’s website. The clip, which would offend many of the taxpayers who helped to subsidize its creation, shows blurry close-ups of various body parts over a bed of muffled talking and electronic whirs, until it concludes with a man yelling repeatedly into a nude woman’s vagina.

The NEA is a communist-style program that allows government to dictate what constitutes art, as well as what art is worthy of funding, then rips money from the pockets of Americans to fund the art preferred by a few well-placed bureaucrats.

Despite the best efforts of many limited government lawmakers to defund the scheme, the NEA still devours $154.5 million in taxpayers’ money annually.

Rather than having the government take our tax dollars to support the art lawmakers and bureaucrats like, why not just let us keep our money to support the art we personally value? The reality is that if the federal government announced tomorrow that it would no longer fund the NEA, Individuals, foundations and charitable organizations would step up to support art – and more styles and kinds of arts would emerge as a result.

Even without the NEA, Freewaves would still be funded if the organization could find enough donors willing to support its unique brand of “art” in the marketplace.

We’ve spent virtually the entire month of October hearing about the practical defects of Obamacare—everything from the failures of the exchange website to the widespread cancellation of insurance plans that don’t comply with the health mandates. Apart from those functional considerations, however, there’s another major drawback to the law: it places America’s health care providers into a Faustian bargain with Washington.

Recall that in order to get many health insurance companies onboard to support Obamacare, the White House made what was essentially a quid pro quo deal: in order to cover the increased costs of covering the chronically ill that the plan would bring into the system, the individual mandate would ensure that young, healthy, actuarially sound Americans would be swept into the system too (the failure of the exchanges, however, is already steering this arrangement towards being upside down financially).

One of the downsides, however, of putting the industry at the government’s mercy is that the feds hold the whip hand when they fail to follow the party line. From CNN:

White House officials have pressured insurance industry executives to keep quiet amid mounting criticism over Obamacare’s rollout, insurance industry sources told CNN.

After insurance officials publicly criticized the implementation, White House staffers contacted insurers to express their displeasure, industry insiders said.

Multiple sources declined to speak publicly about the push back because they fear retribution.

But Bob Laszewski, who heads a consulting firm for big insurance companies, did talk on the record.

“The White House is exerting massive pressure on the industry, including the trade associations, to keep quiet,” he said.

Laszewski, who’s been a vocal critic of Obamacare, said he’s been asked by insurance executives to speak out because they feel defenseless against an administration that is regulating their business — and a big customer.

Government-backed plans accounted for about half of health care policies last year, a number that is expected to grow over the years.

He who has the gold makes the rules, as the saying goes. It turns out there was an additional cost to Obamacare that the insurance companies didn’t factor in: their autonomy.

How scary is Congress? According to a survey released by Rasmussen, 37% of American adults believe zombies would do a better job running the country than our federal lawmakers.

The Rasmussen Reports national telephone survey revealed that another 26% of Americans can’t decide if zombies or D.C. policymakers would be worse for America.

In total, 63% of the 1,000 Americans polled believed that zombies would govern at least as well as President Obama and the members of Congress.

The Halloween-inspired poll also found that “only six percent of all Americans anticipate a zombie apocalypse,” but “Among those who expect an apocalypse, 74% say they are at ‘least somewhat prepared’, with 53% who are ‘very prepared’.”

In an op-ed published yesterday on The Hill’s Congress Blog, CFIF Sr. Vice President Timothy Lee writes how legislation advancing in the House and Senate to reform Fannie Mae and Freddie Mac fail to sufficiently protect taxpayers and private investors.

Specifically, Lee focuses on the PATH Act, sponsored by Representative Jeb Hensarling (R-Texas) in the House, and the Housing Reform and Taxpayer Protection Act of 2013, sponsored by Bob Corker (R-Tenn.) and Mark Warner (D-Va.) in the Senate.  Not only could both pieces of legislation “end up putting taxpayers at even greater future risk,” Lee writes, but in addition:

[B]oth proposed bills fall terribly short in terms of protecting the rights of private investors in Fannie and Freddie, many of whom were actively encouraged by federal regulators to take their risk.  Not only would it be inherently unfair for the federal government to undercut their bargained-for investment rights, it would also send a terrible signal to future investors.  When even Ralph Nader laments that the federal government unfairly threatens to turn those private investors into “zombies,” the impropriety of the government’s proposed course becomes even more obvious.

Accordingly, if Congress seeks to eliminate both GSEs, then using something approximating the existing bankruptcy process would be a far better option for all involved.  Under that process, the government, taxpayers and creditors would be treated more fairly, and taxpayers would not be stuck with trillions in liability.   While not ideal, at least that would constitute an orderly and transparent process, one that more closely adhered to the rule of law on which our society is ostensibly based.

Lee concludes by warning, “unless and until the bills are significantly revised, American taxpayers and private market investors stand to lose.”

Read the entire piece here.

Balaji S. Srinivasan, a computer scientist and co-founder of the genomics company Counsyl who also serves as a Stanford University lecturer, made waves earlier this month when he told an audience of young Silicon Valley entrepreneurs that they should secede from the United States. Wisely, Srinivasan didn’t call for Silicon Valley braniacs to attempt to form an independent state. He did, however, encourage his audience to look for ways to work around, or beyond, America’s suffocating government.

His speech became a rallying cry for innovators frustrated at America’s tax laws, regulatory burdens and other bureaucratic barriers to creativity. Since  Srinivasan essentially called for the creation of physical and virtual libertarian cities, his speech crossed over from Silicon Valley’s tech crowd into websites and email lists consumed by those of us who champion individual freedom and free market economic policies.

Because of government policies and social factors, the U.S. has become obsolete according to Srinivasan.

The logical conclusion of Srinivasan’s philosophy are free states and free cities, or perhaps seasteading. But Srinivasan recommends a number of more viable options in the near term.  The New York Times points out that it’s already possible utilize technology to opt-out of government oversight, intervention and taxation by “spending unregulated digital currency, sleeping in unregulated hotels and manufacturing unregulated guns.”

Srinivasan’s speech should be a wake-up call to entrepreneurs, innovators and employers hampered by government interference. The speech should be taken even more seriously by the federal government.  Technology has created opportunities for clever individuals to live outside of government, and the more damage taxes and regulations cause to individuals and businesses, the more taxpayers and job creators will choose to avoid the government.

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

If you think Obamacare-approved insurance is expensive now, imagine how high it could go if the Supreme Court rules federal subsidies illegal.

Currently, there are four lawsuits making their way through the federal judiciary. I’ve profiled one from Oklahoma previously, and its arguments are essentially the same as the others.

In a nutshell, the text of Obamacare makes federal subsidies available to people buying health insurance on state-run exchanges created under Section 1311 of the law. The law says nothing about subsidies being available for insurance bought through federally-run exchanges created under Section 1321.

The Internal Revenue Service tried to paper-over the problem by issuing a regulation that made subsidies available on both sets of exchanges, but that’s being vigorously challenged as an illegal affront to the plain meaning of the Obamacare statute.

As Sean Trende notes, this challenge to Obamacare, if successful, wouldn’t kill the law outright. That might make voting against the IRS’s power grab more palatable for Chief Justice John Roberts, who cast the crucial fifth vote to uphold the individual mandate last year.

Of course, if the subsidies aren’t available to people in the 34 states where HHS is operating an exchange, then the system will implode. Even with subsidies many people are struggling to pay for the higher costs. Take them away and a huge political backlash will be unleashed.

If any of these cases gets to the Supremes, let’s hope they stick to the law and leave the politics for Election Day.

The Republican National Committee has launched a humorous and biting four-part commercial series to “expose the deep flaws of Obamacare.”

In keeping with its long tradition of being on the cutting edge, the clips parody Apple’s 7-year-old “Get a Mac” ad campaign. (Apparently the GOP couldn’t figure out a way to look even more out-of-touch by criticizing Obamacare by spoofing “Where’s the beef?,” or by dusting off Spuds MacKenzie or Max Headroom to make the point.)

In the RNC’s commercials, two guys representing “The Private Sector” and “Obamacare” square off much in the same way Justin Long and John Hodgman did as Mac and PC back in the good old days when Obamacare was just a bewildering scheme floating in the vacant expanse between Barack Obama’s goofy ears.

The first commercial, “Down” will air during tonight’s Daily Show with Jon Stewart on Comedy Central.

The ads will appear primarily in the Washington, D.C. market. If you’re fortunate enough not to live in the greater Baltimore-Washington Consolidated Metropolitan Statistical Area, have no fear. The videos are available online here, here, here and here.

Hopefully the ads will help spread distrust of Obamacare and represent another step in building the critical mass necessary to eliminate the program.

There is a bit of irony that the RNC is spending millions on ads trying to overturn – or, at least, overhaul – Obamacare when, if the organization had done its job in years past, Obamacare would’ve never been created in the first place.

President Barack Obama lied. NBC News says so.

In 2009, President Obama went around the country saying “if you like your health plan, you will be able to keep your health plan.” After Obamacare passed, he persisted: “If [you] already have health insurance, you will keep your health insurance.”

But in between, the Health and Human Services department gutted that guarantee.

“The law states that policies in effect as of March 23, 2010 will be ‘grandfathered,’ meaning consumers can keep those policies even though they don’t meet requirements of the new health care law,” reports NBC.

“But the Department of Health and Human Services then wrote regulations that narrowed that provision, by saying that if any part of a policy was significantly changed since that date – the deductible, co-pay, or benefits, for example – the policy would not be grandfathered.”

See the game? Obama can claim that so long as insurance companies freeze a plan in time, the consumer won’t be bothered. But change any part of a product – including making it cheaper – and the grandfather clause no longer applies.

In other words, insurance companies can either ignore their market’s price signals and lose money, or respond and get blamed for forfeiting their clients’ health plan.

The worse part: “[T]he administration knew that more than 40 to 67 percent of those in the individual market would not be able to keep their plans, even if they liked them.”

That’s because HHS put that estimate in a federal regulation in July 2010.

Looks like President Obama has about as much respect for the American people as he does for the rule of law: Zilch.

The idea that this disservice to poor, primarily African-American children is is the product of the nation’s first black Attorney General, serving at the pleasure of its first black president is appalling. From Elizabeth Harrington at the Washington Free Beacon:

The Justice Department is attempting to block parents from defending the Louisiana school voucher program in court, according to a brief filed Tuesday.

… The DOJ is seeking a permanent injunction against the school choice program, which would block access to vouchers beginning in 2014 unless a federal judge approves them. The lawsuit claims the vouchers are “impeding desegregation” because some recipients were in the racial minority at their failing school. Vouchers are awarded randomly by lottery.

The DOJ said in a motion filed Tuesday that parents whose kids have benefited from the program have no legal standing to become defendants in the case.

The racial bean-counting is (A) a fig leaf for the Administration’s real goal of scoring a win against school choice and (B) a window into the collectivist’s soul: they care more about the amalgamation of pigment in any given classroom than the lives of the children living within that skin. Now add to that injury the insult of being told by your government that you have no right to defend your child’s right to a decent education.

Shameful and wrong. Let us hope that the DOJ is defeated—and that the courts treat it with the scorn it so richly deserves,

This week’s edition of the Liberty Update, CFIF’s weekly e-newsletter, is out. Below is a summary of its contents:

Senik:  The Infomercial President
Lee:  A Stunning New Court Defeat for ObamaCare
Hillyer:  Room on the Right for Middle Ground

Podcast:  Excuses Won’t Fix Problems with ObamaCare
Jester’s Courtroom:  Plaintiff Didn’t “Like” This Prank

Editorial Cartoons:  Latest Cartoons of Michael Ramirez
Quiz:  Question of the Week
Notable Quotes:  Quotes of the Week

If you are not already signed up to receive CFIF’s Liberty Update by e-mail, sign up here.

Last Halloween, the Taxpayers Protection Alliance released a publication listing some of the frightening ways government spends money to subsidize pumpkin growers, pumpkin tossing competitions, corn mazes and other fall festivities.

Among the finds:

• Federal taxpayers spend hundreds of thousands of dollars a year to underwrite pumpkin growers and subsidize the cost of federal pumpkin crop insurance programs .

• An agritourism grant scheme in Tennessee forces state taxpayers to fund handouts to pumpkin patches, hayrides and haunted houses.

• Each October, taxpayers in Aurora, Colo., shell out over $100,000 to bankroll “Punkin’ Chunkin’ Colorado,” an event where competitors use homemade machines to launch pumpkins hundreds of feet through the air.

Now that Halloween is upon us again, the same wasteful programs – and many others – have come back to life like money-devouring zombies. We’d all be better off if we could bury these pork projects and silly subsidies once and for all.

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

Generation Opportunity, a national organization of young people focused on promoting liberty, presented the main contractor behind HealthCare.gov – the Obamacare website – with the first ever Youth Defender Award.

In a deliciously tongue-in-cheek press announcement released on Monday, Generation Opportunity noted that CGI Federal, the American subsidiary of the Canadian multinational CGI Group, has done “more than anyone to date to save young people from the increased costs and privacy invasions of Obamacare.”

Generation Opportunity continues:

“Sure, CGI is billing the government over 300% of their original contract, and taxpayers could be on the hook for $292 million dollars for the healthcare equivalent of Project ORCA. But no cost is too much to bear to help young people avoid this expensive and creepy law.

Generation Opportunity congratulates all the worthy candidates, including the runner-up, HHS Secretary Kathleen Sebelius, who reminded young people on The Daily Show that they can get the same exemption from Obamacare as businesses by opting out and paying the penalty. After all, Sebelius had the foresight to hire CGI knowing they had a track record of protecting patients from government-run health care. The Canadian government had previously fired CGI’s parent company for failing to create a functioning website for Ontario’s medical registry.

Generation Opportunity developed the awesomely sardonic award in order to promote its OptOut.org website, which encourages young Americans to choose health insurance plans outside of the Obamacare exchanges.

The young folks at Generation Opportunity deserve an award themselves – for providing those of us who despise Obamacare with a big laugh.