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OpenMarket: June 2012

  • Highway Bill Passes Congress, WSJ Blasts "Fiscal Accounting Hocus Pocus"

    June 29, 2012
    This afternoon, both the House and Senate approved the conference report of the largely Senate-crafted MAP-21 surface transportation reauthorization. The bill, which is expected to be signed by the president within a week, will extend federal surface transportation programs for 27 months through Fiscal Year 2014. While the bill makes a number of policy improvements, the fiscal side is so terrible that the whole package should have been rejected. The bill relies on an $18.8 billion general revenue bailout, which even by the rosiest estimates, will not be offset for 10 years. Yes, this is another two-year funding bill being paid for by 10 years of offsets. This is the new normal in Washington. Stephen Moore of The Wall Street Journal is rightly outraged by this fiscal train wreck. In an...
  • Obamacare Lives. So, Now What?

    June 29, 2012
    Former CEI scholar Tom Miller (now with AEI) has some thoughts on the Obamacare decision in today's Los Angeles Times. Tom summarizes the meaning of yesterday's decisions, but the meat of his article is spent asking, in his very thoughtful way, "What's next?"
    "We have already heard cries for repealing the law in Congress, but the fact is that most of the healthcare industry is resigned to shrugging its shoulders and falling back into line with the political deals it cut with the Obama administration several years ago. The political case for repeal will become much stronger among grass-roots voters — particularly independent ones — outside the Beltway this fall if it is...
  • Soda Pop, States' Interests, and the General Welfare

    June 29, 2012
    Michael Bloomberg is as notorious as any American politician of our time. The New York Mayor’s recently proposed ban on “sugary drinks” larger than 18 ounces is the latest example of nannyism that has included a ban on trans-fats and a threatened ban on salt in food preparation. However, the soft drink ban stands out as almost charmingly arbitrary. Sodas and sweet teas are affected, but not fruit smoothies, for example, which are highly...
  • Pension Reform: Could Michigan Be A Model State?

    June 29, 2012
    Appalled by the $22.4 billion fiscal millstone that the public teacher pension fund (MPSERS) has become, Michigan lawmakers hope to make long-overdue structural reforms. In particular, the Michigan Senate is now considering a new “Hybrid” pension plan that would bring retirement benefits more in line with the defined-contribution plans so often utilized by the private sector. If Michigan -- a state whose economic struggles are well documented -- can achieve fiscal stability, the rest of America should take note. While Hybrid systems cannot wreak any more havoc than defined-benefit plans do now, they still bear similar risks. If the “normal cost” of MPSERS -- the amount needed to prefund a year’s worth of retirement benefits --...
  • Today's Links: June 29, 2012

    June 29, 2012
    OPINION TOM SCOCCA: "Obama Wins the Battle, Roberts Wins the War" "Yes, Roberts voted to uphold the individual mandate, joining the court's liberal wing to give President Obama a 5-4 victory on his signature piece of legislation. Right-wing partisans are crying treason; left-wing partisans saw their predictions of a bitter, party-line defeat undone. But the health care law...
  • CEI Podcast: June 28, 2012: The Obamacare Decision

    June 28, 2012
    General Counsel Sam Kazman shares his thoughts on the Supreme Court's health care decision, the Commerce Clause, Congress' taxation power, and more.
  • Supreme Court Concocts New "Rational (Tax) Basis" Test in Upholding Health Law

    June 28, 2012
    In a move that seems to have surprised many observers, the Supreme Court today upheld nearly all of the Patient Protection and Affordable Care Act by a 4+1 to 4 majority (I'll explain the math below). Chief Justice John Roberts, who wrote the Court's opinion, joined with the four liberal justices in affirming the individual mandate and essentially all of the Medicaid provisions. The Court's three reliable conservatives, plus Justice Kennedy, wrote in dissent that the entire law should be ruled invalid. The opinions can be read in their entirety here. Addressing the question of the individual mandate, Roberts agreed that the mandate was not a proper exercise of Congress's commerce power:
    "The power to regulate commerce presupposes the existence of commercial activity to be regulated. ... As...
  • Obamacare Upheld, 5-to-4: A Perverse Decision That Undermines Political Accountability

    June 28, 2012
    Today, in a really perverse ruling, the Supreme Court upheld Obamacare's individual mandate as a tax in a 5-to-4 decision, even though Obamacare's supporters repeatedly denied when they were passing it that it was a tax. (The Court did concede that the individual mandate wasn't valid under the Constitution's Commerce Clause, so it instead relied on Congress's tax power.) This ruling lets politicians avoid the political heat by denying that something is a tax in order to pass it (as President Obama and congressional leaders did, to deny that they had broken Obama’s pledge not to raise taxes on...
  • Union Bosses: Are They Con Men?

    June 28, 2012
    The definition of a con man is “a dishonest person who uses clever means to cheat others out of something of value.” Nowadays, a fitting synonym for "con man" may very well be "union boss." The good news: con men get caught. Earlier this week, the Supreme Court ruled against union bosses in Knox v. Service Employees Int’l Union, Local 1000. The court explained the basis for the case:
    In June 2005, respondent, a public-sector union (SEIU), sent to California employees its annual Hudson notice, setting and capping monthly dues and estimating that 56.35% of its total expenditures in the coming year would be chargeable expenses. A nonmember had 30 days to object to full payment of dues but would still have to pay the chargeable portion.
    After this 30 day opt-out period, however, the SEIU imposed an additional surcharge to fund its political activism...
  • Quick Thoughts on the Health Care Ruling

    June 28, 2012
    The Supreme Court upheld the health care bill, as you've no doubt heard by now. Over at the Daily Caller, I offer a few quick thoughts about the decision.

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