Obamacare Stands

On a 5-4 ruling, the Supreme Court holds that the mandate to have health insurance is upheld as a tax.  As the WSJ notes,

Though the challengers mostly lost on Thursday, the court did affirm one of their basic arguments: that Congress can't use its powers to regulate interstate commerce to require people to buy insurance. Chief Justice Roberts said the government's arguments on this point would fundamentally change "the relation between the citizen and the federal government."
The majority upheld the insurance mandate on other grounds. The chief justice wrote that the penalty's "practical characteristics pass muster as a tax under our narrowest interpretations of the taxing power." He said a person who does not wish to carry health insurance is left with a "lawful choice to do or not do a certain act, so long as he is willing to pay a tax levied on that choice."
Chief Justice Roberts added: "It is well established that if a statute has two possible meanings, one of which violates the Constitution, courts should adopt the meaning that does not do so."

...
The ruling may give more leeway to states that don't want to cooperate with the law by letting them avoid punishment for refusing to expand Medicaid.

Chief Justice Roberts wrote that the Medicaid portion "violates the Constitution by threatening existing Medicaid funding." He said the remedy for the violation was to preclude the federal government from imposing a sanction on states that decline to accept an expansion of Medicaid under the law's provisions. But he said that remedy "does not require striking down other portions" of the law.
Twenty-six states filed suit the day Mr. Obama signed the Patient Protection and Affordable Care Act in March 2010, and a cloud of uncertainty had hung over the law ever since. Lower courts issued conflicting rulings on whether the law's insurance mandate was constitutional.

Ace reminds Republicans that there is another way to undo Obamacare.

Fiat Fraud?

David North looks into some of the possibilities for fraud in President Obama's immigration legalization by fiat:

In any such program the devil is both in the inevitable fraud, and in the governmental definitions, as I learned a quarter of a century ago when the Ford Foundation assigned me the task of evaluating the massive legalization program that came out of the Immigration Reform and Control Act of 1986 (IRCA).
Let's review the threat scenario in the Dream Scheme. In addition to those who genuinely meet the program's generous outline, there will be applicants who will try to beat the system. These are some of the inevitable problems:

• Aliens claiming that they arrived prior to their 16th birthdays when, in fact, they came later.
  
• Aliens claiming to be under 30 when they are older than that.
  
• Aliens who are otherwise eligible, but who have not been here for five years.
  
• Aliens who, in fact, have not graduated from high school, are not in school, and who do not have a GED, but who make such claims.
  
• Aliens, otherwise eligible, who were not in the nation on June 15, 2012.

Another general problem — that an alien would lie about his police record — is less pressing because the government keeps pretty good records on whom it arrests, as opposed to those who entered the nation without inspection (EWI).
My basic worry is that an already overworked DHS staff will not press very hard to uncover fraud on such difficult areas as age at entry and that it will grant short-term legal status to some early fraudulent applicants, who will then tell their peers how easy it is to fool the government on issues such as age at entry and then the peers, in large numbers, will apply for status.
I am concerned about the flood of plausible-looking "documents" purporting to be diplomas, report cards, General Education Development (GED) certificates, and the like that will be submitted to the government; also, overseas birth certificates showing ages under 30.

David Frum on the Obama immigration order:

The decision to grant residency and work rights to young illegal aliens who meet certain conditions is an amnesty in all but name. A conditional amnesty, yes, but amnesty. The trouble with amnesty has always been the incentive effects. It's possible that amnesty may be a necessary final stage in immigration reform, but to put amnesty in place before effective enforcement measures are in place—and before authorities are certain that as many illegals as possible have voluntarily repatriated—is to invite another wave of illegal migration just as soon as business conditions improve.

Frum also argues that the middle class could suffer the most from this:

In a time of very high unemployment, it seems simply reckless to invite future waves of migration—and especially of the low-skill, low-wage migration that America has mostly attracted over the past four decades.
Every serious economic study of immigration has found that the net benefits of present policy are exceedingly small. But that small net is an aggregate of very large effects that cancel each other out. The immigrants get higher wages than they would have earned in their former country. The affluent gain lower prices for in-person services. Lower-skilled native-born Americans face downward wage pressure. In any other policy area, people who consider themselves progressive might be expected to revile a policy whose benefits went to foreigners and the rich, and whose costs were born by the American poor. Immigration policy baffles that expectation.

John Yoo addresses some of the Constitutional questions of the Obama immigration order: "President Obama’s claim that he can refuse to deport 800,000 aliens here in the country illegally illustrates the unprecedented stretching of the Constitution and the rule of law."

Is the Supreme Court Watching?

Today, the White House offered a de facto amnesty of an unknown number of illegal immigrants.  The AP has some details:

The policy change, announced Friday by Homeland Security Secretary Janet Napolitano, will affect as many as 800,000 immigrants [though it could be far more---FB] who have lived in fear of deportation. It also bypasses Congress and partially achieves the goals of the so-called DREAM Act, a long-sought but never enacted plan to establish a path toward citizenship for young people who came to the United States illegally but who have attended college or served in the military....

Under the administration plan, illegal immigrants will be immune from deportation if they were brought to the United States before they turned 16 and are younger than 30, have been in the country for at least five continuous years, have no criminal history, graduated from a U.S. high school or earned a GED, or served in the military. They also can apply for a work permit that will be good for two years with no limits on how many times it can be renewed.

The policy will not lead toward citizenship but will remove the threat of deportation and grant the ability to work legally, leaving eligible immigrants able to remain in the United States for extended periods.

 A key point raised by Daniel Horowitz: no law by Congress has been passed enabling this immunity from deportation or the granting of work permits.  Whether one agrees with the result of a selective amnesty that creates a class of permanent non-citizen workers or not (especially in a time of high unemployment), we should pay attention to the implications of process here.

If the president can claim the ability not only to selectively halt the prosecution of various laws but also to create new legislative mechanisms for work permits for immigrants, what limits are there to the president's power?  Could the president just choose to stop enforcing civil rights laws and create new standards for voting instead?  Could the president choose to avoid collecting taxes at the legally specified rate and instead create new tax rates?  Could the president set separate new rates for Republicans or Democrats or women or men?  (After all, the administration's new immigration rule treats one age group differently from another.)

President Obama's move could have radical implications for executive power.  It could also have implications for the pending Supreme Court case about Arizona's recent immigration law.  The federal government's brief there suggests that the executive branch has a broad latitude in deciding what laws to enforce and how to enforce them.  In this move, the Obama administration has taken that principle to a new level, not only choosing not to enforce certain laws but also creating new measures.  If the Supreme Court endorses the administration's position for Arizona outright, some on the court may feel that they are giving the administration a green light to extend its executive reach even further.

Romney Edges away from Bush Legacy in Education

The New York Times reports on the dissatisfaction of some Bush education advisors with Mitt Romney's seeming opposition to a federal top-down approach to education "reform":

One notable skeptic is Margaret Spellings, a former education secretary under Mr. Bush, who this year was an informal adviser to Mr. Romney. She said she withdrew once the candidate rejected strong federal accountability measures.

“I have long supported and defended and believe in a muscular federal role on school accountability,” Ms. Spellings said. “Vouchers and choice as the drivers of accountability — obviously that’s untried and untested.” 

Romney seems to be emphasizing vouchers rather than federal standards.

Romney Challenges Obama's Priorities

Hot Air draws attention to a potentially effective line of attack that Romney's been trotting out: with the economy in turmoil, why did Obama not focus on that instead of pushing through transformational "change"?

What makes this attack bruising, of course, is not only that it ties Obama’s two biggest political liabilities together, it blows a hole in the idea that he’s some centrist pragmatist who’s working around the clock to generate jobs for the unemployed. On the contrary: When faced with the biggest economic crisis in decades, he passed a stimulus and then spent the better part of a year obsessing over the mega-boondoggle atop his Great Society II wishlist. It makes him look grossly negligent on the key issue of the election, in service to a program that a huge chunk of the public hates and which may end up being cashiered by the Supreme Court before the month is out.

CBO: Income Inequality Depresses Social Security Revenue

The long-term budget outlook released by the CBO today has plenty of dire news if the US continues along its present path.  A number of others are chronicling some of the bad news, so I'll just make a quick observation about this report's comments on Social Security.

Since there is a cap on the income that is taxable for Social Security, an economic cycle in which most economic gains go to people whose income is already above the cap would seem to harm Social Security collections, causing them to not keep pace with the growing economy.  The CBO seems to agree that this dynamic is taking place:

When earnings inequality increases, as it has in recent decades, the taxable share of earnings declines because a greater share of income is above the taxable maximum.

The CBO projects increasing earnings inequality over the next few decades, which would cause the share of earnings subject to the payroll tax to fall from above 85% to around 83%.

It's also worth noting that, according to the CBO, the Boomer generation and Gen X will on average be paying more in taxes into Social Security than they receive in benefits.  It says that, taken all in all, Americans born between the 1940s and 1980s will pay on average about as much into Social Security as they will receive in benefits.  The long-term imbalances, it says, are in part caused by the benefits collected by Americans who were born prior to 1940.  Reagan's Social Security reforms in the 1980s helped correct the imbalance between benefits and taxes.  (However, the report does begin to suggest a rising imbalance for later generations; taken by itself the generation born in the 1980s will collect a little more in benefits than it pays in taxes, according to the CBO.)

More Breakage

Over at Hot Air, Mike Rathbone further develops the conservative argument that the era Too Big to Fail---made worse in many ways by the Obama administration---should end.  He also suggests the political advantages accruing to Romney if he makes this argument:

If he announces (at the Convention wouldn’t be bad, I’m only afraid Obama would beat him to the punch) that he intends to break up the big banks, he would do a lot to dispel the notion that he is a tool of Wall Street. It’s an issue that would put him to the “left” so to speak of Obama. A lot of liberals, who would never vote for Romney, would further be disgusted with Obama if he fought against this and maybe sit out for November. A lot of tea-party types would be for it because they’re sick of bailouts and too-big to fail. If Obama agreed with Romney, it wouldn’t change the fact that the economy is in rough shape and that Obama had a full term to push for this, but he’s failed to deliver. Either way, Romney comes out on top.

Does Obama Lose Either Way in Wisconsin?

As Wisconsin heads off to vote tomorrow in the recall election of Scott Walker, many pundits are looking at the results of that recall as a bellwether for the general election in 2012: a Walker victory would be good for Romney's presidential chances, while a victory by Tom Barrett, the Democratic challenger, would be good for Obama's presidential chances.  I'm personally rather skeptical of the idea that the fate of conservatism rests in Wisconsin's hands, but there's something interesting about the Wisconsin recall dynamic: whatever the result, Obama might lose face.

A strong Walker win in Wisconsin might signal that Wisconsin is getting closer on the presidential level for November.  (However, numerous Wisconsin polls that have shown Walker leading Barrett have also shown Obama leading Romney, so a Walker win in no way guarantees a Romney win in November.)  Moreover, the failure to recall Walker might depress union enthusiasm for Democrats in Wisconsin and elsewhere; the White House has kept its distance from the Barrett campaign.  If union rights are so important to the White House, why isn't it putting any skin in the game?  And if these rights are not that important, why should union members rally around the president?

That dynamic is only marginally changed if Barrett wins tomorrow.*  Should Barrett beat Walker, he can come into the governor's office knowing that he did it without the president.  Indeed, it would seem as though Barrett would owe his gubernatorial win much more to Bill Clinton, who has actively campaigned for Barrett, than to Barack Obama, who has not.  When Barrett appeared weakened, the White House let him twist in the wind.  Would a Governor Barrett really be that motivated, then, to work devotedly to ensure that Obama wins Wisconsin in November?  A union win in Wisconsin without Obama might also fracture the alliance of the White House with many big unions---if unions can win despite the White House's indifference, maybe they don't need the president as much as he needs them.

The White House likely wanted to keep a distance between itself and the Barrett campaign in order to avoid being embarrassed by a Barrett loss.  But the current dynamic might lead to a White House embarrassment no matter what.

*A Barrett win is a distinct possibility; most of the polls showing a Walker lead depend upon a partisan turnout model that is very favorable to Republicans---even more favorable than the 2010 exit polls, in many cases.  If turnout numbers are closer to 2008 than 2010, there is a real chance that Barrett can win, especially as this race appears to be tightening.  Turnout will be key for this race.

May Jobs Report: Unemployment Up

The May jobs report notes that the US added only 87,000 jobs in May, falling well below earlier estimates.  CNBC surveys areas of job growth:

The bulk of the employment gains came from the service sector, which added 84,000 jobs, while manufacturing grew 12,000. Government shaved 13,000 jobs, including 5,000 at the federal level. Private payrolls rose 82,000.

The unemployment rate climbs to 8.2% as economic growth appears to be stalling.