by Larry Levin
“The decision by U.S. District Judge Roger Vinson represents a more sweeping repudiation of the law than the December ruling in a suit brought by Virginia that found the requirement that most Americans purchase health insurance to be unconstitutional.
“As the judge ruled in the Virginia case, Vinson held that Congress overstepped its authority by compelling nearly all Americans to be insured or pay a fine. But Vinson went further: Likening the law to "a finely crafted watch" in which "one essential piece is defective and must be removed," he ruled that the insurance mandate cannot be separated from the rest of the statute and therefore the entire law must be voided.
“’There are simply too many moving parts . . . for me to try and dissect out . . . the able-to-stand-alone from the unable-to-stand alone,’ he wrote.
“…Vinson stopped short of granting an injunction, as the plaintiffs requested, to prevent the law from going forward while the case is appealed. He said such a step was unnecessary because of a ‘long-standing presumption’ that the federal government adheres to rulings of this type.
“…In his 78-page opinion, Vinson, who was appointed by President Ronald Reagan, offered the most lengthy consideration to date of the legal questions at issue. Specifically, he agreed with the states' argument that a person's refusal to buy health insurance does not amount to economic activity and is therefore beyond Congress's power to regulate under the Constitution's commerce clause.
“Attorneys for the government have argued that since virtually everyone will need health care at some point and that, since hospitals cannot turn away patients who cannot pay for emergency care, people who fail to obtain insurance are effectively making an economic decision about how and when they will pay for that care. Instead of paying now through insurance premiums, they are choosing to pay later, either out of their own pocket, or by passing the cost on to hospitals, governments or paying patients. Because this decision, when taken in the aggregate, has enormous impact on the health-care and insurance markets, the government contends that Congress is entitled to regulate it.
“But Vinson held that this line of reasoning "is without logical limitations.
"Every person throughout the course of his or her life makes hundreds or even thousands of decisions that involve the same general thought process that the defendants maintain is 'economic activity,' " Vinson wrote.
“Vinson also rejected the government's argument that Congress also was justified in imposing the insurance mandate under the clause empowering Congress to make all laws "necessary and proper" to carrying out its enumerated constitutional powers.
“The government maintains that, without the insurance mandate, many of the law's regulations on insurers would not be feasible - most notably its prohibition against insurers denying insurance or charging higher rates to those with preexisting conditions. If individuals could wait until they were on their way to a hospital before buying insurance, and insurers were forced to accept them, the companies would go bankrupt or be forced to raise their rates to unsustainable levels.
“Once again, Vinson found no logical limit to the government's argument.
"Rather than being used to implement or facilitate enforcement of the Act's insurance industry reforms, the individual mandate is actually being used as the means to avoid the adverse consequences of the Act itself," Vinson wrote. "Under such a rationale, the more harm the statue does, the more power Congress could assume for itself under the Necessary and Proper Clause."
Yup, back to normal.
Last Friday the market was rocked by the upheaval in Egypt. Could POMO be extended for the Egyptian people? Would Benny & The Inkjets fly over Cairo in the famous helicopter and dump dollars to make everyone happy? Would Tax-Cheatin-Timmy at Treasury design another bailout? These were the questions the market was considering over the weekend.
Although the crisis in the Middle East has gotten a little worse and is spreading, things are back to normal. Monday morning’s POMO brought traders back to life. “Buy the dip” was back in vogue. “Nothing to see here – move along.”
In other news, another state Supreme Court decided that the Obama Care law is unconstitutional.
From the Washington Post…
“A federal judge in Florida on Monday became the first to strike down the entire law to overhaul the nation's health-care system, potentially complicating implementation of the statute in the 26 states that brought the suit.
Although the crisis in the Middle East has gotten a little worse and is spreading, things are back to normal. Monday morning’s POMO brought traders back to life. “Buy the dip” was back in vogue. “Nothing to see here – move along.”
In other news, another state Supreme Court decided that the Obama Care law is unconstitutional.
From the Washington Post…
“A federal judge in Florida on Monday became the first to strike down the entire law to overhaul the nation's health-care system, potentially complicating implementation of the statute in the 26 states that brought the suit.
“The decision by U.S. District Judge Roger Vinson represents a more sweeping repudiation of the law than the December ruling in a suit brought by Virginia that found the requirement that most Americans purchase health insurance to be unconstitutional.
“As the judge ruled in the Virginia case, Vinson held that Congress overstepped its authority by compelling nearly all Americans to be insured or pay a fine. But Vinson went further: Likening the law to "a finely crafted watch" in which "one essential piece is defective and must be removed," he ruled that the insurance mandate cannot be separated from the rest of the statute and therefore the entire law must be voided.
“’There are simply too many moving parts . . . for me to try and dissect out . . . the able-to-stand-alone from the unable-to-stand alone,’ he wrote.
“Vincent, however, upheld the law's expansion of Medicaid, the public insurance program for the poor and disabled that is jointly funded by the states and the federal government. He rejected the states' argument that the expansion infringes on their sovereignty.
“…Vinson stopped short of granting an injunction, as the plaintiffs requested, to prevent the law from going forward while the case is appealed. He said such a step was unnecessary because of a ‘long-standing presumption’ that the federal government adheres to rulings of this type.
“…In his 78-page opinion, Vinson, who was appointed by President Ronald Reagan, offered the most lengthy consideration to date of the legal questions at issue. Specifically, he agreed with the states' argument that a person's refusal to buy health insurance does not amount to economic activity and is therefore beyond Congress's power to regulate under the Constitution's commerce clause.
“Attorneys for the government have argued that since virtually everyone will need health care at some point and that, since hospitals cannot turn away patients who cannot pay for emergency care, people who fail to obtain insurance are effectively making an economic decision about how and when they will pay for that care. Instead of paying now through insurance premiums, they are choosing to pay later, either out of their own pocket, or by passing the cost on to hospitals, governments or paying patients. Because this decision, when taken in the aggregate, has enormous impact on the health-care and insurance markets, the government contends that Congress is entitled to regulate it.
“But Vinson held that this line of reasoning "is without logical limitations.
"Every person throughout the course of his or her life makes hundreds or even thousands of decisions that involve the same general thought process that the defendants maintain is 'economic activity,' " Vinson wrote.
“Vinson also rejected the government's argument that Congress also was justified in imposing the insurance mandate under the clause empowering Congress to make all laws "necessary and proper" to carrying out its enumerated constitutional powers.
“The government maintains that, without the insurance mandate, many of the law's regulations on insurers would not be feasible - most notably its prohibition against insurers denying insurance or charging higher rates to those with preexisting conditions. If individuals could wait until they were on their way to a hospital before buying insurance, and insurers were forced to accept them, the companies would go bankrupt or be forced to raise their rates to unsustainable levels.
“Once again, Vinson found no logical limit to the government's argument.
"Rather than being used to implement or facilitate enforcement of the Act's insurance industry reforms, the individual mandate is actually being used as the means to avoid the adverse consequences of the Act itself," Vinson wrote. "Under such a rationale, the more harm the statue does, the more power Congress could assume for itself under the Necessary and Proper Clause."
Yup, back to normal.
Trade Date: 1/31/11
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