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March 13, 2015, was the first day that the Daily Treasury Statements showed a closing limit at 18,112,975,000,000. This number has now been frozen for 4 straight months. The latest Treasury statement on July 13, 2015 also showed $18,112,975,000,000 at its closing. This repeating amount is a portion of the federal debt that is subject to a legal limitation, currently sitting about $25 million less than the legal debt limit allowed by Congress.
Every day since March 13th, the Daily Treasury Statement shows the debt starting and ending with the exact same amount — $18,112,975,000,000.
The same day that the debt amount ended in $18,112,975,000,000, the current Treasury Secretary, Jacob Lew, informed Congress via a letter that he was issuing a debt “suspension period.” His rationale was due to the fact that legislation passed in 2014 suspended the debt limit until March 15, 2015 — in two days time.
Therefore, Lew wrote, on March 16, “the outstanding debt of the United States will be at the statutory limit. In anticipation of reaching that date, Treasury has suspended until further notice the issue of State and Local Government Series securities, which count against the debt limit.” These securities are classified as public debt.
Without having the debt limit raised by an act of Congress, the Treasury Department announced an alternative solution. Lew would issue a “‘debt issuance suspension period’ with respect to investment of the Civil Service Retirement and Disability Fund and also suspend the daily reinvestment of Treasury securities held by the Government Securities Investment Fund and the Federal Employees’ Retirement System Thrift Savings Plan.”
The last time the Treasury enacted a debt suspension was two years ago for roughly 150 days until the statutory debt limit was resolved. As I wrote back in October 2013,
“Monday, October 14, 2013 marks 150 days since the Treasury Department’s listing of public debt has not moved. The most current Daily Treasury report(October 10) shows “Total Public Debt Subject to Limit $ 16,699,396,000,000; Statutory Debt Limit $16,699,421,000,000.”
The record for these two entries remained unchanged since May 17, 2013, the first time it recorded the public debt at $16,699,396,000,000.”
The debt limit was raised a short time later. Currently, we have not raised the debt limit yet, and probably will not do so until late fall. According to the Bipartisan Policy Center, a stronger than expected tax season will give policymakers more time to haggle over an increase to the debt limit…An unexpected influx of revenue means that the nation is not expected to be at risk of a catastrophic default until November of December of 2015″
Then, as now, at some point, those transactions suspensions will have to be made up, along with continuing to pay on our obligations. In other words, the Administration is currently picking and choosing what parts of government to fund.
For those who are worried about our public debt, have no fear! The Treasury Department’s FAQ’s already have a solution. Did you know:
“There are two ways for you to make a contribution to reduce the debt:
You can make a contribution online either by credit card, checking or savings account at Pay.gov
You can write a check payable to the Bureau of the Public Debt, and in the memo section, notate that it’s a Gift to reduce the Debt Held by the Public. Mail your check to:
Attn Dept G
Bureau of the Public Debt
P. O. Box 2188
Parkersburg, WV 26106-2188″
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On Friday, Office of Personnel Management Director Katherine Archuleta resigned in disgrace after the magnitude of the recent government data breach was revealed. Of course, she should never have been hired in the first place; her prior job was a political director for the President’s reelection campaign, Obama for America.
So how does one avert blame from the White House for this catastrophic privacy breach? Why, blame Republicans of course. CNN stated that Archuleta had never been properly vetted, writing that “aides to Republican lawmakers who voted for her confirmation now acknowledge they didn’t pay enough attention to the importance of technology in the agency Archuleta was taking over.”
In case you missed the point the first time around, CNN also tweeted out a summary of their article on Archuleta, announcing that “Republicans acknowledge to @evanperez they didn’t properly vet Archuleta’s qualifications.”
Of course this is utterly absurd. Do you know how many Republican Senators voted for Archuleta’s confirmation? Only eight did, while 35 Republican Senators voted against her. But all the Democrat Senators voted for her confirmation — after being appointed by a Democrat President. Yet CNN apparently did not care to mention this or even reach out to any of the Democrats for comment on their failure to properly vet her background for this position. It doesn’t fit the playbook.
What’s worse, if those eight Republicans had voted against the nomination, they would have been branded partisan and obstructionist. Hearken back to 2013, when Senate Majority Leader Harry Reid joined forces with a national Hispanic coalition, the National Hispanic Leadership Coalition, warning against blocking the nomination on the eve of the vote. The leader of the Hispanic group, Hector Sanchez, went so far as to suggest the confirmation vote would be used in a Latino scorecard, saying, “it is important that Republicans understand the impact their actions can have because they cannot play political games on these kinds of issues that are so important.”
All that is clearly forgotten in an attempt to deflect any culpability from the Obama Administration. Who is playing “political games” now? It’s CNN’s determination that one or more of the eight Republicans who voted for her are indeed at fault for her incompetency and the massive privacy invasion. You can expect no less from CNN these days, as they are certainly the White House lapdog.
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From my friend, Michael Cannon:
It appears that Medicaid-expansion enrollees are going to cost states a lot more than they thought. According to a just-released “2014 Actuarial Report on the Financial Outlook for Medicaid” from the Department of Health and Human Services, ObamaCare’s Medicaid expansion is costing significantly more than projected:
“In 2014, the average benefit costs of newly eligible adult enrollees are expected to have been substantially greater than those for non-newly eligible adult enrollees in the program. Newly eligible adults are estimated to have had average benefit costs of $5,517 in 2014, 19 percent greater than non-newly eligible adults’ average benefit costs of $4,650. These estimates are significantly different from those in previous reports, in which average benefit costs for newly eligible adults in 2014 were estimated to be 1 percent lower than those of non-newly eligible adults.”
So the Obama administration had projected newly eligible Medicaid enrollees would cost about $50 less than other Medicaid-enrolled adults, but they actually cost nearly $1,000 more. Nice.
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How is it not a complete conflict of interest to have a person working for the State Department oversee both the IRS scandal documents for the current Administration and now the Benghazi documents for an important Presidential candidate? Or, looked at it another way, how is it that a current State Department employee has complete oversight of the documents of a former Secretary of State embroiled in a State Department scandal? Where is the impartiality?
Unfortunately, this is the scenario that is playing out. Catherine Duval, a former lawyer who joined the State Department in August of last year, is in charge of the release of Hillary Clinton’s emails and documents pertaining to Benghazi to the House Select Committee investigation the scandal, the same woman who was in charge of releasing IRS documents and Lerner’s emails.
As Rep. Jim Jordan, who is involved in investigating both scandals, pointed out, “She was at the IRS when there was a preservation order and subpoena — and documents were destroyed. She is now at the State Department, where we were supposed to get [certain] information, and we know that some of the emails were not given.”
It was recently revealed at the end of June by the IRS watchdog that IRS employees had magnetically erased 422 backup tapes that would have contained copies of Lerner’s “lost” emails. Duval apparently discovered the missing Lerner emails in February 2014; “though she alerted IRS Commissioner John Koskinen and a friend she had in the administration to the problem, neither she nor other IRS officials told Congress until June.” As many as 24,000 messages were magnetically wiped on March 4, 2014.
Furthermore, “the IRS said its email backup tapes had been “recycled” under the standard policy, insisting no backup of the lost messages existed.
That turned out to be false: The IRS inspector general that summer located backup tapes of Lerner’s emails. And though Koskinen at the time vowed his top people were trying to find out if there was any recoverable data, IT employees overseeing the tapes told the IG that no top-level IRS employees had even asked if such copies existed.
Duval has testified that she did not know the email preservation tapes even existed, telling Oversight investigators the IT chiefs informed her there were no backup tapes — and she had no reason to question their expertise.”
Rep. Jordan further outlined the frustration with Duval’s management, suggesting a “common pattern”: “Duval hasn’t been clear about important details in the investigations. She knew there were important gaps in Lerner’s email records for months and did not tell Congress, Jordan said — just as State did not tell the Benghazi panel for months that Clinton had exclusively used her personal account for work.”
Now the same tactics are being employed with the Benghazi documents, deemed “slow-walking” requests from the investigation committees. A request from last November remains unfulfilled for Clinton’s Libya-related emails and correspondence of her top 10 advisors.
The State Department has pushed back, pointing to the fact that it has “given Benghazi investigators 300 emails from Clinton’s personal account, allowed 21 State witnesses to be questioned and given investigators 40,000 pages of additional documents”, while claiming diligence “to review and publish the 55,000 pages of emails we received from former Secretary Clinton according to [Freedom of Information Act] standards so they are available to the general public and the media.”
However, 60 new Clinton emails regarding Libya, which had not been given to the investigation panel by the State Department, were discovered in a roundabout way — via a subpoena to Clinton’s close friend Sidney Blumenthal. The State Department claimed that Clinton herself did not turn over 15 of the 60 undisclosed emails to the State Department, but the Benghazi Committee pointed to the other 45 which was in the hands of the State Department, yet not disclosed and released to the Committee — which makes one wonder if there are even more emails and documents.
Heads should have been rolling over how the IRS misconduct was handled. Instead, in typical Obama Administration fashion, they are instead anointed and appointed again to lead another despicable government scandal.
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During oral arguments of the Burwell v Obamacare case before the Supreme Court, the U.S. Solicitor General Donald Verrilli made the case that the “court should defer to the interpretation of the Internal Revenue Service, which said the tax credits apply nationwide.” When the Obamacare decision was announced, it is clear that SCOTUS did apply deference, which was absolutely the worst possible solution.
The idea of “deference” refers “ to “Chevron deference,” “a doctrine mostly unknown beyond the halls of the Capitol and the corridors of the Supreme Court. It refers to a 1984 decision, Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., and it is one of the most widely cited cases in law. Boiled down, it says that when a law is ambiguous, judges should defer to the agency designated to implement it so long as the agency’s decision is reasonable.”
Given the current catastrophic state of the IRS, SCOTUS should have run from this idea as quickly as possible. The IRS has proven overwhelmingly in the last few years that no decision it makes is “reasonable” and therefore cannot be trusted as an unbiased, independent agency capable of carrying out a professional opinion on this or virtually any manner.
Even more unfortunately, not only did SCOTUS apply deference, which allowed the IRS rule to stand, it did so by taking expanding the concept of “Chevron Deference” even further in order to validate its decision. George Will, in a column written just after the Obamacare ruling was handed down, described how the decision now allows the executive branch to apply deference in situations that are not just ambiguous, but also “inconvenient for the smooth operation of something Congress created.” This is not interpreting law — this is legislating.
Therefore, the actions of the IRS — that is, willy-nilly creating rules which expanded the scope of Obamacare beyond its text — were indeed endorsed and given political cover by Roberts and his majority as they applied Chevron Deference. Instead of sending Obamacare back to the legislature for clarification, the judicial branch decided to step in and interpret the law for the sake of alleviating “inconvenience”. But this is wrong. Convenience, ease, and expediency should never be a rationale for the judicial branch to go beyond the scope of deciding whether or not a law is constitutional, as they did here.
The judicial branch, with this decision, seemed to act more in harmony with the legislative and executive one, instead of serving as a check against the others. What’s more, “besides violating the separation of powers, this approach raises serious issues about whether litigants before the courts are receiving the process that is due to them under the Constitution. It would result if its branches behaved as partners in harness rather than as wary, balancing rivals maintaining constitutional equipoise.”
Will summed up the damage Roberts has done, which is likely to have lasting effects in the courts for years to come. Roberts goes “beyond “understanding” the plan; he adopts a legislator’s role in order to rescue the legislature’s plan from the consequences of the legislature’s dubious decisions. By blurring, to the point of erasure, constitutional boundaries, he damages all institutions, not least his court.”
How the Supreme Court uses and applies Chevron Deference in the coming years, in the way they did with this decision, will be especially interesting, given the expanded roles of many government agencies such as the EPA and FCC.
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I really enjoyed this column by George Will, which was published soon after the Obamacare decision. Will explores how the decision exemplifies how Chief Justice Roberts embraced and expanded the concept of “Chevron Deference”, which, he contends, will have a lasting affect on future court decisions.
For those of you who don’t know, Chevron Deference basically says that agencies charged with administering statutes are entitled to deference when they interpret ambiguous statutory language. Will charges that the decision now allows the executive branch to apply deference in situations that are not just ambiguous, also “inconvenient for the smooth operation of something Congress created.” Check out the column below:
Conservatives are dismayed about the Supreme Court’s complicity in rewriting the Affordable Care Act — its ratification of the IRS’s disregard of the statute’s plain and purposeful language. But they have contributed to this outcome. Their decades of populist praise of judicial deference to the political branches has borne this sour fruit.
The court says the ACA’s stipulation that subsidies are to be administered by the IRS using exchanges “established by the State” should not be construed to mean what it says. Otherwise the law will not reach as far as it will if federal exchanges can administer subsidies in states that choose not to establish exchanges. The ACA’s legislative history, however, demonstrates that the subsidies were deliberately restricted to distribution through states’ exchanges in order to pressure the states into establishing their own exchanges.
The most durable damage from Thursday’s decision is not the perpetuation of the ACA, which can be undone by what created it — legislative action. The paramount injury is the court’s embrace of a duty to ratify and even facilitate lawless discretion exercised by administrative agencies and the executive branch generally.
The court’s decision flowed from many decisions by which the judiciary has written rules that favor the government in cases of statutory construction. The decision also resulted from Chief Justice John G. Roberts Jr.’s embrace of the doctrine that courts, owing vast deference to the purposes of the political branches, are obligated to do whatever is required to make a law efficient, regardless of how the law is written. What Roberts does by way of, to be polite, creative construing (Justice Antonin Scalia, dissenting, calls it “somersaults of statutory interpretation”) is legislating, not judging.
Roberts writes, almost laconically, that the ACA “contains more than a few examples of inartful drafting.” That is his artful way of treating “inartful” as a synonym for “inconvenient” or even “self-defeating.”
Rolling up the sleeves of his black robe and buckling down to the business of redrafting the ACA, Roberts invents a corollary to “Chevron deference.”
Named for a 1984 case, Chevron deference has become central to the way today’s regulatory state functions. It says that agencies charged with administering statutes are entitled to deference when they interpret ambiguous statutory language. While purporting to not apply Chevron, Roberts expands it to empower all of the executive branch to ignore or rewrite congressional language that is not at all ambiguous but is inconvenient for the smooth operation of something Congress created. Exercising judicial discretion in the name of deference, Roberts enlarges executive discretion. He does so by validating what the IRS did when it ignored the ACA’s text in order to disburse billions of dollars of subsidies through federal exchanges not established by the states.
Chevron deference does for executive agencies what the “rational basis” test, another judicial invention, does for legislative discretion.
Since the New Deal, courts have permitted almost any legislative infringement of economic liberty that can be said to have a rational basis. Applying this extremely permissive test, courts usually approve any purpose that a legislature asserts. Courts even concoct purposes that legislatures neglect to articulate. This fulfills the Roberts Doctrine that it is a judicial function to construe laws in ways that make them perform better, meaning more efficiently, than they would as written by Congress.
Thursday’s decision demonstrates how easily, indeed inevitably, judicial deference becomes judicial dereliction, with anticonstitutional consequences. We are, says William R. Maurer of the Institute for Justice, becoming “a country in which all the branches of government work in tandem to achieve policy outcomes, instead of checking one another to protect individual rights. Besides violating the separation of powers, this approach raises serious issues about whether litigants before the courts are receiving the process that is due to them under the Constitution. It would result if its branches behaved as partners in harness rather than as wary, balancing rivals maintaining constitutional equipoise.
Roberts says “we must respect the role of the Legislature” but “[A] fair reading of legislation demands a fair understanding of the legislative plan.” However, he goes beyond “understanding” the plan; he adopts a legislator’s role in order to rescue the legislature’s plan from the consequences of the legislature’s dubious decisions. By blurring, to the point of erasure, constitutional boundaries, he damages all institutions, not least his court.
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Dear Governor Rauner,
You have an enormous task before you in trying to navigate pension reform. Through political duplicity, the state legislature in cahoots with the public service unions have fashioned for themselves retirement benefits far in excess of any reasonable amount. The Courts, appointed by the same players, have determined that it is not even legal to revisit the magnitude of these retirement benefits. It must be difficult to draw up a plan when your hands are legally tied from being able to make actual changes to the pension system in order to alleviate the $100 billion in debt. As such, I propose an alternative solution:
Since the courts refuse to allow you to negotiate with the workers for lower pension benefits, then take the negotiations to the worker’s base pay. Simply take the costs of the excessive retirement benefits for each employee and subtract it from the worker’s base pay in determining the new base pay under the new contract. The Courts may not allow a reduction in retirement benefits, but there is certainly no Constitutional provision preventing the negotiating of a lower base salary.
There is no rule that someone must be paid the same base pay amount as last year. If you are constrained from the pension end of the contract, then you ought to change their next offer and reduce their overall compensation from the base pay end, thereby restricting compensation and benefits to amounts no greater than what those skills would command and be realistically afforded in the private sector.
Overhauling the contract process from this end will provide an opportunity for fiscal reform. This will ensure that, going forward, no worker be paid more in any new contract then what can be actually afforded, without regard to what the prior contract provided. Once a current contract ends, there is nothing on the table; nothing prevents any new contract from offering less that the prior contract, especially where pay and benefits of the prior contract are out of line and hamstrung by ironclad guarantees.
The people of Illinois realized when they elected you, that decades of fiscal mismanagement needed to end in order to ensure that Illinois has a chance. Even though it may be politically difficult and unpalatable, anybody representing the taxpayers has an obligation to those taxpayers. Budget reform and deficit reduction will naturally follow once compensation levels have been stabilized and brought in line with realistic affordability. Contract negotiations must happen in order for long term sustainability to be achieved.
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Frederic Bastiat, one of the brightest and most eloquent economists and authors France has ever produced, was born on this date in 1801. Some selections of his wisdom:
“The State is the great fiction through which everyone endeavors to live at the expense of everyone else.”
“[T]he bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, at the risk of a small present evil.”
“When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.”
“Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place.”
“If the natural tendencies of mankind are so bad that it is not safe to permit people to be free, how is it that the tendencies of these organizers are always good? Do not the legislators and their appointed agents also belong to the human race? Or do they believe that they themselves are made of a finer clay than the rest of mankind?”
“[A]t whatever point on the scientific horizon I begin my researches, I invariably reach this one conclusion: The solution to the problems of human relationships is to be found in liberty.”
If you haven’t read “The Law”, start there to get a good introduction to Frederic Bastiat. The Foundation for Economic Freedom (FEE), has a free download, as well as many other economic writings available.
Happy Birthday Bastiat!
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The SCOTUS ruling against the EPA was a breath of fresh air (see what I did there?). Before adjourning until October, the Supreme Court decided that recent EPA rules did not consider cost compliance. The Washington Examiner had a good overview of the ruling. This decision will likely affect other recent EPA rules.
“The Supreme Court ruled 5-4 against Environmental Protection Agency pollution rules for power plants Monday, in a blow to President Obama’s environmental agenda.
The majority decision, written by Justice Antonin Scalia, said the EPA has to consider the costs of complying with the rules and sent the air pollution regulations back to the agency.
The EPA rules in question regulate hazardous air pollutants and mercury from coal- and oil-fired power plants, known as the MATS regulations. The regulations went into effect April 16. The utility industry had argued that the rules cost them billions of dollars to comply and that EPA ignored the cost issue in putting the regulations into effect.
“EPA must consider cost — including cost of compliance — before deciding whether regulation is appropriate and necessary. It will be up to the agency to decide (as always, within the limits of reasonable interpretation) how to account for cost,” Scalia wrote in agreeing with the industry.
The decision will have repercussions for other EPA regulations that are key to Obama’s climate change agenda. The EPA will now have to examine the cost of compliance for the Clean Power Plan, which is at the heart of the president’s environmental agenda.
Many of the companies have either made the investments or closed power plants to comply. If the investments necessary to upgrade a plant to comply with the regulation aren’t justified when considering the operational costs, revenues earned and other factors, then the decision is made to retire it.
The D.C. Circuit Court Appeals favored the EPA in a previous lawsuit filed by the industry, attempting to overturn the rules, which is why they took it to the Supreme Court to decide the cost issue.
The D.C. Circuit was split in its decision, but the majority ruling prevailed. At the center of the case is the question of whether the regulation of hazardous air pollutants from electric utilities are “appropriate and necessary.” On that issue the court was split, but a two-judge majority agreed that the EPA could ignore costs in determining whether to regulate the utility sector.
The D.C. Circuit majority also agreed the EPA could focus solely on the utilities’ contribution to the pollutants of concern, rather than identifying any specific health hazards attributable only to utility emissions.
The EPA had argued that the rules are both appropriate and necessary regardless of the costs, and that it has the discretion under the law to act as it deems fit in regulating hazardous pollutants.”
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Chief Justice Roberts on Obamacare in 2012: “It is not our job to protect the people from the consequences of their political choices.”
This line famously echoed in Robert’s majority the first time Obamacare came before the Supreme Court, pointing out that it is not the business of the Supreme Court of the United States to fix laws (good or bad) that Congress passes.
Three years later, Roberts made an about-face on this exact point essentially saying with his decision that Obamacare is a bad law and poorly written — so we will fix it.
It really is a fascinating thing. First we have Pelosi saying we have to pass the law to see what is in it. And then when we actually get to see and experience the incoherence of the law, Roberts declares that Congress’s stupidity is not his job to fix.
But then the problem became that the Senate didn’t actually have the votes to fix it properly or repeal it entirely. Congress discovered that the law which was passed (state exchanges only) was not the version Congress wanted (federal exchanges too), but the Senate couldn’t get the 60 votes they needed to pass the version they wanted, especially after the Republicans lost Massachusetts a couple years ago.
So good old Roberts gifted them what they needed to have the law that they should have written with this recent opinion. And for Robert’s act of judicial overreach and maneuvering, Scalia’s dissent was particularly scathing:
“Rather than rewriting the law under the pretense of interpreting it, the Court should have left it to Congress to decide what to do about the Act’s limitation of tax credits to state Exchanges…The Court’s insistence on making a choice that should be made by Congress both aggrandizes judicial power and encourages congressional lassitude…
Just ponder the significance of the Court’s decision to take matters into its own hands. The Court’s revision of the law authorizes the Internal Revenue Service to spend tens of billions of dollars every year in tax credits on federal Exchanges. It affects the price of insurance for millions of Americans. It diminishes the participation of the States in the implementation of the Act. It vastly expands the reach of the Act’s individual mandate, whose scope depends in part on the availability of credit…
But this Court’s two decisions on the Act will surely be remembered through the years. The somersaults of statutory interpretation they have performed (“penalty” means tax, “further [Medicaid] payments to the State” means only incremental Medicaid payments to the State, “established by the State” means not established by the State) will be cited by litigants endlessly, to the confusion of honest jurisprudence. And the cases will publish forever the discouraging truth that the Supreme Court of the United States favors some laws over others, and is prepared to do whatever it takes to uphold and assist its favorites. I dissent.”
Scalia was particularly clear that the Supreme Court took it upon themselves to insert themselves into the legislative branch. Put another way, Chief Justice Roberts became the 60th vote in the Senate.
