House/Senate Action: Week of 7/21/14-7/27/14
Both the House and Senate are in session this week.
The House will be in session Monday through Thursday.
The Senate will be in session Monday through Thursday.
The August Recess will begin Friday, and will last through Sunday, September 7.
“I don’t care if it’s legal. It’s wrong.” So said President Obama on Thursday as he added his name to the roster of high-profile Democrats seeking to prevent American corporations from following current tax law to change their tax rate by reincorporating abroad. They’re being lured by much lower corporate tax rates than the current U.S. corporate rate of 35%, highest in the developed world.
Rather than take the obvious route – lower the tax rate to make the U.S. more attractive to its own companies AND foreign investment – Obama’s answer is to change the law to prevent them from moving their operations overseas. And just for good measure, he wants the new legislation backdated to May of this year, to catch any companies that have already made the move recently.
Even if such legislation moves in the Senate, it will go nowhere in the House, and the President knows it. In other words, this is another political maneuver, designed to give Democrats another issue to run on in the fall.
BOEHNER V. OBAMA:
On Thursday, the House Rules Committee held a markup session on H.Res. 676, the resolution that authorizes the Speaker to file suit against the President for failing faithfully to execute the law. During consideration, the Committee took up and agreed to one amendment, offered by GOP Rep. Richard Nugent of FL, which provides for increased transparency and accountability.
On Friday, the Rules Committee announced it would hold a meeting on Tuesday, July 29 to consider the Rule as amended. So it looks like we’ll have a vote in the House before the beginning of the August Recess on whether or not to authorize the Speaker to sue the President.
Senate Majority Leader Harry Reid announced on Wednesday that next week the Senate will take up H.R. 5021, the bill passed last week by the House to replenish the Highway Trust Fund to the tune of $10.8 billion. The House measure is a stop-gap funding bill meant to authorize spending through the end of May 2015 – long enough to get us through the November elections and give the new Congress time to work out a longer-term authorization plan.
The Highway Trust Fund provides funds for about one-quarter of the roughly $216 billion per year in total public spending on highways and mass transit projects. That works out to about $1 billion per week. If the Trust Fund is not replenished, its reserves will be down to about $2 billion by the end of September – hence the need to move quickly.
As we discussed last week, the Senate would prefer to pass a long-term, six-year authorization bill. Why? Because Senate Democrats fear they could lose control of the body in the November elections, and with it, the power to fund their allies.
But they know that’s not likely, so instead they’re coalescing around an amendment to authorize just $8.1 billion through December 19. That would ensure that the longer-term fix would be dealt with by the current Congress in a lame duck session.
The agreement Reid announced Wednesday calls for votes on four amendments – and one of them is a vote on S. 1702, the Transportation Empowerment Act, authored in the Senate by Mike Lee of UT (and in the House by Rep. Tom Graves of GA, where it is H.R. 3486). The TEA bill would phase down the federal gas tax from 18.4 cents per gallon to just 3.7 cents per gallon over five years, and would transfer authority over highways from the Federal Government to the states. With that new authority, states could design their own spending programs – some states would build new highways, others would repair existing roads, others might build light rail – federalism applied to concrete and asphalt.
On Monday, House Oversight and Government Reform Committee released private testimony from Thomas Kane, IRS Deputy Associate Chief Counsel, in which he said he’s no longer certain that all the IRS’ backup tapes were gone. He said that when the IRS first revealed in June the fact that Lois Lerner’s emails had gone missing, they did not know there were additional backup tapes to study.
That makes sense, given that we now know the Treasury Inspector General for Tax Administration says he has found some backup tapes, though it’s not clear yet if they hold any of the missing Lerner emails.
On Tuesday, Ways and Means got into the act, releasing a short summary of testimony it’s received from an IRS IT professional in the criminal division who analyzed Lerner’s hard drive and noticed it was “scratched.” Ways and Means also said it had internal IRS IT documents suggesting that the hard drive was recoverable at one point, but it has not provided copies of those documents.
On Wednesday, the House Oversight and Government Reform Committee held another hearing featuring IRS Commissioner John Koskinen. Trey Gowdy of SC used the opportunity to rip into Koskinen again, as he did in June, over Koskinen’s weak responses regarding Lois Lerner’s allegedly “lost” emails. Koskinen again refused to apologize to Congress for not letting them know of the missing emails in February, when he first became aware of the problem.
I really hope Gowdy has a good accountant, because this guy is definitely going to be audited by the IRS, and soon.
Democrats are doubling down on the notion that House Republicans will attempt to impeach the President.
Two weeks ago, Sarah Palin called for impeachment, and that was all it took to start the mainstream media meme – Republicans want to impeach the President. CNN/Gallup ran a survey (showing that while 57% of Republicans want to see him impeached, only 35% of the country as a whole wants to see that), late night comedians started making jokes, and then, on Friday, speaking at a Sperling Breakfast, White House aide Dan Pfeiffer said it would be “foolish” for the White House not to prepare for impeachment proceedings.
Friends, there is no way in the world this is going to happen any time soon. And by “any time soon,” I mean as long as there are fewer than 70 Republicans in the Senate.
So what is the White House up to? They’re trying to rally their base before the elections. How do I know this? Because on Friday, just hours after Pfeiffer made his comments at the Sperling Breakfast, I got a fundraising email from the DCCC urging me to give money to help them fight back against the nutty House Republicans who are secretly planning to impeach Obama.
Stay away from this. It’s no good for us.
The House may move a Continuing Resolution as early as next week. The measure is needed to keep the government open beyond the September 30 end of the fiscal year, because not a single appropriations bill has made it through regular order to the President’s desk for signature.
For the record, the House has passed seven appropriations bills this year. The Senate has passed none.
There is no indication what the funding level would be, nor is there any indication what would be the duration of such a CR. I’d bet that it would last until sometime in December, so the lame duck Congress could work out an omnibus spending package to get us through FY2015.
Remember back in December, when the Ryan-Murray budget deal passed, setting the overall spending level for FY2015 at $1.014 trillion? Remember how excited they were at the time, because the House GOP cave in meant that at least they’d get a head start on FY2015 appropriations bills, and we could finally get back to regular order and fund the government the way it was supposed to be funded? Yeah, I remember that, too.
Many balls in the air on the ObamaCare front this week.
Let’s start with the release of a new CNN/Gallup poll last week. The coverage proves again just how biased some news organizations can be. The poll’s key finding is that just 18% of the people surveyed said they or someone in their family were better off under ObamaCare. Almost twice as many respondents – 35% – said they or someone in their family was worse off; 46% percent said say they are about the same after ObamaCare as before.
So roughly half the country says it’s made no difference, and among the half of the country that says ObamaCare HAS made a difference, it’s 2-to-1 negative.
Nevertheless, Politico’s headline on the story was “Poll: Most Say ObamaCare Working.”
How did they arrive at this, given what I just shared? They combined the results of two questions – the first asked about personal circumstances, the second asked whether they thought OTHERS were doing better under ObamaCare. So 18% said they were doing better, but 35% said they believed OTHERS were doing better … and, Voila! A majority says ObamaCare is working!
Next up: Revelations that the Government Accounting Office sent undercover investigators to see if they could qualify citizens for ObamaCare subsidies using fraudulent documents. Turns out 11 of the 12 applications that were submitted with fraudulent information were nevertheless approved for subsidies. That’s a rather high error rate, even for government work.
Now let’s go to GOP Sen. Ron Johnson’s lawsuit against the special exemption for Members of Congress and their staffs. On Monday afternoon, Federal District Court Judge William Griesbach of the Eastern District of Wisconsin threw out the lawsuit, ruling that the Senator had no “standing” to sue. Sen. Johnson has yet to announce the next steps he will take.
And now let’s move to the Halbig case.
For anyone who’s missed it, a quick review: The case of Halbig v. Sebelius rests on a simple proposition: That ObamaCare provides premium tax credits – that is, subsidies – to help certain people pay for the inflated insurance premiums they’ll be paying thanks to the individual mandate and the essential benefits requirement … and the “certain people” I just mentioned are limited to purchasers of health insurance who meet the eligibility requirements and who live in states that established their own exchanges.
Specifically, eligibility for what’s called the “affordability tax credit” under Section 36B of the law requires that purchasers enroll “through an Exchange established by the State under Section 1311 of the Patient Protection and Affordable Care Act.” Identical language appears in the definition of a “coverage month” later in the same section, and in every single place eligibility for the subsidies is mentioned in the law.
This is crucial to understand, because the authors of ObamaCare intended to use a carrot-and-stick approach to get states to set up exchanges, and to get their people into the exchanges. The carrot was the subsidies; the stick was the mandate penalties for those who decided not to go along. The two go hand in hand. You cannot have one without the other.
In fact, the plaintiffs in the Halbig case are individuals who are complaining that they are required to pay taxes (read: mandate penalties) that are being illegally applied to them, because they do not live in states that established their own exchanges. In order to have the taxes ruled illegal, the subsidies must also be ruled illegal.
What’s at issue here is a 2011 decision by the IRS to interpret the statute as saying that subsidies would flow and taxes would be imposed on people all over the country, regardless of whether or not they lived in a state that had established its own exchange. In essence, the IRS decided to pay billions in subsidies and impose taxes worth potentially tens of billions more that it had no authority to do.
On Tuesday morning, a three-judge panel of the U.S. Court of Appeals for the District of Columbia issued its ruling in the Halbig case. By a vote of 2-1, the court decided that words mean what they say.
This was a big, big victory for freedom in health care choice. And, frankly, it’s a big, big victory for Tea Party Patriots and all the local coordinators and activists who pressured their Governors and state legislators not to establish exchanges in their own states.
Remember, only 14 states and the District of Columbia opted to set up their own exchanges; 36 states decided to forego the expense and headache, and let the Federal Government do it instead. So residents in those 36 states have just been freed from the Individual and Employer Mandates – assuming, of course, that the ruling of the three-judge panel holds.
“Meh,” said the left. Three hours later, a three-judge panel of the Fourth Circuit Court of Appeals, in Richmond, Virginia, issued its own ruling in King v. Burwell, a similar case, and found exactly the opposite – words do NOT mean what they say.
The Obama Administration immediately announced its intent to appeal the decision of the U.S. Court of Appeals for the District of Columbia, and would ask for an en banc decision. That’s where the losing side in a case can ask to have the case heard again by the entire court – 11 judges, of whom four were appointed by GOP Presidents, and seven by Democratic Presidents (including four by Obama himself, including three who were confirmed by the Senate ONLY as the result of Harry Reid’s decision to invoke the nuclear option last year).
(Editor’s note: Wonder why controlling the U.S. Senate is so damn important? Two words: Judicial confirmations.)
Thus began the wailing and gnashing of teeth on the left. “How could they rip away insurance subsidies on a drafting error?” demanded the Conventional Wisdom. Never mind that the so-called “drafting error” took 16 months for the IRS to find, never mind that to believe it was a “drafting error” you’d have to believe that Congress wrote entire titles of the law by mistake. It was a “drafting error.”
Until Thursday morning, when we saw video of Jonathan Gruber – one of the principal architects of both RomneyCare and ObamaCare – explaining that its authors, at least, knew and understood the political impact of confining tax credits only to those states which established their own exchanges. In a remarkable 59-second clip of a 52-minute speech given in January 2012 at a health care conference, Gruber explained it this way:
“What’s important to remember politically about this is if you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits. I hope that that’s a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges. But, you know, once again the politics can get ugly around this.”
Gruber responded later on Thursday, explaining that he had made what he called a “speak-o” – the verbal equivalent of a typo. Except, of course, that typos typically consist of one or two inadvertently struck keys on a keyboard, and don’t take a full minute to commit.
Thanks to Al Gore, of course, we have the Internet, and we have people who know how to use it to research things. It was only a few hours later that we had a second Gruber clip, from 10 days later, wherein he said exactly the same thing:
“Then finally the third risk and the one folks aren’t talking about, which may be most important of all, is the role of the states.
“Through a political compromise, the decision was made that states should play a critical role in running these health insurance exchanges. And the health insurance exchanges are the centerpiece of this reform, because they’re the place that individuals can go to shop for their new securely priced health insurance.
“But if they’re not set up in a way which is transparent, and which is convenient for shoppers, and which allow people to take their tax credits and use them effectively to buy health insurance, it will undercut the whole purpose of the bill. Now a number of states have expressed no interest in doing so.
“A number of states, like California has been a real leader. One of, I think it was the first state to pass its exchange bill. It’s been a leader in setting up its exchange; it’s a great example. But California’s rare. Only about 10 states have really moved forward aggressively in setting up their exchanges.
“A number of states have even turned down millions of dollars of federal government grants, as a statement, of some sort, that they don’t support health care reform.
“Now, I guess I’m enough of a believer in democracy to think that when the voters in states see that by not setting up an exchange the politicians in a state are costing state residents hundreds and millions and billions of dollars that they’ll eventually throw the guys out, but I don’t know that for sure. And that is really the ultimate threat, is will people understand that gee, if your governor doesn’t set up an exchange, you’re losing hundreds of millions of dollars of tax credits to be delivered to your citizens. So that’s the other threat, is will states do what they need to set it up.”
So much for the “’Speak-O’ Defense.”
So … what’s next?
The Obama Administration will appeal its loss in the Court of Appeals for the District of Columbia to the full court. Given the construction of that court – seven judges appointed by Democrats, four by Republicans – it’s quite possible, indeed likely, that the full court will reverse the decision of the three-judge panel. If that happens, it is not a sure thing that the Supreme Court will take the case on appeal (Halbig et. al. would surely appeal), because they wouldn’t have to settle a dispute between two lower courts – the two lower court rulings would then be in sync with one another, and that could provide the Supremes their way out.
Unless, of course, the losers in the Fourth Circuit case, whether they accept the three-judge panel’s decision or lose after an appeal en banc, decide to appeal their loss directly to the Supremes – an outcome that is highly likely.
It takes four sitting Justices of the Supreme Court to vote to hear a case for the case to get onto the docket.
Meanwhile, while the case is under appeal, the Obama Administration will continue to provide the subsidies – AND impose the taxes.
And Democrats everywhere will try to use this to make the GOP look hard-hearted – as if our side doesn’t want anyone to have affordable insurance, and wants to take away everyone’s subsidies.
So here are a couple of talking points to keep in mind:
- The second-highest court in the land found the President to be breaking the law – that is, they found the IRS regulation implementing the premium tax credits to be illegal.
- No one’s premiums will go up, contrary to the desperate wails of the left. Paying for health care will take a bigger bite out of their wallet, but that’s because the essential benefits package requirement necessarily increases the cost of insurance, and they will no longer have illegal taxpayer subsidies to pay for that inflated insurance – but it’s the President and the Democratic Congress who enacted this law who are to blame for that.
- The ruling for the plaintiffs frees more than 8 million Americans from the individual mandate, and more than 250,000 firms with more than 57 million employees from the employer mandate. Winners literally outnumber losers by more than 10-to-1.
- This is a President who:
o Boasts about going around Congress when Congress doesn’t produce the results he wants
o Has unilaterally rewritten his health care law (and other laws) dozens of times
o Has been slapped down no fewer than 13 times by a unanimous Supreme Court – including two Justices he appointed himself – for executive overreach
- The unlawful behavior uncovered in Halbig – imposing taxes no Congress ever authorized – is beyond anything else he’s done.
- What’s at stake is not just the subsidies, but the mandates – without the subsidies, you cannot have either the individual or the employer mandate.
Early Wednesday morning, Steve King hosted Sen. Ted Cruz for a meeting of more than 20 House conservatives to discuss the border crisis. Cruz pushed hard for support for his solution to the problem – ending the President’s Deferred Action for Childhood Arrivals program, and enacting his legislation to prevent the President from extending that program to future illegal immigrants.
Later on Wednesday morning, the House Republican Conference met to consider various options on how to deal with the President’s request for $3.7 billion in emergency supplemental appropriations to deal with the crisis on the southern border.
Two leaders made presentations – Hal Rogers of KY, Chairman of the Appropriations Committee, and Kay Granger of TX, Chairwoman of the Border Crisis Working Group established a few weeks ago by Speaker Boehner.
Rogers said he had not yet finished drafting a bill, but that it likely would come in at less than $1.5 billion, less than half the President’s request.
Granger’s group made a dozen recommendations:
- Deploy the National Guard to assist with humanitarian care and needs of the unaccompanied minors, to free up the Border Patrol to do their job.
- Amend the 2008 Trafficking Victims Protection Act, so that unaccompanied minors from Honduras, Guatemala, and El Salvador would be treated the same as unaccompanied minors from Mexico for the purpose of removal.
- Prohibit the Secretary of the Interior or the Secretary of Agriculture from denying U.S. Customs and Border Protection (CPB) activities on federal land under their respective jurisdictions.
- Require a DHS strategy and implementation plan to get control of the southern border.
- Establish border security in Central America and Mexico.
- Deploy additional immigration judges to expedite the hearing of asylum and credible fear claims.
- And a whole lot of other junk that won’t do much good, either.
The first complication is simple – do you put the policy changes you want into the appropriations bill (technically, a no-no under budget rules, which don’t allow you to legislate on an appropriations bill), or do you work them as two separate but complementary bills?
The second complication is a bit more … complicated.
The Granger recommendations, as thorough and well-intentioned as they are, miss the point – as we noted last week, while the 2008 law makes more difficult the removal of unaccompanied minors from Central America, it is not the cause of the crisis. The cause of the crisis is President Obama’s Deferred Action for Childhood Arrivals program, and the consequent belief throughout Central America that if you make it to the United States, you’ll be allowed to stay.
Consequently, many House Republicans think the legislation doesn’t go far enough, and don’t plan to vote for the legislation in its current form.
That means the House GOP Leadership is going to have to get some votes from Democrats to pass the bill – but Democrats have indicated that they oppose any changes to the 2008 law.
The House GOP Conference met for a second time on Friday, and Republican leaders said afterward they believed they were moving toward a consensus around a modified Granger plan. Funding would be cut to less than $1 billion, and the policy changes appear now to be limited to amending the 2008 law and adding more immigration judges to expedite asylum and credible fear claims.
At that meeting, several other options were also discussed, including:
- Voting on a separate measure that would challenge Obama’s administrative actions on immigration – most notably, the DACA program.
- Voting on the President’s $3.7 billion budget request, just to vote it down and make Democrats cast an unpopular vote.
- Voting on a resolution that declares that the President has not enforced current immigration law, and caused the current crisis by his failure to do so.
In other words, passage of this legislation – which, I remind you, has yet to be finalized – is no sure thing, not by a long shot.
Never one to muff a chance to muff a chance, former Florida Governor Jeb Bush displayed the tin political ear for which the men of his family are so famous by coauthoring a Wall Street Journal piece on Thursday in which he urged Republicans to “use the crisis” as an opportunity to – wait for it – pass comprehensive immigration reform! House Minority Leader Nancy Pelosi used almost exactly the same words later the same day on the same topic, proving nothing other than both apparently use Rahm Emanuel’s speechwriter.
Meanwhile, in the Senate, Sen. Jeff Sessions – the Ranking Member of the Judiciary Committee – has continued his yeoman’s work on the issue. In a Thursday colloquy with Sen. Cruz, Sessions warned of the President’s plan to provide administrative amnesty to between five and six million illegal immigrants, and insisted that no Member of Congress should vote to fund President Obama’s request without also voting to end the DACA program and block a future amnesty.
Sessions was basing his comments on information regarding a meeting the President had a few weeks ago with leading immigration rights activists. They met on June 30 in a private meeting at the White House.
According to some of the participants in the meeting – including Rep. Louis Gutierrez of Chicago – the President told them in that meeting that he had given up on Congress, and was ready to go it alone. He expects to act before the November election.
Exactly WHAT he’s planning to do is still a secret. But it’s clear he’s looking at expanding a program to provide temporary relief from deportations and work authorization for illegal immigrants.
There are two major options for the President to consider. The first is to provide relief from deportation to one or more groups of people. The most aggressive option here would be expanding his DACA program to anyone who could have gained legal status under the Gang of 8 bill that passed the Senate last year. That bill would have covered up to 8 million illegal immigrants, according to CBO.
He could do that by expanding DACA to include some family members of those already eligible. According to CBO, there are an estimated 4.7 million illegal immigrants who are parents with a minor child living in the U.S., and 3.8 million whose children are U.S. citizens. About 1.5 million illegal immigrants are married to a U.S. citizen or lawful resident, but they have failed to gain legal status themselves.
Or he could decide to provide protections for entire employment categories, such as the 1 million or so illegal immigrants who work in the agricultural sector.
The second major option for the President is on the enforcement side. We may have seen the beginning of these changes a few weeks ago, when he ordered DHS to send its forces from the interior of the country to the border. More changes like that could be on the way.
Also on Thursday, Sen. Cruz introduced new legislation, S. 2666, that would, in the words of Thomas.gov, “prohibit future consideration of deferred action for childhood arrivals or work authorization for aliens who are not in lawful status … facilitate the expedited processing of minors entering the United States across the southern border, and … require the Secretary of Defense to reimburse States for National Guard deployments in response to large-scale border crossings of unaccompanied alien children from noncontiguous countries.”
Elsewhere on Thursday, the New York Times reported that the President is considering another first – creating refugee screening centers in Honduras, so that U.S. officials could meet with and evaluate thousands of Honduran children and youths to determine if they can enter the U.S. as refugees or on emergency humanitarian grounds. This would be the first time the U.S. has addressed a refugee effort in a nation reachable by land to the U.S. – the other places we’ve done this have been Haiti and Vietnam.
Plans call for spending $47 million over two years, assuming 5,000 minors applied and 1,750 were accepted. If the pilot program turned out to be successful, it would be adopted for Guatemala and El Salvador as well.
Even a cursory glance at the numbers indicates a shockingly low estimate – since Oct. 1 of last year, the government says we’ve had an influx of more than 16,500 unaccompanied minors from Honduras alone.
No final decision has been made, but I’m guessing it was a topic of conversation at the White House the next day, when the President met at the White House with the Presidents of the three Central American countries at the heart of the current crisis.
Cannon and Adler: The Heart of the Halbig Case