Health and Human Services Secretary Kathleen Sebelius has already suspended indefinitely implementation of the CLASS act — Obamacare’s Long-Term-Care Entitlement because it was financially unsustainable.

And as Jonathan Adler and Michael Cannon explain in today’s Wall Street Journal Obamacare has yet another major flaw that threatens its basic functioning:

Even if ObamaCare survives Supreme Court scrutiny next spring, its trials will be far from over. That’s because the law has a major glitch that threatens its basic functioning. It’s so problematic, in fact, that the Obama administration is now brazenly trying to rewrite the law without involving Congress.

The Patient Protection and Affordable Care Act offers “premium assistance”—tax credits and subsidies—to households purchasing coverage through new health-insurance exchanges. This assistance was designed to hide a portion of the law’s cost to individuals by reducing the premium hikes that individuals will face after ObamaCare goes into effect in 2014. (If consumers face the law’s full cost, support for repeal will grow.)

The law encourages states to create health-insurance exchanges, but it permits Washington to create them if states decline. So far, only 17 states have passed legislation to create an exchange.

This is where the glitch comes in: ObamaCare authorizes premium assistance in state-run exchanges (Section 1311) but not federal ones (Section 1321). In other words, states that refuse to create an exchange can block much of ObamaCare’s spending and practically force Congress to reopen the law for revisions.

The Obama administration wants to avoid that legislative debacle, so this summer it proposed an IRS rule to offer premium assistance in all exchanges “whether established under section 1311 or 1321.” On Nov. 17 the IRS will hold a public hearing on that proposal. According to a Treasury Department spokeswoman, the administration is “confident” that offering premium assistance where Congress has not authorized it “is consistent with the intent of the law and our ability to interpret and implement it.”

Mr. Adler and Mr. Cannon rightly point out the law’s proponents confidence is misplaced… Federal agencies can create rules — but they cannot amend or ignore statutes and the text of the law is perfectly clear, it does not allow premium assistance in federal exchanges.

Simply put without congressional authorization, the IRS lacks the authority to dispense tax credits or spend money… Not that has ever stopped Washington’s regulators from ignoring the will of Congress – just look at Avenal Power Center, L.L.C. v. EPA.

Anyway, the odds that a Republican controlled House will fix a fatal flaw in Obamacare are somewhere around slim and none… the odds aren’t much in the Senate either where many Democrats are facing tough reelection fights and aren’t going to want to go anywhere near one of the most unpopular and polarizing pieces of legislation in recent memory — especially after the trouncing they took in the mid-terms.

Bottom line, the Obama Administration will undoubtedly try to push through their regulatory fix for this flaw only to see it almost instantaneously tossed out in a court challenge.

Related:

• More Americans than not want health law repeal: poll – Reuters

I’m still reviewing the 200 plus page majority opinion from Judges Joel Dubina and Frank Hull, but here’s the conclusion summarizing the court’s findings:

We first conclude that the Act’s Medicaid expansion is constitutional. Existing Supreme Court precedent does not establish that Congress’s inducements are unconstitutionally coercive, especially when the federal government will bear nearly all the costs of the program’s amplified enrollments.

Next, the individual mandate was enacted as a regulatory penalty, not a revenue-raising tax, and cannot be sustained as an exercise of Congress’s power under the Taxing and Spending Clause. The mandate is denominated as a penalty in the Act itself, and the legislative history and relevant case law confirm this reading of its function.

Further, the individual mandate exceeds Congress’s enumerated commerce power and is unconstitutional. This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives. We have not found any generally applicable, judicially enforceable limiting principle that would permit us to uphold the mandate without obliterating the boundaries inherent in the system of enumerated congressional powers. “Uniqueness” is not a constitutional principle in any antecedent Supreme Court decision. The individual mandate also finds no refuge in the aggregation doctrine, for decisions to abstain from the purchase of a product or service, whatever their cumulative effect, lack a sufficient nexus to commerce. [fn omitted]

The individual mandate, however, can be severed from the remainder of the Act’s myriad reforms. The presumption of severability is rooted in notions of judicial restraint and respect for the separation of powers in our constitutional system. The Act’s other provisions remain legally operaive after the mandate’s excision, and the high burden needed under Supreme Court precedent to rebut the presumption of severability has not been met.

While this is welcome news I wouldn’t celebrate just yet, we’ve still got a long way to go. If nothing else this ruling makes it more likely that this case is headed to the Supreme Court.

Random thoughts:

• Nancy Pelosi wasn’t kidding when she said we had to pass it to find out what was in it… The majority opinion is 207 pages long, most of it is devoted to explaining how the law the works.
• This is the first time a judge appointed by a Democrat has ruled against the individual mandate… Judge Hull was appointed by Bill Clinton, while Judge Dubina is a George H.W. Bush appointee.
• The court didn’t buy the Obama administration’s argument  that the individual mandate is an exercise of the governments taxing powers.  I might be wrong on this, but I think every court that’s considered the matter has ruled against the government on that point.
• The Court points out on page 171 that if it were to accept the Obama administration’s interpretation of the Commerce Clause would mean a limitless federal power:
  

  The federal government’s assertion of power, under the Commerce Clause, to issue an economic mandate for Americans to purchase insurance from a private company for the entire duration of their lives is unprecedented, lacks cognizable limits, and imperils our federalist structure.

• The court basically punted on the issue of severability:
  

  The presumption of severability is rooted in notions of judicial restraint and respect for the separation of powers in our constitutional system. The Act’s other provisions remain legally operative after the mandate’s excision, and the high burden needed under Supreme Court precedent to rebut the presumption of severability has not been met.

  Maybe I’m missing something, but it’s my layman’s understanding the standard for “presuming” something being “severable” in a law is that it includes a specific severability clause. Regardless from what I remember, the government’s argument to Judge Vinson was that the individual mandate was not severable, it was necessary for the law to function as intended.

The complete ruling is here.

Kenneth Melson, acting director of the Bureau of Alcohol, Tobacco, Firearms and Explosives, is expected to resign under pressure, perhaps in the next day or two, in the wake of the ongoing controversy over Operation Fast and Furious, two senior federal law enforcement sources said Monday.

In the operation, straw buyers were allowed to illegally purchase large numbers of weapons, some of which ended up in the hands of cartels in Mexico.

Attorney General Eric Holder will meet Tuesday with Andrew Traver, head of the ATF field office in Chicago, about potentially serving as acting director of the agency, according to the sources.

I haven’t been following all the twists and turns in the Gunwalker Scandal, but I think it’s safe to say Ken Melson is about to become the designated fall guy. Gunwalker, or Operation Fast and Furious as it was officially known was an ATF investigation that sought to track firearms purchased by straw purchasers in the United States and then smuggled to criminals in Mexico. The investigation fell apart after two of the weapons allowed to “walk” into the hands of criminals were used in a shoot-out that killed a US border patrol agent, Brian Terry.

The House Committee on Oversight and Government Reform is currently investigating the actions of the Department of Justice and the Bureau of Alcohol, Tobacco, Firearms and Explosives in Operation Fast and Furious… So far the testimony from whistle-blowers inside the ATF has been damning, but what I want to know is why is the Department of Justice refusing to cooperate with Congressional investigators?

Related

• A Drug-War Plan Goes Awry – Gail O’Grady, Wall Street Jounal
• Report: Four ATF Agents Working on Controversial Operation ‘Fast and Furious’ Tell their Story – House Committee on Oversight and Government Reform
• The Definitive Scandal: ‘Gunwalker’ Much Worse Than ‘Iran-Contra’ – Bob Owens, Pajamas Media
• Operation Fast and Spurious – W. James Antle, III, The America Spectator
• Obama Eyeing Anti-Gun Backer to Run ATF – Newsmax

White House Chief of Staff Bill Daley took heat from business executives Thursday for the Obama administration’s regulatory expansions. Daley also said he didn’t have any good answers for some of what President Obama is doing and expressed frustration about the “bureaucratic stuff that’s hard to defend.”

“Sometimes you can’t defend the indefensible,” Daley said at a National Association of Manufacturers (NAM) meeting.

Daley couldn’t answer basic questions and continually faced criticism from the executives in the room. The business leaders even applauded each other’s criticism of the administration. “At one point, the room erupted in applause when Massachusetts utility executive Doug Starrett, his voice shaking with emotion, accused the administration of blocking construction on one of his facilities to protect fish, saying government ‘throws sand into the gears of progress,’” wrote Peter Wallsten and Jia Lynn Yang in the Washington Post.

Ouch, talk about throwing your boss under the bus.

We could spend days talking about how President Obama’s attempts to impose his political agenda by through regulatory extremism has strangled business and stifled economic growth. But we don’t have to, the President’s own Chief of Staff admits the President’s policies are “indefensible”… If nothing else this helps illustrate just how much of an uphill fight the president is going to have in 2012.

Related

• Federal Judge Rebukes EPA- Kathleen White, Nation Review Online
• How Miserable? Index Says the Worst in 28 Years – CNBC

The federal government Tuesday granted Maine a waiver of a key provision in President Barack Obama’s health care overhaul, citing the likelihood that enforcement could destabilize the state’s market for individual health insurance.

The U.S. Health and Human Services department said in a letter it would waive the requirement that insurers spend 80 cents to 85 cents of every premium dollar on medical care and quality improvement. Instead, the letter said, the state could maintain its 65 percent standard for three years, with the caveat that HHS intends to review the figures after two years.

The decision makes Maine the first state to receive a waiver of the requirement. Similar requests are pending from Kentucky, Nevada and New Hampshire.

There’s a lot of things I could say here, but instead I’m going to point you to Jon Hall’s American Thinker piece ‘Waiving’ goodbye to the Constitution. Mr. Hall very rightly points out that these waivers go to the very heart of what “a nation of laws, not men” is all about. In short, they violate the Constitution’s equal protection clause… As Mr. Hall notes: “The law is the law only if it applies to everyone.”

The U.S. Justice Department told a federal judge in Florida it will appeal his Jan. 31 decision striking down President Barack Obama’s health-care reform legislation.

Federal lawyers today filed a notice of appeal with U.S. District Judge C. Roger Vinson in Pensacola. Their submission comes two days before a deadline imposed by the judge last week, when he put on hold enforcement of his ruling.

In January, Vinson became the second federal judge to find unconstitutional a provision of the Patient Protection and Affordable Care Act requiring almost every person in the U.S. to obtain insurance coverage starting in 2014.

Judge Vinson’s ruling was one of two that have found Obamacare’s individual mandate unconstitutional, his ruling goes much father than Judge Hudson’s ruling the Virginia case though, and strikes the entire health care reform law.

Today’s notice of appeal moves the proceedings to the Court of Appeals for the 11th Circuit in Atlanta, Georgia… It’ll be several months before the 11th Circuit issues a ruling, after that it’s off to the U.S. Supreme Court.

Previous

• Judge Vinson to Obama Administration: Quit Stalling, Either File the Appeal or Stop Implementing Obamacare
• Breaking: Florida District Court Rules Obamacare Unconstitutional

White House Chief of Staff Bill Daley said on Sunday the Obama administration is considering tapping into the U.S. strategic oil reserve as one way to help ease soaring oil prices.

Speaking on NBC television’s “Meet the Press,” Daley said: “We are looking at the options. The issue of the reserves is one we are considering. … All matters have to be on the table.”

There has been support among Senate Democrats for tapping the reserves. Senator Jay Rockefeller on Thursday became the third Democrat to ask President Barack Obama to tap America’s emergency oil supply to cool prices that have risen past $100 a barrel on the strife in Libya.

Heh, I’d laugh, but this isn’t funny…. the strategic petroleum reserve exists to protect the United States against an interruption of petroleum supplies, not to try and temporarily drive down oil prices.

Jazz Shaw sums things up nicely over at Hot Air:

So let me see if I’ve got this straight:

• Oil and gas prices are rising in response to well established laws of supply and demand. Since we’re not going to magically produce all the energy we need for the next few years through “green initiatives” a good portion of this will have to come from fossil fuels for the foreseeable future.
• We’re not producing enough oil domestically because the federal government is sitting on drilling permits like they’re holding hostages.
• The foreign sources of oil from many of our overseas suppliers (who we’re supposed to be reducing our dependency upon because most of them don’t like us very much to start with) are now endangered as several of these countries totter on the brink of collapse.

Shaw’s second point about domestic oil production is an important one… This administration has been choking off domestic natural gas and oil production while at the same time trumpeting so called “green energy”.

The simple truth is it’s bullshit, whether we like it not, whether we want to admit it on not oil, natural gas and coal are the life blood of our economy and will be for the foreseeable future. To deny that reality is the height of political wishful thinking. I’m not saying we shouldn’t be investing in green energy technologies like solar and windmills. We have to be realistic though, neither of them is going to replace oil, natural gas or coal as our primary energy sources anytime soon.

We should be doing everything possible to tap into domestic oil and natural gas supplies not choking off their production in favor of “green energy” technologies that can’t  possibly meet current demands.

Related

• Government posts biggest monthly deficit ever – Washington Times
• Oil settles above $105 a barrel, gas above $3.50 – Associated Press
• Gas prices are about more than just oil – Associated Press
• Salazar appeals court decision forcing him to act on drilling permits – The Daily Caller
  

The number of temporary healthcare reform waivers granted by the Obama administration to organizations climbed to more than 1,000, according to new numbers disclosed by the Department of Health and Human Services.

HHS posted 126 new waivers on Friday, bringing the total to 1,040 organizations that have been granted a one-year exemption from a new coverage requirement included in the healthcare reform law enacted almost a year ago. Waivers have become a hot-button issue for Republicans, eager to expose any vulnerabilities in the reform law.

That’s right folks the Department of Health and Human Services granted 1,040 temporary waivers from burdensome requirements of the President’s signature piece of legislation.

So who’s getting all these waivers? According to the Centers for Medicare and Medicaid Services web site the waivers have gone to Self-Insured Employers (423), Health Reimbursement Arrangements (322), Multi-Employer Plans (237), Non-Taft Hartley Union Plans (23), Health Insurance Issuers (29), State-Mandated Policies (4) and Association Plans (2). You can see the full list here.

The Obama administration got a well-deserved rebuke today from Judge Roger Vinson in the Florida lawsuit challenging the constitutionality of Obamacare (aka the Patient Protection and Affordable Care Act as big government types insist). Judge Vinson issued a new order in response to a bizarre and obtuse “motion to clarify” that the Department of Justice (DOJ) filed on February 17.

Vinson’s original order on January 31 could not have been clearer: He declared the entire law unconstitutional and specifically said that because he presumed that officials of the executive branch would adhere to the law as declared by a court, his declaratory judgment striking the law down was the functional equivalent of an injunction. Judge Vinson wrote then that he presumed that the executive branch would follow his order, which any lawyer (including a lawyer President) would know requires them to cease implementing Obamacare with respect to the 26 states that are plaintiffs and the National Federation of Independent Business. That turned out to be a faulty presumption, indeed.

After waiting more than two weeks, the Obama Administration filed an insulting motion that essentially said that the federal government would not comply with the judgment unless Judge Vinson issued another order “clarifying” that he really meant what he said – that the executive branch was enjoined from implementing this unconstitutional law. This was a political motion, not a legal motion that any serious litigator would file. In fact, Judge Vinson said that if the government was really unable to understand his original order, “[i]t was not expected that they would effectively ignore the order and declaratory judgment for two and one-half weeks, continue to implement the Act, and only then filed a belated motion to ‘clarify.’”

In short, Judge Vinson just told the Obama Administration to quit stalling and either the appeal or stop implementing Obamacare. The key paragraph in Vinson’s order is here:

After careful consideration of the factors noted above, and all the arguments set forth in the defendants’ motion to clarify, I find that the motion, construed as a motion for stay, should be GRANTED. However, the stay will be conditioned upon the defendants filing their anticipated appeal within seven (7) calendar days of this order and seeking an expedited appellate review, either in the Court of Appeals or with the Supreme Court under Rule 11 of that Court.

Ouch, the government asked for clarification… and they got it along with a trip to the woodshed. The government now has 7 calendar to days file it’s appeal on an expedited basis or stop implementation of Obamacare.

I should note Judge Vinson’s ruling forces the Department of Justice to expedite the appeals process, something they were clearly hoping to avoid.  The DoJ was apparently hoping to stall appellate action on Judge Vinson’s ruling in the hopes getting a friendlier set of rulings that would allow them to marginalize Vinson somewhere down the road. Instead they have fight Vinson’s ruling now rather than later.

Related

• Judge hardens health ruling, then delays it – Lyle Denniston, SCOTUS Blog
• Breaking: Vinson stays ruling on ObamaCare – but just for seven days – Ed Morrissey, Hot Air
• Judge Vinson Fails to Apply the Two-By-Four – David Catron, American Spectator

FOX News contributor Tracy Byrnes sums things pretty well:

“The bottom line here is that they gave out waivers is an admission of guilt. Basically they’re saying, “You’re right. We screwed up.” That’s the bottom line here. They did not create a law that benefits all of us.”

Heh, they didn’t pass a law that benefits any of us… If this turkey isn’t repealed it will ultimately destroy private health insurance and private health care in this country.

You can view the list chosen few on the HHS web site.

I should also mention that out of the 375,000 or so Americans with pre-existing conditions HHS said would apply for coverage in the first year of ObamaCare only 8,011 have done so.