Taxing Health Care

From the Wall Street Journal Online

Politicians wouldn’t be politicians if they didn’t trim their sails to the prevailing winds. Even so, the emerging 180-degree turn by Democrats on taxes and health insurance is one for the record books.

Democrats have spent years arguing that proposals to equalize the tax treatment of health insurance are an outrage against the American people. Workers pay no income or payroll taxes on the value of job-based plans, but the same hand isn’t extended to individuals who must buy coverage on their own. Last year liberals mauled John McCain for daring to touch the employer-based exclusion to finance more coverage for the individually uninsured. He was proposing “a multitrillion-dollar tax hike — the largest middle-class tax hike in history,” said Barack Obama, whose TV ads were brutal.

But now Democrats need the money to finance $1.2 trillion or more for their new health insurance entitlement. Last week Senate Finance Chairman Max Baucus released his revenue “policy options” and high on the list is . . . taxing health benefits. Or listen to White House budget director Peter Orszag, who recently told CNN’s John King that the exclusion “was not in the President’s campaign plan, it wasn’t in our budget. Clearly, some Members of Congress are putting it on the table and we are going to have to let this play out.”

Mr. King tried again. “Let this play out. But would the President sign a bill that includes a pretty significant tax increase? That would be a tax increase.” Mr. Orszag: “We’re not going to be — I think it’s premature to be commenting on individual items . . . There are lots of ideas that are being put on the table.” Translation: You betcha he’d sign it.

The tax exclusion is such a big revenue prize because Mr. Baucus is scrubbing every other tax nook and cranny and only coming up with rounding errors. A sampler:

- Impose an excise tax on hard alcohol, beer and some kinds of wine. That would be in addition to a sin tax on beverages sweetened with sugar or high-fructose corn syrup, such as soda. Mr. Baucus doesn’t offer revenue estimates, though the Congressional Budget Office says a $16 per proof gallon alcohol tax might raise $60 billion over 10 years, and another $50.4 billion at three cents per 12 ounces of sugary drink.

- End or limit the tax-exempt status of charitable hospitals, which only costs currently a mere $6 billion a year.

- Make college students in work-study programs subject to the payroll tax. Also targeted are medical residents, perhaps on the principle that they’ll one day be “rich” doctors. CBO has no score on these.

- Reducing Medicare reimbursement rates for supposedly “over valued physician services,” such as diagnostic imaging. CBO says that requiring doctors to get prior clearance could save $1 billion in 10 years.

- For individuals with high-deductible insurance plans, contributions to health savings accounts would no longer be tax deductible. That would penalize patients who choose plans that encourage them to be informed consumers. CBO says that banning HSA payments entirely would yield all of $10 billion.

By contrast, the employer-based exclusion offers a huge money pot — an estimated $226 billion in 2008. Yet as liberal MIT economist Jonathan Gruber recently told Mr. Baucus’s committee, “no health expert today would ever set up a health system with such an enormous tax subsidy to a particular form of insurance” (his emphasis). It creates a coverage gap between workers who receive it from their employers and those who pay — or can’t afford to pay — with after-tax money.

The tax exclusion is also one reason health costs continue to rise. It encourages workers to take an extra dollar of compensation in fringe benefits instead of cash while also routing low-deductible health spending through third parties. Some 84 cents of every medical dollar is spent by someone other than the patient. The insured have no incentives to make cost-conscious decisions about care.

So reforming the exclusion would inject a dose of discipline into American medicine. But for most Democrats the goal isn’t to create a more rational health-insurance market. They simply want the revenue for another government program. Mr. Baucus won’t target gold-plated employer insurance plans in general, because union-negotiated benefits are usually gold-plated. Rather, he may cap or phase out the exclusion by income, starting with workers earning more than $200,000. Insurance options that don’t conform to government diktats (health savings accounts) would also lose any tax advantage. This would do nothing for market efficiency, but it would be one more stealth tax increase.

Democrats owe an apology to Mr. McCain, and it’ll be fascinating to see if they will now suffer a political backlash of their own making. Having told the country that this tax reform is really a tax increase, Democrats are opening themselves to the same attacks they leveled against Republicans.

They could avoid that fate if they used the tax exclusion money to finance, say, a tax credit for the uninsured. That would be a genuinely bipartisan reform. But liberals won’t accept that because they want to take one giant step toward government-run health care. And the only way they can pay for it is by taxing everything in sight, including your current health insurance.

Career lawyers overruled on voting case

Justice Department political appointees overruled career lawyers and ended a civil complaint accusing three members of the New Black Panther Party for Self-Defense of wielding a nightstick and intimidating voters at a Philadelphia polling place last Election Day, according to documents and interviews.

The incident – which gained national attention when it was captured on videotape and distributed on YouTube – had prompted the government to sue the men, saying they violated the 1965 Voting Rights Act by scaring would-be voters with the weapon, racial slurs and military-style uniforms.

Career lawyers pursued the case for months, including obtaining an affidavit from a prominent 1960s civil rights activist who witnessed the confrontation and described it as “the most blatant form of voter intimidation” that he had seen, even during the voting rights crisis in Mississippi a half-century ago.

The lawyers also had ascertained that one of the three men had gained access to the polling place by securing a credential as a Democratic poll watcher, according to interviews and documents reviewed by The Washington Times.

The career Justice lawyers were on the verge of securing sanctions against the men earlier this month when their superiors ordered them to reverse course, according to interviews and documents. The court had already entered a default judgment against the men on April 20.

A Justice Department spokesman on Thursday confirmed that the agency had dropped the case, dismissing two of the men from the lawsuit with no penalty and winning an order against the third man that simply prohibits him from bringing a weapon to a polling place in future elections.

The department was “successful in obtaining an injunction that prohibits the defendant who brandished a weapon outside a Philadelphia polling place from doing so again,” spokesman Alejandro Miyar said. “Claims were dismissed against the other defendants based on a careful assessment of the facts and the law.”

Mr. Miyar declined to elaborate about any internal dispute between career and political officials, saying only that the department is “committed to the vigorous prosecution of those who intimidate, threaten or coerce anyone exercising his or her sacred right to vote.”

Court records reviewed by The Times show that career Justice lawyers were seeking a default judgment and penalties against the three men as recently as May 5, before abruptly ending their pursuit 10 days later.

People directly familiar with the case, who spoke only on the condition of anonymity because of fear of retribution, said career lawyers in two separate Justice offices had recommended proceeding to default judgment before political superiors overruled them.

Tensions between career lawyers and political appointees inside the Justice Department have been a sensitive matter since allegations surfaced during the Bush administration that higher-ups had ignored or reversed staff lawyers and that some U.S. attorneys had been removed or selected for political reasons.

During his January confirmation hearings, Attorney General Eric H. Holder Jr. said that during his lengthy Justice Department tenure, the career lawyers were “my teachers, my colleagues and my friends” and described them as the “backbone” of the department.

“If I am confirmed as attorney general, I will listen to them, respect them and make them proud of the vital goals we will pursue together,” he said.

Justice officials declined to say whether Mr. Holder or other senior Justice officials became involved in the case, saying they don’t discuss internal deliberations.

The civil suit filed Jan. 7 identified the three men as members of the Panthers and said they wore military-style uniforms, black berets, combat boots, battle-dress pants, black jackets with military-style insignias and were armed with “a dangerous weapon”and used racial slurs and insults to scare would-be voters and those there to assist them at the Philadelphia polling location on Nov. 4.

The complaint said the three men engaged in “coercion, threats and intimidation, … racial threats and insults, … menacing and intimidating gestures, … and movements directed at individuals who were present to vote.” It said that unless prohibited by court sanctions, they would “continued to violate … the Voting Rights Act by continuing to direct intimidation, threats and coercion at voters and potential voters, by again deploying uniformed and armed members at the entrance to polling locations in future elections, both in Philadelphia and throughout the country.”

To support its evidence, the government had secured an affidavit from Bartle Bull, a longtime civil rights activist and former aide to Sen. Robert F. Kennedy’s 1968 presidential campaign. Mr. Bull said in a sworn statement dated April 7 that he was serving in November as a credentialed poll watcher in Philadelphia when he saw the three uniformed Panthers confront and intimidate voters with a nightstick.

Inexplicably, the government did not enter the affidavit in the court case, according to the files.

“In my opinion, the men created an intimidating presence at the entrance to a poll,” he declared. “In all my experience in politics, in civil rights litigation and in my efforts in the 1960s to secure the right to vote in Mississippi … I have never encountered or heard of another instance in the United States where armed and uniformed men blocked the entrance to a polling location.”

Mr. Bull said the “clear purpose” of what the Panthers were doing was to “intimidate voters with whom they did not agree.” He also said he overheard one of the men tell a white poll watcher: “You are about to be ruled by the black man, cracker.”

He called their conduct an “outrageous affront to American democracy and the rights of voters to participate in an election without fear.” He said it was a “racially motivated effort to limit both poll watchers aiding voters, as well as voters with whom the men did not agree.”

The three men named in the complaint – New Black Panther Chairman Malik Zulu Shabazz, Minister King Samir Shabazz and Jerry Jackson – refused to appear in court to answer the accusations over a near-five month period, court records said.

Justice Department Voting Rights Section Attorney J. Christian Adams complained in one court filing about the defendants’ failure to appear or to file any pleadings in the case, arguing that Mr. Jackson was “not an infant, nor is he an incompetent person as he appears capable of managing his own affairs, nor is he in the military service of the United States.”

Court records show that as late as May 5, the Justice Department was still considering an order by U.S. District Judge Stewart Dalzell in Philadelphia to seek judgments, or sanctions, against the three Panthers because of their failure to appear.

But 10 days later, the department reversed itself and filed a notice of voluntary dismissal from the complaint for Malik Zulu Shabazz and Mr. Jackson.

That same day, the department asked for the default judgment against King Samir Shabazz, but limited the penalty to an order that he not display a “weapon within 100 feet of any open polling location on any election day in the city of Philadelphia” until Nov. 15, 2012.

Malik Zulu Shabazz is a Washington, D.C., resident.

Mr. Jackson was an elected member of Philadelphia’s 14th Ward Democratic Committee, and was credentialed to be at the polling place last Nov. 4 as an official Democratic Party polling observer, according to the Philadelphia City Commissioner’s Office.

Efforts to reach the Panthers were unsuccessful. A telephone number listed on the New Black Panthers Web site had been disconnected.

The complaint said that the three men were deployed at the entrance to a Philadelphia polling location wearing the uniform of the New Black Panther Party and that King Samir Shabazz repeatedly brandished a police-style nightstick with a contoured grip and wrist lanyard.

According to the complaint, Malik Zulu Shabazz, a Howard University Law School graduate, said the placement of King Samir Shabazz and Mr. Jackson in Philadelphia was part of a nationwide effort to deploy New Black Panther Party members at polling locations on Election Day.

The New Black Panther Party reportedly has 27 chapters operating across the United States, Britain, the Caribbean and Africa. Its Web page said it has become “a great witness to the validity of the works of the original Black Panther Party,” which was founded in 1966 in Oakland, Calif.

A New Enemies List?

From Investors Business Daily

Politics: The government’s bailout of Chrysler was key to saving a national icon too important to be lost. Or so we were told. But it’s looking more like a way to punish political opponents.

Earlier this month, Chrysler announced it was seeking permission from bankruptcy court to kill franchise agreements with 789 of its 3,181 dealers to save costs. Dealers, many of whom ran profitable businesses, told the media that the news was devastating.

Aside from the loss of a business, many of these franchisees may have something else in common: It looks like all the dealers who are losing their Chrysler franchises, with only a single exception found so far, have links to the Republican Party.

Chrysler, an American institution, is no longer being operated as a private-sector company. It’s being run by a task force appointed by the White House. So far, the government has halved Chrysler’s ad budget and forced it into a shotgun wedding with Italian carmaker Fiat.

Has it also directed the company to end its contracts with dealers who dared give contributions to the Republican Party and its candidates? The mainstream media seem less than curious. But the new media haven’t shied away from asking the question.

“Many of the closed dealers were also major donors to Republican candidates and political action committees, a review of campaign finance data from the Federal Election Commission shows,” Kenneth Timmerman wrote at NewsMax.com.

“How do we account for the fact millions of dollars were contributed to GOP candidates by Chrysler who are being closed by the government, but only one has been found so far that is being closed that contributed to the Obama campaign in 2008?” asked Examiner.com editorial page editor Mark Tapscott.

“The initial pass at the list of shuttered dealers showed they had donated, in the aggregate, millions to Republican candidates and PACs and a total of $200 to Barack Obama,” writes blogger Doug Ross.

WorldNetDaily reviewed all 789 of the dealerships the company wants to close. It found that “owners contributed at least $450,000 to Republican presidential candidates and the GOP, while only $7,970 was donated to Sen. Hillary Clinton’s campaign and $2,200 was given to Sen. John Edwards’ campaign. Obama received a combined total of only $450 in donations.”

Has our political class grown so petty that it would use the power of government to punish the political opposition? We hope this isn’t true. If it is, the country’s in more trouble than we thought.

The Need For Failure

From Forbes online

There has been constant chatter about the fact that our regulatory institutions don’t really know how to deal with firms that are deemed “too big to fail” but may be insolvent. Throughout 2008, policymakers improvised a solution for each case that came along–Bear Stearns, Fannie and Freddie, Lehman Brothers, AIG. But improvisation is not a policy, and the weakness of that approach has become increasingly apparent as we drag through 2009.

First, the very notion of “too big to fail” is dangerous. It suggests that there is an insurance policy that says, no matter how risky your behavior, we will make sure you stay in business. It encourages banks to get bigger (or more interconnected), and it subsidizes risky behavior.

Second, it leaves ambiguous the important issue of who gets protected in the event of insolvency–the equity holders, creditors, subordinated debt holders, etc. It seems fair to say that the solutions that have developed on the fly have done severe damage to the notion that there is a well-ordered capital structure that means something.

In recent weeks, two very independent voices have stepped forward to argue for the creation of mechanisms for taking over and shutting bank-holding companies and other large systemic institutions. Sheila Bair, chairman of the FDIC, has argued that the absence of an authority to shut failing systemic banks has cost the American taxpayers dearly because of the unprecedented government intervention in the financial sector.

Thomas Hoenig, president of the Federal Bank of Kansas City, has also been arguing a very similar position. In testimony before Congress and in several speeches, Hoenig has said that the notion of “too big to fail” should be eliminated from the public dialogue. If insolvent firms are not allowed to fail, it undermines the roll of markets in disciplining economic behavior.

The recent stress tests of 19 banks might have been expected to add some clarity to this issue if some banks were found to be too undercapitalized to continue to operate. Instead, the tests had just the opposite effect. The Treasury gave the banks that need more capital until June 9 to raise it. But it also signaled that, if required, it could provide more capital to those banks that cannot raise all that they need. In effect, it treated all 19 as “too big to fail.”

We find ourselves in this peculiar state of affairs because we are paralyzed by the very size and interconnectedness of the institutions that are insolvent or undercapitalized. Yet as Bair rightly pointed out, the FDIC has had lots of experience with the problem of resolving commercial banks that are in trouble. In the current year to date, 40 banks have failed in the U.S., and the process has been extremely orderly.

When an FDIC-insured bank or thrift is at risk of failing, the FDIC has a standard set of rules that are invoked. If a bank is approaching insolvency, the FDIC gives formal notification of its undercapitalized status and the need for a plan to address the issue. Typically, it is then very swift at assessing the bank’s health, organizing a sale, and helping the bank to close or re-open its doors under new ownership.

Sometimes, when there are more complicated issues, the FDIC operates a bridge bank for a period to keep essential services flowing. For instance, it has special resolution authority to prevent immediate close-out of an insured depository’s financial contracts. It has 24 hours after appointment as receiver to decide whether to transfer the contracts to another bank or to an FDIC-operated bridge bank.

Unfortunately, after more than a year of financial turmoil, there is still no resolution mechanism for bank holding companies. The lack of a resolution mechanism has required the government to improvise for each individual situation, making it very difficult to address systemic problems. What we need is a process that imposes losses on equity holders, unsecured creditors and others without triggering domino effects in the financial system. At the same time, the financial plumbing needs to keep working.

In my last column, I argued that a greatly empowered and more independent FDIC might be the best candidate to be the systemic risk regulator. It would be charged with measuring and pricing systemic risk and, most importantly, collecting insurance fees from those institutions that create it. It seems only natural to think that such an organization should also have the expanded responsibility to resolve and shut large systemic institutions.

One great advantage of having a well-articulated responsibility located in one institution like the “Super FDIC” is that it could have the authority to separate bad assets from good assets on an institution-by-institution basis rather than drag out that process with Rube Goldberg-like structures such as the Public-Private Investment Program–PPIP.

At the end of the day, the most important issue here is that we must demonstrate that we will not tolerate the continued existence of zombie banks dependent on taxpayer guarantees and handouts. Perhaps it was tolerable to use taxpayer money to prop up these institutions as an interim solution in the worst days of the crisis–but two years in it is not. We are bankrupting our children because we do not have the political will to address this challenge.

EDITORIAL: Song of Sonia

From the Washington Times

Justice is supposed to be blind, but some Democrats want everyone to focus on Sonia Sotomayor’s race and impoverished upbringing when considering her Supreme Court nomination.

New York Rep. Nydia Velazquez, chairman of the Congressional Hispanic Caucus, warned Tuesday that as Republicans look to make inroads with Latino votes, “they need to be very cautious and careful” in attacking the nominee.

Democrats haven’t always been so sensitive. Internal 2001 Democratic Senate Judiciary staff memos to current Senate Majority Whip Richard Durbin, Illinois Democrat, and Sen. Edward Kennedy, Massachusetts Democrat, used race as a justification for rejecting Miguel Estrada’s nomination by President Bush to serve on the D.C. Circuit Court of Appeals. According to the Democratic memos, Mr. Estrada was “dangerous” because of his “minimal paper trail, he is Latino and the White House seems to be grooming him for a Supreme Court appointment.”

Some of the most vocal opposition to Mr. Estrada’s nomination on Capitol Hill came from within the Congressional Hispanic Caucus. Sen. Robert Menendez, at the time a New Jersey congressman, argued that Mr. Estrada’s ethnicity was irrelevant to his daily work as a judge. But he noted critically that while Mr. Estrada “shares a surname” with Latinos, he had done little to help mentor young Latino lawyers.

Republicans aren’t above racial politics. In 2005, before the Senate approved Alberto Gonzales’ nomination to become the nation’s first Hispanic attorney general, Sen. Orrin Hatch, Utah Republican, warned that, “Every Hispanic in America is watching.” A few wrongs don’t make a right.

Judge Sotomayor’s judicial record and views of the law are what must be examined, not the color of her skin or where she grew up. With the first Hispanic woman positioned to serve on the Supreme Court, Liberal Democrats are diverting attention from Ms. Sotomayor’s troubling record by playing the race card.

America’s Hidden Trillion-Dollar Tax

From Investor’s Business Daily

We need a breather to take it all in: TARP, a $787 billion stimulus bill and a projected $1.845 trillion budget deficit. But lost among all the spending commotion is yet another trillion-dollar poker hand — federal regulation.

Compliance costs from thousands of regulations — pouring out from over 60 departments, agencies and commissions — amounted to $1.17 trillion in 2008. The federal government spends an additional $49.1 billion just to administer and enforce its rules. This figure is on par with federal income tax revenue ($1.2 trillion) and Canada’s entire 2006 GDP ($1.265 trillion).

How To Hide Trillions

When doing business becomes so expensive, there tends to be a lot less of it. Of course, businesses pass on their costs, so regulation becomes a hidden trillion-dollar tax on consumers. This is bad policy at any time.

During a recession, it’s economic hara-kiri.

The numbers are up as well as the costs. The 2008 Federal Register reached a record 79,435 pages, up 10% from the previous year.

Even as the economy dipped into recession, agencies issued 3,830 new final rules. As you read this, 4,004 new federal regulations fill the pipeline, 753 of which affect small businesses.

“Economically significant” is the bureau-speak description for rules costing at least $100 million per year. There are 180 of them in the 2008 Register, up 13% from 2007 — which was itself up 14% from 2006.

Anti-Stimulants

Some rule makers are more active than others. Out of 61 rule-making agencies, just five — the departments of Treasury, Agriculture, Commerce and Interior, and the Environmental Protection Agency — account for 46% of all rules in the pipeline.

This economy needs stimulus. Taxing and spending are anti-stimulants — and so is regulating. The administration’s fiscal “stimulus” amounts to taking money out of the economy and putting it back in. That is like ladling water out of the deep end of a pool only to pour it back in at the shallow end — all the while paying somebody to make the pointless transfer.

Worse, today’s deficits are tomorrow’s tax increases. And more spending is usually followed by more regulation. The Bush spending explosion was accompanied by more than 30,000 new regulations.

What the economy needs instead is a deregulatory stimulus. There are three fronts in the battle to achieve it.

The first is disclosure. The more that policymakers and the public know about over regulation, the more likely they are to do something about it.

To that end, our organization, the Competitive Enterprise Institute, issues the annual Ten Thousand Commandments report. Official Washington needs its own such report card. Each year’s federal budget, or the annual Economic Report of the President, should include in-depth chapters exploring the regulatory state.

The second front is installing sunset provisions. Like a carton of milk, every newly created regulation should have an expiration date, beyond which it gets discarded unless renewed by Congress. Obsolete rules should not be on the books at all.

The third front involves Congress reasserting its lawmaking authority.

Article I, Section 1 of the Constitution says, “All legislative powers herein granted shall be vested in a Congress.” Much of that power has been given away to federal agencies. Congress passed 285 laws last year, compared with 3,830 final rules from agencies. The alphabet soup of agencies should answer to Congress for the regulatory burdens they impose.

Congress Should Step Up

At the very least, Congress should take the time to review the most onerous rules. Overdelegation allows Congress to shift blame to the agencies for excessive or unpopular regulations.

But the people’s elected representatives should perform their rightful duty and approve all new laws, not just 285.

In this age of trillions, we cannot afford the regulatory state as it now stands. It is a hidden trillion-dollar tax on consumers, on top of what they already pay.

A deregulatory stimulus is in order, the sooner the better. In the game of government poker, perhaps it is time to fold.

Sen. Burris on tape offers aid to Ill. Governor

CHICAGO (AP) — Sen. Roland Burris promised to “personally do something” for Rod Blagojevich’s campaign fund while pressing for the then-Illinois governor to appoint him to President Barack Obama’s former Senate seat, according to a wiretap transcript released Tuesday.

“Tell Rod to keep me in mind for that seat, would ya?” Burris tells Robert Blagojevich, who headed his brother’s campaign fund, in a Nov. 13 phone conversation secretly taped by the FBI.

The remark came after Robert Blagojevich urged Burris to “keep me in mind and you know if you guys can just write checks that’d be fine, if we can’t find a way for you to tie in.”

“Okay, okay, well we, we, I, I will personally do something, okay,” Burris says.

Earlier in the conversation, Burris and Robert Blagojevich explored the possibility that Burris might raise campaign money on a larger scale.

“I know I could give him a check,” Burris said. “Myself.”

Burris attorney Timothy Wright said Tuesday that Burris never wrote any checks to the Blagojevich campaign following the conversation. Burris, a former Illinois attorney general, had donated to Blagojevich’s campaigns previously.

“These transcripts verify the accuracy of my previous public statements on this matter and demonstrate once and for all there was no ‘pay to play’ involved in my appointment to the United States Senate or perjury in my recounting of that process,” Burris said in a statement.

Burris repeatedly told Robert Blagojevich on the taped phone call that he wanted to help but added that major fundraising would have “so many negative connotations that Burris is trying to buy an appointment from the governor.”

The transcript was released after U.S. District Chief Judge James F. Holderman approved making it available to the U.S. Senate ethics committee for its preliminary investigation of Burris’s appointment.

The new senator has been under intense scrutiny since he was appointed by the now-ousted governor in December, and for changing his story multiple times about whether he promised anything in exchange for it. The ethics committee began a preliminary investigation into how Burris got his job, and the Sangamon County State’s Attorney was asked to determine whether perjury charges were warranted.

Burris opens the wiretapped conversation by telling Robert Blagojevich: “I know you’re calling telling me that you’re gonna make me king of the world.

“And therefore I can go off to, you know, wherever and do all these great things,” Burris adds. He says that he has “been trying to figure out what the heck, you know, I can do.”

“We’ve had a number of conversations about, you know, anything you might be able to do,” Robert Blagojevich says a moment later.

Burris says he is concerned about how fundraising on his part would be viewed if he got the Senate seat.

“And I’m trying to figure out how to deal with this and still be in the consideration for the appointment,” he says.

“I hear ya,” says Robert Blagojevich. “No, I hear ya.”

The then-governor was arrested Dec. 9 on charges of scheming to sell or trade the Senate seat Obama was vacating and using the political muscle of the governor’s office to squeeze people involved in state business for campaign contributions.

Blagojevich, ousted by lawmakers in January, and his brother have both pleaded not guilty in response to charges in the case as have four other members of the former governor’s inner circle.

Burris talks about taking part in a fundraising event that the Blagojevich campaign fund already has planned and says he is “wrestling with” what to do.

“I understand your concerns, ah, Roland,” Robert Blagojevich says.

“And God knows number one, I, I wanna help Rod,” Burris says. “Number two, I also wanna, you know hope I get a consideration to get that appointment.”

Neither Robert Blagojevich’s attorney, Michael Ettinger, nor Wright objected to the government’s motion to give the tapes to the Senate.

A spokesman for the U.S. attorney’s office, Randall Samborn, had no comment.

Indicted with both Blagojeviches were former campaign fund chairman Christopher G. Kelly, former chiefs of staff John Harris and Alonzo Monk and Springfield multimillionaire William Cellini.

All have pleaded not guilty, although Harris’s attorney says he is cooperating with federal prosecutors and Monk is believed to be as well.

Burris’ Senate appointment followed at least two phone conversations between Burris and Robert Blagojevich.

Burris told the Illinois House impeachment committee that he had promised nothing to Blagojevich in exchange for the seat but has changed his version of exactly what was said several times and questions have been raised about what happened.

U.S. Sen. Dick Durbin, D-Ill., and Senate Majority Leader Harry Reid, D-Nev., agreed to seat Burris if he gave a full accounting of his Blagojevich contacts to the Illinois House committee that considered impeachment of the governor.

Burris gave the committee an affidavit denying any discussion with Blagojevich’s aides before being offered the seat. But when he testified, Burris acknowledged talking to one of Blagojevich’s friends and informal advisers about it.

Burris did not admit talking to anyone else and said he could not recall any other contacts.

Then, after he was sworn in, Burris released another affidavit acknowledging that he had talked to several Blagojevich advisers about his interest in the seat. Soon after, talking to reporters, he said he had been asked to help raise campaign money for the governor and tried to find people willing to donate but failed.

Then he stopped answering questions, letting others speak on his behalf.

A Judge to Far

From the Washington Times:

With his nomination of Judge Sonia Sotomayor for the U.S. Supreme Court, President Obama has abandoned all pretense of being a post-partisan president. While he may like to think of himself as a thoughtful moderate soaring above the issues that divide America, his actions reveal what hides under that hopeful lining.

Presidents usually nominate judges that espouse their philosophy. So what does this nomination tell us about Mr. Obama’s true colors?

Even the liberal establishment worries that Judge Sotomayor tilts too far to the left. New Republic essayist Jeffrey Rosen reports that fellow liberals who have watched or worked with her closely “expressed questions about her temperament, her judicial craftsmanship, and… [they have said] she is ‘not that smart and kind of a bully on the bench.’ “

A suspiciously high number of her decisions have been overruled by higher courts. Wendy Long of the Judicial Confirmation Network said that record shows “she is far more of a liberal activist than even the current liberal activist Supreme Court.”

There will be much to say in days to come about Judge Sotomayor’s manifest lack of appropriate judicial restraint and about other problems in her record. For now, though, three red flags beg for attention.

Speaking at Duke University Law School in 2005, Judge Sotomayor said the “Court of Appeals is where policy is made.” On its face, the assertion runs counter to more than 200 years of American legal tradition holding that courts are merely meant to interpret existing law, not actively make policy choices.

Immediately realizing she was on thin ice, the judge continued: “. . . and I know this is on tape and I should never say that, because we don’t ‘make’ law.” To much laughter, and with facial and hand gestures to indicate that her next line was to be taken with humor as a useful fiction, she added: “I’m not promoting it and I’m not advocating it.”

But judicial activism is no joke. It undermines the Constitution and substitutes judicial whim for democratic decision-making. Unelected judges, answerable to no one but themselves and serving for life, can all too easily become dangerous oligarchs.

Judge Sotomayor seems to think that inherent racial and sexual differences are not simply quirks of genetics, but make some better than others. Consider her 2002 speech at the University of California-Berkeley School of Law.

“I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn’t lived that life,” she said. “I simply do not know exactly what that difference will be in my judging. But I accept there will be some based on my gender and my Latina heritage.”

She also accepted as potentially valid the idea that the “different perspectives” of “men and women of color” are due to “basic differences in logic in reasoning” due to “inherent physiological or cultural differences.”

If a white male had said these openly racialist words in a prepared speech, his chances of reaching the U.S. Supreme Court would be gone in an instant. Instead, it seems that these outlandish remarks are what qualified Judge Sotomayor in Mr. Obama’s eyes.

Judge Sotomayor seems to favor racial discrimination. Consider the case of Ricci v. DeStefano. In that controversial case, 19 white firemen were denied promotion because no blacks scored high enough on a race-neutral test to also be promoted. Judge Sotomayor ruled against the white firefighters.

If Mr. Obama wanted a judge with the right “empathy,” he struck out with Judge Sotomayor. One of the white firefighters denied promotion, Frank Ricci, is dyslexic. In order to ace the promotion exam, he quit a second job, spent $1,000 for instruction materials, and spent many hours reading those books into an audio tape to help him study. For his extraordinary efforts, he finished sixth out of 77 applicants for promotion – but then was denied, simply because he is white.

Second Circuit Court of Appeals Judge Jose Cabranes, appointed by a Democratic president, complained that the ruling written by Judge Sotomayor and two other judges “contains no reference whatsoever to the constitutional claims at the core of this case.”

The Supreme Court is expected to rule on Ricci v. DeStefano before the Senate votes on Judge Sotomayor’s nomination. It would be an extraordinary rebuke were a current nominee to be overruled on such a controversial case by the very justices she is slated to join.

Judge Sotomayor seems to be the most radical person ever nominated for the high court. To continue to command public respect, the Senate will have to ask her some hard questions. The simplest one to ask will be the hardest one for her to answer: Given her statements against whites and males, can she be fair to all Americans?

Obama ducks promise to delay bill signings

From the Washington Times

It seemed among the easiest of his transparency pledges and is entirely under his control, but President Obama is finagling his promise to post bills on the White House Web site for comment for five days before he signs them.

Mr. Obama last week signed four bills, each just a day or two after Congress passed and sent it over to him.

The White House said it posted links from its Web site to Congress’ legislative Web site about a week before Mr. Obama signed the measures, but transparency advocates say that doesn’t match the president’s pledge to give Americans time to comment on the final version he is about to sign.

“He didn’t say, ‘When there’s a bill heading to my desk,’ or ‘When we’re pretty sure a bill will soon be passed.’ He said when a bill ends up on his desk – a strong implication that public review would follow the bill arriving at his desk,” said Jim Harper, director of information policy studies at the Cato Institute.

During the campaign and again during the transition, Mr. Obama said opening bills up for public comment was a way of fighting back against special interests’ control of the process.

“When there’s a bill that ends up on my desk as president, you the public will have five days to look online and find out what’s in it before I sign it, so that you know what your government’s doing,” Mr. Obama said in a major campaign speech laying out his goals for transparency.

Mr. Harper said that to him, the pledge means putting a copy of the bill on www.whitehouse.gov and then waiting five days to allow comments to roll in.

“That’s the only interpretation of this promise that delivers solid transparency,” he said. “Posting a bill late in the process doesn’t give the public a chance to review the final legislation – especially last-minute amendments, which are where a lot of congressional hijinks happen.”

White House press secretary Robert Gibbs said the clock starts ticking when a link is posted to bills when they are in their final version, such as a conference report, even if they haven’t passed Congress.

“A conference report, as you know, is an unamendable piece of legislation that has to be approved by both houses, language has to be simultaneous, it gets sent down here, and we sign it,” he told reporters Friday.

But that was not the case for last week’s bills, at least some of which weren’t in their final form until a day or two before being sent to Mr. Obama.

In the case of a Defense Department weapons acquisition bill, the White House posted its link to the Library of Congress Web site, www.Thomas.gov, on May 14, even though the conference report wasn’t done until May 20. Congress passed that bill on May 21 and Mr. Obama signed it the next day.

On the Credit Cardholders Bill of Rights Act, the White House posted a link to Congress on May 14, but the Senate didn’t finish its work until May 19; the House agreed to the Senate’s version on May 20, and Mr. Obama signed it two days later.

Speaking on the condition of anonymity, a White House official said the link to Congress’ Web site allows readers to find every version of the bill and is more up-to-date.

“We link to Thomas pages that list the latest version, so once they were amended people could still read that latest version once it got posted, as opposed to us posting text that became outdated,” the official said.

The link the White House posts goes to a list of bills in various stages of the process. In the case of the military procurement measure, the White House listed two bills winding their way through Congress, because it couldn’t know which version would actually be presented.

Mr. Obama has exempted emergency bills from his promise and used that to justify his signing some major measures such as the stimulus spending bill before a full five days had elapsed. But there was no stated emergency for last week’s bills.

“They’re certainly not making it a priority to live up to the pledge,” said John Wonderlich, policy director at the Sunlight Foundation.

Sunlight is pressing for a waiting period for Congress, to prevent instances like last week, when House and Senate negotiators filed their final version of the weapons acquisition bill and put it to a vote in the Senate the same day. The House voted on it the next day.

Mr. Wonderlich said Congress is where the actual changes to a bill can happen. By the time it gets to the president, he can only sign or veto it. In light of that, Mr. Wonderlich said, some transparency advocates have questioned the value of Mr. Obama’s five-day pledge.

Mr. Harper, though, said the value will come if and when Mr. Obama enforces the rule.

“Members of Congress are very skilled political risk analyzers. When the president is enforcing this rule and they know their work is going to sit for five days before signing, they’re going to know they can’t slip in that last earmark,” he said.

He pointed to the language that allowed American International Group executives to claim bonuses as an example. That language was added in the conference committee between House and Senate negotiators, at the very end of the legislative process.

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Live Better, Don’t Work Union

From Investor’s Business Daily

Labor Policy: Card check legislation appears to be dead in Washington. Companies, shareholders and employees don’t know how narrowly they missed the financial trouble that comes with a union shop.

The card check bill, with the Orwellian title of Employee Free Choice Act, was an effort by Democrats to make it easier to unionize a company. It would have virtually killed the traditional process for forming a union: the secret ballot in which a majority of voters is needed to approve organization. Under card check, a union would be certified if a simple majority signed the cards used to measure workers’ interest in voting on unionization.

Card check would also authorize federal arbitrators to set the terms of an initial contract if the newly formed union and management can’t agree on a deal three months after certification.

Should the legislation fail to become law, both workers and owners should be thankful — workers because certifying a union through card check rather than a secret ballot invites intimidation and workplace tension, and businesses because of the risk of our now-pro-union government forcing unfavorable contracts on them.

A new report, moreover, has found another reason to breathe easier: Unionization hurts stock prices.

The National Bureau of Economic Research studied unionized public companies between 1961 and 1999, focusing on stock performance 24 months before their union votes to 24 months after.

It found the average loss per company was $40,500 in 1998 dollars for each worker eligible to vote. Equity values fall, the study concludes, for two reasons: (1) “A combination of a transfer to workers,” and (2) “lost profit due to inefficiencies caused by the union.”

The losses aren’t limited to firms with organized workers. Research indicates a doubling of unionization in the U.S. would “lead to a 4.3% decrease in the equity value of all firms at risk of unionization.”

In our era of class envy, some may say falling equity values aren’t a problem. But it’s not just the rich who are hurt. Retirees depend on their stock and mutual fund investments.

Average families — more than half of America has some type of equity investment — are in the market, both for retirement and present gains. Workers, many of them union members, have invested in the companies that employ them, as well as firms that are subject to the unionization effect identified by the NBER researchers.

Two weeks ago Vice President Joe Biden made the astonishing claim that “We can’t achieve a strong middle class without a strong labor movement.” Clearly, he isn’t paying attention. While it’s obvious that unions can help some, but not all, workers on an individual level, organized labor’s effect on the overall economy is negative.

• Unions play the role of protector of the working class, but the truth is they are a cartel that shuts potential workers out of jobs. A company that could use 500 workers at a lower nonunion wage instead employs only 400 when it has to pay a higher union wage.

• Unions cut into company profits because they demand — and receive — ever-higher wages and benefits. Multiple studies have found that profits at unionized companies are 10% to 15% lower than those at similar nonunionized companies. This goes on until union demands drive companies out of business. Chrysler and GM, both struggling for their corporate lives, are real-time examples.

• Platinum labor contracts inflate prices for goods and services produced by union shops. This pinches some consumers and causes others to go without. It also discourages investment in those companies and diminishes the value of workers’ retirement accounts.

Do these facts align with organized labor’s claim that greater unionization through the card check bill will boost middle-class prosperity? Here’s hoping that reports of the death of that legislation aren’t greatly exaggerated.