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Behind Supreme Court's Obamacare Case, A Secretive Society's Hidden Hand
The Federalist Society has for decades worked behind the scenes to shape Supreme Court outcomes to a conservative agenda. In King v. Burwell, its influence could eliminate health insurance subsidies for millions
 
The Supreme Court has no shortage of potentially precedent-shattering cases on its docket this term. But the one the justices are hearing tomorrow, King v. Burwell, could be the most consequential.
 
King focuses on the issue of whether low-income people who get insurance under the Affordable Care Act’s federal exchanges are entitled to tax subsidies. Much has been said (and written) about what could happen if the justices rule “no”: Millions of people in as many as 37 states could lose their health coverage. The political earthquake could be cataclysmic.
 
Yet, few reports have highlighted the role of the Federalist Society, the conservative law group whose ideas are at the intellectual heart of the King v. Burwell challenge. That’s not surprising, given that the group’s members have played a mostly behind-the-scenes part in King — and in many of the most significant conservative legal victories of the last 30 years.
 
In a new book, “Ideas with Consequences: The Federalist Society and the Conservative Counterrevolution,” Pomona College political scientist Amanda Hollis-Brusky channels her inner investigative journalist to trace the group’s influence on the courts, and especially, the Supreme Court.
 
Note: This interview has been edited for clarity and length.
 
Q. What is the Federalist Society? What did it grow out of? 
A. The Federalist Society was founded in 1982 by a small group of conservative and libertarian law students at Yale and the University of Chicago. Many of the founders had worked on the Reagan presidential campaign, and when they arrived in their elite law schools, they noticed a profound mismatch between the ideas that were achieving political ascendancy — about limited government and free markets and states’ rights — and a liberal orthodoxy that was embedded in almost all major legal institutions of the time. 
 
Flash forward 30 years: The Federalist Society has matured into a self-professed “society of ideas” that claims 40,000 to 60,000 members. These include every Republican-appointed attorney general and solicitor general since the 1980s, dozens of federal judges, and four sitting U.S. Supreme Court justices: Antonin Scalia, who was one of the organization’s original mentors at the University of Chicago; Clarence Thomas, Samuel Alito and John Roberts. 
 
Q. How does it operate?
A. The Federalist Society doesn’t exhibit its power in a way that is easily recognizable. It doesn’t bring court cases, or lobby, or publish position papers, or officially endorse political or judicial candidates. Instead, it trains and socializes its members through thousands of events every year. It promotes collaboration. Members are encouraged to draw on their training and networks as they go about their work as judges, policy makers, litigators and academics. In this way, the Federalist Society’s influence is one step removed from the policy process. Yet that influence is profound. 
 
Q. The Federalist Society doesn’t even make public its membership rosters. How did you trace its impact on policy and the courts?
A. I used speaker agendas from Federalist Society national student conferences and lawyer conferences from 1982 to 2012 to construct a database of everyone who’s ever participated in one of these meetings: 1,190 individuals in all. These are the thought leaders — the Mick Jaggers of the movement. If you are invited to speak at a national conference, it signals true believership. 
 
Then I tracked their movements: What Supreme Court cases were they participating in? Were they consistently promoting a certain kind of scholarship or set of beliefs? 
 
I identified the key areas of law that have taken a significant conservative turn over the past 30 years. And by reviewing transcripts from meetings and conferences, I was able to show how those ideas were gestated within the Federalist Society network for decades before being accepted by the Supreme Court.
 
Q. What kind of ideas? 
A. The organization’s statement of principles provides a useful frame. The first part says: We believe the state exists to preserve freedom. Two key areas where this principle has played out are the Second Amendment — there has been a radical reframing of the right to bear arms as a right on par with speech and religious freedom — and campaign finance, culminating in Citizens United and the idea that corporations and individuals both have free speech rights.
 
A second Federalist principle holds that the separation of governmental powers is central to the Constitution. There’s been a very, very concerted effort to narrow the federal power over interstate commerce, to restrict the ability of Congress to regulate, and to dramatically expand states’ rights.
 
The third principle is the idea that it is the role of the judicial branch to say what the law is and not what it ought to be. That is the key issue in King v. Burwell.
 
Q. Let’s talk about the Supreme Court’s first Obamacare decision in 2012. Conservatives greeted that ruling with shock, outrage, disappointment. They lost — the Affordable Care Act (ACA) was upheld. But in your view, that ruling was actually an important Federalist Society victory. Why?
A. For one thing, they won on the Medicaid expansion issue. Conservatives and libertarians had fought that expansion, arguing that it was a coercive policy that infringed on states’ rights. The proposed expansion was a keystone of the ACA, so that part of the ruling was a huge blow to health care reform. 
 
The Federalist Society also prevailed on the issue of the constitution’s Commerce Clause. Congress had argued that the Commerce Clause gave it the power to regulate health care, but a majority of the justices disagreed. That precedent has further contributed to the narrowing of the federal commerce powers. 
 
It’s true, Chief Justice Roberts found a way to salvage the ACA’s individual mandate based on the power of Congress to impose taxes. That made many conservatives very unhappy. But the Federalist Society didn’t just get half a loaf, it got 80 percent of the loaf. 
 
Q. King v. Burwell is avery different type of case. How does the issue at the center of it reflect Federalist Society thinking?
A. Unlike the 2012 challenge to the ACA, King v. Burwell is not a constitutional case. It’s a statutory case. At issue is whether people in states with federally facilitated health insurance exchanges are entitled to receive the tax benefits that make insurance affordable. The parties in this case are asking the Supreme Court to interpret just five words: what is meant by an “exchange established by the State.” 
 
There are two very different ways to look at the issue of statutory interpretation. For many years, the dominant view was: If the meaning of that language is not immediately apparent, judges should look to legislative history – what was Congress’s intent when they wrote those words? In the case of Obamacare, the legislative intent is pretty clear: Congress’s aim was to provide tax benefits to lower income Americans to help underwrite the cost of insurance. 
 
But since the 1980s, there’s been a quiet revolution in statutory interpretation by the courts. Instead of taking into consideration legislative history and intent, there’s been a shift to just looking at the plain meaning of the text and ignoring everything else because supposedly things like legislative history are too subjective. This revolution began with a core group of Federalist Society members centered in the Reagan Justice Department. Justice Scalia has been a major proponent. 
 
If the plaintiffs in King v. Burwell prevail, the Federalist Society will have two victories. The obvious one is that Obamacare will suffer another major setback. The other will be to more firmly entrench this idea of statutory interpretation – we shouldn’t look at legislative history; we shouldn’t look at consequences; we should just look at the plain meaning of the words, and our inquiry ends there. The Supreme Court majority’s approach could well be: The ACA says what it says — let Congress fix it. But they know full well that this Congress will not pass that fix.
 
Q. This idea of ignoring Congressional intent, and just reading the plain text of a statute, comes up in another important Supreme Court case this year, Young v. UPS, which focuses on pregnancy discrimination in the workplace. How has Federalist Society thinking shaped the Supreme Court’s rulings on sex discrimination?
A. Young v. UPS is another case of statutory interpretation — in this instance, the question centers on the Pregnancy Discrimination Act of 1978. The Act prohibits employers from treating pregnant women differently from other employees who are “similar in their ability, or inability, to work.” But what does that mean? Women’s rights advocates say it’s obvious: Pregnant women must not be discriminated against in the workplace. But many employers said it means that pregnant women can’t be treated any differently than “similarly situated” male employees — otherwise women are getting preferential treatment. Never mind that men can’t be similarly situated because men can’t get pregnant. 
 
One of the ways the Federalist Society has been effective is in changing the debate. Twenty or 30 years ago, if you were going to hear oral arguments in a case about the Pregnancy Discrimination Act, much of the discussion would have focused on statutory intent — the fact that the entire purpose of this Act, regardless of how the language is phrased, was to prevent discrimination on account of pregnancy. That is virtually not talked about now. 
 
In the Young oral arguments last December, almost the entire focus was on the meaning of “similarly situated” and “similar in their ability or inability to work.” There was a lot of discussion about semicolons. And when you limit the conversation in this way, the effect almost always is to limit protections, to restrict rights. 
 
Q. There’s another huge discrimination case before the Supreme Court this term, involving the Fair Housing Act (Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc.) Does the Federalist Society’s approach to sex discrimination extend to race?
A. There’s a trope you hear over and over in the Federalist Society network: the idea of the “color-blind Constitution.” The implication is, to treat people equally, you treat them the same and it will all shake out in the end. The government shouldn’t try to equalize resources or equalize opportunity — that’s not its role. As long as discrimination isn’t intentional, it doesn’t matter whether a law or policy has a disparate impact on minorities.
 
But there’s another way of understanding equality, which is that if you want to treat some people equally, you have to treat some people — like pregnant women, or certain homeowners, or black voters in historically segregated states — differently. That is a line of thinking that Federalist Society members have absolutely rejected. 
 
As we’ve seen, this Supreme Court has been pretty opposed to race-conscious remedies. It has seemed pretty bent on limiting, if not declaring unconstitutional altogether, affirmative action policies. In the Shelby v. Holder voting rights decision from a couple of years ago, it repudiated the idea that certain states should have to appeal to the federal government or courts before they make changes to their electoral voting procedures. That case, of course, also touched on another issue important to the Federalist Society network, states’ rights. 
 
Q. I’ve been reading a lot about the pressures on Roberts in King v. Burwell
A. Yes, there is a very active campaign, mostly by the left, to remind Chief Justice Roberts that the integrity of the Supreme Court as an institution is once again at stake and to argue that there are alternative paths he could take to uphold this provision of the ACA and still keep his conservative credentials. On the right, there’s been very quiet and subtle but potentially very effective counter-pressure. People say, we’re not worried about losing any of the conservatives on this, Roberts will follow the rule of law. 
 
One important function of the Federalist Society has been to provide a counterweight to the so-called liberal media. There was a very conscious effort to build a counter-elite to counteract this effect. 
 
Q. What do you think the outcome of King v. Burwell will be?
A. Because of this 30-year revolution in statutory interpretation, the justices have a shield. My sense is that conservatives have enough cover that if five of them want to strike down the law, they will. 
 
Q. But unlike in 2012, the ACA has already gone into effect. Millions of people would have their subsidies and their health coverage taken away. The real-world consequences would be very different.
A. Yeah, but you’d have to believe that the justices are in touch enough with real people to believe that they’re going to take that into consideration. 
 
Anthony Kennedy has demonstrated enough antipathy to the ACA that you would not normally count on him to be the one to save it. But he is the one who, in the marriage equality cases, for example, would bring up the fact that there are children who want their parents to be able to get married. So there are times that he will actually look outside the court and try to work in the real-world impact of potential decisions. 
 
I don’t know if this is one such case. I don’t know how bent he is on disposing of Obamacare at any cost. But who knows — maybe he’ll be the John Roberts of King v. Burwell.
 
Related stories: Read Nina Martin's story about how Alabama Judge Tom Parker and the personhood movement are shaping the abortion rights debate.
 
Courtesy: ProPublica.org

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RBI cuts repo rate by 25 bps to 7.5%

While cutting the repo rate at which RBI lends money to banks by 25 basis points, the central bank said steps the government takes on food management will be critical in determining the inflation outlook 

 

The Reserve Bank of India (RBI) on Wednesday cut repo rate (the rate at which the RBI lends money to banks) by 25 basis points to 7.50% from 7.75% with immediate effect. At the same time, the central bank has kept cash reserve ratio (CRR) unchanged at 4%.
 
Dr Raghuram Rajan, governor, RBI, in a statement said, "The need to act outside the policy review cycle is prompted by two factors. First, while the next bi-monthly policy statement will be issued on 7 April 2015 the still weak state of certain sectors of the economy as well as the global trend towards easing suggests that any policy action should be anticipatory once sufficient data support the policy stance. Second, with the release of the agreement on the monetary policy framework, it is appropriate for the Reserve Bank to offer guidance on how it will implement the mandate."
 
"Going forward, the RBI will seek to bring the inflation rate to the mid-point of the band of 4 +/- 2% provided for in the agreement, i.e., to 4% by the end of a two year period starting fiscal year 2016-17," Dr Rajan said in a statement.
 
Commenting on the rate cut, Arundhati Bhattacharya, Chairman, State Bank of India (SBI), the country's largest lender, said, "We welcome the repo rate cut by RBI. With the Government embarking on a path of qualitative fiscal consolidation and the formal adoption of inflation targeting,   inflation trajectory is expected to stay benign and will aid banks in their decision making. Our bank will take an appropriate call of a cut in base rate by looking at all evolving circumstances."  
 
The new CPI rebased to 2012 was released on 12 February 2015. Inflation in January 2015 at 5.1% as measured by the new index was well within the target of 8% for January 2015. Prices of vegetables declined and, hearteningly, inflation excluding food and fuel moderated in a broad-based manner to a new low. Thus, disinflation is evolving along the path set out by the Reserve Bank in January 2014 and, in fact, at a faster pace than earlier envisaged.
 
"The uncertainties surrounding any inflation projection are, however, not insignificant. Oil prices have firmed up in recent weeks, and significant further strengthening, perhaps as a result of unanticipated geo-political events, will alter the inflation outlook. Food prices will be affected by the seasonal upturn that typically occurs ahead of the south-west monsoon and, therefore, steps the government takes on food management will be critical in determining the inflation outlook," the central bank said. 
 
Dr Rajan said, "Softer readings on inflation are expected to come in through the first half of 2015-16 before firming up to below 6 per cent in the second half. The fiscal consolidation programme, while delayed, may compensate in quality, especially if state governments are cooperative. Given low capacity utilisation and still-weak indicators of production and credit off-take, it is appropriate for the Reserve Bank to be pre-emptive in its policy action to utilise available space for monetary accommodation." 
  
The reverse repo rate under the liquidity adjustment facility (LAF) will be changed to 6.50%, and the marginal standing facility (MSF) rate and the bank rate at 8.50% with immediate effect.
 
Repo Rate.......................7.50%
Reverse Repo Rate........6.50%
CRR................................4%
Bank Rate.......................8.50%
 

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Nifty, Bank Nifty still in uptrend – Tuesday closing report

Uptrend will stall, if Nifty closes below 8,910 and Bank Nifty below 19,610

 

We mentioned in Monday’s closing report that the NSE’s CNX Nifty and Bank Nifty would remain in an uptrend but may weaken if they close below 8,860 and 19,500 respectively. Nifty opened Tuesday marginally higher and soon moved lower to hit the day’s low. Until the beginning of the noon session, the 50-share index was moving with no specific direction. At around 12.08pm, the benchmark gained strength and moved higher and closed near the day’s high.
 
The S&P BSE Sensex opened at 29,500 while Nifty opened at 8,963. Sensex hit a low at 29,365 while Nifty hit a low at 8,926. Sensex reached upto 29,637 and closed at 29,594 (up 135 points or 0.46%) while Nifty reached to the level of 9,008 and closed at 8,996 (up 40 points or 0.44%). Except for the few minutes of trading in the green, Bank Nifty traded in the negative for the entire session. It opened at 20,043 which was also the day’s high. It moved lower to the level of 19,822 and closed 19,961 (down 47 points or 0.23%). NSE recorded a volume of 103.19 crore shares.  India VIX fell 2.24% to close at 15.4925.
 
The index of Eight Core Infrastructure Industries rose at a moderate pace of 1.8% January 2015, compared with 2.4% growth recorded in December 2014, data showed yesterday. Meanwhile, the cumulative growth stood at 4.1% in April-January 2014-15.
 
A Committee set up by Reserve Bank of India (RBI) has suggested a sub-target of 8% of adjusted net bank credit (ANBC) for small and marginal farmers to be achieved in a phased manner. This is while retaining the target of 18% of ANBC for agriculture credit, and overall target of 40% of ANBC or Credit Equivalent of Off-Balance Sheet Exposure (CEOBE), whichever is higher, for priority sector lending.
 
Finance Minister Arun Jaitley reportedly said that India's economy needs to reach an annual growth rate of 9% to 10%, and then sustain that activity for many years in order to improve infrastructure and bring down rampant poverty.
 
BSE has revised its annual listing fees for companies listed on its platform for the next fiscal beginning 1st April. The companies with a listed capital of Rs1,000 crore or more would have to pay Rs8.06 lakh as annual listing fees from 2015-16, as against an Rs8.07 lakh charged in current fiscal. These companies would also have to pay Rs3,469 additional listing fees for every increase of Rs5 crore. This is lower than Rs3,515 currently charged.
 
Sugar output in India, the world's second largest producer, rose by 14% to 19.4 million tonnes in the first five months of the current marketing year ending September, according to industry data.
 
The RBI has refused to share its banks' inspection reports on alleged money laundering laws and other violations with Central Economic Intelligence Bureau (CEIB), citing legal hurdles.
 
Coming back to the stock markets, Tata Elxsi (20%) was the top gainer in ‘A’ group on the BSE. The stock hit its 52-week high today.
 
State-run Coal India (3.89%) was the top loser in ‘A’ group on the BSE also in the Sensex 30 stock. In response to the clarification sought by BSE it stated that its board at its meeting held on 27 February 2015 considered project report on East Rail Corridor Railways Project for construction of Rail Line at Chhattisgarh State and accorded its approval to first year expenditure.
 
Reliance Industries (4.39%) was the top gainer in the Sensex 30 pack. LIC has raised its stake in RIL to 9.084% from 6.987% through acquisition of additional shares via open market purchases.
 
On Monday, US indices closed in the green. Outlays for US construction projects declined 1.1% in January to a seasonally adjusted annual rate $971.4 billion, led by public spending, the US Commerce Department said yesterday.
 
Asian indices showed mixed performance. Straits Times (0.54%) was the top gainer, while Shanghai Composite (2.20%) was the top loser.
 
The Reserve Bank of Australia today left the official cash rate on hold at 2.25%.
 
European indices were trading in the red. US Futures too were trading lower.
 
Data from German Federal Statistical Office (Destatis) today showed retail sales in January rose 5.3%, up from the December's upwardly revised 4.8% rise. Month-on-month, the retail sales printed at 2.9%, higher from the December's upwardly revised 0.6%.
 

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