The Leaflet – Supreme Court Edition

Published March 29, 2012

In what has been one of the most anticipated cases in decades, the constitutionality of the Patient Protection and Affordable Care Act was argued before the Supreme Court of the United States earlier this week. In total, 26 states filed lawsuits against the federal health care law, and a ruling is expected in June.

After three days of oral arguments, the most significant decision will be whether the individual mandate provision is constitutional. Based on the lines of questioning from the Justices, many scholars cautiously believe that the individual mandate will be ruled unconstitutional. It is less certain whether the entire law will be struck down as well.

Regardless of the Court’s ruling, states will face big decisions regarding Medicaid and health insurance exchanges as a result. As Research Fellow Benjamin Domenech stated in response to oral arguments, “for states determining how to proceed, there is every reason to delay action and implementation now until the Court and the people resolve this matter in an opinion and an election over the coming months.”

To help you understand the arguments the Supreme Court has heard this week, The Heartland Institute offers its Research & Commentary: Supreme Court Series. Below you can find direct links to each part of the series as well as a summary of its contents.

This week’s edition of The Leaflet features research and commentary addressing repatriation, EPA rules, special-needs vouchers, cell phone shutdowns, and Texas budget solutions.


John Nothdurft
Director – Government Relations
The Heartland Institute



Lead Story

Research & Commentary: Supreme Court Series
Health Care

The Obamacare Individual Mandate
Health Care Legislative Specialist Kendall Antekeier explains the federal government’s argument that the individual mandate falls within the Commerce Clause. Additionally, Antekeier explains the stance of the 26 states: “Although the Commerce Clause grants the federal government authority to regulate commerce, it does not confer the authority to require citizens to partake in commerce.” She also cites a recent Gallup poll that shows 72 percent of the public believe the individual mandate is unconstitutional, including 54 percent of those who otherwise approve of the law.

Severability and Obamacare
In this Research & Commentary, Research Fellow Benjamin Domenech outlines the arguments over severability and concludes that a ruling to throw out PPACA entirely is unlikely. Domenech writes: “Our research suggests the case against the individual mandate, if successful, will probably not result in the entire law being declared unconstitutional. A decision against the individual mandate, however, is likely to gut the new regime, rendering it unworkable in many key aspects. Congress would then be compelled to address the issue of health reform again.”

The Expansion of Medicaid
Antekeier discusses the 26-state argument that the federally proposed Medicaid expansion is coercive and an infringement upon state sovereignty. She also details the federal claim that the expansion is within its authority and unlikely to cause major consequences for states. Antekeier maintains states will experience costs due to the expansion: “Because all individuals will be required to purchase health insurance, those who are currently eligible for Medicaid but not enrolled will be forced to join to receive coverage. The cost for these individuals will not be covered by the federal government and will have to be covered by the states … states will experience significant cost increases for a Medicaid system that has already proven financially unsustainable.”


What We’re Working On  

Research & Commentary: Repatriation of Foreign Earnings
Finance, Insurance and Real Estate

To avoid high U.S. corporate tax rates, U.S.-based companies operating internationally have kept their foreign earnings in subsidiaries overseas rather than bringing them back to the United States. They do this because U.S. marginal tax rates are, by some measures, the highest in the developed world. Some financial experts say the high cost of repatriating foreign earnings has led to billions of dollars in capital becoming “frozen” in the financial systems of more tax-friendly countries. In this Commentary, Legislative Specialist Matthew Glans examines the repatriation of foreign earnings and corporate income taxes.

In his 2012 State of the Union Address, President Barack Obama proposed creating a “minimum tax” on foreign earnings of U.S. multinationals in order to prevent this. Critics of the president’s proposal say accusing U.S. companies of stowing money abroad to “avoid paying taxes” is disingenuous.

Members of Congress from both parties recently called for a “tax holiday” on repatriated earnings, similar to one implemented in 2004. Such a tax holiday would be only a temporary first step in a needed overhaul of U.S. corporate tax policy. The long-term solution is to reduce the corporate tax rate permanently to a level competitive with other nations while switching to a territorial tax system that exempts most foreign profits from U.S. taxes


Heartland Institute Responds to EPA Emissions Rule
Environment & Climate

Lisa Jackson, administrator of the U.S. Environmental Protection Agency, announced this week that the agency will tighten restrictions on greenhouse gas emissions from new power plants, a move opponents say could essentially ban the construction of new conventional coal-fired power plants. The Heartland Institute’s environment experts weigh in on the costs of such regulation.

Research & Commentary: Special-Needs Vouchers

Seven states currently offer special-needs students the opportunity to take their public funds to a private school, and at least 10 more states are currently considering similar legislation.

The expense and extent of education services targeted at students diagnosed as disabled or with a learning disability such as dyslexia or ADHD has increased markedly in the past 50 years, since the federal government began dedicating funding for such students. Schools have strong financial incentives to diagnose students as special needs, because the school receives more money. Parents of special-needs children also litigate for more money for these services.

Some special-needs advocates say the answer is more money and more programs. The research on many disorders such as autism is still wide open, so much more experimenting remains to be done to determine the best ways to educate students with these disorders. Many families have different opinions about what kind of education is best for their special-needs child.


Real Texas Budget Solutions: 2013 and Beyond
Budget & Tax

Texans must rethink how we fund and operate Texas state and local governments in order to reduce dependence on the government, foster economic growth, and deliver improved, streamlined services to Texans. In other words, Texas government must learn to live within its means so that all Texans will continue to enjoy the nation’s top job-producing economy.

The following reforms will guide us down this path, providing away to prosperity for all Texas families by decreasing state overspending by $1.1 billion in 2012-13 and $8.3 billion in 2014-15and reducing the future spending growth.

Public Comments Sought on BART Cell-Phone Shutdown

The Federal Communications Commission is seeking public comment on when it is appropriate for a local government to shut down mobile networks without notice, after San Francisco officials interrupted wireless services last August.

The FCC promised a probe in December after San Francisco’s Bay Area Rapid Transit system blocked cellular service for commuters in anticipation of a rumored riot. BART claimed protestors would coordinate a riot through the use of cell phones as was done in the London riots last spring. The San Francisco protests were in response to the fatal shooting of a BART passenger by the transit system’s police in July 2011.



Legislative Forum

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Heartland’s Emerging Issues Call

Topic: Parent Trigger
Wednesday, April 4, 2012 at 1:00 pm EST

Phone number: 218/936-6581
Pin: 37661

RSVP by emailing Robin Knox at [email protected]


Heartland’s Author Series: John Stossel
Sunday, April 15, 2012 

5:30pm CST

Union League Club

65 West Jackson, Chicago, IL


Save the date!!
Heartland’s Emerging Issues Forum
Thursday, August 9, 2012
Chicago, IL
Travel scholarships for elected officials are available

For more imformation contact John Nothdurft at [email protected]



Policy Newspaper 


The March issue of FIRE (Finance, Insurance, and Real Estate) Policy News reports on Louisiana’s unusually expensive automobile insurance rates, symptomatic, author Kevin Mooney writes, “of public policy favored by trial lawyers that typically results in anti-business settlements.”



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