Jim Kouri
Fighting Obamacare: States plan to sue federal government
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By Jim Kouri
March 23, 2010

"Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience." — C. S. Lewis (1898–1963)

Many believe the Democrat victory celebration over passing Obamacare will be short-lived. Within hours of passing a historic health care bill, Democrats may face legal action by attorneys general in a number of U.S. states.

Several top law enforcement officials have indicated they plan to file lawsuits that will challenge the health care system overhaul. Of particular interest is the provision that forces American citizens to purchase health care insurance under penalty of fines or imprisonment.

On Tuesday, President Barack Obama will sign landmark health-care legislation into law amid the celebratory tone of Democrats and their many news media cheerleaders. This will occur despite the fact that poll after poll shows a majority of Americans want no part of Obamacare and officials from many states frown on the plan to saddle their governments with more federal mandates,

For example, Florida's Attorney General Bill McCollum states that he is joining several state attorneys general to legally challenge the constitutionality of the Obamacare bill, which passed Sunday evening along party lines 219 to 212. Not one Republican voted for the bill.

McCollum, who is planning a run for governor of Florida, is expected to hold a press conference on Monday to discuss his lawsuit and the provisions he believes are unconstitutional.

McCollum claims the bill is unconstitutional because it forces people to have health insurance. He said the bill also violates states' sovereignty.

In addition to Florida, South Carolina, Nebraska, Texas, Utah, Pennsylvania, Washington, North Dakota and South Dakota are expected to join Florida or sue independently to repeal the health care law.

Some of the officials from various states who oppose the Obamacare law are Democrats who believe the new law is full of unfunded mandates that will hurt state governments and residents.

"It's ridiculous to think that the answer to having people who cannot afford health insurance is to pass a law ordering them to purchase policies they can't afford under penalty of $750 fines," said attorney and political strategist Mike Baker.

"I don't believe U.S. Supreme Court judges will allow citizens to be punished because they a poor and can't afford health insurance," he said.

While the Democrats and their media echo chamber characterize Sunday's vote as a historic victory in a long-running battle to reform the nation's $2.5 trillion health-care system, conservatives and some liberals view the passage of Obamacare as another government intrusion into the lives of Americans and the private sector.

IRS TO ENFORCE OBAMACARE

The Internal Revenue Service (IRS) will see its largest expansion since withholding taxes were first enacted during WWII to enforce the glut of new tax mandates and penalties included in the Democrats' latest health care plan, according to Rep. Kevin Brady (R-TX).

A new analysis by the Joint Economic Committee and the House Ways & Means Committee minority staff estimates up to 16,500 new IRS personnel will be needed to collect, examine and audit new tax information mandated on families and small businesses in the 'reconciliation' bill being taken up by the U.S. House of Representatives this weekend, according to Brady.

"When most people think of health care reform they think of more doctors exams, not more IRS exams," says U.S. Congressman Kevin Brady, the top House Republican on the Joint Economic Committee. "Isn't the federal government already intruding enough into our lives? We need thousands of new doctors and nurses in America, not thousands more IRS agents."

Scores of new federal mandates and fifteen different tax increases totaling $400 billion are imposed under the Democratic House bill. In addition to more complicated tax returns, families and small businesses will be forced to reveal further tax information to the IRS, provide proof of 'government approved' health care and submit detailed sales information to comply with new excise taxes.

Scores of new federal mandates and fifteen different tax increases totaling $400 billion are imposed under the Democratic House bill. In addition to more complicated tax returns, families and small businesses will be forced to reveal further tax information to the IRS, provide proof of 'government approved' health care and submit detailed sales information to comply with new excise taxes.

Unfortunately, according to the Center for American Progress, the structure of the IRS' use of private agencies to collect "debts" encourages abuse. Under the current program, collectors are awarded as much as 25 cents of every dollar they collect, in addition to a $100 bonus for every account they close.

The Internal Revenue Service strategy of paying private debt collectors a 25 percent commission to collect unpaid tax debt originally met with bipartisan resistance from Congress. They claimed that the proposal jeopardized the rights and privacy of American taxpayers. Several organizations voiced their objections to the IRS proposal and have expressed their strong support for the consumer protection legislation Rep. Chris Van Hollen introduced: Citizens for Tax Justice, Consumer Federation of America, Consumers Union, National Consumer Law Center, National Consumers League.

The very nature of the program provides incentives for collectors to push the limits of legality to extract a little more revenue from their targets. As part of the IRS Restructuring and Reform Act of 1998, Congress, fearing overly aggressive collection practices, explicitly prohibited the IRS from compensating its own collectors based on the amount of money they collect. If Congress believes that incentive-based pay will cause official IRS collectors to cross the line, why would they think private collectors would behave any differently?

Although IRS officials indicated that the purpose of the limited implementation phase was to assure readiness for full implementation using up to 12 private collection agencies, the IRS has not documented how it will identify and use the lessons learned to ensure that each critical success factor is addressed before expanding the program even further during the current atmosphere of extraordinary government spending.

Because program's success will be affected by how well IRS makes adjustments, assessing the lessons learned in limited implementation is critical. Also, IRS has not documented criteria that it will use to determine whether the limited implementation performance warrants program expansion.

IRS officials indicated that they are considering criteria that could trigger a go/no go decision, such as the amount of penalties collected from Americans unwilling or unable to purchase health care insurance and there are some indications of PCAs abusing taxpayers or misusing taxpayer data.

Paying private debt collectors on a commission basis is costly and threatens the rights and privacy of the American taxpayers. Congress must ensure, as this resolution seeks to do, that federal tax collection functions will not be handed over to private sector bounty hunters.

Critics of the private collection agency program say that, compared with private debt collectors, whose bad apples star in countless horror stories of debtor abuse and intimidation, the IRS's customer-service-based approach may start looking pretty good to taxpayers.

A recent Center for American Progress report noted that "19% of all complaints received by the Federal Trade Commission (FTC) in 2005 were related to debt collectors, up from 10.5% in 1999. The FTC received more complaints about debt collection in 2005 than about any other industry — 66,627, a 560% increase over the last six years." The report's writers claim this will likely occur with private agencies working on behalf of the IRS.

IRS officials say they will have a little more than a half year to identify the lessons learned before incorporating them into the next contract solicitation, which IRS intends to release in March 2007.

© Jim Kouri

 

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Jim Kouri

Jim Kouri, CPP is currently fifth vice-president of the National Association of Chiefs of Police... (more)

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