Day One: Kneecapping the Affordable Care Act

On his first full day in the White House, Donald Trump signed an executive order that effectively told all federal agencies to be lax on enforcing provisions of the Affordable Care Act, colloquially known as ObamaCare. That could lead to expanded waivers as tax time nears, reducing the number of people required to pay penalties for not buying insurance. It could mean the health department tipping off insurers that it won’t object to lessening coverage provisions in their policies to reduce costs. By law, those waivers can be applied for only in certain periods during the year, and minimum coverage features are baked into the Act, but will agencies reading the order’s vigorous instruction to act “to the maximum extent permitted by law” simply look the other way?

Perhaps it was only a gesture by Trump to prove to his following that he will deliver on his promise “to minimize the unwarranted economic and regulatory burdens”, as his order says, on the road to dismantling Obama’s major achievement. But given language that is more than a suggestion, telling them to “waive, defer, grant ¬exemptions from or delay”, the agencies may think they had better take action or have to answer to Trump why they did not.

What if, while Republicans scramble to come up with a replacement to substitute for repeal (see related story), the Justice Department takes Trump’s order to mean it should drop its defense against the House of Representatives suit against the government that says the subsidies are illegal? The health act provides subsidies to help people buy insurance, but the House never appropriated the money. The suit argues that funds meant for other purposes were misappropriated. The subsidies continue pending appeal, but if Justice drops its appeal, Obamacare’s insurance market is sure to collapse.

This intemperate and unnecessary move by the President before any substitute has even been formulated could lead to serious erosion or even destruction of the healthcare act just when the new administration needs to assure the millions now benefiting from insurance that it is not going to be taken away. Instead, Mr. Trump seems to have a preference for chaos.

Trump Transition Plays Fast and Loose with Laws, Tradition

The Trump transition is showing little regard for law, as it pushes forward cabinet appointees who have not submitted required documents, as it brushes aside the anti-nepotism statute to give son-in-law a White House Post, and as Trump retains international assets which could lead to foreign policy conflicts. A rundown:

appointee mosh pit

That the Republican-controlled Senate tried to cram nine hearings of cabinet appointees into three days was certainly a deliberate strategy to not just hinder Democrats who want a shot at the President-elect’s controversial choices, but to keep the public from seeing the questioning most of them faced. Only one hearing at a time would get television coverage, so we might not learn how labor secretary appointee Andy Puzder would explain why working men and women whose interests he will represent should be denied an increase in the minimum wage, say, or how Scott Pruitt can justify his appointment to run the Environmental Protection Agency he has sued from his perch as attorney general of Oklahoma.

Senators sit on more than one committee, so overlapping hearings would mean a number of them had to attend one and miss the other, thus not hearing testimony meant to guide their vote. Senate Minority Leader Chuck Schumer was left to lament on the Senate floor that “jamming all these hearings into one or two days, making members run from committee to committee, makes no sense”.

For the transition team, it made perfect sense, but pressure won out and hearings for three appointees who have not completed the two-part FBI background ethics disclosures were delayed somewhat. The usual practice is for the president-elect’s transition team to pre-clear cabinet choices, vetting for potential ethical conflicts or security liabilities before submitting their names to the Senate. The transition did not follow the practice, keeping under wraps the vast and complex business holdings of a few appointees that may be rife with conflicts. A couple, such as Betsy DeVos, appointed to run the Education Department, are billionaires. She and her husband have investments in some 250 companies registered at a single Grand Rapids, Michigan, address, “a tangle that could take weeks to investigate”.

Rather than objecting,
Majority Leader Mitch McConnell was party to the rush job. With only ten days to go before inauguration, he assured us that “Everyone will be properly vetted as they have been in the past and I’m hopeful that we’ll get up to six or seven, particularly the national security team, on day one”. That wasn’t the point. The committee members should have those disclosures before them, because they may contain information that could lead to questioning or challenges. McConnell portrayed the Democrats as unreasonable:

“I was in Sen. Schumer’s position eight years ago…What did we do? We confirmed seven cabinet appointments the day President Obama was sworn in…all of these little procedural complaints are related to their frustration in having not only lost the White House but having lost the Senate. I understand that, but we need to sort of grow up here and get past that”.

McConnell failed to disclose that in a 2009 letter to then-Senate Majority Leader Harry Reid he had demanded that all President-elect Obama’s nominees complete FBI background checks and government ethics reviews prior to their hearings. Schumer reminded him of that, reading aloud that 2009 letter on the Senate floor and pointing out that:

“Back in 2009, every Obama cabinet nominee had an ethics agreement in before their hearing, every Obama cabinet nominee underwent a full FBI background check before the Senate considered their nomination. President-elect Trump’s nominees are way behind that mark.”

The director of the Office of Government Ethics just wrote in a letter that,

“I am not aware of any occasion in the four decades since OGE was established when the Senate held a confirmation hearing before the nominee had completed the ethics review process”

And his office clears thousands of appointees, not just cabinet picks. The question remains whether the short delays will mean completed background paperwork for the three with the most complex portfolios: Ms. DeVos, Wilbur Ross (Commerce) and Andrew Puzder (Labor).

all in the family

Donald Trump’s son-in-law Jared Kushner — married to daughter Ivanka — is evidently very capable but he chose the right parents — as with Trump, his family had built a real estate empire — and then he married well. The combination fueled the 36-year-old’s meteroric rise to breathtaking power. Trump values his judgment, “describing him as so talented that he could help ‘do peace in the Middle East’”, and has even decreed that all foreign policy matters first go through Kushner. We wonder how that will sit with Secretary of State appointee, Rex Tillerson.

To calm criticism about a White House position as his father-in-law’s adviser, the Trump camp says Kushner will take no salary, as if money is what defines nepotism. They claim that the nepotism law does not apply to the president. It reads:

“A public official may not appoint, employ, promote, advance, or advocate for appointment, employment, promotion, or advancement, in or to a civilian position in the agency in which he is serving or over which he exercises jurisdiction or control any individual who is a relative of the public official.

Certainly, the spirit of the law applies to the president. It was passed in reaction to President Kennedy having chosen brother Robert as Attorney General. Another argument is that the federal budget that funds the White House offices labels it an “agency”, the criterion used in the clause. None of these principles have deterred the president-elect.

The transition office says Kushner has resigned as CEO from his real estate company, divested foreign holdings, and will relinquish his stake in the family’s flagship 5th Avenue building in Manhattan. But left in place will be his ownership stake in all the other family real estate holdings and other assets.

As with other real estate firms, the Kushner Companies borrow heavily, and much of its borrowings are from foreign entities, making for concerns that circumstances could arise where foreign policy toward a given country might be colored by those debts, such as the “multiple loans from Israel’s largest bank”.

And now Ivanka has announced that she will resign from her position and board seat at the Trump Organization and move to D.C., not to take a White House job — that would be nepotism — but with a West Wing office to act as adviser to her father, because in the Trump administration’s re-definition, only a job can be nepotism.

So for Trump the management of the United States is to be reconfigured as another family business.

three card monte

The President-elect’s press conference was unusual for his lawyer taking the podium for an extended description of the many steps taken to separate Donald Trump from the Trump Organization and turn control of the business to his two sons, Donald Jr. and Eric. They will call a halt to all foreign development projects and work only in the U.S. Dad will have no say over any new U.S. project they choose to undertake. The President “will only know of it if he reads it in a newspaper or sees it on a television”, said lawyer Shari Dillon. The president will resign from all corporate positions and the assets of the company will be transferred to a trust.

But the trust is anything but blind. As lawyer Dillon said, “President Trump can’t unknow that he owns Trump Tower”. Neither can he unknow all his other assets that he continues to own and simply transferred to a trust. Lawrence Tribe of Harvard, often turned to as an acknowledged expert on the Constitution and given to prickly commentary, is outraged by this arrangement. An opinion piece of his in The Guardian is titled, “Donald Trump will violate the US constitution on inauguration day” for running afoul of the so-called Emoluments Clause of the Constitution found in Section 9 of Article I:

And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince or foreign State.

The media has made conspicuous example of the newly opened Trump International Hotel in D.C., positing that foreign emissaries calling upon the government will (and already have) curry favor by making it known to the president that they are staying there (at $439 to $900 a night, says TripAdvisor). An example: “In February, the Kuwaiti Embassy plans to hold its National Day celebration for about 600 guests at the hotel”, says the Wall Street Journal. So, Ms. Dillon says, to avoid any appearance of emolument, the Trump Organization will forego the profit from from the stays of any such foreign delegations and contribute it to the U.S. Treasury. “This way, it is the American people who will profit.” So the ploy has been to convert the hotel from a conflict of interest into a PR gesture. (Will those contributions be made, it is fair to ask? A number of Trump’s past pledged donations weren’t).

And then there’s debt, the several hundred million dollars that Deutsche Bank loaned the Trump Organization backed by the personal guarantee of Donald Trump. The bank has been the target of the Justice Department over “irresponsible” mortgage-backed securities. The years-long case was settled in December for $7.2 billion in fines but is still undergoing a criminal investigation. As the months proceed should we wonder about whether the fines might be reduced or charges lessened while never knowing whether there’s been a quid for the quo?

What about the emoluments received from “foreign States” when their dignitaries and office holders join his golf course clubs or stay at other Trump hotels around the world, or, for that matter, seek to flatter Trump by applying to his Mar-a-Lago club with its $100,000 initiation fee?

Tribe told LawNewz.com that “the whole phony setup would make President Trump a living, walking, talking, tweeting violation of the Emoluments Clause each time banks or funds linked to foreign sovereigns are allowed to take steps that Trump will necessarily know are enriching the total value of his family’s mega-business.”

Overtime Pay at Last, But Judge Yanks It Away

President Obama had announced his plan almost three years ago, as we recounted then. He would update a long-neglected labor law to equitably improve the lives of an estimated 4 million American workers. It almost happened.

The 1938 Fair Labor Standards Act sets a wage threshold under which employees are paid an hourly rate and are owed extra pay for overtime work. Above that threshold, they are considered administrative or managers to be paid a fixed salary no matter their hours. Clearly, the intent of the law is to prevent exploitation of low-paid workers.

Trouble is, no adjustment whatever has been made to that threshold since 1975. So the threshold below which overtime pay is due has been stuck at a meager $455 a week — $23,660 a year. Everyone earning more than that is a “manager”. Employers are free to extract extra hours from them without paying a nickel. Refuse and they may find themselves on an unemployment line.

In the 1970s, some 65% of workers were entitled to overtime. With the manager threshold driven downward by inflation, only an estimated 7% are paid so low that they qualify for overtime pay. It should be clear that the other 93% are not members of management.

So Obama decreed that the threshold should become $913 a week — $47,476 a year — and the Labor Department’s inflation calculator says that the level should be higher still. Everyone under that must be paid for overtime work.

The change was to have taken place December 1, but a Texas judge stepped in only 10 days before, calling a halt in answer to a consolidated lawsuit from the attorneys general of 21 Republican-led states, business groups, and the business lobby the U.S. Chamber of Commerce. The judge ruled that the Obama administration had overstepped its authority, that overtime eligibility cannot be decided by the wage level alone. The law does not agree. The wage level unequivocally controls whether overtime is due, says this source.

The injunction is temporary as the court reviews the case further, and the Labor Department would certainly appeal, but with the Trump presidency taking over, and a new labor secretary who is against raising even the minimum wage, Obama’s initiative is as good as dead. An intriguing question is how this will be met by those who voted for Donald Trump on the promise of his improving their livelihoods.

Obama’s regulation may have done a small amount of good even though it never took effect. Expecting the law change December 1, employers had gone ahead to instituted changes. They have been inclined to elevate to $47,476 the paychecks of employees already paid anywhere near that so as not to have to pay them overtime. Walmart did so, for example.

Almost all other workers remain stranded earning a fixed salary. It will still even be possible for an employer to force enough unpaid overtime that a “manager” is paid less than the minimum wage when that salary is divided by hours worked. Incoming Labor Secretary Andrew Puzder, whose annual compensation as CEO of a restaurant chain is thought to have been around $4 million, thinks workers prefer the low overtime cutoff; it’s worth giving up the extra money, he says, for the prestige of being viewed as a manager.

Israel Ambushed and Betrayed, Or Was It Overdue Comeuppance?

“A shameful anti-Israel ambush”, erupted Israeli Prime Minister Benjamin Netanyahu in response to the U.S. abstention at the United Nations that
let resolution 2334 against West Bank settlements pass by a 14-0 vote . “Friends don’t take friends to the Security Council”, he added.

Ambush it certainly was not, and his Israel has been no friend to America’s efforts toward a two state solution. The Obama administration has been condemning for years every new announcement of Israel’s settlement building as a key impediment to there ever being an independent Palestinian state alongside Israel. Says Martin Indyk of the Brookings Institution and ambassador to Israel under Clinton, “The administration has been escalating its rhetoric in opposition to West Bank settlement for more than a year. Israel doesn’t seem to be listening”.

Settlements are not the only reason for the testy relationship between Obama and Netanyahu. The latter presumably does not like being told what Israel can and cannot do, and must cater to the right wing coalition that keeps him in power. “His passion is with holding power — at any cost”, says Tom Friedman. Moreover, Netanyahu has often acted vengefully. Just weeks ago, Obama signed off on a $38 billion 10-year military assistance pledge — the largest aid package America has ever given to another nation. But Netanyahu, who has taken for granted years of America’s annual $3 billion for Israel’s defense, seems to think the U.S. owes Israel the money. He was miffed. He wanted $45 billion. Despite Obama’s ongoing entreaties, three weeks later, he broke Israel’s pledge only to expand existing settlements by announcing a new 300 units so deep in the West Bank that they will be closer to Jordan than Israel.

That was nothing new. In 2010 there was the incident of Vice President Biden arriving in Tel Aviv only to be embarrassed by the unexpected announcement of a 1600 unit settlement build out. And again in October 2014 Israel announced approval for construction of 2,610 units in East Jerusalem, just before Obama was to meet with Netanyahu. Another 500 units was announced in November 2014, part of a ring of settlements the Israelis have been building around Jerusalem to its east in the West Bank. The Palestinian Authority has said that the settlements were one of the reasons for breaking off the 9-month peace negotiations of 2013-14.

In July 2015, an Israeli court ruled that two illegally built apartment blocks should be demolished. So Netanyahu authorized immediate construction of 300 more units in the same settlement and announced planning would begin for 400 more in predominantly Jewish areas of East Jerusalem.

That belligerence fits what Michael Oren, Israel’s former ambassador to the U.S.,
said about Netanyahu in his book, that “my approach ran counter to Netanyahu’s personality — part commando, part politico and thoroughly predatory”.

It is hard to find an instance when Netanyahu’s actions toward the Obama administration have not been offensive. In May 2011, having rejected a peace idea of Obama, he rudely lectured the president about the peace process before a clutch of reporters while sitting in the Oval Office. Obama’s dislike of Netanyahu went public that November, when France’s President Nicolas Sarkozy was caught on a hot mic calling Netanyahu a “liar” to which Obama replied, “…but I have to deal with him more often than you”.

In 2012 Netanyahu clearly favored Mitt Romney for president — fair enough, for they had been consulting co-workers in the U.S. when younger — but he welcomed Romney to Israel, which could not have sit well with Obama.

iran contra

But Netanyahu’s going behind Obama’s back to persuade Congress to reject the Iran deal between the U.S. and five other countries topped the rest. He was met with “rapturous” applause by all Republicans and most Democrats, the lot of them always mindful of where their campaign funding comes from. Netanyahu wanted a “better deal”, the total removal of Iranian centrifuges and related uranium enrichment, a demand that paid no regard to the difficulty the six nations had in coming to any agreement with Iran, a sovereign country that had a strong negotiating hand.

everything yours is mine

But more substantive than the squabbles between the two leaders are the facts on the ground. Whether in officially planned communities or illegal outposts wrested from the Palestinians by the orthodox, who believe that everything to the Jordan River belongs to Greater Israel, some 407,000 Israelis
are estimated to be in the West Bank, 100,000 more than when Obama’s tenure began, and there are another 375,000 in the Jewish neighborhoods of East Jerusalem, which Israel captured and annexed in the 1967 war.

A government commissioned 2005 survey found that 105 outposts were established in “blatant violation of the law”.

That couldn’t be allowed to stand. In 2012 Netanyahu commissioned another panel that concluded the West Bank is not actually occupied — before 1967 the territory was never internationally recognized as a territory — so the commission obligingly decreed that the Palestinians have no right to the land they live on.

This past November, the Israeli Parliament gave preliminary approval to the Settlers Bill, a law that would legalize settlements on Palestinian-owned land in the West Bank. Sponsored by Naftali Bennett’s Jewish Home Party, it is in violation of even current Israeli law. Netanyahu is opposed, but he voted for it. Israel’s attorney general warned that it would be a struggle to defend the law in court, and that their supreme court would almost certainly strike it down. For that matter, all settlements are in violation of the Geneva Conventions, which prohibit a state from transferring its own civilian population into a territory it has occupied.

Israel makes the case that the Palestinians have become intransigent, ignoring any overture. Israel’s overtures, however, always come with the precondition that the Palestinians recognize Israel as the homeland of the Jews. The Palestinians say that would undermine the rights of the sizable Arab population living in Israel, not to mention that such a concession going in would lead to Abbas’ downfall — or more likely worse. Some argue that the Israeli precondition is a deliberate barrier to guarantee that no two-state agreement will ever happen. And hadn’t Netanyahu declared in March 2015 that no Palestinian state would ever be established on his watch?

takeover

It’s obvious where this has been going. “Israel is moving quickly to establish facts on the ground that preclude a Palestinian state”, said a New York Times editorial back in January, but until Obama’s action and Kerry’s voice, that has been treated as diplomatically unmentionable. Israel is engaged in a long-term plan to inject its citizens into the West Bank in such numbers to make their removal impossible. That has long since been achieved. The map of the West Bank looks like an outbreak of rubella or Karposi sarcoma.

Annexation is the ambition of the increasingly strident right wing that thinks the entirety of Greater Israel belongs to the Jews because

Click image to expand. Splotches mark settlements and
outposts in the West Bank in this Israel-created 2012 map.
they once lived there thousands of years ago. Takeover is the plan espoused by the right wing, such as Bennett who has proposed that Israel simply annex 40% — he now speaks of 60% — of the West Bank and create a few autonomous zones to placate Palestinians. He exulted on the morning after Trump’s election, “The era of a Palestinian state is over”.

For its part, the Palestinians under President Mahmoud Abbas have grown increasingly intransigent toward any peace proposals, having concluded that Israel will never arrive at an acceptable deal. After the peace talks broke down in April 2014, the feuding Fatah Party of the West Bank joined with the Hamas organization in Gaza, the latter designated a terrorist group by the U.S., to form a unified government for the Palestinians. Netanyahu accused Abbas of saying “yes to terrorism and no to peace” and said Israel will never negotiate with a government backed by Hamas. Israel retaliated by announcing plans for hundreds for housing units in the West Bank and Jerusalem.

Beginning with its successful application for “observer status” at the United Nations in 2012 (the U.S. voted against), the Palestinians have turned away from any “peace process” and chosen a diplomatic salient. In 2014 they applied to join 15 international treaties, with plans to apply for 40 more, so as to be treated as a de facto independent state. They’ve now joined the International Criminal Court in the Hague, where they intend to press for a ruling that the Israeli settlements constitute a war crime.

demographic destiny

With no two-state solution, Israel faces an intractable dilemma should Israel’s right wing prevail on its march to ultimately annex all of the West Bank. Israel will be absorbing the West Bank’s 2.8 million Palestinians, adding to the 1.7 million Arabs that constitute 21% of Israel proper’s population. The combined 4.5 million could someday exceed Israel’s 6.3 million Jews if the higher Arab birthrate continues. If Israel chooses to continue as a true democracy, with Jews and Arabs treated alike under its laws, meaning that all Arabs would have the vote, Jewish control of their homeland would be lost. Clearly, that is a path that will not be allowed to happen, meaning the two states will instead be two peoples treated apart — an apartheid with separate laws for each and the end of true democracy. Israel already has 50 laws on the books that prejudice its own Arab citizens. In the West Bank, Palestinians are subject to military courts, where they are almost always convicted, whereas Israeli settlers fall under Israel’s judicial system with its greater rights and protections. And annexation will cause a perpetually simmering insurrection of guerilla attacks. Nothing is so enduringly enraging as the loss of of the territory one calls home.

misplaced loyalty

One would think the U.S. had disgraced itself judging from the American response to the abstention. As a nation don’t we favor a people’s self-determination? How can we support a country that has occupied that people’s land for an incredible 50 years? Yet members of both our political parties were sharply critical of Secretary of State John Kerry for unforgivably speaking the truth about where Israel is headed.

“The status quo is leading toward one state and perpetual occupation…If the choice is one state, Israel can either be Jewish or democratic, it cannot be both, and it won’t ever really be at peace…We cannot, in good conscience, do nothing and say nothing when we see the hope of peace slipping away.”

In his speech, Kerry was careful to confirm America’s steadfast commitment to Israel’s security, and to castigate the Palestinians’ obstructive leadership and violence against Israelis, but U.S. censure was overdue:

“Some seem to believe that the U.S. friendship means the U.S. must accept any policy, regardless of our own interests, our own positions, our own words, our own principles — even after urging again and again that the policy must change. Friends need to tell each other the hard truths”.

That the two-state solution is as good as dead had not yet registered at The Wall Street Journal where the reaction was that Kerry’s words “could further inflame the fraught relations between the Israelis and the Palestinians” and lead to “an unraveling of the push for a two-state solution”. Unlike Kerry’s, the Journal‘s view is that we somehow owe Israel endless deference no matter its conduct. “U.S. Escalates Tensions With Israel” was its front page headline, and the editorial pages read more like an Israeli newspaper, with the headlines “Obama’s Anti-Israel Tantrum”, “Kerry’s Rage Against Israel”, “The War on Israel Never Ends”.

The Times reported the outcry of “lawmakers in both parties” but took a measured approach on its editorial page. But its conservative columnist, David Brooks, found the U.N. abstention “completely indefensible policy”. He finds that while “settlements are an obstacle to peace and the two state solution…they are about the fifth or sixth most important obstacle”. Mr. Brooks needs to see that map of the West Bank.

anything goes

Obama and Kerry have delivered their parting shot, if only symbolic, since the U.N. has no enforcement powers, but at least the administration has gone on record to say it has had enough. Donald Trump has loudly signaled that Israel will hear no such rebukes. “Things will be different after Jan. 20th”, he tweeted. He has tapped David Friedman to be ambassador to Israel, a New York City bankruptcy lawyer who has called members of a liberal Jewish organization “kapos”, the word for those in the concentration camps who cooperated with the Nazis; has accused Obama of “blatant anti-Semitism”; is against the two-state solution; wants Israel to expand settlements; and contributes to them. What clearer signal could Trump have sent to announce his acceptance of total annexation?

“We cannot continue to let Israel be treated with such total disdain and disrespect”, the President-elect has tweeted. Trump is in Netanyahu’s pocket, even wants him to come to his inauguration. Netanyahu knows it and tweeted, “President-elect Trump, thank you for your warm friendship and your clear-cut support for Israel!”. Despite eight years of U.S. vetoes in the U.N. to protect Israel — Obama is the only American president with a 100% record of having his ambassador to the U.N. vote against every resolution condemning Israel, says the Jerusalem Post — despite a huge effort to broker a peace deal, despite supplemental Iron Dome funding to fend off Hamas rockets, despite the biggest foreign aid package in U.S. history, Trump says Israel is “being treated very, very unfairly”. Exhibiting his stunning ignorance of the futile attempts to resolve the Israel-Palestinian problem, the coming president said that the U.N. loss “will make it harder to negotiate peace” but “we will get it done anyway.”