Why the 14th Amendment Solves the Debt Ceiling Crisis

If I understand this the Constitution trumps any other law like the debt ceiling.

The debt ceiling raise is needed not for new spending but that that has been already authorized by Congress, ie by law and thus the President has 2 duties:
1) Uphold all laws that have been passed
2) The debt has already been committed to over many years so it is valid and “shall not be questioned.

That makes using the 14th a no brainer.

The Presidential oath also requires the President to protect and defend the Constitution. If he does not follow it as laid out above one could argue you could impeach him as well.

In fact all members of Congress took a similar oath so their inaction to provide the debt ceiling action needed to fund the laws passed by them could be deemed a violation of their oath of office subjecting Boehner in particular to impeachment. Right?

The other issue here is that failure to protect the nation’s financial system from a meltdown is akin to “war” and the President again is bound to protect the nation as well. Keeping the nation from falling into a deeper recession, higher borrowing costs, higher deficits due to a double dip and the world losing faith in the US as a reserve currency makes his inaction on the 14th impeachable to me.

Failure to act has been estimated to cost the US $50B minimum directly for even a few day default due to increased debt rollover costs and as much as a trillion over a decade not to mention higher borrowing costs for consumers and business as well.

The President has put forth $2T in cuts and asked for $400B in tax loopholes being closed. Every deficit reduction plan that Reagan, Bush I and Clinton did required a combination. Why can’t the Repubs simply negotiate in good faith and get this done?

If they do not they will get hung out to dry by the President being forced to act under his Constitutional duty. That surely isn’t going to help them defeat Obama. It might just sew up his re-election before they even have a primary.

If they think he isn’t tough enough to do this. Just remember the Sunday nite we found about Osama or the Somali pirates that were taken out right after he took office.

If he needs to he will act and get the job done as he should, no doubt about it.


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Is Not Using the 14th Amendment Grounds For Impeachment?

I am going to approach this Constitutional debate from another angle. That President Obama would risk impeachment by NOT acting under the 14th Amendment to prevent default.

Whether any of us like it or not it this debt ceiling debate is all about the “obligations” that Congress over time has signed into law, not the bonds.

The ceiling raise has nothing to do with future spending, only that which has already been committed to by this and prior sessions of Congress over out history.

We elected them, they act via their Constitutional responsibility passes laws/funding programs, we own it and has the “full faith and credit” of the US behind it. These are all laws that then need to be upheld, ie honored.

The Constitution is by definition the original document plus any and all Amendments to it so trying to separate the two is a specious argument as well.

In PERRY V. UNITED STATES, 294 U. S. 330 (1935)SCOTUS addreses the larger context of debt as “obligations” that further supports the notion that default would be unconstitutional and thus stopping it would be required of the President:

“…The government’s contention thus raises a question of far greater importance than the particular claim of the plaintiff. On that reasoning, if the terms of the government’s bond as to the standard of payment can be repudiated, it inevitably follows that the obligation as to the amount to be paid may also be repudiated. The contention necessarily imports that the Congress can disregard the obligations of the government at its discretion, and that, when the government borrows money, the credit of the United States is an illusory pledge.

We do not so read the Constitution….To say that the Congress may withdraw or ignore that pledge is to assume that the Constitution contemplates a vain promise; a pledge having no other sanction than the pleasure and convenience of the pledgor. This Court has given no sanction to such a conception of the obligations of our government.

The Fourteenth Amendment, in its fourth section, explicitly declares: ‘The validity of the public debt of the United States, authorized by law, * * * shall not be questioned.’ While this provision was undoubtedly inspired by the desire to put beyond question the obligations of the government issued during the Civil War, its language indicates a broader connotation. We regard it as confirmatory of a fundamental principle which applies as well to the government bonds in question, and to others duly authorized by the Congress, as to those issued before the amendment was adopted. Nor can we perceive any reason for not considering the expression ‘the validity of the public debt’ as embracing whatever concerns the integrity of the public obligations.”

The office of the President as “Chief Executive” is empowered by the Constitution that “he shall take Care that the Laws be faithfully executed”.

He is also Constitutionally bound by his oath of office:

“I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States.”

This creates a slippery slope for any President. In other words he has no choice in acting per the Constitution lest he violate his oath and for that could be subject to impeachment.

A secondary argument, slightly less compelling, is that in his job as Commander in Chief to protect the nation against any threats could be cited here. A default that plunges the nation into another recession and costs the taxpayers hundreds of billions in additional Federal interest payments and billions more in higher credit card, mortgage and consumer loans threatens the nation as much as any war or attack does. Not acting would weaken the nation considerably and his failure to protect the nation from this sort of “attack” would also be seen as a failure to fulfill his oath.

So the 14th/PERRY V. UNITED STATES makes it clear on the debt’s validity and the fact that it cannot be abrogated in anyway that diminishes the full faith and credit of the nation and its trust with any one owed money via a statute approved by Congress, be it your mom on SS, a cleaning contractor for a federal building or foreign nations holding bonds. All are equally valid and must be honored.

So no action by Congress is illegal and the Debt Ceiling law in any dispute is trumped by the Constitution. In “Perry” Chief Justice Hughes wrote the majority opinion: “We do not so read the Constitution…the Congress has not been vested with authority to alter or destroy those obligations.”

Altering those obligations means that the terms of meeting them cannot be changed in anyway so even a default of a few days or a program to pay bills in some order with revenues is not allowed. So inaction that allows any sort of modification is out of the question as well.

If Obama does not act to avert the crisis if negotiations fail that is a more compelling reason to Impeach than trying to claim that he exceeds his Constitutional power in resolving the crisis using the 14th.

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MLR’s, Broker Commissions and “Stockholm Syndrome”

Stockholm Syndrome Poster Child

In 1996 when we first started Employease, the first online benefits administration and       enrollment platform, insurers were eager to meet with us. As it turned out they were not interested in the efficiencies and customer service value we could bring. In fact the main area of interest in every meeting was simply- “How can this help us get rid of brokers”.

The odd dynamic that exists between the product manufacturers – insurers  and healthplans – and their independent sales team, brokers and consultants, has been at work  for at the least the 35 years I have been in the industry.

They are symbiotic enemies like the Road Runner and Wily Coyote. Neither side likes the other at all, even though without agents, brokers and consultants  insurers would fail miserably and without insurers brokers would have nothing to sell. In fact the current system of employer delivered health insurance  would not exist if the insurers had to deal directly with the employer and consumer. They are  not equipped to deliver their products or services in a way that does not need a 3rd party  guardian like a broker.

Fast forward to 2010/2011. Healthcare reform (PPACA) imposes expected Medical Loss Ratios on healthcare insurers to make sure that employer and consumer’s premium dollars go to care and reimbursement not wasted overhead and high executive salaries.

What do the insurers do first to meet their legally required goals? Either drastically reduce commissions to brokers or cut them entirely (Aetna), making the broker responsible for negotiating service fees that the insurer will then add to their monthly bills. And of course they blame it all on the MLR rules of PPACA. Meanwhile they try and ram through rate increases that are not justified again blaming PPACA and have the best year ever for profits.

The NAIC – the 50 state insurance commissioners-  have reviewed the MLR rules and unanimously supported them and refused to exclude commissions from them because sales costs are part of any insurance product’s overhead. They are dead right on this.

Instead of using their clout to fight the insurers industry groups like NAHU, CIAB, UBA, NAIFA, the Big I and others have inexplicably joined forces with the health insurers to try get commissions excluded from the MLR first via the NAIC (they failed) and now through Congress.

Articles vilifying the new healthcare law rife with misrepresentations and hyperbole abound from these groups, especially NAHU who has bought the insurers line completely with lines like this:

“In fact, the health care law is not only causing many businesses to drop or scale back their insurance plans — it’s also preventing them from creating jobs.”

“Unfortunately, there’s not much fat to trim from insurers’ budgets. The health insurance industry posted a slim 2.2 percent profit margin in 2008 — one-fifth the margin enjoyed by the securities industry, and one-tenth that of the pharmaceutical sector.”

Yet while CEO salaries have increased (UHC +$1oMM) and stock option packages have been enriched (Humana,+73M, Aetna former CEO, $50M) those same insurers have eliminated (Aetna) or cut broker’s commissions (all others) at the same time convincing the brokers that Obama and the big bad government were to blame not them.

You can see the details for the major insurers here for the last 5 years. 

The enemy here is not the healthcare reform law but the complacency and dependency that insurers have lulled brokers into with ever higher commissions based on ever higher rates. Do they really believe the insurers should be able to remain fat dumb and happy, have record profits and CEO salaries and not tighten up their wasteful organizations as long as their commissions do not hurt the insurers MLR calculations?

The real question here is are these brokerage groups really that blind to the reality here or are they simply suffering from Stockholm Syndrome –  “… a term used to describe a paradoxical psychological phenomenon wherein hostages express adulation and have positive feelings towards their captors. These feelings are generally considered irrational in light of the danger or risk endured by the victims, who essentially mistake a lack of abuse from their captors as an act of kindness.”

After all the years of dealing with the insurer’s incompetence but still having their incomes go up every year as premiums have increased at double-digit rates this is the only answer I can come up with.

The real enemy are the insurers and their actions, not PPACA, and the sooner brokers realize that and use their collective leverage accordingly to force the insurers to get more efficient the better for them and their clients.

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Minimizing Secure Email Hassles for Your Portal Users

In this day and age of password overload all of us are having issues with email users logging into our secure email portals.

Infrequent use of tools like your RadarMail 360/Zix email encryption makes this problem even more frequent.

User error  is 100% of the problems here but to help minimize the issues for people we have implemented the following for our RadarMail 360 shared portal and all of our client’s branded portals if they have authorized it.

1) Simplifying passwords to the bare minimum – 6 characters with no number, letter, Caps requirements

2) Add this text re: password Reserts – “If you are locked out click here to Reset your password.”

3) “Remember Me” – add to the portal to allow users to decide if they want their login name saved

4) Change the link for “Online Help” to “Online Help/FAQs” with this link with more specific FAQ help:


Avoiding Client Spam Filters

When a user is not getting the emails from you or from resetting their password this is a client network spam filter issue or client browser same filter issue – NOT A ZIX ENCRYPTION ISSUE.  To solve this issue be sure that the client has the following domain in their network and Outlook whitelist:smtpout.zixmail.net – which is IP addresses through for inbound mail.

Online Resources

User Browser Options

Short of a user getting on the Zix Network at the user level I would recommend having users review secure browser capabilities and addons in the context of their own company computer, browser, network and HIPAA HITECH security policies.

Depending on the sophistication of the user they can enable login/passwords being remembered in their browsers. If used properly this is the easiest solution but potentially the least secure if used wrong :

Firefox – go to Tools|Options|Security and you can enable saving passwords as well as a “master” password to protect use by an unauthorized user. Best, most secure and easiest to use.

  • Other free browser Addons can be reviewed here:


IE 8 – Tools | Internet Options | Content | Auto Complete – no master password so less secure

Chrome – Click on the “wrench” icon on the upper right corner | Options | Personal Stuff | Form Autofill – NO master password option makes this insecure

Safari– Preferences | Autofill | Allow login/passwords – no master password makes this insecure.

Opera – Menu Tab | Settings | Preferences | Forms | Password Manager – no master password makes this insecure

Implementing an appropriate solution will not only help with your HITECH compliance activities but a user’s use of the web in general.

If these resources do not help your users then there is really nothing further to be done for them.

As the old adage says, “you can lead a horse to water but you can’t make them drink.” 🙂

Caution – Any of these actions should be reviewed by a user in the context of their corporate security and HIPAA HITECH privacy policies and the links provided by The Industry Radar/RadarMail 360 are solely for information purposes only.

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A Snapshot From The Industry Radar World HQ

In case you were wondering what goes on at our bustling headquarters I thought I would share this picture of Rosie our 3 year old pug and Peeps, a lame duckling my 10 year old son is taking care, of as they meet face to face to discuss the day’s news.

Peeps was born with one leg turned backwards and her development is months behind her siblings who are grown white duck, but love and attention is bringing her around. Her wings and feathers are finally growing in and in the not too distant future will hopefully retire to a life on a friend’s farm.

Rosie cannot quite figure her out but tries to play with her when she is in her cage by pawing at her only to be met with a snap from Peep’s bill.

Now that our kids are back in school my wife is in charge of Peeps during the day.

Peeps likes to watch TV and has learned from the dogs barking how to verbalize her own needs like food, water etc….honestly….it is quite something to see.

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HITECH E&O? – Are you covered? Likely Not..

The recent legal action in the University of Idaho vs. Colorado Casualty and United Insurance Brokers has caused me to do a little research on the issue of insurance for cyber crime, data breaches etc.

The results are not pretty from the stand point of firms having coverage today for any type of data breach expenses, liabilities, fines etc.

Here are 2 links for you to reference but likely you are “naked” on this cover right now:


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Insurer Denies $3.3M Data Breach Payment Due to BA Negligence

If this were your client where would find $3.3 million dollars to settle their claim let alone the penalties that HHS will apply?

You can read the details here of Colorado Casualty vs. University of Idaho / Perpetual Storage.

Bottom line is that most standard policies do not cover cyber losses and neither does your E&O policy as we have written about before.

“At the same time, the University is seeking in its lawsuit to bring its insurance broker and adviser into the litigation, alleging they were “careless, negligent, and made various negligent misrepresentations about Perpetual’s insurance coverage from Colorado Casualty.”

Aon reviews this case from an insurance perspective here.

Preventing breaches in the first place is key by getting compliant and encrypting ALL data whether “at rest” or “in motion”.

Lesson – your business and livelihood is one mistake away from disappearing if you are not compliant.

We can help you quickly and cost effectively….contact us now

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