Monday, May 18, 2009

Obama Assaults the Rule of Law

Shredding the Constitution

According to the Constitution, the Federal government has few powers. The Constitution only allows the Federal Government the only the execution of specific powers enumerated within the document, and leaves all other powers to the states, or the individual. One basic principle of the constitution prohibits the Federal government from telling a state how to govern its citizens. One example of a basic power that falls to the Congress is described in Article I, Section 8 that establishes a uniform law of bankruptcy across the U.S. (Congress defines the law in Title 11 of the U.S. Code).

Our constitutional law instructor president apparently has forgotten his lesson plans, or has made a conscious decision to ignore those basic tenants of the Constitution he sees inconvenient. Two recent examples of overreach by the Obama administration:


California faces a $21 billion budget deficit. Its state government is working feverously to avoid bankruptcy. After months of bi-partisan effort, an agreement was finally reached by the duly elected officials of the citizens of California that trims healthcare costs and lowers wages of state employees, helping reduce costs and deficits.

Then the Obama administration got physical.

Citing a quietly inserted clause in the hurried passed stimulus package, Obama officials alerted California that it would be ineligible for $6.8 billion of federal funding. The stimulus package prohibited cuts in state funding to cities as a condition for receiving Federal funds. The Obama administration alerted California officials that it was interpreting this provision to mean that California state officials could not trim the wages of any state employee and still receive stimulus funds.

Attempting to receive clarification and find compromise, California officials, headed by Governor Arnold Schwarzenegger, called the Federal Department of Health and Human Services, the agency tasked with oversight of these particular types stimulus funds. Surprisingly, and inappropriately, a third party was on the call, representatives of the Service Employees International Union (SEIU). Their own state employees had torpedoed California officials.

The Obama administration in a sop to a labor union, had preempted the decision making process of elected California state officials on how best to accomplish state goals, a clear violation of constitutional principles.

By the way, the SEIU contributed $33 million and countless workers to the Obama 2008 election campaign.


After years of mismanagement, a shrinking economy has dealt a deathblow to Chrysler. After receiving $4 billion in Federal bailout money to tide the Chrysler over while it reorganized, the current owner, Cerberus Capital Management, refused to inject any further funds into the company. Neither could a new owner be found to assume Chrysler’s liabilities. This drove the struggling automaker into bankruptcy. In order to qualify for any additional Federal dollars, the Obama administration dictated that Chrysler undergo an arranged bankruptcy.

Bankruptcy proceedings, established by the Constitution, and governed and uniformly applied by U.S. code, say that those individuals and institutions holding secured credit (normally bonds) are the first to be paid. Bankruptcy law is clear and settled, its roots running back to the Magna Carta.

The White House-sponsored and negotiated settlement established that Fiat receives the company at virtually no cost. The United Auto Workers (UAW) receives about 50¢ on the dollar for the money it had invested, and secured bondholders are paid out only 30¢ on the dollar. The Treasury department has been quoted as saying that the UAW is an important component to Chrysler’s recovery. No argument there. But should the long established and well-litigated property rights of the bondholder shoveled aside?

The UAW contributed $4.9 million dollars to the 2008 Obama campaign and provided it with countless volunteers.

Chrysler's secured creditors may well have funded the bus under which Obama has thrown them.


Centuries of settled law are now being questioned. Obama sends a new message to the world, “If you lend money to one of my favorite interests, I will wipe you aside with government intervention if I wish.” Is it any wonder that foreign governments are looking to replace our currency and reducing their investment in our country?

We are now seeing an Obama administration that no longer considers the rule of law to be the paramount consideration. Instead, Obama considers the rule of law just one consideration in his deliberations on how to proceed with his presidency. This is a nation founded under the rule of law, not by the rule of men. Obama has forgotten.

We are in danger of becoming a society no longer governed by dispassionate law, but by passionate men who provide payback to their political supporters. We are now being held at the mercy of Obama’s political objectives.

Obama shreds the Constitution by trumping the decisions of the states. Obama shreds property rights for his brand of “social justice.” He makes a mockery of bankruptcy laws. Politicians, on a whim, will now rewrite contracts. Obama, and his Congressional supporters, ignore the Constitution.

The Framers were so keenly aware that overpowering government was possible that in the first article of the constitution define the powers of government. The Framers felt so strongly about limited role of government that they immediately passed first ten Constitutional amendments to further define those limits.

Obama feels no limits. The Federal Government will tell us what to think, how to behave, how to live. Call your Congressman and stop this agenda. The insidious control being exercised by Obama and the Congress are stealing the single-most important thing we have in the U.S. – our freedom.

Contact: Twitter: @FrankCanzolino

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