Saturday, May 23, 2009

Good News Bad News in Reversal of Preemption - which Bush used to give Federal Law peremption over state law

By Faith Chatham - DFWRCC - May 23, 2009
Interstate banks, and their offshore hedge funds protected investors, utilized Federal law and Bush administration policies in the 1990s and 2000's to encroach into states such as Texas with had state laws inhibiting predatory lending policies, protective ursury laws and homestead protections allowing Texans not to lose their homes when bankrupted by unsecured debt. A return to applying Texas State Law would have been a welcome reprieve if Rick Perry were not still in office in Texas. Now, after two decades of Republican control of the Texas House and Senate, giving State Law the preemption over Federal Law, may result in less protections here than other states are reaping under the Obama administration. A review of Texas Law, code by oode, will be required to determine if Texans would benefit more from reversal of Bush era Federal Law and enforcement of Federal Law preemption over state law, or preemption of Texas Law over the Federal.

Obama Curtails Bush's Policy of 'Preemption'
It Let Federal Rules Override State Laws

By Philip Rucker - Washington Post Staff Writer - Friday, May 22, 2009

President Obama continued to reverse his predecessor's policies this week by undoing a controversial Bush administration rule known as "preemption" that used federal regulations to override state laws on the environment, health, public safety and other issues.

Obama, in a memorandum to federal agency heads issued late Wednesday, said his administration should undertake regulations preempting state laws in rare instances and "only with full consideration of the legitimate prerogatives of the states and with a sufficient legal basis for preemption."

The president ordered department heads to review all regulations issued in the past 10 years that are designed to preempt state law and determine whether they are justified under the new policy. If they cannot be justified, Obama said, his administration should consider amending the regulations.

Bush administration officials inserted preemptive language into dozens of federal regulations, in many cases shielding corporations from restrictive state laws. For instance, federal preemption provisions stopped California from enforcing a law limiting greenhouse gas emissions.

In the past ten years, the Texas Legislature voted to amend, repeal or change more of the Texas Transportation Code than had been written in the past 50 years. Most of the changes allowed privitazion of public highways and bridges, streamlined environmental impact assessments, private toll operator preferences over public transporation authorities, and streamlined eminent domain claims for land claims by private toll, stadium, pipeline and water companies.

"It's environmental law, it's drug law, it's mortgage law, it's a whole host of areas where the Bush administration was really aggressive about using regulatory action to clear state and local laws that businesses and corporations didn't like,"
said Doug Kendall, president of the Constitutional Accountability Center.

George W. Bush and Rick Perry used Texas as an incubator, where they frequently piloted corporate friendly, consumer detrimental policy before it debuted in the national political arena. Once George W. Bush was elected President, and Rick Perry advanced to Texas Governor, they welded their political clubs in unison. Now, Texans, who have hope that a change in the Federal Administration will overturn some of the more entrenched Bush era policies, view the overturn of Federal law pre emption as possibly being a two-edged sword. If corporate lobbyists were diverted from concentrating on changing state laws once they got repressive Federal policies enacted, there may be some bright spots for Texans with this new policy, which allow older policies to again become standard practice. However, with the Perry administration still in power, it is dubious that older, more consumer friendly policies which do not favor the largest donors and international banking/petro/drug kingpins will be dusted off and practiced in the Lone Star State.

The U.S. Chamber of Commerce warned that Obama's move could wreak havoc on businesses that would have to deal with different state laws, causing a flood of lawsuits.

"Removing federal preemption forces employers to navigate a confusing, often contradictory patchwork quilt of 50 sets of laws and regulations," said Lisa Rickard, president of the Chamber's Institute for Legal Reform.

The Obama administration is probably finding that thansforming "Change" into more than a mere political slogan is more difficult than they originally surmised. Although corporations are "forbidden" from making political donations, powerful PACS of corporate employees and individuals, frequently CEOs and stockholders with deep pockets, influence lawmakers and the Executive Branch on state and Federal levels. Lawyers, acting as lobbyists, cloaked under attorney-client privilege, present corporate friendly legislation to legislative counsels without having to report their contacts with Legislators. This is how much of the corporate/industry-friendly special interest legislation gets introduced. A nod or buzz from one legislator or aide to another and word passes among cliques of legislators who shared donors and friends during campaign battles moves the legislation in and out of committee, blocking others from hearing or debate, speeding enactment of protectionism and repeals of oversight regulation legislation.

The White House described the move as another step toward rescinding Bush administration policies and protecting the constitutional rights of states.

This memorandum brings clarity and orderliness back to this rule-making process and also ensures that preemption will be done only in cases where it's legally justifiable," said Kenneth Baer, a spokesman for the Office of Management and Budget.

Obama's memo comes nearly three months after the Supreme Court called into question Bush's preemption policy while issuing a major setback to pharmaceutical companies. In Wyeth v. Levine, the court ruled 6 to 3 in favor of a woman who had her arm amputated after an improper injection of an anti-nausea medication. The court said drugmakers could not rely on federal regulation to shield them from lawsuits brought under state consumer-protection laws.

Texas has some of the strongest anti-trust laws in any of the states. Weaker Federal policies and lack of enthusiasm for enforcement of Texas laws gave the energy sector and communication industries an almost free-run on Texas consumers for the past ten-years. In 2006, David Van Os ran for Texas Attorney general on a platform, promising to enforce Texas's Anti-trust laws. Re-elected, Gregg Abbott, has been less zealous in enforcing anti-trust legislation in Texas than some think David Van Os would have been, had he been elected Texas Attorney General. Van Os promised to utilize anti-trust statues to restrict oil and gas from gouging and price-fixing. The largest contingency of lobbyist in Austin last legislative session were employed by parties interested in the TXU acquisition. Legislation was passed tying the price consumers pay for residential electricity to the cost of natural gas, even if produced by less costly methods. This virtually took the benefit out of wind powered sources to the advantage of TXU, keeping electricity cost escalating higher in Texas than in neighboring states.

The American Association for Justice, which represents trial lawyers, cheered Obama's move, saying his memo "makes clear that the rule of law will once again prevail over the rule of politics."

Kendall, of the Constitutional Accountability Center, said that Obama "clearly understands the important role that state and local governments play in our constitutional system and has displayed a very different vision of our Constitution than President Bush displayed in his eight years."

In Texas, until special interest groups which have placed their people on the inside of government, in office and bureaus with industry oversight, are displaced, Obama's attempts to relax Bush era environment detrimental and predatory consumer practices by reviewing Bush's policy of Federal pre-emption will probably not give Texas as much relief as can be seen in other states.

Quotes in this article are from tne Washington Post

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