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By: Alana Abramson, Nash Jenkins, Abby Vesoulis, and Abigail Simon of TIME

Beneath the partisan posturing and fiery monologues, a House hearing Thursday on FBI agent Peter Strzok’s conduct delved into some key factual questions.

In a hearing jointly conducted by the Oversight and Judiciary committees, Republican lawmakers sharply questioned the embattled agent who oversaw the Hillary Clinton email server investigation as well as the beginning of the investigation into Russian meddling in the election, while Democrats defended him and criticized their GOP colleagues.

It was the first chance that Strzok has had to publicly respond to criticism of his work, both from the Justice Department’s inspector general, who looked into texts that Strzok sent to a colleague he was having an affair with, and from President Donald Trump, who has attempted to use those texts to discredit the Russia investigation.

The hearing became particularly heated at points, with Republicans threatening to hold Strzok in contempt for refusing to answer a question about the ongoing investigation due to FBI policy; Republican Rep. Louie Gohmert criticizing Strzok in starkly personal terms, wondering “how many times did you look innocently into your wife’s eyes and lie to her about” his affair; and Strzok arguing that he sent one controversial text because he was upset by Trump’s “unconscionable and disgusting and cruel” treatment of the parents of fallen soldier Humayun Khan.

But there were also several moments in the hearing in which Strzok and lawmakers discussed substantive questions about the two key investigations into Clinton and Trump.

Here’s a closer look at three moments in the hearing that mattered.

How Clinton’s use of a private server went from ‘negligent’ to ‘careless’

Republican Rep. James Sensenbrenner grilled Strzok about how the wording of a statement criticizing Clinton for her use of a private email server was changed before it was issued.

What we know: In July 2016, Strzok, who was leading the F.B.I.’s investigation into Hillary Clinton’s use of a private email server, rephrased his description of Clinton’s decisions from “grossly negligent” to “extremely careless” in a draft of a statement to be issued publicly by James Comey, who then headed the F.B.I.

How Strzok responded: He argued that the revision was introduced by the F.B.I.’s internal legal counsel, who noted that the phrase “gross negligence” carried a specific legal meaning and would carry legal implications.

Key moment: Sensenbrenner asked Strzok to confirm that the revision to the draft was made on Strzok’s computer on June 6; Strzok said he “believe[d] it to be true.”

“Why was the change made?” Sensenbrenner asked.

“My recollection is — and I’m not an attorney — that attorneys within the F.B.I. raised concern that the use of ‘gross negligence’ triggered a very specific legal meaning.”

“Yeah — criminal!” Sensenbrenner said. He then asked if the change was “Hillary’s ‘get out of jail free card.’”

“Absolutely not, sir,” Strzok replied. He then expounded on the F.B.I.’s desire to avoid using a term with specific legal implications.

“With regard to that decision, there was concern within the perspective of a legal definition of that term that people would draw an inference based on that use that it was necessarily talking a specific subset of a statute,” he said.

“That rates four Pinnochios,” Sensenbrenner replied.

Why he was removed from Mueller’s investigation

Republican Rep. Trey Gowdy questioned Strzok about his removal from Special Counsel Robert Mueller’s investigation into Russian meddling, which occurred after the inspector general began looking into his texts.

What we know: Strzok was removed from Mueller’s team last summer after an internal investigation uncovered his text exchanges with Page, which criticized then-candidate Trump. Peter Carr, a spokesperson for the special counsel’s office, said “immediately upon learning of the allegations, the Special Counsel’s Office removed Peter Strzok from the investigation.” Although people speculated about why Strzok was dismissed, Mueller’s team never publicly gave an official reason. Strzok was then abruptly reassigned to a position at the FBI’s human resources division.

How did Strzok respond: Strzok claimed that, to his knowledge, he was removed from the probe for reasons related to public perception — presumably to maintain trust in the integrity of Mueller’s team — rather than any concern about bias on his part.

Key Moment: Gowdy asked Strzok to explain the timing behind his dismissal from the investigation team. “No wonder Bob Mueller kicked you off of the investigation, Agent Strzok. My question is, if you were kicked off when he read the texts, shouldn’t you have been kicked off when you wrote them?”

“No, not at all,” Strzok responded. Gowdy questioned why he was kicked off, and Strzok explained that he was removed “based on the understanding of those texts and the perception that they might create…”

Strzok testified that the meeting was short, somewhere around 15 minutes.

When further questioned by Gowdy, he reiterated that “it is not my understanding that he kicked me off because of any bias. That it was done based on the appearance. If you want to represent what you said accurately, I’m happy to answer that question. But I don’t appreciate what was originally said being changed.”

Gowdy responded, “I don’t give a damn what you appreciate, Agent Strzok. I don’t appreciate having an FBI Agent with an unprecedented level of animus working on two major investigations during 2016.”

What Strzok meant when he said Trump wouldn’t become president

Republican Rep. Trey Gowdy questioned Strzok over perhaps the most controversial text that he sent Page, in which he said that Trump would not become president because “we’ll stop it.”

What we know: In the summer of 2016, Page sent a text to Strzok, writing “[Trump’s] not ever going to become president, right? Right?!” Strzok responded, No. No he won’t. We’ll stop it.” The inspector general’s report reviewing Clinton’s email investigation found that the texts damaged the FBI’s reputation for impartiality, but ultimately concluded there was no evidence that this affected the investigations.

Speaking publicly about the text during the hearing, Strzok explained that it was sent the night that Trump disparaged Khizr Khan, a Gold Star father who lost his son in Iraq, and that it was “off the cuff” comment sent late at night that he didn’t even recall. He gave an impassioned defense, arguing that his beliefs never impeded the investigation into Russian meddling because his FBI colleagues wouldn’t have allowed it.

Key moment: Strzok gave a long explanation for the text:

“Sir, I think it’s important, when you look at those texts that you understand the context in which they were made and the things that were going on across America.

“In terms of the texts that — we will stop it, you need to understand that that was written late at night, off the cuff, and it was in response to a series of events that included then candidate Trump insulting the immigrant family of a fallen war hero.

“And my presumption based on that horrible, disgusting behavior, that the American population would not elect somebody demonstrating that behavior to be President of the United States.

“It was in no way, unequivocally, any suggestion that me, the FBI, would take any action, whatsoever, to improperly impact the electoral process for any candidate. So, I — I take great offense and I take great disagreement to your assertion of what that was or wasn’t. As to the 100 million to one, that was clearly a statement made in jest and using hyperbole.

“I, of course, recognize that millions of Americans were likely to vote for candidate Trump. I acknowledge that is absolutely their right. That is what makes our democracy such a vibrant process that it is.

“But to suggest, somehow, that we can parse down the words of shorthand textual conversation like they’re some contract for a car is — is, simply, not consistent with my or most people’s use of text messaging.”

By: Ed Morrissey of Hot Air

It took the House of Representatives sixteen months to pass HR 1689, the Private Property Rights Protection Act, which finally happened yesterday by acclamation. It took Congress thirteen years to act on this issue [note: for at least the fourth time — see correction below] after the execrable Kelo v City of New London Supreme Court decision, which held that eminent domain could be used to seize property from one private owner to another in the name of “economic development.” Rep. James Sensenbrenner, who authorized the PPRPA, celebrated the belated victory yesterday in a story that no major media outlet covered:

SEE ALSO: Breaking: Pastor Andrew Brunson moved from prison to house arrest in Turkey

Today, the House unanimously passed Congressman Jim Sensenbrenner’s (WI-05) Private Property Rights Protection Act (H.R. 1689).

The bill addresses the controversial Supreme Court decision in the 2005 case Kelo v. City of New London, which expanded the eminent domain power granted by the Fifth Amendment of the Constitution. In Kelo, the Court ruled that “economic development” can be justified as a “public use” under the Constitution’s Takings Clause.

To combat this expansion of power, H.R. 1689 would make any state or locality that uses the economic development justification for eminent domain ineligible from receiving federal economic development funds for two years. This creates a major incentive for governments to respect the private property rights of its citizens.

Additionally, the legislation bars the federal government from exercising eminent domain powers for the purposes of economic development.

Amazingly, not one major media outlet picked up on this, not even to note that it took thirteen years for Congress to address the issue. It might not have gone far even now had it not been for renewed interest in the case from the recent independent film Little Pink House, starring Catherine Keener as Susette Kelo and Jeanne Tripplehorn and produced by Ted Balaker, formerly of Reason.

It’s tough to understand the indifference. The House vote didn’t have much drama to it, but the issue directly aims at the relationship we have with government and the nature of private property, a core right recognized in the Constitution. Kelo perverted that relationship, putting everyone’s property rights hostage to politicians who want to hand off spoils to bigger entities. The case prompted some states to step in and redefine eminent domain to prevent another New London abuse, but despite four attempts by the House to correct this injustice, the Senate has remained obstinate.

Sensenbrenner’s bill will move to the Senate, but it doesn’t have much time to succeed. The legislative calendar will start backing up very soon with budget bills, the Brett Kavanaugh confirmation, and potential action to amplify sanctions on Russia and Iran. If the PPRPA doesn’t pass by the end of this year and get signed into law, the House will have to start over from scratch in the next session — where a potential change of leadership might spell an end to those efforts. Those interested in imposing onerous consequences for cities and states taking away private property to hand it off to other private parties need to contact their senators immediately to get action on Sensenbrenner’s bill.

On top of that, there is a question as to whether Donald Trump will actually sign it into law. Trump has declared himself a fan of eminent domain for the purpose of economic development, which isn’t too surprising given the nature of his business empire. The House vote would be strong enough to override a veto, so the Senate vote had better be almost as strong. Trump might not like to see the new limitation put on his desk, but he’d be careful about vetoing it and looking foolish with a successful override.

Little Pink House has just become available on DVD and digital download. Perhaps renewed interest in the film will prompt renewed interest in the Senate’s inaction over the last thirteen years, and push the Senate into immediate action. Let’s hope so, anyway.

Correction, 7/25: Our friends at the Institute for Justice, which represented Susette Kelo, corrected me this morning on a key point:

“On November 3, 2005, widespread condemnation of the Kelo decision led 157 Democrats to join 218 of their Republican colleagues in the House to pass the Private Property Rights Protection Act, by a 376 to 38 vote margin (H.R. 4128, 109th Cong.): In subsequent Congresses, the legislation has passed the House by voice vote (in the 112th Congress) and by a vote of 353-65 (in the 113th Congress). The Senate has failed to act at all on it each time.”

The House has done its job repeatedly. It’s time for the Senate to do its job.

I have corrected two other sentences to make clear that the Senate is the obstacle in this process. Thanks to our friends at IJ for the information.

Washington, D.C.—Today, Congressman Jim Sensenbrenner (WI-05) released the following statement after President Trump nominated Judge Brett Kavanaugh to the United States Supreme Court:

Rep. Sensenbrenner: “Judge Kavanaugh is an excellent choice for the United States Supreme Court. Throughout his impressive career, he has consistently demonstrated his commitment to upholding the Constitution as our Founders intended. I have full confidence that, when confirmed by the Senate, Judge Kavanaugh will continue to serve our nation honorably.”

By: Meg Jones of the Milwaukee Journal Sentinel

Wisconsin's governor, congressional delegation and U.S. Senate candidates reacted Monday night to President Donald Trump's decision to replace Supreme Court Justice Anthony Kennedy with Brett Kavanaugh.

Here's what they said in statements or on social media.

Gov. Scott Walker said in a statement: "Brett Kavanaugh is an excellent nominee to serve on the U.S. Supreme Court. I believe he fits the criteria I look for in judicial candidates which is: a man or woman of integrity, a person who has a solid understanding of the law, and a person who understands that the role of the judiciary is to uphold the Constitution regardless of one’s personal or political beliefs."

U.S. Sen. Tammy Baldwin (D-Wis.): “People need an independent justice who will not overturn the law of the land on women’s health, health care for people with pre-existing conditions, and the constitutional rights and freedoms of all Americans. The stakes are very high for the American people and these are the things that I will be looking for as I review the nomination.”

U.S. Sen. Ron Johnson (R-Wis.): “A Supreme Court justice ought to be a judge, not a super legislator – applying the Constitution as written, not altering it to reach a result. President Trump nominated a person who fit that description in Justice Neil Gorsuch last year, and to my understanding Judge Brett Kavanaugh fits it as well. I look forward to meeting with Judge Kavanaugh and the Senate moving expeditiously through the confirmation process.”

House Speaker Paul Ryan (R-Janesville): "Judge Kavanaugh will bring extensive experience to the Supreme Court; his long career exemplifies public service and, in particular, dedication to religious liberty. He has shown that constitutional principles are the ultimate guide for his opinions. I look forward to Judge Kavanaugh's swift confirmation in the Senate. This is an excellent choice."

Rep. Jim Sensenbrenner (R-Menomonee Falls): “Judge Kavanaugh is an excellent choice for the United States Supreme Court. Throughout his impressive career, he has consistently demonstrated his commitment to upholding the Constitution as our Founders intended. I have full confidence that, when confirmed by the Senate, Judge Kavanaugh will continue to serve our nation honorably.”

Rep. Gwen Moore (D-Milwaukee): "Unsurprised @realDonaldTrump picks radical inexperienced SCOTUS nominee that believes Trump’s above the law. Kavanaugh should not be confirmed under any circumstances."

Rep. Sean Duffy (R-Wausau): "@POTUS is right: 'the rule of law is a cornerstone of our freedom.' He first found a Supreme Court Justice in Neil who believes just that, and Judge Brett Kavanaugh shows thus far that he holds that same sacred view. I urge @SenRonJohnson, @senatorbaldwin, and the rest of the Senate to support his nomination so that we can ensure that the Constitution remains the foundation of truth for the Supreme Court."

Rep. Mike Gallagher (R-Green Bay): “Judge Kavanaugh is an outstanding pick for the United States Supreme Court. He is a highly respected jurist who holds the right judicial philosophy of stating what the law is, and not what he thinks it should be. I urge my colleagues in the Senate to set aside partisan politics and get to work confirming Judge Kavanaugh to our nation’s highest court.” 

Leah Vukmir, who is seeking the Republican nomination to challenge Sen. Tammy Baldwin in the November election, tweeted: "I've said it before: The best predictor of future behavior is past behavior, and @POTUS's #SCOTUSPick, Judge Brett Kavanaugh has the track record to become a strong constitutionalist justice." 

Kevin Nicholson, a Republican who is also running for U.S. Senate, tweeted: "Liberal obstructionists like Tammy Baldwin will try to stop the confirmation of @realDonaldTrump's #SCOTUS nominee Brett Kavanaugh. One of many reasons Wisconsin needs to #SendInTheMarine. We need an even stronger majority in the Senate."

Washington, D.C.Congressman Jim Sensenbrenner (WI-05) was named by Speaker Paul Ryan to serve as an outside conferee to negotiate compromises between the House and Senate versions of the National Defense Authorization Act (NDAA) for fiscal year 2019. As a conferee, Congressman Sensenbrenner will represent the House Judiciary Committee in negotiations where the two chambers will reconcile differences between the two versions of the legislation.

Rep. Sensenbrenner: “We must ensure the brave men and women in our military have adequate funding to accomplish their missions as safely and efficiently as possible. I’m honored to be chosen to serve on this conference committee, and I look forward to producing legislation that meets the needs of our military and spends the taxpayer dollars wisely.”

Procedural Background:

Often, when the House and Senate pass similar versions of significant legislation, such as the National Defense Authorization Act, the two chambers will convene a conference committee where representatives from each chamber will negotiate a single bill. After the conference committee produces a final bill, known as a “conference report,” both chambers will consider that legislation. Should both chambers both pass the conference report, it will head to the President’s desk. 

By: Dr. Tim Westlake, Opinion Contributor to The Hill

As Congress moves swiftly to address the opioid epidemic, it is vitally important the most meaningful and impactful solutions are enacted, including the Stopping Overdoses of Fentanyl Analogues Act, or SOFA. In testimony last month before the House Judiciary Committee, I urged Congress to consider this critical piece of legislation to halt the spread of fentanyl-related substances. Let me explain.

In my role on the Wisconsin Medical Examining and Controlled Substance Boards, and as an emergency room physician on the front lines of the opioid battlefield for the past two decades, I have witnessed more tragedy than I care to recall. Countless hours have been spent working to identify and implement best practices. One strategy, for physicians to prescribe more judiciously, is already happening in the Badger State -- not with top down mandates, but through education and partnerships with the medical community. The goal is to stem not only the supply of legal, but also illicit, opioids. By far, the deadliest threat in the opioid war is posed by fentanyl-related substances. In fact, deaths from fentanyl-related substances now surpass heroin deaths.

Because so little can kill so many -- a lethal dose of fentanyl is 2mg and one teaspoon is enough to kill 2,000 people -- fentanyl variants are classifiable as weapons of mass destruction. The “bad guys” use loopholes in the existing scheduling laws to create new legal fentanyl variants. These untested chemicals are then produced abroad, mostly in China, and trafficked legally into the U.S. to enter the opioid supply.

As prescription opioid reforms take hold and the medical community returns to more judicious prescribing practices, the market for counterfeit pills will continue to explode. Most illicit opioid users have no idea what they are consuming. With the advent of counterfeit pill production, they believe they’re ingesting a “safe” trade-name manufactured pill, when actually it is a fentanyl-related counterfeit substance. These can be transported legally into the U.S. and even bought online and delivered in the mail. These pills can be alarmingly stronger than what they are purported to be -- up to hundreds of times stronger. The singer Prince died from counterfeit Vicodin pills that were actually fentanyl.

In Wisconsin, we saw this coming and worked closely with the U.S. Drug Enforcement Administration (DEA) to get in front of it. We created and enacted scheduling statutes now being modeled nationally. The SOFA Act controls, by structure, all likely bioactive chemical modifications of the fentanyl molecule. This novel, catch-all legislative language allows us to schedule proactively and not wait for loved ones to die before we can schedule each newly modified fentanyl variant. Essentially, it unplugs the entire fentanyl machine.

The legislation is specific by design: it targets only the likely bioactive modifications of the fentanyl molecule itself; no other opioids or drugs are included. As well, research would not be impeded. The current research approval process would not change and the DEA has streamlined the registration process.

The week after Wisconsin enacted SOFA, the DEA published identical language in the Federal Register as the method of federal temporary scheduling. Chemists around the world must be paying attention. Since the announcement of the intent to schedule using SOFA seven months ago, no new fentanyl-related substances have been found by the DEA. In contrast, during the prior two years, DEA uncovered 17 new fentanyls, representing hundreds of deaths. SOFA is already saving lives, but the language needs to be written into federal law to achieve the best permanent scheduling solution. Thanks to Sen. Ron Johnson (R-Wis.) and Rep. Jim Sensenbrenner (R-Wis.), Wisconsin’s solution is now under consideration as model legislation for the nation.

With the many well-intentioned opioid bills being considered in Washington, it would be a tragedy to leave the fentanyl-related substances loophole open. It’s why I am writing today. I urge Congress to include SOFA in the solutions it enacts in the coming weeks to minimize the scourge of opioids and stop the spread of what are really chemical weapons.

Dr. Tim Westlake is a full-time Emergency Physician; Medical Director of the Oconomowoc Memorial Emergency Department; Vice Chairman of the Wisconsin State Medical Examining Board, where he serves as Chairman of the Licensing and Controlled Substance Committees; member of the Wisconsin State Controlled Substances Board and of the Governor’s Taskforce on Opioid Abuse. 

By: Marco Green of Lancashire Independent News

U.S. President Donald Trump on Tuesday threatened motorcycle maker Harley-Davidson Inc with higher taxes and said their business would suffer in a public backlash over its decision to move production for European customers overseas.

The US President launched a Twitter tirade against Harley-Davidson in which he also suggested that tariffs on the EU's vehicle exports are imminent, raising fears of a further tariff escalation.

Trump warned the iconic American brand that any shift in production "will be the beginning of the end". "The Aura will be gone and they will be taxed like never before!"

Harley-Davidson said that shifting targeted production from the global facilities could take at least nine to 18 months to be completed.

The Wall Street Journal reported that the Trump administration plans to impose curbs on Chinese investment in American technology companies and high-tech exports to China.

Trump offered no clarity later in the day when he was asked about tariffs during a White House photo-op with Congress members.

"Harley-Davidson is using that as an excuse and I don't like that because I've been very good to Harley-Davidson and they used it as an excuse", he said in response. "And I think the people who ride Harleys aren't happy with Harley-Davidson and I wouldn't be either".

"To address the substantial cost of this tariff burden long-term, Harley-Davidson will be implementing a plan to shift production of motorcycles for European Union destinations from the USA to its worldwide facilities to avoid the tariff burden", the company said in an official filing to the United States market regulator.

Trump first responded angrily to the Harley announcement on Monday, saying he has fought hard for the 115-year-old company and was surprised by its plans, which he described as waving the "White Flag". The EU's trade chief said last week that it was "left with no other choice" after Mr. Trump imposed tariffs of 25 percent on steel imports and 10 percent on imported aluminum from the EU on June 1.

The Milwaukee-based company made a decision to build the Thailand plant past year after Trump pulled out from the Trans-Pacific Partnership, which would have lowered import tariffs on its bikes in some of the fastest-growing motorcycle markets in Asia.

"Harley must know that they won't be able to sell back into US without paying a big tax!" In January, it said it would consolidate its Kansas City, Missouri, plant into its York, Pennsylvania, facility. "Taxes just a Harley excuse - be patient!" "Shows how unbalanced & unfair trade is, but we will fix it...."

He said: "We are finishing our study of Tariffs on cars from the European Union in that they have long taken advantage of the USA in the form of Trade Barriers and Tariffs". "Companies are now coming back to America".

More potential pitfalls for Harley-Davidson and other US manufacturers could be on the way. "Europe is a critical market for Harley-Davidson".

"It's unfortunate that such a strong Wisconsin company like Harley-Davidson has to bear the brunt of this trade dispute", Sensenbrenner said.

By: Rep. Jim Sensenbrenner

June 26, 2018

Last Thursday, the United States Supreme Court handed down a ruling in the closely-watched case South Dakota v. Wayfair. While the facts of the case narrowly focus on whether South Dakota can force businesses without a “physical presence” within its borders to remit state taxes during online sales, the far-reaching implications cut to the heart of one of our nation’s most foundational principles and the primary catalyst for the Revolutionary War: taxation (and regulation) without representation.

In light of Wayfair, Congress must now take action to preserve the rights of each state and protect the economic interests of consumers and small businesses.

By overturning decades of precedent established in National Bellas Hess, Inc. v. Department of Revenue of Ill. and Quill Corp. v. North Dakota, the high court opened the door to something feared by consumers and businesses alike: internet sales tax. Small businesses and entrepreneurs will now be forced to navigate the maze of more than 10,000 different tax jurisdictions. Large chain stores, like Walmart and Target, will survive the additional regulatory burden. However, the thousands of independent online entrepreneurs that use platforms such as eBay and Etsy to do business will experience the most harm.

Moreover, the increased cost of compliance for small businesses will likely result in higher prices and fewer options for consumers.

In his dissent, Chief Justice Roberts rightly concluded, “’The Constitution gives Congress the power ‘[t]o regulate Commerce… among the several States.’ Art. I, §8. I would let Congress decide whether to depart from the physical-presence rule that has governed this area for half a century.”

Fortunately, the majority deliberately noted in their opinion: “[…] when Congress exercises its power to regulate commerce by enacting legislation, the legislation controls.”

Now more than ever, Congress must exercise its plenary power by passing my No Regulation Without Representation (NRWR) Act. This bipartisan legislation defends the principles of federalism and reasserts Congress’s authority over interstate commerce by clearly defining when a state can tax and regulate a business. Specifically, it bars states from levying taxes or imposing regulations on businesses that are not physically present in that state, and, therefore, do not have a voice in the creation of those tax laws and regulations.

The NRWR Act prevents states from bullying out-of-state businesses by attempting to set de-facto national policies.

For example, in 2008, California voters passed a proposition that requires egg producers to use cages twice the size of a typical cage. Initially, the regulation only applied to in-state producers. However, when California egg producers complained they were at a competitive disadvantage, state legislators extended the regulation to producers from other states as well.

California’s regulatory overreach is not unique. In 2016, Massachusetts voters approved a ballot initiative to ban certain types of housing for pigs, chickens, and cows. The rule would ban the sale of out-of-state meat and eggs that do not meet the state’s animal housing standards.

California and Massachusetts are well within their rights to regulate their citizens, however, any regulations that extend beyond their borders must come, as the Chief Justice reminds us, from Congress.

While I don’t expect to see residents of Connecticut and Rhode Island storming ships in Boston Harbor to throw bacon, eggs, and veal overboard, we still must restore the principles of federalism and representative government.

Ultimately, the NRWR Act provides a common-sense solution to restore fairness and order to the regulatory free-for-all created by Wayfair. In a time of hyper-partisan disagreements and widespread concern with government overreach, the NRWR Act can bridge the partisan divide and preserve the will of the Constitution.

You can read this piece online here.

By: Jess Bravin, Brent Kendall, and Laura Stevens of the Wall Street Journal

States have the authority to make online retailers collect sales taxes, the Supreme Court ruled Thursday, a milestone marking e-commerce’s treatment as a mature player in a marketplace no longer defined by trips to the corner store or the shopping mall.

By a 5-to-4 vote, the court closed a loophole that helped fuel the early growth of internet sales, overruling a half-century of its own precedents that forbid states from requiring merchants to collect sales tax unless those sellers maintain a “physical presence” within the state’s borders.

The ruling likely will spell the end of an era in which consumers could avoid taxes by purchasing goods online instead of from local merchants.

Justice Anthony Kennedy, who suggested years ago that the precedent should be updated for the digital age, wrote for a majority that defied conventional ideological lines. Liberal Justice Ruth Bader Ginsburg joined his opinion, along with conservative Justices Clarence Thomas, Samuel Alito and Neil Gorsuch.

Justice Kennedy said the “physical presence” rule, always doubtful, had become untenable. He cited studies suggesting that the court’s own “artificial, anachronistic rule” now costs states up to $33.9 billion annually in uncollected sales taxes, sapping resources for essential public services while distorting the marketplace by advantaging remote sellers over those anchored in the community.

Because the court’s rulings freed out-of-state sellers from collecting sales taxes, the duty to pay them has fallen on consumers themselves. Few people have known of that obligation, and fewer still have complied: 96% of such taxes go uncollected, according to a California tax board estimate cited by the court.

More than 40 states, territories and the District of Columbia that rely on sales taxes had urged overruling the 1967 case that established the physical presence rule and a 1992 decision that affirmed it.

Groups representing conventional store retailers including Walmart Inc. and Target Corp. backed them. South Dakota brought the suit, seeking to require out-of-state companiesWayfair Inc., Inc. and Newegg Inc. to collect sales tax on transactions with the state’s residents. Antitax groups and retail platforms including eBay Inc. and Etsy Inc. supported the defendants.

While the justices rarely disturb their own precedents, the court no longer could stand behind an erroneous decision that “limited states’ ability to seek long-term prosperity and has prevented market participants from competing on an even playing field,” Justice Kennedy wrote.

Even the four dissenters, led by Chief Justice John Roberts, agreed that the “physical presence” rule was wrong. But with so much of the economy having grown under its influence, they said the court should leave well enough alone.

Congress, under its constitutional power to regulate interstate commerce, could at any time have altered the court’s rules, which effectively serve as a default in the face of legislative inaction. Torn between opposing commercial interests and fearful of the blame for effectively increasing costs for consumers, Congress hasn’t found the will—or consensus—to do so.

Some online retailers, such as Inc.,already collect state sales tax on products they sell directly. Others don’t—and, to Justice Kennedy’s chagrin, brag about it.

Wayfair’s advertising not only presents “an image of beautiful, peaceful homes,” but “also says that ‘one of the best things about buying through Wayfair is that we do not have to charge sales tax,’ ” Justice Kennedy wrote, calling the pitch, which since has disappeared from the Boston-based retailer’s website, “a subtle offer to assist in tax evasion.”

Nevertheless, the decision suggested states may face some limits on their collection powers. Justice Kennedy favorably noted provisions of the South Dakota law exempting small retailers and forgoing any effort to collect taxes retroactively on prior sales. The state imposes collection duties only on remote sellers that do more than $100,000 in business or at least 200 transactions a year within South Dakota.

“Many states will pick up on those details and incorporate them into their own regulatory regimes,” said Eric Citron, an attorney who represented South Dakota. He said he expected nearly every state with a sales tax to move legislation or regulations to enforce collections. “Complete compliance will become the norm within the next year or two,” he said.

Amazon originally set up its business model to avoid state sales taxes, limiting its physical presence to a handful of warehouses. But it changed strategy to build more warehouses closer to consumers as it has relied more on its Prime two-day shipping offer—and started charging sales tax on items it sells directly.

Amazon hasn’t collected the taxes for most independent merchants who sell on its platform. About $200 billion in sales originated with independent merchants selling on Amazon world-wide last year, according to Factset analyst estimates, compared with about $116 billion in direct sales by Amazon. The company declined to comment on the ruling.

Amazon has drawn sharp criticism from President Donald Trump, and the Justice Department had backed the states’ argument.

On Thursday, the president exulted. “About time! Big victory for fairness and for our country,” he said in a tweet. The Wall Street Journal reported in April that failed to collect taxes for more than 40 states, including New York, where the flagship store is in Trump Tower.

Online merchants’ stocks moved lower after the decision was released before recovering slightly. Amazon initially was down about 1% and Wayfair nearly 7%, before both recovered to close about flat. Etsy’s stock closed down 1.38% and eBay was down more than 3%.

Wayfair said it collects sales tax on some 80% of its U.S. orders and didn’t expect the decision to have “any noticeable impact on our business.”

“While we believe the court was not the ideal venue for creating this level playing field, we expect that today’s decision will bring clarity and certainty to this issue,” the company said.

Small online businesses have been using Amazon, eBay and Etsy to build their sales for years and have argued for a blanket legislative solution to prevent the high cost and burden of complying with different rules in each state.

“Now is the time for Congress to provide clear tax rules with a strong small business exemption,” an eBay spokeswoman said.

Before the court’s ruling, eBay Chief Executive Devin Wenig warned in an interview with The Wall Street Journal of an “extremely chaotic” environment if the Supreme Court handed states more authority to force companies to collect such taxes.

“Every state loves this tax because you get to tax people who can’t vote for you,” Mr. Wenig said. “You get to tax businesses that aren’t in your jurisdiction, so this is the favorite tax of every state legislature.”

Shares of retail landlords rose on the ruling. Perhaps the biggest boost came to a newly public company called Avalara Inc. that makes a type of tax-compliance software many smaller merchants may now need. Its shares finished up more than 14%.

Thursday’s opinion is likely to spur a new push for a federal law to limit states’ ability to require tax collection by small businesses and to restrain cross-border audits. This time, however, it will be internet retailers and catalog businesses seeking guardrails on state action, and they’ll have the burden of mustering majorities in Congress.

Lawmakers, however, appeared just as divided on the issue Thursday as they did before the ruling, making near-term legislative action a challenge. Like at the Supreme Court, the congressional split is not entirely ideological.

Sens. Heidi Heitkamp (D., N.D.), Richard Durbin (D., Ill) and Lamar Alexander (R., Tenn.), for example, praised the ruling as “good news” for Main Street businesses, while Reps. Bob Goodlatte (R., Va.), Jim Sensenbrenner (R., Wis.) and Anna Eshoo (D., Calif.) said the decision was a “nightmare” that would “stifle online commerce, close businesses, and ultimately harm consumers.”

“We are now really comfortable with Congress continuing its path of not acting on this issue,” said Max Behlke, director of budget and tax policy for the National Conference of State Legislatures.

Steve Delbianco, president of NetChoice, an e-commerce trade group, said Congress should act immediately to create rules for states and retailers.

“A brick-and-mortar business won’t have to comply with the differing rules of over 12,000 tax jurisdictions, or integrate costly and complex tax software into its operations,” Mr. Delbianco said in a statement. “But small web businesses will.”

Justice Kennedy saw it differently. “There is nothing unfair about requiring companies that avail themselves of the states’ benefits to bear an equal share of the burden of tax collection,” he wrote.

Washington, D.C.—Today, Congressman Jim Sensenbrenner (WI-05) offered the following statement after voting for H.R. 6, the SUPPORT for Patients and Communities Act:

Rep. Sensenbrenner: “This comprehensive legislation advances our bipartisan effort to end the opioid epidemic and restore hope to families and communities suffering from this public health crisis. I’m proud of our work and urge my colleagues to take the next step and pass my Stopping Overdoses of Fentanyl Analogues (SOFA) Act to specifically target the proliferation of fentanyl analogues, which, along with other synthetic opioids, have become the most common cause of overdose-related death.”

More than 150 patient advocacy groups support H.R. 6. You can view the full list here.

H.R. 6 contains the following bills:

Sec 101. – H.R. 1925, the At-Risk Youth Medicaid Protection Act

Sec 102. – H.R. 4998, the Health Insurance for Former Foster Youth Act

Sec 103. – H.R. 5477, the Rural DOCS Act

Sec 104. – H.R. 5808, the Medicaid Pharmaceutical Home Act of 2018

Sec 105. – H.R. 5799, the Medicaid DRUG Improvement Act

Sec 106. – H.R. 5789, To amend title XIX of the Social Security Act to provide for Medicaid coverage protections for pregnant and post-partum women while receiving inpatient treatment for a substance use disorder, and for other purposes

Sec 107. – H.R. 5810, the Medicaid Health HOME Act

Sec 201. – H.R. 5603, the Access to Telehealth Services for Opioid Use Disorders Act

Sec 202. – H.R. 5809, the Postoperative Opioid Prevention Act of 2018

Sec 203. – H.R. 5798, the Opioid Screening and Chronic Pain Management Alternatives for Seniors Act

Sec 204. – H.R. 5804, the Post-Surgical Injections as an Opioid Alternative Act

Sec 205. – H.R. 3528, the Every Prescription Conveyed Securely Act Act

Sec 206. – H.R. 5675, To amend title XVIII of the Social Security Act to require prescription drug plan sponsors under the Medicare program to establish drug management programs for at-risk beneficiaries

Sec 207. – H.R. 5776, the MOST Act

Sec 301. – H.R. 5806, the 21st Century Tools for Pain and Addiction Treatment Act

Sec 302. – H.R. 5580, the STOP Fentanyl Deaths Act

Sec 303. – H.R. 3692, the Addiction Treatment Access Improvement Act of 2017

Sec. 5001 – H.R. 5583, to amend title XI of the Social Security Act to require states to annually report on certain adult health quality measures, and for other purposes

Sec. 5011, 5012 – H.R. 5800, the Medicaid IMD ADDITIONAL INFO Act

Sec. 5021, 5022 – H.R. 3192, the CHIP Mental Health Parity Act

Sec. 5031, 5032 – H.R. 4005, the Medicaid Reentry Act

Sec. 5041, 5042 – H.R. 5801, the Medicaid PARTNERSHIP Act

Sec. 6001 – H.R. 3331, To amend title XI of the Social Security Act to promote testing of incentive payments for behavioral health providers for adoption and use of certified electronic health record technology

Sec. 6011, 6012 – H.R. 5582, the Abuse Deterrent Access Act of 2018

Sec. 6021, 6022 – H.R. 5685, the Medicare Opioid Safety Education Act

Sec. 6031, 6032 – H.R. 5590, the Opioid Addiction Action Plan Act

Sec. 6041, 6042 – H.R. 5605, the Advancing High Quality Treatment for Opioid Use Disorders in Medicare Act

Sec. 6051, 6052 –  H.R. 5796, the REACH OUT Act of 2018

Sec. 6061, 6062, 6063, 6065, 6064 – H.R. 5773, the PASS Act of 2018

Sec. 6071, 6072 – H.R. 5723, the Expanding Oversight of Opioid Prescribing and Payment Act of 2018

Sec. 6081, 6082, 6083, 6084, 6085, 6086 – H.R. 6110, the Dr. Todd Graham Pain Management, Treatment, and Recovery Act of 2018

Sec. 6091, 6092, 6093, 6094, 6095 – H.R. 5774, the COACH Act of 2018

Sec. 6101, 6102 – H.R. 5676, the SENIOR Communities Protection Act of 2018

Sec. 6111, 6112, 6113, 6114 – H.R. 5775, the Providing Reliable Options for Patients and Educational Resources (PROPER) Act

Sec. 7001, 7002 – H.R. 449, Synthetic Drug Awareness Act of 2017

Sec. 7011, 7012 – H.R. 4275, Empowering Pharmacists in the Fight Against Opioid Abuse Act

Sec. 7021, 7022, 7023 – H.R. 4284, Indexing Narcotics, Fentanyl, and Opioids (INFO) Act of 2017

Sec. 7031, 7032 – H.R. 4684, the Ensuring Access to Quality Sober Living Act of 2017

Sec. 7041, 7042 – H.R. 5002, ACE Research Act

Sec. 7051, 7052 – H.R. 5009, Jessie’s Law

Sec. 7061, 7062 – H.R. 5041, Safe Disposal of Unused Medication Act

Sec. 7071 – H.R. 5102, Substance Use Disorder Workforce Loan Repayment Act of 2018

Sec. 7081, 7082 – H.R. 5176, Preventing Overdoses While in Emergency Rooms (POWER) Act of 2018

Sec. 7091, 7092 – H.R. 5197, Alternatives to Opioids (ALTO) in the Emergency Department Act

Sec. 7101, 7102, 7103, 7104, 7105, 7106 – H.R. 5228, the Stop Counterfeit Drugs by Regulating and Enhancing Enforcement Now (SCREEN) Act

Sec. 7111, 7112 – H.R. 5261, TEACH to Combat Addiction Act of 2018

Sec. 7121 – H.R. 5272, a bill to ensure that programs and activities that are funded by a grant, cooperative agreement, loan, or loan guarantee from the Department of Health and Human Services, and whose purpose is to prevent or treat a mental health or substance use disorder, are evidence-based

Sec. 7131, 7132 – H.R. 5327, Comprehensive Opioid Recovery Centers Act 2018

Sec. 7141, 7142, 7143, 7144 – H.R. 5329, the Poison Center Network Enhancement Act of 2018

Sec. 7151, 7152 – H.R. 5353, Eliminating Opioid-Related Infectious Diseases Act of 2018

Sec. 7161, 7162 – H.R. 5473, the Better Pain Management Through Better Data Act of 2018

Sec. 7171, 7172 – H.R. 5483, Special Registration for Telemedicine Clarification Act of 2018

Sec. 7181, 7182 – H.R. 5587, the Peer Support Communities of Recovery Act

Sec. 7191, 7192, 7193, 7194 – H.R. 5752, the Stop Illicit Drug Importation Act of 2018

Sec. 7201, 7202, 7203 – H.R. 5812, the Creating Opportunities that Necessitate New and Enhanced Connections That Improve Opioid Navigation Strategies (CONNECTIONS) Act

Sec. 7211, 7212 – H.R. 5687, the SOUND Disposal and Packaging Act

Sec. 7221 – H.R. 5811, to amend the Federal Food, Drug, and Cosmetic Act with respect to post approval study requirements for certain controlled substances, and for other purposes

Sec. 8001, 8002, 8003, 8004, 8005, 8006, 8007, 8008, 8009 – H.R. 5788, the Synthetics Trafficking and Overdose Prevention (STOP) Act of 2018

Sec. 8011, 8012 - H.R. 5889, the Recognizing Early Childhood Trauma Related to Substance Abuse Act of 2018

Sec. 8021, 8022 –  H.R. 5890, the Assisting States’ Implementation of Plans of Safe Care Act

Sec. 8031, 8032 – H.R. 5891, the Improving the Federal Response to Families Impacted by Substance Use Disorder Act

Sec. 8041 – H.R. 5892, to establish an Advisory Committee on Opioids and the Workplace to advise the Secretary of Labor on actions the Department of Labor can take to address the impact of opioid abuse on the workplace

Sec. 8051, 8052 – H.R. 2147, the Veterans Treatment Court Improvement Act of 2018

Sec. 8061 – H.R. 4635, to direct the Secretary of Veterans Affairs to increase the number of peer-to-peer counselors providing counseling for women veterans, and for other purposes

Sec. 8071, 8072 – H.R. 5294, the Treating Barriers to Prosperity Act of 2018

Sec. 8081, 8082, 8083, 8084 – House Amendment to S. 1091, the Supporting Grandparents Raising Grandchildren

Sec. 8091, 8092 – H.R. 6029, the REGROUP Act of 2018

You can read more information about the SOFA Act here and review the bill text here.