Heavy Dose of Irony With Supreme Court's Decision on Health Care Act

Yesterday's historic decision upholding the constitutionality of the Affordable Care Act (HCR/Obamacare) was not without a heavy dose of irony.

Where can one start? How about with the person who was the swing vote: Chief Justice John Roberts.

Roberts had been nominated by President George W. Bush and many on the left castigated his conservative views. Indeed, the confirmation vote split Democrats neatly in half. Here's the list of those who voted against Roberts' confirmation as Chief Justice of the Court:

Democrats voting no:
Daniel Akaka of Hawaii
Evan Bayh of Indiana
Joseph Biden of Delaware
Barbara Boxer of California
Maria Cantwell of Washington
Hillary Rodham Clinton of New York
Jon Corzine of New Jersey
Mark Dayton of Minnesota
Dick Durbin of Illinois
Dianne Feinstein of California
Tom Harkin of Iowa
Daniel Inouye of Hawaii
Edward Kennedy of Massachusetts
John Kerry of Massachusetts
Frank Lautenberg of New Jersey
Barbara Mikulski of Maryland
Barack Obama of Illinois
Harry Reid of Nevada
Charles Schumer of New York
Debbie Stabenow of Michigan
Jack Reed of Rhode Island
Paul Sarbanes of Maryland

You'll note more than a few of those Democrats were among those who were behind enacting the PPACA (PL 111-148). They're now loudly hailing the affirmation of the health care reform package and individual mandate but were opposed to Roberts on ideological grounds. Likewise, many Republicans who had supported Roberts, were gravely disappointed about the decision and were vowing to repeal the Act as soon as next month. Pundits and bloggers alike were calling for Roberts' head.

The job of the Senate in confirmation isn't making sure that the nominee of the Court has pure political views that align with the wishes of Congress. It is to advise and consent - does the nominee have what it takes to sit on the highest court in the nation.

I always thought that Roberts was supremely qualified for the Court - as did many Republicans.

Yet, it was the vote on the health care reform package that upset the apple court. Those Democrats who pushed for the health care reform are now cheering Roberts for upholding the health care act's individual mandate, while Republicans and right wingers are calling for Roberts' head because he somehow ruled the individual mandate constitutional when they thought it wasn't.

Roberts held true to his confirmation hearing statement - his job is to call balls and strikes, not to pitch or bat. As his opinion in the case shows, he rejected the Commerce Clause and Necessary and Proper clause because they were Congressional overreach, and yet sustained the Act on taxation powers grounds. He also directly addressed judicial activism and construing acts of Congress:

Now, the Court, of course, has the obligation, and has been recognized since Marbury v. Madison, to assess the constitutionality of acts of Congress, and when those acts are challenged, it is the obligation of the Court to say what the law is. The determination of when deference to legislative policy judgments goes too far and becomes abdication of the judicial responsibility, and when scrutiny of those judgments goes too far on the part of the judges and becomes what I think is properly called judicial activism, that is certainly the central dilemma of having an unelected, as you describe it correctly, undemocratic judiciary in a democratic republic.

That's exactly what was done, and yet Republican after Republican was calling the Act unconstitutional, including GOP Nominee for President Mitt Romney.

Republican leaders pounced, with Senator Mitch McConnell of Kentucky, the minority leader, declaring: “This law is a tax. This bill was sold to the American people on a deception.”

Mr. Romney chose instead to cast the health care overhaul as poisonous to the economy and a prime example of the Obama administration’s expansion of government.

“What the court did not do on its last day in session, I will do on my first day as president of the United States,” Mr. Romney said in a rare appearance on Capitol Hill shortly after the ruling. He added, “Our mission is clear: If we want to get rid of Obamacare, we’re going to have to replace President Obama.”

Romney's vow to act to repeal the Act is not without its own sense of irony. He was Governor of Massachusetts when the state enacted its own form of individual mandate. Romney was once one of the biggest proponents of the kind of health care reform ultimately backed by President Obama.

Then, there the matter that Republicans in general had backed some form of individual mandate for more than 20 years until the Obama Administration decided to use its own version of individual mandate. That's when the Republicans shifted to oppose it at all costs and repeatedly called it unconstitutional.

What can anyone make of the fact that they were pushing a policy objective for 20 years that they only considered unconstitutional once the other side of the aisle took them up on the matter and enacted it as law.

I really think that if a Republican in the White House went ahead with the same proposals, the sides would be a mirror image of what we've got- Republicans would be hailing the decision while Democrats would be aghast at the imposition of the individual mandate (but because it didn't go nearly far enough). Much of the rancor and rhetoric is purely partisan politics at work. After all, who in their right mind would repeal provisions that extend benefits to dependents up to age 26 (expanding coverage to millions) or eliminating lifetime insurance limits. The GOP has made it a central part to their campaigns going into November that they would seek to repeal the entirety of the reform act, but if they simply switched around a few minor provisions, they'd be more than happy to declare Obamacare dead and rename it. They want to deny President Obama any achievement, especially on health care reform.

Despite the landmark ruling, there are issues with the reform package that need reform. Treatment of OTC drugs for flex spending accounts should be revised to once again include it as a reimbursable item. Congress has already address onerous paperwork requirements. Costs for procedures and drugs should be made more transparent so that everyone knows what items cost - and allow for more comparison shopping, which should work towards bending the cost curve and produce additional savings for consumers and health care providers alike.

If Congress wants to find a different way to fund the variety of programs, then by all means let them figure out a way to do so. But with the GOP refusing to accept any tax hikes, even those that are the result of a Congressional decision to allow tax rates to return to pre EGTRRA (Bush tax cuts) levels when the rate cuts expire (and they've already extended the cuts into 2013), that's pretty much a nonstarter.

What is also surprising is that when polled on specific items of the reform act, they show significant support, but they oppose the package as a whole. That goes to how the Republican message has won the day on health care reform, even though their constituents largely approve of changes. It also points out the complexity with the health care law and how most people don't understand what's going on.

Yet Another Federal Judge Rules DOMA Unconstitutional

The constitutionality of the federal Defense of Marriage Act (DOMA) will come before the Supreme Court before long. There are too many lower courts finding that its provisions are unconstitutional to contend with. The latest ruling is from the Second Circuit, where District Court Judge Barbara Jones found that the DOMA provision to define marriage intrudes on the states' right of regulating domestic relations. In other words, DOMA violates the 10th Amendment.

She said, "That incursion skirts important principles of federalism and therefore cannot be legitimate, in this court's view."

The judge said the law fails because it tries to re-examine states' decisions concerning same-sex marriage. She said such a sweeping review interferes with a system of government that places matters at the core of the domestic relations law exclusively within the province of the states.

The ruling came in a case brought by Edith Windsor, a woman whose partner died in 2009, two years after they married in Canada. Because of the federal law, Windsor didn't qualify for the unlimited marital deduction on her late spouse's estate and was required to pay $363,053 in federal estate tax. Windsor sued the government in November 2010.

As part of her ruling, Jones ordered the government to reimburse Windsor the money she had paid in estate tax.

The disparate treatment goes to equal protection under the law. Judge Jones' ruling came just days after the 1st Circuit found that DOMA was unconstitutional in denying federal benefits to same-sex couples. Two judges in the 9th Circuit have issued district court rulings along the same lines.

Mitt Romney Takes Idiocy To New Level

At a campaign rally in Las Vegas yesterday, presumptive GOP nominee Mitt Romney proposed a constitutional amendment that would make anyone who does not have a business background as ineligible for the White House as if they had been born in Kenya.

“I was speaking with one of these business owners who owns a couple of restaurants in town,” Romney said. “And he said ‘You know I’d like to change the Constitution, I’m not sure I can do it,’ he said. ‘I’d like to have a provision in the Constitution that in addition to the age of the president and the citizenship of the president and the birthplace of the president being set by the Constitution, I’d like it also to say that the president has to spend at least three years working in business before he could become president of the United States.‘”

Romney continued: “You see then he or she would understand that the policies they’re putting in place have to encourage small business, make it easier for business to grow.

That's right folks, he'd make someone like Dwight Eisenhower, Teddy Roosevelt, or even recent GOP candidates like John McCain, Mike Huckabee, or Rick Santorum ineligible to run for President because they lack so-called business experience.

Of course, this comes on the heels of Romney's courting of birther Donald Trump, so this isn't all that surprising. He's pandering to the extremists and thinks this is a winning strategy to win in November. It might help solidify his base, but it wont help him sway moderates or independents on which this election will depend (as it always done).

Far from moderating his positions to pull votes from the center, it seems that Romney is sticking to the hard right.

Romney's pushing this nonsense in an attempt to sway people on the economic conditions facing the nation, but his business experience isn't exactly the most sterling example of job creation. Bain Capital - the venture capital firm where he worked - was interested in making money for the firm - not job creation. Jobs were frequently killed in acquisitions and consolidations made by the firm. Creative destruction to be sure - someone made money on the transactions, but it doesn't help create jobs by shuttering factories.

Newt's Odd Understanding of the US Constitution

One doesn't need to look any further than Newt Gingrich's exception to his rule to see the absurdity of his claim that he'd simply ignore US Supreme Court decisions with which he didn't agree, and that he'd consider abolishing some courts or impeaching other judges with whom he didn't agree.

That's not a separation of powers argument; it's a tremendous overreach and one that's ripe for tremendous abuse.

As a historian, Gingrich said he knows President Thomas Jefferson abolished some judgeships, and President Abraham Lincoln made clear he did not accept the Dred Scott decision denying that former slaves could be citizens.

Relying on those precedents, Gingrich said that if he were in the White House, he would not feel compelled to always follow the Supreme Court's decisions on constitutional questions. As an example, he cited the court's 5-4 decision in 2008 that prisoners held by the U.S. at Guantanamo Bay, Cuba, had a right to challenge their detention before a judge.

"That was clearly an overreach by the court," Gingrich said Saturday. The president as commander in chief has the power to control prisoners during wartime, making the court's decision "null and void," he said.

But the former House speaker demurred when asked whether President Obama could ignore a high court ruling next year if it declared unconstitutional the new healthcare law and its mandate that all Americans have health insurance by 2014. Gingrich said presidents can ignore court rulings only in "extraordinary" situations.

So, using Gingirch's standards, if President Obama considered the ruling to be an extraordinary situation, the President could simply ignore the Court's ruling so as to continue the health care reform package even if the Court found it unconstitutional? The howls that would come from the GOP and the conservative base that Gingrich is courting in the 2012 election season would never be louder than if the President simply ignored a court ruling the health care law was unconstitutional because the President simply thought that the health care law was an extraordinary situation. He'd probably be the first to claim that President Obama should be impeached for ignoring the Court.

Moreover, this is yet another blow to the Court's power of judicial review, which puts the Court in the position of deciding what is constitutional and what isn't.

Now, judicial review doesn't mean that the Courts are infallible or that they always make the correct decisions. After all, the Court found that slavery was acceptable before the Civil War and that it approved of actions that were later found to be unconstitutional (see Brown v. Board of Education, for example).

Meanwhile, Gingrich thinks that the Constitution doesn't provide for a right of same-sex marriage. A Court would be justified by the plain language of the Constitution to allow for same-sex marriage because the 14th Amendment requires equal protection under the law using the same kind of rationale as used in Brown and its progeny.

In other words, not only is Gingrich a poor historian, but an even worse scholar when it comes to constitutional matters. But he's shrewd enough as a politician to know that the GOP base he's courting would like to see policies it doesn't like eliminated one way or another, even if it means ignoring longstanding powers of the Courts or a vast expansion of presidential power (but only when held by the "right" people.)

Health Care Reform Law To Go Before US Supreme Court Next Year

The US Supreme Court will take up portions of the health care reform act (Affordable Care Act of 2009) in oral arguments scheduled for March 2012. Its timing will also impact the 2012 elections, as the health care reform is one of President Barack Obama's signature accomplishments. Briefs for both sides, including amicus briefs, are posted on the Supreme Court site.

The oral arguments will focus on the limits of federal power and what the federal government can or cannot prescribe.

On Tuesday, on the other hand, a three-judge panel of the District of Columbia Circuit upheld the law. Judge Silberman, who had grilled Ms. Brinkmann so aggressively, wrote the majority opinion, and his discussion of the limits of Congressional power may have handed the administration a bigger victory than it wanted, because it presumably did not want to win on the grounds that Congress could do anything at all.

Judge Silberman said he remained troubled by what he called “the government’s failure to advance any clear doctrinal principles limiting Congressional mandates that any American purchase any product or service in interstate commerce.”

Then he adopted a version of Mr. Dellinger’s argument.

“That a direct requirement for most Americans to purchase any product or services seems an intrusive exercise of legislative power,” Judge Silberman wrote, “surely explains why Congress has not used this authority before — but that seems to us a political judgment rather than a recognition of constitutional limitations.”

Judge Silberman said there were Supreme Court decisions on issues like regulating the use of medical marijuana that had endorsed broad Congressional power to legislate in the name of commerce.

“It certainly is an encroachment on individual liberty,” he wrote of the health care law, “but it is no more so than a command that restaurants or hotels are obliged to serve all customers regardless of race, that gravely ill individuals cannot use a substance their doctors described as the only effective palliative for excruciating pain, or that a farmer cannot grow enough wheat to support his own family.”

In dissent, Judge Kavanaugh praised the majority for its honesty in describing what followed from its ruling.

“The majority opinion here is quite candid — and accurate,” he wrote, adding: “The majority opinion’s holding means, for example, that a law replacing Social Security with a system of mandatory private retirement accounts would be constitutional. So would a law mandating that parents purchase private college savings accounts.”

My own beef with the mandatory insurance requirement is that the penalty provision is essentially a tax, and the enforcement provisions are carried out through the tax code. The penalties are imposed for people who refuse to sign up for health insurance plans if they are capable of doing so (have income above a certain level).

As written, the mandate requires almost everyone to get insurance or face a fine - $95 in 2014, $325 in 2015 and $695 in 2016 (with a maximum of $2,250 for a family). There is an exemption for low-income people.

This portion could be struck down but the lost revenue generated from the mandate would affect other provisions, including the preexisting conditions clause.

The individual mandate takes effect 2014. The preexisting condition requirement went into effect for children under 19 who are to be on their parents insurance. Adults will have the preexisting condition requirement starting in 2014. You would expect to see a fiscal effect based on the changes already enacted from which one can objectively judge the financial scoring on the health care package.

The health care reform doesn't hit at the core problem with health care delivery in the country - cost. The requirement to force people into obtaining health insurance doesn't reduce the cost of health care to these people. It increases those costs - significantly. The notion that having a greater pool of people paying into health care insurance will lead to overall lower premiums may work, but the costs for health care aren't being contained by any stretch. That will only come through changes not included in the health care reform package.

There's a difference between access to health care and affordability - and the health care reform package obfuscated the two.

So, the Supreme Court will take this matter and issue an opinion within months of the 2012 election, which makes the decision as much a political document as it is a legal one.

Federal Judge Strikes Down Individual Mandate Portion of Health Care Reform Package

A federal court judge in Virginia has ruled that Congress has overstepped its powers to regulate interstate commerce by requiring people to purchase health care insurance whether they want to or not - and impose penalties on those who refuse to buy insurance.

U.S. District Judge Henry Hudson in Richmond, Virginia, said today that the requirement in President Barack Obama’s health-care legislation goes beyond Congress’s powers to regulate interstate commerce. While severing the coverage mandate, Hudson didn’t address other provisions such as expanding Medicaid that are unrelated to it. He didn't order the government to stop work on putting the remainder of the law into effect.

Hudson found the minimum essential coverage provision of the act “exceeds the constitutional boundaries of congressional power.” Hudson was appointed by President George W. Bush in 2002.

The decision left intact other provisions of the law and only affects the part that requires most U.S. citizens to maintain minimum health coverage beginning in 2014.

The decision in Commonwealth of Virginia v. Sebelius can be found here.

The individual mandate is the penalty portion of the package to expand the pool of people paying into the insurance plan. As written, the mandate requires almost everyone to get insurance or face a fine - $95 in 2014, $325 in 2015 and $695 in 2016 (with a maximum of $2,250 for a family). There is an exemption for low-income people.

This portion could be struck down, the the remaining portions of the bill are unaffected - such as the expanded requirements that the insurers cover to age 26, preexisting conditions, etc. However, federal officials say that the revenue loss on this portion will affect the preexisting conditions clause.

The individual mandate takes effect 2014. The preexisting condition requirement went into effect for children under 19 who are to be on their parents insurance. Adults will have the preexisting condition requirement starting in 2014. You would expect to see a fiscal effect based on the changes already enacted from which one can objectively judge the financial scoring on the health care package.

Also expect this to be appealed to the US Supreme Court (it should go without saying). Other circuits will likely take a different tact, but in the end I think it will be upheld on Commerce Clause grounds because Congress does have the power to affect interstate commerce (Art 1, Sec 8) and Congress has previously imposed requirements on insurers nationally. It's an incremental change that is within Congressional power under the Constitution.

That doesn't mean that I agree with the personal mandate provisions, which essentially tax millions of people who have made the decision not to pay for insurance. Congress could disguise it under different terms, but the penalty provisions and enforcement are through the tax code. It represents a significant tax hike if these people opt not to buy insurance. It's a real hike in costs to these individuals in the wishful thinking of bending the cost curve for services by expanding the pool of health care consumers to include those in good health who do not normally seek health care.

Striking this portion down could potentially open up insurers to even higher costs since the unaffected portion of the health care act requires insurers to pick up patients with preexisting conditions.

One thing to keep in mind is that the federal government is counting on substantial noncompliance in order to balance the books on this - it takes billions in penalties imposed under the individual mandate in order to fund other aspects of the health care reform act, and that's shaky ground because you're hoping that millions of people choose to not pay for insurance and then take the tax penalty hit. CBO scoring (full scoring here - See Table 2 (penalties)) assumes that a percentage of the public is noncompliant and balances the HCR on that basis. It figures that $4 billion will be collected in each of 2017 through 2019 and is included in the full figure for penalties collected for the period studied by the CBO. It further assumes that 4 million will choose to pay the penalty rather than pay for the individual mandate.

This decision once again highlights the limits of relying on the CBO and its scoring. The CBO scoring is good at what it does - based on existing law at the time the study is undertaken with no additional changes during the time studied. It doesn't take into account legislative changes enacted thereafter or judicial rulings that can affect outcomes.

UPDATE:
Others weighing in on the ruling include the following: The Huffington Post, The Volokh Conspiracy, ThinkProgress, No More Mister Nice Blog, Crooks and Liars, Outside the Beltway, SCOTUSblog, Examiner, Althouse, Law Blog, Above the Law, Balloon Juice, Firedoglake, Little Green Footballs, and The Moderate Voice.

Idiocy Abounds On Cordoba House Controversy

The latest idiocy comes from none other than a former sports writer who fancies himself an opinionist, Mike Lupica.

He would much rather ignore the US Constitution and its guaranteed protections for free exercise of religion and put the decision of whether to build a mosque near Ground Zero in the hands of the families of victims of the 9/11 terror attacks.

Does Lupica know that there are few issues on which 9/11 families would agree?

Does he realize that some families wanted to see absolutely no construction of office space in Ground Zero?

Does he realize that some families wanted the 2 million tons of debris carted off to Fresh Kills returned to Ground Zero because of the possibility of remains of their loved ones being found pulverized among the debris and that they wanted their loved ones' final resting place to be at the site?

Does he realize that some families backed a proposal to rebuild the Twin Towers as they were - but up to modern building codes and the most advanced construction techniques?

Does Lupica realize that some of those murdered by the 9/11 terrorists were themselves Muslims?

Who exactly was Lupica going to have in charge of the families? Debra Burlingame, whose opposition to the mosque near Ground Zero is on the record, despite the fact that two other mosques are in close proximity to the Park Place site?

No, the final decision for building isn't up to Mayor Bloomberg or even President Obama. It was up to the local community who not only lived through the 9/11 terror attacks, but has ended up thriving and expanding in population significantly. It is the local community who felt that the benefits of a community center with all manner of amenities outweighed other possible detriments. It is the local community who wants to see the community center built, even as outsiders demand that no such construction take place because the backers of the project are Muslim.

Some of the same people who are complaining that a Muslim community center and mosque near Ground Zero would be an affront to the memory of the 9/11 victims or somehow violative of the sanctity of Ground Zero ignore that the community around Ground Zero includes all manner of salacious businesses.

Opponents of a proposed lower Manhattan mosque and community center speak in hushed tones about the sanctity of the "shadow of Ground Zero."

Tell that to the patrons of the Pussycat Lounge, a strip club where a photo of a nearly naked woman marks its location just two blocks from where the World Trade Center stood.

Or the Thunder Lingerie and peep show next door, where the marquee sports an American flag above a window display of sex toys and something called a "power pump."

Many come to the scene of the worst terrorist attack on American soil to pay tribute to pain and unspeakable tragedy. They're welcomed by solemn memorials and a visitors center amid the noise of reconstruction.

Heck, Park Place is home to a bar (the Dakota Roadhouse) next to where the Muslim community center and mosque would be built. Yet, there's nary a peep about that.

Here's a look at how the opposition to the mosque grew, and who was behind the opposition, including Pam Geller. Note too that many of the opponents purposefully conflate the location of the proposed mosque and community center with Ground Zero so as to make it appear that it is being built in Ground Zero, rather than merely near it. News reports continually make the same error even though it is all too clear that the site is nearby. It's laziness for the media, but mendacity for the opponents who are savvy enough to take advantage of that situation.

Is it any wonder that so many people oppose the proposal when they think that the construction will occur within Ground Zero and not near it? Is it any wonder that some people think that the mosque will overshadow Ground Zero and its construction, when it wont even be the tallest building on its own block?

Is it any wonder that some people are complaining bitterly about the choice of location for the community center and voicing their opposition despite the fact that two other mosques are nearby, and predate this proposal by decades?

Sauce For The Goose; Good For A Gander

Senate Majority Leader Harry Reid (D-NV) suggested that Hispanics have no reason to join the GOP in part because of their stance on birthright immigration - the GOP wants to eliminate it.



Well, not so fast Senator Reid. It looks like you were sponsoring legislation (S.1351
Title: Immigration Stabilization Act of 1993) that would have done just that (although it is unconstitutional since legislation can't trump the Constitution). That bill was cosponsored by James Exon (Democrat from Nebraska and former NE Governor), Lauch Faircloth (Republican from North Carolina), and Richard Shelby (originally an Alabama Democrat who switched to the GOP in 1994). The key language is here:

SEC. 1001. BASIS OF CITIZENSHIP CLARIFIED.

In the exercise of its powers under section 5 of the Fourteenth Article of Amendment to the Constitution of the United States, the Congress has determined and hereby declares that any person born after the date of enactment of this title to a mother who is neither a citizen of the United States nor admitted to the United States as a lawful permanent resident, and which person is a national or citizen of another country of which either of his or her natural parents is a national or citizen, or is entitled upon application to become a national or citizen of such country, shall be considered as born subject to the jurisdiction of that foreign country and not subject to the jurisdiction of the United States within the meaning of section 1 of such Article and shall therefore not be a citizen of the United States or of any State solely by reason of physical presence within the United States at the moment of birth.

The legislation went nowhere in 1993, but Reid is making hay over the fact that the GOP wants to do substantially the same thing in 2010.

To Reid, this is politics as usual. All the while, existing immigration laws are not enforced and businesses are not penalized for hiring illegal aliens. That too is business as usual.

Poison Pill Provisions In Porkfest Unconstitutional

It shouldn't surprise anyone that few people, let alone those members of Congress or the President of the US, actually read the entire porkfest stimulus spending bill. Fewer still took an interest in the poison pill provisions that related to unfunded mandates imposed on states.

Even fewer had a clue what Congress sought to do as an end run around state law.

What is truly sad is that the constitutional law experts are finally getting around to writing about this. Ronald Rotunda, who is one of the foremost constitutional law experts in the nation (and edits one of the key hornbooks on the subject), points out the poison pill provision.

Rotunda writes:

The aphorism, he who pays the piper calls the tune, is one that Congress understands quite well. If the state accepts funds, it also accepts a host of restrictions. For example, the plan increases, temporarily, the money it sends to states to fund various welfare programs. To receive that money, states have to add thousands of new people to the welfare rolls. In two years, the federal largesse stops, but the new welfare recipients are still there.

Consequently, several governors have said that they might simply refuse the money. Most are Republican, but recently the Democratic governor of Tennessee has joined the chorus. The stimulus bill, for example, gives $7 billion to the states to add to their unemployment trust funds, but to receive this "gift," a state has to change its formula so that it makes more people eligible for benefits, which leaves a long-term obligation on the system.

Because some governors might not accept the money, Congress added a unique provision, in subsection 1607(b): "If funds provided to any State in any division of this Act are not accepted for use by the Governor, then acceptance by the State legislature, by means of the adoption of a concurrent resolution, shall be sufficient to provide funding to such State."

If state law does not give the state legislature the right to bypass the governor, how can Congress just change that law? Where does Congress get the power to change a state constitution?

It might appear quaint to note that the U.S. Constitution does not create a central government of unlimited powers. Congress only has those powers that the Constitution gives it either expressly or by implication. That's a lot of power, to be sure, but it's not unlimited.

Where does Congress get the power to bypass state law indeed. The federal government derives its legitimacy from the several states - not the other way around. This is an unbridled power grab by the federal government to coerce the states and to circumvent state governors who might refuse to impose massive unfunded mandates on their states at a time when state revenues are uncertain at best, and many are seeing a reduction in revenues.

This law throws federalism on its head and yet Congress and President Obama (who fancied himself a constitutional law expert) saw fit to include this provision in the bill. To what end did they see fit to do this? Did someone in Harry Reid or Nancy Pelosi's office contemplate a situation where a GOP governor might refuse to take federal aid but thought that the state legislature of that state might overrule the governor? If that's the case, then someone ought to be asking Reid's or Pelosi's office what they were thinking overruling decades of jurisprudence on constitutional law and the principles of federalism.

UPDATE:
Powerline also writes on the subject, and asked Prof. Rotunda whether the bill contained a severability clause. Apparently, it does not. For those who are unfamiliar with a severability clause, it essentially states that if any single provision of the bill is found to be unconstitutional, only that individual provision is rendered moot; the rest of the bill's provisions are still in force.