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The Right Prescription
Rewriting Its Own Bad Obamacare Law
Who needs Congress when the Obama administration is ready to legislate?
(Page 2 of 2)
In this case the enactment process militates against a judicial rewrite. After the election of Scott Brown in January 2010, the Democrats lost their filibuster-proof majority in the Senate. That required the Democrats to accept an unfinished product as the final version, subject only to the modest changes available through the reconciliation process (which requires a simple Senate majority). Adler and Cannon point out: “Given the choice between a Senate bill with many provisions they did not like, or no bill at all, they opted to accept the former.” And in using the reconciliation process Congress did not add benefits for federally created exchanges.
Anyway, leaving out tax credits and subsidies for federal exchanges was not just a “drafting error.” Even Jost admits, “It is clear that the federal government favored state exchanges.” The mere fact that tax credits and subsidies for federally run exchanges would be consistent with the legislation does not mean they were intended to be part of the legislation. Jost assumes rather than proves that Congress intended other than it legislated. Jost, like the administration, wants the IRS to amend the law to read as he wishes, not as Congress intended.
Indeed, Adler and Cannon make a strong case that legislators knew what they were doing, that “this feature of the law was intentional and purposeful, and that the IRS’s rule has no basis in law.”
First, the legislation is clear. The text of the bill as passed is unambiguous. The relevant section only applies to state-run exchanges. Antecedent legislation that was subsumed by PPACA also failed to provide tax credits and subsidies for federal exchanges. Moreover, argue Adler and Cannon, “Neither the structure, history, nor other indicia of congressional intent support the IRS position.”
Backers of PPACA decided to rely on state-created exchanges. Obviously, Congress could have taken a different approach. In fact, Senate Finance Committee Chairman Max Baucus, who wrote much of the law, initially favored a federally established exchange. But his first “chairman’s mark” went with a state-based system, with federal exchanges as back-up.
Since the Constitution barred Uncle Sam from formally mandating state action, legislators provided financial incentives to win over recalcitrant states. Note Adler and Cannon, offering benefits only for state-established exchanges “is consistent with the PPACA’s modus operandi of using financial incentives to elicit a desired behavior.” There are penalties for individuals, employers, and states. (Indeed, the Supreme Court ruled that the cost to states that did not expand Medicaid was so onerous as to be unconstitutional.) Obamacare’s supporters appeared convinced that they would get their way.
For instance, the president declared that “by 2014, each state will set up what we’re calling a health insurance exchange.” Secretary Sebelius insisted that states were “very eager” to establish exchanges. President Obama and the congressional authors of PPACA probably did not expect to encounter widespread resistance. After all, the alternative to state action was a federal takeover without politically attractive benefits. The law’s supporters may have been foolish, but it is not up to the IRS to remake the law in response.
To override the obvious would require substantial evidence of contrary intent, but none exists. In fact, Senator Baucus stated that benefits were provided only to state-run exchanges. And that comment, observe Adler and Cannon, “is the only instance we found of a member of Congress discussing whether tax credits would be available in federal exchanges, and it flatly and authoritatively contradicts the IRS position.”
Backers of an administrative rewrite contend that the results of the law, as passed, are, well, absurd — that, in the words of a prior Supreme Court decision, “will produce a result demonstrably at odds with the intentions of its drafters.” However, many laws passed by Congress have absurd results.
PPACA is no different. Adler and Cannon point out that “In at least two other instances, Congress displayed an even higher tolerance for iatrogenic instability.” Legislators imposed community-rating on health insurance for children with no additional requirements, destroying the market for such policies in many states. And the administration gave up on the Community Living Assistance Services and Support Act, designed to cover long-term care, because the law as written was unsustainable.
Anyway, the alleged absurdity results not from how Obamacare was written, but from Congress’s erroneous assumption that states would rush to establish exchanges. The judiciary is not empowered to correct legislators’ judgment errors.
In fact, the administration appears to be suffering from a case of buyer’s remorse. States were supposed to establish exchanges. But they haven’t. Congress did not provide for that possibility by backing federally created exchanges in the same way. So the administration wants to insert the provision via administrative fiat.
PPACA backers also claim general administrative authority to interpret and implement statutes, but agencies can only operate based on legislative authority. If the executive can issue any rule “consistent” with rather than authorized by a law, there are few things that it cannot do — which truly would be an absurd result. Obamacare is massively complex; a wide variety of provisions could conceivably be consistent with the law’s professed objectives. But turning them into law is a job for legislators, not bureaucrats.
Obamacare does many things, most bad. However, it only authorizes tax credits and subsidies for “a governmental agency or nonprofit entity that is established by a State.” That does not include the federal government. The evidence suggests this is what Congress intended.
Maybe legislators were overly confident that their incentives would be sufficient to goad states to act. However, that mistake would not justify an IRS rewrite of the law. Only Congress can authorize tax credits and subsidies. Agencies have substantial discretion but, conclude Adler and Cannon, “they cannot write their own laws, impose taxes, issue tax credits, spend federal revenue, incur new federal debt, or create new legal entitlements without congressional authorization.”
Apparently the Obama administration does not understand this basic constitutional fact. But then, respecting the Constitution is obviously not a priority for the president who once taught constitutional law. It is now up to the courts to protect the rule of law.
About the Author
Doug Bandow is a senior fellow at the Cato Institute. A former Special Assistant to President Ronald Reagan, he is the author and editor of several books, including The Politics of Plunder: Misgovernment in Washington (Transaction).
Letter to the Editor View all comments (34) | Leave a comment
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TLP| 8.22.12 @ 7:14AM
I wouldn't worry about it.
If Black Hitler wins? The Constitution will no longer exist. It will be cast out of the Library of Congress, never to be spoken of, again. You'll be able to read it, as it will most likely turn up printed on Wrapping Paper, and Book Covers, but "What it all means" will be forever lost in the ethers, since it's already being Ignored and Sidestepped by the Politicians, and Trashed by the Left, and the Leftists who oversee Public Education. My kid is going in to the 7th Grade and still has not had Day 1, of the Founding of this Country.
And, if Black Adder loses?
That will end this brief descent in to madness, until the next time we Ignore Human History, and follow a Young attractive leader with powerful oratorical skills, and a slick campaign, into the abyss.
SIEG HEIL!
Capiche?
Alan| 8.22.12 @ 7:26AM
I would only disagree with one item, he has no powerful oratorical skills. Take away his teleprompter and you have to pry his foot out of his mouth with a crowbar. An evil nefarious person with real oratorical skills would be frightening to behold and its effects on the stupid and ignorant twits that grace this country would be pied piper lemming level material.
TLP| 8.22.12 @ 9:06AM
You are correct.
Let's change "Powerful Oratoical Skills" into "Really Good Reader".
Much better.
TLP| 8.22.12 @ 9:16AM
And, not for nothing, but when you look at Frau Sebelius in that photo, above? Can't imagine that there is a Baby that's crying, somewhere in the back of the room, and that she'd like nothing better than to march over their with a pair of Scissors, and Slice that Kid's neck open, at the base of its Skull, and Suck out its Brain, and Throw in in to a Storage Room, if only the Media wasn't there?
Seriously.
Can't you see it?
Cause that's what I see.
R Martin| 8.22.12 @ 10:54AM
Yes, I've always seen that. I think Sebelius makes nurse Ratched look cuddly.
Stephie| 8.22.12 @ 11:23AM
She is the Angel of Death and the democrats are the party of death, all in the name of "a woman's right to choose" of course as we all know, a marxist line to make us feel like we're in charge of our bodies.
chuck| 8.22.12 @ 7:43AM
TLP,
It is up to YOU, not his teachers, to instill the values inherent in our Republic. Teach him what this country stands for, where we came from, and what must be done to preserve it.
You know all these things. Your responsibility is to pass the knowledge down to your children and grandchildren.
TLP| 8.22.12 @ 9:02AM
I do that chuck. That's not the point.
The Point is that I'm a Huge Minority.
I guarantee you that 99 out of 100 Parents, are NOT teaching their children what my Teachers taught Me, in Elementary School, and what these MFers should be Teaching EVERYBODY'S Kids, today.
I hope that cleared things up for you.
Pecos Pete| 8.22.12 @ 9:39AM
Tim: A bit of an overstatement with that "99 out of 100 Parents" thing. But, I'd accept 60 out of 100. Still, your point is made. Parents, not schools, instill discipline, reverence and morality.
Stephie| 8.22.12 @ 11:24AM
Not any more. Too busy working to get that big house and suburban.
Cat Shot| 8.22.12 @ 10:34AM
How can parents teach what they themselves were not taught?
TLP| 8.22.12 @ 6:45PM
Nice.
Jacob McCandles| 8.22.12 @ 7:58AM
The Supremes undid most of the law's "intent" by the Medicaid ruling. Medicaid was the instrument for insuring most of the uninsured.
We all know the true intent of the law, however, and insuring the poor was not it.
Bill Hussein O'Stalin| 8.22.12 @ 7:44AM
In the meantime I suspect we will observe an interesting phenomenon.
All the freeloaders who won't work and refuse to pay for their necessities will gravitate to the states that have set up their health care exchanges.
Once those states are overwhelmed with the freeloaders who can move from state to state quite easily, they may change their minds.
TLP| 8.22.12 @ 6:46PM
Absolute Genius.
chuck| 8.22.12 @ 7:45AM
Laws, we don't need no stinkin' laws!
And the libs say that Bush trashed the Constitution!
The Avenger| 8.22.12 @ 8:20AM
I certainly hope the lemmings who elected this "dear leader" are happy with their changes. I'm not!
Von Mises Jr| 8.22.12 @ 10:01AM
First of all, Obama is not a Constitutional Law Professor. He was a community organizer and lecturer on Alinsky's "Rules for Radicals."
While the article is excellent in explaining the difficulty of setting up the system, it fails to explain that ObamaCare is also not funded. The State Mandate argued on the Third Day was not constitutional. The states DO NOT have to extend Medicaid to 138% of the poverty-line.
In New Jersey, that would increase the Medicaid portion of the State Budget from $10B to $15B. With a $33B budget, property taxes MUST be raised by 15% across the board to fund the Medicaid expansion. But since many seniors have caps on property taxes, average homeowners paying $10-12K would have to pay 20-25% higher taxes. So property taxes MUST NECESSARILY SKYROCKET $2K TO $3K or nobody additional gets a checkup.
So much for finding out what is in the Bill by passing it. Is it Constitutional? "Are you Serious?"
TLP| 8.22.12 @ 6:48PM
Exactly right.
He was never a Professor of ANYTHING.
He was a Guest Speaker, when he wasn't hitting up the GUYS at the Harvard Review for Sex.
Good Post.
Von Mises Jr| 8.22.12 @ 7:32PM
Did Kevin Jennings go to Harvaaaaad?
JD| 8.22.12 @ 11:09AM
When this error in ObamaCare blows up in Obama's face, the MSM will ensure that the public believes fault lies with the evil Republicans who resist efforts to fix the law over trifles like the Constitution. "They're letting people die!"
CJW| 8.22.12 @ 11:53AM
We should thank Nancy Pelosi who at least was honest enough, or stupid enough, to say they had to pass it so they could read it. If they had read it they would have fixed it.
Von Mises Jr| 8.22.12 @ 3:25PM
They read all they needed to know, or thought they needed to know in five words: "As the Secretary Shall Determine."
That is how totalitarianism works. Only their legislation was so mucked up, it is dysfunctional.
TLP| 8.22.12 @ 6:50PM
You are incorrect.
The Democrats didn't need to Read It.
THEY WROTE IT.
UpChuck.Liberals| 8.22.12 @ 11:14PM
BUT that doesn't mean they understood it. We are talking about Nancy Pelosi here.
JP| 8.22.12 @ 11:28AM
HHS will get away with what ever Congress allows. Reid will do nothing, and Boehnner doesn't have to political skill to raise the alarm with the voters.
In a normal world, both Houses of Congress would order the HHS Dir to cease and desit; if she refuses, Congress then could hold her in contempt and remove her from office, as well as hold up all business until she is in compliance.
Never going to happen.
Houdini| 8.22.12 @ 11:44AM
With this administration there is no law.....just their rules. It's sad that the majority of the public doesn't realize how very important this November's election is. I used to laugh at people that talked of a revolution coming because the government was being taken over by sinister forces bent on the destruction of our freedoms and way of life....I'm not laughing any more.
PsychoDad| 8.22.12 @ 1:54PM
All those who advocate for "ObamaCare" -- please list off 2 or 3 existing government programs which you think have been unqualified successes.
JP| 8.22.12 @ 2:34PM
The Mohair sheep farm subsidies have been providing quality wool for the Union Army since 1863.
The federal hydrogen subsidy has been providing quality hydrogen for US Army Zepplins since 1917.
TLP| 8.22.12 @ 6:51PM
You're my New Best Friend.
Seriously.
Sonderegger | 8.23.12 @ 2:50AM
Congress has a responsibility to do its job right and to fix its own mistakes. The courts do not have carte blanche to step in. Adjusting a typo is one thing. Adding a substantive provision that reduces revenue and increases expenditures is another. Indeed, if no state created an exchange, the IRS regulation would cost nearly $700 billion over the coming decade.
Sonderegger | 8.23.12 @ 2:53AM
Congress has a responsibility to do its job right and to fix its own mistakes. The courts http://lyndatownsend616.blog.com do not have carte blanche to step in. Adjusting a typo is one thing. Adding a substantive provision that reduces revenue and increases expenditures is another. Indeed, if no state created an exchange, the IRS regulation would cost nearly $700 billion over the coming decade.
Anyone But Obama| 8.23.12 @ 7:54PM
How about a budget? Doesn't anyone care that there has been NO BUDGET since Obama took office?