Tag: employer mandate

CBO: One-Year Delay of Employer Mandate Increases Spending, Debt, and Dependence

The Congressional Budget Office has released its cost estimate of the Obama administration’s one-year repeal delay of ObamaCare’s employer mandate and anti-fraud provisions. The CBO expects the Obama administration’s unilateral rewriting of federal law (my words, not CBO’s) will increase federal spending by $3 billion in 2014 and reduce federal revenues by a net $9 billion, thereby increasing the federal debt by $12 billion. If President Obama keeps this up, Congress may have to raise the debt ceiling or something.

Where is that $3 billion of new spending going? The CBO estimates the administration’s action will lead to about half a million additional people receiving government subsidies, including through ObamaCare’s Exchanges:

All told, as a result of the announced changes and new final rules, roughly 1 million fewer people are expected to be enrolled in employment-based coverage in 2014 than the number projected in CBO’s May 2013 baseline, primarily because of the one-year delay in penalties on employers. Of those who would otherwise have obtained employment-based coverage, roughly half will be uninsured and the others will obtain coverage through the exchanges or will enroll in Medicaid or the Children’s Health Insurance Program (CHIP), CBO and JCT estimate.

Which makes the president’s delay of the employer mandate and anti-fraud provisions consistent with his administration’s goal of hooking enough voters on government subsidies to affect electoral outcomes and votes in Congress.

Obamacare: House Hearing on the IRS’s Illegal Taxing, Borrowing & Spending

As Jonathan Adler and I detail in our Health Matrix article, “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA,” the Obama administration is attempting to rescue Obamacare from oblivion by literally taxing, borrowing, and spending more than $700 billion without congressional authorization. In a recent letter to the editor of the Washington Post, I explain how these illegal taxes are already hurting workers. 

On July 25, chairmen of the House Ways & Means Committee, the House Committee on Oversight & Government Reform, and two Oversight subcommittees sent a letter to Treasury Secretary Jacob Lew demanding information related to the illegal tax-credit rule.

The House Oversight Subcommittee on Health Care has announced it will hold a hearing this Wednesday, July 31, on the IRS’s illegal tax-credit rule titled, “Oversight of IRS’s Legal Basis for Expanding ObamaCare’s Taxes and Subsidies.” Adler will testify alongside Oklahoma Attorney General Scott Pruitt and Missouri physician and small business owners Charles Willey, each of whom has filed suit to block the IRS’s illegal rule. 

Washington Post: Adding Insult to Obamacare’s Injury

On Sunday, The Washington Post published my letter to the editor:

The excellent July 24 front-page article “Health law’s unintended impact on part-timers” showed how President Obama’s health-care law is cutting part-time workers’ pay by forcing employers to limit these employees’ hours in order to avoid penalties. Yet the reality is even worse.

Obamacare does not authorize those penalties in states that leave the task of establishing a health insurance exchange to the federal government. That means most of the employers the article cited — the commonwealth of Virginia, various Texas employers, the Ohio-based White Castle burger chain, the city of Dearborn, Mich., and Utah’s Granite School District — don’t need to cut part-timers’ hours, because the federal government has no authority to penalize them.

Yet the Obama administration has decreed it will do so anyway, contrary to the clear language of federal law, proving that taxation without representation is not confined to the District.

Two lawsuits have been filed to stop this illegal action — one by the state of Oklahoma, another by employers and individual taxpayers in Kansas, Missouri, Tennessee, Texas, Virginia and West Virginia.

Even so, thousands of part-time workers are already losing wages because of a tax Congress did not authorize. As underemployed music professor Kevin Pace told The Post, “This isn’t right on any level.”

Michael F. Cannon, Washington

The writer is director of health policy studies at the Cato Institute.

On Wednesday, July 31, a House oversight subcommittee will be holding a hearing on the IRS’s illegal taxes, borrowing, and spending.

Obama to Congress: Only I Can Amend ObamaCare

Today the House of Representatives will vote on two bills. One would codify President Obama’s unlawful one-year repeal of the employer mandate and the related reporting requirements. The second would do the same for the individual mandate, effectively delaying its start date until 2015 as well.

I was initially skeptical that these votes would do much to build support for reopening, delaying, or repealing ObamaCare. I wrote last week that they seemed designed mainly to help partisan Republicans build their House majority by “embarrass[ing] House Democrats by forcing them either to support relief for employers but not families or to break ranks with their president on Obamacare.” Two things have changed my mind.

First, if these bills were to pass, it appears the insurance industry would join the coalition demanding that Congress delay ObamaCare. The industry appears very afraid of delaying the individual mandate. An item in today’s Politico Pulse titled, “Would Mandate Delay Mess With Exchanges?” explains:

[A]n insurance industry official makes the case that delay of the individual mandate…would also mean delay of exchanges since all of the 2014 premiums were filed assuming the mandate would be in place. “If the mandate is delayed, the rates will need to be modified to reflect the likely impact on the risk pool,” the official said. “There is not enough time for plans to re-configure their bids, submit them to regulators for approval, and have those new bids reviewed and approved by the time open enrollment begins on October 1.”

Second, these votes have forced President Obama into an untenable position. Yesterday, he threatened to veto both bills. Think about that. President Obama has threatened to veto a bill that would codify his own policy of repealing the employer mandate for one year. He supports rewriting federal law – but only if he does it. Not if Congress does it.

I’d wager lots of congressional Democrats are pretty angry at President Obama today.

The individual mandate is ObamaCare’s least popular provision. Just 34 percent of Americans support it. Only 12 percent support letting it take effect while employers get a pass. When he unilaterally delayed the employer mandate, President Obama put House Democrats, and potentially Senate Democrats, in the position of having to cast their most unpopular pro-ObamaCare vote, ever. The attack ads practically write themselves. ”Congressman X voted against giving families the same breaks as big business.

On top of that, Obama’s threat to veto the bill codifying the employer-mandate delay marginalizes all of Congress, Democrats included. It also puts Democrats in an impossible situation. If Democrats vote against the president on the employer mandate – by voting for the bill codifying his policy (are you confused yet?) – then they are breaking ranks with their party’s leader. If they vote with the president – by voting against the bill codifying the president’s policy – they would be participating in their own marginalization.

All told, these votes appear to maximize the likelihood of exposing fissures among ObamaCare supporters. Maybe they will do more to wear down the opposition to reopening ObamaCare than I thought.

UPDATE: This post originally claimed that only 17 percent of Americans support the individual mandate. The actual figure in the poll cited was 34 percent, split evenly between “very favorable” and “somewhat favorable.” I regret the error, and thank Robert Dible for catching it.

Fourth Circuit’s Liberty Ruling Deals a Hidden Blow to Obamacare

Obamacare had a rough day in court yesterday. In Liberty University v. Lew, the Court of Appeals for the Fourth Circuit ruled against Liberty University’s challenge to various aspects of the law. One might think, as SCOTUSblog reported, this was a victory for the Obama administration. 

In the process, however, the Fourth Circuit undercut three arguments the administration hopes will derail two lawsuits that pose an even greater threat to Obamacare’s survival, Pruitt v. Sebelius and Halbig v. Sebelius

The plaintiffs in both Pruitt and Halbig claim, correctly, that Obamacare forbids the administration to issue the law’s “premium assistance tax credits” in the 34 states that have refused to establish a health insurance “exchange.” The Pruitt and Halbig plaintiffs further claim that the administration’s plans to issue those tax credits in those 34 states anyway, contrary to the statute, injures them in a number of ways. One of those injuries is that the illegal tax credits would subject the employer-plaintiffs to penalties under Obamacare’s employer mandate, from which they should be exempt. (The event that triggers penalties against an employer is when one of its workers receives a tax credit. If there are no tax credits, there can be no penalties. Therefore, under the statute, when those 34 states opted not to establish exchanges, they effectively exempted their employers from those penalties.)

The Obama administration has moved to dismiss Pruitt and Halbig on a number of grounds. First, it argues that those penalties are a tax, and the Anti-Injunction Act (AIA) prevents taxpayers from challenging the imposition of a tax before it is assessed. Second, the administration argues that the injuries claimed by the employer-plaintiffs are too speculative to establish standing. Third, shortly after announcing it would effectively repeal the employer penalties until 2015, the administration wrote the Liberty, Pruitt, and Halbig courts to argue that the delay should (at the very least) delay the courts’ consideration of those cases. In Liberty, the Fourth Circuit rejected all of those claims.

In discussing whether the “assessible payment” that the employer mandate imposes on non-compliant employers falls under the AIA, the court writes:

Obama Administration Tries to Use Its Illegal Delay of the Employer Mandate to Block Legal Challenges

Within hours of announcing its illegal decision to delay the employer mandate, the Obama administration on July 3 asked a federal court to block a legal challenge to the mandate, Liberty University v. Geithner, based on that delay. Today, the administration filed similar requests in Pruitt v. Sebelius and Halbig v. SebeliusThese actions confirm speculation that blocking these lawsuits—and especially Pruitt and Halbig—may have been the whole purpose of the delay.

I don’t have links yet, but the administration’s argument is weak and would not appear to impede any of the three cases. I hope to have more to say about this development soon.