Tag: ppaca

One Executive Order That Could Stop ObamaCare

A new memo from the Congressional Research Service explains that the next president cannot simply stop ObamaCare (“PPACA”) by executive order:

[A] president would not appear to be able to issue an executive order halting statutorily required programs or mandatory appropriations for a new grant or other program in PPACA, and there are a variety of different types of these programs. Such an executive order would likely conflict with an explicit congressional mandate and be viewed “incompatible with the express…will of Congress”…However, there may be instances where PPACA leaves discretion to the Secretary to take actions to implement a mandatory program, and…an executive order directing the Secretary to take particular actions may be analyzed as within or beyond the President’s powers to provide for the direction of the executive branch.

In other words, the worst elements of ObamaCare – the government price controls it imposes on health insurance, the individual mandate, and the new spending on health-insurance entitlements –  are “statutorily required programs” that, say, President Romney cannot repeal or even halt by executive order.

However, there is one executive order that could effectively block ObamaCare, and that lies well within the president’s powers.

The Obama administration has issued a proposed IRS rule that would offer “premium assistance” (a hybrid of tax credits and outlays) in health insurance “exchanges” created by the federal government. The only problem is, ObamaCare only authorizes these tax credits and outlays in “an Exchange established by the State.” The administration did so because without premium assistance, ObamaCare will collapse, at least in states that do not create their own Exchanges.  Yet the executive branch does not have the power to create new tax credits and outlays.  Only Congress does.  So if the final version of this IRS rule offers premium assistance in federal Exchanges, it will clearly exceed the authority that Congress and the Constitution have delegated to the executive branch.

In that case, the next president could issue an executive order directing the IRS either not to offer premium assistance in federal Exchanges or to rescind this rule and draft a new one that does not. The U.S. Constitution demands that the president “take Care that the Laws be faithfully executed.” Such an executive order therefore lies clearly within the president’s constitutional powers: it would ensure the faithful execution of the laws by preventing the executive from usurping Congress’ legislative powers.

While such an executive order would not repeal ObamaCare, as Jonathan Adler and I explain in this Wall Street Journal oped, it would “block much of ObamaCare’s spending and practically force Congress to reopen the law.”

You Can’t Make a Silk Purse out of ObamaCare’s Poll Numbers

The Kaiser Family Foundation’s November 2011 poll results on ObamaCare (“the ACA”) are now available.  The gist:

After taking a negative turn in October, the public’s overall views on the ACA returned to a more mixed status this month. Still, Americans remain somewhat more likely to have an unfavorable view of the law (44%) than a favorable one (37%).

The survey also finds that individual elements of the law are viewed favorably by a majority of the public. The law’s most popular element, viewed favorably by more than eight in ten (84%) and “very” favorably by six in ten, is the requirement that health plans provide easy-to-understand benefit summaries. Also extremely popular are provisions that would award tax credits for small businesses (80% favorable, including 45% very favorable) and provide subsidies to help some individuals buy coverage (75% favorable, including 44% very favorable), as well as the provision that would gradually close the Medicare doughnut hole (74% favorable, including 46% very favorable) and the “guaranteed issue” requirement that prohibits health plans from denying coverage based on pre-existing conditions (67% favorable, including 47% “very” favorable)…

Far and away the least popular element of the health reform law is the individual mandate, the requirement that individuals obtain health insurance or pay a fine. More than six in ten (63%) Americans view this provision unfavorably, including more than four in ten (43%) who have a “very” unfavorable view.

I’ve written about such spin-heavy polls before, including here:

Rather than confront their own errors of judgment, [ObamaCare supporters] self-soothe: The public just doesn’t understand the law. The more they learn about it, the more they’ll like it…

This denial takes its most sophisticated form in the periodic surveys that purport to show how those silly voters still don’t understand the law. (In the mind of the ObamaCare zombie, no one really understands the law until they support it.) A prominent health care journalist had just filed her umpteenth story on such surveys when I asked her, “At what point do you start to question whether ObamaCare supporters are just kidding themselves?”

Her response? “Soon…”

And here:

Asking people whether they support the law’s pre-existing conditions provisions is like asking whether they want sick people to pay less for medical care.  Of course they will say yes.  If anything, it’s amazing that as many as 36 percent of the public are so economically literate as to know that these government price controls will actually harm people with pre-existing conditions.  Also amazing is that among people with pre-existing conditions, equal numbers believe these provisions will be useless or harmful as think they will help…

[T]he pre-existing conditions provisions cannot exist without the wildly unpopular individual mandate because on their own, the pre-existing conditions provisions would cause the entire health insurance market to implode.

If the pre-existing conditions provisions are a (supposed) benefit of the law, then the individual mandate is the cost of those provisions. If voters don’t like the individual mandate–if they aren’t willing to pay the cost of the law’s purported benefits–then the “popular” provisions aren’t popular, either.

Or, as Firedoglake’s Jon Walker puts it, ObamaCare is about as popular as pepperoni and broken glass pizza.

See you again next month.

A Potentially Fatal ObamaCare Glitch

In today’s Wall Street Journal, Jonathan Adler and I explain how a recently discovered glitch could be the undoing of ObamaCare:

ObamaCare authorizes premium assistance in state-run exchanges (Section 1311) but not federal ones (Section 1321). In other words, states that refuse to create an exchange can block much of ObamaCare’s spending and practically force Congress to reopen the law for revisions.

The Obama administration wants to avoid that legislative debacle, so this summer it proposed an IRS rule to offer premium assistance in all exchanges “whether established under section 1311 or 1321.” On Nov. 17 the IRS will hold a public hearing on that proposal…

Any employer whose employees receive premium assistance through a federal exchange…would have standing to challenge these illegal tax credits and outlays.

Public-interest lawyers could file suit as soon as the IRS rule becomes final and they find an employer that will be harmed. Any firm that doesn’t offer health benefits and that employs lots of full-time, low-skilled, young workers in a state that fails to create an exchange should suffice. A successful challenge would block the law’s employer mandate in that state.

In addition, under the Congressional Review Act, a simple (filibuster-proof) majority vote in each chamber of Congress could send to President Obama’s desk a resolution blocking this IRS rule. Even if Mr. Obama vetoed the resolution (taking personal responsibility for this assault on the rule of law), a future president could still rescind the rule.

According to the IRS notice, the public hearing will take place tomorrow, Thursday, November 17, “at 10 a.m., in the auditorium, Internal Revenue Building, 1111 Constitution Avenue, NW., Washington, DC. Due to building security procedures, visitors must enter at the Constitution Avenue entrance. All visitors must present photo identification to enter the building.” Those interested should consult the IRS notice (p. 50938) for more information.

Obamacare Is Bigger than Roe v. Wade

This morning, as expected, the Supreme Court agreed to take up Obamacare.  What was unexpected – and unprecedented in modern times – is that it set aside five-and-a-half hours for the argument.  Here are the issues the Court will decide:

  1. Whether Congress has the power to enact the individual mandate. - 2 hours
  2. Whether the challenge to the individual mandate is barred by the Anti-Injunction Act. - 1 hour
  3. Whether and to what extent the individual mandate, if unconstitutional, is severable from the rest of the Act. - 90 minutes
  4. Whether the new conditions on all federal Medicaid funding (expanding eligibility, greater coverage, etc.) constitute an unconstitutional coercion of the states. - 1 hour

In addition to the length of argument, which we can expect to be heard over multiple days in March or April, perhaps the biggest surprise is the Court’s decision to review that fourth issue.  There is no circuit split here – in large part because 26 states are already in this one suit – and no judge has yet voted to uphold what also be described as a claim that the federal government is “commandeering” the states to do its bidding.  The Court probably took the case precisely because so many states have brought it; that former solicitor general Paul Clement is their lawyer also doesn’t hurt.  As a practical matter, this could be a bigger deal than the individual mandate because, while Congress had never before tried an economic mandate, it certainly does attach plenty of strings to the grants it gives states – and the spending power is thought to be even broader than the power to regulate commerce.

In any event, the Supreme Court has now set the stage for the most significant case since Roe v. Wade.  Indeed, this litigation implicates the future of the Republic as Roe never did.  On both the individual-mandate and Medicaid-coercion issues, the Court will decide whether the Constitution’s structure – federalism and enumeration of powers – is judicially enforceable or whether Congress is the sole judge of its own authority.  In other words, do we have a government of laws or men?

North Dakota Rejects ObamaCare ‘Exchange’

Here’s the story, from the Bismarck Tribune:

Angered by a federal health care law that most of them despise, North Dakota House Republicans defeated legislation Thursday to give state officials authority over a health insurance marketing agency that the law requires states to establish.

(Correction: ObamaCare does not require states to create an Exchange.)

They said endorsing state administration of the agency, which is called a health insurance exchange, would be tantamount to approving the federal health reform law itself.

“I certainly am not going to legitimize Obamacare with my vote,” said Rep. Wes Belter, R-Fargo. “We, as a state of North Dakota, need to follow some of the other states who have said no… It is the law, but the fight should not be over.”

Supporters … said Thursday’s vote was the state’s last realistic chance for running its own exchange, since deadlines are looming and the Legislature does not meet again until January 2013…

After a debate that lasted almost two hours, representatives voted 64-30 late Thursday to reject the legislation. All but 10 of the House’s 69 Republicans voted against the bill, while 20 of its 25 Democrats supported it…

Opponents of the bill said they resented the pressure, which they said was caused by unrealistic deadlines in the federal health care law.

Rep. Keith Kempenich, R-Bowman, compared the situation to high-pressure sales tactics in a used car lot.

“If the federal government was really sincere on trying to reform health care, they wouldn’t have put these artificial dates in,” Kempenich said. “Whenever I’ve seen things that get rushed like this, or they get where you’re pressured like this, usually, they’re full of it, and that’s what this is starting to look like.”

Kudos to the North Dakota Policy Council’s Brett Narloch.

Obamacare’s Footnote Four

This post was co-authored by Cato legal associate Chaim Gordon.

Freedom-loving lawyers everywhere recoil in horror at the mere mention of “footnote four.” In that infamous citation in the 1938 case of Carolene Products, the Supreme Court officially renounced judicial review of laws that infringe on economic liberty. This week, in his dissent from the D.C. Circuit opinion that upheld the individual mandate on Commerce Clause grounds, Judge Brett Kavanaugh added his own dubious “footnote four.”

Judge Kavanaugh’s 65-page dissent was devoted to his parsimonious reading of various provisions in the Internal Revenue Code, culminating in the conclusion that the Anti-Injunction Act robbed federal courts of jurisdiction to hear the case until the mandate penalty is actually enforced. As Judge Kavanaugh noted, “the Tax Code is never a walk in the park.” But the Tax Code is even more grueling when you are given lousy legal advice. And that is why footnote four – in which Judge Kavanaugh inexplicably decides to publicly thank former IRS commissioners Mortimer Caplin and Sheldon Cohen and their counsel for their amicus brief – is so troubling. Here is his footnote four:

Both sides before us want this case decided now and contend that the Anti-Injunction Act does not bar this suit. The amicus brief of former IRS Commissioners Mortimer Caplin and Sheldon Cohen, submitted by able counsel Alan Morrison, cogently argued the opposite position. The Court is grateful to amici and counsel for their assistance.

But it is entirely unclear why Commissioners Caplin and Cohen and Counsel Morrison deserve the court’s thanks. For starters, the Caplin and Cohen brief was not advocating either of Judge Kavanaugh’s nuanced readings – be they correct or not – of various provisions in the Internal Revenue Code. (It did, however, make one of Kavanaugh’s main arguments in response to one of the government’s arguments toards the end of the brief.) Rather, the Caplin and Cohen brief broadly asserts that the AIA “prevents courts from reviewing all claims involving payments under the Code, not just those labeled taxes.”

The problem is that, in support of this broad, sweeping assertion, the Caplin and Cohen brief misleadingly cites cases that do not support its claim. That is, almost all the cases cited by the Caplin and Cohen brief specifically relied upon the fact that the penalties at issue were found in chapter 68 of the IRC or were part of a larger taxing scheme (as in the Mobile Republican case). But you would not know that from reading the Caplin and Cohen brief.

Take, for example, the Caplin and Cohen brief’s citation to Shaw v. United States and Botta v. Scanlon as “perhaps the best illustration of the breadth of the applicability of” the AIA. What the Caplin and Cohen brief does not say is that both of these cases specifically rely upon provisions in the IRC that define the penalty at issue in those cases (under section 6672) as taxes for the purposes of the AIA. Those provisions, by their own terms, only apply to penalties under chapter 68 of the Code, and the penalty for violating the individual mandate is in chapter 48.

This is really green-eyshade stuff, we know, but that’s what this litigation has come to – and it’s why tax lawyers are not suffering the higher rates of unemployment of their peers in other specialties.

To make matters worse, Caplin and Cohen filed essentially the same amicus brief with the Supreme Court in one of the cases that the Court will take up at its cert petition conference this week. This is especially alarming because the government has urged the Court to appoint an amicus counsel to argue for the position that the AIA applies to the penalty for violating the individual mandate (even though the government now agrees with the mandate’s challengers that the AIA does not apply).

We think the justices’ clerks are fully capable of advising their bosses on the pro-AIA arguments, which in any event does not apply to the 26 state plaintiffs in the Eleventh Circuit case.  Plus the Court has the Fourth Circuit’s and now Judge Kavanaugh’s thorough “briefs.” If the Court does decide to appoint an amicus to argue that issue, however, let’s hope that it receives better legal advice than the D.C. Circuit got from Caplin and Cohen.