Today, New Jersey Gov. Chris Christie (R) became the latest governor to throw sand in the gears of ObamaCare, issuing an eleventh-hour veto of a bill to create an ObamaCare Exchange in New Jersey. An excerpt from his veto message:

While I am unwilling to approve the establishment of a statewide health insurance exchange at this time, I am mindful that the requirements of the Affordable Care Act still stand today and I intend to fully oversee New Jersey’s compliance in a responsible and cost-effective manner should its constitutionality ultimately be upheld by the Supreme Court… My Administration will continue this work and stands ready to implement the Affordable Care Act if its provisions are ultimately upheld.

Christie suggests he isn’t yet convinced that Exchanges are per se harmful. He also seems to suggest that if the Supreme Court upholds the law, creating an Exchange might be the best course for the state and that refusing to do so would put the state out of compliance with federal law–neither of which is true. But the veto message contains enough wiggle room for Christie to come out hard against any future ObamaCare Exchange.

Here’s hoping the Supreme Court renders all of this moot.

In the Wall Street Journal, Peter Berkowitz says you probably didn’t. And it shows:

It would be difficult to overstate the significance of The Federalist for understanding the principles of American government and the challenges that liberal democracies confront early in the second decade of the 21st century. Yet despite the lip service they pay to liberal education, our leading universities can’t be bothered to require students to study The Federalist—or, worse, they oppose such requirements on moral, political or pedagogical grounds. Small wonder it took so long for progressives to realize that arguments about the constitutionality of ObamaCare are indeed serious.

Explains a lot, really.

This blogpost was co-authored by Cato legal associate Carl DeNigris.

Before the argument on the Arizona immigration case yesterday, the Supreme Court scored a blow for American taxpayers by rejecting the IRS’s attempt to overturn the Court’s prior interpretation of a disputed provision of the Internal Revenue Code, 26 U.S.C. §6501(e)(1)(A).  By avoiding the issue of whether agencies can use their regulatory powers retroactively, however, the Court didn’t go far enough.

In United States v. Home Concrete, the Court ruled that its decision in Colony v. Commissioner of Internal Revenue (1956) – that a taxpayer’s overstatement of tax basis in property is not an omission of income that would otherwise trigger an extended statute of limitations period for assessment – was still controlling.  The IRS had tried to change its interpretation of the relevant regulation but the Court concluded that, despite the government’s contention that the new interpretation was due judicial deference, “there is no longer any different construction that is consistent with Colony and available for adoption by the agency.”  That is, the IRS can’t unilaterally overturn Supreme Court precedent by changing how it interprets statutory language or applies a particular regulation.

But the Court didn’t address the government’s most insidious action here: the IRS sought deference for a regulation that it promulgated in the midst of litigation and which would have been retroactively applied to the taxpayers who were parties to the Home Concrete lawsuit.

In our amicus brief, Cato argued that sanctioning this sort of ad hoc, retroactive rulemaking undermines the rule of law by altering basic assumptions “regarding fairness and reliability of the laws and their application by the courts.”  Yet, with the exception of Justice Kennedy’s one sentence dismissal in dissent, the Court showed no interest in the retroactivity issue.  Moreover, it referred to the government’s blatant attempt at retroactive rulemaking as a mere “gap-filling regulation” with “no gap to fill.”  So while taxpayers won a narrow victory today, the Court’s silence gives little assurance that it remains a bulwark against arbitrary government power.

Perhaps even more importantly, it’s now unclear how courts are to apply an important precedent called Brand X, a 2005 case standing for the proposition that administrative agencies (like the IRS) can adopt regulations contrary to a judicial decision only when the relevant statute’s silence or ambiguity represents a congressional delegation of authority to fill that “gap” to the agency.  In other words, here the IRS acted contrary to clear statutory language as interpreted by Colony Cove, but what about future cases?  We’re no tax or even administrative law specialists, but it does seem that the Court has made a big mess out of Brand X:  When can an agency overturn decisions of the Court?  When can it not?  We’ll have to wait for the next ridiculous agency action to make its way to the Supreme Court to find out.

For more on the case, see here; for more technical administrative/tax law analysis, see here.  One other curious thing about this decision is that it ended up 5-4 but the majority opinion was written by Justice Breyer (who styles himself as the Court’s administrative law expert) and joined by the “conservative” justices – though Justice Scalia concurs only in part – with Justice Kennedy writing the dissent, joined by the remaining three “liberal” justices.