Uwe Reinhardt, a beloved health economist at Princeton University, died Monday at the age of 80. Uwe was a giant in his profession. His combination of insightful economic analysis and wit knew no equal. I always, always looked forward to hearing what Uwe had to say. We are proud to have hosted him at the Cato Institute, to have debated him, and to have called him a friend. The Cato Institute offers its condolences to the Reinhardt family, for whom Uwe made no secret of his love, and to all those in the health policy and economics professions who will miss him dearly.

“All the Benefits of Boston, Without the Headaches” New Hampshire claims in its Amazon Headquarters II (Amazon HQ2) bid. “Choose Boston and next year when you leave your tiny $4,000-a-month apartment … you’ll be wishing you were in New Hampshire” it declares.

Although New Hampshire may not be winning friends, it isn’t exactly wrong about Boston’s housing affordability challenges. As Boston residents are painfully aware, a one-bedroom apartment in the city will easily run $2,200 per month. Boston was recently named the 5th most expensive city to rent an apartment in the United States.

Surely this isn’t news to Bostonians. Perhaps more of a surprise is that something can be done about it—for free. Improving affordability can be accomplished by reforming zoning regulation. Academic research supports the view that restrictive regulation increases the cost of housing.

For example, Harvard Economist Edward Glaeser found “zoning and other land-use controls play the dominant role in making housing expensive,” and one study attributes 30–50% of the cost of housing in places like Manhattan, Los Angeles, and San Francisco to the regulatory tax associated with regulation. Massachusetts is no exception: according to a recent Cato study new zoning regulation is associated with increasing home prices in the state.

But increasing home prices is just one of many unsavory impacts of restrictive regulation. There is evidence that racial and economic segregation, geographic mobility and economic growth are all significantly affected. For example, a recent Harvard University study suggests that more than 50 percent of the difference in levels of segregation between strictly regulated Boston and lenient Houston could be attributed to zoning regulations. Another study found “a strong and significant relationship between low-density zoning and racial segregation, even after controlling for other…metropolitan characteristics.”

The quantity of zoning and land-use regulation continues to grow, despite the relationship between regulation and its adverse impacts. This is especially true in Massachusetts: my research indicates Massachusetts fared particularly poorly in recent years, adding more zoning regulation than ever before. Between 2000 and 2010, Massachusetts added more zoning regulation per capita than 45 U.S. states.

Source: Zoning, Land-Use Planning, and Housing Affordability

One silver-lining? Massachusetts’ Granite State rival isn’t faring much better. The “Live Free or Die” state isn’t living free at all. For example, New Hampshire relies heavily on exclusionary zoning and is one of the four worst states in the country for residential building restrictions according to Freedom In the Fifty States. New Hampshire’s declining population helps reduce some pressure, but not enough to escape zoning regulation’s harmful impacts on affordability.

In fact, the rival states may have more in common than they thought. For example, either state could focus on regulatory reform to boost competitiveness. Likewise, almost any of the 20 metropolitan area contenders for Amazon HQ2 would benefit from a similar approach. Many of these cities suffer from housing affordability problems and would benefit from reforming the regulatory morass which drives up development costs and crushes resident’s ability to innovate, work, and live affordably.

Because you know what would be even better than winning Amazon HQ2? Reducing home prices across the board for current residents.

Has America become a nation of homebodies? Yale law professor David Schleicher claims it has in a study published last week. In Stuck! The Law and Economics of Residential Stagnation, Schleicher outlines some of the legal and economic barriers to geographic mobility, like land use laws, homeownership subsidies, and occupational licensing. He goes on to argue that government policies depress geographic mobility rates. 

Indeed, in 2016 the U.S. had the lowest relocation rate in seventy years. This is a problem, because low geographic mobility means some Americans are being left in the dust. 

But in order to examine relocation trends, it is useful to understand why Americans relocate to begin with. U.S. Census data describes those reasons. Not surprisingly, the majority of Americans relocate for housing, job, and family.

Data source: U.S. Census Bureau, Geographical Mobility: 2015–2016

Schleicher reasons that many more Americans would move for housing and job-related reasons if it weren’t for existing government policies. That’s because a variety of policies make relocation more costly and remaining in place artificially attractive. Land use laws, homeownership subsidies, occupational licensing, and location-based subsidies distort individual’s decision calculus in harmful ways.

The impacts are not limited to the individual. For example, recent research on land use regulations suggests that when low-skill workers are deterred from relocating to high productivity areas, the whole economy suffers. Enrico Moretti and Chiang Hsieh argue that if just three U.S. cities – San Jose, San Francisco, and New York – adopted regulation typical of the median U.S. city, U.S. economic output would increase by 8.9 percent. If the estimate is correct, then the impact of reducing regulation in all restrictively regulated localities across the U.S. would be enormous.

But government policy doesn’t only make it difficult or impossible for Americans to relocate, it also can make it hard for cities to adapt in the face of decline. For example, housing stock and government operations need to be reduced, capital reallocated, and city’s geographic footprint(s) compressed. Resources should be used for something more productive than policing abandoned neighborhoods in a declining place. 

Regulations get in the way here, too. Cities frequently prohibit citizens from living in mobile homes, tiny homes, and small or cheap housing. But this type of housing is the easiest to move, leave, or eliminate if abandoned. Meanwhile, environmental and land-use regulations make it hard to dismantle abandoned structures.

This leaves cities with the futile job of policing and providing city services in places that aren’t being used. The burden falls to remaining residents, and able residents flee as the costs of city maintenance rise and benefits of city living fall. Remaining residents are left to watch as their city’s decline accelerates. 

The fact is, many Americans feel marginalized and left behind in the Trump era. Government policies exacerbate the situation and ensure they are. Schleicher’s article is a must-read reminder that much can be done to change that. 

For more information on how government policies curtail opportunity, see Cato Policy Analysis paper Zoning, Land-Use Planning, and Housing Affordability. 

President Trump today signed an executive order that urges executive-branch agencies to take steps that could free millions of consumers from ObamaCare’s hidden taxes, bring transparency to that law, and give hundreds of millions of workers greater control over their earnings and health care decisions.

Background: ObamaCare’s Hidden Taxes

Since the Affordable Care Act took full effect in 2014, premiums in the individual market have more than doubled. The average cumulative increase is 105 percent, equivalent to average annual increases of 19 percent. Family premiums have increased 140 percent. In Alabama, Alaska, and Oklahoma, premiums have more than tripled. Analysts predict an average increase of 18 percent for 2018; premium increases will average 24 percent in Washington State and 45 percent in Florida. Maryland Insurance Commissioner Al Redmer predicts that if these trends persist, the Exchanges “will implode.”

ObamaCare’s skyrocketing premiums are not due to rising health care prices. They are due to the hidden taxes ObamaCare imposes. The law’s community-rating price controls increase premiums for the healthy in order to reduce premiums for the sick. The law also requires individuals and small employers to purchase a government-defined set of “essential health benefits,” including coverage (e.g., maternity care) that many consumers do not want.

The cost of ObamaCare’s hidden taxes is substantial. The Department of Health and Human Services commissioned (and then, oddly, suppressed) a study from the consulting firm McKinsey & Co. estimating their impact. McKinsey found ObamaCare’s essential health benefits mandate has increased premiums for 40-year-old males by up to 23 percent over four years. Even more startling, McKinsey found community rating has increased premiums for 40-year-old males by a further 98 percent to 274 percent since 2013. Community rating’s impact on premiums has been three to nine times greater than the overall trend in health care prices and spending. Community rating has also been the driving force behind ObamaCare’s narrow provider networks, which McKinsey found have largely or entirely erased the benefit from requiring consumers to purchase additional coverage.

Finally, insurers are fleeing the Exchanges, leaving consumers with little or no choice of carriers. At last count, 49 percent of counties and 2.7 million Exchange enrollees (29 percent) will have only one carrier in the Exchange. Exchange coverage is also eroding because ObamaCare literally penalizes insurers for providing high-quality coverage to the sick.

Short-Term Plans

Fortunately, Congress explicitly exempted one category of health-insurance products from ObamaCare’s crushing hidden taxes. While those provisions apply to individual health insurance coverage, the Public Health Service Act states, “The term ‘individual health insurance coverage’ means health insurance coverage offered to individuals in the individual market, but does not include short-term limited duration insurance.” Congress did not define “short-term limited duration insurance,” but HHS had traditionally defined them to be health plans with a term of less than 12 months and that were not guaranteed renewable.

After ObamaCare took full effect in 2014, the market for short-term health insurance policies grew by 50 percent as many consumers sought to avoid the law’s hidden taxes. In 2016, the Obama administration tried to cut off that escape hatch and force consumers to pay those hidden taxes by prohibiting short-term plans with terms that exceeded three months.

Today’s executive order directs executive-branch agencies to “consider allowing such insurance to cover longer periods and be renewed by the consumer.”

If the Trump administration allows insurers to offer guaranteed renewable short-term plans, it would be truly revolutionary. Consumers could avoid ObamaCare’s hidden taxes and low-quality coverage by purchasing relatively secure insurance that protects them against the long-term financial cost of illness, and that protects them against their premiums rising if they get sick. Premiums would be far lower than they are in the Exchanges. If the administration gets the regulations right, this change could even allow innovations that reduce the cost of health-insurance protection by a further 80 percent. In effect, the Trump administration could enact Sen. Ted Cruz’s (R‑TX) compromise repeal-and-replace proposal via regulation.

Health Reimbursement Arrangements

The federal tax exclusion for employer-sponsored insurance effectively penalizes workers unless they surrender a sizeable chunk of their income to their employer and let their employer choose their health plan. Workers with family coverage lose control of an average $13,000. Overall, employers get to control $700 billion per year that rightfully belongs to their employees.

Health savings accounts (HSAs), flexible spending accounts (FSAs), and health reimbursement arrangements (HRAs) allow workers to control a portion of their health care dollars without penalty, but different rules apply to each. Only HSAs give workers true ownership of their health care dollars. But HRAs have the potential to allow workers who purchase health insurance on the individual market to avoid the effective tax penalty the federal government has traditionally levied on workers who purchase such coverage.

President Trump’s executive order directs executive-branch agencies “to increase the usability of HRAs, to expand employers’ ability to offer HRAs to their employees, and to allow HRAs to be used in conjunction with nongroup [i.e., individual-market] coverage.” Presumably, this means the administration is thinking of rolling back the Obama administration’s rule that employers could not use HRAs to make tax-free contributions to their employees’ individual-market premiums.

If the agencies get the rules right, they could reduce taxes by reducing the penalty the federal government imposes on workers who want to control their health care dollars, and free workers to purchase relatively secure coverage (e.g., on the short-term market) that does not disappear when they change jobs.

Association Health Plans

The federal government imposes different rules on coverage for individuals, small employers, and large employers. It also imposes different rules on employers who purchase coverage from an insurance company versus employers who “self-insure” by bearing that risk and basically running their own insurance company. As a rule, large employers and those that self-insure are subject to less regulation.

Association health plans, or AHPs, are a way for multiple individuals or employers to purchase insurance together. Trump’s executive order directs the Department of Labor to “consider proposing regulations or revising guidance, consistent with law, to expand access to health coverage by allowing more employers to form AHPs.” It appears the goal is to allow AHPs to let groups of small employers qualify as large employers (and therefore become exempt from federal regulations such as ObamaCare’s essential health benefits mandate) and to let them self-insure (and therefore become exempt from state health-insurance regulations).

The AHP changes the executive order envisions would not be as clear a win for consumers. They seek to build on existing government favoritism toward employer-sponsored health insurance, a type of coverage that has the curious feature that it disappears when you get sick and can’t work anymore. Employer-sponsored insurance therefore does not solve but instead exacerbates the problem of preexisting conditions. It also operates under community-rating price controls that are similar to those in ObamaCare, and that produce similar effects. (Oddly, while the Trump administration is trying to free consumers from community rating, it boasts that AHPs would have that feature.) If the AHP-related changes allow employers to avoid ObamaCare’s hidden taxes, that is a step in the right direction. But to the extent they would move even more authority for regulating health insurance from states to the federal government, that would be a step in the wrong direction.

And note: expanding AHPs is not what free-market advocates have in mind when we talk about allowing consumers and employers to purchase insurance across state lines. The idea is to allow employers and individuals to purchase insurance licensed and regulated by a state other than their own, not by the federal government.

Working within the Law, Not Undermining It

Despite all the hype on both sides, Trump’s executive order is not radical, nor would it undermine ObamaCare. Indeed, by itself the executive order does literally nothing. It merely indicates what some in the administration would like executive-branch agencies to do.

The changes this executive order envisions would not, as some suggest, be the most significant changes the Affordable Care Act has seen. All three branches of government have already altered the constraints imposed by the ACA to a greater extent than these changes would.

• Congress and President Obama actually repealed parts of the ACA, including the “1099 tax” and the CLASS Act. 
• Congress and President Obama curtailed the law’s tax cuts and subsidies by increasing premium-assistance-tax-credit clawbacks and limiting risk-corridor subsidies.
• In NFIB v. Sebelius, the Supreme Court radically rewrote the ACA by making the Medicaid expansion optional.
• President Obama unilaterally exempted people from the ACA’s health-insurance regulations when he created “grandmothered” plans.

The changes this executive order envisions would not go nearly so far. They would not alter the constraints imposed by the ACA or other federal statutes. They would work within those constraints.

It is therefore not accurate to claim these changes would somehow “undermine” ObamaCare. They would allow many consumers to avoid the Exchanges and ObamaCare’s hidden taxes—but then again, so did President Obama when he created “grandmothered” plans. They would make the costs of community rating, essential health benefits, and other hidden taxes more transparent—but so did “grandmothered” plans, as well as the steps President Obama took with Congress to increase premium-assistance-tax-credit clawbacks and to limit risk-corridor subsidies.

When healthy consumers flee the Exchanges, premiums could rise even faster than they already are, and the Exchanges could indeed collapse as Maryland’s insurance commissioner predicts. If so, we must understand that as a manifestation of ObamaCare’s unpopularity. If community rating and other provisions of the law were as popular as ObamaCare supporters claim, consumers would be lining up to pay the resulting hidden taxes. But they won’t–and even Democrats know it. So when Democrats object to reforms that would let consumers avoid ObamaCare’s hidden taxes, they are actually implicitly conceding that even the ObamaCare provisions that they claim are popular are actually unpopular. What Democrats appear to mean when they complain this executive order “undermines the law” is that it could undermine their illusions about ObamaCare’s popularity and sustainability. 

To the relief of many Democrats and the consternation of many Republicans, Congress will not be repealing ObamaCare this month. But that doesn’t mean Democrats are riding high or that ObamaCare is doing well. Premiums are still rising rapidly (Miami Herald: “Obamacare Premiums in Florida to Rise 45 Percent on Average Next Year”), insurers are still leaving the Exchanges (Healthcare Marketplace: “Nearly Half of the Country Left with One Carrier Option in 2018″), and ObamaCare coverage is still becoming a worse and worse deal for the sick (Wall Street Journal/​yours truly: “How ObamaCare Punishes the Sick”). 

Now that repeal is no longer an immediate threat, the conversation has naturally turned to who’s to blame for ObamaCare’s failings. Democrats claim everything was going swimmingly until the Trump administration came along and began sabotaging the law. The funny thing about that line of attack is that’s if it were true, then Democrats’ real complaint would be that voters are sabotaging ObamaCare.

But it’s not true—and reporters should stop repeating this partisan line of attack as if it were. Here are five crucial points:

• The Trump administration is not causing the instability we are seeing in the Exchanges—ObamaCare is. Specifically, ObamaCare’s community rating price controls have both unleashed adverse selection (sick people enroll, healthy people don’t) and are making coverage worse for the sick (as insurers use plan design to deter the sickest from choosing their plans). There are only two ways to deal with that instability: eliminate community rating, or subsidize the heck out of insurers (either explicitly, or implicitly by encouraging healthy people to enroll).
• The Trump administration is not stoking the instability ObamaCare is creating in the Exchanges. Democrats claim that by not ending the uncertainty surrounding cost-sharing subsidies to insurers, and by not investing in enrollment activities as much as the Obama administration did, it is in fact the Trump administration that is creating or exacerbating that instability. That is false. As noted above, it is ObamaCare’s community-rating price controls that are creating this instability, not the Trump administration’s actions. The administration is not even adding to the instability. To do so, it would have to make ObamaCare’s community-rating price controls even more binding, which would exacerbate adverse selection. The worst you can say about those actions is that the Trump administration is failing to mitigate the instability ObamaCare creates, which brings us to our next point. 
• The Trump administration does not have a duty to reduce the instability ObamaCare creates, or to reduce the uncertainty ObamaCare creates, or to make ObamaCare “work.” The Trump administration’s only duty is to execute the law faithfully. So long as it does, it has the prerogative to pursue its political goals however it wants. I’m not aware of anyone accusing the Trump administration of not following the law in its handling of ObamaCare. 
• Reporters who say the Trump administration is causing or stoking instability in the Exchanges are simply regurgitating partisan talking points. Embedded in that claim is the normative, disputed, and ultimately false premise that the Trump administration somehow has an obligation not just to follow the law, but to make ObamaCare “work.” That is a pretty radical notion, because it implies ObamaCare opponents don’t have a right to use lawful means to press their views through the political process. 

If Democrats or the media want to get angry at someone for sabotaging ObamaCare, there are plenty of targets. They can start with the Democratic politicans who — though they now clamor for bipartisanship now — enacted ObamaCare in 2010 on a purely partisan basis, spent seven years refusing to compromise, and as a result sowed the seeds for the GOP’s electoral gains. Then there’s the Democratic president who — and this was perhaps the sole exception to Democrats’ general refusal to compromise — himself sabotaged the law by agreeing to limit so-called “risk-corridor” subsidies to ObamaCare carriers. Then there was the time when ObamaCare was making voters so angry, that same Democratic president even violated the ACA by allowing people to keep non-ACA-compliant plans. That decision counts as an act of double-sabotage, because it continues to make Exchange premiums higher than they otherwise would be. 

In short, ObamaCare still doesn’t work well; it isn’t popular enough for Congress to paper over all its problems with more taxpayer dollars; Democrats did this to themselves; and they deserve nearly all, if not all, of the blame.

Now stop making me defend the Trump administration, people. Sheesh.

Republicans have promised major tax reform, and Cato has suggestions for policymakers. In today’s Wall Street Journal op-ed, Chris Edwards and I argue for the elimination of the Low Income Housing Tax Credit (LIHTC). For those unfamiliar with the program, LIHTC is a corporate tax loophole that endeavors to create low-income housing. Unfortunately, research suggests the program has substantial difficulty doing that.

In the article, we describe a few of LIHTC’s problems: LIHTC mostly benefits developers and intermediaries, crowds out private market housing development, and receives minimal oversight. The latter issue leads to abuse.

We also point out that there are more effective ways to increase the supply of low-cost housing. Still, LIHTC’s advocates stubbornly overlook its failings.

Although willful blindness might be a natural posture for interest groups, it is a bad look for policymakers. Legislators should use tax reform as an opportunity to reduce loopholes and corporate cronyism, while reducing rates. 

Read the details here. 

Thousands of members of Congress and congressional staffers are benefiting from an illegal scheme that gives Congress special treatment both by exempting them from the harshest part of ObamaCare and by providing them each up to $12,000 in benefits that federal law prohibits them from receiving. Last week, the Heritage Foundation’s John Malcolm and I furnished additional evidence that the government officials who implemented this scheme violated federal criminal laws. (Malcolm is a former deputy assistant attorney general in the Department of Justice’s Criminal Division.) Few government officials or legal scholars are willing to defend this scheme. Those who are nevertheless have been unwilling to comment on these new revelations or to offer a legal basis for this scheme. At least one seems to suggest that, because the executive branch did it, it must be legal.

In brief, the Obama administration violated numerous federal laws, including criminal laws, to provide thousands of dollars of benefits to members of Congress for the purpose of preventing members from voting to change ObamaCare. Martha Stewart went to jail for less. Congress has proven unwilling to investigate this obvious fraud, precisely because members of Congress from both parties benefit from it. The Trump administration has kept this illegal arrangement going for the same reason the Justice Department has not investigated the crimes committed implementing it: the beneficiaries of this fraud are extremely powerful and united in their determination both to perpetuate it and to hide it from voters.

The scheme is illegal, as Malcolm and I explain, in part because it relies on Congress enrolling in coverage through the District of Columbia’s small-business Exchange (also known as a “SHOP” Exchange), even though both federal and D.C. law prohibit employers with more than 100 workers from participating in SHOP Exchanges. Congress employs thousands upon thousands of people. Congressional officials falsified the applications they submitted to the D.C. SHOP Exchange on behalf of the House and Senate by claiming each employs fewer than 100 people. All by themselves, those false statements are prosecutable under 18 U.S.C. § 1001, with each count exposing the responsible officials to up to five years in prison.

Malcolm and I found that after those false statements became public in late 2014, D.C. dropped the employer-size question from its SHOP Exchange applications. At a minimum, this means D.C. officials were not enforcing the limits federal and D.C. law place on SHOP Exchange participation. It also has the appearance of a cover-up: after congressional officials made potentially prosecutable false statements about Congress’ eligibility for a federal program, D.C. officials stopped asking all applicants about that eligibility criterion. And when those officials continued to make other false statements on their applications, the D.C. government just stopped requiring applications entirely. Finally, we found Congress has since admitted to D.C. that it employs thousands of people and that D.C.’s SHOP Exchange has never turned down any employer for participation based on the employer’s size.

One must admire the brazen evasiveness of the D.C. government’s response to this additional evidence of the illegality of this scheme:

Federal regulations prohibit the DC Health Benefit Exchange Authority, and all other state-based or federally-facilitated marketplaces, from checking employer size requirements when a small business submits a renewal application (45 CFR 155.710(d)). Thus, DC Health Benefit Exchange Authority cannot deny renewals to DC small businesses and their employees through the SHOP marketplace because that small business has grown beyond 50 full-time employees. [Italics added.]

The claim that federal regulations don’t allow D.C. to ask small businesses who renew their SHOP Exchange participation about how many people they employ merely begs the twin questions of whether Congress was ever a qualifying small business with fewer than 100 employees (obvious answer: no) and whether there was ever any justification under either federal or D.C. law for treating Congress as if it were. If D.C. officials are such sticklers about the law, perhaps they could answer that question. Or they could explain why they chose to eliminate the employer-size question for new applicants in 2015, and eliminate those applications altogether in 2016. The fact that D.C. has never turned down any employer based on firm size suggests D.C. officials may not be such sticklers for the law after all. Their silence leaves us guessing.

University of Michigan law professor Nicholas Bagley commented on our latest revelations, yet he likewise evades the main issue. Bagley acknowledges congressional officials made false statements to the D.C. government, and that those false statements were part of an effort to draw money from the federal treasury to benefit members of Congress. But he says it’s all nice and legal because the Office of Personnel Management says so, and those false statements are not prosecutable because D.C. officials knew they were false, which means they were not “material” to the decision to allow Congress to participate in D.C.’s SHOP Exchange.

I see at least three problems with Bagley’s approach to this issue.

First, according to the United States Attorneys’ Manual, in which the Department of Justice provides guidance to federal prosecutors around the country, “the test for materiality under 18 U.S.C. § 1001 is not whether the false statement actually influenced a government function.” Instead, the Department of Justice explains, “To establish materiality as an element, it is sufficient that the statement have the capacity or a natural tendency to influence the determination required to be made.” Unless we are willing to argue that statements regarding eligibility criteria for federal programs do not have a natural tendency to influence eligibility determinations for federal programs, then these false statements satisfy the test for materiality under 18 U.S.C. § 1001.

Second, Bagley’s theory ultimately reduces to, “When the president does it, that means that it is not illegal.”

Imagine federal law creates Benefit A for some group. Maybe a subsidy or a tax break. Maybe for seniors or veterans. Imagine federal law denies eligibility for Benefit A to members of Congress. Finally, imagine a corrupt president—say, President Nixon—realizes that providing Benefit A to members of Congress would keep them from reopening a law important to the president, and therefore the president personally directs a federal agency to determine that Congress is “a special case” where those restrictions do not apply. Under Bagley’s theory, if implementing that exemption requires government officials to violate laws against false statements or other federal laws, they would be immune from prosecution. Even if their actions satisfy all the elements of a federal crime, they would be immune simply because…the president said what they are doing is legal.

I suspect Bagley isn’t entirely comfortable with how much power this theory would give the executive branch—especially this one. Bagley’s theory would allow the executive to gift members of Congress by manufacturing exemptions to eligibility restrictions on benefits throughout the federal code. It would even allow the president to find special exemptions for Congress where—as in this case!—the purpose of the provision the executive is interpreting is to deny Congress special treatment. And it would eliminate perhaps the only feasible remedy to stop such abuses.

To be fair, there is something to Bagley’s argument that the congressional officials who submitted those falsified applications were simply “relying on OPM’s decision.” But I was just following orders only gets you so far. If implementing an agency ruling requires you to satisfy the elements of a federal crime, that is an indication there is something wrong with the agency’s decision. If relying on the OPM’s decision requires you to falsify official government documents that require you to attest, under threat of legal penalties, that the information you are providing is truthful, that is also an indication that there is something wrong with your course of action, and ultimately with the OPM’s decision. The agency’s decision does not purify the illegal act. The illegal act indicts the agency’s decision.

Third, and finally, in the four years since Judicial Watch’s Freedom of Information Act request first exposed these false statements, neither the OPM, nor Bagley, nor anyone else who defends Congress’ ObamaCare exemption has articulated a legal theory as to why the explicit employer-size limitations that federal and D.C. law impose on SHOP Exchange participation should not apply to Congress. Nor has anyone articulated a theory as to how OPM, whose authorizing statute allows it to pay only for health plans it has “approved” to participate in the Federal Employees Health Benefits Program, has any legal authority to contribute to the premiums of plans it has not so approved.

Instead, the OPM says we have determined it is legal, and its defenders say it is legal because they say it is.