Treasury, but in Consequence of Appropriations made by Law.” U.S. Constitution, Article I, section 9.
Today, a federal judge ruled in favor of the House of Representatives in an ObamaCare case. And this evening, Patterico reads the legalese so you don’t have to. (Note: if your time is very short, I have the short summary here.)
The provisions of ObamaCare that make health insurance cheaper include the following:
Section 1401 provides tax credits to make insurance premiums more affordable, while Section 1402 reduces deductibles, co-pays, and other means of “cost sharing” by insurers.
It is section 1402 which is challenged, as the funds were never appropriated by Congress, as required by the Constitution.
Section 1402 is unlike the tax credits portion of section 1401. Section 1401 actually constitute a “permanent appropriation” which lasts until repealed, under 31 U.S.C. § 1324, which contains a permanent appropriation for “Refund of internal revenue collections.” In other words, the ObamaCare tax credits are refundable, and there is always going to be money from the federal government to give you your tax refund.
By contrast, the “cost sharing” borne by insurance companies, which are initially advanced by the Treasury, require annual appropriations by Congress. HHS even conceded this in a document sent to Congress. Yet no such Congressional appropriation was ever made.
The administration argued that Congress did authorize the advance payments fro the Treasury. Of the Obama administration argument, the judge wryly notes: “It is a most curious and convoluted argument whose mother was undoubtedly necessity.” Describing the argument in detail would put even the most diligent blog reader to sleep. Trust me when I say that it is King v. Burwell on steroids; in other words, it is “ignore the clear statutory language so’s we can make this thing work” style claptrap. Hey, it was good enough for the King v. Burwell majority! But it ain’t working on Judge Collyer, and God bless her for it.
(QUICK ASIDE: It is unfortunate to realize that lower courts actually have to use the King v. Burwell case as precedent in other cases, and essentially argue that, while perhaps the Supreme Court rewrote language in that case, that does not mean that courts just get to rewrite text whenever they feel like it. Only the Supreme Court can do that, apparently, and only with five votes!)
The case illustrates that it is, in fact, a bit lazy to argue that House of Representatives’ lawsuit regarding ObamaCare was a giant dodge, and that the GOP should simply have used the power of the purse. As it happens, they did! That is exactly what happened here. In essence, Congress failed to fund a portion of ObamaCare, and our media missed it. (Did you read about the defunding of a portion of ObamaCare? I certainly didn’t!) But, being the narcissistic entitled Emperor that he is, Obama did his characteristic thing and just ignored the Constitition. He appropriated the money anyway, despite the fact that only Congress has the constitutional authority to do so.
The court cites precedent to show that it is not absurd for Congress to authorize a program permanently, but not enact a permanent appropriation for that program. Indeed, the court notes, most federal entities operate in this fashion. For example (this is my example, not the court’s), there is no sunset provision for the Department of Education (unfortunately). The department does not disappear because Congress does not say every year “The Department of Education still exists.” But if Congress refuses to fund it in any given year, Obama doesn’t just to take the money from the Treasury anyway, because the DoE is a “permanent” department of the federal government. The same goes for the section 1402 cost sharing.
One side note: I have warned you, again and again, about the dangers of looking to Congressional “intent” as reflected by “legislative history.” This was a hobby horse of the late Justice Scalia, and I feel duty-bound to emphasize it strongly now that he is not around to make the argument. Note the sleight of hand the Obama administration used:
Second, the Secretaries point to statements by individual Representatives and Senators whose description of the “cost” of the ACA presumed that Section 1402 would be funded. This argument, too, fails to establish an actual appropriation. “An agency’s discretion to spend appropriated funds is cabined only by the ‘text of the appropriation,’ not by Congress’ expectations of how the funds will be spent, as might be reflected by legislative history.”
If some Democrat hack stands up and flaps his gums about how the money will always be there, that does not trump Congress’s refusal to permanently appropriate the money, or the Constitution’s requirement that Congress appropriate the money. Giving weight to “intent” runs the ever-present danger that courts will pay attention to this kind of irrelevant nonsense. This is why only the text matters, as fairly understood by those subject to the law’s provisions.
Worse, Obama is trying to make opinions from the New York Times relevant to the interpretations of laws passed by Congress. I am not kidding. Here is the quote:
The Secretaries have asked this Court to consider statutes that were enacted years after the ACA; floor statements by individual Members of Congress; an HHS “issue brief” on potential fiscal consequences; a New York Times article; the Hyde Amendment; a CMS webinar from 2013; excerpts from the House Budget Committee’s Compendium of Laws and Rules of the Congressional Budget Process (2015 ed.); CBO scoring terminology; and a House Conference Report from 1997.
No. The answer is no. The New York Times does not get to decide what our laws mean. No, no, no!
The bottom line here is that the money continues to come out the Treasury unconstitutionally. The court has ruled against Obama, but it has stayed its ruling pending appeal. The unconstitutional status quo remains.
P.S. Someone on Twitter claimed that we should thank Marco Rubio for this. I’m pretty sure they have confused the Risk Corridors Program, which Rubio opposed, with the section 1402 Offset Program. I asked Gabriel Malor about this, as he seems to have followed the issue closely, and he appeared to agree.
UPDATE: It’s probably worth noting that, under the law, the cost-sharing provisions are borne by the insurance companies in the first instance. The “cost sharing” payments paid by insurance companies under section 1402 are not dependent on the insurance companies receiving offsetting payments from the Treasury — payments that, we now know, were not authorized by Congress. So the practical effect of this will be that the insurance companies must pay cost-sharing payments, for which they expected reimbursement from the Treasury — reimbursement that they will not be receiving. The net effect? The insurance companies will either raise premiums or exit the exchanges.