The Obama administration carried out the most sustained attack on the rule of law in our nation’s history. One important aspect of that assault was Obamacare, an unworkable statute that the Democrats passed without reading, relying on administrative agencies and the courts to rewrite the law, unconstitutionally. The Supreme Court lent a hand to this project in King v. Burwell by holding that “established by the state” can be interpreted to mean “not established by the state.”
Last night, President Trump issued an order ending subsidy payments to insurance companies under Obamacare, for which Congress has not appropriated money. The Obama administration had made those payments to insurance companies, notwithstanding the lack of any legal basis for doing so. Last May, in U.S. House of Representatives v. Burwell, Judge Rosemary Collyer of the U.S. District Court for the District of Columbia ruled that it was unconstitutional for the executive branch to make these insurer subsidy payments without Congressional authorization. She wrote:
The question is whether Congress appropriated the billions of dollars that the Secretaries have spent since January 2014 on Section 1402 reimbursements. The Secretaries rely on 31 U.S.C. § 1324, which expressly appropriates money for Section 1401 premium tax credits. In order to explain their paying Section 1402 reimbursements out of a permanent appropriation for IRS refunds, the Secretaries posit that Sections 1401 and 1402 are economically and programmatically integrated. A contrary reading of the amended appropriations statute, they contend, would yield absurd economic, fiscal, and healthcare-policy results.
The only result of the ACA, however, is that the Section 1402 reimbursements must be funded annually. Far from absurd, that is a perfectly valid means of appropriation. The results predicted by the Secretaries flow not from the ACA, but from Congress’ subsequent refusal to appropriate money. Such an appropriation cannot be inferred, no matter how programmatically aligned the Secretaries may view Sections 1401 and 1402. See 31 U.S.C.
§ 1301(d) (“A law may be construed to make an appropriation out of the Treasury . . . only if the law specifically states that an appropriation is made”). “This principle is even more important in the case of a permanent appropriation.” Remission to Guam & Virgin Islands of Estimates of Moneys to be Collected, B-114808, 1979 WL 12213, at *3 (Comp. Gen. Aug. 7, 1979).
Paying out Section 1402 reimbursements without an appropriation thus violates the Constitution. Congress authorized reduced cost sharing but did not appropriate monies for it, in the FY 2014 budget or since. Congress is the only source for such an appropriation, and no public money can be spent without one. See U.S. Constitution, Art. I, § 9, cl. 7 (“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law . . . .”).
Judge Collyer ordered an end to the illegal federal payments, but stayed her order pending appeal. The current Department of Justice, having reviewed the legal issues, now has concluded that Judge Collyer was correct, and that the subsidies that the Obama administration paid were unconstitutional. Therefore, the president has now elected to follow the law, and has ended the improper payments.
Liberal news outlets are offering a parade of horribles that will ensue if the federal government doesn’t continue to pay off insurance companies. In most cases, they pay little or no attention to the constitutional issue at stake. Whether such consequences will result is not so clear. Chris Jacobs points out:
For the time being, individuals likely will not see any direct effects from the payments ceasing. Carriers cannot exit Exchanges mid-year, and contracts for the 2018 plan year are already signed. (A provision in carriers’ 2017 and 2018 contracts lets them exit Exchanges if enrollees do not receive cost-sharing reductions—not if the insurers themselves do not receive reimbursement for those cost-sharing reductions. This clause, awkwardly drafted by insurers’ counsel, may provide them with little legal recourse—and further highlights their questionable assumptions and behavior surrounding the subsidies.) So maybe—just maybe—Washington can spend some time focusing on the real issue behind the Administration’s action: Upholding the Constitution.
If Congress wants to continue the subsidies, it can do so. Its appropriation, obviously, will make them constitutional. But regardless of what happens from now on, the Trump administration has acted admirably by refusing to go along with the unconstitutional regime that Barack Obama instituted.