Federal Court Finds Portion Of Administration’s PPACA Subsidy Funding Unconstitutional

A Federal Court has ruled that the Administration violated the law when it spent funds allocated under the PPACA for purposes other than those authorized by Congress.

constitution-preamble-gavel

A Federal Judge in Washington, D.C. has ruled that the Obama Administration acted contrary to the law and the Constitution when it used funds allocated under the Affordable Care Act to subsidize the cost of insurance to lower income policyholders despite a lack of authorization to do so from Congress:

A federal judge struck down a portion of President Obama’s signature Affordable Care Act health law on Thursday, ruling that Obama exceeded his executive authority in unilaterally funding a provision that has subsidized billions of dollars of insurers costs.

In a 38-page decision, U.S. District Judge Rosemary Collyer of the District stayed the ruling’s effect pending the administration’s certain appeal. Her decision sided with the U.S. House of Representatives, which brought the lawsuit challenging more than $175 billion of spending after a party-line vote by House Republicans in July 2014.

The House GOP argued the Obama administration’s decisions to fund payments to reduce deductibles, co-pays and other “cost-sharing” were unconstitutional, saying lawmakers rejected an administration request for funding in 2014.

Obama officials said they withdrew the request and spent the money, arguing the subsidies were covered by an earlier, permanent appropriation.

“The question is whether Section 1402 can nonetheless be funded through the same, permanent appropriation. It cannot,” Collyer wrote, referring to the provision in question.

“None of [the administration’s] extra-textual arguments — whether based on economics, ‘unintended’ results, or legislative history — is persuasive,” added Collyer, a 2003 George W. Bush appointee. “The Court will enter judgment in favor of the House of Representatives and enjoin the use of unappropriated monies to fund reimbursements due to insurers under Section 1402.”

In a briefing Thursday after the decision, White House Press Secretary Josh Earnest called the lawsuit a new low in the battle over the controversial health care law and predicted the ruling would be overturned by the U.S. Court of Appeals for the D.C. Circuit because it charted new ground in the separation of powers between presidents and Congress.

“This is the first time in our nation’s history that Congress has been allowed to sue the executive branch over the interpretation of the statute,” Earnest said. He criticized Republicans for using taxpayer money to “re-fight a political fight that they keep losing.”

“They’ve been losing the fight for six years and they’ll lose it again,” Earnest said.

In arguments before Collyer last May, Justice Department attorney Joel S. McElvain called Congress’s complaint legally invalid and unprecedented in asking the courts to referee a political dispute that Congress could resolve by revoking the law, passing new legislation or withdrawing funding, among other things.

“There are any number of other tools the legislature can use to influence the executive branch . . . which is why we have not seen a lawsuit like this in over 230 years,” McElvain said.

George Washington University law professor Jonathan Turley, arguing for the House, said the administration’s argument would mean that Congress’s “power of the purse is effectively decorative.”

Collyer, a veteran judge who is taking senior status this month and becoming presiding judge of the Foreign Intelligence Surveillance Court, in her ruling blocked further spending “until a valid appropriation is in place.”

The politically sensitive case revives a battle over the health care law that the U.S. Supreme Court had settled last June, in a 6-to-3 decision that prompted Obama to declare from the White House Rose Garden, “The Affordable Care Act is here to stay.”

Lyle Denniston has more:

At issue in the case, as decided on Thursday, was the part of the ACA program that required insurance companies to provide coverage to low and moderate income consumers, mainly through policies sold on the exchanges, with the costs to the consumers lowered by reduced copays and back-up or co-insurance, along with higher deductibles.  The insurance companies, however, do not have to absorb those costs; the ACA mandated that the government directly reimburse such “cost-sharing” arrangements, with federal funds.

Along with that part of the ACA, the law also provided tax credits to consumers at low or moderate income levels to help them afford the premiums charged for the insurance they obtained on the exchanges.

Together, the two programs were estimated to cost the government about $5 billion a year.  In her new ruling, Collyer decided that the cost-sharing program, as implemented since January 2014, has been spending money that Congress did not approve.  It is unconstitutional, she ruled, because no money can be taken out of the federal treasury if it has not been specifically provided by act of Congress.

“Paying out reimbursement,” she wrote, “without an appropriation [from Congress] violates the Constitution.  Congress authorized reduced cost-sharing but did not appropriate monies for it, in the fiscal year 2014 budget or since.  Congress is the only source for such an appropriation, and no public money can be spent without one.”

The judge estimated that, in the past two years, the government has spent billions overall without the authority to do so.  The judge, however, found that Congress had provided authority to cover the spending for the tax credits to consumers who use them to help afford health coverage.  That was funded, she said, through a permanent appropriation measure.

Collyer sharply ridiculed the government’s basic argument that the tax credit and cost-reimbursement parts of the ACA program were interconnected, and thus could both be funded out of that permanent appropriation for tax credits.  (Under ACA, insurance companies can only provide cost-sharing arrangements to consumers who are eligible for the tax-credit subsidies.)

The government’s overall argument about linking the two approaches, the judge commented, is “most curious and convoluted.”  Its “mother was undoubtedly necessity,” she added, with some sarcasm.

Although she ruled that the government had no authority to pay out any money to insurance companies as cost-sharing reimbursements, she did conclude that Congress had in fact authorized that program to be created.  What is lacking, she found, was separate authority to make the payments contemplated by that provision.

If the normal route of appeal is followed, the case would move on next to the U.S. Court of Appeals for the District of Columbia Circuit.  However, the administration also has the option of trying to move the case straight to the Supreme Court by asking the Justices to take it on without waiting for the D.C. Circuit to rule.

In addition to today’s ruling on the merits, any appeal of this case will have to deal with a preliminary matter that could bring a quick end to the case without resolving the ultimate legal issue. Last September, Judge Collyer rejected a motion filed by the Obama Administration and ruled that the House of Representatives did indeed have standing to file suit against the Administration under the facts alleged in the Complaint. As I noted at the time, this was a potentially significant ruling due to the fact that Federal Courts had previously rejected attempts by legislators to resolve disputes over the interpretation and implementation of a law through the Court system, ruling that such cases were barred by the “Political Question” Doctrine. In her September ruling, though, Judge Collyer ruled that the Administration’s seemingly open defiance of the fact that, under Article I of the Constitution, only Congress can authorize how Federal Government monies are to be spent, the House did in fact have standing to pursue the case through the Court system. The Administration had sought leave to appeal this issue to a higher court, but that request was denied and the case proceeded to the merits side of the argument, which ended today with the issuance of Judge Collyer’s opinion. As noted, the Administration has two options for appeal at this point. It can either seek its appeal at the Circuit Court of Appeals for the District of Columbia, or it can seek leave from the Supreme Court for a direct appeal from the U.S. District Court, something which the Justices only grant on rare occasions. If that application is denied, then the matter would go to the D.C. Circuit as normal. Where ever it goes, the relevant appellate court(s) will have to deal with both the standing issue and the merits ruling Judge Collyer issued today.

I’ve already discussed the issues surrounding the standing issues. While this remains an issue of first impression, I’m inclined to believe that, ultimately, the Courts will rule that while Congress may have standing in this case, the rules under which Congress as a whole, or an individual member, will have standing are severely limited. Alternatively, of course, the Court could rule that the standing rules that have been in place for decades remain valid and that neither individual members of Congress nor one of the Houses of Congress can maintain a suit in Federal Court for actions such as this. Given the fact that, in this case, that would mean that Congress would have no redress short of impeachment in response to an Administration that was spending money in a manner not authorized by Congress, though, one would think that the Courts would recognize that, in some situations they cannot dodge their own responsibility to uphold the law and the Separation of Powers established by the Constitution. As for the merits of the case itself, a review of Judge Collyer’s opinion seems to make clear that the allegations of the Complaint are true and that the Administration was indeed spending money in a manner not specifically authorized by Congress. This would seem to be a clear violation of Article I, and therefore unconstitutional. The fact that it was accomplishing a public policy goal is, in the end, entirely irrelevant.

Here’s the opinion:

House of Representatives v. Burwell by Doug Mataconis

FILED UNDER: Congress, Law and the Courts, US Politics
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. Dave Schuler says:

    Next stop, DC Court of Appeals.

  2. Paul L. says:

    It is just another typo in the Law!!!

  3. Jack says:

    Any minute now a parade of Democrat politicians will swear to all that is holy, that what the law says is not actually what they meant. So…..

  4. Todd says:

    This gets a big headline on Drudge, and conservatives temporarily getting to taunt all the evil liberals. But in the end, it will very likely be reversed.

    Also, this part of the Wash Po article maybe incomplete:

    Collyer, a veteran judge who is taking senior status this month and becoming presiding judge of the Foreign Intelligence Surveillance Court, in her ruling blocked further spending “until a valid appropriation is in place.”

    I’ve read in a couple of other places that the ruling will be stayed pending appeal … so spending won’t be immediately blocked.

    Correct?

  5. Jc says:

    Congress can reject a request for mandatory spending? Isn’t this spending mandatory?

    This is an interesting case. Will have to see how it plays out.

  6. Tony W says:

    I am just thankful that we still have a strong political party in the GOP that is committed to making sure the poor have the freedom to die in the streets without access to health care so that the rest of us are not offended that they get care for a lower price than we do.

  7. Jenos Idanian says:

    @Jc: I forget the precise term, but there’s a rule that no Congress can impose restrictions on future Congresses. They can’t pass a law and say no future Congress can touch it, all future Congresses have to fund something, or whatever.

    So Congress can simply refuse to fund ObamaCare, in part or in whole. They could also zero the Defense Department budget if they wanted.

    And the relevant part of the Constitution is Article 1, Section 9, Clause 7:

    No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.

  8. HarvardLaw92 says:

    @Jenos Idanian:

    Mandatory spending measures must be reversed by subsequent law – which means that PPACA is funded automatically every year, in perpetuity, unless and until Congress passes – and the president approves – another law negating the original law. It’s like Social Security – no annual appropriation is necessary for Social Security spending to happen, as the original bill passed in 1935 authorizes it to continue forever. Same with PPACA.

    Defense spending is, by constitutional mandate, time limited, and must be affirmatively renewed at least every two years.

    So, two completely different scenarios. In one, money is spent unless they pass a law stopping it, and in other, spending doesn’t happen unless they pass an appropriations bill authorizing it.

  9. Jenos Idanian says:

    @HarvardLaw92: I KNEW that opining almost blindly about the law would draw you into commenting.

    Now that you’re here, care to discuss the crux of the actual matter here — that Obama took funds that Congress appropriated for one purpose, and spent it on another?

  10. HarvardLaw92 says:

    @Jenos Idanian:

    LOL, no, as usual you tried to play attorney. I’ve tried to get you to stop doing that.

    Aside from the standing issue, which will almost certainly kill this ruling in its tracks at the appellate level without touching the merits, PPACA mandates that these cost-sharing arrangements be reimbursed by the government. It therefore follows under necessary and proper that the government has the implied authority to expend funds in order to pay reimbursements that the law requires it to pay. The bill doesn’t require a separate appropriation – it serves as its own grant of spending authority. In other words, PPACA is a perpetual appropriations bill.

  11. Jc says:

    Did Democrats go to this level to thwart Medicare part D? Apples and oranges I suppose, but with the amount of time, money, meaningless votes, talk, lawsuits, hearings…etc….You would think we would also see some type of replacement healthcare reform plan. Is there one? Like on paper somewhere?

  12. C. Clavin says:

    @Jenos Idanian:
    @HarvardLaw92:
    Jenos just wants the ability to remain a free-rider on the health care system, as he has previously admitted to.
    In his eyes forcing him to be a responsible member of society makes him a victim.
    In the same way this is a perpetual appropriation….Jenos is a perpetual victim.

  13. Catchling says:

    @Jc: In principle, repeal should be the replacement, at least going by the GOP’s own ideology. Repeal/abolish the ACA, Medicare, EMTALA, the FDA, and every other regulation and tax relating to health. Then the free market can finally work its magic and we’ll all live to be 200.

  14. Jenos Idanian says:

    @C. Clavin: Cliffy, before you back on my Ignore list, I just want to note how half the time you beg for my attention, and half the time you wish I’d go away. Do you flip a coin before you start blathering?

  15. C. Clavin says:

    @Jenos Idanian:
    That means I spend all my time thinking about you???
    Are you as big a narcissist as your man-crush, Trump?
    Or just as bad at math as he is?
    Interestingly…you do not deny being a free-loader.
    Or playing the perpetual victim.

  16. Jenos Idanian says:

    @C. Clavin: (click)

  17. Jenos Idanian says:

    @HarvardLaw92: I think you’ve just demonstrated just why so many people hate lawyers.

    Members of Congress have gone to court, saying that the President of the United States has illegally usurped their power of the purse and explicitly violated the US Constitution, and wants him ordered to stop. More specifically, the House as a whole has done this.

    You wanna argue about the merits of that case, fine. But you’re saying that they don’t have the right to even make their argument?

    I got a layman’s understanding of the issue of “standing.” Basically, it’s saying that you gotta have some kind of stake in the matter before the courts will agree to listen to you.

    For example, suppose Doug Mataconis were to promise a glowing recommendation for James Joyner’s kid to some snooty school, and then not deliver such a letter. Joyner could sue him, but if he were to make his complaint public on this blog, I would have no legal right to sue Doug for failing to deliver that letter, because I have nothing to do with the matter.

    Here we have the US House of Representatives — who, by the Constitution, have to originate all spending bills — saying that Obama is violating the Constitution with regards to spending allocated money, and it’s none of their business? No wonder so many people’s favorite Shakespearean quote is that famous one from Henry IV, Part 2. (Act 4, Scene 2, if you need more guidance.)

  18. HarvardLaw92 says:

    @Jenos Idanian:

    But you’re saying that they don’t have the right to even make their argument?

    Yes, I am saying exactly that. Congress has the power to force its will on this matter, by simply passing a law which implements what they want to happen. This question properly belongs to the decision making authority of elected officials, so the proper response from a federal court should be to refuse to inject itself into a political question.

    Not play along with some Republicans who are trying to accomplish in the courts what they were unable to accomplish at the ballot box.

    Beyond that, given that you completely ignored the constitutional justification for this spending (which you requested …) and focused instead on the standing issue, it’s clear that you’re pursuing an agenda here and I’m not going to enable another one of your rants. You’ll have to live with my answer, or talk to yourself. The choice in that matter is entirely yours.

  19. Jenos Idanian says:

    @HarvardLaw92: Yeah, you’re a lawyer. You rewrite the facts to suit yourself.

    1) The case isn’t “Some Republicans v. Burwell,” it’s “The House of Representatives v. Burwell.” It says so right there on the first page of the ruling.

    2) I didn’t ignore the Constitutional aspects, I focused on what you said was a higher priority argument — that of standing. I even said “You wanna argue about the merits of that case, fine. But you’re saying that they don’t have the right to even make their argument?”

    It takes an overeducated, overprivileged, overconfident lawyer to first say “we can’t argue the merits of the case until we settle whether the case even has standing,” then whine when the answer focuses on standing — the issue that you said has priority.

    If you feel the need to fabricate such essential aspects of the matter, then you really don’t have much confidence in the strength of your arguments, do you?

  20. HarvardLaw92 says:

    @Jenos Idanian:

    It’s much more about “I’ve been down this road with you before, and I’m just not interested in doing it again.”

    Have a nice day

  21. steve s says:

    No wonder so many people’s favorite Shakespearean quote is that famous one from Henry IV, Part 2. (Act 4, Scene 2, if you need more guidance.)

    it’s pretty clear in context that the quote shows the character speaking it to be a dumbass.

  22. steve s says:

    and that *does* explain why a lot of people in Murka agree with it.

  23. Jenos Idanian says:

    @HarvardLaw92: Once again, despite the case clearly being named “The House of Representatives v. Burwell,” you keep talking about a few Republicans.

    If you’re so damned intelligent, but you can’t get the actual name of the case right.

    I wonder how Harvard feels about you using their name while doing something so… well, I dunno if it’s stupid or dishonest, but either way it’s not complimentary.

  24. HarvardLaw92 says:

    @Jenos Idanian:

    Actually, the case is titled “United States House of Representatives v. Sylvia Mathews Burwell, et al.”. You can’t even manage to do being a blowhard correctly. Stop trying to be an attorney – you suck at it.

    That having been said, this litigation was authorized by a simple majority, party line vote, in which 221 representatives (ALL Republican) voted in favor, and 201 representatives (every Democrat, in addition to 5 Republicans) voted against.

    So I’ll say it again – this is Republicans trying to accomplish via the courts what they couldn’t accomplish at the ballot box. It’s a political question, properly resolved by elected officials. The appellate court will throw it out / kick it back to them to be resolved politically – as it should.

    As for the ad hominems, seek joy elsewhere. At this point, you’re not even interesting enough to be boring, and I don’t swing for the dirt. Better luck next time.

  25. Jenos Idanian says:

    @HarvardLaw92: Actually, the case is titled “United States House of Representatives v. Sylvia Mathews Burwell, et al.”. You can’t even manage to do being a blowhard correctly. Stop trying to be an attorney – you suck at it.

    I still was a hell of a lot closer to the title than you were until I shamed you into it. And what a remarkably convenient standard — ObamaCare itself was passed on a purely party line vote, but you don’t want to bring that up.

    And you must be resentful that the GOP is “trying to accomplish via the courts what they couldn’t accomplish at the ballot box” — they’re stealing your side’s favorite tactic! How DARE they?

  26. HarvardLaw92 says:

    @Jenos Idanian:

    Yawn … 🙂