As regular readers know, the Supreme Court in King is set to decide whether Obamacare subsidies for policies procured from exchanges are only available when the exchange was “established by a state,” as the plain text of the law says, or whether they are also available for state exchanges established by the federal government, as the Obama Administration, via Treasury Department regulations written by the IRS, has concluded.
Perhaps the most significant issue in the case is the extent to which the Court should defer to the Obama Adminstration’s interpretation of the statute. Precedent in this area is complicated, but the general rule is that courts should defer to agencies like the IRS.
Regardless of whether that’s a good idea in general, I find the notion of deference in this particular case to be foolhardy. First, the IRS did not engage in any technical analysis that goes to its particular expertise, but rather engaged in mundane statutory interpretation. There is no reason to think it has better statutory interpretation skills than does the Court.
Second, one can hardly expect an executive branch agency to be neutral and objective in how it goes about statutory interpretation when the relevant issue has the potential to cripple the incumbent president’s signature domestic policy achievement. It’s nearly impossible to imagine the IRS having ruled the opposite way, no matter how clearcut the statutory language. No Obama political appointee is going to write regulations that say, in essence, “Oops, we (at best) forgot to account for the possibility that most states wouldn’t create exchanges, so let’s throw in the towel on the whole Obamacare thing by denying subsidies to residents of states that have federal exchanges.”
Third, the Obama Administration has engaged in consistently lawless behavior with regard to implementing Obamacare, delaying, modifying, and changing the law on the fly, with no input from Congress, and not even a pretense of going through the normal notice and comment process for regulatory changes. The Administration has taken upon itself the power to “make law,” completely outside lawful processes, and often with barely a fig leaf of pretense that it’s doing so for anything but overtly political reasons.
That’s where the Cato Institute’s amicus brief, written by Professor Josh Blackman of South Texas Law School, a former VC guest blogger, comes in. It details several examples of Administration lawlessness in Obamacare enforcement. The message to the Court is that if you rule in favor of the government, you will not just be deferring to the IRS’s interpretation of “established by a state,” but also implicitly endorsing a pattern of unlawful rulemaking by the Obama Administration.
Put another way, many of the Administration’s unlawful actions will never find their way to court, because no one has standing to challenge them. So this is the Court’s one chance to assert that the rule of law is more important than the Obama Administration’s political machinations, or for that matter the viability of Obamacare, concern for which is the source of the lawlessness in question.
I suspect that this message will have resonance with the majority, and perhaps with some of the other Justices as well. Looking long-term, the growth of unchecked executive power is at least as dangerous to liberal goals as to conservative ones. I’m not the only one who thinks the brief makes an important contribution; last week, the National Law Journal named the Cato brief “brief of the week” (registration required).