The Federalism Fallacy in King v. Burwell

By DAVID RIVKIN and ELIZABETH PRICE FOLEY, March 11, 2015

Last Wednesday, the Supreme Court heard oral arguments in King v. Burwell, the latest challenge to the Affordable Care Act (ACA). The case centers on a provision of Obamacare that authorizes federal tax subsidies for individuals only if they purchase health insurance through an “Exchange established by the State.” If an individual purchases insurance through a federal-run exchange (in the event that the state opts out of setting up its own exchange), can she still qualify for Obamacare subsidies? The Obama administration says yes; the King plaintiffs say no. 

A great deal is at stake here. If the plaintiffs win, individuals in 34 states—the states that have opted not to operate a state insurance exchange—will still be subject to Obamacare’s individual mandate, but they won’t qualify for federal tax subsidies. As a result, their insurance will cost more out-of-pocket. Moreover, because individuals in these 34 states won’t get tax subsidies, employers in these states won’t be subject to the employer mandate, so they won’t have to offer health insurance and can’t be taxed for failing to do so. And yet, those states would be able to continue registering their profound opposition to the entirety of the Obamacare regulatory scheme, thereby undermining its legitimacy. Given these consequences, supporters of Obamacare are pulling out all the stops to prevent a plaintiffs’ victory.

One recent attempt to save tax subsidies in these 34 states has come from an amicus brief filed on behalf of four law professors, two of whom are former clerks to Justice Ruth Bader Ginsburg. During the King oral arguments, it became apparent that their argument had found favor with Ginsburg and three other liberal justices and had gained some traction with the court’s centrist, Justice Anthony Kennedy.

Ironically, the centerpiece of their argument is federalism—the division of powers between state and federal governments—a concept that, while a key part of the Constitution’s separation of powers architecture, is not particularly favored by liberals. Specifically, the law professors’ claim that the court should rule in favor of the Obama administration by invoking the “clear statement rule,” a legal doctrine designed to protect state sovereignty.

However, applying this rule to the King case would be unprecedented and deeply antithetical to federalism. Read more »

When bad Obama policies collide

By Elizabeth Price Foley and David B. Rivkin Jr. — Tuesday, March 10, 2015

Since its partisan passage in 2010, Obamacare has traversed a rocky road. President Obama has taken numerous executive actions to delay and modify the poorly written law in an effort to ease the political consequences of full implementation and make it work. However, in the president’s zeal to rewrite yet another area of law — immigration — he’s sabotaged one of Obamacare’s primary goals: expanding employer-sponsored health insurance.

The president’s executive actions on immigration — the major one of which is currently on hold due to a court order — confers two specific benefits upon approximately 6 million individuals who have entered this country illegally or overstayed their visas. First, they are completely exempted from deportation. Second, they are granted work permits. These unilaterally conferred benefits are powerful evidence that the president isn’t just exercising executive “discretion” by prioritizing enforcement of existing immigration law — he is rewriting it.

This massive influx of now-lawful workers will predictably reduce job opportunities for U.S. citizens and lawful residents. But beyond this obvious negative impact, granting work permits to these individuals will have a subtler, equally pernicious effect: It will encourage employers to hire these 6 million individuals over U.S. citizens and legal residents. This is due to Obamacare’s structure.

Under Obamacare, employers must pay a tax — called the “employer responsibility” tax — if they either fail to offer insurance altogether, or they offer “substandard” insurance. The employer responsibility tax is hefty, ranging between $2,000 to $3,000 per year, and is payable for every full-time employee who buys health insurance on an exchange and receives a tax subsidy as a result. The idea is to incentivize employers to offer generous insurance coverage, thus keeping workers off the exchanges, and away from tax subsidies. If no full-time worker receives a tax subsidy for buying health insurance, the employer will pay no employer responsibility tax. Read more »

Arizona Redistricting Case Could Signal The Future Of Legislative Standing

By Elizabeth Price Foley and David Rivkin, March 3 2015, 11:57am

In Federalist No. 22, Alexander Hamilton observed, “Laws are a dead letter without the courts to expound and define their true meaning and operation.” In constitutional controversies, the judiciary’s role is even more profound. Last week, the Supreme Court heard arguments in Arizona State Legislature v. Arizona Independent Redistricting Commission, a case that will signal how willing the Court is to prevent separation of powers from becoming a dead letter.

Separation of powers protects individual liberty by preventing any one branch of government from amassing too much power. It also ensures that government functions effectively, by assigning to each branch those powers that are most appropriate to its nature. For example, legislating is best accomplished by a multi-member body that engages in extended debate and deliberation. By contrast, waging war requires timeliness, and is thus best given to a unitary executive.

The Arizona case involves a turf dispute between Arizona’s legislative and executive branches, but it’s unclear if the Court is amenable to refereeing this constitutional conflict.  The case is therefore a canary in the coalmine for “legislative standing,” which means a legislature’s ability to defend, in court, its lawmaking prerogative against executive assault.  This is important not only to Arizona’s legislature, but any legislature, including the U.S. Congress.

At issue in the case is the constitutionality of Proposition 106, a referendum passed by Arizona voters that divested the legislature of drawing the state’s congressional districts and gave that power to an independent commission. When the commission redrew the districts in 2012, the Arizona legislature filed suit, asserting that the commission had violated Article I, section 4, of the U.S. Constitution, stating, “the Times, Places and Manner of holding elections for … Representatives [in the House] shall be prescribed in each State by the Legislature thereof .”

Before the meaning of this language can be resolved by the Court, it must first find that the Arizona legislature has standing to sue. In over 225 years of constitutional history, the Court hasn’t definitely articulated when legislative standing is proper. Read more »

Another Obama Collision With the Constitution

By MICHAEL B. MUKASEY and DAVID B. RIVKIN JR, February 19, 2015

President Obama last week sent to Congress a draft resolution regarding an authorization for use of military force, or AUMF, against the terrorist group Islamic State. Although presidents have constitutional power to defend American national-security interests, seeking an AUMF is both constitutional and sound. The measure enables Congress to show its support for military efforts and encourages public approval of them. From the nation’s founding, dozens of AUMFs have been enacted. The 2001 resolution authorizing war against al Qaeda and its affiliates and the 2002 authorization of the Iraq war are only the most recent.

AUMFs also have legal significance. They buttress the president’s powers and, consistent with Supreme Court precedent, provide legal support when such aspects of war-fighting as electronic surveillance, detention of enemy combatants and use of deadly force against American nationals who have joined the enemy are challenged in court.

One can argue whether Congress’s constitutional power to declare war serves principally to distinguish formally among enemies, friends and neutrals, or has broader effect. However, AUMFs have become particularly important in the aftermath of the 9/11 terror attacks, as federal courts have involved themselves to an unprecedented degree in scrutinizing such activities. The relevant judicial decisions often cite the existence of an AUMF.

Despite the benefits of traditional AUMFs, President Obama’s proposal is fundamentally flawed. Attempting to obtain political cover for his strategy to fight Islamic State, also known as ISIS or ISIL, he has asked Congress to ban “enduring offensive ground operations” and to terminate the authorization after three years.

Read more »

Nevada’s Right Choice on Immigration

By DAVID B. RIVKIN JR. And LEE A. CASEY, Feb. 2, 2015 7:40 p.m. ET

A very public dispute broke out last week when Nevada Attorney General Adam Laxalt went against Gov. Brian Sandoval’s wishes and joined a lawsuit filed by 25 other states challenging President Obama’s imposition of his immigration reform policies by executive action.

Messrs. Sandoval and Laxalt are both Republicans who agree that the current immigration system is broken and that comprehensive reform is necessary. But Mr. Sandoval opposes litigation and has suggested that new immigration reform legislation is the best way to proceed.

Yet on Jan. 26 Mr. Laxalt announced that Nevada had joined the plaintiff states in Texas v. United States of America. “As Nevada’s chief legal officer,” he explained, “I am directed by Nevada’s Constitution and laws to take legal action whenever necessary ‘to protect and secure the interest of the state.’ ”

Mr. Laxalt was right to join the suit. Mr. Sandoval’s legislative path will neither solve America’s vexing immigration problems nor rein in a president who has ignored the Constitution’s limits on executive power.

Texas v. United States of America challenges the president’s use of an executive order to suspend federal immigration laws that require, among other things, deportation of undocumented immigrants and strict limits on who may lawfully work in the U.S. The Constitution requires that the president “Take care that the laws be faithfully executed,” and provides no exemption for laws with which the president disagrees.

As the Supreme Court stated in Youngstown Sheet & Tube Co. v. Sawyer (1952), ruling against President Harry Truman’s seizure of the nation’s steel industry during the Korean War, “the President’s power to see that the laws are faithfully executed refutes the idea that he is to be a lawmaker.” Read more »

How Congress Can Use Its Leverage on Iran

By DAVID B. RIVKIN JR. And LEE A. CASEY, Jan. 20, 2015

Nuclear talks between Iran and the U.S. recommenced Jan. 14, ahead of full international talks with senior officials from the U.S., U.K., France, Russia, China and Germany two days later. A final agreement is to be reached no later than June 30. Nothing less than Middle Eastern and global security hangs in the balance.

That security depends on verifiable elimination of Iran’s nuclear-weapons and ballistic-missile programs. Unfortunately, the Obama administration is likely to accept a deal leaving in place a substantial Iranian nuclear-weapons infrastructure, including uranium-enrichment capability, long-range ballistic missiles and the ability to deploy a rudimentary nuclear force on short notice. A course correction that only Congress can effect is urgently needed.

It is difficult for Congress to stop a president determined to sign an agreement with foreign leaders. And as this newspaper pointed out in a recent editorial, President Obama has threatened to veto any legislation to impose further sanctions on Iran if the June 30 deadline is not met. Still, Tehran’s insistence that existing U.S. sanctions be lifted as part of a nuclear-weapons agreement gives U.S. lawmakers substantial leverage. The collapse of oil prices, which dealt a heavy blow to the already weakened Iranian economy, has further increased this leverage. Here is what Congress should do:

First, Congress should insist that any Iranian agreement take the form of a treaty. The Constitution requires that treaties be made only with the advice and consent of the Senate. At the time it was adopted, and throughout most of U.S. history, agreements fundamentally ordering the relationship between the U.S. and foreign nations took the form of treaties, not executive orders. A mere executive agreement, which Mr. Obama may use to evade congressional constraints here, would be constitutionally insufficient. Read more »