Affordable Care Act / Fiscal policy / Politics / Tax

Why the Founding Fathers Would Dislike “Obamacare”

Among the many popular topics of the 2016 presidential campaigns, healthcare remains a timeless defining issue sparking vivid debate on both sides of the political spectrum. In the 2016 presidential campaign, the Affordable Care Act (ACA) – commonly referred to as “Obamacare” – has become the privileged scapegoat. However, beyond the political contention, an aspect of the ACA that has received little public attention but raises an important legal question is the issue of appropriation, or in other words, the authorization of a government entity to spend money.

Jason George https://www.flickr.com/search/?text=white%20house Della Tucker https://www.flickr.com/search/?text=capitol

Via Jason George & Della Tucker

In 2013, the Internal Revenue Service (IRS) suspected the Obama administration of up to $7 billion dollars of unauthorized spending for the “cost-sharing” provision of the ACA. Despite failing to receive authorization for the funds, the government went along with spending the money to offset company out-of pocket healthcare costs for eligible consumers[i]. The Obama administration argued that the legislation provided the necessary appropriation, thus legalizing its actions. Press secretary for the White House, Josh Earnest, summarized the affair as nothing other than a “political dispute that characterize[s] a democracy”. And yet, beyond the political implications, the underlying concern is not healthcare per se but the violation of appropriations law, which falls within the realm of the Antideficiency Act (ADA).

Enacted in 1884, the ADA prevents the executive branch from incurring costs that have not been appropriated by Congress. This legislation was born out of the excessive disbursement of money by the federal government in the 19th century, peaking during the Civil War[ii]. The executive branch negotiated its own financial obligations without congressional accord, leaving legislatures no choice but to authorize payments. As a result, the ADA has been interpreted as emphasizing Article I of the Constitution in granting Congress the “power of the purse”, in which it is written that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law”. Looking at it under a different light, the ADA aims at providing a strict barrier between the two most powerful branches that relentlessly compete for the upper hand. And yet, the executive branch has remained steadfast in attempting to dodge this fundamental constitutional provision separating budgeting from law implementation, as demonstrated with the ACA.

Over the course of its 132 years, the ADA has been referenced numerous times when government institutions have overstepped the funds allocated to them. While it is true that some violations of the ADA are simple mistakes, either from bookkeeping rules or employee incompetency, other violations are more serious and can involve billions of dollars. Eyebrows should rise when finding out that the severest penalties taken against employees involved in an ADA violation have been retraining and letters of admonishment, with suspensions and dismissals the rarest[iii]. No one has ever been criminally prosecuted.

While identifying evidence of voluntary disbursements of unauthorized funds is no easy task, the opposition has raised the hypothesis that the executive knowingly circumvented Congress’ decision not to grant the funds to finance the cost-sharing subsidies of the ACA. While trifling amounts may seem inconsequential individually, the implications can become critical in the aggregate. Violating the ADA is also a violation of Article I of the Constitution, which entrusts Congress with the “power of the purse.” More substantively, the power balance between the legislative and executive branches is shifted to the executive, thereby eroding the constitutional checks-and-balances that the Founding Fathers fought to preserve.

The mere threat of criminal penalty for violating the ADA has been sufficient to keep bureaucrats in line in the past. However, federal courts should take care not to let a dangerous precedence develop under their noses. What has happened with Obamacare exemplifies the type of passive aggressive governmental behavior that has to be avoided: allowing bureaucrats to bypass congressional appropriations and take their own financial initiatives. If such actions go unpunished, government institutions will have no deterrence to spending millions, or even billions, of dollars that have not been approved by Congress, voiding not just the ADA but the separation of powers guarding against the tyranny of any one branch of government.

 

[i] Hulse, Carl. “In a Secret Meeting, Revelations on the Battle Over Health Care.” The New York Times. The New York Times, 30 May 2016.

Cohen, Andrew. “The Odd Story of the Law That Dictates How Government Shutdowns Work.” The Atlantic. Atlantic Media Company, 28 Sept. 2013.

[iii] http://www.gao.gov/legal/anti-deficiency-act/about

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