What if the President of the United States simply refuses to follow the law? For example, assume a tax statute says that the rate on capital gains is 20%. The President, who has been unsuccessful in urging Congress to reduce that tax rate to 10%, simply announces that he has instructed the IRS not to tax gains in excess of the 10% rate. Those who benefit by the reduction in the tax rate have no “standing” to sue — that is, the presidential waiver does not harm them; it simply reduces their tax liability. They have no particularized injury that a court can redress by injunctive or declaratory relief or by money damages. If those benefitted by the law do not like the presidential waiver, they can always pay the statutory rate of 20%. Later, a new President may revoke that Executive Order, but those who have benefitted by the prior order have saved a lot of money. It will be hard for the government to collect money from people who relied on the president’s order, for courts do not favor bait and switch tactics by the government.
Those who feel hurt by this Executive Order (the rest of the taxpayers) also have no particularized injury, so we cannot sue as taxpayers. The U.S. Supreme Court has made clear for many decades that the only taxpayer suits it allows will be those where the taxpayer objects to expenditures that establish a church.
The Authority (and Limitations) of the President to Issue Executive Orders
Sometimes federal statute will authorize the president to issue an Executive Order if he makes certain findings. For example, in 1936, the Supreme Court upheld a law that made it a crime to sell munitions to Bolivia (then engaged in an armed conflict) if the President made certain findings. The President, rather than decreeing legislation or ignoring it, was following the legislation. However, that line of cases does not authorize the President to “waive” provisions of the law that do not provide for a waiver.
At other times, the Constitution itself gives the President unilateral powers, such as the power to decide which foreign countries to recognize, or the power to grant a presidential pardon, even before a trial or conviction. The President may decide not to prosecute an individual criminally.
Still, the President has no general power to issue decrees that have the force of law. Thus, Youngstown Sheet & Tube Co. v. Sawyer (1952) rejected the argument that the President’s power to “faithfully execute” the laws gives him a power to create law. As the Office of Legal Counsel (part of the Justice Department) concluded in one of its Opinions, “The President has no ‘dispensing power.’” The President and his subordinates “may not lawfully defy an Act of Congress if the Act is constitutional.”
The President does not have the authority to issue “waivers” that amount to an amendment in the law. Yet, President Obama has issued over 20 unilateral amendments (“waivers”) of the Affordable Care Act (ACA)—so many that the nonpartisan Congressional Budget Office recently concluded that in 2016, almost 90% of uninsured will pay no penalty because of various “waivers.”
Those who argue that President Obama has issued fewer Executive Orders than prior presidents miss the point. The issue is not the number of Executive Orders; instead, the question is whether any statute authorizes them. In the case of the ACA, there are a few instances where the law authorizes the President or another official to make some findings and issue rules, but there is no general power to amend the law or relieve some businesses or individuals from the insurance mandate.
The Issue of Judicial Standing
Who can challenge these “benign” waivers, which exempt the favored few from the law? Recently, Wisconsin Senator Ron Johnson sued claiming that the Obama administration has no power to grant members of Congress and their staff subsidies to help pay for health insurance under the ACA. He argued that the Office of Personnel Management issued a regulation that makes members of Congress and their staffs eligible for employer-subsidized health insurance, but this regulation directly contradicts a provision of the ACA that requires that members of Congress and their staffs purchase their insurance on the individual exchanges set up under the ACA. Congress enacted this provision because of voters who thought that chefs should eat their own cooking. The district court rejected his lawsuit because of lack of standing.
If the Executive Branch gives Congress subsidies that the ACA forbids, who would have standing to sue? Similarly, if the President rewrites the tax code to grant benefits to a favored few, who has standing? At first look, the precedents suggest no standing. We start with Raines v. Byrd (1997). Raines held that an ad hoc group of Congress members does not have standing to file suit to declare a law unconstitutional simply because they voted against the bill and it became law anyway. In that case, a group of Congress members opposed the Line Item Veto, which Congress had enacted. First, the Court reasoned, neither House of Congress “authorized [them] to represent their respective Houses of Congress in this action, and indeed both Houses actively oppose this suit.” In addition, the Court explained, there are other possible plaintiffs waiting in the wings who would have standing. In fact, the Court found standing and invalidated the line item veto in Clinton v. New York (1998), when such a plaintiff sued.
However, while Raines held that there was no standing in that case, its rationale indicated that a House of Congress does have standing if its claim is that presidential action has nullified the legislative power of Congress, particularly if (1) no other plaintiff has suffered the injury and (2) either or both Houses authorize the lawsuit.
That is what happened in United States v. Windsor (2013). President Obama announced that he would not enforce a portion of the tax code that did not extend favorable estate tax treatment to the spouse of a same-sex married couple, after the Government lost the case at the trial court level. The spouse benefitted because she received favorable tax treatment. The President instructed the IRS to extend the favorable tax treatment, and he instructed the Department of Justice to refuse to defend the relevant federal law on the appellate or Supreme Court level. The Court held that the Bipartisan Legal Advisory Group (BLAG) had standing to defend the law. First, House rules authorized this specific lawsuit. Second, there was no one else who defended the federal statute. Finally, if the Court refused to recognize the injury to Congress as an institution, it would pose “grave challenges to the separation of powers for the Executive at a particular moment to be able to nullify Congress’ enactment solely on its own initiative and without any determination from the Court.”
Lower courts, both before and after Windsor understood that in a few cases, there is legislative standing: if (1) at least one House must authorize the lawsuit; (2) there is no obvious private party to bring suit (because the President has benefitted the private party by announcing that he has “suspended” or amended the law); and (3) the President’s action has nullified the legislative power of Congress.
For example, in 2008, D.C. District Court Judge John Bates found standing in the case before him (the House suit to enforce a subpoena against the Executive Branch). He specifically rejected the Executive Branch argument that “the Committee has not suffered a cognizable personal injury that is required for Article III standing.” The court acknowledged that the litigants are “co-equal branches of the federal government.” Nonetheless, “at bottom this lawsuit involves a basic judicial task—subpoena enforcement—with which federal courts are very familiar.” There was no appeal because, after the elections of 2008, the D.C. Circuit granted the motion of petitioners to dismiss their appeals, voluntarily.
More recently, the Tenth Circuit, in Kerr v. Hickenlooper, held that Colorado state legislators have standing to claim that a state Taxpayer’s Bill of Rights, TABOR, violates the Guarantee Clause. Whether the state legislators are right on the merits is, of course, a separate question. The important point is that they have standing as legislators. In 1939, in Coleman v. Miller, the Supreme Court granted standing to Kansas state senators who argued that the state Lieutenant Governor could not cast a tiebreaking vote supporting a U.S. constitutional amendment, and that vote nullified the Senate’s will.
The rationale of Windsor supports standing for the new case that seeks to determine whether the President has the power to amend, change, “suspend,” or effectively repeal parts of the ACA. There is no one else to bring this suit, unlike the case in Raines. Moreover, the House has specifically authorized this suit (as in Windsor). The House’s complaint is that the President is nullifying the legislative power of Congress, similar to the complaint in Coleman. As Kerr pointed out, “plaintiffs have suffered a particularized injury not widely shared by the general populace that entitles them to have their case heard by the federal courts.”
We will have to wait until the Department of Justice files briefs to find out what legal defenses it will argue. Thus far, the President’s reaction is to belittle the lawsuit as a “political stunt.” However the Court rules, this case should be a watershed in American Constitutional Law. Can the President issue valid unilateral waivers? If so, the next President could repeal all of the ACA simply by issuing waivers to everyone.