The House of Representatives Lawsuit Against the Executive Branch

Posted in: Constitutional Law

As November 2014 drew to a close, the House of Representatives filed its lawsuit against the Administration for violating separation of powers in connection with President Obama’s implementation of the Affordable Care Act (the “ACA,” popularly called ObamaCare). The Administration pooh-poohed the lawsuit. White House spokesperson Brandi Hoffine said, “Instead of passing legislation to help expand the middle class and grow the economy, Speaker Boehner and House Republicans are spending hundreds of thousands of taxpayer dollars pursuing a lawsuit that is without any sound legal basis.”

Yet the Administration and its allies do not act as if this lawsuit is frivolous, a mere publicity stunt. The first lawyer whom the House hired to represent it was David Rivkin, a partner with the firm of Baker Hostetler. House aides say he backed out when clients of his law firm pressured him to drop the suit. The next lawyer was Bill Burck, of the law firm of Quinn Emanuel. House aides say he also withdrew, again because of pressure from firm clients not to represent the House. Former House Speaker Nancy Pelosi, acknowledging this pressure, said, “After scouring Washington for months, Republicans have finally found a TV lawyer to file their meritless lawsuit.” The person she derisively called “a TV lawyer” happens to be a prolific scholar and a chaired law professor at George Washington University, Jonathan Turley. He is now the main lawyer for the House.

If this suit is “meritless,” as Pelosi asserts, one wonders why Administration allies exerted pressure on several law firms to not represent the House. One would think that Pelosi would welcome the suit as a way of vindicating what the President has done. Let us take a closer look at the suit. It has a lengthy and carefully drafted complaint, full of fascinating detail. I will discuss only one of the issues.

One important focus of this lawsuit is the power of Congress to control spending. The framers, in an effort to create institutional checks to the abuse of power, provided that the President, a civilian, would be the commander-in-chief of the military. To check the President’s power of the sword, the framers gave to Congress the power of the purse. The framers thought Congress was the most dangerous branch, so they divided the power of the legislature into two different Houses, each elected in a different way. The third branch of government, the Judiciary, the framers thought was “the least dangerous” branch.

The power of Congress to control the purse strings is an essential element of checks and balances. If Congress orders the President to spend money, the courts will make him spend it. In Train v. New York (1975), President Nixon refused to spend funds that Congress ordered him to spend. Train held that the President must follow the federal statute, not his policy preferences. This lawsuit sought to compel the Administrator of the Environmental Protection Agency to allot funds that the 1972 Amendments of the Federal Water Pollution Control Act had authorized. The Court held the Administrator could not allot to the states less than the entire amounts that the statute appropriated.

Congress also limits the Executive by refusing to authorize funds that the Executive wants. Article I, §9, clause 7 provides, “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.” What if the President spends the funds anyway? We expect the President to follow the law, but what if he does not?

That is a major focus of the House of Representatives lawsuit. The complaint presents some very interesting facts. The complaint, in its preliminary statement, asserts that defendants (the Secretary of Department of Health and Human Services, the Secretary of the Department of the Treasury, and other Executive Branch officials) are “directing, paying, and continuing to pay, public funds to certain insurance companies to implement a program authorized by the ACA, but for which no funds have been appropriated.” (Emphasis in original.)

Section 1402 of the ACA requires various insurance companies to provide reduced deductibles, co-pays, and co-insurance levels to qualified policyholders. The ACA imposes these cost-sharing reductions by the insurance companies without regard to any contingencies. That section also authorizes the government to make direct payment to insurers to compensate them for their costs in giving reductions to qualified policyholders. However—and this is key—this section does not appropriate any money. As is often the case, Congress must pass two laws—one to authorize an appropriation and one to actually appropriate the money. Congress typically provides for annual appropriation for most government expenditures. Congress uses annual appropriations to oversee the Executive Branch.

Congress has appropriated funds for other parts of the ACA. For example, Congress has appropriated funds to pay the “refundable tax credits” that another portion of the law, section 1401, authorizes. However, Congress has not yet appropriated any funds for section 1402. The nonpartisan Congressional Budget Office estimates that the cost of funding section 1402 for the next 10 years (2014 through 2024) will be approximately $178 billion—not an inconsiderable amount.

The Administration has certainly asked Congress to appropriate the money, but the Administration has been unsuccessful. For the 2014 Fiscal Year budget, for example, it asked Congress for $1,420,000,000 ($1.42 billion). As the House of Representatives states in ¶34 of its complaint, “Congress has not appropriated any funds for Section 1402 Offset Program payments to Insurers for Fiscal Years 2014 or 2015.” In the news reports, we constantly hear of proposals to “defund ObamaCare.” Plug that phrase into Google and you get about 280,000 hits. Yet, there is little talk of Congress’s failure to appropriate the new funds that the ACA needs to function.

How can this be? It appears that the Executive Branch has just ignored Article I, §9, clause 7. It is spending money that Congress has refused to appropriate. Because we are talking about billions of dollars, one cannot make ends meet simply by looking for loose change under the sofa. The government has to try harder than that. For Fiscal Year 2014, the federal government paid insurers about $4 billion, pursuant to §1402. The House of Representatives “does not know the actual amount” that the Administration spent for section 1402 because, the complaint states, “the Administration has disguised those figures.”

We know that Sylvia Burwell, the Secretary of Health and Human Services, in response to a request from Senators Ted Cruz and Michael Lee, said that the Treasury would make no payments from a Treasury account created for making section 1402 payments to insurers. That made sense because Congress has never appropriated any funds for section 1402 programs. Then, Burwell added that section 1402 payments “will be paid out of the same account from which the [section 1401 refundable tax credit program payments] are made.” Why? Ah, she said, it was because of “efficiency.” And so it gets curiouser and curiouser.

The House of Representatives lawsuit concludes that Burwell and other executive branch officials are using funds that Congress appropriated for tax refunds under 31 U.S.C. § 1324 to fund programs under section 1402, even though the ACA does not permit that money to be used for funding section 1402 programs. Indeed, 31 U.S.C. § 1324 expressly provides disbursements to implement section 1324 may not be used to fund other programs. In other words, the Executive Branch cannot use section 1324 as an all-purpose piggy bank.

I have just discussed one issue in the complaint that is 28 pages long, with over 100 numbered paragraphs encompassing five separate counts. The House of Representatives has made serious allegations that the Executive Branch is spending money that Congress has specifically refused to appropriate. If the Executive Branch can get away with that, we will find that Congress’s power of the purse is about as effective a restraint on Executive Power as handcuffs made of paper. If the Executive Branch can spend money that Congress has refused to authorize, the spending power is like a ratchet: Congress can force the President to spend money (the holding in Train v. New York) but Congress cannot prevent the President from spending money that Congress never appropriated.

3 responses to “The House of Representatives Lawsuit Against the Executive Branch”

  1. Tom Benghauser says:

    The purpose of this post is solely to let the author know that at least one other person has read it. And liked it.

    Tom Benghauser
    Denver Home for The Bewildered

  2. Carol Eblen says:

    Thank you for this commentary that fairly explains the issues the Court will examine. From the standpoint of checks and balances, it appears that the Executive have overstepped their authority by sending public money to private insurance companies that has not been appropriated by The Congress, The House. of Representatives

    It took the cooperation of the Secretary of the Treasury and the Secretary of Health and Welfare and CMS? to accomplish these payments to the private insurers. This kind of cooperation is not something new, is it?

    In the past and in my experience as an amateur researcher, I was shocked to find out that the Secretary of the Treasury in cooperation with the Department of Defense amended the debt collection law of the Treasury Department to permit the DOD to demand civil demands of $200.00 from the troops and their family members who shopped in government stores who were “on view” ticketed for stealing (shoplifting) and sent to the federal magistrate courts. I was shocked to find that there was no codification of the Civil Recovery Demand of $200.00 for the debt owed by the service member or his/her dependents other than an announcement to the Press that The Congress had authorized the $200.000 demand, but had they? Did they know what the results of the treasury amendment would be? There was no due process of law procedure available, i.e. a hearing, etc.. to protest the demand for the $200 “debt” demanded as a civil recovery.and a debt owed under federal law. Soon after, a Magistrate Court Judge declared in case law that it was not double jeopardy to be prosecuted in the federal magistrate courts for shoplifting and to pay a fine and restitution to the court and ALSO to pay the $200.00 to the AAFES Managers.

  3. Carol Eblen says:

    The matter of “checks and balances” as built into the separation of the powers of the Congress, the Executive, and the Judiciary is vitally important to the American people as to the protection of their individual rights, no matter their political affiliation, under The Constitution of the United States. We, the people, should be concerned when the checks and balances provided by the separation of powers is undermined by any one of these three separate powers. The Judicial Branch of government has the obligation to faithfully interpret the powers delegated by The Constitution and to protect the checks and balances on behalf of the people.

    However, this is not the first time that The Treasury Department has cooperated with other departments of the Executive in “sleight of hand” maneuvers to achieve desired results that may violate constitutional protections, is it? But, of course, what if all three branches of government agree and cooperate with each other to achieve desired and agreed-upon results? What if this cooperation among all three branches may involve the violation of constitutional, code/statute, and administrative law but is not questioned by any affected party who might also have a right to sue? As long as unconstitutional laws or acts are not questioned in the courts, they remain in effect under the cover of the “sleight of hand” manipulation of the law by the parties involved, don’t they? This is demonstrated by the $200 Civil Demand made by AAFES managers when troops or family members are ticketed for “stealing” on government property and sent to the Magistrate Courts to plea bargain with the court —but the $200 Demand is a separate

    In 2001, just before the Iraq war broke out, the US House Armed Services Committee, the Morale, Welfare and Recreation Panel, of the Department of Defense succeeded in getting The Treasury Department to accept an amendment to Department of Treasury Law, that would allow the DOD to pursue civil recovery demands of $200 from Armed Forces Personnel and their dependents, including children 10 years or older, when these personnel and dependents were ticketed in “on view” arrests for “shoplifting” i.e. “stealing” from government stores. Shoplifting is the federal crime of “theft” and is also “theft” under the Uniform Code of Military Justice. The Department of Defense had allowed the AAFES Managers to use use the State laws to demand civil recovery from the troops and their families for several years but state law deemed that civil recovery for shoplifting is a TORT and not a debt subject to the debt collection laws of the United States.