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The next open enrollment period for Obamacare begins in a few weeks. “Health and Human Services Secretary Sylvia Burwell announced Thursday that an expected 10 million Americans will be covered by late 2016 by health plans they bought on the federal and state insurance exchanges created under the law.”
This is a far cry from the CBO projections when Obamacare was passed. Last year, we saw lower revisions for enrollment from 13 million to a hopeful 9.1 million. Obamacare may have barely hit THAT target; the Washington Post reports that the number looks to be around “9.1 million Americans the administration believes will have ACA health plans by the end of this year.”
This is stunning news. To say that 10 million will be covered by 2016 means that the Obama Administration predicts a mere 1 MILLION enrollees this year. As the Washington Post reminds us, 10 million is “just half the most recent forecast by congressional budget analysts, who have long expected 2016 to usher in the biggest surge in enrollment.”
CBO forecasts had predicted 21 million enrollees in 2016, and 32 million by 2019. As expected, there are a litany of excuses for the abysmal numbers:
Still, substantive forces are at work behind the calculation. According to HHS estimates, about 10.5 million uninsured people are eligible to buy a health plan on the exchange, and they are proving more difficult to reach than those who bought coverage early on.
In addition, federal health officials point out that the dynamics of insurance coverage have not been playing out as analysts expected. Fewer employers have dropped health benefits for their workers, and fewer consumers have switched from older policies they purchased on their own. Both factors, HHS officials say, play into their projection of how many people are likely to gravitate to the exchanges.
HHS contended on Thursday that exchange enrollment, originally pegged to reach 24 million within several years, is not plateauing but is instead on “a much longer path towards equilibrium,” as a senior official said.”
What’s even less clear is how how this affects the budget projections and funding of Obamacare. An article last month in the Washington Times outlined how the enrollees for 2016 needed to double to stay solvent. On top of that, the penalty for not having insurance increases begins to increase sharply. The penalty during the first year was $95 or 1 percent of income above the filing threshold — a relatively minor bite. For tax year 2015, the penalty will be $325 or 2 percent of income, and for 2016 it will be $695 or 2.5 percent of income. Per person.
Remember when we were told that Obamacare would help millions to have insurance and also save Americans $2500/family? Me too.
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For minimum wage advocates, their position is clear: more money in the hands of the worker is better for the worker — a tangible result. Though their hearts may be in the right place, they lack the basic understanding of the invisible effects of minimum wage policies, especially when it pertains to the business side of the equation. What does the business grapple with? Here are three typical responses to a minimum wage hike.
1) By raising minimum wage, many people, especially the poorest among us, will either lose their job or not be able to get jobs at all moving forward. The cost of raising the minimum wage is just like the cost of raising a commodity. For instance, consider the scenario where the price of apples — a basic pantry item for most everybody — goes from $1.50/pound to $2.50/pound. Fewer people will buy the apples, or buy less of them overall. So it is also with a higher minimum wage; with more money going to basic business costs, fewer businesses will hire, or they will hire fewer people overall. An added effect is that the economy will likely contract because of the loss of jobs resulting from a wage hike.
2) Businesses earn less money. Employees are the number one cost for businesses. If even more of the earnings must go to the capital cost, the business earns less profit overall. For some minimum wage advocates, perhaps that is the actual goal — to keep businesses from earning too much at the top. But in reality, the loss of business capital (from both large corporations to small mom and pops) means there is less money for future business endeavors. Whether it is reinvested directly back into the business with equipment upgrades or growing the business through expansion, whatever the case may be, earning less money for the company creates a ripple effect. The less a company can earn, the less it can help grow the economy. Impeding its ability to do so, through the imposition of mandated wage increases, is harmful.
3) In order to offset the increased wage cost, a business can also choose to raise its prices. This will attempt to ensure that the company earns the same amount as before. But the effect of the price increase is negative. As prices increase, people are wont to adjust their purchasing habits and will end up buy less of the product. When consumption decreases, the health of the economy worsens.
Every one of these responses — cutting jobs, loss of business capital, and raising prices — are either bad for the employees or the economy as a whole. Though the minimum wage hikes sound good in theory, in reality, economies don’t exist in a vacuum. These types of policies hurt more than help.
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The only reason why I am mentioning this plan is the sheer ridiculousness of its foundation. In his editorial in the Wall Street Journal today, Santorum announces that he will pay for his tax plan by “repealing ObamaCare and all of its associated taxes.” That is patently absurd. No matter how much I may dislike Obamacare, the likelihood that it will be entirely repealed is slim to none. To stake an entire tax plan (flat tax at that) on something likely to be unattainable, is a bit foolish and naive.
You can read the plan below in its entirety:
Since 2007, 15,000 American factories have shut down and more than two million manufacturing jobs have been lost. Wages have flatlined; American families are struggling.
In every recovery since 1960, real GDP grew by 4% a year, according to a report from the Congressional Joint Economic Committee. The Obama-Biden policies have resulted in a paltry 2.3% annual growth since the recession ended in 2009. This growth gap has cost the country $5.4 trillion in lost economic output and 5.5 million fewer jobs than would have been expected during a normal recovery.
So what is Hillary Clinton’s vision to get the economy moving? She wants to slam investors with higher capital gains taxes. Bernie Sanders wants to raise the top personal-income tax rate to 90%.
Donald Trump’s plan to make America great again? He’s offering a complicated tax cut that the Tax Foundation reports will explode the deficit by more than $10 trillion over a decade. Are any Republicans offering serious, specific proposals to scrap the toxic tax code? Jeb Bush wants three rates. Marco Rubio wants two. Rand Paul has proposed a single rate and creating a European-style value-added tax.
America deserves better. That’s why, in my first 100 days as president, I will submit to Congress a comprehensive Economic Freedom Agenda that will abolish the existing tax code. Under “The 20/20 Flat Tax: A Clear Vision For America,” individuals will pay a simple, low 20% individual rate that will be applied to all streams of income. It eliminates the marriage penalty, death tax and alternative minimum tax. It will treat every American the same. No longer will savings and investment be penalized.
Individuals will receive a $2,750 credit, which will replace the standard deduction and personal exemption. The credit will be refundable and replace the Earned Income Tax Credit. The child tax credit will remain. For low- and middle-income workers, the provision will shield much of their basic wages from federal income taxes. They can keep more of what they earn.
In exchange for the refundable tax credit and low rate, itemized deductions will be eliminated, except for two. Charitable giving in any amount will be fully deductible, to affirm and encourage Americans’ generosity. Mortgage interest—up to $25,000 a year—will also be deductible, as a means of helping low- and middle-income workers buy and maintain their family home without subsidizing millionaires and billionaires.
Businesses too will benefit from a flat 20% tax rate. It will replace the current corporate income-tax rate of 39.1% that is only exceeded by Chad and the United Arab Emirates. An initial 0% tax rate on American manufacturers, phasing up to 20% over two years, will help make America the No. 1 manufacturer in the world again.
Companies will be allowed to deduct 100% of their capital costs in the first year. Full expensing will eliminate complicated depreciation schedules and encourage investment in new plants and equipment. To encourage American companies to bring revenues home and reinvest the $2.1 trillion in profits that have been parked overseas, my plan calls for a low 10% rate on business income that is repatriated.
I will eliminate the deductibility of interest and corporate welfare, including all carve-outs, loopholes and tax shelters. No more special deals and favors for the rich and powerful and their lawyers and lobbyists.
An analysis of my plan by the Tax Foundation found that GDP would rise by 10.2% above the Obama-Biden trajectory over 10 years. Capital investment would grow by almost 30% and wages would increase by 7.3%. More than 3.1 million additional jobs would be created beyond current projections.
I will pay for my plan by repealing ObamaCare and all of its associated taxes. My flat tax will reduce federal revenues by $1.1 trillion over 10 years, after accounting for increased GDP growth and job creation. But according to the Congressional Budget Office, repealing ObamaCare will reduce federal spending by $1.7 trillion over 10 years and increase economic growth by 0.7% annually.
Thus, the 20/20 Flat Tax will not increase the deficit. It will allow us to make needed reforms, such as the expansion of Health Savings Accounts, to give patients and doctors, not Washington bureaucrats, more freedom and control over their health care, and to expand coverage. The new tax code will also provide the resources needed to rebuild our military in an increasingly volatile world.
To maximize the country’s economic potential I will, on my first day in office, repeal each and every Obama-administration regulation that creates an economic burden of more than $100 million. The Keystone XL pipeline will be approved, and expanded production of domestic fuels will be encouraged, not hobbled by federal regulations.
As a U.S. senator I never voted for a tax increase, and the first two bills I co-sponsored were the Balanced Budget Amendment and the Line Item Veto. I always fought for bold tax cuts and government reform. My administration will be no different.
The stakes for America are too high for the GOP to nominate untested newcomers, first-term senators, or governors without proven national results. I offer Americans a clear conservative vision, serious plans for reform and the experience to get the job done.
Mr. Santorum, a former U.S. senator from Pennsylvania, is a Republican candidate for president.
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This is an point that I have been writing about for years: workers in the public sector makes more than their private sector counterparts, especially when benefits are factors into the compensation package.
Now, a new study by CATO affirms my supposition. CATO analyzed data from the US Bureau of Economic Analysis (BEA) and found that “that federal government workers earned an average of $84,153 in 2014, compared to the private sector’s average of $56,350.”
Even more incredibly, “when adding in benefits pay for federal workers, the difference becomes more dramatic. Federal employees made $119,934 in total compensation last year, while private sector workers earned $67,246, a difference of over $52,000, or 78 percent.”
Government wage increases vastly outpaced the public sector, and the number of government jobs have soared. For the federal government alone, there are 2.1 million workers, “costing over $260 billion in wages and benefits this year.”
It is interesting to ponder the secondary effects of this phenomenon. First, as the amount of government jobs increases, the amount of voters with government jobs increases. What voter is going to seriously vote to cut the size and scope of government when he is the direct beneficiary. Likewise as pay continues to grow, it becomes less likely that someone will vote to cut his or her own pay.
At some point, the number of voters with government pay and benefits will outnumber those without. When that happens, we’ve reached the tipping point with trying to reign in government spending.
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Remember, Obamacare mandates that you either have an approved insurance plan OR pay a penalty/fine/tax. The 2014 tax year was the first year year the penalty was assessed. This coming tax year, the penalty increases, and for tax year 2016, the penalty increases even more. Here’s how the penalty works:
“Your tax is the greater of either 1) a flat-dollar amount based on the number of uninsured people in your household; or 2) a percentage of your income (up to the national average cost of a Bronze plan , as determined by the IRS and adjusted annually to reflect changes in premiums).
This means wealthier households will wind up using the second formula. For example: in 2016, an individual earning less than $37,000 would pay just $695 (flat-dollar calculation) while an individual earning $200,000 would pay about $4,750 (2.5% of his income above the tax filing threshold). (Hat tip to the Congressional Research Service.)
1) Flat-dollar amount
In 2014, the flat-dollar penalty is $95 per uncovered adult (rising to $325 in 2015, and $695 in 2016) plus half that amount for each uninsured child under age 18. Your total household penalty is capped at three times the adult rate, no matter how many children you have. In 2014, that’s $285 ($975 in 2015, and $2085 in 2016).
2) Percentage of income
In 2014, the penalty is 1 percent (rising to 2 percent in 2015, 2.5 percent in 2016). The penalty is capped at the average cost of a Bronze plan, which for 2015 is $2,484 for an individual and $12,420 for a family of five; this cap will adjust annually. Wealthy households will be happy to know that they will pay a penalty only on that portion of their adjusted gross income “above and beyond their filing threshold,” explains the Center on Budget Policy and Priorities‘ Judy Solomon.”
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From the AP:
A sagging global economy has finally caught up with the United States.
Nervous employers pulled back on hiring in August and September as China’s economy slowed, global markets sank and foreigners bought fewer U.S. goods. Friday’s monthly jobs report from the government suggested that the U.S. economy, which has been outshining others around the world, may be weakening.
Lackluster growth overseas has reduced exports of U.S. factory goods and cut into the overseas profits of large companies. Canada, the largest U.S. trading partner, is in recession. China, the second-largest economy after the United States, is growing far more slowly. And emerging economies, from Brazil to Turkey, are straining to grow at all.
A result is that economists now expect the Federal Reserve to delay a long-awaited increase in interest rates, possibly until next year.
Employers added just 142,000 jobs in September, and the government sharply lowered its estimate of gains in July and August by a combined 59,000. Monthly job growth averaged a mediocre 167,000 in the July-September quarter, down from 231,000 in the April-June period.
The unemployment rate remained a low 5.1 percent, but only because many Americans have stopped looking for work and are no longer counted as unemployed. The proportion of adults who either have a job or are looking for one is at a 38-year low.
U.S. stock prices have tumbled as fears of a global slowdown have intensified. Volatile financial markets can make businesses too anxious to expand and hire.
“We’re back to a period of what I call corporate caution,” says Nariman Behravesh, chief economist at IHS. “It’s wait and see. If things stabilize, we could see hiring come back.”
On Friday, the Dow Jones industrial average fell about 200 points soon after the jobs report was issued before recovering to close up 200. The yield on the 10-year Treasury note dipped below 2 percent, a sign that investors anticipate sluggish growth and low inflation.
Over the past year, the dollar has risen about 15 percent against overseas currencies, making U.S. goods costlier overseas and imports cheaper. Declining exports have led many analysts to slash their growth estimates for the July-September quarter to a subpar 1.5 percent annual rate or less.
Heavy equipment maker Caterpillar has said it will cut up to 5,000 jobs by year’s end. Lower oil prices have hurt its sales of drilling equipment, and overseas sales of its construction machines have fallen.
Hershey has said it will shed 300 positions in the U.S. this year after sales in China plunged.
A host of other companies have announced layoffs in recent weeks, including Wal-Mart, the world’s largest retailer; ConAgra Foods, which makes Chef Boyardee and Slim Jims; and Chesapeake Energy, which has been hurt by lower oil prices.
The tepid pace of hiring clouds the picture for the Fed, which is considering whether to raise rates from record lows. Fed Chair Janet Yellen has said that the job market is nearly healed. But she’s also said she wants to see further hiring and pay growth for reassurance that inflation is edging toward the Fed’s 2 percent target. Average hourly wages are up just 2.2 percent in the past year – far below the 3.5 percent or 4 percent considered healthy.
Many economists now expect no rate hike until 2016, though some still think the Fed will begin raising rates in December – a step that would eventually send consumer and business borrowing rates up.
Some analysts, like Michael Gapen, chief U.S. economist at Barclays Capital, say they remain confident in the economy’s resilience. Gapen notes that the threats from overseas resemble earlier periods in the economic recovery when anxiety about Europe’s financial crisis slowed hiring and roiled U.S. markets.
He says he thinks underlying drivers of the U.S. economy are healthier now and can power through overseas pressures.
“The consumer is in much better shape, and the housing sector is in better shape,” Gapen said. “This is something that is more of a soft patch,” rather than a “meaningful recession risk.”
Some Americans are still willing to splurge out on pricey goods: Auto sales surged to the highest level in a decade last month, and sales of new homes reached a seven-year high in August.
The disparity between overseas weakness and solid consumer spending was evident in the September jobs report: Manufacturers shed jobs for a second straight month while retailers, restaurants and hotels all added positions.
Central banks in China and Europe could take further steps this year to stimulate growth. And most expect growth in Germany to pick up next year. That could lessen the threat from overseas.
Still, the sluggish growth of the U.S. labor force – the number of people either working or looking for work – poses a headwind for job growth. The aging population means more baby boomers are retiring.
The decline in the proportion of Americans in the workforce also signals that many remain discouraged about their job prospects. Modest growth and steady, if unspectacular, hiring haven’t encouraged lots more people to look for work.
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Dear Mr. O’Connor and Mr. McKinnon,
I read with interest many of the reviews of Jeb Bush’s tax plan. As a CPA for the past 40 years, I find his plan overall to be a good start.
However, in your article in the Wall Street Journal, you included a quote from Ms. Holly Shulman of the Democrat National Committee, who declared, “What’s Jeb’s plan? More massive tax cuts for the wealthy and corporations, all while exploding the deficit or shifting the burden onto the middle class.” As we both know, her claim is utterly outrageous.
Why, then, would you just accept a sound-byte quote without even asking if it is the result of an actual reading and analysis of his tax plan? It’s merely just a knee jerk reaction that she thought a gullible writer might just print. It represents the quintessential example of a pundit talking point. Perhaps the better article would have been that a Democrat spokeswoman made the aforementioned claim, but it was obvious that she never even looked at Jeb’s plan; her comments are simply untrue.
In fact, you yourself contradicted her attacks later in your article when you showed that “the most provocative component of Mr. Bush’s plan is his proposal to scrap many tax breaks for businesses and the wealthy”, which included the elimination of “convoluted, lobbyist-created loopholes”, and capping deductions “used by the wealthy and Washington special interests.”
As journalists who are knowledgeable about economics, if you knew the DNC commentary was detached from any economic reality and basic facts, why would you include it in your article?
Yours very truly.
Dear Mr. O’Connor and Mr. McKinnon,
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It was refreshing to read an Op-Ed about overregulation in the Washington Examiner today. Presidential candidate Jeb Bush is absolutely correct that the explosive expansion of regulations during Obama’s Administration has been a major factor in the tepid economic recovery. I enjoyed seeing a candidate speak to this issue. Below are his remarks in full:
“President Obama has presided over a massive expansion of the federal government during his six and half years in office. He shepherded Obamacare into law — a $1.7 trillion spending bill that vastly increased Washington’s role in the healthcare industry. He has raised taxes by nearly $2 trillion, while adding $8 trillion to the national debt. The president has also imposed more than 2,500 new regulations on the American economy that carry a staggering price tag of $670 billion.
It should come as no surprise then that our economy has limped along during the Obama presidency. The anemic two percent rate of growth on his watch is one of the weakest recoveries in American history and it has resulted in labor force participation falling to a 38-year low. Middle class families’ incomes have fallen by $2,000 and there are six million more people living in poverty today than when Barack Obama took the oath of office.
Right now, federal regulations cost our economy $1.9 trillion a year. This works out to an average of $15,000 per household. We need to cut excessive federal red tape and unleash the entrepreneurial spirit in our nation.
Obama-era regulations such as those in Dodd-Frank, Obamacare, and his War on Coal are having a chilling effect on our economy. As president of the United States, I will conduct a spring cleaning of existing regulations to get rid of the ones that are too costly or not providing value to the American people. I will establish a regulatory budget that ensures that for every new dollar of regulations we impose on the American people we cut a dollar of existing regulations somewhere else. I will appoint judges to the judiciary who are committed to reining in regulatory excesses and preventing unelected regulators from exceeding the intent of Congress.
Finally, I will sign into law the REINS Act, which will provide another check on executive agency regulatory authority. The REINS Act would ensure that major rules and regulations are approved by Congress before they can take effect.
Regulations act as a hidden tax on the American people. Reining in their cost is just as important as reducing taxes. When coupled with my bold plan to reduce tax rates and simplify our tax code, my regulatory reform agenda will help drive America to four percent annual growth. Together, these policies will result in the average family seeing their income increase by $3,000 and their tax burden decline by $2,000. This is a significant boost in a middle class family’s budget that will make it easier for them to pay the mortgage, buy groceries, save for college and build a nest egg for retirement.
I know how to do this, because as governor of Florida, I cut taxes every year, by $19 billion total. I streamlined regulations and made my state the national leader in small business creation. During the final seven years of my governorship, Florida led the nation in job creation. Our unemployment rate fell to 3.5 percent and we added 1.3 million new jobs. Over the course of my full two terms in office, Florida averaged 4.4 percent economic growth.
Secretary Hillary Clinton will double down on the massive expansion of taxes, debt and regulations we have seen under President Obama. I am offering the country a different vision that will empower entrepreneurs and American businesses to grow and provide better wages and benefits to the American people. I look forward to having the debate with Hillary Clinton and her allies on the defeatist Left about how best to unleash the entrepreneurial spirit in America and provide a boost to a middle class that hasn’t seen its wages rise in 15 years.”
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The recent Wall Street Journal article discussing the pitfalls of raising interests rates in near future was so utterly fully of incorrect information and assumptions, that I felt compelled to call out the author, Mr. Narayana Kocherlakota, for his pomposity. He contends that raising the interest rates — we’re talking .25% here — would “create profound economic risks….given the prevailing economic conditions.” Though Mr. Kocherlakota recognizes the fragility of our current economy, he fails to recognize that Obama’s economic policies and the Fed’s meddling are the chief sources of the malcontent.
So here we have the current president of the Federal Reserve Bank of Minneapolis blathering on and on as if his point of view — that very low interest rates are necessary and good — is a foregone conclusion. But it’s not. Any economist worth his salt knows that the problem all along is one that Mr. Kocherlakota has not even considered, because it is the exact opposition of his world view. Low interest rates have been the problem all along, not the solution. Yet we have this Fed chief who can’t even understand basic economics and has the audacity to pontificate from the Wall Street Journal on a point that is incorrect.
These sustained low interest rates have been harmful to our recovery. The assertion that inflation is merely 0.3% (and therefore well under the “target 2% rate”) is laughable. Ask anyone who has purchased food or paid energy costs in the last several years, and they will tell a different story. Everything is more expensive than it was a few years ago. Compound that with soaring healthcare costs, rising taxes (at all levels of government) and stagnant wages, and the result is an anemic economy.
For Mr. Kocherlakota to suggest that a .25% rate hike, therefore, would “discourage spending” and “create a drag on economic activity” is a slap in the face to all the Americans who diligently saved for their retirement golden years — only to watch their investments and savings shrink because of the non-existent interest rates and loss of Return On Investment (ROI).
These Fed officials are just out of touch with reality. For instance, QE1, 2, and 3 were miserable failures. The open-endedness of floodgate printing left consumers and investors unsure of what to do with their money for a very long time; now that quantitative easing has ended, with no measurable positive results, we have prolonged, and thus weakened, our ability to recover satisfactorily. But officials like Mr. Kocherlakota believe otherwise.
Case-in-point: Mr. Kocherlakota suggests that, “when the public comes to doubt a central bank’s commitment to its goals, the economy can land in a permanent low-interest-rate trap. The central bank is then much less able to fight recessions effectively.” This is patently untrue. The public doubt stems from ineffective policy by the Fed, which creates market uncertainty and a reluctance to invest. Smart Americans know that the best way to fight recessions are curbing government spending, promoting entrepreneurship, and letting the market correct itself without excessive, unconventional tinkering by a central bank. The public doubt is mainly about the Fed leaders — like Mr. Kocherlakota — who fail basic Economics 101.
What Mr. Kocherlakota and many other Fed officials and Washington bureaucrats fail to recognize, is that artificial monetary policies do not create jobs or businesses, which are the greatest source of expanding an economy. This is achieved by a free market and private capital, with minimal government regulation and reduced government spending. Anything else than that, such as prolonged low interest rates, is a recipe for failure.
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Now this is pretty interesting. Last week, a federal district judge ruled in favor of the House of Representatives against the Obama Administration with regarding to Obamacare payments and Congressional appropriations. Specifically, the ruling allow for House to continue their lawsuit which claims that the Executive Branch (via Health and Human Services and the Treasury Department) has overstepped its authority by overspending on Obamacare beyond what was appropriated to them by Congress.
Rollcall has a great overview of what is at stake, how difficult the question it, how it affects the Constitution, and what it says about the Separation of Powers. You should take a few minutes and read it in full, as this type of lawsuit is fairly rare.
The House can pursue some constitutional claims in a lawsuit against the Obama administration over appropriations and implementing the health care overhaul law, a federal district judge ruled Wednesday.
The ruling means Congress has cleared a high procedural hurdle in the separation of powers case, one that usually stops the judiciary from stepping into fights between lawmakers and the executive branch.
The House has legal standing to pursue allegations that the secretaries of Health and Human Services and Treasury are spending $175 billion over the next 10 fiscal years that was not appropriated by Congress, Judge Rosemary M. Collyer of the U.S. District Court in Washington, D.C., wrote in the 43-page ruling.
The House lawsuit asks the court to declare the president acted unconstitutionally in making payments to insurance companies under Section 1402 of the health care overhaul law (PL 111-148, PL 111-152) and to stop the payments.
House Speaker John A. Boehner said the court’s ruling showed that the administration’s “historic overreach can be challenged by the coequal branch of government with the sole power to create or change the law. The House will continue our effort to ensure the separation of powers in our democratic system remains clear, as the Framers intended.”
Wednesday’s ruling does not address the merits of the claims. Collyer acknowledged that the court was taking a rare step, but doing so carefully into a high-profile dispute, so that it wouldn’t give the House standing to file other similar lawsuits.
“Despite its potential political ramifications, this suit remains a plain dispute over a constitutional command, of which the judiciary has long been the ultimate interpreter,” Collyer wrote. “The court is also assured that this decision will open no floodgates, as it is inherently limited by the extraordinary facts of which it was born.”
The dispute focuses on two sections of the health care overhaul law. The administration felt it could make Section 1402 Offset Program payments from the same account as Section 1401 Refundable Tax Credit Program payments. House Republicans say the health care law doesn’t permit that.
The Obama administration, during the fiscal 2014 appropriations process, initially asked Congress for a separate line item for 1402 payments. Congress did not include money for such a line item. During oral arguments in the case in May, Collyer questioned government lawyers about why the administration could ignore Congress and then argue that the House couldn’t sue them.
The administration argued that the House has other options, such as political remedies or passing other legislation, they said.
Jonathan Turley, the attorney for the House, said in a statement that the ruling means that the House “now will be heard on an issue that drives to the very heart of our constitutional system: the control of the legislative branch over the ‘power of the purse.’ We are eager to present the House’s merits arguments to the Court and remain confident that our position will ultimately prevail in establishing the unconstitutional conduct alleged in this lawsuit.”
Turley said the administration had argued that Congress couldn’t seek judicial enforcement of its constitutional status. “The position would have sharply curtailed both the legislative and judicial branches. The Court has now answered that question with a resounding rejection of this extreme position,” he said.
The case at the U.S. District Court for the District of Columbia is U.S. House of Representatives v. Burwell, No. 14-cv-1967.
