In a relatively brief, concise Order and Opinion, U.S. District Judge Ronald A. White (Eastern District, Oklahoma) has set aside a notorious IRS rule declaring that subsidies and mandates under the Affordable Care Act apply in states with federal as well as state-run health care “Exchanges.” The Order and Opinion in Pruitt v. Burwell agreed with the D.C. Circuit’s holding in Halbig v. Burwell, currently pending on en banc consideration, that the statutory language—an exchange “established by the State”—could not be read to include exchanges established by the federal government in and on behalf of the state. The District Court disagreed…
What does federalism have to do with the administrative state, and vice versa? Everything. Statutes typically confer authority on a federal agency (or several) in the first instance. However, practically all federal regulatory programs are “cooperative,” meaning they’re implemented by state and local officials. Entitlement programs from Medicaid to education are likewise run through states. So states will participate in the federal agencies’ process. Federalism isn’t shaped in once-in-a-generation enumerated powers cases; it’s shaped in millions of daily administrative interactions. How does that work?
In a temporary obsession over the mysteries of interstate taxation (a subject of forthcoming posts—skip alert!), I missed an important event until my twelve-year-old reminded me today: on September 23, Bruce Springsteen turned 65. Happy birthday, and God bless! And do let’s celebrate. Mick Jagger famously intoned that he’d rather be dead than sing “Satisfaction” at 45; how’s that working out for you, Mr. Geezer? Mr. Ezekiel Emanuel, who’s not much into revving up young people but would rather have government force them to subsidize others, wants to be dead at 75; let’s see how that plays out. Say about the…
A few posts ago I introduced “citizen suits”—brought by private parties, usually advocacy organizations, in a capacity of “private attorneys general” against the government to make it do something—as an example of the derangement of our administrative and constitutional law. Here’s a bit more on the real-world aspects of the phenomenon, and a few more thoughts:
A ton of these cases are “deadline” suits. Environmental and, increasingly, many other statutes contain countless provisions saying that the administrator or agency “shall” regulate this, that, or the other thing by date “x.” More often than not, the agency misses the deadline, and the Association of Irritated Residents (an actual group) or some such outfit strolls into court and demands compliance. Agencies rarely fight these cases.
My buddy Chris DeMuth and I are about to embark upon a long-term research project on fines, settlements, and fees collected by federal agencies. If we manage to pull it off, you’ll hear more about it.
Why would otherwise sentient humans volunteer for such a green-eyeshades program? Because the government itself doesn’t collect the data—not in one place, and very often not at all; and it doesn’t keep tabs on the spending, either. To paraphrase a leading public finance expert (the late Robert Palmer), the trend is irresistible—and there’s no telling where the money went. It appears, though, that a bunch of federal agencies have become profit centers for Congress. Our working hypothesis is that that’s bound to have incentive effects throughout the government. None of them, we suspect, are likely to be good.
In further demonstration that this is a forum for vigorous debate among friends: I strenuously disagree with Brother McGinnis’s post on Scottish independence. As usual he gets the analytics right: no matter how the vote turns out, it will embolden independence movements elsewhere. John is also right in suggesting that the EU has by design and institutional logic fostered such movements. It has done so by design (for example, through regional transfer payments) on the theory that anything that is bad for nation-states must therefore be good for the EU’s federalism project. It has done so by logic because the overall umbrella of free trade (by and large) reduces the expected price of secession. They’ve come a long way. There’s no longer a point in obsessing over a Belgium without a functional government because there is no longer a reason to have a Belgium in the first place.
The federal judiciary is in great need of expert economic advice, and mercifully some are happy to supply it. “Stop the Anti-Obamacare Shenanigans,” Henry J. Aaron (senior fellow, Brookings), David M. Cutler (professor, Harvard), and Peter R. Orszag (shill, citigroup) plead on the New York Times op-ed page. They urge the Supreme Court to await the D.C. Circuit’s en banc decision in Halbig before granting cert in King v. Burwell. Because if the petitioners’ position and the D.C. Circuit’s ruling—ACA tax credits and mandates apply only under health care exchanges established by states, not to exchanges established by HHS in a state—were to prevail, “it would create total chaos.”
Last Fall, the excellent Jim Fleming (Boston University Law School) organized a fun conference on “America’s Political Dysfunction: Constitutional Connections, Causes, and Cures.”
Part of the conference was a panel inviting Sotirios A. Barber (Notre Dame) and yours truly to critique each other’s books on federalism—respectively, The Fallacies of States’ Rights (Harvard UP, 2013) and The Upside-Down Constitution (Harvard UP, 2012). Both of us took the assignment quite seriously.
Let’s just say there’s not a lot of common ground; it’s a rather pointed exchange. To my mind, though, the colloquy illustrates the high utility (as well as the entertainment value) of the bilateral critique format, which I think Jim Fleming invented. Kudos.
What struck me on flipping through the essays for purposes of this post is just how much of a game changer the ACA has been, or become.
My earlier post suggested that there might be something to learn from the liberal version of the German Rechtsstaat—the tradition that American Progressives ignored when they imported the most authoritarian versions of administrative law then circulating in Germany.
Philip Hamburger rightly calls attention to the Progressives’ selective acquisition, and he fully acknowledges that the liberal tradition, which over the long haul triumphed in Germany, has a great deal going for it. But he is diffident about the liberal Rechtsstaat because it remains rooted, he says, in a legal tradition that is inimical to the common law tradition that (according to Professor Hamburger) the Constitution seeks to enshrine.
Chapter 24 in Philip Hamburger’s brilliant book on—or rather against—administrative law is entitled “The German Connection.” The Progressive architects of administrative law—Frank Goodnow; Ernst Freund; John Burgess and apparently the rest of Columbia Law School; Woodrow Wilson—all admired the Germans’ post-Hegelian, “scientific” approach to administration. Many had studied at German universities. And so America acquired what she’d never had before: administration. The rule of “experts,” outside constitutional channels and constraints.