McConnell on the Obama Administration’s Decision to Delay the Employer Mandate

In tomorrow’s WSJ, Stanford’s Michael McConnell has an op-ed discussing the constitutional implications of the Obama Administration’s decision to delay enforcement of the PPACA’s employer mandate.

Article II, Section 3, of the Constitution states that the president “shall take Care that the Laws be faithfully executed.” This is a duty, not a discretionary power. While the president does have substantial discretion about how to enforce a law, he has no discretion about whether to do so.

This matter—the limits of executive power—has deep historical roots. During the period of royal absolutism, English monarchs asserted a right to dispense with parliamentary statutes they disliked. King James II’s use of the prerogative was a key grievance that lead to the Glorious Revolution of 1688. The very first provision of the English Bill of Rights of 1689—the most important precursor to the U.S. Constitution—declared that “the pretended power of suspending of laws, or the execution of laws, by regal authority, without consent of parliament, is illegal.” . . .

The Justice Department’s Office of Legal Counsel, which advises the president on legal and constitutional issues, has repeatedly opined that the president may decline to enforce laws he believes are unconstitutional. But these opinions have always insisted that the president has no authority, as one such memo put it in 1990, to “refuse to enforce a statute he opposes for policy reasons.”

As McConnell’s article makes clear, there is a major difference between discretionary enforcement decisions and a wholesale refusal to enforce a given legal provision.  It would be one thing if, say, the Administration announced it was going to focus its resources on pursuing particular types of employers for evading the mandate, or if it issued a guidance identifying the sorts of conduct that would be indicative of a willful (as opposed to accidental) violation of the relevant legal requirements. It is quite another to simply waive a statutory deadline.  From my read, the relevant requirements of the PPACA are quite clear, though some have sought to defend the potential legality of the Administration’s move.  In any event, as McConnell notes, it’s unlikely anyone would have standing to challenge the Administration’s decision.

If the Administration’s decision sets a precedent, it could have far-reaching implications.  McConnell:

Republican opponents of ObamaCare might say that the suspension of the employer mandate is such good policy that there’s no need to worry about constitutionality. But if the president can dispense with laws, and parts of laws, when he disagrees with them, the implications for constitutional government are dire.

Democrats too may acquiesce in Mr. Obama’s action, as they have his other aggressive assertions of executive power. Yet what will they say when a Republican president decides that the tax rate on capital gains is a drag on economic growth and instructs the IRS not to enforce it?

It is somewhat common for federal agencies to fail to meet statutory deadlines when they lack the resources to fulfill their legal obligations (see, e.g., Dodd-Frank).  Yet that does not appear to be what has occurred here — at least not yet.  In this case the Administration is preemptively announcing that it will not even attempt to meet the relevant deadlines and begin enforcing provisions when they are due to come into force.

The decision to delay enforcement of the employer mandate also has substantial practical implications.  As I noted here, the delay will prevent the collection of information necessary to determine whether individuals are eligible for subsidies when they purchase qualifying health insurance plans on exchanges.  No matter, for the Administration has also announced that there will be no need for exchanges to verify an individual’s eligibility before awarding such subsidies, at least not before the employer mandate and associated reporting requirements are enforced in 2015.  What could go wrong? If nothing else, this episode demonstrates that many of the assumptions about how the PPACA would operate — and what it would cost — will need to be revisited.  After all, few predicted that substantial provisions of the law would be eliminated (as in the CLASS Act) or left unenforced.

UPDATE: The National Journal reports that the Administration has “known for months” that it would be difficult to launch fully functioning exchanges in 2014