Law & the Courts

King v. Burwell and the Triumph of the Administrative State

(Travelling-light/Dreamstime)

Shortly after the U.S. Supreme Court issued its ruling in King v. Burwell on Thursday, President Obama made a statement that began, “Five years ago, after nearly a century of talk, decades of trying, a year of bipartisan debate — we finally declared that in America, health care is not a privilege for a few, but a right for all.”

That phrase, “we finally declared,” is perhaps more telling than the president meant it to be — a tacit admission that what congressional Democrats did by passing the Affordable Care Act in 2010 was something less than create new law. They expressed a desire, declared their desire to be law, and told the Department of Health and Human Services and the Internal Revenue Service to make it so.

Thus, when 34 states declined to set up a health-insurance exchange in accordance with the ACA, and HHS was obliged at the last minute to cobble something together in all those states, the IRS simply declared that an exchange “established by the state” could also refer to something quite different: an exchange established by HHS. It was a convenient and seemingly painless way to solve a problem that had cropped up. If subsidies were allowed only on exchanges created by states (as the ACA rather plainly stated) and not on those set up by HHS, then millions of people would not be able to afford very expensive ACA-compliant health coverage. You need subsidies to afford those plans, after all. Something had to be done. So the IRS took care of it and the Supreme Court said, okay.

MORE COVERAGE: King v. Burwell and Obamacare

And so we crossed the Rubicon. A law, no matter how poorly written or designed, can now be fixed by administrative decree. Bureaucrats, empowered to alter the meaning of words to suit the purposes of their political masters, have begun to supplant lawmakers. Chief Justice John Roberts suggests as much in his majority opinion, admitting not only that the law “contains more than a few examples of inartful drafting,” but that it doesn’t “reflect the type of care and deliberation that one might expect of such significant legislation.” It is ambiguous, he says, and then goes about figuring out what the phrase “established by the state” could possibly mean, for it surely was a mistake.

A law, no matter how poorly written or designed, can now be fixed by administrative decree.

Scalia fires back, “If there was a mistake here, context suggests it was a substantive mistake in designing this part of the law, not a technical mistake in transcribing it.” A substantive mistake in design, he argues, is not within the purview of the Court to correct: “The Court forgets that ours is a government of laws and not of men,” writes Scalia. “That means we are governed by the terms of our laws, not by the unenacted will of our lawmakers.”

EDITORIAL: Roberts Gets It Wrong Again

Scalia’s dissent is a blistering critique not only of Roberts’s deeply flawed opinion in Burwell, but of an entire philosophy of governance that has gained ascendancy in America over the past century: rule by decree. Scholars often point to the Progressive era, beginning more or less with President Woodrow Wilson, as the inauguration of the administrative state and the decline of the rule of law. But the tendency to rule by decree goes back much farther, centuries back, although for much of that time it was known by another name — prerogative.

Renowned Columbia Law School professor Philip Hamburger wrote a book last year entitled “Is Administrative Law Unlawful?” The book traced the lineage of administrative law back to royal prerogative — the notion that a monarch’s proclamations carry the force of law even though they are not, in fact, law. Hamburger offers myriad examples of prerogative but one from 1539 stands out. Henry VIII induced Parliament that year to pass the Act of Proclamations, allowing the king to “set forth . . . proclamations, under such penalties and pains” the king deemed “necessary and requisite.” The king’s proclamations “shall be obeyed, observed, and kept as though they were made by act of Parliament.”

RELATED: King v. Burwell: An Embarrassing Decision

Hamburger’s argument — much abbreviated — is that the American founding was the culmination of centuries of struggle against prerogative. A large part of this struggle was not only the development of legislative bodies but also of an independent judiciary, both of which achieved full realization in the U.S. Constitution. The lurch back toward prerogative and away from these institutions began with theories about administration at the turn of the last century, many of which were put into practice by Wilson and his progressive heirs. And now here we are. The Supreme Court has upheld an IRS rule that blatantly rewrites a section of poorly designed law in order to achieve a policy outcome desired by the administration. We overcame royal prerogative in the late 18th century only to replace it, in modern times, with administrative prerogative.

#related#​In his 2012 book about President Obama, I Am the Change, Charles Kesler claimed that the ACA is the “latest installment in modern liberalism’s long-running project to change America by changing Americans’ relation to their government.” The Burwell ruling should leave no doubt that Kesler was correct. No longer must elected representatives of the people hammer out compromises and pass actual laws. It’s enough, now, for Congress to express a desire for a policy outcome and leave the details to a vast unelected bureaucracy — even when those details involve billions of dollars in taxes and spending, strict mandates and penalties, and government control over vast swaths of the economy.

Accepting administrative prerogative, as the Court has done in Burwell, does indeed change our relation to our government. You cannot vote the bureaucrats out of office, after all, and yet their administrative edicts “shall be obeyed, observed, and kept as though they were made by act of Parliament.”

MORE COVERAGE: King v. Burwell and Obamacare

—  John Daniel Davidson is the director of the Center for Health Care Policy at the Texas Public Policy Foundation.

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