Paul L. Caron

Wednesday, July 10, 2013

If Obama Can Suspend Employer Mandate, Can GOP President Suspend Tax on Capital Gains?

Wall Street Journal op-ed:  Obama Suspends the Law, by Michael W. McConnell (Stanford):

President Obama's decision last week to suspend the employer mandate of the Affordable Care Act may be welcome relief to businesses affected by this provision, but it raises grave concerns about his understanding of the role of the executive in our system of government.

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. ...

The employer mandate in the Affordable Care Act contains no provision allowing the president to suspend, delay or repeal it. Section 1513(d) states in no uncertain terms that "The amendments made by this section shall apply to months beginning after December 31, 2013." Imagine the outcry if Mitt Romney had been elected president and simply refused to enforce the whole of ObamaCare. ...

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?

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Re Eric Rasmussen's and AMT's comments, there's a discussion of impoundment in John Steele Gordon's book, Hamilton's Blessing, a fascinating (really!) history of the national debt. As I recall, the numbers on the national debt really took off after Congress took away the power of impoundment, which was not used only by Nixon, but earlier presidents also, when, in their judgment, funds appropriated by Congress should not be spent, in order to reduce the national debt. The implication of the discussion was that impoundment, when used properly, was a useful brake on Congress' fiscal irresponsibility.

Posted by: Bud Norton | Jul 12, 2013 7:46:26 AM

The problem is in how the Republicans are reacting. Rather than attempt to enforce the law, thereby forcing Obama to implement his disaster before an election, they are doubling down on it. This accelerates the speed with which lawlessness will take over the country.

Posted by: teapartydoc | Jul 12, 2013 4:37:55 AM

This leaves me wondering which portions of FISA were found to be 'inconvenient'.

Posted by: Dishman | Jul 11, 2013 8:02:41 PM

Isn't there still some debate about discretionary spending? If the Congress puts $1 billion in the budget for NEA spending, does that mean the Executive has to spend exactly $1 billion for that? What if the President directs the NEA to save money, is that a violation of the "Take Care" clause? I think spending on the mandatory parts of government are not at issue, but has the question been answered about discretionary spending?

Posted by: CptNerd | Jul 11, 2013 7:36:33 PM

If Section 1513(d) requires that the employer mandate proceed as of 2014, and the executive branch refuses to implement, who has standing to go to the Federal courts to demand that the mandate be implemented? The party with standing would point to Article II, section 3, the mandate in 1513(d), and ask the court for relief by requiring the mandate go forward. About the only defense I could imagine the government offering at that point is that they can't implement the law because they previously decided not to implement the law.

But I recognize that the issue of standing is a thorny one, so, who has standing?

Posted by: Steve White | Jul 11, 2013 7:35:26 PM

There is a related article in the WSJ by Charles Schwab and Walt Bettinger titled “Why Individual Inventors Are Fleeing Stocks” we don’t know what the rules are anymore. I had a series 7 and a California series 63; I used to know the rules. When black-letter contract law can be set aside with a “meh” what is a rational actor to do? Chrysler bond bonders much anyone?

Who are these people and what are the rules? My productivity is just for their redistribution?

Posted by: Katherine | Jul 11, 2013 7:20:12 PM

AMTbuff -- it was my understanding that SCOTUS can decide that a law or portion thereof is constitutional or is not constitutional, but I was unaware that SCOTUS has authority under the Constitution to MODIFY duly enacted laws. (Which is what CJ Roberts did when he redefined the word "penalty" to mean a tax, and why many were flummoxed by his opinion re: same.)

That would give SCOTUS legislative power that I do not see in the Constitution. Can you direct me to some supporting information for that assertion?

Posted by: ColoComment | Jul 11, 2013 10:52:54 AM

Whenever AMTbuff and Eric Rasmusen write comments, I know that what they say will be useful and honest. It's nice when we get "twofers" from them.

Posted by: Woody | Jul 11, 2013 9:58:51 AM

Didn't something like this happen in the Nixon Administration---"impoundment", I think. As I recall, he declined to spend money Congress had authorized for something, and everybody got mad at him. Was there any legal recourse then?

Posted by: Eric Rasmusen | Jul 10, 2013 5:14:45 PM

There was some discussion in past years about an executive decree allowing indexing of capital gains to inflation. The consensus then was that this would be improper. Now, who knows?

Nixon tried to refuse to spend appropriated funds, but Congress slapped him down.

Compare those two examples with these recent executive actions:
1. Declaring carbon dioxide to be a pollutant because Congress wouldn't pass a law regulating it,
2. Announcing de facto immunity to young immigrants because Congress wouldn't pass a law granting it, and
3. Illegally amending ObamaCare by ignoring its plain wording regarding subsidies in states without their own exchanges, deferring the employer mandate, and offering subsidies without verification of income or eligibility. (In fairness, the Supreme Court also participated in this activity by rewriting ObamaCare's mandate as a tax, but unlike the executive branch the Supreme Court has Constitutional authority to modify laws.)

Congress has not protected itself from executive encroachment since the 1970's. Some day even Democrats will regret allowing partisanship to trump the principle of separation of powers.

Posted by: AMTbuff | Jul 10, 2013 1:36:11 PM