Presidential Nullification of Obamacare

Richard Epstein

An editorial in today's Wall Street Journal decries a pattern of abuse by President Obama, who the paper finds guilty of the offense “of selectively enforcing the law.” There is much truth to this general proposition, but its broad-based critique overlooks an important question of principle: just how do we determine what counts as "selective enforcement?"

To see why this matters, consider the following two cases. First, there was the President's decision to suspend the implementation of the employer mandate under Obamacare, which was powerfully attacked by Professor Michael McConnell in his July 2013 op-ed in the Journal"Obama Suspends the Law." Second, there was the array of subsequent decisions relating to the individual mandate, such as suspending the law's required minimum coverage provisions for people whose plans otherwise would have been cancelled and giving those who lost their insurance a "hardship exemption" from the mandate's fines.

A straightforward textual argument in favor of the Journal's uniform condemnation is that the Constitution requires the President to take care that the law be faithfully executed, which leaves him no discretion on the question of whether the law’s provisions should be followed, but some discretion—and, in the case of the administrative state, much discretion—on how it should be implemented.

Notwithstanding this tidy account of the law, I think that, even for constitutional purposes, an important distinction should be drawn between the early decision to suspend in its entirety the employer mandate and the subsequent decisions to selectively alter the implementation of the individual mandate in ways that are flatly inconsistent with the statute.

Think first of what would have happened if the president had decided to faithfully execute Obamacare in its entirety. Much of the American health care system would have come to a grinding halt. The requirement that the president faithfully execute the laws presupposes, at a minimum, that there is some capacity to implement the rules. In this case, however, the law to be implemented was so fundamentally flawed that the so-called implementation would have failed abjectly in all its objectives, creating massive dislocations for countless American citizens.

It is foolhardy to demand that a President execute the impossible. All sorts of strict contractual obligations are waived in cases where it is impossible to execute them in proper form, and some discretion on this point has to be accorded the President. We should be relieved that Mr. Obama, having been foolish enough to support the health care reform, had the modicum of humility necessary to suspend some of its most ambitious and perverse provisions.

The situation is exactly the opposite with the constant manipulation of the individual mandate.  Here, the changes the President has made have left him attempting to enforce a newly-designed program that—because it has been so dramatically revised by the executive branch—essentially has no congressional authorization whatsoever.

Obama should, in my view, have the same option with the individual mandate that he had with the employer mandate: to mercifully postpone its entire implementation for as long as it takes to get the system (foolish as it is) up and running. (As an aside, it should be noted that simply demonstrating that people can enroll in a plan isn't enough to say the system is working. At present, there is no evidence that the computer systems are effectively handling things like certification and payment, which are necessary to make coverage actually take effect.) It would be fine to stop this exercise in futility before it really hurts people.

Instead of that kind of sweeping suspension, however, President Obama is selectively implementing some provisions, but not others. As a matter of constitutional law, this is different in kind. It represents an effort to make new legislation without constitutional approval and should be condemned in the harshest possible terms. The distinction that I am making here has real foundations in the difficult doctrine of unconstitutional conditions. It is commonly said that the “greater power” to exclude carries with it the “lesser power” to exclude selectively. 

Unfortunately, the greater/lesser distinction gets it exactly backwards. A general uniform policy of exclusion or inclusion is far less subject to government abuse than the selective power to favor your friends and punish your enemies. It is a lesser power, as it were, to be able to exclude all heavy vehicles from certain public roads. It is a greater power to decide on a case-by-case basis which trucks can use the facilities and which not. 

The original Constitution was drafted at a time when it was inconceivable that the federal government could exercise all-consuming power over the economic life of the nation. With more limited mandates, faithful execution of the law is a relatively easy task. But with the rise of the modern administrative state, faithful execution is often beyond the power of government, at which point total program suspension may well be in order. Remember, the president did not suspend the program because he was opposed to it. This is not a case of executive nullification of legislative action. Rather, Obama engaged in the suspensions because he knew that the law could not work as promised. 

By way of contrast, the situation would be different if his only reason for suspension was that he disliked the rules (which is surely the case with his selective refusal to enforce the immigration laws as they apply to certain classes of undocumented aliens). Impossibility is a narrow justification for program-wide suspension. But it covers both the individual and employer mandates under the health care law—both of which should have been struck down as unconstitutional in the first place.