The President Should Be Impeached For Suspending the Employer Mandate

I wrote a version of this post on reddit about nearly two years ago.  I finally got sick of digging out the link, so I am finally getting it up on De Civ.


On July 2, 2013, Assistant Secretary of the Treasury Mark Mazur announced that the Treasury Department is suspending two related provisions of the Affordable Care Act (popularly known as “Obamacare”) for a period of one year. (Chief-of-Staff Valerie Jarrett elaborated slightly in a post that same day.)

The first suspended provision, Section 6055 /6056, requires employers and insurance providers to periodically report health insurance coverage information to the Treasury Department. It is being suspended in order to allow more time to “consider ways to simplify the new reporting requirements” and for employers to “adapt health coverage and reporting systems.” This is reportedly legalese for “we’re not ready with the regulations, and you’re not ready with the reporting technology, so let’s try again next year.”

The second suspended provision, 4980H, generally known as the “Employer Mandate” or “Shared Responsibility Payment,” requires all large employers (defined by the ACA as, basically, anyone with 50 or more employees) to either provide Obamacare-compliant “minimal health insurance” to all full-time and some part-time employees or suffer substantial penalties (which were clarified as a tax penalty by the Supreme Court last year). The reason given for the Mandate’s suspension was simply that suspending the reporting requirements would render enforcement of the Employer Mandate somewhat impractical. Some Republicans have suggested that the real motivation is to protect the Democrats during the midterm elections.

However, this post is not about the motivations behind the suspensions, nor about the political and practical fallout. Those topics are discussed at considerable length elsewhere. This post is concerned strictly with the legality of the Administration’s administrative action.


The suspension of the reporting requirements is probably kosher, legally speaking. The ACA explicitly gives the Secretary of the Treasury vast discretion over when and how these reporting requirements are to be implemented. (Just read both suspended sections and highlight all the sentences that include the phrase “as the Secretary may prescribe” or “as the Secretary may require”.) Therefore, although it was certainly not directly intended by the legislators who crafted the law, and even though the ACA itself states (at Section 1514(d)) that the reporting requirements come into effect on January 1st, 2014, it is absolutely within the Secretary’s ambit to announce, “Yeah, sure, this technically comes into effect in 2014, but we’ve decided that the first due date for this section is May 1, 2015. See you then.” This legal evasion of a law’s official start date is almost routine procedure in Washington, especially when a piece of legislation turns out to be much broader than anticipated and needs a lot more rulemaking than Congress planned for. In fact, it is a fairly regular occurrence for the Executive branch to simply miss rulemaking deadlines that are set by statute, even though they have no legal authority to miss said deadlines. That’s unfortunate, but it’s not criminal so long as the Executive was making a good-faith effort to complete the rulemaking on time. Heck, sometimes Congress sets impossible deadlines; the Executive does its best.

To be sure, there are still questions about the legality of suspending the reporting requirements. Namely, while the Secretary may indefinitely delay the due date for the reporting, it seems that he may not suspend the reporting requirement itself, so, on whatever due date is eventually picked, employers will have to submit reporting for the entire period from 1 January 2014 up until that date. From the Treasury announcement (and subsequent IRS guidance), it’s not clear that that’s their understanding of the law. But, for all that, on my reading, there’s no obvious violation of the law in the decision to suspend the employer reporting requirements.

However, the suspension of the Employer Mandate itself is, pretty obviously, quite illegal. The ACA contains a mandatory “effective date” requirement at Section 1513(d), which reads, “The amendments made by this section shall apply to months beginning after December 31, 2013.” This is less ambiguous than Section 1514(d) (which uses “periods” instead of “months”). More importantly, the Secretary of the Treasury is simply not empowered to waive these requirements or the resultant penalties. The statute gives him a lot of power to do that with reporting requirements, but not with the taxes themselves. Now, Treasury may delay collection of the required penalties (§4980H(d)(1)), but the “assessable payment” itself is imposed directly by Congress on employers (§4980H(a)), is effective January 2014 (§1514(d)), with specific dollar-amount penalties imposed for specifically 2014 (§4980H(c)(1) and §4980H(c)(5)) which may be suspended only in conjunction with a much broader state-specific “innovation waiver” as described under §1332.

In short, the Affordable Care Act – currently the law of the land – says that this new tax penalty goes into effect in January 2014, and, apparently, the Department of the Treasury is, independently of Congress and the Constitution, cancelling that tax penalty for Tax Year 2014. Right-wingers like Michael McConnell and Michael Cannon are not alone in considering this action illegal; some on the Left, like Sen. Tom Harkin, and Jonathan Chait, as well as some in the Center, like legendary constitutional lawyer Ronald Rotunda, all seem to agree that this isn’t legal, and (as of July 2013) no prominent voices on the Left are speaking up to defend the action as lawful.


Two weeks after Obama Administration suspended the Employer Mandate, J. Mark Iwry, a senior Treasury Advisor, presented, for the first time, the Administration’s legal justification for this action in his testimony to the House Ways and Means Committee. He argued that this is a routine exercise of Treasury’s authority under §7805(a) , which grants the Secretary of the Treasury broad authority to make rules and regulations in order to enforce the Internal Revenue Code (which includes these penalties). But the obvious rebuttal is that this suspension action, and the rules associated with it, don’t enforce the Internal Revenue Code, but specifically and directly prevent enforcement.

Mr. Iwry cited half a dozen instances during the Clinton and Bush Administrations where, he argued, Section 7805(a) had been used to effect similar delays and suspensions, and if it was okay then, why shouldn’t it be okay now? This is perhaps not the strongest defense that can be imagined – “Bush did it first” does not exactly prove that “it” was actually legal – but it is something.

Nevertheless, Mr. Iwry’s examples are deeply unpersuasive. In some of his examples, the statutes in question granted the Secretary broad authority to suspend or even amend portions of the law Congress had passed in order to make it work. The ACA, as we have discussed, grants no such authority with respect to the Mandate.

In other examples, existing rules were deemed adequate to address the necessary provisions of new law as temporary rules while new rules were still under consideration. In other examples, reporting and tax collection were temporarily delayed… but in no case were tax penalties simply cancelled without authorization in the statute to cancel them. You can check for yourself: the authorities Mr. Iwry cited were Treasury Notices 2007-542000-52005-292006-22007-42005-942006-1002007-892008-11596-6499-40, and Announcement 95-48. None of these cases bears even a plausible similarity to the case of the Employer Mandate suspension. Even though, in Mr. Iwry’s example cases, the IRS and Treasury did do a great deal of juggling with reporting requirements and the calendar, they always made certain, in the end, that the government was paid all the taxes that Congress had imposed. The suspension of the Employer Mandate (officially codified in Notice 2013-45) is not pushing off the due dates for the penalties until all the regulations and technology are in place, as it could (and should); it is cancelling the penalties outright – refusing to collect taxes that Congress has imposed. As it states, “no employer shared responsibility payments will be assessed for 2014.” This is illegal – blatantly so.

Mr. Iwry also listed as authorities several actions from during the Obama Presidency. Since the Obama White House is what’s under examination here, I have declined to confer precedential value on them, and I am not including them in my analysis. If the only legal leg the Administration has to stand on is that this very Administration has already broken the law in this way before, that’d be less of a defense and more of an admission of broad unlawfulness!


If the President can, on his own authority, suspend a duly passed, concededly constitutional law, indefinitely, despite the express orders of Congress as expressed by the statute in question, then we no longer live in a democratic republic, but a democratic monarchy, with the President being the ultimate arbiter of law and order and Congress being merely an advisory body. President Mitt Romney could simply suspend all of Obamacare permanently, effectively repealing it without ever getting a vote through Congress to do so. President Ted Cruz could announce that he is suspending indefinitely all the Obama-era tax hikes on high-earners and capital gains, returning to Bush-era taxation by fiat – or, heck, he could just suspend laws hither and thither until he’s effectively abolished the progressive income tax and imposed a flat tax in its place. President Hilary Clinton could announce that Congress is moving too slow on immigration reform and simply legalize everyone by suspending all statutes to the contrary. [Ed. Note: In the years since I wrote this, President Obama pretty much just went ahead and did this.]

Some of these policies would be good; some of them would be bad. But none of them, imposed by presidential fiat, would be constitutional, nor in any way compatible with our system of broad, consensus-based representative democracy. This is precisely why the Constitution requires the President to swear, on taking office, to “take care that the laws be faithfully executed.”


What legal remedies are available to restrict the president back within his Constitutional limits?

The normal answer is “lawsuit,” but it turns out that, in all likelihood, nobody has standing to sue the President over this, so, under Article III of the Constitution, the courts can’t adjudicate it, even if they agree that the President is violating the Constitution.

For its part, shortly after the President announced his lawbreaking, Congress did something quite unexpected to try to fix the situation: the Republicans actually decided, “Hey, we hate the employer mandate, so we are all for suspending it,” and they actually passed a bill, HR 2667 that gave the President statutory authority to make this change. Shockingly, rather than accept the legal fig leaf this bill would have provided, the White House issued a veto threat (presumably for political reasons; the GOP was exploiting the issue for political points) and HR2667 is died in the Democrat-controlled Senate.

This seems to leave us between a rock and a hard place. The courts can’t force the President’s hand unless someone can find standing to challenge the action, so the judicial branch is out of the game; Congress has already attempted to make peace by means of a statutory remedy and been rebuffed; and the President himself is doggedly refusing to change course even as he fails to provide even a plausible case for the legality of his action. The only remedy I can still see on the table is impeachment.

It seems like a very strange thing for Congress to impeach the President for suspending a law that a majority of Congress aggressively opposes to begin with, and ironic in the extreme to impeach the President for violating a law that he himself considers his signature achievement… but there is also the larger principle at stake: we have to protect the bedrock American principle that we follow the rule of law, not the rule of men.

I don’t like the idea of impeaching somebody over an issue that is closely tied to broader questions of health care reform, the most politically polarized issue of the past several years. I’d feel much more comfortable impeaching someone for something clearly apolitical, like murdering a prostitute or being constantly drunk all the time. I also (personal note) hate the idea of President Joe Biden. But the President takes an oath to “take care that all the laws be faithfully executed,” and clearly refusing to do so has to carry a price, or our democracy fails. “Repealing Obamacare” is not the most important issue to me, or even a Top 3 issue.  But “maintaining the Republic” is.  Especially in these days of judicial lawlessness, with hope for the Constitution being swept away by sheer zeitgeist, it is important to stand on our nation’s bedrock legal principles, even if those legal principles make no political sense.

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