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Judge Sides with House in Obamacare Spending Lawsuit

By Todd Ruger, CQ Roll Call

May  12, 2016 -- A federal judge on Thursday sided with the House in an appropriations dispute over funding for the 2010 health care overhaul law, ruling that the Obama administration is unconstitutionally spending $175 billion over 10 years without congressional approval.

House Republicans filed the lawsuit in 2014 as a response to a series of President Barack Obama's unilateral executive actions that lawmakers say are unconstitutional. The ruling sets up a showdown at the appeals court that will test the boundaries of separation of powers and when the courts can step into disputes between the branches of government.

U.S. District Judge Rosemary M. Collyer entered a judgment in favor of the House in the lawsuit that stops the use of certain funds to reimburse insurers under a section of the law. Collyer put that injunction on hold, however, pending an appeal that the Obama administration is certain to file.

The ruling represents a victory for the Republican-led House, which has tried to strike down the law since it was enacted. But the Supreme Court has upheld the constitutionality of the law and numerous efforts to repeal it legislatively have stalled.

"This is an historic win for the Constitution and the American people," Speaker Paul D. Ryan, R-Wis., said in a statement. "The court ruled that the administration overreached by spending taxpayer money without approval from the people's representatives. Here, the executive branch is being held accountable to We the People, and that's why this decision is very good news."

The Obama administration has said the law is here to stay. 

White House Press Secretary Josh Earnest said critics continue to "go through the motions." He said they "have been losing this fight for six years. They will lose again."

Subsidizing Coverage

The dispute focuses on two sections of the health care law that subsidize people who buy insurance coverage. The law provides tax credits to subsidize the monthly premiums of people with income between one and four times the federal poverty level. It also provides extra help to the lowest-income people, those with income between one and 2.5 times the federal poverty level, to help them with their out-of-pocket costs such as deductibles. 

The ruling struck down the additional help for the poorest people. 

The Obama administration said it could make Section 1402 payments for out-of-pocket costs out of the same account as Section 1401 Refundable Tax Credit Program payments for premiums. House Republicans say the health care law, known as the Affordable Care Act, doesn't permit that.

The administration, during the fiscal 2014 appropriations process, initially asked Congress for a separate line item for payments to help the poorest people with their cost-sharing such as deductibles and copayments. Congress did not include money for such a line item. The House then filed the lawsuit against the Department of Health and Human Services and the Department of Treasury, along with the secretaries of those agencies.

Collyer ruled that Section 1402 can't be funded through the same, permanent appropriation that Section 1401 is funded through.

"The Affordable Care Act unambiguously appropriates money for Section 1401 premium tax credits but not for Section 1402 reimbursements to insurers. Such an appropriation cannot be inferred," Collyer wrote in the ruling. "None of Secretaries' extra-textual arguments—whether based on economics, 'unintended' results, or legislative history—is persuasive."

Collyer did not accept the Obama administration's argument that reading the two sections with different appropriations would yield "absurd economic, fiscal and healthcare-policy results." The only result of the law is that Section 1402 must be funded annually, Collyer wrote.

"Far from absurd, that is a perfectly valid means of appropriation," Collyer wrote. "The results predicted by the Secretaries flow not from the ACA, but from Congress' subsequent refusal to appropriate money."

The Justice Department did not immediately return a request for comment.

The Obama administration had already moved to take the case to the U.S. Court of Appeals for the District of Columbia Circuit on a previous ruling in the case. The Justice Department lawyers disagreed with Collyer's decision early in the case that the House had the legal right to sue the Obama administration, arguing that ruling was "a momentous step" that unnecessarily plunges the judiciary into a dispute between the political branches.

The case is U.S. House of Representatives v. Sylvia Mathews Burwell, et al., Case No. 14-1967. Collyer is an appointee of President George W. Bush.

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