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King v. Burwell Pits Rule Of Law Against Rule By Decree


In a speech Tuesday, President Obama said the Affordable Care Act has “now been woven into the fabric of America.”

The president’s remarks come as the Supreme Court is preparing this month to decide King v. Burwell, a case that challenges whether the law ever actually authorized subsidies for health coverage paid out through federal exchanges. The details of Burwell reveal the degree to which the Obama administration’s handling of the ACA is ultimately at odds with ideals and aspirations that really are woven into the fabric of America: the rule of law and the separation of powers under the U.S. Constitution.

The ACA says plainly that subsidies may only be administered “through an Exchange established by the State.” But when it became clear that dozens of states were not going to create exchanges, the Internal Revenue Service (IRS), at the behest of the White House, simply issued a rule saying that subsidies could flow through exchanges created and operated by the federal government.

The Obama Administration Embodies Will to Power

In other words, the challengers in King v. Burwell contend that the White House illegally authorized billions of dollars of taxes and spending, circumventing Congress and flouting the statutory text of the ACA by administrative decree. The accusation isn’t a stretch. After all, governing by decree has become commonplace in the Obama era—from the ACA’s many unauthorized delays, to the president’s executive order on immigration last year, to the State Department’s recent gun speech gag order.

The White House is subjecting 57 million employers and individuals to taxes Congress never authorized to prevent a Republican Congress from opening up the law.

This isn’t a question of a drafting error or a typo in the law, as some New York Times columnists contend. The ACA relies, to a remarkable degree, on the cooperation of the states. Because Congress cannot simply command state legislatures and governors to create a health-insurance exchange or expand Medicaid, the masterminds of the ACA had to give states incentives to cooperate. Hence, the feds offered to pick up the tab for Medicaid expansion—at least to begin with—and also offered to subsidize private coverage for individuals if states would create and operate a health insurance exchange that sold ACA-compliant plans.

But these exchanges proved to be far more difficult to set up and run than anyone expected. That includes the Obama administration, whose federal exchange,, crashed hours after its October 2013 launch. Some states sunk hundreds of millions in taxpayer funds into their exchanges before abandoning them altogether and opting for a federal “fallback” exchange. Of course, some states simply refused to be dragooned into implementing the federal law. In the end, 38 states wound up with a federal exchange, not “an Exchange established by the State” through which subsidies could flow, as ACA allowed.

Instead of going back to Congress, which would have meant compromising with Republicans on other changes to the law, the Obama administration circumvented the ACA and attempted to implement the administration’s preferred policy outcome by fiat. This is not a trifling matter. Exchange subsidies are the ACA’s trigger for penalties and fines against employers who don’t provide coverage and individuals who don’t buy it. So as a result of the IRS rule allowing subsidies on federal exchanges in 38 states, the White House is subjecting 57 million employers and individuals to taxes that Congress never authorized—all to prevent a Republican Congress from opening up the law.

Someone’s Deeply Cynical and Endlessly Partisan

But the effects of this power grab aren’t as bad as the precedent it sets. In his speech Tuesday, Obama denounced what he called, “deeply cynical… endless partisan attempts to roll back progress.” The ACA is helping people, he said, and “once you see millions of people of having health care, once you see that all the bad things that were predicted didn’t happen, you’d think that it would be time to move on.”

The promise of America is not the mere enjoyment of simple pleasures, but something far greater: freedom, self-government, and the rule of law.

But if millions of Americans are receiving taxpayer-funded subsidies because the Obama administration violated the law, should we just turn a blind eye and move on? Is that how we want to govern and be governed? The president said the healthcare law is “integral to restoring the basic promise of America.” He asked, “Is there any greater measure of life and liberty and the pursuit of happiness than those simple pleasures that are afforded because you have good health and you have some security?”

In fact, there is a greater measure: the degree to which we are ruled by laws enacted by representatives of the people, and not ruled by arbitrary edicts. The promise of America is not the mere enjoyment of simple pleasures, but something far greater: freedom, self-government, and the rule of law. In practice, that means the White House can’t order the IRS to change a law that isn’t working out the way the administration hoped it would.

For progressives, the rule of law is but a small thing. If a law gets in the way of the good things the government wants to do, it shouldn’t matter much if the president’s appointees change it to suit their needs. After all, what’s more important, the text of some complicated law or the supposed right to health care? The Obama White House has often used the rhetoric of Christian morality as a smokescreen for the notion that government coercion should be the instrument of our morality. America, Obama said Tuesday, is “a place sustained by the idea: I am my brother’s keeper. I am my sister’s keeper—that we have an obligation to put ourselves in our neighbor’s shoes and see each other’s common humanity.”

Certainly we do. But that’s a personal obligation, not a collective one. Collectively, our highest obligation is to maintain a system of government subject to the rule of law. In the end, that’s the only protection we have against tyranny. In Federalist No. 1, Alexander Hamilton writes: “It has been frequently remarked that it seems to have been reserved to the people of this country, by their conduct and example, to decide the important question, whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are forever destined to depend for their political constitutions on accident and force.”

The president was correct when he said on Tuesday that at the heart of the health-care debate is a simple question: What kind of country do we want to be? And that’s the question before the Supreme Court in King v. Burwell. Will we be a country of free men and women governed by reflection and choice—by laws—or a people ruled by accident and force?