ACRU: IRS, U.S. Court Overreached on Obamacare Exchanges


ACRU Staff


March 11, 2014

WASHINGTON, D.C. (March 11, 2014) — In a brief filed Monday at the Fourth District U.S. Court of Appeals, the American Civil Rights Union (ACRU) argues that the Internal Revenue Service (IRS) has ignored Congress on Obamacare and violated the constitutional separation of powers.

Even though the Affordable Care Act (ACA) makes tax subsidies available only to individuals purchasing insurance through state exchanges, the IRS issued a rule opening subsidies to people who buy on federal exchanges. A U.S. District Court upheld the rule, ignoring the ACA’s clear language, according to the ACRU’s brief filed in conjunction with the Pacific Justice Institute and the Cato Institute.

“This is a simple case that turns on a fundamental constitutional principle:

neither a federal court nor an executive agency is empowered to ignore or override a law’s plain meaning–period,” the brief states.

The case, King v. Sebelius, was brought by behalf of Virginia resident David King, 63, who contends that he should be immune from Obamacare’s penalty tax on the decision not to buy insurance because buying it would cost him more than 8 percent of his income. When the IRS expanded subsidies to states like Virginia that had only a federal exchange, it put Mr. King in the position of being vulnerable to the fine again because he could purchase an amount low enough to face a penalty for not insuring. The IRS and the District Court basically said that this is what Congress would have wanted, even though the law does not specify it.

“By elevating the court’s view of Congress’s objective in passing the ACA over the law’s text, the district court ignored the cardinal principle that legislative purpose must be effected by the words Congress uses, not the words it might have meant or should have chosen to use,” the brief states. “Courts are not empowered under Article III to divine Congress’s overarching objective and then reverse-engineer a version of the law that best achieves it.”



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