King v. Burwell Amicus Briefs: Blackman/Cato Set the Context

by Andy Grewal — Thursday, Jan. 15, 2015

This is the fifth in a series of my posts discussing some of the amicus briefs filed in King v. Burwell:

The amici curiae brief of Professor Josh Blackman and the Cato Institute reflects an unusual but effective contribution to King v. Burwell. The brief touches only lightly on the actual question presented, focusing instead on providing context for the Treasury regulations on Section 36B (the IRS Rule). Blackman illustrates the many ways that Obama administration has ignored the ACA’s plain text and makes it easier for the reader to believe that the IRS Rule reflects a similar act of lawlessness, rather a bureaucrat’s well-meaning attempt to resolve ambiguity in statutory language. He presents a portrait of an executive acting arbitrarily to an almost comic degree, citing blatant HHS flip-flops regarding the territorial exchanges and the open disregard of clear statutory language with respect to the employer mandate.

I agree with much of Blackman’s characterization of the surrounding context, but I’m conflicted on whether and how it bears on the Treasury regulations interpreting Section 36B. Maybe it’s because I’m a tax guy, but I struggle to view actual Treasury regulations through such a jaundiced eye. In the tax world, Treasury department officials and employees are held in extremely high regard. Of course, the tax bar will frequently criticize the Treasury, and I’ve written articles doing the same. But I believe that any controversies related to Treasury regulations usually stem from differences in perspective or judgment. Treasury regulations reflect policy-making, not blatant politicking.

But maybe the IRS rule does not reflect the typical Treasury regulation. I don’t know what went on behind closed doors, and maybe the Treasury issued the Section 36B regulations through a process less dignified than that which usually attaches to its tax regulations. The Blackman brief certainly gives one reason to think so. This whole ordeal just makes me wish Congress would leave those of us in tax bubble alone, rather than pull Treasury and IRS officials into the sometimes dirty business of setting national healthcare policy.

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