President Barack Obama may be breaking his Obamacare law by delaying its tax penalties on employers that don’t provide health care to employees, according to GOP leaders. The question comes in the days after Obama’s deputies’ June 2 announcement that employers will get a one-year holiday from the federal tax penalties included in the massive Obamacare law.
Administration officials haven’t explained their legal reasoning, and they haven’t scheduled any public briefings to explain the move.
That has prompted complaints form GOP leaders, who say the president has repeatedly chosen to ignore laws.
“The president has delayed a critical component of the Affordable Care Act,” said a statement from Rep. Darrell Issa, chairman of the House Government Reform Committee, who opposes the Obamacare law.
“This is another in a string of extra legal actions taken by his administration to mask the horrible impact his law will have on the economy and health care in the United States,” said the statement.
Iowa Republican Rep. Steve King, also slammed the announcement.
In June 2012, “Obama refused to enforce current immigration law-very bad,” he said in a June 3 tweet. “Now, he refuses to enforce his own law… The law is specific & must go into effect day one of 2014,” he said.
“Only lawful alternative is for Obama to ask Congress 2 fix.”
But there may be no remedy, because the Democratic majority in the Senate will likely block any legislation passed by the Republican House, and judges can reject lawsuits on the grounds that no particular person is harmed by the one-year tax-holiday.
Only people who have been directly harmed by a government action have “standing” to sue the government.
Also, the administration may be able to argue to Democrats, judges, the media and the public that it is complying with the complex law’s complex requirements.
That’s because the law gives the administration the authority to schedule reporting requirements.
The administration’s explanation for the one-year delay is focused on the reporting, not on the tax penalties.
“The administration is announcing that it will provide an additional year before the [Affordable Care Act] mandatory employer and insurer reporting requirements begin,” read the June 2 statement from a mid-level official, Mark J. Mazur, the assistant secretary for tax policy at the treasury department.
“We recognize that this transition relief will make it impractical to determine which employers owe shared responsibility payments … [so] these payments will not apply for 2014,” the statement continued.
However, the law allows officials to set reporting requirements, but doesn’t allow them to stop collecting tax penalties, which it dubs the “shared responsibility” payments.
The law “is blunt that it ‘hereby impose[s] on the employer an assessable payment for failing to adhere to the employer mandate,” read a bog post by Nicholas Bagley, an assistant law professor at the University of Michigan.
“The natural inference is that the penalty comes into force on January 1, 2014, whether or not the agency has the reporting machinery in place to administer it,” he wrote.
However, the administration may choose to claim that its ability to adjust reporting requirements implies the tax penalty can also be adjusted, Bagley wrote.
Officials may argue that because Congress gave the “treasury secretary the discretion to specify when those returns will be filed, Congress must also have given him the discretion to delay imposition of the tax penalties until those returns are in fact filed,” Bagley suggested.
The Internal Revenue Service — which is responsible for collecting the tax penalties — is legally an independent agency with a minimal number of political appointees, and has a law-enforcement mission that is supposedly free of political pressures.
That claim of political independence, however, has been threatened by the IRS’ targeting of tea party political groups since 2010.