Wednesday, March 7, 2012

Sticky Red Tape

Scott Johnson over at PowerLine conducts an administrative law explanation of the HHS mandate controversy:

The whole idea of “administrative law” — regulations with the force of law promulgated by executive agencies pursuant to powers delegated by Congress — squares uneasily at best with the Constitution and its scheme of separated powers. Obamacare presents us with a case study that amounts to a reductio ad absurdum. The agencies promulgating Obamacare regulations will produce a code that rivals the United States Code in length and complexity. As we can see with the controversy over the “preventive services” regulation for women, these regulations will seriously impinge on constitutional liberties — as the Obamacare law itself does — only more so. God help us.

The whole thing is worth reading. However, it uses a lot of legalese. So, for those who have not taken courses in Administrative Law (I took one last fall, and it is even more confusing than the PowerLine post would indicate), here is how it works.

The idea of administrative law was largely a result of the progressive movement. I’ve written about this
before, but to recap, the progressives believed that social problems were more efficiently solved by administrative bodies than by deliberative bodies. This led to a preference for the executive branch over the legislative branch.

This concept is still at work today. Over and over again while in my Administrative Law class I marveled how both the professor and other students were aghast at the idea that political decisions should be made by the legislature (of course, they never put it that starkly, but that was the underlying position). No, they argued, the administration and interpretation of laws must be shielded from politics and left to the non-partisan experts who staff the agencies. They, not Congress, have the knowledge and experience to know what’s best for the nation.

As a result, we have entered an era where the legislature routinely delegates not just the enforcement, but the interpretation of statutes to the various branches of the executive branch. Rather than working out the details of a  bill, the Congress passes it in a half-baked form, unread and often internally conflicting, and leaves it to the agency to figure out what it means. That’s what Nancy Pelosi meant when she said we needed to pass the health care reform bill to find out what’s in it. No one really knew what it meant until the various agencies did the work to create a semi-sensible structure of of the statutory spaghetti.

If I sound sorry for the agencies, it’s because I am. I currently work in one and have had to decipher legislation that was poorly thought through and has conflicting provisions or missing definitions. It is the administrative branches that get the task of fixing the problem after the legislature has done the grandstanding. And if implementation goes wrong the politicians can conveniently pass blame to the “bureaucracy” and claim to not have voted for that outcome. The dirty secret is that the agencies have no more power than Congress gives them, and are bound by the statutory requirements Congress sets. The runaway bureaucracy is not the problem of the agencies so much as it is the fault of Congress.

But anyway, to return to the point, Congress has delegated to the agencies the authority to make rules to fill in the gaps in the healthcare legislation. To make rules, the agencies must comply with the Administrative Procedures Act (unless the statute in question specifically gives another process).

That is what HHS is doing with the contraception mandate. Under the APA, the most common form of rulemaking is what is called notice and comment rulemaking. This process generally requires that the agency publish a proposed rule, take comments from the general public on the rule, consider those comments, and then come to a determination regarding the rule. Any defect in this process, including the agency giving insufficient consideration to the comments, can result in a court tossing out the rule. Once a rule is approved, it has the force of law.

Here, the rule requiring contraception coverage was initially published last August for comment. After taking comments, HHS moved to finalize the rule in January. That’s when the controversy opened up, and President Obama announced his compromise position of only requiring insurance providers (rather than employers) to provide contraception coverage.

The problem? Obama’s “compromise” did nothing to the proposed rule. The rule itself had already gone through the notice and comment period, and HHS finalized it on the very same day Obama “modified” it. Thus, the original rule, which goes into effect in a year, has become administrative law without the announced “compromise.” Nor, as the PowerLine post notes, has Obama’s “compromise” even been proposed yet, which is the first step under the APA for an administrative rule to become law. So we don’t know if it resolves any issue.

So, to recap, the mandate itself is a federal requirement that a private company provide its product to the general public free of charge. Congress never passed that requirement, but delegated it to HHS. HHS, in turn, proposed highly controversial rules through the process required by the APA. To lesson the controversy, President Obama announced a “compromise” that was neither reflected in the final rule nor has been introduced to change the final rule. Right now, the original rule is the one on the books. HHS, independent of both Congress and the President, went ahead under its general rulemaking authority and made law governing the entire nation.

I try to be balanced toward President Obama. Unlike some, I don’t suspect he’s intentionally trying to destroy the country. But at moments like this, I suspect that his ego gets the better of him and he doesn’t realize that announcing something doesn’t make it so. Even the President needs to follow the rules.

We haven’t separated the administrative state and the political process that far yet.
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