Eagle Forum Legislative Alerts

Wednesday, July 06, 2016

Court Invalidates Subsidies for Obamacare

In May, a federal court in D.C. invalidated certain subsidies provided by the Obama Administration to insurance companies, which were being used to prop up Obamacare. This is the latest nail in the coffin of this massive government program. Medical costs for the average family have tripled since 2001, and Obamacare has not reined in those expenses as promised. Instead, it has wasted billions in taxpayer money on government programs that will never be as good as the free market. This recent court decision was extraordinary because it is the first time a court allowed Congress to sue the executive branch to stop it from spending money in implementing a statute. Congress informed the court that the Obama Administration was spending money on Obamacare which had not been authorized by Congress, and the federal court agreed with Congress.

The Obama Administration argued that the authority for it to hand billions of dollars to insurance companies for so-called “cost-sharing reductions” could be inferred from the Obamacare statute. But the court completely rejected Obama’s argument, explaining that a specific congressional appropriation is needed before the executive branch can spend taxpayer dollars. Insurance companies have already been fleeing the Obamacare health insurance exchanges because they are such big money-losers. These cost-sharing Obamacare subsidies were expected to cost taxpayers $175 billion over 10 years. The spending by Obama on these subsidies “violates the Constitution,” the court ruled. “Congress authorized reduced cost sharing but did not appropriate monies for it,” the court added. “Congress is the only source for such an appropriation, and no public money can be spent without one.” This case is a major win for American taxpayers. While the Obama Administration is expected to challenge this ruling on appeal, it is refreshing for a federal court to rule against unauthorized spending by the federal government.

Listen to the radio commentary here:

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