Two Americas

The federal government is now shutdown. What happens next is anyone’s guess, especially since we hit the debt ceiling in two weeks and still have to pass an actual budget to fund the government. To get out of the current stalemate, one compromise that has been floated is for Congress to pass a continuing resolution – funding the government until November – along with the “Vitter amendment.” The Vitter Amendment would prohibit Congress from exempting itself from Obamacare. So what is the controversy over Congress and its staffers having to purchase healthcare on the exchanges? What are the issues with Congress exempting itself from Obamacare? And what does it say about our legislature?

In 2009, during the peak of the legislative debate over healthcare reform, Senator Chuck Grassley (R) inserted an amendment in Obamacare that required all members of Congress and their staffers to purchase health insurance on the newly-created health insurance exchanges. Of course, members of Congress wouldn’t be alone in doing this. Starting today, millions of Americans are utilizing the exchanges.

Was it a poison amendment snuck into the bill at the last moment? Actually no. The Finance Committee unanimously adopted the Grassley amendment with Democrat Max Baucus proclaiming, “I’m very gratified that you have so much confidence in our program that you’re going to be able to purchase the new program yourself and I’m confident too that the system will work very well.” Wall Street Journal. Senator Harry Reid subsequently changed it but did not allow for the government to make contributions to pay for its employees’ healthcare.

The result? On January 1, 2014, over 11,000 members of congress and their staffers will lose their lavish healthcare plans and, instead, go on the exchanges to purchase lower-quality, low-choice “Medicaid Plus” plans. Wall Street Journal. Lower level staffers will likely be eligible for a normal Obamacare subsidy, but higher level staffers along with the members will be forced on the exchanges without any taxpayer help. Just like the rest of America.

However, there has been bipartisan (!) condemnation of this provision from Harry Reid to John Boehner. Some have estimated that it amounts to a 7% pay cut for each member and staffer and cries of a “brain drain” have reverberated from the nation’s capital. While a legislative fix of this alleged drafting error would be relatively simple, Obamacare supporters are wary to re-legislate any provision of the healthcare act.

Consequently, in the summer of 2013, the Obama Administration went about rewriting this provision of the healthcare law – as has been the case with other unpopular or unworkable provisions in the law, such as the business mandate. The Office of Personnel Management (“OPM”) wrote a proposed rule that allows members of Congress and their staffers to keep their insurance or, if they chose to go on the exchange, they would receive a taxpayer subsidy of roughly $5,000 for an individual or $10,000 for families. The rule has yet to be finalized into law, though it is nearing the end of the rulemaking process. In essence, OPM exempted Congress from Obamacare, a move that is fraught with legal issues. Consider:

• The text of Obamacare is clear. According to section 1312(d)(3)(D) of the bill: “the only health plans that the Federal Government may make available to Members of Congress and their congressional staff with respect to their service as a Member of Congress or congressional staff shall be health plans that are . . . I) created by this Act or II) offered through an exchange.” There are no other options.

• The intent of the Grassley amendment in Obamacare is clear. Upon passage of his amendment, Sen. Grassley, stated: “My interest in having Members of Congress participate in the exchange is consistent with my long-held view that Congress should live under the same laws it passes for the rest of the country.”

• What is the legal basis for OPM’s rule? As we know, the authority for government agencies to write rules and regulations comes from statute. However, legal scholars have opined that there’s nothing in Obamacare that empowers the OPM to write a rule to give staffers and members of Congress additional money. New York Times.

• Where does OPM get the authority to spend taxpayer money? Under Article I, section 8 of the U.S. Constitution, the spending of taxpayer money comes from Congress as legislation – not a rule from the Office of Personnel Management or the White House.

• Moreover, even though the federal government will provide subsidies under Obamacare, it’s only to those who are under 400% of the federal poverty limit ($45,000 for an individual). These subsidies are dictated by Obamacare and calculated differently than OPM’s rule. For instance, an employee earning $45,000 / year would get a subsidy of $2,500. But the OPM rule would give this staffer – as well as all others at least $5,000.

• Obamacare does not permit tax-exempt employer contributions to health care premiums. But, that is what the OPM rule will do. The subsidy to members of Congress and their staffers are treated pre-tax.

• Can OPM write a rule – a law – increasing members of Congress’ compensation with the subsidy before the 2014 elections? The 27th Amendment of the U.S. Constitution plainly states that “No law, varying the compensation for services of the Senators and Representatives, shall take effect until an election of Representatives shall have intervened.”

Congress currently has a 9% approval rating (Economist/YouGov) and for good reason – we go from crisis to crisis and it wears on the American people. In addition, as the Obamacare exemption proves, Congress is woefully out of touch with the people it serves. Millions of Americans will be buying healthcare on the exchanges, many of which will be there as a result of their employer dropping their coverage. For these folks, health care premiums will be more expensive. Wall Street Journal. It will hit their pocketbooks – and, unlike Congress, they have no exemption.

In 2004, John Edwards campaigned on there being “Two Americas.” While his logic is debatable, if not flawed, I’ll grant him the conclusion – there’s Congress and then there’s everyone else.

This Post Has One Comment

  1. Jerry Hanson

    Fair is fair. They must live in the real America like the rest of us and so be it if they lose their plum health care. No wonder the Rep’s and the Tea Party faction want it overturned. The only government they want is one that benefits special interests and select groups ,not all Americans.

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