Off Topic: Changing the Rules

[Golden Rocket]

This is a legal question and not a tax question. In responding, please respect the TTB board policy of refraining from partisan political content.

When Congress passes a law, it would appear only Congress would be able to change it, unless found to be unconstitutional by the Supreme Court. Usually the law provides for regulations to be promulgated by federal agencies to further clarify the intent of the law, and these regulations have the force of law as well unless it can be shown that the regulations are not following the intent of the congressional legislation itself.

After a law is passed, where does the Executive Branch have the authority to change it? What we have happening today is a President who is changing the rules as the game unfolds because the rules don't fit the agenda. The Affordable Care Act provided from an absolute maximum of $6400 - now arbitrarily with no consent from Congress this becomes $12,800. PriceAdjustment/Credit as written applied to people with 4X the poverty level -- now this has been reduced to 2.5X. The effective date for employer mandates as passed was Jan 1 2014, and now this suddenly becomes Jan 1 2015.

The legal question is: Where does the executive branch have the authority to simply change congressional-passed legislation simply because it becomes an attainment, economic or political issue? The obvious instances of this apply to today's ACA, but it has been happening for at least the last 40 years by both parties.

[ATSMAN]

It is the interpretation and latitude in the actual language of the law that gives the executive branch some leeway at the time of implementation and enforcement of the law.

If it was unconstitutional or completely contrary to the actual language and intent of the law there would be a court challenge.

Also keep in mind that the President has Executive powers and that can only be challenged in a court of law.

There are some items that are set in concrete in the law such as the April 15th. deadline unless it is a holiday. Now the President can't change it arbitrarily but if there was a national emergency and he changed it by Executive power, the only way to challenge that would be a court of law.

[Golden Rocket]

Court Challenge

ATSMAN, good and relevant response. I actually do remember such a court challenge by the Congress.

It was 1972 and at the time lots of politicians cared about the deficit. (Hard to believe that now) President Nixon promised a balanced budget, and actually had a surplus (for one year only).

But he accomplished this by impounding money that had been appropriated by the congress, and by picking and choosing where the money was going to be spent. In other words, a mild version of a "line-item veto."

Congress was not going to tolerate cutting off money for their lobbyists, friends and cronies who had financed their campaigns, so they actually did bring this to court on constitutional grounds. Nixon did not answer their court challenge but responded by releasing the impounded money that had been appropriated by the congress.

So the money was spent, but the spending was delayed, and history does record that one federal surplus year existed during the Nixon presidency.

[TaxGuyBill]

You are probably correct about ‘changing the rules’, but 2 of your 3 examples aren’t correct.

The out-of-pocket maximums were not changed. It is $6,350 for single people and $12,700 for families. Section 1302(c)(1)(A) of the Affordable Care Act (page 47 of this PDF) set the limit as dictated at IRC 223(c)(2)(A)(ii), which states that family coverage is twice what single coverage is.

The “premium assistance credit” is still 400% of the poverty level, but the “cost sharing reductions” were reduced to 250%. That is because the criteria for the “cost sharing reductions” would not mathematically work for the required actuarial values. Section 1402(c)(1)(B)(ii) of the ACA (page 103 of the PDF) specifically allows this adjustment to fit the actuarial values.

The third one you are correct. Interestingly, a dentist in Florida is suing the IRS for illegal delay.