A Massachusetts-sized thorn in Trump’s side

Donald Trump is eager to tear up the major pillars of Barack Obama’s legacy.  Stymied in Congress after the calamitous effort to repeal Obamacare, Trump is looking inward.  His administration would like to use executive orders and regulations to chip away at Obama’s accomplishments, chief among them environmental plans and healthcare reform.

But Trump’s ability to cause largescale damage is cabined and complex.  In fact, the administration may quickly find a single Supreme Court case foiling many of its plans.

Massachusetts v. EPA

The Clean Air Act is one of the United States’ strongest environmental laws.  It requires the head of the Environmental Protection Agency to regulate emission standards for “any air pollutant” that “contribute[s] to[ ] air pollution which may reasonably be anticipated to endanger public health or welfare.”

In 2003, the Bush administration EPA declined to regulate greenhouse gases.  Twelve states sued, arguing that the Clean Air Act compelled the EPA to regulate greenhouse gases in the face of the public threat of climate change.

In 2007, the Supreme Court ruled in favor of the states, deciding that greenhouse gases are an “air pollutant” under the Clean Air Act, and thus are subject to regulation by the EPA.  The Court also rejected the agency’s rationale for declining to regulate greenhouse gases, and ordered the agency to determine whether greenhouse gases endanger public health or welfare.

Importantly, the Court held that the statute compelled the EPA to at least make an endangerment finding: “EPA can avoid taking further action only if it determines that greenhouse gases do not contribute to climate change or if it provides some reasonable explanation as to why it cannot or will not exercise its discretion to determine whether they do.”  But the EPA had “refused to comply with this clear statutory command.”

This, the Court held, was essentially lawless behavior by the agency and the administration.  “[W]hile the President has broad authority in foreign affairs,” the Court held, “that authority does not extend to the refusal to execute domestic laws.”

The Supreme Court thus sent the issue back to the EPA to decide whether greenhouse gases endanger public health.  Following the 2008 election, the Obama administration EPA made precisely such a finding, which served as the basis for the administration’s Clean Power Plan and other greenhouse gas regulations.

How Massachusetts v. EPA gets in Trump’s way

Massachusetts v. EPA could prove to be a major thorn in Trump’s side.  First, it complicates his plan to roll back Obama’s climate change regulations.  While Trump is eager to reverse the Clean Power Plan and other EPA regulations, the agency will have to go through a full rulemaking procedure to come up with a replacement plan.  Because greenhouse gases pose a public danger, the EPA must regulate them—it cannot simply scrap a preexisting regulation it doesn’t like and replace it with nothing.

The only way around this is to reverse the Obama administration’s endangerment finding—that is, the Trump administration would have to go on the record asserting that greenhouse gases (and thus, climate change) pose no conceivable harm to public health.  Given the mountain of settled evidence to the contrary, the credibility of that position will be difficult to sustain in public, through agency notice and comment, or in court.

Outside of Trump’s environmental agenda, Massachusetts v. EPA may also pose difficulties on his efforts to undermine Obamacare.  Though legislative repeal efforts appear to be dead, Trump still believes the law is “exploding” (again, despite all evidence to the contrary).  There’s every reason to believe that he and his administration will look for ways to grease the wheels of that purported “explosion” by sabotaging the law through harmful executive actions and regulations.

Obamacare’s individual marketplaces remain in a precarious state.  Stung by uncertainty surrounding the fate of the law, and earlier successful efforts by congressional Republicans to sabotage it, more and more insurers are backing out of the markets or else jacking up rates.  So the individual marketplaces are highly sensitive to any more adverse actions by the White House.

As Sarah Kliff explains, insurers are closely watching certain policy decisions by the administration to determine whether they will participate in the marketplaces next year, and at what rates.  One of the biggest concerns for insurers is whether the administration will continue to enforce the individual mandate.  Without the mandate, insurers fear that healthy people would drop insurance, leaving companies insuring a mostly sick (and expensive) group of enrollees.  This prospect would lead to largescale insurer exits and high premium increases.

There has already been some indication that Trump’s administration will undermine the individual mandate.  On his first day in office, Trump issued an executive order that in part ordered Health and Human Services Secretary Tom Price to “waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the [ACA] that would impose a . . . cost, fee, tax, penalty, or regulatory burden on individuals [or] families[.]”

Many read this to be targeting the individual mandate, suggesting that the administration would not enforce the tax penalty for forgoing health insurance.  (The penalty is the greater of 2.5 percent of household income, or $695 per adult and $347.50 per minor child.)  Indeed, Trump adviser Kellyanne Conway outright told the press that the administration “may stop enforcing the individual mandate.”

But that seems to be prohibited by Massachusetts v. EPA’s admonition that the president has no authority to “refus[e] to execute domestic laws.”  The text of the Affordable Care Act is clear: individuals who don’t buy insurance must pay a penalty, and the administration must collect that penalty.  For someone who goes without insurance and does not qualify for an exemption, “there is hereby imposed on the taxpayer a penalty.”  This penalty “shall be assessed and collected,” and “shall be paid upon notice and demand” by the Secretary of Health and Human Services.

That doesn’t leave much, if any, wiggle room for the Trump administration to simply decline to enforce the mandate.  Sure, Secretary Price has the authority to expand hardship exemptions from the mandate, letting more people opt out without paying the penalty.  (One of many executive actions that the White House might attempt to undermine Obamacare.)  But it’s doubtful that Trump could outright decline to enforce the mandate altogether.  That would amount to an unlawful “refusal to execute domestic laws” under Massachusetts.

There are signs that the administration may begrudgingly realize this.  When Secretary Price testified before Congress, he criticized the mandate but conceded that “So long as the law is on the books, we at the department are obliged to uphold the law.”

It would be nice if the administration formally declared that it will enforce the mandate, so as to calm the nerves of frightened insurers.  But more likely, it will use that very uncertainty and ambiguity in its position to bootstrap premium hikes and destabilize the markets further—using the administration’s own inaction as evidence that Obamacare is exploding.

The Trump administration can do a lot of damage through its own executive rulemaking.  But the laws on the books and our political institutions constrain just how much damage it can do.  When it comes to abdicating the country’s climate change responsibilities and undercutting healthcare reform, Massachusetts v. EPA may prove to be a mightily pesky constraint for the administration.

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