The other IRS scandals

David Catron:

Thanks to ubiquitous if imperfectly honest press coverage, most Americans know about the IRS scandal involving tax-exempt applications from various Tea Party groups. The public is still, however, getting the mushroom treatment on two other outrages by that rogue agency. The media have devoted scant coverage to its theft of 60 million medical records, now the subject of a class action lawsuit, and they have been all but silent regarding the illegal IRS scheme to fund Obamacare’s federal insurance exchanges.

As scary as is the medical record theft, which I wrote about here last week, the more important of these two additional scandals involves IRS skullduggery relating to the exchanges. A year ago, the IRS finalized a regulatory ruling to the effect that it will issue tax credits through Obamacare’s federal insurance exchanges. Why is that such a big deal? Well, the IRS has been granted no legal authority, by the Affordable Care Act (PPACA) or any other act of Congress, to issue such credits. In fact, the ruling flouts the explicit language of Obamacare.

PPACA stipulates that all such assistance must emanate from state-run exchanges. Even if the federal government sets up an exchange in a state that has declined to do so, it wouldn’t be authorized to issue tax credits. And because 27 states have refused to set up exchanges, this restriction will cripple Obamacare. Without the ability to dole out tax credits and subsidies in more than half of the states, the Beltway bureaucrats attempting to implement the much-despised “reform” law will be hamstrung.

The IRS is attempting to save Obamacare by unilaterally declaring that it will issue tax credits through all exchanges, federal and state alike. Immediately upon the promulgation of this rule, a number of experts on the health care law pointed out that it was illegal. In a paper for Health Matrix, Jonathan Adler and Michael Cannon wrote, “The plain text of the Act only authorizes premium-assistance tax credits … for those who purchase plans on state-run Exchanges.”

Adler and Cannon go on to spell out the breathtaking scope of this IRS plan to offer tax credits through all exchanges: “[T]he IRS is attempting to create two entitlements not authorized by Congress.” Michael Gerson, one of the few who have addressed this in the MSM, puts it thus: “The IRS seized the authority to spend about $800 billion over 10 years on benefits that were not authorized by Congress.” In other words, the IRS has arrogated “the power of the purse,” a right reserved to Congress by the Constitution.
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There is more.

Oklahoma is currently challenging this power grab in the courts.  I think they have a strong case.  But the fact that they have to bring it shows just how lawless this rogue agency has become and I suspect it was done at the direction of the administration.  It is another example of how Obama has ignored the rule of law.