Leviathan on hold

The Affordable Care Act (ACA) is now law, and as much as this is a big victory for 30 million people without insurance and anyone else who will get sick in the future and need insurance, it’s also a victory for Executive power. “I believe this commission is the largest yielding of sovereignty from the Congress since the creation of the Federal Reserve,” says administration budget director Peter Orszag, via Ezra Klein. And given how ineffective Congress is these days, that may actually be good thing.

Orszag is specifically referring to the Independent Payment Advisory Board created under ACA. The Board’s job is to propose cost-saving measures for Medicare to keep cost inflation no higher than the average 5-year GDP growth rate plus 1%. And the Board has a great deal of power. Here’s Ezra explaining:

If Congress approves the board’s recommendations and the president signs them, they go into effect. If Congress does not vote on the board’s recommendations, they still go into effect. If Congress votes against the board’s recommendations but the president vetoes and Congress can’t find the two-thirds necessary to overturn the veto, the recommendations go into effect. It’s only if Congress votes them down and the president agrees that the recommendations die.

My guess is that the political equilibrium will be for the Board to make proposals and for the Congress and President to ignore them and thereby allow them to go into effect without being personally responsible. That gives the IPAB quite a bit of actual power to cut costs in what will soon become the largest item in the federal budget. And who decides who will be on the IPAB? The President, with the advice and consent of the Senate. The Board’s 15 members will all have 6-year terms, renewable once.

Another big win for executive power in the ACA is the role given to the Secretary of Health and Human Services, currently Kathleen Sebelius. The text of the Affordable Care Act says that the secretary shall define, determine, or create 1,697 things. New powers accruing to the Secretary include the ability to define specific benefits and regulate insurance options on the exchanges.

There are two lessons here. First, for Republicans: this is what happens when you adopt a complete rejectionist strategy instead of negotiating to improve the bill. Certainly many liberals were never interested in bipartisanship, but House Blue Dogs and Senate centrists like Baucus, Landrieu, Lieberman, Lincoln, and Nelson were dying for some bipartisan cover. Left to negotiate amongst themselves, Democrats came up with a bill that expands the discretionary powers of the presidency over the congress and the states. Presumably some authentic conservatives may have liked to avoid this situation. So next time, Republicans, try playing the game instead of taking your ball and going home.

Second, this may just push the Democrats to reform Senate procedure. As Prof. Bernstein has been saying since ACA passed, Republicans are likely to start blaming every single problem in the health care system on the newly-passed law, much like they blamed Obama and the stimulus for every economic problem after January 2009. That gives the administration and its party a large incentive to make sure the law is implemented as professionally as possible. The problem is that all the key figures for implementation (the Health Secretary, dozens of other sub- and assistant-secretaries, and the IPAB) are administration appointees, and the appointment process is broken. At this point in his presidency, Obama has had far fewer of his nominees approved by the Senate than his predecessor. Because of arcane Senate rules like unanimous consent and the anonymous hold, staffing up a modern administration turns out to be very, very difficult in a climate of partisan obstruction. The administration and the party have clearly been annoyed by this for a while, but the need to implement the ACA should give them an extra push to do something about the problem at the beginning of the next congress.

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This is a group blog. JSC5 currently writes from the US. JSC7 writes from behind the Great Firewall of China.

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