In December 2008, just weeks after President Obama was first elected, environmental activists sued the Environmental Protection Agency (EPA), claiming that the agency had failed to regulate certain “hazardous air pollutants” emitted by power plants pursuant to the Clean Air Act.
Resolving a lawsuit that involves a federal agency like the EPA can take a very long time – years even – especially when the suit is initiated in the first year of a new administration. But not in this case. Within 10 months, President Obama’s EPA decided to settle the suit with the environmental activists. How did they do it so quickly? By promising to enact new regulations of American power plants.
This is a classic case of a “sue-and-settle” scheme, the pernicious practice of activist organizations suing the federal government with the sole intention of reaching a closed-door settlement that achieves the group’s preferred regulatory goals much faster than could occur through the normal bureaucratic rulemaking process.
Indeed, the environmentalists’ lawsuit provided the EPA the pretext they needed to issue regulations that were far stricter – and more expensive – than otherwise would have been possible. The EPA’s own studies estimate that the resulting set of regulations – called the Utility MACT (Maximum Achievable Control Technology) Rule – will cost the U.S. economy $9.6 billion every year. That’s a staggering sum, but it’s only a drop in the bucket of the total cost of the draconian environmental regulations that the Obama administration has issued in response to similar lawsuits. According to the U.S. Chamber of Commerce, the Obama administration has entered into an estimated 60 such settlements.
Using lawsuits to extort new regulations from executive agencies is an affront to the rule of law and democratic government. But it’s proved to be highly effective for special-interest groups seeking to shape the law in their favor, which is why we see it spreading to other policy areas, like health care.
At least six insurance companies that participated in the Obamacare exchanges are now suing the Department of Health and Human Services (HHS), claiming that HHS owes them billions in “risk corridor” program payments that would have prevented their heavy Obamacare losses.
When Obamacare was first passed, the program was supposed to be funded by payments from other insurance companies who did not have to spend a lot of money covering health-care claims from their policyholders. But since almost all insurance companies were spending more than they expected on Obamacare patients, no one was paying into the program.
President Obama first went to Congress and asked for money to cover the unpaid insurance claims but Congress said no. Then in September, HHS issued a memorandum claiming that the insurance companies who had sued HHS might be able to get their unpaid risk corridor bills paid through the Department of Justice’s Judgment Fund.
The Congressional Research Service has since concluded that such payments were not authorized by statute, but that hasn’t stopped President Obama in the past.
That’s why last month I joined my colleagues, Sens. Ben Sasse (R-NE), Marco Rubio (R-FL), John Barrasso (R-WY), to introduce the HHS Slush Fund Elimination Act. The bill would prohibit the government from using the Judgment Fund, or any other federal funds, to pay final judgment or settlement related to any lawsuits pertaining to the Obamacare risk-corridor program.
Federal bureaucrats and special interests should not be able to create policy through sue-and-settle schemes. Congress has already relinquished far too much of its legislative powers to the Executive Branch. This bill would make sure we don’t give away even more.