WASHINGTON — A federal judge ruled Wednesday that the House had the right to sue the Obama administration over billions of dollars in health care spending, a decision that poses a new legal threat to the health care law and gave congressional Republicans a victory in their claims of executive overreach by the White House.
In a significant defeat for the administration, United States District Court Judge Rosemary M. Collyer found that the House had made a compelling case that suing the White House was the only way to preserve its constitutional power to control federal spending and stop the administration from distributing $136 billion in insurance company subsidies that Republicans say Congress never approved.
“The House of Representatives as an institution would suffer a concrete, particularized injury if the Executive were able to draw funds from the Treasury without a valid appropriation,” Judge Collyer said in her 43-page decision.
She said the merits of the claim would be determined in a later proceeding. But her decision, if it withstands appeal, would mark the first time the House has been able to challenge an administration in court over its spending power.
Speaker John A. Boehner had pressed the lawsuit both as a way to attack thehealth care law and to underscore what congressional Republicans say is a pattern by the Obama administration of exceeding its authority on a range of issues including health care, immigration and pollution controls.
“The president’s unilateral change to Obamacare was unprecedented and outside the powers granted to his office under our Constitution,” Mr. Boehner said in a statement after the ruling. “I am grateful to the court for ruling that this historic overreach can be challenged by the coequal branch of government with the sole power to create or change the law.”
The judge dismissed another challenge to the law by the House, finding that the House’s claim that the Obama administration had improperly moved the deadlines for new employer requirements without congressional action did not rise to a level that justified a court fight.
The Justice Department, which had argued that the dispute amounted to a political disagreement that should be settled outside of the legal system, said it would appeal. The White House had anticipated that it could lose at the lower court level and said it expected the decision to be overturned.
“The law is clear that Congress cannot try to settle garden-variety disputes with the executive branch in the courts,” said Jennifer Friedman, a White House spokeswoman. “This case is just another partisan attack — this one, paid for by the taxpayers — and we believe the courts will ultimately dismiss it.”
Other legal experts warned the decision could have far-reaching consequences if upheld.
“This decision would be a radical expansion of the role of unelected judges to resolve disputes that are essentially political,” said Walter Dellinger, who served as acting solicitor general in the Clinton administration. “The Supreme Court has not gone down that road before, and I doubt they will go down that road now.”Judge Collyer, who was appointed by President George W. Bush, said her decision would “open no floodgates, as it is inherently limited by the extraordinary facts of which it was born.”
But she allowed that her ruling broke new ground, since existing precedents provided no clear path.
The usual congressional responses to executive actions said to be in conflict with laws will not suffice, she said.
The administration had suggested, for instance, that Congress could cut off funding if it was dissatisfied. Judge Collyer wrote, quoting from a House brief, that the administration was “apparently oblivious to the irony” of its position.
The ruling in U.S. House of Representatives v. Sylvia Mathews Burwell came after the Supreme Court in June upheld a key element of the law and dismissed a challenge that threatened the very underpinnings of the Affordable Care Act.
A final ruling in favor of the House in the new lawsuit could undermine the health law and drive up costs for consumers if health insurance companies lose the federal aid or if replacement aid is not found, but it is not seen as having the same capacity to make the health law unworkable.
More than half of all the people with coverage purchased through public insurance exchanges — 5.6 million people out of a total of 9.9 million — receive those cost-sharing reductions, which lower their out-of-pocket costs for doctors’ services, hospital care and prescription drugs. Without that assistance, many of them would have difficulty paying their share of medical bills.
Under the Affordable Care Act, insurance companies must reduce co-payments, deductibles and other out-of-pocket costs for some people in health plans purchased through the exchanges. The federal government reimburses insurers for the “cost-sharing reductions.”
The fight over the employer mandate was initially the central claim in the Republican lawsuit that was strongly opposed by House Democrats when the suit was authorized by a partisan vote in the House in 2014.
But Republicans shifted their focus to the spending issue when the flow of money was first noticed by staff members at the House Energy and Commerce Committee who could not identify any congressional act approving the money. Congress had rejected a budget request for the funds.
The administration later said it determined the budget request was unnecessary, and supporters of the Affordable Care Act say language in the law states clearly that government reimbursement to private insurance companies to help cover health care premiums is mandatory and not subject to Congress’s annual spending bills.
Republicans argued that the Constitution clearly gave Congress the “power of the purse” as its strongest weapon against an aggressive executive branch, and Judge Collyer said that balance needed to be maintained.
“This constitutional structure would collapse, and the role of the House would be meaningless, if the Executive could circumvent the appropriations process and spend funds however it pleases,” she said.
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