(Bloomberg View) — Thursday's Supreme Court decision to uphold a pivotal regulation under the Affordable Care Act is, of course, a tremendous victory for the Barack Obama administration. But it also establishes a principle that's likely to haunt future presidents. (Disclosure: As administrator of the Office of Information and Regulatory Affairs from 2009 to 2012, I worked on, and helped oversee, the regulation at issue in the case.)
The underlying question is which branch of government has the power to interpret ambiguous legislation. Since the Supreme Court's 1984 decision in Chevron v. Natural Resources Defense Council, the executive branch has been allowed to adopt its own interpretations, as long as they're reasonable. And because so many laws are ambiguous, this "Chevron principle" has given great authority to executive agencies and the president.
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But the Chevron principle has been highly controversial, not least within the court itself. Several justices, including Chief Justice John Roberts, have searched for ways to limit it. One of these, which the court as a whole has never clearly embraced, is that if the issue has a great deal of "economic and political significance," then the Chevron principle doesn't even apply. If so, courts should interpret the law on their own without paying the slightest attention to what executive agencies say.
Writing for the court, Roberts today entrenched that principle. His opinion upheld the Internal Revenue Service regulation allowing subsidies for qualified people buying health insurance on the federal exchange, but did so without giving any deference to the IRS. He declared unambiguously that it is "our task," and not that of the executive branch, "to determine the correct reading."
