Typo attracts legal scrutiny

The budget typo that sparked partisan barbs earlier this year is now attracting the attention of more lawyers.

The budget typo that sparked partisan barbs earlier this year is now attracting the attention of more lawyers.

Two new legal actions question the constitutional validity of the $39 billion deficit-reduction bill that President Bush signed in February.

Public Citizen filed a lawsuit yesterday in the U.S. District Court for the District of Columbia seeking to nullify the law. On Friday, 15 Tennessee hospitals involved in a decade-long dispute with Medicare filed a memorandum with the same court calling the bill unconstitutional.

Last month, House Budget Committee Chairman Jim Nussle (R-Iowa) said that Republican leaders would leave it to the judiciary to decide whether the law is constitutional.

These two cases, along with a lawsuit filed by an Alabama attorney last month, threaten to allow the courts to do just that.

A decision against the constitutionality of the bill would send a ripple throughout the federal agencies that have begun to implement the law. A ruling in favor of any of the plaintiffs would affect the entire law, not just the provisions that give each plaintiff putative standing to sue, according to one constitutional scholar.

“The appropriate judicial remedy is to strike the entire bill,” George Washington University law professor Jonathan Turley said.

The two new cases have little in common except their assertion that the budget-reconciliation bill was never made law because the House and Senate approved slightly different versions.

After the Senate passed the bill with amendments in December but before the House voted in February, a Senate clerk erroneously changed a provision in the bill. After the House voted but before the president signed the bill, the clerk corrected the typo.

The provision in question establishes how long Medicare beneficiaries have to rent certain medical equipment before they take ownership. The clerk mistakenly changed the period from the correct 13 months to 36 months. The president signed the 13-month language that the Senate approved and that House members believed was in the bill they passed.

Congressional Republican leaders and the White House have steadfastly maintained that there is no problem. The Republicans say the clerical error is minor and technical and that the official certification of the bill by House Speaker Dennis Hastert (R-Ill.) and Senate President Pro Tempore Ted Stevens (R-Alaska) settled any open questions.

House Democrats have tried to keep the budget typo issue in the public eye, characterizing the typo and the GOP’s response as part of a pattern of secretive lawmaking and disregard for the rules of Congress.

Minority Leader Nancy Pelosi (Calif.) demanded an ethics probe, Administration Committee Democrats asked for a hearing and Rep. Henry Waxman (D-Calif.) wrote to White House Chief of Staff Andrew Card asking if Bush or his senior aides knew of the discrepancy before the bill was signed.

Because the legislation is far-reaching and was adamantly opposed by many business and consumer groups, the potential for additional lawsuits is seemingly limitless.

“Any person who is adversely affected by this legislation has the right to go to court,” said Joan Claybrook, Public Citizen’s president.

The Alabama plaintiff claims that new Medicaid rules restricting transfers of assets will discourage charitable giving. Public Citizen cites a $100 increase in filing fees for civil actions in federal district courts as its justification for suing. The Tennessee hospitals say that an unfavorable provision in the deficit-reduction bill regarding Medicare payments is invalid because the whole bill is invalid.

Last September, the D.C. circuit court awarded the hospitals about $100 million in their case against the Department of Health and Human Services (HHS). The ruling seemingly brought to a close about 10 years of back-and-forth between hospitals and Medicare about how to calculate special payments for hospitals that treat large numbers of indigent patients.

But HHS viewed language inserted into the budget-reconciliation bill, apparently during or after conference negotiations, as an opportunity to undo its loss in court. Days after Bush signed the deficit-reduction bill, HHS filed a motion to alter the court’s judgment, citing the new law’s provision defining the formula for the special payments.

The hospitals filed their response Friday, making a multifaceted case that claims the budget-bill language does not apply to them and that, even if it did, the bill is constitutionally invalid.

The court could avoid the constitutional issue by simply denying the motion and upholding its September decision.

But if the court takes up the motion, hears arguments for both sides and issues a new decision in favor of the hospitals, the entire law would be ruled unconstitutional, according to Murray Klein, the Princeton, N.J.-based litigator with Reed Smith LLP who has led the case for the hospitals.

If the court alters its original decision, Klein said the hospitals would likely appeal the ruling and probably try to bring the case directly to the Supreme Court.

In addition to prompting a legal response that could obliterate a $39 billion spending-reduction bill, the HHS motion to overturn that decision attracted the ire of Senate Majority Leader Bill Frist (R-Tenn.) and the entire Tennessee delegation.

Frist and his colleagues wrote to HHS Secretary Mike Leavitt and Attorney General Alberto Gonzales on March 10 to complain about the government’s motion.

“We request further explanation of what we believe to be a serious miscommunication by [Medicare representatives],” the lawmakers wrote.