Columbia's Philip Hamburger has an article in NRO that argues that the Health Care waivers that HHS Secretary Sebelius has been handing out to favored suppplicants violates an implicit constitutional understanding that the executive has no power to exercise a dispensing power -- the power, once associated with royalty, to exempt persons from compliance with otherwise generally applicable laws. While the historical record is clear that our English anestors emphatically and explicitly rejected the dispensing power, the Constitution forbids it as well. The first grievance against James II in the 1689 Declaration of Rights was James's assumption of the power to suspend laws and dispense with their compliance. The first two declarations were that those powers were illegal. While the Constitution may not be as explicit as the Declaration of Rights, there is a sound reason why the Health Care waivers are not constitutional.
Exercise of a dispensing power amounts to a partial repeal of the law. If the President lacks authority to repeal particular provisions of a law as to everyone -- a/k/a the line item veto -- surely the same principle must forbid partial repeal as to a select few. It doesn't matter whether Congress has explicitly given the Secretary the power to grant waivers and provided a standard for exercise of that power -- that was true of the Line Item veto as well.
Moreover, in some circumstances the dispensing power might amount to an impermissible delegation of legislative power. The delegation doctrine has been on the constitutional ashheap for some time, but it retains some theoretical vitality. The doctrinal answer is that so long as Congress gives the President an ascertainable standard by which to exercise discretion, there has been no unlawful delegation of legislative power to the executive. If the Secretary grants or denies waivers in accord with an ascertainable standard, there is no improper delegation, but if it turns out that, as applied, the waivers are dispensed to those with political clout and denied to similarly situated but less well-connected applicants, the ascertainable standard becomes the grin of the Cheshire cat.