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Halbig: Another Expert View

The federal judiciary is in great need of expert economic advice, and mercifully some are happy to supply it. “Stop the Anti-Obamacare Shenanigans,” Henry J. Aaron (senior fellow, Brookings), David M. Cutler (professor, Harvard), and Peter R. Orszag (shill, citigroup) plead on the New York Times op-ed page. They urge the Supreme Court to await the D.C. Circuit’s en banc decision in Halbig before granting cert in King v. Burwell. Because if the petitioners’ position and the D.C. Circuit’s ruling—ACA tax credits and mandates apply only under health care exchanges established by states, not to exchanges established by HHS in a state—were to prevail, “it would create total chaos.”

As opposed to the good order that’s prevailed in the insurance markets ever since Obamacare’s enactment. And further delay would solve—what? No lawyer on either side, no lawyer in between, and no market participant expects the question to be settled by anyone but the Supreme Court. But then, the authors write,

We are economists, not lawyers. But we note that the statute, while vague at points, confirms, when read in its entirety, that tax credits are to be available on all the exchanges, nationwide. … And when the law was passed, everyone involved in the law’s passage understood that this directive vested federal exchanges with the same mission and authority as state-mandated exchanges.

Like the authors of the First Amendment, the economists should have stopped after the first five words. The second sentence merely restates the legal question at issue, while hiding in a weasel phrase (“vague at points”) the inconvenient fact that the statute is very precise on the particular point at issue. The third sentence is an outright falsehood. As Jonathan Adler and Michael Cannon have shown in excruciating and (as here relevant) uncontested detail, no one understood any such thing. And of all people, Messrs. Aaron and Cutler ought to know.

On December 24, 2009, the wretched PPACA child was spawned by the U.S. Senate in the wee morning hours, with not a vote to spare. In January 2010, Senator Brown was elected to Ted Kennedy’s former seat, depriving the Democrats of a filibuster-proof majority. Whereupon a bunch of experts, including the aforementioned gentlemen, sent a letter to the House leadership, urging them to pass the Senate bill, warts and all. Best we can get, they said, and too important to be renegotiated. Details can be fixed through reconciliation (which did take place but conspicuously did not address the Halbig issue). Pass it.

The letter merits (re-)reading for its unctuous tone; for the “experts’” preposterous proposition that the ACA would or even sought to create “functioning insurance markets”; and for the light it sheds on this latest round of unsolicited expert advice. In this country, we usually follow the laws that Congress did enact, not some blowhard’s latter-day reconstruction. In 2010, they begged for an imperfect bargain; now, they want it back.

I teach law, not economics. But did someone just say, “ex post opportunism”?

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Obamacare: The States’ Rights and Wrongs

Briefs have been trickling into the U.S. Supreme Court in the Obamacare cases. Soon, they’ll come flooding: briefing on the Affordable Care Act’s individual mandate is starting today. It’s important to recognize that the constitutional arguments in the cases don’t always mesh easily with conservative-libertarian opposition to Obamacare’s policy—or for that matter, with their concerns over the state and trajectory of American federalism. Continue reading to learn more.