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.”
Peter Huber’s The Cure in the Code is likely the best nonfiction book in years if quality is measured by the potential to improve important social policy. Huber compellingly shows how twenty-first century medicine can lengthen life and improve its quality, if only we can get rid of the twentieth century mindset of government control at the FDA and in the Obama administration. Huber does not write as a political polemicist, but as scientist, demonstrating that the model of medical treatment and discovery on which current law rests does not comport with the revolutionary nature of modern molecular and genomic medicine.
Herewith, as promised in Part I, a few additional thoughts on Halbig’s lessons. My humble observations aren’t intended as nuanced legal analysis; there’ll be time enough for that as the cases progress. Today’s subject is the broader context of how the doctrines and institutions that have sustained administrative law are coming apart at the seams.
My friend and former colleague from the Office of Legal Counsel, Bill Levin, has been following the Halbig case closely. Here are his thoughts on the aftermath of the case.
The aftermath of the D.C. Circuit decision in Halbig is encouraging.
On the PR front, it has been unexpectedly difficult for Obamacare defenders. In recorded speeches from 2011 and 2012, Obamacare architect Jonathan Gruber confirms that the central premise of Halbig is correct: Obamacare provides subsidies for state exchanges only (“[I]f you’re a state and you don’t set up an Exchange, that means your citizens don’t get their tax credits.”). Now in 2014 he says his statement, evidently recorded in varying versions on at least seven different occasions, and counting, was “just a speak-o—you know, like a typo,” which, unintelligible valley speak aside, cannot be accurate unless in the Michael Kinsley sense of accidentally telling the truth.
The multiple Gruber audio and video recordings are truly a smoking gun, readily available for all to evaluate the next time someone claims that Halbig seeks to undermine Obamacare, or in the colorful, but demonstrably unsound words of dissenting Senior Circuit Judge Edwards, “This claim is nonsense, made up out of whole cloth.”
To recap the whole cloth for perspective, Obamacare provides subsidies for an exchange “established by the state.” Nowhere in its 906 pages does the statute manage to apply these simple words to the federal exchange. Not once in the legislative history is a federal subsidy mentioned by a single legislator. And now we have an architect of Obamacare, a distinguished MIT economist, not some random talking head or partisan opponent, plainly stating what the law plainly means. “[I]f you’re a state and you don’t set up an Exchange, that means your citizens don’t get their tax credits.” It could be a rallying cry, for it truly crystallizes the case, except that the sentence lacks style and cannot fit on a T-shirt. Yet Obamacare supporters are taking to the barricades and a senior judge feels emboldened to claim the litigation is fanciful. This could be the stuff of comedy were the stakes not so high.
Two-plus weeks have passed since the D.C. Circuit’s panel decision in Halbig v. Burwell and the Fourth Circuit’s opposite decision in King v. Burwell, a substantially identical case. The King plaintiffs have filed their cert petition; and the government has asked for rehearing en banc in the D.C. Circuit; and the initial agitation has subsided. It’s a fine time to highlight a few lessons that, in my estimation, we have already learned. I offer three sets of observations: today, I’ll focus on the interplay between constitutional and administrative law and on the advocacy network that produced Halbig and its companion cases; tomorrow, I’ll analyze the institutional pathologies and ideological derangements that account for the contretemps.
These are interesting times, constitutionally speaking. In the past two weeks, federal courts have ruled both ways on Obamacare. In the D.C. Circuit, a panel ruled that the law allows for subsidized health insurance in exchanges created by state governments, but not in the “backstop” exchange created by the federal government. Meanwhile, the Fourth Circuit says that the statute allows subsidies in both.
Who is right?
The arguments by which the Obama administration is countering lawsuits that seek to limit Obamacare subsidies to participants in “exchanges” established by states—a limit that is specified in the Obamacare law itself—have raised the outcome’s stakes. Administration officials argue that the plain, unmistakable, uncontested language of the Affordable Care Act (ACA) is less important than what they want the law to mean, and that hewing to its words would deprive millions of people of the subsidies that the administration had granted them regardless of those words. Therefore the courts should enforce what the administration wants rather than what the law says.
There will be a Republican President again someday. This will happen. Democrats, having forgotten that fact, would do well to remember it. Suppose this happens too: Congress cuts taxes, stating in the preamble to the law that it intends to spur economic growth and, Laffer-style, boost revenue. The cuts fail to achieve that goal, so the President—on the grounds that a law should not be implemented in a manner contrary to its stated overall purpose—unilaterally orders the IRS to cut them some more.
After the arguments made to the D.C. and Fourth Circuits to justify the subsidies for coverage on federal Obamacare exchanges, the howls of indignation might be hard to separate from the howls of righteous vengeance. Because while the tax-cut scenario takes the case to eleven, the species of argument is the same: that the President is authorized to violate—or, more politely, let us say, reconceptualize—the letter of a law in the name of achieving its overriding purpose.
Routing a political dispute to the courts is the constitutional equivalent of appealing to one’s parents for relief from mistreatment by the bully on the block. How about throwing some weight instead?
Senator Ron Johnson’s fists are stuffed in his pockets as he runs across the Capitol Plaza to the pillared edifice where parental figures in black robes dispense constitutional wisdom evidently inaccessible to the rest of us. The Wisconsin Republican is suing President Obama over the administrative agreement that protects members of Congress and their staff from the legal requirement—which, by the way, was the product of asinine posturing, but which is also, you know, law, which you can tell because it bears the President’s signature—that they purchase insurance on the Obamacare exchanges.
In the recent Hobby Lobby Case, Justices Elana Kagan and Sonia Sotomayor said that corporations that don’t want to pay for abortions should simply not provide any health insurance: “But isn’t there another choice nobody talks about, which is paying the tax, which is a lot less than a penalty and a lot less than — than the cost of health insurance at all?” Dissenters from the official line must pay a tax. That sounds familiar.