The real import of the Jon Gruber fracas

It would be much easier if (some) people would simply say “Of course this normally should be kicked back into the legislature for clarification.  But I don’t want to do that because I don’t regard Republican control of the House, and how that control is used, as a legitimate form of rule.”  One may agree, or not, but the nature of the case is pretty clear.

Instead we read irrelevant blog posts and tweets about how the experts meant to have subsidies at all levels all along.  Of course they did.  But did Congress know what it was doing in a detailed sense, one way or another?  Hard to say, personally I doubt it, and Alex says no.  The basic starter hypothesis here is that many of them knew this was a health care bill, it would extend coverage, it had a mandate, it had some subsidies, it had a Medicaid expansion, it had some complicated cost control, it was approved by leading Democratic Party experts, it met some CBO standards, and beyond that — if you pull out those who were confused on the details of the exchanges and the subsidies do you still have majority support?  I doubt it.  Most absurd of all are the tweets asking the critics to show Congress intended no federal-level subsidies.

So, to return to the title of this post, the import of the Gruber fracas is to show that if he can be confused (more than once, at that, and is “confused” even the right word?) a lot of ACA supporters in Congress probably were confused too.

So given that across-the-board subsidies are not written into the bill formally, and given the importance of precedent, and rule of law, why not kick the matter back into the legislature for redrafting?  Which brings us back to the first paragraph of this blog post…

I have drawn on some Ross Douthat tweets in thinking through this post.


All I can say is, if you're going to pass a law with zero bipartisan support, you should be very careful in the drafting, since they aren't likely to help you out if you muck it up. In this case, haste and arrogance is biting them in the ass.

Exactly. The current legislature can never rely upon a future legislature to serve its will:

"Acts of parliament derogatory from the power of subsequent parliaments bind not. . . . Because the legislature, being in truth the sovereign power, is always of equal, always of absolute authority: it acknowledges no superior upon earth, which the prior legislature must have been, if it's [sic] ordinances could bind the present parliament." Blackstone, Commentaries on the Law of England 90 (1765).

While your conclusion is correct, I find it amusing when Americans derive something about their own law from the doctrine of parliamentary supremacy. America was made in order that Parliament is *not* supreme there.

In terms of making laws, Congress is most certainly supreme (or it's supposed to be).

No, the People is the supreme sovereign, which is why Congress is (or is supposed to be) governed by a Constitution promulgated by "We the People."

No. Even if Congress passed a law prohibiting Islamic speech, it would not be legal to enforce it. That means it is not supreme.

Actually, our government is a series of checks and balances...but ALL laws flow from Congress. If a president signs them, then he's responsible for following them. The president may not rule by fiat, hence our Declaration of Independence is a series of indictments upon the personal rule of George III. Thus, the foundation of law stems from our peculiar version of parliment.

No, not really. We have a constitution intended to produce legislative supremacy, it's just being routinely violated.

Note that the legislature can, with a super-majority, pass a law over the objection of the executive. But the executive has no way to enact a law over the opposition of the legislature.

Note that the legislature can, with a super-majority, remove the executive. But the executive has no way to remove members of the legislature, may not even impede their travel while it is in session.

Note that the President has no role in amending the constitution, and is not permitted to make appointments without legislative approval except for temporary ones in emergencies.

Note that the President cannot declare war, only the legislature.

No, it is a system of legislative supremacy, though perhaps not so supreme as some parlimentary systems. It's just that it's a system that is routinely being violated, because Presidents like exercising power, and members of Congress like letting them, so that they can relax and spend their time taking in graft.

Congress has the supreme power to write statutes. The Supreme Court has the supreme power to interpret statutes and to resolve conflicts between two or more statutes and between statutes and the Constitution. But the Supreme Court is also supposed to be the weakest branch of government, because it must explain its decisions as based in the text of the statutes, Constitution, and/or English Common Law. The President executes the laws, with, indeed, some leeway for interpretation. And Presidents routinely use signing statements to explain why they think a law is unconstitutional and what the Executive branch will do about it. But Presidents do not rewrite statutes, and Obama has not claimed that the statute is unconstitutional if it is not read to demand subsidies for non-state exchanges.

Well, depends if you mean "Parliament" as in the specific body that meets in London, or "parliament" as a legislature with representatives elected from the places it purported to govern. That being the exact debate over the English constitution that divided the Loyalists from the Patriots. If the former was the proper meaning of "Parliament" in the English constitution, the taxation in the colonies was legal and proper; if the latter was, the colonies were being subjected to the very same illegal "taxation without representation" that sparked the English Civil War, since they had no voice in London and their "parliaments", the local legislatures, had not approved the taxing.

Now, of course, the supremacy of the American "parliament" was abolished either in 1789 (when the local legislatures established a Constitution derogatory to their future power and which did not simply transfer that supremacy to a single merged legislature) or in 1865 (by military force ending the ability of the local legislatures to leave the Constitution by legislative act, moving the Constitution from a delegation of power from the local legislatures to a derogation of the power of the local legislatures). But both of those dates are subsequent to the making of America.

America is different in that our constitution does indeed bind both present and future legislatures. But that doctrine is perfectly sound, boht in the USA and england, in that a legislature cannot bind a future legislature.

If I were the Republicans, I would demand a pound of flesh to fix the bill. Something like lower corporate taxes.

How about no corporate taxes?

Ironically, that would probably fix the economy in time to elect another Dem in 2016.

How about shredding the whole mess and starting over?

I would demand more than that, I would demand repeal of the entire monstrosity.

It's far from obvious to me that if SCOTUS eventually shoots down the subsidy for people buying on federal exchanges, that the ass that gets bitten will be the Dem one. Seems much more likely to bite the ass of GOP state legislators and governors if they don't set up their own state exchanges. I can't say whether that was the cunning Dem plan all along, but if I were a Dem strategist, I'd be praying for SCOTUS to rule against the federal subsidies, sometime in the summer of 2016.

Except for this fact: the entire system envisioned by the law is wholly underpinned by the tenuous logic that the very age demographic designed to fund the system by paying for coverage required by the law yet generally unneeded at their age is the same who are living in their parents basements while frantically searching for work which doesn't require them to master the phrase, "Do you want fries with that?" and trying to pay off student loans.

And they're not buying. In droves.

But hey, some socialists got to look in the mirror and like their reflections. Because central planning.

There are, at most ten million covered by o care. About half of those lost coverage because of o care. About 20 % aren't getting any subsidy, many more are getting fairly small subsidies. About 40 % of those getting subsidies are in states that currently have state exchanges. Of those getting subsidies, I'm betting a lot are either non voters or already faithful democrat voters. CNN did a survey last week that showed 35% say o care has hurt them and only 18% say it has helped them. If the ruling is upheld, it will provide a competitive advantage to states without exchanges as there will be no employer mandate in those states (and hence no minimum standards), making them more attractive for business expansion and relocation (accelerating the trends that already exist. On the whole, there's just not much risk for republicans in a large majority of states that do not have state exchanges. Most of those states have also rejected that pile of money in Medicaid expansion and democrats haven't been able to gain traction complaining about that. Further, notice it creates a political environment where it puts pressure on democrat office holders from red/purple states/districts without state exchanges to vote with republicans to completely overturn or at least abolish the subsidies. Further, it gives states a big stick to threaten democrats with (establishing/abolishing state exchanges.

Except that most of the states that dont have exchanges now, also have popuoations that hate the entire law, and would love it if the entire law was repealed, so why would the people in those states be demanding to fix it.

It doesn't matter WHAT any Laws says. Obama and his minions like Holder and Lehrner simply aren't constrained by US Law. They are ABOVE the "Law". I'm sure you'll agree that requiring Obama to abide by the "Law" is nothing but raacist. Raacist I tell you.

How about: “Of course this could be kicked back into the legislature for clarification, but since we have a dysfunctional legislature more interested in political posturing than solving policy problems, it's understandable why no rational person wants to do that.”

Is there any reason why one political party has a responsibility to help their opponents pass laws they oppose? "Solving policy problems" in this case means "We can't even write a law, even though that's our job, and we need Republicans to save us from our own incompetence".

Unlike Tyler's question, does my comment point to any single party as the one with the problem or responsibility?

Right now, the policy is being implemented in the way Democrats prefer. If Republicans want to clarify the law, it's up to them now to go ahead and introduce that change. Of course, if they want to advocate for the alternative implementation, that would require them to vote on removing those subsidies for thousands of their constituents. Not a surprise that they are reluctant to go on record for that. Regardless, it's the Republicans that want to overturn the current implementation, so it's on them to introduce the legislation.

If the courts eventually rule against the current implementation, then you might have a point. Then, the onus would be on the Democrats to make the change, which is why Tyler's framing is as revealing as it is misguided. Until then, the legislative ball is in the Republican's court.

So Republicans need to pass a law to force the administration to follow the law. Now there's a heavy dose of crazy for a Saturday morning. Wow.

If you accept the Republican interpretation of the law, yes, it would be crazy.

If, on the other hand you believe the administration is following the law--and many people do--then it's up to Republicans to change it, because they are the ones that do not like the law.

What was I thinking? Words have no meaning with you guys. It is all who? whom?

Words have meaning only in context. Remove the context, and you remove the meaning.

D Shea, is it fair to say the entire unilateral passage of this law was political posturing?

The whole point of clarification is the lack of consensus on what the Law says. As far as the Administration's opinion is concerned, it is already following it, thank you very much. If you disagree, you can take your case to the court or to the Legislative Branch, right?

John I'd agree that it was an epic political out - maneuvering of a Republican party that has repeatedly demonstrated its inability to avoid shooting their own least so far.

Of course, if they want to advocate for the alternative implementation, that would require them to vote on removing those subsidies for thousands of their constituents.

Yes, as we know the Republican house passing bills that repeal Obamacare in whole or in part is unheard of.

I believe the phrase was "law of the land". Just because the Dems didn't read their own bill, or pay much attention to anything at all except emptying a dictionary onto several thousand pages and handwaving at the IRS and HHS to figure it all out down the road, doesn't mean the opposition has any responsibility to dig them out of the hole. They wrote the law, now it's up to the executive to enforce it as written. If he will not, or if he attempts to bend the law into something it wasn't, then the courts get to say which interpretation is correct. And it won't be on Republicans if the subsidies are struck down, because THEY DIDN'T WRITE IT. It is not their responsibility to write democratic laws for them.

Alex, political wanking may provide temporary relief, but is never actually a true effort at consummation the deal.

To extend, it's not the Democrats (right now) that need a deal. They have 75% of their pie, and the longer they get to keep it, the harder it will be to take it away. As others noted, it may take a long time for the subsidy issue to get resolved and it may even be a low probability of being resolved against them and even if it is, there is a lot in that change that could bite Republicans a lot more than Dems So, why offer to make a deal? Any rational, self-interested Dem isn't going to put much on the table.

It's the Republicans who need a deal sooner, rather than later. And, there's any number of deals they could propose on immigration, Medicare reform, tax reform, and on, and on that might give them an opportunity to scale back ACA.

As with the original bill, they choose to go for the home run, hoping these efforts will destroy the entire thing. And, it's also probably in their self-interest, because no Republican who proposed or participated in a deal that preserved a reasonable facsimile of ACA AND gave the Dems something on immigration, Medicare, etc. would ever get out of a primary given the current state of their base.

Dysfunctional hasn't got a thing to do with Republican or Democrat, Alexei. Don't know about the rest of you, but I'm an economist. I just see self-interested folks pursuing their ends in the system we've created for them. Tyler's original complaint of "why not just kick it back to the legislature" seems to me to be a failure to see both sides of why that is not happening.

Here is my plan for "clarification" repeal the whole stinking mess.

The legislature is so dysfunctional and interested in posturing more than gold policy that you almost wish they hadn't written the thing in the first place!

I do wish they had not written the thing in the first place, which is why my favorite solution is repeal.

At the time, regarding the legitimacy of a major policy with zero bipartisan support, (to paraphrase) "elections have consequences, we are in the majority, we have the votes". One response today, is yes, elections do have consequences and it is time to face the consequences of the two election cycles in which those that passed the bill have been soundly defeated. What is the logical consequence?

Regarding intent, unless my memory is playing tricks, the state exchange clause was discussed at the time as a means to pressure the states. It would not be the only heavy clause inserted to coerce states to get along with the program (see for example the Medicaid clause the Roberts court discarded.)

Finally, if the legislation does not have intent, is it really legislation? Constitutionally, Congress may not delegate powers. That may leave room for interpretation, but failure to clarify (or worse, voting without knowing what the bill really contains) is gross dereliction and a violation of oath of office.

If you are going to claim a revealed preference at this point, and a mandate, wouldn't it be for gridlock and inaction?

Think there was at least one election in there in which him who passed the bill was not soundly defeated, right?

Part of the consequences of the elections is that if you don't control the executive branch, you don't control how laws get implemented.

Thats just a cute way of saying "the President can implement the laws however he wants". Its false. Imagine if the next POTUS declared: we will no longer enforce the laws with don't agree with. Abortion is banned"

Bil, that was definitely a discussion in policy circles before, during and after passage, usually framed hypothetically: "If the subsidies were set up this way, it would be crazy for any state not to set up their own exchange, right?"

Whether that was actually what Congress intended isn't clear. If they wanted it to be a threat, as the Medicaid section was, wouldn't it be important to be clear about that threat? Yet, there's little evidence that the legislators were clear.

Whether the lack of clarity is deliberate or accidental, it's then up to the agencies to interpret. And, I think they quite clearly concluded that, in fact, there were plenty of people running many states who were bat guano crazy, and if they wanted to be sure that people got subsidies, they would have to apply to the federal exchanges, too.

Show me a link where one state said "we'll go with the federal exchange, even though we know this will cost us our citizens their premium subsidy."

The issue here is actually an interpretation offered by the IRS. The career guys followed statute on its plain text (no authority to offer credits on Fed Exchanges) but Chief Counsel and TD adopted the opposite interpretation (nothing unusual or wrong about that, though they (like good lawyers) they worried that the new interpretation was an iffy rewrite of plain statutory language). The Oversight Committee has lots of that correspondence.

I promise you that if the IRS career guys prevailed then you as a taxpayer'd get laughed out of the room asserting some Congressional intent mumbo jumbo in defense of taking a credit for a FedEx policy. And pay a penalty.

What was the timing? Were there governors who waited until the ruling from HHS and IRS that subsidies would be part of the federal exchange before deciding. Then there are OR and MA that basically couldn't do it. They tried and failed. They should be out too.

The answer is no on your second point. Medicaid has always been a program under which states had to agree to play by Medicaid's rules, or not play at all. That is very clear in statute and everyone gets it. The SC obviously thought the expansion was a bridge too far and coercive, but the general rule still stands with regard to participation in Medicaid (at least at the old eligibility levels), which every state does. The difference is that there is absolutely no indication in the law that Congress meant to strongly encourage/coerce states into setting up exchanges. It isn't implied anywhere in the text. If Congress had meant to withhold subsidies it would have made damn sure they put it in the law.

The law says, "subsidies shall be available through exchanges set up by the States." That is at least some evidence and is more than implied. It is wrong to say there is no evidence. Maybe not as clear as you would like, but not nothing.

"absolutely no indication..."

Except for the actual words written in the actual bill, but please, continue to "deconstruct and interpret", you have to get value out of that gender studies degree somehow.

No. More like this:

We passed a law with a majority in both houses, had to make compromises and prevaricate to get it past our people. Next election to quote the President, we were shellacked, and lost the majority in the house to Republicans who vowed to repeal the legislation. Now there are serious problems with it, and we can't have it go to the house because the legislation would not survive the process.

And next election, which the Republicans tried to make a referendum on the law, he President trounced them. So, now, the Republicans can't repeal the law or gut it by implementing it their way, and the law is being implemented the way the Dems want it to be. Until that changes, there aren't any serious problems with it, so why do anything until it has to be done.

Sure. But after that same election the house is still republican.

You are hand waving. The president needs amendments to his bill. He doesn't want to take it to the house for amendments because he knows that it would come out substantially different. So he is setting a precedent for all future presidents, remember that, all, where legislation is rewritten by executive order.

You are right, he is right to try to find a way around the legislative process, because of what would result. He would lose.

Republicans have actually started to work ever so slowly to fix the law, but on a covert basis. Just a couple small changes have made it through. They will fix it, eventually, but their first priority is playing politics, so we'll have to wait.

The president has signed multiple amendments passed by the GOP House and Dem Senate and has taken executive actions that mirror GOP bills (e.g., delayed both mandates, gutted the long term care provisions, etc). Both parties have worked in sync to amend and repeal provisions of the ACA so it's inaccurate to say they don't.

To fix their ACA mistakes the Dems need to "pay" the GOP with compromises, as required by our system. On this issue, the Dems took a dubious executive end run instead of confronting our political realities. We shall see if it works today and how it's future copycats work.

Nah, if the Republicans want to fix it they should. Fixes are to make it better. If they don't want to make it better, they want to make it worse, so they should block any updates. They will want to make it better when their constituents get tired of their incessant moaning and obstructionism. It looks like that is starting to happen. The Dems don't need to say pretty please, but they can trash them in the media.

Yah, "fixing" doesn't mean "stuff Jan likes". It could mean letting states opt out of the increased taxes and minimum (but more expensive) coverage. Which is what this lawsuit is about.

Nope. Opting out of the exchange, will never happen, but I can see the debate going on. Letting some states opt out of federal taxes? No way.

Seems worth pointing out that Romney got trounced in at least some degree because of his inability to make the race a referendum on the PPACA--most of the polling strongly suggests that if that were truly the sole issue in the election, the President would have gone down.

Elections have consequences, sure, but it's a little disingenuous to claim that winning an election where one evaded an issue somehow constitutes voter approval of one's conduct on that same issue.

If 2012 really had been a referendum mainly on obamacare I think Obama might well have lost. But the dems made it a referendum on war on women, repub racism, romney does not care about us, and all sorts of other distracting BS.

Unfortunately this is an accurate reading of the left's view.

Doesn't matter if the Gruber's statement is an obvious lie, doesn't matter if everyone knows the statement is an obvious lie, all that matters is that the statement is made, and then they can act as though the statement was true, because then Things Get Done.

And at the end of the day, that's all that matters. If due to our system of checks and balances Congress is not Getting Things Done, then Congress is "dysfunctional" and the rule of law can be set aside.

Unfortunately only a small minority of them seem to understand the difference between posturing and reality, which is one more reason why I wish the left could just have their own country where they can enjoy all of the benefits of their ideas without bothering everyone else.

>... where they can enjoy all of the benefits of their ideas without bothering everyone else.

Ah, but then who's money would they spend?

See the problem?

Functional = Democrat controlled

Dysfunctional = Republican controlled


So you're saying that the Senate as it stands now is "Functional"? When was their last true budget passed?

I believe he is referring to the way Democrats (AKA the MSM) frame this. According to the MSM, the Senate is working just fine.

You seem to be saying that if the Republicans won't do what the. Democrats were too incompetent to do themselves, then it's all their fault ?

If you want to repeal Obamacare, why is opposition to extending the foolish subsidy regime a case of "political posturing", surely it's an entirely sensible stand to take. You seem further to believe that Obamacare is so wonderful that all should support it, sadly, you're simply deluded.

And while Republicans and Democrats argue about whether people in Federal exchanges should receive subsidies people in Federal exchanges get their subsidies? Good idea.

Not once the courts strike it down, unless obama wants to defy the supreme court as well as congress, which would really make him a dictator.

Remember the controversy before Obamacare passed, that no one in Congress had read the bill?

Does "we have to pass the bill to find out what is in it" count as legislative intent?

So given that across-the-board subsidies are not written into the bill formally

Are you actually saying that this is the case, or are you saying, "Assuming, for the purpose of discussion, that this is the case"? Because this question is, of course, still up in the air, and there are well-established doctrines of interpretation that do not support that reading of the statute.

No, it's pretty clear that across the board subsidies are not "formally" written into the bill. Otherwise we wouldn't be having this discussion. If they were "formally" written into the bill, then there would be no question that subsidies apply to federal exchanges as well as state exchanges. Because they were not "formally" written into the bill, Democrats are hoping that, via legislative intent and other methods of statutory interpretation, the Courts will conclude that what was not "formally" written into the bill can be interpreted to mean both states and federal exchanges receive subsidies.

Yeah, that was an excellent and deliberate use of "formally", although readers like Simeon may whiff.

Legitimacy of rule is exactly the opposite of the issue here, and it's odd that you would use that term.

It is because the progressives understand that the Republican majority in the house can and will use their legitimate power to prevent subsidies on the federal exchanges, but that the Republicans cannot use it to repeal the ACA in general, that they seek to have the Court issue an interpretation of the law as it stands that favors their agenda.

If one is playing chess and makes a careless unforced error and realizes it immediately and wants to reverse it before the opponent gets to make his next move, he can appeal to the judge and try to pretend that his fingers slipped and knocked a piece over, but that has nothing to do with how the careless player regards the legitimacy of the opposition player's right to make the next move if the judge rules against his plea.

Don't forget: the issue is higher taxes, not just credits. Employers avoid some of the tax increases in ACA if there is no state exchange. That's why the plaintiffs have standing.

Standing has been a problem In challenging other administrative interpretations like waiving the requirement that Congress and its staff obtain policies on the exchanges.

For at least the 44 years since Sierra Club v. Morton the issue of who had standing to ask the courts to compel the enforcement of the law has been muddled by the special solicitude given to plaintiffs in environmental holdings, in a line of cases extending to Lujan, Friends of the Earth v. Laidlaw and especially Massachusetts v. EPA.

Somehow, the same people who argue for generous and liberal interpretations of standing in environmental cases suddenly become technical absolutists on standing requirements when the issue is homosexual marriage, immigration, or healthcare. Funny how that works.

In the case of the EPA, at least, the agency tells the environmental group what issue it wants them to sue over, then defaults or deliberately loses the case so they can then claim the courts forced them to do what they wanted to do all along - issue unpopular regulations.

That is a very transparent proposal. Somehow, after years of drama, and purely by chance, opponents think that they have the health care law by the toe. And here they want to use that toe-hold to redraft the bill. Of course they do.

To reverse your argument about votes and legislatures, if they had the votes, they could have redrafted already.

They only didn't because they didn't actually have the democratic mandate to do so.

The conservative theory of "accountability" is that mistakes have consequences. The ACA was rushed through with mistakes and Democrats don't get free do-overs.

Every attempt to complicate is an attempt to obfuscate. That's what Congressional Democrats were doing when they crafted the bill. They made that clear when they passed it. They presented it as a black box that would magically cure what ails you.

All of the hand wringing today over Herr Gruber's dissembling is an attempt to obscure the fact he was either lying then or he is lying now. Herr Gruber is a sophisticated and intelligent man. Claiming ignorance now just means he was lying back when the bill was passed. Unless you're prepared to argue that Gruber is retarded and incapable of understanding basic concepts, you're left with just two options. He was lying then or he is lying now.

Yup. I have no doubt Gruber himself made a massive strategic error, thinking the stick of subsidies would force the states into line. Typo my ass.

John Roberts will prolly save the Democrats bacon again.

Roberts will be saving some bacon, but just like last time it will be Republican bacon that he's saving. Keeping Obamacare in place without having any Republican who needs to get reelected ever say anything nice about it is the ideal outcome for the Republican party. If the benefits of Obamacare were actually taken away from the people then the Republican party's candidates would be roadkill at the next election.

The amount of crazy on display here today is remarkable. They must have wired up the asylum day rooms with Fios. That or a Kos Club decided to take a field trip to MR. They used to conduct similar raids on NRO until they finally banned most of them.

Ha! It looks I overwhelmingly passed the Turing test (of sorts). Just because I've figured out that the consensus position among Republican politicians on a policy area is hogwash that the public would overwhelmingly revolt against if they understood it does not mean that I am to their left.

A black box with over a year of well covered debate and close Republican involvement? Ask Max Baucus how many months Senate Rs played footsie with him, in public and behind closed doors. Ask any of the media or health policy organizations analyzed the bills and reported on them, some in excruciating detail. What a short memory you have. Or perhaps it's something else?

You might also ask Senator Baucus what conditions he was referring to regarding state participation in the exchanges in this committee hearing - - if not tax credits, given that he then immediately refers to the tax subsidies.

(I readily admit that this is hardly conclusive evidence)

States are responsible for determining the minimum set of benefits to be required under individual and group health plans. All the plans offered on the exchange in a state must meet those state-mandated criteria, which all states have laid out.

And to be clear, section 1401(f)(3) of the law actually mandates that both both federal and state exchanges report info about tax credits being administered. So why would federal exchanges be reporting tax credit info that was not a permissible pathway for awarding subsidies under the law? To me, the intent is crystal clear.

I really give the states credit that all 50 states managed to agree or come up with the benefits floor.

"Close Republican involvement"? In drafting the ACA? Talk about short memory...

There is no dispute that one can conceive that Congress (or some knowing inside group of Federalist extremists) thought it was so important to coerce states into setting up exchanges (to embarrass the Rick Perrys and Bobby Jindals of this world?) that they would withhold subsidies to those on those exchanges: a threat they were willing to carry out. We have seen a political party act this way once over the debt ceiling extension and once over the government shut down. But is this the most reasonable interpretation of Congress's intent in this instance? My guess is that zero members of Congress thought that way. Therefore IRS's interpretation does not seem unreasonable [And if Alex is correct that the very notion of Congressional intent is incoherent, then anything IRS does is OK, right?.]

Yes, but... It was a bluff. And the bluff was called. Had one or only a few states declined, the administration position might be opposite.

If you think this was overt coercion, you should be able to point to old warnings, "implement an exchange or no subsidy for you!"

I don't think there are such, I think that this is post hoc rationalization.

In that case, somebody should have reined Gruber in two years ago. It's not like he's a nobody.

I've got to admit I have no explanation for that "moment in Gruber's life." If he meant it, why didn't he follow through? Did he just decide that the law could mean something else?

Gruber was and is a tenured college professor. He had previously done work for the administration as a consultant when it was designing the bill, but by the time of his remarks that was in the distant past. Any you think he should be "reined in"? That's not how things operate around here. Who was supposed to rein him in? Even the level of surveillance necessary to even be aware that he said it does not really belong. You're talking KGB stuff.

>It’s not like he’s a nobody.

He will be shortly.

Although I recall this as an old issue, it may be memory playing tricks. The easily found facts are that the Roberts court finally affirmed ACA in 2011, the IRS issued the clarifying rules in May 2012 and Oklahoma soon thereafter sued because the rules providing subsidies threatened employers in Oklahoma with the fines if employees took advantage of the subsidies. If the text had been meant as a coercion, that effect would be mitigated by neutering the fines on employers.

You did watch the Gruber videos, didn't you? That was exactly what he was saying.

Thomas, The threat, which was explicit, was in the Medicaid portion, and not in the non-Medicaid. See my comment below and the comment of the law prof.

Subsidies are written in formally, just not clearly. In that situation, precedent and the rule of law dictate for courts to a) defer to reasonable administrative interpretations, and b) interpret statutes in the context of their full text and overall intent.

The rule of law and precedent clearly call on courts to stay their hand here, not substitute their less-than definitive understandings of statutory meaning for reasonable ones of the relevant executive agencies.

So you're just wrong about what precedent and the rule of law dictate. they dictate not kicking anythgnanywhere, but allowing the executive to enforce the law so long as it's interpretations thereof are reasonable.

What you wrote is wrong on so many levels I want to cry.

re: a) Interpreting statutes is what the court does. That's their job. In fact, it's at that very moment that Courts do, and are supposed to, step in and override agency decisions. Implementing law, agencies have expertise. Interpreting law, that's the courts. Your response is exactly backwards.

re: b) "interpret statutes in the context of their full text and overall intent." Please, please, please do not pretend that is a settled belief among lawyers, law profs and judges. It's not. There's a whole lot of people who believe "plain meaning" is a far better method of statutory interpretation.

Your second and third paragraphs, because your original a) and b) were so off, are equally off.

If you're going to tell me there's a judge or law school professor who thinks the supreme court wrongly decided the case where they saved the state of Arkansas from accidentally repealing all of its laws, well then I'm going to tell you there's an incompetent idiot.

No, his analysis is correct although I disagree with his conclusions.

Remember, the issue is whether the agency action comports with the statute. Basic Chevron test.

The issue is whether the section is operational or definitional. Reasonable minds can disagree with that. I certainly think, as all the judges do the plain language of the law is written would preclude it. That gets me out of Chevron. But I can see the other side of the case, which the 4th circuit said was ambiguous.

For the second prong, it does seem a reasonable interpretation to say the IRS can issue tax rebates.

The legal problem is that defining operational vs. definitional is a black art, and if I was a judge I wouldn't like to go there. Usually you can find a standing issue to throw the case out.

I'd be curious on a equal protection claim as well, although nobody is making it.

More law, less literature.

Surely the lesson here is that if you need different lies to tell different constituencies in order to get a dog's breakfast of a piece of legislation passed, whatever you do, make sure you are not being taped?

This is not about the legislature or their pathetic efforts at overseeing this law. It is about the arrogance of people who lied and lied and lied again. To Congress. Most likely. But not to donors. Or perhaps it is the other way around. So no he was not confused. He is morally bankrupt. They knew what they had to say to get Congress to pass it. But they were telling their friends something else.

Health care is an issue which ought to be a non-contest. It is almost impossible to screw up. Everyone likes "free" stuff and everyone will need health care at some point. Usually these laws pass without any trouble at all. The Obama Administration deserves a Nobel Prize for taking a no-brainer and screwing it up so badly it will be in textbooks as an example of what not to do for generations to come.

For being such a non-contest no-brainer, there have been a number of administrations that tried and failed over the last century. Maybe it's not the no-brainer you suspect.

You assert that "Everyone like "free" stuff" on an economics blog? That's bold.

I suppose economists could like "free" stuff even though in their heart they know, that there is no such thing as "free" stuff. That while it may be no cost to them individually, it is a cost to the society and economy. Even then, as we see with the Obamacare, the "free" stuff comes with a high transaction cost in time and effort of the individual. More over, there is little incentive in the government run system to reduce those costs. In fact, with recent revelations about widespread fraud, we can expect the costs to individuals in time and effort to rise precipitously.

I think you ought to read your blog partner more carefully. He isn't saying Congress didn't know what it was doing, he's saying it can't have a collective intent at all. (Which probably means it can't be collectively confused either.)

This Gruber controversy means the opposite of what you would like it to mean. Think of all the column-miles, gallons of ink and electrons that have been spilled on the ACA, by the administration, congress people, and their advisers. That conservatives are crowing over one such contradiction in an ocean of material proves it rareness, does it not? If this was indeed a way for Congress to encourage states to make their own exchanges, why would it be kept such a perfect secret, that only Gruber spilled years after passing? As an economist maybe you can tell me, what point is there to a secret incentive?

It would be much more reasonable if you said: "Of course that's what Congress intended, but they got forgot to cross this t, they left a technical ambiguity, so our current Congress should be the arbiter."

"That conservatives are crowing over one such contradiction in an ocean of material proves it rareness, does it not?"

No, it doesn't, not even close. I'm bitching about the rain right now. That does not prove it rarely rains here. That and the fact the Red Team has been pointing out problems with the law since it passed. Maybe you have been in a coma for the last three years, but your portrayal of events is in sharp conflict with reality.

Have you seen the polls? Everyone with Obamacare prefers Obamacare.

Survey: Most Republicans Who Bought Obamacare Coverage Like Their Plans

That certainly will matter if Republicans are forced to say "happy days, we just raised your bills."

That's not actually a link. Also, as Gruber pointed out, we're all paying for it whether or not we like it or use it.

Well, then, relieve my ignorance and point me to some instances of Congressional leaders talking about how they're incenting states to have their own exchanges by denying them subsidies if they don't.

In other words, you can just claim ignorance of what a law you passed actually says and then the courts should have it be enforced based on what you now claim (or did claim, knowingly or not) the law was supposed to be.... Isn't this problematic? Certainly, enforcing the law as it is written (i.e., no subsidies for those on the federal exchanges) creates a bit of a catastrophe, but it's one that even the Republicans won't be able to swallow. They'll certain put together some sort of compromise -- one that Democrats won't necessarily like, but that's their problem for not writing the law correctly in the first place. To do other wise just adds more incentives for legislative obfuscation, which further diminishes electoral accountability and the incentive for good governance.

There's been a lot of jurisprudence about this. Certainly, this is not the first ambiguous law ever written. The practice that has been established is to look at the text and construction of the law, including legislative history, and discern the congressional intent. The fact that Gruber is such a cause celebre among conservatives just points out how thin the case is. This is a huge part of the law, and they can find ONE administration expert talking about this incentive scheme? Do you think it would be hard to discover people saying the opposite? Of course not, because that's how everyone assumed the law would function. And yes, that includes not just experts, but Congress.

I predict that the (largely) Red State subsidies will not go away, but if they do, that will be all the court does. Democrats will then sit back and wait for Republicans to blink, as Blue States retain their subsidies, and Red States face premium spikes.

Exactly. Except for ginning up the base, the politics of this are still incredibly destructive to the Republicans. From the very beginning, both policy and long-run national politics argued for fully engaging to develop a proposal even much more along conservative lines, and take credit for accomplishing it. One day, perhaps, more rational heads will prevail in the GOP. subsidy, no mandate as the costs exceed the mandate imposition threshold. Premium spikes, young/healthy drop out of the exchanges, death spiral.

Not to mention, in 6 months, the Congress may be able to take up a bill to clarify the ACA due to a change in majority.

That only happens in the states that did not set up their own exchanges. I don't think the Dems will rush to the rescue of the states that chose to cut off their own noses.

The Republican House passes a bill that removes the individual mandate in states without subsidies.

Your move, Harry Reid.

I kind of doubt that, but would that really be a Republican win? To let California enjoy expanded, subsidized, coverage, while Texas (etc.) suddenly face a rollback, with the poorest and sickest thrown off?

Do you really think that is "good TV" for conservatives?

Given that this is exactly the same thing Republican states have done with the Medicaid expansion... yes, I think it's something they'd consider a win.

The politics of prospectively offering people health insurance is very different than the politics of taking health insurance away. By one estimate, 5 million people would be affected. They will be much angrier than the people who didn't even know they were going to get it and then didn't get it.

With chart after chart showing declining uninsured only in those states expanding Medicaid, hospital balance sheets improving significantly in states expanding Medicaid, etc. I think you are not clear on how this plays out for a state over time

The absence of subsidies also decreases the burden on employers, because the employer mandate penalties are only triggered when an employee receives a subsidy. So it's a prospective win with the small business community.

In the heady days of 2009, the Democrats felt transcendent over a dead and buried Republican party so for the first time in the legislative history of the nation, over 200 years people, the Democrats passed a major, institutional establishing bill using resolution without one single vote from the opposition party. This was a singular, unique episode in Congressional history. Never before had such a major piece of legislation resorted to such tactics to become law.

Now that the horrendous construction of the ACA becomes apparent for the nation to see the Democrats ignore the colossal political mistake they made back in 2009 and decide to try to lie, cheat, and steal their way to an absolutely false paradigm on the ACA.

History will see the Obama administration as the most legislatively inept in our history. He was unable to secure one single Republican vote because of his conceit in those triumphant months after January 20, 2009.

I read past this post, but came back to it to reply.
The idea that we have to divine the INTENT of Congress in regards to ACA is, well, rubbish.
It was supposed to be a law, and laws that are not clearly stated, don't survive review.

In my opinion, most of those that are claiming we must divine intent, understand that team Blue poked the pooch on this,
Team Red, will not, in fact should not, fix it. It was poorly conceived, and the Nation would have been better served by simply expanding Medicaid/Medicare, or subsidizing a high-risk pool that would cover the 3 million paying enrollees.

People are very annoyed about the high increase in premiums, deductibles, and the loss of many preventative, and Wellness programs. The only saving grace has been the basic fact that only about 15% of those that pay for their own insurance are impacted.

Wait until the Employer Mandate kicks in, many will do what I did with marginal businesses. They will shut them down.
I am in the business of paying people to make me more money than I spend on them. Each and every regulation adds costs, and even though some are extremely necessary, most aren't. We could argue all day about which regulations are good or bad, but in the end, it is very simple.

If I cannot make enough money, from the remunerated sweat of your brow, I cannot stay in business.
Hopefully, those on this forum that claim to have any form of economics instruction, will understand that this is a very common practice. As much as I derive great pleasure in running businesses, I run for profit organizations. This is very fundamental, and as I understand from helping non-profits, they also have to pull in more than they spend, as well.

Mr. Thomas, you nut-shelled this succinctly by pointing out the obvious.

Only one party owns this mess. It is so exceptional in it's partisanship, that there is no other example in the history of this Nation.

The Real Import of the Tyler Cohen Fracas

The real import is that economists are not lawyers, do not know or understand legislative interpretation and seem to be more politicians than economists. Gruber included.

Here is one law profs reading of the DC Circuit and Fourth Circuits opinions and legislative interpretation issues:

“Unlike the ACA’s Medicaid provisions, the exchange provisions have a federal fallback: Medicaid is use it or lose it; the exchanges are do it, or the feds step in and do it for you. In other words, this isn’t Medicaid; it’s the Clean Air Act (CAA). If a state decides not to create its own implementation plan under the CAA, its citizens do not lose the benefit of the federal program—the feds run it. The same goes for the ACA’s exchanges and so it would be nonsensical to deprive citizens in federal-exchange states of the subsidies. More importantly, if we are going to compare apples to oranges, the ACA’s Medicaid provisions have an explicit provision stating that if the state declines to participate, it loses the program funds (this was the provision at issue in NFIB v. Sebelius in 2012). The ACA’s subsidy provisions, in contrast, have no such provision, strong evidence that the subsidies were was not intended to be forfeited if the states did not participate. If the challengers are going to insist on strict textual arguments, this is exclusio unius 101: the rule of interpretation that provides that where Congress includes a specific provision in one part of the statute but does not include an analogous provision elsewhere, that omission is assumed intentional.”

The last argument makes the most sense to me on legislative interpretation grounds, as well as the Dog that Didn't Bark observation: there is nothing in the legislative history supporting the argument that if the fed creates the exchange and the state doesn't that there won't be subsidies on the non-Medicaid portion. They were explicit on the Medicaid portion. And, thats where the "exclusio unis" argument comes in. You would think the opponents of the bill would be talking in debates about how the bill meant nothing, and the proponents arguing to amend it to deal with this issue.

Kudos, though, to the law firm associate who came up with this argument.

The same could be said about lawyers in the blogosphere: They seem to be more politician than lawyer, and very few ever seem to have been gainfully employed in the mundane field of statutory interpretation.

PD, Better qualified than an economist.

Lawyers and judges interpret statutes all the time. If you want to read on the subject of legislative interpretation, the book I liked was a classic, J Willard Hurst, Dealing with Statutes (Columbia University Press: 1982)

Bill, with your reading comprehension ability, and your repeated dishonest debating tactics, I wouldn't hire you to represent me in traffic court. I doubt you are even a lawyer, and if you are, I suspect you are a disbarred one.

The ACA has the explicit Medicaid provision because it was required to alter the Medicaid Act itself under which the states were receiving Medicaid funds. Without that requirement, the Medicaid provisions of the ACA would have had about the same form as the subsidy provision in question- i.e. only states that expand Medicaid get the funds for the expansion. The argument you are presenting here is just about as ridiculous as Gruber's claims of memory malfunction.

Yancey, I have taught law and am a successful lawyer. I am AV rated. The argument I am presenting is one in the briefs, and one that is summarized in a law prof blog.

It must hurt when someone points out the other side.

Too bad. I am not deterred.

By the way Yancey, the argument you made supports the other side. BECAUSE the Medicaid provision had to be explicit to remove a feature, that is why removal of OTHER features had to be explicit also.

Inclusio unis et exclusio alterius.

Look it up.

Yancey, If you want to read more from other profs on the subject, go here:

It was Abbe Gluck whose argument you're quoting.

Here's Ilya Somin responding (Abbe's blog post was in response to Illya's original post).

I think Illya wins this one.

I agree. That was a persuasive post by Somin. But, I'll add another thought to those of Somin:

It is entirely conceivable and rational that within the scope and context of a "cooperative federalism" regime, the federal government would step in to create an exchange if a state did not. After all, the statute still requires that everyone have health insurance. The exchanges were devised, in large part, as a convenient place to shop for that required insurance and, as argued by the sponsors, to promote competition among insurers and lower insurance prices (with or without subsidies). Providing an arguably convenient marketplace for which to purchase insurance and meet the mandate is rational with or without taxpayer subsidies. The existence of a federal exchange is not dependent on the provision of a subsidy to make sense.

Vivian, You might want to read the full text, and not just the part in Wapo. The full text of the argument is at belkin which I cite below.

It is a clever argument, but it remains the the Medicare provision removed subsidies already in place. This must be explicit in construction. The text as written appears to fails to offer a subsidy under certain circumstances.

Interestingly, as Oklahoma pointed out, offering a subsidy on the exchange potentially exposes the employers in the state to fines. Failure to expose the levy the fines on employers in states that demurred seems unlikely to have been intended but would be the effect of a literal reading of the law. One could either take this as bolstering that law professor's argument or as evidence that the writers of the law didn't think some things through very carefully.
These two views are not mutually exclusive, but that law professor's view presumes some identifiable intent.

As long as we're calling out people for not being lawyerly, I'll just ask if you have a Bluebook-compliant citation for that quote.

Whose intent matters? The strongest supporter or the marginal vote that ultimately passed the law?

No, I'm reminding you this is an end-game none of us expected, but particularly not one Obamacare foes (mere troops) expected. Obamacare was supposed to be a disaster, everyone was supposed to hate it. That's why it was important to stop. Of course Obamacare foes (generals) feared something different. They feared success, and so for them it was critical to kill it before anyone found out that it worked, and came to love it.

Well, here we are. Surveys find broad satisfaction, and foes are happy to have caught Obamacare in a late technicality.

That isn't really a good outcome for foes, when you think about it. Now they have to deal with shutting down a working and popular law.

Success to my way of thinking would be a program that pays for itself. The "teachable moment" here is that TANSTAAFL. The ACA didn't make anything more affordable; it's just cost-shifting and transfer payments. Not that there's anything wrong with that (well, there's actually plenty wrong with that) but partisans on both sides seem to lack intellectual honesty. Insurance is an awful way to pay for "health care." (There's actually no such thing.)

I certainly agree that "insurance" is a poor path to national health care. I have an HMO, which is a closer match. They even tell us to go out and ride a bike.

... but isn't one of the areas of dueling facts right now about projected costs, with liberals interpreting the facts to mean reduced future costs (a changed curve)?

(Everybody should probably have a base HMO plan, single payer, multiple vendor, with expanded coverage as an option on top of that base.)

The proper way to modify the plain language of the statute, with a thin Congressional record that might inform a non-standard understanding of that language, is by legislative action.

Such a legislative action is also who they might "fix" the flaw where they left the ACA subject to the provisions of the RFRA. In fact, some Democrats have offered such legislation regarding religious freedom although carefully (now their are careful) designed not to open up debate on the ACA in general.

Reopening the ACA is almost inevitable regardless. The Administrations illegal granting of subsidies to those in the federal exchange will present a problem once a final ruling is issued. No doubt some will have received or have been made to buy insurance based on the expectation subsidies. It is unlikely Republican or Democrat would want to see the IRS going after citizens to recover those subsidies. As such, legislation will be necessary to ratify the Administration's illegal actions even if future subsidies are precluded. This will open the ACA up for debate and modification. If it happens before January 2017, then President Obama will be faced with signing the law or seeing his signature legislation die amid widespread voter pain.

All in all, this opera has a lot more acts before the fat lady sings.

You mean like all the illegal spying by the Bush administration, including the spying on Merkle that got the CIA station chief expelled recently and has forced Obama to make excuses for Bush's actions.

Obama will not need to cause any pain - he simply goes to Congress demanding a billion to fund the IRS going back over millions of tax returns and then acting to collect back taxes, to which Congress will refuse, so the IRS will not act due to higher priority work.

Obama will be responsible for ordering the cancellation of subsidies in some States leading to cancelled policies for non-payments in mostly red-states, while working with blue-states on retroactive State contracts with CMS with the rubber stamp of the legislatures. Some might argue that contracting with CMS to run an exchange is not a State exchange, but contracting with a Canada based government contractor to run an exchange is a State exchange, but that would require some bizarre legal logic. Going after the retroactive provision would be another legal case that seems to have no point beyond appealing to perhaps a million radicals. But in any case, such cases would be decided after Obama is gone.

Given nothing about getting the tax rebates requires voting Democratic before or after, conservatives demanding the IRS go get money back from Republican working class workers - they earned too much from working to fall below the Medicaid cutoff - is hardly the way to recruit people to your "taxes are theft" and anti-IRS cause.

Stuff these days is just too complex for government. It's utterly obvious and if people could lower their ideological blinkers for a second we wouldn't be having these arguments.

Even as tech empowers the individual and spins us toward decentralized governance, here we are being sufficated by more laws, centralization and coercion.

Are you arguing that you as an individual can find a way to pay for treating the hep C you got from food that was prepared by an infected worker at $80,000-100,000, which is more expensive than a liver transplant, if you can find a donor?

After all, the simple economics makes it clear that to create the drugs we need, a corporation deserves to earn $50 billion in profits for a decade to pay for its couple billion in investment, all paid for out of the pockets of workers earning an average of ~$50K...

Gruber did not sound confused. He sounded the opposite. He sounded very confident in use of the tax extortion stick and carrot. This is a little more than rule of law stickling. This is I want to get one over on you but turnabout ain't fair play.

As in pass it while we can in hopes if having the opposition over a barrel later.

Yes. His claim that he doesn't remember saying these things, nor why he said them, is just about as blatant a lie as you will ever see spoken by a public figure.

That may be, but I'm not attacking Gruber.

My point is he meant something at the time that us a tried and true political strategy.

"States" means "states and federal." Duh. It's clear. Can't you read?

"Take care that the laws be faithfully executed? Yea, well, the Republicans disagree with me. So, since I don't get my way in the legislature, I have to go it alone. Not my fault. If they did what I said, then I would go through Congress. Makes sense right? I mean, what's the point of having Congress if they're not going to agree with the President?"

"Mr. Filburn, are you dense? Of course your wheat grown purely for on-farm consumption substantially affects interstate commerce. Just close your eyes and think about all the wheat grown by all the farmers in America. Boom. Substantially affects. Think rationally Filburn."

Rule of law matters, right up until it crosses paths with political ideology. Then it's just a nuisance.

Andrew, States can delegate duties to others, or have their duties delegated to others, such as a federal exchange, which are explicitly created if the state does not create an exchange.

Bill, Congress can delegate their duties. States may not delegate their duties to the federal government or other states.

Federal exchanges are created, correct. Subsidies are to go to state exchanges. Undoubtedly, either a) a stupid error on Democrats' part, b) a compromise in order to get the law passed, and/or c) Dems wrongly assumed this wouldn't matter b/c states would end up setting up exchanges. What this doesn't mean, however, is that the words, plainly written, don't mean what they clearly and plainly mean. "States" does not equal "States and Federal" no matter how hard you flex your brain.

The provision was likely part of a compromise to ensure the states were the primary operators of the health exchanges. This was a concern for quite a few of the marginal Democrats in Congress that the state insurance commissions not be overrun by the federal government. You can even get a hint of that in the second Gruber recording where he states just how important it was to have the states involved. This is one reason I believe that Gruber was not operating under a mistaken understanding of the provision, but literally knew its origin and purpose. In the weeks ahead, you are going to get even more evidence of this kind now that 25,000 times as many people are looking around for it.

If the distinction is indeed about "primary operator" that is not at all connected to modern web architecture. "Exchange as service."

As a tech guy, I have to wonder about the big distinction between "state" and "federal" exchanges. If the feds park servers in every state, why wouldn't that be a state exchange? Would the state need to sign a piece of paper to say "OK, that's my exchange?"

Seems a pretty easy way to pick up $ for your constituents.

Well, your first proposed solution (just parking the servers in a given state) doesn't remotely work. The exchange must be "established" by the state, i.e., the state must take some sort of legal action to set up the exchange and take legal responsibility for its operations.

The second solution is more interesting, and I've seen a few discussion about it in the legal blogosphere recently. Some states already run their exchanges as a true state-federal cooperative in terms of how responsibilities are allocated. Does that qualify as an exchange "established by the state?" Who knows?

The State simply contracts with CMS.

Or are you arguing that a State exchange created by a corporate contractor using employees and servers outside the State is not a State created exchange because a State exchange must us government workers for everything, government owned computers, government generated power, equipment manufactured by government workers in government factories....

Andrew, If the Federal government is creating a duty for the state, it can most certainly create a delegable duty, or create a backstop if the state does not act.

Please cite the authority for your statement: "States may not delegate their duties to the federal government..."

What really surprises me about this whole 'debate' is that had the legislative opponents of the bill at the time believed that the provisions gutted the bill, they would have said so. They didn't. Nor did the legislative proponents of the bill argue in floor debate that the citizens of states that did not establish an exchange, but rather used the default federal exchange, would not get benefits, except for the explicit medicare language.

This is a really, really silly argument, and one which the DC circuit will en banc reverse. And, then the story will be : "Liberal DC judges reverse".

States don't have the power to give up their powers. Over time, via the Commerce Clause, Necessary & Proper Clause, and the spending/tax power, Congress has taken tons of power from the states. But states don't have the ability to delegate their powers. Because Congress has expanded its powers over the years there's now lots of overlap, and Congress can certainly delegate power to the states, which the states can refuse (as is the case with the exchanges), but that does not mean states are allowed to delegate their powers. That's getting the locus of the power confused. The power for the ACA originates with the federal government. Congress could have just created a federal exchange. They didn't. The bill wouldn't have passed had they done that. Then, in order to induce states to create exchanges, they tied subsidies to the exchanges. Sure, they created a federal backstop. Also perfectly acceptable. But they plain as day said all subsidies are to go through state exchanges. Then many states didn't change their exchanges. Now they're hamstrung by the words of the law they wrote.

Andrew, States are given money with strings attached all the time. They are also given powers to administer federal programs. You may claim that is taking away their power, but you are ignoring that the power they were given was under a federal program.

Excellent argument for limited government.

I think this never makes it to the Supreme Court. DOJ is appealing for the DC Circuit Court for Appeals to review the case en banc. From what I understand, that bench is overall fairly liberal leaning and would be expected to uphold subsidies under the federal exchange. At that point, there is no longer a split decision, so SC wouldn't have nearly as much pressure to hear the case. And If I were Roberts, I'd try very hard to stay away from this. Just my analysis. Not sure if the experts see it playing out that way.

En Banc rehearing is just a stall tactic; there are other circuits with much more conservative dispositions (most notably the 10th and 5th); I doubt the administration really expects to get circuit uniformity on this issue.

Instead, I imagine the litigation strategy is to make this take as long as possible to reach SCOTUS, so that when it does, the law is more entrenched, and Roberts is once again primed to be cowed into upholding the law.

Interesting. I didn't know similar cases were currently making their way through other circuits. Not to say I'd be surprised if this emboldened them to bring cases if they hadn't already.

You're right that timing matters. If this decision had come out last fall, it could have been quite bad for ACA. There may be some weird situation where the correct legal interpretation aligns with what most people think is right for this country. However, if he did uphold the subsidies, I'd expect Roberts to find some way to at least give a nod to his conservative masters.

The full DC Circuit will reverse for a reason.

because "states" means "states and federal government."

so far, 6 out of 8 judges disagree with you.

"..written into the bill formally.." I don't think anything in a statute is informal. Gruber is full of it - period. He's one of these "by any means necessary" folks. The ends justify the means. How can these people sleep at night?

On piles of money, with many beautiful women.

But their food is terrible.

Their food is fine. It just isn't cheap. That is fine too since they don't pay for it.

Comment of the decade.

Isn't dangling/withholding federal funds the usual SOP with Congress? How did they get the drinking age raised back to 21?

You don't have to ask what the intent of the legislators was. All you need is the intent of the law. The law is designed to give subsidies to people who need health insurance and can't afford it otherwise. It is full of provisions that assume the subsidies. Without them, it is incoherent. This is standard legal reasoning, as deployed by the courts that have ruled and will rule in favor of the law's intent.

As to why you can't send it back to the House, obviously because the Republicans will never do anything to make the law work better. Instead they will try to damage it and make it worse, in the hope that people will hate it so much that they will elect more Republicans, which is an end in itself. Also Republicans hate subsidies for workers. What's the point of exploiting your workers unless they stay exploited? Workers don't need to be helped, they need to be punished, so they will work harder.

Seriously, is there even one Republican in the House who would vote to correct a drafting error?

It's not a drafting error. It's more bribery. Here's all this money if you do this. Some states decided against it. While my memory is hazy, I seem to recall the way the feds got Wisconsin to up the drinking age to 21 from 19 is to threaten to withhold highway funds. But it was a long time ago.

Oh God, this is awesome in a terrible way. Jacqueline Halbig says the ACA includes Baby Death Panels. Yeah, you read that correctly. Great mind, there. She should run for VP.

The problem is the Democrats, and more specifically the Progressive Trash Ruling Class that have hijacked a once respectable party. I've still never a met a single Progressive who was a decent human being. They are inherently fascist and deserve to be treated like the jackbooted thugs they are.

Expecting human decency from a Democrat is like expecting kindness from a rabid dog.

Totally. Executions in the street anyone? An idea whose time has come if you ask me.

PS I'm interested in how long it takes to graduate from Russia Today's rigorous training program. Deceit and hyperbole as a way of making a living have always intrigued me.

This is why it's so important to gain substantial majority support before passing transformative legislation. Because it absolutely should be kicked back to Congress to clarify, and under normal circumstances, a law that enjoyed widespread popular support would have no problem getting a quick ironing before implementation. But the manner in which the Democrats rammed this through was so offensive to so many people - and the law so poorly conceived, elucidated, and sold to the dissenters - that by now the razor thin margins have reversed, and the think would get completely dismantled if it goes back to Congress. But tough beans. It was a strategic mistake and really, really short sighted politicking that made this happen in this way, and the left has no one to blame but themselves and their own self-righteousness.

I would love to see Republicans run on that in any campaign. "Sure, you got insurance, but 'tough beans', you lose it because we don't care."

If the plaintiffs win the case in the SCOTUS, then the issue goes back to the states or to Congress. I can envision a number of states with fierce battles over starting an exchange and that would more or less frame the debate and settle it with up and down state by state votes. It would, however, might be the wrong framing. The technical aspects of the exchanges proved to be troublesome and having a number of independent states develop and operate them seems an invitation for more trouble. The Southern Consortium Unemployment Benefits Initiative, for example, has never had a successful software acquisition.

Nothing prohibits a State government from contracting with CMS for services just as they contract with the private sector on systems that fail to work.

Just as ALEC drafts laws for multiple States on things like concealed carry and stand-your-ground, it would be easy to draft a model law and model contract with CMS that would pass easily once all the pork and other stuff were added to must pass legislation in a couple dozen States.

If campaigns were launched to get such laws passed within each State with the credible threat of that being an issue in the 2015/2016 legislative and governor race, the law would quickly pass in most.

And the laws would include retroactive terms that might be ruled illegal, but who would pursue those cases with the point of having the IRS go after people for back taxes now due? Conservatives as advocates of jack boot IRS thugs taking money and property from struggling working class families?

Baucas talked about intent on 9/23/09 and that was withholding tax credits in states that did not set up exchanges.

Why hasn't Baucus made clear since 2010 that the intent of all the Congress was to give subsidies to only the hard workers in States that voted Democratic and thus had State legislatures that authorized State exchanges??

That would have been a great campaign issue for Democrats in all the State election campaigns in 2010, 2011, 2012, 2013, and now in 2014, don't you think?

Would Republicans countered "only workers for big corporations getting lavish tax credits deserve health benefits because a worker earning only $30-40K a year from 2000+ hours of work is too lazy to deserve tax credits"?

Tyler is picking one person, Gruber, on which to make this assessment. There are dozens of other people who were involved at the time. Their thoughts should also count. None of them remember the bill being crafted so that non-state plans would not get subsidies. You can find zero commentary on the part of those writing about healthcare reform, pro or con, about subsidies being denied to federal exchange participants.


Baucus made a comment on 9/23/09. What is written was the intent. They just never thought some states might not set up exchanges. "Inconceivable!"

Gruber got paid $400k for this. Did he also not declare it?

Cite please? Without a cite, your highly specific yet completely vague assertion carries no weight whatsoever.

Here you go:

"why not kick the matter back into the legislature for redrafting?"

The House became a Republican majority based on the promise to do exactly that: "repeal and replace".

Where is the Republican draft?

Multiple Democrats have joined with some Republicans to redraft the health reform law but the Republicans can not agree on a replacement bill which is purely Republican nor a replacement bill which is bipartisan even with willing Democrats seeking a such a compromise.

Republicans have promised a free lunch health reform for decades but can never manage to draft a bill that provides affordable health care to anyone without costing a dime as their constituents demand.

I find the much simpler highway maintenance funding problem to be a clear demonstration of the problem of the decades of conservative free lunch economics.

Conservatives called for privatizing as much of government as possible because when profits are the motive, quality and service improve and the price goes down.

So, prisons are privatized, but the costs have gone up and the quality has suffered with the bad deal tolerated because no voters are in prison.

War functions have been privatized with horrible results like requiring soldiers to protect the private sector workers and be in combat situations effectively 100% of the time because the army no longer has soldiers working as clerks and cooks and cleaners and truck mechanics. I WWII, for every combat soldier, ten were in the supply chain supporting them. Soldiers could rotate from combat back to training or support while those who were in country in support roles could move into combat, already familiar with the battle.

Like the fighting of wars, health care has millions of moving pieces and the experts who sit in ivory towers of conservative think tanks without even the Harvard MBA that requires actually working in business before being admitted, layout grand ideas on how to cut costs and deliver superior results.

In my view, if Rumsfeld had been Sec of War in 1940, Hitler would have won because no one would have been willing to continue the war for the required decade of combat that his "we must not require the private sector to sacrifice but must insure their profits" attitude.

Unlike the operation of the Pentagon in war and peace, Congress manages the government's implementation of the health care system. Much as the Rumsfelds have wanted to let cost drive the health care for the military who served in the multiple wars when Rumsfeld was in government, the voters have a say, at the margins, on what Congress authorizes for health care.

I say "at the margins" because the VA delivery of care can be good or bad and irrelevant until a few members of Congress or candidates use it for an issue in an election campaign. It might affect only a few elections, but it sets the public expectation for many more, and Congress can not act rashly. And a few votes in Congress determines what is passed. Especially with the Hastert rule enforced by Boehner, forcing the status quo.

I would love to have SCOTUS rule that the tax rebates to subsidize can't be granted in the States without State exchanges. That would come in June a year from now, with the case sent back to the DC judge who must now issue an order. Which would likely be subject to appeals. Tax returns would have already been filed for 2014, but now the rebates of 5-6 million people are now illegal, so does he order the IRS to go back and dun all those people for taxes due? Does he say "bygones" and only prohibit subsidies for 2016 while allowing them to apply for 2014 and 2015?

Note that SCOTUS ruled that Congress can't take away Medicaid funding to force States to expand Medicaid, so logically Congress will not be able to take away the tax rebates to subsidize the State insurance exchange policies. Right??

What a fantastic issue to have feed the 2016 election cycle. Republicans can campaign on how they will force the IRS to go after all the middle class workers in Texas and Florida to collect taxes that were illegally given.

Imagine Ted Cruz "if elected president, I will direct the IRS to vigorously collect taxes from the lowlifes in Texas who worked for only $30,000 a year at a job with no benefits and then illegally collected tax rebates to pay for health insurance - those people are lazy ne'er do wells living off the Obama welfare state. They should have been patriots who ran up medical bills they could never pay."

Just ignorant, anti-GOP ranting. For one thing, the GOP House has passed repeals of O'care, but like nearly all the bills it has passed, Reid refuses to bring them up for a vote in the Senate. As to Hitler, if Obama had been president he would have ignored Japan's and Germany's declarations of war delivered right after Pearl Harbor. Then he would have asked Holder to indict the Japanese pilots and try them in abstentia in U.S. District Court. He would then threaten to impose "severe economic sanctions " on Japan, but Germany would just be warned not to make any more silly war declarations.

>...the experts meant to have subsidies at all levels all along. Of course they did.

Jon Gruber, the Expert of Experts, has said you are wrong. Repeatedly.

I guess it's time to give him the Nate Silver treatment, huh?

This could easily end up blowing up in Reps faces.

E.g., if SCOTUS goes with the letter of the law, that puts Reps in a bind. Dems will propose a bill (even if Reid is out) that just eliminates the few offending words ("created by the State" or whatever).

Do the Reps have the stones to tell the Red state holdouts "no your folks don't get to keep their subsidies. They'll have to pay full freight."

Is there some law that the Reps would pass (short of repeal) that would fix the problem? It could put some deal-breakers for Dems in there, too. If so, I doubt Dems would play. The media would back them and the back-home heat would be on red staters, not blue staters.

Here is what Ezra Klein reports on this subject.

Not that it much matters, but that was Sarah Kliff's "report" on the subject, not Ezra Klein's. I think "report" is a poor choice of words, because it's actually an op-ed and a pretty weak one at that. Sarah Kliff is "comfortable". That should convince us all.

Stand corrected regarding author.

void for vagueness?

Only for criminal law

First, you only look to Congressional intent if the word or phrase at issue is ambiguous. There is no ambiguity here. The law says the people that may be entitled to subsidies got ins. from a "State" exchange. Period. End of story. Game Over. Moreover, Scalia refuses to look at legislative history even when there **is** ambiguity because he considers it useless. What is in the Congressional Record or even the House and Senate Reports does not necessarily reflect what those who voted "Aye" thought they voting for, even when they had a better sense of it than was the case w/ O'care.

Here are some comments in a Yale Law Prof blog:
"More importantly, Section 1311 purports to require each state to establish an exchange: “Each State shall, not later than January 1, 2014, establish an American Health Benefit Exchange (referred to in this title as an ‘Exchange’)[.]” The section then defines an “Exchange” as an entity that necessarily has been established by a state: “An Exchange shall be a governmental agency or nonprofit entity that is established by a State.” See also § 1563(b) (stating that “[t]he term ‘Exchange’ means an American Health Benefit Exchange established under [§] 1311”). Section 1321 later makes plain that Section 1311 must be taken stipulatively, not literally. That is, a state may, as a matter of fact, “elect” to establish an exchange or not, and if it does not, then the federal government “shall . . . establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements” (my emphasis).

In other words, the part of the ACA that uses the “established by the State” language asserts by definition, regardless of the fact of the matter, that the state is establishing the exchange. Another part of the statute directs the federal government to stand in the shoes of the state—to be the state for purposes of the statutory language and structure—if a state as a matter of fact does not create an exchange. "

Go to the belkin site listed in my comments above, and then read the Fourth Circuit Court of Appeals decision.

OK. Feds establish the exchange for a State that does not set up its own. But, then that State's residents don't get the subsidies. Established "on behalf of the State" or "in place of the State" or "in a State" does not = "by the State."

Subtitle E later on grants tax credits to enrollees in Sec. 1311 exchanges. No mention of Sec. 1321 exchanges.
Disclosure: I have not read the ACA, and don't know anyone who has. Nor even heard of anyone who has.

I appreciate why someone might want to say "I don’t regard Republican control of the House, and how that control is used, as a legitimate form of rule" in lieu of getting heir signature legislation altered but its a bad bad idea. Is basically an open invitation to civil war if certain measures are taken.

Its better just to take your lumps and deal. Win some lose some.

What in Hell is wrong with all of you people? The country is nearly 18 trillion in debt! 18 TRILLION DOLLARS!!!!!!!!! Do you have ANY idea what it will take to pay that back? Do you understand the consequences of not doing so? Can't you see we not only cannot affort this bloated boondoggle of an ACA, we need to start cutting back one Hell of a lot more in EVERY direction? Our political class COULD NOT BE more detrimental to our society. I absolutely despise the Democrats but I've got little less disgust for the Republicans. No one in the District of Criminals seems to have the slightest idea of how to even SPELL the term "fiscal responsibility," much less implement it. Can't we elect someone in this country who can actually count?

Obamacare needs to be repealed in its entirety and the party who promoted it should be sent into the political wilderness until Hell freezes over as an object lesson to any bunch of damned fools who actually think there is such a thing as a free lunch. How incredibly grateful I would be to see someone elected who understood the First Rule of Holes, i.e., that when you're in a hole you want to escape from, the first thing you do is STOP DIGGING!

"So, to return to the title of this post, the import of the Gruber fracas is to show that if he can be confused..."

But of course Gruber wasn't confused -- unlike most in Congress, he understood what was in the bill and why it was there (and was well paid for his efforts). Limiting subsidies for state exchanges was obviously a means of pressuring states to set up exchanges. This is a very common pattern on the part of congress (pass state law X or lose federal monies for Y). Just as the well-prepared, non-confused Gruber explained. And the idea that the executive branch should be allowed to rewrite laws when it doesn't believe that the legislature will do the executive's bidding in making changes is...crazy. Also scary.


That's how legislation works.

When the farm bill was about to expire and everyone was lamenting $7 milk, no one even entertained the thought that the president unilaterally declare that, of course, no one would have possibly planned for this scenario, therefore the existing bill should be extended.

Just because the current bill, in it's current form, wouldn't pass both houses of Congress is not a sufficient reason for the administration to revise it administratively. It's just not.

I am a little late to the game but I think the Gruber episode should make several things very clear:

1. Here is prominent leftist caught in a lie. Instead of admitting it, he lies further.
2. It should be clear that if the choice is between the truth and furtherance of their aims (i.e., the expansion of control over the population), the truth loses.
3. The left is pervasively corrupt - the truth means little when their goals are at risk.
4. If the left will lie about facts which are obvious, arguing with them about larger complex issues is a complete waste of time.
5. If they will lie where the lie is obvious, they will lie when some facts cannot be ascertained - e.g., IRS targeting of groups hostile to Obama, Benghazi murders. Do not fall for plausible deniability.
6. Americans still accord respect to the President and have a hard time believing that he would make bold lies - "if you like your insurance, you can keep your insurance". The falsity of this claim is verifiable, but the President relied on a compliant media to keep enough voters in the dark to gain reelection.
7. Don't argue with a leftist because you will be drawn into a pool of irrationality. State the truth, be temperate and keep on punching.

No one gives Dr Gruber due credit. He is a man who once bought, stays bought - a clear-headed economist who took stock of his human capital and valued loyalty over integrity. He has leveraged his credentials to extract far beyond the going rate for such men, and in Washington, too, with its notoriously tight market.

I know that being one of the last comments on a 200 comment thread means no one will read this. But Tyler, this is my challenge to you and the others in the blog who seem to be skipping over the important separation of powers in our constitutional system.

"It would be much easier if (some) people would simply say “Of course this normally should be kicked back into the legislature for clarification. But I don’t want to do that because I don’t regard Republican control of the House, and how that control is used, as a legitimate form of rule.” One may agree, or not, but the nature of the case is pretty clear."

Step 1: Congress writes and passes ambiguous law.
Step 2: The executive branch implements ambiguous law.
Step 3: The executive branch's interpretation is challenged in courts.

When you say "This should normally be kicked back into the legislature for clarification" why is your default to side with the challengers in step 3? Why not assume that if Congress meant something other than what the executive branch is doing, the Congress would step into clarify. This is a fundamentally political question between how Congress passes laws and how the executive branch interprets them. That's best settled by Congress asserting its prerogative to clarify laws.

To be clear, this means that if Step 2 were being carried out by a Romney or Rubio or Rand administration, and they decided to implement differently, the standing (or rather lack of standing) would be the same.

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