Author Page for Scott Lemieux
Not that I can blame Halbig defenders from wanting to create diversions from the argument on the merits, but really:
Little did I know that within hours of the D.C. Circuit’s decision, Ezra Klein voxsplained how the Chief Justice would not rule in Halbig’s favor because horrible things would happen. Or did Ezra voxtimidate the Chief Justice Justice not to rule in Halbig’s favor because horrible things would happen…
There is a blurred line between voxsplaining and voxtimidating, that pundits walked delicately in the runup to NFIB v. Sebelius. Now, it is a well-worn path. And there is one key difference. We know the Chief blinked in 2012. Why should we think he will act any differently in 2015. Whether the full court press on the Chief worked in 2012, it is certainly worth a shot again.
McArdle has tried a similar technique of preemption (“This is the Washington equivalent of the old lady in the movies who puffs out her bosom, settles her pince-nez higher up on her nose, and huffs, ‘You wouldn’t DARE!’”) And we saw similar arguments in the run up to Sebelius.
But this is all silly, and is also irritating because it implies bad faith on the part of people making both predictive and normative arguments that do not conform to the preferences of the 25% of federal judges who have so far bought the most recent ad hoc challenge to the ACA. As it happens, I disagree with Ezra about the likelihood that the Supreme Court will uphold Halbig (or, more likely, reverses the D.C. Circuit once it hears the case en banc and laughs the argument out of court.) I think Trende and Yglesias have a much more accurate read on the chances that the Court would destroy the private exchanges in a majority of states. Nonetheless, I see no reason to believe that Ezra isn’t arguing what he really thinks, and his expressing his views on the matter does not constitute “intimidation” or “Voxtimidation” or even “Kleintimidation.” Fatally absent from such arguments are identifications of what precise form of leverage pundits have over Supreme Court decision-making. (There’s the additional problem that the theory fails to explain the vast majority of Roberts’s jurisprudence.)
I suppose another implication here is that some critics of Hilbig have been a bit shrill. (I certainly plead guilty.) But this isn’t “intimidation”; it’s “people who strongly disagree for obvious reasons.” The consequences of Halbig, as the majority conceded, would be serious and dire if it is upheld. The IRS, which is by law owed deference over reasonable judgments, has interpreted the law as making the subsidies available on federally-established state exchanges. The majority had a high burden of proof to overcome, and yet Halbig‘s reading of the statute is nonsensical on its face.
And, again, there’s the striking absence of people involved in the legislation who agree with the court’s ruling. The fact that no supporters of the law were persuaded by the commerce clause arguments against the ACA doesn’t mean much in itself; supporters of the ACA didn’t write or ratify the relevant constitutional provision, and it was theoretically possible that they were construing it too broadly. But Halbig is a statutory interpretation case — the text in question was written and enacted exclusively by supporters of the law. It was by people who wanted it to work, not by the people inventing one legal argument after another to try to make it fail. If the statute unambiguously denied subsidies to people obtaining insurance on the federally-established exchanges — and this is the standard Chevron requires — don’t you think this reading would have, at a minimum, a substantial constituency among those involved in drafting and ratifying the ACA? But, once, again, here is an exhaustive list of this highly relevant group who have ever expressed anything that could be construed as agreeing with the Halbig reading:
- Jonathan Gruber in two YouTube clips from
Here is everyone in that category who disagrees:
- Jonathan Gruber in his contemporaneous data calculations
- Jonathan Gruber in 2014
- Everyone else
Given this context, it is not exactly surprising that the assertion that the ACA unambiguously established a federal fallback that was designed to fail has met with strong resistance. This intense disagreement is not strategic; it’s genuine, and it’s not some kind of bad form to express it. If supporters of this lawsuit think that they can attempt to deny health insurance to millions of people with a remarkably feeble argument and have it treated as a clever legal puzzle, they’re going to be very disappointed.
Shorter Ann Althouse: We must maintain a horribly costly, arbitrary, racially discriminatory drug prohibition regime…for the children!!!!!! And…science!!! If the case of tobacco has proven anything, there is no way of regulating second-hand smoke and access to minors without throwing lots of people in prison. Hopefully you will all be able to think rationally rather than being consumed by random emotional impulses like me. And if you don’t like these non-sequiturs, I have more!
Is it still plagiarism when no one at either end of the act is using their grown-up words anymore?
But if you think what Gruber said is some evidence about what the ACA means, you can’t ignore other, similar evidence. That’s cherry-picking. So go ask John McDonough, who was intimately involved in drafting the ACA and is as straight a shooter as there is: “There is not a scintilla of evidence that the Democratic lawmakers who designed the law intended to deny subsidies to any state, regardless of exchange status.” Or ask Senator Max Baucus’s chief health adviser, Liz Fowler. She says the same thing. Or ask Doug Elmendorf, the current CBO Director: “To the best of our recollection, the possibility that those subsidies would only be available in states that created their own exchanges did not arise during the discussions CBO staff had with a wide range of Congressional staff when the legislation was being considered.” Or ask Peter Orszag, then-OMB Director: “[A]s someone who was there, [there is] zero chance this was the intent (as opposed to typo/poor drafting).”
Or ask Jonathan Cohn or Ezra Klein, both of whom followed the deliberations over the ACA closely. Neither heard a whisper about any supposed threat. Or ask Abbe Gluck, a law professor at Yale who details how “a basic understanding of the ACA’s legislative process makes clear that Congress intended for the subsidies to be available on the federal exchanges.” Or ask Aaron, who wonders, if this threat was so clear, why TIE never mentioned it. “Do you think we would have ignored this? We wouldn’t have been concerned?”
Better still, ask the states, which were on the receiving end of the supposed threat. According to a report from the Georgetown University Health Policy Institute, there’s no contemporaneous evidence that the states feared that declining to set up an exchange might lead to a loss of tax credits. How can it be that Congress unambiguously threatened the states with the possible loss of tax credits if the states never understood that threat?
This argument is unanswerable.
Conservatives are fond of quoting Scalia’s quotation of Harold Leventhal, describing the judicial use of legislative history as “as the equivalent of entering a crowded cocktail party and looking over the heads of the guests for one’s friends.” (The problem with this argument isn’t so much that it’s wrong as that it applies to any source of evidence that judges might use to determine the meaning of an ambiguous statutory phrase, originalism and textualism most certainly included.) Any conservative who 1)opposes the use of legislative history on these grounds and 2)cites Gruber 2012 (but not Gruber 2010 or Gruber 2014!) as definitive evidence for the intent of the ACA should be responded to solely with hails of derisive laughter.
…Also: “The opponents of Obamacare have from the beginning found themselves driven by the logic of their position to make arguments that are increasingly morally repulsive.”
…And, yes, the Halbig argument also requires the assumption that Congress was emulating Alexi de Sadesky.
Neil Seigel summarizes the problems with the hackwork of the 2 (of 8) federal judges who accepted the latest and possibly very weakest ad hoc challenge to the ACA perfectly:
Halbig and King (plus the Indiana and Oklahoma cases) are different. I can accept as reasonable, even if ultimately unpersuasive, the argument that the relevant provisions of the ACA are ambiguous. What I cannot accept as reasonable or responsible, however, is the argument—accepted by the D.C. Circuit panel majority in Halbig—that the ACA Congress clearly and unambiguously accomplished what no Member of Congress, no one in the Congressional Budget Office, none of the four dissenting Justices in NFIB v. Sebelius, and no state official realized that Congress had accomplished when it passed the ACA: self-destructively limit the tax subsidies that make health insurance affordable for millions of Americans to those who have the good fortune of happening to reside in states that set up their own health insurance exchanges.
As we’ve discussed before, the bolded fact is critical — we’re being asked to believe that Congress “clearly and unambiguously” did something that both makes no sense on its face and that neither federal officials nor state officials (some who certainly would have established exchanges had they thought their citizens wouldn’t be eligible for the tax credits) thought it did.
Trying to get around this problem, some conservertarians who are gleeful over the prospect tens of millions of people being denied medical care and hence determined to stop the legislation from working believe they have a smoking gun: a youTube video featuring ACA “architect” Jonathan Gruber seeming to claim that subsidies would not be available on federally established state exchanges. Well, I happen to have Jonathan Gruber right here, and:
Among those who say they are surprised by the statement is Gruber himself, whom I was able to reach by phone. “I honestly don’t remember why I said that,” he said, attempting to reconstruct what he might have been thinking at the time. “I was speaking off-the-cuff. It was just a mistake.” As evidence that it was not indicative of his beliefs, he noted that his projections of the law’s impact have always assumed that all eligible people would get subsides, even though, he said, he did not assume all states would choose to run their own marketplaces.
[Gruber:] But there was never any intention to literally withhold money, to withhold tax credits, from the states that didn’t take that step. That’s clear in the intent of the law and if you talk to anybody who worked on the law. My subsequent statement was just a speak-o—you know, like a typo.
There are few people who worked as closely with Obama administration and Congress as I did, and at no point was it ever even implied that there’d be differential tax credits based on whether the states set up their own exchange. And that was the basis of all the modeling I did, and that was the basis of any sensible analysis of this law that’s been done by any expert, left and right.
I didn’t assume every state would set up its own exchanges but I assumed that subsidies would be available in every state. It was never contemplated by anybody who modeled or worked on this law that availability of subsides would be conditional of who ran the exchanges.
So much for that. Gruber seems to gave been suggesting that states that didn’t set up their own exchanges might have their citizens temporarily denied the tax credits depending on the progress of the federal backstop, not that any such denial would be permanent.
But let’s assume for the sake of argument that Gruber, not only when asked to clarify his remarks but in his contemporaneous cost projections, was mistaken and the interpretation of some of Gruber’s extemporaneous remarks most favorable to the arguments of those who hate the ACA is correct. The argument is still roughly 99 parts water to 1 part tea. We still have essentially everyone responsible for drafting, voting on and/or implementing the legislation at the federal and state levels (not to mention the Sebelius conservative joint opinion) assuming that the federally established exchanges were intended to work, and a consultant making a bare assertion with no explanation that the federally established exchanges weren’t intended to work. It’s pretty obvious which is more significant, particularly since the next decent explanation for why Congress would bother to create a federal backstop that couldn’t actually function would be the first. Picking a single cherry out of a massive vat of nectarines is exceptionally weak evidence that we’re looking at a vat of cherries.
And, again, let’s return to Seigel’s first point. The challengers don’t just have to show that their interpretation is plausible; they have to show that it’s the only possible reasonable interpretation. Even if we assume that Gruber in a a single ambiguous YouTube video trumps everything Gruber has said before or since, a single ACA supporter agreeing with the silly interpretation of the law created after the fact by some of its most fanatical enemies is of little help in climbing Mount Chevron. Congress didn’t establish a federal backstop that was designed to fail; they established a federal backstop because they knew some states wouldn’t establish health care exchanges and they wanted to substantially reduce the number of people without health insurance. Unless you insist on projecting your own hostility to the federal government acting to expand coverage onto members of Congress who rejected it, this is entirely obvious.
In the midst of her palpable excitement over the possibility that an asinine legal argument may be used to deny tens of millions of people health care, Megan McArdle inadvertently demonstrates another reason why the argument of the Halbig majority is asinine:
On the other hand, that outcome is hardly inevitable. Law professor Jonathan Adler pointed out in a conference call yesterday that Ohio would have to amend its constitution to allow the government to establish a state exchange, and barriers in some other states are high as well. State exchanges cost millions to build and to run. States can still apply for federal money to build exchanges, Adler said, but the annual operating costs have to come out of either user fees or tax revenue. In lower population states, or poor states, that might be enough to keep legislators on the sidelines. So might the fear of primary challenges, even if the administration comes up with some easy administrative workarounds to lower the cost. [My emphasis]
This is a point I discussed with Seder yesterday. One reason that the ACA empowered the federal government to set up state exchanges was because they anticipated opposition from Republican statehouses. (So much for the other terrible conservative argument-like rhetorical gesture floating around, “Congress wasn’t worried because it expected the states to go along!”) But another was that for low-population states — including those with public officials supportive of law — the administrative costs made it more logical for the federal government to establish the exchanges. So McArdle wants us to believe that Congress expected to federal government to establish state exchanges for multiple reasons…but wanted them not to work? That’s an absurd reading of the law. And statutory construction that leads to absurd results is inept.
It’s also important to keep in mind the burden of proof here. The Fourth Circuit unanimous opinion (as opposed to the Davis concurrence) was overly timorous, but it does do a good job on this point. Under Chevron, if a statute is ambiguous the courts have to defer to administrative judgments of statutory meaning as long as the reading is reasonable. And, at a minimum, the IRS reading is reasonable; administrative agencies are not required to use bad parodies of “textualism” to read statutes. The fact that nobody responsible for the statute thinks that the Halbig interpretation is correct should also be dispositive on this point. If a construction is plainly wrong, the contrary construction really should have at least some support from the architects of the statute. And if you don’t believe me, ask the authors of the neoconfederate joint opinion in Sebelius, who also assumed that subsidies would be available on the federally-established state exchanges, because this is utterly obvious.
While we’re here, consider this:
A lot depends on the 2016 election, of course: Do voters turn out for Hillary Clinton, to protest the loss of their subsidies, or do they turn out for the Republican, to protest this unpopular, unworkable clunker of a law?
Let’s leave aside the fact that while the ACA remains unpopular, voters like the Republican alternative (i.e. get rid of the ACA either tout court or piecemeal, and after that nothing) even less and hence if healthcare is a salient issue in the 2016 elections this is excellent news for Democrats. First of all, this “unworkable clunker” has led to millions of people getting health insurance, a figure that would be substantially higher had the statute not been ineptly re-written by John Roberts to enable Republican statehouses to reject the Medicaid expansion. Which brings us to the remarkable chutzpah on display here: conservatives inventing ad hoc legal arguments of varying degree of absurdity to prevent the law from working as intended then complaining that the law is “unworkable.” Republicans are thugs with wrecking balls asserting that building construction is unworkable.
As Cohn says, “these lawsuits are simply one more attempt to cripple Obamacare and yank insurance away from millions of people, no matter what it takes.” Just so, and if Adler tries to pretend his arguments about the Rule of Law (TM) his supporters feel no need to conceal the real agenda.
To the extent that there’s an argument against reading the ACA to include subsidies on the federal exchanges, it has to be that while Congress intended the subsidies to be available on both, reading the literal language of an isolated provision it says that the subsidies are only available on state exchanges, so tough luck. This is, to be clear, a terrible argument, but it’s the best one available. To my amazement, as I first saw on Twitter yesterday, some conservatives are arguing that Congress actually intended for the federal exchanges not to include subsidies. For example, Ramesh Ponnuru:
Supporters of Obamacare have been lamenting that the law shouldn’t be crippled by a mere “drafting error.” But it’s not at all clear that restricting tax credits to state-established exchanges was a drafting error. If Obamacare had proven more popular, or resistance to it weaker, then most states would have established exchanges. And if the law were put in place as written — with the restriction on tax credits — then the few holdouts would be under pressure to establish exchanges to get credits for their residents. Other health-care legislation before Congress at the same time as Obamacare had the same restriction.
It’s wrong, then, to say that Congress obviously didn’t intend to include this restriction.
This argument is…amazing. It may be true that many members of Congress were too optimistic about states creating their own exchanges. But we also know that Congress anticipated that some states would not create their own exchanges…because the statute gave the federal government the power to create exchanges when states wouldn’t. Ponnuru’s reading of the statute can’t explain why they bothered to do this at all. The actually existing Congress assumed that some states would not participate but wanted the exchanges available in all 50 states. So Ponnuru’s explanation is plainly wrong, and we’re left with an implicit assumption that Congress established the power to have the federal government to create exchanges but wanted them not to work, which is absurd.
In addition, we know that Congress anticipated significant state resistance because of the way it structured the Medicaid expansion. If Congress thought that all but a few states would establish exchanges with little direct incentive to do so, then surely the huge gobs of federal money that comes with accepting the Medicaid expansion would be more than enough for states to buy in. But Congress didn’t think that, and until the statute was ineptly re-written by John Roberts all existing Medicaid money was contingent on accepting the expansion. Ponnuru’s explanation cannot account for this either.
But there’s a more fundamental problem with the arguments made by the majority of the D.C. Circuit panel and the Republicans cheering them on. The ACA was not written by Republicans — it was written by public officials who wanted to substantially increase access to medical care. The central function of the subsidies wasn’t to create incentives for state governments; it was to ensure that the non-affluent uninsured who didn’t qualify for Medicaid could purchase insurance on the exchanges. To not provide subsidies on the federal exchanges would defeat the very purpose for which they were constructed. If you understand the ACA from the standpoint of those who passed it, this couldn’t be more obvious. Conservatives trying to evaluate the goals of the ACA are like elephants trying to play a toy piano.
And, needless to say, this is why as a first approximation zero supporters of the ACA either inside or outside Congress are persuaded by this latest ad hoc attack on the law. In addition to the other ways in which it’s silly it’s premised on not comprehending what the ACA was trying to accomplish.
For those that missed it yesterday, I have a piece up about Halbig v. Burwell. The bottom line:
The sole dissenting judge, Harry Edwards, in his tour de force dissent, made clear his distaste for appointed judges making new law – and pointed out that the majority opinion requires the courts to ignore all the sound principles of statutory construction.
Congress clearly thought the subsidies were essential to the functioning of the exchanges, and it permitted the federal government to establish exchanges in order to prevent states from thwarting the aims of the ACA – which is to help people buy more affordable health insurance.
The majority’s reading, however, would allow hostile states to do exactly what the law was designed to prevent: by refusing to establish a state exchanges, they could effectively stop the exchanges from working properly in their states.
As Edwards observes, the majority’s interpretation “is implausible because it would destroy the fundamental policy structure and goals of the ACA that are apparent when the statute is read as a whole”. Plus, not a single state government – even those hostile to the law – believed that the statute demands what the majority says it does. Nobody is confused about what the law intended, but some people who oppose the ACA on political grounds are opportunistically pretending to be.
To be clear, the position taken by 4 of the 6 judges to have ruled on the question yesterday (see the 4CA opinion here) does not entail “re-writing the law” or binding the public to the subjective intent of the legislators rather than what they wrote. Statutes have to be read as a whole, not in isolated phrases. When one reads the statute properly, that Congress intended to make the subsidies available is not merely plausible but blindingly obvious. As Judge Davis noted in his concurrence:
I am not persuaded and for a simple reason: “[E]stablished by the State” indeed means established by the state – except when it does not, i.e., except when a state has failed to establish an Exchange and when the Secretary, charged with acting pursuant to a contingency for which Congress planned, establishes and operates the Exchange in place of the state. When a state elects not to establish an Exchange, the contingency provision authorizes federal officials to establish and operate “such Exchange” and to take any action adjunct to doing so. When a state elects not to establish an Exchange, the contingency provision authorizes federal officials to establish and operate “such Exchange” and to take any action adjunct to doing so.
That disposes of the Appellants’ contention. This is not a case that calls up the decades-long clashes between textualists, purposivists, and other schools of statutory interpretation. The case can be resolved through a contextual reading of a few different subsections of the statute. If there were any remaining doubt over this construction, the bill’s structure dispels it: The contingency provision at § 1321(c)(1) is set forth in “Part III” of the bill, titled “State Flexibility Relating to Exchanges,” a section that appears after the section that creates the Exchanges and mandates that they be operated by state governments, ACA § 1311(b). What’s more, the contingency provision does not create two-tiers of Exchanges; there is no indication that Congress intended the federally-operated Exchanges to be lesser Exchanges and for consumers who utilize them to be less entitled to important benefits. Thus, I conclude that a holistic reading of the Act’s text and proper attention to its structure lead to only one sensible conclusion: The premium tax credits must be available to consumers who purchase health insurance coverage through their designated Exchange regardless of whether the Exchange is state- or federally operated.
I might have more on this in another post, but the idea that Congress intended for the federal exchanges not to work is transparently absurd, which hasn’t stopped some people from trying to make the argument.
The Supreme Court may not hear this case, since it’s overwhelmingly likely that the D.C. Cicuit en banc will end the silliness, upholding the proper reading of the statute and eliminating the circuit split. If they do hear it, some commentators — for example, Goldtsein and Klein, — are confident that the Supreme Court would side with the 4th Circuit. In a rational universe, we could indeed expect that “[t]he Supreme Court simply isn’t going to rip insurance from tens of millions of people in order to teach Congress a lesson about grammar.” But I’m less sure. After all, in their gratingly disingenuous attempt to claim that their gutting of the ACA was an act of judicial restraint, the D.C. Circuit majority acknowledged the terrible consequences of their decision — but didn’t care. Republican statehouses know that turning down the Medicaid expansion will cause many people to go without coverage — they don’t care. I don’t put anything past a Supreme Court controlled by the contemporary Republican Party.
I will have more on this, but two Republican hacks at the D.C. Circuit have embarrassed themselves by accepting a particularly bad statutory argument that would throw the exchanges into chaos.
…my piece is here. More imminently.