1) A lot of the liberal commentary about this week’s D.C. Circuit decision on Obamacare is hard to square with the way liberal judges have tended to approach these cases. I have in mind the commentators who say the decision is “corrupt,” its theory “preposterous,” and the conservatives who support it “dishonest.”
As Josh Blackman points out, most of the liberal judges who have sided in the end with the administration’s position have not said that it is simply obvious that the text of the legislation authorizes tax credits in states where state governments did not set up exchanges. They have said that the text is ambiguous and given the administration the benefit of the doubt. Some of these liberal judges have gone even further, and rejected common liberal claims that the legislative history of Obamacare clearly shows that Congress intended to make tax credits available on the federal exchange.
Judge Gregory’s ruling in the Fourth Circuit that the tax credits should keep going in all fifty states included these comments: “[T]he court is of the opinion that the defendants have the stronger position, although only slightly.” “There can be no question that there is a certain sense to the plaintiffs’ position. If Congress did in fact intend to make the tax credits available to consumers on both state and federal Exchanges, it would have been easy to write in broader language, as it did in other places in the statute.” “[T]he court cannot ignore the common-sense appeal of the plaintiffs’ argument; a literal reading of the statute undoubtedly accords more closely with their position.” “Both parties offer reasonable arguments and counterarguments that make discerning Congress’s intent difficult.” “The Act’s legislative history is also not particularly illuminating on the issue of tax credits.”
I prefer Judge Griffith’s ruling for the D.C. Circuit to Judge Gregory’s, but Judge Gregory’s showed a much better grasp of the issues than a lot of its fans.
2) Some of the liberal commentary seems to me to misunderstand the argument about the tax-credit issue in a more specific way. The other day I tweeted, “A foresight error is not a drafting error.” Some liberals (I have in mind Brian Beutler among others) have taken my tweet to imply an argument that runs as follows: Congress wrote the text of Obamacare in a way that tied tax credits to the state establishment of exchanges, and it did that because it wanted to create an incentive for the states to create those exchanges. The Democrats in Congress just didn’t foresee that the incentive would fail to work and that this feature of their plan would backfire.
They take this argument to be what I meant, and they take it to be the basic pro-Halbig argument. It is neither. The argument, rather, is, first and most important, that the text of the law does in fact tie the tax credit to state-created exchanges; and second, that you can’t get around the text by claiming it would be absurd to tie them in that way. That’s where the point about the incentives this feature of the law would create comes into play. It isn’t meant to suggest that 278 members of Congress consciously put this feature of the law in because they wanted this incentive, or were even aware of this feature of the law. As Ilya Somin puts it, “[i]n order for the text of a statute to avoid absurdity, the non-absurd rationale for it doesn’t necessarily have to be found in the legislative history.”
I think there’s no question that if Democrats in Congress had imagined that four years after the law was enacted 36 states would not have set up exchanges, they would have written the law differently. But they didn’t foresee that eventuality, and so they enacted the law they enacted. That’s what I meant about lack of foresight.