Politics & Policy

Obamacare’s Meaning Is Not Subject to the President’s Whim

Halbig rebuked the administration’s lawlesness, but what happens next is far from clear.

This morning, at just after ten o’clock, a wave of hibernating progressives were awoken violently from their slumber, a federal court at long last issuing a ringing affirmation that, if the rule of law is to mean anything, congressional legislation must be restricted to its plain meaning. As David Harsanyi reports over at the Federalist,

Judge Griffith wrote that “the ACA unambiguously restricts the section 36B subsidy to insurance purchased on Exchanges ‘established by the State.” The law unequivocally, and more than once, stated that the federal government would only subsidize insurance plans in states that opted to create such marketplaces.

In plain English, then: There is nothing in the text of the Affordable Care Act that permits the federal government to subsidize health-insurance plans sold through federal, and not state, exchanges. Consequently, the Obama administration has been acting illegally since January.

Contrary to insinuations from the Left, the court did not base today’s decision upon a “glorified typo” or upon a minor mistake made within a broadly legible statute, but instead upon the plain meaning of the law itself. The text, says the mastermind behind the case, Cato’s Michael Cannon, is “clear, uncontradicted, and unambiguous” — its intentions corroborated throughout. His co-architect, Jonathan Adler, agrees. “The burden is on the government to explain why it may depart from the text,” Adler explained on a conference call this morning. In court, the government “couldn’t identify any contemporaneous statements” or legislative affirmation to support the notion that its authors had merely erred in their language. In consequence, he concluded, “it didn’t meet that burden.” When Politico’s Blake Hounshell asks sarcastically, who the “staffer” was who “made the drafting error in the ACA?” the correct answer, then, is “Congress.”

Which is to say that words have meaning and governments are not permitted to change them on a whim. Nor, for that matter, is the executive branch authorized to subordinate the rule of law to its political ambition. That Congress’s plan did not shake out how it would have liked is no doubt greatly vexing for it. But it is not sufficient warrant for the White House to rewrite the law. Yes, the federal government has been surprised at how many states have declined to establish exchanges. Nevertheless, as Ramesh Ponnuru observes, that the majority of states have elected to behave in a manner that many in Congress neither predicted nor like does not imply a “drafting error” so much as a lack of foresight — of a piece, perhaps, with the administration’s heartfelt conviction that the more speeches Obama gave, the more popular the law would become.

“We conclude,” the court’s majority opinion held, “that appellants have the better of the argument: a federal Exchange is not an ‘Exchange established by the State,’ and [the relevant section of the law] does not authorize the IRS to provide tax credits for insurance purchased on federal Exchanges.” The majority rejected, too, the idea that the word “State” was ambiguous. “Nothing in the law,” the majority opinion observes, “requires interpreting ‘established by the State’ to mean anything other than what it plainly says.” Presumably, then-senator Ben Nelson, who withheld his vote until he was promised that the exchanges would be run locally, would agree.

As for charges of “activism,” the court was clear on its role, reserving a sizeable portion of its opinion to the topic:

We reach this conclusion, frankly, with reluctance. At least until states that wish to can set up Exchanges, our ruling will likely have significant consequences both for the millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly. But, high as those stakes are, the principle of legislative supremacy that guides us is higher still. Within constitutional limits, Congress is supreme in matters of policy, and the consequence of that supremacy is that our duty when interpreting a statute is to ascertain the meaning of the words of the statute duly enacted through the formal legislative process. This limited role serves democratic interests by ensuring that policy is made by elected, politically accountable representatives, not by appointed, life-tenured judges.

During both oral arguments and in his demurring opinion, the sole dissenting justice effectively took two positions: First, that it would be bad for the government if it could not do as it wished — thus delivering what the (decidedly non-conservative) law professor Gerard N. Magliocca characterized as “an interpretation” that serves as “not much more than a statement that the consequences of reading the law as written would be terrible, thus it should not be done”; and, second, that the plaintiff’s motivations were impure. Taken together, this argument amounts to whining that the case had been brought by citizens who disliked the legislation they believed to be illegal — a peculiar tack for a judge to take. Why a plaintiff brings a case has nothing whatsoever to do with that case’s merits. Likewise, that it may yield an outcome that conservatives like is immaterial. That it may increase premiums is irrelevant. That it may affect the next election is neither here nor there. What matters is whether he’s right.

What happens next? Legally, Adler isn’t sure. The Obama administration’s most likely response will be to appeal the case to en banc review (meaning it would go before the whole court) and pocket the automatic stay that this would yield in the interim. Adler seemed mildly skeptical that this will work. “It’s not clear that this case is en banc-worthy,” he said. “We should not assume such review is automatic.” Perhaps. But if it is worthy, the odds would appear to be in the administration’s favor. The review would be heard before all of the court’s active judges and the senior judges on the original panel. As such, as Talking Points Memo’s Sahil Kapur put it, “Reid’s nuclear option, which put 3 new Obama-appt judges on the DC Circuit, could save Obamacare.” “Remember,” Kapur tweeted, “WH can seek en banc ruling in Halbig and it’d be cast by 8 Dem-appt judges and 5 GOP-appt judges.” After that, the only recourse is the Supreme Court. Whether it would take the case is anybody’s guess.

As is its wont, the Left was quick to trade discussion of legal principle for discussion of political outcome — a perverse instinct. “If people lose [their] subsidies” because Halbig is upheld, Adler noted, “it’s because the courts ruled that those subsidies are — and always have been — unlawful,” and because the Obama administration “never had the authority” to promulgate them in the first instance. “Halbig,” he added, “did not cause those effects; those are the effects of the Affordable Care Act.” Clearly, this is true.#page#

Nevertheless, there are potentially some serious problems for the GOP. The passage of time has been good to Obamacare’s advocates, affording them the opportunity to entrench their law and to complicate its political future. If a binding decision in Halbig had been handed down as soon as it was first filed — back in September 2012 — the situation on the ground would now look very different indeed. At that time, 34 states had refused to establish exchanges. Deprived of the opportunity to circumvent the rules and to establish a federal alternative, Obamacare would have been grounded before it got off the ground, and Congress would have been forced to reopen — and possibly repeal — the law.

Of course, no immediate decision was forthcoming. And so, shocked that their beloved measure had failed to become popular — and irritated that the states had proven to be so recalcitrant — the Obama administration took illegal steps to counter the obstinate polities and impose its will from afar, setting up a federal exchange and instructing the IRS to provide subsidies to those who used it. In order to protect its signature achievement from unpredicted pushback at the state level, Cannon says, “the Obama administration violated its own” legislation.

This has substantially changed the political dynamic. If Halbig were upheld and the law effectively gutted, the Right’s instinct would be to push for substantial reform — or, preferably, for full repeal. But there would be little incentive for the Democratic party to play along. In a world without federal subsidies, the many red states that have refused to set up exchanges would likely be stuck in an unappealing no man’s land — their voters unable to access the federal dollars that would continue to flow into the blue states that had established exchanges, but bound nonetheless by the still-intact federal regulations that were making insurance more expensive.

Would the philosophically opposed crack under the pressure? Possibly, yes. As Halbig neatly demonstrates, the administration has routinely failed to grasp the depth and scale of the opposition to its signature law. But Republicans, too, have exhibited a tendency to overestimate just how much conservatives dislike the reforms — and how vehemently they will fight them. It is eminently feasible that a mortally wounded Obamacare would provoke enough Republican voters into demanding a fix that the law would end up being strengthened, and not further gutted.

In other words: It could pan out that Halbig is reversed not by the courts, but by Congress. If the GOP takes back the Senate — and if the next president is more amenable to altering the system — a flailing Obamacare could provide the impetus needed for Americans to finally put the experiment out of its misery and usher in a new scheme. If not, the plaintiffs could find themselves back at square one. Today was a victory for principle, for common sense, and for the rule of law — for all those virtuous attributes that the republic is intended to exhibit in abundance. But before long politics will intrude. And that’s a different matter altogether.

— Charles C. W. Cooke is a staff writer at National Review.

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