Bench Memos

King v. Burwell

A quick refresher (before I rush out of town), drawing from earlier posts of mine:

The issue in this case—on which the Supreme Court has just granted review of a ruling in favor of the Obama administration—is whether the provision of Obamacare that authorizes tax credits for insurance purchased on an exchange “established by the State under section 1311” doesn’t authorize tax credits for insurance purchased on an exchange established by the federal government

Those who maintain that the text can’t be read to mean what it says argue that such a reading would produce absurd results. But leading Obamacare architect (and MIT economist) Jonathan Gruber embraced this exact reading and explained why it was sensible. Specifically, in a January 2012 presentation, Gruber said:

[S]o these health-insurance Exchanges … will be these new shopping places and they’ll be the place that people go to get their subsidies for health insurance. In the law, it says if the states don’t provide them, the federal backstop will. The federal government has been sort of slow in putting out its backstop, I think partly because they want to sort of squeeze the states to do it. I think what’s important to remember politically about this, is if you’re a state and you don’t set up an Exchange, that means your citizens don’t get their tax credits. But your citizens still pay the taxes that support this bill. So you’re essentially saying to your citizens, you’re going to pay all the taxes to help all the other states in the country. I hope that’s a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these Exchanges, and that they’ll do it

Cato’s Michael Cannon, who (with Jonathan Adler) has spearheaded the challenges, provided a video of Gruber’s remarks here. And, as Gruber tried to run away from his comments, John Sexton and Peter Suderman highlighted similar comments by Gruber on another occasion.

Contrary to the silly claims on the Left, the issue in this case does not involve a typo. (Congress spelled “State” correctly.) It instead involves whether rampant purposivism can render clear text irrelevant, even when that text is consistent with a plausible account of Congress’s purposes.

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