Halbig:DocumentsshoweitherthatCongresswantedfederal

Halbig: Documents show either that Congress wanted federal exchange consumers to get subsidies or, er, the opposite

posted at 7:21 pm on July 29, 2014 by Allahpundit

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Conservatives are having fun with this Greg Sargent post arguing that the legislative history of ObamaCare proves the Halbig case was wrongly decided. There were two versions of the exchanges drafted by congressional Dems in 2009, says Sargent. The first, the HELP Committee bill, was the Democratic dream scenario: It called for state exchanges and a federal exchange for those states that refused to build their own exchange and subsidies for consumers in both exchanges. The staff memo quoted by Sargent is pretty explicit about it. Any exchange, including the federal one, gets subsidies. That’s exactly the system we ended up with, Democrats now maintain — with one wrinkle:

Now, to be fair, the memo notes that the HELP Committee bill’s structure did delay subsidies to those in states that hadn’t yet set up their exchanges.

So even in the HELP bill, which gave Dems basically everything they wanted, there was some impulse to punish states that refused to build their exchange by withholding subsidies from their residents temporarily. Back to that in a minute.

The second bill was the Senate Finance Committee bill. In that one, there was no federal exchange. There were only state exchanges, with the feds empowered to build an exchange for any state that refused to build one but required to appoint some nonprofit entity to actually run the darned thing afterward. Here too, subsidies were available to consumers on both types of exchange. But the Finance Committee clearly wanted a smaller role for the feds than a full federal exchange, just as HELP wanted a smaller role for the feds by giving states a (temporary) incentive via subsidies to create their own exchanges.

Eventually these two bills were merged — and, if you believe Sargent, the resulting bill somehow gave the feds more power even though each of the underlying bills sought to limit federal power in different ways. Essentially, and very conveniently, he’s arguing that we ended up with a version of the HELP bill except without that little wrinkle about withholding subsidies from states that delayed building their own exchanges. Subsidies for everyone, right from the start! You could just as easily argue, though, that the fact that the final ObamaCare bill isn’t as explicit as HELP in extending subsidies to the federal exchange means — ta da — that Congress didn’t intend to extend those subsidies. When language from an earlier version of a bill disappears from a later version, courts tend to assume, understandably, that it disappeared for a reason:

Here's the Supreme Court in 1987 http://t.co/O2xMiQeJGl pic.twitter.com/2wIzwSh4VI

— Dan McLaughlin (@baseballcrank) July 29, 2014

As Leon Wolf puts it:

Even for people who take legislative history as a thing that ought to be given great weight, the fact that Congress included a clause in an earlier version of the bill but then changed or removed it in the final version is considered to be conclusive evidence that Congress specifically desired the change in question, not that they intended the earlier version. Let’s say hypothetically that you had a bill that said when it came out of committee, “Congress hereby appropriates $10 million for the funding of studies the mating habits of pink salmon and $5 million for the funding of studies of the mating of silver salmon,” but the final version of the bill merely said “$1o million for the funding of studies of the mating habits of pink salmon,” courts (like reasonable people) come to the inescapable conclusion that the clause about the silver salmon was removed per the deliberate intent of Congress otherwise it would have remained in the bill.

If Congress wanted the HELP bill, why didn’t it just enact the HELP bill? By watering down the language and merging it with the Finance Committee bill, which dropped the idea of a federal exchange entirely, it pointed to a more state-centric structure for ObamaCare. And if they wanted the states to have a bigger role, go figure that they might have ramped up the incentive to have states build their own exchanges by tweaking that little wrinkle in HELP so that consumers in state exchanges were the only ones eligible for subsidies permanently.

Read all of Sargent’s post, as he has quotes from a few Senate staffers at the time insisting that they wanted everyone to have subsidies. I guess, in the battle of experts, our side will just have to make do with Jon Gruber.

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Openthread:Sundaymorningtalkingheads

Open thread: Sunday morning talking heads

posted at 8:01 am on July 27, 2014 by Allahpundit

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In a week full of foreign crises, from MH17 fallout in Ukraine to Israel’s operations in Gaza, it’s domestic policy that leads the Sunday shows. Paul Ryan gets top billing on “Meet the Press” to discuss his paternalistic/compassionate new anti-poverty plan while John Cornyn and Henry Cuellar get quizzed on “This Week” about their bill to speed up deportations of illegal immigrant children. Nancy Pelosi will also talk immigration on “State of the Union,” specifically to remind America’s Christians that Moses and Jesus were refugees too.

If domestic policy doesn’t grab you, Israel’s ambassador to the UN will be on “Fox New Sunday” to preview the next stage of the Gaza war. The full line-up is at Politico.

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Tags: halbig, illegal, immigration, mh17, Paul Ryan, pelosi, poverty, Russia, Sunday, talk shows, Ukraine

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Uhoh:MoreaudioemergesofJonGruber

Uh oh: More audio emerges of Jon Gruber saying only state ObamaCare exchanges will be eligible for subsidies; Update: Gruber responds by ducking

posted at 2:01 pm on July 25, 2014 by Allahpundit

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Oh dear. This is another speak-o, isn’t it?

Give credit to Morgen Richmond and John Sexton for digging it up. There’s a key difference between this audio and the audio Ed posted this morning, too:

Funny thing about this other "off the cuff" Gruber comment, it was part of his prepared remarks. Weird.

— Morgen (@morgenr) July 25, 2014

Gruber’s moronic excuse to TNR, that he committed a “speak-o” while rambling through a Q&A, obviously doesn’t work for this one. Which makes me wonder: Did he knowingly lie to TNR or has he somehow convinced himself that he never believed that only state exchanges would be eligible for ObamaCare subsidies? The answer doesn’t matter insofar as the quotes are damaging either way to the left’s bogus “drafting error” theory for what happened in the parts of O-Care at issue in the Halbig case, but I’m amused by how he’s painted himself into a corner now. His choices are ‘fessing up to lying, probably by admitting that yes, okay, he did at one point believe that only state exchanges would be eligible but has since changed his mind, or basically saying, “Oh yeah, I forgot about that.” Mind you, this is the guy whom the media routinely credits as having all but drafted the ObamaCare statute.

In lieu of an exit question, I’m setting the over/under on the final total of damaging Gruber soundbites to emerge at four. Place your bets.

Update: This is a non-answer.

Gruber told The New Republic [after the first video clip emerged] that he had made a mistake.

“I was speaking off-the-cuff. It was just a mistake. People make mistakes. Congress made a mistake drafting the law and I made a mistake talking about it,” Gruber told The New Republic’s Jonathan Cohn. “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.”

A second recording has surfaced showing Gruber making similar statements about subsidies not being available on federally run exchanges. Asked over email whether those remarks were a mistake, too, Gruber wrote back, “same answer.”

He wasn’t speaking off the cuff in the second clip, though. It obviously wasn’t a speak-o/typo. This is him basically saying “I don’t want to talk about it anymore.”

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Uhoh:MoreaudioemergesofJonGruber

Uh oh: More audio emerges of Jon Gruber saying only state ObamaCare exchanges will be eligible for subsidies

posted at 2:01 pm on July 25, 2014 by Allahpundit

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Oh dear. This is another speak-o, isn’t it?

Give credit to Morgen Richmond and John Sexton for digging it up. There’s a key difference between this audio and the audio Ed posted this morning, too:

Funny thing about this other "off the cuff" Gruber comment, it was part of his prepared remarks. Weird.

— Morgen (@morgenr) July 25, 2014

Gruber’s moronic excuse to TNR, that he committed a “speak-o” while rambling through a Q&A, obviously doesn’t work for this one. Which makes me wonder: Did he knowingly lie to TNR or has he somehow convinced himself that he never believed that only state exchanges would be eligible for ObamaCare subsidies? The answer doesn’t matter insofar as the quotes are damaging either way to the left’s bogus “drafting error” theory for what happened in the parts of O-Care at issue in the Halbig case, but I’m amused by how he’s painted himself into a corner now. His choices are ‘fessing up to lying, probably by admitting that yes, okay, he did at one point believe that only state exchanges would be eligible but has since changed his mind, or basically saying, “Oh yeah, I forgot about that.” Mind you, this is the guy whom the media routinely credits as having all but drafted the ObamaCare statute.

In lieu of an exit question, I’m setting the over/under on the final total of damaging Gruber soundbites to emerge at four. Place your bets.

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Gruber:My2012remarkswere“aspeak-o”

Gruber: My 2012 remarks were “a speak-o”

posted at 12:01 pm on July 25, 2014 by Ed Morrissey

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In a sense, Jonathan Gruber’s response today to the emergence of his 2012 explanation for the language in ObamaCare mirrors the attempt to get courts to ignore the plain text of the statute and instead rule based on the most current interpretation. The New Republic’s Jonathan Cohn reached out to Gruber to get his reaction to the emergence of the Nobilis video in which the architect of ObamaCare explains that the restriction of subsidies to states with their own exchanges was a rational attempt to coerce states into creating those exchanges, rather than shifting the burden back to the federal government. Gruber calls that “a speak-o — you know, like a typo”:

I honestly don’t remember why I said that. I was speaking off-the-cuff. It was just a mistake. People make mistakes. Congress made a mistake drafting the law and I made a mistake talking about it.

During this era, at this time, the federal government was trying to encourage as many states as possible to set up their exchanges. …

At this time, there was also substantial uncertainty about whether the federal backstop would be ready on time for 2014. I might have been thinking that if the federal backstop wasn’t ready by 2014, and states hadn’t set up their own exchange, there was a risk that citizens couldn’t get the tax credits right away. …

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.

In order to believe that, though, you’d have to ignore the plain meaning of the question Gruber was asked, and the plain meaning of the answer he gave. Gruber explicitly identifies states balking at running exchanges as one of the three main threats to the success of ObamaCare, at the 28-minute mark in the full video below. Note too at the time that Gruber stressed in the presentation that ObamaCare shouldn’t be seen as a federal takeover of health care in part because ObamaCare incentivized states to deal with the exchanges, an argument made at least in parallel to the point about the political threat to the law that balking states would create.

The second question after that argument went directly to that issue, with no misunderstanding the point (around 31:20):

Q: You mentioned the health implementation exchanges in the states, and it’s my understanding that if states don’t provide them, then the federal government will provide them. What do you say to that?

GRUBER: Yeah, so these health-insurance Exchanges, you can go on ma.healthconnector.org and see ours in Massachusetts, 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. But you know, once again, the politics can get ugly around this.

This answer is not a “speak-o” any more than the statutory language on subsidies and exchanges was a “typo.” Gruber explained the coercive policy correctly and in detail, along with the stakes involved in seeing the coercion succeed. It’s not a case of just using the wrong terminology, like “market” instead of “exchange.” Gruber clearly understood the statute at this time — in January 2012 — to provide the arm-twisting needed to get states to launch their own exchanges by stiffing consumers in states without them, which would then create more pressure on those states to get them the federal subsidies that they were funding but not receiving.

That is exactly what the plaintiffs argued in Halbig, and what the court ruled to be the intent of Congress as well as the statutory reality of the ACA. Just because that arm-twisting policy failed in its goals doesn’t mean it wasn’t deliberate, rational, and very much a part of the ObamaCare strategy then, and it doesn’t make it a “typo” now — or a “speak-o” either.

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ObamaCarearchitectexplainedin2012videowhyonly

ObamaCare architect explained in 2012 video why only state exchanges pay subsidies

posted at 8:01 am on July 25, 2014 by Ed Morrissey

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This week, Jonathan Gruber appeared on MSNBC to assert that the DC Circuit appellate court got the ObamaCare statute all wrong in its Halbig decision. Gruber, one of the key architects of the ACA and of the Massachusetts “RomneyCare” law that preceded it, insisted that the state exchange requirement for subsidy payment was purely accidental. “It is unambiguous this is a typo,” Gruber told Chris Matthews. “Literally every single person involved in the crafting of this law has said that it`s a typo, that they had no intention of excluding the federal states.”

Two years ago, though, Gruber gave a much different explanation for this part of the ObamaCare statute. Speaking at a January 2012 symposium for a tech organization that this was no typo. It was, Gruber said, a deliberate policy to twist the arms of reluctant states to set up their own exchanges — and that a failure to do so would mean no subsidies for their citizens. Peter Suderman at Reason and William Jacobson at Legal Insurrection immediately grasped the significance of this contradiction:

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 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. But, you know, once again the politics can get ugly around this. [emphasis added]

Suderman gives the context of Gruber’s remarks:

Jonathan Gruber, a Massachusetts Institute of Technology economist who helped design the Massachusetts health law that was the model for Obamacare, was a key influence on the creation of the federal health law. He was widely quoted in the media. During the crafting of the law, the Obama administration brought him on for consultation because of his expertise. He was paid almost $400,000 to consult with the administration on the law. And he has claimed to have written part of the legislation, the section dealing with small business tax credits.

After the law passed, in 2011 and throughout 2012, multiple states sought his expertise to help them understand their options regarding the choice to set up their own exchanges. During that period of time, in January of 2012, Gruber told an audience at Noblis, a technical management support organization, that tax credits—the subsidies available for health insurance—were only available in states that set up their own exchanges. …

And what he says is exactly what challengers to the administration’s implementation of the law have been arguing—that if a state chooses not to establish its own exchange, then residents of those states will not be able to access Obamacare’s health insurance tax credits. He says this in response to a question asking whether the federal government will step in if a state chooses not to build its own exchange. Gruber describes the possibility that states won’t enact their own exchanges as one of the potential “threats” to the law. He says this with confidence and certainty, and at no other point in the presentation does he contradict the statement in question.

So is this a smoking gun in the Halbig case? Politically — yes. Legally? It certainly undermines one argument used by the administration to defend payment of subsidies through the federal exchanges, but it may not be entirely dispositive. What matters here is Congressional intent, not Gruber’s, to the extent that the statute itself appears ambiguous. The actual text of the law supports Gruber’s 2012 position, as both the DC and 4th Circuits found in their opposing rulings, but the 4th Circuit couldn’t quite believe that Congress intended to shaft Americans in states that didn’t set up their own exchanges. That might have changed had they heard from the 2012 version of Gruber.

Will this be enough at the Supreme Court to demonstrate that there was a rational reason for Congress to make the distinction in the law and force the court to adopt the DC’s Halbig decision? You’d have to ask Anthony Kennedy and John Roberts that question. And I’d say the odds are good that they’ll be asked it relatively soon.

Here’s the entire Nobilis presentation, in case anyone worries that this got taken out of context. The relevant remarks come at the 31-minute mark.

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CouldaRepublicanpresidentgutObamaCarewithoutaction

Could a Republican president gut ObamaCare without action from Congress or the Supreme Court?

posted at 8:01 pm on July 23, 2014 by Allahpundit

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Why not? If President Obama can declare without statutory support that the employer mandate won’t be enforced for a few years, why couldn’t President Cruz declare that the individual mandate won’t be enforced? Why couldn’t he promulgate a rule, a la Obama did last fall when his “if you like your plan” lie was exposed, that allowed insurers to revive pre-ObamaCare health plans that had been rendered illegal by the new law? Those plans would have lower premiums than ObamaCare exchange plans do, which would entice healthy customers to drop their O-Care coverage and sign up for an old plan instead. Result: Two separate risk pools, one for healthy people and one very unsustainable one composed mostly of the sick. Once the latter pool collapses, poof — no more ObamaCare. The law has survived through dubious unilateral executive action; it’s only fitting that dubious unilateral executive action brings it down.

That’s the quick and dirty solution. Patterico has a more elegant plan, one based on yesterday’s appellate court rulings. The Fourth Circuit, you’ll recall, held that the federal ObamaCare exchange (Healthcare.gov) does qualify as “an exchange established by the State” under the statute — not because Congress necessarily intended it to but because that’s how the IRS is interpreting the law. And under Supreme Court precedent, if an agency’s interpretation of a law is reasonable, courts are supposed to defer it. Patterico’s point is simple, then: Does that mean that if President Cruz’s IRS decided to interpret the rule differently, so that the federal exchange doesn’t qualify as “an exchange established by the State,” courts would be bound by that interpretation too?

The U.S. Supreme Court’s Chevron case that created “Chevron deference” said:

“The fact that the agency has from time to time changed its interpretation . . . does not . . . lead us to conclude that no deference should be accorded the agency’s interpretation of the statute. An initial agency interpretation is not instantly carved in stone. On the contrary, the agency, to engage in informed rulemaking, must consider varying interpretations and the wisdom of its policy on a continuing basis.”

In other words: agencies can change their minds, and we will continue to defer to them.

So, applying the Fourth Circuit’s reasoning, an IRS under Obama can say that an exchange “established by the state” can mean “established by the federal government.” But an IRS under Ted Cruz, applying the classic formulation of Monty Python’s argument sketch, could say: “No it doesn’t.”

President Cruz’s IRS could pull the plug and there’s nothing that a divided Congress could do to stop him. But that assumes two things: (1) that the Supreme Court will follow the Fourth Circuit’s lead and allow courts to be guided by the IRS’s interpretation of the law, and (2) that the politics of ObamaCare circa 2017 would allow Cruz or any other Republican to cancel subsidies for federal exchange consumers en masse. Avik Roy, while celebrating the Halbig ruling as a victory for the rule of law, thinks it’s a speed bump for ObamaCare and little more:

In this context, Ezra Klein makes a relevant point. “By the time [the Supreme Court] even could rule on Halbig the law will have been in place for years. The Court simply isn’t going to rip insurance from tens of millions of people due to an uncharitable interpretation of congressional grammar.” Ezra unfairly derides the legal issues at play, and exaggerates the policy implications, but he asks the right political question.

Chief Justice Roberts, you may recall, was the justice who singlehandedly re-wrote Obamacare in order to justify the legality of the law’s individual mandate. He did so, it appears, because he was more worried about left-wing criticism of the Court than he was about constitutional precision. It’s hard to believe he wouldn’t act the same way here.

I agree. His ruling on the mandate was based on the Constitution whereas his ruling on the Halbig appeal would be based on a statute, which might encourage him to be bolder this time. But it’s hard to believe Roberts would have waved ObamaCare through when he had a shot to kill the law before it began only to blow it up five years later, after the country’s insurance system has been overhauled. Even the D.C. Circuit, despite having mustered the courage to rule as it did yesterday, said that it issued its ruling “reluctantly,” knowing that it would mean pulling the rug out from under millions of people who were counting on subsidies to reduce the cost of their new insurance. If the politics of undoing subsidies are that hot now, just nine months after ObamaCare went into effect, how much hotter will they be three years from now, when people have grown dependent on them? That was Ted Cruz’s whole point in pushing “defund,” in fact — that the law had to be stopped before it took effect because dependency would prevent it from being undone afterward. Does that mean President Cruz would refuse to instruct his IRS to interpret the law as Patterico suggests?

That’s not the only political deterrent for Republicans in canceling the subsidies later, in 2017 or beyond. Lefty Brian Beutler is right that Halbig is a win for ObamaCare opponents generally but a huge headache potentially for Republican governors. Most of the states that refused to build their own state exchanges are red states; their citizens are the ones who are buying most of the plans sold on the federal exchange, Healthcare.gov — which means it’s their citizens, by and large, who’ve now had their subsidies yanked away. Since Congress isn’t going to restore those subsidies, those O-Care customers are going to demand that their state governments fill the gap and build their own state exchanges instead. Someone like Scott Walker will thus be caught in a bind, pressured from the right by conservatives who don’t want him to validate ObamaCare by building an exchange and pressured from the left by O-Care customers (some of them Republicans) who want him to build an exchange so they can get their subsidies back. If President Cruz told his IRS to follow the Patterico approach, he’d essentially be punting this problem to Republican governors, some of whom could suffer politically from it. Would he do that, or would he stick with the subsidies to keep the heat off state-level Republicans? Maybe we’ll find out.

But let’s not think about that right now. Let’s enjoy a rare judicial rebuke to executive power.

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InvestigationrevealsObamacareisafraudster’sdreamcome

Investigation reveals Obamacare is a fraudster’s dream come true

posted at 2:41 pm on July 23, 2014 by Noah Rothman

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Tuesday’s federal appeals court decision in Halbig v. Burwell focused the public’s attention on the shaky legal ground upon which the Affordable Care Act’s subsidized coverage provisions are founded. In spite of the best efforts of the administration and it’s defenders to reassure the public that those who enrolled in ACA plans through the federal exchanges will continue to receive financial assistance, the seeds of apprehension have been sown. That anxiety will not be easily alleviated.

In fact, that trepidation may have been exacerbated just hours later when the findings of a government investigation into the ACA and fraud was released. According to the findings of an investigation conducted by the Government Accountability Office which were presented to Congress on Wednesday, some of those taxpayer-funded subsidies are not merely legally problematic but are also subject to extensive fraud.

The GAO found that 11 of 12 applications for federal assistance while applying for insurance provided through the ACA using “fictitious identities” were accepted. “For each of our 11 approved applications, we paid the required premiums to put policies into force, and are continuing to pay the premiums. For the 11 applications that were approved for coverage, we obtained the advance premium tax credit in all cases,” the report read.

In six other applications, GAO investigators also tried to sign up fake applicants with in-person representatives. But in five of those cases, GAO was “unable to obtain in-person assistance” for various reasons, including one representative saying they could not help because HealthCare.gov was down.

“We are examining this report carefully and will work with GAO to identify additional strategies to strengthen our verification processes,” administration spokesman Aaron Albright said. At least on paper, fraudsters risk prosecution and heavy fines.

The GAO said its investigators concocted fake identities using invalid Social Security numbers and falsely claiming citizenship or legal residence. In other cases, they made up income figures that would disqualify them from getting subsidies.

The GAO also found that contractors processing applications were not aware that they had to vet applications for potential fraud, that five out of six falsified applications for coverage submitted by telephone were accepted, and that an online identity checking system could be easily bypassed.

Conn Carroll notes that, in spite of the fact that this blockbuster investigation has received virtually no coverage in the mainstream press, it has nevertheless sparked some grumbling in liberal ranks:

Obama’s complete failure to prevent fraud in his signature domestic accomplishment even had some liberals questioning the administration. “This lack of oversight just isn’t acceptable,” Indiana University School of Medicine professor Aaron Carroll (no relation) blogged, “The GAO should be checking this stuff, and the administration should be responding to it. Let’s see what happens.”

Carroll should not hold his breath. Obama has every incentive to get as many “beneficiaries” signed up for Obamacare no matter how fraudulent they are. Democrats have made the number of “Americans” enrolled in Obamacare the defining metric for the law’s success. There simply is no penalty for signing up fake people.

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WhiteHousegivingupfightoverObamacare’scontraception

White House giving up fight over Obamacare’s contraception mandate?

posted at 8:40 am on July 23, 2014 by Noah Rothman

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The Supreme Court’s ruling in the Hobby Lobby case was met with incandescent outrage from progressives. The overturning of a mandate never passed by Congress which had not existed prior to 2010 signaled, those who consider themselves members of a class of deliberative and reasoned thinkers said, evidence of a theocratic judiciary in the United States. Recognizing the indignation on their side of the aisle, the White House responded by reassuring their base supporters that this offense would not go unanswered.

“Today’s decision jeopardizes the health of women who are employed by these companies,” White House Press Sec. Josh Earnest said.

He added that it the administration would urge members of Congress to plug this new hole in the Affordable Care Act, and that is exactly what they did. In order to appease the notoriously lethargic base of Democratic voters who had suddenly grown energized over the specter of impeded access to free contraceptives, Congressional Democrats submitted a measure aimed at restoring that coverage without amending the Religious Freedom Restoration Act. It failed to pass.

After that ol’ college try, it seems the White House may be giving up on the fight over the contraception mandate entirely. In a move sure to dispirit their supporters, the administration is reportedly developing a compromise proposal which The Hill reports would let “nonprofits opt out of ObamaCare’s contraception mandate without filing a form they say violates their religious belief.”

On Tuesday, a senior administration official said they are working on an alternative option for religious nonprofits that do not want to fill out the document and will issue a federal regulation in the next month.

While the officials provided no further details, they emphasized the regulation will not shift the burden of paying for contraception to the employees.

The news comes after the Supreme Court issued an injunction in favor of Wheaton College, an evangelical institution in Illinois that will not have to fill out the third-party form while the high court makes its ruling, which isn’t expected until at least fall.

In the wake of Tuesday’s decision in Halbig, the war to keep Obamacare intact is becoming a multi-front conflict. Politics is, as they say, the art of the possible and compromise is probably a welcome short-term solution to this issue until the broader problem of the Affordable Care Act’s legitimacy can be finally determined at the ballot box.

This will not satisfy Democrats who were spoiling for a fight and abhor compromise over an issue so central to the War on Women.

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On the other hand: Fourth Circuit upholds ObamaCare subsidies for federal exchange consumers

Ontheotherhand:FourthCircuitupholdsObamaCare

WhiteHouse:It’sbusinessasusualonsubsidies

White House: It’s business as usual on subsidies after Halbig

posted at 1:21 pm on July 22, 2014 by Ed Morrissey

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Another example of executive-branch lawlessness, or simply business as usual while an issue proceeds through the appeals process? The White House reacted to today’s Halbig decision by reassuring enrollees through the federal exchange that HHS would continue to pay their subsidies. But for how long?

The White House says health subsidies under the Affordable Care Act will continue to flow for the time being despite a major setback delivered by a federal appeals court.

The ruling potentially derails billions of dollars in subsidies for many low- and middle-income people who bought policies. But White House spokesman Josh Earnest says while the case works its way through the courts, it has “no practical impact” on tax credits. He said the White House is confident in Justice’s legal case.

At first blush, this seems rather arrogant. The court struck down the subsidies based on the explicit text in the law, and HHS’ most recent interpretation of its application to American territories is consistent with it. Should the court decision mean an immediate cessation of subsidies?

Well, probably not, for both legal and practical reasons. HHS is almost certain to appeal this to either the Supreme Court or to the en banc panel at the DC appellate level, and ask for a temporary stay in the meantime. Subsidies are not a constant stream, but get paid out on a monthly basis. The Obama administration is confident in getting a reversal and even more confident in getting a temporary stay while the appeals process continues, especially given the stakes involved for people already enrolled on the basis of the promises of subsidies. This isn’t defiance, it’s merely a reminder that this won’t stop on a dime, and it may not stop at all depending on what the en banc or Supreme Court review decides. (Plus, the 4th Circuit ruled the other direction a few minutes ago; Allahpundit has analysis of that coming up next.)

Practically, it might be difficult to stop the subsidies immediately anyway. The Healthcare.gov back end that is supposed to manage that function is still largely AWOL, as Jeryl Bier reminded us on Twitter:

It's not such much they're defying the law; it's just that the "backend" module that could stop subsidies isn't built yet. @AP @bomble

— Jeryl Bier (@SpeakWithAuthor) July 22, 2014

The practical implications of this ruling work in the other direction, too. For states that didn’t opt to build an exchange, are Americans under obligation to comply with the mandates and pay penalties for non-compliance? Allahpundit linked to this earlier, but Michael Cannon’s explanation about the real scope of Halbig is worth reading in full. This not only ends subsidies for as many as 7 million Americans, it also lifts the obligation to pay taxes on tens of millions more for non-compliance — which is what was supposed to fund those subsidies:

Critics will respond that, as dozens of economists who filed an amicus brief on behalf of the government have predicted, a Halbig ruling would also cause the full premium to rise by unleashing adverse selection. This claim is based on a fundamental misunderstanding of Halbig and the PPACA. If a lack of subsidies in federal Exchanges leads to adverse selection, Halbigis not the cause. The cause is Congress tying those subsidies to state-established Exchanges, and 36 states refusing to cooperate. Halbig will not and cannot cause adverse selection. It merely asks the courts to apply the law as Congress enacted it.

Second, Avalere Health, the Urban Institute, and media outlets that have repeated their estimates typically neglect to mention that a victory for the plaintiffs would mean the second-highest court in the land ruled the Obama administration had no authority to issue those subsidies or impose the resulting taxes in the first place – that those taxes and subsidies are, and always were, illegal. Regardless of one’s position on the PPACA, we should all be able to agree that the president should not be allowed to tax and spend without congressional authorization. That’s what’s at stake in Halbig. It is why the Halbig cases are far more important than “ObamaCare.”

The termination of those subsidies and the taxes they trigger takes on an entirely different flavor when we introduce that small detail. If the courts rule for the plaintiffs, I’ll be interested see how many news agencies use headlines like, “Ruling Denies Subsidies to Millions,” versus the more accurate, “Court Rules Obama Gave Illegal Subsidies to Millions.”

Though that small detail doesn’t change the fact that 5 million people have been deeply wronged, it does clarify who wronged them: not the Halbigplaintiffs or a few judges, but a president who induced 5 million low- and middle-income Americans to enroll in overly expensive health plans with the promise of subsidies he had no authority to offer, and that could vanish with single court ruling.

Third, these reports and the ensuing media coverage uniformly neglect to mention that a victory for the Halbigplaintiffs would free not only those plaintiffs but tens of millions of Americans from the PPACA’s individual and employer mandates. Indeed, Halbig would free from potential illegal taxation more than ten times as many people as lose an illegal subsidy.

The bigger question will be whether the IRS will be able to collect any of those fines while Halbig stands as is, and what that does for the entire fiscal standing of ObamaCare. Don’t expect Congress to address the imbalance, either, as Republicans have warned all along about the fiscal imbalances of ObamaCare even outside of Halbig and have no incentive to fix them now.

Also, don’t expect House Republicans to withhold subsidy funds either, because the subsidies are essentially an entitlement program and not a budget line item. A few commenters on Twitter pointed to the House’s supposed “power of the purse,” but that belongs to Congress as a whole, not just the House. Besides, the revenue flow to the subsidies don’t come through appropriations, but through the taxes and fines built into ObamaCare — the supposedly self-sustaining system that aimed to avoid budget battles altogether. With 36 states now out of the system, that revenue flow will dry up tout suite unless HHS gets a temporary injunction soon.

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Tags: Barack Obama, Court of Appeals, employer mandate, halbig, ObamaCare, subsidies, White House

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D.C. Circuit guts ObamaCare: Consumers in federal exchange are ineligible for subsidies

D.C.CircuitgutsObamaCare:Consumersinfederal

HHS suddenly finds ObamaCare exemptions for territories

HHSsuddenlyfindsObamaCareexemptionsforterritories

Obama’slawprofessor:There’sa“veryhighrisk”

Obama’s law professor: There’s a “very high risk” that a federal court is going to gut ObamaCare

posted at 6:41 pm on July 11, 2014 by Allahpundit

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Via the Corner, a perfect note on which to end the week, not only as a palate cleanser after bumming you out with that impeachment post but because it’s quite likely we’ll have a ruling from the D.C. Circuit next week on the case. Prepare accordingly.

Don’t read any further, though, if you haven’t read this post already as background. The issue, remember, is one line in the ObamaCare statute that says subsidies shall be available only to consumers who buy their new health insurance on “an Exchange established by the State.” Thirty-four states refused to build their own exchanges, so the federal government went ahead and built Healthcare.gov for people in those states as a substitute. Question: Is that “an Exchange established by the State”? If not, a lot of people who were counting on subsidies to help pay for their insurance are about to have the rug pulled out from under them. Right, Laurence Tribe?

Harvard legal scholar Laurence H. Tribe warned Tuesday of a “very high risk” that a crucial aspect of Obamacare – its government subsidies provision – could fall victim to a major legal challenge being mounted by conservatives. That is why, he also said, that the Supreme Court will almost certainly get “a second bite of the apple” in determining the fate of President Obama’s signature health law, with uncertain consequences…

Tribe, whose new book, Uncertain Justice, takes a deep dive into the Roberts court, said the plaintiffs make a strong argument. The legislative language is clear, he said, that the subsidies apply to exchanges established by states. Yet in drafting the law, Tribe said the administration “assumed that state exchanges would be the norm and federal exchanges would be a marginal, fallback position” – though it didn’t work out that way for a plethora of legal, administrative and political reasons.

“You could argue that as long as a state triggers it by asking the federal government to come in [and establish insurance exchanges] that it’s a state-established exchange, even though it’s a federally run exchange,” Tribe added. That might give some of the justices who aren’t strict constructionists some leeway in looking beyond the law’s specific language, he said.

“I don’t have a crystal ball,” Tribe said, “but I wouldn’t bet the family farm on this coming out in a way that preserves ObamaCare.” “I would!”, says law prof (and O-Care supporter) Timothy Jost. Healthcare.gov is merely a conglomerate of individual state exchanges, he argues. The feds established each of those exchanges on behalf of a state, which is close enough to the language in the statute to survive judicial scrutiny.

The Affordable Care Act was meant to “provide affordable . . . coverage choices for all Americans.” A key section says, “Each state shall . . . establish an . . . Exchange,” but another section provides that if a state “elects” not to establish the “required Exchange,” the secretary of health and human services must “establish and operate such Exchange.” These sections both require states to establish exchanges and allow them not to do so.

Congress gave the IRS the responsibility to resolve such contradictions, and the IRS adopted the only reasonable approach. If a state does not create the “required Exchange,” HHS steps into its shoes and sets up “such Exchange.” The law, in other words, requires the federal government to create the “Exchange established by the state,” with the same authorities and responsibilities as state exchanges, including offering premium tax credits…

ACA opponents, however, hope that the other two judges on the D.C. Circuit panel, both Republican appointees, will share enough of their Obamacare phobia to detonate the imaginary bomb. If that happens, their success will be short-lived. The U.S. Court of Appeals for the 4th Circuit seems poised to uphold the IRS rule in an identical challenge, and the entire D.C. Circuit is likely to reverse the three-judge panel if it issues such an outlier ruling. There is no secret bomb in the ACA, as the courts have told us and will tell us, and the imaginary bomb will not destroy the law.

It’d be weird to pass a law called the “Affordable Care Act,” Jost says, that disallows affordable coverage for tens of millions of people just because it was the feds who set up their state’s exchange instead of the state itself. For a reply to that, read Michael Cannon’s comments at the Corner. He and Jonathan Adler have spearheaded this suit, arguing all along that the reason subsidies were limited to true state exchanges was to create an incentive for each state government to build their exchange themselves rather than forcing the feds to do it. It’s not just a semantic distinction, in other words. Subsidies were supposed to be restricted to state exchanges for a reason.

Exit question: If the D.C. Circuit strikes down the subsidies for Healthcare.gov customers, 34 state governors — all of them Republican, I believe — are going to suddenly face a lot of pressure at home to build their own exchanges, huh?

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Tags: exchange, federal, halbig, laurence tribe, ObamaCare, state, statute, subsidies

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