Update IV: Tomorrow is a big day at the Supreme Court for ObamaCare. The Justices will sit down for private deliberations on the latest ObamaCare case. It was no surprise therefore, that advocates on both sides of the issue took their arguments pro and con public today for one last thrust at the nine Justices. Most of the propaganda/discussion is about Justice Kennedy and his words/intentions (we speculated about that in an update below).
Yesterday, ObamaCare defenders tried to convince themselves that Justice Kennedy was on their side. Ruth Marcus today tries to keep the drum rolling but is forced to admit that maybe (as we argued) things are not as clear as ObamaCare shills HOPE:
Kennedy’s concern involved whether prohibiting subsidies on federal exchanges would be unfair — not to citizens denied subsidies, mind you, but to states themselves. States, Kennedy noted, would be put to the coercive choice of either setting up their own exchanges or being stuck with the ensuing disaster.
“From the standpoint of the dynamics of Federalism, it does seem to me that there is something very powerful to the point that if your argument is accepted, the States are being told either create your own Exchange, or we’ll send your insurance market into a death spiral,” Kennedy told Michael Carvin, the lawyer representing four individuals challenging the federal subsidies. “It seems to me that under your argument, perhaps you will prevail in the plain words of the statute, there’s a serious constitutional problem if we accept your argument.”
Kennedy’s point has contradictory implications, one tilting in favor of those challenging the subsidies, one in the government’s direction. On the pro-challenger side, he could find that (a) the law clearly does not provide for federal subsidies and (b) is unconstitutional because it effectively forces states to establish their own exchanges.
That’s what we wrote in our of our updates. Justice Kennedy is actually making another argument for why ObamaCare is UNCONSTITUTIONAL not merely statutorily defective. Kennedy thought the law was UNCONSTITUTIONAL in ObamaCare case #1 and to us it appears clear he still thinks it is UNCONSTITUTIONAL.
Arguments to preserve ObamaCare are mostly scare-fests of fearmongering horror worthy of Halloween. SCOTUSblog mostly spun the line of the ObamaCare shills but we found this nugget from the down-the-middle Amy Howe:
Alito added that, if Congress didn’t want to limit the subsidies to the residents of states that had set up their own exchanges, it could have used more precise language to do so – as it did, for example, in making clear that the District of Columbia (which is not a state) nonetheless qualifies as a “state” for purposes of the ACA.
Justice Kennedy’s concerns about states’ rights resurfaced again during Verrilli’s argument, but this time pointing in the other direction. Responding to Verrilli’s contention that it would not have made any sense for the ACA to include a provision for the federal government to set up exchanges if Congress envisioned that the states would all do so, Kennedy suggested that the fall-back option might have been added so that the states could “show that they had concerns about the wisdom and workability of the [ACA] in the form that it was passed.” Later on, Kennedy also challenged other aspects of the government’s reading of the statute – for example, he cited the Court’s earlier cases to make the point that, if the IRS is going to allow “billions of dollars” of tax deductions for the subsidies, “it has to be very, very clear.”
Good points all. Another tasty essay on ObamaCare which fries an ObamaCare defender’s arguments is Sean Trende’s Does ‘Joy of Cooking’ Explain Logic of King v. Burwell?
The problem, at least for the five conservative justices, is that the next case before it really might be the Uranium Mill Tailings Radiation Control Act, and if they find for the government here, that next case will be evaluated in the shadow of a decision holding that “oil” can mean “butter,” and that “whipped with a blender” can mean “whipped by hand” (notwithstanding a statutory definition in the latter instance). They are just going to be incredibly reluctant to do so, as that would undermine an awful lot of precedent on statutory interpretation that conservatives have worked hard to erect.
Pancake recipes included.
Attorney General of Oklahoma Scott Pruitt in the Wall Street Journal provided Justice Kennedy all he needs to rule against ObamaCare with federalism as the justification. Likewise Avik Roy at Forbes provides 7 Reasons Why Obamacare ‘Federalism’ Won’t Lead Anthony Kennedy To Join The Supreme Court’s Left In King v. Burwell. It’s a CLASS-y argument by Roy.
Update III: Kennedy rules the day. Nervous Nellies, Pearl Clutchers, rule the day – as we noted in our first update. The question of the day? We’ll go with door number 3. Supreme Court oral argument: Kennedy leaning towards White House’s view on ObamaCare subsidies?:
The third option open to Kennedy is the trickiest. What if he decides that “established by a State” isn’t unclear, that the plaintiffs are obviously right that “State” means the states only, not the federal government — but that, per the federalism/coercion reasoning of those 1990s cases, that means the statute is … unconstitutional? What happens to the statute then? Is the entire subsidies scheme, not just for federal customers but for state customers, now illegal? That would be an even bigger disaster for the White House than they’re expecting.
Quo Vadis Kennedy? “But Kennedy added that the challengers may win anyway based on the plain meaning of the provision at issue.” In the comments we’ve followed up on what we think happened today. Rest assured, it will get worse. The IRS wants $490 million more to implement ObamaCare. Will Boner and House Republicans cave and give Obama/ObamaCare more money?
Update II: More information is in and it appears that our view in our first update is gaining support from the new reports of what happened/is happening today at the Supreme Court:
Chief Justice John Roberts said almost nothing in nearly 90 minutes of back-and-forth, and Justice Anthony Kennedy’s questions did not make clear how he will come out. Roberts was the decisive vote to uphold the law in 2012. [snip]
“It may not be the statute Congress intended, but it may be the statute Congress wrote,” Scalia said of the provision in question. [snip]
Kennedy voted to strike down the health law in 2012, but on Wednesday he asked questions of both sides that made it hard to tell where he might come out this time.
He suggested that challenger Carvin’s argument raised a “serious” constitutional problem affecting the relationship between states and the federal government.
On the other hand, he seemed less than convinced by Verrilli’s reading of the law to allow the subsidies nationwide.
Justice Kennedy knows ObamaCare sucks and is unconstitutional. Any Obama and/or ObamaCare supporter who takes any solace in what Kennedy asked (see our first update) should also consider the consequences of his state/federal arguments and what that could mean when the immigration case from Texas crawls up the ladder.
Update: The tea-leaf reading has already begun and most of it is uninformed. First, Justice Ruth Bader Ginsberg tried to demolish the case with a fierce attack on the standing of the plaintiffs. She failed.
But the most controversy, or rather pearl clutching, thus far regards a question and argument Justice Kennedy advanced. Ann Althouse is clutching pearls and declaring all is lost and that Kennedy will vote with the government. Wisely, she advises herself to read the entire transcript once it is released before jumping to pearl clutching. The smart Powerline is discouraged too. All of this pearl clutching jumps to conclusion are based on an early mid-argument report from an ObamaCare supporter at the usually good SCOTUSblog. This is the much too early assessment, via Powerline:
Eric Citron at Scotusblog provides a mid-argument report on King v. Burwell, the vital Obamacare case being heard by the Supreme Court today. According to Citron, the petitioners, who argue that subsidies are not available on the federal exchange faced a troubling question from Justice Kennedy, on whose vote the case may very well turn.
Kennedy, says Citron, “expressed deep concern with a system where the statute would potentially destroy the insurance system in states that chose not to establish their own exchanges – likening this to an unconstitutional form of federal coercion.” Recall that part of the argument in favor of the view that subsidies aren’t available on the federal exchange is the idea that Congress set up Obamacare this way to induce states to establish their own exchanges. This is what Jonathan Gruber famously said.
If I understand the import of Kennedy’s questioning, he’s concerned that such a scheme might be unconstitutional. If so, then he might strain to construe the statute as not “coercing” the states to establish exchanges, and therefore not withholding subsidies to residents of states that opt not to have exchanges.
Let’s see, though, how the questioning of the government’s lawyer goes.
UPDATE: The argument that petitioners lack standing to challenge the statute has not gone well. Of note, Justice Sotomayor seemed to reject. This might mean she wants to the Court to rule on the merits because she’s confident now the government will win.
This is all very pearl clutching worthy. Except that Justice Ginsberg fought tooth and nail to get to the “standing” question. More importantly however, this Kennedy argument can be turned upside down and inside out. What does it mean? The conclusion jumping is based on ObamaCare supporter Eric Citron’s initial report. But Citron has another update to his reports which appear to advise pearl clutchers to put down the pearls:
Until we hear how Justice Kennedy questioned the government, the most important news from the morning’s argument is clearly his focus on the potential consequences for states that choose not to establish their own exchanges under the petitioners’ reading of the statute – that is, that citizens of those states would receive no subsidy and no resulting mandate tax penalty. Trained constitutional lawyers will find it noteworthy that his focus here is on the consequence for states as such, and not for their citizens; Kennedy’s concern is about the federal/state balance and his distrust of a reading that puts a gun to the head of states that fail to set up their own exchanges – threatening them with the almost certain destruction of their statewide insurance systems if they do not comply. That concern might be interpreted (as a matter of legal theory) in a few different ways:
That last sentence is the key. This can be interpreted (until we hear how the rest of the argument goes or we read the transcripts or hear the audio to be released on Friday) in several ways:
Justice Kennedy might believe that Congress would not have intended to set up such a dubious system; he might believe that this reading is required but actually unconstitutional (so that he would strike down the statute’s condition that subsidies apply only to exchanges established by the state); or – perhaps most likely – he might believe that the statute should be interpreted so as to avoid the “serious constitutional problem” he identified. [snip]
He seemed to realize that state legislators would be in an impossible position under that reading – more or less forced to “adopt” or “endorse” the ACA system in order to avoid unmanageable consequences in their states. His plausible conclusion was that Congress either did not intend to put them to that choice, or that the statute shouldn’t be read to have done so, because that’s not typically how our constitutional system works. Instead, the federal government makes and administers federal laws without forcing the states to do some of the work for them. Kennedy seemed to be thinking that this provision should be read more like the typical case, and rather unlike the kind of unusual provision the petitioners suggested.
We have an alternate view which fits all the facts: Justice Kennedy thinks the whole ObamaCare systems sucks. The attempt by the government to force states to establish ObamaCare exchanges sucks (and is unconstitutional as he voted in the first ObamaCare case). Justice Kennedy appears to think that whether Congress intended or did not intend to screw the states the bottom line is the ObamaCare law screws the states and the law sucks.
Bottom line: Justice Kennedy wants to take the gun out of the hands of the federal government. How he will come up with a plan to do so might be the same way he decided in the first ObamaCare case: Dump ObamaCare root, trunk, and branch.
At 10:00 today the Supreme Court hears arguments in King v. Burwell. We have written a lot about this line of cases. If you want to drown in detail on this case read our previous articles: ObamaCare Chess: Supreme Court Moves To Checkmate King, HalBIG and other ObamaCare Hilarities, How Big??? ObamaCare Jonathan Gruber #HalBIG, How Big??? #HalBig – Halbig Court Decision On ObamaCare, ObamaCare Halbig Court Decision, ObamaCare Architect Jonathan Gruber On Capitol Hill To Testify With Lies, What To Do About Jonathan Gruber ObamaCare Lies.
As with the first legal challenge to ObamaCare this second attack was initially mocked by Obama and ObamaCare supporters. No longer. The main line of defense for ObamaCare defenders in this case is designed around the reality that this case, like the first case, could thoroughly gut ObamaCare (and Obama) like a sharp knife slicing rotted fish bloated in the sun.
If the challengers win and ObamaCare is implemented as written then the overwhelming majority of ObamaCare registrants would no longer get subsidies for their coverage and they would have to pay the huge bills and the ObamaCare contraption would fall apart. It would be like prisoners in an expensive jail who have to pay for their own long-term incarceration. At some point the prisoners just want to be set free. And some prisoners already want to be set free:
Dear @CoveredCA – you’ve turned a staunch supporter of #Obamacare into an opponent. Id rather die broke than have to go thru your exchange. [snip]
[A]s of today I’ve stopped making excuses for you and this system. It’s time to get your shit together. If I knew then, what I know now, I would have foregone insurance and taken the tax penalty. In fact, I’d rather be dead and broke than have to participate in Covered California’s health care exchange. [snip]
It saddens me to say this, but I no longer believe that the government should mandate health care. It’s not because I’ve abandoned the basic principles behind health care reform. Quite the contrary. But a great idea, is just an idea, if you can’t execute. And the government has proven time and time again, it can’t execute.
The problems that dupe encountered are in a sense the genesis of the ObamaCare case in the Supreme Court today. It’s not so much that the Obama government was totally incompetent (which it was extraordinarily so). The real problem is that the law as written and as intended to be written was and is a complete and total mess that can never work.
That the ObamaCare law is a total mess that can never work is what is at play here. Let’s repeat that: THE OBAMACARE LAW IS A TOTAL MESS THAT CAN NEVER WORK is what is at play here.
The ObamaCare law as intended and as written was a total mess. What happened then is that Obama elves tried to make the mess work. The contortions Obama elves put themselves through to get the ObamaCare mess to work got many of them in trouble.
The big contortion of the elves was to essentially try to rewrite the law at the morgue of compassion and logic – the IRS. The elves discovered the ObamaCare screws were not an incline plane wrapped helically around an axis but rather large square “screws” attempting to fit tiny triangular “nuts”. The contraption was designed so badly that it would not work no matter what they did so they continued to change and rebuild until little recognizable was left of the original design.
What did these elves do? They decided to ignore the law’s restriction that subsidies only be provided to those in states that established an ObamaCare exchange, and instead, of their own accord, give subsidies regardless of whether or not, as required by the law, the individual states had established an ObamaCare exchange.
The reason the law was written with such a foolish restriction was that without such a foolish restriction (1) there would not have been enough votes to pass ObamaCare in the Senate; and (2) the “penalty” of not having subsides would force the individual states to establish ObamaCare exchanges. Here’s one of the ObamaCare elves explaining further:
Most observers of the legal battle over Obamacare’s subsidies are now familiar with the two clips (one video and one audio) in which economist Jonathan Gruber takes the plaintiff’s side, saying only states which set up an exchange will receive subsidies. But a third example of Gruber saying much the same thing has, so far, received very little attention. [snip]
Here is what Gruber said in a March 2013 interview with Employee Benefit Adviser magazine:
I think the piece that isn’t going so well is the next step with states. A number of states have done a great job and are getting ready to go for 2014. But a lot of states are uncertain and there are other states that are, unfortunately, playing a terrible political game at the cost of their state residents in not developing exchanges.
What was that “terrible political game” Again, Gruber the Obama elf:
Through a political compromise, the decision was made that states should play a critical role in running these health insurance exchanges. And the health insurance exchanges are the centerpiece of this reform, because they are the place that individuals can go to shop for their new, securely priced health insurance. But if they’re not set up in a way which is transparent, and which is convenient for shoppers, and which allows people to take their tax credits, and use them to effectively buy health insurance, it will undercut the whole purpose of the bill. Now a number of states have expressed no instance in doing so. [snip]
It’s been a leader in setting up its exchange. It’s a great example. But California is rare. Only about 10 states have moved forward aggressively in setting up their exchanges. A number of states have even turned down millions of dollars in federal government grants as a statement of some sort, that they don’t support health reform.
I guess I’m enough of a believer in democracy to think that—when the voters in states see that by not setting up an exchange, the politicians of the state are costing state residents hundreds and millions and billions of dollars—that they’ll eventually throw the guys out, but I don’t know that for sure. And that is really the ultimate threat is will people understand that, gee, if your governor doesn’t set up an exchange, you’re losing hundreds of millions of dollars of tax credits to be delivered to your citizens. So that’s the other threat is will states do what they need to to set it up.
That “enough of a believer in democracy” thought he could impose his will on the citizenry by diktat. Obama’s Elf Gruber thought that California was “a leader” in the ObamaCare dream but that woman we quoted from earlier appears to disagree. It was a bad law badly written and now the diseased chickens are coming home to roost.
ObamaCare elves of course deride and attack those that are so brutal “they don’t support health reform”. But what is “health reform” to some is the disease to others. That’s another big part of the defense at the Supreme Court today:
Even if the text of the law is not perfectly crystal clear, the Obama administration plans to argue, the federal agencies should receive deference to sort out details and ambiguities. [snip]
However, opponents of the law say it would be a mistake to let an agency decide to offer tax credits, which affect tax refunds and equate to direct payments out of the U.S. Treasury.
“Decisions of a certain magnitude are not the sort of thing that Congress would delegate to an agency,” Adler said. “It would really be quite something to conclude that Congress had delegated the decision whether to offer tax credits to the IRS.”
It’s not just “tax credits” though. If the ObamaCare subsidies are permitted everywhere regardless of what the law as written says then everyone in every state must comply with the dictates of the law even if effects them adversely. This means that, as the challengers claim, because of the perversity of the IRS interpretation of the law they too will be forced to participate in ObamaCare.
That perversity is what sparked this latest challenge to ObamaCare:
But Congress does not have the power to make the states set up exchanges, so the ACA also instructs the federal government to step in and set one up if a state declines to do so – as thirty-four states eventually did. The exchanges are where the subsidies come in: the ACA provides that you only get the subsidies if you buy your health insurance through an exchange. The federal government reads the ACA to allow subsidies whenever someone buys health insurance on any exchange, whether it’s set up by the federal government or a state.
The challengers in King disagree. They point to the fact that in announcing the formula used to calculate the amount of the subsidies, the Act refers to “an Exchange established by the State.” So, they contend, the subsidies are not available to people who purchase their health insurance through an exchange operated by the federal government.
In 2014, over five million people bought health insurance on exchanges created by the federal government. One of those people was David King, a sixty-four-year-old Vietnam veteran who lives in Virginia and works as a limo driver. Based on his annual income of $39,000, King can purchase a health insurance plan with a monthly premium of $648 for just $275; the other $373 is covered by a subsidy. But King doesn’t want that subsidy. In fact, he doesn’t want to have to buy health insurance at all. And without the subsidy, he wouldn’t have to, because the health insurance would cost him enough that he would qualify for an exemption from the individual mandate.
King and three other Virginia residents filed a lawsuit challenging the government’s interpretation of the ACA as allowing subsidies for anyone who purchases health insurance on an exchange. The lower federal courts rejected their argument, but in November the Justices agreed to weigh in.
In their briefs at the Supreme Court, the challengers say that their argument is so simple that anyone who speaks English can understand it. The text of the ACA directs states to create an exchange. If they don’t, the federal government steps in and creates one itself. But Congress made clear that subsidies are only available for coverage that is “enrolled in through an Exchange established by the State” – and the federal government is not a state. If Congress had wanted subsidies to be available no matter who sets up the exchange, it could have said so, and it certainly wouldn’t have specifically indicated that subsidies would be available only for coverage obtained through exchanges “established by the State.” And reading the ACA to make subsidies available only for insurance purchased through state exchanges, they add, is consistent with what Congress intended because it gives states a strong incentive to create the exchanges in the first place.
When Missouri citizens “specifically voted not to set up a state exchange” there was “public awareness” that therefore the citizens of Missouri would not receive subsidies. The initiative still passed. Somehow ObamaCare defenders today at the Supreme Court will try to argue otherwise.
The arguments at the Supreme Court will conclude this afternoon and we will have updates as to what happened.