Halbig v. Burwell

by Don Boudreaux on July 22, 2014

in Health, Law, Legal Issues

The Wall Street Journal has a very good summary of today’s two different, and conflicting, court rulings on the lawfulness of the Obama administration’s efforts to violate the clear language of the Obamacare legislation.  A slice:

In Halbig v. Burwell, the D.C. Circuit Court of Appeals held that the Administration violated the Affordable Care Act by expanding subsidies to the 36 insurance exchanges run by the federal government. The plain statutory language of ObamaCare repeatedly stipulates that these credits shall flow only through “an Exchange established by the State.” The 2-1 panel majority thus did not “strike down” part of ObamaCare, as liberals and the media claim. Using straightforward textual construction, the court upheld the law the President signed but it vacated the illegitimate federal-exchange subsidies he tried to sneak in via regulation.

Distinguishing between state and federal exchanges was no glitch or drafting error. In 2010 Democrats assumed that the unpopularity of ObamaCare would melt away and all states would run their own exchanges. Conditioning the subsidies was meant to pressure Governors to participate. To evade this language, the Internal Revenue Service simply pumped out a rule in 2012 dispensing the subsidies to all. The taxmen did not elaborate on niceties such as legal justification.

The courts usually defer to executive interpretation when statutes are ambiguous, but Mr. Obama’s lawyers argued that the law unambiguously means the opposite of the words its drafters used. Judge Thomas Griffith knocked this argument away by noting in his ruling that, “After all, the federal government is not a ‘State,’” and therefore “a federal Exchange is not an ‘Exchange established by the State.’”

The White House also argued that the court should ignore the law’s literal words because Congress intended all along to subsidize everybody, calling the contrary conclusion an “absurd result.” Yet this is merely ex post facto regret for the recklessness and improvisation of the way ObamaCare became law, when no trick was too dirty after Democrats lost their 60-vote Senate supermajority. Nancy Pelosi said we had to pass the bill to find out what’s in it. Now we know.

Judge Griffith, a George W. Bush appointee known as a moderate, writes that he and Judge Ray Randolph reached their conclusion “frankly, with reluctance,” given the practical consequences. “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.”

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