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September 23, 2014

Latest Obamacare Attack is Met With ‘Bug-Eyed Disbelief’

Commenting on the fracas over the Halbig v. Burwell lawsuit, Jonathan Chait writes that conservatives are “fantastically wrong” to assert that “Obamacare was designed to deny tax credits on the federal health exchange.”

“Lots and lots of people followed the Affordable Care Act really closely. If the federal exchanges were intended not as a backup but as a punishment, denying their customers tax credits, it would have been a huge deal. People would have known about it. The Obama administration would have publicized the threat. This enormously consequential policy decision would be the subject of thousands of news stories and public comments. The news would not be confined to one economist [(Jonathan Gruber)] speaking about it a couple of years later.”

“It is hard to summarize the liberal response to the right’s bizarre new revisionism except as the kind of stammering, bug-eyed disbelief that occurs when somebody is forced to defend a factual proposition that everybody knows is true.”


    It is perfectly reasonable to believe the legislation passed is what was meant, that is, that there was both a carrot and a stick directed towards the states regarding the establishment of an exchange. Open a state exchange and your citizens get financial support, don’t and they won’t. The ACA had other coercive portions which the Supreme Court dismissed (the federal government could not unilaterally change the medicaid formula denying all federal funds to states which would not accept the new federal medicaid formula and rules) and changing the individual mandate to a tax based formula (Congress having the power to tax) from a command from Congress to individuals to do something (buy insurance.) So, to say that Congress had no intention to coercively incentivize and punish the citizens of a state based upon the willingness of that state to establish an exchange is not based upon the internal record of the act itself as passed and signed.

    • JenniferJia

      Actually, no. None of the internal record of the act itself indicated such intent, with regards to subsidy on the federal exchange.

      • ASRKC

        Below is a section from the paper which underwrites the suit against the IRS position on the support given to purchasers of insurance through the Federal exchange. Note that Baucus’ point is that the tax credits allows the committee to write the bill, forces the states to conform to the requirements of the Federal regulations (coerciveness as noted elsewhere above), and the language was unchanged in this area in the final bill. The language as written should be that which stands.

        “E. Authorial Intent

        “Statements by one of the PPACA’s primary authors, Senate
        Finance Committee Chairman Max Baucus, provide additional evidence that the language of Section 1401 conditioning tax credits on a state establishing an Exchange was no accident.

        “During Finance Committee deliberations over the Baucus bill, which became the PPACA without pertinent alteration, Sen. John Ensign (RNV) asked Baucus, “How do we [in this committee] have jurisdiction over changing state laws on coverage,” such as through the bill’s requirements that states establish Exchanges and adopt the bill’s insurance regulations, when such matters are “only in the jurisdiction of the HELP Committee and not in the jurisdiction of this committee?”

        “Baucus responded that the bill conditions the availability of tax credits on states complying with those directives. Specifically, Senator Baucus explained that the requirements Ensign mentioned are among the “conditions to participate in the Exchange,” and that “an Exchange . . . essentially is tax credits,” which “are in the jurisdiction of this committee.”In other words, the reason the Finance Committee could impose requirements on state-run Exchanges was because tax credits
        were conditional on state compliance.

        “Conditioning the tax credits on state compliance provided the
        jurisdictional hook the Committee needed to direct states to create Exchanges and otherwise alter their health insurance laws. If the Finance Committee bill had authorized tax credits in both state-run and federal Exchanges, then the Committee would not have had jurisdiction to impose regulatory requirements on state-run Exchanges. The operation of state Exchanges would have been outside the Committee’s bailiwick and arguably immune from federal oversight altogether. The
        fact that Section 1401 provided the Finance Committee this
        jurisdictional hook further demonstrates that the PPACA’s authors intentionally restricted tax credits to state-run Exchanges.

        “It is irrelevant that the need for that jurisdictional hook evaporated when the Finance bill cleared committee or that other members of Congress may have preferred a different outcome. The text that the Finance Committee approved is the text that the House and Senate passed and that the president signed. Nor is it plausible to argue the IRS rule is justified because congressional intent subsequently changed; the language did not.

        “In our extensive search of the PPACA’s legislative history, this
        comment by Sen. Baucus is the only instance we found of a member of Congress discussing whether tax credits would be available in federal Exchanges. Like all other relevant aspects of the legislative history, it flatly contradicts the IRS’s position. In contrast, the IRS and its defenders have identified nothing from the legislative history that supports the IRS rule. Senator Baucus’s own words show both that the plain meaning of Section 1401 accurately reflects congressional intent and that the IRS rule undermines congressional intent by discouraging
        states from creating Exchanges.”

        pp 156-158, “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA” Jonathan H. Adler and Michael F. Cannon, Health Matrix: Journal of Law-Medicine, Volume 23, Spring 2013, Issue 1.

        • JenniferJia

          Except that:

          “The disputed language about the exchanges being “established by the state” appears in the early version of the law that passed the Senate Finance Committee in the fall of 2009. But that version did not even contain a federally-operated exchange, and in fact required the creation of what the Finance Committee described as “state exchanges.” Therefore, there’s no clear logical way the Senate Finance bill could plausibly have been intended to deny subsidies to those on a federally-operated exchange, since no such federally-operated exchange was envisioned under that bill’s structure.”

          The point is, that line is a legacy that comes from ONE of the committee in charge of coming up with a version of the law, that didn’t even consider the existence of the federal exchange. Therefore, your whole point of subsidy was intended only for state exchange but not the federal exchange is pretty much laughable, as the concept of the federal exchange didn’t even exist in the Baucus-draft version.

          So there you go.

          • ASRKC

            Have looked at the piece in Plum Line. It is a useful item. The problem is that it is testimony after the error had blown up. While it may represent the intention of those on other committees, it does not represent the language which was adopted by Congress and signed by the President. And now we have found public statements from Dr. Gruber from two to three years ago indicating that the supposed flaw was recognized and was presented as a feature, not a bug. That is why courts look for contemporaneous commentary if they have to try to interpret legislative language. That is why the Baucus/Ensign discussion is so important. However, it really isn’t necessary to interpret the language, it is clear. Further, as I pointed out above, coercion of the states, and individuals, exists elsewhere in the bill, making the idea of an intention of the legislation to coerce the states into setting up state exchanges in return for credits for their citizens as being quite plausible.

            Of course the Congress could be said to be too dumb to know what it was passing. Many believe that over this and other legislation. However, since this was passed on a straight party line vote, in this case such a comment could only be laid upon one party.

          • GlobalTrvlr

            But the premise of the article is that there was no way this was debated and discussed, and then you argue that it was debated, inserted, and then dropped. But it was dropped & then added. It has been well documented.

          • ASRKC

            Which article? There are numerous articles referenced.

          • GlobalTrvlr

            Sorry, I intended that reply to Jennifer Jia, and was talking about the article that we are commenting on and then her argument that it was added & then dropped.

  • gsmullennix

    Ah, the written word. Not so easy to spin as the mindless verbal. But, easy to correct. Just get the offending passage legally modified so that no judge anywhere could see it any other way but as written. A better approach than passing it to find out what is in it donchathink?

  • Cindy in CA

    You forget the tax credits perk was to force states to do their own exchanges. So, no state exchange, no subsidies. NOW they are calling foul. FIGURES.

    • xian

      that is incorrect

  • jjj-truthisalwaysthere

    i love this article.. like Obama would *always* speak up if there was a problem with the new law.. ummm.. “nobody is going to lose their health insurance” and the couple dozen provisions of the law which were supposed to take effect in 2012 but *Obama himself* requested they be delayed so the impact wouldnt hurt his chances at re-election..
    and, um, dont you remember nobody read the thing before they passed it? they were in such a hurry to pass it and get it into law that they skipped serious debate, input from anybody but the health insurance companies, ignored the advice of doctors, business leaders, and basically everybody whos professional experience would have been valuable before enacting such a major national-impact/ budget defiinng law.
    and these are the guys who you think would have caught a small mistake in their wording? the whole debacle of this law’s passage was such an gregious example of negligent leadership and oversight for purpose of political gain, i can’t imagine anybody being stupid enough to thing the signers and supporters were actually competent and thoughtful leaders in its passage

  • jjj-truthisalwaysthere

    *aggregious example*

  • jjj-truthisalwaysthere

    and no, he doesnt care if people are actually insured. in the process of insuring, what, 7 million that he had to beg to sign up for the exchange, he took away the insurance of 2.5 million by rendering their policies invalid under the new plan and then made insurance far more difficult to purchase for the 80 million who already had insurance and are now struggling to pay for the 15% – 30% premium costs they now have to figure out how to pay for.
    this plan never had the health interests of all americans at heart. it was designed to ensure the 7 million vote block from people who would have to reelect him to get health insurance and the foolish rest who were fooled when he said he was looking out for all americans (as he forced companies to stop hiring full time employees.. um.. those jobs would have gone to millions of Americans who would have been able to get insurance if they could get a full time job.. and forced 80 million to pay $1000s more every year for insurance)

    • xian

      still posting false information, I see

  • Denice Adams

    No Obama doesn’t give a rats ass if people are insured or not. This was never about health care it is about power. Obama passed this in the dead of night without any Republican votes.
    No I’m not republican; I’m American. I lost my health insurance and had to pay more for less because of this debacle.

    • Robert DAgostino

      you are such a bad liar!!!

    • xian

      dead of night? you must be thinking of medicare part d

      is there some rule that laws must get Republican votes to be real?

      give us more detail on your health insurance and how you pay more for less, because I don’t believe you.

  • Patriot556


  • Patriot556

    57 States

    • xian


  • xian

    middle of the night? you mean medicare part d?

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