Obamacare's Halbig trap

The Halbig case, in which the DC Circuit Court overturned Obamacare subsidies paid through the federal exchange, is generating an onslaught of evidence that destroys the contentions of the law’s supporters. The Fourth Circuit in Richmond delivered a contrary opinion justifying ignoring the language of the statute based on the overall intent of the bill, as did the dissenting opinion in the DC Circuit. But that position has now become untenable.

Clarice Feldman points out:

Instapundit readers have found some legislative history devastating to the government's claim, involving Sen. Baucus, the Democrat sponsor:  

WELL, WELL, WELL: Senate Hearing : Tax Credits are available for State Exchanges Only. Senator Baucus explains how The Affordable Care Act sets conditions where Tax Credits are available for State Exchanges Only. The discussion is a bit confusing, but he’s saying that this is under the Finance Committee’s jurisdiction because the tax credits are an incentive to adopt state exchanges. You can read more about that here, in footnote 136. Thanks to InstaPundit commenters R.C. Dean, and ThomasD for pointing this out in the comments to  WHO ARE YOU GOING TO BELIEVE — ME, OR YOUR LYING EARS? Gruber: My 2012 remarks were “a speak-o — you know, like a typo.”

Unfortunately for Gruber, he said the same thing elsewhere. He's lying and it is obvious.

And Kimberly Strassel of The Wall Street Journal has uncovered even more damning evidence that politics took control when the IRS (the fully weaponinzed, poltiicized IRS!) started writing regulations to implement the subsidies, following the bill’s passage:

Democrats needed those subsidies. The party had assumed that dangling subsidies before the states would induce them to set up exchanges. When dozens instead refused, the White House was faced with the prospect that citizens in 36 states—two-thirds of the country—would be exposed to the full cost of ObamaCare's overpriced insurance. The backlash would have been horrific, potentially forcing Democrats to reopen the law, or even costing President Obama re-election.

The White House viewed it as imperative, therefore, that IRS bureaucrats ignore the law's text and come up with a politically helpful rule. The evidence shows that career officials at the IRS did indeed do as Treasury Department and Health and Human Services Department officials told them. This, despite the fact that the IRS is supposed to be insulated from political meddling.

We know this thanks to a largely overlooked joint investigation and February report by the House Oversight and Ways and Means committees into the history of the IRS subsidy rule. We know that in the late summer of 2010, after ObamaCare was signed into law, the IRS assembled a working group—made up of career IRS and Treasury employees—to develop regulations around ObamaCare subsidies. And we know that this working group initially decided to follow the text of the law. An early draft of its rule about subsidies explained that they were for "Exchanges established by the State."

Yet in March 2011, Emily McMahon, the acting assistant secretary for tax policy at the Treasury Department (a political hire), saw a news article that noted a growing legal focus on the meaning of that text. She forwarded it to the working group, which in turn decided to elevate the issue—according to Congress's report—to "senior IRS and Treasury officials." The office of the IRS chief counsel—one of two positions appointed by the president—drafted a memo telling the group that it should read the text to mean that everyone, in every exchange, got subsidies. At some point between March 10 and March 15, 2011, the reference to "Exchanges established by the State" disappeared from the draft rule.

Emails viewed by congressional investigators nonetheless showed that Treasury and the IRS remained worried they were breaking the law. An email exchange between Treasury employees in the spring of 2011 expressed concern that they had no statutory authority to deem a federally run exchange the equivalent of a state-run exchange.

Yet rather than engage in a basic legal analysis—a core duty of an agency charged with tax laws—the IRS instead set about obtaining cover for its predetermined political goal. A March 27, 2011, email has IRS employees asking HHS political hires to cover the tax agency's backside by issuing its own rule deeming HHS-run exchanges to be state-run exchanges. HHS did so in July 2011. One month later the IRS rushed out its own rule—providing subsidies for all.

This pretty much destroys the contentions that the explicit language was anything other than deliberate. It was not typo, it was not an error, it was an incentive that didn’t work as intended.

At the appellate level, these facts can be introduced via the filing of briefs in the case. Plus, judges (and justices) do read the newspapers (and websites).

Glenn Reynolds sums it up:

…they rammed it through on a party-line vote using a budget-reconciliation technicality, then they did an “I won” victory dance. Now it turns out the bill sucks and they’re blaming Republicans for not stopping them.

The Halbig case, in which the DC Circuit Court overturned Obamacare subsidies paid through the federal exchange, is generating an onslaught of evidence that destroys the contentions of the law’s supporters. The Fourth Circuit in Richmond delivered a contrary opinion justifying ignoring the language of the statute based on the overall intent of the bill, as did the dissenting opinion in the DC Circuit. But that position has now become untenable.

Clarice Feldman points out:

Instapundit readers have found some legislative history devastating to the government's claim, involving Sen. Baucus, the Democrat sponsor:  

WELL, WELL, WELL: Senate Hearing : Tax Credits are available for State Exchanges Only. Senator Baucus explains how The Affordable Care Act sets conditions where Tax Credits are available for State Exchanges Only. The discussion is a bit confusing, but he’s saying that this is under the Finance Committee’s jurisdiction because the tax credits are an incentive to adopt state exchanges. You can read more about that here, in footnote 136. Thanks to InstaPundit commenters R.C. Dean, and ThomasD for pointing this out in the comments to  WHO ARE YOU GOING TO BELIEVE — ME, OR YOUR LYING EARS? Gruber: My 2012 remarks were “a speak-o — you know, like a typo.”

Unfortunately for Gruber, he said the same thing elsewhere. He's lying and it is obvious.

And Kimberly Strassel of The Wall Street Journal has uncovered even more damning evidence that politics took control when the IRS (the fully weaponinzed, poltiicized IRS!) started writing regulations to implement the subsidies, following the bill’s passage:

Democrats needed those subsidies. The party had assumed that dangling subsidies before the states would induce them to set up exchanges. When dozens instead refused, the White House was faced with the prospect that citizens in 36 states—two-thirds of the country—would be exposed to the full cost of ObamaCare's overpriced insurance. The backlash would have been horrific, potentially forcing Democrats to reopen the law, or even costing President Obama re-election.

The White House viewed it as imperative, therefore, that IRS bureaucrats ignore the law's text and come up with a politically helpful rule. The evidence shows that career officials at the IRS did indeed do as Treasury Department and Health and Human Services Department officials told them. This, despite the fact that the IRS is supposed to be insulated from political meddling.

We know this thanks to a largely overlooked joint investigation and February report by the House Oversight and Ways and Means committees into the history of the IRS subsidy rule. We know that in the late summer of 2010, after ObamaCare was signed into law, the IRS assembled a working group—made up of career IRS and Treasury employees—to develop regulations around ObamaCare subsidies. And we know that this working group initially decided to follow the text of the law. An early draft of its rule about subsidies explained that they were for "Exchanges established by the State."

Yet in March 2011, Emily McMahon, the acting assistant secretary for tax policy at the Treasury Department (a political hire), saw a news article that noted a growing legal focus on the meaning of that text. She forwarded it to the working group, which in turn decided to elevate the issue—according to Congress's report—to "senior IRS and Treasury officials." The office of the IRS chief counsel—one of two positions appointed by the president—drafted a memo telling the group that it should read the text to mean that everyone, in every exchange, got subsidies. At some point between March 10 and March 15, 2011, the reference to "Exchanges established by the State" disappeared from the draft rule.

Emails viewed by congressional investigators nonetheless showed that Treasury and the IRS remained worried they were breaking the law. An email exchange between Treasury employees in the spring of 2011 expressed concern that they had no statutory authority to deem a federally run exchange the equivalent of a state-run exchange.

Yet rather than engage in a basic legal analysis—a core duty of an agency charged with tax laws—the IRS instead set about obtaining cover for its predetermined political goal. A March 27, 2011, email has IRS employees asking HHS political hires to cover the tax agency's backside by issuing its own rule deeming HHS-run exchanges to be state-run exchanges. HHS did so in July 2011. One month later the IRS rushed out its own rule—providing subsidies for all.

This pretty much destroys the contentions that the explicit language was anything other than deliberate. It was not typo, it was not an error, it was an incentive that didn’t work as intended.

At the appellate level, these facts can be introduced via the filing of briefs in the case. Plus, judges (and justices) do read the newspapers (and websites).

Glenn Reynolds sums it up:

…they rammed it through on a party-line vote using a budget-reconciliation technicality, then they did an “I won” victory dance. Now it turns out the bill sucks and they’re blaming Republicans for not stopping them.

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