Legislative intent matters: Democrats removed availability of subsidies through the federal exchange before Obamacare was passed

Obamacare supporters are very worried about last week’s decision in Halbig v. Burwell, in which the D.C. Circuit Court of Appeals ruled that the IRS didn’t have the authority to dole out subsidies to consumers who purchased covered on the federal insurance Exchange.

In light of recently discovered January 2012 comments made by Jonathan Gruber, chief architect of the Obamacare, the Obama administration’s allies are trying to spin the legislative history of the law.

Greg Sargent, who writes at the Washington Post’s PlumLine blog, says that language authorizing the federal Exchange was actually in the version of Obamacare that passed the Senate Health, Education, Labor and Pensions (HELP) Committee, but was taken out when its version was merged with the Senate Finance Committee’s version:

A reconstruction of the process by which that contested phrase got into the law demonstrates two key facts:

1) The first Senate version of the health law to be passed in 2009 — by the Health, Education, Labor and Pensions Committee — explicitly stated that subsides would go to people on the federally-established exchange. A committee memo describing the bill circulated at the time spelled this out with total clarity.

2) 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 disputed language ended up in the final bill because the two versions — both of which intended subsidies in all 50 states, albeit by varying structures — were merged.

Sargent, who defends pretty much President Obama and his administration says and does, keeps going on and on and on and on about this. But he’s not really making the case he thinks he is.

Dan McLaughin (@baseballcrank), a blogger at RedState, tweeted out some language from Supreme Court decisions in 1963 (Arizona v. California), 1974 (Gulf Oil Corp. v. Copp Paving), 1983 (Russello v. United States), and 1987 (INS v. Cardoza-Fonseca) that show that, if anything, Sargent just made the case for the Halbig decision.

Over at Reason, Peter Suderman explains that Congress, then-controlled by Democrats, explicitly decided to apply Obamacare subsidies to states that created their own Exchanges:

Any hunt for the congressional intent behind a piece of legislation should start with the actual language of the law in question. And in this case, the language is unambiguous. Tax credits—that is, subsidies for health insurance—are limited to “Exchanges established by a State.” In case there was any confusion, the law defines “State” as “each of the 50 states plus the District of Columbia.” These qualifying exchanges must further be established under Section 1311 of the law, the section which deals with state-based exchanges. The federal exchanges are set up under the authority of a different section, 1321.

That’s it. That’s what the law says. That’s what Democratic members of Congress, in both the House and Senate, voted to pass, despite some initial disagreement over whether states or the federal government should be in charge of the exchanges. That’s the language that President Obama signed into effect.
That’s not just common sense. It’s also the conclusion of the Congressional Research Service, which wrote in a July 2012 report that “a strictly textual analysis of the plain meaning of the provision would likely lead to the conclusion that IRS’s authority to issue the premium tax credits is limited only to situations in which the taxpayer is enrolled in a state- established exchange.” Even legal authorities that have ultimately agreed with the administration seem to agree. A separate ruling by the U.S. Court of Appeals for the 4th Circuit last week sided with the administration’s interpretation, but admitted that “a literal reading of the statute undoubtedly accords more closely with [the] position” of the challengers.

Unfortunately, the Obama administration, with its proclivity for trying to change laws it doesn’t like, argues that full deference should be given to bureaucrats to make the changes needed, despite the clear reading of the statutes.

But whatever excuse Obamacare supporters want to throw out there — typos, the rush to get something through as public opposition was building, or the sheer size of the legislative undertaking — it doesn’t really matter. The legislative intent is pretty clear.

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