D.C. Circuit Court of Appeals

Obamacare’s architect agrees: Healthcare law subsidies were supposed to apply only to state-run Exchanges

The Obama administration’s claim that Congress never intended for Obamacare subsidies to apply only to states that implemented their own Exchanges looks much, much weaker this morning. Reason’s Peter Suderman has passed along some video gold, in which the architect of the law says it was worded to place political pressure on states.

Jonathan Gruber, the MIT economist who worked on Romneycare in Massachusetts, helped the administration craft Obamacare and, in January 2012, stated pretty clearly that consumers in states that opted out of the law would be denied subsidies.

“What’s important to remember politically about this is if you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits — but your citizens still pay the taxes that support this bill,” Gruber told an audience. “So you’re essentially saying [to] your citizens you’re going to pay all the taxes to help all the other states in the country.”

“I hope that that’s a blatant enough political reality that states will get their act together,” he said, “and realize there are billions of dollars at stake here in setting up these exchanges.”

Here’s the clip (the original is almost an hour long) via Phil Kerpen:

Another reason to fire Harry Reid: His “nuclear option” allowed Obama to pack the D.C. Circuit Court with Leftist judges

In November, amid the Obamacare rollout disaster, Senate Majority Leader Harry Reid (D-NV) claimed that Republicans’ “unprecedented obstruction” had forced his hand, he had no choice but to invoke the nuclear option to eliminate the filibuster for most judicial and executive-level nominees.

Really, though, the true motive was to pack D.C. Circuit Court of Appeals, the second-most powerful court in the country, with Leftist judges appointed by President Barack Obama. The court regularly hears legal cases dealing with regulations and rules written by federal agencies. It has also been a thorn in the side of the Obama administration.

Although he’s denied in speeches on the Senate floor, Reid admitted that he was trying to tilt the court during an August 2013 interview with a Nevada radio station. “We’re focusing very intently on the D.C. Circuit,” said Reid, according to Talking Points Memo. “We need at least one more [seat filled]. There’s three vacancies. And that will switch the majority. So we’re working on it.”

That brings us to the yesterday’s decision in Halbig v. Burwell, in which a three-judge panel court ruled that the IRS acted outside of its statutory authority by extending subsidies to consumers who enrolled through the federal Obamacare Exchange.

The Obama White House’s whining doesn’t change the fact that the IRS illegally tried to rewrite Obamacare

The White House may not like the D.C. Circuit Court of Appeals’ panel decision in Halbig v. Burwell, but President Barack Obama need only look to his own administration for what is yet another smackdown by the judicial branch.

Judge Thomas B. Griffith realized the impact the decision could have on the availability of Obamacare subsidies for consumers who purchased plans on the federal Exchange. He was mindful, however, of the role the judicial branch plays in interpreting statues. And, in this instance, the Internal Revenue Service acted without authority by authorizing subsidies to consumers in states that refused to participate in Obamacare.

The Affordable Care Act, in §1311, makes it very clear that subsidies were limited to states with established Exchanges. Claims that Congress intended to apply the subsidies broadly, including to the federal Exchange, rang hollow. “The fact is that the legislative record provides little indication one way or the other of congressional intent,” Griffith wrote, “but the statutory text does.”

Rather than illegally promulgating guidance to dole out subsidies, the Obama administration should have gone to Congress to seek a legislative remedy to fix the problem. That’s something President Obama just wasn’t willing to do, whether it was pride holding him back or the prospect of having to try to forge a compromise with House Republicans on the law.

The D.C. Circuit Court of Appeals just gutted Obamacare in a big way: Judges smack down another administration power grab

The U.S. District Court of Appeals delivered a huge blow to the Obama administration this morning, ruling that it’s illegal for the Internal Revenue Service to dole out tax subsidies for enrollees in the nearly three-dozen states on the federal Obamacare Exchange.

At issue in Halbig v. Burwell is whether the IRS has the authority to provide tax subsidies to enrollees in states that opted not to comply with Obamacare. A reading of the Affordable Care Act statutes in question (§1311 and §1321) confirms that the subsidies were meant to apply only to states with established Exchanges.

But the IRS, apparently unconcerned with the actual text of the law as passed by Congress, wrote rules to apply the subsidies to the federal Exchange, which didn’t exist until states refused to establish their own.

In a 2 to 1 decision this morning, a panel of judges from the U.S. District Court of Appeals agreed that the IRS overstepped its statutory authority, even though the majority acknowledged that the opinion will have major ramifications for healthcare policy.

“We reach this conclusion, frankly, with reluctance,” wrote Judge Thomas B. Griffith in the 42-page opinion. “At least until states that wish to can set up Exchanges, our ruling will likely have significant consequences both for the millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly.”

Federal court may breathe new life into case that could bring down Obamacare

The arguments on Obamacare’s contraception mandate weren’t the only heard about the law on Tuesday. The D.C. Circuit Court of Appeals heard arguments in another case yesterday, Halbig v. Sebelius, that could bring down Obamacare.

At issue is whether the Obama administration can legally provide tax subsidies to residents of states that haven’t established exchanges. This is a scenario that lawmakers didn’t anticipate. They didn’t expect state resistance to the law, and didn’t foresee the creation of a federal exchange.

A reading of the statutes in question (§1311 and §1321) confirms that the subsidies were meant to apply only to states with an established exchange, but the Internal Revenue Service illegally wrote rules to apply the subsidies to apply to the federal exchange as well.

Based on reports from those who witness oral arguments in the Halbig case yesterday, the challenge may well prove successful, at least temporarily:

Judge A. Raymond Randolph indicated he felt the statute was quite clear in repeating “seven times” in that section that the subsidies are available only “through an Exchange established by the State.”  He indicated that it “is not up to the courts to fix” a problem that Congress may have created for itself.  (Nor, we might add, is it up to the IRS to rewrite the statute in its regulatory interpretation.)

Biggest Stories of 2013: Senate Democrats Nuke the Filibuster

Throughout New Year’s Eve, we’ll be going through the 10 biggest political stories of 2013 as selected by United Liberty’s contributors. Don’t forget to chime in on the biggest stories of the year on our Facebook page.

After Republicans blocked three of President Barack Obama’s nominees to the D.C. Circuit Court of Appeals in November, Senate Majority Leader Harry Reid (D-NV) and Democrats went nuclear on the filibuster, the 60-vote threshold for most executive nominations and appointments that had existed for more than 200 years.

Reid complained that Republicans had forced him to call for the change in Senate rules because of what he called “unprecedented obstruction” (his words) and claimed that the it’s “something both sides should be willing to live with to make Washington work again.”

To be clear, there was no short of judges on the D.C Circuit Court of Appeals. In fact, this court is the most underworked in the country. It just so happens that the rule change came amid the disastrous Obamacare rollout, which led some Republicans to accuse Democrats of trying to distract Americans.

But not only was the timing of this move very curious, it was clearly an attempt to sway the influence of the D.C. Circuit Court of Appeals, the second most influential court in the country, and Reid said as much in August.

Harry Reid goes “nuclear” on the filibuster

Senate Majority Leader Harry Reid (D-NV) and most members of the Democratic conference voted today to eliminate the 60-vote threshold for executive nominations, excluding Supreme Court appointments, after Republicans blocked three appointments to the D.C. Circuit Court of Appeals.

Executive nominees now need only 51 votes to win confirmation from the Senate. The change was approved by the Senate by a vote of 52 to 48. Three Democrats — Sens. Carl Levin (D-MI), Joe Manchin (D-WV), and Mark Pryor (D-AR) — joined every Senate Republican to vote against the rule change.

Reid complained that Republicans had forced him to call for the change in Senate rules because of, what he called, “unprecedented obstruction” and claimed that the it’s “something both sides should be willing to live with to make Washington work again.”

“The American people are fed up with this kind of obstruction and gridlock. The American people – Democrats, Republicans and Independents – are fed up with this kind of obstruction and gridlock,” said Reid from the Senate floor. “The American people want Washington to work for American families once again.”

The rule change is an attempt to change the narrative. President Obama and Democrats have talked up “gridlock” in government to get attention off of the problems with Obamacare. Minority Leader Mitch McConnell (R-KY) made that point to colleagues this morning.


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