The following is an excerpt from OpinionJournal’s “Best of the Web” at WSJ written by the editor, James Taranto.
This week the U.S. Supreme Court hears oral arguments in one of the term’s most-watched cases: King v. Burwell, which raises the question whether the Obama administration has been violating the Patient Protection and Affordable Care Act of 2010.
That law, popularly known as ObamaCare, authorizes income-tax subsidies for taxpayers who purchase medical insurance policies from an exchange “established by the State.” A 2012 Internal Revenue Service decree nullified that qualification—improperly, the appellants argue—by interpreting it to include an exchange established by the federal government. In short, unlike 2012’s big ObamaCare case, National Federation of Independent Business v. Sebelius, King is all about statutory interpretation; it does not challenge the constitutionality of ObamaCare.
But in a Politico op-ed, a legal scholar makes a strong case that the ACA—or at least substantial portions of it—is unconstitutional. And the scholar, Yale’s Abbe Gluck, intends the argument as a defense of ObamaCare against the King plaintiffs’ arguments.
Gluck’s contention is that unless the subsidies are available nationwide, ObamaCare is a violation of states’ rights. “The Supreme Court, led by its conservatives, has spent the past four decades developing a set of legal rules to protect states from federal imposition,” Gluck writes. “In fact, these very same state-protective rules were used by those who challenged the ACA in 2012—as well as by seven Justices in that case when they concluded the ACA’s Medicaid expansion was impermissibly coercive on the states.”
As written, the ACA penalized states that refused to expand Medicaid by withholding all federal Medicaid funding. The court, with Justice Stephen Breyer and Elena Kagan joining the five Republican appointees, held that was an abuse of the congressional spending power. The remedy was to allow Washington to withhold only the newfunding under the law, which made it an inducement rather than a threat.
But “the Exchanges have an entirely different federalism structure,” Gluck notes:
They adopt the other main federalism model that Congress routinely employs—one that looks like the Clean Air Act, not like Medicaid. Under this model, Congress enacts a nationwide program, but offers the states the right of first refusal to implement a part of it. All of these types of programs share a defining structural feature: a federal fallback mechanism that requires the federal government to operate the program when the states decline to do so. Either way, the new federal regulatory scheme takes full, national effect, and that’s the point of the program.
No one has ever disputed that the ACA’s central reform—the new insurance regulations—take effect nationwide regardless of whether states choose to run their own exchanges. The ACA gives the states the opportunity to run these insurance markets, but provides a federal fallback. There is no statute in the entire U.S. Code with a federal fallback that operates as challengers say this one does: The challengers argue that as soon as the states decline to run their own exchanges, the federal government steps in, [but] the subsidies are no longer available, millions of people suffer, and the insurance markets collapse. Why in the world would Congress establish a national regulatory program, with a federal fallback, but doom the whole thing to destruction as soon as the federal fallback kicks in?
“That question has no answer, [Gluck] argues: Whatever words Congress may have used in [the ACA], it could not have intended that senseless outcome.”
What is a jurist’s proper response when presented with a senseless law? The preceding paragraph is a repurposing of Justice Elena Kagan’s answer, in a 2014 decision called Michigan v. Bay Mills Indian Community that involved a statute called the Indian Gaming Regulatory Act of 1988. Here’s the Kagan quote in context (citations omitted):
Michigan . . . urges us to adopt a “holistic method” of interpreting IGRA that would allow a State to sue a tribe for illegal gaming off, no less than on, Indian lands. Michigan asks here that we consider “IGRA’s text and structure as a whole.” But (with one briefly raised exception) Michigan fails to identify any specific textual or structural features of the statute to support its proposed result. Rather, Michigan highlights a (purported) anomaly of the statute as written: that it enables a State to sue a tribe for illegal gaming inside, but not outside, Indian country. “[W]hy,” Michigan queries, “would Congress authorize a state to obtain a federal injunction against illegal tribal gaming on Indian lands, but not on lands subject to the state’s own sovereign jurisdiction?” That question has no answer, Michigan argues: Whatever words Congress may have used in IGRA, it could not have intended that senseless outcome.
But this Court does not revise legislation, as Michigan proposes, just because the text as written creates an apparent anomaly as to some subject it does not address. Truth be told, such anomalies often arise from statutes, if for no other reason than that Congress typically legislates by parts—addressing one thing without examining all others that might merit comparable treatment. Rejecting a similar argument that a statutory anomaly (between property and non-property taxes) made “not a whit of sense,” we explained in one recent case that “Congress wrote the statute it wrote”—meaning, a statute going so far and no further. The same could be said of IGRA’s abrogation of tribal immunity for gaming “on Indian lands.” This Court has no roving license, in even ordinary cases of statutory interpretation, to disregard clear language simply on the view that (in Michigan’s words) Congress “must have intended” something broader.
Gluck, however, implies that the ACA as read by the appellants is not merely senseless but unconstitutional. She asserts that it would “set up what appears to be the greatest federalism trap for state governments in history.”
Let’s say she’s right—that the plaintiffs are urging a reading of the statute that would make it an unconstitutionally coercive intrusion into state autonomy. That does not prove such a reading is wrong. Congress has been known to enact unconstitutional laws as well as senseless ones.
In NFIB v. Sebelius, the court upheld ObamaCare’s individual mandate by adopting what Chief Justice John Roberts called a “saving construction.” Although the law expressly described it as an (unconstitutional) invocation of Congress’s power to regulate interstate commerce, he recast it as a tax, a legitimate use of congressional power.
In that case, however, it was unquestioned that Congress had enacted the individual mandate; the question for Roberts was which of its constitutional powers it had exercised in doing so. At issue in King is not Congress’s authority to enact the ACA but the IRS’s authority to interpret it in the way it did. The proposed remedy for the law’s constitutional infirmity—the executive branch’s spending money or modifying the tax structure without congressional authorization—is itself patently unconstitutional.
Besides, there’s a simple remedy to the constitutional problem Gluck identifies, and it is more or less the same one the court used with Medicaid in NFIB v. Sebelius: permit states to opt out of ObamaCare’s regulatory burdens at the cost of their residents’ forgoing subsidies. If the appellants prevail in King, one suspects state attorneys general will be standing by to file lawsuits seeking such relief.
As to the statutory question in King, Gluck offers this argument:
The ACA has a provision that expressly lays out the consequences to states of not operating their own exchanges. . . . That provision is entitled “Failure to establish Exchange or implement requirements,” and it spells out what happens if states do not operate their own exchanges. The penalty the challengers would foist on the states—the loss of the subsidies and drastic consequences that would go with it—does not appear there, where it should appear if it existed.
Randy Barnett pointed out analogously in our 2010 Weekend Interview that the ACA also has a provision that lays out all of its changes to tax policy—except, as it turns out, one. Lawmakers “failed to include the penalty” for noncompliance with the individual mandate. “They didn’t even think of it as a source of revenue.”
The point came up in NFIB v. Sebelius, but the chief justice and the majority ignored it entirely. “The nail in the coffin is that the mandate and penalty are located in Title I of the Act, its operative core, rather than where a tax would be found—in Title IX, containing the Act’s ‘Revenue Provisions,’ ” asserted the dissent, which commanded four votes. That and a dollar will buy you a cup of coffin—uh, coffee.
Make That 5.03125
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