CBO reports contradict the claims in King v. Burwell

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ObamacareIn early March the U.S. Supreme Court will hear oral arguments in King v. Burwell, in which Libertarian lawyers who write for the Volokh Conspiracy at the Washington Post will make a  Textualism argument that the text of “ObamaCare” limits federal subsidies only to people who buy insurance from state-run exchanges, not from the federal exchange.

The “textualism” argument would require the Court to abandon its “Chevron deference,” i.e., that when a federal statute is ambiguous, courts defer to the agency’s interpretation (in this case the IRS). Chevron U.S.A. v. Natural Resources Defense Council, Inc. (1984).

The “textualism” argument would also require the Court to abandon a long-established canon of statutory construction, what Justice Scalia just last year in Utility Air Regulatory Group v. EPA called “the fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.”

The “textualism” argument would also require the Court to abandon examination of the congressional record to determine congressional intent, a practice the Court has routinely engaged in. On this topic, Sarah Kliff at Vox.com reports on the research by Theda Skocpol who finds no support the argument being made by the Libertarian lawyers in this case. Analysis: CBO contradicted the latest case against Obamacare 68 different times:

The Congressional Budget Office wrote 68 reports about the Affordable Care Act during the session that Congress debated the law. Not one of them, a new analysis from Harvard University’s Theda Skocpol, ever explored the possibility of limiting insurance subsidies to the state marketplaces after the law’s full implementation.

The analysis could prove relevant in the pending Supreme Court case, King v. Burwell, where challengers argue that Congress meant for Obamacare to limit subsidies to state exchanges. If the justices agree, millions of Americans who purchased coverage through Healthcare.gov could lose billions in health-insurance subsidies.

The CBO’s whole job is to game out how much different laws will cost. The agency typically looks at different possible scenarios. When the Supreme Court ruled, for example, that the Medicaid expansion was optional, it published new cost estimates for scenarios where some states either did or didn’t opt out.

Skocpol points to the fact that CBO never considered a similar, alternate scenario where some states didn’t build exchanges as evidence that Obamacare’s drafters meant for all states to get subsidy money.

She isn’t the first person to make this argument: the New Republic’s Brian Beutler talked to a former CBO analyst who made the same argument. And Yale University’s Abbe Gluck also explored the issue in 2012.

But Skocpol’s analysis is the first to comb through each and every CBO analysis of the health-care law to make the point. This includes requests from both Democrats and Republicans. And, each of them shows CBO never considering a situation where only some states get subsidies for their residents.

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“The larger truth is that no one assumed every state would do this,” Skocpol, a professor in Harvard’s school of government, says. “It wasn’t an issue of politics then, it was one of policy: these were smaller states and there was a thought some of them wouldn’t be able to manage the process. It was taken for granted by all parties that some states would need a backup.”

I am skeptical that Chief Justice John Roberts, who is responsible for upholding the Affordable Care Act, would now vote to gut the Act on such a flimsy legal theory, which is not supported by long-established canons of statutory construction. To rule in favor of the plaintiff in this case would require upsetting these long-established canons of statutory construction, and would have far-reaching effects on other laws under review before the court and the court’s prior precedents. The damage from such flagrant judicial activism in King v. Burwell could not be limited to just this case.

UPDATE: It was widely reported last week that remarks in 2010 by Rep. Paul Ryan (R-WI), GOP Budget Committee chairman, made days before the enactment of Obamacare expressed no doubt that the relevant language in the bill would apply the subsidies to Americans of a certain income level regardless of where in the country they lived. Did Paul Ryan Undermine The SCOTUS Case To Topple Obamacare?

His remarks, which haven’t received much attention until now, add to the overwhelming body of evidence that members of Congress, staffers, policy experts, and the media covering the health reform debate all understood the law to be providing for subsidies on the exchanges, whether state or federal.

It should be noted that Ryan’s comments — sent to TPM by the Constitutional Accountability Center, a liberal legal group helping defending Obamacare in court — aren’t dispositive of the law’s meaning or of what the Democratic-led Congress intended. So they do not compel the courts to rule a certain way. But they represent another blow to an argument underpinning the King lawsuit, which is set to be argued in March and decided by the end of June.