It seems altogether clear that SCOTUS will end up ruling in the not-too-distant future on the legality of federal subsidies in states that have declined to establish exchanges. I just predicted that, if only for the sake of not upsetting the whole Obamacare applecart, ultimately the Court will probably allow those subsidies. And that’s true even if the justices have to torture the law to find a way to do it.
And torturing it will be necessary:
“There are specific rules about when and how the IRS can deviate from the plain language of a statute,” Cannon explained to National Review Online, arguing that the subsidies regulation fails to comply with those rules.
The IRS can deviate from “absurd” laws, in theory, but the subsidies language is not absurd. “It might be stupid, but that’s not the test for absurdity,” Cannon says. Similarly, the IRS can deviate in the case of scrivener’s errors — typos, basically — but this is not a typo, Cannon says, because the language was written into repeated drafts of the law.
“They not only keep that language in there, but they even inserted it, this same phrase again, right before passage while the bill was in [Senate Majority Leader] Harry Reid’s office,” Cannon says. “So, it’s not a scrivener’s error, either.”
Finally, the IRS could fill in ambiguous gaps in a law. The problem for the IRS, though, is that the subsidies language is not ambiguous…
“The power of executing the laws necessarily includes both authority and responsibility to resolve some questions left open by Congress that arise during the law’s administration. But it does not include a power to revise clear statutory terms that turn out not to work in practice,” Justice Antonin Scalia wrote in an opinion that Roberts joined in full.
The legislative history of Obamacare also shows “that Congress was considering all sorts of proposals that would withhold subsidies from states that didn’t establish exchanges or do other things.” So it is logical to conclude that there was nothing accidental or unintentional about the ACA’s language.
And yet I stand by my prediction about how SCOTUS will end up ruling, even in the face of the evidence. I think the justices, particularly John Roberts, are loathe to turn Obamacare into something unworkable, especially now that it’s been in operation for more than a half a year and people have come to rely on it. That was always the danger of the passage of time, and both sides knew it.
[ADDENDUM: At Ace's, DrewM gives some reasons he thinks SCOTUS may decline to hear the case, and that it will be decided in favor of Obamacare by the Circuit Court en banc.]