July 25th, 2014

Did the ACA framers mean to limit subsidies to state exchanges?

The decision in any appeal of Halbig—and therefore the ultimate fate of Obamacare—may rest on that question.

The left would like to say it was all a huge oversight and more or less an unfortunate and careless typo or drafting error, and that clearly Congress’s intention was to allow the feds to give out subsidies. The right says no way:

The deliberate creation of a separate section to authorize a separate federal entity is not a drafting error. The repeated and deliberate reference to one section but not another is not a drafting error. The refusal to grant equal authority to two programs authorized by two separate sections is not a drafting error. The decision to specifically reference section X but not section Y in a portion of a law that grants spending or tax authority is not a drafting error.

The clear text of the law repeatedly demonstrates that plans purchased via federal exchanges were never meant to be treated the same as plans purchased by state-based exchanges. Despite its assertions, the IRS was never granted the statutory authority to hand out tax credits related to plans purchased via a federal health exchange.

Now a video from 2012 has been unearthed featuring “Obamacare architect” Jonathan Gruber (about whom I’ve written about in depth before). In it Gruber, who should know a thing or two about Obamacare, makes it very very clear that subsidies can come only through the state exchanges. What’s more, he said it on record at least two times, one of them not in response to a question, and explained both times at significant length.

Now, of course, he’s saying dummy me, I can’t even imagine what I was thinking back then. He calls it a “speako”—like a typo, get it? But these were “speakos” that went on for a full minute, in some detail. The most that he could say that would make any sense is that he was mistaken.

It really doesn’t matter, though, whether Gruber was right or wrong. His statements can’t speak for Congress’s intent, although they would constitute a small bit of evidence about it. Intent is deduced from much more than that, but you know what? Statutes are usually considered (at least by non-liberals) to say what they mean unless the mistakes really do involve typos, which the ACA certainly does not (as Sean Davis makes clear).

Here’s the rule:

It might seem a bit odd, but as a general matter, while conservative jurists are likely to look to the intent of the framers for constitutional questions, for statutes the basic process is to look at the plain language of the statute first, either ignoring Congress’ intent entirely, or turning to it only in the case of an ambiguity in the statute.

The language is not the least bit ambiguous here, and it is consistent too. There is really very little wriggle room for interpreting it otherwise. In a more normal world, the courts would simply say to the legislature, “If you didn’t mean what you wrote, go back and fix it so it says what you meant.” Now, of course, that’s not possible, because Obamacare could never be passed again, and everyone knows that. It’s that unpopular.

33 Responses to “Did the ACA framers mean to limit subsidies to state exchanges?”

  1. Mrs Whatsit Says:

    Instapundit now has a link to a 2009 video in which Sen. Baucus allegedly explains that tax credits are available to state exchanges only (I haven’t been able to watch the thing yet):

  2. Cornhead Says:

    We need to hang that term “speak- o” around the Dems’ necks.

    Normal people will get it. Lying liars trying to spin.

  3. Geoffrey Britain Says:

    “When I use a word,’ Humpty Dumpty said, in rather a scornful tone, ‘it means just what I choose it to mean [from moment to moment] — neither more nor less.’

    ‘The question is,’ said Alice, ‘whether you can make words mean so many different things.’

    ‘The question is,‘ said Humpty Dumpty, ‘which is to be master — that’s all.'”

    In the Alice in Wonderland of the Left, ‘inconveniences’ are only real if they cannot be ignored. Obama will declare that the Feds can give out subsidies, the IRS will allow and issue them and a corrupt Congress of Democrats and a collaborative GOP will do nothing. Any negative rulings from the courts will of course be ignored.

    A de facto state of rule by men now exists and the rule of law will only be followed when advantageous or unavoidable due to the prioritization of other factors.

    It is of course not just the Feds;

    University Says Statement Overheard Through Open Window Is A Hate Crime

    “The political correctness craze has hit a new level this week as police in Arkansas are looking for a man who was overheard saying something racist in the middle of the night through an open window. The incident occurred on the University of Arkansas campus in Fayetteville in a building called The Garland House.

    University of Arkansas Police Captain Gary Crain believes the incident “is considered a hate crime,”

    So now, when a white person makes a racist comment in private it is a ‘hate crime’ but when a black person attacks from ambush a white or Asian in the ‘knockout game’ (some of whom have died) it is not a hate crime… got it?

  4. mf Says:

    The purpose of ACA was to destroy the healthcare system so government could eventually totally dominate. Mistakes in the bill were the whole point of the thing.

  5. ConceptJunkie Says:

    2700 pages long. I’m surprised something like this didn’t happen sooner, and I expect it will happen again.

    This is what happens when Congress has legal diarrhea, and it’s become the norm rather than the exception.

    Rules that require reading an entire bill on the floor of both houses of Congress before it can be passed might help, but probably they’d just find some stupid way to subvert that too.

    Our leaders are not serving us. They are serving themselves and those who finance them. The rule of law has become, as was stated above, the rule of men, and men cannot rule without corruption.

    How did the electorate become so damn ignorant and indifferent so as to let this happen?!

  6. OlderandWheezier Says:

    I encourage everyone to read Kimberly Strassel’s latest article at online.wsj.com. Google the title, “The ObamaCare-IRS Nexus” in order to get past the firewall. This mess goes beyond mere incompetence. It involves collusion and yet another instance of illegal political activity regarding the IRS.

  7. parker Says:


    Humpty Dumpty immediately came to mind. We are no longer sovereign citizens living in a society based upon the rule of law, we are the subjects of a king of hubris and hypocrisy who makes ‘law’ with his royal phone, pen, and fund raiser speeches.

  8. J.J. Says:

    The intent was to dangle a carrot in front of the states so they would all want to erect exchanges. How could they resist the Federal money for their citizens? Hmm, it appears a lot decided to resist. And some of the states that did set up their own exchanges didn’t do such a great job of it. Pace Oregon.

    If it is a law and this needs to be changed, it should go back to Congress. The administration does not want that. So, it’s the Supreme’s who will change the law. Or not. Don’t laugh, they’ve been in the legislative business for quite some time now.

  9. Cornhead Says:

    In Nebraska, all bills are read out loud. The Legislature tried to get rid of it, but it failed. I can’t recall the details.

    We have 60 and 90 day sessions in alternating years. Because of the time expended in reading, fewer laws are passed.

  10. jack Says:

    When you draft law it should state EXACTLY what it means. Evidence from the very people that drafted the law shows this part of ACA stated exactly what it meant.

    They rolled the dice and it’s come up snake eyes on this subsidy deal.

    Now they want a do over.

  11. Geoffrey Britain Says:

    “When you draft law it should state EXACTLY what it means.”

    “Laws are made for men of ordinary understanding and should, therefore, be construed by the ordinary rules of common sense. Their meaning is not to be sought for in metaphysical subtleties which may make anything mean everything or nothing.” Thomas Jefferson

    “They rolled the dice and it’s come up snake eyes on this subsidy deal. Now they want a do over.”

    To advance the cause, the ideologue is willing to sacrifice any principle, break any rule, violate any standard.

  12. Ed Bonderenka Says:

    As some previous commenters alluded to, if no one read the bill, how would you know congresses intent?

  13. Bill West Says:

    Some ACA defender said that we should ignore the explicit text because it was a simple drafting error. Rather, we should consider the intent, namely to make subsidies available to everyone.

    But that was not the intent. The intent was to create political problems for the Republican governors who did not establish state exchanges.

    If the high court sides with the plaintiffs, disallowing subsidies for citizens of states that rely on the federal exchange, will Maryland and Oregon get exemptions because they tried?

  14. jack Says:

    Let me give another real life example of Dem math. What these subsidies are kida like. Mrs Jack is a yellow dog dem.

    “This is how Dems do math. Now pay close attention.

    Mrs Jack bought a pair of shoes for $150. She decided she didn’t like them and took them back for a refund or credit. The store refunded her money… $150. While there she saw a purse she loved that cost $300. She told Jack she almost bought it since it was 50% off. Jack said oh the purse was $150? Mrs Jack said no it was $300 but since she had a $150 in her hot little hand it was 50% off.

    That is how Democrats do math. whatyougonado ;)”

    Maybe not exactly like the subsidies deal but a real life example of dem thinking.

  15. parker Says:

    When 45% of every buck spent is borrowed money our days are numbered down to precious few. The center can not hold. A rough beast slouches towards DC. The question is are you ready to stand upright in the wind that will blow? I am glad I live in flyover country with gardens, backyard chickens and rabbits, and where fat deer abound.

  16. Sarah R Says:

    I looked at the Gruber video. He says:

    “These health-insurance Exchanges . . . will be the place that people go to get their subsidies for health insurance. In the law, it says IF THE STATES DON’T PROVIDE THEM, THE FEDERAL BACKSTOP WILL. The federal government has been sort of slow in putting out its backstop, I think partly because they want to sort of squeeze the states to do it.”

    My question is: How can you interpret these comments to exclude a federal backstop––that is, federal subsidies? Gruber’s comments were made BEFORE the federal exchange was set up, and he was referring to the reasons for the DELAY in setting up the federal exchange, or backstop. He then goes on to explain the strategy behind the delay:

    “I think what’s important to remember politically about this [the delay in setting up a federal “backstop”], is if you’re a state and you don’t set up an Exchange, that means your citizens don’t get their tax credits.”

    So, by delaying the federal exchange, the Obama administration was trying to force support for the ACA in states where it was otherwise lacking.

  17. parker Says:

    “So, by delaying the federal exchange… force support for the ACA in states where it was otherwise lacking.”

    😉 Those racist states where there was some level of recognition of the importance of the 9th and 10th. DC must snuff out every shred and sliver of a desire of sovereignty in the states. Let the hunger games begin.

  18. Beverly Says:

    OT: saw this on Ace’s place. Man, it’s even worse than I thought.

    New England has stripped itself of almost all “dirty” fossil fuel, and is looking at devastating power shortages:


    They also oppose nuclear power, AND natural gas pipelines, AND EVEN transmission lines to bring hydroelectric power down from Canada.

    They are like the most primitive savages kicking around a state of the art computer, with no idea in the world what it is. They are the new Cargo Cult, except they don’t want the strange metal birds to come in at all — they just want the cargo to magically appear.

    Madness. Idiocy.

  19. neo-neocon Says:

    Sarah R.:

    Gruber doesn’t seem to agree he was saying that. He seems to agree what he said back then does not agree with what the Democrats are asserting now. Otherwise he wouldn’t describe it as a “speako” and say he has no idea why he said it.

    Either the statute made it clear that the feds would be providing subsidies or it did not. If there was an “if”–in other words, if the feds were trying to coerce the states into setting up exchanges because they were trying to give the impression that only states could provide subsidies, then the federal law did not clearly set up the feds as providing subsidies for a state that refused to do it. If the “backstop” was not thought to exist, then how could it be that the ACA clearly set one up? One can only conclude that it did not.

    That’s the interpretation—and I think the only rational interpretation—of Gruber’s statement, “if you’re a state and you don’t set up an Exchange, that means your citizens don’t get their tax credits.”

  20. Beverly Says:

    Re: Obamacare —

    I’ve been around long enough to know that government projects of Every Kind run up costs that exceed the initial projections by an order of magnitude, Every. Single. Time.

    The percentage of throughput of useful effort/product in any gov. machine can’t be more than, say, 5% on a good day. So anything they do will cost 20 times as much as what a private entity would provide.

    This, even more than who’s robbed to pay for whom, is what we’re facing: see Cspan’s Prime Minister’s Question Time online to get an idea of how incredibly petty and useless the govt. numpties are at doing any of this. They all squabble about their bloody statistics, while patients die in their own excrement, drinking water from flower vases.

    Of course, no matter what happens, the Idiocracy won’t blame the Leftists.

  21. waitforit Says:

    I’m just a bill on Capital Hill . . .

    What I am I am because
    he that made and bade me was
    less than what he said he was.

    Although the promise was made
    no bargain happened, no trade.
    All that happened: a charade.

    Now the public is not thralled.
    They know when they see a fraud
    now relish their schadenfreude.

  22. parker Says:

    The sooner it all falls down the better. Everything they touch turns into caca and dust.

  23. Ymarsakar Says:

    When Americans gave up power to lawyers, that become judges, that become politicians, they can’t really complain that their new masters are treating the livestock like livestock.

    Freedom has quite a different meaning than free stuff from DC.

  24. blert Says:

    Barry and Pelosi want a Mulligan.

    The idea was to economically COMPEL GOP governors to gain OWNERSHIP of 0-care. <<< Get it?

    Hence, it was a back door way to get bi-partisan support for what was obviously a totally partisan program designed to destroy the GOP.

    It's not for nothing that voter registration is now tied into 0-care paperwork.

    Barry is Hell bent on crafting a MACHINE in DC — Chicago on the Potomac.

    The Russian-Ukraine invasion and the dust up in Gaza are so inconvenient: bad timing.


    We're going to see more political perversion in the next 30 months than we've seen to date.

    Barry figures he's been going slow on us all.

  25. Don Carlos Says:

    Augusto Pinochet where are you?

  26. FOAF Says:

    Like, the Founding Fathers made a speak-o, dude? When they, uh, wrote the Second Amendment they really meant to say, like, “the right of the people to keep and bear arms shall, uh, like, totally be infringed”?

  27. Matt_SE Says:

    I would normally say that it will be interesting watching what logical/linguistic contortions are necessary to save the ACA.

    However, by now the lawlessness from certain directions is so blatant, that maybe they won’t even pretend that the judges/justice’s rulings have to make sense.

    Suck it, serfs. What are you gonna do about it?

  28. RickZ Says:

    ConceptJunkie Says:

    2700 pages long.

    2700 pages was the bill as passed into law. See this picture:


    Now see this picture for the law after all the illegal HHS changes, that is ‘filling in the details’:


    If this law wasn’t built to fail it will fail by its own weight, literally.

    Just looking at that second picture is quite scary. How can anyone be in compliance with such a massive and complex law? The short answer is, ‘Of course they can’t’. But that, too, is by design.

    “It will be of little avail to the people that the laws are made by men of their own choice if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood.” ~ James Madison

    “The only power any government has is the power to crack down on criminals. Well, when there aren’t enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. ~ Ayn Rand

  29. blert Says:


    That’s a valuable citation.

    It’s author left out the most damaging reality: alternate energy does not create synchronous three-phase power.

    It can’t join up with the ‘infinite bus’ that constitutes the power grid.

    The moment alternate energy scales past a certain threshold the ENTIRE system becomes unstable — and eventually collapses entirely.

    That’s right: everything. The circuit breakers trip out to save the expensive equipment.

    It then takes days to boot the system back up.

    When it happened to Italy (about ten years ago) it took a FULL WEEK for Italy to fully boot up. This blackout shut down essentially all of Italy.

    Recently (2013) Germany found that she’d reached just this saturation point. So the Greens of Germany have had an introduction to modern electrical engineering.

    They found out that alternate energy can NEVER scale all the way up. It HAS to stay a minor fraction of the infinite bus.

    Their grand vision is impossible by the laws of physics and electromagnetic waves.

    Even the cited author missed that connection to reality.

    BTW, the power grid also has to have stockpiled and ready to hand primary energy at all times. Pipelined gas does not count.

    Should AQ hit enough natural gas pipelines at the same time, the entire grid must go down.

    The only fix would be if every major power station had its own, co-adjacent, massive natural gas reservoir. The required volume would be such the Greens would have a fit.

    The only sources that have the requisite, timely buffers: oil, coal and hydro.

    To top all of this off: the digital controls within our power grid are easily hacked. The whiz kids designed them without consideration for evil hackers — at all. (!!!)

    A decent hacker can shut off your (digital) electric service with his smart phone. He doesn’t even need to touch it.

    This basic design flaw can’t be fixed until the entire meter is replaced — across the nation.

    No-one has yet produced a digital meter that can’t be hacked. The panic only set in recently.

    All around the nation, security experts are spelling it out to the nations power companies. They are now in a twist.

    The correction will come out of rate payers pockets, of course.


    Atomic EMP bursts are so yesterday. Iran is working on this very prospect even now. The buzz is coming out of the Arab middle east. (Ask NSA.)


  30. Don Carlos Says:

    As to Halbig and what may follow, I think it simply does not matter.Life is not a debate conducted in a courtroom before a judge, or judges, who are at least somewhat predictably biased toward one of the two debating parties.

    Morality is not going to be established by two debaters debating, which means massaging facts to score points. Truths in general are not established in this process, though lots of points are scored, and the ground is littered with losers.

    Obamacare is a combination of the malign with the stupid, wrapped in flavors to seduce the would-be slaves. That will never be declared in a courtroom, though the numbers of angels dancing on a pin will be debated ad nauseam and to no useful purpose.

  31. Harold Says:

    “Did the ACA framers mean…”

    Well the words mean whatever the left says they mean. There is no intrinsic meaning to words or language. The left makes it up to support or oppose whatever they are currently supporting or opposing.

    Today it is a mandate, tomorrow it is a tax, the day after it’s a tax again.

  32. Paul in Boston Says:

    A commenter at Legal Insurrection found this beauty!


    This is Sen. Hatch, rnaking Republican on the Senate Finance Comm., on 12/1/2011 in a letter to the Treasury pointing out that the law as written clearly states that subsidies can only go to exchanges established by the States not the Federal government. Furthermore, the regulation as written is an unconstituional violation of the separation powers since it rewrites the law.

  33. Cornflour Says:

    I often listen to NPR for the music. Then, as the station goes back to propaganda, I almost pull a muscle reaching for the off-button. Sometimes I’m a little slow, and a few words leak through.

    As a service to all the non-NPR listeners here, I’ll relay the news: if the Supreme Court confirms the Halbig decision, then Progressives expect States to set up small offices that would subcontract their State Obamacare exchanges to the Federal exchange. In praise of Potemkin.

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Previously a lifelong Democrat, born in New York and living in New England, surrounded by liberals on all sides, I've found myself slowly but surely leaving the fold and becoming that dread thing: a neocon.

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