Mea blog-o

Yesterday I felt horrible, and today I woke up with a fever for the first time in years.  So that’s my excuse.  I was already sick.

Seriously, I haven’t changed my views 180 degrees since yesterday, but I have changed them about 90 degrees.

1.  I still feel the ACA wording was ambiguous.  This probably reflects its size, the way it was rushed through after Scott Brown was elected, and the fact that early in the process most people assumed states would set up the exchanges.  (This article from 2012 discusses its ambiguity, as well as the intent of the drafters.)

2.  I still think the intent was to provide subsidies via the federal exchange.

So why have I somewhat changed my mind?  I don’t think I can continue to claim the courts were engaged in their typical overreach.  There are too many arguments on both sides.  It seems to me now that judges on both sides of the split decision had good arguments.

And commenters raised some issues that I found appealing:

1.  I hate ultra-long bills like Sarbanes-Oxley, Dodd-Frank and the ACA.  Complexity makes for bad governance.  So there is an argument that the Dems are paying the price for their belief in complexity.  The bill was so big they were not careful in drafting it.  Of course that’s not really reason enough to gut the bill.  But it’s an argument I find appealing.

2.  Another argument from commenters (and Tyler Cowen and Ross Douthat) is that it makes sense for courts to interpret laws literally, and then the Congress can change the language if there is a problem.  Now in this case the peculiarities of America politics makes that unlikely, at least in the near future.  But that merely shows the danger of trying to force through major changes in social policy with razor thin margins, and zero support from the other side.  (BTW, both parties have become much more extreme in recent years, so both are to “blame.”  The GOP probably fell further, but with the new Ryan proposal they show signs of having hit bottom and rebounding, whereas the Dems are still falling.  On the other hand if the GOP is serious about impeachment . . . )

3.  Look what happens when I try to help a liberal with whom I strongly disagree about everything. He undercuts me with a very weak response to the second set of revelations.  (He said “same answer.”)  That’s not the answer I would have given in that situation.  Do MIT profs ever do soul-searching?

4.  Perhaps the Dems are weaker on the time inconsistency front than I am.  If I had used subsidies as a club for the states to set up exchanges, I’d sure as hell carry through with the threat.  On the other hand this is the administration that drew a “red line” in the sand with Syria and chemical weapons, so who knows?  And I’m a bit on the stubborn side.

It’s now clear to me that this is not just another case of judicial overreach, but rather a very complex set of factors that are unlikely to ever again come together in exactly the same way.

I’d like to thanks Megan McArdle for providing me with some useful information.


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50 Responses to “Mea blog-o”

  1. Gravatar of Chris S Chris S
    26. July 2014 at 12:13

    Scott may win the award for the first person on the internet to state publicly that they changed their mind.

  2. Gravatar of Jerry Brown Jerry Brown
    26. July 2014 at 12:19

    I hope you feel better very soon.

  3. Gravatar of Jason Braswell Jason Braswell
    26. July 2014 at 12:33

    Good post. Like I said in the last post, I think you were trying a little too hard to be fair. Your soul isn’t dark enough for politics. ☺︎

  4. Gravatar of Jason Braswell Jason Braswell
    26. July 2014 at 12:33

    Good post. Like I said in the last post, I think you were trying a little too hard to be fair. Your soul isn’t dark enough for politics. ☺︎

  5. Gravatar of Morgan Warstler Morgan Warstler
    26. July 2014 at 13:25

    Nothing like a good night of sleep to let the brain elves come rewire away cognitive dissonance.

  6. Gravatar of Morgan Warstler Morgan Warstler
    26. July 2014 at 13:27

    Brain elves:

    https://www.themoneyillusion.com/?p=27141#comment-358666

  7. Gravatar of foosion foosion
    26. July 2014 at 13:58

    >>On the other hand this is the administration that drew a “red line” in the sand with Syria and chemical weapons>>
    After which Syria agreed to give up its chemical weapons and to have inspectors check. http://en.wikipedia.org/wiki/Destruction_of_Syria's_chemical_weapons

    This seems a good outcome. Would you have preferred starting another war?

    Get well soon.

  8. Gravatar of Michael Byrnes Michael Byrnes
    26. July 2014 at 14:07

    Scott, on issue #2 that you found appealing…

    “Another argument from commenters (and Tyler Cowen and Ross Douthat) is that it makes sense for courts to interpret laws literally, and then the Congress can change the language if there is a problem.”

    This would be completely reasonable if the courts used this approach systematically, for all disputed laws. It is not at all clear to me that that is the case. For example, the Supreme Court appears to have done the opposite (overruled a literal reading of a provision in a law based on the court’s interpretation of Congress’ intent) on at least one occasion:

    http://theincidentaleconomist.com/wordpress/an-expedited-appeal-in-the-exchange-litigation/

    If the approach of the courts is “we’ll interpret laws literally… if and when it suits us to do so” then I think we are all right back where you started out yesterday.

    What I personally find infuriating in this whole dispute is not the argument that the law was written ambiguously (it clearly was) or the argument that it is possible that Congress (or at least some in Congress) intended to use withholding subsidies as a stick to get states to set up their own exchanges. Rather, it is the argument that there is no ambiguity – that Congress absolutely, unquestionably intended that subsidies would not be available via federal exchanges and that this has been plainly obvious all along yet somehow it escaped the notice of the CBO, the Administration, the newspapers, the liberal blogosphere, the conservative blogosphere, Republican governors angered by Congress’ secret evil plan, etc.

  9. Gravatar of ssumner ssumner
    26. July 2014 at 14:18

    foosion, A good outcome? Really?

    http://www.theguardian.com/world/2014/apr/29/syria-chemical-weapons-chlorine-gas

    And no, I don’t favor going to war with Syria, nor do I favor making empty threats.

    Michael, I agree the literal interpretation approach has been used erratically. That’s one reason I have mixed feelings on this issue. My point in this post is that the other side of the issue is not obviously wrong, as I originally thought. The conservatives took an approach that is not unreasonable, even if I might have gone the other way.

    You said;

    “Rather, it is the argument that there is no ambiguity – that Congress absolutely, unquestionably intended that subsidies would not be available via federal exchanges and that this has been plainly obvious all along yet somehow it escaped the notice of the CBO, the Administration, the newspapers, the liberal blogosphere, the conservative blogosphere, Republican governors angered by Congress’ secret evil plan, etc.”

    In fairness, the smarter conservatives have not been making this argument.

  10. Gravatar of dtoh dtoh
    26. July 2014 at 15:19

    Scott,
    I always have found that those who are seldom wrong find it easier than other people to admit it in the rare cases when they actually are wrong.

    Nice post.

  11. Gravatar of Gordon Gordon
    26. July 2014 at 15:42

    The Incidental Economist example is rather weak. Regarding the 21 USC Section 321(g)(1)(C), the text uses the term “intent”. I don’t know what argument the SC used in the tobacco case the IE mentions, but the simplest is to argue that smokers do not “intend” to “affect the structure or any function of the body of man” when they smoke, whatever the *result* might be. As they say, Congress knows the difference between “intent” and “result”.

    With the ACA, the word at issue is “state”, which is defined in the statute and does not include the federal government.

  12. Gravatar of David R. Henderson David R. Henderson
    26. July 2014 at 15:46

    @Chris S,
    Not true.
    @Scott,
    I hope you feel better.

  13. Gravatar of Jason Jason
    26. July 2014 at 16:32

    Scott, you said “both parties have become much more extreme in recent years, so both are to “blame.””

    This is measurably false at least in terms of people in office. Check DW NOMINATE scores. Republicans have created a tightly packed cluster in PCA.

  14. Gravatar of Joshua Joshua
    26. July 2014 at 19:05

    <3

  15. Gravatar of Joshua Joshua
    26. July 2014 at 19:05

    <3

  16. Gravatar of Joshua Joshua
    26. July 2014 at 19:05

    <3

  17. Gravatar of Joshua Joshua
    26. July 2014 at 19:05

    <3

  18. Gravatar of Joshua Joshua
    26. July 2014 at 19:06

    🙂

  19. Gravatar of Tom Brown Tom Brown
    26. July 2014 at 23:06

    Scott, O/T: What’s your view of this David Andolfatto interview of Michael Woodford? Have you seen it before?:

    http://www.stlouisfed.org/publications/Connecting-Policy-with-Frontier-Research/Michael-Woodford.cfm

    Have you read the paper he’s referring to?

  20. Gravatar of Nick Nick
    27. July 2014 at 02:45

    Very brave blogging.
    An honest question for the legal scholars: do you all think the executive is in flagrant violation of the Controlled Substances Act with regard to current marjiuana policy? And, if not, why is this sloppy combination of executive discretion and congressional sloth not as worthy of SCOTUS’s attention? My understanding is that it’s even worse in the case of CSA, since the executive has regulators empowered by the act to reschedule pot if they want to no longer enforce the law as strictly, but they have declined to actually do this (for political reasons) and are instead just ignoring the law. No charge of hypocrisy–it’s easy enough to just say, ‘yeah this is illegal, they should reschedule it if this is the new policy’. But the CSA is too complicated for me to read and understand, so anyone out there know there’s something in it that makes current policy legal?

  21. Gravatar of TravisV TravisV
    27. July 2014 at 06:12

    Morgan Warstler,

    Where can I read more about this:

    “Yesterday I mentioned some stuff about how brains rewire neural networks (during first 3-4 REM cycles each night) to deal with cognitive dissonance – whatever people struggle with most today, tonight their brain will do what it needs to do to get rid of that kluge.”

    https://www.themoneyillusion.com/?p=27141#comment-358666

    Fascinating!

  22. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    27. July 2014 at 06:59

    I just checked Brad DeLong’s two blogs and neither has any mention of the Gruber fiasco. Though DeLong does link to one of Scott’s earlier posts denying that what Gruber said has any relevance.

    He also thought that Michael Cannon’s trivial error in his Halbig amicus brief important enough to quote from. DeLong is one of the signers, alongside Gruber, of an amicus brief that denies what Gruber said was true in January 2012.

  23. Gravatar of Jim Glass Jim Glass
    27. July 2014 at 11:43

    I haven’t changed my views 180 degrees since yesterday, but I have changed them about 90 degrees … I don’t think I can continue to claim the courts were engaged in their typical overreach. There are too many arguments on both sides. It seems to me now that judges on both sides of the split decision had good arguments.

    So, with reluctance and only as the result of much effort, you eventually conclude that the professionals in another field act competently and in good faith.

    Interesting.

    One might wonder if this delay was the result of initial personal bias, or of economists generally projecting their own standard of behavior on other fields.

    Well, in any event, good, you finally got there — it’s more than Krugman and a whole lot of others have ever managed to do.

  24. Gravatar of Jim Glass Jim Glass
    27. July 2014 at 11:49

    @ Jason

    Scott, you said “both parties have become much more extreme in recent years, so both are to ‘blame.'” This is measurably false at least in terms of people in office. Check DW NOMINATE scores.

    No, *this* is measurably false. The Dems have moved sharply leftward, as is seen clearly when examined on an issue-by-issue basis, e.g. in the recent Pew survey, (discussed by Politco: http://www.politico.com/magazine/story/2014/07/left-took-over-democratic-party-109348.html )

    The DW NOMINATE methodology looks only at numerical relationships, not at issues, and so produces some highly misleading results.

    E.g., under it, if the Democrats voted unanimously to repeal the Bill of Rights, and the Republicans voted 2-1 to preserve it, those two-thirds of Republicans would be the divisive splitter extremists.

    Republicans have created a tightly packed cluster in PCA.

    In voter polls Obamacare is 15 points underwater, 55% against to to 40% for.

    http://www.realclearpolitics.com/epolls/other/obama_and_democrats_health_care_plan-1130.html

    Could this explain the Republicans’ stance? Which of two parties is “most extreme”, the one reflecting solid majority public opinion or the one fighting it?

  25. Gravatar of ssumner ssumner
    27. July 2014 at 12:07

    Jason, I’m afraid I don’t know what those acronyms mean.

    Jim, I still think judges show lots of bias, in cases like the 2000 election. I only changed my mind on this case.

  26. Gravatar of Jason Jason
    27. July 2014 at 12:44

    Hi Scott, DW NOMINATE refers to an analysis of voting patterns in the political science literature which uses principal component analysis (PCA).

    @Jim Glass: why do I get the feeling that if the mathematical analysis showed democrats were becoming more extreme you’d totally believe it? I use various PCA and low rank methods as part of my daily work, so if had to put up DW NOMINATE against your gut feelings about “issues”, I’d go with the DW nominate. Show me a mathematical model that removes this apparent bias and I’ll hear you out.

  27. Gravatar of Jim Glass Jim Glass
    27. July 2014 at 21:32

    Jim Glass: why do I get the feeling that if the mathematical analysis showed democrats were becoming more extreme you’d totally believe it?

    I don’t know, why do you?

    Perhaps you feel better personally slighting people you don’t know at all, when they post facts you don’t like, than you do responding to those facts.

    if had to put up DW NOMINATE against your gut feelings

    Well you don’t have to, eh? What gut feelings? I provided a link to Pew findings on Democratic movement to the left on specific issues, issue-by-issue.

    Did you even look at that data?

    Today, almost four-in-ten (38%) politically engaged Democrats are consistent liberals, up from just 8% in 1994. The change among Republicans since then appears less dramatic – 33% express consistently conservative views, up from 23% in the midst of the 1994

    Or did your gut feelings convince you to not bother yourself with such facts when you can hurl an ad hominem instead?

    See, you don’t have to put your DW NOMINATE analysis up against anybody’s gut feelings — just reconcile it with the Pew data showing Democrats moving so significantly leftward issue-by-issue.

    The share of Democrats holding consistently liberal views has grown steadily over the past 20 years, quadrupling from 5% in 1994 to 23% today. Social issues like homosexuality and immigration that once drove deep divides within the Democratic Party are now areas of relative consensus. And Democrats have become more uniformly critical of business and more supportive of government.

    Changes in ideological consistency on the right have followed a different course. In 1994, during the “Republican Revolution,” 13% of Republicans were consistent conservatives. That figure fell to 6% a decade later during George W. Bush’s presidency, before rebounding to 20% today. This increase has come despite more moderate views among Republicans on issues like homosexuality and immigration…

  28. Gravatar of Jim Glass Jim Glass
    27. July 2014 at 21:55

    Jason, one more thought.

    Interactive graphics are fun. Have some fun yourself. Go here…

    http://www.pewresearch.org/fact-tank/2014/06/13/why-we-didnt-include-the-y-axis-on-our-polarization-chart/

    … click back and forth between 1994 and 2014, and then tell us how that “median Democrat” line moving way back-and-forth doesn’t move in DW NOMINATE terms.

  29. Gravatar of Brian Donohue Brian Donohue
    28. July 2014 at 03:47

    @Jim Glass,

    Great links. The last one deserves a post from someone. Assuming the data are accurate, it’s fascinating.

    Here are some take-aways:

    1. Politically active people are more extreme than the general population. D’uh. But it’s become more pronounced.

    2. The population overall has shifted somewhat to the left.

    3. As you say, Republicans have moved to the right somewhat, but Democrats have moved to the left a lot.

    4. Remember when Bill Clinton said that the era of big government was over? I miss that guy.

  30. Gravatar of ssumner ssumner
    28. July 2014 at 05:54

    Jason, Thanks, I was thinking about politicians, not voters.

  31. Gravatar of maxk maxk
    28. July 2014 at 07:02

    I’m not a lawyer or legal scholar and I suspect that most of the people commenting on this issue are also not. But my guess is that laws are *always* ambiguous in one way or another. Scott suggests that a complex law with hundreds of pages is more prone to ambiguity. I’m not sure I believe that. Will it be necessarily easy to interpret a short law in a variety of circumstances? But in any case, I take as given that the application of law requires judgment and interpretation.

    Law says [such and such]. Complaintant says, but what about this circumstance? Judge (or government agency) says [interpretation]. This is unavoidable. We math people know how hard it is to state rules for the real world.

    So what is the standard for this interpretation? For the Constitution there’s a lot of debate. Note that the debate there is not between one group who want to interpret literally and one who want to interpret broadly. Rather, the debate is between a group who want to stick with the *intentions* of the original writers and a second group who will allow meanings to evolve. In the case of the Constitution we have two difficulties: ambiguous language and the passage of time.

    In the case of recent laws, it must be the case that the clear intentions of the writers of the law should be the primary standard of interpretation. For the question of subsidies for states without state exchange, those intentions seem unambiguous. Irrespective of Gruber’s comments (which are inconsistent with the volumes of other stuff he has said and written on Obamacare), the clear intention is that subsidies should be available in all states. See Yglesias’s current article in Vox for links.

    These days most impactful laws are going to pass with a thin margin. See the work of Frances Lee for an explanation for why our politics have become so polarized (nice video interview of her on Vox). If Scott thinks the parties should try to pass laws by tight margins, I think he is basically asking Congress to do nothing.

    I love Scott’s blog. Everything I know about monetary economics (not enough!) I’ve learned from him. I argue with everyone that the Fed could have much reduced the recession. But I am mildly disappointed with his change of heart here. It certainly doesn’t read as bravery to me. Rather, it reads like another Obamacare opponent who has convinced himself that this tactic has legs. I’d love to change Obamacare, but not this way.

  32. Gravatar of Squarely Rooted Squarely Rooted
    28. July 2014 at 09:28

    The thing is that the legal standard here is really clear:

    http://en.wikipedia.org/wiki/Chevron_U.S.A.,_Inc._v._Natural_Resources_Defense_Council,_Inc.

    1) Is the statute ambiguous? Yes or no?

    If no – do what the statute says.

    If yes, see step 2:

    2) Is the relevant agency’s interpretation of the statute “a permissible construction?”

    If no – stop what you’re doing and comply with some permissible construction.

    If yes: carry on.

    So question 1) Is ACA ambiguous on this question? Clearly the answer is ‘yes’ because nobody can quite agree!

    Question 2) Is the government’s construction – that federal exchanges can offer subsidies – permissible?

    Well, here’s the relevant section of the law (1321):

    http://www.ncsl.org/documents/health/ppaca-consolidated.pdf

    (c) FAILURE TO ESTABLISH EXCHANGE OR IMPLEMENT REQUIREMENTS.””
    (1) IN GENERAL.””If””
    (A) a State is not an electing State under subsection
    (b); or
    (B) the Secretary determines, on or before January
    1, 2013, that an electing State””
    (i) will not have any required Exchange operational
    by January 1, 2014; or
    (ii) has not taken the actions the Secretary determines
    necessary to implement””
    (I) the other requirements set forth in the standards under subsection (a); or
    (II) the requirements set forth in subtitles A and C and the amendments made by such subtitles;
    the Secretary shall (directly or through agreement with a notfor-profit entity) establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements.

    Certainly it is a permissible construction of “the Secretary shall…establish and operate such Exchange within the State” to say that consumers on ‘such Exchanges’ will have equal access to subisides.

    On a broader level, nobody thought the intent of the law, at the time, was to withhold subsidies from federal exchanges, and nobody planned to do that, and nobody wanted to do that:

    http://theincidentaleconomist.com/wordpress/what-does-the-gruber-video-tell-us-about-halbig/

  33. Gravatar of maxk maxk
    28. July 2014 at 10:21

    There’s a serious risk in making bad arguments to support a desired outcome, namely that people will classify you as someone who is willing to make bad arguments in support of desired outcomes. And they’ll stop reading.

  34. Gravatar of Jim Glass Jim Glass
    28. July 2014 at 21:56

    In the case of recent laws, it must be the case that the clear intentions of the writers of the law should be the primary standard of interpretation.

    That’s one of many notions in life that seems obviously right until you actually try it. Courts hate to be forced into trying to determine “the intent of Congress” because…

    1) Congress is 535 people, not one, with different intents going in all different directions. They don’t have the same intent even when they vote the same way.

    2) When two political sides each get something in a deal, legislators protect themselves by making a point of declaring out loud to their constituents “this is great for our side! but does *not* give anything to the other side, never, I’d never intend to do that” … you know, lying dissembling for political purposes.

    3) After the fact, heading for another election with problems arising, like say today, they will say *anything* about what their intent was. Getting re-lected is job #1.

    If you don’t believe this, consider 14th Amendment, probably the most important for our time. Check the actual historical record of the statements of the Congress voting for it as to whether it applies the Bill of Rights to the states. “Yes … No … Of Course! … Never!…” What was their intent?

    This is why courts go to what the words of the law say, first and foremost — whatever they all may have “intended” or not, the words are what they actually *agreed upon*.

    Face it, we don’t even know what Gruber’s intent was in 2012. And he’s just one presumably honest guy in a tight spot – not 535 politicians all with a strong motive to dissemble.

    Scott suggests that a complex law with hundreds of pages is more prone to ambiguity….

    That’s not the real problem here at all. Laws very commonly have drafting errors, and Technical Correction Acts fixing them are entirely routine, enacted all the time. No problem. There are many easy fixes for this Habig issue. It’s not an “existential threat” to the ACA at all like the NFIB case was.

    The real problem is the Dems pushed this law *knowing* it was only 2/3rds done and needed massive re-work, through the reconciliation process without a Conference or re-write, to need only 51 votes — because they didn’t have public support to pass it any other way. And they hoped public support would appear for the needed TCAs. But now Obamacare is 15 points underwater with the voters and the Repus are in.

    So the ACA’s creators today are facing a real threat in “the intent of the current Congress”. (But why should only the intent of the 2010 Congress count?)

    This is not a problem resulting from the courts or judicial interpretation — it is one of legislative malpractice.

  35. Gravatar of Jim Glass Jim Glass
    28. July 2014 at 22:07

    @ ssumner

    Perhaps the Dems are weaker on the time inconsistency front than I am. If I had used subsidies as a club for the states to set up exchanges, I’d sure as hell carry through with the threat.

    I doubt that you would. ISTM you are underestimating the ability of the professionals in another field again. Politicians are very, very good at their job — which is maintaining their power base and getting re-elected. Look at the Congressional re-election rate.

    Yes, the Dems have folded on *every* enforcement issue that is supposed to push people into coverage and pay for ACA costs — the tax on union gold-plated benefit plans went down on day one, every mandate and tax penalty unpleasant to voters, forcing them to move to “better” plans, etc., all on perpetual hold or repealed.

    But as those things would threaten you with the loss of your seat and power, you’d fold on them too. (Or not, and quickly be removed from the game in favor of someone who learned from your example.)

    However passing a *good* law was never their first priority — if it were, they’d never have forced through a law they *knew* was only two-thirds done and needed a major re-write, using a reconciliation rule that prevented even a conference and allowed no substantive amendments at all, with Pelosi saying “we’ll find out what’s in it after we pass it”.

    Their *first priority* was to get the big short-term victory of passing A law, figuring they’ll straighten it out later (second priority) with Technical Correction Acts after the law became very popular. Which hasn’t happened. So it’s hardly surprising that their first priority remains getting re-elected and salvaging their power, and actually running the law as promised is a far lower priority that gives way in any conflict with #1.

    If you were a Dem politician, why wouldn’t it be so for you too?

    These people are good at doing their job #1, they deserve respect!

  36. Gravatar of Jim Glass Jim Glass
    28. July 2014 at 22:23

    @ Squarely Rooted

    I don’t have a dog in this fight, so you can trust me as an impartial commentator, unscrupled lawyer that I am.

    The real issue in this case is ACA section 1401, which states taxpayers may receive tax credits when …

    “enrolled through an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act” (and explicitly repeats the “by a state” requirement)

    …versus the IRS Regulation which states tax credits will be allowed….

    regardless of whether the Exchange is established and operated by a State”

    I’m not going to go into all the argument about what makes the above on-its-face pretty clear contradiction so “ambiguous”.

    But a word of context about “Congressional intent” vs legislated text:

    Some years ago in my day job I contributed in my own small way to the death of the telephone excise tax that had been in place in the USA since the Spanish-American War. The terms of that tax law applied the tax by the “long distance” of the call, instead of on all the various billing methods developed since the 1980s. Of course the IRS had published regulations applying the tax to current billing practices — but the terms of the law itself had not kept up.

    Thus the tax-authorizing legislation was erroneous — in a way utterly trivial compared to the Obamacare error of today — and the tax was ruled illegal. The IRS gave three years of refunds to the entire country!

    And clearly, obviously, the intent of Congress was to collect that tax — they’d been actually collecting it since 1898!!

    That’s how tightly Congress is required to draft legislation supporting a tax, and how little weight is given to “intent” compared to the actual words of the tax law, and how little authority the IRS has to create a tax by regulation, in all tax cases not as mega-political as this one.

    On a broader level, nobody thought the intent of the law, at the time, was to withhold subsidies from federal exchange…

    The “nobody had ever even thought of this” line is totally false, pure bunkum.

    There were two predecessor bills to the current law that explicitly gave tax subsidies only to state exchanges, withheld them from persons using a “backup” federal exchange, and even repealed existing tax subsidies for state exchanges if they stopped complying with federal requirements, all to force the states to create exchanges. (Somehow I never see this reported by the ACA’s defenders.)

    Language from those laws was cut-and-pasted into the current law, as it was rushed two-thirds done thru the reconciliation process with no House conference or proper review. And that language in those laws meant what it said.

    BTW, for an impartial authority on a legal dispute you shouldn’t cite a partisan for the law quoting a collection of other partisans for the law. You hardly learn both sides of the argument that way!

    You’ll do much better quoting a relevant legal brief — lawyers, surprisingly, are much more *honest and respectful* of the other side’s arguments than anyone else … because if we don’t heed the full strength of the other side’s arguments we lose, and are removed from the pool.

    Other partisans, pundits, economists, and such are just the opposite — the more they slang other side the more their selected chorus cheers them! For them, partisanship pays.

    Which makes us lawyers the most honest, fairest, full-of-integrity arguers you can find. Believe it!

    Here’s the precursor to the winning brief in the Fed Circuit case, you’ll find in it better arguments for *your* side than you’re using now. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2106789

  37. Gravatar of Vivian Darkbloom Vivian Darkbloom
    28. July 2014 at 22:49

    “The real problem is the Dems pushed this law *knowing* it was only 2/3rds done and needed massive re-work, through the reconciliation process without a Conference or re-write, to need only 51 votes “” because they didn’t have public support to pass it any other way. And they hoped public support would appear for the needed TCAs. But now Obamacare is 15 points underwater with the voters and the Repus are in.”

    Patrick Sullivan alluded to this issue a while back, but it is worth elaborating on a bit. Up until the time the PPACA was passed, there were two competing bills–a House bill and a Senate bill. So, there was hardly agreement, even among Democrats, at that point. When Scott Brown was elected to the Senate at that stage in the process, it became clear that the only way to get a bill passed was to go with the Senate version and forego reconciliation. The Senate bill was based on Senator Baucus’ earlier legislative efforts–efforts of which were based on the “federal/state cooperation” model, a feature of which was federal “nudging”–adopt our “invitation” or lose money. The House bill was much different in that regard. Had it been possible for the House bill to be passed, or perhaps even a reconciliation bill, things would have turned out differently and we likely would not be faced with Halbig. Given this background, it is certainly understandable why the original bill–the one that actually passed Congress–was drafted in a fashion that provided tax credits only to Exchanges created by a “state” (nota bene Squarely Rooted, a term clearly defined in that statute, an inconvenient fact that you omitted).

    So, it was not merely the lack of *public* support for the bill, it was the lack of sufficient *Congressional support* that led to the problem. At the end of the day, this appears to be a law that very few in Congress wanted, with the possible exception of the Senate sponsors of that bill. But, it *is* the bill the majority voted for, despite apparent efforts after the fact to remake a law to the administration’s satisfaction that they were not able to muster sufficient support in Congress for.

    There is a comprehensive discussion of that “history” in the Cannon/Adler amicus brief to Halbig.

  38. Gravatar of Vivian Darkbloom Vivian Darkbloom
    28. July 2014 at 23:03

    By the way, I’ve been patiently waiting for Paul Krugman’s blog post on this whole thing, but alas, he’s been silent. Apparently, he’s not sufficiently outraged by the Halbig decision.

    He did, however, weigh in much earlier on the matter of Jonathan Gruber–that is, the matter of Gruber, contrary to NYT rules, writing Op-Eds in the NYT without disclosing his $400K government consulting contract with HHS on the health care bill (and, as the last commenter on that blog correctly noted, it was not a “grant” as PK alleged).

    According to PK, writing in 2010, all this was blown completely out of proportion, in part because, up until then, Gruber’s “position on reform has been entirely consistent”.

    http://krugman.blogs.nytimes.com/2010/01/11/jonathan-gruber/?_php=true&_type=blogs&_r=0

  39. Gravatar of ssumner ssumner
    29. July 2014 at 05:11

    maxk, I still favor upholding the Obama administration on this. I changed 90 degrees, not 180, which means I now think the other side also has good arguments. That seems reasonable, give all the arguments presented on that side. Again, the most powerful argument on the other side from you and me is that it makes sense for a court to interpret a law literally and let Congress fix the problem later. The fact that Congress can’t do so in this case is a fact the courts are not allowed to take into account.

  40. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    29. July 2014 at 07:30

    There’s another reason for incentivizing the states, hidden on page 131 of Jonathan Gruber’s comic book (literally) ‘Health Care Reform: What it is. Why it’s necessary. How it works’

    It reads; ‘If states want to innovate by offering their own public option as part of their exchanges, they are welcome to do so…’

    Which is offered to the semi-literates who are reading as the reason congress did not create a ‘public option’.

  41. Gravatar of J Mann J Mann
    29. July 2014 at 13:57

    The tobacco litigation is interesting, and I’m reassessing my feeling.

    To grossly summarize that one, when setting out the mission of the FDA, Congress defined “drug” and “medical device” so broadly that read literally, it pretty much included everything intended to affect the body in any way (like shoes, alarm clocks) except for food, which it specifically exempted. When the FDA decided that meant it could regulate totobacco, the Court said that yes, read literally, that’s what the statute said, but that if you looked at the statute as a whole and the surrounding circumstances, it was sufficiently obvious that the statute didn’t reach tobacco that the FDA was wrong, even considering the deference the courts are supposed to extend to regulatory authorities interpreting their own rules.

    I’m not convinced that the relevant portions of ACA are ambiguous in the sense of “the actual language is susceptible to two different reasonable interpretations,” but if you apply the tobacco “look at the statute as a whole test,” I can see the argument in favor of extending subsidies.

    . . . which means I hate the tobacco reasoning, but it is the law of the land.

    . . . which means if this gets to the Supreme Court, we should get a good “test” of the Justices’ ability to rule consistently or to identify a convincing distinction.

  42. Gravatar of maxk maxk
    29. July 2014 at 18:51

    @ssumner
    “maxk, I still favor upholding the Obama administration on this. I changed 90 degrees, not 180, which means I now think the other side also has good arguments. That seems reasonable, give all the arguments presented on that side.”

    Admitting that both sides have good arguments is only reasonable if both sides actually have good arguments. If not (think for example of evolution vs creationism), then you’ve strayed. I’ll admit that lots of smart people who I often agree with (e.g., Megan McArdle & Tyler Cowen) seem to be making parts of this argument. Still, I have this strong conviction that if the law applied to a less contentious and less fundamentally impactful topic, there’d be no argument about interpretation. Everyone would agree that the IRS reading is consistent with the great majority of the content of the law, irrespective of some poor wording in one or two places.

    This scares the *bleep* out of me. Because it suggests that we’ve reached a point where the two sides will never be able to work together, because we can agree on nothing, not even what laws mean. One side says clearly this law says Up. The other side says clearly it says Down. We convince ourselves that we’re making good legal arguments, but somehow those arguments always wind around in our favor (whichever side we’re on). We expect that of politicians. Now we expect it just as much of judges.

  43. Gravatar of maxk maxk
    29. July 2014 at 19:12

    One argument that I hear is “this mess is the fault of the Democrats for pushing through a bill with a thin margin and no support of the other side”. (Of course, I’m deeply suspicious of any argument that starts with, this is the fault of [the others] because of their [presumably heinous acts].)

    Frances Lee has convinced me that our current political system provides zero incentive for the non-presidential party to work with or compromise with the presidential party. In fact I believe that the Democrats had no choice but to pass a bill with very little Republican support. (They tried pretty hard to get some support.) If the president had been Republican, the reverse would have been true. I think there is literally no health care bill that Obama could have passed which would not have led to the current contentious situation. We’re all being pushed hard into demonizing the other side. You can hear that in comments on both sides here.

    See http://www.vox.com/2014/4/28/5660666/the-ugly-truth-about-gridlock

  44. Gravatar of maxk maxk
    29. July 2014 at 19:35

    Another argument: “the courts should interpret literally and Congress should modify if that isn’t what they meant.”

    To me that sounds superficially plausible, but likely very very far removed from the realities of the process. It suggests that if the Congress tried hard enough and had enough do-overs they could remove all ambiguities of language. In fact, every law must need interpretations all the time. All the more so in Scott’s world of only simple laws (no complexity). The world is a messy place full of particularities. Applying a law to circumstances will always require interpretation, and in nearly every case those interpretations will be straightforward. At least provided we apply the process in good faith. If there isn’t good faith (and I see little of that here), then maybe everything just falls apart.

  45. Gravatar of Jim Glass Jim Glass
    29. July 2014 at 23:21

    @ maxk

    Still, I have this strong conviction that if the law applied to a less contentious and less fundamentally impactful topic, there’d be no argument about interpretation.

    Exactly. See how the multiple appeals courts struck down the telephone excise tax, as I described above — even though Congress fully intended to keep collecting it as it had since 1898.

    Another argument: “the courts should interpret literally and Congress should modify if that isn’t what they meant.” To me that sounds superficially plausible, but likely very very far removed from the realities of the process. It suggests that if the Congress tried hard enough and had enough do-overs they could remove all ambiguities of language.

    No, it just means the law needs a perfectly common and routine Technical Corrections Act, as is enacted all the time with Congress clarifing its intent regarding mistaken wording.

    The problem with that here is that with Obamacare 16 points underwater with the voters (40% for, 56% against), *this* Congress doesn’t have the intent you want. But that’s what happens when one party forces through a very unpopular law unilaterally.

    One argument that I hear is “this mess is the fault of the Democrats for pushing through a bill with a thin margin and no support of the other side”.

    As Vivian reminds us, they didn’t have support of *their own* side. They had the Presidency, House and a 60-vote filibuster-proof Senate majority going into 2010, and couldn’t get their own bill passed. How did the Repubs manage to block that?

    With all that, they still had to resort to a reconciliation process with *no* Conference, pushing through a two-thirds finished Senate bill with no substantive fixes to it possible — hoping to do the TCAs later. It was an *unfinished, bad, bill*, and they *knew* it was … hitting 15% of the economy (!) … and now they can’t get the TCAs because it is so unpopular. Legislative malpractice.

    In fact I believe that the Democrats had no choice but to pass a bill with very little Republican support …

    Why? Why did they have ‘no choice’ but to push through a health care bill — that they knew was ill-drafted and unpopular — as their top priority?

    Because the country demanded it above all other things?
    ~~~~

    Voter Priorites, 2009

    CBS News/New York Times Poll. Jan. 11-15, 2009.

    “What do you think is the most important problem facing the country today?”

    Economy/Jobs 60%
    War in Iraq, 3%
    Moral values/Family values 3%
    Budget/Deficit, 2%
    Education, 2%
    Health care/Health insurance, 2%
    Oil dependency/Energy policy, 2%
    Poverty, 2%
    Politicians/Corruption, 2%
    Other, 20%
    Unsure, 2%

    “What is the single most important thing you would like to see Barack Obama accomplish in the next four years as president?”

    Improve the economy, 40%
    Create jobs in the U.S., 11%
    Address/end Iraq war, 10%
    Health insurance plan, 8%
    Make the U.S. better (general) 5%
    Keep the country safe, 2%
    Bring bipartisanship, 2%
    Other/no answer, 20%

    I think there is literally no health care bill that Obama could have passed which would not have led to the current contentious situation

    Perhaps a very good reason, considering the voters’ priorities above, *not* to bet the house on unilaterally forcing an unfinished one through anyhow, and instead put that effort as the voters wanted into attending the economy — such as by filling all those Fed BoG seats that he left vacant through the entire crisis.

  46. Gravatar of J Mann J Mann
    30. July 2014 at 05:07

    Jim, what do you think about FDA v. Brown and Williamson?

    My gut is that if Halbig gets to the Supreme Court, it will be interesting to see the any flipping justices distinguish their opinions then vs now.

  47. Gravatar of ssumner ssumner
    30. July 2014 at 08:12

    maxk, You are speaking to the converted. I’m equally discouraged by the way people line up predictably. But in fairness, some of the people you cite are notable unbiased thinkers. Tyler Cowen is extremely unbiased, and while I don’t know McArdle as well, she also comes across as pretty sane and fair-minded. So if there is a problem, it’s more with other intellectuals.

    I also think the “endgame” of the Gruber case hurt that side. I was trying to defend him, but when he said “same answer,” he sounded both uncomfortable and a bit arrogant. But again, in the end I’d still vote the way you would, if I were a judge.

    J Mann, That cigarette sounds interesting. Maybe I spoke too soon when I said I doubted we’d see a similar case. There clearly are SOME Congressman who would love the FDA to go against tobacco, on the other hand that probably wasn’t intended by most.

  48. Gravatar of Major_Freedom Major_Freedom
    30. July 2014 at 08:26

    Everybody is biased.

  49. Gravatar of J Mann J Mann
    30. July 2014 at 12:00

    Scott, I’ve only skimmed the case, which is one of the reasons I was hoping to free ride on Jim Glass, but the gist was that since (1) prior to 95, the FDA had been interpreting its enabling as NOT including tobacco for decades; (2) during this whole time, Congress had not passed a law saying “no, ‘drugs’ include tobacco for purposes of the FDA; and (3) instead, Congress had passed numerous other laws providing for regulation of tobacco by ATF.

    So on its face, the defintion of “drug” read (1) literally pretty obviously includes tobacco but (2) there’s lots of evidence that no one thought it meant that.

    On top of that, it was a 5-4 split pretty much exactly as you would expect if I told you which justices were on the court in 2000.

    If Halbig gets to the S Ct, it should be a pretty good test of which justices flip and if they have a convincing explanation for why the two cases are different.

  50. Gravatar of Tom Tom
    30. July 2014 at 12:23

    To expand on Jim Glass’s point, the WSJ discusses the lack of reconciliation and how legislative intent is judged from unpassed drafts. IMO, this provides better context than the 2012 article Scott links to.

    http://online.wsj.com/articles/best-of-the-web-today-the-obamacare-chimera-1406750614

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