White House: It’s business as usual on subsidies after Halbig

posted at 1:21 pm on July 22, 2014 by Ed Morrissey

Another example of executive-branch lawlessness, or simply business as usual while an issue proceeds through the appeals process? The White House reacted to today’s Halbig decision by reassuring enrollees through the federal exchange that HHS would continue to pay their subsidies. But for how long?

The White House says health subsidies under the Affordable Care Act will continue to flow for the time being despite a major setback delivered by a federal appeals court.

The ruling potentially derails billions of dollars in subsidies for many low- and middle-income people who bought policies. But White House spokesman Josh Earnest says while the case works its way through the courts, it has “no practical impact” on tax credits. He said the White House is confident in Justice’s legal case.

At first blush, this seems rather arrogant. The court struck down the subsidies based on the explicit text in the law, and HHS’ most recent interpretation of its application to American territories is consistent with it. Should the court decision mean an immediate cessation of subsidies?

Well, probably not, for both legal and practical reasons. HHS is almost certain to appeal this to either the Supreme Court or to the en banc panel at the DC appellate level, and ask for a temporary stay in the meantime. Subsidies are not a constant stream, but get paid out on a monthly basis. The Obama administration is confident in getting a reversal and even more confident in getting a temporary stay while the appeals process continues, especially given the stakes involved for people already enrolled on the basis of the promises of subsidies. This isn’t defiance, it’s merely a reminder that this won’t stop on a dime, and it may not stop at all depending on what the en banc or Supreme Court review decides. (Plus, the 4th Circuit ruled the other direction a few minutes ago; Allahpundit has analysis of that coming up next.)

Practically, it might be difficult to stop the subsidies immediately anyway. The Healthcare.gov back end that is supposed to manage that function is still largely AWOL, as Jeryl Bier reminded us on Twitter:

The practical implications of this ruling work in the other direction, too. For states that didn’t opt to build an exchange, are Americans under obligation to comply with the mandates and pay penalties for non-compliance? Allahpundit linked to this earlier, but Michael Cannon’s explanation about the real scope of Halbig is worth reading in full. This not only ends subsidies for as many as 7 million Americans, it also lifts the obligation to pay taxes on tens of millions more for non-compliance — which is what was supposed to fund those subsidies:

Critics will respond that, as dozens of economists who filed an amicus brief on behalf of the government have predicted, a Halbig ruling would also cause the full premium to rise by unleashing adverse selection. This claim is based on a fundamental misunderstanding of Halbig and the PPACA. If a lack of subsidies in federal Exchanges leads to adverse selection, Halbigis not the cause. The cause is Congress tying those subsidies to state-established Exchanges, and 36 states refusing to cooperate. Halbig will not and cannot cause adverse selection. It merely asks the courts to apply the law as Congress enacted it.

Second, Avalere Health, the Urban Institute, and media outlets that have repeated their estimates typically neglect to mention that a victory for the plaintiffs would mean the second-highest court in the land ruled the Obama administration had no authority to issue those subsidies or impose the resulting taxes in the first place – that those taxes and subsidies are, and always were, illegal. Regardless of one’s position on the PPACA, we should all be able to agree that the president should not be allowed to tax and spend without congressional authorization. That’s what’s at stake in Halbig. It is why the Halbig cases are far more important than “ObamaCare.”

The termination of those subsidies and the taxes they trigger takes on an entirely different flavor when we introduce that small detail. If the courts rule for the plaintiffs, I’ll be interested see how many news agencies use headlines like, “Ruling Denies Subsidies to Millions,” versus the more accurate, “Court Rules Obama Gave Illegal Subsidies to Millions.”

Though that small detail doesn’t change the fact that 5 million people have been deeply wronged, it does clarify who wronged them: not the Halbigplaintiffs or a few judges, but a president who induced 5 million low- and middle-income Americans to enroll in overly expensive health plans with the promise of subsidies he had no authority to offer, and that could vanish with single court ruling.

Third, these reports and the ensuing media coverage uniformly neglect to mention that a victory for the Halbigplaintiffs would free not only those plaintiffs but tens of millions of Americans from the PPACA’s individual and employer mandates. Indeed, Halbig would free from potential illegal taxation more than ten times as many people as lose an illegal subsidy.

The bigger question will be whether the IRS will be able to collect any of those fines while Halbig stands as is, and what that does for the entire fiscal standing of ObamaCare. Don’t expect Congress to address the imbalance, either, as Republicans have warned all along about the fiscal imbalances of ObamaCare even outside of Halbig and have no incentive to fix them now.

Also, don’t expect House Republicans to withhold subsidy funds either, because the subsidies are essentially an entitlement program and not a budget line item. A few commenters on Twitter pointed to the House’s supposed “power of the purse,” but that belongs to Congress as a whole, not just the House. Besides, the revenue flow to the subsidies don’t come through appropriations, but through the taxes and fines built into ObamaCare — the supposedly self-sustaining system that aimed to avoid budget battles altogether. With 36 states now out of the system, that revenue flow will dry up tout suite unless HHS gets a temporary injunction soon.


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The Imperial Presidency continues…

Khun Joe on July 22, 2014 at 1:23 PM

The 4th Circuit just gave Obama all the cover he needs.

myiq2xu on July 22, 2014 at 1:24 PM

L’etat c’est SCOAMF.

ezspirit on July 22, 2014 at 1:29 PM

The court struck down the subsidies based on the explicit text in the law, and HHS’ most recent interpretation of its application to American territories is consistent with it. Should the court decision mean an immediate cessation of subsidies?

Well, probably not, for both legal and practical reasons.

Actually, that should hinge on when the three-judge panel said their ruling should go into effect immediately, and whether or not the circuit court or SCOTUS is willing to grant a stay.

Stoic Patriot on July 22, 2014 at 1:29 PM

And all spending line items start in the House.

Those that the Senate wants have to get a House sponsor and put into a bill.

It is for this reason that government agencies follow that which is passed by the House.

And it is also for this reason that the House is the body to grant spending privileges to Contract Officers and set the amount that they can spend.

Doesn’t matter what you call it – subsidy, entitlement – it starts in the House. And if the House wants to get nasty by pulling certs, they can.

ajacksonian on July 22, 2014 at 1:30 PM

that revenue flow will dry up tout suite unless HHS gets a temporary injunction soon

I suspect the administration will interpret their obligation differently. And how many divisions does the DC Circuit Court of Appeals have anyway?

MTF on July 22, 2014 at 1:30 PM

Mr Cool is always a thug.

Good thing he’s in escrow.

First Family believed to be in escrow…

— Drudge

Does that mean that Soros is selling them?

I wonder who would pay money for such shoddy goods?

They shouldn’t be in escrow. They should be in prison, or in Hell.

Schadenfreude on July 22, 2014 at 1:31 PM

If Obama is free to ignore court rulings he doesn’t like, what’s to prevent a conservative President from ignoring Roe?

Also, recipients, be forewarned that if you accept Obamacare subsidies from the federal exchange you had better be prepared to remit them back to your friendly IRS.

ConstantineXI on July 22, 2014 at 1:31 PM

Also, don’t expect House Republicans to withhold subsidy funds either, because the subsidies are essentially an entitlement program and not a budget line item. A few commenters on Twitter pointed to the House’s supposed “power of the purse,” but that belongs to Congress as a whole, not just the House.

So basically, even when conservatives win, they should tuck their tails between their legs and offer to lose. It certainly makes sense in light of the punditocracy’s commentary after Hobby Lobby (“Oh noes! We won! Quick, let’s make birth control available OTC!”)

Stoic Patriot on July 22, 2014 at 1:31 PM

It merely asks the courts to apply the law as Congress enacted it.

Starting my day with a hilarious joke ….it’s gonna be a goooood day today :P

burrata on July 22, 2014 at 1:33 PM

Shhhhh…..we don’t talk about obamacare around here anymore.
 
everdiso on July 22, 2014 at 1:27 PM

 
Ha.

rogerb on July 22, 2014 at 1:33 PM

laws-schmaws

ConservativePartyNow on July 22, 2014 at 1:33 PM

And Erdogan no longer talks to obama.

Schadenfreude on July 22, 2014 at 1:34 PM

Nobody mention Impeachment, or something something something will happen.

portlandon on July 22, 2014 at 1:34 PM

But these Obamacare posts are about whistling past the graveyard, by next Novemeber Democrats will be openly running on the ACA. Mark my words.
libfreeordie on December 20, 2013 at 10:14 AM

Schadenfreude on July 22, 2014 at 1:34 PM

So you want to see what happens when you have a Country without laws…?

Well, look around peeps, and embrace the suck!

Seven Percent Solution on July 22, 2014 at 1:35 PM

Laws schmlaws

It’s good to be the king

cmsinaz on July 22, 2014 at 1:36 PM

Leftists are never liberal/progressive, always only fascist thugs.

Schadenfreude on July 22, 2014 at 1:36 PM

So basically, even when conservatives win, they should tuck their tails between their legs and offer to lose.

Yup, just like the Mississippi run off. Thank you, sir! May I have another?

ezspirit on July 22, 2014 at 1:36 PM

CPN
Great minds :)

cmsinaz on July 22, 2014 at 1:37 PM

Nobody mention Impeachment, or something something something will happen.

portlandon on July 22, 2014 at 1:34 PM

Fluke impeachment.

Indict him for Treason.

ConstantineXI on July 22, 2014 at 1:37 PM

So you want to see what happens when you have a Country without laws…?

Well, look around peeps, and embrace the suck!

Seven Percent Solution on July 22, 2014 at 1:35 PM

That’s why we’re importing illiterate welfare queens from banana republics. It’s only going to get worse.

ezspirit on July 22, 2014 at 1:38 PM

It got derailed…they aren’t functional not that Obama cares the dictator wannabe…

sorrowen on July 22, 2014 at 1:39 PM

Does that mean that Soros is selling them?

I wonder who would pay money for such shoddy goods?

They shouldn’t be in escrow. They should be in prison, or in Hell.

Schadenfreude on July 22, 2014 at 1:31 PM

Pat & Stu showed pics of that property on their show.
At that location that property has been waaaaay underpriced .
No way that thing is worth that little . Rancho Mirage, on top of a hill , sitting like a fortress and all those amenities ? They are lying about the price.
Looks like a gift from a muzzie sheikh , frankly
( just like Rezko did for their Shi*cago house)

burrata on July 22, 2014 at 1:39 PM

Redefining the language:

In July, we learned that a Google search of the word “bigotry” turned up a definition that equated the word to “right-wing.” The sample sentence from the Oxford Dictionary set off a small firestorm of anger by conservatives, who don’t consider themselves bigoted and don’t think it should be part of any dictionary definition of the word.

Well, it seems Merriam-Webster also thinks conservatives are bigots.

http://dailycaller.com/2014/07/21/merriam-webster-editor-apologizes-for-bigotry-association-to-conservatism-sort-of/#ixzz38Dj89M6S

davidk on July 22, 2014 at 1:43 PM

Runaway executive branch….it sounds like they will be defunded anyway.

sorrowen on July 22, 2014 at 1:44 PM

“I want to see examples from peer-reviewed articles”:

It appears that news media and some pro-environmental organizations have the tendency to accentuate or even exaggerate the damage caused by climate change. This article provides a rationale for this tendency by using a modified International Environmental Agreement (IEA) model with asymmetric information. We find that the information manipulation has an instrumental value, as it ex post induces more countries to participate in an IEA, which will eventually enhance global welfare.

http://www.globalclimatescam.com/2014/07/dishonest-global-warming-reports-are-good-as-long-as-they-promote-certain-agenda-paper-says/

davidk on July 22, 2014 at 1:45 PM

It’s good to be King.

Ricard on July 22, 2014 at 1:47 PM

Congrats tea party governors, you succeeded in making the law not work …

libfreeordie on July 22, 2014 at 10:52 AM

Schadenfreude on July 22, 2014 at 1:47 PM

burrata on July 22, 2014 at 1:39 PM

Gay quarters not muzzie sheik.

Schadenfreude on July 22, 2014 at 1:48 PM

When y’all’s premiums go down y’all gonna be pi$$ed…libfree

22044 on July 22, 2014 at 1:49 PM

“Business as usual”:

Photo: President Obama boards Marine One for 3-day Democratic fundraising trip to Washington and California – @markknoller

davidk on July 22, 2014 at 1:50 PM

What a perfect government system: It hands out money left and right without the ability to verify where the money is going or how to get it back if there was a mistake.

If the gubment had built the first car it would have left the factory with no brakes.

Bishop on July 22, 2014 at 1:51 PM

“No need to fear, comrade Citizens: Dear Leader will not allow the tyranny of courts, or Congress to interfere with his infinite love for you and your votes endless dependency best interests.
He has therefore declared that the extreme, racist DC Circuit was in error, and their decision is anathema.”
Return to your subsidized housing, with your EBT cards. All is well.”

orangemtl on July 22, 2014 at 1:53 PM

4th Circuit’s basis for upholding subsidies:

Federal exchanges : State exchanges :: Pizza Hut pizza : Domino’s Pizza

/facepalm

blammm on July 22, 2014 at 1:53 PM

I demand that Elizabeth Warren’s Federal Consumer Protection Agency put a stop to these fraudulent practices by Healthcare.gov.

This is bait and switch.

At least put a warning label on the healthcare.gov website “Warning: Premiums subject to massive retroactive increase subject to IRS bank account levies”

faraway on July 22, 2014 at 1:53 PM

You can stab it with your steely knives,

White House: It’s business as usual on subsidies after Halbig

but you just can’t kill the beast…….

ted c on July 22, 2014 at 1:54 PM

How about a budget, Reid?:

Photo: President Obama signs Workforce Innovation and Opportunity Act. Jokes he needs more practice, tells lawmakers, ‘More bills!’ – @nedrapickler

davidk on July 22, 2014 at 1:54 PM

The penalty, like the subsidies, applies to people who live in a state with “an exchange established by the State.” Per the D.C. Circuit, that phrase no longer includes the federal exchange. Then again, pretty much everyone is now exempt from the individual mandate if they really, really want to be, right?

Don’t comply, no matter what.

Schadenfreude on July 22, 2014 at 1:55 PM

There be a breaking point to this lawlessness…and it won’t be pretty for O.

sorrowen on July 22, 2014 at 1:55 PM

“Our ruling will likely have significant consequences both for millions of individuals receiving tax credits through federal exchanges and for health insurance markets more broadly. But high as those stakes are, the principle of legislative supremacy that guides us is higher still,” Griffith wrote.

If only Justice Roberts on the Supreme Court had such principle.

Wigglesworth on July 22, 2014 at 1:55 PM

How many divisions does the DC Circuit have to uphold their decisions?

- Iosif Obama

Steve Eggleston on July 22, 2014 at 1:56 PM

“Our ruling will likely have significant consequences both for millions of individuals receiving tax credits through federal exchanges and for health insurance markets more broadly. But high as those stakes are, the principle of legislative supremacy that guides us is higher still,” Griffith wrote.
Sounds like the ruling does indeed effect the money flow.

sorrowen on July 22, 2014 at 1:57 PM

obama just signed off the 41st exemption from obama’care’, to keep the healthcare budget low. Dr. Carson ripped him to shreds.

Schadenfreude on July 22, 2014 at 1:58 PM

The law authorizes the federal government to establish exchanges for states that refrain, but has no provision allowing tax credits to be offered to defray the costs of insurance policies offered on those federal exchanges. Without the tax credits, though, the policies will be prohibitively expensive for so many people that the law will not work.

So the Obama administration’s Internal Revenue Service decided that it would offer tax credits even on the federal exchange, which covers 36 states. The success of the program required going beyond the letter of the law — several hundred billion dollars beyond it over the next decade.

That decision, in addition to being legally questionable, created some losers. Various taxes and penalties in the law come into effect only when tax credits are available. Employers will be subject to a penalty for not offering insurance, for example, only if their employees get tax credits on an exchange. What the IRS has done, then, is to declare that it is going to collect taxes that Congress has not authorized in law.

Several lawsuits have challenged the administration on this point. While it has won the early rounds of the cases, the D.C. Circuit Court of Appeals is now considering one of them. It could make it as far as the Supreme Court.

Jonathan Adler and Michael Cannon (the first a law professor at Case Western Reserve University, the second a health-policy analyst at the Cato Institute, both libertarians who have published often in NR) have made the case for the plaintiffs at length in Health Matrix, a journal of law and medicine. They want the courts to rule that the IRS must stop issuing tax credits, and also stop levying taxes and penalties that are tied to them, in the 36 states covered by the federal exchange.

Unlike the challenge to the individual mandate that the Supreme Court decided in 2012, these lawsuits do not question the scope of congressional power. Neither Adler nor Cannon nor any of the other people involved in the lawsuits denies that Congress had the legal power to extend tax credits to people getting insurance from a federal exchange. Congress could, for that matter, have stipulated in the law that for purposes of the law’s treatment of exchanges the federal government would be counted as a state; it did just that with respect to U.S. territories.

Resist We Much on July 22, 2014 at 2:00 PM

As Obama clearly says, I don’t have to obey any laws or courts. I do what I want, when I want, and how I want with my pen and phone. I am a power unto myself and you had better like it for the next 2 ½ years.

leader4hru on July 22, 2014 at 2:00 PM

obama just signed off the 41st exemption from obama’care’, to keep the healthcare budget low. Dr. Carson ripped him to shreds.
Schadenfreude on July 22, 2014 at 1:58 PM
How does one define “low” in D.C.???

sorrowen on July 22, 2014 at 2:01 PM

it is simply business as usual while an issue proceeds through the appeals process

Gebeaux on July 22, 2014 at 2:02 PM

Gay quarters not muzzie sheik.

Schadenfreude on July 22, 2014 at 1:48 PM

It’ll be really interesting to ascertain —-at what point did the value of that property drastically lower itself to almost 30% of it’s value and WHO did it ?
BTW, you’ll be surprised to know about the large number of properties owned by muzzies specially nation of islam and hamas operatives etc. in addition to oil sheikhs , in and around CA hills and canyons.
No doubt this is a ” gift “.

burrata on July 22, 2014 at 2:03 PM

I demand that Elizabeth Warren’s Federal Consumer Protection Agency put a stop to these fraudulent practices by Healthcare.gov.

This is bait and switch.

At least put a warning label on the healthcare.gov website “Warning: Premiums subject to massive retroactive increase subject to IRS bank account levies”

faraway on July 22, 2014 at 1:53 PM

Example #900,000 of “if a private enterprise operated like the government, the CEO would be in prison”.

ConstantineXI on July 22, 2014 at 2:04 PM

It’s not about rule of law even when the law is a bad one…as if it ever was.

Obama’s the guy in the At World’s End movie…”I’m free to do what I want, any old time!”

22044 on July 22, 2014 at 2:05 PM

King Barack will just write a personal check to cover expenses.

GarandFan on July 22, 2014 at 2:05 PM

It’ll be really interesting to ascertain —-at what point did the value of that property drastically lower itself to almost 30% of it’s value and WHO did it ?
BTW, you’ll be surprised to know about the large number of properties owned by muzzies specially nation of islam and hamas operatives etc. in addition to oil sheikhs , in and around CA hills and canyons.
No doubt this is a ” gift “.

burrata on July 22, 2014 at 2:03 PM

Obama has been doing his best to put the brake on American energy independence, so I guess OPEC owes him an estate or three.

ConstantineXI on July 22, 2014 at 2:06 PM

King Barack will just write a personal check to cover expenses.

GarandFan on July 22, 2014 at 2:05 PM

An Obama use his own money? Preposterous.

He’ll put it on his Taxpayer’s Express Card. And he never flys off to fundraisers without it. H/T Ronald Reagan.

ConstantineXI on July 22, 2014 at 2:07 PM

Also, don’t expect House Republicans to withhold subsidy funds either(1), because the subsidies are essentially an entitlement program and not a budget line item. A few commenters on Twitter pointed to the House’s supposed “power of the purse,” but that belongs to Congress as a whole, not just the House. Besides, the revenue flow to the subsidies don’t come through appropriations, but through the taxes and fines built into ObamaCare — the supposedly self-sustaining system that aimed to avoid budget battles altogether(2). With 36 states now out of the system, that revenue flow will dry up tout suite unless HHS gets a temporary injunction soon.

To point #1, the House GOP, in particular its leadership, has not shown any real intent or desire to use any of the House’s ‘power of the purse’ to inhibit the Executive Branch’s abuses and expansions of power. At this point, even bringing up the House using any means to limit the authorizations or expenditures of any part of the Executive Branch is little more than a wasted exercise as the GOPe leadership is too afraid of the media to take any real action.

To point #2, this ‘supposedly self-sustaining system’ is currently slated to cost us about $2.4T over the next decade – all for providing insurance for a fraction of the 30-35 million who do not have any health insurance, expanding the power and reach of the federal government, and dramatically expanding wealth redistribution in the name of ‘social justice’ and ‘fairness’.

Which is the greatest threat to our freedom and liberty – the ACA or the GOPe who talk a lot about opposing the Democrats, but seem focused on going down the same path, just at half the speed?

Athos on July 22, 2014 at 2:07 PM

HHS is almost certain to appeal this to either the Supreme Court or to the en banc panel at the DC appellate level, and ask for a temporary stay in the meantime.

The gov’t can request review en banc, but they aren’t entitled to it. That decision is entirely in the discretion of the judges of the DC Circuit Court of Appeals. If that request is denied or the ruling of the court en banc goes against them they can petition for certiorari.

novaculus on July 22, 2014 at 2:09 PM

Besides, the revenue flow to the subsidies don’t come through appropriations, but through the taxes and fines built into ObamaCare — the supposedly self-sustaining system that aimed to avoid budget battles altogether.

As we know, the Constitution grants only Congress the ‘power to tax’ and the Supreme Court has already held that the penalty in Obamacare is a ‘tax’; thus, the IRS lacks the ability to collect unauthorised taxes.

Resist We Much on July 22, 2014 at 2:10 PM

…the clusterfark continues!

JugEarsButtHurt on July 22, 2014 at 2:22 PM


1. The OBOZO dictatorship has requested the FULL DC Court to rule on this criminal act by his irs – that court has been STACKED with d-cRAT/OBOZO appointees.
2. If it is then appealed to SCOTUS there are several options:
a. They could let stand the final ruling of the DC OBOZO/d-cRAT court
b. They could rule on it with the TRAITOR ROBERTS again bailing out OBOZO, or
c. They MIGHT apply the ACTUAL LAW and rule against OBOZOCARE (The ONLY outcome that applies real JUSTICE to the case)
3. If the final ruling is against OBOZO, the dictator might just IGNORE IT, since he thinks he’s ABOVE THE LAW. Boehner/Mcconnell and their worthless Repub-o-cRAT weasels in congress will then DO NOTHING, as usual.

It’s a long and difficult trip….but that’s ALWAYS true for gaining freedom from tyranny…

MicahStone on July 22, 2014 at 2:22 PM

The point of this decision that Republicans need to hammer is: 1) the language of the law is clear, 2) clear statutory language MUST either be followed OR changed by the legislature, 3) if the Obama administration wants the language changed they need to come back to Congress to get the changes made.

The House also needs to file their federal lawsuit against Executive branch overreach. There has been too much talking and too little action from Boehner and his gang. IF the Republicans are not just bluffing, the lawsuit needs to proceed NOW!

pilsener on July 22, 2014 at 2:25 PM

Obama has been doing his best to put the brake on American energy independence, so I guess OPEC owes him an estate or three.

ConstantineXI on July 22, 2014 at 2:06 PM

Now the Mooch should ” get” her own chalet …maybe in Aspen if not in Switzerland ;-)
She deserves it for her sacrifices .

burrata on July 22, 2014 at 2:35 PM

Let them eat cake

Fore

txdoc on July 22, 2014 at 3:10 PM

Keep Obama in preznit, you know?
He gave us a phone!
He gonna do more!

Galtian on July 22, 2014 at 3:50 PM

So the law is anything the President, and his regulatory agencies, decide it is, regardless of the language of the law, Congress passed. HUH !!!!!??????

kjatexas on July 22, 2014 at 5:10 PM