ObamaCare drafters: We never intended to limit federal subsidies to state exchanges

A strange story from the NYT in that it tries to debunk the conservative position in King v. Burwell and, if anything, ends up supporting it.

At the Finance Committee, which thrashed out its version of the bill in September and October 2009, senators initially assumed that all states would set up exchanges, so they added a section to the Internal Revenue Code to provide subsidies, in the form of tax credits, for insurance purchased through an exchange.

But senators and staff lawyers came to believe that some states — “five or 10 at the most” — would choose not to set up exchanges, said Christopher E. Condeluci, who was a staff lawyer for Republicans on the Finance Committee.

At that point, senators authorized a backup plan to allow the federal government to establish an exchange in any state that did not have its own, but they failed to include that language in the section of the tax code providing subsidies. “We failed to include a cross-reference to the federal exchange,” Mr. Condeluci said. “In my opinion, due to a drafting error, we overlooked it. It was an oversight. Congress, in my experience, always intended for the federal exchange to deliver subsidies.”…

The idea of a federal backstop came later, [Russ Sullivan] said, when people started asking what would happen if some states did not set up an exchange.

So they started from the premise that all states would set up their own exchanges, wrote the subsidies provisions based on that belief, then forgot to tweak those provisions later when it became clear that some states would refuse. That’s super, notes Ramesh Ponnuru, because … that’s what the plaintiffs in the King case are claiming too. Congress made a mistaken assumption about what the states would do and didn’t clarify in the statute what should happen if they didn’t. The solution to that isn’t to have the Supreme Court interview individual legislators, many of whom might have had different understandings of the law when they voted on it or are simply misremembering now what they believed at the time. The solution is to have Congress amend the statute now and decide the issue clearly. If they want subsidies to flow to federal consumers, they can add a sentence to the law that does that. If they don’t, they can leave the text as is. There’s no reason to have the Court rewrite ambiguous text to enable subsidies for federal consumers except that it’d make things much easier politically for the left. (In the short term, that is. In the long term, as red states debate whether to build their own exchanges to reinstate subsidies, “losing” this case is probably better for the left.)

Beyond that, though, note what the drafters are doing in the NYT story. Some complain of a “drafting error,” others grumble that an earlier version of the bill got mixed in with a later version, but few are claiming that the phrase “established by a State” should properly be read to include the federal exchange too. That’s a key concession insofar as courts that have ruled for the White House on this question typically have said that “exchange established by a State” can and should be read, in the context of the wider statute, to include the federal exchange. The drafters appear to contradict that — yes, they’re saying, that’s the result we intended, but the language we actually used doesn’t make that clear. Charles Cooke made a similar point: If suddenly we’re putting stock in what the law’s drafters think, it’s a big deal that they agree with the plaintiffs that the law doesn’t say what they wanted it to say. In which case, SCOTUS’s ruling should be easy — namely, the text of the law doesn’t extend subsidies to federal consumers.

Exit question: Was I living in an alternate reality when multiple videos surfaced of ObamaCare architect Jon Gruber arguing several years ago that, in fact, the drafters always intended to limit subsidies to state-exchange consumers? Gruber, a guy who’s boasted about having helped to write ObamaCare, was himself under the impression that federal exchange consumers wouldn’t be eligible for subsidies by design, in order to put pressure on holdout states to build their own exchanges. I’m happy to accept that the law as written was a big screw-up by the drafters — not that that matters for the Supreme Court’s purposes — but Gruber had other thoughts. Where’d they come from?

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