Washington Post columnist and Fox News contributor George Will joined right-wing media celebrating a lawsuit he believes will "blow [the Affordable Care Act] to smithereens," even though legal and policy experts agree that the theory the lawsuit is based on is ridiculous.
In a January 29 column, Will cheered the efforts of Oklahoma Attorney General Scott Pruitt, who is challenging the legality of tax credits the IRS provides to consumers who buy health insurance on the new federal exchange. According to Pruitt's lawsuit, which is the brainchild of Michael Cannon of the conservative Cato Institute and the National Review Online's Jonathan Adler (also a blogger at the right-leaning Volokh Conspiracy, which makes him a new colleague of Will's), the IRS has no authority to offer the tax credits in the federal exchange. Instead, according to the theory, Congress somehow intended the credits only for exchanges set up by the states.
Will ignored the fact that a federal court recently ruled against this type of far-fetched challenge.
Yet the case still sounds pretty good to Will, who used his column to not only celebrate this dubious lawsuit, but to complain about the IRS' "breezy indifference to legality":
The four words that threaten disaster for the ACA say the subsidies shall be available to persons who purchase health insurance in an exchange "established by the state." But 34 states have chosen not to establish exchanges.
So the IRS, which is charged with enforcing the ACA, has ridden to the rescue of Barack Obama's pride and joy. Taking time off from writing regulations to restrict the political speech of Obama's critics, the IRS has said, with its breezy indifference to legality, that subsidies shall also be dispensed to those who purchase insurance through federal exchanges the government has established in those 34 states. Pruitt is challenging the IRS in the U.S. District Court for the Eastern District of Oklahoma, and there are similar challenges in Indiana, Virginia and Washington, D.C.
The IRS says its "interpretation" -- it actually is a revision -- of the law is "consistent with," and justified by, the "structure of" the ACA. The IRS means that without its rule, the ACA would be unworkable and that Congress could not have meant to allow this. The ACA's legislative history, however, demonstrates that Congress clearly -- and, one might say, with malice aforethought -- wanted subsidies available only through state exchanges.
Congress made subsidies available only through state exchanges as a means of coercing states into setting up exchanges.
In Senate Finance Committee deliberations on the ACA, Chairman Max Baucus (D-Mont.), one of the bill's primary authors, suggested conditioning tax credits on state compliance because only by doing so could the federal government induce state cooperation with the ACA.
From the December 5 edition of Fox News' America's Newsroom:
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The New York Times reported on a dangerous legal challenge to the Affordable Care Act (ACA) brought by officials in states who refuse to implement their own healthcare exchanges, which has been widely trumpeted in right-wing media. But these lawsuits are based on a far-fetched theory that the law only authorized essential tax credits in state exchanges, not federal ones, a counterintuitive claim that has been widely discredited.
Fox News is promoting another legal challenge to the Affordable Care Act that originated in a right-wing think-tank and was hyped by conservative blogs. The State of Oklahoma filed a lawsuit based on a problematic theory that alleges tax credits within federally-run health insurance marketplaces called "exchanges" are unauthorized, which was developed by Michael Cannon, Director of Health Policy Studies at the Cato Institute, and National Review Online contributing editor and Case Western Reserve University School of Law professor Jonathan H. Adler. But Fox News has not only failed to report the extensive debunking of this tax credit theory, it has also mischaracterized this challenge to tax credits offered in exchanges as a "serious" constitutional one, although the new constitutional arguments are even more far-fetched than the original statutory claims.
Opponents of health care reform have opened up a new front in their relentless campaign, receiving extensive media attention for their claim that only state-created exchanges can legally offer tax credits for health insurance. This contested reading of the health care reform law would leave consumers in states with federal exchanges -- the default marketplace for states that decline to set up their own exchanges -- without access to affordable health insurance.
Exchanges have become the latest bogeyman in the right-wing media, but a just-released report by the Center on Budget and Policy Priorities explains why a legal challenge to them is unsupported by both the clear language of the Affordable Care Act and relevant case law.
As described in a June 25 USA Today op-ed, opponents of exchanges are claiming that their reading of the health care reform law reveals that "[c]redits are [legally] available only in states that create an exchange themselves. The federal government might create exchanges in states that decline, but it cannot offer credits through its own exchanges." Right-wing activist groups have jumped on this argument and are already clamoring for lawsuits to be filed over the administration's interpretation of the law to the contrary. A July 9 article in Congressional Quarterly Today (subscription required) reported the director of policy at the Koch-backed Americans for Prosperity as adamant that litigation would "absolutely" ensue.
The idea of suing to block exchange implementation and hamstring affordability programs designed to help low- and moderate-income persons afford coverage in the private insurance market appears to have originated with two frequent National Review Online contributors, Jonathan Adler, Professor of Law at Case Western Reserve University, and Michael Cannon, Director of Health Policy at the Cato Institute. Long-time opponents of the Affordable Care Act and authors of the USA Today op-ed, the two first presented this questionable theory to the mainstream press through a November 16, 2011, op-ed in The Wall Street Journal. Cannon, in particular, seems to have made exchanges his personal target, barnstorming the country along with other Koch-backed organizations.
Experts on health care law and policy are highly critical of the proposed anti-exchange lawsuits. However, although the challenge might be a long shot due to its debatable reading of the statute and disregard of congressional intent, even far-fetched legal challenges have legs in today's increasingly conservative courts. Remember broccoli? Amplified by the increasing synergy between right-wing academics and media, the "broccoli" and "inactivity/activity" argument in the health care reform cases rocketed from the fringe to the mouths and pens of Supreme Court Justices.
Judith Solomon, vice president for health policy at the Center on Budget and Policy Priorities, wrote the report yesterday that rebuts Adler and Cannon's claims:
Opponents of health reform apparently intend to file a legal challenge to the law on behalf of one or more employers who are penalized for not providing coverage in a state with a federal exchange, based on the claim that the federal exchange was not authorized to provide the subsidies. A court considering such a claim would almost certainly defer to the Treasury Department interpretation that subsidies are fully available through federally operated exchanges.
In providing for a federal exchange, Congress clearly intended that it substitute for a state exchange. One of the primary functions of an exchange is to determine eligibility for, and the amount of, advance premium tax credits so that people can afford to buy coverage. The language of section 1321 of the ACA establishing the federal exchange is clear on that point, as is the reference in section 36B of the Internal Revenue Code to credits being provided through a federally operated exchange. But even if the statute were ambiguous, a court examining whether the Treasury regulations are valid would certainly defer to the agency's interpretation of the statute because it is both permissible and reasonable. [Center on Budget and Policy Priorities, 7/16/12]
On June 10, The Cato Institute's Michael F. Cannon responded to a story about "illegal immigrants helping to clean up the oil" by joking "I hear they're very absorbent" on his Twitter page. The post appears to have since been deleted:
H/T Think Progress
Update: The Washington Post's Dave Weigel writes that Cannon was "joking about what he sees as craziness in Louisiana," in response to "a local Louisiana sheriff fretting that undocumented workers might bring a 'criminal element' to the gulf if brought in for oil spill cleanup."
On the November 10 edition of Fox News' Glenn Beck, Michael Cannon of the Cato Institute said: "Insurance companies save more lives in a single day than President Obama or Nancy Pelosi will save in their entire lifetimes."
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