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.
Will's analysis of Pruitt's suit and the legislative history of the ACA is entirely wrongheaded. Although Pruitt's case is still pending, the judge in a similar case -- Halbig v. Sebelius -- called the plaintiffs' arguments about the legality of the subsidies "unpersuasive" and said they would lead to "strange or absurd results," as experts have repeatedly explained. But Will doesn't even mention the ruling in Halbig, which refutes his entire argument.
Moreover, Will's claim that "Congress clearly ... wanted subsidies available only through state exchanges" is just plain wrong, at least according to those who would know. As the judge in Halbig pointed out:
If there were any remaining uncertainty as to the ACA's meaning -- and there is not -- the scant relevant legislative history in this case confirms Congress's intent on this point.
[T]here is no evidence that either the House or the Senate considered making tax credits dependent on whether a state participated in the Exchanges. To the contrary, Congress assumed the tax credits would be available nationwide.
Will goes on to dismiss a nebulous "some" who "have suggested that the language limiting subsidies to state-run exchanges is a drafting error." What he doesn't mention is that, in this case, "some" is actually many, as well as the members of the Senate who helped draft the law. In fact, Jonathan Gruber -- who helped write both Mitt Romney's health care plan in Massachusetts and portions of the ACA -- has called Pruitt's lawsuit and others like it "nutty," "stupid," and "unprecedented."
As for Will's suggestion that Democratic Sen. Max Baucus, "one of the bill's primary authors," expressed an intent to create this absurdity, health care reform expert Timothy Jost testified to Congress that it never happened. From Jost's testimony:
Mr. Cannon claims, however, to have found a smoking gun, a colloquy between Senators Baucus and Ensign during the Finance Committee debate on the bill, in which, they claim, Senator Baucus admits that premium tax credits could not be made available through federal exchanges. In fact, the colloquy had nothing to do with federally facilitated exchanges, but rather with whether the Finance Committee or the Judiciary Committee had jurisdiction over malpractice reform legislation that Ensign wanted to attach to the bill. In fact, there is nothing in the legislative history of the ACA that supports the notion that premium tax credits will not be available through federal exchanges.
Mr. Cannon argues that Congress prohibited the federal exchanges from offering premium tax credits as a way of encouraging the states to adopt exchanges. It is in fact clear that Congress favored state exchanges, and offered generous grants to the states -- which to date have totaled nearly $850 million dollars with more on the way.
Congress did not try to "coerce" states to create state exchanges by threatening their citizens with loss of billions of dollars of premium tax credits.