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NYT Shows No One Buys Government’s ‘Term of Art’ Argument in King v. Burwell

May 26, 2015 in Economics

By Michael F. Cannon

Michael F. Cannon

The Supreme Court is likely to rule on King v. Burwell by the end of June. The King plaintiffs are four Virginia taxpayers. They claim the Patient Protection and Affordable Care Act (ACA) does not authorize the Internal Revenue Service to issue certain subsidies or impose certain taxes in states like Virginia, whose health-insurance “Exchanges” were established by the federal government rather than the state itself. The challengers argue Congress intentionally authorized those taxes and subsidies only—as the ACA says—”through an Exchange established by the State.” A win for the challengers means: more than 57 million Americans in up to 38 states will be freed from the ACA’s individual and employer mandates, with considerable economic benefits; and perhaps 8 million consumers will see the full cost of their ACA plans. The Obama administration, on behalf of the IRS,argued before the Supreme Court that the statutory phrase “through an Exchange established by the State” is actually “a term of art that includes an Exchange established for the State by HHS.”

Today’s New York Times asks how the phrase “through an Exchange established by the State” got into the ACA’s subsidy-eligibility rules:

The answer, from interviews with more than two dozen Democrats and Republicans involved in writing the law, is that the words were a product of shifting politics and a sloppy merging of different versions. Some described the words as “inadvertent,” “inartful” or “a drafting error.”

A few observations about the Times’ account.

1. Senators and staff involved in the process don’t buy the government’s “term of art” argument.

None of the senators or staffers quoted in the article echoed the government’s argument that the phrase “through an Exchange established by the State” is a “term of art” meant to encompass Exchanges established by the federal government.

This is not too surprising. The government itself didn’t cook up that argument until King reached the Supreme Court. As Jonathan Adler and I explain here, there are reasons to believe the government doesn’t even believe its own “term of art” argument.

While the Times’ sources may have intended to undercut the King challengers’ case, they, like others before them, inadvertently bolstered it.”

Indeed, by describing “through an Exchange established by the State” as “inadvertent,” “inartful,” or “a drafting error,” the senators and staff implicitly acknowledge the phrase clearly does not encompass federal Exchanges. 

2. The ACA’s authors rejected “term of art” language.

The Times explains that Majority …read more

Source: OP-EDS