John Roberts Rewrites Obamacare Yet Again

“If we give the phrase ‘the State that established the Exchange’ its most natural meaning, there would be no ‘qualified individuals’ on Federal Exchanges.” You’d think that I pulled that phrase from Justice Scalia’s dissenting opinion in today’s big Obamacare ruling—it makes clear that Congress said what it meant in the ACA, giving states the incentive to create exchanges by making their citizens eligible for tax credits if they do—but you’d be wrong.

It comes from the pen of Chief Justice Roberts, who admits, as he did three years ago in the individual-mandate case, that those challenging the administration are correct on the law. Nevertheless, again as he did before, Roberts contorts himself to eviscerate that “natural meaning” and rewrite Congress’s inartfully concocted scheme, this time such that “exchange established by the state” means “any old exchange.” Scalia rightly calls this novel interpretation “absurd.”

Of course, Roberts explains his transmogrification by finding it “implausible that Congress meant the Act to operate in this manner,” to deny subsidies to millions of people as part of legislation intended to expanded coverage. But it’s hardly implausible to think that legislation that still says that states “shall” set up exchanges—the drafters forgot to fix this bit after lawyers pointed out that Congress can’t command states to do anything—would effectively give states an offer nobody thought they’d refuse. It was supposed to be a win-win: states rather than the federal government would run health care exchanges (yay federalism!) and all those who need subsidies to afford Obamacare policies would get them (yay universal healthcare!).

The Court Today: At Once Deferential and Activist

A few additional broader thoughts on the Court’s King v. Burwell ruling today. First, technically, this is not an administrative law ruling. That is, the Court did not apply so-called Chevron deference and thereby uphold the IRS’s reading of the relevant Affordable Care Act’s provision. But practically, it comes to the same thing. In both cases, a provision that makes tax credits available to eligible individuals who buy insurance on exchanges “established by the State” is read to mean that those credits are also available to individuals who buy on exchanges established by the federal government.

Rather, this is a statutory ruling—as if the IRS had never interpreted that provision and the Court were doing so as a matter of first impression. And the tangled web the Court weaves in reading “established by the State” as meaning “established by the State or by the federal government” is reduced to shreds by Justice Scalia’s devastating dissent. It is a tour de force that must be read.

Toward the end of his dissent, however, Scalia waxes more broadly, on the proper roles of Congress and the Court. “Our task,” he writes, “is to apply the text, not to improve upon it.” “Rather than rewriting the law under the pretense of interpreting it, the Court should have left it to Congress to decide what to do about the Act’s limitation of tax credits to state Exchanges.” “The Court’s insistence on making a choice that should be made by Congress both aggrandizes judicial power and encourages congressional lassitude.” And he concludes this important section of his dissent with Hamilton in Federalist No. 78: “What a parody today’s decision makes of Hamilton’s assurances [that the Court has] ‘neither FORCE nor WILL but merely judgment.’”

With Chief Justice Roberts’s opinion for the Court, therefore, we have a perverse blend of the opposing positions of the judicial restraint and activist schools that reigned a few decades ago. To a fault, the Court today is deferential to the political branches, much as conservatives in the mold of Alexander Bickel and Robert Bork urged, against the activism of the Warren and Burger Courts. But its deference manifests itself in the liberal activism of a Justice Brennan, rewriting the law to save Congress from itself. As Scalia writes, “the Court forgets that ours is a government of laws and not of men.”

You Ought to Have a Look: Critical Looks at the Papal Encyclical, Carbon Tax, and the Clean Power Plan

You Ought to Have a Look is a feature from the Center for the Study of Science posted by Patrick J. Michaels and Paul C. (“Chip”) Knappenberger.  While this section will feature all of the areas of interest that we are emphasizing, the prominence of the climate issue is driving a tremendous amount of web traffic.  Here we post a few of the best in recent days, along with our color commentary.

 

This week, we feature three analyses of the top climate stories of recent weeks—the papal encyclical, the carbon tax, and the EPA’s Clean Power Plan. Each of these analyses provides uncommon insight.

The first is an article penned by the always insightful Roger Pielke Jr. appearing in the typically non-insightful U.K.’s The Guardian.  Roger’s piece is titled “Is science policy a theological matter?” and is a reminder that Pope Francis’ encyclical, Laudato Si’ is “just the latest intervention in a debate over technologies that has been going on for centuries.”

Roger reviews some of the historic highlights of this debate and the philosophical roots of Pope Francis’ way of thinking—basically that “human roots of the ecological crisis” are grounded in a “technocratic paradigm.” In other words, technology (spurred by capitalism) is leading to the downfall of humanity through ecological deterioration. Not everyone agrees with the pope on this. But even for those who do, Roger points out they are often inconsistent when it comes to embracing (or disavowing) the fruits of technology. Roger provides this example:

But for many, embracing an overt religious framing for existential debates over technology can quickly become problematic, or at least deeply inconsistent. Consider technologies of family planning. Consistent with Catholic history, Pope Francis largely dismisses concern about global population as a contributor to environmental problems, “To blame population growth instead of extreme and selective consumerism on the part of some, is one way of refusing to face the issues.”

Supreme Court Validates Obama’s Power Grab

Today the Supreme Court allowed itself to be intimidated. Afraid that ObamaCare as written would throw the sickest patients out of their health plans a second time, the Court rewrote ObamaCare to save it—again. In doing so, the Court has sent a dangerous message to future administrations: If you are going to violate the law, make sure you go big.

The Court today validated President Obama’s massive power grab, allowing him to tax, borrow, and spend $700 billion that no Congress ever authorized. This establishes a precedent that could let any president modify, amend, or suspend any enacted law at his or her whim.

ObamaCare will continue to disrupt coverage for sick Americans until Congress repeals it and replaces it with reforms that make health care better, more affordable, and more secure. Despite today’s ruling, ObamaCare remains unpopular with the American public and the battle to set in place a health care system that works for all Americans is far from over.

So Much for the Rule of Law

Justice Scalia’s final paragraph in his dissent today in King v. Burwell pretty much says it all. Read the opinion and weep.

Perhaps the Patient Protection and Affordable Care Act will attain the enduring status of the Social Security Act or the Taft-Hartley Act; perhaps not. But this Court’s two decisions on the Act will surely be remembered through the years. The somersaults of statutory interpretation they have performed (“penalty” means tax, “further [Medicaid] payments to the State” means only incremental Medicaid payments to the State, “established by the State” means not established by the State) will be cited by litigants endlessly, to the confusion of honest jurisprudence. And the cases will publish forever the discouraging truth that the Supreme Court of the United States favors some laws over others, and is prepared to do whatever it takes to uphold and assist its favorites.

We’ll have more on the decision in due course.

Speaking of Greece…

If you think that the Fed isn’t involved in the Greek mess, you may want to think again. Paul-Martin Foss, our good friend at the Carl Menger Center, wrote a very nice post a few days ago concerning how the Fed may be getting itself tangled-up in an impending Greek default, through its swap lines with the ECB.

According to the Federal Reserve Board of Governors, those swap lines were first established in December 2007 “to improve liquidity conditions in U.S. and foreign financial markets by providing foreign central banks with the capacity to deliver U.S. dollar funding to institutions in their jurisdictions during times of market stress.”

Those original swap facilities, never meant to be permanent, were shut-down in February 2010. But — wouldn’t you know it? — similar facilities were announced in May 2010 in response to “the re-emergence of strains in short term funding markets in Europe.” Those facilities were also supposed to be temporary, but then, in October 2013 — what do you know! — they were made permanent. According to the Fed, that step

further supports financial stability by reducing uncertainties among market participants as to whether and when these arrangements would be renewed. This action results from the ongoing cooperation among these central banks to help maintain financial stability and confidence in global funding markets.

What has all this got to do with Greece? Here is Paul-Martin:

If you want to get a sense of the Fed’s involvement in Europe, watch the swap lines. Swap line data is published every Thursday afternoon on the Fed’s balance sheet, the H.4.1 release. If you look at the St. Louis Fed’s charts and data on swap lines, you’ll see the huge amount of swaps during the financial crisis, and then a smaller but still significant increase in swap lines during the first iteration of the Greek financial crisis back in 2012. While swaps have been relatively non-existent this year, there was a small blip back in April, likely Greek-related, and more importantly, another blip this week. While the amount, $114 million, is a drop in the bucket compared to what it has been in the past, this number needs to be watched. It could very well be an indicator of the Fed getting involved in Europe again. And if the doomsday scenario ends up taking place next week, expect that $114 million figure to skyrocket. The Fed seems to want the conversation to revolve around a possible upcoming interest rate hike, so it’s been relatively silent on the topic of Greece and its involvement in bailing out Europe. But even if the Fed doesn’t say anything about Greece, its money-printing to pump up the swap lines will do plenty of talking.

That was on June 19th. Well, the CMFA’s champion Fed watcher, Walker Todd (who you will be hearing from shortly on these pages) has been keeping a sharp eye on those swap lines. On June 11th — a week before the transaction showed up on the Fed’s own H.4.1 release — Walker reported that “Someone in Europe drew a small amount on a dollar swap with FRBNY”:

ECB website today has details below on a swap line drawing this week against the US dollar swap line with FRBNY. It says that there was one bidder; one wonders whom. Amount is $113 million. There has been no swap line activity for several months now. These numbers should show up on FRBNY next week (due to timing of swap drawings and time zone differences, there usually is a one-week lag between a drawing in Europe and the FRBNY report of the same drawing).

(The $1 million difference between the numbers mentioned by Paul-Martin and Walker reflects a Bank of Japan draw of that amount.)

The day after Paul-Martin’s post came out, Walker alerted us to another transaction that had not yet been reported by the Fed:

It won’t show up until next week in Fed statistics, but ECB statistics show that an unnamed entity (one suspects the same one as last week) borrowed again for a week under the dollar swap line for $115 million. The drawing was $113 million the last time I checked. As a purely hypothetical example, a Greek bank could be borrowing dollars under the swap line. Other than a token $1 million to $2 million that Bank of Japan borrows from time to time to reassure itself, this is the only borrowing outstanding under the Fed’s swap line, according to FRBNY statistics. The notable thing is that it is still there and growing.

Today the swap was rolled over yet again.

Stay tuned…

[Cross-posted from Alt-M.org]

Video: Teachers Victimized by IRS’s Illegal Taxes Call King v. Burwell a “Godsend”

Yesterday, I blogged about the 70 million Americans President Obama is subjecting to illegal taxes, who would be freed from those taxes by a ruling for the challengers in King v. Burwell. Many of the victims of those illegal taxes are teachers. Kevin Pace, for example, is a jazz musician and music professor in Northern Virginia who lost $8,000 of income in one year alone when the Obama administration unlawfully imposed ObamaCare’s employer mandate on his employer. 

A group called American Commitment has produced a short video telling the stories of two more victims of these illegal taxes. One says these illegal taxes reduced his hours worked by 40 percent, calling it “absurd” and “unfair.” Another says a ruling for the King v. Burwell challengers would be a “godsend” and asks Congress to “come to its senses and give me back my hours, please.”