Stairway to Halbig

Yesterday, the United States Court of Appeals for the D.C. Circuit vacated the opinion in Halbig v. Burwell and agreed to hear the case en banc. This means that the entire D.C. Circuit (or a large number of its judges) will hear and decide the case instead of just the three judges on the original appellate panel.

The issue in Halbig centers on a provision within Obamacare. It was discovered years ago, not long after the passage of the law but well before the Supreme Court ruled on the constitutionality of the individual mandate. I described the situation to Governor Mead in a letter in late 2011:

Section 1321 of the PPACA (codified at 42 U.S.C. § 18031) does indeed give the Secretary of Health and Human Services the power to establish and operate an exchange if Wyoming is not actively establishing one by January 1, 2013. However, § 1401 of the Act (codified at 26 U.S.C. §36B) limits the premium assistance tax credit for exchange enrollees to those exchanges "established by the State under [§] 1311 of the [PPACA]" . . . . In short, if the federal government establishes an exchange in Wyoming pursuant to § 1321, lower-income individuals (those the exchange is meant to serve) will not qualify for federal subsidies and the exchange will be unworkable under the law.

(Emphasis added.)

However, on May 23, 2012, the Internal Revenue Service interpreted this section of the law to allow credits "regardless of whether the Exchange is established and operated by a State . . . or by [Health and Human Services]." (45 C.F.R. § 155.20.) The Halbig lawsuit was filed soon after, and on appeal last month the D.C. Circuit ruled that the law really means what it says and that only state exchanges qualify for federal subsidies. Since only 14 states and the District of Columbia established such exchanges, this is obviously a large setback for Obamacare.

Some commentators expect the en banc panel to decide, unlike the original panel, that the IRS's interpretation of the law was reasonable under the Administrative Procedure Act. Indeed, on the same day the original D.C. Circuit panel ruled in Halbig the Fourth Circuit unanimously upheld the IRS's interpretation in another case, King v. Burwell. The entire body of administrative law is largely based on executive interpretation and action, and likely accounts for why many average citizens despise certain elected leaders and their lawyers. Often, it seems federal agencies and elected officials will go to endless lengths to make a law mean what they want it to mean, laughably mimicking Clintonian discussions of the meaning of the word "is." Halbig is just such a case, where with enough lawyerly esotericism "established by the State" means "regardless."

Even as a lawyer, the obfuscation and bomb-throwing surrounding Halbig is bewildering. (It shouldn't be – this was the same strategy leading up to NFIB v. Sebelius.) Many dismiss Halbig as politically motivated, or a mere technical attempt to defeat Obamacare after the Supreme Court upheld most of it constitutionally. Even if this is true, it cuts both ways and thus means little. Politically speaking, supporters of Obamacare know they cannot change the law since Republicans have controlled the House of Representatives since 2010. Thus, any and all bumps in the road (and there have been a lot) must be dealt with by executive fiat, and Judge Randolph's short concurrence in Halbig ("Only further legislation could accomplish the expansion the government seeks.") must be trounced at all costs.

But holding President Obama, the IRS and all executive agencies to the laws passed by Congress obviously has much larger implications than Obamacare. If, indeed, the President or unelected bureaucrats can rewrite laws or interpret them far beyond their written scope, why have any laws to begin with? Even if Obamacare were the greatest policy ever enshrined in the United States Code (stop laughing), its loftiest ends would not justify stepping outside of its parameters. This is lawlessness, and when practiced by government in any form, it is tyranny.

(I expect, of course, to hear it's this rhetoric that's far more destructive than the administrative state.)

Taking some liberties with lyrics from Led Zeppelin's classic "Stairway to Heaven," the stairway to Halbig comes down to three depressing lines:

There's a line in the law /

But we want to be sure /

'cause you know sometimes words have no meaning.

Halbig or a related case may end up before the Supreme Court; one of these cases certainly should. If the law really means whatever the administrative state wants it to mean, then it effectively means nothing, and so goes the Republic.