It's Not a Typo: Michael Cannon on Obamacare's Exchange Subsidy Provision


Cato Institute

When Obamacare goes back to the Supreme Court next year, the nine justices on the court will be hearing a case built in large part by Cato Institute Health Policy Director Michael Cannon.

For the last three years, Cannon has been working on a challenge, not to Obamacare, but to the way it has been implemented by the Obama administration, which has allowed insurance subsidies to be offered through exchanges run by the federal government despite clear legislative language saying that those subsidies are meant only for state-established exchanges. Cannon's 2012 paper on the IRS rule authorizing subsidies in federal exchanges, co-written with Case Western Reserve Law Professor Jonathan Adler, is the foundation of the legal argument the court will be hearing. 

Sarah Kliff of Vox.com interviewed Cannon about the challenge. It's worth reading in full, but I want to highlight two sections in full. 

In the first, Cannon explains why the section of the law in question is not just a minor typo, as several not-very-well-informed commenters have suggested:

Sarah Kliff: You and Adler initially thought that this was a glitch or a typo, that it was a drafting error where legislators were sloppy and forgot a word. But you've since become convinced that it was the intention of Congress to withhold subsidies from states that don't build exchanges. How did your viewpoint change on that?

Michael Cannon: We first thought that it was a mistake, that it was a drafting error. And it is still a glitch in the sense that it's a snag or something that complicates implementation. The reason I didn't initially think they wrote it this way was it would give states a lot of power to block the law.

But we started doing a lot of research into this, the most research that I think anyone has done. And if you look at the tax-credit eligibility rules, they are very tightly worded. It's not in one place, but in two places, it says that the credits are only available "through an Exchange established by the State." Then there are seven different cross-references to that language. They never mentioned any other type of exchange. They never mentioned exchanges generally. It's all very tightly worded to refer only to exchanges "established by the State."

Then if you look at the legislative history, you'll find that that was the language in the Finance Committee's bill and when it passed the Finance Committee. But that bill only had one of those explicit "Exchanges established by the State" phrases. They added the other one in Harry Reid's office while it was being merged with the HELP bill under the direction of the Senate leadership and White House staff — Peter Orszag and Valerie Jarrett and Nancy-Ann DeParle, and everyone else who was going in and out of that room. So this restriction was added to the statute in multiple places at multiple points in the drafting process.

The history and the repetition make it hard to argue that the language was just a fat-finger oopsy. I would also add that the law doesn't just say that subsidies are allowed in exchanges "established by the State." It also explicitly defines "State" as being one of the fifty states or the District of Columbia (conspicuously leaving out the federal government), and it also extends that phrase to say "established by the State under [Section] 1311 of the Patient Protection and Affordable Care Act." It refers to this section twice. Section 1311, notably, is the section that deals with state-run exchanges. There's a whole different section—1321—for federal exchanges, and that section isn't mentioned.

This was no mere typo, no careless wording error. It is how the law was purposefully and intentionally written. And this is the language that Congress voted to pass. 

In the interview, Cannon also addresses the question of whether he's to "blame" if the Supreme Court agrees with the challengers that the subsidies in the federal exchanges are illegal:

Sarah Kliff: What do you think of the people who put the blame on you? There are people who are going to say, if your case wins, "Why did you guys take away health coverage from millions of people?"

Michael Cannon: The first thing I'd say in response is, "If those subsidies are illegal, would you favor or oppose ending them?" So far, no one has said they would favor allowing the president to subsidize people illegally.

Then the question becomes, "Are they legal or are they not?" That's what we've been debating all this time. I'm convinced that they're illegal.

Then I ask, "If you were convinced the president was doing something illegal, what would you do?" Well, this is what I would do. This is what I'm doing. Any dislocation, any disruption, any harm that is caused by those people losing those subsidies, the responsibility for that falls at the feet of the president himself.

The question that matters here is whether or not the law is being implemented in a way that is legal under the statute. If the administration's implementation is illegal, then it needs to be stopped.  

A. Barton Hinkle wrote about the challenge yesterday. I went through the arguments at length over the summer

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  1. If the administration’s implementation is illegal, then it needs to be stopped.

    But if the president does it, it can;t be illegal!


  2. Sounds like a sound gamble to me dude.


  3. So far, no one has said they would favor allowing the president to subsidize people illegally.

    I find that hard to believe. The number of progs I’ve personally heard say that this or that provision in the constitution should be ignored because compassion and living document.

    1. They believe that, they just haven’t said it. Right now they are saying “of course the President can’t do that it has to be a drafting error”. Let them lose before the SCOTUS and they will immediately claim Obama has the right to defy the court and the law because he is right and Republicans are evil.

      1. “You have made your ruling, now enforce it.”


        “How many divisions does the Supreme Court have?”

        1. They will rule in favor of the administration, because to do otherwise would cause “chaos”. They will reverse-engineer a rationalization for doing so.

          1. Sadly I think this is what will happen too.

          2. We’ve seen it once on Obamacare, why not twice?

        2. “”How many divisions does the Supreme Court have?””

          In this case, roughly the same number as the US.

          Obama is none too popular in the military and in a constitutional crisis I think he would be VERY hard pressed to count on military support

  4. a nation of laws or of men?

    1. Far too many laws and far too few men.

  5. OT– Police Union to private companies hiring flaggers to direct traffic out of parking garages: You’re shut down.

    City bars civilian flaggers from directing traffic in South Lake Union
    The city of Seattle forbids private flaggers from directing traffic in the busy side roads of South Lake Union.



  6. RC Dean made a great point that I hadn’t seen made anywhere else. It is not just that you don’t get the subsidy if the state doesn’t set up the exchange, it is also that your employer is off the hook for not providing you health insurance if there is no state exchange. If the language is applied as written, Obama care gets gutted in any state that refused to set up an exchange.

    The thing is that the people demanding subsidies are unlikely to be Republican voters. And the Republicans are not responsible for the success or failure of this bill. Obama is. And the Republicans own Congress. So if this case goes against Obama, he will have millions of free shit Democratic voters demanding he fix it but be facing a Republican Congress that has absolutely no incentive to help his sorry ass with a fix to the language. Obama will be forced to go to the Congress and offer them a reason to fix this. That will be very entertaining and a very bitter bill for the Chocolate Nixon to swallow.

    1. Unfortunately, it looks like Obama has been sending a clear message lately that he intends to rule by executive fiat. I wouldn’t be surprised to hear him say something to the effect of “John Roberts has made his decision, now let him enforce it.”

      1. I’ll buy that he ironically fancies himself as “Jacksonian”, but it’s one thing for the President to simply not enforce a law (e.g., immigration), and quite another for him to hand out money. For Obama to ignore a decision against the Federal exchange subsidy, he’d need Congress to cooperate every time it votes on an appropriations bill to fund it.

        1. I’m curious, how could he even get that money? He doesn’t have signing power on those checks. I suppose there’s a way, however…

        2. He’ll just blatantly ignore the language of the appropriations bill and re-direct funds to fund the subsidies. In fact, I can’t find the article, but I’m pretty sure he’s already doing that anyway. I recall there being an article on here a few weeks ago that he had already re-directed funds to fund some part of the Obamacare implementation.

          1. I think you’re onto something. We can forget the talk about him illegally raiding the U.S. Treasury. In fact, I bet he could make propaganda off it by taking money from some traditional Republican concern and presenting it as a choice between paying for a machine that kills or medicine for blind orphans.

      2. Then he’ll overcome the reluctance to impeach and will be removed. Really, he’s well past minor offenses already. Even a cursory investigation now, especially when people who could easily face jail time are given a plea option, would almost certainly uncover enough to get a conviction.

        There are reasons, albeit pretty stupid in my mind, for not going after him, but if he goes much further, I bet the impeachment card does get played. They won’t do it over the EO for immigration, because they have other options, but I don’t think he can go much further.

        1. Call me naive, but I think if Obama really did start drawing money from the treasury over the objection of both Congress and the Courts, it would get him not just impeached but removed from office.

          The Democrats would have to do that if for no other reason than they wouldn’t dare risk living under a Republican President with such powers.

          1. The democrats don’t care about precedent, because they (usually correctly) think the republicans are too gutless to use it against them in the face of almost universal media condemnation, while the democrats enjoy media cover.

            1. It doesn’t work that way. There is certainly a double standard but not that big of one. If Obama did this, it is all but certain a Republican President would do the same at some point and the Democrats know that. And it would only take 13 Democratic votes to remove him from office. It would be ugly for them but there is a good chance they would get it if he did this.

              That is why I don’t think he will do it. The Democrats in the Senate will make it clear the consequences of him doing it. If he loses this, he will stomp his feet and throw a temper fit and not much else.

              1. I guess we will see.

              2. If Obama uses executive order to give legal status to millions of illegal immigrants he’s going to ignite a real shit storm. I wonder if he’s just bluffing and will call it off at the last moment.

                1. Hyperion,

                  His immigration bit is while loathsome is just refusing to enforce a law. Here, he would be breaking a law in defiance of the Supreme Court. That is a completely different and more serous issue than refusing to pursue deportation of illegals.

                  1. If that’s the case, he’s not really doing anything but running his mouth, because at least in some states, like MD, we’re already not enforcing the law.

                    1. But at least part of the illegal community here truly believe that he’s going to make them at least permanent residents on a path to citizenship. I hear little birds chirping such things every day. If he does any less, they’re going to be really disappointed with him. Not sure what he gains from that.

                    2. Yes Hyperion. That is why I think his immigration gambit is going to blow up in his and the Democrats face. He cant’ give the illegals what they are expecting. They are going to realize they have been had and his actions will do nothing but make the Hispanic community cynical and distrustful of the Democrats. Meanwhile, the rest of the country is going to assume that is what he has done and he will get the full backlash for doing it and few if any of the benefits.

                    3. “If that’s the case, he’s not really doing anything but running his mouth, because at least in some states, like MD, we’re already not enforcing the law.”

                      CA is largely the same; it’s political grand-standing by Obo. Outside of lying, it’s about his only skill.

                2. I’ve been wondering about that, too. If he does that, he’s setting himself up for a very unpleasant two years.

              3. You have more faith in 13 D-Senators than I do. Plus I wouldn’t be surprised if some R-Senators wouldn’t want to do it just for the sake of not making waves or being seen as “extreme”.

                1. You guys grossly underestimate how big of a deal that would be. The President would be taking the primary power of the Congress away from them and ordering his administration and the Treasury to commit a felony by spending funds without congressional approval.

                  I know it seems like sometimes there is no limit to what this asshole can get away with. But there is a limit and doing this is mostly certainly beyond it.

                  1. Seems to me that Congress has already given up the Power of the Purse anyways though, for all practical purposes, or Obamacare would already be gone.

                    So I do fail the Turing test completely for trying to be your typical Congress critter. Hopefully that means you are right about this.

                    1. They haven’t at all Biggens. No money is spent unless they say so. If the President could spend money on his own, there would be no reason to lobby Congress for government money. You could just get the President to do it.

                      Congress depends on that power for every perk it gets. No way are they giving it up.

                  2. I know it seems like sometimes there is no limit to what this asshole can get away with. But there is a limit and doing this is mostly certainly beyond it.

                    The question is, is he smart enough to realize that, or has he bought into his own bullshit for so long that he really is Cartman as an out of ocntrol teen: “Whatevah, I do what I want!”

          2. I think the Dems are more concerned, rightly, about a GOP congress with a real power to impeach. They’re not as concerned about Republican abuses so long as they get a chance to perform their own abuses every other decade.

            1. No. The Democrats don’t want to give up their power of the purse anymore than Republicans do. If Obama can spend money without their approval, what power do they have left?

        2. They will never try to impeach the first black president.

          1. No, I don’t agree. They absolutely don’t want to impeach him, but if he goes too far, even for today’s anything-goes government, they’ll have little choice.

            It’s pathetic that this country is letting a minor tyrant operate freely mostly because of identity politics. He’d likely be facing impeachment, or at least the threat of it, if he were a white male.

          2. They already did. Obama would be the second black president they impeach. Which of course begins to make it look like they only impeach black presidents.

            1. We’re never going to have limited government again if we don’t grow a pair about going after bad guys. This president and his administration constitute one of the worst and most corrupt executive branches we’ve ever had.

              1. Unfortunately– and I really believe this– there are GOP politicians and strategists looking at Obama’s performance and thinking “When WE get in, now the precedent is set, we can do it too.”

                1. Probably. If voters continue to not give a shit about limiting government as a rule, we’ll continue seeing variations on the tyranny theme.

        3. I’m starting to think that he wants to be impeached. A lot of liberal pundits have even come right and and said that he wants the Republicans to try it so that it will backfire on them and help the dems.

          If the GOP are smart(hard to do for stupid party), they won’t even talk about impeachment, but go full bore in prosecuting those fake scandals like Fast and Furious and the IRS scandal. They should call the entire IT department of the IRS before congress and make them fess up on the lost emails bullshit and produce the backups.

          Let the emperor resign if he can’t take the heat.

          1. Also have to add that I believe the longer Obama stays in office and has to defend himself with his notoriety for being thin skinned and petulant, the more damage he’s going to do to Democrats chances in 2016 and beyond.

          2. They seem to be smart enough to do that. The problem is that if Obama just started ignoring them and spending money, they would have no other choice but to look at impeachment. It would be a constitutional crises of the highest order. And it would be so blatantly illegal that even the media would play hell spinning it for him. There would literally be no legal argument to make in his favor.

            I don’t think he would do it. I think the Democrats in Congress would quietly make him think better of it.

            1. I believe that we already have a constitutional crisis. You have bureaucrats blatantly lying to congress about breaking the law and in a way that is almost like open taunting and declaring that they are above the law. If they let them get away with such outrageous behavior, what is really left of the law?

              1. so much this.

                Republic? We have lost it.

                1. We have more of a Republic than you think. You just don’t realize how bad it can actually get.

            2. The problem is that if Obama just started ignoring them and spending money, they would have no other choice but to look at impeachment.

              I don’t think they have to take it that far. Congress holds power of the purse; they could simply tell him that the second one red cent goes towards something other than what it was designated for, all funding would immediately cease.

              They’d have to be smart about it and make sure they’re hammering early on exactly *why* they won’t fund the government until Obama stops his shenanigans, so that might be asking too much. But impeachment, even if justified, seems an extreme step when other Constitutional checks exist that might not be so polarizing.

          3. Just as a matter of pure political strategy, I absolutely expect them to go after every major scandal and to remove any official they can get their hands on. . .except the president. But if he gets totally out of control, they may go ahead and go after him, too.

            1. I want to see bureaucrats in prison over these fake scandals. Nothing less is acceptable. If a GOP controlled congress just lets this shit slide, we’ll know for sure that they plan on doing the same now that it’s their turn. Then we’re all pretty much fucked because we’re going to have a total breakdown of law with administrations, congress, and out of control bureaucrats doing whatever they want to do, legal or constitutional or not. We’re nearly there now.

              1. Absolutely. If the GOP is worth anything at all, people will be ejected all over, with some prosecutions to boot.

                If that doesn’t happen, we’ll know the Republic is well and truly done. It’s that simple.

                1. It’s something I want to know about every 2016 presidential candidate: Will you investigate and prosecute to the highest levels the crimes of Operation Fast & Furious, the IRS and Benghazi? (I’m leaving out a few, yeah.)

                  Basically, I want to know if this country is divided into a political class and the rest of us.

                  1. Basically, I want to know if this country is divided into a political class and the rest of us.

                    The decision to not go after anyone in the Bush administration answered that one.

            2. Do you think the Republicans are going to let the Democrats go after Bush Administration officials and future Republican Administration officials in exchange or will the GOP back down lest that happen?

          4. Why impeach? Why not have him prosecuted?

        4. Maybe he will get himself impeached. But that would require at least e few dems to turn on him(mostly for BS political reasons). Maybe a few dems will turn, but that’s gonna be a very bitter pill for them to swallow for several reasons.

          1. He’s doing all the things they would like too, just in a politically destructive way.

          2. They’ve spent 6 years screaming that all criticism of the chosen one is blatant racism. How can they side with and even become the racist critics?

          3. The absurd cult of personality they(and the Republicans) have built around the presidency over the last 100+ years.

          1. Having to impeach a President is brutal for the President’s party no matter what. A President no matter how out of control and unpopular still has a lot of friends in the party. Doing it would mean a full civil war within the party.

            Democrats or Republicans would be loath to do it. It would take a lot. But spending money from the Treasury in defiance of a SCOTUS ruling would be one of the few things I could see causing it to happen.

            1. John|11.19.14 @ 12:42PM|#
              “Having to impeach a President is brutal for the President’s party no matter what. A President no matter how out of control and unpopular still has a lot of friends in the party. Doing it would mean a full civil war within the party.”

              If anyone remembers Nixon, it would not come to impeachment. The party would gang up on the prez and force resignation.

              1. Remember, when the Republicans went to Nixon and asked him to resign and spare the country, Nixon did it. No fucking way Obama would do that. At heart Nixon cared to some degree about the country and the Republican Party. Obama doesn’t care about anything but Obama.

                1. John|11.19.14 @ 1:26PM|#
                  …”Obama doesn’t care about anything but Obama.”

                  Which is the reason I think he would resign; would he want a legacy of the first POTUS removed from office? Or the second to have resigned?

      3. He might do that. The problem is that the law is very clear that the Treasury cannot spend money unless it is appropriated by Congress. That is more than any other single provision, the bedrock of our government. If the President is free to spend money in defiance of both Congress and the Courts he has crossed a line even Obama hasn’t crossed so far.

        If he did that, I am not sure the treasury would follow his orders. Doing that is a no kidding crime. Also, it would be an unmitigated political disaster for the Democrats. It would require them to embrace outright tyranny. Not tyranny hid behind some convenient rationalization but clear and undeniable tyranny.

        Your guess is as good as mine as to what the fallout of that would be. But I don’t think it would be good. Moreover, I think it would be so bad that the Democrats in Congress would have to step in and stop him if for no other reason than out of self interested fear of a Republican President someday doing the same.

        1. If the republicans don’t put it in the budget, Obama will be ‘forced’ to veto the budget, and the evil republicans will have ‘shut down government’ again for political reasons because they want to deprive you of your health care. Bet on it this will be the media narrative.

          1. That is also a very likely outcome.

          2. That won’t happen. By the time this decision comes out, the money to run the government for the year will have already been appropriated. So, Obama couldn’t shut down the government until next year.

            The other thing is that since the Republicans own all of Congress now, they will be able to send Obama individual spending bills funding each part of the government. This would mean Obama will have to veto the DOD bill because he is pissed over that. That wont’ play with the public like vetoing a omnibus bill did. The reason why he was able to win the shutdown in 13, at least in the short term was because the Democrats controlled the Senate and kept the Republicans from funding the various parts of the government piece by piece. They can’t do that this time.

        2. I expect them to abide by the court’s decision, but to engage in an all out blitz to try and pin the loss of subsidies on Republicans in the run up to 2016. And that will just be the start. I could see them making a concerted push for somehow reforming how the Supreme Court operates. Whether that gains traction is open question, but I’d bet it will be tossed about.

          It will be entry #1-10 for why Democrats need to retake all branches of government, including the Court, along with state legislators, governorships, etc.

          1. I think you are right. I just can’t see him doing that.

          2. Republicans will prepare a contingency plan for those who lose their subsidies. Some funds to get them through 2017 — although I expect to see a lot of those people in Hillary’s campaign ads.

            1. But they’ll demand something in return. Otherwise, why go through all this trouble? If they were willing to just amend the law and protect the subsidies without asking for anything in return, they could do so now.

              The question then becomes, will Obama sign off on Republican demands? I guess it depends on the demands. I think there will be sufficient political motivation on both sides to find some sort of agreement. But then, I’ve been wrong about that sort of thing in the past. So who knows?

              1. Oh, I don’t see it that way. What they’ll be getting in return is protection from pitchfork-bearing mobs of Obamacare clients and their media enablers. It’s simply something they have to do for their own sake. Forcing people to live with the consequences of sloppy Democrat legislation is unthinkable.

              2. I agree LynchPin. That is what will happen. But Obama is going to have to pay pretty dearly to fix this thing and he is going to suffer an epic amount of butt hurt to do it.

                1. Well, if it goes the way you two describe it then I expect to see him carried out of the White House on a stretcher. I still say Republicans have so much to lose by letting those subsidized people shift for themselves that Obama is actually in the better bargaining position.

                  1. @Faceless

                    I think it depends on how Republicans react. If SCOTUS sides with the plaintiffs, the immediate narrative will be that a “conservative” Koch-funded think-tank just got subsidies taken away from millions of poor Americans. John may be right that committed Republicans won’t care, but uncommitted independents will, and I have a hard time seeing them side with Republicans on this. Even the ones who agree with SCOTUS on principle will view this as a petty and vindictive way to hurt Obamacare via a technicality. Plenty will disagree with SCOUTS.

                    So Republicans will have to act to restore subsidies. The question is, what do they demand? If it is something that most people find reasonable, like rolling back provisions of Obamacare that are already unpopular (individual mandate, employer mandate, policy cancellations, etc.), then they can say that they sent an Obamacare fix to the President that also restored the subsidies. If Obama vetoes that, they can argue that he is the one that is refusing to compromise and holding the poor hostage. It will be an uphill battle given the media narrative, but it might sway enough people.

                    1. (cont.)

                      If they refuse to send anything to Obama that restore the subsidies, or if they try to demand too much, then I think it will hurt them.

                      But at the same time, if they do nothing, they might pay for it politically, but it will also destroy Obamacare, which is Obama’s only real major accomplishment. Is he willing to live with that so that Democrats can score political points once he is no longer in office?

                      I honestly don’t know how this plays out. But the ball will be in Republican’s court. They could make this work for them if they play it right.

                    2. Another thing to keep in mind is that I think almost every Democrat that was up for reelection a few weeks ago admitted that Obamacare needed to be fixed. So Republicans will have a counterargument to anyone that says that subsidies have to be restored in a standalone bill. If the law needs fixed, why not do it all at once?

                      Again, getting that message out will be hard given the media environment, but they’ll be able to use Democrats own words against them.

                    3. Lynch Pin,

                      I think your points are good. The only thing I wonder is how much political pressure there will be on the Republicans to restore the subsidies. The states that don’t’ have exchanges are pretty much all solid Red and most of the voters in those states hate Obamacare. The people in the states that have exchanges won’t have any reason to demand the subsidies be restored to people in states that don’t and I am not sure the people who want the subsidies in red states have enough pull to put any pressure on Republicans.

                      Maybe they will have to give in. But I am not so sure about that.

                    4. I don’t know the demographic breakdown well enough to say with certainty, but I suspect that even red states depend on conservative-leaning independents, especially in state-wide elections, and especially in presidential election years. And I think independents will swing heavily in favor of restoring subsidies. After all, they’re already being handed out, people are already depending on them and making financial decisions based on them, they are supposedly going to the poor, and independents are not likely to buy into the argument that Democrats were trying all along to extort the states into setting up their exchanges. Even those that agree that the law should be enforced as written are going to look at this as a technicality that hurts poor people.

                      That may not be the case in the reddest of the red, but Republicans can’t win the presidency and maintain control of the Senate by relying only on the deep red states.

    2. Obama will be forced to go to the Congress and offer them a reason to fix this.

      “Typo” blah blah “not who we are as a nation” blah blah “Take the case of Shanequa Willis” blah blah. He’s really not very good at this.

    3. The fact that an illegal tax subsidy actually can create an injured party (the employer who then gets tagged with a penalty because one of their employees got a subsidy) is very important for this reason:

      It means that any attempt to just ignore a SCOTUS ruling and dish out the subsidies anyway will trigger an avalanche of lawsuits from employers to enforce the SCOTUS ruling. So the courts will have a clear path to enforcing the SCOTUS ruling if the administration tries to just ignore it.

      It also means there will be political opposition to amending the statute to allow subsidies to go to everyone. The Republicans and the Chamber of Commerce types will be able to say that amending the statute to expand penalties on employers will kill jobs.

      1. Simple Obama solution: waive the penalties on the businesses while continuing to dish out the subsidies.

        Actually, I think something like that will happen. We’ll create a safety net for the people on subsidies and let the rest of the law go its merry way.

        1. waive the penalties on the businesses

          Which will create a financial shortfall that Congress will have to fund.

          Good luck with that.

          1. And I don’t think it would deprive the businesses of standing. So it wouldn’t prevent the avalanche of lawsuits.

            Also, every state could bring suit to get the feds to enforce this ruling.

        2. He could waive the penalties okay. But paying the subsidies is going to be very hard. The country is not going to go along with the President spending money in defiance of Congress and the Courts. I don’t think waiving the fees would prevent the businesses from having standing. The fees still can be assessed. There would be courts all over the country ordering him to stop. It would be a complete shit show and a disaster for the Democrats. I don’t think they would let him do that.

          1. Okay, so all good points. What do you think Obama is preparing? Because he’d better have a plan other than calling Republicans names.

            I don’t know where we get the money to keep paying subsidies through 2017, but there is no way in hell we’re gonna get away with making people who are deeply subsidized pay the new, improved price of a health insurance policy.

            1. Never forget, Obama is a fucking moron. So he likely doesn’t have a plan. Also remember, Obama is a complete chump and an easy mark. So my guess is that he will throw a fit and make an ass of himself and then fold and give the Republicans whatever they want in return for fixing this.

              I agree with what Lynchpin said above.

              1. HAHAHAHA. I should have said, what is Jarrett planning? I’d better lay in some more popcorn.

                1. Jarrett is by all accounts dumb as a post.

            2. What do you think Obama is preparing?

              Speeches. It’s all he knows how to do.

    4. “If the language is applied as written, Obama care gets gutted in any state that refused to set up an exchange.”

      Now just those who refused, those who tried to and failed as well.

      1. A state like Illinois: refused to set up their own exchange. And the GOP subsequently won the governorship.

  7. OT: Washington State legalizes recreational marijuana, but for some reason, the black market in it is still attractive:

    Shootout follows home robbery targeting pot dispensary owner
    Posted by The Associated Press
    TACOMA ? A Pierce County sheriff’s spokesman says at least one person was shot and wounded in a gun battle after a home invasion robbery targeted the owner of a marijuana dispensary.

    The News Tribune reports that two armed men followed the dispensary owner home Tuesday afternoon to a house in Midland and forced their way in. After a scuffle, the resident was pistol-whipped and tied up. When his girlfriend arrived, she was tied up as well.


    1. I am not sure that is the black market. That is just someone looking for an easy mark to rob.

      1. It’s hard to say and the article is woefully inadequate.

        The black market price of marijuana not only remains, but remains high because of the tortured and limited ways in which marijuana can legally be sold, and where and by whom.

        By “dispensary”, I presume this is a medical marijuana dispensary which as of right now, are in legal limbo (read: illegal) as of Sept 26th.

        The article doesn’t say if they were going after product or cash, but due to the illegal nature of medical dispensaries, I’m presuming this was an all cash business and therefore a juicy target.

        I’m blaming Washington’s Soviet Style “legalization” of marijuana for this.

  8. During the bill’s “writing”, this language was stripped out and put back in. That sort of thing, for any law not being read politically, would mean it was intended to be there deliberately.

  9. It also explicitly defines “State” as being one of the fifty states or the District of Columbia (conspicuously leaving out the federal government)

    Good to know.

    1. As if they needed to define that, other than to include DC. Still, it kills one argument that is no more mendacious than the argument that Roberts used to save OCare the first time around.

      1. As if they needed to define that

        They were also specifically excluding, by that phrasing, territories like the US Virgin Islands and Puerto Rico. Legislators sometimes forget to clarify when those are included in some bill and when they’re not.

        And in fact there are other questions about the rest of the ACA and how it applies to territories. Because they didn’t clarify those things. The current thinking is that the policies apply (pre-existing conditions OK, etc.) but the mandates don’t — can we spell ADVERSE SELECTION? And they will get very diminished money for subsidies.

        Because of this, it’s quite possible that the ACA is going to really hurt in the territories more than the 50(+1) states.

      2. This is the penaltax times a hundred. There isn’t even a way to dress this up like there was in that case. To decide this for the government the court will have to say “since reading this decision would result in really chaotic results, we are ignoring the language.”

        The justice who is most likely to do that is not Roberts. It is Scalia. Scalia is the justice who says he will read the constitution erroneously if reading it correctly would cause too much disruption.

  10. The SC will supposedly decide in June. If they rule for the plaintiff, I guess it will immediately take effect, thus creating all kinds of business for tax accountants and wreaking havoc on individuals. I hope Congress’s contingency plan for those who will lose their subsidies will cut people like “bigdayqueen.”


    1. The truly needy.

      1. There’s someone like that in my neighborhood, too. She lives in a multi-million dollar home and has a massive bank account but a small annual income. Yup, you and I are subsidizing her health insurance.

    2. thanks…now I have a flat forehead and broken desk.

      1. And get the comments on that story. You go, girl! How inspiring! Another lovely Easter Egg in this garden of delights!

  11. Thank you, Mr. Cannon.

  12. Looks like he just made all that up in his head.

    1. Tony, did your parents drop you on your head when you were a kid or something?

      1. From the rape culture thread, why the Master Baiter is a waste of time.

        ?John|11.19.14 @ 10:21AM|#

        Tony’s point is so stupid and simplistic it is actually difficult to respond to. How do you respond to a statement that is that stupid and not germane to the topic?

  13. I have to wonder if the intent was not only to use the “threat” of people losing out on subsidies as an incentive to get states to establish their own exchanges, but also the hope that any EVUL RETHUGLIKKKAN red states that did refuse would be flipped to the Dems at the next election after the law passed.

    Basically, is it possible they thought that the people would be so enamored with the promise of MOAR FREE SHIT that they’d vote out the Repub’s and usher in a permanent Democrat majority. Basically a sort of LBJ like “I’ll have those niggers everyone voting Democrat for the next 200 years” thing. If so, talk about your all time backfires.

    1. They honestly thought it was going to be popular and bury the Republicans for the next generation. They really were that fucking delusional.

  14. Its a really a shame that appeals courts don’t do any factfinding. It would be priceless for SCOTUS to subpoena Gruber, Pelosi, Jarrett, etc. and grill them under oath about why this was drafted the way it was.

    Its one thing to lie to a sycophantic press. It would be another altogether to lie under oath to the Supreme Court.

    1. I am pretty sure the Republicans in Congress plan to have hearings this spring and do just that. You are going to get to see Gruber and others under oath explaining what he meant and exactly what happened when this bill was written.

      It is going to make for some interesting CSPAN programing.

      1. I hope so.

        Even so, I think there is an order of magnitude of difference between telling lies to a bunch of politicians in a building full of liars and built on lies, with liars running interfence for you on the committee,

        And committing perjury with the nine Justices looking down on you from the bench in the Supreme Court building.

        1. My dad was a circuit court judge, and he said the same sort of thing. When someone is sworn in and questioned in open court, especially under a probing cross examination, it makes it a whole lot harder to keep your lies straight. Most people can’t do it.

      2. You are going to get to see Gruber and others under oath explaining what he meant and exactly what happened when this bill was written.

        *shifts some IRA/ 401K money into popcorn futures*

      3. It’s going to be hilarious when Gruber says “I don’t know why I said that subsidies would flow only through state-based exchanges.”

        “I can’t recall” will work for damn near anything else, but “I don’t know why I, an MIT economist who designed Romneycare and was subsequently paid $400k by a federal agency for my input, forcefully explained an intricacy in a certain unmistakable way on numerous occasions” will be a first.

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