Eric Rasmussen makes interesting points below. In all honesty, I’m impressed and somewhat persuaded by some of the arguments that commentators are now raising. Although I ultimately don’t find the majority’s reasoning in Halbig to be persuasive, I think the majority makes a far better argument than anything that was written until very recently. With apologies for being frank to the point of rudeness, I thought the arguments originally made in support of the majority’s position to be so poorly reasoned as to be jokes. If the arguments being made today had been made years ago, I would have taken these arguments far more seriously.
This brings us back to why I don’t think the inquiry here should be based on some narrow notion of legislative intent. There are numerous reasons why courts should defer to agency rulemaking. Agencies are much better positioned than courts to evaluate a regulatory framework as a whole and to interpret the language of a statute so as to make that language workable in light of implementation and administrative concerns.
Again, the State government officials who decided to go with the federal Exchange infrastructure rather than creating Exchanges on their own had no reason to expect that this decision would have implications for whether State citizens would be eligible for the premium tax credits. If allowed to stand, the majority’s decision in Halbig would create chaos and very real hardship. It’s not clear who would benefit politically from this chaos and hardship, or whether the ultimate effect would be to undermine or strengthen Obamacare. But it seems undeniable that adopting the majority’s position today—after both States and individual taxpayers have made important decisions based on an expectation that premium tax credits would be available on the federal Exchanges—would create hardship and disaster that no one intended.
Adler and Cannon deserve credit for raising an innovative argument. In a draft of one of their writings on the topic, they write: “We were both surprised to discover this flaw in the law, and characterized it as a ‘glitch’”. (Jonathan H. Adler & Michael F. Cannon, Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits under the PPACA, Case Research Paper Series in Legal Studies, Working Paper 2012-27, July 2012, at 4.) They then say in a footnote (id.) that they “were first made aware of this aspect of the PPACA by a presentation by attorney Thomas Christina at the American Enterprise Institute in December 2010. See Thomas Christina, What to Look for Beyond the Individual Mandate (And How to Look for It) (Dec. 6, 2010), available at: http://www.aei.org/files/2010/12/06/Christina20101206.pdf.”
Note that this presentation is dated December 6th, 2010, over eight months after the legislation was signed into law. The draft Regulations interpreting the statutory language in question were already well developed by December 2010, and many States had already decided whether to establish their own Exchanges or whether to instead rely on the federal infrastructure. Moreover, this date is when Adler and Cannon first heard the argument. Again, I don’t remember when Adler and Cannon first took to radio and print media to start popularizing the argument, but it was clearly after December 6th, 2010.
The situation today might have been different if the arguments that are now being raised had been articulated years ago, when the Regulations in question were being written and when the States were deciding whether to establish Exchanges on their own. But, it is just plain ridiculous to argue that the unambiguous plain reading of a statute requires interpreting the statute in a way that almost no one thought was even a possible interpretation only a few years ago.
I continue to believe that the best reading of the plain language of the statute is that premium tax credits are to be available on the federal-run Exchanges. Yet, even if I am wrong, this is clearly an instance where the courts should defer to agency rulemaking.