Covering the Front and Back Pages of the Newspaper
August 1, 2014
LAW/POLITICS: Josh Marshall & TPM Promise a "BOOM," Deliver A Dud
There's a well-known saying among lawyers that when the facts are against you, argue the law; when the law is against you, argue the facts; and when the facts and the law are both against you, pound on the table and yell like heck. The behavior of Josh Marshall of TalkingPointsMemo is just the latest illustration of this axoim among the critics of Halbig v Burwell, who keep ratcheting up the temperature of their rhetoric in a none-too-thinly veiled effort to paper over the weakness of their argument on the law and the facts. But don't just listen to me - look at the evidence.
We have covered here on several occasions the ongoing debate over Halbig and King v. Burwell; in the latter, the case coming out of the Fourth Circuit, the plaintiffs have now petitioned for Supreme Court review, setting up a possible Supreme Court ruling in the spring of 2015 if the Court takes the case rather than waiting to see if the en banc D.C. Circuit overrules the Halbig panel. As Leon Wolf noted this morning, left-leaning pundits on the healthcare beat (most of them not lawyers) have grown increasingly shrill in labeling Halbig's defenders - anyone who argues that the Obamacare statute should be read (as its plain language indicates) to provide subsidies only to buyers of healthcare on an exchange "established by the State," defined in the statute as one of the 50 States or DC, and not to buyers on the federal Healthcare.gov exchange - as "Obamacare Truthers" or some such sneering epithet.
Other longtime writers on the healthcare beat have noticed the same thing. Phil Klein at the Washington Examiner, who in my experience has always been unfailingly polite to writers on the Left who frequently fail to return the favor, hopefully posited yesterday that perhaps the revelations of contemporaneous prior statements by Jonathan Gruber and Jonathan Cohn on the federal exchanges and subsidies issue might lead to a reduction in sneering and perhaps even a little humility:
Liberal critics of this legal theory have portrayed it as absurd, ridiculous, nutty, stupid, and even criminal. Recently, I’ve been likened to the health policy equivalent of a World Trade Center attack conspiracy theorist merely for sympathetically reporting the legal case of the challengers...
Josh Marshall Promises A "Boom"
Marshall's original reaction to Halbig was to accuse the judges - without a scintilla of evidence - of "corruption," in a fairly obvious effort to delegitimize the practice of courts reading statutes by reference to the statutory language rather than what a law's supporters would like that language to say. Today, on Twitter, he breathlessly ("Boom!") touted a long Dylan Scott story at TPM purporting to be definitive proof that Halbig defenders were wrong:
You would be forgiven in thinking that Marshall was looking mostly to troll Halbig's defenders if you read his next tweet in which he suggested...trolling Halbig's defenders:
The story, subtly entitled "BOOM: The Historic Proof Obamacare Foes Are Dead Wrong On Subsidies," recounts how the CBO scored Obamacare:
[L]ike everybody else on Capitol Hill in 2009 and 2010, from legislators to the journalists who covered them, the CBO's quants never even considered the scenario that Obamacare faces today. A federal appeals court has ruled in Halbig v. Burwell that the law's crucial subsidies are not available on the federal insurance exchange, HealthCare.gov, putting coverage for nearly 5 million people in 36 states at risk. That outcome, as bad as it would be for the uninsured, would dramatically lower the cost of Obamacare -- but the CBO never entertained that possibility for the same reason no one else did: It was not how the law was supposed to work.
Scott goes on to detail, repeatedly, how every CBO score assumed that subsidies would be available in all 50 states - which he and Marshall present as definitive proof that the CBO concluded that subsidies would be available in the states served only by the federal exchange:
[U]nder all that scrutiny and after all its familiarity with the law, the CBO never did one thing: It never considered that subsidies would be unavailable in some states if they didn't set up an exchange, as Auerbach told TPM this week. In all its iterations of the law, the idea that the subsidies would be available nationwide permeated all of them.
There are two obvious, glaring and related flaws in this analysis, however: 1) it overlooks the fact (to which Scott alludes at the end) that the CBO never even analyzed how the federal exchange would work if states failed to set up their own exchanges, and 2) it completely ignores how the CBO functions.
How The CBO Works
As to the first point, as Jonathan Adler (a law professor deeply involved in developing the Halbig argument) has noted, the CBO's score of the bill assumed that the federal Healthcare.gov exchange would not cost a single penny. The scores done during the debate leading up to passage assumed no cost at all for the federal exchange. Why? Because, rather obviously, the bill's proponents assumed that every state would establish an exchange, and thus at most the federal exchange would be a stopgap so small it was not worth scoring. This turned out to be factually wrong.
But that assumption is something that Halbig critics keep going back to and keep getting wrong about the argument. They insist that, if they can show that everybody assumed subsidies would be available nationally, that meant they'd be available federally. But in fact, as I've explained before and so have numerous others, all that really means is that they assumed the states would have a strong enough incentive that none would decline to run an exchange. At best for their argument, that's a neutral fact about the federal subsidies, if you read it to mean that they were mostly an afterthought nobody looked at too closely; at worst, it's evidence that they were at least implicitly relying on the very thing Halbig defenders claim the bill's plain language does: create an incentive parallel to the incentive in the Medicaid section of the bill.
In any event, the fact that the CBO never (prior to passage) scored what would happen to subsidies on the federal exchange - because the CBO never scored any scenario in which the federal exchange would even exist - means that there is absolutely zero probative value to anything in Scott's story. All he shows is that nobody working on the bill predicted what actually happened in 36 states. Which ought to be a cautionary tale for the next time we are treating CBO scores as some sort of religious totem.
Which brings me to my second point. The CBO is only ever as good as the questions it is asked and the assumptions it is given. Anyone who knows even a little bit about Congress knows that CBO scores prove only one thing: what CBO was asked to score. And proponents of bills ask CBO to score only what they want CBO's score to reflect. Like any mathematical model, this means that, while the CBO process can work fine for fairly straightforward questions, its output is often a case of "garbage in, garbage out."
In particular, the CBO's function is mainly economic, not legal, and by its own admission it never analyzed the statutory language. As Adler and Michael Cannon have explained:
The JCT and CBO produced revenue and spending estimates that assumed tax credits would be available in all fifty states. But this is not the same as ‘‘assum[ing] that the tax credits will be available through the federal exchange,’’ and neither the CBO nor JCT stated such an assumption when conducting their analysis. Indeed, the CBO has acknowledged it did not conduct a legal analysis of whether the statute authorizes tax credits through federal Exchanges. Thus its cost projections can hardly be considered authoritative. Like many of the PPACA’s supporters, it appears the CBO and JCT simply assumed that every state would create its own Exchange and incorporated that miscalculation into their projections. Further evidence for this interpretation, if more were needed, is that the CBO made no mention of the hundreds of millions of dollars it would take to establish and operate federally run Exchanges (just as Congress didn’t authorize those funds).
CBO confirmed that they did not conduct a legal analysis of whether premium subsidies would be available on federal exchanges. Furthermore, during the time period the law was being debated, CBO was inundated with requests to score various changes to the proposed health care bill. The Director of CBO, Douglas Elmendorf, told the Committees that CBO also only had a single full-time lawyer on staff during this time period.
It wasn't just the CBO, and it didn't end with the bill's passage. The same report goes on to note that the IRS, when it was developing what would be included in its 2012 ruling on the statutory language, didn't do much more:
In the June 13, 2013, briefing, two senior IRS attorneys who worked on the 36B rule told the Committees that they did not consider the availability of tax credits in federal exchanges as a central issue during the rulemaking process and they spent relatively little time on it. Chip Dunham, a lawyer in the income tax and accounting division at the Office of the Chief Counsel, mentioned that the issue was discussed but that it was not considered a key issue. Kim Koch, a lawyer in the health care division at the Office of the Chief Counsel, told the Committees that IRS employees working on the rule were extremely busy discussing and drafting the regulation during that time and many other issues related to the tax credits were a higher priority.
The IRS, in fact, ended up having to ask HHS for an excuse to find that the federal exchange was actually an exchange "established by the State":
[A]n email sent after the March 25, 2011, large group meeting, where the issue of subsidy availability in federal exchanges was discussed...highlighted three specific points. First, Treasury and IRS considered that the language restricting tax credits to state-established exchanges may have been a “drafting oversight.” Second, the email between Treasury department employees expressed concern that there was no direct statutory authority to interpret an HHS exchange as an “Exchange established by the State.” Third, the email suggested that IRS request HHS clarify the issue in their rulemaking by deeming HHS exchanges to be exchanges established by States.
Which was what HHS wound up doing, in March 2011, a year after the statute was passed.
The fact that nobody at the CBO worked through this question at the time the statute was being prepared for passage, that liberal reporters covering the story never asked about it, and that the IRS had to ask for help a year later coming up with a theory for how the statute could provide subsidies on the federal exchange, all show that the people involved in the process simply didn't think much about this issue, and didn't ask the right questions (which, as Sean Davis notes, means the journalists simply weren't very good at their jobs). It also, as I noted before, reflects the chaotic circumstances in which the law was passed, and is a consequence of the Democrats' determination to keep pushing this massively complex law under circumstances where reflection, attention to detail, and the correction of mistakes was impossible. Of course, given the omission of earlier statutory language providing such subsidies, we can fairly conclude that somebody decided at some point that at least one version of the bill (which by accident of fate ended up being the one passed by Congress) should have the "established by the State" language and no other, and we can draw plausible inferences from the language and circumstances about what they meant to do by that. But any realistic reading of these events confirms that most people involved in the process just did not consider what would happen if states did not set up exchanges, and thus put no effort into providing a separate subsidy structure to deal with that eventuality. They thought it wouldn't rain, so they didn't build an ark.
The Politics of "Derp"
I've been blogging since 2000, and Marshall was already covering Washington politics on the web before that, so while I'm not surprised that - being a history Ph.D. rather than a lawyer - he does not know how statutory interpretation works, I find it hard to believe that he actually does not understand how the CBO scoring process works. Look at what one Halbig critic, Brian Beutler, wrote for Marshall at TPM last July when President Obama delayed the employer mandate, an action that will soon be challenged in court by the House of Representatives as illegal: "I assume Republicans will rightly ask the Congressional Budget Office to analyze both the fiscal consequences of the decision and its impact on coverage -- how many people will now be insured and by whom." Beutler did not jump to the conclusion that, because the CBO's original scores had assumed the mandate would be in place by now, this meant there was no statutory authorization to delay it.
In any event, Marshall's responses on Twitter to being called out on the flaws in the reasoning of Scott's piece were decidedly short on facts and law and long on pounding the table and yelling like heck:
Marshall ran through all his favorite insults here - "dead ender," conspiracy theorist, "LOL," and of course that ever-popular logical fallacy, the argument from personal incredulity. All that was missing was his favorite, "derp."
In my experience (and I'm not the only one), this sort of thing is a signal to the reader of weakness, not strength: if you actually have a good argument on the facts and the law, you don't need to keep asserting that the other side is making "dead ender" and "truther" arguments, you just show why they are wrong and respect your readers to listen to that. I had the good fortune, as a young lawyer, of having more senior lawyers teach me that lesson when I submitted draft briefs that went too far in denigrating the other side rather than illustrating why they were wrong, and it seems sad that someone like Marshall appears never to have been taught this, and has evidently not taught it to young writers under his tutelage. Ross Douthat made a similar point a while back on Twitter about this style of argumentation (tweets read bottom to top):
This is not a plea for civility (we're all adults here, we can take it) or an argument against the occasional flourish; everybody in the world of opinion journalism does this sort of thing now and then in making an argument. It's more an observation that this is a rhetorical crutch that intelligent readers will weary of and tune out if they are not already converts to your cause - and maybe a symptom of no longer believing that persuasion is necessary.