The Wall Street Journal Is Pumped About This Far-Fetched But Dangerous ACA Lawsuit

The Wall Street Journal is so excited about a lawsuit that could gut the Affordable Care Act (ACA) that it has dedicated two editorials to lauding the challenge in the past week.

On March 25, the D.C. Circuit Court of Appeals heard oral arguments in Halbig v. Sebelius, a right-wing lawsuit based on a far-fetched anti-ACA theory that could make it impossible for some consumers to obtain tax credits from the federal government to purchase health insurance. The editorial board of the WSJ considers this counterintuitive goal of a law meant to make insurance affordable the "faithful interpretation of the statute."

The central argument of the suit is that a provision within the ACA can be misread to imply consumers who buy insurance from the federal exchange are not eligible for the tax credits that make health insurance affordable. Most legal experts, as well as those who helped draft the law, agree that this was nothing more than a drafting error, not evidence of Congress' alleged intent to deny subsidies to some consumers. But because many states (particularly those with Republican governors or Republican-led legislatures) refused to set up their own exchanges, conservatives saw an opening to attack this key part of the ACA.

Halbig's legal theory was cooked up by Michael Cannon of the Cato Institute and Jonathan Adler, a contributor to National Review Online and The Washington Post's libertarian legal blog The Volokh Conspiracy. Right-wing media have joined Adler and Cannon in vocally supporting the suit, even though legal experts have soundly rejected the challenge as "an absurd distortion of the law" and lacking merit.

But The Wall Street Journal continues to have a particular affection for Halbig. On March 23, the editorial board celebrated Halbig's potential to “vindicate the rule of law” in an Obama administration it characterized as “willful[ ] in defying limits on executive power.”

Its March 30 editorial was more of the same, but with even more misinformation about the legal issues underpinning the Halbig case:

Liberals keep dismissing challenges to ObamaCare, political and legal, so it's no surprise they mostly ignored last week's oral argument at the D.C. Circuit Court of Appeals that could send another case to the Supreme Court. Coming in the week the White House wheeled out its 38th rewrite of the law, Halbig v. Sebelius is even more important for the contours of executive power and the rule of law.


This ought to be a straightforward matter of statutory construction. Democrats put conditions on the subsidies to pressure Governors to join ObamaCare on the familiar U.S. federal-state cooperative model, but they never anticipated lasting unpopularity and opposition. To resolve this political problem, the IRS brushed off the statute and expanded the subsidies to both types of exchanges.

Arguing before a three-judge panel, Assistant Attorney General Stuart Delery pointed up “interpretive tension” among various complex provisions. But he also suggested that reading the text literally would undermine ObamaCare's purpose and structure of a nationwide system of subsidized health care. Try to parse that one: This is a law that its defenders argue will self-destruct if implemented as drafted by its architects.


As Chief Justice John Roberts famously wrote upholding the insurance purchase mandate, “It is not our job to protect the people from the consequences of their political choices.” It is also not their job to protect politicians from the consequences of their policy choices.

Interestingly enough, it actually is the Court's job to give strong deference to federal legislation like the ACA. As Roberts pointed out in the same opinion that the WSJ positively cites -- the infamous challenge to the ACA's individual mandate -- the Court's “permissive reading of [Congress's] powers is explained in part by a general reticence to invalidate the acts of the Nation's elected leaders” and that the justices must not interpret solitary provisions in these complicated laws in “isolation.”  Not only that, said Roberts, but "[t]he text of a statute can sometimes have more than one possible meaning. To take a familiar example, a law that reads 'no vehicles in the park' might, or might not, ban bicycles in the park. And it is well established that if a statute has two possible meanings, one of which violates the Constitution, courts should adopt the meaning that does not do so." In other words, the courts should assume that Congress intended the law to make sense and to function rationally. When it comes to the ACA, Roberts has already chided legal challengers from reading too much into Congress' use of “wrong labels” in the text when it is “reasonable to construe”  what the legislature wanted to do.

In fact, this lawsuit, and another based on this same legal theory, are at a disadvantage in the courts because Cannon and Adler's legal theory doesn't withstand the common sense scrutiny Roberts explained in his rejection of the last right-wing challenge to the ACA. Although the WSJ dismisses Assistant Attorney General Delery's argument that to read the subsidies provision literally would undercut the entire point of the ACA, a federal judge has already embraced that point of view. In his opinion, D.C. Circuit Court Judge Paul Friedman not only wrote that Cannon and Adler's interpretation would lead to “strange and absurd results,” but that "[s]uch an interpretation would violate the basic rule of statutory construction that a court must interpret a statute in light of its history and purpose."

The WSJ is right about one thing -- this should be “a straightforward matter of statutory construction.” Because the Affordable Care Act's purpose is to provide affordable care, it's strange that the WSJ would argue that Congress intended for the subsidies to be available to some consumers but not others, without a good reason.

Photo of the E. Barrett Prettyman Courthouse via Flickr/Ken Lund under a Creative Commons License.