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Tuesday, January 6, 2015

The Watergate Story... Kirby Delauter Style

It's late one evening in 1973 in the office of Ben Bradlee executive editor of The Washington Post, when the silence is broken by a ringing phone.

Bradlee: Hello, this Ben Bradlee

Caller: Please hold for the President of the United States

Richard Nixon: Mr. Bradlee, it's come to my attention that two of your reporters, Bob Woodward and Carl Berstein, are preparing to publish articles in which you link my office, including myself, my Chief of Staff H. R. Haldeman and former Attorney General John Mitchell to the break-in at the Watergate Complex. Is that correct?

Bradlee: Yes sir, that's correct. The evidence is pretty overwhelming.

Nixon: Oh it is?

Bradlee: Yes Mr. President, it is.

Nixon: Well it just so happens that Haldeman and Mitchell are here in the office with me and we've decided that we're not going to authorize Woodward and Bernstein or the Washington Post to publish our names... right boys?

Haldeman and Mitchell: That's right! 

Bradlee: I'm sorry to hear that. But don't we have the right to a free press?

Nixon: Your rights end where mine start!

Moments later Bradlee pokes his head into the newsroom...

Bradlee: Woodstein!!!!

Bob Woodward and Carl Bernstein: Yes Mr. Bradlee?

Bradlee: The Watergate story is finished...

Woodward: What happened? 

Berstein: Did we make a mistake?

Bradlee: Nope, but I just got off the phone with Nixon, Haldeman and Mitchell and they won't let us use their names.

Berstein: Gosh darn it!

Woodward: And it seemed like such an important story... but we certainly shouldn't be aloud to to just freely write about elected officials and their actions while in office.

Bradlee: Goodness no... what kind of society would allow such a thing!

Kirby Delauter...

"Frederick County Councilman Kirby Delauter wrote on social media that he plans to sue The Frederick News-Post if his name or any reference to him appears in print without his permission."

"Billy Shreve, R-at large, told The News-Post in a phone interview he supported Delauter taking legal actions.
“I did not see his post, but I think The News-Post is extremely biased and someone should sue them,” Shreve said.
When asked if news media outlets should obtain permission to publish an elected official's name or reference, Shreve said, “I think media outlets are cowards and they hide behind the label of journalists and that's a bully pulpit to expand their liberal (agenda)."  (Emphasis mine)

I really need to ask Billy Shreve a simple question... whose the coward, a reporter who writes about people in power and takes public credit for all that she writes or an elected representative of the people who threatens to sue a newspaper if it dares mention his name?

Oh, and one more thing... Kirby DelauterKirby Delauter, Kirby DelauterKirby Delauter, Kirby Delauter.

Thursday, November 20, 2014

Obama's Executive Action on Immigration Offers More Evidence of A Weakened Presidency

As Obama is set to take unilateral action on immigration reform, I am reminded of an op-ed I wrote on the eve of his 2nd inaugural. Sadly, Obama's decision to "go it alone" is a common feature of contemporary presidents and by far a greater sign of presidential weakness than of gridlock.

Steve Schier and I cover the presidential power trap in great detail in our book, American Government and Popular Discontent.

Excerpt:

"Faced with obstacles to successful leadership, recent presidents have come to rely more on their formal powers. The number of important executive orders has increased significantly since the 1960s, as have the issuance of presidential signing statements. Both are used by presidents in an attempt to shape and direct policy on their terms. Presidents have had to rely more on recess appointments as well, appointing individuals to important positions during a congressional recess (even a weekend recess) to avoid delays and obstruction often encountered in the Senate. Such power assertions typically elicit close media scrutiny and often further erode political capital.

Faced with the likelihood of legislative defeat in Congress, the president must rely on claims of unilateral power. But such claims are not without limit or cost and will likely further erode his political capital."

Full Op-Ed:

January 21, 2013|By Todd Eberly
As Barack Obama prepares to be sworn in for the second time as president of the United States, he faces the stark reality that little of what he hopes to accomplish in a second term will likely come to pass. Mr. Obama occupies an office that many assume to be all powerful, but like so many of his recent predecessors, the president knows better. He faces a political capital problem and a power trap.
In the post-1960s American political system, presidents have found the exercise of effective leadership a difficult task. To lead well, a president needs support — or at least permission — from federal courts and Congress; steady allegiance from public opinion and fellow partisans in the electorate; backing from powerful, entrenched interest groups; and accordance with contemporary public opinion about the proper size and scope of government. This is a long list of requirements. If presidents fail to satisfy these requirements, they face the prospect of inadequate political support or political capital to back their power assertions.
What was so crucial about the 1960s? We can trace so much of what defines contemporary politics to trends that emerged then. Americans' confidence in government began a precipitous decline as the tumult and tragedies of the 1960s gave way to the scandals and economic uncertainties of the 1970s. Long-standing party coalitions began to fray as the New Deal coalition, which had elected Franklin Roosevelt to four terms and made Democrats the indisputable majority party, faded into history. The election of Richard Nixon in 1968 marked the beginning of an unprecedented era of divided government. Finally, the two parties began ideologically divergent journeys that resulted in intense polarization in Congress, diminishing the possibility of bipartisan compromise. These changes, combined with the growing influence of money and interest groups and the steady "thickening" of the federal bureaucracy, introduced significant challenges to presidential leadership.
Political capital can best be understood as a combination of the president's party support in Congress, public approval of his job performance, and the president's electoral victory margin. The components of political capital are central to the fate of presidencies. It is difficult to claim warrants for leadership in an era when job approval, congressional support and partisan affiliation provide less backing for a president than in times past. In recent years, presidents' political capital has shrunk while their power assertions have grown, making the president a volatile player in the national political system.
Jimmy Carter and George H.W. Bush joined the small ranks of incumbents defeated while seeking a second term. Ronald Reagan was elected in two landslides, yet his most successful year for domestic policy was his first year in office. Bill Clinton was twice elected by a comfortable margin, but with less than majority support, and despite a strong economy during his second term, his greatest legislative successes came during his first year with the passage of a controversial but crucial budget bill, the Family and Medical Leave Act, and the North American Free Trade Agreement. George W. Bush won election in 2000 having lost the popular vote, and though his impact on national security policy after the Sept. 11 attacks was far reaching, his greatest domestic policy successes came during 2001. Ambitious plans for Social Security reform, following his narrow re-election in 2004, went nowhere.
Faced with obstacles to successful leadership, recent presidents have come to rely more on their formal powers. The number of important executive orders has increased significantly since the 1960s, as have the issuance of presidential signing statements. Both are used by presidents in an attempt to shape and direct policy on their terms. Presidents have had to rely more on recess appointments as well, appointing individuals to important positions during a congressional recess (even a weekend recess) to avoid delays and obstruction often encountered in the Senate. Such power assertions typically elicit close media scrutiny and often further erode political capital.
By mid-2011, Mr. Obama's job approval had slipped well below its initial levels, and Congress was proving increasingly intransigent. In the face of declining public support and rising congressional opposition, Mr. Obama, like his predecessors, looked to the energetic use of executive power. In 2012, the president relied on executive discretion and legal ambiguity to allow homeowners to more easily refinance federally backed mortgages, to help veterans find employment and to make it easier for college graduates to consolidate federal student loan debt. He issued several executive orders effecting change in the nation's enforcement of existing immigration laws. He used an executive order to authorize the Department of Education to grant states waivers from the requirements of the No Child Left Behind Act — though the enacting legislation makes no accommodation for such waivers. Contrary to the outcry from partisan opponents, Mr. Obama's actions were hardly unprecedented or imperial. Rather, they represented a rather typical power assertion from a contemporary president.
Many looked to the 2012 election as a means to break present trends. But Barack Obama's narrow re-election victory, coupled with the re-election of a somewhat-diminished Republican majority House and Democratic majority Senate, hardly signals a grand resurgence of his political capital. The president's recent issuance of multiple executive orders to deal with the issue of gun violence is further evidence of his power trap. Faced with the likelihood of legislative defeat in Congress, the president must rely on claims of unilateral power. But such claims are not without limit or cost and will likely further erode his political capital.
Only by solving the problem of political capital is a president likely to avoid a power trap. Presidents in recent years have been unable to prevent their political capital from eroding. When it did, their power assertions often got them into further political trouble. Through leveraging public support, presidents have at times been able to overcome contemporary leadership challenges by adopting as their own issues that the public already supports. Bill Clinton's centrist "triangulation" and George W. Bush's careful issue selection early in his presidency allowed them to secure important policy changes — in Mr. Clinton's case, welfare reform and budget balance, in Mr. Bush's tax cuts and education reform — that at the time received popular approval.
However, short-term legislative strategies may win policy success for a president but do not serve as an antidote to declining political capital over time, as the difficult final years of both the Bill Clinton and George W. Bush presidencies demonstrate. None of Barack Obama's recent predecessors solved the political capital problem or avoided the power trap. It is the central political challenge confronted by modern presidents and one that will likely weigh heavily on the current president's mind today as he takes his second oath of office.

Sunday, November 2, 2014

About the Hogan Poll Showing Him Ahead by 5 Points....

I have no idea how the MD gubernatorial race between Republican Larry Hogan and Anthony Brown will end, but the race appears to be very close. The Cook Political Report recently classified the contest as a tossup.  The Hogan camp caused a stir this past week by releasing an internal campaign poll that showed Hogan beating Brown 44-39%. Right away I was suspicious - a dead dog with a D after its name on the ballot would draw more than 39% in Maryland -right? So I contacted the Hogan campaign and convinced them to share all of the internals of the poll including questions asked and demographics of the sample and voting coalitions. Try as I might I could not find a flaw in the methodology or the questions. The sample size is a bit small so the error margin is a bit larger than usual. But if you consider the succession of polls from the Washington Post, to the Baltimore Sun, to Gonzales Research Marketing, and now to the Hogan poll there has been movement toward Hogan. Also, the three debates were good for Hogan. The first two were a tie, but Hogan won big in the third debate. Contrary to the dangerous candidate Brown accused Hogan of being, voters saw a candidate who was about as extreme as a vanilla milkshake.

The poll appeared to have a proper sample. It assumed an electorate that was 55% Democrats, 26% Republicans, and 19% Independents. Some have argued this is a bad sample as Democrats were 62% of the early voters and Independents were only 10% - wrong. Early voting attracts partisans eager to vote, but early voting is not a predictor of overall turnout.  In 2010, Democrats were 57% of the electorate and they have lost registration ground since then.

The Brown campaign has tried to downplay the poll, pointing to the 2 to 1 early vote Democratic turnout advantage last week. Problem is, that advantage was 3 to 1 in 2010. So Democrats are doing worse this election cycle than in 2012.  Of course in 2010 O'Malley crushed Ehrlich by a 14 point margin - so Democrats can lose some ground and still deliver for Brown. Then again, Ehrlich ran a horrible campaign in 2010 and surrendered votes a better GOP candidate would've won. This time around it's Brown who is running a bad campaign. As noted by Heather Mizeur, Brown's campaign has been relentlessly negative and, as described by the Baltimore Sun, "strikingly dishonest." Who knows how all of that will shake out.

The sample also assumed an electorate that would be 29% African American - essentially what it was in 2012. Based on weak primary turnout in PG County and Baltimore City, the final share may be lower than 29%. The poll found Hogan beating Brown 3 to 1 among white voters, but Hogan was only attracting 13% of the African American vote. Hogan was winning Independents by 2 to 1 and was receiving a 25% of the Democratic vote. The numbers all made sense. There were many undecideds and the poll pointed to a lot of unease with Brown.

And the most interesting aspect of the poll, to me, were the questions asking "How much have you seen, read, or heard recently about Anthony Brown/Larry Hogan and his campaign for Governor?" Then folks were asked "would you say you have a MUCH (more/less) favorable impression of him?" Now 2/3 of respondents said they learned some or a lot about Hogan during the campaign and by a 55-32% margin, what they learned made them feel more favorable toward him. But 3/4 indicated learning some or a lot about Brown and by 34-48% margin what the learned made them feel less favorable toward him.
It suggests Brown's negative campaign has backfired.

Is the poll a fluke? A bad sample? We'll find out Tuesday. But the findings certainly help to explain all of the high profile visitors like the Clintons and Obamas trying to rally support. The finding also help explain the recent mailing by the MD Democratic party that attempted to link the election to the incident in Ferguson, MO. The poll found Brown receiving 60% of the African-American vote. Hogan was at 13%. So 27% of African-Americans were undecided a week before an election where Brown could become the state's first African-American governor. You have wonder, if Brown can't count on the overwhelming support of the Democratic party's most loyal voters then how many other normally Democratic voters are equally ambivalent about him?

As a political scientist, I'm trained to predict the the future based observation of the past. As such, I have to believe that Brown is likely to win this race. Democrats have tremendous structural advantages in the state and come Tuesday we could see Hogan win by 3 or lose by 10. But it is becoming easier to see Hogan's path to victory. Though it's still hard to see how Hogan could be 5 points up in a state that has only elected two GOP governors in the last 45 years. It's hard as well to accept that Brown could be doing worse than Kathleen Kennedy Townsend. But this poll reveals real trouble for Brown. And he may well find himself the second MD heir apparent to have stumbled on his way to the coronation.

Tuesday will tell the tale.

 

Wednesday, October 29, 2014

Voters Deserve better than Dishonest Campaigns

Among the many election mailers that I received this week two stood out. One was a Republican financed mailer attacking District 29B Delegate John Bohanan (D) and the other was financed by state Democrats and attacked District 29C Delegate Tony O'Donnell (R). But these mailers did more than just attack Bohanan and O'Donnell, the mailers contained outright lies about both men. The anti-Bohanan mailer claimed that he had supported elimination of the death penalty and supported publicly financed needles for heroin addicts. The anti-O'Donnell mailer warned voters that he opposed replacing the Thomas Johnson bridge placing the safety of our families at risk.

Pretty damning stuff. Too bad none of it's true. Anyone who pays attention to Maryland politics knows that Bohanan vigorously opposed the state's recent repeal of the death penalty and when a bill was put forward to provide a publicly funded needle exchange statewide Bohanan voted against it. As for O'Donnell, anyone ho has had more than a passing conversation with O'Donnell knows that replacing the Thomas Johnson bridge is his top priority. So how could Democrats support their claim that he is against replacing it? Because O'Donnell voted against increasing the gas tax. O'Donnell didn't vote against replacing the bridge, he voted against a tax increase that may not have been necessary had Governor O'Malley not repeatedly raided the state's transportation trust fund.

John Bohanan and Tony O'Donnell may come from two different parties, but they share the same commitment to southern Maryland, and each has earned another term. The mailers weren't just misleading, they were dishonest. The voters of District 29B and 29C deserve better. And two men who have been tireless public servants, powerful voices for southern Maryland, and fierce advocates for their constituents, deserved better.


 

Monday, October 13, 2014

Second Brown/Hogan Debate Ends in Another Tie

The second Maryland gubernatorial debate is in the can (or on the web...) and, for me anyway, the results mirrored the first debate. Both Anthony Browne and Larry Hogan performed well, neither made any serious mistakes, and neither scored any major blows. It was a tie. The debate itself, however, came across as a disorganized mess. But more on that later.

Anthony Brown
After 8 years as Lt. Gov. Brown is having serious trouble sealing the deal with voters in a state that favors his party by a 2-to-1 margin. There are many causes for his problems. 1) The national and the Maryland economy remain weak. Recent reports show that middle class Americans have seen all the income gains made between the mid-1990s and 2009 disappear in the last 5 years. In Maryland, wages have stagnated, unemployment is higher than the national average, and a record number of people have simply dropped out of the labor force. Good luck being the quasi-incumbent running in the midst of all of that. 2) Martin O'Malley is unpopular. No doubt part of O'Malley's collapse is linked to the poor economy, but I think it's linked as well to a sense that at a time of need within the state O'Malley is touring Iowa and New Hampshire in hopes of being president. I think folks see in Brown another rising star of the Democratic party and wonder if he'll follow O'Malley's example and put national ambitions ahead of his state. And 3) even after 8 years, most folks don't know Anthony Brown. Brown jumped into the governors race before anyone else, but even as he was securing a running mate and endorsements he was not introducing himself to voters. His campaign was structured around the assumption that Brown would be the presumptive frontrunner in the primary and that the general election would be a mere formality. As such, his campaign has shielded him from the press and the public. He does not attend unscripted events and prefers to meet with friendly audiences. As to the press, he rarely does interviews and his campaign manager has had more to say about Brown's agenda than has Brown.

It has been clear for weeks that the general election will not be a cake walk. And yet, the Brown campaign refuses to change strategy. They need to get Brown out in public. They need him in front of cameras and talking with reporters. The Baltimore Sun poll found that Brown is supported by only 71% of Democrats and he's losing independent voters by double digits. Worse, fully 25% of Brown's supporters are open to changing their mind. Based on current polling, if only half that many do change their minds then Brown loses. Brown has been so committed to telling voters why they shouldn't vote for Hogan that he forget to tell them why they should vote for him. A better Maryland for more Marylanders is not a reason, it's barely even a bumper sticker. In the debate today, he repeatedly reminded voters that the election is about the future - but he offered little regarding what that future would involve.

Brown's best moment was his discussion of the MD gun control bill. His passion was clear and when he indicated that Hogan said one thing in public and another in private he was clearly trying to raise doubts in voters minds about Hogan's promises to not try to undo "settled law" regarding guns, abortion, or same sex marriage. His closing statement in which he linked his military service to his public service was strong as well.

Brown's worst moment was attempt to belittle Hogan's understanding of the complexities involved in managing a state by saying to Hogan that he was a "small" business owner. In prior debates, Brown has said small businesses are the backbone of the economy and that he supports small businesses, but I guess he just doesn't think small business owners are smart enough to govern? It was a mistake.

Brown's non-answer to the question about funding pre-k was a bad moment as well. He essentially said that if the gambling revenue isn't there then Maryland will do what it has always done to deal with shortfalls. He then paused and quickly added, "by not raising taxes..." Well Maryland did raise taxes to deal with prior shortfalls. We raised taxes, froze spending, raided trust funds, shift costs to counties, and skipped out on pension obligations. Hogan should've asked Brown which of those options he'd consider should the gambling money not materialize.

Larry Hogan
Hogan continues to stay focused on the economy. Some are suggesting that he needs to branch out, but that's only partially true. Hogan is a Republican running in a state where independent and unaffiliated voters will soon outnumber registered Republicans. His window of opportunity is narrow. A recent poll found that by a 48-44% margin, Marylanders believe the state is going in the wrong direction - a 4 point margin. In 2002, Bob Ehrlich defeated a woefully incompetent candidate, Kathleen Kennedy Townsend, by about 3 points. That margin is the best that Hogan or any other Republican can expect. Hogan needs to win the 48% who think Maryland is going the wrong way. Given that Democrats control every aspect of statewide governance, it's hard to imagine that many of the 48% blame Republicans for the state's problems. But Hogan is tainted as well by the national GOP and by the lingering remnants of the Tea Party. For many in Maryland, national Republicans are responsible for the government shutdowns and there is no doubt that the national GOP continues to oppose abortion rights and is the major roadblock to national gun control legislation. Though Hogan may not support the national party on any of those issues, the R after his name means that for many voters those issues hang around his neck. Hogan needs to do better than simply say, it's settled law. Shift the focus more to the people. Say that if elected he will serve the people and their agenda. They've spoken on same sex marriage, abortion, and in state tuition for undocumented kids. Sometimes the job of those we elect is to stop and listen to the people. Then he needs to turn that around and say that too often those in Annapolis have forgotten to listen -  they refused to hear the people on the sales tax, the gas tax, the rain tax. They failed to hear the people when they raided trust funds dedicated to the bay. That's what he needs to do.

Hogan's best moment was in his rebuttal to a question about the errors in his campaign's plan to save $1.7 billion in fraud, waste, and abuse. The report is full of errors and Hogan couldn't really defend it, but rather than focus on that, Brown pointed to his own plan that has identified $1.5 billion in savings. Hogan responded with the perfect question - if you know the state is wasting $1.5 billion per year why haven't you fixed it?

But next time, Hogan needs to go after Brown's plan. The $1.5 billion will never materialize. Consider two items from the plan. Brown's plan says that MD is spending $105 million each year on improper Medicaid payments. If true, the federal Center for Medicare and Medicaid Services (which covers half on MD's Medicaid costs) would likely demand an audit of those payments and demand that the state reimburse the federal government - so that's money lost. Brown's plan also calls for $30 million in savings by reducing chronic diseases among state employees. Folks, chronic diseases are the leading cost drivers in the health care system. If we could manage chronic diseases then our nation's long term spending problems (all linked to Medicare and Medicaid) would be solved. So the notion that MD will solve a problem among state employees what no nation has managed to control seems unlikely. It wouldn't hurt for Hogan to point to specific problems like those.

Hogan's worst moment? He was too thin skinned when Brown was linking him to the Ehrlich administration. I'm not sure why he was so defensive. His retort that it wasn't Ehrlich/Hogan but it is O'Malley/Brown was weakened by his defensive tone. Next time Brown says Marylanders don't want to return to the "dark days" Hogan should just say that during those dark days unemployment was lower and wages were actually growing.

Hogan's other bad moment was his weak answer on gun control. Suggesting that he opposed a bill because it didn't do enough is a bad answer and it undercuts his message that he's a pragmatist. You know who reject bills because they don't go far enough? Ideologues. They want all or nothing and usually get nothing. Hogan needs a better answer and Brown needs to keep hitting on that issue.

The Debate Itself
I got the feeling that the moderators decided that they would try to cover every topic that people felt had been ignored in the first debate - bad idea. Sometimes topics are ignored for a reason. Doug Gansler tried again and again to get traction on the failed health exchange website - it never connected with voters - move on. Perhaps the better and more relevant question would be how will the tens of thousands of folks newly enrolled in Medicaid (mostly adults) find a doctor in a program that mainly serves children? By the state's own admission there were too few doctors in about 40% of the state to meet the needs of Medicaid enrollees BEFORE the expansion (pages 9-10 of the linked report). After the expansion many Marylanders will find that their new insurance card will simply be a license to hunt for a doctor who will take it.

It was also unclear just what the rules were. Was it response, rebuttal, rebuttal response? That seemed to be the case, but at times it was clearly response, rebuttal, rebuttal response, rebuttal response response, and once there was a rebuttal response response response... Moderators need to enforce the rules and keep the debate moving. And what was with the climate change question - the moderator directed the candidates to give a one word answer if possible. Really?  I thought the reference to questions coming in via twitter and social media was distracting and time consuming. Who cares where the question came from? If it's a good question, just ask it quickly and let the candidates reply. And I thought it was odd how a moderator would sometimes prompt another moderator - "did you have a follow up that you wanted to ask regarding my question?" If a moderator has a follow up, he or she will ask it. The debate was as long as the prior debate, but it felt shorter and less substantive, and not because of the candidates. Moderators should keep the train running on time, ask questions, and otherwise blend into the background. I like and respect each of the moderators, but I think a three person panel, especially three people crammed around a little table, was just a bad idea.

So I end this review much as I did the first review - it was a tie. This is still Brown's race to lose (this is Maryland after all), but Hogan is a serious threat. I think turn-out will be awful and right now, Hogan is ahead among the voters who most reliably turn-out.

Tuesday, July 22, 2014

Is the Affordable Care Act on Life Support? Maybe.

Here's my quick take on this and why I think the Supreme Court will agree with DC Circuit Court of Appeals and strike a lethal blow to the Affordable Care Act. 

In short, section 1411 of the Affordable Care Act specifies that premium assistance can only be given to exchanges established by a State under section 1311. An exchange established by the Federal Secretary of Health and Human Services under section 1321 does not qualify according to the letter of the law. But when the IRS issued implementing regulations the agency interpreted "established by the State" to mean any exchange operating in the State.

That's the point of contention. Today, the DC court said the IRS overstepped its authority and violated the clear letter of the law. The 4th Circuit disagreed and said section 1401 is "ambiguous" and as such the IRS was free to interpret the true meaning and the courts should defer.

I really don't think that the 4th Circuit's "ambiguous" argument will pass muster in the Supreme Court. A 5 vote majority would likely decide that section 1411 was not ambiguous and not even in error as the wording is repeated in the Definitions section of the Affordable Care Act. So twice, Congress stipulated that subsidies were only available to those who enrolled in an exchange established by the State under section 1311.

If this is upheld by the Supreme Court then much of the Affordable Care Act and the attempt to reach near-universal coverage will essentially die. There are over two dozen states that never established exchanges and millions in those states would lose their subsidies and then their insurance. And there would be no bare bones, low cost alternatives available because of the minimum benefit standards established by the law.

It would be a nightmare, but a nightmare of Congress' making. All of the normal procedures for legislating were pushed aside in the push to enact the law after losing the filibuster-proof majority in the Senate. No amendments were allowed, no conference committee appointed, no opportunity to look for problematic language. I warned of this back in March of 2010 in a post titled "Why Process Matters" in which I wrote of the Affordable Care Act "It will face years of legal challenges and likely deeply entrenched public opposition. Worse, the manner in which the bill is being pushed may allow for errors or inconsistencies in the law that could weaken or undermine it in unanticipated ways. The normal process may cause delays and be fraught with obstacles, but it exists to protect the public and to promote sound legislation.

Suddenly the 2014 midterms take on a new meaning. If the Supreme Court does strike down the subsidies Obama may have to go to a GOP House and Senate to seek a legislative solution. I expect they extract a heavy price.


Below are key excerpts from the law with certain crucial sections highlighted.

The key comes down to the use of the word "State" in SEC. 1401. REFUNDABLE TAX CREDIT PROVIDING PREMIUM ASSISTANCE FOR COVERAGE UNDER A QUALIFIED HEALTH PLAN. Which explains, "Premium assistance amount.--The premium assistance amount determined under this subsection with respect to any coverage month is the amount equal to the lesser of-- `(A) the monthly premiums for such month for 1 or
                more qualified health plans offered in the individual
                market within a State which cover the taxpayer, the
                taxpayer's spouse, or any dependent (as defined in
                section 152) of the taxpayer and which were enrolled in
                through an EXCHANGE ESTABLISHED BY THE STATE under 1311

                of the Patient Protection and Affordable Care Act."

Section 1311 specifies all the ways in which a State can establish an exchange. At no point in Section 1311 is the Federal Exchange ever mentioned.

The Federal Exchange is first mentioned several sections later in SEC. 1321. STATE FLEXIBILITY IN OPERATION AND ENFORCEMENT OF EXCHANGES AND RELATED REQUIREMENTS.

Which reads:

Failure To Establish Exchange or Implement Requirements.--
            (1) In general.--If--
                    (A) a State is not an electing State under
                subsection (b); or
                    (B) the Secretary
                determines, on or before January 1, 2013, that an
                electing State--
                          (i) will not have any required Exchange
                      operational by January 1, 2014; or
                          (ii) has not taken the actions the Secretary
                      determines necessary to implement--
                                    (I) the other requirements set forth
                                in the standards under subsection (a);
                                or
                                    (II) the requirements set forth in
                                subtitles A and C and the amendments
                                made by such subtitles;
       THE SECRETARY SHALL (directly or through agreement with a not-
        for-profit entity) ESTABLISH and operate such Exchange within
        the State
and the Secretary shall take such actions as are
        necessary to implement such other requirement."

So there you have it. The law clearly says that subsidies are available to those enrolled in exchanges established by the State as the language regarding the federal exchange comes several sections later and refers to the Secretary establishing it...

The court is being presented with a case of the letter of the law v. the intent of the law. If a court thinks the letter is clear it will trump the intent.