Second Court Strikes Down Obamacare Subsidies In Federal Exchanges

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SARAH HURTUBISE
Reporter

Another federal court has struck down an IRS rule that gives Obamacare subsidies to customers in federally-run exchanges.

The United States District Court in Oklahoma ruled Tuesday in Pruitt v. Burwell that the IRS rule extending health insurance tax credits to Obamacare exchange customers in states that chose not to build their own exchange is illegal.

The Obama administration’s rule is “arbitrary, capricious, an abuse of discretion or other not in accordance with law,” according to federal district Judge Ronald White.

The question comes down to the repeated instruction in the text of the Affordable Care Act that advanced premium tax credits are to go only to customers of exchanges “established by the state.” The plaintiff in this case, Oklahoma attorney general Scott Pruitt, argues that Congress’ text says customers in Oklahoma, which doesn’t run its own exchange, aren’t eligible for the subsidies.

The decision follows two highly-charged appeals court cases. The Washington, D.C. Circuit Court ruled in Halbig v. Burwell that Obamacare’s tax credits are only applicable to the several state-run exchanges; but hours later, the Fourth Circuit Court ruled that the IRS was within its rights to make the adjustments in its extension of the subsidies. (RELATED: Federal Court Takes Down Obamacare)

But at the Department of Justice’s request, the D.C. Circuit Court agreed to re-hear its case with a full court — which has been packed with three new judges appointed by President Obama since Senate majority leader Harry Reid deployed his nuclear option to avoid Republican opposition last fall.

With liberal judges outnumbering conservatives now by eight to five, it’s likely that the court will take back its initial ruling and approve the subsidies, taking the pressure off the Supreme Court to hear the case.

But Pruitt’s victory in Oklahoma paves the way for another court split in the future. The Department of Justice will presumably appeal the district court’s decision to a United States appeals court, and if the Obama administration loses again, the Supreme Court will once again be presented with a split decision by two equal courts below it. That may prompt the justices to take the decision into their own hands.

OBAMA STRATEGY: CLAIM IGNORANCE, BLAME SUBORDINATES, HOPE PEOPLE FORGET…

The president has a pattern of deflecting blame and denying responsibility. With military action against ISIS underway, that’s a dangerous habit.

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BY JOSH KRAUSHAAR

The time-tested strategy for Obama: Blame, deny, and wait-it-out When national security is at stake, politics should stop at the White House’s edge ‘The president is the captain of the ship and should assume accountability.’
September 29, 2014 In attempting to downplay the political damage from a slew of second-term controversies, President Obama has counted on the American people having a very short memory span and a healthy suspension of disbelief. The time-tested strategy for Obama: Claim he’s in the dark about his own administration’s activities, blame the mess on subordinates, and hope that with the passage of time, all will be forgotten. Harry Truman, the president isn’t. He’s more likely to pass the buck.

His latest eyebrow-raiser came on 60 Minutes on Sunday, when the president blamed the failure to anticipate the rise of ISIS on his intelligence community for not informing him of the growing threat. “I think our head of the intelligence community, Jim Clapper, has acknowledged that I think they underestimated what had been taking place in Syria,” Obama said. Most early news reports dutifully pinned the blame on the intelligence agencies, with the president escaping any further scrutiny.

But anyone following the news over the past year would have been better informed than the commander in chief. As NBC foreign affairs correspondent Richard Engel said on MSNBC Monday: “It’s surprising that the president said that U.S. intelligence missed this one, because it seems that U.S. intelligence was the only group that missed this one. Everyone knew that Islamic extremists were on the rise in Syria and in Iraq; it was well documented. The extremists were publicizing their activities online—they were bragging about it. Journalists, including us, were interviewing foreign fighters. This was no state secret.”

Former Democratic Rep. Joe Sestak of Pennsylvania, the highest-ranking former military officer ever elected to Congress, told National Journal that the president was wrong to pass the buck. “As commander in chief, you’re accountable. You’re the one who is responsible whether the good ship of state is doing it right,” said Sestak, pointing to congressional testimony from former Defense Intelligence Agency chief Michael Flynn in February 2014 regarding the growing threat posed by ISIS. “The administration failed, and the president is the captain of the ship and should assume accountability.” Sestak is considering a Pennsylvania Senate bid in 2016, and he would be one of the Democrats’ top recruits if he ran.

The president’s defenders pointed to a recent David Ignatius interview with Clapper in The Washington Post, in which the intelligence chief indeed claimed he provided the White House with evidence of ISIS’s “prowess and capability.” At the same time, he also acknowledged downplaying the enemy’s “will to fight” and overestimating the capabilities of the Iraqi forces. It was an odd admission, given the long-demonstrated ruthlessness of the extremists in Iraq and Syria, and the long-reported struggles of Iraq’s military. And given the rosy projections of postwar Iraq during the Bush administration, it’s unusual to hear intelligence agencies making the same mistake twice. Still, it’s clear that Obama wasn’t blindsided by the rising threat from Islamic extremists in the Middle East. Outgoing Attorney General Eric Holder even warned that the emerging threat was “more frightening than anything”—back in July.

The elements of the administration’s blame, deny, and wait-it-out communications strategy has been front and center amid all the recent controversies. When the administration badly botched the launch of the health care exchange website, Obama said he was “not informed directly that the website would not be working the way it was supposed to.” This, for his signature achievement in office. Blame was later pinned on Health and Human Services Secretary Kathleen Sebelius, who left the administration in April.

When officials at the Internal Revenue Service improperly targeted conservative outside groups for scrutiny, Obama first feigned outrage, saying he had “no patience for” the misconduct. But months later, as the public’s anger subsided, Obama said there “wasn’t even a smidgen of corruption” at the agency, and the administration has done little to hold anyone accountable since.

After CNN reported that Veterans Affairs Department offices covered up long wait times at several of its facilities, former Obama press secretary Jay Carney said, “We learned about them through the [news] reports.” Long wait times were hardly a secret, with Obama himself campaigning on VA reform as a candidate. To his credit, Obama signed legislation reforming the VA and replaced embattled Secretary Eric Shinseki. But the president himself escaped much of the blame, even though he was clearly familiar with the long-standing problems that the agency faced.

The administration’s approach to controversies was best crystallized by former National Security Council spokesman Tommy Vietor, who deflected criticism about allegations that talking points on the attack on the U.S. consulate in Benghazi, Libya, were altered for political reasons. “Dude, this was two years ago,” he told Bret Baier of Fox News. The remarks were perceived as flippant, but they underscored the success of the administration’s public-relations strategy. Buy enough time, and inevitably problems tend to go away—especially in today’s attention-deprived environment.

The difference between bureaucratic incompetence and not being fully truthful with the American public is a big one. In the aftermath of scandal, it’s easy to understand why the administration, when choosing between portraying the president as disconnected or dissembling, has chosen the former. But throughout his presidency, Obama has acted far from detached. In his second term, he’s relied increasingly on loyalists who are less likely to push back against the president’s wishes. It’s hard to square a president who reportedly is micromanaging airstrikes in Syria with a president who was unaware of the growing threat from Islamic extremists, which had been increasingly trumpeted on the network news.

“The biggest deficit [in politics now] isn’t the debt. It’s the trust deficit in our politics,” said Sestak. “A year or two ago, when the administration signaled it wasn’t going to use the [phrase] ‘War on Terror,’ that wasn’t correct. When they walked away from that, they suggested to the public we’ve got this in the bag.”

Indeed, at a time of American military conflict, truth in advertising is especially important. The president has avoided using the word “war” in describing the conflict with ISIS and new terrorist cells in Syria, but it’s hard to view it any other way. Military advisers have said ground troops will be necessary to prevail, even as the president continually rules out that option (most likely because it’s politically unpopular). Obama ridiculed the strength of the moderate Syrian militias just last month in an interview with The New York Times’ Tom Friedman, but now he’s praising their skill after his strategy abruptly changed.

It’s understandable that the president was trying to avoid acknowledging that he personally downplayed the threat from ISIS; as a sound bite, it would’ve been politically damaging. But it is crucially important, going forward, that he’s brutally honest with both himself and the American people about the mission. Using campaign-style techniques to deflect criticism from domestic controversies might be expected from any administration. But when national security is at stake, politics should stop at the White House’s edge.