CATO's Michael Cannon, last seen mansplaining Julie Rovner's own reporting to her
Michael Cannon, director of Health Policy Studies at the conservative libertarian CATO Institute think tank, is one of the chief architects of the
King v. Burwell U.S. Supreme Court case that is threatening to
impose an average tax hike of $3,200 on as many as 7.3 million people by repealing Affordable Care Act subsidies on the federal exchange.
The premise of the case, which seems to be unraveling day by day, is that the letter of the law of the Affordable Care Act only allows subsidies for people who live in states that have established their own health exchanges. This technicality is no fluke, Cannon claims: Congress wanted it that way to compel the states to adopt their own exchanges.
It doesn't matter to Cannon how many lawmakers, legislative aides, or journalists come out and say that Congress always intended to allow subsidies for participants on the federal exchange. He just keeps insisting that he knows the intention of Congress better than Congress itself. He does the same thing with journalists: his latest hit was an attempt to tell former NPR reporter Julie Rovner that her interpretation of her own reporting couldn't possibly be accurate.
More below the fold.
The most egregious example of Cannon and his team putting words into sources' mouths involves former Sen. Ben Nelson (D-NE), who had a heavy hand in shaping the federal and state exchange parameters that made their way into the final version of the Affordable Care Act.
The plaintiffs in the King case filed a brief arguing that Nelson was so adamant about making states take the lead that he didn’t want any federal exchange subsidies at all. Nelson himself took issue with that interpretation, and wrote a letter asserting that the law’s intent was always to ensure that subsidies were available to participants on the federal exchanges.
But once again, Cannon is less interested in what people say than in what he thinks they should have said. In his latest argument, he flat-out lies about what Nelson told a reporter last year—and the evidence is right there in Cannon’s own CATO blog post.
Cannon starts off sounding like Monty Python's black knight dismissing his dismemberment as a flesh wound when he argues that Nelson's letter is irrelevant. Nelson insisted on having state exchanges, Cannon says, and the only way state exchanges could work is if the federal government forced states into it by denying subsidies:
What the plaintiffs, Adler, and I actually argue is that Nelson matters because, and only because, (1) he insisted on state-run Exchanges rather than a single, nationwide Exchange, and (2) his vote was crucial to get a bill through the Senate, and, since Congress cannot force states to implement federal programs, (3) the PPACA’s drafters therefore needed some way to states [sic] to establish Exchanges – a part of the Act that has turned out to be very costly, difficult, and fraught with political peril. So what the PPACA’s drafters do? They adopted a wacky, hair-brained, far-out idea that has been proposed only on numerous occasions by multiple Congresses as well as Presidents Johnson, Nixon, Clinton (more than twice), and Bush. They created an incentive for states to implement federal priorities by conditioning federal benefits on state cooperation.
Cannon's logic is a hopelessly flawed straw man: that because Nelson wanted state-run exchanges, he must also have wanted to use federal benefits to pressure states into creating them. Nelson knocks down that straw man explicitly in his letter about the subject:
As you may recall, during debate of the Affordable Care Act, I objected to the House of Representatives proposal to have a single federally-run exchange, and advocated instead for the flexibility to the states to establish state-based exchanges with a federal exchange as a backup if a state was either unable or unwilling to create an exchange.
See that key word? Flexibility. There’s a strong difference between "allow" and "compel." Nelson was wary about federal preemption, and wanted to ensure that states had first right of refusal—but he still acknowledged that the federal exchange would serve as a backup if necessary. The mere existence of state exchanges in the law was not, as Cannon claims, evidence of the need for federal compulsion; it was evidence of Nelson’s desire, and others’, to allow states the ability to do things their own way.
Not content with straw man argumentation, Cannon moves on to outright prevarication. He flagrantly misrepresents Nelson's statements about his knowledge of the bill and involvement in the negotiations. This is a long excerpt, but needs to be read in its entirety:
Thanks to a handful of intrepidresearchers [sic] and the North Dakota Department of Insurance, I happened to find audio of a press conference Nelson gave in January 2013, upon being appointed CEO of the insurance-regulators lobby in Washington, D.C.. As luck would have it, a reporter asked him about subsidies in federal Exchanges. Here’s part one of the press conference, but the relevant part is part two (at 8:20). When discussing negotiations over the crafting of the PPACA, Nelson described federal Exchanges as an afterthought, and admits he voted for the bill without paying any attention to whether the bill actually authorized subsidies in federal Exchanges:
NELSON (8:20): This is Ben Nelson again. I might add that I don’t know what everyone who voted for the health care act was thinking. But I can tell you that the discussions for having state-based Exchanges as an option for the states was to assure that the states would have that role. There was never really any intent for the federal government to assume any role, except by default or at the request of the states. So there was no way that the federal government was to have an initiative in this direction. It was more of a backup, fallback situation, should the states decide that they didn’t want, or a state decided it didn’t want for establish a state-based Exchange, but preferred to do it with a federal FFE, as it’s called, or join together on a multi-state basis for an Exchange. As many options as possible, but the goal was to be as far away from any kind of federal preemption as possible.
REPORTER (9:32): Was there, was the discussion along the lines of, we don’t want the subsidies to go through the federal Exchange? I’m sure you’re aware of that issue. Was that part of the thinking? And why did they go the way, they write the law the way [inaudible].
NELSON (9:43): I don’t think it ever got quite that specific, at least not during any time that I was involved in discussions. But when the discussion about an Exchange occurred, it was always, once [we] got over the hurdle of saying yes, states first, federal second, that it was clear that there was no real pre-emption,we didn’t get into, unfortunately, the details, because now they have to be fleshed out. So there are some levels of uncertainty.
Cannon concludes from this that Nelson never cared that much whether the final bill allowed subsidies on the federal exchanges, and that the federal exchanges were an afterthought. Unfortunately for him, that's a hopeless lie.
Nelson is quite clear in this quote about the role of the federal exchange: "default or at the request of the states." In other words, if the states were unwilling or unable to establish their own exchanges, then the federal government would be there to step in and ensure that the state's citizens were served by the law. He repeats that concept twice more in case you missed it the first time: "backup, fallback situation," and "states first, federal second."
Most importantly, the entire point of Nelson's intervention was to grant flexibility to the states. Compelling states to adopt an exchange by outlawing subsidies on the federal exchange is directly antithetical to that.
But that's not the worst news for Cannon: Nelson's quote also strikes at the very heart of his argument that Congress intended to outlaw subsidies on the federal exchange. Remember what Cannon wrote above:
They [the PPACA's drafters] created an incentive for states to implement federal priorities by conditioning federal benefits on state cooperation
And yet, when the reporter asks Nelson directly whether there was any discussion about not wanting the subsidies to go through the federal exchange (in other words, conditioning federal benefits on state cooperation), Nelson says that according to his memory, such an idea was never brought up the whole time he was involved in the negotiations. And keep in mind that Nelson is one of the main reasons we have state exchanges in the first place, and the negotiations he led were key to their creation.
The bottom line? Cannon is deliberately distorting Nelson's view about the importance and function of the federal exchanges. But on top of that, the quote he uses from Nelson as support destroys the key principle of his argument, rather than bolstering it. Moreover, the quote in question comes from January 2013—a full year before any arguments in the series of cases challenging the legality of federal exchange subsidies were heard in the various appellate courts, and making it very tough to argue that Nelson was describing congressional intent in anything other than an academic and historical context.
It is fun to see Cannon's own arguments contribute to the increasingly fast self-destruction of his own case. But this heavily politicized Supreme Court might not find itself bound by logic, history, or precedent.