- - Monday, March 31, 2014

Even after President Obama and the Democrats enacted Obamacare, they didn’t know what was in it, despite Nancy Pelosi’s assurance that Congress would find out what it had done once it was the law.

With each passing week, the Obama administration invents new exemptions, delays and revisions, though the Constitution clearly says that Congress enacts laws and the president executes them. Mr. Obama’s shortcuts and inventions could yet be the end of the health care takeover.

The fiercest battle is being waged in Halbig v. Sebelius, which the U.S. Court of Appeals for the District of Columbia Circuit heard last week. The three-judge panel must decide whether Congress meant what it said when it wrote that penalty mandates and the power to grant tax credits applies to taxpayers who enroll in qualified health insurance plans “through an Exchange established by the State under Section 1311” of Obamacare.

The statute clearly limits the tax credits to state exchanges, but only 17 states have created these exchanges. Democrats naturally assumed that everyone would leap at the chance to bring government medicine to their state. The IRS joined the party by declaring that it had the authority to apply penalties and tax credits to the federal exchange used in the other 33 states.

The federal exchange was established under Section 1321 of the statute. In the surreal world of Obamacare, expanding eligibility for the tax credits expands the penalties. Taxpayers who by the letter of the law shouldn’t be fined by the IRS, are fined. Alice is not the only dowager in Wonderland.

Professor Jonathan Adler of Case Western Reserve and Michael Cannon of the Cato Institute argue that Congress intended for the states to establish health insurance exchanges, and the tax credits were the tempting carrot to induce them to do that.

In fact, reporting requirements in the law meant that anyone forced into a federal exchange would be told what he would have received in tax credits if the state had established an exchange.

This requirement was meant to put pressure on the states to establish exchanges. To insist, as the administration now does, that Congress intended identical tax treatment of state and federal exchanges defies logic.

Mr. Obama has unilaterally modified Obamacare 27 times — including changing deadlines on short notice, adding to the cost and uncertainty in the economy.

The IRS, by choosing to read language which Congress did not put into the law, says it can collect taxes and pay subsidies of $500 billion over 10 years without congressional authorization.

Had the Democrats who wrote the law intended the subsidy to apply to the federal exchange, they could and would have said so. Congress certainly knew the language required to treat something that’s not a state as if it were a state for legal purposes, and it could have done that for the federal exchange.

Instead, the law as enacted sets out a clear distinction between federal and state exchanges.

These arguments found a receptive audience in the three-judge appellate panel last week. “There is an absurdity principle,” said Judge A. Raymond Randolph, “but there is not a stupidity principle. If the law is just stupid, I don’t think it’s up to the court to save it.”

We agree. There’s no good reason to save this law.