Uh, no shit...and how is this a weakness?
As I said, a condition to raising the argument resolves it. If your issue is resolved before it can be raised, then it isn't a winning issue--in fact, it never becomes an issue, period. This is a straightforward point, but because you insist on contradicting it, let me explain in more detail.
The principal question in
King is whether the IRS rule permitting credits on FFEs is permissible in light of the statutory provision under which the IRS purports to act. In answering this question, the Supreme Court will rely primarily on the doctrine first established in
Chevron U.S.A. v. Natural Res. Def. Council, Inc.. That doctrine provides that, in determining whether an agency regulation is lawful, a court engages in a two-step process. Under the first step, the court determines "whether Congress has directly spoken to the precise question at issue. If the intent of Congress is
clear, that is the end of the matter; for the court, as well as the agency, must give effect to the
unambiguously expressed intent of Congress." If the court answers that question in the negative, then it must further determine "whether the agency's answer is based on a permissible construction of the statute." Assume, for present purposes, that the challengers lose the case if they lose on that first question.
The issue you keep trying to raise is the doctrine stated in
Pennhurst State School and Hospital v. Halderman. In that case, the Court explained, "legislation enacted pursuant to the spending power is much in the nature of a contract:
in return for federal funds, the States agree to comply with federally imposed conditions. The legitimacy of Congress' power to legislate under the spending power thus rests on whether the State
voluntarily and knowingly accepts the terms of the 'contract.' There can, of course, be no knowing acceptance if a State is unaware of the conditions or is unable to ascertain what is expected of it. Accordingly,
if Congress intends to impose a condition on the grant of federal moneys, it must do so unambiguously" (citations omitted). This language demonstrates several problems with the issue you're trying to raise: first, you can see that the doctrine only applies when a state "
accepts the terms of the 'contract'" (emphasis added). Where a state
rejects the terms of the "contract," there is no
Pennhurst problem, because its acceptance is a precondition for applying the doctrine. Second, even assuming that
Pennhurst is relevant to this case, the requirement is that Congress impose conditions "unambiguously"--the same standard used in step one of the
Chevron analysis. In other words, if the plaintiffs win at
Chevron step one, they win on
Pennhurst.
But you haven't mentioned
Pennhurst. Instead, you mentioned a later case that applies the doctrine,
Arlington Cent. Sch. Dist. Bd. of Educ. v. Murphy. In that case, after quoting
Pennhurst, the Court formulates the test somewhat differently: "we must view the IDEA from the perspective of a state official who is engaged in the process of deciding whether the State should accept IDEA funds and the obligations that go with those funds. We must ask whether such a state official would clearly understand that one of the obligations of the Act is the obligation to compensate prevailing parents for expert fees. In other words, we must ask whether the IDEA furnishes clear notice regarding the liability at issue in this case." But this is simply a different way of saying what
Pennhurst said. When the Court refers to "the perspective of a state official," it
isn't saying that courts should poll
actual state officials; it isn't inviting courts to admit evidence of what state officials understood the statute to mean. If it were, it would have mentioned such evidence in the remainder of its opinion or remanded to the district court so such evidence could be admitted, but it does neither. It's simply creating a hypothetical character (similar to the ubiquitous "reasonable person") as an analytical vehicle. The question remains, having accepted the deal offered by Congress, is such-and-such requirement clearly (or unambiguously) one of the conditions imposed by the offer? But because the states with FFEs in
King rejected the federal government's offer, this case has no application here. (And, in any event, the requirement is that the restriction be unambiguous under both tests, so if it satisfies one, it satisfies the other.)
You try to rebut this argument later:
The Clear Notice doctrine is important and cannot undone because the offer was rejected rather than accepted. The Clear Notice doctrine means the offer must be known unambiguously, regardless.
Yet you offer no citation, nor could you. Needless to say, your
ipse dixit carries little persuasive force.
It is perprosterous to argue that the SCOTUS says states cannot accept conditions they unaware of but can subsequently reject conditions they are unaware of.
Not at all; the different treatments make perfect sense. It's unfair to hold a person who accepts an offer to obscure terms included in the offer, just as it would be unfair to hold a person whose offer has been rejected to an obscure term in the rejected offer simply because the term was obscure. What matters in the latter case is that the offer was rejected, not that the term was obscure. If you don't believe me, go reject a contract offer that includes an ambiguous term, then see what court will compel the offeror to perform the term on account of its ambiguity.
But there is no way a rational person can read the context of the entire law and assume the subsidies were only intended for the states. It makes no sense. It only works in isolation.
Also, in yates, Alito dissented from what you just said, so it has happened.
Regarding your first paragraph, I'm not sure I can make my case any better than I already have. Your reliance on "context" is empty--you think that the fact that the statute includes other words is enough to change the meaning of the words used in 36B. I've addressed the context of the statute pretty thoroughly, showing that, at worst, it doesn't support the government's argument.
Regarding
Yates, Alito concurred. He didn't dissent.
You ask why Congress would set up an Exchange doomed to fail. There are a number of possible responses: first, Congress might not think a subsidy-less Exchange would fail or otherwise threaten the insurance market in a state. Second, Congress might have only included a fallback exchange to avoid the argument that it was commandeering states (which is a far more plausible explanation for the proliferation of the phrase "established by the State" throughout the statute than the government's "term of art" argument, btw). Third, Congress might have assumed that the deal it was offering to states to establish their own exchanges was so good that none would reject it (and
there is extra-textual
evidence--your favorite kind, I know--to support this view).
Didn't I already show something akin to this with the CBO's scoring of a bill introduced after the ACA (where they didn't really specify anything regarding the bolded anyway)?
I digress, however, with a related question that might provide better contextual basis for the CBO links I'm about to post: When, exactly, was the IRS's rule put into place?
Yes, you and I did discuss that. I remembered someone had discussed the CBO with me before, but I couldn't remember who or when. Suffice to say that post-enactment legislative history is accepted by no judge.
Ultimately, without a statement of the assumptions underlying their calculations (i.e., we assume that every state will establish an exchange or we assume that X states will establish an exchange and the others will be served by an FFE), it's impossible to use their estimates to interpret 36B (if we're giving up on interpreting it by, you know, reading it). As I said, credits-in-every-state would be the outcome if either (a) credits are limited to state-established exchanges and every state would establish an exchange (as 1311 undeniably purports to require) or (b) credits are available on any exchange. And, as Michael Cannon pointed out in the article I linked to yesterday, the CBO's estimates relating to credits in earlier bills also ignored the undeniable limitation of those credits, and also ignored the possibility that states would reject PPACA's own Medicaid expansion.
Oh, and the IRS rule was initially proposed in August 2011 and finalized in May 2012.