For most people, words mean what they say. But not necessarily for a majority of Supreme Court justices in two important decisions handed down Thursday.
In the most prominent, King v. Burwell, Chief Justice John Roberts, writing for a 6-3 majority, ruled that the words “established by the state” mean “established by the state or the federal government.”
In a second decision, Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Justice Anthony Kennedy, writing for a 5-4 majority, ruled that the omission in the 1968 Fair Housing Act of words banning acts that have a disparate impact on people of different races didn’t matter. The plaintiff could bring a lawsuit anyway.
Both cases were victories for the Obama administration and for the proposition that the executive branch can rewrite laws to say what they want them to say.
The results are particularly striking, since neither case was a challenge based on the Constitution. They simply required the Court to interpret the words of a statute — words that can be changed by an act of Congress.
But waiting around for Congress to act is not the modus operandi of the second-term Obama presidency. Results are what the president wants, and if the plain meaning of words has to be ignored — well, the Red Queen from Alice in Wonderland provides guidance on that.
A contrary decision in King v. Burwell would certainly have had some unpleasant consequences, as the chief justice noted. Obamacare, as passed by Congress, provided for insurance subsidies only in states which established their own health exchanges. It specifically did not authorize subsidies in states which took the other option of using an exchange set up by the federal government.
Obamacare fans dismiss this as a drafting error, an unexplainable glitch. But it’s very much in line with the way Congress has drafted numerous statutes. Under settled constitutional law, Congress can’t require state governments to do things. But it can provide money on the condition the states do what it wants.
And since the 1930s, the states have usually accepted such bargains. That’s how, for example, we had a 55 mile-per-hour speed limit for several years and have now a 21-year-old drinking age. If you don’t accept those conditions, you don’t get federal highway (and mass transit and bike path) money.
But much to the surprise of Obamacare’s framers, notably including MIT economist Jonathan Gruber, 36 states declined to establish their own health exchanges. So if the Supreme Court interpreted the words “established by the state” to mean “established by the state,” some 6 million people would have lost their health insurance subsidies.
Barack Obama rightly pointed out that in that case, Congress could restore the subsidies by adding four words — “or the federal government” — to the statute. But a Republican-majority Congress would insist on other changes, though Republicans don’t seem to have reached consensus on exactly what.
That could have meant a year-long battle between a statute-writing Congress and a veto-wielding president. The Court’s decision spares them that battle.
The chief justice’s King v. Burwell decision was crisply written and assertive. Justice Kennedy’s Inclusive Communities decision, in contrast, was almost apologetic. The issue was not whether the Fair Housing Act prohibits intentional discrimination — everyone agrees that it does. The issue was whether the fact that more monies go to heavily black (or white or Hispanic) neighborhoods than to others — “disparate impact” — was enough to trigger a lawsuit.
The Obama administration has scrambled to keep this issue away from the Court, lest it frustrate HUD’s program to “diversify” affluent neighborhoods with low-income housing.
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