continue to borrow. of course one of the areas where job growth and the economy growth is impeded is with the health care. president obama is disconnected from the harsh reality that this health care law has created for people almost two weeks ago speaking about his health care law, the president said -- and i quote -- "part of what's bizarre about this whole thing is we haven't had a lot of conversation about the horrors of obamacare because none of them have come to pass." none of them have come to pass? how insulated is our president? i just want to emphasize what he said. none of those horror stories have come to pass. apparently that message didn't make it very far because i hear a drastically different story from folks across wyoming and other parts of the country. people like a rancher from gillette who complained to me that her and her husband's health insurance went up from $11,000 per year to $20,000 per

year. and then had a deductible thrown in that was $6,500. she said how's that affordable? people like a retired nurse from kasper who said if you add the premium increases and deductible increases that she and her husband are up $36,000 per year. she wrote that health care is unaffordable, a huge burden and worry. how can people afford to pay more for health care than they make in a year? she said obamacare doesn't provide them for their medical needs and added it goes against everything they believe in for america. people like the man from cheyenne who says the president's health care law is forcing him to choose between paying for his health care or paying for his mortgage. people like the small business owner in new castle who said that before the affordable health care law, she could afford to pay for her employees'

health care. after the law went into force h she couldn't. her employees couldn't afford it either so they might leave for a bigger company -- which probably is impossible -- and the small business owner might have to sell out to a bigger company, which in many of the towns in wyoming also isn't going to be possible. she loves her community and wants to stay active as part of it. she's discouraged by the situation this health care law has created and is asking for help. and we've been asking for help for several years now. and the president recognized that there needs to be some help. otherwise there will be some real calamities. why haven't they happened? some of them have, and i've described some of them here to you. but some of them haven't happened here yet and that's because the president has given a waiver on some of the things that he knows are atrocious and will cause a huge problem with the economy of the united states. did he have the authority to do the waiver? not really. but he did them, and that's to

put off the tragedies until later. that's not what we ought to be doing. we ought to be making health care more affordable. and there are lots of plans around here for making it more affordable. most of those were just discarded. the bill that went through here went through -- and there was a 60-vote majority on that side of the aisle. 60 votes is enough to pass anything through here. i kind of hope neither party ever has a 60-vote majority again because you don't have to listen to the other side. you don't have to listen to the unintended consequences that might come from somebody knowledgeable because of their background. there's a whole bunch of different background that serve here and another 435 background that serve on the house side. why do we have so many people in congress? so we have those diverse background, so we can find those unintended consequences and adjust for them. the people that i've mentioned are real people, real families.

they didn't write the story. they and many, many more like them contacted me. they're telling me and they're telling all of us in washington to do something about this unworkable health care bill for millions of americans that is far from affordable, breaks promises and makes lives harder. i'm listening to them. so should the torch carriers of this federally mandated dream that was broken before it began. today's supreme court ruling on king vs. burwell is surprising, but it reminds all of us who warned against this health care law that we will have our work cut out for us to move our country away from the failed policies. this law was written and implemented in its entirety by one party as i mentioned and has been informed from the start by ideology rather than reality. there were a number of us that were working on health care before the president even became a senator and continued to work

on it. we've had a lot of discarded ideas that could have increased competition, brought prices down. this law was written and implemented in its entirety by one party and it's been informed from the start by ideology rather than reality. yet, it's fallen to us to make things better and help people get through these difficulties caused by this law. the federal government cannot possibly know what's best for each individual. and as we've seen, a a one-size-fits-all dictate doesn't work. the wyoming family stories i just relayed and the millions like them from every state are a testament to that. that's just a very small sample out of the hundreds of people that write to me or talk to me as i travel across wyoming. our focus is to offer each of them new choices for quality affordable health care. our focus is not protecting this failed law this busted political legacy. we want to protect families as

we get rid of obamacare and transition away from this fiasco. that's what it is, as illustrated by the testimonials i talked about earlier and hundreds more that i have. it's time for republicans and democrats to truly deliver on the president's broken promise of a health care system that expands access and promotes quality, that has patient-centered care while actually bringing the cost down. that is possible, just not under that bill. this is an opportunity for both parties to work together and to put into place real solutions that rely on these principles. i think they just announced that one of the federal insurance co-ops is going out of business. all of them are severely in the red. those would be government-sponsored entities who said too much was being

charged for health care by many of the insurance companies and they went for far lower premiums. that was the hope that it would bring down the price but it didn't. that's not the way to encourage the kind of competition that we need if we're going to bring down health care costs. one of the things that's been focused on around here for a long time has been small business health plans or small businesses. and small businesses are the ones that are really having the problem. i ran into one man who said, you know, i have a very successful business and i just got this tremendous location that's only 50 miles away that i could put in another one. but that would put me over 50 employees, and that puts me in a different category on health care costs. the people that are working for me like the health care costs i'm providing but i would have to go to a whole different level or pay huge fines and i can't afford to do that. so i'm not going to do that other location. i'm not going to put 50 more

people to work. for too long the debate over health care has placed politics before the best interest of patients. no matter the court's ruling, it's time for democrats and republicans to deliver what the president promised but ultimately mailed to deliver. we need a health system that expands access and promotes quality patient-centered care while actually bring bringing the costs down. we must allow states the freedom and flexibility to ensure hardworking americans can get the care that they need. it's time for both parties to work together on real solutions that rely on these principles. we should move forward on a bipartisan basis to provide more choices and a better health care system for hardworking americans. i yield the floor. a senator: mr. president? the presiding officer: the senator from wyoming. mr. barrasso: thank you mr. president. mr. president, i come to the floor to congratulate my colleague, the senior senator from wyoming whom i've worked with for many yeeshes who has been a -- for many years and who has been a true leader in true

health care reform with proposals he's made that actually would help people get affordable care. the obama health care law regardless of the ruling of the supreme court continues to be an expensive failure. there have been so many broken promises by this president about health care in america which to me, is the reason that this health care law the support of it across the country remains at an all-time low. people were promised if they like their coverage, they could keep their coverage. millions have lost coverage. the president has promised if you like your doctor, you can keep your doctor. millions have lost their doctors. the president said premiums would go down by $2,500 per family. instead premiums have gone up, and there is no end in sight. when i take a look at this and say why is this support still so low, it's because most people believe that for them

personally, it's a bad deal. they're paying more in premiums, higher co-pays higher deductibles, all of which makes it a bad deal for them personally. so mr. president, i would say that obamacare cannot be fixed but health care in america must be fixed. they say what are you going to do about it as a republican? there are incredible republican plans out there each of which is much better than the president's health care law. we still have 30 million americans without insurance concerned about the fact that they still need care. so we are going to continue to work to repeal and replace this health care law with a law that will allow people to get what senator enzi has been talking about. we need people, we need patients to get the care they need from a doctor they choose at lower costs. that's what republicans are

committed to and that's what republicans, in spite of today's ruling by the supreme court will continue to work for. thank you, mr. president. connecticut. mr. murphy: subsidy that we dispense with the quorum call. the presiding officer: without objection. mr. murphy: thank you, madam president. hopefully we can move on after a presidential election two supreme court cases 60-plus votes to repeal the affordable care act in the house of representatives endless debates here in the united states senate senate. maybe now is the moment where republicans will choose to close the books on trying to strip away from millions of americans the benefits that they have received from the affordable care act. this is an important day for

over 10 million americans who have health care right now because of the affordable care act. i'd argue it is an important day as well for the separation of powers the recognition that it is the legislative body that sets policy for this country. and i just wanted to come down to the floor for a few minutes to express my hope and my desire that proponents of the affordable care act like myself and senator stabenow and senator baldwin, who have come come down to the floor over and over again over the course of the last three years don't have to do it anymore. i'd love to come down to the floor and talk about the need to fix our transportation surgeon general the need for mental -- our transportation systems the need for mental health reform. i have a come down to talk about the affordable care act simply because it has been perpetual eye under attack, despite the

fact that its successes are now unparalleled. justice roberts in the decision today -- i won't quote from it at length -- said, "congress passed the affordable care act to improve health insurance markets, not to destroy them." that's essentially the orp the operative phrase in today's decision. we passed the affordable care act to improve health insurance marketplaces not to destroy them. and that's what it's done. it's improved marketplaces all across the country. why? because people have voted with their feet. 10-11 million people who have signed up for either expanded medicare medicaid coverage or these exchanges have showed us that the law worked as intended because they didn't stay out they didn't deem it to be unaffordable. they stepped in and bought

coverage. and we should now be in the business of perfecting this law. none of us, frankly think that this law is perfect. many of us are open to conversations about how to make it better how to perfect it. but hopefully now that the supreme court has completely shut the door to a judicial repeal of the act and after debate after debate, it's clear that there are not the votes nor the support obviously in the executive branch to repeal the act, we can move on to something else. madam president, this is an old chart of mine. i brought this down the floor several months ago when a colleague of ours suggested that we shouldn't be -- the administration shouldn't be celebrating the successes of the

affordable care act as if people receiving health insurance for the first time in their life wasn't something to celebrate, as if 17 million children with preexisting conditions who will never have their health care taken away from them wasn't something to celebrate, as if 9.4 million senior citizens who are saving $15 billion on drugs isn't something to celebrate. i get excited when i talk about the affordable care act because i know it is a really sober and important topic but because when i talk to my constituents back home, they're excited they're bubbling over with enthusiasm those of them who never had the chance to get health coverage before the affordable care act those that worried every single night sick, that their child wouldn't be able to live a normal life because their existence would be obsessed with whether or not they would be able to cover

their complicated illness with insurance. there are millions of people who are celebrating this decision. and it is a sober day because hopefully we'll be able to have a conversation about how we can move on to another topic. but it is a day to celebrate. for the 6.4 million americans first and foremost, who would have had their insurance taken away by an adverse decision, but for all americans who would have been caught up in an insurance death spiral had the decision gone the other way. so, madam president i hope that we can limit our discussions about the affordable care act to ways in which we can make it work better. i hope that we can now spend more time talking about other things that matter to this country. i hope that the house of representatives decides to give up this obsession with repealing the affordable care act something that is simply not going to happen.

and for its opponents out in the field, the supreme court has shut the doors to a judicial repeal of the affordable care act today. i think of a lot of stories when i think about what the affordable care act has meant to the people of connecticut. we have cut our uninsurance rates in half in connecticut. we have one of the best-running exchanges in the country. but one of the simplest stories is the only one i'll convey is, as i wrap up this morning, i was at the community pool that my family has gone to in cheshire, connecticut. and i was in the pool with my then, i think 2-year-old just shortly after the passage. and a young man about my age come up to me and he said, listen i'm sorry you know, mr. mover if murphy to disturb you -- i

know you're here with your son -- but i have a he got a little boy, too. and he's got a congenital heart problem. and i just every single day since he's been born, have been worried that he wouldn't get to live out his dreams because his life decisions would be dick -- dictateed by whether or not he could get insurance and that that would be determinative of his path in life, not his dreams his desires for himself. and he said, i get it that this is going to help a lot people in very practical and economic ways but i just want to thank you because now i sleep better at night knowing that my son is going to be able to get covered that my son is going to be able to lead a relatively normal life and that he can be whatever he wants to be.

that's the benefit of that the afordable care act brings people. it's not just economical, it's not about whether everybody has health insurance or not it's psychological, it's peace of mind. the supreme court has protected 6.4 million people from losing their health insurance today but they've also protected tens of millions of patients and parents and sons and daughters and grandparents from losing that peace of mind that comes with the protections from an afordable care act that is working. mr. cruz: mr. president today's decision in king v. burwell is judicial activism, plain and simple. for the second time in just a few years a handful of unelected judges has rewritten

the text of obamacare in order to impose that failed law upon millions of americans. the first time the court ignored federal law and magically transformed a statutory penalty into a tax. today these robed houdinis have trans-morgrafied a federal exchange into an exchange -- quote -- "established by the state." this is lawless. as justice scalia rightfully put it, without objection, so words no -- words no longer have meaning if an ex-chapping that's not established by a state is established by the state. justice scalia continued, "we should start calling this law scotus-care.

i agree. if this were a bankruptcy case or any other case of ordinary statutory interpretation, ther results would have been 9-0 with the court unanimously reversing the obama administration's illegal actions. but, instead politics intervened. for nakedly political reasons the supreme court willfully ignored the words that congress wrote and instead read into the law their preferred policy outcome. these judges have joined with president obama in harming millions of americans. unelected judges have once again become legislators and bad ones at that. they are lawless and they hide their prevarication in legalese. our government was designed to

be one of laws, not of men. and this transparent distortion is disgraceful. these justices are not behaving as umpires calling balls and strikes. they have joined a team, and it is a team that is hurting americans across this country. obamacare is the biggest 0 job killer in america. millions of americans have lost their jobs, have been forced into part-time work, have lost their health insurance have lost their doctors. millions of americans have seen their health insurance premiums skyrocket and it is the direct result of president obama of democrats in the united states of congress, and of lawless judges at the united states supreme court who have joined the team of the obama administration. if those justices want to become legislators, i invite them to resign and run for office.

that's the appropriate place to write laws on this floor not from that courtroom. mr. president i began my career as a law clerk at the united states supreme court clerking for chief justice william rehnquist, one of the greatest chief justices ever to serve our nation. i have spent the majority of my adult life litigating before the united states supreme court both on behalf of the state of texas and on behalf of private parties. what this court has become is heartbreaking. if chief justice rehnquist could see this court today, he would be filled with sorrow at what has become of the supreme court of the united states.

the obligation of fidelity to the constitution and fidelity to law matters. we are not living in a platonic og gar canoligarchy with philosopher kings governing us who believe they can to write the laws, interpret the laws, enforce the laws. that's not the american system of governance. at the same time, mr. president crocodile tears are flowing here in our nation's capital over the supreme court's decision to illegally rewrite obamacare which has been a disaster since its inception. but one day a full outrage from the washington cartel won't fool the millions of courageous conservatives all across our country. they know that far too many career politicians -- democrats

and republicans in this nation's capital -- are quietly celebrating the court's decision. if they believe this issue is now settled so they don't have to address it, they are sorry mistaken. -- they are sorely mistaken. i have made repeal of this disastrous law a top priority since the very first day i entered in body and i have made its repeal central to my tenure in office. republicans all across the country, including my friend, mr. president, in the presiding chair, campaigned on repealing this law and were elected in an historic tidalwave year, historic majorities in both chambers of this body, and in statehouses all across the country. it's now up to us to keep our promises.

i believe 2016 will be a national referendum on repealing obamacare. this law is profoundly unpopular. it's un-0 unpopular with republicans with independents, with democrats, it's unpopular with young people, hispanics with everybody it is hurting and there are millions being hurt by this law. the court adopted and put its stamp of approval on the i.r.s.' blatantly unlawful reading of the statute to make subsidies and taxes a pplicable to individuals -- applicable to individuals on federal exchanges when congress explicitly provided the opposite. jonathan gruber famously said, obamacare was built on

exploiting the stew piedty of the american people -- stupidity of the american people. unfortunately, the supreme court is now complicit in that deception. the supreme court has joined president obama whose statement "if you like your health insurance plan, ub keep you can keep your health insurance plan" was rightfully noted as the lie of the year as millions lost their doctors. now that's rogue justices are complicit in that lie in setting aside their oath of office to lie to the american people. after today's ruling, obamacare will now being responsible for impose og illegal taxes on more than 11 million individuals and for burdening hundreds of thousands of businesses with illegal penalties on their workers, killing jobs, and further slowing economic growth. if you're a young person right

now, you come out of school, you got student loans up to your eyeballs you're struggling, you don't know if you're going to get a job the dismal obama economy means your future is bleak. you have no hope or optimism about actually beginning a career getting skills, moving towards the american dream. well today the united states supreme court has joined arm in arm with president obama and the i.r.s. in illegally imposing taxes on you. you, that young person starting your career, struggling to make your student loan payments, working as a part-time employee making coffee doesn't pay those payments and yet you're stuck with the individual mandate which is a tax -- so the supreme court told us. so the obama justice department argued right after president obama told the american people it wasn't a tax the obama justice department said, yes, it is a tax. the supreme court agreed, and you, the young person shall the

single mom trying to feed your kids are paying an illegal tax because of the lies emanating from washington, d.c. you, the teenager immigrant like my father was 58 years ago washing dishes, making 5 50 cents an hour, he couldn't speak english, but he was filled with hopes and dreams. he was filled with an aspiration for the american dream. ours is the greatest nation in the history of the world because people can start with nothing and as chief anything. that is the promise of america. and obamacare is strangling that promise. you, the teenage immigrant washing dishes or paying illegal taxes right now today, because of president obama's deception because of the i.r.s.'s lawlessness and because of the supreme court's judicial activism violating their oaths of office.

mr. president, i remain fully committed to repealing every single word of obamacare. and mark my words following the election in 2016, the referendum that we will have in 2017, this chamber will return and we will repeal every word of obamacare. we'll bring back economic growth. we'll bring back opportunity. and then we'll pass commonsense health care reform that makes health insurance personal and portable and affordable, that keeps government from getting between us and our doctors. we will recognize that this horrible experiment has failed. and when millions of americans lose their jobs, are forced into part-time work, lose their health care, lose their doctors when millions of americans see their premiums skyrocket it's

incumbent on members of this body it's incumbent on the federal government to fix the wreckage they caused, to fix the wreckage that the supreme court has now embraced lawlessly. we will repeal obamacare, and i will fight with every breath in my body to make sure that happens in 2017. mr. president, i yield the floor.

chief justice john roberts wrote the decision which the court heard in march.

this is the government's recitation of facts.

mr. hertz was a veteran for 10 months in 1970. he is not eligible for any veterans service because if you serve -- health services. there has been fact finding by the lower courts. >> i don't think it was ever brought up in the lower court. >> if i could make one further point. even if you were technically eligible, there's an i.r.s. rule 26 cfr which says yes with the usual clarity of the i.r.s. code making clear that you are

only eligible if you have enrolled. it's undisputed that he has not. >> then there are the two women. i think one of them was going to turn 65 in june which would make her -- >> she would turn 65 in late june subject to the individual mandate well in advance of that by virtue of the i.r.s. rule. she would have to spend 1800 per year for health insurance by virtue of the i.r.s. -- >> but you said she would turn 65 in june. >> late june. >> so that takes care of 2015. >> no. right now she is obliged under the individual mandate to have insurance. you have to have insurance for nine months of the year. so as of april 1 she will be subject to the penalty which will be alleave yate -- >> i will ask the government if they agree with you on that.

i think for the fourds plaintiff there is a question whether she would qualify for a hardship exemption from the individual mandate even if she received a tax credit in which case a tax credit would be irrelevant. it's black letter law that exemption only one plaintiff needs standing. both plaintiffs have -- >> i don't want to detain you on this any more but i will ask the government what their position is on standing. >> returning to the merits. the only provision in the act which either authorizes or limits subsidies says in plain english that the subsidies are

only available through an exchange established under section 1311. >> if you're going to elaborate on that i would appreciate your your elab ration i read that . and this statute is like the tax code. more than it's like the constitution. there are defined terms and the words you just used concern a defined term. now, as i read the definition. it says the term exchange means an exchange established under 1311 and 1311 says an exchange shall be a government agency et cetera. that is established by a state. then you look to 13 21 sand 13

21 says if a state does not set up that exchange then the federal secretary shall establish and operate such exchange. so it says the secretary is to establish and operate such ex change. the only kind of exchange to which the act refers. which is an exchange established by a state under 1311. that's definition. so the statute tells the secretary set up such exchange. namely a 1311 state exchange. there is nothing else in this statute. so that's throughout what they're talking about. so what's the problem? >> as your honor just said it tells the secretary to establish such exchange. and what 36 b turns on is

whether the state or the secretary established established by a state under 1311. it. >> uses the same terminology but it is you used 15 times. namely the terminology in the definition is an exchange established bay state. that's the phrase. >> under 1311 that is the phrase. and if 1311 -- definitional section created some ambiguity whether h.h.s. was establishing 1311 or 13 21 exchange that is immaterial because it does not say all get subsidies it says exchange is established by the state not established by h.h.s. under 1311. so it eliminates any potential ambiguity. >> can i offer you a sort of simple daily life kind of example which i think is lingwissically equivalent to

what the sections here say that justice breyer was talking about. so i have three clerks. so my first clerk i say will i would like you to write me a memo. and i say elizabeth i want you to edit will's memo once he is done. then i say amanda listen if will is too busy to write the memo i want you to write such memo. now my question is if will is too busy to write the memo and amanda has to write such memo should elizabeth edit the memo? >> if you are going to create moneys to will for writing the memo and amanda writes the memo and you say the money will go if will writes the memo then under plain english and common sense no. >> gosh you run a different shop than i do.

because in my chambers elizabeth would not be performing her function. in other words, there's a substitute and i've set up a substitute and then i've given instructions -- elizabeth you edit will's memo but of course if amanda writes the memo the instructions carry over. elizabeth knows what she is supposed to do. she is supposed to edit amanda's memo too. >> and in your chamber you're agnostic. but the key point here is under section 1311 congress was not agnossive whether states or h.h.s. -- >> if i had the same clerks and amanda wrote the memo and i received it and said this is a great memo who wrote it? would the answer be it was

written by will because amanda stepped into will's shoes? >> that was my first answer. >> you could accept -- the second answer which is you were agnossive between will and amanda but congress is not agnostic. >> that's a very important point i think because what you're saying is that the answer to the question really does depend on context. and it depends on an understanding of the law as a whole and whether they were agnostic. i agree with that. so it's not the simple four or five words because the four or five words in my example it's obvious that elizabeth should edit the memo. it's the whole structure and context of the provision that suggests whether those instructions carry over to the substitute. isn't it? >> we implore you to examine these words in the context of the act as a whole because our argument becomes stronger for five reasons.

to respond to justice breyer's point he says such exchange connotes that it's the same person doing it. but look at the provision on tertorle exchanges. it says territories can establish such exchanges and then it says and shall be treated as a states. >> no it's not a question of cannottation. it is a question of denoteation. now, what does that mean? it moorns that the federal government the secretary is establishing a thing for the state and what is the thing? the thing that it is establishing for the state is defined as. an exchange established by the state. now, that a person from mars who sliltral which i usually am not. but a literalist who i think would have to read it that way. but if you're not a literalist,

well, at least you could read it that way. now, you want to go into the context. if you want to go into the context at that potent it seems your argument is weaker. >> the exchanges fall apart. nobody can buy anything on them. you know the arguments you know the briefs. there are no customers. employers don't have to pay penalties as long as they use just people from virginia. you know all those arguments. so how does the context support you? >> again under the literalist or nonliteralist saying that h.h.s. will establish such exchange doesn't mean the state. if there was ambiguity in that regard, if i could finish my answer, you look at a pra level decision and they said and shall be treated as a state. >> language which is notably omitted. >> and it's a basic principle that you interpret the same

phrase as the same way and it shows that congress knew how to create equivalence if and when it wanted to. >> take a breath. i'm a little concerned with how you envision this provision working. you're saying that the h.h.s. exchange can't be for the state so that it is established by the choice of the state. the choice the state had was established your own exchange or let the federal government establish it for you. that was the choice. if we read it the way you're saying then we are going to read the statute as intruding on the federal-state relationship. because then the states are

going to be coerced into establishing their own exchanges. and you say no they can't be coerced. but let's go back to the states are what justice breyer was talking about. in those states that don't -- citizens don't receive subsidies, we're going to have the death spiral that this system was created to avoid. states are obligated insurers are obligated to make sure that in their states whether they're part of this program or not that they have guaranteed coverage, that children are covered until they are 26, and that they base their costs on community ratings. so if they have to do that, then costs are going to rise on every insurance every insurance plab offered in the country in those 34 states.

three -- or six or nine of your states will have to tighten their medicaid eligibility requirements in contra vention of the act so they're taking money by breaking their compacts. they would have to lose all of their medicaid money. tell me how that is not coercive in an unconstitutional way. and if it is coercive in an unconstitutional way in -- i was it was rast term, we said that is a primary statutory command if we read a statute in a way where we don't imping on the basic federal-state relationship. >> this court has never suggested outside a very

unusual coercion context that a funding condition somehow invades a state police power. obviously -- >> we said it last year. >> and if -- no in bond. there the federal government was taking away a police power. here the federal government is doing the same. you want free federal dollars that's hardly invading state sovereignty and the kind of routine has -- countless times. >> let me say that from the standpoint of the dynamics of federalism it does seem to me that there is something very powerful to the point that if your argument is accepted the states are being told either create your own exchange or we'll send your insurance market into a death spiral. we'll have people pay mandated taxes which will not get any credit on the subcity, cost of insurance will be sky high. but this is not coercion. it seems to me that under your

argument -- perhaps you will prevail on the plain words of the statute there's a serious constitutional problem if we adopt your arguments. >> one is the government has never made that argument. number two -- >> sometimes we think of things the government doesn't. >> well, i certainly hope you do in this case but not on this question. >> what i'm trying to quite seriously justice yind convey, is if this wasen constitutional then the medicaid statute that this court approved would be unconstitutional. what will the consequence be very often you have an ambiguous provision could be interpreted one way or another way. if interpreting it one way is unconstitutional you interpret it the other way. >> correct. >> but do we have any case which says that when there is a clear provision if it is unconstitutional we can rewrite it? >> and that is --

>> is there any case we have that has that? >> no, your honor. that was really my point. think about the consequences of the medicaid deal as being coercive. 22 states have said no. that has create add bizarre anomaly in the law that people making less than the poverpbt line are not available to any funds -- >> i fully understand that. but i think the court and the counsel for both sides should confront the proposition that your argument raises a serious constitutional question. i'm not sure that the government would agree with that. but it is in the background of how we interpret this statute. may well be that you're correct as to these words and there's nothing we can do. i understand that. >> a there's no savings construction to etcho justice scalia's point. but if this is unconstitutional then all the provisions in the

code that say if you do something for no child left behind -- >> i'm not sure in south carolina versus dole where the matter of funding for the highway -- suppose congress said if you don't build the highway you have to go 35 miles an hour all over the state. we wouldn't allow that. no. there of course you would be interfering with a basic state prerogative as to establish their limits and the condition is not related to that. here the condition is perfectly related. >> if you want to create something -- >> you will refer to the medicaid example. that's -- the federal government says to the state here's the conditions take it or leave it. but this pattern that we have says you can have your program if you want it. and if you don't there's a fallback. there's the government program.

that's a typical pattern. it's the pattern of the premier act. you'll have a state implementation plan but if you don't there's a federal implementation plan. never seen anything like this where it's if you take what the statute says you can have in 13 21 then you get these disastrous consequences. >> that's why this is much less riskier deal for congress and what distinguishes it from medicaid as the dissenting opinion pointed out. in medicaid congress is playing all in the take it or leaf it. if they turn down the deal medicaid is completely thwarted. here if they turn down the subsidy they still get the valuable benefits of the exchange. >> what are those benefits? what the customers can buy on it? what are the inshures that will sell on it? >> we know they thought

exchanges without subsidies work because again they have territorial exchanges but the government concedes -- >> that's not what you said previously when you were here last time in this never ending saga. you said the -- without the subsidies driving demand within the exchanges insurance companies would have absolutely no reason to offer their products through exchanges. and then you said the insurance exchanges cannot operate as intend i hadded by congress absent the subsidies. rar that is entirely true. congress intended all 50 states to take this deal. >> so why create 1326 at all? obviously they thought that some states wouldn't. >> they thought it was possible. >> very possible because they set up a mechanism for that to happen. >> and then what happened. you still get the exchange. it's not like medicaid where the entire federal program is

thwarted. >> but nobody -- >> no one's going to visit the program if there are no subsidies because not enough people will buy the programs to stay in the exchanges. >> that is dems strabbably untrue and not reflected anywhere in the legislative history. the legislative history quite clearly contradicts that. many senators got up and said there are very valuable to the exchange one stop shopping amazon as president obama said the government came in the last case and told you these two things operate quite independently we don't need exchanges without subsidies. in contrast there's nona skin tilla of legislation that without subsidies there will be a death spiral. >> that is the whole purpose that drove this bill. because states have experimented with this and those that didn't have subsidies for other provisions of the act didn't survive.

you said it yourself in the prior case. >> no. the prior case was about the individual mandate. the government came in and said the individual mandate is necessary to effect death spirals. no one in the findings in congress or anywhere else suggest that had subsidies were available. where sbisbzis -- >> my problem is the reverse. you're talking about congress hiding borrowing the phrase of one of my colleagues a huge thing in a mouse trap. ok? because do you really believe that states fully understood that they were not going to get their citizens were not going to get subsidy fs they left the federal government? what senator said that during the hearing? >> the same amount of senators who said that subsidies were available on h.h.s. exchanges which is none. they didn't deal with it in the legislative history just as they didn't deal with medicaid

because the statute is quite clear. lest talk about context again. the context is the only provisions in the act establishing any limits along with subsidies is found in 36 bmp. so it's not a -- it's the place in the act that limits subsidies to purchases. >> i don't think that's quite right. it's a tax code provision that's an implementation provision. it tells you how you compute the individual amount. it's not in the body of the legislation where you would expect to find this. >> your honor, if that's -- >> and but then what was read to you, you have the idea that the subsidies were essential to have the same work. that's what you told us last time. >> what i told you is it wouldn't work as expected. that's because they thought this deal would work just like the medicaid deal where all 50 states would say yes so you

would have both. >> why in the world would they said that up if they didn't think anybody was going to take it? >> that was going to -- that was my response. that was made post op by ameekcuss. there's no ristry of that and refutures it. >> we've heard talk about this other case. did you you win that other case? maybe it makes sense that you have a different story today. >> i'm really glad your honor said that. and if i could return to the context. >> please. >> just very briefly. very much appreciate it. to respond. we've already talked about the context. section 1311 is a key part of this context. it says in the strongest possible terms we want states to run the exchanges. if you give subsidies there's no incentive for states to do it and you have undermined that

purpose whereas if you condition subsidies congress accomplishes both of its goals. widespread subsidies plus state run exchanges. again, there is language in the stat tulet which says exchanges. exchanges under the act. those phrases naturally encompass both h.h.s. exchanges and stat established exchanges and yet the solicitor general is coming here to tell you that a rational exling speeching person intending to convey subdisavailable use the phrase exchanges established by the state. >> why don't you take an extra ten minutes and maybe it will give you more of a chance to talk. >> ok. fine. >> well then i'll ask a question. >> well, if you're going to ruin my ten minutes.

>> no. i mean, let's go back to this question of where congress put this thing because putting aside constitutional issues, there's at least a presumption as and here and this goes back to what justice ginsburg was saying there's really nothing clear about this. i mean, this took a year and a half for anybody to even notice this language. and as justice ginsburg said it's put in not in the place that you would expect it to be put in, which is where it says to the states, here is the choice you have. it's not even put in where the statute defines who a qualified individual is or who is entitled to get the subsidies. rather, it comes in this technical formula that's directed to the department of the treasury saying how much the

amount of the subsidy should be. and that seems to be it both makes no sense from congress's point of view, and in terms of our own point of view, in terms of interpreting statutes, that's not the clarity with which we require the government to speak when it's upsetting federal-state relations like this. >> i must respectfully disagree for three reasons, justice kagan. in the first place, of course, you where else would you expect a tax credit except in the tax code? that's where this was. you wouldn't put it in 42 u.s.c., which has nothing to do with taxes. it's the only place where exchange is limitations placed. you have three audiences here, not just states. you have to tell taxpayers what they're entitled to. you have to tell insurance companies when these subsidies are available. and you have states. so you have to put it in 36b. so the argument, i guess, the government is making is what you should have done is put half of it in 36b and half it in 1321 which, of course, would have

confused everybody. 36b would say, exchanges period. then you'd go to 1321 and say when we said exchanges in 36b, we meant established by the state. >> mr. carvin, if i were a state official and i was trying to decide whether my state should establish an exchange, and i wanted to know whether individuals who enrolled in a plan on my possible state-established exchange would get a credit, where would i look? >> exactly. the basic thesis here is these exchanges don't work without subsidies. you've read 1311. you've read 1321. now you're going to go find out where the subsidies are. that's 36b. they're hypothesizing state -- >> i think not, mr. carvin. i mean, i think the place i would look to find out about my choices is in the provision of the statute that talks about my choices. i think the last place i would

look is a provision of the statute that talks about what is it, coverage months for purposes of this subsection, which, by the way, isn't even the right subsection, but whatever. [laughter] that's where i would look, is in where it talks about what a coverage month is? >> but, your honor, i've already described the difficulties of putting it part of it in 1321, right? because then you would create this bizarre tax credit provision which is only half true, and you wouldn't tell taxpayers and insurance companies. so i believe that's the complete answer. but the other practical point i'd like to make is they had three years to implement this. and no one thought the states were going to have to make a decision overnight. if the irs had done its job, every state would have been fully informed of the consequences because presumably they've read 36b, and then they would make an intelligent decision well in advance of the 2013 deadline. so there's a bizarre notion that states were somehow unable to

read a statute or to or to read a regulation is simply -- >> i really want to hear what you're going to say in your five to ten minutes. and if you want, only if you want, i would be interested in your responses to the government's brief, that if you read the words "established by the state" without reference to the technical definition as you wish, this isn't just about the taxes. it means employers in virginia don't have to make policy, don't have to don't have to give policies, but if they have one maryland worker they do. it means that they never can tighten up their medicaid regulations, never, in 34 states but, of course, in the others they can. it means that there's no qualified person ever to buy anything on an exchange established by the secretary for the state, and they have two or three other anomalies that have nothing to do with taxes, all of which supports their argument

that you have to read this phrase technically according to the definition. now, that's their basic point. i've tried to summarize it. do it as you wish. i just want you to have 5 or 10 minutes to answer it. >> thank you. and the first point is there are no anomalies. >> i'm going to clock that, see if see if you get 5 minutes. [laughter] >> there are no the first point -- >> the first point i'd like to make is there are no anomalies stemming from our interpretation of 36b. the government agrees with that. their biggest anomaly is this qualified individuals point about how there would be nobody on hhs exchanges. the solicitor general is not going to stand up here and tell you that if we prevail in our interpretation of 36b, they would be obliged by the logic of that opinion to empty out hhs exchanges. so we all agree that there's no connection between 36b and the qualified individual. that's point one. point two is, if you want anomalies, their interpretation of the statute requires 34 states today to lose all

medicaid coverage. why is that? because of the provisions on 64a through 66a of the government's brief, there are various requirements that the state, on pain of losing all of its medicaid funds, must coordinate between the state-established exchange, the state agency for chip, and the state agency for medicaid in terms of secure interface and enrollment. now that makes perfect sense if "exchange established by the state" means what it says, but they think it encompasses hhs exchanges. well, the state cannot ensure coordination between hhs exchanges and the state agencies, and none of the 34 are doing it today. so under their atextual reading of the statute, 34 states will suffer the penalty that this court found in nfib as unconstitutionally coercive. as to this medicaid maintenance anomaly, the government agrees that the purpose of this provision was to freeze medicaid payments until you had an exchange with subsidies, which makes sense, right?

you want to coordinate the two. and that's exactly what this provision means under our interpretation. until you have an exchange with subsidies, the states will be frozen. the government says, that thing ended on january 1, 2014. that's a figment of their imagination. it's nowhere in the statute. plus which it makes no sense. before 2014, the states were powerless to have an exchange with subsidies, right? they couldn't do it. so there was a 3-year freeze on medicaid that they were powerless to get out of. after 2014, if they don't want to have their medicaid frozen, all they have to do is establish an exchange. so it's a less harsh restriction on states, plus which it gives them another incentive in addition to the subsidies to create the state exchange, which is the purpose enunciated in 1311. i don't know oh, as to, yeah maybe somebody would from another if you had an employee that let lived in other state, maybe he would be subject to the employer mandate. why is that an anomaly?

congress likes the employer mandate. of course they wanted to expand it. they also never thought it would really happen because, again what they thought was going to happen was there wouldn't be neighboring states without it because nobody was going to turn down this extraordinarily generous deal. i don't know if my 5 minutes are up, but that's my response to these anomalies. >> as i understand it -- >> i think if i could -- >> wow. you've been talking a long time. [laughter] >> yes. yes. sorry. >> you have two more sentences. >> even if there were anomalies in these other sections, you don't transport them to 36b which is concededly neither absurd and furthers the purposes of the act, just like in utility air, because the word pollutants didn't work with one section, you don't spread it like a virus throughout the rest of the act. you cure it in that provision -- >> those were two long sentences -- >> if and when there's any litigation. >> i think i think -- >> oh, it was a long sentence. >> yes. i think i'm right that justice

breyer's question about anomalies, which are replete in the act, under your interpretation, did not talk about what i think is one of the most glaring ones, which is this -- disqualified individual thing, that you're essentially setting up a system in which these federal exchanges, that there will be no customers and in fact, there will be no products, because section 1311 says that the exchange shall make health plans available to qualified individuals, and then the next section says that qualified individual means an individual who resides in the state that established the exchange. so under your theory, if federal exchanges don't qualify as exchanges established by the state, that means federal exchanges have no customers. >> which, of course, is not the reading that the government's giving to it because they're not going to tell you -- >> well, that's because they don't share your theory. >> no, no. >> under your theory -- >> no. >> that's the result. >> well, no. let me be as clear as i can. if we prevail in this case, they are not going to empty out the

hhs exchanges because they understand that there are numerous defenses even if you interpret "established by the state" literally in the qualified individuals provision. number one defense that they will use is, it says you have to be a qualified individual with respect to an exchange. as justice breyer pointed out, the statutory definition of exchange is a 1311 exchange. so they're only talking about state exchanges, not these hhs exchanges, and it is in section 1312, which immediately follows 1311, before 1321. number two, "qualified individual" doesn't mean that you're guaranteed access. it doesn't mean if you're not qualified, you're absolutely denied access. we know that from the illegal alien provision, which says illegal aliens are neither qualified individuals nor eligible for subsidies. >> ah, but look at the look at the prisoner provision, which says prisoners shouldn't be treated as qualified individuals. so under your theory, this

statute effectively said that prisoners should be able to enroll on federal exchanges? that makes no sense. >> it makes perfect sense to say the states get a choice. think about somebody who's in prison in february, they're getting out in april, they've got to buy insurance under the individual mandate. so if you said nobody who's incarcerated can buy insurance that means they wouldn't be able to buy insurance during the relevant enrollment period. it makes perfect sense to give states the flexibility to say, as to those incarcerated principles, you can make them available for exchanges, but under illegal aliens we don't want to, which is why we are saying they are neither qualified nor eligible. even if you don't find that the most pristine logic to be applied to a statute, remember we are interpreting these statutes to avoid an absurd result. and it's a basic principle of statutory construction that you will give a plausible, if not the most persuasive, reading to a statute to avoid the result.

>> but we are interpreting a statute generally to make it make sense as a whole, right? we look at the whole text. we don't look at four words. we look at the whole text, the particular context, the more general context, try to make everything harmonious with everything else. i think you said, even at the very beginning of this argument as we were going back and forth about my hypothetical, that, of course, context matters and context might make all the difference with respect to what those five words mean. and i think what we're suggesting is that, if you look at the entire text, it's pretty clear that you oughtn't to treat those five words in the way you are. >> i've given you the contextual points before. i think the key one that i'd like to convey to you, justice kagan, is section 1311. you say the statute must work harmoniously. if you provide subsidies to hhs exchanges, you have essentially gutted section 1311's strong preference for state exchanges.

what will happen is precisely what did happen under the irs rule, 2/3 of the states are saying no, we're not going to undertake this thankless task of running these exchanges with no incentives to do so. what i have here in terms of what the statute means is 36b quite clearly saying exchanges are available only on states. i have 1311 explaining why they limited subsidies to that. and there is no contrary legislative history at all. what do they have, an atextual reading of 36b, which they can't explain why anybody would have used those words if they wanted to convey exchanges, a rule that completely undermines the purposes of 1311 and no supporting legislative history. so under all the legal materials that this court normally used to discern what statute means, we clearly prevail. >> thank you, counsel.

general verrilli, you'll have an extra 10 minutes as well. >> thank you, mr. chief justice, and may it please the court, standing has been raised, so let me start by telling you where we stand on standing and then i'd appreciate the opportunity after that to summarize what i think are the two key points in this case. now, with respect to standing, the question the case or controversy question turns on whether any of the four petitioners is liable for the tax penalty for 2014. now, this case was litigated in the district court in 2013 based on projections on the part of each of the four petitioners that they would earn a certain income in 2014. they filed declarations saying that. with respect to 2 of the 4, the projections were of their income were such that they would qualify for the unaffordability exception and they wouldn't have standing. with respect to the other two, their projections were such that they wouldn't qualify for the unaffordability exception and they would have standing. but those were projections in 2013 about their income in 2014. 2014 has now come and gone, and

petitioners know whether any of the 4 have, in fact are, in liable for the tax penalty and that will depend on whether their actual income in 2014 matched their projections. now, mr. carvin said there was fact-finding about this. i'm afraid that's not correct. the petitioners did file a motion for summary judgment, but the case was decided on the basis of the government's motion to dismiss before discovery and without any fact-finding. i'm assuming because mr. carvin has not said anything about the absence of a tax penalty, that at least, 1 of the 4 has and is, in fact, liable for a tax penalty, but that's the key standing question. now, with respect to the veterans point, your honor, if it is the case, as mr. carvin tells us, that mr. hurst was a veteran for only 10 months, then i think he's correct, he would not qualify for va health care because you generally have to serve two years. so that's where we are on standing. now, if i could turn to the merits. >> so are you saying one person does have standing?

>> no, no. it will depend on whether as a factual matter 1 of the 4 has and is, in fact, liable for the tax penalty for 2014. and that's information that is not in the government's possession. it is in the possession of petitioners' counsel. i should make one more point with respect to 2015, there were no projections, there's nothing in the record about the possible income of any of the petitioners for 2015, so there's really nothing that would establish a case of controversy for 2014. >> well, you're surely not raising a standing question with us here for the first time at oral argument, are you? >> well, mr. chief justice, as i said, that based on the projections, it was our understanding that at least 1 of the 4 would be liable for a tax penalty. the question of standing has been raised and i've tried to identify for the court what i think is the relevant question which is whether any one of the 4 has, in fact is, in fact liable for a tax penalty because -- >> this is this is on a motion

to dismiss, right? >> well, that's correct, your honor, but it does also go to this court's jurisdiction. because if none of the four is liable for a tax penalty for 2014, there just isn't the case for controversy. none of them is liable, there's no injury. and so i do think that's ultimately the relevant question here and with respect to standing. i don't think there's a question about veteran status, but i do think that's the relevant question. >> isn't the question before us as to standing whether the district court correctly held in the motion to dismiss context that there was standing? that may not be the end of the matter, but don't we have to isn't that what's before us? >> well, that may be yes. you might alternatively think about this as a question of mootness, i guess, in that, you know, based on the projection, there was a case or controversy, but if the projection didn't come to pass and none of the plaintiffs is liable for a tax penalty, then the case or controversy no longer exists. >> well, what are you suggesting? should we have a should we have a trial here? >> no, i'm not suggesting anything of the kind.

>> on this issue and find -- what the facts are? >> justice alito, i did not raise standing affirmatively the court raised it. and i'm just doing my best to let the court know what our position is on standing. >> well, you would you send it back then to the district court? >> well, i guess no. i guess what i've said is that mr. carvin hasn't suggested that there's no plaintiff liable for a tax penalty. based on that, i'm inferring that at least one of the petitioners -- >> why would we not accept a representation by him? >> and i'm not -- >> why wouldn't we accept a there's no reason not to if he if he makes a representation that at least one of the four is has was liable in 2014 and is liable in 2000 or will be liable in 2015 -- >> so i guess what i'm saying -- >> i mean, we know at least one of them won't because that's -- >> what i'm saying about that is i'm actually going to step further than that, justice sotomayor, given that there hasn't been i'm willing to accept the absence of a

representation as an indication that there is a case or controversy here, and so that's why, mr. chief justice, we haven't raised standing and -- but i do think that the key question is whether one of the four is liable for a tax penalty. you have to have that to have a case or controversy in the case. if i could now, let me please turn to the merits that summarize what i think are the two key points. first, our reading follows directly from the text of the act's applicable provisions and it's really the only way to make sense of section 36b and the rest of the act. textually, their reading produces an incoherent statute that doesn't work. and second, our reading is compelled by the act's structure and design. their reading forces hhs to establish lump exchanges that are doomed to fail. it makes a mockery of the statute's express status express textual promise of state flexibility. it precipitates the insurance market death spirals that the statutory findings specifically say the statute was designed to avoid, and of course it revokes the promise of affordable care for millions of americans. that cannot be the statute that congress intended.

>> of course it could be. i mean it may not be the statute they intended. the question is whether it's the statute that they wrote. i mean, you know, there are no provisions in the statute that turn out to be ill considered and ill conceived. >> so it's not the statute that they wrote, and the reason it's not the statute that they wrote, i think i want to actually start, if i could, picking up i think on a variation of the hypothetical that justice kagan asked. in petitioners' brief they throw down the gauntlet with respect to a hypothetical about airports, and that a statute requires a state to construct an airport, it says the federal government shall construct such airport if the state doesn't, and no one would think that the federal government's airport was an airport constructed by the state. well, what i would say to that is that if those statutory provisions were conjoined with a provision that said airplanes may only land at airports constructed by the state, then you would conclude immediately that what that federally constructed airport qualifies as

an airport constructed by the state, and the because otherwise the statute would make no sense. and the same exact thing is true here. >> there are no statutes that make no sense. >> this one makes sense. >> if that is the case, every statute must make sense and we will we will twist the words as necessary to make it make that -- that can't be the rule. >> that isn't the rule. but the rule -- >> of course not. >> is that you read -- that you don't read statutory provisions in isolation. you read them in context. the rule is that you read them in order to ensure that the statute operates as a harmonious whole. you read them so that you don't render the statutory provisions ineffective. you read them to promote -- >> where is that possible. >> you read -- >> i mean, you acknowledge that all of what you're saying only applies where there are alternative readings that are reasonable. you pick the one that will do all the things that you say. >> and there is there is -- >> but, but if it can only reasonably mean one thing, it will continue to mean that one thing even if it has untoward consequences for the rest of the statute.

no? >> with respect to this statute, first, let me i want to make two points. first -- >> answer me in principle. i mean, is it not the case that if the only reasonable interpretation of a particular provision produces disastrous consequences in the rest of the statute, it nonetheless means what it says. is that true or not? >> i think there are a couple of limitations on that principle. the first is if what you have is a situation in which the that equates conflict within a statutory scheme, then the court's got to do its best to try to harmonize and reconcile the provisions. >> well, i disagree with that. you have a single case in which we have said the provision is not ambiguous, it means this thing, but, lord, that would make a terrible statute, so we will interpret it to mean something else. do you have one case where we've ever said that? >> i think i think brown & williamson is a good example of that. in brown & williamson, the court

said, look, the definition of drug and drug delivery device would actually seem unambiguously to cover tobacco but when you read that provision in context, and considering the full scope of the regulatory regime, it can't possibly mean that. but let me let me actually work through the text here, because i do think i can show you that there's a quite reasonable reading of this statutory text that allows you to affirm and requires you to affirm the government's position. >> but, general verrilli, before we get too immersed in a number of provisions of this, could you respond to a question that was asked during mr. carvin's argument? if we adopt petitioners' interpretation of this act, is it unconstitutionally coercive? >> so the here's what i would say about that, justice alito. i think that it would be certainly be a novel constitutional question, and i think that i'm not prepared to say to the court today that it is unconstitutional. it would be my duty to defend the statute and on the authority of new york v. united states, i

think we would do so. but i don't think there's any doubt that it's a novel question, and if the court believes it's a serious question -- >> is it a i was going to say -- >> does novel mean difficult? [laughter] because it does seem to me that if petitioners' argument is correct, this is just not a rational choice for the states to make and that they're being coerced. >> so what i -- >> and that you then have to invoke the standard of constitutional avoidance. >> well, what i was going to say, justice kennedy, is to the extent the court believes that this is a serious constitutional question and this does rise to the level of something approaching coercion, then i do think the doctrine of constitutional avoidance becomes another very powerful reason to read the statutory text our way. i do think with respect to the point that your honor's making remember, it's not just it's not just a situation in which there is onerous conditions, onerous consequences for state

residents. it's also a profound problem of notice here, that, you know, if you read petitioners' if you take petitioners' reading of the statute, then the idea that states were given added -- you can't possibly justify this as adequate notice to the states. >> well, mr. general verrilli, let me ask you this about notice. we get lots and lots of amicus briefs from states. and we got two amicus briefs from states here. 34 states, i think, is -- that's the number of states that declined to or failed to establish a state exchange? >> correct. >> now, if they were all caught off guard and they were upset about this, you would expect them to file an amicus brief telling us that. but actually, of the 34, only 6 of them signed the brief that was submitted by a number of states making that argument. 23 states, 23 jurisdictions submitted that brief. 17 of them are states that

established state exchanges. only 6 of the states that didn't establish state exchanges signed that brief, how do you account for that? >> so, i guess i'd make two points about that, justice alito. first, you've got states there, states in both camps, all of whom told you that they didn't understand the statute that way. now, with respect to the other 8 states that filed the amicus brief on the other side, i actually think there's quite an important point that goes to their understanding of what this act did. remember, this is an irs rule that we're talking about here, and the irs put out a notice of proposed rulemaking saying this is what we intend to do, and several of these states oklahoma, indiana, nebraska they filed rulemaking comments in that in that proceeding. and if you look at those rulemaking comments you will see that they address a number of issues, and they say nothing nothing about the issue that's before the court now. so if they really understood the statute as denying subsidies in states that did not set up their own exchanges, that would have front and center in their rulemaking comments, but they

said nothing about it and i think that tells you a good deal about where -- what everybody understood that this statute was -- >> well, there's another point on notice. on this pennhurst argument that seems curious to me. usually when this argument comes up, a state has signed up for a federal program and then they say, oh, my gosh, we didn't realize what we had gotten ourselves into. but here, it's not too late for a state to establish an exchange if we were to adopt petitioners' interpretation of the statute. so going forward, there would be no harm. >> well, let me address that directly, and then i'd like to make a broader point about statutory context in response. now directly, of course, i don't i don't think it's possible to say there would be no harm. the tax credits will be cut off immediately and you will have very significant, very adverse effects immediately for millions of people in many states in their insurance markets -- >> well, i said i've said going forward.

>> and then -- >> after the current tax year. >> and then going -- >> would it not be possible if we were to adopt petitioners' interpretation of the statute to stay the mandate until the end of this tax year as we have done in other cases where we have adopted an interpretation of the constitutional or a statute that would have very disruptive consequences such as the northern pipeline case. >> sure. northern pipeline is an example of doing that, and it will be up to the court to decide whether it has the authority to do that. i will say, this does seem different than northern pipeline to me, because this is about money going out of the federal treasury, which is a different scenario. but if the court obviously, if that's where the court is going and that's what the court thinks the proper disposition is, that would reduce the disruption. but what i think is another important point to make here just as a practical matter, the idea that a number of states all of these states or a significant number are going to be able to in the 6 months between when a decision in the this case would come out and when the new the new year for insurance purposes will begin

we'll be able to set up exchanges, get them up, up and running and get all the approvals done i think is completely unrealistic. >> how long has it taken -- >> well, for just to give you an example of the current time line, justice ginsburg, the in order to be in order to have an exchange approved and insurance policies on the exchange ready for the 2016 year, those approvals have to occur by may of 2015. ok. so that gives you a sense of the of the time line that hhs is operating under. >> what about what about congress? you really think congress is just going to sit there while all of these disastrous consequences ensue. i mean, how often have we come out with a decision such as the you know, the bankruptcy court decision? congress adjusts, enacts a that takes care of the problem. it happens all the time. why is that not going to happen here? >> well, this congress, your honor, i -- [laughter] you know, i mean, of course, theoretically of course, theoretically they could.

>> i don't care what congress you're talking about. if the consequences are as disastrous as you say, so many million people without insurance and whatnot, yes, i think this congress would act. >> and but the relevant question and then i'm going to try to get back to the point i was trying to make in response to justice alito's question. the relevant question here is, what did the congress that enacted this statute in 2010 do? did they really set up a system in which the states are subject to the kind of onerous situation that the petitioner claims? and i think there are three textual indications objective, textual indications that cannot possibly have been the statutory scheme that congress tried to set up. first is the existence of the federal exchanges. it would make no sense, no sense for congress to have provided for federal exchanges if, as mr. carvin suggests, the statutory design was supposed to result in every state establishing its exchange. second -- >> well, wouldn't it have been again, talking about federalism a mechanism for states to show that they had concerns about the

wisdom and the workability of the act in the form that it was passed? >> so, justice kennedy, i think the federalism values are promoted by our interpretation because if that is, indeed, what a state thought, if a state really would have preferred that not to have the state government participate in the implementation of this act, for reasons that your honor identified, the structure of the act that congress put in place and that we're advocating for today fully vindicates that concern. they can decide not to participate without having any adverse consequences visited upon the citizens of the state. and that's why our reading is the pro-federalism reading. it's their reading that seems to me that is the anti-federalism reading, and that's a powerful reason to reject it. and if i could go to the second statutory point, which is related to what we're talking about, justice kennedy, which is section 1321, says that this

statute is designed to afford state flexibility. state flexibility. it would be an orwellian sense of the word "flexibility" to use it in the manner that petitioners say the statute uses it, because it's the polar opposite of flexibility. and the third point, seems to me, is the notice point, that if, indeed, the plan was, as mr. carvin said, that every state was going to establish an exchange for itself and that would cure all of the massive statutory anomalies and textual anomalies and absurdities and impossibilities that his reading provides for, if that was really the plan, then the consequence for the states would be in neon lights in this statute. you would want to make absolutely sure that every state got the message. but instead what you have is a subclause in section 36b, which is a provision that addresses the eligibility of individual taxpayers for taxing purposes. >> this is not the most

elegantly drafted statute. it was pushed through on expedited procedures and did not have the kind of consideration by a conference committee, for example that statutes usually do. what would be so surprising here if among its other imperfections there is the imperfection that with the states have to do is not obvious? it does not strike me as inconceivable. >> i will answer that question by talking with the legislative process. i think it is quite relevant even to you, the respective question that you asked. the language here in 36b was not the product of some last-minute deal, not the product of scrambling at the end. the language that emerged here about tax credits, a language

about 3611, was the product of the senate committee markup, a public hearing covered by c-span. you can watch it in the c-span archives. you can see coming out of that that the understanding was with the statutory set up was with subsidies being available in every state. >> there were senators that were opposed having the federal government run the whole thing because they thought that would be to a single-payer system . the explanation for this provision is it prevents the federalization of the entire thing? it certainly a plausible explanation. >> mr. carvin has floated that as a nation and he is suggested that it was senator ben nelson that required it. there is absolutely no evidence whatsoever that anybody thought

that way. that the solution to the problem your honor identified is what congress did by having the states have the option to set up their exchanges and state-by-state federal fallbacks rather than a national system. senator nelson has stated he had no intention of that kind. there is no evidence that anyone did. what mr. carbon has suggested is that this was a product of some deal to try to get votes so the act could get past. get past. what i suggest your honor is that there is objective proof that is not true. the provisions in the act that were negotiated at the into secure the necessary votes on title x of the act. if you look in the act, pages 833-924, you can see all the amendments. >> if congress did not want the phrase "established by the

state" to mean what that would normally be taken to mean, why did they use that language? why did they not use other formulations that appear in the act? why did not say -- why did they not say "established under the act?" why do not include a provision that would say an exchange established by hhs is a state exchange when they have a provision in there that does exactly that for the district of columbia and for the territories. it says they are deemed to be states for these purposes. why would they do that? >> the provision says "established by the state under section 1311," our position textually is, and we believe this is a better reading of the text, that by cross-referencing section 1311, effectively what

congress is doing is saying that exchanges established through whatever mechanism, exchanges set up by states themselves -- >> cross-referencing 1311 and 1321. that seems to me to go in the wrong direction. >> i think it goes in the right direction if you ride with me for a little bit. >> your answer does not explain why by the state is in their. in there. why didn't they say "established by 1311?" >> wherever this provision appears in the act, it is doing work. the work it is doing is saying what we are talking about is this specific exchange established in the specific state as opposed to the general rules for exchanges. if you look at the medicaid means it works the same way. >> why would they not say "in

the state?" >> i suppose they could have but it works perfectly well this way. it is really how they're are using it with respect to the qualified individual provision. with respect to the provision, it's is a qualified individual is a person who is located or resides in the state that established the exchange. clearly what they are talking about is a geographical reference to a particular state. that is what is going on there and every time the statute uses that phrase. it is doing that work and that is why it is in their here it if re. if i could go back to your point, justice kennedy, it says establish by state under section 1311. section 1311b.1, it is not as mr. carvin says, each state shall establish. we know when congress used that language it was some inclusive

than state governments shall set up exchange. we know that because congress'backdrop was the 10th amendment. we know that because of section 1321. section 1321 provides the means by which the 1311 b-one requirement is it satisfied. it will be satisfied by a state electing to meet the federal requirements for exchanges. or could be satisfied in the event that a state does not, or tries but comes up short, with hhs stepping in and establishing the exchange. >> it really means the federal government shall establish in if the state does not establish? if that were the correct interpretation do not need 1321 at all. >> i think the right way to think about this, justice alito, is that what is going on -- the right to focus is not on the who but on the what.

on the thing that gets set up and whether it qualifies as an exchange established the state. and these exchanges do qualify and the reason they qualify is because they fulfill the requirements of section 1311b1 that each state shall establish an exchange. 1321 tell you that. it says to hhs that when a state has not elected to be the meet the federal requirements hhs steps in. , what hhs does the sets of the required exchange and such exchange, referring to the required exchange, but the only change required in the act is a change under 1311 b1. it has to be that what hhs is doing under the plain text of the statute is for filling -- fulfilling the requirement of 1311 b1. that is why we say it qualifies an extension established by the state. it's by the definition which says the extent established

under 1311, which says each state shall establish an exchange and it has to be that way. petitioners have conceded on page 22 of their brief, that an exchange that hhs sets up is supposed to be the same exchange and the petitioner say functioning just like an exchange that the state sets up for itself. >> you are putting a lot of weight on the word "such." it seems to me the most unrealistic interpretation of "such" that the federal government shall establish a state exchange. it seems to me "such" means in exchange for the state rather than in a change of the state. at the federal government establish a state exchange? that is gobbledygook. it must be something different there.

>> if the language of 36 b were exactly the same as it is now, and this statute said in 1321 that an exchange set up by hhs shall qualify as an exchange established by the state, you would not change the language one iota and there were not be any doubt in anyone's mind that subsidies were available on federal exchanges here it we are exchanges. we are saying that effectively reading of 1311 and 1312 together, that is what the statute does. it is a reasonable reading of the statute. it is the only reading of the statute that allows you to be faithful to the text of 1311 b1, the word "shall", -- >> the exchange that the exchange was posted set up, what it means the state exchange.

an exchange satisfied by the state because it satisfies the requirement of 36 b one. your case hinders on the fact that a federal exchange is a state exchange. >> it hinges on it qualified as the state exchange or being a quote into a steady oracle into the operational statute. a reasonable reason -- >> once you have concluded it's a provisional reading you have to read it the way we say it is to be read because it is the only way to make sense of the statute as a whole. the only way to bring to harmony with the qualified individual and qualified health plans to lead what they do admit is an absurdity. >> would you agree that there are provisions of the act where the exact same phrase established by the state has to be read to mean established by

the state and not by hhs? >> i think they are wrong about each one. >> i would be interested in your answer. 82 usc section nine 3h1d, each state shall status procedures to make sure a exchange established by the state utilizes secure electronic interface. if exchange established by the state there is redeeming and hhs ready to mean and hhs exchange that means that the state in , which that exchange has established is responsible for making sure that the federal exchange as a secure electronic interface. >> that is completely wrong. the statute says -- the statutory obligation is addressed to the state medicaid agencies. it says they shall establish

procedures to ensure the coordination hhs has issued . hhs has issued regulations setting forth with that statutory provision requires the states and the circumstances. every state where there is a federally facilitated exchange has fulfilled the requirements and it works perfectly fine. there is no anomaly there at all. >> it for the regulations attract the statute? >> they gave the state authority to say whether or not these conditions have been met. >> the requirements are imposed on the state medicaid and their relationship. that is what the statute does. it does say and that proves our point, that each state shall -- it does not safe states that instead of the stages for themselves shall. the statute says each state shall. it presupposes that there is going to be something that qualifies as a change established by the state in every state.

if your honor was to ask about ended the others you can. there are no anomalies. >> as i understand your answer to be that there are federal regulations telling the states with a have to do here. they have all done it. the factor base of the state is some obligation under the regulations to make sure that there is a proper interface for the federal exchange. >> on the stateside. yes. those are state government agencies and it is their side of the interface of the statute governs. if there are anomalies they pale in comparison to the anomalies on the other side. i want to focus on this point about the qualified health plan and individual. the statute is quite clear in section 1311 that in exchange, not an exchange established by the state, but in exchange can only sell a qualified health plan. it is forbidden from have selling a health plan that is

not a qualified health plan. it is an exchange. the statute also said that two to certify a health plan is qualified the exchange has to decide that it is the interest to qualified individuals. qualified individuals are persons to reside in the state that establishes these exchange. if you read the statute the way mr. carvin reads it, you come to the conclusion that the state with a steadily facilitated exchange there are no qualified individuals here it therefore the exchange cannot -- there are not any. there are not any qualified health plans that can lawfully be sold on the exchange. >> what is the provision that says only a qualified individual can enroll in a plan under an exchange? >> i will address that but i want to make sure the provision i'm talking about respect to the prohibition on selling qualified health plans to anybody is on

anything other than a qualified exchange is 1311 d2b. it is absolutely unambiguous. an exchange may not make available any health plan that is not qualified health plan. >> what is the provision you are referring to when you say that an exchange may enroll only a qualified individual? >> what it says throughout is that qualified individuals are eligible to purchase on exchanges. it is the necessary meaning of that phrase that if you're not a qualified individual then you are not eligible to purchase health care on an exchange because otherwise the word qualified would not have any meeting. meaning. the meaning of the word qualified is a distinction between people who are eligible and in eligible.

think of the people who are not qualified individuals. they are people in prison and undocumented aliens. >> the person on an exchange must reside in the state that establishes the exchange. >> there are no such people in 34 states under mr. carvin's interpretation of the statute. >> you argue that it is a logical inference from a number of provisions that only a qualified individual may purchase a policy to there is no provision you can point to that says that directly. >> that is what qualified means. if you're not qualified you were unqualified. that is what it means. he just take the word qualified out of the statute if the reader that would. >> it is not a technical term here? >> given the way it is to find it is a person who resides in the state.

it does that because the statute was quite clear you would not be allowed to shop across state lines because that would infringe on traditional state prerogatives regarding insurance. with respect to prisoners, it is does not make any sense for -- that prisoners should be allowed to get insurance. there is a specific statutory provision that says when you have a life circumstance like getting out of prison you can sign up at that point. he makes the point about unlawfully present persons being "unqualified and not being able to be covered." that is not surplus. that is there for an important reason which is someone can be a lawful status and therefore be eligible for health care but then lose lawful status. at that point they can no longer be covered. none of that works for them. to get to the fundamental point at the level of text you have clear irresolvable conflicts.

the statute cannot work if you read it mr. carvin's way. you have ambiguity there precisely because you have -- this statute will operate one way or another. the question is how it will operate. when you read it their way -- >> if you think it's ambiguous we think about chevron. it seems to be a drastic step for us to say that the department of internal revenue and its director can make this call one way or another when there are millions of dollars of subsidies per year? >> there are billions of dollars a year. >> i think it's a to say that at -- i think it is safe to say that if the internal revenue

service is going to allow deductions it has to be very clear. it seems to me a little odd that the director of internal revenue did not identify this problem if it is ambiguous and advise congress at once. >> with respect to chevron deference, we do think chevron deference clearly supports the government. before we get to that, you can resolve and should resolve this statute is statute winning in our favor even without resorting to chevron difference. it's what the very important principles of federalism that we've been describing here direct you to do. if you think there is a constitutional problem of the statute, it is what the doctrine of constitutional avoidance does. with regards to chevron, section 36bg expressly delegates to the irs the authority to make any decisions necessary to implement

section 36 be. b. congress said the irs should do this. it is a big question, and as the court said two terms ago chevron applies to big questions as well a small. your honor raise the point about the need for clarity and a tax reduction. there is a treatise that describes it as a false notion. it is certainly not consistent with this court's unanimous decision to terms ago that chevron applies to the tax code like it in the house. >> if you are right about chevron, that would indicate a subsequent investors and could change that interpretation. >> a subsequent administration would need a strong case under step two of the chevron analysis in view of disruptive consequences. i think you can and should resolve this case because the statute really has to be read when taken as a whole to adopt

the government's position. >> if there any tax attorneys in the courtroom today i would think they would probably write down what you said today. there should be no presumption that the tax credit is provided by the statute. >> you should read it according to its terms, and when you read it according to the terms and read it in context and read it against the background principles of federalism, you have to affirm the government's interpretation. thank you. >> four minutes mr. carvin. , >> thank you mr. chief justice. mr. hearst would be subject for a penalty for 2014. both he and mrs. leedy would face the same principle for 2015 if the government is suggesting their cases become moot because of circumstances under cardinal chemical. it is their burden to raise it not ours to supplement the

record. in terms of all the states losing, 34 states losing their medicaid fund, the solicitor general greatly distorted the statute is printed in 64a of their exhibit. if says a state shall establish procedures for the notion hhs establishes them is contrary to that. they can't enroll anyone on their exchanges if there are no such exchanges in the state. by the plain language, if you adopt the notion that the change established by the state needs established by hhs, all of them need to lose their medicaid funding. >> could i add to something the general ended with? the need to read subsidies in a a limited way.

so is the need to ensure that exemptions, tax liabilities are read in a limited way. under your reading we are giving , more exemptions to employers not to provide more insurance. more exemptions to states and others. how does that work? you have two competing -- >> you get more exemptions for employers under our reading but it is unambiguous. they can and requires unambiguous statutes not to it afford the tax credit. under their view of the statute the federal government gets to unilaterally impose on the states, there is an amicus from indiana, a requirement that

states ensure their own individuals. under their theory, the states are absolutely helpless to stop the federal intervention into the most basic personnel practices. under our theory come a they are able to say no. the more intrusive view of the statute is theirs. in terms of the funding edition head-on on, i think my short answer is as follows. there is no way to view the statute is more course of our harmful than the reversion of medicaid approved by this court and the dissenting opinion when he did this provision as something that was unacceptable, noncoercive alternative. as justice scalia pointed out, there is no alternative reading of the statute that avoids that because either way you are intruding on state sovereignty. in terms of qualified

individuals as predicted, the solicitor general did not come here and tell you that if we prevail under this theory they will have to empty out the hhs exchanges. nor did he respond to my argument that with respect to an exchange under the definitional section only applies to study state exchanges. i think we can view this as a complete -- in terms of a qualified health care he said that she does find, answer is in 1311. 1311 is only talking about state established exchanges. it has no obligation to hhs six exchanges. they could not possibly create an anomaly. thank you. >> washington journal is next on c-span. president obama will be interesting, south carolina for the funeral services -- will be

in charleston, south carolina for the funeral services. live coverage starts at 11:00 a.m. eastern on c-span. >> the new cessionle directory is a handy guide with photos and bio and contact information and twitter handles. also, foldout map of capitol hill and a look at congressional committees, the president's cabinet, federal agencies and state governors. order your copy today. it's $13.95 plus shipping and handling through the c-span online store at c-span.org. >> coming up, your reaction on the federal subsidies and the affordable care act and supreme court reporter david savage of

the "los angeles times" and "chicago tribune" will join us. [captions copyright national cable satellite corp. 2015] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] and today after more than 50 votes to awaken this law, after a presidential election based on preserving or repealing this law, after multiple challenges to this law before the supreme court the affordable care act is here to stay. host: and that was the president's reaction to the supreme court's latest decision regarding the 49ers. and we want to know what is your reaction? is the a.c.a. now the law of the land? is it here to stay? should the g.o.p. still work to replace it?