House Republicans Want to Resuscitate an Obamacare-Killing Lawsuit

Darrell Issa is hunting for documents that could save a libertarian lawsuit and gut the ACA.

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Stop what you're doing: Outgoing House Oversight and Government Reform Chairman Darrell Issa issued a fresh subpoena against the Obama administration. Yes, yes, I can hear the skepticism. Darrell Issa subpoenaed the Treasury Department? Again? He's been draining the toner drawer with those sorts of requests for years. 

This one's a little different. Issa is asking Treasury to turn over "all documents related to the development of the 36B regulation," i.e. the IRS rule that allowed residents of states that did not set up their own Affordable Care Act exchanges to receive subsidies anyway. As Cato's Michael Cannon points out -- with some personal interest -- it's basically a Halbig subpoena. Halbig v. Burwell, the lawsuit against the IRS rule, won out in the D.C. circuit this July, but is widely expected to be cut down now that the whole circuit has gone en banc

For Cannon, who helped bring the case forward, and for the many Republicans who see Halbig as an Obamacare-killer, this was an injustice that might have been prevented had the investigators been able to peer more closely into the IRS's process. In February, the Ways and Means Committee's oversight team produced a report, based on what it could read privately and suss out in public hearings, that accused the Treasury of slapdash rule-making. The IRS appeared to "[impute] congressional intent from bills that did not and could not pass the Congress as a whole," a fact that so shocked the investigators (and might have shocked judges who got the case) that they underlined it.

The Republican arguments had no purchase with the Fourth Circuit. They convinced two judges on the D.C. circuit, setting off a brief summer of hope and outrage, but the smart money was on other judges ruling for the government, for the rule. 

Thus the new subpoena. "You have a responsibilty to be open and transparent with the American people about the regulatory process," writes Issa. At the very least, Issa's throwing up more dust and warning judges that there might be proof of IRS perfidy that has been covered up for years. At most, he'll find it -- though his ratio of wolf-alerts to actual wolf-sightings is pretty spotty.

"It may be that the congressional investigators who reviewed the Treasury and IRS documents were a bunch of partisan hacks who misunderstood or misrepresented what they saw," writes Cato's Cannon. "If so, and if IRS officials indeed engaged in reasoned decision-making when developing this regulation, the subpoenaed documents will dispel the confusion and support the government’s case in court."

If so. Maybe. The not-so-concealed conservative hope is that the right judges take the case, and have enough evidence, quotes, and questions to make Obamacare unworkable in half the country. That's what Halbig attorney Michael Carvin suggested to Sahil Kapur this month, when he explained the rationale for taking the case directly to the U.S. Supreme Court.

"I don't know that four justices, who are needed to [take the case] here, are going to give much of a damn about what a bunch of Obama appointees on the D.C. Circuit think," said Carvin.

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