Phil Kerpen

The language in the Obamacare statute has always been crystal clear. Eligibility for the "affordability tax credit," or subsidy, requires enrollment "through an Exchange established by the State under 1311 of the Patient Protection and Affordable Care Act." Identical language appears in the definition of a "coverage month," and every, single place subsidy eligibility is mentioned in the law.

States would, liberals assumed, all create state exchanges to get the money. It never occurred to them that some states would want to stop the subsidies and the employer taxes, 30-hour workweek, and associated penalties that come with them.

The only exception was eleven Democrats who were pretty sure their state would turn down the cash and warned: "In Texas, we know from experience that the dangers to the uninsured from greater State authority...millions of people will be left no better off than before Congress acted."

The Congressional Research Service (CRS) wrote in April 2010, right after the law passed, that subsidy eligibility required "residing in a state that established an exchange," but simply assumed: "Under PPACA, state-established 'American Health Benefit Exchanges' will have to be established in every state by January 1, 2014."

But something funny happened on the way to those 50 state exchanges.

The American people rose up against Obamacare - ultimately resulting in one of the biggest landslide elections in history. They wanted the law repealed, but obstinate Senate Democrats refused to consider even modest changes. Most states, however, were in no mood to cooperate.

Rather than accept the verdict of the American people, the Obama administration turned to the IRS to come to Obamacare's unlawful rescue. I say unlawful because CRS had issued a legal opinion on the matter, based on standard textualist principles of statutory construction: "An IRS interpretation that extended tax credits to those enrolled in federally facilitated exchanges would be contrary to clear congressional intent, receive no Chevron deference, and likely be deemed invalid."

Yet the IRS, in a May 23, 2012 regulation, did extend subsidies.

Some states still didn't believe it. At least three - Oklahoma, Alabama, and Indiana- cited the illegality of the IRS rule as a reason not to establish an exchange. They didn't want the subsidies.

With lawsuits challenging the IRS rule moving through the courts, Obamacare had a problem. They were wrong on the facts and wrong on the law, so they pounded the table.

Phil Kerpen

Phil Kerpen is president of American Commitment, a columnist on Fox News Opinion, chairman of the Internet Freedom Coalition, and author of the 2011 book Democracy Denied.

American Commitment is dedicated to restoring and protecting America’s core commitment to free markets, economic growth, Constitutionally-limited government, property rights, and individual freedom.

Washingtonian magazine named Mr. Kerpen to their "Guest List" in 2008 and The Hill newspaper named Mr. Kerpen a "Top Grassroots Lobbyist" in 2011.

Mr. Kerpen's op-eds have run in newspapers across the country and he is a frequent radio and television commentator on economic growth issues.

Prior to joining American Commitment, Mr. Kerpen served as vice president for policy at Americans for Prosperity. Mr. Kerpen has also previously worked as an analyst and researcher for the Free Enterprise Fund, the Club for Growth, and the Cato Institute.

A native of Brooklyn, N.Y., Mr. Kerpen currently resides in Washington, D.C. with his wife Joanna and their daughter Lilly.