The challengers have one really good piece of evidence: the “established by the State” language, read in isolation, does support the view that Congress meant to restrict tax credits to state exchanges.
Everything else, to my mind, cuts against them. Congress repeatedly used the “exchange established by the State” language as shorthand for “exchange.” Adopting the challengers’ interpretation would make a dog’s breakfast of other provisions of the statute. If Congress wanted to threaten the states to coerce them into establishing exchanges, wouldn’t it have made that threat clear? And if the governing assumption was that states would be happy to establish exchanges, why would Congress have bothered to make such a threat?
If you’re an intentionalist, you can add to this some straight-up legislative history—earlier versions of the health-care reform bill, the CBO score, the statements of members of Congress or their staff, even the recollections of journalists. Fairly read, I think that history confirms what the rest of the evidence already shows: that when Congress used the phrase “established by the State,” it didn’t mean to withhold tax credits from federal exchanges.
(Via The Incidental Economist)