AP
Democratic Senate Majority Leader Harry Reid might have saved Obamacare by going "nuclear."
Last November, Reid pushed the button on the so-called "nuclear option," dramatically changing Senate filibuster rules to get more of President Barack Obama's judicial and executive nominees approved. Reid's rule change allowed Obama's nominees to be approved by a simple majority vote rather than with the support of 60% of senators, which prevented the Republican minority from blocking the president's picks.
And it turns out, Reid's maneuvering might become the White House's most effective weapon as it faces the most serious legal challenge to the Affordable Care Act in more than two years.
"It's the first big case where the effects of the nuclear option could be felt," one Senate Democratic aide told Business Insider last week.
Here's how Reid's senatorial nuke could theoretically save Obamacare. Last week, a three-judge panel on the D.C. Circuit Court ruled that a 2012 IRS regulation that implements key subsidies under the law is invalid, in the case of Halbig v. Burwell. The decision has the potential to affect more than five million people who have been given tax credits when purchasing health insurance through the federal exchange.
But the Department of Justice is appealing the panel's decision, requesting an "en banc" review by the full D.C. Circuit Court. The math for the Obama administration is better in this situation — the court splits 7-4 in favor of Democratically appointed judges, because of Reid's rule change. Because of this breakdown, legal experts believe the D.C. court will reverse the Halbig decision if it grants the en banc review.
Reid's decision to go nuclear came after Obama mounted an unusual public campaign to get three of his judicial nominees appointed to the U.S. Court of Appeals for the D.C. Circuit. After months of threats, Reid responded to the president's push by instituting the rules change. Those three D.C. Circuit Court judges have since been confirmed — and they're the reason there's a Democratic majority on the court that would most likely reverse the Halbig decision in the en banc review.
"Adding Democratically appointed judges who are less enamored of a literalist approach to statutory interpretation makes it much more likely that the court will take the case en banc," Nicholas Bagley, a law professor at the University of Michigan and contributor to The Incidental Economist, told Business Insider, adding, "The nuclear option thus matters a great deal for the moment."
The D.C. Circuit Court, considered the second-most powerful court in the nation after the Supreme Court, is of particular importance to Obama's second-term agenda — and his legacy. The court has a vast jurisdiction over the federal government and thousands of regulations, rules, and executive actions from more than 400 administrative agencies. The Halbig case is viewed as the most significant case yet to potentially come before the new D.C. Circuit Court's split.