By Nathan Mehrens

President Obama’s socialized medicine law has a big problem on its hands — something much more serious than a botched website or a broken political promise. And while some say it’s nothing more than a “technicality,” the court case over this “glitch” is moving forward even as most of the mainstream media looks the other way.

“This is for all the marbles,” George Mason University professor Michael S. Greve wrote.

“This has the potential to sink Obamacare,” Cato Institute health policy expert Michael Cannon told The Los Angeles Times.

The case they’re referring to is Halbig v. Sebilius, filed in May by seven plaintiffs (four individuals and three companies) in U.S. District Court in Washington, D.C. At the heart of this case is a simple question: Does the federal government have the right to tax and spend $700 billion worth of health care subsidies in the thirty-four states which declined to create state-administered health care exchanges under Obamacare?

Under the specific language of the law, tax subsidies (and tax penalties) on individuals and employers only apply in states that created these exchanges. It’s right there in black-and-white — as the availability of subsidies was expressly confined to qualified plans enrolled “through an Exchange established by the State.”

Obamacare makes no mention of these subsidies being provided in federal exchanges.

At the time the law was being drafted this wasn’t seen as a problem. The President and his allies believed the allure of more “free money” from Washington would be sufficient to entice states into doing their bidding. However when it became clear this wasn’t happening, the Internal Revenue Service scrambled to issue a “rule” extending the subsidies to all states.

The rub? This IRS rule explicitly contravenes the language approved by Congress — and signed into law by Obama himself. Not only that — to quote from Halbig — it “(disburses) monies from the Federal Treasury in excess of the authority granted by the Act.”

And at $700 billion, we’re talking about the single largest instance of taxation without representation in human history.

The legal principles involved in Halbig are simple: If Obamacare is to be taken at its word — then the law’s subsidies and penalties do not apply in two-thirds of the country. And if that’s the case, then Obamacare is a “Dead Law Walking” — incapable of sustaining itself without hundreds of billions of dollars in deficit spending.

So where does this case currently stand? Last month U.S. District Court Judge Paul Friedman issued a pair of procedural Halbig rulings. First, he denied the government’s attempt to dismiss the case — concluding its plaintiffs had standing to pursue their claim against the IRS. Friedman also denied the plaintiffs’ motion for injunctive relief — concluding they had failed to demonstrate irreparable harm as a result of the law’s slow-rolling implementation. Of course Judge Friedman attributed this decision to the fact a verdict in the case is expected prior to the late March deadline for enrollment.

In other words there’s no irreparable harm because Obamacare’s mandates aren’t yet in place.

Where Judge Friedman (and higher courts) ultimately come down on Halbig is anybody’s guess — but if they follow the letter of the law they must limit IRS tax collection and Treasury disbursements to those states which established exchanges. There is simply no legal authorization to tax and spend beyond that.

Judge Friedman seemingly acknowledged as much during oral arguments last month – when government lawyers tried to copy and paste definitions from one section of Obamacare to the section governing the subsidies and penalties.

“They’re still not established by the state,” Friedman chided.

The government’s response? That even if states did not create exchanges, Obamacare’s commandment that they “shall” create them preemptively supersedes their refusal.

“The premise stands,” government attorney Joel L. McElvain argued.

That’s a pretty convoluted basis on which to impose a $700 billion tax hike. And make no mistake, this is a tax — something the Obama administration is definitively admitting after several flip-flops.

“There is no such thing as an individual mandate,” McElvain said. “It’s a tax.”

On every front, Obamacare has been a disaster. The law has forced millions of Americans to lose their coverage, raised premiums for millions more and prevented thousands of employers from creating jobs our economy desperately needs.

It’s time for the courts to put an end to this abomination: And all they have to stop it is simply uphold the law as it was written.

The author is president of Americans for Limited Government.