Tea Leaves

Every liberal has a conservative friend who warned them, back in 2003, in a friendly way, that they were going to be mighty embarrassed when our troops found those weapons of mass destruction in Iraq. That would be a former friend, but these things happen. Consider the curious case of Bill O’Reilly – as on March 18, 2003, it was this – “If the Americans go in and overthrow Saddam Hussein and it’s clean, he has nothing, I will apologize to the nation, and I will not trust the Bush Administration again, all right?”

He knew. Sure he did. On February 10, 2004, it was this – “I was wrong. I am not pleased about it at all and I think all Americans should be concerned about this… What do you want me to do, go over and kiss the camera?”

O’Reilly had a problem, and then, two days later, there was this – “I go on Good Morning America yesterday and say that I’m personally sorry my analysis on WMDs before the war was wrong and I’m angry about the CIA mistake. I mean, any honest commentator would say that, but the left-wing press sees my admission as some kind of liberal policy vindication and is using my words to hammer the president. Well, that’s dishonest. I still believe removing Saddam was the right thing to do and that history will prove it. And there’s also the possibility that WMDs will be found, so I might have to apologize for my apology. I don’t mind. I still hope they find WMDs.”

They never did find any of those weapons of mass destruction, and with Saddam Hussein gloriously gone we got ISIS fighting the Iraqi government we created, now tightly aligned with Iran, our deadly enemy. Bill O’Reilly has been silent on the matter about which he was so sure ever since – but Obama sure has messed everything up, hasn’t he?

Yes, that’s changing the subject, but when someone says that anyone can see what’s going on here – which everyone seems to like to say – it’s probably not what’s going on here, or anywhere. Reading tea leaves is an art, or foolishness, or a scam – but this was the day everyone was trying to figure out if Obamacare would be destroyed and eight to eleven million people would lose their new health insurance and the entire healthcare insurance system would collapse. That will be decided in June, or July. This was the day of tea leaves:

The Supreme Court on Wednesday took up the Affordable Care Act in one of the most anticipated arguments of the term, and it seemed closely divided over the fate of President Obama’s signature legislative achievement.

The court’s four liberal members voiced strong support for the administration’s position. But Chief Justice John G. Roberts Jr., who cast the decisive vote to save the law in 2012, said almost nothing on Wednesday, and did not indicate his position.

In a pleasant surprise for the administration, however, Justice Anthony M. Kennedy, who was in dissent in 2012, made several comments indicating that his vote was in play.

“Perhaps you will prevail in the plain words of the statute,” he told a lawyer for the challengers. But, he continued “there’s a serious constitutional problem if we adopt your argument.”

Wednesday’s arguments suggested that the coming months will be tense for the administration as it waits to hear whether about seven million low- and middle-income people in some three dozen states will continue to receive subsidies to help them buy health insurance. Should the court rule that subsidies were not authorized by the health law, most of those people would no longer be able to afford insurance. And insurance markets in those states could collapse.

Josh Earnest, the White House press secretary, said it would be “unwise” to draw conclusions based on the questioning by the justices. Such efforts, he said, can produce “some erroneous predictions about the likely outcome.”

Slate’s Josh Voorhees reviews those predictions:

After watching the first day of arguments in the 2012 blockbuster, Jeffrey Toobin famously declared that it was “a train wreck” for the White House. “This law looks like it’s going to be struck down,” the CNN legal expert and New Yorker writer said at the time. “I’m telling you, all of the predictions, including mine, that the justices would not have a problem with this law were wrong.”

Toobin was far from alone in making that assessment. But in the end, of course, the high court voted 5–4 to preserve the individual mandate and avoid delivering what would have likely been a death blow to the Affordable Care Act.

As you may remember, much of the immediate analysis was focused on Solicitor General Donald Verrilli, the White House lawyer tasked with saving Obamacare then, as he is again this week. Verrilli stuttered, stumbled, and coughed out of the gates during the March 2012 arguments, drawing an onslaught of criticism from court watchers and prompting serious handwringing from liberals. “Verrilli seemed more like a nervous first-year law student than a respected advocate who had appeared before the court on 17 previous occasions,” declared the Daily Beast. Mother Jones went one step further, writing that the Verrilli performance just might “go down as one of the most spectacular flameouts in the history of the court.” After the solicitor general’s argument and the rest of the day’s action, “the Obama administration better start preparing for the possibility of a future without the individual mandate,” warned the Huffington Post.

The assessments were more measured in the nation’s papers of record, but the takeaway was largely the same. The New York Times explained that “the available evidence indicated that the heart of the Affordable Care Act is in peril.” The Washington Post, meanwhile, reported that court’s conservative justices “appeared deeply skeptical” that the individual mandate was constitutional, “endangering the most ambitious domestic program to emerge from Congress in decades.”

They were all wrong, and this time the question before the court isn’t about whether the government can compel citizens to buy health insurance or pay a fine, which was sort of a constitutional matter. This time the issue is a bit more arcane, and the New York Times’ editorial board finds it rather absurd:

The central claim of the lawsuit, which was filed on behalf of four Virginians by a small group of conservative activists who have long sought to destroy Obamacare, is that the law does not allow tax-credit subsidies to be made available to anyone living in the 34 states whose health care exchanges are operated by the federal government, which stepped in when those states declined to set up their own.

This is, to put it mildly, baloney.

In the long, tangled history of the debate over the Affordable Care Act, no member of Congress ever indicated a belief that the law would work this way. To the contrary, the law explicitly provides for “quality, affordable health care for all Americans.”

And it has accomplished a good deal of this goal: More than 11 million people now have coverage under the law, and more than eight in 10 of them qualify for subsidies. In other words, broad availability of the subsidies is central to the functioning of the act. Without them, it collapses.

But because of the opponents’ purposefully blinkered reading of four words in the 900-page law the case is now before the Supreme Court.

The four words – “established by the State” – appear in a subsection of the law dealing with the calculation of tax credits. The law’s challengers say this means that credits are available only in the 16 states that have set up their own exchanges.

The Times’ board smells a rat:

The challengers did not innocently happen upon these words; they went all out in search of anything that might be used to gut the law they had failed to kill off once before, on constitutional grounds, in 2012. Soon after the law passed in 2010, Michael Greve, then chairman of the Competitive Enterprise Institute, which is helping to finance the current suit, said, “This bastard has to be killed as a matter of political hygiene. I do not care how this is done, whether it’s dismembered, whether we drive a stake through its heart, whether we tar and feather it and drive it out of town, whether we strangle it.”

After the challengers found the four-word “glitch,” as they initially called it, they worked backward to fabricate a story that would make it sound intentional. Congress, they claimed, sought to induce states to establish exchanges by threatening a loss of subsidies if they did not. (Not coincidentally, the challengers also traveled state to state urging officials not to set up exchanges, thus helping to create the very “crisis” they now decry.) Of course, if Congress intended to introduce a suicide clause into a major piece of federal legislation, it would have shouted it from the mountaintops and not hidden it in a short phrase deep inside a sub-sub-subsection of the law. So it is no surprise that no one involved in passing or interpreting the law – not state or federal lawmakers, not health care journalists covering it at the time, not even the four justices who dissented in the 2012 decision that upheld the Affordable Care Act – thought that the subsidies would not be available on federal exchanges.

That’s what makes this so odd:

Many legal observers were surprised that the court agreed to hear the case at all. But despite several justices’ clear dislike for the health care law, it is hard to imagine how they could disregard their longstanding approach to interpreting statutes, which, as Justice Clarence Thomas wrote in a 1997 case, requires them to consider “the language itself, the specific context in which that language is used, and the broader context of the statute as a whole.”

Reading the Affordable Care Act as a whole, it’s clear that Congress meant to provide subsidies on both federal and state exchanges. For one thing, why establish a federal exchange that doesn’t actually work? As an amicus brief submitted by a group of legal scholars put it, “Congress does not write statutes to fail.”

And yet the challengers insist that their bizarre, non-contextual reading of the law is the only possible one. A majority of federal judges who have reviewed the case have thrown out this argument. So should the Supreme Court. Even if the court were to consider the law ambiguous, under its own precedent it must defer to an agency’s reasonable interpretation of the statute’s wording. Here, that agency is the IRS, which has issued a rule affirming that subsidies are available no matter who establishes the exchange.

Ah, but there are those four words:

The challengers disingenuously say that Congress can go back and change the wording, knowing full well that Republicans on Capitol Hill hate the law almost as much as they do. The states that currently rely on federally operated exchanges could set up their own, but many – egged on by the challengers – have already refused to do that.

Whatever legal games the challengers play, this case has never been more than a ginned-up, baseless attack on one of the most important pieces of social legislation of the last generation. The health of millions of Americans hangs in the balance. And now it is not even clear that the four plaintiffs have legal standing to bring the lawsuit.

All that may be so, but this Supreme Court seems inclined to wipe out Obamacare, or not. It was hard to tell:

If President Obama could draw hope from the 1 hour and 25 minutes of debate about his signature domestic achievement, it would be because of Justice Anthony M. Kennedy. Three years ago, Kennedy was among the four dissenters who would have found the entire act unconstitutional. But Wednesday, with his comments and questions seeming to cut both ways, he appeared to be back in play.

The outcome could also hang on Chief Justice John G. Roberts Jr. He wrote the opinion saving Obamacare from a constitutional challenge in 2012, but he was inscrutable this go-round, asking no questions that would provide a clear reading of his inclinations.

At issue in the current case is whether millions of Americans who receive tax subsidies to buy health insurance are doing so illegally. The challengers say a straightforward reading of the law means the credits are available only for those who buy insurance on marketplaces, called exchanges, that are “established by the State,” rather than on a federal marketplace.

The subsidies are a linchpin in the program to require Americans to buy health insurance. A ruling against the administration would have adverse consequences for an estimated 7.5 million Americans who now receive subsidies in the 34 states where authorities have declined to establish their own exchanges.

That led to this:

Questions about dire consequences for the states seemed to most concern Kennedy, the court’s leading advocate of federalism.

He told Washington lawyer Michael A. Carvin that the challengers’ reading of the law – which he characterized as telling the states to “create your own exchange, or we’ll send your insurance market into a death spiral” – is the kind of coercive pressure the federal government is not allowed to apply.

“Perhaps you will prevail in the plain words of the statute, [but] there’s a serious constitutional problem if we adopt your argument,” Kennedy said.

Carvin said that plain reading must be what guides the justices.

“The only provision in the act which either authorizes or limits subsidies says, in plain English, that the subsidies are only available through an exchange established by the state,” Carvin said.

The rest of the law may contradict those four words, and if the law is struck down many lives will be made miserable, and many may die, but someone put those four words in there, even if no one noticed them until now, and no one double-checked the text and the words are there. This is about the rule of law. Let those people die.

Carvin didn’t say that, but he came close, and some justices were unhappy:

To read the law as literally as he does, Justice Elena Kagan told Carvin, would mean Congress authorized the establishment of federal exchanges “in which there will be no customers and, in fact, there will be no products.”

She added: “We are interpreting a statute generally to make it make sense as a whole, right? We look at the whole text. We don’t look at four words. We try to make everything harmonious with everything else.”

Solicitor General Donald B. Verrilli Jr., representing the Obama administration, made a similar point. He said the law meant to provide states with flexibility and avoid “death spirals” in insurance markets, which could occur if not enough healthy individuals are enrolled to make the system financially viable. The challengers’ reading of the law, he said, would put coverage beyond the reach of many.

“It revokes the promise of affordable care for millions of Americans,” Verrilli said. “That cannot be the statute that Congress intended.”

The conservative justices were having none of that:

“Of course it could be,” responded Justice Antonin Scalia. “I mean it may not be the statute they intended. The question is whether it’s the statute that they wrote.”

Scalia and fellow conservative Justice Samuel A. Alito Jr. were the most challenging of Verrilli. Scalia said it was not up to the court to “twist the words” of a law to make it fit what the administration said Congress intended.

Alito asked Verrilli the question he had the most trouble answering: “If Congress did not want the phrase ‘established by the State’ to mean what that would normally be taken to mean, then why did they use that language? Why didn’t they use other formulations that appear elsewhere in the act? Why didn’t they say ‘established under the act’? Why didn’t they say, ‘established within the State’?”

And then they said this was none of their business:

Scalia and Alito also played down the dramatic consequences that the administration said would follow from an adverse ruling. Alito said the court could stay its ruling to avoid immediately cutting the subsidies. Scalia said lawmakers could fix the problem if they thought the court had misinterpreted their intent.

“You really think Congress is just going to sit there while – while all of these disastrous consequences ensue?” Scalia asked.

“Well, this Congress, Your Honor?” Verrilli replied, as laughter filled the packed chamber.

But this wasn’t funny:

It was the comments from Kennedy that received the most scrutiny. He is the court’s most outspoken advocate of states’ rights, and he said Carvin’s argument must be seen as Congress telling the states “either you create your own exchange, or we’ll send your insurance market into a death spiral.”

Kennedy brought up the “standard of constitutional avoidance.” That means that if there are two possible interpretations of a statute, judges should choose the one that is plainly constitutional instead of the one that raises constitutional questions.

Verrilli said that would be a “very powerful reason to read the statutory text our way.”

But Kennedy said later that may not be an option if the justices are convinced that the plain language of the statute should prevail.

Kennedy was also concerned that the law might be ambiguous, as a panel of the U.S. Court of Appeals for the 4th Circuit ruled. In such cases, the Richmond-based panel ruled, courts should defer to the agency responsible for implementing the law. The judges found the Internal Revenue Service permissibly “crafted a rule ensuring the credits’ broad availability and furthering the goals of the law.”

That, too, worried Kennedy. “It seems to me a drastic step for us to say that the department of internal revenue and its director can make this call one way or the other when there are, what, billions of dollars of subsidies involved here?” he asked.

There are all sorts of ways to read those tea leaves, and there was this:

Justice Roberts was even more opaque. The chief justice was blasted by fellow conservatives in 2012 when he came up with the compromise that found the law constitutional, and there were media reports that the justices on the right felt he had changed his vote late in the game.

On Wednesday, he seemed determined not to tip his hand. Normally an active questioner, Roberts instead played the role of impartial umpire, playing traffic cop when the other justices were vying to be heard and allocating more time to Carvin and Verrilli when the questioning cut into their responses.

That’s not very helpful, but Ian Millhiser thinks that Obamacare will probably survive its second trip to the Supreme Court:

If tax credits are cut off in states with federally run exchanges, premiums will spike, and healthy people will likely drop insurance that they can no longer afford. Once that happens, however, the insurance companies will no longer have enough revenue to pay for sick peoples’ costs, so they will have to raise premiums even further. That, in turn, will cause more healthy people to drop care. The result is a “death spiral” where higher premiums beget fewer customers, which beget higher premiums, which beget fewer customers.

This threat of a death spiral raises constitutional concerns, because the Supreme Court’s first Obamacare decision forbids Congress from coercing states into taking certain actions. If states are forced to choose between setting up their own exchange or watching their individual insurance markets collapse, that could amount to unconstitutional coercion.

Justice Kennedy appeared to believe that it did. There’s “something very powerful” to this coercion argument, Kennedy said, adding that Carvin’s interpretation of the law raises a “serious constitutional problem.” Later in the argument, he indicated that the Court may have an obligation, under something known as the “constitutional avoidance doctrine,” to read the law in a way that does not raise constitutional doubts.

And then he admits Kennedy’s vote is not certain. On Fox News they’re shouting OBAMACARE IS DEAD! That’s where Bill O’Reilly works, and he may still think we’ll find Saddam’s weapons of mass destruction, any day now. Or maybe he doesn’t. Maybe he’s learned something about tea leaves.

That’s unlikely, or unlike him, and Ezra Klein looks at the implications of the Supreme Court destroying Obamacare:

1) For Republicans, the challenge to Obamacare’s individual mandate made good political sense: if the mandate was repealed, it would cripple the law. Obamacare would be a disaster from coast to coast. The White House would have to agree to repeal, or at least root-and-branch reform.

2) The challenge to Obamacare’s subsidies makes less political sense: if the subsidies are ripped out of federal exchanges, it will only cripple the law in red states that loathe the legislation. Obamacare will work fine in states that want it to work; those states either have their own exchanges now or they’ll quickly build them. But resistant red states will be left with a policy disaster – and a hefty bill.

3) This is a key point: if the Supreme Court rules for the plaintiffs in King v. Burwell, the subsidies will basically shut off in (mostly) red states. But Republicans in those states will still be paying the taxes and bearing the spending cuts needed to fund Obamacare. They just won’t be getting anything back.

4) So the Republican plan is to make Obamacare a huge subsidy flowing from red states to blue states. Or, put more simply, the Republican plan to fight Obamacare is for Republicans to rip themselves off.

Oops. But then this all may be moot. Each side made their oral arguments in this matter, and there were very few tea leaves in the bottom of the teacup. Only Professor Trelawney could read those, and she was mad as a hatter. In late June or early July we’ll find out if Saddam really had weapons of mass destruction, or something.

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About Alan

The editor is a former systems manager for a large California-based HMO, and a former senior systems manager for Northrop, Hughes-Raytheon, Computer Sciences Corporation, Perot Systems and other such organizations. One position was managing the financial and payroll systems for a large hospital chain. And somewhere in there was a two-year stint in Canada running the systems shop at a General Motors locomotive factory - in London, Ontario. That explains Canadian matters scattered through these pages. Otherwise, think large-scale HR, payroll, financial and manufacturing systems. A résumé is available if you wish. The editor has a graduate degree in Eighteenth-Century British Literature from Duke University where he was a National Woodrow Wilson Fellow, and taught English and music in upstate New York in the seventies, and then in the early eighties moved to California and left teaching. The editor currently resides in Hollywood California, a block north of the Sunset Strip.
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One Response to Tea Leaves

  1. Rick says:

    Two things today:

    ———-
    First, there’s Antonin Scalia, responding to Solicitor General Donald B. Verrilli Jr., who said that the challengers’ theory “revokes the promise of affordable care for millions of Americans,” and “That cannot be the statute that Congress intended.”:

    “Of course it could be,” responded Justice Antonin Scalia. “I mean it may not be the statute they intended. The question is whether it’s the statute that they wrote.” … Scalia said it was not up to the court to “twist the words” of a law to make it fit what the administration said Congress intended.

    So I’m thinking when I first see this, “This is coming from Scalia, the Supreme Court’s so-called ‘Originalist’? Isn’t he the one who’s always saying we need to understand the founders’ original intent, which is more important than what they wrote? In other words, isn’t Scalia now singing a different tune?”

    So I looked this up in Wikipedia, and to my surprise, it turns out he’s not:

    Originalism is an umbrella term for interpretative methods that hold to the “fixation thesis”—the notion that an utterance’s meaning is fixed at the time it is uttered. There are two broad source of meaning that originalists seek:

    * The “original intent” theory, which holds that interpretation of a written constitution is (or should be) consistent with what was meant by those who drafted and ratified it. This is currently a minority view among originalists.

    * The “original meaning” theory, which is closely related to Textualism, is the view that interpretation of a written constitution or law should be based on what reasonable persons living at the time of its adoption would have declared the ordinary meaning of the text to be. It is this view with which most originalists, such as Justice Scalia, are associated.

    (This, by the way, makes me even more convinced that the Court misread the Second Amendment in their ruling in Washington, DC, in 2008 — that not only did the framers intend the right to bear arms be mostly in support of national defense, all reasonable persons living at the time of its adoption would have declared the ordinary meaning of the text to be understood to intend that. But that’s another story.)

    So the whole thing comes down to the literal meaning of words, specifically, four particular words – “established by the State” — which revolves on the question, what could people possibly mean when they use the word “State”? For example:

    * When we talk about the “Separation of Church and State”, exactly which state are we talking about?

    * President Obama is our “Head of State”. Again, which state would that be?

    * And if he’s the “Head of State”, then who’s the “Head of the Country”? (Or can he be both?)

    * In fact, Queen Elizabeth II is a head of state, too — the only question being, which one?

    Also, there’s this:

    It’s a little-known fact that, back in July of 1776, the 13 colonies jointly declared…

    “That these United Colonies are, and of Right ought to be Free and Independent States … and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do.”

    You’ve seen these words in the Declaration of Independence before, and may have assumed the founders were declaring the independence for a brand new nation state called “The United States of America”, but if so, you were wrong; they were declaring the independence for thirteen new “nation states”, each with the full power to do all the other things a nation state could do — just like their fellow nation states, such as France and Spain.

    These “United Colonies”, but now independent and sovereign “states”, continued their alliance with each other, but now in a confederation of nations known as the “United States of America”. Years later, they jointly adopted a Constitution that turned all these nations into “states”, as we now call them, joined into a new nation that they also called the “United States of America”.

    My point here simply is that, at least in this country, the use of the word “state” to signify a nation pre-dates the use of the word to be synonymous with “province”, and that should count for something.

    ———-
    Secondly, I was intrigued by this throw-away line, from the New York Times:

    And now it is not even clear that the four plaintiffs have legal standing to bring the lawsuit.

    This is what I’d been wondering! In other words, who brought this suit? Was it brought by some people in some red state who are upset that they are forced to choose whether or not to apply for a subsidy?

    Following those Times links (to a Wall Street Journal article and an especially excellent Mother Jones article), I discovered that, yes, it is indeed something like that after all. According to Mother Jones:

    The case is legally complex. It centers on the claim that the Internal Revenue Service has illegally interpreted the Affordable Care Act to provide subsidies to people who live in states that have not established online health insurance exchanges and use the federal exchange to obtain insurance. The lawsuit asserts that Congress intended for Americans to receive insurance subsidies only through state exchanges — an argument that the bill’s congressional drafters have vehemently denied.

    In a complicated legal maneuver, the plaintiffs argue that if the IRS hadn’t illegally made subsidies available to them, they would have the right to the hardship exemption provided by the law that would free them from paying a fine for going uninsured. (Exemptions are available to Americans whose health insurance costs would be more than 8 percent of their incomes.)

    Isn’t that sort of like hitting the jackpot in a multi-million-dollar lottery, then suing the lottery commission because winning that much money made you ineligible for public assistance?

    Stephanie Mencimer, who wrote the Mother Jones article:

    So who are the two men and two women that CEI [The libertarian Competitive Enterprise Institute] handpicked to front its assault on Obamacare? What harm had they suffered as a result of the health care law? And why are they willing to put their names on a suit that could jeopardize the health coverage of millions of fellow Americans?

    I set out to track down the plaintiffs to hear in their own words why they had decided to take part in the case, and it soon became evident that CEI had struggled to find suitable candidates. Three of the four plaintiffs are nearly eligible for Medicare, meaning their objections to Obamacare will soon be moot. Two of them appear to qualify for hardship exemptions — that is, they are not forced to acquire insurance or pay fines because even with a subsidy insurance would eat up too much of their incomes — so it’s unclear how Obamacare had burdened them. These two plaintiffs seemed driven by their political opposition to President Obama; one has called him the “anti-Christ” and said he won election by getting “his Muslim people to vote for him.” Yet most curious of all, one of the plaintiffs did not recall exactly how she’d been recruited for the case and seemed unaware of the possible consequences if she wins. Told that millions could lose their health coverage if the Supreme Court rules in her favor, she said that she didn’t want this to happen.

    You need to read that whole article if you want to learn more about how apparently clueless these plaintiffs are about their own case.

    And by the way, according to that WSJ article, at least two of the plaintiffs might not even have standing in this case, since, as Vietnam War veterans, they appear to already qualify for veterans’ medical coverage. The standing of a third of the four has been questioned by the government “on the grounds that her income may exempt her from paying the penalty for lacking insurance, [although] a lower court didn’t address the issue.”

    Okay, apparently the legal standing of three of these won’t kill the case, as long as they have one plaintiff that fills the bill. Still, according to David Levine, a professor at the University of California Hastings College of the Law, having only one out of four certainly doesn’t make the case look like much more than it is, in reality — a pretty feeble attempt to torpedo Obamacare:

    “If you can’t find better plaintiffs than these people, it does show you how hard it is to find someone who is genuinely hurt.”

    ———-
    Oh, one last thing I noticed in Mother Jones about that organization responsible for calling together this rag-tag gang-bang of plaintiffs:

    The libertarian Competitive Enterprise Institute, a think tank funded by big pharmaceutical firms, oil and gas outfits, the Koch brothers, Google, tobacco companies, and conservative foundations…”

    Okay, the Koch brothers I could have guessed — I’ve already stopped buying Quilted Northern toilet paper — but Google? I just can’t see how I’ll survive if I have to rely on Bing or Yahoo!

    Rick

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