This is the Cato Daily Podcast for Monday, June 18th, 2012.

I'm Caleb Brown.

President Obama's health care law does not, as it turns out, empower the IRS to, in many cases penalize employers for failing to

provide health insurance to workers.

And that flaw stops cold, much of the law's machinery.

Jonathan Adler, a professor of law at Case Western Reserve University, comments.

Michael Cannon here at the Cato Institute has made a big deal about the state-based

health care exchanges that were created by the health care law.

States are asked to create them, it's not required, and if they don't,

then the feds are supposed to create an exchange in the state, but unfortunately a lot of the

goodies that go along with the state-based exchanges do not occur with the federal exchanges. that itself is a problem.

Many states have said we're not going to create exchanges.

You point out an additional problem that is related to that.

What is that problem?

The two problems are one that with federal exchanges the federal

government cannot offer tax credits and premium assistance to make health

insurance plans offered in the exchanges affordable. The second problem is, is that if the federal

government can't offer tax credits, then it doesn't have a trigger to enforce what's

called the employer mandate and that mandate is a requirement that larger the is that when an employer fails to do so, they're supposed to pay a penalty to the federal government,

but the trigger for payment of that penalty is the issuance of a tax credit to an employee.

So if there are no tax credits, there's no penalty.

So the federal government is essentially saying to employers,

...