There is an interesting twist this morning on the controversy over the Halbig decision that we have previously discussed. As I have stated in testimony before Congress and columns, I do not view the law as ambiguous and agree with the conclusion in Halbig as a matter of statutory interpretation, even though I think that the change ordered by the Obama Administration makes sense. Nevertheless, the White House and various supporters have insisted that the key language in the law linking tax credits to exchanges “established by a State” was a typo and nothing more. One of those voices has been Jonathan Gruber, a Massachusetts Institute of Technology economist who played a major role in the drafting of the law and was paid almost half of a million dollars to consult with the Administration on the law. He told MSNBC recently that “It is unambiguous this is a typo. Literally every single person involved in the crafting of this law has said that it`s a typo, that they had no intention of excluding the federal states.” However, a libertarian group just uncovered a video showing Gruber saying quite clearly after the passage of the law that this provision was a quid pro quo device: state exchanges for tax credits. Conservative sites have lit up over the video below showing Gruber essentially describing the very tradeoff identified in Halbig.
As I explained in my testimony, at issue is the express language of the statute that ties the creation of state (as opposed to federal) exchanges to the availability of tax credits. Congress established the authority of states to create their own exchanges under Section 1311. If states failed to do so, federal exchanges could be established under Section 1321 of the Act. However, in Section 1401, Congress established Section 36B of the Internal Revenue Code to authorize tax credits to help qualifying individuals purchase health insurance. However, Section 1401 expressly links tax credits to qualifying insurance plans purchased “through an Exchange
established by the State under 1311.” The language that the qualifying exchange is “established by the State” seems quite clear, but the Administration faced a serious threat to the viability of the Act when 34 states opted not to create exchanges. The Administration responded with an interpretation that mandates: any exchange – state or federal – would now be a basis for tax credits. In adopting the statutory construction, the Administration committed potentially billions in tax credits that were not approved by Congress. The size of this financial commitment without congressional approval also strikes at the essence of congressional control over appropriation and budgetary matters.
Around the 31 minutes mark on the video below, Gruber addresses the issue:
What’s important to remember politically about this is if you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits—but your citizens still pay the taxes that support this bill. So you’re essentially saying [to] your citizens you’re going to pay all the taxes to help all the other states in the country. I hope that that’s a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges. But, you know, once again the politics can get ugly around this.
Critics have called out Gruber for later joining the counter spin from the White House and denouncing that very interpretation as “nutty.”
I can understand Gruber changing his views on the issue and there is no need to pummel him. He is quoted on one site in explaining that “I was speaking off-the-cuff. It was just a mistake.” However, in fairness, it does show that even supporters at the time viewed the language as meaning exactly what it said. The import is that there was a carrot and stick approach to exchanges. In crafting the act, Congress created incentives for states to set up health insurance exchanges and disincentives for them to opt out. The law, for example, made the subsidies available only to those enrolled in insurance plans through exchanges “established by the state.” However, to the great surprise of the administration — some 34 states opted not to establish their own exchanges, leaving it to the federal government to do so. This left the White House with a dilemma: If only those enrollees in states that created exchanges were eligible for subsidies, a huge pool of people would be unable to afford coverage, and the entire program would be in danger of collapse.
In the end, this issue will not be decided by spin but statutory interpretation. It will be interesting to see if both the Fourth Circuit and D.C. Circuit opinions go to en banc review. You could have the D.C. Circuit flip the result in favor of the Administration and the Fourth Circuit flip in favor of the challengers — preserving the split in the circuits. Even without such a split, however, there is a strong argument for Supreme Court review. It will be equally interesting to see if briefs bring in Gruber’s statement since he has signed amicus briefs in favor of the Administration’s interpretation.
Anon
Dredd-Who are you kidding? If this was a law introduced by a Republican President and rammed through the legislative process by a Republican Congress, you would be screaming from the rooftops that this “goober’s” words were proof that the Halbig decision was correct. Nick was spot-on in his use of the word cult.
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Thanks for your opinion.
It is wrong grasshopper.
Why can’t Spinny and the Nyets articulate the Four Judge Majority, rather than doing, like you, the ad hominem boogie woogie and present the two judge minority case?
I said from the beginning, if you want to use facts rather than intellectual dishonesty, that Edwards J. had the correct analysis.
You lamies are the type to take one sentence out of a book and write a “book review” on one sentence, leaving out the book.
It is utterly anal.
When drafting the ACA it would of been nice if those who did the drafting consulted with the Governors and State Legislators; but sadly they did not.
semby – it would have been nice if someone had read the entire bill and figured out the pitfalls.
After the vote to “rewrite,” “interpret” and “legislate from the bench;” for such a
blatant POLITICAL ACT and USURPATION
these judeges must be IMPEACHED.
Professor Turley, if you haven’t read it, I’d urge you to read Kim Strassel’s Wall Street Journal piece, “The Obamacare-IRS Nexus”, linked below. (Note: It’s behind a paywall. But the Wall Street Journal permits access to a limited number of articles behind the paywall if you access them via Google. So Google the title and access it that way if you don’t have a subscription and would like to read it):
http://online.wsj.com/articles/kim-strassel-the-obamacare-irs-nexus-1406244677
It fits in to the Gruber story and is consistent with your warnings that we are rapidly losing our Madisonian form of government to an all powerful executive branch that ignores and re-writes law and refuses to be bound by the Separation of Powers doctrine.
If a SOP of your core ideology is “any means justified by our glorious ends” you end up with zero integrity with regard to being impeccable with your word. The progressive movement is replete with academics and “best & brightest” drones just waiting for their referent power king (in this case Mr. Obama) to signal a need. Armed with their narcisstic sword of self righteousness and elitist cases of OCD control freakishness…we get whatever it takes. No amount of lies, manipulations, misrepresentations, hair splitting, double speaking Orwellian word games and disingenuous actions are too much to gain favor from the king and meet the glorious ends. At this point, reality of it all is surpassed only by Harvard Law Grads dressed in drag in phone booths while breaking into Watergate to please their king. They’re damn close though.
*****NEWSFLASH*****
JUDICIAL COUP DE ETAT IN AMERICA.
Film at 11.
It depends on what meaning of the word is is.
Facts are facts.
Spin is spin.
Judges are judges.
Legislators are legislators.
The Circuit will take a POLITICAL VOTE ALONG PARTY LINES.
That is for the PEOPLE to decide through their Congress of elected officials.
The POWER is the people’s, not the judicial branch.
This issue belongs back in Congress.
The judicial branch determines if actions comport with law – that is all.
The circuit will illegally usurp the power of the legislative branch if it votes.
A new “tipping point.”
Someone call Professor Turley and ask him to present the “tipping point” sequel.
“When bad men combine, the good must associate; else they will fall, one by one, an unpitied sacrifice in a contemptible struggle.”
Edmund Burke
Dredd-Who are you kidding? If this was a law introduced by a Republican President and rammed through the legislative process by a Republican Congress, you would be screaming from the rooftops that this “goober’s” words were proof that the Halbig decision was correct. Nick was spot-on in his use of the word cult.
http://www.msnbc.com/all-in-with-chris-hayes/watch/supreme-court-caught-red-handed-on-obamacare-312267843982
Supreme Court seems to agree with the VA court much to their chagrin.
Nick Spinelli
But, cultists will believe Gruber’s “explanation.”
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Goober had nothing to do with either case.
Four judges who held that one sentence out of a book of sentences was capable of more than one meaning to reasonable people.
That is the classical definition of ambiguous in statutory interpretation – legal hermeneutics.
To ignore the majority of judges and listen to a goober is intellectually dishonest.
Your culture is showing through again.
The whole ACA was a poorly crafted law to insure insurance companies gained maximum profits. The primary purpose was not to set up a health care overhaul to give everyone health insurance. That being said, we need health coverage overhaul but our political climate is such that if the Repos want to pass a law that says water is wet, the Demos won’t bring it to a vote, and if the Demos want to pass a law that says people need to breathe, the Repos will vote against it.
We also have a Constitutional form of government where our government is limited, not we the people. If we let Mr. O get away with his attempt at dictatorial law making/breaking, will we also let President Santorum or President Palin get away with the same? Can’t have one without the other.
But I really want to know where I can get one of those half million dollar consulting jobs for creating a law that makes sure giant corporations get billions of tax dollars?
Ron, Intellectual dishonesty is rampant in politics now, more than any time in my 6 decades on this earth.
But, cultists will believe Gruber’s “explanation.”
SWM, “I DON’T KNOW WHY I SAID THAT.” Precious response. When I want to get people to tell me what they really think during an interview, I create an environment where they are comfortable to speak, “off the cuff.” This “explanation” provided by TPM tells all shrinks, cops, attorneys, PI’s, even more that he knew EXACTLY what he was saying. It is precious!
Intellectually dishonest people thrive because they lack integrity.
The right is hamstrung by logic and integrity…doesn’t it feel that way sometime?
That’s why Prof. Turley is such a rare commodity, a man of integrity and intellectual honesty who is willing to part with the criminals in his party.
http://talkingpointsmemo.com/livewire/jonathan-gruber-explains-obamacare-halbig-video ”
“MIT professor Jonathan Gruber said Friday that his comments that appeared to endorse the view that Obamacare’s tax credits would not be available through HealthCare.gov were “just a mistake.”
“I honestly don’t remember why I said that,” he told The New Republic’s Jonathan Cohn. “I was speaking off-the-cuff. It was just a mistake.”
An online video surfaced late Thursday of Gruber speaking in 2012. In the video, when asked about Obamacare’s insurance exchanges, he appeared to say that the tax credits would not be available in states that used the federal website instead of setting up their own exchanges.
“At this time, there was also substantial uncertainty about whether the federal backstop would be ready on time for 2014,” Gruber told Cohn. “I might have been thinking that if the federal backstop wasn’t ready by 2014, and states hadn’t set up their own exchange, there was a risk that citizens couldn’t get the tax credits right away.”
Gruber noted that his own analysis assumed subsidies would be available in every state. He added that it was “never contemplated by anybody who modeled or worked on this law that availability of subsides would be conditional of who ran the exchanges.”
“There was never any intention to literally withhold money, to withhold tax credits, from the states that didn’t take that step,” Gruber said. “That’s clear in the intent of the law and if you talk to anybody who worked on the law. My subsequent statement was just a speak-o—you know, like a typo.” “
Gruber is in CYA mode.
The situation is clear I think: It is a crap law, and crap reform. But it is not ambiguous and the President does not have the power to alter the law.
It isn’t good policy, but it is what the conservatives wanted.
The meaning of “state” depends on the near context as well as the larger context.
Ascertaining congressional intent ought not be anal.
There were 4 judges who figured that out, two who did not.
Every whore has a price!!!
I guess the government will have to jump through some WHOOPS! in upcoming hearings.
Squeeky Fromm
Girl Reporter