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.
I would imagine that what has the anger boiling , in general, is that all the various shills and hacks and cultists craft a wonderful tale that only the mean old Republicans would ever read the law to prohibit subsidies and FERSPLAT!, here comes these old Gruber tapes to the surface and demolishes that spin like somebody poking a stick in some bicycle spokes. Whoops, tumble, limbs akimbo, ouch!
The lawyer types try to salvage the situation by making evidentiary objections, but it is too late. The cat is out of the bag.
No wonder the cultists are trying to drown themselves with echoes.
Squeeky Fromm
Girl Reporter
The macro issue here is Obama was elected and saw his mandate as govt. solutions to societal problems. He was the highly intelligent politician who knew how to run a govt. Besides the lawlessness, the arrogance, the condescension is the real Achilles heel that is so destructive. This President is incompetent in domestic and world issues. cue, “Yea but Bush,” The issue is OBAMA. Bush is long gone. I never voted for Bush. The incompetence of the big govt. philosophy has taken a gut shot, and those gut shots hurt like hell and are almost always fatal.
At least that’s the way it should work in a capitalist society.
Insurance companies decide coverage, individuals decide policies based on their wants and needs.
The Constitution is based on the individual, is it not? Making people buy a policy they don’t want or need is antithetical to everything in the Constitution. Of course, your guys Obama and Holder have shredded the Constitution. JT writes eloquently about that. The alleged “good intention” is the road to hell.
I see myself more a Touchstone. Either way, a big step up from cockroach. Can we have a civil discussion about what has your anger boiling.
And 98% equals hundreds of millions. Is there a point to this math? People don’t decide covergage. Insurance companies do. To suggest otherwise puts you outside of reality.
That mere “2%” equals MILLIONS of people. And the paternalism of the government cultists deciding for people what is a “better deal” in a health policy is like a used car salesman trying to sell a lemon but telling you “It’s a great deal.” You allow people to decide on their own what is, or isn’t, a good deal. People have different needs, wants and desires. People are exponentially more qualified to make their own decisions than a govt. that runs the VA!
Nick:
I dub thee Dagonet.
mespo, I dub thee Sir Galahad.
Z:
Sure you will. That’s the battle cry of the disgruntled. You want to talk revolution be prepared to suffer the fate of revolutionaries and know the odds. Violent revolutions succeed about 20% of the time and nonviolent ones about 50% if at least 3.5 % of the population gets behind it and protests. So why not get 10.5 million of your closest friends and hit the streets. Good luck.
If the Supreme Court, President and Legislative Branch will not uphold the US Constitution, then We the People will have no choice but to take control from them and uphold it ourselves.
Annie:
I call it cockroach courage.
Mike A:
“This issue has fallen victim to over thinking. Sloppiness is usually evidence of nothing more than sloppiness. The question is what to do about it. My gut (for what that’s worth) tells me that the D.C. Circuit will agree to reconsider the case en banc in an effort to salvage the statute, because that’s what courts are supposed to do if possible. The court will then adopt something akin to the 4th Circuit rationale, and the Supreme Court will at least temporarily dodge the bullet. Congress will then be under pressure to adopt a glitch bill. The only way the ACA will disappear is through enactment of a single payer system, an eventuality I view as inevitable, but way down the road.”
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That sounds about right based on past history.
Mespo, some beasts think that by schmoozing and brown nosing others, those others won’t call them on their falsehoods, when they continuously spout them. I see that one after another has recognized the creature sidling up to them for what it is and rejects the falseness of its entire being. The creature sidles away to look for its new ‘mark’.
An allegory, by Annie.
“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.”
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It’s pure sophistry to argue that Congress intended to allow both state and federal exchanges but only allowed tax credits for state exchanges. It’s makes no rational sense. That is why Judge Gregory interpreted the statute correctly.
But the bigger point everyone keeps missing is that the law is working with millions now becoming insured. That seems to be mere afterthought to those hellbent on finding ways to undermine this President. It’s form over substance and lost is the fact that the 25000 who were dying every year under the old broken system for wont of healthcare are now able to survive.
None of the critics ever mention that fact. I don’t blame ’em. How could they ever justify being complicit in their fate. Better to ignore them.
“The line repeated thousands of times by the President and his sycophants “If you like your insurance you can keep your insurance” was a lie, AND THEY KNEW it was a lie. This monstrosity is suffering the death it deserves, slow and painful”
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Yeah, it’s a real whopper and nick’s .005 correctness batting average remains intact. About 2% of the people with plans can’t keep ’em because they don’t offer the minimum coverages required under the ACA. That means the carriers can’t fleece people any more with substandard coverage. Quite the lie and threat to the Republic.
The bottom line is that the vast majority of subscribers can keep their plans and most of those cancelled will enjoy better not poorer coverage.
Does anyone out there actually believe that any SCOTUS resolution of this issue would have ANYTHING to do with the actual text (or actual legislative history) of the statute? Please…
This issue has fallen victim to over thinking. Sloppiness is usually evidence of nothing more than sloppiness. The question is what to do about it. My gut (for what that’s worth) tells me that the D.C. Circuit will agree to reconsider the case en banc in an effort to salvage the statute, because that’s what courts are supposed to do if possible. The court will then adopt something akin to the 4th Circuit rationale, and the Supreme Court will at least temporarily dodge the bullet. Congress will then be under pressure to adopt a glitch bill. The only way the ACA will disappear is through enactment of a single payer system, an eventuality I view as inevitable, but way down the road.
Lovely. Another public lie connected with Obamacare, claiming it was a “typo” because the court decision undermines the ACA. Now there is evidence that the wording was a carrot to try to buy states’ support.