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.
Nick:
“Laws are written by lobbyists and special interests w/ the most money to help specific interests of the elite class. Don’t laugh too much nespo, your condescension has not clothes.”
*************
And the White House was built by slaves. Think they lived there?
Of course your comment does nothing to refute my point, but I’ll play. It’s the most simplistic (and disingenuous) of notions to argue that because lobbyists write some laws they get what they want. However, it’s an easy mistake to make since we all lived through Bush and his ceding of the government to special interests but for most non-corporatist governments the drafting of the Bill is a starting point for negotiation. The drafts change over time as the Bill is read.
Keep swinging, nick. You’re due to get something right. Maybe another pseudo-Churchill quote?
mespo, You’re throwing numbers around like a math professor. I know what orifice you found the “Nick is correct 5% of the time.” That reservoir of numbers is strategically located to enable you to shoot from the hip.
Squeeky, Your 1:30p comment is hilarious. You must be weaned off the opiates?
SWM, For the hardcore 20% cultists, they still obsess on Bush. Not the other 80%.
SWM, We have gone over the surveillance state previously. Bush started it w/ the Patriot Act. When Obama took office he set his Chicago politics eyes on it and had a pants tent for months. He doubled down on it. That’s evident to all but sycophants. Shit, he bragged about his kill list, adores drones, and kills US citizens w/o due process.
mespo said, “Laws aren’t ends unto themselves. They are instruments of policy designed to effect the most good for the most people.” Well, our learned barrister must have dusted off his old middle school civics book for that archaic notion. Here’s the reality. Laws are written by lobbyists and special interests w/ the most money to help specific interests of the elite class. Don’t laugh too much nespo, your condescension has not clothes.
Squeeky:
“The country is full of unemployed and underemployed people and he wants to bring in a bunch of immigrants who have no jobs waiting for them.”
***************
Yep, lots of Latino 11-year-olds competing for those lucrative factory jobs in the US. BTW the US unemployment rate stands at 6.1 %. That’s the lowest it’s been since 2008 (5.8%).
Paul:
I guess you have no idea what an end unto itself means. In your pitiful example, the end was preventing death by celebratory gunfire. The means was criminalizing the act of shooting in the air.
Celebratory gunfire is dangerous and most jurisdictions are banning it to save lives. Hey saving lives — another end unto itself, just like the problem addressed by the ACA.
Squeeky:
If only religions believed that. Instead they claim exclusive and competing versions of the truth and encourage their members to enforce those beliefs with violence. Yep if religions were self-correcting like democracis they’d be fine. But since they clam direct approval of the Creator they can’t be. From your lips to god’s ear.
mespo – laws are ends unto themselves. We had a young woman killed by a stray bullet shot into the air during New Year’s Eve. Now we have a law making it a crime to shoot guns into the air. Prior to that, no one had ever been hit, so statistically you have 500 bullets in the air and no one hit, with a population of a couple million. Your odds of being hit are 1 in 2 million times 500. or 1 in 1 billion, but we still have a law. It made the legislature feel like they were doing good.
mespo – as a practicing agnostic I follow or recognize no saints. Obama has much to answer for, but the most transparent administration evah is hiding in the bushes again. I am just sorry that I will not be alive when all of his perfidy is revealed to everyone.
@messpoo
I know just how you feel! Consider:
Now that I’ve stopped laughing, I’ll reply. RELIGIONS aren’t ends unto themselves. They are instruments of policy designed to effect the most good for the most people. You seem to think they are for some other purpose like furthering some conservative utopia or existing in some parallel universe where they move about seeking absolute linguistic perfection and congratulating themselves when they do. They aren’t perfect — none of them — but if they accomplish the designed purpose without too much misery they are good RELIGIONS, the draftsmanship notwithstanding.
Squeeky Fromm
Girl Reporter
Paul:
He ‘ll take double the blame for the failures if he gets half the credit for the successes.
Quiz: Which Repub saint said that?
@paulcs
Yep. Particularly the economic issues. The country is full of unemployed and underemployed people and he wants to bring in a bunch of immigrants who have no jobs waiting for them. All he sees are potential Democratic party voters to keep his crew in power. All it will take is one little bo bo, and we are even deeper into a depression.
Squeeky Fromm
Girl Reporter
John:
“A bad law that does good things is still a bad law.”
***********************
Now that I’ve stopped laughing, I’ll reply. Laws aren’t ends unto themselves. They are instruments of policy designed to effect the most good for the most people. You seem to think they are for some other purpose like furthering some conservative utopia or existing in some parallel universe where they move about seeking absolute linguistic perfection and congratulating themselves when they do. They aren’t perfect — none of them — but if they accomplish the designed purpose without too much misery they are good laws, the draftsmanship notwithstanding.
Squeeky – it is all on Obama now. He owns it all. He and the Democrats.
History is sooo cool because this:
“Bush set a lot of bad things in motion and they seem to have a life of their own.” -Swarthmore mom
will morph in a few years to this:
“Obama let a lot of bad things get set in motion and they seem to have a life of their own” -bobjonesu mom
Squeeky Fromm
Girl Reporter
http://www.huffingtonpost.com/2014/07/26/senate-torture-report_n_5623277.html
“I am outraged,” said John Rizzo, one of the former officials who was offered, and then refused, a chance to see the summary report before publication. He retired in 2009 as the CIA’s top lawyer after playing a key role in the interrogation program.
“They are accusing people of misleading Congress, of misleading the Justice Department, and they never even asked to talk to us,” he said. “And now they won’t let us read the report before it is made public.”
Too bad, so sad, John. Tsk-tsk.
A little OT. Now back to the ACA.
Who has paid you for your part in taking away millions of people’s health insurance? You should be ashamed.
http://www.emptywheel.net/2014/07/26/cofer-black-gets-to-rebut-torture-report-that-shouldnt-include-him/