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.
Apparently not in the 60’s and early 70’s Annie. I wish they didn’t allow 11 year old’s to buy them because I wouldn’t have had to go.
Squeekers, bwahahahaha! I can’t wait.
@annie
I look to convert Nick if she runs. He seems to be pretty open minded.
Squeeky Fromm
Girl Reporter 🙂
And John, there are women who earn a living, and are also poor excuses for a mother. ALSO, I thought that cigaretts were not something that could be bought with food stamps.
Sorry that your mother had issues John. I have a niece who had a child out of wedlock, was on AFDC and got a Section 8 housing subsidy while she went back to nursing school. She’s now a nurse practioner, we’re very proud of her, as are her children who benefitted from food stamps, the AFDC and a roof over their heads via Section 8.
AFDC supported my mother’s alcoholism and steak dinners at the bars while me and my four sisters ate food out of a can. Food stamps were used for her to purchase cigarettes that I would be sent to the market to buy for her. I mowed lawns, raked leaves and shoveled sidewalks to make money for school lunches and clothes. I delivered papers in the morning before school and shined shoes in bars at night (age 11/12) to afford to buy myself sporting goods. We never left poverty; I left her at age 14.
In retrospect, I should have enjoyed that life, right? I should be grateful for the blessings it bestowed on my mother? I should be grateful it sustained her in a lifestyle that her children did not share? I should look fondly on those times and fight tooth and nail for every other child to have the same experience? OR, should I put my energy into reforms that support the less fortunate AND at the same time provide a pathway out of the system.
You have been lied to if you believe conservatives don’t believe in social safety nets. We just believe there is a difference between using it for need and using it as a lifestyle choice.
So Squeeky, I know you will be very excited when Hillary announces she’s running, huh? I bet your buddy Spinelli will be so disappointed in you when you start posting pro Hillary comments. 😀
Well Squeeky, I’m sure Hillary isn’t poor and I know she still thinks social safety nets are a good thing.
Hmmm. I bet there are “liberals” here who comment here who live in gated communities, send their kids to private schools, pay their employees minimum wages or close, cheat on their taxes, have a gun at home, and warn their kids and/or wives not to drive through certain areas of town.
And, FWIW, it is the Libertarians who probably do most of the carping about social security. For some unknown reason, conservatives have been seduced by the economic Libertarians while liberals have fallen head over heels for the social Libertarians.
Squeeky Fromm
Girl Reporter
I bet there are conservatives who comment here who are collecting disability, all the while disparaging those who are disabled and also collect it. I usually tell those who dislike our country’s social safety nets to make sure they tell their elderly parents or disabled relatives that they should refuse the entitlements and that they, the safety net haters, will take care of them, themselves.
Mespo,
Just like Paul Ryan, who benefitted from the Social Security safety net after his father’s death, yet he wants to dismantle it. Such hypocrisy.
Mespo,
You forget stop breathing the clean air or drinking the clean water.
John (our civics):
“Nick and Squeeky,
I’m enjoying your posts; keep up the good work.”
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I’m sure you do. They’re almost as cunningly constructed as this little ditty I found on your website answering some conservative Neanderthal braying your praises”
Joe, I never “bought” into it either; there’s nothing to buy into. Progressivism isn’t just about policy-making that must be sold. It’s a complete cultural indoctrination that destroys individualism, self-reliance, reason, logic and the bedrock Judeo-Christian principles necessary for a virtuous and moral society. I spent my entire adult life as a Republican because I hated the welfare system I lived in as a child but mostly because I joined the Navy in 1979 and wanted a CinC that wanted a 600 ship Navy. It didn’t hurt that we immediately got a big pay raise in his first year in office. What I didn’t know was progressivism exists in both parties. While I was voting for “mine”, I had no idea I was contributing to the growth of government. I’m proud to admit my mistake because that means I “get it” and now make informed choices. I’m now an independent. Like I said earlier; The 1st step is difficult.
So you “hate” the welfare system and regret “living” in it. If true and you’re a man of principle as you claim, I suggest you pay back the benefits you received. It’s an easy calculation. Also, I expect that you will turn in your PX card, deny yourself free medical care at government expense, and pay back all the benefits you derive by virtue of your Navy service that was, after all, compensated for at the time by Uncle Sam. Since you’re a man unto yourself, I also want you to disclaim veteran preferences in employment, turn down veteran tax credits, and avoid federal highways by cutting your own way through the countryside content with the knowledge that you don’t need anyone/anybodyand especially that nasty ol’ federal government that drug you out of poverty, employed you for years and now makes your life quite easy. Thank you for your service!
You don’t hate the welfare system. You hate that other people who now benefit from the welfare system. “I got mine, baby,” and now paying for others troubles you on philosophical grounds. Dear me? Quite the philosopher.
Come on there, sailor. Tell the truth.
Nicely done!
I will be here as long as JT keeps the blindfold on.
Well , I think you could sum up Gruber in an Irish Poem. Oh wait, I have one right here!
Rubric ‘s Grube???
An Irish Poem by Squeeky Fromm
There once was a fellow named Gruber,
And consistency wasn’t his oeuvre.
What he said way back when
Disagreed with the spin,
Now he’s stuck in the muck. What a goober!
Squeaky Fromm
Girl Reporter
nick:
“You’re pissed @ me and the conservatives that have come here and “ruined” this nice blog. Get out your anger. But, they’re here to stay.”
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I doubt it. Like a bad marriage, it’s usually over in a few months.
Once again, both Mespo and Nick, we have a clear rule against using this comment section for personal jabs and tit-for-tat discussion. I am asking you both again to respect that rule and end this personal stuff.
LOL!
John Oliver, Thanks. And kudos on your HBO gig.
Paul:
“So, I guess we are all agreed that the Obama consultant has done himself in by his at least two video appearances backing the DC Circuit.”
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Well, if you guys all agree it’s tantamount to a pronouncement of the Algonquin Roundtable. Might you next take on the problems of climate change?