Yesterday, we discussed a controversy involving Jonathan Gruber, a Massachusetts Institute of Technology economist who played a major role the ACA, or “Obamacare.” 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 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. 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. Indeed, Gruber later signed on amicus briefs supporting the White House interpretation and even joined the counter spin from the White House and denouncing that very interpretation as “nutty.” Gruber responded to critics showing the video below by that “I was speaking off-the-cuff. It was just a mistake.” However, now another response has been raised in which Gruber gave the same interpretation during this presentation. In my view, the point is again to ask why both sides have to denounce each other as nuts or extremists when there are good-faith arguments can be made on both sides.
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 addressed 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.
Gruber later insisted that his support for the interpretation was the result of an off-the-cuff comment and a mistake. However, now a second answer is being highlighted where Gruber gives the very same interpretation embraced in Halbig.
Q: You mentioned the health implementation exchanges in the states, and it’s my understanding that if states don’t provide them, then the federal government will provide them. What do you say to that?
GRUBER: Yeah, so these health-insurance Exchanges, you can go on ma.healthconnector.org and see ours in Massachusetts, will be these new shopping places and they’ll be the place that people go to get their subsidies for health insurance. In the law, it says if the states don’t provide them, the federal backstop will. The federal government has been sort of slow in putting out its backstop, I think partly because they want to sort of squeeze the states to do it. I think 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’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, and that they’ll do it. But you know, once again, the politics can get ugly around this.
The point is not to hammered Gruber on this but to address his later criticism of the court and commentators who have embraced this interpretation as simply “nutty.” I happen to agree with the interpretation of the D.C. Circuit as a matter of legisprudence. I believe that the statute is clear and that it is dangerous for a court to read out such express language as “a typo” — just as I believe that it is dangerous for a president to read out such language.
As I noted before, 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. After all, Gruber received almost half a million dollars from the Obama Administration to consult on the ACA and clearly maintaining (at one time) that the provision meant what it says: that states with federal exchanges would not fall under the tax credit benefit.
When confronted on the second discussion, Gruber simply said “same answer.”
@ringhals
Sorry. Spell correcter put in “rituals” not me. I turned the darn thing off.
Squeeky Fromm
Girl Reporter
@rituals
Maybe they are thinking the same as I said here the other day. It is the Red States where the axe will cut the deepest if the subsidies get chopped. Conservatives need to tread lightly, go ahead and prepare a Subsidy Relief bill and have it ready, and get their talking points ready about how Pelosi and the Dems screwed up the bill.
Squeaky Fromm
Girl Reporter
A few Capital “C” conservatives with a different perspective on the Gruber affair:
http://www.theamericanconservative.com/jonathan-gruber-and-the-smoking-gun-that-wasnt/?utm_source=rss&utm_medium=rss&utm_campaign=jonathan-gruber-and-the-smoking-gun-that-wasnt
http://www.themoneyillusion.com/?p=27141
Really this thing all comes down to a bit of might makes right.
No one, not even the courts, are suggesting that the statuory language isn’t clear and obvious.
The courts and people who wish to “make it work” post hoc – that is after we have seen what is in it – are saying that agency interpretation that goes against what is written in the statute is OK, if that interpretation allows a more comprehensive result. Some say that such “make-it-work” interpretation is even more acceptable because although the offending language is in it, obviously no one in their right legislative mind would have written that way intentionally.
Now, when evidence that shows clearly that is exactly what they intended when enacting it, there is still argument that is all just a big misunderstanding.
It is not a misunderstanding, either from inception, to enactment, to even the initial roll-out expectations.
But now that the language just doesn’t work for reality, well they have to claim post hoc reinterpretation is acceptable, for any reason that will fit.
rafflaw, Obamacare was written by insurance companies, for insurance companies. We have already seen how the insurance companies have been able to work around the few things of worth that were in the bill. That was the intent. The plan was conceived at the Heritage foundation, taken up by Mitt Romney, known to be a failure in Mass., then finally written by a Wellpoint executive who had been a staffer to Baccus, took her revolving door to Wellpoint and revolved back to be his staffer so she could write the bill.
Obama is the person who told Congress they could not consider universal, single payer. He barred that plan and the people who represented it from all meetings, even arresting Physicians for Single Payer as they tried to deliver their plan for implementation at the WH. In other words-this is a bad bill, written with bad intent by both the Congress and the President. I don’t understand how you can not see they are all working on this together.
Be that explanation of the origin the case, it doesn’t matter. This is about restoring the rule of law. Gruber knows exactly what that bill means, he did not misspeak, he was caught with his truth pants down. The most important point is that even though you like Obama and thus his power play does not bother you, it is destroying the rule of law. That used to bother you under Bush. It should bother you under Obama. He hasn’t yet been declared emperor for life and there are only assess not horses in the Senate as of now!
What if you get Jeb Bush? What are you going to say, since you’ve already agreed that the president may write the law if he doesn’t agree with how things are going in Congress? Really? What is going to be the basis of your objection? You don’t like Jeb? That’s exactly what abandoning the rule of law gets us into.
What was the incentive for States to set up an exchange? If the Federal exchange provided exactly the same “benefits” as the State then in what alternate universe does it make sense to set up 50 (57 depending on who you ask) when all you need is one?
So, the clear language indicates tax credits only go to State and not Federal exchanges. What’s absurd is to believe the legislative intent was ALL about healthcare insurance.
Oh my , Euro Rap ! Well, since some people are trying to put makeup on the Gruber shiner :
http://m.youtube.com/watch?v=qttGJ3il62Y
BTW, Even the King Court said the writing was ambiguous and they saved the subsidies by deferring to the IRS ‘s interpretation of “broad policy goals.” Sooo , the King Court decision was more about deference than statutory construction. I did an Irish Poem on this somewhere???
Squeaky Fromm
Girl Reporter
Oops, missed …”they’ll be the place that people go to get their subsidies for health insurance.
In the law, it says if the states don’t provide them, the federal backstop will.””
Jonathan, you are highlighting the wrong sentence. The context is derived from the immediately preceding statement:
“In the law, it says if the states don’t provide them, the federal backstop will.”
So Gruber clearly believed that the federal exchange would provide the subsidies but that the government was dragging it’s feet to encourage the states to set up their own:
“The federal government has been sort of slow in putting out its backstop, I think partly because they want to sort of squeeze the states to do it.”
Incidentally, the same thing happened when GOOBER lived in Italy, the home of all Samaritans … I hope you Spinny Trolls don’t botch this one as bad as you did that one so that JT has to remove my comment from WordMess cause the regular admins can’t find it with both hands …
John Oliver,
John,
I would accept “more perfect”. Good post.
===========================
The man opens his eyes to question.
Damn good!
In so doing do not forget that a question is not an answer.
Nick Spinelli
Obamacare does not make sense. It has been a Rube Goldberg cartoon since its inception. It is dying because of it’s ill conceived construct and the administrations utter incompetence. You do remember the website. Whose fault was that?
===============================
Now software fault enters the “picture” to deny care to those in need.
Like an EMT walking by a dying or maimed American because GOOBER be trippin …
The good Samaritan should trip on GOOBER rather than who?
“The parable of the Good Samaritan is a parable told by Jesus and is mentioned in only one of the gospels of the New Testament. According to the Gospel of Luke (10:29–37) a traveller (who may or may not have been a Jew ) is beaten, robbed, and left half dead along the road. First a priest and then a Levite come by, but both avoid the man. Finally, a Samaritan comes by. Samaritans and Jews generally despised each other, but the Samaritan helps the injured man. Jesus is described as telling the parable in response to a question regarding the identity of the “neighbour”, who Leviticus 19:18 says should be loved.
Portraying a Samaritan in a positive light would have come as a shock to Jesus’s audience. It is typical of his provocative speech in which conventional expectations are inverted. (Wikipedia, Parable of
GOOBERGood Samaritan).INVERT!
And when the plain language of the statute is clear and the legislative intent is absurd, then what?
John,
I would accept “more perfect”. Good post.
Squeeky, Thanks. And kudos to all for ignoring the troll. It is the only way.
John
John Oliver (@OurCivics)
“I still have one question: If the Federal Exchange would exist
…
=======================
There is no if about that except in Goober land.
Congress mandated that if a state did not set up an exchange then the federal state must set one up to do what the little state would not.
Big state is not different from little state based on size.
This case is like human sex … little and big both have a good time dood.
John
MA,
Professor Turley says the law is “quite clear.”
That is an objective statement of fact.
Given that the law is “quite clear,” what rationale do judges and courts use to ignore the “quite clear” law and modify it to fit their party affiliation, political bias and ideology?
This court is in a box. It must RESPECT law as legislated by the legislative branch or USURP power of a separate branch of government.
The judicial branch is an embarrassment of arrogance.
==========================
Hey Yawn.
It is so clear that Four Judges ruled one way, and Two Judges ruled another way.
In the laws of baseball 4-2 sayeth something clear too.
Clear to who … Goober?
John Oliver (@OurCivics)
“I still have one question: If the Federal Exchange would exist in the absence of State exchanges and without a loss of coverage or tax credits, then why were State exchanges even necessary? It would be like me telling my son he had the choice to clean his room (to my standards) to get his allowance; if he didn’t, I would do it for him and still give him his allowance. That makes no sense!”
You want a perfect union?
It makes no sense because the sense was abandoned early on as some declare the Preamble “not binding” when it is the essential American context – The Constitution provides for governance within the parameters of the Preamble. Without those parameters, America makes no sense.
Government is limited to security and infrastructure as “the blessings of liberty” are our endeavors, businesses and industries conducted in the free markets of the private sector without governmental interference. The healthcare industry; all industry is not the purview of government.
Here is all the sense you need.
“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”
They thought people understood that the freedom of BUSINESS was the same as the freedom of RELIGION, speech, assembly, etc.
Privatization. That makes sense.
@nicks
Foley testified along with Mr. Turley about the lawsuit against Obama. She testified that the House had standing. After that l, she was accused of saying the opposite. Which charge was rebutted pretty well IIRC. Anyway , some commenters here jumped on this, yet they seem to MIA on Gruber.
http://jonathanturley.org/2014/07/16/turley-to-testify-in-house-hearing-on-authorization-of-congressional-lawsuit/#comments
They must be busy on something else ???
Squeaky Fromm
Girl Reporter
Oliver, I would add a second question: Why not put subsidized insurees on Medicare? In other words, why dilute limited healthcare dollars by going through Obamacare and sharing with insurance companies? If you like to drink beer and have only limited dollars, you’re going to buy a 6 pack at Walmart, not go to some bartender who will give you only one bottle for the same money.