This week we discussed another videotape of Jonathan Gruber, a Massachusetts Institute of Technology economist who played a major role the ACA, or “Obamacare,” making revealing and highly embarrassing statements about the strategy behind the passage of the Act. Gruber had already previously attracted controversy with statements where he endorsed the theory at the heart of the recent decisions in Halbig and King by challengers to the ACA: to wit, that the federal funding provision was a quid pro quo device to reward states with their own exchanges and to punish those that force the creation of federal exchanges. That issue will now be decided by the United States Supreme Court. Gruber caused uproar when, after he had denounced the theory as “nutty” during the arguments in Halbig and King, he was shown later to have embraced that same interpretation. Gruber has become a major liability in the litigation. Gruber then was back in the news with an equally startling admission that the Obama Administration (and Gruber) succeeded in passing the ACA only by engineering a “lack of transparency” on the details and relying on “the stupidity of the American voter.” Now a new videotape has surfaced from Gruber speaking at the University of Rhode Island in 2012 and expressing the same contempt for the intelligence of citizens — suggesting again that they were hoodwinked to “the lack of economic understanding of the American voter.” Gruber was paid roughly $400,000 to help design the ACA by the Obama Administration, but he is proving far far more costly in its aftermath.
The latest comments came with discussion of the so-called “Cadillac tax” which mandated that insurance companies would be taxed under the Act. It was the idea of then Senator John Kerry, who Gruber describes as his “hero” in using the naiveté of voters against them. He explains that taxing individuals would have been “politically impossible” so Kerry and the Administration opted to tax the companies with full knowledge that the cost could be passed on to citizens:
“So basically it’s the same thing. We just tax the insurance companies, they pass on higher prices that offsets the tax break we get, it ends up being the same thing. It’s a very clever, you know, basic exploitation of the lack of economic understanding of the American voter.”
In another view taken from at an October 2013 event at Washington University in St. Louis, Gruber also refers to the “Cadillac tax,” and says “They proposed it and that passed, because the American people are too stupid to understand the difference.”
In fairness to Gruber, (putting aside his obvious low opinion of the American people) his frank discussions are consistent with speaking as an academic. However, such machinations are rarely confirmed by high-level consultants or officials. The ACA was pushed through by a muscle vote on a handful of votes while the Administration made claims that he later had to admit were misleading at best, such as the President’s repeated assurance that citizens could keep your current insurance policy if you liked it. There was a great deal of cynicism and misleading representations made during the ACA debates — reflecting a deep-seated contempt for the intelligence of the American voter. Gruber however seems to celebrate the success in using what he viewed as the stupidity of citizens, to quote his earlier comments, to secure passage of the ACA. It is the triumph of the ends over the means — the mantra of Beltway denizens who view more principled actors as naive chumps. What is shocking for many outside of the Beltway is of course the moral relativism and cynicism reflected in such comments, but Gruber is the norm in Washington. He is the face of the consequentiality morality that has long governed this city.
What is different is that he admits it.
The video below shows an honest and frankly insightful account of how the tax issues are addressed as well as the merits of such tax systems. It is the type of lecture that occurs on many campuses but the lecturer is rarely the architect of the underlying legislation. It is the combination with the earlier videotapes that has fueled the ongoing controversy, even though this is less confrontational. Actually, the far more significant statements were found in the first videotape where Gruber expressly endorses the theory of challengers in King and Halbig. Those statements are likely to be cited in the ongoing litigation and Gruber later effort to dismiss them as unintentional or off-the-cuff seemed less than honest.
The fact is that academics are often caught in a dilemma in moving between the political and academic worlds — worlds based on different values. Where the political world values opaqueness and evasion; the academic world values transparency and clarity. Gruber is a brilliant and highly distinguished academic and his lectures satisfy his obligation to be honest and accurate. That is precisely why his former associates in the Obama Administration may now find him less than ideal as a political ally.
http://kff.org/health-reform/state-indicator/marketplace-enrollees-eligible-for-financial-assistance-as-a-share-of-the-subsidy-eligible-population/
http://www.newrepublic.com/article/120233/king-v-burwell-how-supreme-court-could-wreck-obamacare-states“You can follow this link to see numbers for each state, based on data from earlier this year I got from HHS and the Kaiser Family Foundation. But go back to that map for a second. Notice a pattern? Nothing would happen in states on the West Coast and in much of the Northeast, plus Kentucky, Colorado, and Minnesota—because those states all created their own marketplaces. The premium increases would hit in the other states, and they’d generally be largest across the South, for the same reason they are high in Mississippi: Those states have large numbers of lower income people, who qualify for more assistance.”
Obama started the US on the road to a single payer system that will eventually cost Americans a third to a half of what they pay now.
What evidence exists of this? Just the opposite has happened – premiums have increased, co-pays have increased, deductibles have decreased, and covered illnesses have decreased. This is ALL because of additional taxes, ACA mandated coverages, etc.
Anyone here hear of the proposed Read the Bills Act?
How many times have we heard of Congress/House passing bills where none of the legislators actually read what was in the bill, but rather trusted or assumed what was in it via third parties? PATRIOT ACT and ACA both come immediately to mine. “We have to pass it to see what is in it” mentality.
Here is a link to the RTBA proposed legislation:
https://downsizedc.org/etp/rtba/
Has Gruber given back the $400,000?
DBQ –
As a modification to your ideas –
1.) Change it every business, and person, is taxed at a fixed amount. This will provide the basic (and I mean basic, like catastrophic coverage primarily) level. From there, a business can choose to pay more toward an employee’s coverage of above minimum. Make that payment tax deductable or some kind of credit to encourage businesses to pay more (bigger ones will as a means of competing for talent or good PR). Make it simple by having a single clearinghouse for the employers to send their checks. Reduce fraud by having a single location for payment, and save employers a boat load of money that they hopefully will invest in their employees. And it gives some degree of centralization and control to the Government which feels it needs it.
2) Give individuals some type of sliding tax credit for spending more on their health insurance. That way you’re helping those that make less money, or are young and just starting out. The 25 year old version of me didn’t think much about health insurance until being young and newly married resulted in the natural consequence and forced me to. But a tax credit on my 1040 would have caught my attention.
Lots of money to be made in the stock market these days. Apple stock is on the move these days, jim22. Wouldn’t sit around peeping out the window and waiting for the crash
“Nick Spinelli
I’ve noticed most of the liberal commenters here don’t get outta bed until late morning.” Another insult…….I am up at seven and working hard. Mostly, I prefer not to participate these days but good for Isaac as he provides some historical perspective….. not nearly as myopic as the breitbart crew.
Well, I do have to agree with Gruber in one aspect. The American voters in the majority are really uneducated and stupid when it comes to economic thinking. It is on display here with those who want to chime in and parrot the mantra of single payer without any comprehension whatsoever on the economics of putting such a policy in place and the economic ramifications on the general public. Squawking without thinking.
I’m on the same side as Karen…I…>TOLD….you so!
Personally, I have always been in favor of making the premiums paid for employer group insurance taxable to the employee and giving the employees several choices of
1.)different levels of coverage that they can choose from high deductible to Cadillac plans. Most people would choose a less expensive plan, be taxed less and not overuse medical services as they do now. The cost of insurance would be less and the rising cost of medical services would be less from decreasing demand.
2.)taking the money as cash instead of insurance premiums and finding your own insurance. The young would benefit incredibly in this process in a free market/actuarially correct insurance product.
3.) taking the money and having more discretionary income. Good again for the young, the healthy and for those who may already be covered under another plan from their spouse.
Of course these choices are unacceptable to the Progressive all controlling centralized government mindset, because they are individual choices made by individual people to serve what they decide is in their OWN best interest. In addition, there isn’t the opportunity to transfer income from one unwilling set of people to another set of people and there isn’t as much opportunity for corruption, graft and kickbacks.
I’ve noticed most of the liberal commenters here don’t get outta bed until late morning.
God I can’t wait for the real collapse so things can really change.
We now have a name for this sort of corruption: GRUBERING. And all of those that support it before, during and after they learn of it have been: GRUBERED!
You wrote: “The fact is that academics are often caught in a dilemma in moving between the political and academic worlds — worlds based on different values. ”
Academics can not be excused by your reasoning. Values are values! Do you personally have a different set of values for different situations? I am serious; can you answer that question? I imagine that you–Johnathan Turley–have one set of values.
Isaac didn’t just drink the Kool-Aid, he mixes it up for his fellow cultists.
“Obama started the US on the road to a single payer system that will eventually cost Americans a third to a half of what they pay now.”
I hear that claim make quite frequently, but I have never heard anyone back it up with any logic. How does requiring every individual to purchase private insurance lead to a single payer system? What is the process of transmogrification that you see happing? Step one is… Step two is…
Mike, I agree w/ you about big business and its corrupting influence. But, business also knows how to do things. How to make things work. Don’t you think having a business person in charge would have helped the rollout of Obamacare?? You did notice when his ass was in the fire Obama went to a business executive to try and fix the VA, didn’t you?
I’m sorry . . . can’t . . . hold it . . . in . . .
Told you so!
OK, that’s out of my system. I feel so much better now.
Here’s what I find inconceivable: after discovering their government has lied to them to get a healthcare law passed, which they made a mess of by overpaying for websites that didn’t even work, and personal information got hacked because they didn’t bother to build an adequate firewall, there are still people who want the government MORE involved in our healthcare through single payor, or some type of hybrid like Medicare.
You don’t reward dishonesty by handing over more keys!
And Medicare is going to be short on funds by 2030. So why dump in 10 times more people when we haven’t made it self sustaining with the people it already serves?
What’s really scary is the blind obedience of a segment of voters. I suppose every party must have its true believers, but they’ve really been on display on blogs criticizing Obama.
Aren’t both forms of ‘taxation’ occurring? Our insurance policy has gone up considerably in price, *and* my husband’s company’s consultant infiormed us that the company can no longer offer 12,000 a year to the employees for insurance reimbursement–that they can, however, offer a 12,000 bonus to employees which will be taxed. Or, the employees can buy insurance on the Exchange. Is this information my husband received incorrect? It certainly seems that the government is pushing people onto the Exchange…
Pick your sausage maker. The process is the same but the results are not. The results of the three stooges is the mess Obama is getting us out of.
Complete transparency with all statistics and data accessible to all voters. Voters should then be obligated to take a test on each issue and pass it before being allowed to vote. The same circus can continue voting for the idiots that come forth but if voters understand the issues and the issues are part of voting then the twenty to twenty-five voters that pass the tests will end up running the country. Like Socrates and Plato desired, the thinking man rules not the special interests. Plato’s ‘Republic’ was written 2500 years ago and the problem then was the same as it is now: oligarchs and special interests versus the thinker. The more things change the more they stay the same.
This guy Gruber or Goober is on a pedestal. Obama started the US on the road to a single payer system that will eventually cost Americans a third to a half of what they pay now. This is an example of Obama’s sausage making. The three stooges started the US on a road to ruin, two wars bungled, one of which was criminal, sewering of the economy, the lies of the bush regime make Obama look like a school child. Oh yeah, voters should have to take ‘recent’ history tests also.