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.
And here’s the rub – the architects of Obamacare have gleefully discussed, on video, how stupid and easily manipulated the American voters are, and yet people STILL blindly support this law.
They use the absurd, well, at least the poor have something, excuse.
I could rob you, and set your house on fire, and give everything you have to the poor, and use that stupid excuse.
Excuse me, “factory model” not “factor.”
Michael H:
Yes, I am enrolled in Obamacare. We are self employed, so the individual mandate hit us. Although I did not buy the policy on the CA Exchange, the individual plan you buy through Anthem Blue Cross is the same as what they offer on the exchange.
It sucks.
My premium more than doubled. I went from paying a few hundred a month for a family of 3 to more than $900. My per person deductible increased 1100% from a manageable $500 to $6,000 PER PERSON. None of my doctors accepted this new policy, because they explained that there is no way they could keep their doors open and pay their own staff, & malpractice insurance, on what they pay them. I have a photo in my phone of a sign at one of my doctors offices explaining that the vast majority of doctors in CA cannot afford to accept these plans. The only ones who do employ a factor model – get as many patients in and out as fast as you can, reducing the amount of time they can spend with any one patient. (Isn’t that a lovely improvement on quality healthcare?) My drug formulary got tightly restricted, and there is ZERO off formulary benefit, as there had been before. So now I can’t afford a medication that was prescribed for me, and had to skip it.
So, after paying almost $1000 a month for health insurance, I STILL have to pay out of pocket to see a doctor. Obamacare is a curse word in my home. Damn them, damn the politicians who lied to us to pass it, and damn the voters who refused to listen to us who warned them. We’re now paying for your mistake. And boy, are we paying.
My previous insurance had great coverage, and every doctor and hospital we went to accepted it. (My husband has had 3 surgeries over the past 10 years on this policy, and I had a C-Section, and never had any trouble getting the best doctors to accept it.)
So for me, personally, the quality and affordability of my healthcare plummeted.
And we’re just a middle class small business owner. I have NO IDEA how the middle class is supposed to afford this monstrosity. Obamacare was a financial catastrophe to my family.
And I am not alone. Every single time, bar none, I have gone to the doctor for myself or my son, bar none, there ware impromptu meetings in the lobby about how awful Obamacare is for the doctors and patients.
Alright, I’m guessing most of the wingnuts have vented their anti-Obama “I told you so” BS by now. Basically, what Gruber says boils down to “the mandate won’t be called a tax because the public is too stupid…”. As a member of the public I quite vividly remember the SCOTUS allowing the mandate to stand BECAUSE it is a tax. That was in 2012. Gruber’s statement came in 2013. That and the fact that Gruber was one of many consultants to the law, was involved in the economic end of the issue and not policy AND was not involved in writing the law (being a consultant) I’d say his statements speak more to a bragadocious academic with a big ego than anything of solid substance. The details of the ACA were heavily debated in public for about a year leading to its passage. Anyone following the debate that wasn’t tuned solely to the intentionally misleading rightwing media would have been fairly well informed. Don’t blaim the Dems…the details were all publicly available. If you want to blaim anyone for your mis-information then look at the news outlets who had a stake in pushing lies like “death panels”, “$750 billion being stripped from Medicare”, “the ACA covers abortion” and the rest of the lies pushed for political purposes.
Gary – I can’t believe we need to pass an actual bill that would force our representatives to actually read the legislation they passed, but if that’s the only way to get them to do what is the most basic aspect of their jobs, then let’s do it.
JT, since there is so much talk about the amnesty/executive action, I would like to know what you think , will that be violation of the constitution and if it is, will that be an impeachable offense?
CNN is a fraud. Almost All American media is. Ny Times covers up stories and they did it for Bush even.
Our press is a freakin joke
One of the reasons insurance companies and other entities have Pre-existing Conditions clauses in their contracts is that people will wait until they have an expensive medical procedure forthcoming, buy the insurance, and after the procedure is performed cancel their coverage. This type of behavior puts high liability on behalf of the insurance company without any years of prior and future premium payments to offset the losses. If these types of incidents were high enough in terms of their subscribers, the insurance company would become insolvent. There were the notions of elimination periods where pre-existing conditions would not be allowed but those prior to that would be covered. That seems to have worked as a fair balance as long as the elimination periods were only a few months.
“Obama is the President Nixon wanted to be.”
We know the course recommended and taken against Nixon.
Fraud is the matter. Obama, Pelosi, Gruber et al. committed fraud (including Benghazi/Susan Rice, IRS/Lois Lerner et al., Fast and Furious/Eric Holder, VA, Bergdahl, Illegal “child” immigration campaign, failure against Al Qaeda in Iraq, Syria).
Is it legal to defraud the American legislative process and branch; the American people?
Did Nancy Pelosi mean, “we have to pass the bill to find out what’s in it” or did she already know?
The Supreme Court supported and accepted the fraud as dereliction and negligence.
America discusses and knows the fraud was perpetrated.
Excuses are made for “academics.” Does the Constitution mandate the dominion of “academics” for the purposes of matters academic?
Is the Affordable Care Act “academic?” Is the nullification of the Constitution academic?
This egregious fraud is actionable.
What is the course from here, Professor Turley?
What do we call for? What do we say next on CNN?
George – I am thinking we should be boycotting CNN. They are part of the problem.
Without revisiting the Robert’s decision to turn the penalty into a tax:
One of the main reasons that they tried to hide that the Penalty was really a TAX is that it is unconstitutional violation of the origination clause. Revenue and tax bills originate in the House of Representatives not in the Senate. The ACA did not originate in the House.
If the Dems were to put forth that they were taxing the American public, it would have never been able to pass through Congress.
http://www.nationalreview.com/article/360460/obamacares-unconstitutional-origins-andrew-c-mccarthy
At least one Vox writer is certainly having a hard time distinguishing between Gruber and some goober nobody’s ever heard of.
This Gruber is goofy and fruit enough to confuse with Goober. You guys remember Goober Pyle don’t you? From Google on Goober:
“Goober Pyle is a fictional character in the American TV sitcom The Andy Griffith Show and its later sequel series Mayberry RFD. He was played by George Lindsey. Lindsey initially read for the part of Gomer Pyle, which went to singer Jim Nabors. Lindsey is originally from Jasper, Alabama and he was born in Fairfield, Alabama, while Nabors is originally from Sylacauga, Alabama.”
@leejcaroll: Thanks to google, ThinkProgress could find one media story giving some ACA numbers. Impressive.
Interesting that your list of “aware” senators consists entirely of Republicans, with the exception of DLC-type Evan Bayh, who retired from the Senate in 2010.
None of that constitutes a refutation of Gruber’s statement about the attempts of the bill’s supporters to obfuscate.
Also, you’ve either misunderstood or willfully misrepresented Gruber’s statement about CBO scoring. He didn’t say it wasn’t scored at all, he said that it wasn’t scored as a tax. As a matter of simple fact, it was not scored as a tax. The relevant line in the CBO’s report of Nov. 18, 2009, reads: “Penalty Payments by Employers and Uninsured Individuals.”
“Penalty Payments”, not “Tax Payments.” Just as Gruber said.
They can do it if they send up bills that are transparent and easy to understand and the President vetoes them. The Keystone pipeline will be the first. Even some at risk Democrats will sign on. Let him veto it. Incremental changes in Obamacare should come next. Cut it up and make it simple and force the President to show what he stands for. Higher taxes. Less coverage. Forcing the country to his will so he can decide what coverage you should have. That will not fly. Force the issue so he can’t lie his way out of it.
Piece by piece and inch by inch they can be effective. He might start with vetoes but he is too lazy to see it through for the long haul and eventually he will go off golfing and fund raising.
Great article and great comments.
The fact that the Obama administration bases it’s governing philosophy on lies and relying on the stupidity of the American People is particularly troubling when examining how it is enabling Iran to develop nuclear weapons.
In retrospect this might be viewed as the biggest disaster coming out of this festival of ineptitude.
Here is Gruberin his own words:
This bill was written in a tortured way to make sure CBO did not score the mandate as taxes. If CBO scored the mandate as taxes, the bill dies. Okay, so it’s written to do that. In terms of risk rated subsidies, if you had a law which said that healthy people are going to pay in – you made explicit healthy people pay in and sick people get money, it would not have passed… Lack of transparency is a huge political advantage. And basically, call it the stupidity of the American voter or whatever, but basically that was really really critical for the thing to pass… Look, I wish Mark was right that we could make it all transparent, but I’d rather have this law than not.”
Both of those assertions are false — and demonstrably so.
The Congressional Budget Office and the Joint Committee on Taxation scored the individual mandate as increasing revenue by $4 billion in 2016, and, on average, “an estimated $5 billion will be collected per year over the 2017–2024 period.” Whether they viewed the mandate as a “tax” or not would not have affected their analysis because the economic effect is the same whether it is called a tax or a penalty. That penalty is collected under the Internal Revenue Code and policy makers have always claimed — and detractors complained about — the fact that individuals would have report it on
That same office — which produced a flurry of cost estimates throughout the legislative process — was also plainly clear that healthy people would have to subsidize sick people in a larger health care insurance pool. In this letter dated November 30, 2009 to then-Democratic Senator Evan Bayh (IN): “some provisions of the legislation would tend to decrease or increase the premiums paid by all insurance enrollees, while other provisions would tend to increase the premiums paid by healthier enrollees relative to those paid by less healthy enrollees or would tend to increase the premiums paid by younger enrollees relative to those paid by older enrollees.”
That concept of healthy people subsidizing the sick was also widely covered in media reports. In a Sep. 29, 2009 story titled, “Age and higher premiums go together,” Associated Press reporter Erica Werner explained that the various reform bills making their way through Congress rely on a concept called “community rating,” in which insurers would only be allowed to vary premiums by certain factors such as age, geographic area and tobacco use, within certain limits. Tying the rates of younger and healthier people to the rates of older and sicker beneficiaries causes the former to pay more.
In the House, Democrats sought to impose “an age rating limit of 2 to 1, meaning that a 60-year-old could only be charged twice as much as a 20-year-old based on age,” Werner wrote, while the Senate measure had “originally had proposed a 5 to 1 age rating limit.”
The question was relentlessly discussed in health committees and the White House’s very public webpage about President Barack Obama’s own health care proposal states that he wants to “limit premium variation based on age.” In fact, the president addressed the issue repeatedly while making the public case for reform.
During a 2009 forum with the AARP, Obama explained that “part of the insurance reforms we want to institute is to make sure that there’s what’s called a community rating principle” that would “reduce costs or level out costs for older Americans.” At a bipartisan White House forum on health care the following year, Obama said that healthy and sick people would enroll in a large insurance pool in order to better balance the risk and the cost of insurance. “[Y]ou get the healthy and the young people alongside the not-so-healthy and the older people. But we’re all kind of spreading our risk, because each of us don’t know at any given time what might happen,” Obama explained.
The idea of cross-subsidization was routinely used by Republican critics and lawmakers to slam Obama’s health care effort in 2009 and 2010, but it had been embraced by the GOP during debate over President Bill Clinton’s health care bill. In fact, an alternative to Clinton’s plan sponsored by Republican Sens. John Chafee (RI) and Bob Dole (KS) would have “spread risks and costs more broadly” by requiring insurers to adopt “modified community rating.”
Lawmakers were aware that this aspect of health reform could be seen as controversial but they spoke about it openly without attempting to hide its effect. As Sen. Chuck Grassley (R-IA) explained during a February 2, 1994 Senate Finance Committee hearing on the matter, the issue was “a given.” “Well, I think it is almost a given that-it is a little more controversial on community rating, but it is almost a given that there is going to be some sort of community rating, modified community rating, and eliminating cherry-picking, et cetera,” he said.
Update
Community rating has long been a topic of Congressional conversation. The committee sites aren’t great, but a search of Senate Finance shows 155 results, for “community rating.” A Congressional Record search (also, the tool doesn’t work super duper well) from 2009-2010 shows 35 mentions on the floor (a lot of them by Republicans disparaging the concept).
“http://thinkprogress.org/health/2014/11/13/3591850/jonathan-gruber-lying-obamacare/
The facts are the facts but I know a bunch of folks will say oh its from think progress but the CBO and what lawmakers did and knew do not change because if the site copied and pasted from. Unfortunately too many here will say don’t care about the facts because it is from a liberal site as though that negates facts, i.e. the facts that they do not want to know because they may actually have to think about their positions and the arguments on which they base them,
Chanced upon this article but again that is it for me with this thread and other about Gruber, (Proof of how facts are irrelevant I wrote I was finished with the thread then get notified in email Paul and another asking me a question because after all my statement I am finished was irrelevant to what they want to say and present)
Why is it every time I meet a person or group that attends these expensive political fundraising dinners etc – I also find out that while they are reflexively fussing about corporation & wealthy influencing elections – I also find that they own huge amounts of financial instruments that supply their generosity. – I also find that they never wish to change the tax code in any way that would place a tax on wealth unearned vs income.
There are three different types of people in this world:
Those that are born ordinary,
Those that were born ordinary but can change,
And those who are born with special powers…
DBQ, I couldn’t write it better. i have argued the oil change analogy over and over. HSA’s are the only way to go. How great would it be to put that money away each month during your healthy 20’s to have for later in life. People like Annie do not want personal responsibility mechanisms to be put in place. I really think it scare them for people not to rely on the nanny state. It is always about redistributing wealth of what they perceive as the greedy people.