Patterico's Pontifications

7/25/2014

Video: Key ObamaCare Drafter Says in 2012 That You Don’t Get Subsidies on Federal Exchanges – Updated with more video

Filed under: General — Patterico @ 7:45 am

Bring out the flaming skull, or the nuclear bomb, or the siren, or whatever mental image you prefer to accompany Big News:

[I]n January 2012, Jonathan Gruber—an MIT economics professor whom the The New York Times has called “Mr. Mandate” for his pivotal role in helping the Obama administration and Congress draft the Affordable Care Act—told an audience at Noblis that:

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.

Boom. Watch it yourself:

The relevant part of the video is at 31:25. You can skip ahead in the video above, or can automatically start it there by clicking this link.

That’s what we lawyers call a “statement against interest.”

Here’s a quote from the New York Times article that calls this fellow “Mr. Mandate”:

After Mr. Gruber helped the administration put together the basic principles of the proposal, the White House lent him to Capitol Hill to help Congressional staff members draft the specifics of the legislation.

Might be a good idea to ask this guy why it says “exchange established by the state,” huh? I have a weird hunch he might know. But probably doesn’t want to say . . .

(H/t RB Pundit on Twitter.)

UPDATE: IT WAS A PUN! Ha. He now says that he can’t figure out why he said that, and that it must’ve been a mistake. Well, sure. For lefty ideologues like Gruber, it’s usually a mistake when they tell the truth.

He should apply to be a White House Press Secretary. He lies poorly.

UPDATE BY J.D.:

More video with prepared remarks where he speak-o’ed.

Even JournLista hack Weigel had to acknowledge this.

30 Responses to “Video: Key ObamaCare Drafter Says in 2012 That You Don’t Get Subsidies on Federal Exchanges – Updated with more video”

  1. Watch everyone on the left ignore this.

    Patterico (9c670f)

  2. He is now saying that the argument that the federal exchange is not eligible for subsidies is “nutty.”

    I though (but cannot remember) that Ben Nelson’s vote for the ACA was predicated specifically on the federal exchange being blocked from offering subsidies. Google is not my friend this morning – am I wrong and/or high?

    RomneyBot since 2007 (62dd0e)

  3. That’s a theory but I think it’s unproven. Got a link to the “nutty” quote?

    Patterico (9c670f)

  4. I though (but cannot remember) that Ben Nelson’s vote for the ACA was predicated specifically on the federal exchange being blocked from offering subsidies.

    I thought it was the “Cornhusker KickBack”!

    Hadoop (f7d5ba)

  5. Thanks for picking this up Patterico. Look forward to seeing the usual suspects try to spin this.

    njrob (396a12)

  6. A Pun? It was an economic reality when they thought only a few states wouldn’t set up an exchange. When the majority of states refused, it became a political reality.

    Dejectedhead (a094a6)

  7. The court is not supposed to go behind the plain language of the statute. But if you do, it’s carrots and sticks all the way down – and no subsidies for states that don’t set up state-run exchanges was one of them.

    SarahW (267b14)

  8. there’s no other case with as much potential to expose the Roberts whore court for the fascist constitution-perverting obscenity that it’s become I think

    happyfeet (8ce051)

  9. All of these guys know this, in the media, in government, in everywhere.

    Is it a lie when you don’t believe in truth? I mean, just because something is so, doesn’t mean it is SO.

    Amphipolis (d3e04f)

  10. Tim McGuire makes a good point, though:

    The obvious problem – if the potential loss of subsidies was meant to motivate the states, how did it remain a secret, and where was the motivation?

    Milhouse (c63fe5)

  11. Oops. Sorry, Tom Maguire.

    Milhouse (c63fe5)

  12. How did what remain a secret Milhouse? This has been known from the beginning. Are you claiming otherwise?

    njrob (396a12)

  13. How did what remain a secret Milhouse? This has been known from the beginning. Are you claiming otherwise?

    Yeah, I’m not getting the “secret” thing. Wasn’t this the reason for the Halbig Lawsuit?

    Hadoop (f7d5ba)

  14. This was known day one… Senator Max Baucus warned everyone about it during the drafting of this bill:
    http://www.c-span.org/video/?c4504852/senate-hearing-tax-credits-available-state-exchanges

    whembly (b9d411)

  15. Of note: about four or five months ago an MIT Alumni magazine had an interview with Jon Gruber. He came off as rather detached from his legislation, but when he was asked what he thought the chances were that ObamaCare would survive all of its challenges, and he acknowledged that it was highly dependent upon getting young and healthy people to sign up for the exchanges. Obviously, canceling all of the subsidies for the federal exchange is going to keep the young and healthy from signing up, so goodbye ObamaCare.

    JVW (feb406)

  16. I’m sure that Reich Minister Earnest will give us the facts on this from Camp Tranquility.

    askeptic (efcf22)

  17. Truth bends to conform to what they want at any given time. They play with it, like a child plays with dolls.

    Amphipolis (d3e04f)

  18. There is an op-ed article in the Wall Street Journal today (Potomic Watch by Kimberly Strassel) that goes into how the original IRS regulation about who got the subsidies was changed.

    She is basing this on a February 2014 joint report by House Oversight and the House ways and Means Committee. Maybe this report could be found online.

    It was definitely a political decision, and the original draft IRS rule was changed between March 10 and March 15, 2011 after Emily McMahon, acting Assistant Secretary for Tax Policy at the Department of the Treasury saw a news article about the growing legal focus on the menaing of this text. That’s when the words ‘EXCHANGES ESTABLISHED BY A STATE’ disappeared from the draft regulation. The IRS chief counsel (a political appointee) told the working group to read the law in such a way so that everyone in every exchange was eligible for a subsidy.

    There are emails from the spring of 2011 between Treasury employees expressing the opinion that they had no statutory authority to do this.

    They decided that if HHS declared HHS-exchanges to be the same as state-run exchanges that would help, and IRS employees e-mailed HHS on March 27, 2011 requesting exactly that. HHS did so in July 2011 and the IRS published its draft rule in August. It became a formal rule in March, 2012.

    That means Jonathan Gruber, in January 2012, was actually incorrect, because the Obama Administration had already decided the other way, unless he was meaning to argue that the IRS should not adopt a rule like it was proposing.

    The IRS initially was very un-co-operative with Congress and at first refused to give documents to House committee investigators, and then redacted a lot.

    Sammy Finkelman (51afd4)

  19. Kim Strassel….If you’re a subscriber to the WSJ, you can access Kim on-line at wsj.com;
    if not, you can sometimes ‘back door’ through Google.

    askeptic (efcf22)

  20. 8.A Pun? It was an economic reality when they thought only a few states wouldn’t set up an exchange. When the majority of states refused, it became a political reality.
    Dejectedhead (a094a6) — 7/25/2014 @ 9:02 am

    Not a PUN. You know, one of those things that read the same forwards and backwards. Um…a PALINDROME!

    Anyway, I love seeing how this guy called his plain, prepared words an error. Actually, he called it a “Speak-o.” You know, like a typo, only out loud.

    Which is funny, because I always thought a typo was when you did something like type “the” instead of “the.” Or how one guy typed my name “srik” because the ‘a’ and the ‘s’ are right next to each other on the keyboard. Or when Patterico typed “Jonathan Gruber – MIT economics professor” instead of “Jonathan Gruber – Lying liberal hack.”

    arik (02de93)

  21. Gruber’s flip-flops are as expedient as they are transparently self-serving. It’s how hollow men operate.

    ropelight (f693dc)

  22. If it was a speak-o, Gruber made it more than once.

    Milhouse (9d3e42)

  23. How did what remain a secret Milhouse? This has been known from the beginning. Are you claiming otherwise?

    Who knew about it? Hardly anyone, and when Jonathan Adler and a few others discovered it in the text of the law the government denied it. If it was intended as an incentive for the states to establish exchanges, then you’d expect it to have been well publicised at the time, and for the government to have been shouting it from the rooftops (before changing its mind). After all, what good is an incentive that hardly anyone knows about?

    Milhouse (9d3e42)

  24. And none of the state officials who declined to set up an exchange gave the fact that their citizens would not be eligible for subsidies as a reason <i. at the time

    There’s a discussion here (link via JustOneMinute website)

    http://balkin.blogspot.com/2014/03/obamacare-subsidies-before-dc-circuit_24.html

    There is indeed some proof here that this was a drafting error: (that was not caught and corrected) I added some bold.

    ACA §36B(f) provides:

    ‘‘(3) INFORMATION REQUIREMENT.—As revised by section 1004(c) of HCERA.Each Exchange (or any person carrying out 1 or more responsibilities of an Exchange under section 1311(f)(3) or 1321(c) of the Patient Protection and Affordable Care Act) shall provide the following information to the Secretary and to the taxpayer with respect to any health plan provided through the Exchange:… ‘‘(C) The aggregate amount of any advance payment of such credit or reductions”….

    Section 1311 refers to the state exchanges; section 1321 refers to the federal exchanges. Half of this section—which requires reporting to the IRS of the amount of the subsidies offered on both exchanges—would be superfluous the subsidies were not available on the federal exchange. It also would be absurd— another favorite textualist canon.

    Furthermore, as noted by the words in the statute in italics, this section, §36B(f), was added to the ACA in the reconciliation legislation, which followed a week after the ACA’s enactment-. That legislation harmonized House/Senate preferences and took the place of Conference, which is typically the last stage of legislation and brings together the versions from each chamber. Every legislation expert knows that this last stage—where differences across the chambers are resolved—is the most important. It’s why the Supreme Court pays special attention to Conference Reports, for example.

    As a result, §36B(f) is the latest piece to be added to the official original ACA statute and is part of the only document that was negotiated and written by both chambers together. As I have written previously (here), unforeseeable political circumstances made the Senate text of the ACA the text that had to be adopted virtually unchanged by the House. The reconciliation bull was the one and only later-coming piece of the ACA that was negotiated and written by both House and Senate.

    It is no small matter, then, that §36B(f) clearly contemplates the subsidies on both types of exchanges.

    Sammy Finkelman (51afd4)

  25. Or maybe that part is the drafting error, not the clearly written down “established by a state”.

    Patrick Henry, the 2nd (ea3541)

  26. The public reason why many of the states declined to set up their own exchanges was the concommitant responsibility they would have to undertake for an expanded Medicaid scheme, which they claimed that they could not afford.

    askeptic (efcf22)

  27. The question not yet asked is why would ANY state setup an exchange if this section was not in the
    bill ? I doubt we would have 14 state exchanges … more like one or two from rabid liberal governors …

    JeffC (faa0ee)

  28. Yay. Sammy has started the spin already. He’s ignored Senator Nelson and Senator Backus’s remarks at the time. He’s decided to also ignore the prepared speeches of the liar in the video. Sammy, you’re such a good little leftist.

    njrob (cbaf26)


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