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Jonathan Gruber: Airbrushed from History

GruberA flurry of activity surrounding the Affordable Care Act (described below) brings to mind a bitter-cold day in February 1948, when party leader Klement Gottwald stepped out onto a Prague balcony to announce the birth of Communist Czechoslovakia. A solicitous comrade (Clementis) placed his fur cap on Gottwald’s bare head. As Milan Kundera describes it in The Book of Laughter and Forgetting:

Every child knew the photograph from posters, schoolbooks, and museums.

Four years later Clementis was charged with treason and hanged. The propaganda section immediately airbrushed him out of history and, obviously, out of all the photographs as well. Ever since, Gottwald has stood on that balcony alone. Where Clementis once stood, there is only bare palace wall. All that remains of Clementis is the cap on Gottwald’s head.

What remains of Jonathan Gruber?

Until a few weeks ago, the administration and the ACA’s congressional masterminds celebrated the MIT professor, in legal briefs and in public, as an unimpeachable authority on the ACA and the chief theorist of the ACA’s “three-legged stool” of coverage mandates, subsidies, and individual and employer mandates. Comrade Gruber, for his part, denounced the Halbig/King plaintiffs’ principal contention—the ACA’s subsidies and mandates apply only in states that have established a health care “exchange” but not in the thirty-plus states that have declined to do so—as “crazy.”  All that, though, was before the appearance of a 2012 video wherein Professor Gruber fully supports the plaintiffs’ theory and, indeed, states it in an admirably concise form.

Professor Gruber has since been airbrushed.

The government’s brief in King v. Burwell—the Fourth Circuit case pending in the Supreme Court on the plaintiffs’ cert petition—conspicuously omits any mention of Professor Gruber and his once-authoritative views. (All briefs, opinions, and further materials are available at the Competitive Enterprise Institute’s site.) What remains of Professor Gruber in the legal proceedings is Judge Edwards’ dissenting opinion in the D.C. Circuit’s Halbig decision, which seeks shelter under the professor’s cap.

Related news flash: In today’s Washington Post and other papers, Senators Harkin and Wyden and Congressmen Levin, Miller, and Waxman explain “The health-care bill we intended.”

(Why today? Because King v. Burwell is on the distribution list for today’s Supreme Court conference. And the dates for the D.C. Circuit’s rehearing are fast approaching—government brief due November 3. Personally I doubt that the justices and judges are terribly impressed with ham-fisted open letters and post-hoc rationalizations, but maybe it’s worth a try.)

The legislators confidently aver that under the ACA, “every state is required to have a marketplace.” If that were true, though, the act would have been declared unconstitutional years ago. (Under the Constitution, no state is required to have anything except a republican form of government, and Congress can’t change that state of affairs. Which is why the ACA gives states an opt-out.) But we intended universal coverage, protest the legislators. Why, yes; and the Halbig/King plaintiffs don’t dispute that. But the best-laid plans of Hill mice and Congressmen gang aft agley. Congress didn’t expect states to opt out until 36 of them did. For an explanation of how this was supposed to work, consult Jonathan Gruber.

If you can find him.

Reader Discussion

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on October 31, 2014 at 11:23:01 am

The supposition underlying the health care scam was that fiats from Washington would survive the few disgruntled mumbles from old reactionaries still wondering how Goldwater lost in '64. Who dares stand in the path of Progress, which is the concomitant of Mother Government, which as the wise know, leaped from the brow of Zeus.
Of course a few minor details and possibilities were overlooked, understandable when you're churning out dicta from on high and at an Olympian rate. Who expected the Little People to notice, didn't the media becloud their obtuse minds? It only shows that even the cognoscenti of Washington, aided by their advance guard, the media, are cursed by the stain of imperfection
And a good thing it is.

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johnt
on October 31, 2014 at 12:28:39 pm

Professor Greve would undoubtedly [?] appreciate the application of Hans Kelsen's criteria to this attempt (including the DC Circuit's) at "positive law."

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R Richard Schweitzer
on October 31, 2014 at 13:30:40 pm

The first time I ever saw video of Jonathan Gruber he stated how wonderful Romney was in the first and only meeting he ever had with Mitt. Then Gruber went home and told his wife he was terrified that the Republican Romney could be President.

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Rich W.
on November 02, 2014 at 07:10:32 am

Should any filings cite his remarks showing "Gruber fully supports the plaintiffs’ theory," it would be quite simple to explain why Gruber is to be given any consideration in determining the Congressional intent. Just copy/paste, copy/paste, copy/paste....

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kbp
on November 02, 2014 at 13:23:03 pm

I expect Gruber to submit an amicus brief, reminding the court that his comments were taken entirely out of context: http://www.youtube.com/watch?v=GtnEmPXEpr0

Gruber says that the law provides for Federal backups for States that don't establish exchanges, but that the Feds are being "slow" about getting them set up (maybe to put "pressure on the States" - a stupid suggestion on Gruber's part). If the Federal backups weren't going to be ready on time, then citizens in States that didn't establish there own exchange will not be able to access tax credits.

There is a good discussion of this by Scott Sumner (no fan of Obamacare):
http://www.themoneyillusion.com/?p=27141.

"Sumner actually watched the video and noticed Gruber’s remarks were taken out of context (context: what a concept!)" - Scott Galupo
http://www.theamericanconservative.com/jonathan-gruber-and-the-smoking-gun-that-wasnt/

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Ken Kelly
on November 06, 2014 at 14:22:04 pm

Come on, Ken. You and I both know it was not taken out of context and that he said it not once but twice. In fact, the whole "off the cuff" thing is laughable since the Noblis video, which was found first and caused the "speak-o" comment, was actually from January 18th where as the JCC video from SF was from a week prior. I don't care what Scott Galupo says. I'll deal with him separately. The bottom line is that for Gruber, he's gone and will never be forgotten. He took the "absurdity" out of the "absurdity" defense.

BTW: I have many more videos of Gruber talking about the power of the States with regard to implementation and the threat that power posed to the ACA. MANY MORE. He was concerned about 1. The Supreme Court decision on Mandates, 2. Romney getting elected and starving the law, 3. States implementation of the exchanges. If you don't like the context of the Noblis video, don't worry, I have more. But at this point I have larger fish to fry.

Lastly, Dr. Gruber was quite confident and vocal about other things regarding the ACA as well. I've been holding back...

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Rich Weinstein
on November 07, 2014 at 17:38:52 pm

Excellent point! Let’s brief this to the Supreme Court.

David Klemencic, among others, interprets the ACA to preclude federal subsidies for health insurance purchased through federally-organized exchanges – that is, in states that declined to set up their own exchanges. They argue that this interpretation does not produce an absurd result, undermining the whole health care law; rather, it reflects the Congressional intent to provide incentives for states to set up their own exchanges.

Other people – and the government – interpret the law to reach the opposite conclusion. Indeed, to read the law to preclude such subsidies would produce an absurd result. What sense would it make for the ACA to direct federally-established exchanges to report on who receives the subsidies if they can’t give subsidies? Moreover, the ACA makes no provision for anyone other than a “qualified individuals” to buy insurance on exchanges, where a qualified individual is defined as someone who “resides in the States that established the Exchange.” To construe the statute as narrowly as Klemencic would suggest, we’d have to conclude that Congress intended to establish federal exchanges with no customers.

Thus, to prevail against the feds, Klemencic must argue that the statute unambiguously precludes providing subsidies in federal exchanges, and that this interpretation does not produce an absurd result. Otherwise, under Chevron, the government wins.

So, can anyone seriously argue that the ACA has no unambiguity on this point, and that we can read it to preclude the subsidies without producing an absurd result?

Certainly not Klemencic. See his 2012 brief in NFIB v. Sebelius at 51:

The Federal Government only subsidizes coverage purchased within an exchange, thus giving insurance companies a reason to sell there despite the distinct regulatory burdens imposed on plans offered through the exchanges. The exchanges cannot be severed from the provisions already addressed. Without the subsidies driving demand within the exchanges, insurance companies would have absolutely no reason to offer their products through exchanges, where they are subject to far greater restrictions. Premised on the mandate, the insurance regulations, and the subsidies, the insurance exchanges cannot operate as intended by Congress absent those provisions.

And his reply brief at 20:

Indeed, the “critical feature” of those exchanges was the “greater standardization of health insurance policies” created by the effective end to individual underwriting. Id. Without that standardization, Congress’ goals in creating the exchanges “would be significantly frustrated.” Id. 46. Moreover, the federal subsidies are the incentive to participate in the exchanges, and without those subsidies, there will be no mechanism to sustain the exchanges.

And certainly not Scalia, Kennedy, Thomas and Alito; see their dissenting opinion at 60:

In the absence of federal subsidies to purchasers, insurance companies will have little incentive to sell insurance on the exchanges. Under the ACA’s scheme, few, if any, individuals would want to buy individual insurance poli­cies outside of an exchange, because federal subsidies would be unavailable outside of an exchange. Difficulty in attracting individuals outside of the exchange would in turn motivate insurers to enter exchanges, despite the exchanges’ onerous regulations. See 42 U. S. C. §18031. That system of incentives collapses if the federal subsidies are invalidated. Without the federal subsidies, individuals would lose the main incentive to purchase insurance inside the exchanges, and some insurers may be unwilling to offer insurance inside of exchanges. With fewer buyers and even fewer sellers, the exchanges would not operate as Congress intended and may not operate at all.

How much more clearly could anyone acknowledge that interpreting the ACA to withhold subsidies from federal exchanges produces an absurd result?

Now, suppose we understand the video to depict Jonathan Gruber stating that the federal exchanges would not offer tax credits. We also know that he has reached the opposite conclusion. While this may not reflect well on Gruber, it certainly bolsters the argument that the statute is susceptible to more than one interpretation – precisely the argument the ACA opponents must defeat to avoid granting Chevron deference to the feds.

So keep pounding that Gruber drum!

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nobody.really
on November 08, 2014 at 14:04:38 pm

I believe you are wrong. You believe I am dishonest. That is not the basis for a good faith discussion.

The Sumner and Galupo links summarize my views on l'affaire Gruber. Frankly, YouTube link should be sufficient. It's not an accident that the first 40 seconds of his answer in the Q&A were clipped out by Blumstein at the recent Cato debate.

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Ken Kelly
on November 08, 2014 at 15:03:12 pm

Wow. I don't think you're dishonest. And I do sometimes cringe when original video is edited. I trynot to do that so as to not destroy context.

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Rich w
on November 09, 2014 at 10:52:19 am

It seems I read to much into the repeated "C'mon you know..."''s in our exchanges. I apologize for jumping to conclusions. That said, It's still hard to imagine what either of us could add to move this conversation forward. I've got two further thoughts, then my quiver is empty:

1) Everybody knows that Gruber was a consultant to administration. What most don't know (or acknowledge) is that he also worked with the Senate Finance committee, and their bill, S. 1796, did not withhold tax credits from non-electing States. To my knowledge, I did not work with Reid's office when then PPACA was assembled there. If there were any weird shenanigans in that office completely up-ending the meaning of :"established by the State" from it's meaning in S.1796, I can't see how he had anything to do with it.

2) In 2011 the IRS issued for notice and comment their proposed rule on exchanges. That rule included language stating that tax credits etc would be available in all exchanges. This was six months before Gruber's book store. (PS Not one single State even mentioned that part of the rule in there voluminous comment, tho they had many other complaints)

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Ken Kelly
on November 09, 2014 at 10:53:57 am

PS. Despite the typos above, ("I" for"he") I am not Gruber.
Some of us would really benefit from being able to edit our posts....

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Ken Kelly
on November 09, 2014 at 11:06:15 am

I'm actually having a totally different thought right now. It has to do with "intent." The "intent" changed. Assuming, and I"m stipulating but not agreeing with, the intent was for all exchanges to have subsidies, (and Ben Nelson would disagree with that, I believe), once Scott Brown got elected, all intent changed. I have that on video from more than one person (Gruber, Zeke, etc.)

The old intent could/might have been to get votes like Ben Nelson and Olympia Snowe and whoever else they needed by jamming stuff into the bill then modifying the bill at Conference. They abandoned that course and the new intent was formed. The new intent was to get the damn thing passed no matter what it said.

If true, then I'd have to go with the Plaintiffs. The legislators changed their legislative path in mid stream. They could have gone through regular process but the Country was against that (Scott Brown). So they cheated the process and got crap instead. I know, I know- Chevron.

Again, I'm stipulating to something that I'm trying to re-noodle in my head. Don't take it too seriously. Just a thought process.

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Rich W.
on November 09, 2014 at 11:42:46 am

"...it certainly bolsters the argument that the statute is susceptible to more than one interpretation – precisely the argument the ACA opponents must defeat to avoid granting Chevron deference to the feds.

(scratching head??) If of the "more than one interpretation" each (all) of the provisions of the statute in question may include an interpretation favorable to the ACA opponents, why do you classify that as the factor that wins the case for the ACA proponents?

For the court to go with a ruling favoring the interpretations of the ACA proponents, would they not then have to ignore the counter interpretations >>>AND<<< interpret the plain text requiring that States establish the exchange as being absurd?

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kbp
on November 10, 2014 at 02:45:55 am

Ben Nelson said repeatedly that he was against a single national exchange on the grounds that it might lead to single-payer. He never once said he had a problem with state exchanges run by HHS. The DC panel noticed this, and declined to give the idea that he did any weight at all.
As for the impact of Scott Brown's election, he was elected well after the language in question was drafted and voted on by the Senate. How can the meaning of the ACA be changed by something that happened after it was written?

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Ken Kelly
on November 10, 2014 at 16:44:10 pm

If of the “more than one interpretation” each (all) of the provisions of the statute in question may include an interpretation favorable to the ACA opponents, why do you classify that as the factor that wins the case for the ACA proponents?

For the court to go with a ruling favoring the interpretations of the ACA proponents, would they not then have to ignore the counter interpretations >>>AND<<< interpret the plain text requiring that States establish the exchange as being absurd?

1. I know of no language requiring the states to establish exchanges. Indeed, the ACA straightforwardly contemplates that the feds with establish an exchange any state that declines to establish one.

2. The Chevron doctrine establishes that where a statute is ambiguous, federal courts must defer to the interpretation given the statute by the agency entrusted to enforce the statute. Thus, any argument that a statute is susceptible of more than one interpretation – or that the “plain meaning” is not so plain, in that it would render an absurd result – should cause a federal court to defer to the interpretation favored by the enforcing agency.

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nobody.really
on November 13, 2014 at 23:13:34 pm

The ACA says each State "shall establish" an exchange. The government's position is that one way to establish an exchange is to do nothing, and let HHS do it for you.

Seems reasonable to me. Not all agree, however.

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Ken Kelly
on November 16, 2014 at 11:58:04 am

Gruber has a wife? Now THERE's a newsworthy story!

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Otto Carbine

Law & Liberty welcomes civil and lively discussion of its articles. Abusive comments will not be tolerated. We reserve the right to delete comments - or ban users - without notification or explanation.