On July 22, I wrote about the Halbig decision by the D.C. Court of Appeals. That decision, which actually saw a court limiting itself to the role the Founders envisioned and created for courts, has the very real potential to destroy Obamacare.
A brief summary: Obamacare plainly says that only people getting insurance through insurance exchanges established by the states are eligible for subsidies. That means money out of the pockets of taxpayers to pay for other people’s insurance. This is what “affordable” means. The Obamites that drafted the law purposely included that provision as a means of forcing states to establish state exchanges lest they be in political trouble with their constituents. Unfortunately for the Obamites, 36 states refused to establish exchanges, but the IRS, willing slave of progressive tyranny, made regulations that basically said “OK, so it says “state,” but state means federal exchanges, so everybody gets subsidies! Free money! Whee! All praise the great and magnificent Obama, and pay no attention to that man behind the curtain!”
If the Halbig decision stands and is implemented, millions of people now getting subsidies for their insurance would be forced to pay full price, which is many times what they currently pay. The “Affordable Care Act,” never was affordable, and will be even less so, requiring Congress to go back to the drawing board. When–not if–that happens, Obamacare dies a rapid and unlamented death, particularly if Republicans, despite their best efforts to ensure a permanent Democrat majority, win both houses of Congress. Therefore, progressives are scrambling to construct sufficient lies to stave off the inevitable.
Progressives are now claiming that “state” was merely a typo, a drafting error, and they meant, all along, that everybody should get subsidies. But now we discover, via the good folks at Powerline, that the very architect of Obamacare (and Romneycare)–MIT professor Jonathan Gruber–made a gaffe back in 2012. A gaffe, as you’ll recall, is when a political type accidently tells the truth.
Jonathan Gruber, a professor at MIT, is widely is regarded as the architect of both Romneycare and Obamacare. Following the D.C. Circuit’s decision in Halbig, he asserted that the provision of Obamacare limiting subsidies to the state exchanges was a “typo.” Indeed, he found it “criminal” to suggest that Obamacare was intended to work this way.
But William Jacobson (via one of his readers) has unearthed video from 2012 in which Gruber explains why Obamacare limits subsidies to participants in state exchanges — the view of the statute he now finds “criminal.”
Gruber stated: ‘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.’
This, of course, is precisely what the D.C. Circuit concluded in Halbig.
By all means, take the link, view the video clip and read the entire brief article, but before you do, consider this excerpt from a March 28, 2012 New York Times article about Gruber’s exalted place in the progressive firmament:
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.
Powerline followed up with a brief article about the complicity of the IRS. They quote Kimberly Strassel, writing in the Wall street Journal.
[T]he White House was faced with the prospect that citizens in 36 states—two-thirds of the country—would be exposed to the full cost of ObamaCare’s overpriced insurance. The backlash would have been horrific, potentially forcing Democrats to reopen the law, or even costing President Obama re-election.
The White House viewed it as imperative, therefore, that IRS bureaucrats ignore the law’s text and come up with a politically helpful rule. The evidence shows that career officials at the IRS did indeed do as Treasury Department and Health and Human Services Department officials told them. This, despite the fact that the IRS is supposed to be insulated from political meddling.
Talk about irony! We know how well that’s worked out. Strassel continues:
We know this thanks to a largely overlooked joint investigation and February report by the House Oversight and Ways and Means committees into the history of the IRS subsidy rule. We know that in the late summer of 2010, after ObamaCare was signed into law, the IRS assembled a working group—made up of career IRS and Treasury employees—to develop regulations around ObamaCare subsidies. And we know that this working group initially decided to follow the text of the law. An early draft of its rule about subsidies explained that they were for ‘Exchanges established by the State.’
Yet in March 2011, Emily McMahon, the acting assistant secretary for tax policy at the Treasury Department (a political hire), saw a news article that noted a growing legal focus on the meaning of that text. She forwarded it to the working group, which in turn decided to elevate the issue—according to Congress’s report—to ‘senior IRS and Treasury officials.’ The office of the IRS chief counsel—one of two positions appointed by the president—drafted a memo telling the group that it should read the text to mean that everyone, in every exchange, got subsidies. At some point between March 10 and March 15, 2011, the reference to ‘Exchanges established by the State’ disappeared from the draft rule.’
The February report cited by Strassel is accessible online here; Strassel’s column is must reading in its entirety.
Mr Gruber has helpfully explained what might seem to the unsophisticated to be an embarrassing gaffe. Via Reason.com:
The statement he made in the video, that ‘if you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits,’ aligned closely with the plain language of the law, which plainly states that subsidies are only available state-established exchanges, as well as the argument made by legal challengers who have argued in court that the Obama administration’s implementation of the law—which allowed subsidies in federally run exchanges via an Internal Revenue Service rule—is illegal.
The timing was also notable. Gruber made the statement in January 2012, before the paper laying out the legal case against the administration’s implementation had been published, and before the legal challenge against it had been filed.
Gruber has over the past year and a half repeatedly taken the other side of the argument, saying on MSNBC this week, ‘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.’
This morning, in response to the clip, Gruber told The New Republic that the comment was a mistake. ‘I honestly don’t remember why I said that. I was speaking off-the-cuff. It was just a mistake,’ he said.
He continued: ‘There was never any intention to literally withhold money, to withhold tax credits, from the states that didn’t take that step’ [of creating their own exchanges]. That’s clear in the intent of the law and if you talk to anybody who worked on the law. My subsequent statement was just a speak-o—you know, like a typo.
A mistake. A typo. Off-the-cuff. Right. If so, Gruber made that mistake repeatedly:
But as it turns out, earlier in the same month as the original clip, he made essentially the same point, using similar language, once again calling the possibility that states won’t set up their own exchanges a ‘threat’ to the law and saying explicitly that residents in states that don’t set up their own exchanges would not have access to tax credits.
In a January 10, 2012, speech to the Jewish Community Center of San Francisco, he said the following:
The third risk, and the one folks aren’t talking about, which may be most important of all, is the role of the states. Through a political compromise, it was decided that states should play a critical role in running these health insurance exchanges. And health insurance exchanges are the centerpiece of this reform, because they are the place that individuals can go to shop for their new, securely priced health insurance. But if they are not set up in a way which is transparent, and which is convenient for shoppers, and which allow people to take their tax credits and use them effectively by health insurance, it will undercut the whole purpose of the bill.
Now a number of states have expressed no interest in doing so. A number of states—like California, has been a real leader—one of, I think it was the first state to pass an exchange bill. It’s been a leader in setting up its exchange. It’s a great example. But California is rare. Only about 10 states have really moved forward aggressively on setting up their exchanges. A number of states have even turned down millions of dollars in federal government grants as a statement of some sort—they don’t support health care reform.
Now, I guess I’m enough of a believer in democracy to think that when the voters in states see that by not setting up an exchange the politicians of a state are costing state residents hundreds and millions and billions of dollars, that they’ll eventually throw the guys out. But I don’t know that for sure. And that is really the ultimate threat, is, will people understand that, gee, if your governor doesn’t set up an exchange, you’re losing hundreds of millions of dollars of tax credits to be delivered to your citizens. [emphasis added]
No doubt additional examples of Gruber’s inadvertent, off the cuff “mistake” will come to light in the days to come.
At this point, the only thing I still find surprising is that something under 50% of Americans still think Barack Obama is doing a swell job, and is fundamentally honest. Oh well. As long as he’s vacationing, golfing and fund raising for the next two years, most of the remaining damage will be by omission rather than commission.