ObamaCare architect explained in 2012 video why only state exchanges pay subsidies

posted at 8:01 am on July 25, 2014 by Ed Morrissey

This week, Jonathan Gruber appeared on MSNBC to assert that the DC Circuit appellate court got the ObamaCare statute all wrong in its Halbig decision. Gruber, one of the key architects of the ACA and of the Massachusetts “RomneyCare” law that preceded it, insisted that the state exchange requirement for subsidy payment was purely accidental. “It is unambiguous this is a typo,” Gruber told Chris Matthews. “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.”

Two years ago, though, Gruber gave a much different explanation for this part of the ObamaCare statute. Speaking at a January 2012 symposium for a tech organization that this was no typo. It was, Gruber said, a deliberate policy to twist the arms of reluctant states to set up their own exchanges — and that a failure to do so would mean no subsidies for their citizens. Peter Suderman at Reason and William Jacobson at Legal Insurrection immediately grasped the significance of this contradiction:

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. [emphasis added]

Suderman gives the context of Gruber’s remarks:

Jonathan Gruber, a Massachusetts Institute of Technology economist who helped design the Massachusetts health law that was the model for Obamacare, was a key influence on the creation of the federal health law. He was widely quoted in the media. During the crafting of the law, the Obama administration brought him on for consultation because of his expertise. He was paid almost $400,000 to consult with the administration on the law. And he has claimed to have written part of the legislation, the section dealing with small business tax credits.

After the law passed, in 2011 and throughout 2012, multiple states sought his expertise to help them understand their options regarding the choice to set up their own exchanges. During that period of time, in January of 2012, Gruber told an audience at Noblis, a technical management support organization, that tax credits—the subsidies available for health insurance—were only available in states that set up their own exchanges. …

And what he says is exactly what challengers to the administration’s implementation of the law have been arguing—that if a state chooses not to establish its own exchange, then residents of those states will not be able to access Obamacare’s health insurance tax credits. He says this in response to a question asking whether the federal government will step in if a state chooses not to build its own exchange. Gruber describes the possibility that states won’t enact their own exchanges as one of the potential “threats” to the law. He says this with confidence and certainty, and at no other point in the presentation does he contradict the statement in question.

So is this a smoking gun in the Halbig case? Politically — yes. Legally? It certainly undermines one argument used by the administration to defend payment of subsidies through the federal exchanges, but it may not be entirely dispositive. What matters here is Congressional intent, not Gruber’s, to the extent that the statute itself appears ambiguous. The actual text of the law supports Gruber’s 2012 position, as both the DC and 4th Circuits found in their opposing rulings, but the 4th Circuit couldn’t quite believe that Congress intended to shaft Americans in states that didn’t set up their own exchanges. That might have changed had they heard from the 2012 version of Gruber.

Will this be enough at the Supreme Court to demonstrate that there was a rational reason for Congress to make the distinction in the law and force the court to adopt the DC’s Halbig decision? You’d have to ask Anthony Kennedy and John Roberts that question. And I’d say the odds are good that they’ll be asked it relatively soon.

Here’s the entire Nobilis presentation, in case anyone worries that this got taken out of context. The relevant remarks come at the 31-minute mark.


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Comment pages: 1 2

How long until this nightmare is over?

Kidfromjersey on July 25, 2014 at 8:07 AM

What’s a”federal state”?

& This shows why trying to discern intent from unambiguous statutory language must fail.

LASue on July 25, 2014 at 8:08 AM

How long until this nightmare is over?

Kidfromjersey on July 25, 2014 at 8:07 AM

If we get a GOP Senate after November, you are quickly going to find that there is very little difference between the two party establishments.

If anything good comes of that, it will be that the GOP finally dies it’s long overdue death and is replaced by a Conservative Party.

ConstantineXI on July 25, 2014 at 8:09 AM

So is this a smoking gun in the Halbig case? Politically — yes. Legally? It certainly undermines one argument used by the administration to defend payment of subsidies through the federal exchanges, but it may not be entirely dispositive.

So we have…

The text of the law
The administration’s refusal to include territories
The Gruber admission

I’m still going to bet on SCOTUS saying that subsidies through the Federal exchange are legal, but they’re going to have to do Robertseque “It’s a tax for the purposes of constitutionality, but not a tax for the purposes of the anti-injunction act” twists and contortions to be able to explain their decision.

Stoic Patriot on July 25, 2014 at 8:10 AM

Not only does he say that only state-established exchanges receive the subsidies, but the question from the audience was explicitly about what happens if the feds set up the exchanges instead. Gruber says unequivocally that the tax credits don’t apply.

As Ed notes, this isn’t legally dispositive but it does add further confirmation to what I learned this week from studying the text of the law pretty thoroughly — the language in the law about the tax credits only applying to state exchanges is not accidental, not a typo, not a drafting error. The distinction is given in many places in the text, and was clearly deliberate.

Ramesh Ponnuru said it best – a foresight error is not a drafting error. The drafters didn’t correctly anticipate what would happen if they withheld the subsidies from federally-run exchanges, but that’s clearly what they did.

Chuckles3 on July 25, 2014 at 8:10 AM

Liar!!!!!

cmsinaz on July 25, 2014 at 8:10 AM

Crashing hard drives and typos? Really?

EA_MAN on July 25, 2014 at 8:11 AM

If this is submitted as evidence along the way, my money says that this creep will submit a declaration under oath that he didn’t say what he said, but that if he did say it, he didn’t mean.

LASue on July 25, 2014 at 8:11 AM

Stoic
*sigh*
You’re probably right

cmsinaz on July 25, 2014 at 8:11 AM

Gruber: “I was suffering from PTSD at the time I agreed with how the DC circuit just decided the Halbig case.”

BuckeyeSam on July 25, 2014 at 8:11 AM

Shame there wasn’t a constitutional scholar available.

rogerb on July 25, 2014 at 8:12 AM

Every democrat, whether elected, consulted or relied on for teaching, reporting or for votes is a liar that supports this crap and will defend it no matter what.

We need to confront them and call them out everywhere.

DanMan on July 25, 2014 at 8:12 AM

What’s a”federal state”?

& This shows why trying to discern intent from unambiguous statutory language must fail.

LASue on July 25, 2014 at 8:08 AM

Pelosi’s own hubris caused this fatal defect in the law.

For many decades the Democrat Party has favored creating progressive mandates and forcing them on the states. Raising the drinking age to 21, the 55MPH national speed limit, seat belt mandates, etc are all Federal mandates forced on the states. All those mandates still survive, except the hated 55MPH speed limit was repealed in the late 80′s.

In that tradition, the Democrats wanted to force the responsibility for Obamacare and expanded Medicaid onto the states, so the Feds didn’t have to do it. Which is why the language about the subsidies were written as they were. In their small minds I guess they couldn’t imagine that ANY state wouldn’t rush to set up exchanges…

The mistake they made in the first place was using FORCE to pass a law so unpopular that 36 states would refuse to set up exchanges.

ConstantineXI on July 25, 2014 at 8:13 AM

Shame there wasn’t a constitutional scholar available.

rogerb on July 25, 2014 at 8:12 AM

I am still trying to find the “President can pass legislation by PenNPhone” clause in Article II.

ConstantineXI on July 25, 2014 at 8:15 AM

Not only does he say that only state-established exchanges receive the subsidies, but the question from the audience was explicitly about what happens if the feds set up the exchanges instead. Gruber says unequivocally that the tax credits don’t apply.

As Ed notes, this isn’t legally dispositive but it does add further confirmation to what I learned this week from studying the text of the law pretty thoroughly — the language in the law about the tax credits only applying to state exchanges is not accidental, not a typo, not a drafting error. The distinction is given in many places in the text, and was clearly deliberate.

Ramesh Ponnuru said it best – a foresight error is not a drafting error.
The drafters didn’t correctly anticipate what would happen if they withheld the subsidies from federally-run exchanges, but that’s clearly what they did.

Chuckles3 on July 25, 2014 at 8:10 AM

“best”? I don’t know-I think I like this description of Gruber better.

Liar!!!!!

cmsinaz on July 25, 2014 at 8:10 AM

non-nonpartisan on July 25, 2014 at 8:15 AM

2+2=4

For now.

avi natan on July 25, 2014 at 8:16 AM

I’m still going to bet on SCOTUS saying that subsidies through the Federal exchange are legal, but they’re going to have to do Robertseque “It’s a tax for the purposes of constitutionality, but not a tax for the purposes of the anti-injunction act” twists and contortions to be able to explain their decision.

Stoic Patriot on July 25, 2014 at 8:10 AM

Roberts should just let those embarrassing photos the NSA has on him be published…

*snicker*

workingclass artist on July 25, 2014 at 8:16 AM

Doesn’t matter one iota “legally”. Progressive judges will vote in contradiction of the clear written language of the law in the next round based on political motives – as usual.

forest on July 25, 2014 at 8:17 AM

“We have to pass the bill to find out what is in it” dim wit nanzi not too happy now.

tim c on July 25, 2014 at 8:18 AM

Doesn’t matter one iota “legally”. Progressive judges will vote in contradiction of the clear written language of the law in the next round based on political motives – as usual.

forest on July 25, 2014 at 8:17 AM

Tar and feathers await them.

ConstantineXI on July 25, 2014 at 8:18 AM

Shame there wasn’t a constitutional scholar available.

rogerb on July 25, 2014 at 8:12 AM

I am still trying to find the “President can pass legislation by PenNPhone” clause in Article II.

ConstantineXI on July 25, 2014 at 8:15 AM

Look in the box marked “Obama’s records & birth certificate”….It’s next to the crate marked Ark of the Covenant

workingclass artist on July 25, 2014 at 8:19 AM

Obamacare is an argument for an automatic sunset clause for every act of Congress. And the length of time to expiration should be inversely proportional to the LENGTH of the bill.

IE: any bill more than 100 pages in length should have to be re-authorized ANNUALLY.

ConstantineXI on July 25, 2014 at 8:20 AM

Look in the box marked “Obama’s records & birth certificate”….It’s next to the crate marked Ark of the Covenant

workingclass artist on July 25, 2014 at 8:19 AM

I bet all that is in a warehouse being researched by Top. Men.

ConstantineXI on July 25, 2014 at 8:21 AM

The video does a good job demonstrating that the law written that way so the feds could coerce states into setting up their own exchanges. When their bluff got called, all they have left was to deny the written language of the law and make up new rules.

The worst part is that they will get away with it – as usual.

forest on July 25, 2014 at 8:21 AM

Even with this the DC circuit (bought and paid for) will attempt to sell us up the river in the Banana Republic of America.

Swaneeeee, how I love ya

Lonetown on July 25, 2014 at 8:22 AM

God bless the videotape inventor. And thanks to whoever taped this douchebag. These lying frauds get away with their lies too many times. It’s good to see the left’s hypocrisy and dishonesty exposed to the public in a way that can’t be denied.

AZCoyote on July 25, 2014 at 8:30 AM

I realize that it’s been reported that there’s very little legislative history on this. Nevertheless, I’ve wondered whether there was some evidence in the CBO scoring that suggests that the Dems understood how this worked and decided to gamble that the states would set up the exchanges.

I guess my point is that the Dems had CBO score the bill assuming that the feds would have to pay subsidies but that the feds would not have to pay to run an exchange for so many states. To me it seems damning for the feds if CBO’s projection never included the cost of running exchanges for any states. Why? Because the feds rationalized keeping the cost of running exchanges out of the mix on the theory that the states would incur that cost because the states would never want their residents to lose out on the subsidies.

BuckeyeSam on July 25, 2014 at 8:30 AM

Halbig of a smoking gun is this?

When will Allahpundit declare your jedi-snark training to be complete?

abobo on July 25, 2014 at 8:31 AM

Part of their problem was that the (D) Senate couldn’t send it back to the (D) House for modifications because Scott Brown had taken office, and that’s why Pelosie/Reid/Obama took the no/extremely limited reconciliation route to do an end run around the (ahem) intent of appropriate legislative procedures, correct?
 
They had to pass Obamacare as it was to find out what was in it, and this turned out to be in it.

rogerb on July 25, 2014 at 8:31 AM

If this evidence was not introduced in the trial court, can it be later introduced on an appeal or even de novo at a Supreme Court level?

KW64 on July 25, 2014 at 8:31 AM

This guy should be slinking off into a corner after getting busted like this.

Throat Wobbler Mangrove on July 25, 2014 at 8:32 AM

Gruber: “At least I never said, ‘If you like yoh doctoh, you can keep yoh doctoh.’”

BuckeyeSam on July 25, 2014 at 8:32 AM

Troll-free thread

crrr6 on July 25, 2014 at 8:33 AM

He was paid almost $400,000 to consult with the administration on the law. And he has claimed to have written part of the legislation

This is part of what is so wrong in Washington, D.C.

MAJOR bills written by unelected and highly compensated “consultants”, while the elected officials don’t even read the bill before voting in favor of it on a strictly party line basis and shoving unwanted CHANGE down the entire nation’s throat.

ITguy on July 25, 2014 at 8:33 AM

HA legal eagles….

How long does the admin have to file the en banc hearing?

Can you describe for those of us who aren’t that familiar with the process what would/could happen if the admin does not file for en banc during the allotted time?

lineholder on July 25, 2014 at 8:34 AM

Some very fine summary-and-followup reporting here by Ed Morissey to the reporting from Reason and Legal Insurrection.

Ed served up a hearty breakfast for HA readers today.

Toocon on July 25, 2014 at 8:35 AM

MAJOR bills written by unelected and highly compensated “consultants”, while the elected officials don’t even read the bill before voting in favor of it on a strictly party line basis and shoving unwanted CHANGE down the entire nation’s throat.

ITguy on July 25, 2014 at 8:33 AM

Each Congressman and Senator should get one full time secretary paid for on the public payroll. They want any more than that they pay out of their pocket.

Anyone working for the President who makes more than minimum wage should have to be confirmed by the Senate.

No more CONsultants paid for by taxpayers. No more Czars.

ConstantineXI on July 25, 2014 at 8:35 AM

So this is the madman that created this Frankenstein? Any relation to Hans?

crrr6 on July 25, 2014 at 8:35 AM

If this evidence was not introduced in the trial court, can it be later introduced on an appeal or even de novo at a Supreme Court level?

KW64 on July 25, 2014 at 8:31 AM

It can’t be considered evidence as in being part of the trial court record. But I have to think there’s a way that it can be brought to the Court’s notice in briefs and in oral argument.

BuckeyeSam on July 25, 2014 at 8:35 AM

Surely state government officals were advised by their lawyers or by the feds that they had to set up a state exchange in order to receive the subsidies. What about the blue states that stopped the state exchanges and defaulted to federal exchanges?

casel21 on July 25, 2014 at 8:35 AM

Doesn’t matter one iota “legally”. Progressive judges will vote in contradiction of the clear written language of the law in the next round based on political motives – as usual.

forest on July 25, 2014 at 8:17 AM

And that is why who controls the Senate and thus judicial confirmations during the next term is so important.

KW64 on July 25, 2014 at 8:35 AM

Halbig of a smoking gun is this?

When will Allahpundit declare your jedi-snark training to be complete?

abobo on July 25, 2014 at 8:31 AM

That is really, really good.

Where is the thread about the poll that had Hildabeast and Obama less popular than Darth Vader?

ConstantineXI on July 25, 2014 at 8:36 AM

I love the typo claim–as if it’s a misspelling.

BuckeyeSam on July 25, 2014 at 8:37 AM

And that is why who controls the Senate and thus judicial confirmations during the next term is so important.

KW64 on July 25, 2014 at 8:35 AM

Are you kidding me?

We can’t even get unanimous Republican opposition to Obama’s horrid judicial appointments as the MINORITY.

Morons like Lindsey Graham voted for the Wide Latina and Gender-Nonspecific looking Kagan.

He voted to confirm Holder too.

ConstantineXI on July 25, 2014 at 8:38 AM

The developers of the law used the carrot rather than the stick as a motivating factor numerous times in the legislation. It’s a pattern of behavior that is relatively obvious. It’s consistent.

I would think that could be used to show mindset of the developers when presenting the content of the law in court.

lineholder on July 25, 2014 at 8:39 AM

What does that matter, at this point in time, anyway?!

Honestly, the judiciary will find intent however they want it. “Well that’s nice that that’s what he said but when the legislators voted on it they intended something else.”

Sorry, the Republic has fallen. Witness the rise of the Empire and Obama is the Sith apprentice.

Skywise on July 25, 2014 at 8:42 AM

“Crashing hard drives and typos? Really?”

What you are seeing here is the demon spawn of

“….that depends on what the meaning of ‘is’ is.”

Gosh, is there anything dummycrats won’t do to lie? They’re so special.

GrassMudHorsey on July 25, 2014 at 8:42 AM

It was, Gruber said, a deliberate policy to twist the arms of reluctant states to set up their own exchanges — and that a failure to do so would mean no subsidies for their citizens.

Pardon my ignorance but wasn’t this pretty well known at the time? The Dems thought they were clever in inserting legislation that would have the minions pounding down the statehouse doors if the legislature didn’t set up the exchanges so they could get themselves some of that free Obamacare. They were shocked when the majority of states said “no we’re good” when asked about setting up a state exchange.

Happy Nomad on July 25, 2014 at 8:43 AM

…they had no intention of excluding the federal states

Huh, how many federal states are there?

Fifty-seven I guess.

Akzed on July 25, 2014 at 8:49 AM

i hate the way that the obama administration tried to put so much pressure on the states to do the exchanges. such a sneaky, unfair tactic. it’s pretty disgusting.

Sachiko on July 25, 2014 at 8:50 AM

“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.”

After the fact, yes. Not a single shred of evidence before the passage of this law. That makes the statements unbelievable.

Oh, and what the heck is a “federal state”? The wishcasting of a fascist?

(And, a typo is when I spell your name “Johnathan Grub”. It’s not a typo when I use “the fascist in a tie” in place of your name.)

GWB on July 25, 2014 at 8:50 AM

These lying frauds get away with their lies too many times. AZCoyote on July 25, 2014 at 8:30 AM

What’s the right amount of times?

Akzed on July 25, 2014 at 8:51 AM

Sorry, the Republic has fallen. Witness the rise of the Empire and Obama is the Sith apprentice.

Skywise on July 25, 2014 at 8:42 AM

How long untill Obama’s well funded Civilian Defense Corpse executes Order 66?

ConstantineXI on July 25, 2014 at 8:51 AM

Pardon my ignorance but wasn’t this pretty well known at the time?

Happy Nomad on July 25, 2014 at 8:43 AM

Nope, no ignorance, you’re remembering it right.

GWB on July 25, 2014 at 8:51 AM

Pardon my ignorance but wasn’t this pretty well known at the time? The Dems thought they were clever in inserting legislation that would have the minions pounding down the statehouse doors if the legislature didn’t set up the exchanges so they could get themselves some of that free Obamacare. They were shocked when the majority of states said “no we’re good” when asked about setting up a state exchange.

Happy Nomad on July 25, 2014 at 8:43 AM

If you lived in Texas and were paying attention to politics in the 2010-13 period, there’s no way you couldn’t have known, since state Democrats were screaming at Rick Perry over his refusal to create a state exchange. They were yelling that Perry was deliberately denying subsidies to Texas residents because they wouldn’t be available through the federal system.

(The counter-argument was that the subsidies were only assured via the feds through 2017, and there was no guarantee that after that, the government wouldn’t continue to demand the subsidies, but would require individual states to take on a bigger and bigger share of the cost. The Democrats right now want to put the subsidies for the national exchange back into play because of Halbig, but there’s still no assurance the federal subsidy carrot won’t be pulled and dumped on each state in the future if it’s maintained.)

jon1979 on July 25, 2014 at 8:55 AM

We need to confront them and call them out everywhere drag them into the street then…

DanMan on July 25, 2014 at 8:12 AM

FIFY

Doomsday on July 25, 2014 at 8:56 AM

HA legal eagles….

How long does the admin have to file the en banc hearing?

Can you describe for those of us who aren’t that familiar with the process what would/could happen if the admin does not file for en banc during the allotted time?

lineholder on July 25, 2014 at 8:34 AM

I’m no guru in federal appellate work, but I’ll try to advance things.

If you look at Rules 35 and 40 of the Federal Rules of Appellate Procedure, it appears as if the feds have 45 days, unless shortened or extended by the circuit.

Also, if you look at Rule 35, you’ll see that the circuit itself can, without being asked, decide to rehear a case en banc. An example of that, I think, came a few years ago with a case that Sotomayor handled with two other judges in the second circuit. It was that reverse-discrimination case involving RI firemen. She and two colleagues issued a terse per curiam decision against the firemen. I think after all dispositions, the judges meet to review what’s going on in the circuit, and Sotomayor’s hack work was uncovered by one of her own liberal colleagues who actually takes being a circuit judge seriously. He said screw her and persuaded enough judges to rehear the case. I think the firemen still lost, but the case got much higher profile and eventually, after the decision en banc, SCOTUS granted cert and ultimately tatooed a reversal to Sotomayor’s forehead.

I don’t see a time limit within which the circuit judges have to decide to hear a case en banc.

http://www.law.cornell.edu/rules/frap/rule_35

http://www.law.cornell.edu/rules/frap/rule_40

BuckeyeSam on July 25, 2014 at 8:56 AM

This is truly laughable..

KingBarrycare repeal or KingBarrycare defeat in Supreme Court is like a sultry seductress for conservatives. They keep drawing to it like a moth to flame.

Btw, when is the next KingBarrycare repeal vote? It has been a while. The crazy caucus must be having withdrawal symptoms having gone this long without a KingBarrycare repeal vote.

LOL indeed.

Ned Pepper on July 25, 2014 at 8:58 AM

jon1979 on July 25, 2014 at 8:55 AM

The concern about having the costs shifted back to the states was warranted. That pattern had been written into the law in other areas. For example, funds would be provided to the states to help set up the exchanges, but those exchanges are required to be self-supporting by 2015.

lineholder on July 25, 2014 at 9:00 AM

God bless the videotape inventor. And thanks to whoever taped this douchebag. These lying frauds get away with their lies too many times. It’s good to see the left’s hypocrisy and dishonesty exposed to the public in a way that can’t be denied.

AZCoyote on July 25, 2014 at 8:30 AM

“exposed to the public”? Try finding this story carried anywhere in the LSM.

bofh on July 25, 2014 at 9:00 AM

A basic tenant by which every Marine is judged is integrity. I say this because I served six years in the Corps and it’s a principle that has stayed with me throughout the years since.

Liberals however, have no such principle it seems. I’m not even sure if they’ve heard of the term. They will do and say anything to advance their cause, and their cause is always about strengthening a limited number of liberal elitists.

This guy should be shamed into a public apology then run off on a mule with a bucket over his head, into obscurity. He should lose his employment – not because what he said has anything to do, necessarily, with his job – but because in 2014 if you make a statement or series of statements that is profoundly offensive to someone, you lose your job. He’s every bit a piece of trash as the plagiarizing lib Senator. He’s blatantly dishonest.

BKeyser on July 25, 2014 at 9:03 AM

Ned Pepper on July 25, 2014 at 8:58 AM

Republicans in the house have attempted to provide a solid lead in repealing the law, but recalcitrant Dems simply aren’t willing to let go of the glory days of the New Deal and admit that Obamacare, as it stands, is by far one of the worst monstrosities in legal form ever to be passed into law in this nation.

If Dems really cared about the American people, they would have read it before they passed it. Having failed to do so, they would have attempted to make the necessary revisions to the law.

But nooooo, not the Dems. It’s New Deal or bust!!!!

lineholder on July 25, 2014 at 9:03 AM

Halbig of a smoking gun is this?

Ed, you should be shot, drawn, and quartered for that!

Or maybe a Nobel Prize for literature.

jwolf on July 25, 2014 at 9:05 AM

i hate the way that the obama administration tried to put so much pressure on the states to do the exchanges. such a sneaky, unfair tactic. it’s pretty disgusting.

Sachiko on July 25, 2014 at 8:50 AM

Been done many times before. Democrats in Congress threatened states with confiscating highway funds to force them to enact seat belt laws, the 55MPH speed limit, and raising the drinking age to 21.

The State response to that blackmail should have been to take over all tax collections within their border (including collecting federal taxes)

ConstantineXI on July 25, 2014 at 9:06 AM

Not sure if my prior comment posted, but I this is a great find.

Not only does it confirm what everyone knew at the time, it comes straight out of the “drafter’s” mouth.

Typo, my ass.

LASue on July 25, 2014 at 9:09 AM

If you lived in Texas and were paying attention to politics in the 2010-13 period, there’s no way you couldn’t have known, since state Democrats were screaming at Rick Perry over his refusal to create a state exchange. They were yelling that Perry was deliberately denying subsidies to Texas residents because they wouldn’t be available through the federal system.

(The counter-argument was that the subsidies were only assured via the feds through 2017, and there was no guarantee that after that, the government wouldn’t continue to demand the subsidies, but would require individual states to take on a bigger and bigger share of the cost. The Democrats right now want to put the subsidies for the national exchange back into play because of Halbig, but there’s still no assurance the federal subsidy carrot won’t be pulled and dumped on each state in the future if it’s maintained.)

jon1979 on July 25, 2014 at 8:55 AM

Exactly the same arguments we had here in Kentucky, that was the governors final statement on why he set up the exchange without House approval or funding. He explicitly stated he did not want the Citizens of the Commonwealth to miss out on the wonderful Federal subsidies that came with setting up the exchange, and they were idiots because they wanted to screw people out of free Federal money.

I might go and search the Lexington and Louisville papers later today because they argued over and over that we would lose out on the subsidies if we didn’t set up an exchange.

Everyone on the Left is either lying about this now or simply staying silent if they can.

Johnnyreb on July 25, 2014 at 9:09 AM

Pelosi’s own hubris caused this fatal defect in the law.

For many decades the Democrat Party has favored creating progressive mandates and forcing them on the states. Raising the drinking age to 21, the 55MPH national speed limit, seat belt mandates, etc are all Federal mandates forced on the states. All those mandates still survive, except the hated 55MPH speed limit was repealed in the late 80′s.

In that tradition, the Democrats wanted to force the responsibility for Obamacare and expanded Medicaid onto the states, so the Feds didn’t have to do it. Which is why the language about the subsidies were written as they were. In their small minds I guess they couldn’t imagine that ANY state wouldn’t rush to set up exchanges…

The mistake they made in the first place was using FORCE to pass a law so unpopular that 36 states would refuse to set up exchanges.

ConstantineXI on July 25, 2014 at 8:13 AM

Brilliance via simplicity. Deserves a full re-quote

Ricard on July 25, 2014 at 9:11 AM

Doesn’t this make a case for Purjery?

I thought Gruber testified in court therefor he statements now saying just the opposite of what he is recorded saying at the time of the writing of the document clearly demonstrates he has perjured himself.

SO tired of the “enlightned” “educated” “betters” continously acting like unaccountable 5 year olds with about the same intelligence and wisdom.

Skwor on July 25, 2014 at 9:12 AM

BuckeyeSam on July 25, 2014 at 8:56 AM

In my limited experience, the court works on a slow timetable in responding to requests for an en banc hearing. But in a high profile case, it probably moves along faster.

LASue on July 25, 2014 at 9:13 AM

This is truly laughable..

Ned Pepper on July 25, 2014 at 8:58 AM

An apt description of Obamacare overall.

Congrats! You’re seeing the light. (You’d just better hope that it’s not the headlamp of an oncoming train.)

Alien on July 25, 2014 at 9:14 AM

Congress made subsidies available only through state exchanges as a means of coercing states into setting up exchanges.

In Senate Finance Committee deliberations on the ACA, Chairman Max Baucus (D-Mont.), one of the bill’s primary authors, suggested the possibility of conditioning tax credits on state compliance because only by doing so could the federal government induce state cooperation with the ACA. Then the law’s insurance requirements could be imposed on states without running afoul of constitutional law precedents that prevent the federal government from commandeering state governments. The pertinent language originated in the committee and was clarified in the Senate.

Many of the PPACA’s drafters and supporters in Congress, for example, clearly endorsed the idea of withholding health-insurance subsidies if states refused to meet Congress’ demands, such as by failing to establish Exchanges. This group includes:

1. Senators Durbin, Begich, Bingaman, Burris, Casey, Gillibrand, Klobuchar, Kohl, Lieberman, Lincoln, Pryor, Shaheen, and Specter. Each of these “aye” votes on the PPACA also sponsored S. 979, the Small Business Health Options Program Act of 2009, which offered tax credits to small businesses only “in a State which . . . maintains a State-wide purchasing pool that provides purchasers in the small group market a choice of health benefit plans, with comparative information provided concerning such plans and the premiums charged for such plans made available through the Internet” (i.e., an Exchange).

2. Senators Dodd, Bingaman (again), Brown, Casey (again), Hagan, Harkin, Merkley, Mikulski, Murray, Reed, Sanders, and Whitehouse. Each of these “aye” votes on the PPACA also voted for the S.1679, the Affordable Health Choices Act (reported by the Health, Education, Labor, and Pensions Committee), which withheld health-insurance subsidies from a state’s residents for four years if the state failed to establish an Exchange, and permanently if the state failed to implement the bill’s employer mandate.

3. Senate Finance Committee chairman Max Baucus (D-MT), who (1) wrote the PPACA language restricting subsidies to state-established Exchanges and preserved it through multiple drafts, (2) introduced a Health Coverage Tax Credit in 2002 that uses similar eligibility rules and that the Congressional Research Service says “can be claimed for only 10 types of qualified health insurance…7 of which require state action to become effective”; and (3) also in 2009 floated proposals that (like S. 979) would have conditioned health-insurance tax credits on states enacting certain laws.

That’s 24 of the 60 senators who approved the PPACA. There is no evidence they changed their minds before casting their votes.

The record also shows some members initially opposed the PPACA because of this feature. In an aforementioned letter to House Speaker Nancy Pelosi (D-CA) and President Obama, 11 Texas Democrats warned the PPACA allowed states to block their residents from receiving “any benefit” by refusing to establish an Exchange. Though they opposed this provision, when the PPACA became the only bill that could become law, all 11 of them grudgingly voted for it.

It Wasn’t A Typo: Congress Meant Exactly What They Wrote About Obamacare Subsidies…And Here’s Why

Resist We Much on July 25, 2014 at 9:17 AM

Disagree with Stoic Patriot. This time Roberts will not cave.

The Commentator on July 25, 2014 at 9:17 AM

Btw, when is the next KingBarrycare repeal vote? It has been a while. The crazy caucus must be having withdrawal symptoms having gone this long without a KingBarrycare repeal vote.

LOL indeed.

Ned Pepper on July 25, 2014 at 8:58 AM

Actually, the next vote is Boehner’s lawsuit to prevent Obama from delaying the employ mandate indefinitely.

You know, what Obamacare was actually intended to do.

sentinelrules on July 25, 2014 at 9:18 AM

2012:

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.

2014:

“It is unambiguous this is a typo,” Gruber told Chris Matthews. “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.”

Not much to debate about here. The man is a blatant liar. He either lied then, or he is lying now. Either way, he has zero credibility on the issue.

airupthere on July 25, 2014 at 9:20 AM

but the 4th Circuit couldn’t quite believe that Congress Democrats intended to shaft Americans in states that didn’t set up their own exchanges.

Remember, Obamacare had ZERO Republican votes in Congress.

leftamark on July 25, 2014 at 9:20 AM

The concern about having the costs shifted back to the states was warranted. That pattern had been written into the law in other areas. For example, funds would be provided to the states to help set up the exchanges, but those exchanges are required to be self-supporting by 2015.

lineholder on July 25, 2014 at 9:00 AM

Which is exactly the argument Perry, and other Republicans in Texas, and GOP governors and officials in other states were making — the federal government has a long history of ‘unfunded mandates’ where Washington gets to say they’re not raising costs on the public by simply dumping the costs off on the individual states.

Many (but not all) of the Republican governors weren’t going to play that game, based not on the idea that they hated their voters and wanted to deny them medical subsidies, but that the feds would eliminate the carrot once the state exchanges were in place, and leave each state stuck with paying the costs for the increase government health care plans starting in 2018.

jon1979 on July 25, 2014 at 9:21 AM

Brave, brave Sir Roberts will betray his oath and responsibilities this time just like last time.

Or at least that’s what I’m assuming.

DRayRaven on July 25, 2014 at 9:21 AM

Let’s take a step back to see how plausible that explanation is. There are two types of exchanges: state-established, and federally established. The statutory authority for state-based exchanges comes in section 1311 of Obamacare. The statutory authority for a federal exchange in the event that a state chose not to establish one comes from section 1321(c) of Obamacare. Right off the bat, we have two discrete sections pertaining to two discrete types of health exchange. Was that a “drafting error”?

Then we have the specific construction of section 1321(c), which allows for the creation of a federal exchange. Nowhere does this section say that an exchange created under its authority will have the same treatment as a state-based exchange created under section 1311. At no point does it say that section 1321 plans are equivalent. Why, it’s almost as though the exchanges and the plans offered by them were not intended to receive the same treatment. Was that another “drafting error”?

Most important, we have the sections of the law providing for tax credits to help offset the cost of Obamacare’s health care plans: sections 1401, 1402, 1411, 1412, 1413, 1414, and 1415. And how do those sections establish authority to provide those tax credits? Why, they specifically state ten separate times that tax credits are available to offset the costs of state health exchange plans authorized by section 1311. And how many times are section 1321 federal exchange plans mentioned? Zero. Was that yet another “drafting error”?

The specific phrase “established by the State under section 1311″ can be found twice in the tax credit title of Obamacare. The first instances relates to the size and the second to the scope of the tax credit subsidy. How many times is the phrase “established by the Federal government/Secretary under section 1321″ found? Zero. Was that also a “drafting error”?

The clear text of the law repeatedly demonstrates that plans purchased via federal exchanges were never meant to be treated the same as plans purchased by state-based exchanges. Despite its assertions, the IRS was never granted the statutory authority to hand out tax credits related to plans purchased via a federal health exchange.

All of that of course begs the question: if the law’s authors originally intended to constrain subsidies to state plans, what was the rationale for the IRS about-face in 2011? That’s actually an easy one to answer: the administration never imagined that so many states would refuse to establish Obamacare exchanges. The subsidies for state exchange plans were meant to be pot sweeteners—incentives for states to set up their own exchanges. If fines for mandate non-compliance were Obamacare’s stick, the subsidies for state exchange health plans were the carrot. To the law’s backers, that plan made sense: the White House didn’t really want to have to manage 51 separate exchanges. They wanted the states to do all the heavy lifting. Unfortunately, several dozen legislatures and governors had different plans.

So why did the IRS wait nearly 16 months to spring this new interpretation on the public? That’s also an easy one. As of August 17, 2011, when its rule was first proposed, only ten states had passed laws establishing their own exchanges. Seventeen had outright rejected the Obamacare exchanges. All told, 40 states had by that point failed to do the administration’s bidding and set up state-based Obamacare exchanges.

Without exchanges in every state, Obamacare would surely fail as a policy matter. And without massive subsidies to offset the costs of Obamacare’s health plans, Obamacare would fail as a political matter. The IRS maneuver was a last-ditch attempt to paper over the law’s serious structural flaws.

The Halbig case changed all that and ripped off the facade to expose a structure ready to collapse under its own weight. And it wasn’t due to a “drafting error,” the uninformed opinions of know-nothing bloviators who’ve spent exactly zero time drafting federal legislation notwithstanding.

Resist We Much on July 25, 2014 at 9:24 AM

Gruber is a typical lying statist.

CW on July 25, 2014 at 9:25 AM

Shhhhh…..we don’t talk about obamacare around here anymore.

everdiso on July 22, 2014 at 1:27 PM

The Schaef on July 25, 2014 at 9:26 AM

Outside of the media, this guy’s discredited position and his take is irrelevant anyways.

He is not a member of Congress, so his opinion on intent of the subsidy applicability is meaningless.

Thanks to Senator Baucus we have a window into the intent of Congress.

There is no ambiguity in the language, there is no congressional intent for the federal exchanges to receive subsidies at the time of passing legislation. This is a slam dunk in a sane world.

airupthere on July 25, 2014 at 9:26 AM

I am still trying to find the “President can pass legislation by PenNPhone” clause in Article II.

ConstantineXI on July 25, 2014 at 8:15 AM

It comes right after the “Good and Plenty” clause.

Grammar Nazi on July 25, 2014 at 9:27 AM

Ned is unintelligent and a troll. Yes, laughable.

CW on July 25, 2014 at 9:27 AM

But these Obamacare posts are about whistling past the graveyard, by next Novemeber Democrats will be openly running on the ACA. Mark my words. libfreeordie on December 20, 2013 at 10:14 AM

Akzed on July 25, 2014 at 9:32 AM

BTW: there are two other cases addressing the same issue. One is in district court in Oklahoma–appealable to the 10th circuit, I think. The other is in Indiana–appealable to the 7th circuit.

BuckeyeSam on July 25, 2014 at 9:32 AM

“It is unambiguous this is a typo,” Gruber told Chris Matthews. “Literally every single plantation overseer 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.”

Fixed.

onomo on July 25, 2014 at 9:33 AM

to the extent that the statute itself appears ambiguous

It doesn’t.

but the 4th Circuit couldn’t quite believe that Congress intended to shaft Americans in states that didn’t set up their own exchanges

John Roberts couldn’t quite believe a few things in exactly the same way.

Axe on July 25, 2014 at 9:34 AM

Without exchanges in every state, Obamacare would surely fail as a policy matter. And without massive subsidies to offset the costs of Obamacare’s health plans, Obamacare would fail as a political matter. The IRS maneuver was a last-ditch attempt to paper over the law’s serious structural flaws.

The Halbig case changed all that and ripped off the facade to expose a structure ready to collapse under its own weight. And it wasn’t due to a “drafting error,” the uninformed opinions of know-nothing bloviators who’ve spent exactly zero time drafting federal legislation notwithstanding.

Resist We Much on July 25, 2014 at 9:24 AM

As I have said, Obamacare was never intended to succeed or be a permanent system. It’s purpose was to be a bridge to single payer

So failure is a FEATURE, not a bug.

But like anything else government does, their intended failure instead became a cataclysm.

They wanted it to fail. Not EXPLODE on the launch pad and set the whole country on fire.

ConstantineXI on July 25, 2014 at 9:35 AM

Typical blatantly intellectually dishonest leftie… End justifies the means…

Pest on July 25, 2014 at 9:36 AM

Shhhhh…..we don’t talk about obamacare around here anymore. everdiso on July 22, 2014 at 1:27 PM

I’ve never lost a debate here. everdiso on June 13, 2014 at 2:27 PM.

Akzed on July 25, 2014 at 9:36 AM

but the 4th Circuit couldn’t quite believe that Congress intended to shaft Americans in states that didn’t set up their own exchanges

John Roberts couldn’t quite believe a few things in exactly the same way.

Axe on July 25, 2014 at 9:34 AM

If the Congress doesn’t intend it to work that way they can revise the legislation in the appropriate way and pass it again.

The courts have no business trying to divine the “intent” of a previous Congress and re-write a flawed law instead of kicking it back to the CURRENT Congress to fix if they so choose.

ConstantineXI on July 25, 2014 at 9:37 AM

Typical blatantly intellectually dishonest leftie… End justifies the means…

Pest on July 25, 2014 at 9:36 AM

Conservatives are never going to win until we start fighting back in the same way.

ConstantineXI on July 25, 2014 at 9:38 AM

So much for “drafting error”. Liberals are stupid.

Jaibones on July 25, 2014 at 9:38 AM

If it doesn’t matter whether states create exchanges or not, why would any do so?

“Get out there and cut the lawn young man, or I’ll do it.”

“Ok, you do it.”

Akzed on July 25, 2014 at 9:39 AM

http://www.nationalreview.com/corner/383717/obamacares-architect-agreed-only-state-exchanges-could-offer-subsidies-veronique-de

Nice summary about what a lying SOS this guy Gruber is.

BuckeyeSam on July 25, 2014 at 9:40 AM

Oof. I think Obama with the big screw might be a better picture.

Ellis on July 25, 2014 at 9:40 AM

I am still trying to find the “President can pass legislation by PenNPhone” clause in Article II.

ConstantineXI on July 25, 2014 at 8:15 AM

That’s because it isn’t in Article II, silly. It’s in Article VIII.

GWB on July 25, 2014 at 9:42 AM

Not much to debate about here. The man is a blatant liar. He either lied then, or he is lying now. Either way, he has zero credibility on the issue.

airupthere on July 25, 2014 at 9:20 AM

Obamacare, written by blatant liars, passed by partisan Democrats who neither wrote, nor read, the bill before passing it without a single Republican vote.

ITguy on July 25, 2014 at 9:42 AM

He’s not the only professor to now take a completely different position. In a Washington Post piece from July 9th, Professor Jost says that the statute must be read in a “convoluted” (IRS) fashion if it is to make any sense.

http://www.washingtonpost.com/opinions/courts-wont-void-the-affordable-care-act-over-semantics/2014/07/09/5910c9d0-060b-11e4-a0dd-f2b22a257353_story.html

However, in 2009, he wrote a Georgetown law journal article (googlable) which explained the constitutional merits of limiting subsidies to state exchanges:

“Congress might attempt to implement a federal exchange program through the states, thus taking advantage of the insurance regulation institutions and experience of the states. In doing so, it would need to be mindful of the limitations the Constitution places on the power of the federal government to control the states….

“That is, Congress cannot require the states to participate in a federal insurance exchange program by simple fiat….

“[Congress] could exercise its Constitutional authority to spend money for the public welfare (the “spending power”), ***either by offering tax subsidies for insurance only in states that complied with federal requirements*** (as it has done with respect to tax subsidies for health savings accounts) or by offering explicit payments to states that establish exchanges conforming to federal requirements.” [asterisks added]

His discussion was in the context of the exchanges being the primary means of implementing the various mandates but that doesn’t mean the idea is just totally nonsensical because the exchanges do not fill as complete a role.

Perhaps by lowering the administrative burden, by having the federal government impose standards directly on insurers, it was thought that states would be more incentivized to administer exchanges. Plus states were giving up less regulatory authority than anticipated by Jost if they chose to implement exchanges (since the ACA took much of it away elsewhere). And don’t forget that the federal exchange was seen as a less desirable fall-back and the push on states to set up exchanges was immense. The state only subsidies theoretically could have served as a needed push for states.

That the federal government feared the political backlash and decided to provide subsidies on its own exchange, thereby short-circuiting any incentivizing effect doesn’t mean there couldn’t have been. It was simply hard to politically justify as it would have made Obamacare look bad/worse.

Crispian on July 25, 2014 at 9:44 AM

You and the libs are playing by a different set of rules. In fact you’re playing entirely different games. You’re playing chess and are trying to trap the king and they’re playing paintball and don’t care what you do with those little pieces on the board.

You think that this is about proving who’s right and who’s wrong and this tape is smoking gun that proves you were right.

The libs don’t care about that. They want what they want and they’ll get what they want.

If the unambiguous wording of the law wasn’t enough, then a tape explaining the unambiguous wording of the law won’t be enough either. It’ll only mean that the libs will have to work extra hard on the spin to show that black is white and white is black and the lib judges will work extra hard to mush-mouth a legal justification for ignoring the law. But those tasks won’t stop them from doing what they want.

Read Chapter 6 “Planning and the Rule of Law” from Hayek’s “Road to Serfdom”:

Nothing distinguishes more clearly conditions in a free country from those in a country under arbitrary government than the observance in the former of the great principle know as the Rule of Law. Stripped of all technicalities, this means that government in all its actions is bound by rules fixed and announced beforehand

In fact, as planning becomes more and more extensive, it becomes regularly necessary to qualify legal provisions increasingly by reference to what is “fair” or “reasonable”; this means that it becomes necessary to leave the decision of the concrete case more and more to the discretion of the judge or authority in question.

The libs don’t care about what is legal or consistent or true; they only care about what they want to do.

PackerBronco on July 25, 2014 at 9:50 AM

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