Me v. William Cannon, Part II: The Jonathan Gruber Canard
Okay, well, as all you AB regular readers know, yesterday I posted a post deconstructing—and, yes, that’s what I did—a blog post on the Forbes website by William F. Cannon. He blogs there on “health, freedom, and other uncertainties,” but his day job is Director of Health Policy Studies at the Cato Institute.
The studies apparently entail mostly studying such things as YouTube video of Jonathan Gruber speeches and interviews. Which, at least in this instance, is academic.
Gruber, Cannon explained in a Jul 28, 2014 opinion piece on Politico, is “the MIT economist who helped congressional Democrats write the Patient Protection and Affordable Care Act in 2009.” Or, as Wikipedia says, “In 2009–10 he served as a technical consultant to the Obama Administration and worked with both the administration and Congress to help craft the Patient Protection and Affordable Care Act (PPACA).” I’ll let Cannon, in his Politico piece, help me explain further:
[Gruber] has been sharply critical of Halbig v. Burwell, a lawsuit alleging the Obama administration is illegally subsidizing health insurance for 5 million Americans in the 36 states with exchanges established by the federal government. The PPACA offers those subsidies to only those who enroll through an exchange “established by the State.” (Disclosure: I helped lay the groundwork for Halbig and three similar lawsuits.)
The occasion for his Forbes blog post yesterday was that:
Last week, the House Committee on Oversight and Government Reform subpoenaed documents from the Treasury Department and IRS that could have a huge impact on Pruitt v. Burwell, Halbig v. Burwell, King v. Burwell, and Indiana v. IRS – four lawsuits that could have a huge impact on ObamaCare.
Those cases challenge the federal government’s ability to implement the Patient Protection and Affordable Care Act’s major taxing and spending provisions in the 36 states that failed to establish a health insurance “Exchange.” The federal government established fallback Exchanges within those states, but the PPACA says the IRS can implementthe law’s Exchange subsidies, employer mandate, and (to a large extent) its individual mandate only “through an Exchange established by the State.” Nevertheless, the IRS issued a regulation implementing those taxes and expenditures in states with federal Exchanges anyway. That regulation that is being challenged as illegal by taxpayers, employers, school districts, and states, who claim the IRS is taxing them without congressional authorization.
The occasion for my blog post here at AB yesterday was to point out that the issue is not whether some IRS administrator or HHS official initially used the statute’s “through an Exchange established by the State” phrase in drafting the agency regulations to implement the ACA. The issue is instead, uh, what “established by the State” means within the statutory scheme. The question, more specifically, is whether mandatory default delegation, by a state to the federal government, of the setup and operation of a state’s exchange is, y’know, the establishment of an exchange by the state. Sorta like whether the delegation of, say, prison operations by a state to a private for-profit company is the establishment of a prison system by the state or is instead a rogue operation with coopted police powers to hold people against their will. Which I think would be called false imprisonment, in tort law.
“And so, taken seriously,” I said, “Cannon’s claim would just make us dizzy. After all, the context of that law—in fact, an express provision of that law–provides that states have the option of setting up their own exchanges or instead allowing the federal government to establish an exchange for the state.” Begging the question by pointing out that regulatory agencies initially picked up the language whose meaning within the statute is at issue doesn’t really advance their argument.
“The bottom line,” I said, “is that what matters is what Congress said and intended when it enacted the ACA, not what someone at HHS said to someone at the IRS in 2011, or whatever.”
Cannon titled his blog post, “The Halbig Subpoena.” I titled mine, “The Halbig Subpoena. Oh, the Horror!”
Enter Rightisright5116. Into the discussion, that is, via the Comments thread to my post:
September 29, 2014 10:47 pm
So why’d Jonathan Gruber say the opposite? Twice.
Ah, yes. Jonathan Gruber. No, not that Jonathan Gruber; the Jonathan Gruber who was a member of Congress when the ACA was enacted.
Okay, seriously. The name rang a faint bell, faint enough that I had to do a quick search. Up popped Cannon’s Politico article. Which, in addition to identifying Gruber, says:
The administration’s defenders responded to the Halbig case by insisting that Congress never intended to withhold subsidies from residents of states that did not establish exchanges. Like the Obama administration, Gruber told the D.C. Circuit that this idea is “implausible.” The D.C. Circuit disagreed when it ruled for the plaintiffs last Tuesday.
Gruber then became part of the story on Thursday when a video surfaced in which he espouses the very interpretation of the law he now publicly derides as “screwy,” “nutty” and “stupid.” In 2012, Gruber told an audience: “If you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits.”
Gruber tied to explain away that comment as misspeaking, but, alas, Cannon points to another occasion in which Gruber made a similar comment. Uh-oh, especially since, Cannon says:
One of the nation’s top health economists, he helped craft and implement a nearly identical law in Massachusetts. He was a paid adviser to the Obama administration in 2009 and 2010. The New York Times reports, “the White House lent him to Capitol Hill to help Congressional staff members draft the specifics of the legislation.”
Gruber was so heavily involved in writing the PPACA that when he boasts, “I know more about this law than any other economist” — and that he even wrote part of the bill himself — everyone believes him. When the chief architect of the PPACA admits it withholds tax credits in uncooperative states, that establishes that the plaintiffs’ interpretation of the statute in Halbig was not only plausible but that it had currency among the law’s authors.
Ergo, Cannon concludes that “Gruber’s stature and role in writing the PPACA are critical here.” Critical. Sounds like a potentially fatal medical problem. Good thing it has healthcare insurance. Through the ACA.
In response to Rightisright5116’s initial question–“So why’d Jonathan Gruber say the opposite? Twice.”—I wrote:
Cannon apparently has for months now been pushing the claim that Gruber is the official spokesman for the Congress that enacted the ACA. Or maybe that his real name is Harry Reid. Or Nancy Pelosi.
See [Cannon’s Politico “study” article].
What that Politico opinion piece (which the above link is to) by Cannon does suggest is that Gruber wanted the ACA to provide what Cannon and the Halbig plaintiffs claim it provides, but that Congress had other plans—those plans being the CREATION OF THE FEDERAL-SETUP BACKUP. Apparently, Gruber wrote the “through an Exchange established by the State” language, but played no role in creating the federal-setup backup.
Congress, however, DID create the federal-setup backup, a virtually meaningless provision absent the availability of the federal subsidies. Since the only conceivable purpose of the federally-set-up state exchanges would be as a fallback in states that declined to set up and run their exchanges—and since Gruber was not a member of Congress—it does appear that Congress rejected the idea that Cannon and the Halbig plaintiffs say Congress adopted. Gruber’s comments notwithstanding.
The Gruber quotes are a transparent canard. A classic red herring.
Soooo sorry. Hope that answers your initial question to me, rightwinger. I must say, though, that I detect from your comments here a tad bit of concern that my post dangerously deconstructs your, and Cannon’s, silly claim.
I don’t think I committed medical malpractice in that comment. And my bill for services is fully covered.
1. Gruber has repeatedly repudiated the comments on two isolated occasions that are supposedly of such importance to Cannon’s argument. Moreover, the vast majority of the comments made by Gruber and other drafters and legislators indicate that the credits were to apply to all Americans regardless of the type of exchange.
2. The legislative history of the bill seems to confirm the intent of the legislators to apply subsidies regardless of the exchange type. See the Bill Summary: Subtitle E Affordable Coverage for All Americans: Part 1 Tax Credits. http://thomas.loc.gov/cgi-bin/bdquery/z?d111:HR03590:@@@L&summ2=m&
Those who seek to overturn the PPACA have resorted to tactics and arguments that are based in absolute desperation. Any angle, any opening will suffice because the end justifies the means. This sense of never accepting the result of any legislative loss or the result of any election will be the downfall of our nation.
These aren’t conservatives, they are reactionaries, revolutionaries and nihilists who simply cannot argue in good faith.
Occam’s Razor folks – the simplest explanation is likely also the most correct. If the legislature intended to use tax credits as a carrot one might think there would be other specific instances and explanations where they said just that. To interpret the slightly, and it is only slightly, nebulous provision of the applicability of tax credits as meaning only exchanges specifically set up and operated by the states is to argue in bad faith, nothing less.
All true, Mark. My point, though, is that Gruber’s statements, and Gruber’s preferences, are irrelevant to the legal issue. Which, yes, actually is a factual issue, but concerns CONGRESS’s intent as indicated by the stated purpose of the law, by the fact of Congress’s inclusion of the federal-setup fallback, by a hybrid fact/law legal doctrine concerning federal-agency regulations, called the Chevron doctrine–and by the fact that the law itself structures the law, “through Exchanges established by the State” provision, as permitting states to establish their exchanges by opting to allow the federal government to establish a exchange FOR the state.
The Halbig claim is ridiculous. And that changes not one whit because of anything Cannon’s found through his “studies.”
“Gruber’s statements, and Gruber’s preferences, are irrelevant to the legal issue”
Which is precisely what I stated in your earlier post. This just trash talking by a bunch of people who do not like a president who is African American, occupying The White House, and they have to obey. This has little to do with the PPACA, the law, and more to do with turning back anything ever done by Pres. Obama.
Like Gruber, I can get defensive when I write an unclear sentence, sometimes even insisting that it is clear to anyone with decent reading skills, or that people are misinterpreting or twisting my words. It wasn’t me! Regardless, SCOTUS will do whatever it wants after listening to intellectually entertaining arguments on both sides.
I sit on Beverly’s side, but not in a comfortable seat. (For example, if a state did nothing–and I mean nothing–it’s not easy to argue that it “established” something.) When a law contains an unclear sentence, we should be interested in what people thought they were passing into law. Those people were Dems in Congress. Far less relevant is the guy who wrote the sloppy sentence, although he wouldn’t think so.
PJR, you say that if a state did nothing–nothing at all–it’s not easy to argue that it “established” something. I disagree. The statute itself ensured that a state’s doing nothing was actually the state’s doing something, albeit by operation of the statute, not by choice. What the state did, by operation of the statute, was to choose to allow the federal government to set up and run the exchange for the state.
There’s no claim (at least to my knowledge) that the federal government lacked the authority to structure the statute that way.
No doubt PJR now sits most comfortably having been reassured that “The statute itself ensured that a state’s doing nothing was actually the state’s doing something.”
It’s statutory construction by gotcha. It’s a joke, except it’s not funny.It’s just about the most unethical, reprehensible thing I’ve ever seen out of any judge anywhere. The judges who propagated this laughable nonsense deserve impeachment because it is perfectly obvious they decided on the result in advance — for whatever reason, maybe fear? — and constructed their legal analysis entirely to provide cover for that pre-determined result. One might at least hope that the faculties of their respective law schools (Virgina and Penn) would circulate a unanimous declaration that regardless of how distinguished their careers and academic achievements may have been, their idea of statutory construction as expressed in this opinion is unworthy of a graduate of the school.
Or PJR could actually read the statute and know that the failure to exercise an option led to another option and he could be totally reassured.
Y’know, sort of like the “no interest for two years” offers you see on carpets, etc. If you do not take the option of paying off the balance in two years, then the interest charges are applied to the amount from the purchase date.
This came out yesterday after the OP was posted.
“A federal judge in Oklahoma has ruled that Obamacare subsidies cannot go to residents of states that are not running their own insurance exchanges, a second blow to the Obama administration on a issue that threatens a key element of the health law’s coverage expansion.
Judge Ronald A. White said that the administration’s decision to allow subsidies to go through either a state-run health insurance exchange or the federal exchange is an improper and invalid reading of the Affordable Care Act and must be struck.
White’s ruling marks the second judgment against the government on the subsidy question and comes as the Supreme Court could decide whether to weigh in.
“The court holds that the IRS rule is arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law,” White wrote in his ruling. The IRS had allowed people to get subsidies in all states.”
Well, if Judge Ronald A. White — http://www.fjc.gov/public/home.nsf/hisj — says that the IRS rule is arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law, it must be so. No appeals necessary!
While Gruber’s intent is irrelevant, Congress’ intent is less relevant than many might believe. Courts have a very consistent record over the last 40 years of ruling that if the wording in a law is not ambiguous then things like typographical errors stand until a law is enacted correcting them. So the question is not what Congress intended, but what the law says. But that is judged in a holistic manner – or is supposed to be. If then the law is truly ambiguous, then courts hold that the executive branch has pretty broad authority to chose among the possible meanings. The thinking is that Congress always has the authority to remove errors or clear up ambiguities.
Eric, the issue is what Congress meant by the words “established by” in the clause “through Exchanges established by the State”. And what is meant by the words “established by” in the clause “through Exchanges established by the State” absolutely is informed by the fact that Congress included the automatic fallback in which a state’s decision to allow the federal government to set up and run an exchange for that state, as opposed to opting to set up and run one itself, and that there would have been no conceivable purpose to the creation of the fallback other than to effectively establish exchanges by the state (by operation of law).
So, while I appreciate your comment, I think that under the circumstance of this complex statute, what you’ve said amounts to circularity. When what is at issue is the very meaning of “established by” in a section of a large, complex statute containing a separate mechanism whose purpose is to operate in conjunction with the statute section at issue, it’s deeply disingenuous for a court to say that the phrase “established by” unambiguously means that another, equally important section—the one creating the fallback—is an empty provision.
I also have to say that anyone who’s read Alito’s bizarre opinion in Harris v. Quinn from last term knows that these justices are perfectly capable of engaging in a the-knee-bone’s-connected-to-the-thighbone-which-is-connected-to-the-hip-bone analysis of what a statute says. http://www.nytimes.com/2014/07/03/opinion/the-supreme-court-ruling-on-harris-v-quinn-is-a-blow-for-unions.html
I believe that the Supreme Court majority will not allow the Halbig crowd to win, because ultimately the wingers are most interested in skewing the elective process to favor Republicans, and the ACA is not an election law—other than that a ruling removing the federal healthcare-premium subsidies would help elect Democrats. Yeah! And Roberts and Kennedy know that.
So the interest is applied even if you don’t buy a rug?
Fascinating, though completely theoretical as there is zero interest owed on non-purchases.
You are wise to stay clear of this demented business: all of the Halbig claims are (when not head-spinningly ridiculous) question-begging, just as you point out here about Michael Cannon’s silly use of the history of the IRS’s ACA phraseology.
That said, please know that poor Jonathan Gruber never said what the Halbiggers attribute to him. Rather, he said that he was concerned that the federal exchanges would not be ready on time for open enrollment and that, as a consequence, States that did not establish their own exchanges might deprive their residents of tax credits to buy exchange insurance.
The two minute you-tube link is quite clear, if a little embarrassing for Gruber : he suggested that HHS may have been deliberately slow-walking the backup exchanges in order to put pressure on the States, which is rather silly in itself.
As someone who writes on the PPACA, this comment is help to refute what is being claimed. Sometimes people have to be careful of what they say.