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. BurwellHalbig v. BurwellKing 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.