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Obamacare Architect: No State Exchange = No Subsidies

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In just a year, Gruber went from honest reading of law to calling same "nutty," "stupid," and "desperate."

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http://reason.com/blog/2014/07/24/watch-obamacare-architect-jonathan-grube

Watch Obamacare Architect Jonathan Gruber Admit in 2012 That Subsidies Were Limited to State-Run Exchanges

Earlier this week, a three-judge panel in the D.C. Circuit Court ruled that, contrary to the Obama administration’s implementation and an Internal Revenue Service rule, Obamacare’s subsidies for private health insurance were limited to state-run health exchanges.

The reasoning for this ruling was simple: That’s what the law says. The section dealing with the creation of state exchanges and the provision of subsidies states, quite clearly, that subsidies are only available in exchanges "established by a State," which the law expressly defines as the 50 states plus the District of Columbia.

Obamacare’s defenders have responded by saying that this is obviously ridiculous. It doesn’t make any sense in the larger context of the law, and what’s more, no one who supported the law or voted for it ever talked about this. It’s a theory concocted entirely by the law’s opponents, the health law's backers argue, and never once mentioned by people who crafted or backed the law.

It’s not. One of the law’s architects—at the same time that he was a paid consultant to states deciding whether or not to build their own exchanges—was espousing exactly this interpretation as far back in early 2012, and long before the Halbig suit—the one that was decided this week against the administration—was filed. (A related suit, Pruitt v. Sebelius, had been filed earlier, but did not challenge tax credits within the federal exchanges until an amended version which was filed in late 2012.) It was also several months before the first publication of the paper by Case Western Law Professor Jonathan Adler and Cato Institute Health Policy Director Michael Cannon which detailed the case against the IRS rule.

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.

A video of the presentation, posted on YouTube, was unearthed tonight by Ryan Radia at the Competitive Enterprise Institute, a libertarian think tank which has participated in the legal challenge to the IRS rule allowing subsidies in federal exchanges. Here’s what Gruber says.

• 
  
• 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.

Here’s the video, which according to YouTube's date stamp was uploaded by Noblis on January 20, 2012.

• http://www.youtube.com/watch?v=rBAHvX1WdWc&feature=youtu.be

There can be no doubt, based on his record, that Gruber is a supporter of the law. He says so in the presentation. "I’m biased, I’m in favor of this type of law, I won’t hide that," he says. He also explains early on that his entire presentation is made of "verifiable objective facts."

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.

In early 2013, Gruber told the liberal magazine Mother Jones that the theory advanced by the challengers in this case was "nutty." Gruber also signed an amicus brief in defense of the administration and the IRS rule. But judging by the video it is quite clear that in 2012 he accepted the essence of the interpretation advanced by the challengers.



Unless this video is a fraud or there are relevant details missing, there are only two options here: Either Gruber, a key influence on the legislation who wrote part of the law and who consulted with multiple states on setting up their own exchanges, was correct, and the law explicitly limits subsidies to state-run exchanges.

Or he was wrong in a way that perfectly aligns with both the clear text of the legislation and the argument later made by the challengers to the IRS rule allowing subsidies in federal exchanges.

Update: Earlier this week, Gruber was on MNSBC to address the Halbig ruling. He was asked if the language limiting subsidies to state-run exchanges was a typo. His response: "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."

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http://therightscoop.com/obamacare-architect-caught-lying-about-subsidy-typo-on-msnbc/

Obamacare architect caught LYING about subsidy ‘typo’ on MSNBC

The Halbig case has forced the Obama administration and the ‘Obamacare architects’ to suggest that the line stating that subsidies must go through state exchanges is a typo. And that’s exactly what this Obamacare/Romneycare architect, Jonathan Gruber, told Chris Matthews the other day: (50 second video)

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• Chris, 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. And why would they? Look, the law says that people are only subject to the mandate if they can afford insurance, if it`s less than 8 percent of their income. If you get rid of these subsidies, 99 percent of the people who would get subsidies can no longer afford insurance, so you destroy the mandate. Why would Congress set up the mandate and go through all that political battle to allow it to be destroyed? It`s just simply a typo, and it`s really criminal that this has even made it as far as it has.

[...]

• “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.”
  Jonathan Gruber - January 18, 2012

LTC8K6

Jul 24 2014, 10:53 PM

Maximum Obamacare fine — or tax, whatever — set at $2448 per person

The caps are $2,448 per person and $12,240 for a family of five. The amount is equal to the national average annual premium for a bronze-level health plan.

The penalty for the first year starts at $95 per person and can rise to as much as 1 percent of annual income. The latest figure limits what the government can charge people using the personal income computation. The penalty is due when people file their 2014 taxes.

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Conservative lawmakers and groups that are critical of the Affordable Care Act encouraged consumers to skip buying insurance, arguing it would be cheaper to pay the $95 penalty, but often failed to mention the 1 percent clause.

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• “Questioner: You mentioned the health-information Exchanges for the states, and it is my understanding that if states don’t provide them, then the federal government will provide them for the states.
  
  Gruber: Yeah, so these health-insurance Exchanges, you can go on ma.healthconnector.org and see ours in Massachusetts, will be these new shopping places and they’ll be the place that people go to get their subsidies for health insurance. In the law, it says if the states don’t provide them, the federal backstop will. The federal government has been sort of slow in putting out its backstop, I think partly because they want to sort of squeeze the states to do it. 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. 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’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, and that they’ll do it. But you know, once again, the politics can get ugly around this.

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• “But probably the most widely touted reason given for why obstinate Republican governors will be able to take Obamacare down is a legal theory pushed by [libertarian] scholars like Michael Cannon, the health policy director at the libertarian Cato Institute. It goes like this: Congress only intended the subsidies and tax credits that help consumers buy health insurance to be available through state-created, not federally created, exchanges. If these benefits aren’t available in states with federally run exchanges, the argument goes, then other key components of the law, like the requirement that employers offer health insurance, and that most people must buy insurance, also fall apart in those states.
  
  Jonathan Gruber, who helped write former presidential candidate Mitt Romney’s Massachusetts health care law as well as the Affordable Care Act, calls this theory a “screwy interpretation” of the law. “It’s nutty. It’s stupid,” he says. And beyond that, “it’s essentially unprecedented in our democracy. This was law democratically enacted, challenged in the Supreme Court, and passed the test, and now [Republicans] are trying again. They’re desperate.”

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• “Appellants [i.e., the plaintiffs] posit that Congress purposely dangled the “carrot” of affordable health insurance for low-income families and individuals in front of states to encourage states to establish exchanges. In Appellants’ conception, the “stick” of having to “explain to their voters that they had deprived them of billions of dollars by failing to establish an Exchange” would so frighten state officials that eventually, every state would create an Exchange and, consequently, uninsured Americans nationwide would become eligible for premium subsidies… That account…is implausible and indeed irreconcilable with the ACA’s structure and purpose.

kbp

Jul 25 2014, 09:14 AM

http://online.wsj.com/articles/kim-strassel-the-obamacare-irs-nexus-1406244677?tesla=y
The ObamaCare-IRS Nexus
The supposedly independent agency harassed the administration's political opponents and saved its health-care law.

Some very important information here, but I can't copy it with the laptop I am presently using.

If anyone can paste it, I'd appreciate it!

ADD: It helps to confirm what the intent was in constructing the text of the law that required an exchange established by the state if they wanted the FREE MONEY.

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• “The evidence gathered by the Committees indicates that neither IRS nor the Treasury Department conducted a serious or thorough analysis of the PPACA statute or the law’s legislative history with respect to the government’s authority to provide premium subsidies in exchanges established by the federal government. IRS and Treasury merely asserted that they possessed such authority without providing the Committees with evidence to indicate that they came to their conclusion through reasoned decision-making.

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• •IRS and Treasury officials produced just one paragraph of analysis on this issue prior to promulgating the proposed rule, and just one further paragraph of analysis between issuing the proposed rule and the final rule.
  
  •A May 16, 2012, policy memorandum accompanying the final rule stated, “we carefully considered the language of the statute and the legislative history and concluded that the better interpretation of Congressional intent was that premium tax credits should be available to taxpayers on any type of Exchange.” Yet that memo raises more questions than it answers.
  
  •The memo’s author was “Cameron Arterton, a Deputy Tax Legislative Counsel for Treasury hired in late 2011…to conduct a review of the legislative text and history surrounding the issue of whether tax credits should be available in federal exchanges.”
  
  •Investigators wrote that Arterton “did not remember ever discussing the issue of whether the statute authorized premium subsidies in federal exchanges with other members of the working group” developing the rule. This raises the question: was Arterton tasked with discerning Congress’ intent, or merely finding support for the agencies’ decision to do the opposite of what the statute says? The available information suggests it may have been the latter.
  
  •An email exchange from December 2011 shows Arterton counseled Treasury attorneys that “tension/conflict between two statutory provisions can create sufficient ambiguity” for courts to defer to an agency’s interpretation. When asked by investigators, Arterton could not identify which provisions of the PPACA created such ambiguity.
  
  •An October 2012 letter from Treasury to congressional investigators claimed there was “no discernible pattern” in the statute that suggests Congress meant to restrict tax credits to state-established Exchanges. Yet Arterton along with a colleague who searched for certain terms in the statute “admitted…that neither of them made any attempt to categorize or organize the results of their search in any way to determine whether a pattern existed with PPACA.”
  
  •Arterton likewise “told the Committees that she never produced a written review of any kind related to her search of the law’s legislative history.”
  
  •Arterton told investigators her legislative-history search incorporated statements made by House members prior to the Senate approving the PPACA in December 2009. Such statements would not shed any light on the intent behind the PPACA. The House bill took a different approach to Exchanges and subsidies than the PPACA. Among other differences, it explicitly authorized subsidies through both state-established and federal Exchanges. Statements about the House’s approach cannot constitute congressional intent, because that approach did not and could not pass Congress.
  
  •McMahon confirmed at a congressional hearing that Treasury and IRS considered the House bills when trying to ascertain the intent behind the PPACA.
  
  •At the same time Arterton was researching inapposite legislative history, she failed to consider a January 2010 letter from Rep. Lloyd Doggett (D-TX) and 10 other Texas Democrats that spoke to the issue at hand. The Texas Democrats’ letter warned that the PPACA’s approach to Exchanges would allow states to block the hoped-for coverage expansion and that “millions of people will be left no better off than before Congress acted.”
  
  •Interestingly, prior to joining the IRS, Arterton worked for Doggett at the Ways & Means Committee. So while Arterton was inappropriately researching House members’ thoughts about the House bill, she overlooked her former employer’s thoughts on the PPACA itself, which happen to conflict with the IRS’s theory of what Congress intended and to confirm the plain meaning of the statute.
  
  •The agencies admitted the legislative history of the PPACA does not support their interpretation. “Arterton told the Committees that the legislative history was inconclusive, echoing then-Deputy General Counsel for Treasury Chris Weideman’s statement…that IRS and Treasury concluded that there was a lack of evidence in PPACA’s legislative history to support its interpretation and that there was also a lack of evidence in the legislative history that contradicted their interpretation.”
  
  •If Treasury and the IRS didn’t find any evidence from the PPACA’s legislative history that contradicted their interpretation, it can only be because they weren’t looking very hard. The investigators report, for example, “the seven IRS and Treasury employees stated they did not consider the Senate’s preference for state exchanges during the development of the rule.” A preference for state-run Exchanges offers a good rationale for restricting tax credits to state-established Exchanges: the tax credits would serve as an inducement to states.
  
  •And yet: “none of the seven IRS and Treasury employees interviewed by the Committees were aware of any internal discussion within IRS or Treasury, prior to the issuance of the final rule, that making tax credits conditional on state exchanges might be an incentive put in the law for states to create their own exchanges.” That’s pretty remarkable. The very article that first brought this issue to the agencies’ attention – the one Emily McMahon saw in March 2011 – and countless articles and commenters since have all described the tax credits as an inducement to encourage states to establish Exchanges. Yet every official interviewed by the committees admitted they never considered that possibility.
  
  •Investigators showed Treasury and IRS officials an article from early 2009, in which influential health-law professor Timothy Jost noted that because the Constitution does not permit Congress to commandeer states into establishing Exchanges, Congress might consider encouraging states to comply “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)” — which the IRS also administers. Yet “none of the seven key employees from IRS and Treasury interviewed by the Committee had seen Timothy Jost’s January 2009 article prior to being shown it by Committee staff.”
  
  •Emily McMahon, furthermore, “was unfamiliar with the term ‘commandeering problem’” and “none of the officials working on the rule could recall anyone raising the commandeering problem and its applicability to its rulemaking in this area.”
  
  •None of the seven Treasury and IRS employees the Committees interviewed could recall whether they considered other incentives the PPACA creates for states to establish Exchanges (e.g., unlimited start-up grants or a costly new requirement on state Medicaid programs that only lifts once “an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act is fully operational”). Nor could they recall discussing the highly relevant and undisputed fact that the PPACA also conditioned Medicaid funding on state cooperation.
  
  •The officials were unaware that the PPACA contains language providing that U.S. territories that establish Exchanges shall be treated as a state, and offering small-business tax credits through “an Exchange,” and that these provisions show Congress knew how to use inclusive Exchange language when it desired.
  
  •The officials “did not consider” a 2009 statement by the PPACA’s lead author, Finance Committee chairman Max Baucus (D-MT), in which he acknowledged the bill places conditions on tax credits, and that that is how the Finance Committee had jurisdiction to direct states to establish Exchanges, which would otherwise be outside its jurisdiction.

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http://www.atr.org/new-irs-form-proves-obama-lied-about-individual-mandate-tax

New IRS Form Proves Obama Lied About Individual Mandate Tax

On Thursday the IRS released a slew of draft 2014 tax forms. The new draft Form 1040 shows a new surtax line has been created for the payment of the individual mandate surtax – see line 61 of the 1040:



President Obama has repeatedly denied that the surtax is in fact actually a tax. The most prominent example was a heated exchange on ABC’s This Week in Sept. 2009, when George Stephanopoulos confronted Obama with a dictionary:

STEPHANOPOULOS: I -- I don't think I'm making it up. Merriam Webster's Dictionary: Tax -- "a charge, usually of money, imposed by authority on persons or property for public purposes."

OBAMA: George, the fact that you looked up Merriam's Dictionary, the definition of tax increase, indicates to me that you're stretching a little bit right now. Otherwise, you wouldn't have gone to the dictionary to check on the definition. I mean what...

STEPHANOPOULOS: Well, no, but...

OBAMA: ...what you're saying is...

STEPHANOPOULOS: I wanted to check for myself. But your critics say it is a tax increase.

OBAMA: My critics say everything is a tax increase. My critics say that I'm taking over every sector of the economy. You know that.

Look, we can have a legitimate debate about whether or not we're going to have an individual mandate or not, but...

STEPHANOPOULOS: But you reject that it's a tax increase?

OBAMA: I absolutely reject that notion.

It was always obvious that the penalty for not complying with Obamacare’s individual mandate was just another surtax:

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• The surtax is collected by, and enforced by, the IRS.
  
  
• As shown by the newly released draft Form 1040, the surtax is paid as part of normal income tax filing by taxpayers.
  
  
• The individual mandate surtax was written into tax law itself by the Obamacare statute.
  
  
• Revenues derived from the individual mandate surtax have always been scored by the Congressional Budget Office as tax revenue.

Famously, Chief Justice John Roberts pointed out that the individual mandate surtax is in fact a tax. However, that does not compel conservatives to agree that Obamacare’s individual mandate is Constitutional. The same decision declared the individual mandate unconstitutional under the Commerce Clause. Conservatives can accept that this surtax is a tax increase without accepting the constitutionality of the individual mandate.
[The point of the Constitutional argument debated in public was it is either a tax for doing nothing or it forces you to purchase something from others.]

The Obamacare individual mandate non-compliance surtax is one of at least seven Obamacare taxes that violate the President’s “firm pledge” not to raise any tax on any American making less than $250,000 per year. Thorough documentation of Obama’s promise can be found here.

LTC8K6

Jul 25 2014, 05:28 PM

http://www.breitbart.com/InstaBlog/2014/07/25/Another-Stunning-Admission-in-Gruber-s-Speech-The-Public-Option-Was-Single-Payer

Another Stunning Admission in Gruber's Speech: The Public Option Was Single Payer