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Jonathan Gruber and the Smoking Gun That Wasn’t

Conservative economist Scott Sumner offers up a desperately needed example of intellectual honesty [1] on l’affaire Gruber. (For those who haven’t been keeping score at home: Some libertarians last night released a video [2] of Obamacare “architect” Jonathan Gruber in 2012 seemingly affirming the reasoning of the D.C. Circuit Court’s ruling on the legality of offering healthcare subsidies via exchange.)

Sumner actually watched the video and noticed Gruber’s remarks were taken out of context (context: what a concept!):

That seems to suggest he agrees with the recent court ruling.  But he actually disagrees with the ruling.  Indeed he seems to regard the ruling as ludicrous.  That doesn’t look good.  Until you realize that the quote was taken out of context, and that the comments immediately preceding the quote tells a very different story: “Yes, so these health insurance exchanges . . . 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 up its backstop in part because I think they want to sort of squeeze the states to do it.”

That seems to imply the federal backstops would provide health subsidies.  So how can we reconcile these two statements?  I believe Gruber was trying to say that the federal government was being slow in setting up the exchanges, because until they did so, those states without state exchanges would get no subsidy.  Once the federal exchanges were set up, they would all get the subsidy.

What I don’t understand is why commenters were providing me with the quote on top, but not the second quote, which provides important context.

The cherry-picking of off-the-cuff remarks isn’t the worst thing about this absurdist drama. Take a step back: Michael Cannon, the Cato mastermind, basically went on a fishing expedition to find someone with standing in the Halbig case. His lightbulb [3]: the average citizen has standing! And now this bombshell video: the Gruber remarks were the first and so far only piece of documentary evidence I’ve seen that anyone actually believed subsidies weren’t intended to be offered via the federal exchanges. This evidence was discovered two years after the lawsuit was filed.

We already had a murder charge without a body; now we have a smoking gun with all its bullets. I’m sorry. We’re not in the realm of reasonable disagreement. The charitable explanation is that this stuff is pure unmitigated cuckoo cockamamie BS. The cynical explanation, per Sumner:

BTW, which of the following two statements represents the conservative view on the role of the courts?


A.  The courts should interpret the laws passed by the duly elected members of Congress, and should not be substituting their own views.  Original intent is what matters.  Unelected judges should not set policy.

B.  Yay!!  the courts have just gutted the ACA, which was an awful law passed by Congress.

I used to think it was A; now I wonder if it is B.

You’ll pardon me if I don’t find this behavior—this abusive legal chicanery—the least bit “conservative.”

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#1 Comment By David M On July 25, 2014 @ 1:57 pm

I don’t think a drafting error is out of the question, as the wording in the bill is ambiguous. However, the idea this was an intentional policy decision is just so ridiculous that I can’t begin to take it seriously.

I’m fairly liberal, so I don’t always agree with what Scott writes, but being willing to call out obvious BS like this means his arguments are at least worth considering.

#2 Comment By icarusr On July 25, 2014 @ 2:01 pm

🙂 wait for the pitchfork carrying commentariat to storm this thread and to lecture you about the “clear” wording of the ACA, how TAC is now the mouthpiece of the Kenyan anticolonial movement, that Obama is the most tyrannical monster the United States, the Western Hemisphere and indeed all of Africa, has ever seen and so it is imperative for the courts to step in and stop the tyranny, and so on, and so forth.

As for the observation,

What I don’t understand is why commenters were providing me with the quote on top, but not the second quote, which provides important context.

Easy to understand. “Context” used to be a fundamentally conservative approach – read Burke and see the battle between his “circumstances” and Rousseau’s “abstractions”. Now, of course, it is the self-described conservatives who are the principled Jacobins: the abstractions of “liberty”, of “constitutionalism”, of “original intent” reducing one political faction to advocates of scorched-earth politics. “Context” to them is precisely the sort of namby-pamby liberalism that asks, for example, that the discussion of “marriage” takes place in todays social context, rather than against principle abstractions. Context kills ideologues and ideologies; what’s there not to understand?

#3 Comment By Johann On July 25, 2014 @ 2:19 pm

A minor quibble with the article. “Conservative economist Scott Sumner”. I wouldn’t call a Market Economist a conservative economist. A Market Economist just thinks the Federal Reserve should manipulate the interest rates and quantity of money to obtain a target GDP growth instead of targeting an inflation and employment target. So they believe a politburo of financial “experts” can control the economy just as the monetarists and keynesians do.

#4 Comment By Johann On July 25, 2014 @ 2:22 pm

In my previous comment, I’m using the American meaning of conservatism, which is very misleading when it comes to economics. In the US, an economic conservative is equivalent to an economic liberal in Europe.

#5 Comment By Michael On July 25, 2014 @ 3:02 pm

What if Gruber made the same “mistake” twice? What if he openly talked about one of the top risk factors for success of the bill being whether states choose to set up their own exchanges? Would this be enough evidence to finally remove claims that no one in their right might thought subsidies weren’t intended to be offered via the federal exchanges. Might this call into question the honesty of Gruber and his submitted statements to the courts?

#6 Comment By Essayist-Lawyer On July 25, 2014 @ 3:55 pm

If he talked about a “risk factor” for success of the bill, that would presumably mean that he saw this as a bug (a drafting error) rather than a feature. Hot news flash: When people draw up a law, the goal is usually not to make it vulnerable to sabotage.

#7 Comment By S On July 25, 2014 @ 5:27 pm

If indeed it was an error, a typo, an oversight, whatever, surely the remedy is well within Congress’ reach. There really is no reason to moan about the courts, and Michael Cannon, and phantom standing – god forbid there ever be standing against the Bureaucracy to follow the actual law – all Congress has to do is edit a few lines. And if they dont? It will be telling.

#8 Comment By David On July 25, 2014 @ 7:13 pm

Seriously? This is one of the smoking guns that is. This context doesn’t make the meaning any different. The text isn’t ambiguous. Gruber’s remarks weren’t off-the-cuff (not that being off the cuff would change the truth of the remarks). The resort to speculation—”seems to imply”—contradicts the explicit words of the law—and the clear meaning of Gruber’s words. And of course he said the exact same thing on multiple occasions.

Why on Earth are you trying, and so transparently lamely, to salvage Obama’s pernicious law?

#9 Comment By tz On July 25, 2014 @ 7:44 pm

The rules have changed.

We live in a “B” world. One can wish that the courts would decide on reason, the constitution, etc. but maybe one or two justices do that.

I’m not sure how much credibility the Court has after “At the heart of liberty is the right to define one’s own concept of existence” Casey – O’Connor’s book ought to have been titled “The Travesty of the Law”.

Three generations of imbeciles aren’t enough – we’ve been packing the court with them for far longer than that.

My point is the court is politicized. Bork was a great legal and rational mind before he became a verb. Thomas was lynched. Now the game is to pack the court with sotto voce party hacks to do the dirty work when the other branches don’t want to take on the issues democratically.

I can wish it were not so. I do. Yet to depend today on reason and reasonable judges and courts is to wait for Godot.

#10 Comment By smintheus On July 25, 2014 @ 9:51 pm

There plainly is a drafting error in the sentence the libertarians seized upon. It refers to “an Exchange established by the State under 1311 of the” ACA. Obviously the word “section” was mistakenly omitted before 1311. Few laws are so perfectly drafted as to eliminate any need to figure out what was obviously intended.

And what did the laws’ backers intend? To withhold subsidies from residents of poorer states that couldn’t afford to establish their own exchange? To build a self-destruct button into the ACA and put that button in the control of Republican legislators around the country, daring them to blow up the health care law?

The libertarians’ argument lacks more than evidence. It is totally without coherence.

#11 Comment By ed On July 25, 2014 @ 10:17 pm

Thanks for this read. This is the only balanced report on this new angle that I have seen. I have seen the right use it as a smoking gun and the left contort themselves into crazy positions to try to defend Gruber. This is the only post I saw where someone put it in context and it completely made sense. I appreciate the integrity of anyone, left or right, who puts intellectual honesty ahead of political bent.

#12 Comment By gocart mozart On July 26, 2014 @ 12:55 am

“Might this call into question the honesty of Gruber and his submitted statements to the courts?”

Even if everything you speculate were true (unlikely)Gruber’s opinion is irrelevant to the court case.

#13 Comment By M_Young On July 26, 2014 @ 3:51 am

Knowing full well this will get spiked… (but that’s okay, I’m all about property rights)

The exquisite concern for the intensions of the legislature would ring a bit more true if it would have been evident during Obama’s many ‘waivers’ and postponed dates with regard to the ACA. It would have been even more convincing had it been manifested during ‘the Ones’ campaign to gut immigration law (that’s right there in the constitution, Congress controls it).

So no, I don’t lose sleep over perhaps an ideological court (which aren’t) taking advantage of a badly drafted law.

#14 Comment By BP On July 26, 2014 @ 11:07 am

Watched the video. The best light I can give Gruber is he cynically expected to have it either way. So, I say he has to hang on the bill’s exact wording.

#15 Comment By Gary Trieste On July 26, 2014 @ 6:32 pm

No one, not even the courts, are suggesting that the statuory language isn’t clear and obvious.
The courts and people who wish to “make it work” post hoc – that is after we have seen what is in it – are saying that agency interpretation that goes against what is written in the statute is OK, if that interpretation allows a more comprehensive result. Some say that such “make-it-work” interpretation is even more acceptable because although the offending language is in it, obviously no one in their right legislative mind would have written that way intentionally.
Now, when evidence that shows clearly that is exactly what they intended when enacting it, there is still argument that is all just a big misunderstanding.
It is not a misunderstanding, either from inception, to enactment, to even the initial roll-out expectations.
But now that the language just doesn’t work for reality, well they have to claim post hoc reinterpretation is acceptable, for any reason that will fit.

#16 Comment By David Naas On July 26, 2014 @ 8:15 pm

“You’ll pardon me if I don’t find this behavior—this abusive legal chicanery—the least bit “conservative.” ”

Pardon if I paraphrase John Prine — “Some Conservatives” ain’t conservative.”

#17 Comment By Glaivester On July 26, 2014 @ 10:29 pm

btw, the first quote from Gruber was:

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.

This is the “quote on top” Sumner refers to. I think it might be less confusing to include both quotes in the excerpt (in abbreviated form if number of words is an issue) rather than to force readers to click through the link to understand specifically what the statements are.

#18 Comment By Glaivester On July 26, 2014 @ 10:41 pm

Now, of course, it is the self-described conservatives who are the principled Jacobins: the abstractions of “liberty”, of “constitutionalism”, of “original intent” reducing one political faction to advocates of scorched-earth politics.

The problem is, the alternative to “constitutionalism” and “original intent” is “the Constitution means whatever I need it to mean to pass my agenda.” Pretty much that is what is being presented as the alternative to “jacobinism.”

Yes, you can argue all you want about the Constitution being a living document that expands to fit the times, or about how we need to take into account the differences in culture and interpret the document through the lens of our current situation, but in the end, it all boils down to “the Constitution means whatever my agenda is for it to mean.”

“Context,” as you would apply it, simply means the judge substituting his own judgment for the law.

#19 Comment By Glaivester On July 26, 2014 @ 10:46 pm

By the way, I do not have a strong opinion on this particular issue. As I understand it, it seems that the bill was poorly worded, and this is likely roughly equivalent to a typo. Whether or not this means that the proper interpretation is the more restrictive, I do not have a definite opinion on. So I’m sort of sitting this out right now.

#20 Comment By icarusr On July 27, 2014 @ 2:04 am

“No one, not even the courts, are suggesting that the statuory language isn’t clear and obvious.”

The Fourth Circuit said that the statutory language is not clear. This is why they could refer to the agency’s determination.

#21 Comment By simon94022 On July 28, 2014 @ 12:03 pm

Original intent is what matters. Unelected judges should not set policy.

This is the dumbest perennial argument against conservative jurisprudence.

Justice Scalia et al. have spent decades arguing for interpretation according to the original public meaning of a text, not “original intent.”

Scalia in fact is a famous opponent of the use of legislative history to determine intent because the intent of the all the authors and ratifiers of a piece of legislation can never be known. The President, 435 House members and 100 Senators may have intended many different things.

In this case you have an unambiguous text. It would require absurd contortion to interpret the word “State” to mean “State or Federal”. Perhaps the omission of Federal was a typo – fine. Then Congress and the President are free to correct it at any time.

What really hacks off the left is that the ACA was passed at one golden moment when the Democrats controlled the White House, House and Senate with a filibuster-proof super-majority. Such moments are exceedingly rare in American political history (the Republicans have not had that kind of dominance in nearly 90 years). That moment is gone, unlikely to return any time soon, and the ACA remains deeply unpopular.

So politically there is no prospect of simple fixes or corrections to the legislation. But that is not a judicial problem, it is a political one.

#22 Comment By William On July 28, 2014 @ 12:33 pm

I watch the whole video…..and he not being taken out of context. He vacillates between “saying” there are subsidies and then goes on a rant about the political realities of no subsidies for recalcitrant states. Max Baucus does the same. The law is pretty clear and if thier “intent” was subsidies, then they should have written it that way. The courts have no business divining the “intent” if the language is clear as day.

My take: the Admin and Gruber et al thought about using their own ambiguity of the law as a political weapon for wayward governors…before they thought better of the idea before the election, deciding it was too risky of a strategy.