King v. Burwell-The Gruber Tape

Yesterday I said that my view is that Congress did not intend to use subsidies as a carrot for states to create exchanges under the ACA.  What is the best argument on the other side?  The answer is that Jonathan Gruber, one of the architects of the law, said in 2012 in a public Q&A that the subsidies were a carrot.    Gruber now says that he misspoke.

I have significant reservations about relying on this statement.  First, is this in the record?  Thus, can the Court consider this at all?  Second, even if it is in the record, Gruber did not give testimony in the District Court.  Maybe he is lying now when he says he made a mistake.  Maybe he is telling the truth.  I don’t know.  The way we figure these things out is through a fact-finder.  The way not to do this is through appellate briefs.

 

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15 Responses

  1. Brett Bellmore says:

    That’s an awfully complex, repeated, “mispoke”. More of a Kinsley gaffe. He told the truth, and it came back to haunt him.

  2. Nice post Gerard. I think equally unpersuasive are the many briefs filed by members of Congress and those involved in the drafting process who tell us whet the statute really means. Though, Gruber’s 2012 statement was made before a reason to fabricate existed so it is somewhat more reliable. http://joshblackman.com/blog/2014/11/08/the-gruber-tape-and-federal-rule-of-evidence-801d1b/

    • Ken Kelly says:

      Six months before that, the IRS issued the proposed rule for notice-and-comment that said that TC would be available on all exchanges (States commented on every part of the rule but that one).

      One month before that statement he served on a committee that issued a report saying: “HHS noted that the ACA and proposed regulations are clear that individuals enrolling through a Federally-facilitated Partnership Exchange have access to advanced payments of premium tax credits”

      And of, course, 10 seconds before that statement, he said that exchanges were the places people would go to get subsidized insurance, and that the Feds were supposed to set them up if the States failed for whatever reason, but that the Feds were being really slow about it, maybe to squeeze the States to do it themselves.

  3. Ken Kelly says:

    Heaven’s to Betsy you people – if you won’t concede that context matters in a statute, you might at least allow for it when in book tour Q&A.

    Scott Sumner, (See http://www.themoneyillusion.com/?p=27141 for the. um, context of the following):

    “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.”

    See Scott Galubi for a rather less measured reaction to this silliness: http://www.theamericanconservative.com/jonathan-gruber-and-the-smoking-gun-that-wasnt/

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

  4. pc says:

    The cert petition in King v Burwell says that the states only decided not to set up exchanges after the IRS determined the subsidies would still flow to states if they let fed government set up them up. p. 7. In fact, the petition admits the states relied on that determination in choosing not to set up the exchanges themselves, and that they would not have done so if subsidies were to be withheld. p. 21. Doesn’t this cut against their argument? If the challengers are correct, then the IRS interpretation was not just inconsistent with the incentivising provision, it destroyed it, directly causing the opposite result than that intended by Congress. Yet, this somehow went unnoticed. When States declined to set up exchanges in reliance on the IRS interpretation of the provision, no one mentioned that this was the opposite of what was intended — not congress, and not any of the states relying on that interpretation (perhaps now to significant detriment if the challengers prevail). Isn’t this less likely than the respondent’s position, that Congress wanted the subsidies to flow regardless of who set up the exchanges (what actually happened)?

  5. pc says:

    sorry if this is a duplicate:

    The cert petition in King v Burwell says that the states only decided not to set up exchanges after the IRS determined the subsidies would still flow to states if they let fed government set up them up. p. 7. In fact, the petition admits the states relied on that determination in choosing not to set up the exchanges themselves, and that they would not have done so if subsidies were to be withheld. p. 21. Doesn’t this cut against their argument? If the challengers are correct, then the IRS interpretation was not just inconsistent with the incentivising provision, it destroyed it, directly causing the opposite result than that intended by Congress. Yet, this somehow went unnoticed. When States declined to set up exchanges in reliance on the IRS interpretation of the provision, no one mentioned that this was the opposite of what was intended — not congress, and not any of the states relying on that interpretation (perhaps now to significant detriment if the challengers prevail). Isn’t this less likely than the respondent’s position, that Congress wanted the subsidies to flow regardless of who set up the exchanges (what actually happened)?

  6. Pc says:

    In other words, I thought the claim was that some states declined to set up exchanges despite the incentive provision (explaining why congress didn’t anticipate them doing so), and that the IRS reacted to this by improperly interpreting the rule to still permit funds to flow to those states. But that does not appear to be what the challengers are arguing. Instead, they are saying that the IRS interpretation caused those states not to set up the exchanges.

  7. David Bernstein says:

    Gruber claimed that he misspoke, but then another video of him saying the same thing surfaced. But it’s not really important what Congress intended, even if you can claim that the haphazard (or perhaps half-assed) way the law came into being allows one to discern any “intent” by Congress when most in the Senate had no idea what was in the details of the Senate bill when they voted on it, and the House couldn’t make any substantial changes to it. What matters is the text of the bill. The Supreme Court is not a committee of correction, even if Roberts let it play that role in NFIB v. Sebelius.

  8. Gerard Magliocca says:

    Unless you think the result of a literal interpretation is “absurd,” whatever that means. I guess that means irrational, though I suppose Roberts could decide that it means “too chaotic.”

  9. Sebastian says:

    Or you could say that the result of an interpretation is absurd if the result is a statute that Congress could not have intended. If the King challengers are correct, then in 36 states there is very little left of the individual mandate. And, as the 4 dissenters in NFIB v. Sebelius argued when discussing severability, Congress would not have passed the statute without the mandate as it would have lead to vast premium increases.

  10. Brett Bellmore says:

    I don’t think “absurd” can be taken to mean the same as “undesirable”, in as much as every law is viewed as undesirable by those who oppose it. It has to be something more in the nature of Lewis Carol type absurdity.

    Take that law that was passed stripping states that wouldn’t lower their speed limits of virtually all federal funding. If the states had gotten their dander up, and refused en masse to comply, the result would have been remarkably unpleasant, but it wouldn’t have been absurd. This seems in that nature; The drafters of that particular clause intended the results of a state refusing to establish an exchange to be nasty, nasty enough that the states would all buckle under and do it. They only changed their tune on this when a bunch of states took that dare.

    • Pc says:

      But that’s not the timeline, at least according to the challengers – they say the states’ decision not to set up exchanges was a product of the IRS rule, not a cause.

    • Ken Kelly says:

      The “absurdity” here, if any, is in the very idea of an HIX that can legally only carry subsidy-eligible insurance (QHPs) without the legal authority to disburse the very subsidies necessary to entice insurance companies to bother to sell them. Bear in mind that ACA HIXs do not have a monopoly on ACA-compliant insurance. In the absence of TC, nobody would bother to jump the high regulatory hurdles necessary to be allowed to sell QHPs. Insurance companies would simply sell non subsidy-eligible plans (EHBPs) off-exchange, and ignore the exchange entirely.
      To pile absurdity upon absurdity, the second (and last) function of the exchanges is as a portal to Medicaid and CHIP. That function is also fore-closed by the Halbig view, as only “exchanges established by the State” are mentioned in the “no wrong door” section of the ACA, which requires States to coordinate Medicaid enrollment with the exchanges.

  11. Gerard Magliocca says:

    The Chief Justice is creative when it comes to interpreting statutes.