Since July 22, when a federal appeals court panel dealt a potentially significant blow to Obamacare by ruling that participants in healthcare exchanges administered by the federal government in 34 states are not eligible for billions of dollars in tax subsidies, several facts have emerged which question Jonathan Gruber, an MIT economist and chief architect of Obamacare, and his opinions on whether the intent of Obamacare was that subsidies should only be available for state-run Obamacare exchanges.
In response to the dismantling of Gruber’s position, the White House and Democrats are distancing themselves from him. Specifically, Democrats argue that Gruber was not a member of Congress and there is no evidence that anyone in Congress relied on him or his analysis. I think there is significant evidence to the contrary.
Three important background details:
As described on the CBO web site – “Since its founding in 1974, the Congressional Budget Office (CBO) has produced independent analyses of budgetary and economic issues to support the Congressional budget process. The agency is strictly nonpartisan and conducts objective, impartial analysis, which is evident in each of the dozens of reports and hundreds of cost estimates that its economists and policy analysts produce each year.”
Senator Max Baucus Chairman of the Senate Finance Committee said from the Senate floor on December 9, 2009, “[Gruber] takes the CBO data and, in some respects, he has helped CBO by giving some information to CBO that it otherwise does not have.”
And, as Jane Hamsher wrote in an article published on the Huffington Post titled “How the White House Used Jonathan Gruber’s Work to Orchestrate the Appearance of Broad Consensus,” “In December 28, Gruber published an op-ed in the Washington Post — in which he neglected to mention his contract to consult with the White House on this very issue. He was asked point-blank if he had any contracts related to the piece for which he was being paid, and he said ‘no.’ The Post subsequently published a correction.”
Therefore, we have the CBO using information that “it otherwise does not have” from a guy, who some if not most people did not know was a consultant to the White House on this exact issue, to develop independent analyses for Congress. Below are the eight key facts that prove that Gruber’s analysis was marketed as expert, independent analysis that Congress should and did rely on.
HHS argued that Gruber was the only consultant that had the expertise it needed – HHS announced on February 25, 2009, it “intends to negotiate with Jonathan Gruber, Ph.D. on a sole sources basis for technical assistance in evaluating options for national healthcare reform. The basis for restricting competition is the authority 13.106-1(b) because only one source is reasonably available to satisfy agency requirements.”
Senior Democratic Members of Congress gave Professor Gruber high praise for his “independent analysis”
- Senator Max Baucus, Chairman of the Senate Finance Committee, said from the Senate floor on December 9, 2009: “The Congressional Budget Office and Professor Gruber are both credible and unbiased sources that are not bought and sold by the insurance industry. The Congressional Budget Office and MIT’s Gruber have confirmed what many of us have known: that the bill before us will lower premiums and provide a great many options for more comprehensive coverage. That is very important.”
- Current Secretary of State and then-Senator John Kerry said, “Having spent years working to make health care work for Americans, Jonathan Gruber has now provided another service: walking everyone through the benefits of the Affordable Care Act reforms so consumers are armed with accessible information.”
- Senate Majority Leader Sen. Harry Reid (D-NV) said from the Senate floor on December 1, 2009, “Massachusetts Institute of Technology’s Jonathan Gruber, who is one of the most respected economists in the world, said in today’s Washington Post: ‘Here’s a bill that reduces the deficit, covers 30 million people and has the promise of lowering premiums in the long run.’ Pretty good statement. That means millions of Americans who today cannot afford coverage or whose medical bills drive them to financial ruin.”
- Then-Speaker of the House Rep. Nancy Pelosi (D-CA) praised Gruber – As Jane Hamsher wrote in her article published on the Huffington Post, “Rep. Nancy Pelosi (D-CA) touted ‘the Gruber analysis’ on the Speaker’s website.”
- The United States Senate Finance Committee issued a press release touting Gruber’s “independent analysis” on December 10, 2009 that stated: “Massachusetts Institute of Technology economist Jon Gruber estimates that wages will go up by $234 billion over the next ten years as a result of this policy. He estimates that on the whole, Americans will see a one-year wage increase of $55 billion by 2019. That amounts to almost $700 in increased wages per insured household. Gruber adds, ‘[T]he conclusion that lower employer insurance spending will lead to higher wages is not mere speculation: it is strongly supported by both economic theory and evidence.'”
The White House praised and widely marketed Gruber’s Analysis
- The White House Budget Director Peter Orszag relied on Gruber – According to a Wall Street Journal article published on January 14, 2010, “White House budget director Peter Orszag has also relied on a letter from Mr. Gruber and other economists endorsing the Senate bill.”
- On October 15, 2009, the White House promoted Gruber and his data’s promised insurance savings on Whitehouse.gov, writing, “MIT Economics professor Jon Gruber recently conducted analyses based on the non-partisan Congressional Budget Office model to show that the bill will deliver savings for people purchasing health care in the nongroup insurance market, ranging from several hundred dollars for the youngest consumers to over $8500 for families.”
- Executive Office of the President Council of Economic Advisers issued a report on December 14, 2009 with numerous references to Gruber, including the statement, “Recent estimates by MIT economist Jonathan Gruber and by the CBO suggest that this health insurance exchange would lead to health insurance coverage that is both more secure and comprehensive, and has lower administrative costs and premiums than comparable coverage under current law.”
- The White House Posted Gruber’s reports on Whitehouse.gov – For example, Whitehouse.gov posted Professor Gruber’s November 27, 2009 report titled “The Senate Bill Lowers Non-Group Premiums: Updated for New CBO Estimates.”
- The White House dedicated a web page to Gruber’s analysis – On November 4, 2009, Whitehouse.gov dedicated almost an entire page including links to Gruber articles, reports, etc. Gruber’s word was characterized as “objective analysis.”
- The White House used Gruber to refute a governor’s concerns about Obamacare – In response to concerns raised by the Governor of Tennessee, Stephanie Cutter posted on Whitehouse.gov, “Jonathan Gruber of the Massachusetts Institute of Technology analyzed the Governor’s arguments and declared: ‘The Affordable Care Act will not lead to widespread erosion of employer-sponsored insurance. Rather, it will provide the necessary protection for those who are suffering from the erosion that is already taking place.'”
Then-current HHS Secretary Kathleen Sebelius released a report on December 3, 2009 that “highlighted the benefits of health insurance reform for businesses and released a new fact sheet regarding a recent analysis from the Congressional Budget Office.” The report included 16 footnotes highlighting sources for the report. The CBO was listed once and Professor Gruber was listed three times. No other individual was listed.
The White House and Democratic Party widely distributed Gruber’s reports – As the Huffington Post article by Jane Hamsher highlights, “On Monday the 23rd, the DNC was sending the Brownstein column around in its entirety… one of 71 emails they would send touting Gruber’s work and it was included in OFA’s Monday Morning News Clips on BarackObama.com.”
Gruber argued that he was integral to Congress and Obamacare
- Gruber, in a March 11, 2010 video clip, said, “I helped write the federal bill,” and “I was a paid consultant to the Obama administration and helped develop the technical details of the bill.”
- Gruber, on another video clip on June 13, 2102, said, “So I went down shortly after the election. I worked with the transition team to help put the numbers together for the administration. And then, essentially, most of 2009 I was really on loan from the administration to Congress, particularly the Senate Finance Committee, to help them put the numbers together on what became the finance committee bill, which really became Obamacare. Yeah, that’s what I did.”
As every day passes, more information surfaces making it abundantly clear that the intent of Obamacare was to create strong incentives for governors to set up exchanges in their own states. Gruber is very clear about this, and Congress relied on Gruber. When this strategy failed, the White House and HHS tried to change their position. Unfortunately for them, too much public information exists showing their original intent. If federal exchange subsidies are prohibited, Obamacare is over. Ending Obamacare is the step we need for Oblimination – the reversal of Obama’s failed policies.