Obamacare architect explained intent behind allowing subsidies only on state exchanges

Jonathan Gruber, a professor at MIT, is widely is regarded as the architect of both Romneycare and Obamacare. Following the D.C. Circuit’s decision in Halbig, he asserted that the provision of Obamacare limiting subsidies to the state exchanges was a “typo.” Indeed, he found it “criminal” to suggest that Obamacare was intended to work this way.

But William Jacobson (via one of his readers) has unearthed video from 2012 in which Gruber explains why Obamacare limits subsidies to participants in state exchanges — the view of the statute he now finds “criminal.”

Gruber stated: “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.”

This, of course, is precisely what the D.C. Circuit concluded in Halbig.

Gruber’s use of the word “politically” is the key to understanding why Obamacare limits subsidies to state exchanges. As Gruber went on to explain in the 2012 talk, by limiting the subsidies, Congress put pressure on states to open exchanges so that their citizens will receive the subsidy benefit.

Are Gruber’s 2012 remarks legally significant? They should be because, as Jacobson says, they confirm that there is a solid rationale, of which Obamacare’s architects were well aware, that explains why Obamcare, by its unambiguous terms, limits subsidies to participants in state exchanges.

It is now quite untenable to argue that interpreting Obamacare in accordance with its plain language defeats the purpose of the law, much less that this interpretation renders the law absurd. To the contrary, as Gruber said, such an interpretation is entirely consistent with the “political” purpose of the law

As a practical matter, though, Gruber’s 2012 remarks may not be of much consequence. Liberal judges will not be moved by it; presumably, their determination not to sink Obamacare is absolute.

As for the judges who matter most — Chief Justice Roberts and Justice Kennedy — they already had all the information they would need to uphold the Halbig result. For them, I suspect, the question would be whether it is politic to pull the trigger.

JOHN adds: Lest anyone doubt Gruber’s role as a principal architect of Obamacare, check out this adoring profile in the New York Times of March 28, 2012, right around the time of the video:

After Mr. Gruber helped the administration put together the basic principles of the proposal, the White House lent him to Capitol Hill to help Congressional staff members draft the specifics of the legislation.

Explicating exchanges

Following up on Paul Mirengoff’s series of posts on the DC Circuit’s Halbig decision, I want to draw attention to Kim Strassel’s weekly Wall Street Journal column exploring “The Obamacare-IRS nexus” (behind the Journal’s subscription paywall but accessible via Google). Strassel exposes the role played by the IRS at the behest of the White House in promulgating regulations ignoring the limitation of Obamacare subsidies to exchanges established by states. Democrats had assumed that the limitation would be sufficient to coerce states into establishing Obamacare exchanges, but that the calculation behind the assumption failed. What happened next? Strassel writes:

[T]he White House was faced with the prospect that citizens in 36 states—two-thirds of the country—would be exposed to the full cost of ObamaCare’s overpriced insurance. The backlash would have been horrific, potentially forcing Democrats to reopen the law, or even costing President Obama re-election.

The White House viewed it as imperative, therefore, that IRS bureaucrats ignore the law’s text and come up with a politically helpful rule. The evidence shows that career officials at the IRS did indeed do as Treasury Department and Health and Human Services Department officials told them. This, despite the fact that the IRS is supposed to be insulated from political meddling.

We know this thanks to a largely overlooked joint investigation and February report by the House Oversight and Ways and Means committees into the history of the IRS subsidy rule. We know that in the late summer of 2010, after ObamaCare was signed into law, the IRS assembled a working group—made up of career IRS and Treasury employees—to develop regulations around ObamaCare subsidies. And we know that this working group initially decided to follow the text of the law. An early draft of its rule about subsidies explained that they were for “Exchanges established by the State.”

Yet in March 2011, Emily McMahon, the acting assistant secretary for tax policy at the Treasury Department (a political hire), saw a news article that noted a growing legal focus on the meaning of that text. She forwarded it to the working group, which in turn decided to elevate the issue—according to Congress’s report—to “senior IRS and Treasury officials.” The office of the IRS chief counsel—one of two positions appointed by the president—drafted a memo telling the group that it should read the text to mean that everyone, in every exchange, got subsidies. At some point between March 10 and March 15, 2011, the reference to “Exchanges established by the State” disappeared from the draft rule.

The February report cited by Strassel is accessible online here; Strassel’s column is must reading in its entirety.

Peter Suderman explores the same question in a post with the explanatory heading “Watch Obamacare architect Jonathan Gruber admit in 2012 that subsidies were limited to state-run exchanges.” Suderman includes a just-unearthed video of Gruber speaking to a technical management support organization as the law was being implemented. The relevant passage deep in the video shows Gruber explaining (emphasis added):

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.

In an update to his post — also must reading in its entirety — Suderman adds that Gruber was on MNSBC earlier this week 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.”

The video below, forwarded by a reader this morning, usefully contrasts Gruber then and now. Lest there be any misunderstanding, Gruber was explaining the plain meaning of the statute then and he is lying now.

Thoughts from the ammo line

Our friend Ammo Grrrll is not out of ammo. Ammo Grrrll checks in this morning with THE CASE FOR MANDATORY NAMETAGS. She writes:

If you live long enough, eventually you will have difficulty remembering the names of anyone you haven’t known since grade school or aren’t currently married to. This usually begins about the time you get your first mailing from AARP (the Addled Attempting to Recognize People).

Babe Ruth just called everybody “Kid,” which is one approach. I often call people “Hon,” and, if you should land a PR job with the Obama Administration, you could call news anchors “Dude.”

Another approach is to just up and move to a new state, hypothetically, Arizona, and try hard not to meet any new people.

What you should NOT do is attempt to fake it. For one thing, people are stubbornly resistant to throwing you a life preserver. How many times have you been talking to someone you kinda sorta recognize but whose name you do not know and your wife or co-worker comes up to stand beside you, expecting an introduction? If she is a GOOD wife who knows you can only remember the names of ancient baseball players or obscure cowboy action actors from your childhood, she will put out her hand and say, “I’m Ammo Grrrll, nice to meet you.” And do you think the doofus will say his or her name back? Oh no, that would be too helpful.

Continuing the theme of faking it: It will also not behoove you to try to fish around for some clue. Sample scenario at a party:

Vaguely Familiar Person Who Seems to Know YOU: “Hey, Arnie, great to see you!”
You (Arnie): “Wow, yeah, how you been?”
VFP: “Fine.”
You (madly searching for clues): “How’s work?”
VFP: “Oh you know, same old, same old.”
You: “The family good?”
VFP: “You bet.”
You: “Well, I’ve got to get to the Post Office before the price of stamps changes. Whoa! Look at that hottie over there!”
VFP: “That’s my wife.”
You: “Sure, I knew that.”

It has long been my contention that it’s not what you don’t know in Life that hurts you the most, but what you know for sure that isn’t true. If you are doing a crossword puzzle and the clue is “an intrusive govt agency” in 4 letters, and you’re sure it’s OSHA, when it’s NLRB, you are going to be heading down the wrong path at full speed.

This happened to my mother several years ago. She was in her hometown mall with her adult grandson, Marc, a very proper, easily-embarrassed young man, when she ran into a woman she hadn’t seen for some time, who she was absolutely certain was a lady named Betty. The following conversation took place that has become legend in our family:

Lady: “Well, goodness gracious, you’re looking wonderful, Dorothy!”
Mom: “How sweet of you to say that! How’s your husband?”
Lady: (long pause) “He died three years ago. You were at the funeral.”
Mom: “Oh my goodness, I’m so sorry. I thought you were Betty B.”
Lady: “No, I’m Shirley S.”
Mom: (waiting for floor to open up) “Well, for Pete’s sake. I could have sworn…”
Marc: (sprinting away, blending into crowd. Grandma? What Grandma? I’ve never seen this woman in my life.)

I realize that in Minnesota you can’t even convince the electorate that an ID should be required to vote. One man, one vote is so yesterday. New motto: one felon, one illegal, 300 votes for Franken! But, I think with our aging Boomers, it would be very helpful to have mandatory nametags. Give us a sporting chance to avoid humiliation.

Earth to House Republicans: Don’t Blow It Now!

As long as Congress remains in session, there is a risk that Republicans may turn victory into defeat by making an ill-advised deal on immigration. In the House, a group of Republicans led by Kay Granger has produced a report that looks alarmingly like the Gang of Eight proposal. At National Review, the tireless Jeff Sessions explains why Republicans should avoid that course like the plague:

The border crisis is the direct and predictable result of the President’s sustained policies undermining America’s immigration laws. The President’s continued determination to carry out this nullification remains the singular obstacle in the way of restoring lawfulness. It is therefore odd that the House working group did not mention President Obama even once in their released findings. Indeed, they made no mention of the President’s threat of sweeping new executive actions. Multiple reports indicate that these imminent actions are likely to take the form of administrative amnesty and work permits for 5-6 million illegal immigrants. Any attempt at improving the border situation would be rendered utterly void if the President follows through on his dramatic nullification acts. How can Congress ignore this brewing constitutional crisis? In fact, granting the President new funds without tackling these orders would be an institutional surrender to the planned illegality.

Substantively, the group’s report represents a step backward:

The border security measures also raise concerns. The document calls for President Obama’s Department of Homeland Security to develop a ‘strategy’ and ‘plan’ to secure the border, which is less than what is actually required to do under current law. Meanwhile, it omits any discussion of restoring collapsed interior enforcement.

But it is Sessions’ ringing conclusion that should be read by every American:

Finally, it is curious that the proposal makes no mention of the needs of Americans. Yes, this is a humanitarian crisis. But it is also a legal crisis. And so too is it a crisis for the American people who have begged and pleaded for a lawful system of immigration that serves their interests, protects their jobs, and increases their wages. Republicans should not be timid or apologetic, but present a bold defense of the American people. The House GOP has so far been the last bulwark protecting working Americans; it would be tragic for that defense to buckle in the closing days of this Congress.

The great danger, of course, is that the House might pass something that would lead to a conference committee with the Senate that would revive the Gang of Eight’s bill. I don’t think that will happen, but with Congressional Republicans, you never know.

Pro bono law morphs into left-wing lawfare

Do you remember Shirley Sherrod? She’s the former Department of Agriculture official caught on camera saying she denied a white farmer the full measure of benefits she could have given him, before later describing how she ended up rejecting this racist approach to her job.

The late Andrew Breitbart posted excerpts of the Sherrod video that failed to include the part about how she overcame her racist impulse and ended up helping the white farmer.

The Obama administration fired Sherrod after Breitbart posted the video. However, based on a review of the full video, Sherrod was offered a new position at the Department of Agriculture.

Even so, Sherrod decided to sue Breitbart. And now that Andrew is no longer with us, she is pursuing her claim against his widow.

Sherrod’s vengeful, spiteful crusade against Andrew’s widow is being prosecuted by lawyers at the mega-firm of Kirkland & Ellis. They are doing so on a pro bono basis. In other words, they are doing it for free.

The modern left has hopelessly perverted the concept of pro bono representation, and Sherrod’s case against Andrew’s widow is a near-perfect manifestation of that perversion. As Christian Adams explains:

Once upon a time, pro bono representation was provided to those who could not afford a lawyer after finding themselves in dire straits. Imagine a widow with children being sued by a landlord in an eviction lawsuit. Law firms, acting out of a sense of charity, might donate time to the widow to help her avoid eviction.

In the case of Andrew Breitbart, however, that script is flipped. Lawyers for the monster Big Law firm Kirkland & Ellis are representing Shirley Sherrod against Andrew Breitbart’s widow, for free.

The widow Breitbart clearly is not the prototypical target of an old-fashioned pro bono representation. But then, neither is Sherrod a prototypical pro bono plaintiff. Adams reminds us:

[A] farming collective associated with Sherrod’s family was the beneficiary of a multi-million dollar windfall settlement from the. . .Agriculture Department. In the same settlement, Sherrod and her family even received $150,000 for pain and suffering in the racial discrimination case against the USDA. . . .

Clearly, we have entered the new world of pro bono law in which big law firms assist the political left in conducting “lawfare.”

Adams illustrates the phenomenon by reviewing Kirkland & Ellis’ pro bono portfolio — one which, in my experience, is typical of the kinds of pro bono work other big law firms handle or aspire to take on:

• Pro bono attacks on North Carolina’s election integrity laws, including voter ID. Thomas Yannucci, the same lawyer heading the complaint against Andrew Breitbart and now Andrew’s widow, is also on the march against North Carolina voter ID. Never mind that a vast majority of Americans support voter ID, including a majority of blacks and Democrats.

• Helping illegal aliens stay in the United States.

• Sending 120 salaried lawyers to help left-wing groups monitor polls on Election Day 2012. Kirkland coordinated election day activities with. . .the same left-wing group, the Lawyers’ Committee for Civil Rights, [that] hassled Tea Party organizations on the eve of the election, ironically threatening them for similar plans to monitor the polls on election day. How far out of the mainstream is the organization? It actually asked the United Nations to monitor American elections.

• Support for a hodgepodge of leftist groups like Centro Legal de La Raza, Public Advocates, Inc., the Asian Pacific American Legal Center, the National Center for Lesbian Rights, the ACLU Foundation, and the Nature Conservancy. . . .

• Aiding the radical pro-abortion Center for Reproductive Rights that seeks to criminalize free speech by members of the Catholic Church through United Nations-sponsored treaty intervention. There’s no mention of Kirkland support of any pro-life organizations, or even health care services to women who seek to preserve life (like Tepeyac Family Center or the Capitol Hill Pregnancy Center). When it comes to the life vs. abortion debate, Kirkland money seems to have taken one side.

• Providing financial support to racialist groups like the Mexican American Legal Defense and Educational Fund (MALDEF), a group regularly on the side of opposing election integrity and making it easier for voter fraud to occur.

• Giving financial support to the Appleseed Center for Law and Justice, a group working to impose gun control in Washington D.C.

• Aiding the anti-GOP and open borders group OneJustice. Kirkland lawyers have been working closely with OneJustice to help illegal aliens stay in the United States.

Speaking of Christian Adams, Kirkland & Ellis has subpoenaed him to testify at a deposition in Sherrod’s suit against Breitbart’s widow. As I understand it, Adams had no role in the posting of the video excerpts. Dragging him into the litigation appears to be harassment, a fishing expedition, or both.

Paying clients, particularly when they are individuals, tend not to countenance depositions taken for purposes of harassment and/or “fishing.” But that’s the beauty of pro bono work. The client doesn’t pay, the law firm boosts the number of pro bono hours it can brag about, and the left pursues its political agenda — in Sherrod’s case the attempt to chill conservative media.

In this instance, though, Kirkland & Ellis has done legal lore a favor by pestering Adams. An overreaching and obnoxious “lawyer letter” from a K&E lawyer demanding the production of documents elicited a hilarious response from Robert Driscoll who is representing Adams.

Joe Patrice at Above the Law calls Driscoll’s missive “the best smackdown letter you’ll see today.” To me, it’s the best smackdown letter I’ve seen in years.

Please read it. It will make your day. If you’re a lawyer, it might make your week.

Adams promises to cover his deposition at PJ Media. I will cover Adams’ coverage.

JOHN adds: This is why I get annoyed when people talk about “establishment Republicans.” The establishment is not Republican. It is more or less 100% Democrat.

Time to Pull the Plug on Planned Parenthood

Planned Parenthood has subsisted on government grants and misguided private largesse for too long. It has sunk to an ACORN-like level of corruption. But this is the last straw: a Planned Parenthood staffer in Portland instructs a 15-year-old girl in the niceties of bondage, and worse. You have to see it to believe it:

This is actually one of several such Planned Parenthood videos. Is bondage advice part of PP’s employee training program? One wonders. In any event, the fact that this organization continues to receive funding from governments at any level is a scandal.

Bruce Braley couldn’t be bothered with VA oversight hearings

Rep. Bruce Braley, the Democratic candidate for the Senate in Iowa, landed in hot water when video emerged of a fundraiser with trial lawyers at which he ridiculed Sen. Chuck Grassley for being an Iowa farmer. Now we learn, via the Des Moines Register, that Braley missed 75 percent (15 of 20) of meetings of the House Veterans Affairs Committee, which provides oversight for the immensely troubled Veterans Administration.

One of the committee meetings Braley missed occurred just a few months before news reports found systemic and shocking problems in patient care. The subject of that particular hearing was the backlog of disability claims and reports of problems with mental health care and stewardship of VA funding — an important subject, one might have thought.

The day of that hearing, Braley attended three fundraisers.

Braley’s staff claims that he missed the VA oversight hearing on the day of the three fundraisers because he went to a congressional hearing on Fast and Furious. However, according to the Des Moines Register’s report, Braley said nothing during that hearing. And the multiple times his seat was within camera view during the hour and a half that the Veterans Affairs committee was in session, Braley wasn’t seated at the Fast and Furious hearing.

Braley did check himself in as “present” for the Fast and Furious hearing, but apparently did not participate in it — and certainly not in a way that would have prevented him from attending at least part of the Veterans Affairs hearing.

Evidently, Braley had places to go and people to meet that day, and those places and people did not pertain to the care and treatment of our wounded warriors. Indeed, given his pattern of skipping VA oversight hearings, it’s fair to conclude that the mental health and medical treatment of military veterans isn’t a priority item for this politician.

By the way, Braley’s opponent, Joni Ernst, is an Iraq war veteran. Ernst just took two weeks off from campaigning to perform her annual service in the Iowa National Guard whose largest battalion she currently commands.