On Friday November 7, Rich Weinstein (the only one of the millions of Americans whose health plans were canceled who responded by watching hundreds of hours of video of the people responsible) sent my organization the now-infamous video of Jonathan Gruber saying “lack of transparency is a huge political advantage” because of “the stupidity of the American voter.”
We helped get Weinstein’s find out to the media and about a month later, on Tuesday December 9, Gruber will face the House Committee on Oversight and Government Reform. They have an enormous amount of ground to cover.
Perhaps the most significant issue is Gruber’s videotaped confession that Obamacare “was written in a tortured way to make sure that the CBO did not score the mandate as taxes. If CBO scored the mandate as taxes, the bill dies.”
Democrats on the committee, and Gruber himself, are expected to pretend he was talking about whether the noncompliance penalty was a tax. He wasn’t. The CBO did of course score the penalty as revenue, and that relatively small number didn’t kill the bill.
What Gruber was referring to was the decision made at CBO Director Doug Elmendorf – while Gruber was advising him – to change the office’s longstanding methodology which held that if a person is required by a government mandate to make a purchase, then the amount paid is effectively a tax and should be reflected that way in the federal budget.
After all, there is no functional difference between the government taxing you and spending the money and the government simply forcing your to spend the money directly. Mandatory health insurance is a tax no less than mandatory Social Security is. This principal accounted for a large portion of the eye-popping score of Bill Clinton’s health care plan in the 1990s. One leading health economist said bluntly in his textbook that people subject to a mandate “could view themselves as essentially being taxed in order to support this market.” That economist was Jonathan Gruber.
So the bill was written in a tortured way to conceal the costs of the mandate. Gruber was working for the Obama administration at the time, but was also being cited as an “independent expert,” and even testifying in front of Congress as such. He was also on the CBO’s panel of health advisers.
What was his role in the CBO decision to change its methodology, go along with the tortured language, and not score the mandate as taxes?
Was this purely political, a conscious decision to lie for the sake of passing the bill? Or did he, for a brief period of time between when his textbook was written and when he was taped last year, actually believe the mandate was not taxes? Why?
Gruber’s involvement with CBO raises other questions, especially about the CBO’s microsimulation model, nearly identical to Gruber’s own, that claimed premiums would decrease under Obamacare. Did Gruber assist CBO in essentially recreating his own model? Why is neither transparent to the public? Taxpayers have given Gruber $6 million – will he release his source code so we can check his work?
Why did CBO and Gruber get it so wildly wrong when other private sector models they attacked as biased correctly predicted the significant premium increases that have actually occurred?
About that $6 million. We know part of it was from a sweetheart no-bid contract from HHS. The sole-source justification said: “Gruber is uniquely positioned to provide the analytic work,” because of his “ongoing advisory role with the Office of Health Reform,” which means he was already working for the administration. Nearly every state that considered or adopted an Obamacare exchange hired with Gruber or one of his partners at the going rate of $400,000 a pop.
Were those contracts steered by an HHS directive? Did HHS in effect replicate the no-bid parameters for the federal contract to steer the state contracts as well?
What about the Cadillac Tax? Gruber repeatedly said in public statements and in testimony to Congress that Obamacare would have almost no effect on employer-sponsored insurance, relying on a CBO estimate that only 2% of Americans would lose employer coverage. Was that 2% estimate a torturing of the data to deceive the public? If not, how does it square with the video of Gruber recently explaining that the Cadillac Tax “essentially amounts over the next 20 years essentially getting rid of the exclusion for employer sponsored plans”?
Gruber admitted this was accomplished by “mislabeling it, calling it a tax on insurance plans rather than a tax on people when we all know it’s a tax on people who hold those insurance plans.” Is such mislabeling ethical?
There is also the matter of ongoing litigation about the IRS rule purporting to authorize subsidies via refundable tax credit in federal exchanges. Gruber mocked and ridiculed this lawsuit before two videos surfaced over the summer – thanks again to Rich Weinstein and his scorn over his plan being canceled – showing him explaining precisely the plaintiffs arguments.
“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,” Gruber said. “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.” And then, perhaps hedging that politics might trump the law, he added: “But, you know, once again the politics can get ugly around this.”
Was Gruber aware that the IRS originally wrote the rule just this way, to reflect the statute? Was he involved in the subsequent reversal? Did a message come from the White House with the new talking points?
Finally, Democrats may continue the laughable charade of pretending that Gruber, widely regarded as the architect of Obamacare, was some peripheral figure they hardly knew. If so, he should be asked to explain exactly how and when he personally convinced Obama to reverse his campaign promise and embrace the individual mandate that he had attacked Hillary Clinton for supporting.
There is so much ground to cover and only so much time in this hearing, which is also Chairman Darrell Issa’s last hurrah. We’re all angry about being called stupid voters, but the more time that can be focused on substantive questioning the better we can expose the deceptions at the heart of Obamacare and keep building the case for repeal.
Phil Kerpen is head of American Commitment and a leading free-market policy analyst and advocate in Washington. Kerpen was the principal policy and legislative strategist at Americans for Prosperity for over five years. He previously worked at the Free Enterprise Fund, the Club for Growth, and the Cato Institute. Kerpen is also a nationally syndicated columnist, chairman of the Internet Freedom Coalition, and author of the 2011 book "Democracy Denied."