{"id":350,"date":"2014-07-26T21:45:00","date_gmt":"2014-07-26T21:45:00","guid":{"rendered":"http:\/\/admin.patheos.com\/blogs\/janetheactuary\/2014\/07\/gruber-state-exchanges-and-the-easy-way-vs-the-right-way.html"},"modified":"2014-07-26T21:45:00","modified_gmt":"2014-07-26T21:45:00","slug":"gruber-state-exchanges-and-the-easy-way-vs-the-right-way","status":"publish","type":"post","link":"https:\/\/www.patheos.com\/blogs\/janetheactuary\/2014\/07\/gruber-state-exchanges-and-the-easy-way-vs-the-right-way.html","title":{"rendered":"Gruber, State Exchanges, and the Easy Way vs. the Right Way"},"content":{"rendered":"\n<\/head>

Everybody\u2019s talking about the statements of Jonathan Gruber in 2012 that have been unearthed and show him, a key architect of Obamacare, saying quite directly that subsidies are only for state exchanges as a carrot\/stick (Ann Althouse here<\/a>\u00a0and here<\/a>, and Megan McArdle here<\/a> and here<\/a>, for instance), but this article<\/a> makes a key point that is even more of a \u201csmoking gun\u201d than the Gruber quotes.<\/p>\n

The only statement anyone has found in the legislative history that addresses this point comes from the Act\u2019s lead author, who affirmed that Congress did intend to withhold tax credits in federal Exchanges. During a September 23, 2009, mark-up of his bill, which ultimately became the PPACA, Senate Finance Committee chairman Max Baucus (D-MT) refused to consider a Republican amendment regarding medical malpractice on the grounds it fell outside the Committee\u2019s jurisdiction. Sen. John Ensign (R-NV) protested, asking how Baucus\u2019 bill could do other things that lie outside the Committee\u2019s jurisdiction, like direct states to create Exchanges. Baucus responded the bill creates tax credits, which are within its jurisdiction, and makes eligibility for those tax credits conditional on states creating Exchanges. Conditional necessarily means that Baucus intended to withhold tax credits in states that did not create their own Exchanges.<\/p><\/blockquote>\n

This would seem to make it pretty hard to defend the claim that the \u201clegislative intent\u201d was to provide the subsidies to both state and federal exchanges. \u00a0What\u2019s left is the claim that the current implementation of Obamacare has to be maintained because (a) it would be too disruptive and (b) it would be unfair to move to a true implementation of the law.<\/p>\n

Now, I can\u2019t really provide a detailed parsing of the rulings and their legal reasoning, or lack thereof. \u00a0 I can\u2019t really tell you whether the ACA defenders\u2019 claim that it\u2019s nonsensical that the law would withhold subsidies from federal-exchange customers, is their genuine perception of the situation, or, as this National Review article claims<\/a>, a cynical attempt to rewrite history.<\/p>\n

But here are a few examples to consider:<\/p>\n

In my field, pension consulting, there is a substantial body of legislation around funding requirements and maximum (deductible) funding rules, as Congress tries to balance the competing interests of ensuring pension plans are well-funded, while preventing corporations from dodging taxes with excess tax-deductible contributions (honestly, this isn\u2019t much of a problem these days), and not placing too heavy a burden on employers. \u00a0The latest was \u201cMAP-21\u201d \u2013 that is, an infrastructure bill funded, in part, by lightening the funding requirements (hence increasing tax revenues) \u2014 or, as we say the the field, by providing \u201cfunding relief,\u201d since the funding requirements are based on interest rates, and, every time the government bond rate drops, funding requirements become more onerous unless legislation is changed.<\/p>\n

So what happens when it\u2019s clear that movement in interest rates means that employers face the prospect of burdensome contribution requirements? \u00a0Congress, in a bipartisan manner, pulls together new legislation.<\/p>\n

And remember the agriculture bill? \u00a0For quite a while we were told that if Congress didn\u2019t act, we\u2019d be seeing $7 milk because certain new provisions would expire and be replaced by some old provisions. \u00a0To be honest, I don\u2019t remember what happened any longer. \u00a0It seems to me that there were some editorials on the fact that this farm bill was just as bad as prior ones, but the bottom line is that we\u2019re not paying $7 for milk.<\/p>\n

Now, surely Congress didn\u2019t mean to create legislation that, upon its expiry, would produce $7 milk. \u00a0But there was never any hint that, because the consequences of allowing the legislation to run its course would be extreme, it would be altogether permissible for the administration to reinterpret the law differently, to apply the existing law after its expiration date, for instance.<\/p>\n

Now, of course, in any case in which the administration finds itself with an inconvenient law, it would always be easier to find a way to simply disregard the law, and they\u2019re plenty willing to do that (and I really don\u2019t know yet whether Obama will in fact carry out his threat to grant amnesty unilaterally, for example) \u2014 but that\u2019s not the way a democracy governed by laws, not men, works.<\/p>\n

Yes, it\u2019s harder to come up with a compromise in which Democrats and Republicans agree on enough revisions to the ACA to make it palatable for the Republicans to vote on an \u201ceverybody gets subsidies\u201d rewrite, but it\u2019s necessary. \u00a0Whining that \u201capplying the law as written is too hard\u201d might be easier, but it\u2019s not right. <\/p>\n

Of course, this makes it all the clearer that it\u2019s just a really bad idea to push through legislation in a single-party manner, without a shred of bipartisanship, despite wide opposition, and with such monstrous complexity. \u00a0But just because the law\u2019s supporters are in a difficult position doesn\u2019t mean that they get a pass on following the law. \u00a0And the legislators who voted in 2010 do not some how have a sacred right to have their legislation preserved, by hook or by crook.<\/p>\n

So, look, maybe it\u2019s just because I we were at an Eagle Court of Honor today (\u201ca Scout is trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, brave, clean, and reverent\u201d), but I\u2019m not buying claims that it\u2019s necessary to preserve the administration\u2019s implementation of the law because to do otherwise would be \u201ctoo hard.\u201d \u00a0Sometimes doing the right thing is hard.<\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":"

Everybody\u2019s talking about the statements of Jonathan Gruber in 2012 that have been unearthed and show him, a key architect of Obamacare, saying quite directly that subsidies are only for state exchanges as a carrot\/stick (Ann Althouse here\u00a0and here, and Megan McArdle here and here, for instance), but this article makes a key point that […]<\/p>\n","protected":false},"author":2209,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-350","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nGruber, State Exchanges, and the Easy Way vs. the Right Way<\/title>\n<meta name=\"description\" content=\"Everybody's talking about the statements of Jonathan Gruber in 2012 that have been unearthed and show him, a key architect of Obamacare, saying quite\" \/>\n<meta name=\"robots\" content=\"index, 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