Despite his memory lapses, the ethical problems related to his work on Obamacare are plain.
By John Fund
December 12, 2014
An old Soviet joke had men carrying briefcases marching alongside tanks and soldiers in a Kremlin parade. “Why are those men in a military parade?” a boy innocently asks his father. He replies, “Those are the economists. They are the most dangerous of all.”
MIT economist Jonathan Gruber’s factually impoverished testimony on Obamacare didn’t get nearly the attention it should have, as congressional Democrats cleverly decided to release a report on CIA torture abuses on the same day. Gruber’s stonewalling about videos in which he boasted that the “stupidity” of the American people and their “lack of transparency” had been the key to passing Obamacare was buried deep inside major papers and ignored by the next morning’s network-TV shows. John Harwood of CNBC dismissed his testimony: “I’m sorry, Gruber is a nothingburger and always has been.” Mark Halperin of Bloomberg News chimed in: “This has been a sideshow. . . . It has no impact whatsoever.”
Halperin will be right if journalists continue to look the other way and fail to probe more deeply into the issues Gruber has raised. The lack of curiosity many of them display about a witness who used variations of “I don’t recall” 20 times during his testimony is remarkable. One journalist explained to me that many of his colleagues have bought into the liberal argument that Gruber was just a bit player in the Obamacare spectacle, even though many journalists played up his role just a few years ago. “He’s not a legislator. He’s not a staff guy. He’s like 300 million other Americans who can have their opinion,”now sniffs Jay Angoff, a Department of Health and Human Services official who worked on implementing the health-care legislation.
Everyone behind Obamacare appears desperate to deflect attention away from Gruber. It’s like the scene in Star Wars where Obi-Wan Kenobi uses an old Jedi mind trick to convince adversaries they’re going down the wrong path: “Those aren’t the droids you’re looking for.”
In fact, Gruber was the most influential economist advising Congress and the Congressional Budget Office on how to score the budget impact of Obamacare. Back in 1994, CBO helped sink HillaryCare when it prudently pointed out that an individual health-insurance mandate imposed costs on the American people that should be reflected in the federal budget as a tax. But Peter Orszag, the director of the CBO from 2007 to 2009 until he became President Obama’s budget chief, engineered a policy reversal that decided not to count the individual mandate’s costs as part of the federal budget. That explains Gruber’s famous confession at the University of Pennsylvania last year 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.”
Gruber has direct knowledge of this subterfuge because through 2010 he served on the Panel of Health Advisers to the CBO, even though in his testimony this week he couldn’t remember exactly when he was on the panel. He was also at the same time working under contract for the Obama administration, although he often concealed his role when promoting Obamacare with reporters, describing himself as “an independent expert.” As a Wall Street Journal editorial points out, “Gruber appears to have been sitting on both sides of the table as the CBO made this crucial decision. It isn’t clear how much interaction he had with the staff at CBO, but did this association afford him insights that helped Democrats draft a deceptive bill that avoided acknowledging that it included a tax?”
It’s no wonder that Gruber decided to play stupid when asked about his confessions on the CBO scoring issue. Representative Michael Turner of Ohio put it to him point-blank in this exchange during Gruber’s testimony:
Turner: “Mr. Gruber, you made these statements, did you not?”
Gruber: “I don’t recall exactly.”
Turner: “You don’t recall? Now, one of them we actually saw on video. Do you recall that one?”
Turner: “Right, I can’t imagine how you don’t recall your own statements, because the American voter has seen them over and over again, as you’ve called them stupid. Do you deny making these statements, Mr. Gruber, even though you don’t recall them? Do you deny calling Obamacare a tax?”
Gruber: “If you’re reading my actual quotes, then I don’t deny it.”
Turner: “I’m reading your actual quotes.”
Gruber: “Then I don’t deny it.”
Gruber has gone to great effort to avoid calling Obamacare’s mandate a tax, but in his own economic textbook he wrote that people subject to a mandate “could view themselves as essentially being taxed in order to support this [health-care] market.” Professor Gruber is clearly at odds with Forrest Gump Gruber.
Later in the hearing, Gruber also claimed to Representative Trey Gowdy of South Carolina that he “honestly didn’t remember” making his comment that the American people were “too stupid” to figure out Obamacare’s sleights of hand.
But perhaps the most bizarre exchange came as Gruber was asked repeatedly to provide details of his Obamacare contracts with the federal government and various states. Some estimates have placed his income from those contracts at over $6 million. Gruber was asked by the House Committee on Government Reform and Oversight to detail his income on a standard disclosure form. But Gruber chose not to use that form and provided a pitifully inadequate accounting of his own. When he was pressed for more details, he repeatedly dodged the issue and said the committee could contact his lawyer.
Gruber may have lawyered up on the issue to avoid questions about his unusual “sole source” contract with the Department of Health and Human Services. In February 2009, HHS announced that 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.” But that was clearly not the case, as entities with expertise in health care ranging from PricewaterhouseCoopers to Anthem Inc. have demonstrated. Was Gruber uniquely qualified to provide the “garbage in, garbage out” analysis that Obamacare needed to pass because he himself may have helped develop the revised economic model that hid its true costs?
Despite his constant memory lapses, what can we fairly deduce from the role of Jonathan Gruber in Obamacare? A person who advised the Congressional Budget Office in a formal capacity and admits to communicating with it on scoring issues (he hasn’t revealed details) is hired at the same time by the Obama administration via a mysterious non-competitive contract.
During that contract, which is in effect at the same time he is helping CBO with its health-care effort, he helps “torture” (Gruber’s word) the Obamacare bill so it will be scored in the most favorable light by CBO. This all sounds like a conflict of interest and a scandal of the highest order. After the new Congress is sworn in, Jonathan Gruber needs to be called to testify again. And perhaps some of his former colleagues at CBO should be at the witness table with him.
The questions I’ve raised are only part of the mystery of Jonathan Gruber, a mystery that has only deepened with his astonishingly opaque testimony. Rarely has a congressional witness left more clues that a scandal has been underreported. All this makes the lack of curiosity by so many reporters all the more disturbing. Nancy Pelosi’s infamous statement that “we have to pass the bill so that you can find out what is in it” was certainly true when she made it in 2010. It’s even truer now as Americans begin to experience the law’s imperfections and distortions. Will the news media force us to wait until Obamacare is fully locked in before we finally learn how this was foisted on the American public?
— John Fund is national-affairs correspondent for National Review.