I would also like to clear up some misconceptions about my January 2012 remarks concerning the availability of tax credits in states that did not set up their own health insurance exchanges. The portion of these remarks that has received so much attention lately omits a critical component of the context in which I was speaking. The point I believe I was making was about the possibility that the federal government, for whatever reason, might not create a federal exchange. If that were to occur, and only in that context, then the only way that states could guarantee that their citizens would receive tax credits would be to set up their own exchange.Back in July when video and audio of Gruber connecting subsidies to state exchanges he made a similar claim to the New Republic about what his thought process might have been:
At this time, there was also substantial uncertainty about whether the federal backstop would be ready on time for 2014. I might have been thinking that if the federal backstop wasn't ready by 2014, and states hadn't set up their own exchange, there was a risk that citizens couldn't get the tax credits right away.The first problem with this excuse is that Gruber never said anything in his remarks about the federal backstop not being ready in time. In his January 10, 2012 speech at the Jewish Community Center of San Francisco, Gruber chose to close his remarks by listing three ongoing threats to the law. In order, those threats were the Supreme Court, the 2012 election and the states failing to set up exchanges.
Because Gruber is complaining about context, it seemed important to make clear that no extenuating context was removed from his remarks. The following clip is an expanded version of those remarks. Cuts for length have been clearly indicated with a flash. As you'll hear, he makes no mention of a delayed federal exchange. For the record, there is no mention of this before he offers his list of threats to the law and no mention in the Q&A that comes afterwards. The full audio is here for those who feel the need to check.
Finally, it's worth pointing out that Gruber's excuse really can't be reconciled with his 2012 statement. For one thing, he was explicit that the threat was about the states. He said, "only about ten states have moved forward aggressively in setting up their exchanges." He went on to say that 2013 was going to be a "crazy year" as states rushed to set up exchanges. If he believed the states who hadn't begun the process could be ready in time, albeit via a mad scramble, why not the federal government?
And there's another problem. Gruber gave a specific example about what it would take to insure state residents got their subsidies. He said, "when the voters in states see that by not setting up an exchange the politicians of the state are costing state residents hundreds and millions and billions of dollars that they'll eventually throw the guys out." Gruber is not describing a delay in getting subsidies, he is describing a denial in getting them, a stalemate for which the only solution would be an election of new leadership more than a year after Obamacare's launch date.
Gruber may believe he misspoke but his explanation about missing context doesn't fit with the actual content of his remarks.
Update: Hot Air's Allahpundit reached the same conclusion about Gruber's remarks:
Clearly, Gruber knew at the time that the feds might have to build their own exchange for those states; and yet, instead of saying “no biggie, federal consumers can get subsidies too,” he says the opposite, that the fact that consumers in those states can’t get subsidies should put political pressure on the state legislatures to think twice and build their own exchanges. The guy’s lying, straight up.
Reason's Peter Suderman also has a post about this. He points out that the question Gruber was asked to prompt the other clip about state-based exchanges explicitly presumed a federal backup was available. So much for that excuse. Suderman also points out that Gruber's explanation is "odd given that the federal government is required by law to [set up an exchange] if a state does not." Good points.