An inside look and history of Jonathan Holmes Gruber from Discover the Networks…
Born on September 30, 1965, Jonathan Holmes Gruber earned a BS in economics from the Massachusetts Institute of Technology (MIT) in 1987 and a PhD in that same discipline from Harvard University in 1992. He has taught economics at MIT since 1992, except during a brief period (1997–98) when he served as Deputy Assistant Secretary for Economic Policy at the U.S. Treasury Department.
From 2003–06, Gruber was a key developer of the Massachusetts healthcare reform plan instituted during the administration of then-governor Mitt Romney. In 2006, Modern Healthcare magazine named Gruber as one of “The 100 Most Powerful People in Health Care in the United States,” a designation he would earn again six years later.
In 2008 Gruber was a consultant to the presidential campaigns of Hillary Clinton, John Edwards, and Barack Obama. Obama in particular had admired Gruber’s intellect for some time, having named him during an April 2006 Brookings Institution panel discussion as one of “the brightest minds from academia and policy circles” whom he (Obama) had “stolen ideas from liberally.”
In 2009-10 Gruber served as a chief architect of the Patient Protection and Affordable Care Act (a.k.a. Obamacare). By Gruber’s own account, he “helped write the federal bill” and “was a paid consultant to the Obama administration to help develop the technical details as well”—services for which the Department of Health & Human Services (headed by Kathleen Sebelius) paid him $392,600.
All told, Gruber earned some $5.9 million from federal and state government sources for his consulting services between 2000-14. This included $2.05 million from the National Institutes of Health (for work related to Medicare Part D), $1.7 million from the Justice Department (for “expert witness” testimony), and $103,500 from the State Department (for legal services). Also highly lucrative was his “Gruber Microsimulation Model” (GMM), which helped Obamacare’s authors anticipate whether the Congressional Budget Office (CBO) would (correctly) interpret various features of the Affordable Care Act as “taxes.” The GMM afforded those authors—who understood that such an interpretation could entirely thwart the prospect of passing the legislation—an opportunity to deceptively tweak the wording of the bill accordingly. Eight U.S. states—Colorado, Connecticut, Maine, Michigan, Minnesota, Vermont, West Virginia and Wisconsin—have also contracted with Gruber to gain access to his computer model.
In 2009 Gruber attended five of the twelve White House meetings where top experts gathered to discuss the design of Obamacare. One of these was a July 20 gathering that Obama himself attended.
In early November 2014, Gruber became engulfed in controversy when video clips of some of his past speeches on Obamacare came to public attention. In those clips, Gruber could be seen boasting that he and the Democrats had knowingly and repeatedly lied about key aspects of the legislation so as to deceive American voters, whom the professor characterized as “too stupid” to realize what was happening.
For example, during a videotaped October 17, 2013 panel discussion (at the University of Pennsylvania) about the political hurdles that Obamacare had faced in 2009-10, Gruber openly acknowledges that, contrary to the Obama Administration’s claims, the Affordable Care Act’s individual mandate—requiring every American to purchase health insurance—is in fact a massive tax. But “this bill was written in a tortured way” to conceal that politically unpalatable fact from the CBO, Gruber explains, lest it should lose any hope of becoming law. Similarly, says Gruber, “if you had a law which … made explicit that healthy people pay in and sick people get money, it would not have passed.” “Lack of transparency,” he elaborates, “is a huge political advantage. And basically, you know, call it the stupidity of the American voter or whatever, but basically that was really, really critical to get the thing to pass. And you know, I wish … we could make it all transparent, but I’d rather have this law than not.”
In a 2012 videotaped interview with PBS, Gruber states that at the aforementioned July 20, 2009 White House meeting, he and President Obama brainstormed about how they might bring to fruition their mutual desire to place a 40% tax on a portion of the value of high-end insurance plans—those costing more than $10,200 for an individual or $27,500 for a family—that employers provided for their workers. Describing Obama as “a realistic guy” who understood that policy holders would be opposed to paying such a tax, Gruber quotes the president as conceding that this “is just not going to happen politically” unless the tax could be dressed up as something else. As Gruber puts it, Obama wondered aloud how they might “manage to get there through phases and other things.” “And we talked about it,” says Gruber. “And he was just very interested in that topic.” By Gruber’s telling, this conversation “ultimately became the genesis of what is called the ‘Cadillac’ tax in the health-care bill.”
Video footage of a November 2012 speech which he delivered at the University of Rhode Island, shows Gruber detailing the immense deception that pervaded the Cadillac Tax concept. Specifically, he praises then-Senator John Kerry as a “hero” for reframing the issue and saying—to voters to whom it had theretofore been “politically impossible” to “get through to”—“No, no, we’re not going to tax your health insurance, we’re going to tax those evil insurance companies. We’re going to impose a tax that [says] if they sell health insurance that’s too expensive, we’re going to tax them.” “So basically it’s the same thing,” Gruber explains, “we just tax insurance companies, they pass on higher prices that offsets the tax break we get and ends up being the same thing. It’s a very clever, you know, basic exploitation of the … lack of basic economic understanding of the American voter.”
Similarly, in a videotaped October 2013 speech at Washington University in St. Louis, Gruber reiterates how the Democrats were able to pass the Cadillac Tax “because the American people are too stupid to understand” that taxing the insurance companies is no different than taxing the individual policy holders.
In a 2011 videotaped conversation about Obamacare, Gruber denounces the “terrible policy” of not taxing high-end, employer-provided insurance plans as a “regressive, inefficient and expensive tax subsidy” that “politically [is] really hard to get rid of.” “[T]he only way we could get rid of it,” he recounts, “was first 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.”
In that same 2011 video, Gruber states that implementing the Cadillac Tax involved yet another major deception as well: scheduling the tax to take effect “late, starting in 2018.” “[B]y starting it late,” he explains, “we were able to tie the cap for ‘Cadillac Tax’ to CPI [consumer price index], not medical inflation,” the latter of which is higher than the former. “What that means is the tax that starts out hitting only 8% of the insurance plans essentially amounts over the next 20 years [to] essentially getting rid of the exclusion for employer-sponsored plans.” And because by then the government will have grown accustomed to counting on the income generated from that tax to cover its operating expenses, the tax will be virtually impossible to eliminate. Says Gruber: “[A]t that point if they [unions, employees, etc.] want to get rid of it they’re going to have to fill a trillion-dollar hole in the deficit…. It’s on the books now.”
Senator John Kerry once described Gruber as the Democrats’ “guide” in advancing the Cadillac Tax.
In January 2014, Gruber acknowledged that Democratic assurances about the Affordable Care Act’s potential for reducing Americans’ healthcare expenditures were utterly fictitious. Indeed, even though the White House’s official blog had cited Gruber’s “objective analysis” as solid evidence that Obamacare would lower insurance premiums, he now conceded that promises of cost savings were nothing more than a “misleading motivator” designed to fool an ignorant public.
Nor was this the first time that Gruber had made such an admission. In a speech he delivered at the College of the Holy Cross on March 11, 2010, for instance, Gruber said that forecasts about Obamacare’s anticipated cost-cutting were highly deceptive: “Barack Obama’s not a stupid man, okay? He knew when he was running for president that quite frankly the American public doesn’t actually care that much about the uninsured…. What the American public cares about is costs…. [But] no one has a politically feasible way right now to bend the cost curve, it just doesn’t exist.”
Though Gruber (like Obama) has long favored the implementation of a government-run, single-payer healthcare system, he refrained from drafting such a plan in 2010 because he understood that the American public would have opposed it. As he said in a 2010 speech at MIT, single-payer was “just politically impossible in the U.S. context” because: (a) “most Americans are actually pretty happy with what they have and aren’t willing to give it up,” and (b) “we have about an $800 billion a year private health insurance industry that’s not going to go without a fight.”
Gruber and Obama also support healthcare systems that facilitate the redistribution of wealth by subsidizing—as Obamacare does—the medical expenses of people with lower incomes. In November 2013, Gruber was quoted in the New York Times saying that “a fair and fixed insurance market” is impossible to create “without some redistribution away from a small number of people.”
In recent years, Gruber has been an associate editor with the Journal of Health Economics (since 2001), the Journal of Public Economics (since 2009), and the American Economic Journal (since 2009). Moreover, he has authored two books: (1) Public Finance and Public Policy (2005), which has since been updated in three revised editions, and (2) Health Care Reform: What It Is, Why It’s Necessary, How It Works (2011), explaining the Obamacare law in comic-book format.
For additional information on Jonathan Gruber, click here.