VT lawmakers question credibility of anticipated Shumlin-Gruber plan

By Bruce Parker | Vermont Watchdog

Vermont lawmakers say they’re skeptical of Gov. Peter Shumlin’s forthcoming single-payer financing plan because it relies on economic modeling provided by Jonathan Gruber.

As Shumlin gets ready to present a health-care financing plan to the Legislature in January, key lawmakers who will decide its fate are saying Gruber’s explosive video confessions severely damage the proposal.

“How could anyone trust this man who has said with arrogance that the lack of transparency and the stupidity of the American people is why Obamacare and related individual state health-care reform has passed?” state Rep. Mary Morrissey, R-Bennington, told Vermont Watchdog.

Morrissey, a member of the House Committee on Health Care, said the issue was too important to keep Gruber on as a consultant in Vermont, even if he’s no longer being paid.

“How could anyone put a person like Mr. Gruber into a position of power over an initiative like health care that affects every citizen personally and financially?” she asked.

In comments made at a health-care panel at the University of Pennsylvania last year, Gruber, a chief architect of the Affordable Care Act, said the federal health law was “written in a tortured way” to conceal from the public that the individual mandate was a tax. It was also written to disguise the idea the plan involved government redistribution of money from the healthy to the sick.

“If you made explicit that healthy people pay in and sick people get money, it would not have passed,” Gruber said of the Affordable Care Act. “Lack of transparency is a huge political advantage … and I would rather have this bill than not.”

Gruber’s admission that he misled others to obtain a predetermined outcome stands to discredit Shumlin’s health-care financing plan, which relies on economic modeling provided by Gruber.

State Sen. Jane Kitchel, D-Caledonia, vice chair of Joint Fiscal Committee, said the Legislature is taking extra precautions with regard to the coming Shumlin-Gruber plan.

“I know there’s concern about Gruber and his statements. But even without that, last session the Legislature tried to put itself in a position where we could do our own due diligence in terms of the analysis,” Kitchel said.

Although Kitchel said the Joint Fiscal Committee would not get an advanced peek at the Shumlin plan, she said the group would seek an independent examination by the Rand Corporation. The committee has also hired federal Congressional Budget Office analyst Joyce Manchester to help scrutinize Gruber’s economic data. Manchester is an economist who has worked as chief of CBO’s Long-Term Analysis Unit.

“The Legislature felt that we needed to have our own independent capacity to look at the data. We have someone at Joint Fiscal who has a background to do that, and then Rand will be helping us to get that independent examination,” Kitchel said.

Last week Shumlin’s health-care reform chief, Lawrence Miller, announced Gruber would not receive the full amount of his $400,000 contract with the state, due to his video comments. But Gruber will still provide the deliverables described in the contract, and his research assistants will get paid for their work.

That arrangement didn’t pass the smell test with state Rep. Doug Gage, a Republican from Rutland City who also serves on the House Committee on Health Care.

“Usually an employee represents the interest of his boss, and if he’s cut off the funding for Gruber but not for the team that’s under him, that doesn’t seem to be accomplishing the goal that the governor’s looking to do, which is to not benefit him financially or any other way,” Gage said.

“It tells me the governor is interested in what Gruber is saying and it holds some credibility to him.”

According to Gage, the Gruber videos severely undercut the credibility of the MIT professor and any testimony he might give to the committee.

“It sounds like he’s trying to mislead the public, and he thinks it’s a good thing that people aren’t educated on a topic like that. … It does bring into question any testimony he does bring before our committee,” Gage said.

Gage, who seeks greater scrutiny for the plan, expressed a hope that House Speaker Shap Smith might add more Republicans to the 11-member Committee on Health Care to ensure votes on the Shumlin plan reflect the new balance of power in the House. Republicans now make up one-third of the total representatives, yet only two Republicans served in the committee this past session.

Unlike Vermont, which has retained Gruber as Shumlin’s top single-payer consultant, North Carolina announced last week it has severed all ties with the economist because officials can no longer trust his work, according to WRAL.

“We can’t use you on a project where you have a bias or where people might even think you have a bias,” said Bill Holmes, a spokesman for state Auditor Beth Wood.

Kitchel says the controversy surrounding Gruber makes the Legislature’s advanced planning all the more critical for scrutinizing Shumlin’s plan in January.

“In light of the statements he made, it makes the work that we did to prepare and give ourselves our independent capacity even more important,” she said.

“Our committee hearings are public, our meetings our public, and the documents are on the web. … So, it’s not as though — and I know this will be people’s concern — somehow he’s controlling the whole process.”

But Morrissey says Gruber’s statements taint both his work product and the process, and she added that it’s difficult to imagine any tax scenarios that would enable Vermont to pay for a single-payer system estimated at $2.2 billion.

“We have about 630,000 residents. … I don’t see how we can tax out way out of this or put a further tax burden on our citizens at this point. I just don’t. I don’t say it in any way politically, I just don’t know how we could do this,” Morrissey said.

“I want a good health-care reform, but as a small state I don’t know how we are going to do this multi-billion-dollar initiative without information or even a tax base so that we can produce a good product. That’s what keeps me awake at night.”

Contact Bruce Parker at bparker@watchdog.org