What Jonathan Gruber is taking heat for right now, was planned out specifically with Barack Obama. It wasn’t just him. It was all of them, with Obama in the room taking part.
The next time I see him is summer 2009. The big issue there is that he really wants to make sure I’m moving forward on cost control. I think that at this point he sort of knew we had a good plan on coverage, but he was worried on cost control. So we had a meeting in the Oval Office with several experts, including myself, on what can we do to get credible savings on cost control that the Congressional Budget Office would recognize and score as savings in this law.
And that was a meeting — it was very exciting, once again, because the economists in the room all said the number one thing you need to do is you need to take on the tax subsidy to employer-sponsored insurance. We need one minute of background on this. The way employer-sponsored insurance works is, if you get paid in wages, you get taxed. If you get paid in health insurance, you do not. …
So this tax subsidy economists have been railing against for decades, it’s super-expensive. We forego about $250 billion per year in tax revenues. It’s regressive — the richer you are, the bigger tax break you get. And it’s inefficient because it causes people to buy excessive health insurance. So everyone in the room said, “You want something that is real cost control that we know it will work, go after this.”
Now, the problem is, it’s a political nightmare, … and people say, “No, you can’t tax my benefits.” So what we did a lot in that room was talk about, well, how could we make this work? And Obama was like, “Well, you know” — I mean, he is really a realistic guy. He is like, “Look, I can’t just do this.” He said: “It is just not going to happen politically. The bill will not pass. How do we manage to get there through phases and other things?” And we talked about it. And he was just very interested in that topic.