State: No More Pay for Gruber

November 20, 2014

Times Argus

By Neal P. Goswami

MONTPELIER — The economist under fire for his remarks regarding American voters and a Vermont commentator is being asked to complete his contract with the state but will receive no further payments, state officials said Wednesday.

The governor’s chief of health care reform, Lawrence Miller, said Jonathan Gruber has been told he will not be paid for any further work under the $400,000 contract he signed with the state in July. Gruber and his team have been paid a total of $160,000 so far, according to state officials.

Although Gruber will receive no further compensation, his research team will continue to be paid, Miller said. Gruber is submitting invoices to the state that track the work by each member of his team. The state will pay for work completed by others.

“I don’t see that as terribly complicated,” Miller said.

It is unlikely the state will pay out the full amount of the contract now that Gruber himself is not being paid, according to Miller. “We’re not changing the scope of the contract. He’s expected to deliver the same amount. I don’t see why it would cost more of the associates’ time to do it,” he said.

Gruber, a Massachusetts Institute of Technology economist, has a personal-services contract with Vermont that is worth as much as $400,000 to test economic models related to Gov. Peter Shumlin’s universal, publicly financed health care proposal.

An additional $50,000 is included in the contract to subcontract with Moody’s Analytics for macroeconomic modeling.

The contract allows the state to use the Gruber Microsimulation Model that Gruber developed to simulate the implementation of Shumlin’s plan and test various financing mechanisms.

Gruber, who has served as a health care adviser for the Obama administration, also has contracts with the federal government and other states for economic modeling.

But calls for his firing are becoming more frequent, especially from Republicans in Vermont and elsewhere, because of comments he has made on several occasions in the last several years.

During a 2011 hearing of Vermont’s House Health Care Committee, then-Chairman Mark Larson read aloud comments written by John McClaughry, a former state senator and policy adviser for President Ronald Reagan. McClaughry, in his published commentary, said Shumlin’s health care proposal would lead to higher taxes, ballooning costs, poor health care facilities, disgruntled providers and long waits for care, among other concerns.

“Was this written by my adolescent children by any chance?” Gruber asks in a video recorded by True North Reports and released last week to the online site

In other videos that came to light last week, Gruber credits “the stupidity of the American voter” with getting the federal Affordable Care Act passed.

Miller said he spoke with Gruber by phone a number of times since the videos emerged, along with Robin Lunge, Shumlin’s director of health care reform.

“Mr. Gruber is well aware of the impact,” he said. “He was understanding of how we felt this impaired the value of the work and that we were incredibly disappointed and that our request was a reasonable request.”

Gruber “pushed back some,” Miller said, but “understood fairly quickly our perspective.”

State officials were looking to address questions about Gruber’s credibility.

“Doing the work without compensation helps to address that, helps to mitigate that,” Miller said. “It does not mitigate how inappropriate those comments were, but it does, I hope, mitigate the credibility gap that those comments created.”

Gruber declined to comment Wednesday in an email.

Gruber’s work will be verified by other economists and the Legislature’s nonpartisan Joint Fiscal Office, which has been advising both the Shumlin administration and lawmakers on health care reform, according to administration officials.

Republicans said Wednesday that the administration’s decision to withhold payments from Gruber is just “smoke and mirrors” and does nothing to address Gruber’s credibility.

“If they’re trying to say to Vermonters that we’re getting rid of him, that’s not true,” said the House minority leader, Rep. Don Turner, R-Milton. “He’s getting the same amount of money, he’s just not charging for his time, but his company is netting the same amount of money. To me it’s smoke and mirrors, again, by this administration and not holding people accountable.”

Darcie Johnston, the founder of Vermonters for Health Care Freedom and an ardent opponent of Shumlin’s health care plan, said the administration has found a way to allow “MIT minions to do the work and still get paid.”

“It’s not a termination of the contract,” Johnston said. “It is smoke and mirrors. We don’t know what these MIT minions are doing. There’s no transparency to what they’re doing.”

Still, Turner said he has “full trust” in the Joint Fiscal Office to review Gruber’s work, despite prior assertions to him that the JFO does not have the appropriate in-house staff to complete such analysis.

Meanwhile, the Senate minority leader, Sen. Joe Benning, R-Caledonia, joined a trio of House Republicans on Tuesday night in calling for Gruber’s ouster. Appearing on the Fox News Channel’s “On the Record with Greta Van Susteren,” Benning said Gruber had lost the respect of Vermonters that is required. As a result, Benning said, he and Sen. Kevin Mullin, R-Rutland, were calling for Gruber’s contract to be terminated.

Shumlin said this week that Gruber will complete his work, which is already about 90 percent done. Gruber has not advised the administration on policy and is only testing the administration’s proposed funding mechanisms for a single-payer system, Shumlin said.

Gruber’s work is critical to meeting the statutory requirement calling for the administration to prove that a single-payer system will help and not harm the state’s economy, the governor said.