The Obama administration ignored its own findings and forged ahead with Obamacare payments to insurers in defiance of Congress, House Republicans said Thursday in a scathing report that says the White House essentially swiped $7 billion from taxpayers.
The Treasury Department determined in 2012 that it needed to ask Congress for money for the Affordable Care Act’s cost-sharing program — but then rescinded that decision, withdrew its budget request and drafted a new memo saying it no longer needed lawmakers’ blessing. It began to spend the money on its own.
“Our Founding Fathers entrusted Congress with the power of the purse, not the White House,” said Ways and Means Committee Chairman Kevin Brady, a Texas Republican who led the 17-month probe with Energy and Commerce Chairman Fred Upton, Michigan Republican.
The cost-sharing program is designed to reimburse insurers who must help poorer enrollees with out-of-pocket costs. President Obama feared that if he had to ask Congress for the money and it was refused, the program would go belly-up, potentially causing insurers to hike premiums to make up their additional costs.
Instead, the White House said it had the power to make the payments under another part of Obamacare, the premium subsidies paid out under the Obamacare exchanges. Republicans say there is a firewall between those programs, so the White House is knowingly flouting the law.
Democrats called the GOP’s probe a “witch hunt” during a hearing on the dispute Wednesday, saying it made little sense to go after a program that, though filtered through insurers, helps 6 million poor Americans.
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Yet a federal judge sided with House Republicans in May, ruling the payments were illegal. The judge stayed her ruling while the administration appeals her decision.
The litigation hasn’t stopped Republicans from digging into the matter, saying Mr. Obama’s moves threaten the limits the country’s founders intended to put on the presidency.
“This is not about the ACA. This is about a constitutional responsibility,” said Rep. Peter Roskam, Illinois Republican, who chaired a Wednesday hearing on the issue.
IRS Commissioner John Koskinen and Treasury officials insisted the payments are allowed, even without explicit permission.
Mark Mazur, assistant Treasury secretary for tax policy, said the subsidies and cost-sharing program were part of an “integrated” system of assistance for people who rely on Obamacare.
GOP lawmakers said the administration needed more than that to spend billions of dollars.
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“Where is the language that allows you to do the cost sharing?” Rep. Patrick Meehan, Pennsylvania Republican, asked the panel.
The GOP report says the administration initially requested $4 billion for the cost-sharing program in fiscal 2014, though it later withdrew its request in a phone call to Senate appropriators. Investigators theorized that so-called sequester caps, which would have slashed the request by $290 million, may have hastened that decision, since insurers must pick up customers’ costs even if they are not reimbursed.
“It is reasonable to assume that the sequestration report factored into the Administration’s decision to find a separate source of funding for the [cost-sharing] program — one that was not subject to sequestration,” the GOP report said.
The GOP report says senior IRS officials had doubts about the White House’s justification for making the payments, but that Treasury Secretary Jacob J. Lew approved a memo by the Office of Management and Budget in January 2014.
The administration didn’t ask Congress to fund the program in its fiscal 2015 budget request, and House Republicans sued the administration over its payments in fall 2014.
Committee Democrats complained that the issue should be left to the courts to sort out.
“What the point of this hearing?” Rep. John Lewis, Georgia Democrat, said. “Why are we placing public servants in the middle of an ongoing legal case?”
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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