According to a report released today by House Republicans, the Obama administration has unlawfully spent billions in taxpayer dollars to fund an Affordable Care Act program without the prior prerequisite approval from Congress.
The report is the result of an extensive investigation into Affordable Care Act spending. It reveals that the Obama administration allocated over $7 billion to a cost-sharing reduction program (CSR) without Congressional authority.
“This is stealing from the American people – plain and simple. To date, the Administration has unlawfully spent $7 billion of taxpayer funding on the CSR program,” said Republican Texas Rep. Kevin Brady, chair of the House Ways and Means Committee.
In the absence of congressional authority, the report attempts to prove that the administration violated the Constitution. “The power of the purse lies with Congress… This action is a clear constitutional violation of the most fundamental tenet of appropriations law.”
The report is the result of an investigation spearheaded in 2015 by Rep. Brady and Republican Michigan Rep. Fred Upton. The program-in-question, CSR, aims to reduce consumer costs by financially incentivizing insurers to reduce premium prices.
A federal judge has already reviewed the case and ruled in favor of the GOP; the administration’s decision to funnel money to insurers for CSR, without congressional authority, was illegal. The ruling came out this May after former House speaker John Boehner filed an initial lawsuit on the issue in 2014.
The administration argued they were within constitutional jurisdiction in allocating funds because they had prior authority to fund a tax credit program, and all funds for CSR were drawn from this shared pot.
However, the report includes a 2012 Treasury Department memo to the White House Office of Management and Budget stating, “there is currently no appropriation to Treasury or to anyone else, for purposes of the cost-sharing payments to be made,” and that funding for the program can only occur “in connection with whatever statute ultimately appropriates funds for the cost sharing program.”
“Nothing in the ACA provides an appropriation or a source of funding for the CSR program. Therefore, the Administration needed to request an appropriation from Congress to make CSR payments to insurance companies,” the report states.
The report further reveals that the administration may have knowingly attempted to circumvent the system. After the 2012 memo notified the administration that they were currently no funds to run the CSR program, the administration applied for $4 million to fund CSR in 2013.
A year later the funding appeal was withdrawn over the phone — a move that is “highly unusual” for something so formal — partially due to concerns that they would not receive the $4 million.
The Obama administration then produced a OMB legal memo, granting themselves jurisdiction to fund CSR through tax credits. High level IRS-officials raised concerns over this payment model and the report claims that committees were not provided a copy of the memo for prior review.
While the federal judge already ruled against this payment model, the report concludes that this evidence reveals that the Obama administration knowingly circumvented tenets of the Constitution, so that the health care law could survive in a shaky economic landscape.
The administration has responded by filing an appeal with the U.S. Court of Appeals earlier this week. Some Democrats argue that this is another attempt in 6-year war with the GOP constantly attempting to undermine the ACA.
“Clearly there is no end to the lengths Republicans will go to undermine the Affordable Care Act,” said Ranking Members Rep. Frank Pallone (D-NJ) and Rep. Sander Levin (D-MI), in a statement, “House Republicans are not conducting meaningful oversight, but are instead taking every opportunity to undermine the law and root for its failure.”
Another hearing on the issue is scheduled to take place tomorrow morning on Capitol Hill.