    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

                       THE ACA'S COST SHARING REDUCTION
                         PROGRAM: RAMIFICATIONS OF THE
     ADMINISTRATION'S DECISION ON THE SOURCE OF FUNDING FOR THE CSR PROGRAM

    =======================================================================

                                    HEARING

                                   BEFORE THE

                  SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                  JULY 8, 2016

                                   __________

                               Serial No. 114-159

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Printed for the use of the Committee on Energy and Commerce
                            energycommerce.house.gov

                                     ______

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                        COMMITTEE ON ENERGY AND COMMERCE

                              FRED UPTON, Michigan
                                     Chairman
    JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
      Chairman Emeritus                    Ranking Member
    ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
    JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
    JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
    GREG WALDEN, Oregon                  GENE GREEN, Texas
    TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
    MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
    MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
      Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
    STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
    ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
    CATHY McMORRIS RODGERS, Washington   KATHY CASTOR, Florida
    GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
    LEONARD LANCE, New Jersey            JERRY McNERNEY, California
    BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
    PETE OLSON, Texas                    BEN RAY LUJAN, New Mexico
    DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
    MIKE POMPEO, Kansas                  JOHN A. YARMUTH, Kentucky
    ADAM KINZINGER, Illinois             YVETTE D. CLARKE, New York
    H. MORGAN GRIFFITH, Virginia         DAVID LOEBSACK, Iowa
    GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
    BILL JOHNSON, Ohio                   JOSEPH P. KENNEDY, III,
    BILLY LONG, Missouri                     Massachusetts
    RENEE L. ELLMERS, North Carolina     TONY CARDENAS, California
    LARRY BUCSHON, Indiana
    BILL FLORES, Texas
    SUSAN W. BROOKS, Indiana
    MARKWAYNE MULLIN, Oklahoma
    RICHARD HUDSON, North Carolina
    CHRIS COLLINS, New York
    KEVIN CRAMER, North Dakota

                  Subcommittee on Oversight and Investigations

                            TIM MURPHY, Pennsylvania
                                     Chairman
    DAVID B. McKINLEY, West Virginia     DIANA DeGETTE, Colorado
      Vice Chairman                        Ranking Member
    MICHAEL C. BURGESS, Texas            JANICE D. SCHAKOWSKY, Illinois
    MARSHA BLACKBURN, Tennessee          KATHY CASTOR, Florida
    H. MORGAN GRIFFITH, Virginia         PAUL TONKO, New York
    LARRY BUCSHON, Indiana               JOHN A. YARMUTH, Kentucky
    BILL FLORES, Texas                   YVETTE D. CLARKE, New York
    SUSAN W. BROOKS, Indiana             JOSEPH P. KENNEDY, III,
    MARKWAYNE MULLIN, Oklahoma               Massachusetts
    RICHARD HUDSON, North Carolina       GENE GREEN, Texas
    CHRIS COLLINS, New York              PETER WELCH, Vermont
    KEVIN CRAMER, North Dakota           FRANK PALLONE, Jr., New Jersey (ex
    JOE BARTON, Texas                        officio)
    FRED UPTON, Michigan (ex officio)

                                 C O N T E N T S

                                  ----------
                                                                       Page
    Hon. Tim Murphy, a Representative in Congress from the
      Commonwealth of Pennsylvania, opening statement................     1
        Prepared statement...........................................     3
    Hon. Diana DeGette, a Representative in Congress from the state
      of Colorado, opening statement.................................     5
    Hon. Fred Upton, a Representative in Congress from the state of
      Michigan, opening statement....................................     6
    Hon. Gene Green, a Representative in Congress from the State of
      Texas, opening statement.......................................     8

                                   Witnesses

    Doug Badger, Senior Fellow, Galen Institute......................    10
        Prepared statement...........................................    12
    Tom Miller, Resident Fellow, American Enterprise Institute.......    33
        Prepared statement...........................................    35
    Morton Rosenberg, Legislative Consultant.........................    52
        Prepared statement...........................................    54
    Simon Lazarus, Senior Counsel, The Constitutional Accountability
      Center.........................................................    86
        Prepared statement...........................................    88

                               Submitted Material

    Subcommittee memorandum..........................................   122

        THE ACA'S COST SHARING REDUCTION PROGRAM: RAMIFICATIONS OF THE
     ADMINISTRATION'S DECISION ON THE SOURCE OF FUNDING FOR THE CSR PROGRAM

                                  ----------

                              FRIDAY, JULY 8, 2016

                      House of Representatives,
          Subcommittee on Oversight and Investigations,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 9:15 a.m., in
    room 2322 Rayburn House Office Building, Hon. Tim Murphy
    (chairman of the subcommittee) presiding.
        Members present: Representatives Murphy, McKinley, Burgess,
    Blackburn, Griffith, Bucshon, Flores, Mullin, Collins, Cramer,
    Upton (ex officio), DeGette, Schakowsky, Castor, Tonko, Clarke,
    Kennedy, Green, and Welch.
        Staff present: Gary Andres, Staff Director; Jennifer
    Barblan, Counsel, Oversight and Investigations; Jessica Donlon,
    Counsel, Oversight and Investigations; Jay Gulshen, Staff
    Assistant; Brittany Havens, Professional Staff, Oversight and
    Investigations; Charles Ingebretson, Chief Counsel, Oversight
    and Investigations; Jennifer Sherman, Press Secretary; Dylan
    Vorbach, Deputy Press Secretary.

       OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN
             CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

        Mr. Murphy. Good morning, everyone. Just first announce
    that we know there are a number of things happening over in the
    Capitol building and on the floor. We will move as quickly and
    readily as possible, so I appreciate members' patience in
    trying to get through onto the witnesses. Thank you. If someone
    could get the door in the back of the room I would appreciate
    that.
        So this is a hearing of the Energy and Commerce Committee
    on the ACA's Cost Sharing Reduction Program: Ramifications on
    the Administration's Decision on the Source of Funding for the
    CSR Program. Let me say the Constitution is clear. No money
    shall be drawn from the Treasury but in consequence of
    appropriations made by law.
        This means that the Executive Branch cannot spend money
    unless Congress says they can. Yet just yesterday, the
    Assistant Secretary for Tax Policy at the Department of
    Treasury testified before the Ways and Means Committee, ``If
    Congress doesn't want the monies appropriated it could pass a
    law saying do not appropriate the monies from that account.''
    That is a direct quote. It is in direct contradiction to the
    principles of appropriations law, it is an affront to the
    powers granted to Congress in the Constitution, and I don't
    agree with the concept of that which is not forbidden is
    permitted.
        We are here today to examine the ramifications of the
    Administration's illegal decision to fund the Affordable Care
    Act's Cost Sharing Reduction program to a permanent
    appropriation. We aren't here to discuss whether or not the
    decision is illegal. A federal district court has already
    decided that it is. We are here today to talk about the
    consequence of the Administration's brazen attempt to grab the
    power of the purse from Congress.
        The ACA established the CSR program but did not fund it.
    The Administration knew this and requested an annual
    appropriation for the CSR program in the President's fiscal
    year 2014 budget request. Congress, however, denied that
    request. But just a few months later, the Administration began
    making CSR payments anyway. How? Well, the Administration
    decided to raid the permanent appropriations for tax refunds
    and credits, an action which violated the most fundamental
    tenet of appropriations law.
        In February 2015, alongside the Committee on Ways and
    Means, this committee launched an investigation into the
    Administration's actions. The committee's investigation sought
    to understand the facts surrounding the Administration's
    decision to fund the CSR program through a permanent
    appropriation. Our questions were straightforward and included
    when and how this decision was made and who made it.
        From the onset, the Administration has refused to cooperate
    with the committee investigation, but despite the
    Administration's relentless efforts to obstruct our necessary
    investigation we were able to shed some light on the
    Administration's decision. The details of the findings from the
    committee investigation are outlined in our joint report that
    was released yesterday. And I believe this is the report. You
    should all have that.
        The Administration's position essentially boils down to
    this. Don't judge my actions, judge my intentions. The
    President swore an oath to preserve, protect, and defend the
    Constitution, as members of Congress we have each done the
    same.
        And again this Administration seems to believe it is above
    the law, and let me be clear: none of us are. This decision is
    not about the merits of the Affordable Care Act or the ability
    to provide health care for anyone. I certainly believe we
    should be doing something to help those, particularly those who
    are low income who struggle for health issues, but this is
    about a constitutional question and will this committee and
    this Congress uphold the Constitution or look the other way? No
    matter your position on the merits of the Affordable Care Act,
    we should all agree that we all must follow the law.
        Today's hearing will examine the consequences of the
    findings from the committee's investigation into the
    Administration's decision to unconstitutionally fund the CSR
    program through a permanent appropriation. These consequences
    are widespread and they impact the ACA, they impact
    appropriations law, and they impact congressional oversight.
        The Obama administration's actions with respect to the CSR
    program are part of the broader pattern. There are clear
    problems with the law if the Administration must violate the
    Constitution to keep the law afloat. And it is not just the CSR
    program. There are also problems with the Transitional
    Reinsurance Program, the Risk Corridors, the Basic Health
    Program and the list goes on. There are broad institutional
    concerns in play here.
        The Constitution clearly states that the power of the purse
    lies not with the executive but with congressional branch. This
    provides Congress an important check on the executive branch
    and that applies to any President of any party at any time. The
    President's claim of appropriations by inference, however,
    turns the Constitution on its head and threatens this important
    power of Congress.
        Finally, we as an institution must confront the executive
    branch's position that can dictate the terms of our oversight.
    Oversight is critical to a functioning democracy and that is
    why the Constitution grants Congress extensive authority to
    oversee and investigate executive branch activities. That is
    how we improve the efficiency and effectiveness of the laws and
    how we eliminate waste, fraud, and abuse from government.
        As our report makes clear, the executive branch has gone to
    great lengths to keep information about the Cost Sharing
    Reduction Program from Congress and therefore the American
    people. If they think what they are doing is legal then I would
    invite them to come before this committee and explain it. This
    subcommittee cannot and will not accept any witness tactics
    that is delay and deny.
        In fact, again today we have another instance of the
    Administration's obstruction. The committee invited Department
    of Health and Human Services' Secretary Burwell or a designee
    of her choosing to attend today's hearing, but the Department
    has failed to provide anyone. For the alleged most transparent
    Administration in history, this Administration is trying its
    utmost to avoid congressional scrutiny and that begs the
    question is someone trying to hide something.
        I want to thank our esteemed panel of witnesses for
    appearing today. We look forward to listening to your expert
    opinions on the consequences of the Administration's actions.
        [The statement of Mr. Murphy follows:]

                   The prepared statement of Hon. Tim Murphy

        The Constitution is clear--``No Money shall be drawn from
    the Treasury, but in Consequence of Appropriations made by
    Law.'' This means that the Executive branch cannot spend money
    unless Congress says it can. Yet, just yesterday, the Assistant
    Secretary for Tax Policy at the Department of the Treasury
    testified before the Ways and Means Committee, ``If Congress
    doesn't want the monies appropriated, it could pass a law
    saying do not appropriate the monies from that account.'' That
    is a direct quote. It is in direct contradiction to principles
    of appropriations law and it is an affront to the powers
    granted to Congress in the Constitution. That which is not
    forbidden is permitted.
        We are here today to examine the ramifications of the
    Administration's illegal decision to fund the Affordable Care
    Act's ``cost sharing reduction'' program through a permanent
    appropriation. We aren't here to discuss whether or not the
    decision is illegal--a federal district court has already
    decided that it is. We are here today to talk about the
    consequences of the administration's brazen attempt to grab the
    power of the purse from the Congress.
        The ACA established the CSR program, but did not fund it.
    The Administration knew this, and requested an annual
    appropriation for the CSR program in the President's Fiscal
    Year 2014 budget request. Congress, however, denied that
    request.
        But just a few months later, the Administration began
    making CSR payments anyway. How? The Administration decided to
    raid the permanent appropriation for tax refunds and credits--
    an action which violated the most fundamental tenet of
    appropriations law.
        In February 2015, alongside the Committee on Ways and
    Means, this Committee launched an investigation into the
    Administration's actions. The Committees' investigation sought
    to understand the facts surrounding the Administration's
    decision to fund the CSR program through a permanent
    appropriation. Our questions were straightforward, and included
    when, and how this decision was made, and who made it.
        From the outset, the Administration has refused to
    cooperate with the Committees' investigation. But despite the
    Administration's relentless efforts to obstruct our necessary
    investigation, we were able to shed some light on the
    Administration's decision. The details and findings from the
    Committees' investigation are outlined in our joint report that
    was released yesterday.
        The Administration's position essentially boils down to
    this--don't judge my actions, judge my intentions. The
    President swore an oath to preserve, protect, and defend the
    Constitution. As Members of Congress, we have each done the
    same. Yet, again, this Administration seems to believe it is
    above the law. Let me be clear--it is not.
        This hearing is not about the merits of the ACA or ability
    to provide healthcare for anyone. It is about a constitutional
    question and will this committee and this congress uphold the
    constitution or look the other way. No matter your position on
    the merits of the Affordable Care Act, we should all agree that
    the executive branch must follow the law.
        Today's hearing will examine the consequences of the
    findings from the Committees' investigation into the
    Administration's decision to unconstitutionally fund the CSR
    program through a permanent appropriation. These consequences
    are widespread-they impact the ACA, they impact appropriations
    law, and they impact congressional oversight.
        The Obama Administration's actions with respect to the CSR
    program are part of a broader pattern. There are clear problems
    with the law if the Administration must violate the
    Constitution to keep the law afloat. And it's not just the CSR
    program--there are also problems with the Transitional
    Reinsurance Program, the Risk Corridors, the Basic Health
    Program, and the list goes on.
        There are also broad institutional concerns at play here.
    The Constitution clearly states that the power of the purse
    lies not with the Executive, but with the Congress. This
    provides Congress an important check on the Executive branch.
    And that applies to any president, of any party at any time.
    The President's claim of appropriation by inference, however,
    turns the Constitution on its head and threatens this important
    power of Congress.
        Finally, we as an institution must confront the Executive
    branch's position that it can dictate the terms of our
    oversight. Oversight is critical to a functioning democracy.
    This is why the Constitution grants Congress extensive
    authority to oversee and investigate Executive branch
    activities. It is how we improve the efficiency and
    effectiveness of the laws, and how we eliminate waste, fraud,
    and abuse from government.
        As our report makes clear, the Executive branch has gone to
    great lengths to keep information about the cost sharing
    reduction program from the Congress, and therefore from the
    American people. If they think what they are doing is legal,
    then come before this committee and explain it. But instead,
    they delay and deny. In fact, again today, we have another
    instance of the Administration's obstruction. The Committee
    invited Department of Health and Human Services Secretary
    Burwell-or a designee of her choosing-to attend today's
    hearing, but the Department has failed to provide anyone. For
    the alleged ``most transparent Administration in history,''
    this Administration is trying its utmost to avoid Congressional
    scrutiny. That begs the question: What are they trying to hide?
        I want to thank our esteemed panel of witnesses for
    appearing today. We look forward to listening to your expert
    opinions on the consequences of the Administration's actions. I
    now recognize the Ranking Member of the Subcommittee, Ms.
    DeGette, for 5 minutes.

        Mr. Murphy. And before I recognize the ranking member of
    the subcommittee, Ms. DeGette, I want to personally thank this
    committee for what was done for mental health reform,
    particularly my friend, Ms. DeGette, and everybody here
    steadfast in investigating a very important question of this
    nation. The chair, the vice chair, the full committee, the
    ranking members, it is powerful what came through and I
    personally want to thank you for that. But now I recognize the
    ranking member of the subcommittee, Ms. DeGette, for 5 minutes.

     OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF COLORADO

        Ms. DeGette. Thank you, Mr. Chairman, and thanks for your
    praise on the mental health bill. It really was a joint effort.
    There were a lot of bumps in the road and difficult
    negotiations. That is an example of what this committee can do
    when we really work together. And as I said in this committee
    and on the floor, it is a really good first step. Now we need
    funding and I think we all know that.
        Unfortunately today's hearing is not a productive hearing
    like all of our mental health hearings were, and it is really
    not intended to improve the ACA or to improve the affordability
    of health care for middle income and low income people. It is
    yet another hearing to bash the Administration as they tried to
    do their best to implement--well, to enact and implement the
    Affordable Care Act.
        Just for the record, it is the 17th hearing that this
    subcommittee has had since the ACA was passed into law in 2010
    in Congress alone. Nearly one-fifth of the hearings that we
    have had in this subcommittee have focused on ACA oversight. As
    I have said repeatedly in my various statements in this
    committee, I wouldn't mind that if there actually was an
    attempt to do something to improve the way the ACA works.
        Now obviously we try to enact constitutional legislation in
    this Congress. That is our job. That is the thing we were sworn
    to uphold. But we do have a judicial branch which is there to
    give checks and balances just in case people get it wrong, and
    in this case the House Republicans decided that they thought
    the CSR was unconstitutional. Well, it is not this committee's
    job to determine whether this program is unconstitutional or
    not. It is the court's job.
        And guess what. The House Republicans filed a lawsuit in
    federal court. They asked the judge to decide between
    conflicting interpretations of the law. And guess what. The
    trial court judge actually chose to rule on the merits of the
    case and the judge ruled for the House Republicans and said in
    fact according to that judge's position that this provision of
    the ACA was not constitutional and now the Administration is
    appealing that decision.
        So what are we doing here today? This matter is in the
    courts. Now I am not here to say whether it is my opinion, even
    though I am a lawyer, about whether this is constitutional or
    not, but I will say that everything I knew in the deliberation
    of this bill was everybody believed this provision to be
    constitutional. And so once again we are having this oversight
    where we are hauling in the Administration, we are hauling in
    other people to talk about whether this provision, this Cost
    Sharing Reduction Program is constitutional or not, but in fact
    what we should be talking about is what are we going to do to
    improve the ACA so that the middle class and lower income
    taxpayers can afford health care?
        Mr. Chairman, I was glad to hear you say that it is not
    about the merits of health care or provision of health care to
    low income people, but isn't that really what we should be
    worried about? Shouldn't we let the courts worry about the ins
    and outs of the constitutionality? And if in fact the appeals
    court upholds the trial court decision, shouldn't it be our job
    to try to figure out how to give some kind of subsidies or
    other offsets to middle and low income people so they can
    afford health care?
        There is nothing I have seen since 2009 to indicate that
    there was any ill will on behalf of the Administration with
    respect to the low cost fund, or the Cost Sharing Reduction
    Program. There is no indication that the Administration
    knowingly violated the Constitution. They in fact thought that
    it was constitutional.
        So why are we here? Once again we are here to bash the ACA,
    to rake the Administration through the mud, and to continue to
    question this policy. I think it would be much more useful for
    this committee to look at legislation or to look at policies
    that would help fix this program and help make it affordable to
    get health care. With that I yield back.
        Mr. Murphy. The gentlelady yields back, and I will
    recognize the chairman of the full committee, Mr. Upton, for 5
    minutes.

       OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF MICHIGAN

        Mr. Upton. Well, thanks, Mr. Chairman. Again, kudos on
    mental health. It was a great effort, and if I remember it
    passed our full committee 53 to nothing, so that is not a bad
    mark.
        So it was nearly 18 months ago when former Ways and Means
    chair Paul Ryan and I sent our first letter to the
    Administration requesting documents and information about the
    source of funding for the health law Cost Sharing Reduction,
    CSR, Program. Chairman Brady now continued on with me in this
    investigation after he became chairman of Ways and Means late
    last year, and we believed then and still believe today that
    the President illegally and unconstitutionally funded this
    program to a permanent appropriation used primarily to pay back
    tax refunds.
        Over the course of the investigation we have sent more than
    a dozen letters and interviewed just as many Administration
    officials. We have been forced to issue subpoenas to the
    Administration for documents on the issue and I sent three
    subpoenas myself. And we have learned a lot during this time
    despite the unprecedented obstruction from this Administration,
    but there are even basic facts that the Administration is still
    withholding from the Congress.
        Yesterday, the majority staff of this committee along with
    the majority staff of Ways and Means released this report
    detailing our investigation. We did it because folks at home in
    my state of Michigan, but frankly across the country and
    elsewhere, deserve to know how the government is spending their
    hard-earned tax dollars, and we are taking billions, talking
    billions in this instance.
        The federal government has an obligation to each and every
    taxpayer to spend the money with full transparency in
    accordance with the law, and when it comes to the CSR Program I
    am sorry to say that the federal government has failed to do
    so. This Administration has gone to great lengths to prop up
    the health law, going as far to break its signature law to keep
    it afloat and here the Administration won't even give Congress
    the documents or the testimony that we need to fully understand
    how they came to the decision that they made to fund the
    program, in my view, illegally.
        Without access to the information from the executive branch
    we cannot conduct the effective oversight. Without effective
    oversight we can't protect the public's interest. Last month I
    proudly joined my colleagues in introducing our proposal to
    replace the Affordable Care Act once and for all. I believe
    that our plan offers a better way forward. One that makes
    important changes to our health care system to improve access
    and also to decrease costs in a way that won't require the
    federal government to secretly shuffle around billions of
    dollars and violate the law like we have seen this
    Administration do from our report with the Affordable Care Act.
        Yesterday's hearing of Ways and Means Oversight
    Subcommittee focused on the extensive findings detailed in this
    report. Today we are here to talk about the long-term
    implications of those findings. Our findings go far beyond the
    CSR Program and are important to the future of the Affordable
    Care Act, appropriation laws and principles, and even our
    institutional powers in the legislative branch.
        We did invite Secretary Burwell to attend or provide a
    witness for today's hearing and I am disappointed that they
    have declined our invitation to testify. We deserve answers and
    we are not going to rest. Our work continues, and I yield to
    Dr. Burgess the balance of my time.
        Mr. Burgess. I thank the Chairman for yielding, and I
    certainly want to second his comment about the Department of
    Health and Human Services owed us the presence of the Secretary
    or an appropriate designee to continue to investigate this
    issue.
        As we have discovered, this Administration has disregarded
    the Constitution by taking and transferring money from the
    authorized and funded premium tax credit account to the Cost
    Sharing Reduction Program. Throughout this committee's
    investigation the Administration has gone to unprecedented
    lengths to delay providing this information, often citing
    nonexistent legal privileges. If the Administration's rationale
    for withholding information is accepted we risk exempting the
    entire executive branch from congressional oversight.
        This trend toward an all-powerful Administration must not
    continue in the next Administration. I look forward to hearing
    from the witnesses that we do have today about the importance
    of transparency and oversight and what this committee might do
    to further prevent this type of activity in the future, and I
    yield to the gentlelady from Tennessee.
        Mrs. Blackburn. I thank the gentleman for yielding. And to
    the answer as to why we are here today, we as Congress have
    oversight and that is exactly what we are doing, because we
    have found that there is money that is being reprogrammed and
    shifted, as Dr. Burgess said, from one account to another
    without our agreement and appropriation. It is called Article I
    powers. We are talking, as Chairman Upton said, about billions
    of dollars. It is inappropriate. We should be doing the
    oversight and making the determination of what is happening
    with these dollars. And with that I yield back the balance of
    my time.
        Mr. Murphy. I thank you, and now recognize Mr. Green of
    Texas for 5 minutes.

       OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF TEXAS

        Mr. Green. Thank you, Mr. Chairman. It is my job to give
    our ranking member's statement today because I think he is
    locked down in the Capitol. But before we do that, the issue of
    litigation brought by the Republican majority, it is not
    unusual that a litigant would not show up and not come to a
    hearing while you are in the court process.
        We know the district court made a ruling and that is on
    appeal, so I don't think there is any problem with somebody
    from the Administration not showing up simply because we can
    decide, we have an opinion between all of us on what is
    constitutional but that doesn't matter. The folks who make that
    decision sit in the black robes over in the Supreme Court
    building. So I don't think there is any problem with the
    Administration not showing up, because since the litigation was
    brought by the majority and let's let the courts work its way
    through that. But now I will go to my colleague's opening
    statement.
        When we passed the Affordable Care Act into law over 6
    years ago, we dramatically changed the health care landscape in
    the United States. The law has made access to comprehensive
    affordable health care a reality for the American people, and
    at the close of the third open enrollment earlier this year
    nearly 13 million people had selected health plans or had been
    reenrolled in quality, affordable health insurance through the
    federal or state exchanges.
        The uninsured rate has fallen to a historic low, and an
    estimated 10 or 20 million previously uninsured adults have
    gained coverage since the passage of the bill in 2010. To help
    limit health care costs to consumers, the law includes several
    mechanisms like the Cost Share Reduction or the CSR Program
    assists low and middle income Americans afford their
    deductibles, copayments and coinsurance.
        CSRs are also help that ensure that out-of-pocket health
    care costs do not place a crippling financial burden on
    American families. Many health care enrollees have taken
    advantage of the benefits offered by the CSR program. Of the
    approximately 11.1 million consumers who were enrolled at the
    end of March of this year, 57 percent or nearly 6.4 million
    individuals were benefiting from the CSRs to make their
    coverage more affordable.
        This CSR program is proven effective in accomplishing what
    it was designed to do. One study estimates that Americans who
    are eligible for cost sharing reductions would save an average
    of $479 each year. Yet if you listen to my colleagues on the
    other side of the aisle, you will hear nothing about the
    benefits of the CSR Program or about the Affordable Care Act at
    all.
        But despite the overwhelming success of the law, this
    committee has chosen to hold yet another hearing to attack and
    undermine the Affordable Care Act. This is nothing new. The
    Republican majority spent 6 years promising to repeal and
    replace the Affordable Care Act but we have yet to see a
    meaningful piece of legislation, and I might add until the last
    week. They recently unveiled a plan that falls laughingly short
    in providing quality, affordable coverage for our constituents
    and their constituents.
        Those watching this hearing need to understand that the
    Republican majority is exclusively focused on taking down the
    Affordable Care Act. They have now voted 64 times to undermine
    or repeal the Affordable Care Act. They have held hearings,
    sent letters, document requests, conducted interviews, and
    issued subpoenas. They have filed an unprecedented lawsuit in
    federal court to challenge the Cost Share Reduction Program.
        There are certain ways we could be conducting meaningful
    oversight of the Affordable Care Act and I am sure we could
    come together and improve the law and enhance the coverage and
    options available to our constituents. But this hearing and
    this investigation will do no such thing. Hearings like this
    only serve to hurt Americans, reverse the progress that has
    been made for millions who now benefit from the law, and it is
    time our Republicans just stop litigating the past and to work
    with us to continue improving the health care quality of the
    country.
        Anybody else want the time, the minute?
        Mr. Murphy. Well, I think the gentleman----
        Mr. Green. Being a former state senator I could continue to
    talk for a minute but I would be glad to yield back.
        Mr. Murphy. Well, Senator, I understand. Having been a
    senator myself I understand that senators are given unlimited
    time to speak and they always manage to exceed it. But thank
    you.
        I ask unanimous consent that the members' opening
    statements be introduced into the record, and without
    objection, the documents will be entered into the record.
        I would now like to introduce the witnesses for today's
    hearing. First, we have Mr. Doug Badger who will lead off our
    panel. Mr. Badger is a former White House Senior U.S. Senate
    Policy Advisor, currently a senior fellow at the Galen
    Institute. We thank Mr. Badger for being with us today, and we
    look forward to his comments. We also want to welcome Tom
    Miller. A resident fellow at the American Enterprise Institute,
    Mr. Miller studies health care policy including health
    insurance and market-based alternatives to the Affordable Care
    Act. Thanks to Mr. Miller for appearing before us today and we
    appreciate your testimony.
        Next, we welcome legislative consultant Mr. Morton
    Rosenberg. For over 35 years, Mr. Rosenberg was a specialist in
    the American Public Law with the American Law Division of the
    Congressional Research Service where among other topics he
    focused on the scope and application of congressional oversight
    and investigative prerogatives. He has been in the forefront of
    these issues and we appreciate him being here today and
    offering his testimony on this important issue. And finally we
    would like to introduce Mr. Simon Lazarus who is senior counsel
    with The Constitutional Accountability Center. We thank him for
    being with us today.
        I want to again thank all of our witnesses. It is quite an
    esteemed panel with probably a century or more of experience,
    so we look forward to hearing from you.
        Now you are all aware this committee is holding an
    investigative hearing and when so doing has had the practice of
    taking testimony under oath. Do any of you have any objections
    to taking testimony under oath? Seeing no objections, the chair
    then advises you that under the rules of the House and the
    rules of the committee you are entitled to be advised by
    counsel. Do any of you desire to be advised by counsel today?
    And seeing no requests for that in that case, will you please
    rise and raise your right hand and I will swear you in.
        [Witnesses sworn.]
        Mr. Murphy. Thank you. You are now all under oath and
    subject to the penalties set forth in Title 18 Section 1001 of
    the United States Code. We will ask you each for a 5-minute
    summary of your written statement. Because we are on a tight
    time schedule I hope you will pay attention to the yellow and
    red lights there.
        Mr. Badger, you may begin.

    STATEMENTS OF DOUG BADGER, SENIOR FELLOW, GALEN INSTITUTE; TOM
    MILLER, RESIDENT FELLOW, AMERICAN ENTERPRISE INSTITUTE; MORTON
     ROSENBERG, LEGISLATIVE CONSULTANT; AND SIMON LAZARUS, SENIOR
           COUNSEL, THE CONSTITUTIONAL ACCOUNTABILITY CENTER

                        STATEMENT OF DOUG BADGER

        Mr. Badger. Thank you, Mr. Chairman and Ranking Member
    DeGette and members of the subcommittee for this opportunity to
    appear before you this morning to discuss the Affordable Care
    Act's Cost Sharing Reduction Program. Implementation of that
    program has been irresponsible, unaccountable, and at its
    heart, unlawful. It is part of a pattern of malfeasance in ACA
    implementation occasioned by a serious miscalculation of demand
    for health insurance among young and relatively healthy people.
        This miscalculation led to a series of decisions by senior
    officials at the Departments of Treasury and Health and Human
    Services during 2014 that ranged from the reckless to the
    illegal. My colleagues, Brian Blase of the Mercatus Center,
    Edmund Haislmaier at the Heritage Foundation, and Seth Chandler
    at the University of Houston, and I, have published two studies
    of insurer performance in the 2014 benefit year.
        Our first study provided information on how insurers fared
    selling individual qualified health plans, QHPs. We found that
    corporate welfare payments made to these plans in the form of
    reinsurance payments and risk corridor claims averaged more
    than $1,100 per enrollee, or 25 percent of premium. Put another
    way, had risk corridor payments been made in full, insurers
    would have received $1.25 in revenue for every dollar they
    collected in premiums and still lost money.
        Our second paper examined the relative performance of the
    174 issuers that sold QHPs in both the individual and small
    group markets. We found that insurers lost nearly three times
    as much per enrollee selling QHPs to individuals than they did
    to small groups. Those losses occurred despite billions of
    dollars in individual and corporate subsidies that were
    available for individual QHPs but not for group QHPs. The main
    reason, individual QHP enrollees incurred medical claims that
    averaged 24 percent more per enrollee than for group QHPs.
    Those claims consumed 110 percent of premium dollars.
        These losses continued after 2014. McKinsey and Company
    estimates that they may have more than doubled in 2015. Now why
    has this happened? Brian Blase of the Mercatus Center I think
    has laid out why the rules governing the individual QHPs have
    produced such disastrous results for insurers that billions in
    lawful and unlawful corporate subsidies cannot cure. He said,
    ``The ACA largely replaced risk based insurance in the
    individual market with income redistribution based on age,
    income, and health status.''
        Whatever the merits of the redistribution of wealth,
    Congress cannot redistribute health. The ACA's rule structure
    for the individual market seeks to do this by requiring
    insurers to sell products that are generally unattractive to
    younger and healthier people, and overcharge them for those
    products, while discounting premiums for people who are older
    and less healthy. The result is a so-called market that
    attracts high risk enrollees and repels low risk ones. Such a
    market is incurably dysfunctional.
        As this began to dawn on Administration officials during
    2014, they made a series of sudden policy reversals to entice
    insurers to remain in exchanges. These included the
    expenditures of unappropriated money on the CSR Program, the
    diversion of billions of dollars from the Treasury to insurance
    companies through the reinsurance program, repeated
    restructuring of the reinsurance program to make payments 40
    percent more generous to insurers than at the time they
    submitted their premiums, and a slow retreat from the agency's
    prior position on risk corridor budget neutrality, an effort to
    turn it into a TARP-like fund that forces taxpayers to bear the
    costs of bad business decisions made by big corporations.
        This committee has been diligent in calling attention to
    these actions and Congress has acted to ensure that the risk
    corridor program operates as intended. Further action is
    required to end the unlawful diversion of funds from Treasury
    through the reinsurance program and to ensure that lawsuits
    filed by insurers do not render Congress' budget neutrality
    risk corridor requirement meaningless.
        The health care reform law is not working in the individual
    market. The unlawful payment of corporate subsidies cannot fix
    it. I am encouraged by the remarks of Ranking Member DeGette
    and by the Chairman. I agree that Congress should repair the
    health care reform law, but it should not overlook unlawful
    improvisations that try to disguise its deficiencies. Thank
    you.
        [The prepared statement of Doug Badger follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Murphy. Thank you.
        Mr. Miller, you are recognized for 5 minutes.

                        STATEMENT OF TOM MILLER

        Mr. Miller. Thank you, Chairman Murphy, subcommittee
    Ranking Member DeGette, and members of the subcommittee for the
    opportunity to testify today on the Obama administration's
    funding decisions regarding the Cost Sharing Reduction Program
    under the Affordable Care Act.
        The federal district court ruling in House v. Burwell
    reaffirmed the longstanding rules of appropriations law.
    Advanced payments to insurers to reimburse their expenses in
    providing cost sharing reductions mandated by the ACA were
    never appropriated by Congress. Hence, they could not be spent
    by the Obama administration. All appropriations must be
    expressly stated. They cannot be inferred or implied. The ACA
    does not designate a source of funds to make the cost sharing
    reimbursements.
        The Administration has offered a number of legal rationales
    to try to find authority for its decision to continue funding
    of the CSR payments, but as Judge Collyer in House v. Burwell
    concluded, the plain text of the ACA outweighed those arguments
    in most cases when other important textual distinctions did not
    already.
        The Administration's overly broad approach to inferring
    permanent appropriations by Congress in this case would provide
    no limiting principle to prevent future Administrations from
    paying for virtually any ACA program on the theory that it is
    linked somehow to premium tax credits under Section 1401 of the
    law. It is this Congress and future ones that is the
    constitutionally designated branch of the federal government
    that must decide whether or how to appropriate funds for CSR
    payments to insurers.
        This particular legal controversy needs to be placed within
    a larger and disturbing context. For the last 6 years, the
    Obama administration has been frustrated by its inability to
    get Congress to support more funding for a number of its less
    popular objectives under the ACA. It keeps trying to stretch
    appropriations law and administrative guidance to spend the
    money without necessary consent or authority.
        The Administration has a lengthy rap sheet in bypassing the
    Constitution, statutory law and norms of administrative law.
    Its transgressions and evasions have essentially challenged
    opponents to just go ahead and sue in court if they want to
    uphold the law. But this pattern of conduct seriously
    undermines the minimum level of respect we need for and from
    our government agencies and officials. Laws passed by Congress
    are not just mere suggestions to be selectively revised or
    discarded by the executive branch. Elections do matter and so
    do the decisions by the elected representatives of Congress
    they empower. Trust in the basic integrity of our government
    institutions and their adherence to the rule of law is a key
    foundation of democratic accountability, civil discourse, and
    economic progress.
        And if we are ever going to reduce the partisan rancor and
    operational gridlock in remedying the long list of
    dysfunctional components of the ACA, taking illegal shortcuts
    and making expedient administrative revisions in the law must
    be replaced by offering a more persuasive case for whatever
    legislative changes in the underlying statute are necessary and
    then facilitating actual votes in Congress to do so. But until
    then, this subcommittee's continuing investigation and
    oversight of the executive branch's policies and practices in
    this area remain essential to maintaining political
    accountability and the rule of law.
        I submitted my written testimony earlier this week before
    the extraordinary joint congressional investigational report
    into the source of funding for the ACA's Cost Sharing Reduction
    Program was available for review and comment. It carefully and
    meticulously details how the Administration first abused and
    raided another permanent appropriation in order to pay for the
    Cost Sharing Reduction Program and then obstructed the work of
    several congressional committees to investigate its actions. We
    have learned over the years that not every serious abuse of
    executive branch power in implementing the ACA differently than
    the law passed by Congress can or will be remedied in court.
        But at a minimum, the American people need to know more
    about how officials execute the laws that control taxpayer
    funds and shape so many vital aspects of their lives in order
    to hold them politically accountable in our representative form
    of government. I hope and expect that today's Oversight and
    Investigation hearing will further that objective. Thank you.
        [The prepared statement of Tom Miller follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Murphy. Thank you, Mr. Miller.
        Now Mr. Rosenberg, you are recognized for 5 minutes. Just
    make sure your mic is on and you pull it close to you. Thank
    you. Could you turn your microphone on? OK.

                     STATEMENT OF MORTON ROSENBERG

        Mr. Rosenberg. I'm pleased to be here, Mr. Chairman and
    members of the committee. This is a welcome return to be before
    a committee that I learned whatever I think I know about
    investigative oversight from a legendary chairman like John
    Moss and John Dingell and their great staffs.
        I did more work for this committee between 1975 and 2005
    than I did for any other committee in the Congress, and if I
    had to boil down the essence of what I've learned about
    oversight it would be this. Committees wishing to engage in
    successful oversight must establish their credibility with the
    White House and the executive departments and agencies that
    they oversee early, often and consistently, and in a manner
    evoking respect, if not fear.
        Although the standing committees and special committees
    have been vested with an array of very formidable tools and
    rules to support their powers of inquiry, it is absolutely
    critical to the success of the investigative power that there
    be a credible threat of meaningful consequences for refusal to
    provide necessary information in a timely manner. In the past
    that threat has been the possibility of a citation of criminal
    contempt of Congress or even earlier in our history a trial at
    the bar of the House, either of which could result in
    imprisonment. There can be little doubt that such threats were
    effective in the past at least until 2002.
        Between 1975 and 1998 there were ten votes to hold Cabinet
    level officials in contempt of Congress. Four of those votes
    came from this committee and were very effective in getting
    information. Indeed, the first two votes, which were the first
    two votes ever to hold Cabinet level officials in contempt,
    involved an issue that is raised here. It involved two statutes
    that had noncompliant and confidentiality provisions and the
    heads of each of those departments, the Commerce Department in
    1975 and HEW in 1978, claimed that a broad, nondisclosure
    provision applied to Congress.
        John Moss challenged that in both cases, and in both cases
    preliminary votes of contempt in the subcommittee were
    sufficient to have the documents released and the testimony
    given that was wrought. And similar things happened during the
    early '80s under John Dingell.
        As I said, all of these ten resulted in one way or another
    of substantial compliance with information demands in question
    before the necessity of any criminal trial. It was my sense
    that those instances established such a credible threat of a
    contempt action it was possible that until 2002 even the threat
    of a subpoena was often sufficient to move an agency to an
    accommodation with respect to document disclosures or the
    testimony of agency officials and the White House to allow even
    officials to testify without a subpoena.
        The last such instance was the failed Presidential claim of
    privilege during the chairmanship of Dan Burton in its 2002
    investigation of two decades of informant corruption in the
    FBI's Boston office. I might add that it was a bipartisan
    effort in which the contempt was a virtual certainty.
        The current situation is that Congress is presently under a
    literal siege by the executive. The last decade has seen among
    other significant challenges an unlawful raid on a
    congressional office, Department of Justice prosecutions of
    Members that successfully denied them speech debate
    protections, Presidential cooption of legislative agency
    rulemaking, among other things.
        But with respect to investigative oversight since 2000 and
    recently, the executive branch has adopted a stance of-- which
    was first enunciated by the Department of Justice in 1984--that
    the historic congressional processes of criminal and inherent
    contempt designed to ensure compliance with its information
    gathering prerogative are unconstitutional and unavailable to a
    committee if the President unilaterally determines that such
    officials need not comply.
        Mr. Murphy. Mr. Rosenberg, I just want to say you are out
    of time. If you could just give a final statement, then I have
    to move on.
        Mr. Rosenberg. Congress has to protect its investigative
    authority. The current stance of the Justice Department means
    that every time you issue a subpoena for documents or testimony
    that is not going to be complied with they're going to force
    you into District Court. And forcing you into District Court
    will mean delay and the possibility of aberrant judicial
    decisions which has occurred in the Myers case and in the
    present Fast and Furious litigation which in total with its
    investigative time----
        Mr. Murphy. Thank you.
        Mr. Rosenberg [continuing]. And the time before the courts
    has gone on for 5 \1/2\ years without resolution.
        [The prepared statement of Morton Rosenberg follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Murphy. Thank you very much, sir. I appreciate it. Mr.
    Lazarus, you are recognized for 5 minutes.

                       STATEMENT OF SIMON LAZARUS

        Mr. Lazarus. Thank you very much, Mr. Chairman, and I think
    the mic is now on. As Senior Counsel to The Constitutional
    Accountability Center, I helped draft an amicus curiae brief
    which CAC filed in House of Representatives v. Burwell which
    you referenced, Mr. Chairman. That brief was on behalf of
    Democratic Leader Pelosi and other leading members of the House
    Democratic Caucus. It supports the Administration's
    determination that it has authority to fund the Affordable Care
    Act cost sharing provisions that are at issue in that case and
    in this hearing. And my sole narrow mission here is to explain
    why.
        To begin with, as all of us here know the Cost Sharing
    Reduction Program was designed and has in practice operated as
    an integral component of the Affordable Care Act. However,
    House leadership and district court for the District of
    Columbia judge contend that there is no appropriation for the
    cost sharing reductions even though as they concede 31 U.S.C.
    Section 1324 does provide a permanent appropriation for the law
    as complementary premium assistance tax credits program.
        With respect, this assertion is at odds with the ACA's plan
    for restructuring individual insurance markets with the
    mechanisms Congress designed to effectuate that plan with
    textual provisions defining those mechanisms and how they are
    intended to operate and with multiple other provisions which
    would make no sense under these ACA opponents' interpretation.
    The Administration has determined that the premium tax credits
    and cost sharing reductions are commonly funded by that
    permanent appropriation in 31 U.S.C. Section 1324. That
    interpretation, the Administration's interpretation, suffers
    from none of the above fatal deficiencies and enables the act
    to operate as Congress intended.
        Just 1 year ago in King v. Burwell, the Supreme Court
    rejected a similarly perverse, contrived interpretation which
    in the words of its architects was contrived to drive a stake
    through the heart of Obamacare. I believe at a conference of
    the American Enterprise Institute I think that was stated. In
    that case Chief Justice John Roberts held for a six-justice
    majority in terms which I think everyone interested in how to
    interpret the provisions at issue here, the Cost Sharing
    Reductions provision, should read very carefully. He said
    Congress passed the Affordable Care Act to improve health
    insurance markets not to destroy them. If at all possible we
    must interpret the act in a way that is consistent with the
    former and avoids the latter. Section 36(b) can fairly be read
    consistent with what we see as Congress' plan and that is the
    reading we adopt.
        One year later, ACA opponents have mounted a transparent
    rerun of the same strategy. Once again they brandish an
    acontextual, hyperliteralist, contrived interpretation ignoring
    the statute as a whole, crafted to undue the statutory design,
    and to yield results that are inconsistent with the ACA's plan
    for improving health insurance markets, precisely the sort of
    scenario that the court in King ruled out.
        The House leadership's argument is that section, the ACA
    Section 1401 which prescribes the tax credits specifically
    amends 31 U.S.C. Section 1324, whereas there's no such
    reference in Section 1402 which addresses the CSR subsidies.
    But this is a too narrow prism. The text and structure of the
    ACA overall made clear that the CSR subsidies and the premium
    assistance tax credits form a mutually interdependent package
    and that together both are critical to what the Supreme Court
    characterized as the ACA's series of interlocking reforms.
        And I should also add that the House leadership's narrow
    interpretation would generate as the Department also explained
    a cascading series of nonsensical results. Now most nonsensical
    among these--and I think that there's something like 40 of
    them, 40 provisions which would make no sense under the
    leadership's interpretation and the district court's
    interpretation. Most nonsensical, federal expenditures would
    actually increase and from the same fund from which the House
    leadership's interpretation purports to save taxpayer dollars.
        Chairman Upton is not here and so I can't point this out to
    him, but the Department of Health and Human Services has
    determined that the net budget impact of the district court's
    interpretation would cost the government, quote, billions of
    dollars higher annually, and I believe that my colleague----
        Mr. Murphy. Sir, if you could just wrap up, because we are
    late and we need to get going.
         Mr. Lazarus. OK. I'm sorry I'm over. I didn't know that. I
    apologize. So in sum, the Administration has lawfully acted to
    provide intended benefits for the 6.4 million individuals
    currently receiving cost sharing reductions. Withdrawing
    funding for that lifeline would flout the design of the ACA and
    the textual provisions which establish that design, which is
    why this latest effort to undermine health reform is no more
    likely to succeed than its predecessors. Thank you very much.
        [The prepared statement of Simon Lazarus follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Murphy. Thank you very much. I now recognize myself for
    5 minutes of questions. At the Ways and Means hearing
    yesterday, a Department of the Treasury official stated on the
    record, quote, if Congress doesn't want the monies appropriated
    it could pass a law saying do not appropriate the monies from
    that account.
        Now Mr. Miller, there you are. Is that how appropriations
    laws are supposed to work that Congress has to pass a law
    specifying how the executive branch cannot spend a specific
    account or appropriations? You may have heard me reference the
    idea that which is not permitted is allowed.
        Mr. Miller. Your question implies the answer, Chairman
    Murphy. That's exactly the opposite as to what happens. It's
    trying to say we can spend whatever we want until you stop us
    as opposed to it is the role of Congress under the Constitution
    to first authorize and then appropriate the funding. Failing to
    say you can't spend is not the same thing as saying it was
    originally approved for spending.
        Mr. Murphy. Thank you.
        Mr. Rosenberg, in the course of this investigation the
    committee has really faced unprecedented obstruction. The
    Administration has refused to comply with subpoenas issued by
    this committee and the committee on Ways and Means, and has
    grossly restricted the testimony of important fact witnesses
    giving us no legally recognizable basis to do so. And one of
    the excuses given is that the House v. Burwell litigation
    prevents the Administration from complying with our request. In
    your professional opinion did the House lawsuit preclude the
    Congress from conducting oversight over the source of funds for
    the Cost Sharing Reduction Program? Yes or no.
        Mr. Rosenberg. No.
        Mr. Murphy. OK. And then why not?
        Mr. Rosenberg. Because the Supreme Court has addressed this
    issue in at least two major cases, one of them a Teapot Dome
    case called Sinclair v. United States. And that question
    specifically arose that the witness got up and said, I'm
    involved in a lawsuit that I'm going to have to testify at and
    I'm going to leave my testimony for that lawsuit. For that he
    was held in contempt of Congress, and the Supreme Court upheld
    it saying there's no way that he can avoid the breadth and the
    need of Congress to continue investigations into knowing what
    was going on there.
        A second case some years later came to the same conclusion
    with regard to a witness who claimed that the committee that
    litigation that was going on, this might cause him concern or
    may even reveal evidence that he was criminally responsible.
    The court said too bad.
        Mr. Murphy. Let me ask in addition to that. The
    Administration has further refused to provide documents or
    testimony that include any internal or deliberative materials.
    Now it claims it can withhold this information based on
    longstanding executive branch confidentiality interest. Is this
    a valid or a legal reason to withhold information from
    Congress? Yes or no.
        Mr. Rosenberg. No.
        Mr. Murphy. And why not?
        Mr. Rosenberg. When Congress operates it has in practice
    kept for itself the discretion to determine whether common law
    privileges such as deliberative process, attorney-client
    privilege, work product privilege will be recognized by the
    chair. Indeed, your processes of investigation and holding
    hearings is based on the need and its ability to get all the
    information possible no matter what. The Congress has the
    discretion whether or not to accept a claim of deliberative
    process. It is entitled to know everything and under law that's
    the final word.
        Mr. Murphy. So Mr. Badger, in expanding from your testimony
    too, why do you think the Administration is taking these kind
    of positions that where we see the executive branch bending the
    law or stretching it?
        Mr. Badger. Well, I think, Mr. Chairman, if Chief Justice
    Roberts believes that the ACA has improved individual markets
    and not destroyed them he doesn't get out much. What has
    happened is that this has turned into a Dumpster fire for
    insurers forcing them to rely on a series of unlawful subsidies
    as I laid out in my testimony.
        And again I'll return to the ranking member's opening
    remarks. The idea of honestly addressing these I think would be
    a very good approach for Congress to take. What happened was as
    we moved into 2014, the Administration realized what was
    happening, insurers realized what was happening, and that
    caused the series of sudden regulatory improvisations of
    dubious legality to try to get more money to insurance
    companies to keep them in the game. That has not worked.
        Mr. Murphy. Thank you. I see I am out of time. I would now
    turn to Ms. DeGette for 5 minutes.
        Ms. DeGette. Thank you, Mr. Chairman.
        Mr. Lazarus, as I read your biography you are a
    constitutional law expert. Is that correct?
        Mr. Lazarus. I'll have to leave that expert part to----
        Ms. DeGette. Well, that is what you do.
        Mr. Lazarus. I try.
        Ms. DeGette. Thank you. And in fact you wrote the amicus
    brief on behalf of the House Democrats that was filed with the
    court in this case. It is a subject of----
        Mr. Lazarus. I helped write it. I was one of three people.
        Ms. DeGette. OK. So I want to ask you a couple of questions
    about your view of the Administration's interpretation of the
    statutory provisions at issue here. The first thing is, I think
    I heard you say in your testimony that you believe the
    Administration's position that the ACA makes clear that the
    CSRs and the advance premium tax credits are integral
    components of a single program that are both funded out of an
    explicit permanent appropriation in the statute; is that
    correct?
        Mr. Lazarus. That is correct.
        Ms. DeGette. And why do you believe that?
        Mr. Lazarus. Well, let's try to be brief about it, but the
    Administration has a perfectly coherent interpretation of the
    statute which in my view is clearly the most reasonable in--
    excuse me.
        Ms. DeGette. No. OK, go ahead. Just move the microphone--
    yes.
        Mr. Lazarus. The Administration has a perfectly reasonable
    well thought through interpretation of the appropriation issue
    with respect to the Cost Sharing Reductions provisions. It's
    outlined very clearly in the Justice Department's briefs and
    supporting briefs like ours. Just in brief----
        Ms. DeGette. Let me just stop you there and say, now--
    because we have got your brief and we have got your testimony
    too.
        Mr. Lazarus. Right.
        Ms. DeGette. Now as you know, the district court decision
    went against your position and the Administration position,
    correct? Yes will work.
        Mr. Lazarus. Well, the district court----
        Ms. DeGette. OK. Their ruling went against----
        Mr. Lazarus. They simply said that there is no
    appropriation, it's therefore unconstitutional.
        Ms. DeGette. And the case is up on appeal now; is that
    correct?
        Mr. Lazarus. The case is definitely on appeal.
        Ms. DeGette. And in your experience some of these, most of
    these lawsuits that have been filed around the ACA have had a
    diversity of district court opinions and many have been
    reversed on the appellate court level.
        Mr. Lazarus. That is also true.
        Ms. DeGette. And so is it your view that the Administration
    has an excellent case on appeal?
        Mr. Lazarus. I believe that it has on the case----
        Ms. DeGette. OK.
        Mr. Lazarus [continuing]. Both with respect to whether or
    not the House of Representatives can claim that it has standing
    to bring the lawsuit and with respect to the merits----
        Ms. DeGette. Merits.
        Mr. Lazarus [continuing]. Interpretation.
        Ms. DeGette. Now you testified that just a minute ago that
    the CSR fund has 6.4 million people receiving that benefit; is
    that correct?
        Mr. Lazarus. It is correct that I so testified and I got
    that information from I think a report by the Department of
    Health and Human Services.
        Ms. DeGette. OK. And of those 6.4 million people they are
    all middle class or lower class because that is what the
    requirement for the fund is. Is that right?
        Mr. Lazarus. Well, they would have to have incomes that are
    between 100 and 250 percent of the federal poverty level.
        Ms. DeGette. OK, of the federal poverty level. OK. And I
    know you are narrowly an expert on constitutional law, but as
    you wrote your amicus brief in this matter and as you have
    reviewed this, were you aware of any proposal that is pending
    in Congress to replace this fund, the CSR program, with
    something else? Are you aware of any pending legislation?
        Mr. Lazarus. No, I am not aware. But I would point out that
    Congress instead of wringing its hands has every ability to
    change the law if it disagrees with the Administration.
        Ms. DeGette. Right. And in fact what will happen if the
    lawsuit is, if the trial court opinion is upheld by the Court
    of Appeals the result of that will be that the CSR fund which
    benefits 6.4 million people will be struck down.
        Mr. Lazarus. Yes. It'll be a very complicated process as my
    colleagues on the other side have explained in their testimony.
    But that will be the result.
         Ms. DeGette. Yes. so the result--and so you are not aware
    of any pending legislation in Congress to fix this issue.
        Mr. Lazarus. No, I'm not.
        Ms. DeGette. So if they win their lawsuit then these people
    will lose their benefits.
        Mr. Lazarus. I believe that that is true. Yes.
        Ms. DeGette. OK, thank you. I yield back.
        Mr. Murphy. Thank you. I now recognize the vice chair of
    the full committee, Mrs. Blackburn, for 5 minutes.
        Mrs. Blackburn. Wonderful. I want to come to you, Mr.
    Miller, because you have looked at the report. You know that we
    find that the Administration does not have the authority to do
    these payments, yet they go ahead and they do that. So let's
    kind of go back to the legislation. In your opinion, does the
    ACA designate any source of funding for the Cost Sharing
    Reduction Program?
        Mr. Miller. No, it does not. The provisions which provide
    for, in effect, mandatory appropriations by linking it to some
    preexisting, a list of those categories, added the premium tax
    credits to that but there's no language that links it to the
    cost sharing reduction payments so therefore there is not that
    appropriation.
        Mrs. Blackburn. Can a program or can money be appropriated
    by inference?
        Mr. Miller. Well, you can try in this Administration and
    it's tried that pretty extensively. But under our Constitution
    you cannot do that and under standard appropriations law which
    the GAO is longstanding the expertise in that area lays out the
    general categories of how you approach----
        Mrs. Blackburn. And what would the consequences be for an
    executive branch that chooses to appropriate money by
    inference?
        Mr. Miller. Well, there are several consequences. I don't
    know whether you mean legal consequences. I mean, first,
    they're getting a free ride. They're able to basically run
    roughshod over----
        Mrs. Blackburn. And that is why we are doing oversight.
        Mr. Miller. That's correct. And basically saying we're
    going to do this until you can stop us, and that's why we're in
    this type of impasse. It's an unusual lawsuit by the House as
    an institution to have to go into court in order to assert its
    constitutional authority and that's why they got the ruling
    they did. But as a general rule this has worked out in the
    political process.
        We're in a very unusual moment where to oversimplify and
    carry on with my colleague Doug Badger, the Congress passed a
    law that didn't work. Now the executive branch decided they
    couldn't fix it or wouldn't fix it and so we're stuck. They're
    making the law into something other than what it is and trying
    to appropriate money which wasn't appropriated as opposed to
    fixing the law which would resolve it or at least bring the
    issue out more transparently in a political manner.
        Mrs. Blackburn. So basically what they did, as you are
    saying, they passed something. They realized that it is not a
    workable program much like we in Tennessee realized years ago
    that TennCare was not a workable program. It was established by
    an 1115 waiver. It was too expensive to afford, and a Democrat
    governor came in and completely reshaped it. It took 35.3
    percent of the state budget by the year 2005, and he removed
    300,000 people from the program and reshaped the drug program
    because of the number of scrips that were being written and
    said this is not sustainable.
        The good thing there was we had a governor who would say I
    am going to be transparent in this and you need to know what
    this is going to cost you. They couldn't shift the money around
    and play a game of chess behind the curtain that nobody was
    going to see. So what they decided to do federally was say, oh
    my gosh, our theories don't work. We can't afford this. The
    insurance companies are going to bale on us. Let's start moving
    some money around here because this is too expensive to afford
    and we don't want egg on our face--pretty much?
        Mr. Miller. Pretty much. Again this is structure, just
    respond to what Mr. Lazarus said. This is not a rerun of King
    v. Burwell, although we differ in terms of how much statutory
    ambiguity there may or may not have been on that. This is
    simply a core provision of the Constitution which says it's the
    role of Congress assigned to them to appropriate money. It's
    pretty straightforward. The law doesn't have to change if
    Congress votes tomorrow to appropriate funds for this. It
    decided not to. There's not any authority for that money to be
    spent.
        Mrs. Blackburn. Thank you. I yield back.
        Mr. Murphy. The gentlelady yields back. I recognize the
    gentlelady from Florida, Ms. Castor, for 5 minutes.
        Ms. Castor. Thank you, Mr. Chairman. Thank you to the
    witnesses for being here. Approximately 20 million Americans
    have gained coverage since the Affordable Care Act became law
    about 6 years ago, but my Republican colleagues continue to
    look for ways to pull the rug out from under these Americans.
    In addition to the over 64 votes to repeal the law, the
    Republicans in Congress have decided to sue, targeting now the
    cost sharing reductions that are a key part of ensuring that
    our neighbors back home have access to affordable health care.
        Now the Affordable Care Act, it is a complex law. It had a
    number of different components. Part of it was to end
    discrimination against our neighbors who had a preexisting
    condition, like a cancer diagnosis or diabetes, so insurance
    companies could no longer block them from purchasing insurance.
        Another part of the law was intended to stabilize insurance
    markets because this was a fundamental change in the way people
    would purchase insurance, and especially if you had people with
    preexisting conditions coming in, and I think everyone agrees
    to that. I would hope so. My Republican colleagues have said we
    are going to repeal the act in its entirety. It is important to
    have a stable insurance market especially when they are state
    based.
        And another important part of it was to ensure that our
    neighbors, our working class neighbors who are doing everything
    right can go in and purchase a policy. This has been a
    remarkable improvement to the way things were handled in the
    past. We have all talked to so many of our friends and
    neighbors that now have that stability in their life that they
    didn't have before.
        So of the approximately 11 million consumers who enrolled
    at the end of March of this year including 1.6 million
    Floridians, my neighbors at home, nearly 6.4 million
    individuals were benefiting from this cost sharing reduction
    piece that helps make their coverage more affordable. And what
    that really means, it makes the difference on whether or not
    they can get to see a doctor or nurse, get the checkups they
    need or not.
        So Mr. Lazarus, in your understanding how does the cost
    sharing reduction piece fit within the broader mission of the
    Affordable Care Act?
        Mr. Lazarus. Thank you. The cost sharing reduction enables
    people who have insurance and who got premium assistance tax
    credit funding to afford their insurance premiums, but people
    who could not afford actually to purchase health care because
    the deductibles and copays were too much for them to afford,
    the cost sharing reductions enable those people to have
    confidence that they will be able to actually use their
    insurance and therefore it encourages them to purchase it.
        Ms. Castor. So these are----
        Mr. Lazarus. And without that the act wouldn't work because
    as you just said, insurers must accept people without respect
    to their health status and unless the pool includes a large
    number of people, including healthy people, the markets will be
    destabilized. So the cost sharing reduction provisions are
    essential to achieving that stabilization.
        Ms. Castor. So this is kind of another tack that my
    Republican colleagues have taken. In addition to the repeal
    votes, the Republican majority, the Republicans in Congress
    filed a lawsuit in federal court to undermine families' ability
    to purchase affordable insurance. And I was surprised about the
    lower court ruling, but let's be clear here that if the House
    Republicans prevail in this lawsuit it is going to be our
    neighbors all across America who are hurt.
        Mr. Lazarus, if the House Republicans are successful here
    what is the impact to families across America? And do you know,
    out of all these 64 votes they have brought there has not been
    a corresponding plan to address their needs. Are we just going
    to have many of our neighbors that are out of luck? They have
    been successful in pulling the rug out from under them and they
    won't be able to find affordable insurance?
        Mr. Lazarus. Well, first of all, I would certainly not lose
    hope that the district court's decision is going to be upheld.
    I think that the Administration has a very powerful case both
    on whether or not the House standing to get itself into court
    over this and also on the merits of the Administration's
    interpretation, which is a very compelling interpretation.
        What I do know is I believe that something like 57 percent
    of all of the people getting insurance on the exchanges--57
    percent, that's many millions of people--are eligible for and
    receiving the cost sharing reduction. So we're talking about a
    lot of your neighbors.
        Ms. Castor. Thank you.
        Mr. Murphy. Thank you. The gentlelady's time is expired. I
    just want to say that with regard to the--I think there is some
    confusion about the CSR and also the premium tax credit. The
    Administration admitted in lawsuits that beneficiaries get the
    CSR reduction regardless of whether or not the insurers are
    paid and regardless of whether or not the district court ruling
    is upheld on appeal.
        So the CSR is a subsidy to insurance companies and the
    premium tax credit goes directly to the people. I just want to
    make sure we have that on the record.
        I recognize Mr. McKinley for 5 minutes.
        Mr. McKinley. Thank you, Mr. Chairman. I feel in many
    respects like a fish out of water on this. I go back 40 years
    ago when Sam Ervin was in the Watergate thing, hearings, and he
    said I am just a country lawyer, and he had made some fairly
    profound remarks. Well, I am just an engineer and I am dealing
    with something that is a medical and a legal issue more than
    anything else.
        So I am really enjoying the conversation here with it, but
    I am caught with some of the discussion that we seem to be,
    from my perspective, more the ends justify the means. I am not
    sure that that is the way we are supposed to be doing that. I
    don't think there is any question that people that are getting
    health care and medical benefits that that is a good thing for
    them, but how do we get there? How do we get there?
        I mean, I have made some mental notes to myself about food.
    We could rush food to market, but if we bypass the FDA in the
    process to make sure that the food is approved that was
    supposed to get to market, then we shouldn't do it, but they
    benefited from it. Same thing with medicine, we have a lot of
    medicine that could help people but we need to follow the
    process to make sure that it is appropriate for them.
        I am lost with this. It just hearkens back again to the
    same thing we heard a year or so ago, the Administration saying
    that he had no authority. He said it 22 times. I have no
    authority to deal with this immigration issue, but then he just
    went ahead and did it.
        I know that back during the testimony they said that there
    was a request; that the President put in a request for
    appropriation just like he did on immigration. He needed to
    have authority to do it. Well, he asked for authority for
    appropriations but it was denied, but he went ahead and did it
    anyway. And then he apparently was just, said I am going to do
    it. I am just going to do it.
        So I am curious as to whether we have a rule of law or a
    rule of man. I thought all the statements that we see on the
    walls around here these are all the rules of law. So I am going
    to go back to this, I guess to Rosenberg perhaps. If Lazarus is
    right and this thing gets overturned where do we go? Have we
    just opened the gates to lack of control? Is there something in
    the appropriation process that we should be doing to prevent
    this from happening?
        If it is upheld then I think we are going to be OK, because
    it has been, it appears it will be clear you can't spend money
    that has not been appropriated or authorized, vice versa. What
    happens if they overturn it? What happens to us in our process?
    Can you elaborate a little on that how we might essentially,
    what should we be doing here in Congress then? Mr. Rosenberg.
        Mr. Rosenberg. With regard to the appropriations process?
        Mr. McKinley. Yes, the whole thing. If this thing is
    overturned what are we supposed to do?
        Mr. Rosenberg. Get a new plan.
        Mr. McKinley. Get a new what?
        Mr. Rosenberg. Pass laws. If the problem is there wasn't an
    appropriation and you think there should be an appropriation,
    pass it. But you have to have a plan and you have to have the
    votes to do it.
        Mr. McKinley. OK. Mr. Miller, same question. What should
    Congress be doing at this point?
        Mr. Miller. Well, we've tried to fix these problems in the
    past and your historical example is rather apt because there
    was a lot of controversy in the 1970s not only about the
    Watergate but about the budget process. I remember working on
    impoundment authorities and we passed the whole budget act was
    supposedly to deal with that.
        It encourages the worst instincts in both sides. You get
    into trench warfare where Congress would retaliate in various
    ways not as effectively where you'd try to, you'd be shutting
    down the government, you'd be trying to hold other
    appropriations hostage, and that just makes our politics
    descend into a worse example is who can get away with as much
    as possible.
        This is a fundamental, legal, structural, constitutional
    issue here beyond what you prefer in health policy in
    particular. All parties need to be accountable in broad
    daylight to say here's what our argument is. We're voting for
    it. We're going to find out what happens and what the public
    will support. You can't do an end run around the process or you
    get this type of improvisation where the Administration tries
    to run out in front of what the law says and then Congress has
    to play catch up.
        Mr. McKinley. Thank you. I yield back the balance of my
    time.
        Mr. Murphy. The gentleman yields back and now I will
    recognize Mr. Green for 5 minutes.
        Mr. Green. Thank you, Mr. Chairman.
        Mr. Lazarus, thank you for testifying, and I think your
    testimony clearly lays out why the Affordable Care Act includes
    what we call either permanent or mandatory appropriation for
    the CSR program. And mandatory spending is not unusual. The
    Affordable Care Act in 2010 did that along with a bill we just
    recently passed this year for mandatory funding for the SCHIP
    program and for the continuation of the FQHC program. So
    Congress does add on at times.
        My Republican colleagues disagree with you and they
    disagree with the Administration in claiming that the
    Administration acted unlawfully in concluding it had the
    authority to fund the CSR program without an annual
    appropriation. In fact, this lawsuit shows that they even were
    willing to go to court.
        Mr. Lazarus, Congress has many tools at its disposal when
    it disagrees with an agency on policy; is that correct?
        Mr. Lazarus. That is very definitely correct, and those
    tools are available to it right now. This is the sky is not
    falling, Mr. Miller, this is a simple matter of a difference of
    interpretation of the relevant statutory provisions on the part
    of the Administration and Congress. Congress can fix that in an
    instance if it wants to go on record casting a vote to take
    these subsidies away from people who need them. Congress has
    actually done that in the Affordable Care Act and we're all
    here very well aware of that. And as specifically the risk
    corridor program, which has been a target of criticism from my
    colleagues on the right side here, and it has, Congress has
    actually acted to affirmatively deny appropriations to fund
    that program.
        So you can put your money where your mouth is or your votes
    are if Congress wants to, and it shouldn't really be running to
    court to try to protect itself here.
        Mr. Green. Well, some of my colleagues seem to claim
    victory on the legal issue because of the federal district
    court recently ruled in their favor. They suggest that the
    ruling is conclusive evidence. Being a lawyer I know there is
    an appeals process. And were you surprised by the district
    court's decision?
        Mr. Lazarus. Well, I wasn't surprised after going to the
    oral argument, frankly, but I was surprised because the
    precedents are very clear that there's no congressional
    standing simply to vet a disagreement over implementation of a
    law with the executive branch. So I was very surprised that the
    court ignored those precedents and granted standing.
        Mr. Green. And do you expect the ultimate outcome of the
    case on the appeal?
        Mr. Lazarus. Well, I believe that it's more likely than not
    that on appeal the decision will be reversed, but of course I
    could be wrong about that. We have to wait and see what it is.
        Mr. Green. Well, as a lawyer I normally don't ask a
    question I don't have the answer to, but I want to ask the
    panel. Doing health care policy for decades with Republican and
    Democratic administrations, some way you have to find a way to
    encourage the private sector to take the poorest folks, the
    ones who have a lot of claims, and CSR is part of that process.
        Can any four of you think that over the period of time
    whether it be the prescription drug plan of 2003 that
    encouraged insurance companies to cover poor seniors who took a
    lot of medications? And I would be glad in my one point, 1
    minute 10 seconds, how was that dealt with in 2003?
        Mr. Badger. Well, Congressman, I represented the White
    House in negotiations on that and the way it was done was that
    it was a bipartisan process to agree on a law. The difference
    here is----
        Mr. Green. Oh, I disagree. I was here and it wasn't
    bipartisan, on our side.
        Mr. Badger. I will say on the Senate side we did have over
    60 votes and that required substantial Democratic support, but
    they were part of the conference process. The difference here,
    Congressman, I don't want to be argumentative, but this is not
    working. The reality is that despite all of these corporate
    subsidies, despite all of these changes that were made during
    the first part of 2014 by the Administration, some of which do
    appear to be unlawful, the insurance companies are still losing
    money in the individual market. We haven't solved this problem
    yet.
        And what I would encourage, just to correct the record, of
    the 6.4 million who are getting these subsidies, even if the
    Administration were to follow the law, Section 1402(a)(2) says
    the issuer shall reduce cost sharing under the plan. The
    insurer has an obligation to do it irrespective of the presence
    of these funds. But what I would hope that this would
    precipitate is this kind of conversation we had with respect to
    Part D, where people work together, acknowledge that this is
    not working in many ways, and try to work together on getting
    something that does.
        Mr. Green. Well, in my last 15, 20 seconds, whatever I
    have, I agree with you. We need to work together to see how we
    can fix it because these folks need that health care coverage,
    and just dropping six million off without this assistance. And
    the majority, we can deal with that and fix it instead of going
    to court and, you know, the law needs to be successful so we
    need to fix it.
        Mr. Murphy. Thank you. Mr. Griffith, you are recognized for
    5 minutes.
        Mr. Griffith. Thank you, Mr. Chairman. I appreciate it very
    much. This is an important hearing because it points out some
    major flaws and problems that we have in the way that
    Washington is currently working. I think it is high time, and
    this is a classic example of it. It is high time that we start
    defending the legislative prerogative.
        It is not a matter of Democrat or Republican or Independent
    or Socialist or whatever party you want to put on there. It is
    a matter of defending the Constitution from the congressional
    branch, the legislative branch of our government. We aren't
    doing it and we should be doing it whether it is Democrats or
    Republicans as I said.
        And it is one of the reasons I really hope we will have a
    Republican President so that my colleagues on the other side of
    the aisle will see that if a Republican President were to
    flaunt the law as it has been flaunted in this particular
    circumstance and try to spend money not authorized by Congress,
    I will stand up and say to that President just as I am going to
    say today, you can't do that and we are not going to sit idly
    by and allow you to do that.
        It doesn't matter whether it is a Republican or a Democrat,
    whether it is a program I like or dislike, we have got to
    follow the law. Just yesterday--we are not robots here just
    doing things. Yesterday I made an independent constitutional
    decision. We don't have to wait on the courts to tell us what
    is and isn't constitutional. We get to make some of those
    decisions ourselves. That is why we take an oath to uphold the
    Constitution. And I voted against a rule against my party
    because I thought paragraph 5 of the rule included something
    that I believe is unconstitutional. Now all that getting off my
    chest, I have to say this as well. I think the 60-vote rule in
    the Senate is killing us.
        Mr. Lazarus, you said it is easy for us, we can just pass a
    law. We can in the House pass a law with a majority vote. You
    can't do that in the Senate. They have totally botched up the
    entire process. Again it doesn't matter whether you are
    Democrat or Republican, when it takes 60 of 100 votes to pass a
    piece of legislation it is wrong. The process doesn't work and
    it is weakening the legislative branch of government and it is
    dangerous to the Republic.
        Mr. Rosenberg, you said to Mr. McKinley, if this ruling is
    upheld and we now have to flip things around where instead of
    voting for appropriations we have to vote against
    appropriations and say you can't spend money here, the problem
    with just passing a law and having a new plan is that 60-vote
    rule in the Senate. There, I got all that off my chest.
        But I think it is very clear, just like in the Solyndra
    case where they didn't have authority to subrogate, then they
    subrogated and claimed that, before lunch was different than
    after lunch because it was an hour later you could subrogate
    because you weren't supposed to subrogate at the time of the
    initial loan but you could come back later.
        It is the same kind of thing here. They are interpreting
    the law in such a way. And when we take the position as a
    legislative branch of government that we have to sit back and
    wait for the courts before we can take any action, we lose our
    authority and it diminishes the legislative branch. Mr.
    Rosenberg, would you disagree with what I have just said?
        Mr. Rosenberg. Not at all.
        Mr. Griffith. And I appreciate that. Mr. Miller, would you
    disagree with what I have just said?
        Mr. Miller. No. And I would just underscore that what was
    unique about the House v. Burwell case is--we need to think
    about this. The judge knocked out a different complaint that
    the House had about the employer mandate because that was a
    matter of statutory interpretation. However, this went to a
    core constitutional provision, the power of Congress to
    determine appropriations and spend money, and that's why it was
    uniquely moved forward and got past the standing
    considerations. There was really no other plaintiff you could
    have bring this case before a court and that's why the judge in
    a very unusual ruling said this is the only way to remedy this
    issue.
        Mr. Griffith. And I think we may have some more of those,
    but first we have to stop looking at ourselves as playing for
    the Republican team or the Democrat team and start playing for
    the legislative branch of government, because if we follow the
    process in the legislative branch of government we end up with
    better government.
        I don't think that in due deference, Mr. Lazarus, I don't
    think that we can say we can flip it. I think that is bad for
    the Republic too, where you say that since we didn't
    specifically say they couldn't spend it they can spend it. I
    think that is an error for the----
        Mr. Miller. Mr. Griffith, if I could just add one thing you
    didn't mention. Beyond the 60 votes in the Senate you've got a
    Presidential veto. So you have an Administration which could
    act illegally and then protect its illegal actions by vetoing
    correction by Congress to try to override it.
        Mr. Griffith. Well, and that is true, although I respect
    the constitutional prerogative of the President to veto a bill.
    But at least if we could get it out of the Senate we could make
    it veto it, because my position is a President won't veto
    everything you send him. If we send him 70 bills he doesn't
    like we are going to get 10 or 15 of them at least past that
    veto pen.
        And my time is almost up. Mr. Rosenberg, I would love to
    get the cites on that Teapot Dome case that you cited earlier
    because I think that is important again as a part of a
    legislative prerogative, and that is really what this hearing
    is about. It is not about trying to take down the ACA. It is
    about the legislature defending its right to determine where it
    is going to spend money and where it is not going to spend
    money.
        And unfortunately the Administration has totally
    disregarded it, and we need to be more aggressive. My time is
    up so unfortunately I can't let you respond.
        Mr. Rosenberg. In my testimony on page 5.
        Mr. Griffith. On page 5, all right, very good. And I yield
    back, Mr. Chairman.
        Mr. Murphy. The gentleman yields back. I recognize Ms.
    Clarke for 5 minutes.
        Ms. Clarke. Thank you very much, Mr. Chairman. I thank our
    expert witnesses for appearing here today. I just want to drill
    down a little bit more on some specifics with respect to the
    CSR. Our Congress designed the ACA Cost Sharing Reduction
    Program to reduce out of pocket costs for certain enrollees
    purchasing Silver plans on the exchanges. Cost sharing
    subsidies along with advance premium tax credits lower a
    beneficiary's pay for health insurance costs. Essentially these
    discounts lower the amount of money consumers must pay out of
    pocket for deductibles, coinsurance, and copayments. The
    Department of the Treasury then reimburses insurance companies
    for making these cost sharing reductions. This is the basic
    premise.
        So Mr. Lazarus, how is the mission of the Cost Sharing
    Reduction Program consistent with the broader goals of the
    Affordable Care Act?
        Mr. Lazarus. Thank you very much. The Cost Sharing
    Reduction Program is essential to the overall operational plan
    of the Affordable Care Act. It enables people who otherwise
    couldn't afford health care even with premium assistance to
    help pay their insurance premiums to get health care and
    therefore encourages them to actually buy insurance. They
    become part of a larger insurance pool. That leads to the
    stabilization of markets and it enables the markets to
    accommodate the fact that the law now forbids insurance
    companies from turning away people if they have preexisting
    conditions and so forth. So all of these components work
    together, just as the Supreme Court ruled in King v. Burwell
    and the cost sharing reduction provisions are absolutely
    integral to that. So that's how that works.
        Ms. Clarke. Thank you. Since Congress passed the Affordable
    Care Act in 2010 the number of uninsured in the United States
    has fallen by 20 million people. This is a remarkable
    achievement, and such an achievement would not have been
    possible without ensuring that all elements of the law work
    together as designed to provide a stable and accessible
    insurance marketplace.
        In his opinion in King v. Burwell, Chief Justice Roberts
    wrote, ``Congress passed the Affordable Care Act to improve
    health insurance markets, not to destroy them.'' If at all
    possible we must interpret the act in a way that is consistent
    with the former and avoid the latter.
        Mr. Lazarus, can you apply this same reasoning to the CSR
    program?
        Mr. Lazarus. Well, I would say that if you take the
    approach that Chief Justice Roberts elaborated there he was
    applying it to the premium assistance tax credits and stating
    that under that approach the law, an ambiguous provision in the
    law, should be interpreted to make them applicable in all
    states and not just in states with state run exchanges.
        I would say that the cost sharing reductions part of the
    subsidies is on exactly the same footing as the premium
    assistance tax credits and would fit into that analysis in the
    same way, and therefore the Administration's interpretation is
    the proper interpretation.
        Ms. Clarke. Very well. Mr. Chairman, we have heard today
    that the Cost Sharing Reduction Program is a critical component
    of the Affordable Care Act and it has played a very important
    role in the efforts to provide health care security for working
    Americans. To attempt to dismantle this program without
    providing any other way to ensure access to critical health
    care services to deserving Americans is frankly, I believe,
    irresponsible, and I hope we can move on from this partisan
    investigation to provide all of our constituents with the
    health care coverage that they need. And having said that Mr.
    Chairman, I yield back.
        Mr. Murphy. Thank you. Dr. Bucshon, you are recognized for
    5 minutes.
        Mr. Bucshon. Thank you. As a health care provider I just
    want to say I want every American to have access to quality,
    affordable health care, and that I think is a goal that we all
    share. But this was a bad law. It was passed in a bad way.
        I would just remind everyone the law was a Senate bill that
    did not have the chance to go to conference because it would--
    any change to the law would have resulted in its failure to
    pass Congress after a change in the makeup of the U.S. Senate.
    We all know that. And when you do those type of things you end
    up with this.
        I would also encourage everyone to look at our Better Way
    Web site, House Republicans and our proposal to replace the
    Affordable Care Act.
        Mr. Lazarus, does the ends justify the means?
        Mr. Lazarus. Do the ends justify the means?
        Mr. Bucshon. Yes.
        Mr. Lazarus. No, they don't.
        Mr. Bucshon. OK, because essentially in your testimony that
    is what you have said.
        Mr. Lazarus. No, that is not what I----
        Mr. Bucshon. It is my time.
        Mr. Lazarus. With all respect that is not what----
        Mr. Bucshon. Here is what you said. You said because of
    what will happen if the district court decision is upheld, and
    our Democratic colleagues implied the same, that it should be
    overturned even if the Constitution is violated. That is
    essentially what you said.
        Mr. Lazarus. No. That is not what I said. What I said----
        Mr. Bucshon. Then what did you say?
        Mr. Lazarus. That the Administration has a different
    interpretation of its appropriation authority here; that the
    Administration's interpretation's perfectly sensible.
        Mr. Bucshon. Can you quote me in the Constitution where
    their interpretation is, or it says in the Constitution that
    the only people that can appropriate money is the Congress. Can
    you tell me in the Constitution where it says that you can
    interpret that that the executive branch can appropriate money
    that Congress has not appropriated?
        Mr. Lazarus. The Administration's position is that Congress
    has appropriated the money. Your position is that it has not.
        Mr. Bucshon. Well, the district court disagrees with you,
    so----
        Mr. Lazarus. That's true.
        Mr. Bucshon. And the other thing is, is I want to just
    clear this up. And this could apply to any law, but in this
    case because the law's intent is to provide insurance to
    American citizens for health insurance, does it matter--the
    gist of your testimony is, is it doesn't matter what the law
    actually says because the intent of the law is to provide
    coverage.
        Mr. Lazarus. That is not true. That is not at all what I
    said.
        Mr. Bucshon. Because that is what you basically said.
        Mr. Lazarus. That's not what the Administration is arguing.
        Mr. Bucshon. And again this isn't a partisan issue. This is
    a legislative branch discussion versus an executive branch
    discussion, and it honestly in fairness has been a struggle for
    240 years. But I agree with my colleagues that have said that
    unless the legislative branch in a bipartisan way reasserts its
    authority the future of the Constitution and this country is at
    risk.
        Mr. Lazarus. Well, I certainly agree that if you believe
    that the Administration's interpretation of its appropriations
    authority with respect to this program is incorrect, you should
    attempt to pass a law----
        Mr. Bucshon. OK, the other thing----
        Mr. Lazarus [continuing]. Or otherwise use your ample
    powers to change that result.
        Mr. Bucshon. Now let me just say this. You are a partisan
    in support of the Administration and you know as well as I do,
    and you can say that because you know the President would just
    veto anything related to the Affordable Care Act and we don't
    have the override vote. So it is pretty easy to say that,
    right? But I would like to know what you were saying back when
    Republicans had 60 votes in the Senate, the House, and the
    White House. I think your view would be a little different.
        But the other thing I want to get at in this is does it
    matter if a law makes sense to make it enforceable? I mean
    obviously the constitutional provision of appropriations
    doesn't make sense to you in this case. But does that matter?
    Does it mean that we can't enforce it because it doesn't make
    sense to you?
        Mr. Lazarus. The constitutional provision about----
        Mr. Bucshon. You said in your testimony--well, that doesn't
    make any sense----
        Mr. Lazarus. It makes perfect sense.
        Mr. Bucshon [continuing]. Because people are going to lose
    their health insurance if we don't this. That is implying the
    end justifies the means. It implies that the Constitution
    doesn't matter. It implies that it doesn't matter why we
    opposed the Affordable Care Act or that in your interpretation
    that just doesn't make any sense. None of that matters, right?
    What matters is what the Constitution says about appropriating
    money.
        And the district court at this point, I would argue that I
    don't think it is going to be overturned because historically
    Congress has been found to have standing in this, to sue the
    Administration based on our congressional appropriations and I
    would hold that we are going to win that. And I would also say
    that people on both sides of the aisle in the legislative
    branch should continue to argue that this is in the
    Constitution and it is our sole authority to appropriate money.
    It doesn't matter what it is for. It doesn't matter what law it
    pertains to. I yield back.
        Mr. Murphy. I just want to clarify that the Administration
    in 2014 asked for an appropriations for this. If what you are
    saying is true they didn't have to, that belies what they did.
    So in fact that is true. The second thing is the Department of
    the Treasury said there is currently no appropriation to
    Treasury or to anyone else for the purpose of cost sharing
    payments. I just want to say that is important, so I just
    wanted to clarify that for Dr. Bucshon.
        Ms. DeGette. Mr. Chairman, if you are going to do that you
    should let him respond to your statement.
        Mr. Murphy. I will let him respond.
        Mr. Lazarus. Yes. I'm perfectly aware that the
    Administration did request an appropriation, but that has
    often, or at least it has sometimes happened that an
    Administration will request congressional action in an area
    where it's unclear whether or not the executive branch has
    authority to act on its own. It happens all the time. And the
    only question here is whether in fact the Administration's
    interpretation of its authority is correct or is not correct.
        Mr. Murphy. Well, along those lines, if you can get us
    examples of that and show me where, show this committee where
    in the Affordable Care Act it gives that. You just said it was
    unclear, but also the Treasury said it was not. Treasury said
    there is currently no appropriation of Treasury or anyone else
    for the purpose of the cost sharing payments.
        So you are saying it was unclear to the Administration.
    They asked for the money. We are just saying for this committee
    if you could show us the lines in the Affordable Care Act what
    gave the automatic preauthorization for the future of this and
    also--or the appropriations--and if you could respond to the
    statement of the Treasury this committee would appreciate that.
        Mr. Lazarus. OK, just two points. The first point is it's
    hardly surprising that there was disagreement within the
    Administration over this issue. That often happens. But what
    matters now is whether or not the position that the
    Administration has finally and with careful attention taken
    whether that position is correct or not. Now the position is--
    --
        Mr. Murphy. Wait, wait. I just want to make sure I
    understand. They took a position of whether or not that is
    correct. That is what you said.
        Mr. Lazarus. Yes, whether it's correct. I mean----
        Mr. Murphy. Well, that is what this committee is trying to
    find out, sir. You don't get to take a position and then
    retrospect----
        Mr. Lazarus. Well, you asked me----
        Mr. Murphy. OK.
        Mr. Lazarus [continuing]. Where in the Affordable Care Act
    does the authority to spend this money come from. The
    Administration's interpretation is that within the integrated
    program that includes both the cost sharing reductions and the
    premium assistance tax credits, within this integrated program
    both portions of the advance payments to insurers to cover
    those two halves of the program are, quote, refunds due from
    Section 36(b) within the meaning of 31 U.S.C. Section 1324
    because both are compensatory payments to the insurers made
    available through the application of Section 36(b) which sets
    forth conditions necessary to qualify for both of those
    subsidies.
        But that's the Administration's textual interpretation and
    I think that it is a perfectly reasonable interpretation. You
    may disagree, but that's----
        Mr. Murphy. I need to let other members continue on. Mr.
    Tonko, you are recognized for 5 minutes.
        Mr. Tonko. Thank you, Mr. Chair. I do thank our witnesses
    for being here today, but I regret that we are in a sense
    wasting your time to reexamine an issue that has been examined
    to death. This issue fundamentally comes down to a difference
    of opinion about what was intended by the Affordable Care Act
    with regard to the CSR program.
        Yesterday the majority released a 150-page report with the
    Ways and Means Committee documenting in great detail their
    opinion of the legality of an appropriation for the CSR
    Program. So Mr. Lazarus, in your opinion, is it responsible to
    conclude that the ACA provides a permanent appropriation for
    the CSR Program?
        Mr. Lazarus. I believe that it's correct. I understand that
    there's an argument, a good argument for the opposite point of
    view and I respect that. But I believe that it is not only
    responsible but that it's legally correct.
        Mr. Tonko. And my Republican colleagues also claim that the
    Administration has ``overreached in executing the CSR provision
    of the Affordable Care Act.'' Mr. Lazarus, would you agree with
    that assessment?
        Mr. Lazarus. I not only would not agree, but I think that
    the constant din of charges coming from the President's
    political opponents that he's overreaching, violating laws is a
    very unfortunate distortion of the truth.
        We must remember that prior to King v. Burwell last year we
    heard the same litany of charges that funding the premium
    assistance tax credits in federal exchange states was a gross
    violation of the law, and it turns out the Supreme Court didn't
    agree with that at all but we're still hearing it and we're
    hearing it over and over again. We heard it with respect to
    various delays in the effective dates of parts of the
    Affordable Care Act as the Administration implemented it.
        But the truth is, when Part D of Medicare, the prescription
    drug benefit which was a President Bush program and it turns
    out a very good program--I can personally testify to that--when
    it was implemented there also were delays because it's very
    complicated implementing these very complicated laws. Secretary
    Leavitt, who was the secretary of HHS at the time said that the
    Obama administration's delays were ``wise.'' So I think that
    this, these charges of overreach reflect a political strategy
    of demonizing this Administration rather than the facts.
        Mr. Tonko. I thank you. In just a few minutes we have
    concluded that a difference of opinion exists, yet it is
    reasonable to believe that the executive branch acted
    appropriately in executing the law. Now my Republican
    colleagues have been examining this issue for 2 years without
    reaching that conclusion.
        Today's hearing follows the filing of a lawsuit in federal
    court questioning the constitutionality of the CSR program. It
    follows 15 letters from the majority of this committee and from
    the Ways and Means Committee to Administration officials. It
    follows six subpoenas for documents to three different federal
    agencies. It follows interviews with 13 current and former
    government officials from four federal agencies, and it follows
    a hearing yesterday by the Ways and Means Committee with four
    federal witnesses.
        So my question is, Congress clearly has a wealth of tools
    at its disposal, Mr. Lazarus, has Congress successfully used
    its legislative authority to review or to reverse or defund the
    Administration's implementation of the Cost Sharing Reduction
    Program?
        Mr. Lazarus. Well, I think that the fact that Congress, the
    Republicans have taken no steps to pass such legislation is an
    eloquent testimony to the fact that they're failing to use
    those weapons and instead running to court as a kind of
    diversionary tactic.
        Mr. Tonko. I thank you for that assessment. And I would
    just state enough is enough. After 64 votes on the floor,
    dozens of hearings, and countless letters to the
    Administration, it is clear that there is no purpose to this
    aimless oversight. I call on my Republican colleagues to move
    on to other important topics that deserve our time and
    attention and certainly respond much more appropriately to the
    general public that we serve. With that I yield back.
        Mr. Murphy. The gentleman yields back. I now recognize Mr.
    Mullin for 5 minutes.
        Mr. Mullin. Thank you, Mr. Chairman. The Administration's
    position on the source of funding only changed after the
    sequestration report; is that correct, Mr. Lazarus?
        Mr. Lazarus. I believe that it is correct.
        Mr. Mullin. OK. Mr. Miller, would you mind explaining that
    a little bit more for us?
        Mr. Miller. Well, the timeline was first they requested the
    appropriation, then they also filed some information that
    basically confirmed that this would be subject to
    sequestration. They reversed direction on that because it would
    be subject to a sequestration, it was not a mandatory
    appropriation which was beyond just that single year and that
    would have reduced the cost sharing reduction payments.
        Mr. Mullin. And the insurance was only going to get 92.8
    cents on a dollar?
        Mr. Miller. It was an across the board haircut for those
    funds that are subject to sequestration.
        Mr. Mullin. I think the position that we are trying to take
    is that the timing on this can't be--what is the word I am
    looking for here? The timing on this just seems a little odd
    for it, coincidental. There you go, thank you. The Oklahoma
    accent wasn't allowing it to be spit out. But it just seems odd
    to us, and the justification that is coming out behind this I
    have a hard time to believe it.
        Mr. Lazarus, I appreciate your opinion on this but it
    sounds like you are trying to justify the actions. And all we
    are trying to do is not keep poking the eye in this
    Administration even though we do that quite often, but who is
    hurting here? It is the insurers. It is the people that this
    was supposed to protect. I mean, in Oklahoma alone the
    exchanges went up 49 percent this year alone. Insurance costs
    have skyrocketed through the roof. The same people that we were
    supposed to take by this law it is hurting. Don't take our word
    for it. Go out and see how much insurance is costing today
    versus what it cost in 2010, in 6 years.
        Something is wrong here, and that is all we are trying to
    do is fix it. We all have constituents. We all, we don't want
    anybody to go out there without insurance, but yet there aready
    is and with the cost rising the way that it is, why? It is just
    one piece of it. It is costing the taxpayers some dollars. We
    are the one holding the bucketful of dollars I guess, but yet
    this is just one piece of it.
        And so Mr. Lazarus, I am not really trying to come after
    you on this one. I am just disappointed in hearing you trying
    to justify the Administration's actions and think for some
    reason it is political. It is not political at all.
        Mr. Miller, would you like to respond a little bit more to
    what Mr. Lazarus was saying a while ago?
        Mr. Miller. Well, I could choose a lot of territory. Let me
    raise one that hasn't been talked about. It's kind of the
    arguments we try to have it both ways. We even hold this
    argument in the alternative in court. We've heard that people
    are going to be suffering because they won't be getting any
    cost sharing reduction subsidies. Well, actually we know that
    it will still be required to do it, but even if that was the
    case then the trying to have it both ways argument is to say,
    well, the insurance will just raise the premiums and the tax
    credits will be even larger for the premiums so they'll all be
    covered anyway. It's one of these migrating arguments where no
    matter what you do you end up in the same place.
        Mr. Mullin. Mr. Rosenberg, you are our congressional
    oversight expert, I mean, literally wrote the book on this. I
    know you have been asked what we could do. I think your
    response was pass legislation. We tried that. It doesn't work.
    We have this little guy that keeps holding us up.
        What else could we do here in Congress to help hold this
    Administration accountable to keep things that we feel is
    completely outside their boundaries? Everybody says we control
    the purse strings, so in your opinion as the expert what is our
    next step?
        Mr. Rosenberg. Well, you've got to shore up your abilities
    to know what's going on, to know how decisions are made, who
    makes them. And what's clear in your investigation and it's
    been clear for the last 5 or 6 years in other investigations
    that the doors have been closed on you. Either slow walking
    getting information, that gives you the ability----
        Mr. Mullin. Deliberately slow walking.
        Mr. Miller. Deliberately slow walking and absolute refusals
    and when subpoenas are issued they are ignored. And when you
    try to go to what traditionally has been done for 200 years,
    either go for a criminal contempt to show that you mean what
    you say and we need what you're withholding from it, it's now
    impossible to do because what they're telling you is, well, if
    you want to do that go to court for a civil action.
        And what that does is put everything on hold and we know
    that it takes up time, and time in good oversight is a
    necessity. It's timely getting the information so that it can
    be acted on so it would be effective is there.
        Mr. Murphy. Thank you. The gentleman's time is expired.
        Mr. Mullin. I am sorry. My time is expired. But thank you,
    Mr. Chairman, for allowing him to try to explain that.
        Mr. Murphy. Thank you very much. Ms. Schakowsky, you are
    recognized for 5 minutes.
        Ms. Schakowsky. So I really apologize for missing. There
    are all these conflicting things. But I appreciate all of you
    being here and I do have a couple of questions for Mr. Lazarus.
        But yesterday the Ways and Means Committee held a hearing
    on this very same topic, Cost Sharing Reductions. In front of
    representatives from HHS and Treasury and IRS and OMB, a member
    of that committee repeatedly declared, ``this is not about poor
    people; this is about an insurance subsidy.'' I think this is
    simply disingenuous.
        Just like the advance premium tax credit, the cost sharing
    reductions are a direct benefit to consumers. They simply flow
    through the insurance companies. The average consumer
    benefiting from these cost sharing reductions receives
    approximately $500 per year, and suggesting that it is an
    insurance subsidy, I think, is a cynical and misleading attempt
    to distract people from the reality that House Republicans are
    trying to take health care benefits away from low and middle
    income families.
        Mr. Bucshon. Will the gentlelady yield?
        Ms. Schakowsky. No.
        Mr. Bucshon. We are not.
        Ms. Schakowsky. This tells us all we need to know about the
    Republican Party's priorities. This investigation is not a good
    faith effort to improve the Affordable Care Act and ensure that
    all of our constituents receive quality, affordable health
    care. This is just a partisan witch hunt.
        Mr. Lazarus, the Affordable Care Act has now faced its fair
    share of challenges in the court. Does this lawsuit do anything
    to improve the quality of health care for the American people?
        Mr. Lazarus. Well, I think that the lawsuit is a very
    inappropriate lawsuit. I think that it's a political food fight
    between the executive branch and part of the Congress that
    doesn't belong in court. And I think that ultimately on appeal
    that that's the determination that the courts are going to
    make.
        Ms. Schakowsky. This law was passed to make health care
    about people, not about insurance companies. The Affordable
    Care Act has provided 20 million Americans with affordable
    health insurance and offered millions more protections against
    discrimination for preexisting conditions, age, and gender. Of
    the approximately 11.1 million consumers who had effectuated
    enrollment at the end of March 2016, 57 percent or nearly 6.4
    million individuals were benefiting from CSRs to make coverage
    more affordable.
        Mr. Lazarus, what does the text of the law suggest about
    Congress' intent when the Affordable Care Act was passed? Is
    the way the Administration has administered the cost sharing
    reductions provision consistent with the broader reforms to the
    individual insurance marketplace and the American health care
    system?
        Mr. Lazarus. Well, yes. In brief, the cost sharing
    subsidies are an absolutely essential component to the other
    mechanisms that the Affordable Care Act deploys in order to
    further its goal of getting as close as possible to universal
    insurance. And the statute is replete with references to those
    purposes with the specific components of the plan that are
    necessary to achieve them and it's replete with specific
    references to the importance of the cost sharing reductions to
    achieving those purposes.
        Ms. Schakowsky. Thank you for that. And it is clear that in
    passing the law Congress' intent was to make it easier to
    access quality, affordable health coverage, and I believe the
    Republican's partisan investigation only takes us further from
    that goal. The comments made yesterday were misleading and they
    are disrespectful to the American people who are benefiting
    from the coverage provided through the law.
        Let me just say too, over the years since the passage of
    the Affordable Care Act, which was a very big and I think
    powerful and important law, we have attempted to sit down with
    the Republicans to come up with the kinds of fixes that on a
    bipartisan basis we could do. What I have seen is that all the
    bad has been embraced, and there are so many times when I have
    felt like, give me the name of that constituent and we will
    take care of it in our constituent service office to try and
    make it work.
        I think we need to be serious about working together, stop
    these frivolous lawsuits, and get down to making this law the
    great law that it could be. Thank you. I yield back.
        Mr. Murphy. The gentlelady yields back. Now Mr. Collins is
    recognized for 5 minutes.
        Mr. Collins. Thank you, Mr. Chairman. I am hearing a lot of
    passion by the Democrats on the other side about why we are
    holding what they call a partisan hearing. I guess I have three
    children and I have three grandchildren with a fourth on the
    way. That is why I am here. That is why I think this hearing
    and others like it are important. It is about our children. It
    is about our grandchildren and the fact that every dollar of
    deficit that we spend today are dollars that my children, the
    other children in America, and the grandchildren are going to
    have to repay.
        We are not living within our means. I go back to that every
    single time I cast a vote. Seems as though the Democrats,
    whether it is Zika funding or anything else, their solution is
    always the same. Borrow more money that my children and
    grandchildren have to pay back. You talk about disrespectful,
    now that is disrespectful. If we can't pay our way now, what
    are we doing in borrowing on the backs of our children and
    grandchildren? It is just fundamentally immoral.
        So here we are, Affordable Care Act. Talk about bait and
    switch. Talk about false advertising. America, here is this
    great plan and here is what it is going to cost. Well, it is
    costing billions if not trillions more than it was supposed to
    cost.
        And so, when we get into a hearing like this where the
    Administration has inappropriately put $7 billion--and I would
    like to remind the Democrats on the other side where that would
    go. That would fully fund Zika and rebuild 5,000 bridges in
    America that have fallen apart at a million dollar a bridge.
    Seven billion dollars would fully fund Zika. Seven billion
    dollars on top of that would rebuild 5,000 bridges in America.
    That is why this hearing matters, to remind the Americans that
    dollars matter.
        So Mr. Miller, here is kind of a rhetorical question for
    you. If the $7 billion hadn't flowed into the insurance
    companies in what we would say was beyond the constitutional
    authority of the Administration, what would have happened to
    premiums across the ACA?
        Mr. Miller. There are a lot of moving parts on that front.
    If you follow one line of argument that the insurers would
    still be required to provide these subsidies those premiums
    would be higher. But you've got a lot of moving parts but not
    at the same time.
        Mr. Collins. Well, but if we stop there, because the CSR is
    part of the ACA so they would have to continue to provide them
    and if there is not funding you could argue one way or the
    other. Premiums go up and maybe the federal government then
    would have to----
        Mr. Miller. The broader answer is by making Congress
    responsible as it should be for deciding how to sort that out
    there would be a lot of cross pressures.
        Mr. Collins. Sure.
        Mr. Miller. And we don't know how Congress might decide to
    subsidize low income individuals differently.
        Mr. Collins. And in those cost pressures we may decide to
    change some things. We may decide to prioritize our children's
    future. We may decide to prioritize our grandchildren's future.
    We may decide to prioritize Zika funding. We may decide to
    prioritize infrastructure repairs.
        But this Administration, in what we would say is an
    unconstitutional overreach, decided they would set the
    priorities, and the President said he had the phone and a pen.
    I don't know if he ever calls anybody but he sure uses the pen
    all the time. And so I think that is where this oversight
    hearing is absolutely proper.
        And I will just bring up another point, and maybe this is a
    nuance but we should do it anyway. There is something called
    the Antideficiency Act and under the Antideficiency Act
    Congress can sue an individual, an individual who
    misappropriates government funding without an appropriation
    request. It has got to be an individual. And this
    Administration has continued to refuse to put anyone's name on
    the line that was involved in what we would say was an illegal
    decision making, and would just ask you, sir, if that is a
    proper interpretation. If we don't have a name we can't sue
    someone under the Antideficiency Act that misappropriated
    money.
        Mr. Miller. That's correct. Because of the way it applies
    you have to have an accountable official, and that is a little
    bit of a mysterious effort right now.
        Mr. Collins. And we have been attempting to get some names.
    We can't get names, so I guess we will hold hearings. We will
    invite the secretary in. She refuses to come in. I guess that
    is her right. I don't know, maybe we can get her in here
    another way. But those are those little nuances that do matter.
    I believe they matter quite a lot.
        But I will go back and just say this is about my children
    and grandchildren. It is about respecting the taxpayers. That
    is why this hearing is occurring. We respect the taxpayers of
    the United States of America and future generations who will be
    robbed of the opportunity to live the American dream that we
    grew up in because they are going to be so saddled with debt
    the debate will become the debate we are seeing today in
    Venezuela, in Greece, and Puerto Rico. And I yield back the
    balance of my time.
        Mr. Murphy. The gentleman yields back. I recognize Mr.
    Flores for 5 minutes.
        Mr. Flores. Well, thank you, Mr. Chairman. I want to thank
    the panel for joining us today. I want to tell the truth to
    offset some of the claims we have heard from the other side
    about how great the Affordable Care Act has been. The architect
    of the plan has said publicly that if they could fool Americans
    into this that they would eventually like it. Well, Americans
    still don't like it.
        Americans were promised they could keep their doctor. That
    turned out to be a lie. They were promised they could keep
    their insurance plan, another lie. They were promised that
    premiums would go lower, a third lie. And it goes on and on and
    on. And I want to remind everybody what the Constitution simply
    says, and it says that--well, let me come back to that in a
    minute.
        Also one of the claims from one of the folks on the other
    side was that this was a frivolous lawsuit. Mr. Lazarus
    admitted the validity of the lawsuit. The courts have upheld
    the validity of the lawsuit. If it was a frivolous lawsuit they
    would have thrown it out originally, so just so that we have a
    clear context for where we are going.
        Now Article 1, Section 9, paragraph 7 says no money shall
    be drawn from the Treasury but in consequence of appropriations
    made by law. It doesn't say if the Administration deems it to
    be that way or if it reads the law a particular way. So my
    questions are this, we have had unprecedented levels of
    obstruction from this Administration and that indicates that
    they have got something to hide. If they didn't have anything
    to hide they would send us the documents. They would send us
    every document we ask for. They would send the witnesses. They
    wouldn't tamper with the witnesses. They would let the
    witnesses answer the questions. If they didn't have anything to
    hide they would do that.
        But nonetheless, even though they have attempted to cover
    this up and then cover up their illegal actions, we have
    learned a lot about the Administration's decision to
    unconstitutionally fund this program and we are going to
    continue to pursue the facts.
        We have another problem here though. As Congress continues
    to carry out its constitutional obligation to conduct
    congressional oversight of the executive branch, which is a
    necessary part, a constitutional part of our checks and
    balances, the Administration sinks to new depths to withhold
    information from Congress and this is unacceptable.
        So Mr. Rosenberg, I have a couple of questions. There have
    been executive claims of confidential--or the Administration
    has sort of tried to claim privileges. One is called
    confidentiality claims and the other one is called heightened
    sensitivities. Are you aware of any such privilege that the
    executive branch has to withhold information?
        Mr. Rosenberg. Not with regard to that no.
        Mr. Flores. The Administration has clearly obstructed
    congressional investigation here. Do you agree with that Mr.
    Rosenberg?
        Mr. Rosenberg. I'm sorry?
        Mr. Flores. The Administration has clearly obstructed
    Congress trying to pursue this matter. Do you agree with that?
        Mr. Rosenberg. Yes. From what I've been reading and what I
    know, yes.
        Mr. Flores. One of the things, the direction that Mr.
    Mullin was headed is that he was asking what could Congress be
    doing to ensure that it has the access it needs to conduct
    oversight to help Congress pass legislation. What additional
    steps do we need to take?
        Mr. Rosenberg. You need to shore up your ability to enforce
    your subpoenas.
        Mr. Flores. OK.
        Mr. Rosenberg. And there are two ways to do it.
    Traditionally you had a criminal contempt process, but the
    Administration has come out with a dicta that says we can block
    that. That we don't have to go to court to do it and you can't
    because it's unconstitutional. It interferes with the
    Presidential prerogatives. You used to have and still have
    another course. It's called inherent contempt where you can
    bring a recalcitrant officer before the bar of the House,
    question him and hold him in contempt and even jail him at that
    particular point. That's been deemed unseemly and also
    unconstitutional by the Justice Department.
        What you need to do is do two things. One, you have to make
    the inherent contempt process seemly. That is, don't make it
    appear draconian. That you go out, you arrest, detain, try, and
    then can put them in jail for it. What you want is to get
    information and you need leverage to do it. If you bring
    someone in, have an adjudicatory proceeding in which the facts
    about the obstruction are looked at and determined by a
    committee with a recommendation that there be a trial before
    the House, have the person brought in, testify, and as a result
    there would be a fine. Not imprisonment but a fine that went
    against the salary of the particular person. That would have an
    effect. After it was upheld--it will be challenged of course.
    After it's upheld, a finding of inherent contempt would trigger
    a point of order with regard to salaries. And that will get out
    and that will bring attention.
        Mr. Murphy. Thank you.
        Mr. Rosenberg. Everything you can do----
        Mr. Murphy. Sir, we are way out of time and we have votes
    coming up in a couple of minutes, if you would be so kind as to
    submit other recommendations for the record.
        In fact, I would like to thank all the witnesses that
    participated at today's hearing and remind members they have 10
    business days to submit questions for the record. And ask the
    witness----
        Ms. DeGette. Mr. Chairman, can I----
        Mr. Murphy. If you would like to make a----
        Ms. DeGette. I just want to say one thing briefly, which is
    I really don't question the motives of the majority here. I
    think it is in the congressional prerogative to file a lawsuit
    if Congress believes that the Administration has overstepped
    its constitutional bounds. But, I do think based on what Mr.
    Lazarus has said today and what the Administration filed in
    their brief there may be an honest disagreement here. We
    believe that the Administration had the constitutional ability
    to establish----
        Mr. Murphy. Would the gentlelady yield?
        Ms. DeGette [continuing]. No, I won't--to establish the CSR
    and also to implement it. But be that as it may, I feel what
    the Democrats are trying to say here today is that we are
    trying to say that even if there is a general disagreement on
    the constitutional authority this problem could be easily
    resolved by Congress by passing legislation to clarify it. And
    the thing we are concerned about is that the----
        Mr. Bucshon. Mr. Chairman, can I get a----
        Ms. DeGette. If this CSR fund----
        Mr. Bucshon. Is this out of order?
        Mr. Murphy. Yes, but----
        Ms. DeGette. If this CSR fund is struck down by the court
    then 6.4 million people will lose their subsidies.
        Mr. Bucshon. Not true. That is not true.
        Ms. DeGette. Mr. Chairman. And so the result is we really
    hope that what we are trying to say is there has been no effort
    to fix this, and irrespective of what happens in the court
    case, we need to work together to try to make sure these people
    can get affordable insurance. That is all I am trying to say
    and I yield back.
        Mr. Murphy. Just to the other members, it has been our
    tradition in the subcommittee that I give the ranking member
    and myself just a wrap-up moment. And I would say I disagree. I
    would ask members to read the joint congressional investigative
    report in the source of funding of the ACA's cost sharing
    program where we outline a lot of these things.
        This committee is dedicated to try to find some solutions
    for health care. We are not abandoning those who are in need.
    There is a constitutional question here. I fundamentally
    disagree with a lot of what Mr. Lazarus says that good
    intentions don't automatically mean good results. And we need
    to pull together on this. I do agree we need to find some
    solutions here. None of us want to leave people who are of low
    income out on the lurch with regard to health care, but simply
    declaring that because I intend it we can make it so, is not a
    constitutional answer and we will continue to uphold that.
        I thank all the members for this. And I would suggest, if
    other members have other questions to submit to this panel,
    please get them to us.
        Mr. Flores. Mr. Chairman, I would suggest that if the
    Administration would provide the documents it might make this a
    little easier.
        Mr. Murphy. Yes.
        Mr. Flores. They have covered up.
        Mr. Murphy. I want to say that we have asked for a lot of
    those documents, and we are going to continue to do that. But
    with all this, I now adjourn this subcommittee.
        [Whereupon, at 11:29 a.m., the subcommittee was adjourned.]
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