[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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