[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



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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:]
    
    
  
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    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:]
    
    

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    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:]
    
    
  
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    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:]
    
    

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    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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