The Obama administration knowingly spent billions in health care dollars without proper congressional authority and went to “great lengths” to impede congressional scrutiny of the money, Republicans on two major House committees said in a report that will be made public on Thursday.
An extensive investigation by the Ways and Means and the Energy and Commerce Committees concluded that the administration plowed ahead with funding for a consumer cost-reduction program that was central to the new health insurance law even though Congress did not provide money for it.
“This action is a clear constitutional violation of the most fundamental tenet of appropriations law,” said the report, which is to be the subject of hearings on Thursday and Friday on Capitol Hill. It notes that “nothing” in the Affordable Care Act allocates money for the program that has received about $7 billion so far.
The funding has become a leading Republican exhibit of their argument that President Obama abused his authority to circumvent congressional opposition to his agenda.
In May, a Federal District Court judge, ruling in a case brought by House Republicans, found that the administration funneled the money to insurance companies without constitutional authority, and the judge blocked further spending. But the court order was stayed pending an appeal, and the administration on Wednesday filed its notice to challenge the initial decision just as the House prepared to bring new public attention to the dispute.
White House officials and congressional Democrats have derided the Republican focus on what is formally known as the cost-sharing reduction program as just another attempt to use the courts to undo or undermine thehealth care law. They say that the law provides permanent authority for the spending and that the dispute is a matter of differing legislative interpretations. Top administration officials are expected to testify again Thursday that they “faithfully implemented” the health care law.
The House report, based on an investigation that began in February 2015, challenges that assertion. It provides the most detail yet on the administration’s evolution on funding for a program created to pay insurers to reduce some out-of-pocket health costs for eligible consumers under the new health law. But it does not offer recommendations on any immediate actions that could be taken against the administration.
The report says that in early 2010, just months after the measure became law, the administration began exploring ways to fund the cost-sharing program along with a companion program for tax credits to offset premium costs. Both sides agree that the tax credit program was appropriately funded in the health care law.
The Republican report says the administration’s treatment of the tax credits as it began setting up a new payment system validates the Republican criticism of the cost-sharing subsidies. The report notes that while the authority for the tax credit was undisputed, the administration itself could identify no funds available for the cost-sharing element.
A previously undisclosed 2012 Treasury Department memorandum included in the report stated “there is currently no appropriation to Treasury or to anyone else, for purposes of the cost-sharing payments to be made.” It adds that the eventual basis for making them “can be determined only in connection with whatever statute ultimately appropriates funds for the cost-sharing program.”
Republican investigators say the view that even the administration believed it needed to find new money was further bolstered by the administration’s decision in April 2013 to seek a nearly $4 billion annual appropriation for the cost-sharing program in its budget.
That request, according to the House report, was later quietly withdrawn and the Senate spending measure ultimately made clear that it had not funded the cost sharing program.
The House report seeks to build a record showing the administration knew it needed to win an appropriation and then changed course rather than struggle with a resistant Congress.
Along with the new Treasury memo and formal budget request, the report cites reservations about the spending raised by senior Internal Revenue Service officials as well as the involvement of cabinet-level officials such as the former Attorney General Eric H. Holder Jr.
“Our report confirms that decisions about the source of funding were made by cabinet members like former Attorney General Holder — the chief legal officer for the United States at the time,” said a joint statement issued by Representatives Kevin Brady of Texas and Fred Upton of Michigan, Republican chairmen of the Ways and Means and Energy and Commerce Committees respectively.
The report suggests that the administration ignored the Constitution in order to eliminate a potential financial threat to the stability of the new health care law.
“The Patient Protection and Affordable Care Act did not — and still does not — provide funding for the cost-sharing reduction program,” it says. “The administration knew that. Internal administration memoranda acknowledged that fact. Actions taken by the administration in 2012 and 2013 demonstrated that fact.”
The investigators say many questions about the money remain unanswered because of a concerted administration effort to thwart the inquiry by citing privilege exceptions that did not exist, redacting and withholding documents, ordering witnesses not to answer questions, not delivering subpoenas to witnesses, and other measures.
At the initial Ways and Means Committee hearing on Thursday, top administration officials are expected to be pressed on the report’s findings, while a second hearing Friday by the Energy and Commerce Committee will explore the ramifications of the dispute with a panel of outside experts.