Republican Ways and Means RSS Articles

ICYMI: Some unions now angry about health care overhaul

Fri, 24 May 2013 04:00:00 GMT

WASHINGTON (AP) — When President Barack Obama pushed his health care overhaul plan through Congress, he counted labor unions among his strongest supporters.

But some unions leaders have grown frustrated and angry about what they say are unexpected consequences of the new law — problems that they say could jeopardize the health benefits offered to millions of their members.

The issue could create a political headache next year for Democrats facing re-election if disgruntled union members believe the Obama administration and Congress aren't working to fix the problem.

"It makes an untruth out of what the president said, that if you like your insurance, you could keep it," said Joe Hansen, president of the United Food and Commercial Workers International Union. "That is not going to be true for millions of workers now."

The problem lies in the unique multiemployer health plans that cover unionized workers in retail, construction, transportation and other industries with seasonal or temporary employment. Known as Taft-Hartley plans, they are jointly administered by unions and smaller employers that pool resources to offer more than 20 million workers and family members continuous coverage, even during times of unemployment.

The union plans were already more costly to run than traditional single-employer health plans. The Affordable Care Act has added to that cost — for the unions' and other plans — by requiring health plans to cover dependents up to age 26, eliminate annual or lifetime coverage limits and extend coverage to people with pre-existing conditions.

"We're concerned that employers will be increasingly tempted to drop coverage through our plans and let our members fend for themselves on the health exchanges," said David Treanor, director of health care initiatives at the Operating Engineers union.

Workers seeking coverage in the state-based marketplaces, known as exchanges, can qualify for subsidies, determined by a sliding scale based on income. By contrast, the new law does not allow workers in the union plans to receive similar subsidies.

Bob Laszewski, a health care industry consultant, said the real fear among unions is that "a lot of these labor contracts are very expensive and now employers are going to have an alternative to very expensive labor health benefits."

"If the workers can get benefits that are as good through Obamacare in the exchanges, then why do you need the union?" Laszewski said. "In my mind, what the unions are fearing is that workers for the first time can get very good health benefits for a subsidized cost someplace other than the employer."

However, Laszewski said it was unlikely employers would drop the union plans immediately because they are subject to ongoing collective bargaining agreements.

Labor unions have been among the president's closest allies, spending millions of dollars to help him win re-election and help Democrats keep their majority in the Senate. The wrangling over health care comes as unions have continued to see steady declines in membership and attacks on public employee unions in state legislatures around the country. The Obama administration walks a fine line between defending the president's signature legislative achievement and not angering a powerful constituency as it looks ahead to the 2014 elections.

Union officials have been working with the administration for more than a year to try to get a regulatory fix that would allow low-income workers in their plans to receive subsidies. But after months of negotiations, labor leaders say they have been told it won't happen.

"It's not favoritism. We want to be treated fairly," said Hansen, whose union has about 800,000 of its 1.3 million members covered under Taft-Hartley policies. "We would expect more help from this administration."

Sabrina Siddiqui, a Treasury Department spokeswoman, declined to discuss the specifics of any negotiations between the administration and union officials. But she said the law helps bring down costs and improve quality of care.

Katie Mahoney, executive director of health policy at the U.S. Chamber of Commerce, said employers were concerned about possible increases in health care costs and would do what was needed to keep their businesses running and retain worker talent. The Chamber has not taken a position on the union concerns, but Mahoney said it was highly unlikely that the administration would consider subsidies for workers in the union plans.

"They are not going to offset the expense of added mandates under the health care law, which employers and unions are going to pay for," Mahoney said.

Unions say their health care plans in many cases offer better coverage with broader doctors' networks and lower premiums than what would be available in the exchanges, particularly when it comes to part-time workers.

Unions backed the health care legislation because they expected it to curb inflation in health coverage, reduce the number of uninsured Americans and level the playing field for companies that were already providing quality benefits. While unions knew there were lingering issues after the law passed, they believed those could be fixed through rulemaking.

But last month, the union representing roofers issued a statement calling for "repeal or complete reform" of the health care law. Kinsey Robinson, president of the United Union of Roofers, Waterproofers and Allied Workers, complained that labor's concerns over the health care law "have not been addressed, or in some instances, totally ignored."

"In the rush to achieve its passage, many of the act's provisions were not fully conceived, resulting in unintended consequences that are inconsistent with the promise that those who were satisfied with their employer-sponsored coverage could keep it," Robinson said.

Harold Schaitberger, president of the International Association of Firefighters, said unions have been forceful in seeking solutions from the Obama administration, but none have been forthcoming. While Congress could address the problem by amending the health care law, Schaitberger said Senate Democrats told union leaders earlier this month that any new legislation was highly unlikely.

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Johnson Opening Statement: Hearing on the President’s and Other Bipartisan Entitlement Reform Proposals

Thu, 23 May 2013 04:00:00 GMT

Good morning and welcome to the third hearing in the Committee’s series on the President’s and other bipartisan entitlement reform proposals.

Workers have worked hard, played by the rules, and earned the right to a secure retirement that no one can take away.

Yet unless Congress acts to protect and preserve Social Security, beginning in 2033, Social Security will be unable to pay full benefits, according to the Board of Trustees.

Here’s why Social Security has to be fixed. Under Social Security, workers’ payroll taxes aren’t saved in workers’ own retirement accounts. Instead, their taxes are immediately used to pay benefits for today’s retirees.

This kind of system works when there are many people paying in and very few collecting benefits. In the 1950s, for instance, there were 16 workers paying in for each retiree collecting benefits.

But today, families are having fewer children and people are living longer. As a result, even though the number of workers is growing, the number of retirees is growing much faster.

Today, there are just over three workers supporting each retiree. In the future, there will be less than two workers per retiree.

Back in 2008 the first Baby Boomers started collecting retirement benefits. Costs rose quickly. Two years later, in 2010 Social Security began running permanent cash flow deficits, reaching $1.3 trillion over the next 10 years.

These deficits will grow very large, very fast.

When today’s 47-year-old workers reach their full retirement age in 2033, they and everyone else already receiving benefits face a 25 percent benefit cut unless Congress does its job.

Fixing Social Security is a serious challenge today; if we wait, it will become a crisis. The sooner we act, the sooner changes can be phased in gradually over a number of years. If we fail to act, future generations will be faced with changes that are sudden and even larger.

Today our witnesses include representatives from two bipartisan groups who have taken a hard look at Social Security and have come up with ways to fix it. This wasn’t easy work but they know that we can’t afford to wait.

Their two plans have a lot in common. They would slow the growth of benefits for higher earners, take into account the fact people are living longer, and make important changes to improve benefits for some of those poorly served by the current system.

Since these plans were written, Social Security’s 10-year cash flow deficit has increased by over 450 percent, across-the-board cuts will occur seven years sooner, and Social Security’s long-term shortfall is almost 60 percent larger.

It's unfair, and wrong, to leave with our kids and grandkids a Social Security system that can’t pay full promised benefits.

The good work of Simpson-Bowles Commission and the Bipartisan Policy Center Debt Reduction Task Force shows us that there are bipartisan solutions to fix Social Security.

As I’ve said before, the President likes to say that if we agree on a policy, then we should act and not let our differences hold us up.

Today we will again carry out our responsibility to every American to closely examine each bipartisan policy option. When we agree, we should act. And we will.

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A bushel of Pinocchios for IRS’s Lois Lerner

Mon, 20 May 2013 04:00:00 GMT

In the days since the Internal Revenue Service first disclosed that it had targeted conservative groups seeking tax-exempt status, new information has emerged from both the Treasury Inspector General’s report and congressional testimony Friday that calls into question key statements made by Lois G. Lerner, the IRS’s director of the exempt organizations division.

The clumsy way the IRS disclosed the issue as well as Lerner’s press briefing by phone were seen at the time as a public relations disaster. But even so, it is worth reviewing three key statements made by Lerner and comparing them to the facts that have since emerged.

“But between 2010 and 2012 we started seeing a very big uptick in the number of 501(c)(4) applications we were receiving and many of these organizations applying more than doubled, about 1500 in 2010 and over 3400 in 2012.”

Lerner made this comment while issuing a seemingly impromptu apology at an American Bar Association panel (it was later learned that this was a planted question—more on that below.) In her telling, the tax-exempt branch was simply overwhelmed by applications and so unfortunate shortcuts were taken.

But this claim of “more than doubled” appears to be a red herring. The targeting of groups began in early 2010, after the Supreme Court’s decision in Citizen’s United was announced on Jan. 21. The ruling paved the way for political groups to apply under a tax-exempt status known as 501(c)4. Most charities apply under 501(c)3, but under 501(c)4 nonprofit groups that engage in “social welfare” can also perform a limited amount of election activity.

At first glance, the Inspector General’s report appears to show that the number of 501(c)(4) applications actually went down that year, from 1,751 in 2009 to 1,735.

But it turns out that these are federal fiscal-year figures, meaning “2010” is actually Oct. 1, 2009 to Sept. 30, 2010, so the “2010” year includes more than three months before the Supreme Court decision was announced.

Astonishingly, despite Lerner’s public claim, an IRS spokeswoman was not able to provide the actual calendar year numbers. By allocating one-quarter of the fiscal year numbers to the prior year, we can get a very rough sense of the increase on a calendar-year basis.(Figures are rounded to avoid false precision; 2012 is not possible to calculate)

2009: 1745

2010: 1865

2011: 2540

In other words, while there was an increase in 2010, it was relatively small. The real jump did not come until 2011, long after the targeting of conservative groups had been implemented. Also, it appears Lerner significantly understated the number of applications in 2010 (“1500”) in order to make her claim of “more than doubled.”

“I think you guys were reading the paper as much as I was. So it was pretty much we started seeing information in the press that raised questions for us and we went back and took a look.”

Here, Lerner suggests that she only found out about this issue when news reports appeared in February and March 2012 about tea party groups complaining that they were being targeted. But the IG timeline shows this claim to be false.

According the IG, Lerner had a briefing on the issue on June 29, 2011, in which she was told about the BOLO (“Be On the Look Out”) criteria that included phrases such as “Tea Party” or “Patriots.” The report says she raised concerns about the wording and “instructed that the criteria be immediately revised.” She continued to be heavily involved in the issue in the months preceding the new reports, according to the timeline.

“I don’t believe anyone ever asked me that question before.”

This was Lerner’s excuse during the media call for why she had not publicly addressed the issue before.

But in congressional testimony Friday, former acting director Steven T. Miller said he had discussed with Lerner about arranging to make a statement at a May 10 conference sponsored by the American Bar Association, knowing that the IG report would soon be released.

Lerner then contacted a friend, Celia Roady, a tax attorney with the Washington firm Morgan Lewis, to ask a question about the targeting, according to a statement by Roady on Friday. (Roady had previously denied this was a planted question when asked directly by participants at the meeting.)

So Lerner was dissembling when she suggested that a simple well-aimed question prompted the disclosure.

In fact, just two days before the ABA conference, Lerner appeared before Congress and was asked about the status of investigations into 501(c)(4) companies by Rep. Joe Crowley (D-N.Y.). She provided a bland answer about a questionnaire on the IRS Web site, failing to take the opportunity to disclose the results of the probe. (The clip is embedded below, with the question coming at 5:09.) Small wonder that Crowley is now calling for her to resign, saying that Lerner lied to him.

We gave the IRS the weekend to provide a response. A spokeswoman said they were not able to offer an explanation for Lerner’s remarks in time for our deadline.

The Pinocchio Test

In some ways, this is just scratching the surface of Lerner’s misstatements and weasely wording when the revelations about the IRS’s activities first came to light on May 10. But, taken together, it’s certainly enough to earn her four Pinocchios.

Four Pinocchios

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Brady Introduces Legislation to Repeal ObamaCare Sweetheart Deal

Mon, 20 May 2013 04:00:00 GMT

Washington, DC – Today, Committee on Ways and Means Health Subcommittee Chairman Kevin Brady (R-TX), along with Reps. Pat Tiberi (R-OH), Peter Roskam (R-IL), Vern Buchanan (R-FL), Aaron Schock (R-IL), Tom Reed (R-NY), Mike Kelly (R-PA), Jim Renacci (R-OH) and Morgan Griffith (R-VA) introduced the Medicare Hospital Wage Index Equity Act of 2013.

The legislation repeals the "Bay State Boondoggle," a sweetheart deal included in ObamaCare that allowed hospitals in the state of Massachusetts (MA) to increase their payments by $257 million, resulting in hospitals in 40 states having their payments cut. As former Centers for Medicare and Medicaid Services administrator under President Obama, Donald Berwick, said, “What Massachusetts gets comes from everybody else.” Without the Medicare Hospital Wage Index Equity Act of 2013, this inequity would continue in perpetuity.

On the introduction of the legislation, Chairman Brady stated: “To many Americans, the secret earmarks included to ensure the passage of ObamaCare continue to be outrageous. It’s one of the many reasons why the House voted last week to stop this bad law now. Because of the controversial 'Bay State Boondoggle,' last year local hospitals in 40 states lost $471 million, and unless Congress acts they’ll continue to be financially harmed every year. The Senate already passed a bipartisan amendment to repeal this earmark as part of its 2014 budget. It is my hope that Congress will act this year to repeal this misguided policy. It’s time to stop rewarding one state at the expense of all the others.”

The Medicare Hospital Wage Index Equity Act of 2013 is similar to S. 183, the Hospital Payment Fairness Act of 2013, introduced by Senators Claire McCaskill (D-MO) and Tom Coburn (R-OK).

Background:
The Centers for Medicare and Medicare Services (CMS) is required to adjust Medicare hospital wage reimbursements to reflect the geographic area where services are delivered. This allows for recognition that the average hourly wage for an emergency triage nurse is higher in urban areas than it is in rural areas. The Medicare wage hospital wage index also includes “floors” to ensure that the wage index for rural hospitals is not higher than urban hospitals. Prior to ObamaCare, CMS was implementing a change that would tie application of all hospital wage index floors to a state budget neutrality calculation -- meaning a change to the wage index rural floor in a state would reallocate money only within that state.

ObamaCare changed this state budget neutrality to a national budget neutrality. Soon after ObamaCare was signed into law, a 15-bed hospital in MA was purchased by a large MA health system and was re-designated from a critical access hospital (the wage index does not apply to critical access hospitals) to an acute care hospital (wage index does apply). This 15-bed acute hospital set a new rural floor for the state of MA. Prior to ObamaCare this change would have triggered a reallocation of funds only within MA. But, because of ObamaCare’s change to national budget neutrality for the rural floor, hospitals in 40 other states ended up paying for the MA change. In 2013, MA hospitals received $267 million from hospitals throughout the country. Preliminary data from CMS suggests that MA will receive even more money in 2014.

The Medicare Hospital Wage Index Equity Act of 2013 repeals the ObamaCare earmark and would convert any changes to Medicare hospital wage index floors back to a state-specific budget neutrality calculation. Overall, the legislation has no budgetary impact.

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Camp Opening Statement: Hearing on IRS Targeting Conservative Groups

Fri, 17 May 2013 04:00:00 GMT

On May 10, 2013, Lois Lerner, Director of Exempt Organizations for the Internal Revenue Service (IRS) division that oversees tax-exempt groups, finally acknowledged that the agency had been targeting conservative-leaning political organizations.

Four days later, the Treasury Inspector General for Taxpayer Administration (TIGTA) confirmed that, “the IRS used inappropriate criteria to identify organizations applying for tax-exempt status.” The report also confirmed that this abuse of power began as far back as 2010.

This revelation goes against the very principles of free speech and liberty upon which this country was founded. The blatant disregard with which the agency has treated Congress and the American taxpayer raises serious concerns about leadership at the IRS.

Let’s establish the facts that we do know. Based on the TIGTA report we know that for an 18-month period beginning in Spring 2010, IRS employees in the agency’s Determinations Unit employed keywords such as “tea party,” “patriot,” and “9/12” to target applicants for tax-exempt status. These groups were then subjected to further IRS investigation and document requests.

IRS employees later expanded their search to include groups concerned about government spending, debt, taxes, the Constitution, the Bill of Rights, or trying to “make America a better place to live.” Let me repeat that, people were targeted for trying to “make America a better place to live.”

These Americans had their applications delayed for nearly three years, and at least 98 applicants were asked for improper and inappropriate information such as donor lists and whether family members planned to run for public office.

During that delay, and while applications of conservative groups sat untouched for more than a year, other applications with names like “progress” and “progressive” were approved in just a matter of months. The headline in USA Today from earlier this week really says it all: “IRS gave liberals a pass; Tea Party groups put on hold.”

TIGTA’s audit found that some of those cases should have been set aside because of concerns related to their potential political activity, but no such review was done. Without objection, I enter the USA Today news report into the record.

This week, we learned that senior IRS officials knew about this activity almost two years ago, in June 2011, and IRS’s leadership in Washington knew of it in May 2012 – a year ago.

Despite a two-year long investigation by this Committee, the IRS never told the American people or their representatives about this simple truth. In fact, we were repeatedly told no such targeting was happening. That isn’t being misleading, that is lying.

But now, we know the truth – or at least some of it. We also know that these revelations are just the tip of the iceberg. It would be a mistake to treat this as just one scandal. This may be the one generating headlines, but in total I count at least five serious violations of the taxpayers’ right to be treated fairly, honestly and impartially by their government.

First, back in August of 2010, a "White House official" discussed the tax status of a private company – a clear intimidation tactic.

Second, in June 2010, the targeting of conservative groups began.

Third, in May 2011, the IRS started to threaten donors to conservative leaning non-profits that they were liable for certain taxes.

Fourth, in March of 2012, the Huffington Post published the confidential 2008 donor list of the National Organization for Marriage, a conservative tax-exempt organization.

And fifth – but unlikely the final transgression – ProPublica announced that the IRS had leaked confidential applications for tax-exempt status from conservative groups.

Mr. Miller, with all due respect, this systemic abuse cannot be fixed with just one resignation. And, as much as I expect more people need to go, the reality is this is not a personnel problem. This is a problem of the IRS being too large, too powerful, too intrusive and too abusive of honest, hardworking taxpayers.

There isn’t a person I come into contact with back home – or anyone in this country frankly – who does not fear the IRS. They fear getting something wrong on their tax filings. And, they fear the IRS’ ability to audit them and wreak havoc in their lives. Especially when all they are trying to do is improve their lives, let alone, God forbid, trying to “make America a better place to live,” which is what the IRS targeted them for.

Under that kind of thinking, every civic group in America is at risk – the Knights of Columbus, the Rotary, the JC’s, the American Legion and VFW clubs. I’m sure you’re aware of the saying that the power to tax is the power to destroy. Well, under this Administration, the IRS has abused its power to tax, and it has destroyed what little faith and hope the American people had in getting a fair shake in Washington.

This will not stand. Trimming a few branches will not solve the problem when the roots of the tree have gone rotten. And, that is exactly what has happened with our entire tax system – it is rotten at the core, and it must be ripped out so we can start fresh. Only then will the American people get a tax system that treats them fairly and honestly, as they deserve.

And, while that is a larger discussion, it is directly tied to the issue before us today – how and why our tax system has gone so far off-track. Many questions still remain:

Why did the IRS repeatedly target the American people and then keep that fact covered-up for so long?
Who started the targeting, who knew, when did they know and how high did it go?
Who leaked private taxpayer information?
Why were the names of donors asked for, and what was done with those lists before they were supposedly discarded?
When did the Administration know about each of these, and what was its reaction?

Listening to the nightly news, this appears to be just the latest example of a culture of cover-ups – and political intimidation – in this Administration. It seems like the truth is hidden from the American people just long enough to make it through an election.

The American people have a right to the truth, to a government that delivers the facts, good or bad, no matter what. President Obama promised to be different and to deliver a better government, the most transparent in history.

He was right. America deserves better. It is time to end the corruption at the IRS and fix a tax code that allows Washington and the IRS to pick who wins and who loses in America.

I expect nothing less than total cooperation by the IRS and this Administration as we investigate what happened and what we must do to fix it.

I now recognize Ranking Member Levin for the purpose of his opening statement, and thank him for his commitment to pursue this issue.

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Nunes Opening Statement: Hearing on U.S.-EU Trade and Investment Partnership Negotiations

Thu, 16 May 2013 04:00:00 GMT

Good afternoon. I want to welcome everyone to our hearing on the U.S.-EU trade and investment partnership negotiations. Today’s hearing focuses on the enormous potential that exists in a U.S.-EU trade and investment agreement. The U.S.-EU economic relationship is the largest and most integrated in the world, comprising 50 percent of global GDP and supporting millions of U.S. jobs.

Although it’s a deep and mature relationship, we can do more. The timing is exactly right to promote growth in both of our economies, and I strongly support negotiations for an ambitious and comprehensive trade and investment agreement.

From a strategic perspective, the United States and Europe have long been close allies in the effort to open markets and promote free trade. These negotiations are an opportunity to strengthen an already strong economic alliance and serve as an influential model to promote free trade and open markets around the world.

However, we should also recognize that these negotiations will not be easy. They will require enormous creativity and flexibility on both sides of the Atlantic.

Any agreement must be ambitious and comprehensive, with all issues on the table. A critical area for me is agriculture and SPS. This area has been exceedingly longstanding, difficult, and frustrating, which must be resolved. In particular, I would like to see sufficiently enforceable obligations that go beyond the WTO SPS chapter. I know many of my colleagues share this concern.

This hearing provides an opportunity to hear from the private sector about the potential benefits and challenges of these negotiations. In particular, I hope that we will learn more from our witnesses about the following issues:

1. Addressing traditional barriers to trade, including eliminating tariffs and liberalizing tariff rate quotas.

2. Resolving services and investment barriers and establishing strong rules in these areas that can be jointly promoted in our engagement with other countries.

3. Creating specific commitments and an ongoing agenda to identify and eliminate unnecessary regulatory barriers, including sanitary and phytosanitary barriers to U.S. agriculture exports. The EU regulatory process is often non-transparent, prevents U.S. stakeholders from participating, and is unpredictable. An agreement should address the EU’s practices on a comprehensive, horizontal basis.

4. Exploring opportunities for regulatory cooperation and coherence by eliminating redundancy and inefficiency without weakening our respective high standards.

5. Developing and strengthening cooperation regarding our shared concerns with trade and investment policies in third countries, such as anticompetitive behavior from subsidized state-owned enterprises and policies that undermine intellectual property rights.

Today’s hearing also highlights the need to develop and pass bipartisan Trade Promotion Authority to provide a clear framework for Congressional consideration and implementation of trade agreements as well as to set out negotiating objectives for this negotiation. I welcome the Administration’s interest in TPA but call for further and intensified engagement from USTR and the White House.

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Senate, House Republicans Call on GAO to Investigate Sec. Sebelius’s Solicitation of Funds for Private Non-Profit

Thu, 16 May 2013 04:00:00 GMT

Washington, DC – Today, House Ways and Means Committee Chairman Dave Camp (R-MI), Senate Ranking Members Lamar Alexander (R-TN) of the Senate Health, Education Labor and Pensions Committee and Orrin Hatch (R-UT) of the Senate Finance Committee, with House Chairmen Fred Upton (R-MI) of the House Energy and Commerce Committee and Jack Kingston (R-GA) of the House Appropriations Committee Subcommittee on Labor, Health and Human Services, and Education, today sent a letter to the Government Accountability Office calling for an investigation into Secretary Sebelius’s fundraising for a private non-profit to implement the new health care law.

The members wrote: “The Secretary’s actions show an apparent disregard for constitutional principles and may violate the Antideficiency Act, the prohibition against augmenting congressional appropriations, and executive branch ethics laws.”

“The Appropriations Clause is arguably the single most important curb in the Constitution on executive branch power. Article I of the Constitution gives Congress alone the power of the purse. This means a federal agency is dependent on Congress for its funding, and it is up to Congress to make important policy choices about whether or not to provide funds for a particular program and to fix that level of funding or set terms and conditions on its use.”

The Republican committee leaders asked the GAO to provide a detailed report on information including: all outside entities for which HHS is soliciting funds for purposes of implementing the health care law; a description of the degree of coordination between HHS and Enroll America; the names of HHS personnel who have been involved in the fundraising; the names of those they contacted; and a description of what was requested in the solicitations.

The full text of the letter is below:

May 16, 2013

The Honorable Gene Dodaro
Comptroller General of the United States
Government Accountability Office
441 G Street, NW
Washington, DC 20548

Dear Comptroller General Dodaro:

We are writing to request that the Government Accountability Office (GAO) conduct an audit of the facts related to Department of Health and Human Services (HHS) Secretary Sebelius’ solicitation of funds for a private sector entity that she is working with to implement the Patient Protection and Affordable Care Act (PPACA). The Secretary’s actions show an apparent disregard for constitutional principles and may violate the Antideficiency Act, the prohibition against augmenting congressional appropriations, and executive branch ethics laws.

Various news outlets have reported that Secretary Sebelius has asked individuals in the private sector to make large financial donations to Enroll America, a nonprofit organization run by a former White House aide, to support HHS’ implementation of PPACA. An HHS spokesman even explained to the Washington Post that HHS is intentionally taking these actions because Congress did not provide additional appropriations, “We requested additional money … but we didn’t receive any additional funding for the exchanges. So we’ve had to come up with a Plan B.”[1]

The Appropriations Clause is arguably the single most important curb in the Constitution on executive branch power. Article I of the Constitution gives Congress alone the power of the purse. This means a federal agency is dependent on Congress for its funding, and it is up to Congress to make important policy choices about whether or not to provide funds for a particular program and to fix that level of funding or set terms and conditions on its use.

The Antideficiency Act enforces these principles and generally prohibits entering into contracts or obligations or accepting voluntary services for the United States in excess of available appropriations. Depending on the relationship between the Secretary and Enroll America, the level of control exercised by the administration, and the nature of the activities the organization is engaged in, HHS may be creating obligations or accepting services in violation of the Antideficiency Act.

It also appears that the Secretary’s actions may be in violation of the “rule against augmentation of appropriations,” which GAO describes as meant to “prevent a government agency from undercutting the congressional power of the purse by circuitously exceeding the amount Congress has appropriated for that activity.”[2] This includes a prohibition on certain voluntary services in 31 U.S.C. §1342 and the restriction of the use of appropriated funds to their intended purposes in 31 U.S.C. §1301(a). As one recent GAO decision stated, “a congressional appropriation establishes a maximum authorized program level, meaning that an agency cannot, absent statutory authorization, operate beyond the level that can be paid for by its appropriations.”[3]

The Secretary’s actions also may be in violation of federal ethics rules against fundraising from regulated entities. For example, Office of Government Ethics Rule §2635.808 prohibits fundraising in an official’s private capacity from any person or entity that is seeking official action by that official’s agency, that does business or seeks to do business with the agency, or has interests that may be substantially affected by performance or nonperformance of the official’s duties. The Washington Post reported that the Secretary was fundraising from “health industry executives,” which may be prohibited sources under the ethics rules.

In public statements, an HHS spokesman has claimed that the Public Health Service Act (PHSA) authorizes the Secretary to engage in these efforts in her official capacity. Section 2635.808(b) of the ethics rules allows an employee to fundraise in an official capacity but only if in accordance with a specific authorization to do so. However, the possibly relevant sections of the PHSA, 42 U.S.C. §§300u-1, 2, or 3, only provide—and in a parenthetical at that—for the Secretary to “encourage others to support” efforts in health information and health promotion, preventive health services, and education in the appropriate use of health care. Fundraising by the Secretary in her official capacity for a specific organization that exists to promote the President’s health care law and that is controlled significantly by entities that have a vested interest in the law’s implementation is a farfetched interpretation of this statute. This is especially true given that the agency is citing a parenthetical reference in a thirty plus year old statute that has not to our knowledge previously been interpreted to authorize this sort of activity.

As we examine this matter carefully we request that GAO focus on the facts of the matter to inform our deliberative process on what steps Congress should pursue to protect the prerogative of the legislative branch. Accordingly, we are writing to request that GAO gather the facts surrounding Secretary Sebelius’ actions and provide a detailed report on them. Among other things, we would like GAO to provide the following information as part of the report:

1)   A list of all outside entities that HHS is soliciting funds on behalf of for purposes of assisting HHS in the implementation of PPACA.
2)   A description of the degree to which HHS and Enroll America (or other outside entities) are coordinating efforts on PPACA implementation, including a summary of relevant correspondence and the number of meetings as well as a description (or copy where available) of any written or oral agreements between or among them.
3)   A list of HHS personnel and their positions who have been involved with fundraising for outside entities to support PPACA as well as whether any other federal government personnel outside HHS have been soliciting funds.
4)   A description of the government resources, including email, travel, telephones, government employee time, etc. used for fundraising on behalf of Enroll America or other entities and the costs (estimated or actual) incurred in doing so.
5)   A list of all individuals (and their affiliations) that the Secretary or her subordinates contacted or addressed in order to fund Enroll America (or any other outside entity).
6)   A description of the specific request(s) made to those individuals or entities that Secretary Sebelius or her subordinates contacted, including whether HHS specifically requested donations for Enroll America or any other outside entity and the amounts requested.
7)   A description of any commitments or offers made by HHS to those individuals or entities that were contacted, including whether HHS specifically offered any benefit or threatened any punishment in exchange for donating or not donating to Enroll America.
8)   Whether Secretary Sebelius or other HHS personnel were aware of the results of their solicitations of funds and/or whether Enroll America reported to HHS about their financial activities, donors or amounts donated, and if so what those reports showed and how HHS used that information/those reports.
9)   Information about whether the Secretary and her subordinates received clearance for this activity from the designated agency ethics official, the Office of Government Ethics, and/or the General Counsel of HHS, the Department of Justice, and/or the White House and, if so, when that clearance was received as well as a copy of any ethics opinion(s).
10)   Information about whether HHS has ever used the provisions of the Public Health Services Act relied upon for this activity to solicit donations for outside private entities before and the scope of that activity, if any.
11)   A list of amounts and specific accounts for all transfers made by the Secretary or her subordinates to fund PPACA implementation at HHS since March 23, 2010 and whether any funds have been received from other government agencies or donations received from the private sector to support HHS implementation of the Act.

Thank you for your attention to this matter.

Sincerely,

Lamar Alexander, Ranking Member, Senate Health, Education, Labor and Pensions Committee

Orin Hatch, Ranking Member, Senate Finance Committee

Fred Upton, Chairman, House Committee on Energy and Commerce

David Camp, Chairman, House Committee on Ways and Means

Jack Kingston, Chairman, House Committee on Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies

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Tiberi Opening Statement: Hearing on the Ways and Means Small Business Tax Reform Discussion Draft

Wed, 15 May 2013 04:00:00 GMT

The hearing will come to order. Good morning and thank you for joining us for our hearing on the Ways & Means Small Business Tax Reform Discussion Draft.

In March 2011, the Select Revenue Measures Subcommittee held a hearing on small businesses and tax reform. We learned that the temporary, complex nature of the tax code was forcing small business owners to invest their time and resources complying with the tax code instead of growing their businesses. The message was clear: simplifying the tax code means more jobs created by small businesses.

Indeed, comprehensive tax reform must result in a simpler, more stable tax code with lower statutory tax rates for small business owners. Today nine out of ten small business owners rely on a tax preparer. There have been over 4,500 changes to the tax code over the last decade. And with the addition of the 3.8 percent Obamacare tax, small business pass-through entities—which pay their taxes at individual rates—will have a top federal tax rate of 44.6 percent. Comprehensive tax reform cannot be limited to an exercise of only lowering the corporate tax rate as the President has suggested. It must also lower rates for small businesses, who employ over 50 percent of the private sector workforce and whose tax compliance costs are 65 percent higher than for large businesses.

The Small Business Tax Reform Discussion Draft is a step forward in creating a better tax code for small businesses. But that’s not to say it can’t be improved upon, and that’s why Chairman Camp released this as a discussion draft: to ensure that through a public, transparent process, stakeholders – including small businesses themselves – have the opportunity to tell us what they need from tax reform to help them create jobs and increase wages for their employees. I’m looking forward to a great bipartisan discussion today. I thank our witnesses for being here and I now yield to Ranking Member Neal for his opening statement.

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37 Reasons to Repeal ObamaCare

Wed, 15 May 2013 04:00:00 GMT

After $1 trillion in new taxes and more than $2 trillion in new spending, three years later the Democrats’ law has failed to deliver on the promise of affordable health care for Americans.

Instead, American families and businesses are facing the tough and costly realities of ObamaCare: higher health insurance premiums, the loss of the health plan you have and like, lower wages, and less hiring and business expansion. Now, on the eve of the 37^th vote in the House to repeal all or some of the failed health care law, here are 37 real life reminders of why ObamaCare should be repealed.

Individuals and Families Will Pay More for Health Care

1. Secretary Sebelius admitted premiums will increase for Americans.

2. The American Society of Actuaries estimates a 32 percent increase in the cost of covering people in the individual market as a result of ObamaCare.

3. The New York Times recently reported some states are seeing health insurance premium hikes up to double digits.

4. “Maryland health insurers … said they will need to charge more for health insurance to compensate for new risk and additional requirements under the federal Affordable Care Act. CareFirst BlueCross BlueShield, for example, has proposed a 25 percent rate increase to many of its plans in the individual and small group markets. In the company’s filing, CareFirst — the region’s largest insurer — attributes the increase largely to new rules under the Affordable Care Act.”

5. A report by the House Energy and Commerce Committee reveals “consumers purchasing health insurance on the individual market may face premium increases of nearly 100 percent on average, with potential highs eclipsing 400 percent.”

6. The same report shows “small businesses can expect average premium increases in the small group market of up to 50 percent, with potential highs over 100 percent.”

7. Insurers agree. According to one industry executive, “We're going to see some markets go up by as much as 100%.” (Mark Bertolini, CEO, Aetna)

8. “We estimate that almost 80 percent of those ages 21 to 29 with incomes greater than 138 percent of FPL [Federal Poverty Level] who are enrolled in nongroup single coverage can expect to pay more out of pocket for coverage than they pay today – even after accounting for premium assistance.” (Oliver Wyman consultants)

9. Beginning in 2014, Americans buying coverage on their own or as an employee of a small business – whether inside or outside the Exchange – will be forced to pay a “user fee” totaling 3.5 percent of the monthly premium to fund the bureaucratic operations of the government-run federal Exchange.

ObamaCare Threatens Job Creation, Wages, and Hours

10. According to a recent report/survey, 70 percent of small businesses cite ObamaCare as a major obstacle to job creation.

11. USA Today and the Wall Street Journal have reported that many businesses plan to bring on more part-time workers next year, trim the hours of full-time employees or curtail hiring because of the new health care law.

12. According to a study by the Hudson Institute, in the franchise industry alone, ObamaCare’s employer mandate puts up to 3.2 million jobs at risk.

13. The Federal Reserve recently warned, “Employers in several [Federal Reserve] Districts cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff.”

14. According to the Congressional Budget Office (CBO), the amount of workers in the labor force will be reduced by 800,000 in 2021 as a result of the Democrats’ health care law.

15. Regal Cinemas, the largest theatre circuit in the United States, announced they would be cutting the hours of thousands of employees as a result of ObamaCare.

16. The Wall Street Journal reported, “Several restaurants, hotels and retailers have started or are preparing to limit schedules of hourly workers to below 30 hours a week…. CKE Restaurants Inc., parent of the Carl's Jr. and Hardee's burger chains, began two months ago to hire part-time workers to replace full-time employees who left…. Home retailer Anna's Linens Inc., is considering cutting hours for some full-time employees to avoid the insurance mandate if the health-care law isn't repealed....”

17. From the New York Times: “There is another reason to believe that part-time employment will stay higher for longer, namely the incentives to employ part-time workers created by Obama’s health care reforms.” (Paul Dales, senior United States economist for Capital Economics)

18. The ADP payroll survey shows U.S. companies added just 119,000 jobs in April, the fewest in seven months. According to AP, “New requirements under President Barack Obama's health care law may be prompting some small and mid-size companies to hold back on hiring.”

19. In April, the city of Dearborn, Michigan announced it will cut hours of part-time and seasonal workers because of ObamaCare.

20. Citing added costs and the competitive disadvantage ObamaCare puts larger companies at, The United Union of Roofers, Waterproofers and Allied Workers has withdrawn its public support for ObamaCare and now favors its repeal.

21. “To date, employers are still missing key pieces of guidance needed to construct their systems, make plan design changes and communicate with their employees…the delay in issuing the regulations pertaining to the notice and reporting requirements is becoming increasingly untenable for employers.” (Employers for Flexibility in Health Care Coalition Comment letter to the Treasury Department, March 15, 2013)

You Can’t Keep the Health Plan You Have and Like

22. The State of Washington is considering a plan that “threatens to affect the federal budget and the pocketbooks of some part-time workers, as it would push a group of employees out of their current health care plans and into an exchange developed under the Affordable Care Act.”

23. Based on two separate analyses provided by CBO and Deloitte, as many as 20 million to 65 million Americans might lose their employer-sponsored health insurance as a result of the Democrats’ health care law.

24. Secretary Sebelius has admitted up to 24 million Americans will lose the coverage they currently have and like.

25. The Wall Street Journal reported that annual premium increases and costs associated with the law, including a $65 per person coverage fee set to take effect beginning in 2014, are driving, and will continue to drive, up the cost of care and make it prohibitive to continue offering health coverage. A result of such cost pressures is that employers are being forced to discontinue the offering of spousal coverage in employer health plans.

26. ObamaCare contains $308 billion in cuts to the Medicare Advantage (MA) program, which the Medicare Trustees originally predicted could cut enrollment in MA in half by 2017.

27. Approximately nine-in-ten seniors with retiree benefits will lose their retiree prescription drug coverage through their employer under the Democrats’ health care law.

ObamaCare Is a Burden on American Families and Employers

28. Estimates from CBO and the Joint Committee on Taxation (JCT) confirm that the Democrats’ health law is a one trillion dollar tax hike on families and employers.

29. The law contains 21 tax hikes, and more than half of those fall on the backs of Americans earning less than $200,000 per year for singles and $250,000 per year for married couples – a clear violation of the President’s pledge to avoid tax hikes on low- and middle-income taxpayers.

30. According to the Obama Administration’s own estimates, ObamaCare will require American job creators, families, and health care providers to spend over 190 million hours per year on compliance.

31. The employer mandate penalty raises significantly the cost of hiring lower-skill workers, because the penalty is a higher proportion of their compensation than for high-skill workers. Industries that have traditionally offered the greatest opportunities to entry-level workers – leisure and hospitality and restaurants – will be particularly hard-hit by the new law.

ObamaCare Is a Train Wreck

32. At a time when the IRS’s credibility is in serious question, the Obama Administration says it needs to hire an additional 2,000 IRS agents to implement functions related to ObamaCare.

33. Henry Chao, a Centers for Medicare and Medicaid Services official, oversees the technology for the Exchanges and has downgraded his expectations for ObamaCare saying he just wants to “make sure it’s not a third-world experience.”

34. Senate Finance Committee Chairman Max Baucus (D-MT) and Senate Majority Leader Harry Reid (D-NV) both warned ObamaCare could become a “huge train wreck.”

35. A Kaiser Family Foundation poll found that just 35 percent of Americans view ObamaCare “very” or “somewhat” favorably.

36. The same poll showed that more than half of Americans “say they do not have enough information about the Affordable Care Act to understand how it will affect them.”

It Didn’t Have to be This Way

37. The House GOP alternative to the Democrats’ health care law was the only legislation that met the top health care priority of American families – lowering the cost of health insurance premiums.

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Timeline of Communications Between Ways and Means Committee and IRS

Wed, 15 May 2013 04:00:00 GMT

March-April 2010
According to TIGTA, the IRS’s Determinations Unit “began searching for other requests for exemption involving the Tea Party, Patriots, 9/12 and IRC § 501(c)(4) applications involving political sounding names, e.g., “We the People” or “Take Back the Country.”

June 3, 2011
Chairman Camp sends letter to Commissioner Shulman inquiring about IRS targeting of taxpayers who donated money to conservative groups, as well as information regarding audits of 501(c)(4) organizations.

June 29, 2011
According to TIGTA, IRS Exempt Organization Division director Lois Lerner is apprised of the IRS’s discriminatory practices.

July 1, 2011
The IRS responds to Chairman Camp’s June 3 letter by issuing a directive to halt investigations pending further guidance. The IRS failed to provide any explanation or assurances to the Committee that targeting was not occurring.

July 7, 2011
Then-Deputy Commissioner for Services and Enforcement Steve Miller issues a directive citing “significant legal, administrative, and policy implications” for his decision that “all current examinations relating to the application of gift tax to contributions to I.R.C. § 510(c)(4) organizations should be closed.”

July 25, 2011
Then-Deputy Commissioner for Services and Enforcement Steve Miller responds to Chairman Camp’s June 3 letter with supplementary information, yet fails to provide information regarding targeting of conservative groups.

October 6, 2011
Chairman Boustany sends letter to Commissioner Shulman requesting information regarding the tax-exempt sector.

November 18, 2011
The IRS responds to Chairman Boustany with some requested information but includes no mention of knowledge of targeting conservative groups.

December 16, 2011
Ways and Means Oversight staff met with IRS staff, including Lois Lerner. The IRS staff did not mention knowledge that the IRS targeted conservative groups.

March 1, 2012
Chairman Boustany sends a follow-up letter to Commissioner Shulman with additional questions about reports that “the IRS has been questioning new tax-exempt applicants, including grassroots political entities such as Tea Party groups.”

March 12, 2012
The IRS responds with no mention of knowledge of targeting conservative groups.

March 22, 2012
The Ways and Means Oversight Subcommittee holds its 2012 hearing on the tax return filing season and general IRS operations. Chairman Boustany asks then-IRS Commissioner Shulman about reports that the IRS has been targeting Tea Party groups. Shulman responds, “I can give you assurances…[t]here is absolutely no targeting.”

March 23, 2012
The IRS sends a supplementary response containing additional information, but again, makes no mention of knowledge of targeting conservative organizations.

April 23, 2012
Oversight Subcommittee Chairman Boustany and 61 other House Republicans sign a letter to Commissioner Shulman inquiring about reports that “numerous nonprofit civic organizations across the country have experienced extensive delays and received excessively burdensome information requests” when applying for tax-exempt status.

April 26, 2012
The IRS sends a second supplementary response but includes no information about its discriminatory practices.

May 3, 2012
After numerous responses from the IRS, Chairman Camp sends a letter to Commissioner Shulman seeking all 501(c)(4) applications from 2010 and 2011 in order to conduct an investigation into whether the IRS targeted conservative groups.

June 15, 2012
The IRS responds to the April 23 letter from Chairman Boustany and 61 other House Republicans, but includes no information about the IRS’s practices.

July 25, 2012
The Ways and Means Oversight Subcommittee holds a hearing on charitable organizations. In response to questions regarding reported IRS harassment of conservative groups, then-IRS Deputy Commissioner for Services and Enforcement Steve Miller tells the Subcommittee, “I am aware that some 200 501(c)(4) applications fell into this category [the determinations letter process]. We did group those organizations together to ensure consistency, to ensure quality.” Miller made no reference to the IRS’s discriminatory practices.

September 21, 2012
Chairman Camp writes a letter to Commissioner Shulman requesting a briefing for Ways and Means Committee staff regarding Steve Miller’s testimony at the July 25th Oversight Subcommittee Hearing.

Fall 2012
The IRS makes all 2010 and 2011 501(c)(4) applications available to Ways and Means Committee staff, pursuant to Chairman Camp’s May 3 request.

November 15, 2012
Ways and Means Oversight staff met with IRS staff, including Lois Lerner. The IRS staff did not mention knowledge that the IRS targeted conservative groups.

June 3, 2011-present
Beginning with Chairman Camp’s initial June 3, 2011 letter, Ways and Means Committee staff conducts an investigation into whether the IRS improperly targeted conservative political groups and their donors. Throughout the entirety of the investigation, IRS officials make no effort to inform Ways and Means staff that the IRS had, in fact, targeted conservative groups.

Week of April 22, 2013
According to White House Press Secretary Jay Carney, the White House Counsel is notified of the IRS’s targeting of conservative groups.

May 10, 2013
At an American Bar Association function, Lois Lerner, director of the IRS’s Exempt Organizations Division, publicly apologizes for the IRS’s discrimination against conservative organizations during.

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Committee Rules and Committee Budget for FY 1997-1998

Wed, 05 Feb 1997 05:00:00 GMT

H.R. 668, the "Airport and Airway Trust Fund Tax Reinstatement Act of 1997"

Wed, 12 Feb 1997 05:00:00 GMT

Oversight Plan

Wed, 12 Feb 1997 05:00:00 GMT

Hearing on Medicare Provisions in the President's Budget

Tue, 16 Aug 2011 20:36:05 GMT

Hearing on Annual Report of the Internal Revenue Service Taxpayer Advocate

Tue, 16 Aug 2011 19:41:56 GMT

Hearing on WTO Singapore Ministerial Meeting

Wed, 17 Aug 2011 14:10:09 GMT

Hearing on "High-Risk" Programs within the Jurisdiction of the Committee on Ways and Means

Tue, 16 Aug 2011 19:22:51 GMT

Hearing on The Future of Social Security for this Generation and the Next

Tue, 16 Aug 2011 19:32:17 GMT

Hearing on The Future of Social Security for this Generation and the Next

Tue, 16 Aug 2011 19:38:30 GMT

H.R. 968, a bill to amend titles XVIII and XIX of the Social Security Act to permit a waiver of the prohibition of offering nurse aid training and competency evaluation programs in certain nursing facilities

Wed, 12 Mar 1997 05:00:00 GMT