In a Secret Meeting, Revelations on the Battle Over Health Care
New York Times
May 30, 2016
On Jan. 13, 2014, a team of Internal Revenue Service financial managers piled into government vans and headed to the Old Executive Office Building for what would turn out to be a very unusual meeting.
Upon arrival, the I.R.S. officials, some of whom had expressed doubts that the Obama administration had the proper authority to spend billions of dollars on a crucial element of its health care law, were ushered into a conference room.
There, they were presented with an Office of Management and Budget memo laying out the administration’s justification for spending $3.9 billion on consumer health insurance subsidies. They were told they could read it but could not take notes or make copies. The O.M.B. officials left the room to allow their visitors a moment to absorb the document, and then returned to answer a few questions and note that Attorney General Eric H. Holder Jr. had been briefed and signed off on the legal rationale.
“It was not a common practice in my 10 years in government at the three agencies where I worked,” said David Fisher, a former I.R.S. financial risk officer, recounting the odd meeting during a deposition on May 11 conducted by investigators for the House Ways and Means Committee.
The clandestine nature of the session underscores the intense conflict over the spending, which is the subject of a federal lawsuit in which House Republicans have so far prevailed, as well as a continuing investigation by the Ways and Means and the Energy and Commerce Committees. It also shows that more than six years after President Obama signed the Affordable Care Act into law, Republican opposition has not waned.
After failing to win congressional approval for the funds, the Obama administration spent the money anyway and has now distributed about $7 billion to insurance companies to offset out-of-pocket costs for eligible consumers. The administration asserts that the health care legislation provided permanent, continuing authority to do so, and that no further appropriation was necessary.
Mr. Fisher, for one, did not agree, and his testimony is the first to reveal that some within the administration challenged the spending. Beginning in late 2013, he and his supervisor began having qualms about how the White House was planning to proceed. In combing through documents to make sure his agency could defend the spending in future audits, Mr. Fisher said he came up empty.
“Cost-sharing reduction payments are not linked to the Internal Revenue Code, as far as I could tell, directly anywhere,” Mr. Fisher, now in the private sector, said in his deposition, made public last week by House Democrats who feared Republicans would release selected excerpts. “There is no linkage to the permanent appropriation, nor is there any link to any other appropriation that was indicating what account these funds should be paid from.”
Committee Republicans say Mr. Fisher’s sworn testimony, compelled by a rare Ways and Means Committee subpoena, affirms what they thought all along: that the Obama administration knew it did not have the authority to spend the money and did so regardless to strengthen the health care law in defiance of the Constitution. They say the administration violated a fundamental principle of American government: Congress must appropriate any money spent by the executive branch.
“Our investigation is revealing,” said Representative Kevin Brady, the Texas Republican who leads the Ways and Means Committee. “The more we learn, the more it’s clear that high-level administration officials knowingly circumvented Congress and undermined the Constitution.”
Committee Democrats dismiss such talk as overheated. They accuse Republicans of conducting a witch hunt in their crusade to dismantle the Affordable Care Act, which has twice been upheld by the Supreme Court.
Representative Sander M. Levin of Michigan, the top Democrat on the committee, said Mr. Fisher’s testimony made clear that internal accounting disputes were not uncommon, and that Mr. Fisher had acknowledged that the I.R.S. commissioner, John Koskinen, reached a reasonable decision to free up the money based on the guidance of others who saw the legal justification differently.
“The deposition only reinforces that the administration looked at this diligently and reached a conclusion,” Mr. Levin said. “The Republicans just have this kind of conspiratorial notion, but I think they are out to sink the A.C.A. and they don’t really care what technique they use.”
The deposition does show that the spending received substantial attention at the highest levels of the government. Not only was Mr. Holder’s name invoked, but Treasury Secretary Jacob J. Lew signed off on a separate memorandum approving the spending. Republicans say White House visitor logs suggest multiple senior-level meetings on the subject.
The dispute over the money is not going away. Mr. Brady said his panel would continue to investigate, and a report highly critical of the administration is expected this summer. Congress could take steps to reclaim the money distributed so far.
In the court fight, Judge Rosemary M. Collyer of Federal District Court has already ruled that the administration violated the Constitution in spending the money, but stayed her order blocking any more funds pending the administration’s appeal. If the ruling is reversed, it is more likely to be on the question of whether the House had standing to sue the administration, not the legality of the spending.
Mr. Fisher, in his testimony, sought to dispel any notion that his reservations were related to the health law. He said his objective was to make sure that he and his agency were not running afoul of the Antideficiency Act, a nearly 150-year-old statute that prohibits spending federal funds in excess of legitimate appropriations.
“This was about appropriations law,” he said. “For those of us who work in financial management, when it comes to the Antideficiency Act, which has criminal penalties associated with it, we take it very seriously.”
Mr. Fisher wanted to be careful not to break the law. Republicans want to know if others were not quite so scrupulous.