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Key Congressional Committees: Obama Administration 'Broke the Law and Violated the Constitution'

US President Barack Obama delivers remarks at an Organizing for Action 'Obamacare Summit' at the St. Regis Hotel on November 4, 2013 in Washington, D.C. (Ron Sachs-Pool/Getty Images)
Caption
US President Barack Obama delivers remarks at an Organizing for Action 'Obamacare Summit' at the St. Regis Hotel on November 4, 2013 in Washington, D.C. (Ron Sachs-Pool/Getty Images)

A recent Weekly Standard editorial highlighted how the federal government is hiding some $104 billion in federal spending by falsely labeling Obamacare's outlays to insurance companies as "tax credits." Now a 157-page investigative report released by two powerful House committees—Ways and Means in conjunction with Energy and Commerce—finds that the Obama administration is illegally using funding for these "tax credits" to finance another part of Obamacare. In the process, the two committees declare, the administration has knowingly "broke[n] the law and violated the Constitution," by effectively granting itself the power of the purse.

The Federalist says that Congress "commands the purse," and it describes the purse as "that powerful instrument" for "reducing…all the overgrown prerogatives of the other branches of the government." Article I of the Constitution—the legislative article—reads, "No Money shall be drawn from the Treasury, but in Consequent of Appropriations made by Law." Yet the Obama administration is drawing money from the treasury in the absence of a congressional appropriation, in order to finance a part of Obamacare that Congress has declined to fund.

The committees' report details the administration's actions, which a federal judge recently declared unconstitutional. According to the report, when Obamacare was passed, its premium subsidies were both authorized and funded (through a "permanent indefinite appropriation") by Congress. However, Obamacare's subsidies to cover a small subsection of the population's out-of-pocket costs—deductibles, copays, etc.—were authorized but not funded.

Therefore, in July of 2012, the Obama administration's Treasury Department wrote a memorandum to the White House Office of Management and Budget noting that the funding for Obamacare's premium subsidies couldn't be used to finance its subsidies for out-of-pocket costs (officially known as the Cost Sharing Reduction program, or CSR). Treasury declared that "there is currently no appropriation to Treasury or to anyone else, for purposes of the cost-sharing payments." Accordingly, in April of 2013, the administration submitted its annual budget request and asked Congress for nearly $4 billion to fund Obamacare's subsidies for out-of-pocket costs.

Shortly thereafter, however, an assistant secretary for the Department of Health and Human Services (HHS) took what the report calls "the highly unusual step of withdrawing the appropriations request via a telephone conservation," leaving no paper trail. When asked in 2014 by Senators Ted Cruz and Mike Lee why this about-face had occurred, HHS Secretary Sylvia Burwell explained, in Clintonian fashion, that for "efficiency" purposes, subsidies for out-of-pocket costs—which had not been appropriated—would be "paid out of the same account from which the premium tax credit portion…are paid." This move to take money appropriated for one purpose and use it for another had been signed off on by Treasury Secretary Jack Lew earlier in 2014. But Lew has no authority to circumvent Congress.

The committee writes that, in this manner, the Obama administration chose to "knowing[ly]…violate appropriations law, the Antideficiency Act, and ultimately, the United States Constitution."

As the committees' report explains,

"[A]ppropriations must meet two specific criteria: they must (1) designate that payment is to be made, and (2) indicate a source of funds to be used. Unless the law meets both criteria, it does not constitute an appropriation. As the GAO explains, '[b]oth elements of the test must be present. Thus a direction to pay without a designation of the source of funds is not an appropriation.'

"Congress both authorized and funded the premium tax credit program in the ACA [the Patient Protection and Affordable Care Act—a.k.a. Obamacare]. Section 1401 of the ACA added Section 36B to the Internal Revenue Code, which authorizes the PTC [premium tax credit] program….

"With respect to the CSR program [the subsidies for out-of-pocket costs], however, Congress provided only an authorization, and not an appropriation, in the ACA. The CSR program is not a tax provision and not codified within the Internal Revenue Code. Further, there is no language in the ACA or anywhere else tying the CSR program to the 31 U.S.C. § 1324 appropriation. Despite statements by the Administration, it has never been a principle of appropriations law that an authorized program can be funded from the account of another program simply for 'efficiency' purposes if Congress does not appropriate money to the program."

As I recently wrote, "Three major casualties of Obamacare have been the rule of law, the separation of powers, and the Constitution." This is simply further evidence of all three.

It is time to repeal Obamacare and replace it with http://www.hudson.org/research/12004-an-alternative-to-obamacare" target="_blank">a conservative alternative</a> along the lines of "the recently released House GOP plan With a new president in office who will sign such repeal-and-replace legislation into law, the Obama administration may come to represent the high-water mark in the unfortunate era of big-government liberalism.