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21–944 2017

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 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

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 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

TIM MURPHY, Pennsylvania 

Chairman 

DAVID B. MCKINLEY, West Virginia 

Vice Chairman 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

H. MORGAN GRIFFITH, Virginia 

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 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

DIANA DEGETTE, Colorado 

Ranking Member 

JANICE D. SCHAKOWSKY, Illinois 

KATHY CASTOR, Florida 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

JOSEPH P. KENNEDY, III, Massachusetts 

GENE GREEN, Texas 

PETER WELCH, Vermont 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(III) 

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 

(1) 

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 

2 

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. 

3 

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. 

4 

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 Burwellor 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. 

5 

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 AdVerDate Nov 24 2008 09:35 Apr 12, 2017 Jkt 037690 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 114\114-159 CHRIS
6 

ministration, 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 

7 

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 

8 

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 

9 

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 

10 

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 marVerDate Nov 24 2008 09:35 Apr 12, 2017 Jkt 037690 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 114\114-159 CHRIS
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kets. 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 

34 

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 ofVerDate Nov 24 2008 09:35 Apr 12, 2017 Jkt 037690 PO 00000 Frm 00056 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 114\114-159 CHRIS
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fice. 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. 

87 

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 

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leges 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 

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spect 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. 

101 

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. 

102 

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. 

103 

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 AdminisVerDate Nov 24 2008 09:35 Apr 12, 2017 Jkt 037690 PO 00000 Frm 00107 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 114\114-159 CHRIS
104 

tration 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. 

105 

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 

106 

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 

107 

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. 

108 

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 

109 

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 apVerDate Nov 24 2008 09:35 Apr 12, 2017 Jkt 037690 PO 00000 Frm 00113 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 114\114-159 CHRIS
110 

proach 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 

111 

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. 

112 

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 

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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. 

114 

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. 

115 

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 beVerDate Nov 24 2008 09:35 Apr 12, 2017 Jkt 037690 PO 00000 Frm 00119 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 114\114-159 CHRIS
116 

cause 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 

117 

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 reVerDate Nov 24 2008 09:35 Apr 12, 2017 Jkt 037690 PO 00000 Frm 00121 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 114\114-159 CHRIS
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mind 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. 

119 

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 

120 

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 

121 

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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