[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]



 
                   THE COST SHARING REDUCTION PROGRAM

                    INVESTIGATION AND THE EXECUTIVE

                   BRANCH'S CONSTITUTIONAL VIOLATIONS

=======================================================================

                                HEARING

                               before the

                       SUBCOMMITTEE ON OVERSIGHT

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              JULY 7, 2016

                               __________

                          Serial No. 114-OS13

                               __________

         Printed for the use of the Committee on Ways and Means
         
         
         
         
         
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                      COMMITTEE ON WAYS AND MEANS

                      KEVIN BRADY, Texas, Chairman

SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan
DEVIN NUNES, California              CHARLES B. RANGEL, New York
PATRICK J. TIBERI, Ohio              JIM MCDERMOTT, Washington
DAVID G. REICHERT, Washington        JOHN LEWIS, Georgia
CHARLES W. BOUSTANY, JR., Louisiana  RICHARD E. NEAL, Massachusetts
PETER J. ROSKAM, Illinois            XAVIER BECERRA, California
TOM PRICE, Georgia                   LLOYD DOGGETT, Texas
VERN BUCHANAN, Florida               MIKE THOMPSON, California
ADRIAN SMITH, Nebraska               JOHN B. LARSON, Connecticut
LYNN JENKINS, Kansas                 EARL BLUMENAUER, Oregon
ERIK PAULSEN, Minnesota              RON KIND, Wisconsin
KENNY MARCHANT, Texas                BILL PASCRELL, JR., New Jersey
DIANE BLACK, Tennessee               JOSEPH CROWLEY, New York
TOM REED, New York                   DANNY DAVIS, Illinois
TODD YOUNG, Indiana                  LINDA SANCHEZ, California
MIKE KELLY, Pennsylvania
JIM RENACCI, Ohio
PAT MEEHAN, Pennsylvania
KRISTI NOEM, South Dakota
GEORGE HOLDING, North Carolina
JASON SMITH, Missouri
ROBERT J. DOLD, Illinois
TOM RICE, South Carolina

                     David Stewart, Staff Director

                   Nick Gwyn, Minority Chief of Staff

                                 ______

                       SUBCOMMITTEE ON OVERSIGHT

                  PETER J. ROSKAM, Illinois, Chairman

PAT MEEHAN, Pennsylvania             JOHN LEWIS, Georgia
GEORGE HOLDING, North Carolina       JOSEPH CROWLEY, New York
JASON SMITH, Missouri                CHARLES B. RANGEL, New York
TOM REED, New York                   DANNY DAVIS, Illinois
TOM RICE, South Carolina
KENNY MARCHANT, Texas


                            C O N T E N T S

                               __________

                                                                   Page

Advisory of July 7, 2016 announcing the hearing..................     2

                               WITNESSES

Michael Deich, Senior Advisor, Office of Management and Budget...    19
John A. Koskinen, Commissioner, Internal Revenue Service.........     9
Mark J. Mazur, Assistant Secretary for Tax Policy, U.S. 
  Department of the Treasury.....................................    15
Mary Wakefield, Ph.D., R.N., Acting Deputy Secretary, U.S. 
  Department of Health and Human Services........................    13

                        QUESTIONS FOR THE RECORD

Questions from The Honorable Peter Roskam, a Representative in 
  Congress from the State of Illinois, to the Internal Revenue 
  Service........................................................   212
Additional Questions from The Honorable Peter Roskam, a 
  Representative in Congress from the State of Illinois..........   214


                   THE COST SHARING REDUCTION PROGRAM



                    INVESTIGATION AND THE EXECUTIVE



                   BRANCH'S CONSTITUTIONAL VIOLATIONS

                              ----------                              


                         THURSDAY, JULY 7, 2016

             U.S. House of Representatives,
                       Committee on Ways and Means,
                                 Subcommittee on Oversight,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 10:07 a.m., in 
Room 1100, Longworth House Office Building, Hon. Peter Roskam 
[Chairman of the Subcommittee] presiding.

    [The advisory announcing the hearing follows:]

ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS

                       SUBCOMMITTEE ON OVERSIGHT

                                                CONTACT: (202) 225-3625
FOR IMMEDIATE RELEASE
Thursday, June 30, 2016
No. OS-13

                  Chairman Roskam Announces Hearing on

                   The Cost Sharing Reduction Program

                Investigation and the Executive Branch's

                       Constitutional Violations

    House Ways and Means Oversight Subcommittee Chairman Peter Roskam 
(R-IL) announced today that the Subcommittee will hold a hearing on 
``Defying the Constitution: The Administration's Unlawful Funding of 
the Cost Sharing Reduction Program.'' The hearing will focus on the 
Committee's year-and-a-half-long investigation into the 
Administration's funding of the Affordable Care Act's Cost Sharing 
Reduction program. The hearing will take place on Thursday, July 7, 
2016, in Room 1100 of the Longworth House Office Building, beginning at 
10:00 a.m.

      
    In view of the limited time to hear witnesses, oral testimony at 
this hearing will be from invited witnesses only. However, any 
individual or organization may submit a written statement for 
consideration by the Committee and for inclusion in the printed record 
of the hearing.

      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
written comments for the hearing record must follow the appropriate 
link on the hearing page of the Committee website and complete the 
informational forms. From the Committee homepage, http://
waysandmeans.house.gov, select ``Hearings.'' Select the hearing for 
which you would like to make a submission, and click on the link 
entitled, ``Click here to provide a submission for the record.'' Once 
you have followed the online instructions, submit all requested 
information. ATTACH your submission as a Word document, in compliance 
with the formatting requirements listed below, by the close of business 
on Thursday, July 21, 2016. For questions, or if you encounter 
technical problems, please call (202) 225-3625.

      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
record according to the discretion of the Committee. The Committee will 
not alter the content of your submission, but we reserve the right to 
format it according to our guidelines. Any submission provided to the 
Committee by a witness, any materials submitted for the printed record, 
and any written comments in response to a request for written comments 
must conform to the guidelines listed below. Any submission not in 
compliance with these guidelines will not be printed, but will be 
maintained in the Committee files for review and use by the Committee.

      
    All submissions and supplementary materials must be submitted in a 
single document via email, provided in Word format and must not exceed 
a total of 10 pages. Witnesses and submitters are advised that the 
Committee relies on electronic submissions for printing the official 
hearing record.
      
    All submissions must include a list of all clients, persons and/or 
organizations on whose behalf the witness appears. The name, company, 
address, telephone, and fax numbers of each witness must be included in 
the body of the email. Please exclude any personal identifiable 
information in the attached submission.
      
    Failure to follow the formatting requirements may result in the 
exclusion of a submission. All submissions for the record are final.
      
    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TDD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.
      
    Note: All Committee advisories and news releases are available 
online at 
http://www.waysandmeans.house.gov/.

                                 

    Chairman ROSKAM. The Committee will come to order. The Ways 
and Means Oversight Subcommittee hearing on the cost sharing 
and reduction investigation is under way. Welcome today. We are 
joined by the Chairman of the Ways and Means Committee, 
Chairman Brady, and I am going to yield to Chairman Brady for 
an opening statement and then we will hear from Mr. Lewis.
    Chairman Brady.
    Chairman BRADY. Thank you, Chairman Roskam, for holding 
this important hearing.
    Today we are releasing substantive findings from our 17-
month investigation into the Administration's unlawful funding 
of Obamacare's cost-sharing reduction program. The reason why 
our investigation took 17 months is because the Administration 
obstructed the process and simply refused to give the facts to 
the American people.
    So we are here today to fulfill our constitutional 
responsibility to conduct oversight and reinforce Congress' 
constitutional power of the purse. We are not here to litigate 
whether the Administration acted unlawfully in funding 
Obamacare's cost-sharing reduction program. That was settled in 
May when the Federal judge ruled that the Administration had no 
constitutional or statutory authority to fund this program.
    As our Constitution makes clear in article I, section 9, 
clause 7, ``No money shall be drawn from the Treasury but in 
consequence of appropriations made by law.'' This means the 
executive branch may not spend a single taxpayer dollar without 
an explicit appropriation by Congress. Our Founding Fathers 
entrusted Congress with the power of the purse, not the White 
House.
    While current law authorizes the cost-sharing reduction 
program, Congress has never provided an appropriation for it. 
The Administration knew this and they didn't care. They broke 
the law and spent the money anyway. This is stealing from the 
American people, plain and simple. To date, the Administration 
has unlawfully spent $7 billion of taxpayer funding that was 
never appropriated for the CSR program. Let me repeat that: The 
Administration unlawfully spent $7 billion, taxpayer dollars 
for this program.
    So in February of 2015, our Committee and the Energy and 
Commerce Committee initiated a joint investigation into how all 
this was put into motion. The Administration has met us with 
unprecedented resistance at every turn. Numerous times we would 
call for agencies to turn over critical documents and numerous 
times we were denied.
    We also asked Administration personnel to come speak with 
us in person about how things transpired. Again, we were 
denied. At the beginning of the year, I finally said enough is 
enough. I issued subpoenas to compel the testimony of agency 
officials and legally require the Administration to turn over 
requests to documentation. This was one of my first acts as 
Chairman. It was the first time in years our Committee has 
subpoenaed the Administration for information needed to fulfill 
our oversight responsibilities.
    The lengths we have had to go, in this investigation, 
clearly underscore the unprecedented level of obstruction by 
this Administration. In fact, all of the agencies represented 
here today still have not complied with our subpoenas to turn 
over relevant documents. But these lengths also demonstrate how 
seriously we take our duty to oversee the Administration's 
actions. We will not be deterred by stonewalling.
    Thanks in large part to the outstanding work of Chairman 
Roskam, Chairman Upton at Energy and Commerce, and the 
oversight teams, our two committees, we have uncovered critical 
information about the Administration's unlawful actions. And it 
is because of this hard work that we now have a chance to 
deliver real findings to the American people.
    This morning, along with the Energy and Commerce Committee, 
we released a comprehensive staff report on what we have 
uncovered thus far. The report, which can be found on our 
Committee's website, details how the Administration decided to 
fund the CSR program illegally, and it provides an in-depth 
look at their unprecedented obstruction of this investigation.
    Our investigation in this matter is far from complete, but 
today represents a major step toward providing Americans with 
the transparency and accountability they deserve from their 
government.
    Again, thank you to Chairman Roskam and all the Members of 
the Oversight Subcommittee for your hard work and dedication. I 
yield back.
    Chairman ROSKAM. Thank you, Chairman.
    Mr. Lewis.
    Mr. LEWIS. Thank you, Mr. Chairman.
    Let me just say good morning and welcome to the witnesses. 
I begin by thanking each and every one of you for being here. 
Thank you for your service.
    In particular, I would like to thank the Commissioner for 
joining us once again. The Commissioner is an honorable man who 
has faithfully served his country. I would like to quote the 
former IRS Chief Risk Officer who said he is not only a 
phenomenal leader but one of the best managers we ever had in 
government.
    Mr. Chairman, I must tell you, I am upset. And I am very 
disappointed with today's hearing, with the topic. I am afraid 
it is nothing more than another attempt to roll back healthcare 
reform. Almost 2 years ago, House Republicans filed a lawsuit 
against the Obama Administration over the funding of the cost-
sharing reduction program, better known as CSR. This program 
simply helps low-income people afford medical costs.
    Today, over 6 million Americans have been helped. Today, 
over 6 million have better access to care. To be clear, the 
lawsuit claims that this program needs annual funding from 
Congress. The Administration argues that it does not. Mr. 
Chairman, this is a lawsuit between two branches of government. 
Both parties agree on the facts.
    So I respectfully ask, what is the point of this hearing? 
Why are we placing public servants in the middle of an ongoing 
legal case? Some of you argue that we are here because the work 
of the Committee is being blocked. This is not the case. This 
is not true. For the record, there are four government 
officials representing four different agencies here today. The 
Administration has voluntarily provided 13 current and former 
officials for interviews on this matter. Thirteen. Not 5, not 
6, not 10, but 13. The lawsuit is still pending in the courts. 
It is ongoing. Yet, here we are.
    Mr. Chairman, there is real work to be done. There are real 
issues that need to be addressed. This is not it. This is not 
the one. There may be others. We should not waste the time and 
energy debating how to tear apart the good part of healthcare 
reform. We should not be trying to roll back what helps people 
make ends meet. We can and we must do better, and we can do 
better. We are called to be leaders, to be headlights and not 
tail lights.
    Mr. Chairman, I deeply believe that this Subcommittee can 
do good work on behalf of the American people. I am hopeful 
that we will return to that work very, very soon.
    Thank you, and I yield back.
    Chairman ROSKAM. Thank you, Mr. Lewis. Let me attempt to 
answer some of the questions that you have laid out.
    And before I do that, I want to thank Chairman Brady and 
Chairman Upton for the work that they have done in driving this 
investigation and, from my point of view, that work has paid 
off.
    The Ranking Member just a minute ago said there is real 
work to be done, and I agree with that. He gave us an 
admonition and the question was, what is the point of the 
hearing. Let me describe, I think, what the point of the 
hearing is. But there is also a notion that when you are doing 
good work--and we all want to do it--there have to be clear 
lines, clear lines of authority.
    We have all heard that phrase, ``Good fences make good 
neighbors.'' And what we have seen going back and forth between 
the executive branch and the legislative branch are areas where 
the legislative branch, at least the Majority in the House 
thinks so, feels encroached upon.
    And it is not as if this is just a parochial thing. We are 
talking about these constitutional themes that this entire 
Subcommittee believes matter. Now, how that manifests itself, I 
don't obviously speak for the Minority, but these things do 
matter and it is not just esoteric.
    So as we all learned, we have this system of checks and 
balances. And there are three coequal branches of government, 
and they are meant to restrain one another. That was the nature 
of the architecture that the founders had, and they looked at 
these as essential safeguards to protect the American public 
from their own government.
    In our hearing today, we are going to be looking at how 
this Administration has run roughshod over two key authorities 
that the Constitution gave to Congress. The Constitution didn't 
give them to the Administration, didn't give them to the 
courts; the Constitution in article I gives them to Congress.
    And as Chairman Brady discussed a minute ago, the first key 
authority is Congress' power of the purse. And as we all know, 
the Constitution says this: ``No money shall be drawn from the 
Treasury but in consequence of appropriations made by law.'' 
That means that the government may not spend any taxpayer money 
unless Congress passes a law that says it can.
    The American people elect Members of Congress. And here in 
the House, we are up for election every 2 years. And we are all 
too familiar with that process, and that is the process by 
which the American public adjusts the dials. They make the 
choices at the ballot box that is manifested in who is seated 
in this Congress, and the Constitution says those people, who 
are sent by those representatives, get to choose how the money 
gets spent. Other people don't; Congress does.
    And it also means that the President cannot take money from 
one program and spend it on another just because he wants to or 
just because he thinks it is a good idea. Money is specifically 
appropriated for individual programs, and it seems to me that 
this Administration has ignored those constitutional 
restraints.
    So if you set aside the ``good intentions'' by which the 
Administration is cloaking itself and you begin to project out 
and think, well, what would a future Administration be able to 
do if we allow this to stand? Can a future Administration say 
they are going to do what they perceive to be a good idea 
regardless of what the Constitution says? And I would argue 
that that isn't a good thing.
    The Affordable Care Act established many programs. One of 
them was the premium tax credit, which helps people pay for 
their insurance premiums. Congress wrote the Affordable Care 
Act to allow the Administration to pay for that program from an 
account held by the Treasury Department. That account is paid 
for with a permanent appropriation so the tax credit account 
always has money. In this hearing, we might refer to that as 
the section 1324 account, or the premium tax credit 
appropriation.
    Okay. So far, so good. Permanent appropriations are unusual 
though. Congress pays for most programs with annual 
appropriations, meaning each year the Administration has to ask 
Congress for money to pay for those programs. Well, the ACA set 
up one of those programs that requires an annual appropriation. 
Let me repeat that: The ACA set up the program that requires an 
annual appropriation called the cost-sharing reduction program, 
or the CSR program.
    The cost-sharing reduction program requires insurance 
companies to reduce copayments, deductibles, and other out-of-
pocket costs for qualified people. Under the CSR program, the 
government is supposed to help offset the insurance company's 
cost. Let's get that clear. Who's the beneficiary here? It is 
the insurance companies.
    The underlying statute says the insurance companies have an 
obligation. This program is a subsidy for insurance companies. 
It is not a subsidy that is going directly to poor people. It 
is a subsidy that is going to insurance companies to offset 
their costs for the CRS payments.
    But unlike the premium tax credit program, Congress did not 
give any money in the ACA for the CSR program. Instead, each 
year the President's supposed to ask for money from Congress 
and the Congress can decide whether or not to give the 
executive branch that money. That is the architecture of the 
ACA. And in 2012, the Treasury Department wrote the President's 
Office of Management and Budget a memo saying exactly that.
    In 2013, the President initially asked Congress for $3.9 
billion to pay the cost-sharing reduction payments to the 
insurance companies in his fiscal year 2014 budget request. But 
then something strange happened. In July of 2013, the HHS 
assistant secretary of financial services called the Senate 
Appropriations Committee staff and asked them to take that line 
out of the President's budget. How unusual.
    Then in the fall of 2013, OMB created a memorandum 
explaining why the Administration could use the money Congress 
appropriated to pay for the premium tax credit program, that 
permanent appropriation I was just talking about, to pay for 
the cost-sharing reduction program using a permanent account to 
pay for an annual expense.
    OMB shared that memo with top officials in the 
Administration to get their approval, including--think about 
this. The level of granularity of this account is getting the 
attention of these people: The general counsels of Treasury and 
HHS, as well as the Attorney General, Eric Holder, who all had 
to sign off on that plan.
    Now, around that same time, the IRS' deputy chief financial 
officer was confirming that the Administration was squared away 
to make these payments, which were set to start being paid in 
January of 2014. At first, he was under the impression that the 
payments would be made from an annual appropriation to HHS, but 
then he learned HHS had withdrawn its request. HHS explained to 
him that the payments would come from the premium tax credit 
account.
    The deputy CFO had two big concerns: First, how would HHS 
make payments from a Treasury account? He wanted to be sure 
that an audit trail would be in place to later trace the 
accuracy of the payments, but then he became concerned about a 
bigger problem. Were the funds in the premium tax credit 
account even available for these payments?
    Because not only does the Constitution prohibit the 
Administration from making payments unless they have an 
appropriation, there is a law called the Antideficiency Act, 
and of all things, it makes it a criminal violation for a 
Federal official to pay for a program if Congress has not 
appropriated funds for that program.
    Helping the IRS avoid Antideficiency Act violations was one 
of the deputy CFO's primary responsibilities, and so he did the 
right thing. He raised red flags to the IRS' Chief Risk 
Officer, David Fisher, the IRS' chief counsel's office as well. 
His warning set off a chain of discussions at the IRS, and by 
early January of 2014, IRS Chief Counsel William Wilkins 
reached out to the OMB General Counsel, Geovette Washington, to 
discuss these issues. She then set up a meeting at OMB for 
seven IRS officials to come to OMB and look at the memo they 
prepared about the CRS funding.
    So on January 13, 2014, IRS lawyers and the chief risk 
officer and chief financial officer and several other officials 
went to OMB in the Old Executive Office Building. And there, 
these top IRS officials were escorted into an OMB conference 
room. Ms. Washington was at the meeting, along with several of 
her subordinates. The OMB lawyers passed out copies of the 
memo.
    Ms. Washington told the IRS officials not to take notes on 
it or to take a copy with them. Think about that. No notes, no 
copies, which several participants, according to our 
investigation, found to be very strange indeed. The OMB lawyers 
left the room and let the IRS officials read the memo. Then the 
OMB lawyers come back in. Ms. Washington talked about how she 
was excited to have had a chance to brief Attorney General Eric 
Holder about this issue and that he had approved the memo.
    Chief Risk Officer David Fisher and others raised concerns 
that the payments would violate the Antideficiency Act and the 
Constitution at that meeting. According to Mr. Fisher, OMB 
offered a weak explanation for why the payments would be okay. 
Back at the IRS, the officials briefed Commissioner Koskinen 
about the OMB meeting. Mr. Fisher told Commissioner Koskinen 
that he was worried about the Antideficiency Act violations.
    Our investigation has revealed, however, by the time the 
officials met with Commissioner Koskinen the decision already 
had been made. At the meeting, the IRS officials saw copies of 
an action memorandum directing the IRS to make certain CRS 
payments from the premium tax credit memo. Secretary Lew had 
already signed off on that memo.
    Administration officials who constructed this plan and 
moved ahead with it chose to fund the CRS payments from money 
that Congress designated for other programs. In other words, 
all of those individuals chose to hijack Congress' power of the 
purse and make those violations in violation of the 
Constitution and in violation of Federal law.
    To this day, they have made more than $7 billion in CSR 
payments without congressional authorization. That is the first 
thing. The second thing is this, that we will talk about here 
today, is Congress' power to oversee the executive branch, 
which is not mitigated, which is not restrained, which is not 
hampered by a pending lawsuit.
    Congress' oversight authorities are critical to ensuring 
the Administration is transparent to the American people. That 
is our job. Congress has run into unprecedented obstruction 
during the course of this investigation. It took the Committees 
a year and a half to gather the facts surrounding the 
Administration's decision to make these illegal payments. And 
even now, OMB, Treasury, and HHS are in violation of subpoenas 
issued by the Ways and Means Committee.
    The Administration has argued that because the House sued 
the Administration to stop them from making these payments, the 
Ways and Means Committee and Energy and Commerce Committee 
shouldn't be investigating the facts surrounding the 
decisionmaking. The House's lawsuit only focuses on a narrow 
legal issue. The House and the Administration have agreed that 
the court didn't need to do any of the factfinding to reach its 
decisions. That is why we need to do the factfinding here.
    The Committees want to know who, why, and how the 
Administration decided to embark on this unconstitutional 
course. While our oversight--while the prerogative of the 
American people, as manifested through them adjusting the dials 
in their periodic elections has been run roughshod over, it is 
our responsibility to determine these facts. And the fact that 
there is pending litigation has no influence on our inquiry 
there. And we will stipulate further that it is going to be the 
courts that are going to make the ultimate constitutional 
decision but already the lower court has decided as I have 
described.
    Instead of accountability and transparency, the 
Administration threw up roadblock after roadblock. But despite 
those, and through persistent efforts, we have learned a great 
deal. We look forward to learning more from the Administration, 
why they decided to make these payments, why they worked so 
hard to prevent Congress from learning these facts. And we are 
here to listen. We are here to learn. We are also here to 
defend the prerogative of the American public.
    We will hear from just one panel. Our panel is the four 
witnesses, the Department of Health and Human Services Acting 
Deputy Secretary, Mary Wakefield; Treasury Assistant Secretary 
for Tax Policy, Mark Mazur; IRS Commissioner, John Koskinen; 
and Office of Management and Budget Senior Advisor, Michael 
Deich.
    Commissioner, welcome. Let's start with you. You have 5 
minutes. Thank you for coming.

                STATEMENT OF JOHN A. KOSKINEN, 
             COMMISSIONER, INTERNAL REVENUE SERVICE

    Mr. KOSKINEN. Chairman Roskam, Ranking Member Lewis, and 
Members of the Subcommittee, as always, I appreciate the 
opportunity to appear before the Subcommittee. This hearing 
marks the 35th time I have testified before the Congress.
    During my 2\1/2\ years as IRS Commissioner, I have 
developed a deep respect for this Subcommittee and its primary 
role in overseeing the work of the IRS. We do not always agree, 
but you raise important questions and your requests and 
suggestions often lead to improvements in our service to 
American taxpayers.
    I am scheduled to lead the IRS for another 16 months, but I 
serve obviously at the pleasure of the President and a new 
President can always ask me to step aside sooner. But as long 
as I am Commissioner, I am committed to working with you in 
pursuit of our common goals and helping you fulfill your 
important oversight role.
    The IRS has been charged with implementing the tax-related 
provisions of the Affordable Care Act. These efforts include 
supporting the integrated system of Federal subsidies that help 
millions of American families afford health insurance coverage 
purchased through the Federal and State health insurance 
marketplaces. This system consists of interrelated subsidies, 
the premium tax credit, and cost-sharing reduction payments.
    The health insurance marketplaces, which are overseen by 
the Centers for Medicare and Medicaid Services, are responsible 
for determining whether an individual is eligible for APTC 
payments as well as the CSR payments. The IRS provides the 
marketplaces with data and computational services for use in 
their determinations about eligibility for financial 
assistance.
    CMS certifies the payments using the information it 
receives from the marketplaces and notifies the Treasury 
Department's Bureau of Fiscal Services, which disperses the 
payments to insurers. The IRS role in this process involves 
providing administrative support to ensure proper funding of 
and accounting for the advance premium tax credit and the 
shared CSR payments.
    The source of funding for these payments is a permanent and 
definite appropriation to the Secretary of the Treasury. The 
IRS manages and administers this appropriation on the 
Treasury's behalf for various types of payments, including CSR 
payments, premium tax credit refunds, and advance payments of 
the premium tax credit.
    At the beginning of each fiscal year, the IRS ensures that 
sufficient funding has been transferred into an allocation 
account for CMS to use in obligating and disbursing payments, 
including those for CSR payments. The IRS manages unobligated 
funds in the account at the end of the fiscal year and performs 
financial reporting as the parent of the allocation account.
    Because the payments are reflected on the IRS' financial 
statements, the IRS coordinates closely with CMS throughout the 
year to ensure that CMS has effective controls over the 
integrity of the payment process and amounts. The IRS 
continually monitors those controls to mitigate any risk to 
financial reporting. This includes an independent third-party 
assessment performed at CMS for the IRS to share with the 
Government Accountability Office for the financial statement 
audit.
    The IRS has received a clean audit opinion from the GAO on 
its accounting and financial reporting with regard to the cost-
sharing reduction payment for the 2 years the program has been 
in operation. Before the first CSR payments were made in late 
January 2014, the Treasury Department determined that it would, 
through the IRS, administer cost-sharing reduction payments 
pursuant to the Affordable Care Act under the section 1324(b) 
appropriation. Thereafter, we proceeded with our activities to 
support implementation and operation of the CSR payments.
    Chairman Roskam, Ranking Member Lewis, and Members of the 
Subcommittee, as well as Chairman Brady, this concludes my 
statement, and I would be happy to answer your questions.
    [The prepared statement of Mr. Koskinen follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]    
    
    
   
    Chairman ROSKAM. Thank you, Commissioner.
    Ms. Wakefield.

    STATEMENT OF MARY WAKEFIELD, PH.D., R.N., ACTING DEPUTY 
    SECRETARY, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

    Ms. WAKEFIELD. Chairman Roskam, Ranking Member Lewis, and--
--
    Chairman ROSKAM. Turn on your mike.
    Ms. WAKEFIELD. Chairman Roskam, Ranking Member Lewis, and 
Members of the Subcommittee, I appreciate this opportunity to 
testify on the Department of Health and Human Services' 
implementation of the Affordable Care Act, including the 
provisions of the Affordable Care Act that require the 
executive branch to make advance payments of premium tax 
credits and cost-sharing reductions that help to defray the 
cost of insurance coverage.
    The Affordable Care Act is expanding access to care for 
millions of Americans who would otherwise be uninsured. It 
improves the quality of care for people no matter how they get 
their insurance while also slowing the growth in healthcare 
costs nationwide. Now, we have an estimated 20 million 
Americans that have gained coverage since the Affordable Care 
Act's coverage provisions have taken effect, and cost-sharing 
reductions are a key part of providing more Americans with 
access to quality health care that they can afford.
    This financial assistance helps low-income Americans to see 
their doctor on a regular basis and also to afford their out-
of-pocket healthcare expenses. The Administration has 
faithfully implemented the Affordable Care Act, including 
provisions that require the executive branch to make advance 
payments of premium tax credits, as I indicated, and cost-
sharing reductions that help to defray the cost of insurance 
coverage.
    Both the advance payment of premium tax credits and cost-
sharing reductions are fully funded by the Affordable Care Act 
through the appropriation provided under section 1324. As you 
know, the House has filed the lawsuit against HHS concerning 
the payment of cost-sharing reductions. This issue continues to 
be litigated, and for additional information, I would refer you 
to the briefs that have been filed in the case.
    At HHS, we remain committed to cooperating with the 
Committee to provide information that it needs to fulfill its 
legislative responsibilities while also taking into account the 
significant confidentiality interests of the executive branch. 
And we look forward to continuing to work with you and with 
your staff on important matters related to the implementation 
of the Affordable Care Act.
    Thank you, Mr. Chairman.
    [The prepared statement of Ms. Wakefield follows:]
    
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    Chairman ROSKAM. Thank you.
    Mr. Mazur.

        STATEMENT OF MARK J. MAZUR, ASSISTANT SECRETARY 
        FOR TAX POLICY, U.S. DEPARTMENT OF THE TREASURY

    Mr. MAZUR. Good morning. Chairman Roskam, Chairman Brady, 
Ranking Member Lewis, and Members of the Subcommittee, I 
appreciate the opportunity to be here today to testify 
regarding the cost-sharing reduction program under the 
Affordable Care Act.
    Since the enactment more than 6 years ago, the ACA has 
significantly reduced the number of Americans without 
healthcare coverage. Twenty million people have gained health 
insurance coverage because of the ACA. The uninsured rate is 
the lowest on record.
    Moreover, the ACA is making health coverage more affordable 
and accessible for Americans across the country. About 85 
percent of marketplace consumers benefit from tax credits to 
make their coverage more affordable and they pay an average 
premium of $106 per month after tax credits. And since 
enactment of the ACA, we have seen the slowest growth in 
healthcare costs in 50 years. This reduced growth rate and cost 
benefits all of us.
    For insured individuals and families, the total cost of 
health care covered by our plan consists of a combination of 
payments to insurers and direct or indirect payments to 
healthcare providers. The payments to insurers take the form of 
monthly premiums that the insurers charge. The payments to 
healthcare providers, collectively known as cost-sharing 
payments, reflect the fact that insurance plans typically do 
not pay the full cost of covered healthcare services. Rather, 
plans require insured individuals to pay a copayment or 
coinsurance for visits to healthcare providers.
    Further, some plans require individuals to pay a specified 
amount out of pocket, known as a deductible. The principle goal 
of the ACA is to make health insurance more affordable for low- 
and moderate-income Americans. To achieve that goal, the Act 
established an integrated system of Federal subsidies that 
lower insurance premiums and reduce out-of-pocket costs for 
millions of eligible individuals through the premium tax 
credits and through the cost-sharing reductions.
    Premium tax credits, as you know, subsidize monthly 
insurance premiums for eligible individuals. Those credits are 
available to eligible individuals with household incomes from 
100 percent of the Federal poverty level, to 400 percent of the 
Federal poverty level, and that reduces the cost of insurance 
purchased through the ACA's marketplaces for low- and moderate-
income households.
    For individuals eligible for the premium tax credit and who 
have household income up to 250 percent of the Federal poverty 
level, the ACA also helps with cost-sharing expenses, such as 
copayments and deductibles for plans obtained through the 
marketplaces. The permanent appropriation in 31 U.S.C. section 
1324 provides funding for all components of ACA's integrated 
system of subsidies for the purchase of health insurance, 
including both the premium tax credits and the cost-sharing 
reduction portions of the advanced payments.
    Since January 2014, the executive branch has been making 
advance payments of premium tax credits and cost-sharing 
reductions to issuers of qualified health plans as provided for 
in the Affordable Care Act. I understand that some Members of 
this Committee disagree with, and will have questions about, 
the Administration's legal conclusions that 31 U.S.C. section 
1324 permanently appropriates funding for cost-sharing 
reduction payments.
    The Administration's conclusion about those payments are 
the subject of active litigation brought by the House of 
Representatives. So for further information on the legal 
justifications, I would refer you to briefs filed in that case.
    We welcome the opportunity to continue our work with this 
Committee and with all of Congress to achieve the objectives 
and goals of the Affordable Care Act. Thank you.
    [The prepared statement of Mr. Mazur follows:]
    
    
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    Chairman ROSKAM. Just to put a finer point on it, Mr. 
Mazur, your invitation was for further legal justification. We 
are going to stipulate that is not the nature of the inquiry. 
We are looking for the process justification. So thank you for 
the opportunity to inquire there.
    Mr. Deich.

                  STATEMENT OF MICHAEL DEICH, 
        SENIOR ADVISOR, OFFICE OF MANAGEMENT AND BUDGET

    Mr. DEICH. Chairman Roskam, Ranking Member Lewis, and 
Members of the Subcommittee, thank you for the opportunity to 
testify before you today.
    Chairman ROSKAM. Turn on your mike. Can you pull it closer?
    Mr. DEICH. Is that better?
    Chairman ROSKAM. Yes, sir. Thanks.
    Mr. DEICH. Great. I am Michael Deich, and I have had the 
privilege of working for the Office of Management and Budget 
twice over the last 20 years. In my first position from 1996 to 
2001, I served as Associate Director for General Government and 
Finance.
    Since returning to OMB last year, I have served as Senior 
Advisor to the Director and have been delegated the duties of 
the Deputy Director. In this capacity, I advise the Director on 
development of the President's budgets and on appropriations 
activity. Every day, I am reminded of the excellent work 
performed by OMB staff, and I am honored to be part of this 
agency and proud of the mission it performs.
    The Office of Management and Budget assists the President 
in developing and executing----
    Chairman ROSKAM. Mr. Deich, I am getting some requests. If 
you can move a little bit closer to the mike or pull it closer 
to you, that would be helpful.
    Mr. DEICH. Is that good? Thank you.
    Chairman ROSKAM. Thank you.
    Mr. DEICH. A core part of OMB's mission is working with ev- 

ery component of the executive branch to develop the 
President's budget proposals, submitting the President's budget 
to Congress, working toward enactment of the budget, and 
overseeing the executive branch's implementation of enacted 
appropriations.
    OMB ensures agencies develop, express, and implement 
policies and practices in accordance with the President's 
priorities and with statutory direction. OMB is committed to 
improving the effectiveness and efficiency of government 
programs. As part of its mission, OMB works with other 
executive branch agencies to ensure the successful and ongoing 
implementation of the Affordable Care Act.
    As my colleagues have noted, the ACA has expanded access to 
care for millions of Americans who otherwise would be 
uninsured. It has improved the quality of care for people no 
matter how they get their insurance, and it has slowed the 
growth in healthcare costs nationwide.
    Cost-sharing reductions have helped improve the 
affordability of coverage options for eligible consumers. 
Moving forward, the Administration will work to build on the 
progress that has been made to further reduce the number of 
uninsured Americans, improve health care, and slow healthcare 
cost growth.
    OMB respects Congress' oversight role in examining the 
Affordable Care Act and will continue to work with the 
Committee to respond to its requests for information. OMB has a 
long history of working collaboratively to respond to 
congressional inquiries and will continue to work with this 
Committee to accommodate its request for information.
    Thank you again for the opportunity to testify today. I 
look forward to answering your questions.
    [The prepared statement of Mr. Deich follows:]
    
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    Chairman ROSKAM. Thank you all for your testimony.
    Chairman Brady.
    Chairman BRADY. Chairman, first, let me ask unanimous 
consent that the staff report on this investigation be 
submitted for the record.
    Chairman ROSKAM. Without objection, so ordered.
    [The submission of The Honorable Kevin Brady follows:]
    
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    Chairman BRADY. Second, Congress is always about 
distraction. So let's knock down a couple of them right away. 
The distraction is that we can't be doing oversight because 
there is litigation involved. Our Founding Fathers didn't write 
in the Constitution the power of the purse for Congress unless 
a lawsuit is filed. Our Democratic colleagues did recognize 
that when they led this Committee into oversight; and 
Republicans who, who lead this Committee today, recognize that 
constitutional power of the purse and oversight trumps 
litigation every day of the week.
    Third, this is not about health care. In my view, the 
Affordable Care Act is failing 2 years in advance, but that is 
not this issue. This is about whether any White House, not just 
this one, any White House can ignore repeatedly the explicit 
directions of Congress that no dollars will be spent on a 
specified program. That is what is at the heart of this. And 
whether you are Republican or Democrat, you ought to be 
interested in this report and in this power because at that 
point there is no need for a legislative branch. Any White 
House--any White House can just pick or choose which programs 
to fund and which to ignore.
    Finally, there is still this--this investigation will 
continue until it gets to the complete truth. We have sent 
subpoenas for documents to every agency representative here 
today. Every one of your agencies are out of compliance with 
those subpoenas. You have not asserted a single legal privilege 
that protects these documents, so you have absolutely no reason 
not to hand them over.
    So Mr. Mazur, beginning with you, Treasury is months 
overdue on document subpoenas. Yes or no, you do intend to 
comply with subpoenas by the end of next week?
    Mr. MAZUR. Mr. Brady, I understand that your staff and the 
staff of the Treasury Department have been in contact to 
determine how best to respond to those subpoenas. I suspect 
those will be ongoing and hopefully they will be a success.
    Chairman BRADY. You know, we have been very patient and are 
trying to be accommodative to it, but it is time to deliver 
those documents.
    Ms. Wakefield, HHS is also months overdue on the document 
subpoenas. Does HHS intend to comply by the end of next week?
    Ms. WAKEFIELD. Sir, we have provided information and 
documents, and we will continue to work with the Committee to 
review the Committee's request.
    Chairman BRADY. Mr. Deich, OMB is also months overdue on 
the document subpoenas. We have only asked for one from you. 
One. One. It shouldn't be that hard. So does OMB intend to 
comply by the end of the week?
    Mr. DEICH. We are committed to providing the information 
sought by the Committee, and we look forward to working with 
the Committee to find a way to accommodate its interests.
    Chairman BRADY. I am going to take all of that as a yes for 
each of the agencies.
    In my view, the level of obstruction has been astonishing. 
This is a fairly direct issue. The Administration should not be 
hiding the ball on this. And the sooner we get to this and to 
the public scrutiny of this, the better all around. And I would 
encourage you to do that.
    With that, Chairman Roskam, I yield back.
    Chairman ROSKAM. Thank you, Mr. Chairman.
    Mr. Lewis.
    Mr. LEWIS. Thank you very much, Mr. Chairman.
    Thank each of you for being here. Thank you for your 
testimony.
    My question is for the panel. Please explain what for us 
the cost-sharing reduction program is that was established by 
the Affordable Care Act?
    Ms. WAKEFIELD. Thank you for the question, sir.
    The cost-sharing reduction program was established by the 
Affordable Care Act to help to defray the costs of healthcare 
coverage for individuals and families, particularly--not 
particularly, but specifically for those that are low income up 
to about 250 percent of the Federal poverty level. And, in 
fact, what it does is it allows the defraying of costs that are 
out-of-pocket costs, so those costs that an individual would 
need to pay as part of a copay or a deductible, different from 
the advance premium tax credits that focus explicitly on 
helping to offset the costs of premiums.
    So this is the place, the cost-sharing reduction component, 
that for low-income people can have such a significant impact; 
that is, it can be the difference between a mom who feels 
comfortable taking their child to an urgent care center because 
they know in advance that the copay or the deductible is not 
going to be prohibitive in terms of their ability to pay.
    So the point is that this provision in this statute is 
really designed to help individuals offset or defray their 
costs so that they can get access to doctors, nurse 
practitioners, when they need access to health care. It is a 
really important part of the Affordable Care Act, particularly 
for those populations that are lower income.
    Mr. LEWIS. Does this program benefit the average person, 
the average Joe?
    Ms. WAKEFIELD. Yes, as a matter of fact, the program 
benefits over 6 million individuals as of about March of this 
year. That is the data that we have, that there are millions of 
individuals that are able to access physicians and other 
healthcare providers without what has historically been a 
barrier to getting health care pre the Affordable Care Act. 
That is the out-of-pocket cost that people would have to pay. 
And so about 6.4 million people, about that number, are 
currently benefiting from this provision.
    Mr. LEWIS. That is the number that are participating in 
this program at this time?
    Ms. WAKEFIELD. Approximately 6.4 million individuals across 
the United States, and States, and congressional districts all 
over, are benefiting from this program as of this year. And 
prior to the Affordable Care Act, it wouldn't be uncommon to 
see individuals having to choose between getting healthcare 
coverage or paying rent or being able to pay for food because 
of the associated costs of coinsurance or deductibles, as I 
mentioned, and copays.
    So this removes that barrier for individuals that are often 
working families, but families that are low-income. It is a 
really important provision to help ensure that people have 
access to health care.
    Mr. LEWIS. Thank you very much.
    Mr. Chairman, I yield back.
    Chairman ROSKAM. Thank you, Mr. Lewis.
    Dr. Wakefield, just for the point of clarification, you are 
conflating two issues: The premium tax credit directly benefits 
individuals; the cost-sharing reduction program benefits 
insurance carriers. That is the direct beneficiary.
    I will yield to Mr. Meehan.
    Mr. MEEHAN. I think that gets right to the issue, and this 
is the whole heart of what is disturbing about the way these 
representations are being made.
    Let me just start with--Mr. Koskinen, could you please get 
exhibit 7. You will see it up on the screen right here. And I 
don't know if you are able to read from the screen, but you are 
able to read from the documents in front of you. Would you 
please read the yellow parts of section 1324 that has been 
cited by just about everybody today in the testimony?
    Mr. KOSKINEN. I cannot quite see that, but which----
    Mr. MEEHAN. Let me read it for you then so we don't waste 
time. ``Necessary amounts are appropriated to the Secretary of 
the Treasury for refunding Internal Revenue collections as 
provided by law, including payments of''--and then we go to 
34(b), the section that states, ``Disbursements may be made 
from the appropriations made by this section only for''--and 
then it highlights number one, ``refunds for the limit of 
liability,'' and number two, ``refunds from the credit 
provisions of the Internal Revenue Code.''
    So that is the authority for the credit provision 
reimbursements. Is that not correct?
    Mr. KOSKINEN. That is the authority, yes.
    Mr. MEEHAN. So from that, you make those tax credit 
reimbursements. Are you able to choose to do anything else? Can 
you give any of the people there the ability to have other 
kinds of benefits? Let's say they all need cars to get to 
appointments. Can you give them cars out of that account?
    Mr. KOSKINEN. No. We basically rely on legal advice as to 
what is included----
    Mr. MEEHAN. Well, no, you rely on the legal language, 
correct, of the statute?
    Mr. KOSKINEN. Well, actually, the language, you know, there 
is a piece of litigation going on about what the language 
means. Our role----
    Mr. MEEHAN. Well----
    Mr. KOSKINEN. Our role is to administer the Act. And we 
made, as you know----
    Mr. MEEHAN. Where is there ambiguity here where--because I 
am looking at the part that articulates tax credits as being 
specifically given. But where is the part in the appropriation 
that says that you are entitled to do cost sharing?
    Mr. KOSKINEN. Well, as you know, we have not been involved 
directly in that discussion. We are not involved in the 
litigation. It is not----
    Mr. MEEHAN. Then let me ask Ms. Wakefield, where is the 
language that allows you to do the cost sharing?
    Mr. KOSKINEN. With all due deference, I am not in a 
position to enter into that legal debate about whether----
    Mr. MEEHAN. No, I am not asking you, Mr. Koskinen. Thank 
you. I am asking Ms. Wakefield now. Thank you. You have told me 
the authority for what you are enabled to do. I am asking Ms. 
Wakefield where she believes she has the authority to do that 
now.
    Mr. KOSKINEN. I have not done an analysis of what is 
included.
    Mr. MEEHAN. Ms. Wakefield, did I address you with a 
question, please? Please answer my question.
    Thank you, Mr. Koskinen.
    Ms. WAKEFIELD. It is our interpretation that the Affordable 
Care Act requires the executive branch through this section to 
make advance payments for the payment of premium tax credits--
--
    Mr. MEEHAN. This is a process question. Can you point to me 
where you are entitled to do that?
    Ms. WAKEFIELD. Sir, I cannot. I am not an attorney or a 
lawyer. I can say that for the specific interpretation of that 
language, I would refer you to the briefs that have been filed 
by the Department of Justice.
    Mr. MEEHAN. No. Ms. Wakefield, we are talking about a 
process here, not the briefs in a legal filing. You can't refer 
me to it because it doesn't exist. Where in that language does 
it say you are entitled to make payments for cost sharing? Read 
it.
    Ms. WAKEFIELD. What I can say is that our interpretation of 
that section----
    Mr. MEEHAN. Interpretation of what? What are you 
interpreting? What is--tell me--Mr. Mazur, what are you 
interpreting? Show me the point that says cost sharing is 
entitled to be paid for. This is not a complex issue.
    Mr. MAZUR. Mr. Meehan, we are not trying to make this hard 
for you, but if you look at the Affordable Care Act as a whole, 
there are cost-sharing payments that are authorized in the 
program. They are an integrated part of the program with the 
premium tax credits. And the legal briefs, as has been pointed 
out, filed make that point of how the interpretation is done.
    Mr. MEEHAN. Where do they point to the authority? This is a 
process--no, no, no, Mr. Mazur, you are in front of me.
    Mr. MAZUR. Yes, I refer you to the legal briefs to take a 
look at them. They are available.
    Mr. MEEHAN. Well, why don't you refer to the legal briefs 
and tell me where they are.
    Mr. MAZUR. Because I don't have the legal briefs in front 
of me at the moment, sir.
    Mr. MEEHAN. Why did you come not prepared to answer the 
very question that relates to the point that each and every one 
of you made relying on this specific provision and yet 
completely unprepared when I pointed out the specific language 
that does not give you that authority?
    Mr. MAZUR. Sir----
    Mr. MEEHAN. Could you speak to the issue that it does? You 
have each used it as the basis upon which you have justified 
this decision. It clearly does not exist in statute, and 
arguably, Mr. Koskinen, you appreciate people could be 
criminally prosecuted for spending money they are not 
authorized to spend. I am not suggesting we go there. Where 
does this authority emanate from?
    Mr. MAZUR. Sir----
    Chairman ROSKAM. Mr. Crowley.
    Mr. CROWLEY. Mr. Chairman, thank you.
    First of all, I just want to clarify a point that the 
Chairman and Mr. Koskinen made, that the CSR program benefits 
insurers is misleading. That is what he alluded to, that it 
somehow doesn't benefit the insurers. CSR directly benefits the 
patients by reducing out-of-pocket costs at the point of care.
    To make an analogy, I know my Republican colleagues love 
the Medicare Advantage program. The Federal Treasury pays the 
insurance company. Is that correct, Ms. Wakefield?
    Ms. WAKEFIELD. Yes.
    Mr. CROWLEY. Not the patient, correct, in a similar way in 
which the CSR is operated as well? Is that correct?
    Ms. WAKEFIELD. Yes.
    Mr. CROWLEY. But no one would say--I don't think my 
Republican colleagues would say that the Medicare Advantage 
program doesn't benefit patients. So I think you really have to 
be under a rock not to understand that the 6 million people who 
are getting a benefit today that they didn't have before the 
Affordable Care Act, are getting that benefit because of that 
subsidy of the cost-sharing reduction program that helps them 
afford that coverage. Is that not correct, Ms. Wakefield?
    Ms. WAKEFIELD. Yes, that is correct, and it does so using a 
sliding-fee scale. That is correct.
    Mr. CROWLEY. I think it is a shame we are here today. And a 
shame and sham are very closely related. I think it is a sham 
as well. The Majority claims today's hearing is somehow needed 
to ``investigate'' the implementation of a program that helps 
people with healthcare costs. But their minds were made up well 
before they embarked on this fool's errand to find wrongdoing 
where none existed. They started out believing that what was 
happening was illegal. They made that determination and then 
they filled in the blanks.
    I have been wondering why this hearing was needed, since 
after all, our Republican colleagues are engaged simultaneously 
and are in the middle of a lawsuit on this very matter, which I 
know Mr. Mazur and others have alluded to. But the Majority 
kept insisting that this hearing is needed to hear from all of 
you today, taking you away from important work.
    And then this morning, hours before the hearing even 
started, the Majority issued their own partisan, biased report, 
full of, in my opinion, false conclusions. And, in fact, we 
were asked not to--my understanding is when the report was 
given to the Committee Minority side we were asked not to--the 
Ranking Member was asked not to share that report with anyone 
in terms of open process. I guess they were so eager to hear 
from the witnesses they couldn't even wait for you all to 
testify before they came to the conclusion and claimed the 
wrongdoing.
    So it's clear to me this hearing today is only about 
attacking the Affordable Care Act and in many respects 
embarrassing the witnesses and the Administration and 
interfering with the public servants, you all, who are helping 
to implement this Act.
    But let's take this opportunity to clear some things up. I 
am troubled by the charges the Majority has thrown around that 
the Administration has somehow not cooperated with the 
investigation. As my colleague, Mr. Lewis, has referred to, the 
Administration has made available 13 former and current 
employees to talk about the implementation of the health reform 
laws cost-share program.
    I also understand the Administration has made these 
individuals available despite being sued right now by the House 
Republicans over the very same subject matter that they are 
engaged in, and now are simultaneously holding this so-called 
investigation on.
    Let me just ask a couple of questions, Ms. Wakefield, if I 
could. Are you aware of the fact that not a single Republican 
on this Committee supported the Affordable Care Act?
    Ms. WAKEFIELD. No, I wasn't aware of that.
    Mr. CROWLEY. Would you be surprised if I told you that not 
a single Member of the Republican caucus supported the 
Affordable Care Act? Would you be surprised if I told you that? 
You don't have to answer that.
    Would you be surprised if I told you that the Republican 
caucus has tried 60 times to overturn the Affordable Care Act?
    Ms. WAKEFIELD. No, I wouldn't be surprised of that.
    Mr. CROWLEY. Do you know that they actually have attempted 
60 times to overturn the Affordable Care Act? You know that. Is 
that correct?
    So I think I have an understanding where they are coming 
from here in terms of this morning. They had a predetermined 
outcome. They determined what you did was wrong and then they 
just filled in the blanks in this report. I think a first 
grader could do that, but they would probably get an F from the 
teacher for trying to do something just like that. And I think 
the American people understand what this is. It is a sham.
    And with that, I yield back the balance of my time.
    Chairman ROSKAM. Just for the point of clarification, the 
Administration stipulated in the lawsuit that has been 
frequently cited here that notwithstanding the cost-sharing 
reduction program, it is the insurance carriers that are on the 
hook. So my declaration earlier is without repute.
    Mr. Holding.
    Mr. HOLDING. Thank you, Mr. Chairman.
    Mr. Mazur and Commissioner Koskinen, in preparing for this 
hearing, discussing the issues, I am going to assume that you 
have talked with people at IRS and Treasury who have been 
involved in funding the cost-sharing reduction program. 
Correct?
    Mr. KOSKINEN. No, I have not talked to anybody at the 
Treasury Department about it. As noted earlier, David Fisher's 
deposition discusses the time we had a discussion about this. I 
had been at the IRS about a month, and going to Congressman 
Meehan's point, the question was raised in terms of what was 
the authority, did we have the authority to administer the 
plan.
    Mr. HOLDING. Well, let me ask a little bit more 
specifically. So, Commissioner, do you know Charles Messing?
    Mr. KOSKINEN. Pardon?
    Mr. HOLDING. Charles Messing.
    Mr. KOSKINEN. Charles?
    Mr. HOLDING. Messing.
    Mr. KOSKINEN. I do not know.
    Mr. HOLDING. He is the former IRS CFO.
    Mr. KOSKINEN. I am not aware of him.
    Mr. HOLDING. You don't know him? So Mr. Messing, who is the 
former IRS CFO, gave this document here. I think it is exhibit 
1, if we could put it on the screen. If you all could turn in 
your binders to exhibit 1. Each of you has it in front of you, 
and each of you will need to look at it. So Mr. Messing, the 
former IRS CFO, gave the document, which is exhibit 1, to the 
Treasury Inspector General when they asked for information 
about the premium tax credit program.
    Mr. Mazur, do you know who Michael Briskin is?
    Mr. KOSKINEN. I do not.
    Mr. CROWLEY. Mr. Mazur.
    Mr. KOSKINEN. Oh, sorry.
    Mr. MAZUR. It is Mr. Mazur.
    Mr. HOLDING. Mazur, excuse me.
    Mr. MAZUR. Yes, I do know who Michael Briskin is.
    Mr. HOLDING. He is the Treasury Special Counsel to the 
Assistant General Counsel for General Law Ethics and 
Regulation. And the metadata of the document that we are 
looking at show that he was the last person to edit this 
document.
    Now, the document shows that Mr. Briskin, a Treasury 
counsel, was the last person to edit the document. And the 
Treasury wrote this memo in July 2012 to OMB. And it talks 
about whether HHS could use a Treasury allocation account to 
make the advance premium credit payments.
    So if you are taking a look at the highlighted passage 
there in the document, this passage is contrasting the funding, 
the appropriation Congress gave for the premium tax credit 
program to the lack of funding for the cost-sharing program.
    Mr. Mazur, would you read the highlighted passage, please.
    Mr. MAZUR. It is not possible for me to read that 
highlighted passage.
    Mr. HOLDING. You have it in your document there.
    Mr. MAZUR. Is it highlighted in there as well?
    Mr. HOLDING. It is the last paragraph, exhibit 1.
    Mr. MAZUR. The last paragraph of the memo?
    Mr. HOLDING. Yes, exhibit 1.
    Mr. MAZUR. Sure. It says--the memo as written says, ``Such 
a reading, of course, would not be applicable to the largely 
parallel language in section 1324(c)(3); there is currently no 
appropriation, to Treasury or anyone else, for purposes of the 
cost-sharing payments to be made under that section. However, 
this does not suggest that section 1412(c)(2)(A) should be read 
to require certification of payments by Treasury; such a 
reading would be equally inapplicable to section 1412(c)(3).''
    Mr. HOLDING. All right. I will stop you there.
    Mr. Mazur, are you aware that in July of 2012 Treasury's 
legal department wrote this memorandum stating that the account 
the Administration currently is using to make the cost-sharing 
reduction payments was not available to make those payments and 
that there was no appropriation for the CSR payments? Were you 
aware of that in July? Were you aware of that?
    Mr. MAZUR. Sir, I was not aware of this memorandum until 
today, until you brought it up. I have been in my current job 
since August 2012, when the Senate confirmed me.
    Mr. HOLDING. Okay. Mr. Deich, do you know who received this 
memo at OMB that is exhibit 1?
    Mr. DEICH. I do not.
    Mr. HOLDING. Do you know who would know who received that 
memo at OMB?
    Mr. DEICH. I do not. I arrived at OMB last year.
    Mr. HOLDING. Would you be able to find that out for us and 
report back to the Committee?
    Mr. DEICH. I will take that back, yes.
    Mr. HOLDING. Thank you.
    So based on this memo, OMB was aware that Treasury believed 
that there was no appropriation for CSRs in 2012. Would you 
consider that to be accurate, having looked at this memo and 
what we have read here, Mr. Mazur?
    Mr. DEICH. I don't know. I don't know who at OMB received 
or read the memo.
    Mr. HOLDING. Mr. Mazur.
    Mr. MAZUR. So I look at this as one input into a decision 
process not dispositive by itself, and I haven't seen this memo 
before today.
    Mr. HOLDING. Thank you, Mr. Chairman.
    Chairman ROSKAM. Thank you.
    Mr. Rangel.
    Mr. RANGEL. Thank you. Thank you, Mr. Chairman.
    I didn't follow that line of questioning, but is there any 
question that the four of you believe that you are following 
constitutionally the letter of the law as relates to the 
Affordable Care Act? Have you any problem with it that you are 
trying to follow the law?
    And in the course of reaching a conclusion of how the law 
should be enforced, from time to time there are disagreements, 
I assume, among lawyers; and that is what lawyers are for, to 
make certain this agreement so that we can get paid. So the 
fact that there is not unanimity in memos does not distract 
from the unanimity of your testimony today. Does it in any way?
    Mr. MAZUR. Correct.
    Mr. RANGEL. Do you have any doubts at all about the 
positions you have taken as it relates to the constitutionality 
and legality of the Affordable Care Act and how we are funding 
it right now?
    Mr. MAZUR. I have none.
    Mr. RANGEL. And, obviously, the court is a separate branch 
of government. And you, I, and Republicans and whoever will be 
relying on them to determine who is right and who is wrong.
    What I don't understand and I hope some of my political 
friends on the other side of this aisle can explain is that--
and I hope I don't get in trouble with Reverend Lewis, but it 
just seems like----
    Mr. LEWIS. Well, it will be good trouble.
    Mr. RANGEL [continuing]. Every moral concept that civilized 
countries have is you are supposed to take care of the darn 
sick--is you have a commitment to take care of the sick. And 
there is no reason for me to believe that Members of Congress 
don't have that same compassion.
    And I do believe, before the Affordable Care Act, that you 
received calls from people saying that my dear relative has 
cancer and the insurance company claimed they had a 
precondition and they are not going to pay for it. And I always 
was successful to say, you don't mean to tell me that the 
premiums weren't paid so you are not going to give the service. 
And we had all hoped that the Federal Government could take 
that responsibility off of us legislatively and have a program 
that a sick person can either get care or prevent themselves 
from getting sick.
    Now, what are we talking about? We are talking about how a 
person is eligible for care. And if they say that you need 
insurance to do it, you are talking about how they get the 
resources to pay for the insurance; but if they don't have it, 
they can die. They can absolutely die if they don't have the 
money to pay for care.
    I can see how you can disagree with Obama and Democratic 
majorities, but for God's sake, if you think we are doing it 
wrong, you should have an alternative to do it right. But you 
just can't say that people are not entitled because you don't 
like the method in which it is being funded.
    So I just hope that, as we go through these things, that 
the voters would recognize that somebody cares for how they are 
being treated, in terms of their need for health care. And if 
they don't like the way we are doing it, they certainly should 
come up with a plan to say, ``We can do it better.'' I don't 
think that is asking too much since our offices know how many 
people, because of the inability to pay these doctors and 
hospitals, die because they can't do it.
    So I want to thank all of you for doing your job. We write 
the law, you interpret it, and they take us to court. I wish 
somebody would say, if you don't do it this way, at least show 
us how these people can get health care.
    Thank you, Mr. Chairman.
    Chairman ROSKAM. Thank you, Mr. Rangel.
    Let me accept your invitation, as I look over to recognize 
the next Member, the invitation to explain it from the 
viewpoint of one of your political friends--and we are 
political friends, and I am on the other side of the aisle. It 
goes like this. Here goes the thinking:
    Number one, you used a great phrase, ``you don't mean to 
tell me.'' And so we have the same thing going on. You don't 
mean to tell me that you have to violate the Constitution in 
order to get this done. You don't mean to tell me that you are 
going to come before Congress and say one thing and go to a 
Federal court and say another thing, come to Congress and say 
this is about poor people--and that is the representation here. 
And that is what has your attention. And I respect that.
    But let's be really clear. The Administration, in the 
lawsuit, stipulated that the insurance companies are going to 
do this regardless. They are going to get the money regardless. 
In other words, this is a subsidy for insurance companies. And 
so that is the scandal.
    And if this is such a great idea, then, to go back to 
Chairman Brady's point, come clean and say: Here, here is how 
we came to this information, here are these witnesses.
    And to characterize this group of people, frankly, as being 
helpful and forthcoming? They are coming up with new legal 
standards here that don't even exist in the law. Heightened 
interest in confidentiality, something like that? That is a 
complete fiction. That is made up. That is nonsense.
    So that is the part that animates me, and I am inviting you 
to be animated by that, as well. Because when it all comes down 
to it, your point is, look, people need help. Our argument and 
what we are trying to drive today is, ``Yes, and there is a way 
to do it.''
    And don't tell me that you are telling a Federal judge one 
thing and you are coming before the Ways and Means to hear 
another thing.
    Let me yield to Mr. Smith.
    Mr. RANGEL. I just want to join with you. If you are going 
to sue somebody, sue the insurance company. I will join in with 
that suit and encourage the Democratic leadership. But you 
don't take away the right and the ability of a sick person to 
get well. That is wrong----
    Chairman ROSKAM. Great point.
    Mr. RANGEL [continuing]. Morally wrong.
    Chairman ROSKAM. And, Mr. Rangel, they have admitted in 
court that the insurance company is on the hook.
    I yield to Mr. Smith.
    Mr. SMITH. Thank you, Mr. Chairman.
    I want to follow after that conversation.
    Mr. Deich, when Congress writes an appropriations law, what 
does that law have to say in order to legally give money to 
that program?
    Mr. DEICH. I am not a lawyer. My understanding is that an 
appropriation has two components. One is directing that a 
payment be made, and the other, designating the source of funds 
that are used.
    Mr. SMITH. That is exactly what I think most Members of 
Congress believe, that when you do appropriations that is what 
is necessary.
    And, Ms. Wakefield, does HHS ever decide to take money from 
one program and give it to another for convenience?
    Ms. WAKEFIELD. No, sir. Sir, we follow the expectation----
    Mr. SMITH. Wait, was your answer ``no, sir'' at the 
beginning? The mike wasn't on.
    Ms. WAKEFIELD. Yes.
    Mr. SMITH. Okay.
    Ms. WAKEFIELD. That was my answer.
    We follow the expectations that are laid out in the 
statutes that are associated with the programs that HHS has 
responsibility for implementing. And so our actions derive from 
our interpretation of the statutes, and that is the basis for 
our implementation of our programs.
    Mr. SMITH. Your actions rely on the statutes.
    Ms. WAKEFIELD. That is correct, on our interpretation----
    Mr. SMITH. And based on the appropriations, that is how you 
distribute money. And if you distributed money any other way, 
that would be against the law, correct?
    Ms. WAKEFIELD. So our actions are based on our 
interpretation of the statute, and that is associated with 
authorizing language as well as with appropriations language.
    Mr. SMITH. So if appropriations are passed saying money 
will be disbursed out of this fund for this purpose, if you 
disburse it any other way, that would be a violation of that 
appropriation, correct? Yes or no.
    Ms. WAKEFIELD. We interpret the statutes----
    Mr. SMITH. It is a yes-or-no answer. Is it yes or no?
    Ms. WAKEFIELD. Well, sir, we interpret the statutes----
    Mr. SMITH. So it depends is what you are telling us? Just 
yes or no or it depends, one of the three.
    Ms. WAKEFIELD. Our responsibility is to----
    Mr. SMITH. Okay.
    Let me read this letter, okay? In a letter, Senators Cruz 
and Lee--this was a letter to Senator Cruz and to Senator Lee 
from Secretary Burwell.
    And it says, ``To improve the efficiency and the 
administration of the subsidy payments made pursuant to the ACA 
for insurers as well as the Federal Government, the cost-
sharing subsidy payments are being made through the Advance 
Payments program and will be paid out of the same account from 
which the premium tax credit portion of the advance payments 
for that program are paid.''
    Secretary Burwell did not give a statutory basis for using 
the account. She just said it was for efficiency.
    Mr. Deich, have you ever seen any other situation in which 
the executive branch used money appropriated for one program to 
pay for a different program and justified it solely because of 
the convenience or for efficiency?
    Mr. DEICH. Congressman, thank you for your question.
    In the present instance, the Administration made the 
payments based on the existence of an appropriation.
    Mr. SMITH. Have you ever seen Congress make an 
appropriation determination based on the efficiency or based on 
their convenience?
    Mr. DEICH. I am sorry, I didn't hear the question. Say it 
again.
    Mr. SMITH. Let me repeat the question again, because you 
didn't answer it.
    Mr. Deich, have you ever seen any situation in which the 
executive branch used money appropriated for one program to pay 
for a different program and justified it solely because of 
convenience or efficiency?
    Mr. DEICH. I have not. And, as I mentioned earlier, in the 
present instance, it is our belief----
    Mr. SMITH. Today you have.
    Thank you, Mr. Chairman.
    Chairman ROSKAM. Mr. Davis.
    Mr. DAVIS. Thank you, Mr. Chairman.
    I am going to read from a letter to the editor of Newsweek 
from the Cook County president, Toni Preckwinkle, as she 
responds to Newsweek magazine's March 4, 2014, article, ``How 
Obamacare May Lower the Prison Population More Than Any Reform 
in a Generation.''
    And she says, ``Cook County, home to 130 municipalities, 
including the city of Chicago, is the second-largest county in 
the United States. As president of Cook County's Board of 
Commissioners, I am charged with overseeing an overburdened 
criminal justice system, which includes one of the Nation's 
largest jails. I commend Newsweek for recognizing the vital 
connection between Obamacare and safer communities.''
    How Obamacare May Lower the Prison Population More Than Any 
Reform in a Generation, March 4, 2014.
    ``In November 2012, Cook County was granted a Medicaid 
waiver that has already allowed us to provide health insurance 
to over 86,000 low-income residents, including 2,600 formerly 
detained individuals. For the first time, many of these people 
are now receiving mental health and substance abuse treatment, 
supported by preventive physical health care in their 
communities.
    ``These efforts mean those with criminal records are less 
likely to return to our jail, while others will never make the 
first trip into detention. When a young person struggling with 
depression gets treatment instead of access to street drugs, it 
puts him or her on the path to a productive life. We can 
realize lower rates of incarceration and recidivism in 2014 by 
seizing the opportunity Obamacare has created.''
    Deputy Secretary, do these individuals receive the benefit 
from shared-cost reductions?
    Ms. WAKEFIELD. Thank you for the question.
    Individuals with an income between 100 and 250 percent of 
the Federal poverty level are eligible for the benefits 
associated with the cost-sharing reduction provisions of the 
statute. And it is a provision that is really important for 
low-income individuals and families, because it helps to offset 
and defray the costs that are out-of-pocket costs when 
individuals access healthcare services.
    So, certainly, no doubt, some of the individuals in the 
population you have just described, sir, would be probably 
eligible for that particular benefit.
    Mr. DAVIS. And if we did not provide care for them, would 
they have any other recourse, any other place, any other 
source, or any other way to do anything except, as 
Representative Rangel suggested, die?
    Ms. WAKEFIELD. So those out-of-pocket costs can be a 
barrier to individuals getting access to health care services. 
Individual families will make decisions on occasion about 
whether or not the money they have available would be used to 
pay for a deductible, for example, or a copay to see a doctor 
to have their child taken care of, for example, or that that 
money would be stipulated in that family's budget for use for 
some other purpose.
    So choices would, historically, before the Affordable Care 
Act, for families, many families, would have needed to have 
been made, especially those families that are--well, the 
families that are lower-income families. So those were tough 
choices that impacted individuals.
    And I can tell you, as a nurse, as a registered nurse, it 
is really important, from my vantage point, that people are 
able to access care when they need it. And this provision helps 
to remove what has been a barrier for many individuals to 
access health care when they need it because of their low-
income status and limited funds that they have to pay for 
healthcare services versus some other choice.
    Mr. DAVIS. Thank you very much.
    I yield back, Mr. Chairman.
    Chairman ROSKAM. Thank you, Mr. Davis.
    Mr. Reed.
    Mr. REED. Thank you, Mr. Chairman.
    Deputy Secretary, I want to focus in on some of the 
decision-making processes that happen at the Department of 
Health with this issue.
    Are you aware that in fiscal year 2014 there was an 
appropriations request made to the Senate for reimbursement of 
the cost-sharing payment?
    Ms. WAKEFIELD. It is my understanding that in the fiscal 
year 2014 budget there was a request for appropriations to fund 
the cost-sharing reduction provisions.
    Mr. REED. So that request was made by the Administration to 
the appropriations process, to have it funded through the 
discretionary appropriations process that we deal with here in 
Congress, correct?
    Ms. WAKEFIELD. I believe that is correct----
    Mr. REED. I think you are accurate.
    Ms. WAKEFIELD [continuing]. I believe.
    Mr. REED. Then, 2015, that appropriations request did not 
seek reimbursement for the cost-sharing reduction payment. 
Isn't that correct?
    Ms. WAKEFIELD. I believe that for fiscal year 2015, in the 
President's budget, that the conclusion was made that the 
executive branch was required to make cost-sharing reduction 
payments using permanent appropriations and to fund CSR.
    Mr. REED. So isn't it fair to say, then, 2014, the 
Administration requested an appropriations request for this 
cost-sharing payment; 2015, they did not make that request for 
the appropriations payment and they went a different route, 
they went down this mandatory spending, this provision that we 
are relying upon that is in the lawsuit? That is where we are 
at, correct?
    Ms. WAKEFIELD. As I said, the conclusion that was drawn for 
fiscal year--the conclusion that was made, it is my 
understanding, for fiscal year 2015's President's budget was 
that the executive branch was required to make appropriations 
available to fund the cost-sharing reduction provisions of the 
law.
    Mr. REED. Because the appropriation was denied in 2014.
    The other question I have then for you is, you have in your 
testimony asked us to look at the briefs, to get to some of the 
details here. And are you aware that in the briefs the court 
asked the question of the Administration lawyers, what caused 
you to withdraw that appropriations request from 2014 to 2015? 
Are you aware of the court asking that in the litigation?
    Ms. WAKEFIELD. No, I am not aware of that.
    Mr. REED. They did. They did.
    And then the Administration's lawyers responded to that 
request of the court and said, ``The reference of withdrawal is 
to OMB's submission of the fiscal year 2015 budget, which did 
not request a similar item. Defendant's counsel did not intend 
to suggest that there was a separate formal withdrawal document 
and apologizes for being unclear on that point.'' That was the 
representation of the Administration to the court.
    Now, are you aware of an Ellen Murray?
    Ms. WAKEFIELD. Yes. She is the Assistant Secretary for 
Financial Resources at the U.S. Department of Health and Human 
Services.
    Mr. REED. And are you aware she made a phone call to the 
Senate Appropriations Committee asking them to withdraw or to 
not provide that cost-sharing payment?
    Ms. WAKEFIELD. I was not in the position that I am 
currently in, as the Acting Deputy Secretary, during the fiscal 
year 2014- 
fiscal year 2015 budget process that you described----
    Mr. REED. So you weren't there.
    Ms. WAKEFIELD. I wasn't there, so I can't speak to 
conversations.
    Mr. REED. I anticipated you saying that. But the question 
is--the record is very clear. Ms. Murray made that phone call. 
She made that phone call to the Senate Appropriations Committee 
to withdraw that request. I think that is going to be--that is 
undisputed, as to what happened there.
    The question I am going to ask you is--I am going to give 
you an opportunity to come clean. Do you know who directed her 
to make that call?
    Ms. WAKEFIELD. Sir, I wasn't in my current position at that 
time. I was the Administrator for the Health Resources and 
Services Administration. I have no knowledge of a call that was 
made or--I have no knowledge of a call that was made.
    Mr. REED. Have you ever had any conversations with anybody 
at the Department of Health about Ellen Murray's phone call to 
the Appropriations Committee?
    Ms. WAKEFIELD. I have no knowledge of a call that was made 
by Ellen Murray.
    Mr. REED. Have you talked to anybody at the Department of 
Health about that phone call?
    Ms. WAKEFIELD. No. I have no knowledge of that call.
    Mr. REED. Okay. So this is the first time you have ever had 
a conversation about Ellen Murray's phone call, with me here 
today.
    Ms. WAKEFIELD. I have no knowledge of that call, 
Congressman. I have----
    Mr. REED. No, no, no, not that you don't have knowledge. 
Have you had a conversation? Other than our conversation right 
here today, have you had a conversation in the Department of 
Health about Ellen Murray's phone call to the Appropriations 
Committee to withdraw the request?
    Ms. WAKEFIELD. In coming into the Committee today, 
Congressman, I was informed that there was the possibility of a 
call. Somebody mentioned in passing to me, Congressman, that 
there was a conversation that had--I am sorry, I am trying to 
catch it exactly correct.
    I was, I think, informed that a conversation had been made 
by Ellen Murray with an Appropriations staffer. I have no 
knowledge of----
    Mr. REED. Who did you have that conversation with?
    Ms. WAKEFIELD [continuing]. The details of that call.
    Mr. REED. Who told you that? Who told you that?
    Ms. WAKEFIELD. Oof.
    Mr. REED. In preparation for your Committee testimony 
today----
    Ms. WAKEFIELD. Yes, that is right. So this was in 
preparation for the Committee.
    Mr. REED. Who told you that?
    Ms. WAKEFIELD. I am trying to remember.
    Mr. REED. You don't even remember who told you that in 
preparation for the Committee?
    Ms. WAKEFIELD. Congressman, we do a lot of prep with 
different individuals coming into the----
    Mr. REED. So who did you prepare with in preparation for 
today's testimony?
    Ms. WAKEFIELD. Sure. So I prepared----
    Mr. REED. Give me names.
    Ms. WAKEFIELD. Excuse me?
    Mr. REED. Give me names.
    Ms. WAKEFIELD. Yes. So I prepared with individuals from 
different parts of the----
    Mr. REED. Names.
    Ms. WAKEFIELD. Well, the individuals that I prepared with 
included Kevin Barstow--bear with me, please, because this is 
over the course of the last few days--Hannah Bumsted. Let's 
see----
    Mr. LEWIS. Mr. Chairman, I am going to object. The Member's 
time is over. I don't think he should be harassing----
    Mr. REED. This isn't harassment, Mr. Lewis.
    Chairman ROSKAM. I mean, I was just letting her complete 
her statement, and then I was going to interrupt.
    Ms. WAKEFIELD. Yes. And sorry, there are just a number of 
individuals. So, in preparation for this meeting--Congressman, 
I am not trying to obfuscate. I am actually trying to remember 
the names of the individuals. There----
    Mr. REED. That is the problem.
    Ms. WAKEFIELD [continuing]. Are a number of them.
    Mr. REED. You obfuscated to the court, and you are not 
being truthful here today.
    Chairman ROSKAM. The gentleman's time----
    Mr. LEWIS. Mr. Chairman?
    Chairman ROSKAM. I got it. I got it.
    The gentleman's time has expired.
    Dr. McDermott.
    Mr. MCDERMOTT. Thank you, Mr. Chairman.
    I always like to come to a session of the theater of the 
absurd. It is an old period in the theater in which things are 
very strange on the stage.
    What I find interesting in the theater of the absurd today 
is that we have Mr. Koskinen here as a witness. Now, he is the 
guy that this Committee and this Congress, on the Republican 
side, is trying to get rid of or dismiss as the IRS head, but 
he is good enough to come here and testify.
    So I am glad to see you here, Mr. Koskinen. I appreciate 
your public service.
    Now, what is the theater of the absurd here is that he sits 
as an administrator in which people argue in front of about 
what decision he should make, about how money should be spent, 
or how money should be spent in a particular program that is in 
law, and there are disputes.
    I sat in a deposition and listened to some employee of the 
department say that there was a big dispute. And then he went 
on to say that Mr. Koskinen made the decision that 99 percent 
of the people would make--that is, to pay out these payments.
    The witch hunt that is going on here is really about 
discrediting the IRS. Because the Speaker himself has said we 
care about poverty, we really care, we Republicans are really 
worried about poverty. This was a program to help poor people 
get health care. It was to give them the ability to buy and 
deal with some of the problems that come up for folks that 
don't make $170,000 a year like we do. Everybody on this dais 
does not have problems with healthcare payments, but there are 
a lot of people out there in the world who do.
    And we put a program together, and instead of coming in 
here to fix it--if it was an appropriation, then fix it. That 
would be a simple bill, almost a consent calendar bill, if 
people were serious about fixing it. But this is not about 
fixing it. This is about a witch hunt for somebody in the IRS 
who sent a letter or made a phone call or did something.
    Now, I find it very hard to see how a public 
administrator--have you ever had any decision, Mr. Koskinen, 
before you that did not have people on both sides of it?
    Mr. KOSKINEN. As a general matter, the only decisions that 
come to me are where there are close questions or arguments on 
both sides of the question.
    Mr. MCDERMOTT. And what is the process you go through in 
dealing with those kinds of things?
    Mr. KOSKINEN. Well, as Mr. Fisher noted in his deposition, 
from the day I started--and the meetings involved here were in 
my first month--I have always said that at any meeting everyone 
in the meeting should feel comfortable and, in fact, obligated 
to raise any questions or concerns they have.
    And, in fact, Mr. Fisher and I were setting up an 
enterprise risk management program, where my goal was to have 
every IRS employee view themselves as a risk manager who not 
only should feel comfortable raising concerns or issues but 
really has an obligation to let us know.
    So my way of running meetings is everybody in the meeting 
should feel comfortable--if they have a question or an issue to 
be raised, they should be comfortable raising it, and, in fact, 
it is their obligation to raise it.
    Mr. MCDERMOTT. And then, when that process is done, you 
have listened to all of them, you make a decision.
    Mr. KOSKINEN. That is correct.
    Mr. MCDERMOTT. And the buck stops at your desk, more or 
less, is how it would be put in Harry Truman's terms, correct?
    Mr. KOSKINEN. That is correct.
    Mr. MCDERMOTT. Now, has there ever been a decision you made 
where you think, well, I could have gone the other way, but--
maybe I should have gone the other way? Have you ever 
questioned yourself afterward?
    Mr. KOSKINEN. Well, if you run meetings the way I have been 
running them for my 45-year career and you see all of the 
issues before you, as a general matter, I have not then felt 
that I had to make second choices or a concern about that, 
because I have heard from very smart and able people on both 
sides of the issue. There is usually a consensus that develops.
    And that is what happened in this meeting, as Mr. Fisher 
noted. By the time we got through analyzing it and looking at 
the legal advice we had, the consensus was the IRS was 
authorized to go forward with its administrative 
responsibilities, which we did.
    Mr. MCDERMOTT. Thank you for your service as the Director 
of the IRS.
    Mr. KOSKINEN. Thank you.
    Mr. MCDERMOTT. I yield back the balance of my time.
    Chairman ROSKAM. Thank you.
    Part of the challenge in coming into act three of the 
theater is that you missed the two previous acts. The point I 
made in my opening statement was that this decision was largely 
made at the time the Commissioner showed up at the IRS. So this 
was basically a done deal.
    Let me also point out that the Commissioner is the only 
person who accepted our invitation to be here. He was invited, 
he accepted the invitation, and here he is as a witness. The 
other three witnesses are here basically by threat of subpoena, 
and it was like passing a kidney stone to get these people to 
come here. So the Commissioner is in very much a different 
posture, and that was very clear in my opening statement.
    Let me yield to Mr. Rice.
    Mr. RICE. Thank you, Mr. Chairman.
    And I am going to follow up on Mr. Reed's questions to Mrs. 
Wakefield.
    Did you know that the Administration's lawyers in the 
ongoing litigation regarding this matter wrote that the 
Administration did not withdraw its request for the 
appropriation, but later on, in the process of preparing for 
this, in our investigation, Ellen Murray in fact said that she 
was directed by somebody--that is unclear, who that was--to 
call Senate Appropriations and say that we no longer needed the 
money, the Administration no longer needed the money? Were you 
aware of that?
    Ms. WAKEFIELD. No, sir. I have no knowledge of the 
circumstances that you just described. I do not.
    Mr. RICE. Okay. Well, so if the Administration's lawyers in 
the course of this litigation said that there was no withdrawal 
but, in fact, Mrs. Murray did actually call Senate 
Appropriations and withdraw, that would be somewhat of a 
misrepresentation to the court, wouldn't it?
    Ms. WAKEFIELD. I am unaware of the context or the specific 
circumstances that you have just described. Sorry. I was not in 
my position at the time of----
    Mr. RICE. Thank you, Mrs. Wakefield.
    I want to talk to you, Mr. Mazur. You know, we work for the 
same people, the American people. And President Obama promised 
the American people the most transparent Administration in 
modern history. But experience has proved exactly the opposite.
    With a string of lies and scandals and coverups in the IRS 
and in other areas of government, from Lois Lerner and Jonathan 
Gruber, to things that you said to this Congress, Commissioner 
Koskinen, to Susan Rice, to Hillary Clinton, Eric Holder, James 
Clapper--it goes on and on--it is just not surprising that the 
American people have lost faith in our government.
    Mr. Mazur, I am trying to understand--I am looking at your 
memo of January 15, 2014, which I assume you have in front of 
you, and I am trying to understand your justification for using 
1324(b). What I don't understand is why you can't clearly 
answer that question, why it has to be confused, duck and 
cover. I want to know--this memo, you prepared it, right? Your 
name is on it.
    Mr. MAZUR. Correct.
    Mr. RICE. How many memos do you do, action memorandums, for 
Secretary Lew? How often do you do that?
    Mr. MAZUR. I have probably written hundreds of memorandums 
to Secretary Lew over the time that I have been there.
    Mr. RICE. Whose initials is that where it says ``approved'' 
there?
    Mr. MAZUR. Excuse me?
    Mr. RICE. The initials where it says ``approved'' on the 
memo, is that Secretary Lew's?
    Mr. MAZUR. Those would be Secretary Lew's initials, yes.
    Mr. RICE. That is Secretary Lew's? All right.
    When it gets down to the part of justifying why you believe 
that the payments are appropriate under section 1324(b), that 
entire paragraph is redacted. Why would that be redacted?
    Mr. MAZUR. Really, that is----
    Mr. RICE. Is there some privilege that you want to assert? 
Is this a top-secret matter of national security? Why would 
that be redacted? Why wouldn't you share that with the Congress 
and the American people?
    We both work for the same people. All we are asking for is 
what President Obama promised, and that is transparency. Why 
would that be redacted?
    Mr. MAZUR. Sir, I agree we all work for the same American 
people. I also think that the Treasury Department has been 
working with your Committee to give you the information you 
need----
    Mr. RICE. Oh, really? So here we sit, a year and a half 
later, and we still don't know the justification in this 
memorandum for why you believe these cash payments should be 
taken out of 1324(b).
    You say you have been working with us, but yet you redact 
the very crux of it in this memorandum. The most important 
paragraph is taken out of this memo. Why would you hide that 
from us? Why is it a constant, constant stream of scandals and 
cover-ups and obfuscation? Why is that?
    Mr. MAZUR. Sir, first, I am going to respectfully disagree 
with you on the scandals part. I don't think there has been a 
set of scandals in this Administration.
    Mr. RICE. Well, I mean, the Congress had to take the 
unprecedented action of suing the Administration to get to the 
bottom of this because of continued ducking, covering, hiding, 
obfuscation. Why do we have to go to the courts to get these 
answers?
    Why are we sitting here today, a year and a half into this 
investigation, and you still won't lay out the specifics of 
your memorandum of January 15, 2014, which--the public has the 
right to know this information. Why is it that we continuously 
are faced with these lies and coverups?
    Mr. MAZUR. Sir, the House of Representatives has taken the 
unprecedented action of suing the Administration over this 
political disagreement. And that is where it stands right now. 
It----
    Mr. RICE. Political disagreement? We don't even know what 
we are disagreeing about because you won't even tell us your 
position.
    Chairman ROSKAM. Mr. Marchant.
    Mr. MARCHANT. Thank you, Mr. Chairman.
    I would like to ask the panel today if any of you consider 
the tax refund account a slush fund.
    Mr. MAZUR. Sir, no. It is used for appropriate purposes.
    Mr. MARCHANT. Okay. So is there any precedent, is there any 
other time in history where the tax refund account--and, Mr. 
Koskinen, Mr. Commissioner, you certainly don't view that tax 
refund account as a slush fund that can be tapped for political 
reasons.
    Mr. KOSKINEN. Absolutely not. We would only----
    Mr. MARCHANT. I think----
    Mr. KOSKINEN. We only run a program with----
    Mr. MARCHANT. I think that every member of the panel can 
agree that that is not the intent of that fund. And all of you 
should be concerned that that is the way it was actually, in 
effect, used.
    The Administration had a real clear choice to come to the 
Congress and ask for that money. It is in the legislation. It 
allows the Administration, or Health and Human Services, to 
come to the Congress, get that appropriation so that they can 
make those payments to the insurance company. Is that correct? 
Yet they chose not to do it this year. Why?
    Well, I can tell you. Back in my district, Obamacare is one 
of 
the most unpopular programs the Federal Government has ever 
printed. And it is my opinion that the Administration knew that 
if it came to Congress for that appropriation it was going to 
have trouble getting it.
    So, Ms. Wakefield, if those insurance companies don't get 
that amount of money, what do they do to recoup the money?
    Ms. WAKEFIELD. Congressman, it is our intent that, through 
the litigation, that the----
    Mr. MARCHANT. No, not the litigation. Just from a practical 
aspect, don't the insurance companies have to raise their 
premiums if they do not get that reimbursement?
    Ms. WAKEFIELD. Sir, it is our view that the Administration 
will prevail in the position that we have taken in litigation--
--
    Mr. MARCHANT. No. I am talking about, just from a practical 
standpoint, if those insurance companies don't get that amount 
of money, they are going to have to raise their premiums to 
recoup their costs so they don't go broke.
    So my opinion is that there was no appropriation sought. 
The money was available in this fund. It was readily available 
through a--looks like a very complicated process. They got 
everybody on the same page and got this money, tapped this 
money, and sent it to the insurance companies, primarily so 
that the insurance companies would not have to go up on their 
premiums so that the program would not be--it would not be 
disclosed earlier than it is being disclosed this year and next 
year, where in Texas I think Blue Cross-Blue Shield has said 
that in some areas they are going to have to go up as much as 
60 percent on the premiums just so they don't go broke.
    So this was all political. This was all done for political 
expediency, to keep the insurance companies from going up on 
the premiums so that the Obamacare program would not appear to 
be insolvent and not working and going broke.
    So is there any precedent in government for these kinds of 
funds, this fund particularly, being used this way? Do any of 
you know of another instance in your career where the tax 
refund account was used for this purpose?
    Mr. MAZUR. Sir, the Administration's position is that it is 
an integrated system of the premium tax credits and the cost-
sharing payments, and it is appropriate to make them out of the 
permanent appropriation. That is what the law--the law is very 
clear that these payments shall be made. And so, interpreting 
that statute, that is the conclusion that we came to.
    Mr. MARCHANT. And of all the thousands of Federal programs 
out there, has the Administration--has any Administration ever 
reached the conclusion that the tax refund account was the 
place to go to fund a program that it did not want to go to 
Congress and get its appropriation for?
    Mr. MAZUR. Sir, again, this is an integrated system of 
payments that are made to the insurance companies on behalf of 
individuals, and the Administration believes it is appropriate 
they come out of the same account.
    Mr. MARCHANT. So, as a public policy moving forward, I 
would just challenge the witnesses from your standpoint and the 
positions that you hold. We consider, Congress considers this a 
breach of faith, not just an illegal, unconstitutional act, but 
a breach of faith of what your duties are.
    And I would urge you, if you are ever presented with this 
situation again, whether the courts rule one way or the other, 
to take this kind of action very seriously.
    Thank you.
    Chairman ROSKAM. Mrs. Black.
    Mrs. BLACK. Thank you, Mr. Chairman.
    Mr. Mazur, so let's just establish, first of all, you are 
the Treasury Assistant Secretary for Tax Policy, correct?
    Mr. MAZUR. That is correct.
    Mrs. BLACK. Okay. And is it fair to say that you are 
familiar with how tax credits and refunds work?
    Mr. MAZUR. I am familiar with a lot of parts of the tax 
law, yes.
    Mrs. BLACK. Okay. So the ACA premium tax credit is paid out 
of a permanent appropriation given to the Treasury at 31 U.S.C. 
1324, right?
    Mr. MAZUR. I believe that is correct.
    Mrs. BLACK. Okay. And that appropriation is set up to pay 
for other tax refunds and credits, as well. Is that correct?
    Mr. MAZUR. I believe it is a permanent appropriation to do 
so, yes.
    Mrs. BLACK. Okay.
    Are cost-sharing reductions a tax credit?
    Mr. MAZUR. Ma'am, again, you need to go back to the 
Affordable Care Act as a whole and look at the cost-sharing 
payments and the premium tax credits as an integrated set of 
payments that are made.
    Mrs. BLACK. Can you show me in the bill, in section 1402, 
where the cost-sharing reductions or tax credits are--excuse 
me? In CSR, in 1402, is where the cost-sharing is actually 
talked about. Can you show me in there--because you keep using 
this word ``integrated,'' and that is an assumption, because I 
have read that section over? And I would like to know--maybe I 
am not reading it correctly--can you show me in there where it 
actually says that that is a cost-sharing reduction that goes 
back to a tax credit?
    Mr. MAZUR. Ms. Black, I don't have that in front of me 
right now, so I really can't point to the language.
    Mrs. BLACK. But if you keep on saying it is integrated, 
then you have to be able to report--you have to somewhere show 
me that there is not an assumption made here. Because you keep 
using this word, ``integrated.'' I can't find the word 
``integrated'' anywhere in this section. So you keep using that 
word, ``integrated,'' when it is not in the law. Do you not 
have to abide by the law?
    Mr. MAZUR. Ma'am, we are looking at the Affordable Care 
Act, and the intent of the law is that these payments are made 
to insurance companies, much like the premium tax credits are 
made.
    Mrs. BLACK. Yes. The intent is that the insurance companies 
would reduce the cost. That is the cost-sharing reduction piece 
of this. It does not say in here--and, again, I want you to 
point somewhere in this section that actually says that. 
Because if that doesn't say that and it is not clear, then what 
it does say is that it should be an annual appropriation and 
not an appropriation that is a mandatory appropriation. Is that 
not----
    Mr. MAZUR. Congresswoman Black, I mean, I think you can 
look at this in a somewhat different way. If Congress doesn't 
want the moneys appropriated, they could pass a law that 
specifically said, do not appropriate the moneys from that 
account.
    Mrs. BLACK. That is not my understanding, sir. And you are 
an expert in this area. So what you are saying is, if it is 
left without direction, that it can just be made a mandatory? 
Is that what you are telling me?
    Mr. MAZUR. I am saying that the Affordable Care Act--and I 
think the legal piece we referred to goes to this. The 
Affordable Care Act directs the executive branch to make these 
cost-sharing reduction payments. And these payments are of a 
piece with the same payments that are made to the insurance 
companies under the premium tax credit. And that is the 
justification for using the same account.
    Mrs. BLACK. So the justification comes because the 
Administration then decides that that is the way they want to 
do it, even though it is not stipulated in the law.
    Mr. MAZUR. And, frankly, if you would like to make the law 
clearer, you could pass an appropriation law that said, do not 
make them.
    Mr. MEEHAN. Would the gentlewoman yield for one second?
    Mrs. BLACK. I would yield.
    Mr. MEEHAN. Mr. Mazur, we discussed this point. It clearly 
articulates, ``Disbursements may be made from the 
appropriations made by this section only for refunds due from 
credit provisions in the Internal Revenue Code.'' That is 
section 1324. What is ambiguous about that?
    Mr. MAZUR. Again, sir, as we were talking about earlier, 
the legal interpretation of the Administration is that section 
1324 of 31 U.S. Code allows for these cost-sharing payments to 
be made.
    Mr. MEEHAN. ``Only for.'' And it points out, you asked 
Congress to give you direction. Congress gave you direction. 
And it said ``only for'' and then told you what you could spend 
it on.
    Mr. MAZUR. Sir, Congress gave----
    Mr. MEEHAN. And then you went beyond and spent it, because 
you determined that you could spend it in an area that was not 
authorized by Congress.
    Mr. MAZUR. Sir, Congress gave direction to the executive 
branch in the Affordable Care Act to make these cost-sharing 
reduction payments----
    Mrs. BLACK. I am reclaiming my time.
    Mr. MAZUR [continuing]. To help low-income individuals pay 
for their healthcare insurance.
    Mrs. BLACK. And reclaiming my time, can you--and I know we 
are going to be out of time, but can you specifically show me 
where that authority is? Because I don't see that authority in 
this bill.
    Mr. MAZUR. Congresswoman Black, I don't have that in front 
of me, but I can take that back and get back to you.
    Mrs. BLACK. Thank you.
    Chairman ROSKAM. Mr. Renacci.
    Mr. RENACCI. Thank you, Mr. Chairman. I want to thank you 
for holding this hearing and allowing me to attend and 
participate. I do believe one of Congress' most important roles 
is oversight and that it is important we have this hearing.
    I am trying to get a timetable here, and I am noticing 
that, in going back to some of the testimony, that HHS had 
actually requested almost $4 billion in funds at some point in 
time, early 2013, as part of the budget process. So it looks 
like they were looking to fund these dollars through the 
appropriations process.
    But, at some point in time, OMB released a report--
actually, it was the 2014 sequestration report--that said that 
these funds would be subject to sequestration.
    And then I noticed that HHS Assistant Secretary for 
Financial Resources Ellen Murray testified that she withdrew 
the request before the Senate Appropriations Committee released 
its appropriations bill in July of 2013.
    So, at some point in time, the Administration was looking 
for money. At some point in time, the Administration realized 
it couldn't get the money they needed through the 
appropriations process so it would be through sequestration. So 
then, all of a sudden, at some point in time, the 
Administration decided to look elsewhere. And it also appears, 
then, late in 2013 is when they started looking toward the 
premium credit account.
    The Committee also heard testimony that the IRS Deputy CFO 
raised red flags about the Administration's plan to make the 
cost-sharing reduction payments from the premium tax credit 
account in late fall. So there were red flags going up in late 
2014.
    Mr. Mazur, did you personally know that the people at the 
IRS were concerned about this plan in the fall of 2013?
    Mr. MAZUR. Not at that time, no.
    Mr. RENACCI. You found out later?
    Mr. MAZUR. I am aware--you have gone through the timeline 
right now.
    Mr. RENACCI. Okay. Was anybody else in the Treasury aware 
of it at that time? Because, again, the IRS was throwing up red 
flags.
    Mr. MAZUR. I can't speak for other people at the Treasury 
Department, sir.
    Mr. RENACCI. We also understand that the former Chief Risk 
Officer was also concerned. He was worried the payments would 
violate the Constitution--wow, violate the Constitution--and 
the Antideficiency Act. You all know the Antideficiency Act is 
a criminal law that prohibits government officials from making 
payments without an appropriation. So people were getting 
concerned.
    So the IRS General Counsel and OMB General Counsel arranged 
for seven IRS officials to come to OMB and view the memo. The 
OMB General Counsel told them that they were not allowed to 
take notes or take the memo with them.
    Mr. Deich, is this common, to have meetings like this 
where, you know, you can't take notes and you can't take the 
memo? It just seems unusual. Red flags were flying, we are 
going to have this meeting, can't take any notes, don't take 
the memo. Is this normal?
    Mr. DEICH. I wasn't here at the time, and I can't speak to 
the specifics of the circumstance. But, as a general matter, I 
don't think it would be highly unusual for issues that are 
still under discussion to be considered by sharing the 
information in a memo but not allowing materials to be 
brought----
    Chairman ROSKAM. Mr. Deich, just--I didn't hear. Did you 
say ``highly usual'' or ``highly unusual''?
    Mr. DEICH. It would not be highly unusual to share 
information in this way.
    Mr. RENACCI. You are right, it wouldn't be highly unusual, 
because it was an issue that was concerning people. You had red 
flags all over the place. The IRS was concerned.
    We have testimony the IRS officials got back to the IRS; 
the Chief Risk Officer and others still worried about the 
payments violating the Constitution. Keep going back to 
``violating the Constitution,'' which is really important about 
this hearing. So they asked to speak with Commissioner 
Koskinen.
    Commissioner, do you remember that meeting?
    Mr. KOSKINEN. I do.
    Mr. RENACCI. Do you remember the IRS officials at that 
meeting told you that they thought the payments may violate the 
Constitution and the Antideficiency Act?
    Mr. KOSKINEN. We had a full discussion of concerns about 
the appropriation, the appropriate Appropriations Act, as well 
as our ability to monitor the payments and ensure there was an 
appropriate audit trail. The CFO's concern was as much about, 
if we had the authority, how would we make sure that there 
would be a sufficient audit trail.
    And all those issues were vetted. Chief Counsel reported on 
the meeting at OMB--I did not realize that David Fisher had 
gone to that meeting--and that we had legal advice from OMB and 
we had just received authorization and, in effect, a directive 
from Treasury to go forward.
    Our job is to administer the Tax Code, and we felt that, on 
balance, when we got through with the discussion, that we had 
the appropriate authority to proceed.
    Mr. RENACCI. So, at that meeting, there was also this 
action memorandum put in that I know one of my colleagues 
talked about, the memorandum between Mr. Mazur and Mr. Lew.
    And I am not sure I got the answer from you----
    Mr. KOSKINEN. I would just note that that memorandum was 
not at the meeting. It had just been issued. The Chief Counsel 
reflected that he had received the memo. But I have never seen 
the memo until today.
    Mr. RENACCI. Okay.
    So, getting back to what my--so, Mr. Mazur, you authored 
this, and then you approved using these funds--based on this 
memo, you approved using these funds then, correct?
    Mr. MAZUR. If you read the text of the memorandum, I 
recommended that that account be used for those funds. Yes, 
that is true.
    Mr. RENACCI. So who made the final decision? Who approved--
--
    Mr. MAZUR. Again, if you look at the memorandum, which you 
are holding in your hand, you can see that Secretary Lew 
approved the course of action.
    Mr. RENACCI. So, Mr. Deich, you said earlier you are 
familiar with the Antideficiency Act. If someone approves an 
authorized expenditure of funds without appropriation, is that 
person in violation of the Antideficiency Act?
    A pretty simple question. Yes or no?
    If somebody--I am going to ask----
    Mr. DEICH. The Administration believes that there----
    Mr. RENACCI [continuing]. It one more time.
    Mr. DEICH [continuing]. Is an appropriation for this----
    Mr. RENACCI. If someone approves and authorizes the 
expenditures of funds without the appropriation, is that person 
in violation of the Antideficiency Act, yes or no?
    Mr. DEICH. I am not a lawyer, but it is my understanding 
that an appropriation is needed in order to make payments, and, 
in the absence of the appropriation, it would be a violation of 
the Act.
    Mr. RENACCI. Thank you.
    I yield back.
    Chairman ROSKAM. Thank you all.
    Let's do a little bit of cleanup. I would like to talk a 
little bit about the legal justification--that is, the 2013 
memo.
    And you have sort of put us in a trick bag, in a way, in 
that you have talked about the totality of a system, an 
integrated system--I think that was your word, Mr. Mazur, I am 
not sure, but a holistic theme, basically. And yet you have 
said we have all this, it is all written down, and it is all in 
a memo; we are just not going to share this integration, this 
revelation, this legal theory that came to us.
    Do you understand, sort of, the nature of the trick bag 
that you are putting the Congress and the American people in 
because you have not disclosed that information?
    Mr. MAZUR. Sir, which 2013 memo are you talking about?
    Chairman ROSKAM. I am talking about the OMB memo.
    Mr. MAZUR. I am not aware of that memo.
    Chairman ROSKAM. All right. How about your memo? Let's go 
to the one that you were just talking about, the January 2015 
memo. What is in the redacted part?
    Mr. MAZUR. I don't recall what is under the redacted part, 
sir.
    Chairman ROSKAM. Come on. You don't recall that?
    Mr. MAZUR. Come on. I write hundreds of memos.
    Chairman ROSKAM. Okay.
    Well, yesterday, you were on full display before the Senate 
Finance Committee and the House Ways and Means Committee, Mr. 
Mazur. And, in that Committee, I was very impressed by your 
independent recollection of section 385, your ability to wax 
eloquent on chapter and verse and this and that. ``We have done 
this, Congressman. We have done that, Mr. Chairman. We have 
taken on this responsibility.'' You had details of process that 
were very, very impressive.
    And now, on an issue that is absolutely pivotal, that is a 
fulcrum between the executive and the legislative branch, you 
say in this memo ``I don't remember''? Is that your testimony 
today?
    Mr. MAZUR. That is correct, sir.
    Chairman ROSKAM. Is there anything that would refresh your 
recollection?
    Mr. MAZUR. Not that I could think of, sir.
    Chairman ROSKAM. Did you prepare in any way for this 
hearing?
    Mr. MAZUR. Sir, as you know----
    Chairman ROSKAM. Did you prepare in any way for this 
hearing?
    Mr. MAZUR. Yes, I had some brief preparation.
    Chairman ROSKAM. What was the nature of your preparation, 
brief as it was?
    Mr. MAZUR. I reviewed this memorandum.
    Chairman ROSKAM. You reviewed the memorandum?
    Mr. MAZUR. With the redacted portion, the one----
    Chairman ROSKAM. Oh, so that is all you did? Tell me what 
else you did.
    Mr. MAZUR [continuing]. The one that was provided to your 
Committee. I also reviewed the 10-page----
    Chairman ROSKAM. When is the last time you saw the 
memorandum as you wrote it?
    Mr. MAZUR. I really can't remember, but it probably would 
have been 2014.
    Chairman ROSKAM. So there has been nothing in 2 years that 
has prompted your recollection about your reasoning about the 
ability to move forward on a program that brought a great deal 
of consternation and anxiety all throughout the Administration. 
Based on your own testimony, based on the red flags, based on 
one thing after another, there is nothing that you have done to 
refresh your recollection about that in the past 2 years. Is 
that right?
    Mr. MAZUR. That is correct, sir.
    Chairman ROSKAM. Wow. That is remarkable. And that is in 
stark contrast to the hard work you have been doing on section 
385, where you had independent recollections. Is that right?
    Mr. MAZUR. Sir, section 385 regulations are proposed 
regulations. That is something that is ongoing. This is 
something that was done 2-plus years ago.
    Chairman ROSKAM. How delightful to be able to move from one 
work product to another so quickly and so effortlessly.
    Let me turn everyone's attention, just so we are clear, on 
section 1402, following up on what Mrs. Black was focusing in 
on. This is the exact language. So let's knock down this straw-
man argument that this is about poor people. This is not about 
poor people. This is about an insurance subsidy. And this is an 
insurance subsidy that the Administration argued before the 
Federal court.
    Here is the plain language, section 1402. In this section, 
the Secretary shall notify the insurer of the plan of such 
eligibility. And the issuer--that is, the insurance carrier--
shall reduce the cost-sharing under the plan at the level of 
the amount specified in subsection C, period, paragraph, end of 
letter.
    What that tells us is this is not about poor people; this 
is about making sure an insurance carrier gets a subsidy. So 
let's debunk the straw-man argument. You can make a poor-person 
argument as it relates to premium tax credit. You cannot with 
any credibility couch this, cloak this, masquerade this in some 
way as it relates to poor people on cost-sharing reduction. It 
is an absurdity.
    Mr. Deich, let me ask you a couple of questions. OMB wrote 
a memo to try to justify making the cost-sharing reduction 
payments from the premium tax credit appropriation. That is 
right, isn't it?
    Mr. DEICH. That is my understanding, yes.
    Chairman ROSKAM. And you are aware that the Committee has 
subpoenaed that memo. Isn't that right?
    Mr. DEICH. I am.
    Chairman ROSKAM. And you are aware that OMB has not 
produced that. Isn't that right?
    Mr. DEICH. I am.
    Chairman ROSKAM. And you are also aware--tell me you are 
aware of this, restore my hope that you are aware of this--that 
OMB has not given any legal justification for withholding the 
memo. You are aware of that, aren't you?
    Mr. DEICH. My understanding is that OMB continues to look 
for ways to provide the Committee----
    Chairman ROSKAM. No, no. That is not my question. And let's 
just--listen, I will be here all day. So let's just get right 
to the point.
    There has not been a legal justification that has been 
articulated by the Office of Management and Budget based on a 
legitimate subpoena from the United States Congress. There has 
been no privilege asserted. Is that right?
    Mr. DEICH. There has been no executive privilege asserted, 
that is correct.
    Chairman ROSKAM. So there is no legal justification, based 
on your own admission, for withholding that information. Isn't 
that right?
    Mr. DEICH. I am not a lawyer, and I can't address----
    Chairman ROSKAM. I am not asking you to be a lawyer.
    And, by the way, you are here, you are representing--so 
this ``I am not a lawyer'' laminated hall pass that people want 
to use today? It is completely ridiculous. Then send a lawyer. 
Then send somebody who is equipped to answer these questions. 
These are not questions that are unanticipated, Mr. Deich. It 
is the nature of the conflict that is between us.
    So do you have any other information today about the nature 
of the assertion that you are making? In other words, is there 
something that you know that is a legitimate reason as to why 
this information should be denied to the American people 
through their elected representatives in Congress? Do you have 
anything new?
    Mr. DEICH. OMB is committed to providing the information 
that the Committee----
    Chairman ROSKAM. Your commitment is waning and 
underperforming. Good grief.
    Mr. DEICH. There are many instances in which the Congress 
and the executive branch----
    Chairman ROSKAM. There is one memo. There is one memo, Mr. 
Deich. There is one memo. It can't be that hard to find. And it 
seems to me you have either of two choices. Either you say, 
``Here is the memo,'' or you say, ``We are not going to give it 
to you, and here is why we are not going to give it to you. 
Because you don't have the legal justification to do it.''
    You are being passive-aggressive. You are being an 
obstructionist agency. And it is outrageous.
    Do you know who wrote the memo?
    Mr. DEICH. I do not.
    Chairman ROSKAM. You didn't prepare to even understand who 
authored a memo? And you are here today representing OMB?
    Mr. DEICH. That is correct.
    Chairman ROSKAM. Are you aware that the Attorney General 
signed off on the memo?
    Mr. DEICH. I am not.
    Chairman ROSKAM. Mr. Mazur, what happens at Treasury when 
you receive a document request from Congress?
    Mr. MAZUR. I believe it goes to our Office of Legislative 
Affairs and then to our General Counsel's Office to respond.
    Chairman ROSKAM. Is that the same thing that happens when 
you receive a subpoena, or is a subpoena treated differently?
    Mr. MAZUR. I am not aware. I think it is the same 
treatment, but I am not aware of the exact----
    Chairman ROSKAM. Do you recognize the distinction between a 
letter, let's say, that Mr. Lewis and I would write together to 
the Department making an information request and a subpoena 
that is formally issued? Do you understand a legal distinction 
or appreciate the distinction between those two?
    Mr. MAZUR. I believe there is a distinction, yes.
    Chairman ROSKAM. What is the distinction?
    Mr. MAZUR. I believe the subpoena is more of a compelling 
document.
    Chairman ROSKAM. What is your understanding of what the 
Department's obligation is upon the receipt of a subpoena?
    Mr. MAZUR. Sir, I understand that our staff has been 
working with your staff on these issues to try to give you 
information you need.
    Chairman ROSKAM. If what you are hearing from your staff is 
that your staff is doing a good job, your staff is 
misrepresenting what is happening. Because what we are hearing 
from our staff is that your staff is not doing a good job, 
because you have not met a single deadline that the subpoena 
has put forward.
    And these are not unreasonable deadlines. I mean, let's be 
real. These are requests for documents, they are requests that 
the Congress is entitled to, and they are requests that you are 
denying. Isn't that right?
    Mr. MAZUR. Sir, we have provided you with numerous pages of 
documents and----
    Chairman ROSKAM. Numerous pages is not zip.
    Mr. MAZUR [continuing]. Made many people available for 
transcribed----
    Chairman ROSKAM. Numerous pages is meaningless. You know 
that, and I know that.
    What is your commitment today to comply with--in other 
words, you have an opportunity to give a resounding ``yes'' to 
Chairman Brady on his request. Are you prepared to do that?
    Mr. MAZUR. No.
    Chairman ROSKAM. And you are not willing to do that.
    Mr. MAZUR. No. I will take back the request to the 
Department.
    Chairman ROSKAM. You will take it back. To the same staff, 
presumably, that has been representing what a great job they 
are doing. Is that who you are going to take it back to?
    Mr. MAZUR. I will take it back to the relevant staff who 
are responsible, sir.
    Chairman ROSKAM. Let me just make one final point.
    Mr. LEWIS. Mr. Chairman?
    Chairman ROSKAM. Yes, I will come to you. I will make one 
final point.
    Mr. LEWIS. We have been here for a while----
    Chairman ROSKAM. Listen----
    Mr. LEWIS [continuing]. And you are going over.
    Chairman ROSKAM. We are going to be here for a while. So--
--
    Mr. LEWIS. Mr. Chairman, I don't plan to stay here, and I 
don't----
    Chairman ROSKAM. Listen, you don't have to stay here.
    Mr. LEWIS [continuing]. And I don't think it is fair for 
the witness to stay here.
    Do you want to subpoena all of them? Do you want to hold 
them in contempt?
    Chairman ROSKAM. Listen, I want to get answers; you want to 
get answers; everybody wants to get answers. So let me just 
make one final point.
    There has been a lot of discussion at a high level today 
about the nature of the Constitution and what it means. And, 
look, there are complicated issues that we are all dealing with 
and we are all walking through.
    But there is a real danger that I perceive as being on full 
display here. And the danger is a level of presumption that 
says, we will not be limited by the plain language of a 
statute, as Mr. Meehan was pointing out and as Mrs. Black was 
pointing out.
    The limitation, when we were invited by Mr. Mazur to 
correct the statute, Mr. Meehan pointed out, look, it says 
``only.'' ``Only'' means ``only.'' There is not more than one 
way to interpret ``only.''
    And there is this feeling, and I think it is in full bloom 
and on full display today, and the feeling is this: That it is 
okay to cut down laws, it is okay to cut through things in 
cloaking ourselves in good intentions.
    It is a dangerous game. Because if we accept this, then 
mark my words, there will come a day when there is going to be 
a different Administration or a different disposition or a 
different attitude and we are going to say, ``Where were the 
people who should have stood up for these things at the time?''
    My friends on the other side of the aisle, God bless them, 
the ACA is now orthodoxy, and it is jarring to them when it is 
challenged. This is not about the ACA. This is about a 
constitutional responsibility.
    The Committee stands adjourned.
    [Whereupon, at 12:08 p.m., the Subcommittee was adjourned.]
    [Questions for the Record follow:]
    
    
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