IRS Doubted Legality of ObamaCare Payments But Made Them Anyway After Meeting with Administration

From the Hill:

The IRS raised concerns in early 2014 about the legality of certain ObamaCare payments that Republicans are now challenging in a lawsuit, according to a deposition from a former agency official.

David Fisher, who was the IRS’s chief risk officer, told the House Ways and Means Committee that agency officials questioned whether the Affordable Care Act provided the authority to make certain payments to insurers without an appropriation from Congress.

Most senior IRS officials ended up concluding that the payments were legal after a meeting with the White House to hear its legal justification, and the administration eventually went ahead with disbursing the funds.

The Treasury Department declined to comment on the deposition, citing the litigation.

Those payments, called “cost-sharing reductions,” are the subject of the lawsuit by House Republicans against the administration. A federal judge ruled this month that the administration overstepped its authority by making the payments without an appropriation from Congress, though the ruling will be appealed.

According to Fisher, IRS officials questioned whether the healthcare reform law provided a "permanent appropriation" for the payments. The text of the law clearly provides one for ObamaCare’s tax credits, which help people pay insurance premiums, but does not specifically provide one for the cost-sharing reduction payments, which help people afford their deductibles.  

The administration went on to argue that the same authority that provides for the tax credits also covers the cost-sharing reductions because the structure of the law links the two “inextricably.” 

But in early 2014, the IRS, which is responsible for distributing the payments, pointed out the lack of an explicit appropriation for the cost-sharing reduction. ...