House votes to end federal grants for state health insurance exchanges

Republicans spent much of Tuesday on the floor arguing that the bill would repeal what amounts to an unlimited "slush fund" that the Department of Health and Human Services (HHS) can give to states. The program was established under last year's healthcare law, but does not does not limit HHS to a specific spending level.

Republicans noted that HHS Secretary Kathleen Sebelius told members that she believes she has unlimited funds and does not have to seek additional permission to spend more, which they said means spending could exceed the $14 billion estimated by the Congressional Budget Office over the next 10 years.

"Quite simply, our country is broke, and we cannot continue to spend money like we have in the past," Rep. Tom Reed (R-NY) said. "Slush funds and unlimited tabs on the Treasury must be the first to go, particularly when they are being used to fund a government-centered takeover of our nation's healthcare system that does not improve care, does not lower cost, and simply we cannot afford."

Rep. Cliff Stearns (R-Fla.) argued that the grant program is just one of many federal programs that are putting the U.S. at risk of a serious fiscal crisis.

"Just because we followed Greece into Democracy does not mean that we should follow them into bankruptcy," he said.

Democrats argued that Republicans are trying to withdraw much-needed funding to states, and that by killing the funding, Republicans would leave in place the mandate that states establish health insurance exchanges. "They leave in place in these two bills the medical device tax, they leave in place the tax on unearned income, and yet they remove the benefits to the American people from these taxes," Rep. Jared Polis (D-Colo.) pointed out.

Democrats also tried to argue that Republicans were effectively reducing the ability of states to set up their own health insurance exchanges, which they said is at odds with the GOP's "state's rights" position. But Republicans rejected that by saying last year's healthcare law sets out hundreds of requirements on states, and that the bill approved today is about chipping away at these federal mandates.

"When you look at the law, you understand that this concept is actually not true," Rep. Michael Burgess (R-Texas) said in rejecting the idea that the bill would hurt states. "In reality, the relationship between the states and Washington [is that] the states are the servant, not a partner with Washington under this healthcare law. The secretary of Health and Human Services will control what benefits must be bought — must be bought — in an exchange."

Debate was also punctuated by remarks from Rep. Marsha Blackburn (R-Tenn.), who acknowledged that Republicans will continue to seek ways to repeal all of last year's healthcare law.

"Mr. Chairman, we're going to keep revisiting this until we get single every piece of this bill off the books," she said.

Before the final vote, the House rejected all five amendments that Democrats offered to the bill, including one from Rep. Sheila Jackson Lee (R-Texas) that would have required HHS to post a public notice saying that the funds have been rescinded. Burgess said it would be impossible to say how much money was rescinded, since the provision allows HHS to spend an unlimited amount.

That amendment was rejected in a 177-239 vote.

The House rejected other two other Democratic amendments by nearly identical margins, and killed two by voice vote. These included two amendments that would have required HHS to report on difficulties states have setting up the exchanges due to the rescission. Two others would have required a study on state-run exchanges, and allow nearly $2 billion in funding to remain for states that take the lead in developing information technology used to run their exchange.

The White House on Monday warned that it would veto the bill if it were presented for President Obama's signature, although that is not expected to happen because the Senate will not take it up.