Issa accuses Treasury of stonewalling ObamaCare probe, threatens subpoena

Rep. Darrell Issa (R-Calif.) on Wednesday accused the Treasury Department of stonewalling an investigation into ObamaCare's insurance subsidies.

Republicans believe the IRS and Treasury are implementing the subsidies illegally, making them available more broadly than the healthcare law allows. 

Issa, the chairman of the House Oversight and Government Reform Committee, said the Treasury has not produced information he has requested about its interpretation of the law.

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"Where the hell is the paper on that?" Issa asked a Treasury official during a hearing Wednesday. "Where's the analysis? Congress doesn't agree with you, at least the House of Representatives ... we asked for the analysis; you've stonewalled us."

He threatened to issue subpoenas if the Treasury and IRS don't provide more records or briefings.

"Not only will I issue a subpoena, but I'm going to have to do a lot more" if the records aren't provided, Issa said.

Issa is investigating the way the IRS has implemented new tax credits to help low-income households cover the cost of their insurance premiums. 

The IRS is making the subsidies available in every state's insurance exchange, while Republicans argue the subsidies should not be available in more than half of the states.

Emily McMahon, deputy assistant for tax policy at the Treasury Department, defended the administration's interpretation during the hearing Wednesday but declined to give many details about the process because the issue is the subject of pending lawsuits.

"We believe that our interpretation of the statute was consistent with the purpose of the legislation as a whole," McMahon said.

As the three-hour-plus hearing drew to a close, Issa slammed McMahon for her cautious responses.

"You were pretty close to a useless witness who came saying, 'I don't know,' " Issa charged.

The Treasury said in a letter to the committee Wednesday morning that it has provided hundreds of pages of documents and eight hours of interviews to the committee. Some additional documents were withheld because of the lawsuits and because they pertain to the executive branch's deliberative processes, the department said.

"Public disclosure of such discussions could have a significant chilling effect on their deliberations and could inhibit the ability of agency staff to fulfill their statutory obligations."

Some critics of the Affordable Care Act, including Issa, argue that new tax credits to help people afford their premiums should only be made available in insurance exchanges established by the states. Subsidies should not be available in exchanges set up by the federal government, they argue.

The IRS disagrees and has written regulations that make subsidies available in all 50 states, irrespective of whether the state or federal government established the exchange.

Republicans have charged that the IRS's interpretation is the work of political interference. Former IRS Commissioner Douglas Shulman has said the determination came from the IRS's lawyers, not political pressure from the White House.

The law's critics point to a section that refers to subsidies flowing through exchanges "established by the state," arguing that means federal exchanges aren't included.

They have suggested recently that Congress intended to withhold subsidies from the federally run exchanges as a way to push states to handle the task themselves. 

That possibility, however, was not a big part of the debate ahead of the law's passage, and the Congressional Budget Office was never asked to provide a cost estimate that did not account for subsidies in all 50 states.

"We did look very carefully at all of the legislative history relating to the Affordable Care Act and found nothing to suggest the incentive rationale you're suggesting," McMahon told GOP lawmakers Wednesday.

—This post was changed to note that the possibility of withholding subsidies was mentioned in debate before the law's passage but was not a major topic of discussion.