The Washington Swamp is choking over the Trump administration’s decision to cut off ObamaCare bailouts to insurance companies, and some, such as Sen. Lamar AlexanderLamar AlexanderMcConnell gets GOP wake-up call The Hill's Morning Report - Presented by Alibaba - Democrats return to disappointment on immigration Authorities link ex-Tennessee governor to killing of Jimmy Hoffa associate MORE (R-Tenn.), are doing everything they can to find a legislative work around. But I’m asking myself a different question: Is President Trump aware that IRS Commissioner John Koskinen signed off on those unconstitutional and illegal payments? And would the president fire Koskinen if he knew that Koskinen had approved the payments over the objection of his own agency’s chief risk officer?
Of all the top-level Obama administration political appointees involved in making the decision to raid a permanent appropriation fund at the Internal Revenue Service to pay billions of dollars every year to insurance companies in violation of both the Constitution and the law — President Obama’s attorney general, and secretary of the Treasury, and secretary of Health and Human Services, and director of the Office of Management and Budget, and commissioner of the IRS, among others — only IRS Commissioner Koskinen remains in office.
That means there’s no way to fire Eric HolderEric Himpton HolderArkansas legislature splits Little Rock in move that guarantees GOP seats Oregon legislature on the brink as Democrats push gerrymandered maps Christie, Pompeo named co-chairs of GOP redistricting group MORE, or Jack LewJacob (Jack) Joseph LewThe Hill's Morning Report - Biden argues for legislative patience, urgent action amid crisis On The Money: Senate confirms Yellen as first female Treasury secretary | Biden says he's open to tighter income limits for stimulus checks | Administration will look to expedite getting Tubman on bill Sorry Mr. Jackson, Tubman on the is real MORE, or any of the others, for their willful disregard of both the Constitution and the law. They’re long gone, having punched their tickets for warmer climes and lots more money.
But Koskinen is still in place. And he needs to go.
ObamaCare created two kinds of exchange subsidies to help lower-income people afford the higher-priced health insurance that was going to result from the law’s onerous insurance mandates.
Section 1401 of the law created “premium tax credits” and their sister, “advance premium tax credits,” which would be administered by HHS and paid for out of a permanent appropriation fund that the IRS already used to pay for tax credits and refunds. Because the subsidies would take the form of tax credits to individuals, it made perfect sense that the IRS permanent appropriation already used to pay for tax credits and refunds would serve as the source for funding these subsidies. And section 1401, recognizing this, specifically amended that permanent appropriation to include payment of the premium tax credits and advanced premium tax credits.
Section 1402 of ObamaCare, by contrast, created “Cost Sharing Reduction” payments, which were authorized as payments the government would make to health insurers, to reimburse them for funds they spent to reduce out-of-pocket healthcare costs (read: deductibles and co-pays) for their customers. Because the payments went directly to insurance companies, and not to individuals themselves, it was inappropriate to fund them from the IRS’s permanent appropriation fund. And the law recognized this, and did not amend the permanent appropriation to reflect that recognition.
The Obama administration understood this, and, on April 10, 2013, submitted a budget request that included $3.9 billion to fund the section 1402 Cost Sharing Reduction payments.
But later that summer, the Obama administration dropped its request for the specific — and necessary — appropriation to fund the CSR program in fiscal year 2014. Instead, OMB wrote a memo – later approved by the attorney general and the secretaries of Treasury and HHS — outlining why the IRS permanent appropriation account was the proper funding source for the CSR payments.
But several IRS officials remained unconvinced. In the fall of 2013, Deputy Chief Financial Officer Greg Kane and Chief Risk Officer David Fisher, among others, were concerned that there was no legal basis in the statute for the payment method outlined by OMB. They were concerned that wrongfully funding the CSR payments from the IRS permanent appropriation account could put IRS officials at risk of violating not just the Constitution, but also the Anti-Deficiency Act, which puts government officials at personal risk of criminal penalty for spending unappropriated funds.
On Jan. 13, 2014 — just weeks before the first CSR payments were supposed to be made — they and several other senior IRS officials raised their concerns with OMB officials in a meeting at the OMB offices at the White House complex. They were shown the OMB memo, but were not allowed to take copies of the memo, or even take notes.
Many of them remained unconvinced. They insisted that IRS Commissioner Koskinen be briefed before the IRS made the first CSR payments.
Koskinen convened the meeting in mid-January 2014. Fisher raised his objections. But Koskinen, Fisher later testified to the House Ways and Means Committee and House Energy and Commerce Committee investigators, “listened to my concerns and thanked me, actually, in the meeting for expressing those concerns but felt the appropriate course was to go forward and make the payments, you know, per the strong majority of folks who believed they were appropriate.”
Koskinen was wrong. So were Holder, and Lew. The use of the IRS permanent appropriation to fund the CSR payments violated both the Constitution and the law, and was ruled as such by a federal district judge.
Commissioner Koskinen had the chance to prevent the Obama administration from violating the Constitution and the law – the Constitution and the law he swore to uphold.
President Trump cannot do anything to remove from office former Attorney General Eric Holder or former Treasury Secretary Jack Lew, both of whom signed off on this scheme. They’ve already left government service.
But Koskinen remains. President Trump should fire him for cause, because we need to set an example that government officials who violate the Constitution and the law will pay a personal price.