Today, House Judiciary Committee Ranking Member Jim Jordan (R-OH) and House Committee on Oversight and Reform Ranking Member James Comer (R-KY), sent a letter to Treasury Secretary Janet Yellen and Internal Revenue Service Commissioner Charles Rettig raising concerns regarding the Biden Administration’s proposal to unlawfully expand ObamaCare subsidies. President Biden’s plan will cost taxpayers billions of dollars at a time when Americans are already experiencing record high inflation and rising gas prices.
Excerpts from the letter:
“The Internal Revenue Service recently issued a proposed rule that, if finalized, would unlawfully expand eligibility for taxpayer-subsidized health insurance under ObamaCare. This proposed rule is inconsistent with both the statutory text and a rule that the IRS finalized nearly a decade ago. Although the IRS acknowledges that its existing rule is the product of ‘considerable deliberation’ and ‘a comprehensive analysis of the issue,’ the agency now seeks to reverse itself. Partisan politics appears to be driving the IRS’s sudden change. Because of Democrats’ previous weaponization of the IRS and the likelihood that this new rule will lead to tens of billions of dollars in new spending, we write to request information about this rulemaking.”
“The Biden Administration’s new rule proposes to ‘fix’ this ‘problem’ by changing how the agency determines whether an employee’s dependent is eligible for a premium tax credit. Under the Biden Administration’s revised approach, ‘affordability’ would be based on the premium amount for family coverage instead of the self-only coverage. The IRS’s reversal is unlawful, and it is bad policy. By deploying the IRS for partisan political ends, the Biden Administration is returning to its playbook from the Obama-Biden Administration in weaponizing the IRS to achieve partisan goals.”
“The IRS’s attempt to rewrite the regulation also contravenes the Administrative Procedure Act (APA). Under the APA, courts must ‘hold unlawful and set aside agency action’ that violates a statute. All of the Biden Administration’s attempts to rewrite statutes have been troubling, but this one is especially so because Congress has declined to amend the text of ObamaCare in this way time and again. The Biden Administration’s attempt to circumvent the law tramples on the Constitution and ignores the will of the American people. Likewise, the rule runs the risk of ignoring reliance interests that the almost-decade-long previous policy—which faithfully interpreted the statute—has created.”
“Second, the IRS’s proposed rule is poor policy and will cost billions of taxpayer dollars. Most people that the rule will affect already have coverage under employer health insurance plans. Because the rule will make more dependents eligible for taxpayer-subsidized plans, those dependents will likely switch coverage. In other words, the rule ‘would mostly displace private spending with government spending as dependents replace employer coverage with subsidized exchange coverage.’ In 2020, the Congressional Budget Office estimated that the change would cost more than $45 billion over ten years. In addition, the dependents who give up private-sector health insurance to enroll in a taxpayer-subsidized plan will likely end up with worse coverage. Families will be forced to navigate multiple plans that could have different networks, benefits, costs, or other disparities. Quite simply, the IRS’s rule is another step toward progressive Democrats’ goal of ‘mov[ing] all Americans to government health insurance.'”
“As the Committees further explore these issues, we request the following information:
- All documents and communications sent or received between January 20, 2009, and January 20, 2017, referring or relating to how the affordability determination is made for purposes of premium tax credit eligibility under ObamaCare, including but not limited to all communications sent or received by the following individuals:
- Mark Mazur, then-Assistant Secretary for Tax Policy at the U.S. Department of the Treasury;
- David Gamage, then-counsel in the Treasury Department’s Office of Tax Policy; and
- Emily McMahon, then-Deputy Assistant Secretary in the Treasury Department’s Office of Tax Policy.
- The policy memo that David Gamage signed as part of the regulatory-clearance process for the proposed rule that was finalized as the Health Insurance Premium Tax Credit, 78 Fed. Reg. 7264 (Feb. 1, 2013).
- All documents and communications sent or received between November 3, 2020, and the present referring or relating to how the affordability determination is made for purposes of premium tax credit eligibility under ObamaCare.
- All communications sent or received between November 3, 2020, and the present between or among any employee (political or otherwise) of the Executive Office of the President, including the Office of Management and Budget, the IRS, and the Treasury Department referring or relating to how the affordability determination is made for purposes of premium tax credit eligibility under ObamaCare, including but not limited to all communications sent or received by the following individuals:
- Topher Spiro, Associate Director for Health at the Office of Management and Budget; and
- Christen Linke Young, Deputy Director of the White House’s Domestic Policy Council for Health and Veterans.”
Read the full letter here.