Trump Should Stop Illegal Obamacare Subsidies Now

President Trump has an opportunity to unilaterally halt an unconstitutional corporate welfare scheme, deal Obamacare a mortal blow, and save the taxpayers more than $100 billion. U.S. District Judge Rosemary Collyer ruled last year that the Obama administration had unconstitutionally dispensed subsidies to insurers, holding that it had flouted the Appropriations Clause by doling out “cost sharing reduction” (CSR) payments that hadn’t been authorized by Congress. The Obama administration later filed an appeal but didn’t have time to pursue the case further. President Trump has the power and the duty to drop that appeal and stop these unconstitutional CSR payments immediately.

Instead of doing so, however, Trump is attempting to use these bribes as a bargaining chip in a futile attempt to get the Democrats to deal in good faith on a viable replacement for Obamacare. This, to coin a phrase, is worse than a crime — it’s a mistake. He has no more right than did his predecessor to spend these funds without congressional approval, and the Democrats have no intention of negotiating honestly with him on the “Affordable Care Act.” Indeed, when Trump suggested in a Wall Street Journal interview that he might use the CSR payments as leverage to force them to the bargaining table, the Democrats just turned up the volume on the ridiculous rhetoric of “the resistance.”

Sen. Ron Wyden, the ranking Democrat on the Senate Finance Committee, responded by conflating Trump’s implied threat with terrorist tactics: “We will not negotiate with hostage takers. There is no outcome in which the administration sabotaging insurance markets persuades Democrats to pass Trumpcare.” Not to be outdone by her Senate accomplice, House Democratic Leader Nancy Pelosi released the following hysterical statement: “Refusing to make the Cost Sharing Reduction payments has no purpose but to hurt millions of people, and manufacture a crisis.” You will note that neither Wyden nor Pelosi make any reference to the illegality of these CSR payments.

But that’s what really matters here. For those who want to know all the sordid details of the CSR controversy, the House Energy & Commerce Committee and the House Ways & Means Committee released a 158-page report outlining an all-too-typical tale of Obama administration skullduggery. The short version goes thus: The administration knew it couldn’t use a permanent appropriation to fund the CSR program, a fact that high-level IRS officials confirmed. Nonetheless, a creative and clearly illegal plan was developed to do it anyway. And, when Congress asked questions, it got the standard Obama administration stonewall treatment. Eventually, the House filed a lawsuit.

It was that lawsuit, House of Representatives v. Burwell, which eventually produced the above-noted ruling from Judge Collyer, who didn’t mince words about the CSR funding scheme. Noting that it “violates the Constitution,” she enjoined “the use of unappropriated monies to fund reimbursements.” However, she also stayed her own injunction “pending appeal by either or both parties.” Unfortunately, this permitted the insurer bribes to continue while Obama administration lawyers filed their appeal, no doubt in the belief that Hillary Clinton was going to be the next president and would want to vigorously pursue the case until Judge Collyer’s ruling was eventually overturned.

But the nation was mercifully spared another Clinton presidency, and the U.S. Circuit Court of Appeals for the District of Columbia issued an abeyance that postponed further motions in the case, which has now been rechristened House of Representatives v. Price, until February 21, 2017. It’s probably fair to say that most observers, having heard candidate Trump repeatedly rail against Obamacare, assumed that the appeal would be dropped by his administration by that date and that the CSR payments would stop. However, when the deadline arrived, the Trump administration and the House filed a joint motion to continue the abeyance — and the CSR payments — to allow time for a resolution.

Meanwhile, President Trump had the bargaining chip brainstorm that he divulged during his Wall Street Journal interview. When asked what he was going to do about the CSR payments, he implied that their ultimate fate was in the hands of the Democrats, “Obamacare is dead next month if it doesn’t get that money.… I don’t want people to get hurt… What I think should happen and will happen is the Democrats will start calling me and negotiating.” Fat chance. All he got from the Democrats was the ridiculous posturing noted above, and that is all he will ever get from them. Wyden, Pelosi, and their accomplices have called his bluff and clearly believe that he will blink.

It goes without saying, of course, that he was also denounced by the crypto-Democrats of the legacy “news” media. The following Bloomberg headline was typical: “Trump Threatens Health Subsidies to Poor to Force Talks.” Never mind that the CSR payments don’t go to “the poor.” They go directly into the coffers of the insurance companies. To use a formulation much beloved of the left, the CSR payments are “trickle-down” subsidies. Their benefit to low-income enrollees is, at best, marginal. Their cost to the taxpayers, however, is anything but. The Congressional Budget Office estimates that the CSR payments will cost more than $100 billion over the next ten years.

In other words, Trump is perpetuating an incredibly expensive and unconstitutional corporate welfare scheme in exchange for precisely zero concessions from the Democrats and universal vilification by the media. Moreover, his reluctance to drop the Obama administration’s appeal of Judge Collyer’s ruling will render conservatives skeptical about his commitment to killing Obamacare. What he must do in order to convince both the left and the right that he is serious about eliminating this crime against democracy is drop the appeal and stop the CSR payments immediately.

David Catron
David Catron
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David Catron is a health care consultant and frequent contributor to The American Spectator. You can follow him on Twitter at @Catronicus.
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