Deposition reveals early IRS doubts about cost-sharing reduction funding

Before a court fight erupted over the legality of a key Affordable Care Act provision, the Obama administration held a secretive meeting with IRS officials to lay out its justification for making billions of dollars in payments to health insurers to subsidize individuals' premiums.

David Fisher, a former IRS financial risk officer, describes that meeting and his own misgivings about the administration's plan in a recently released deposition before the House Ways and Means Committee, the result of a subpoena from congressional Republicans.

Republicans have argued the ACA's cost-sharing reductions are not legal because Congress never appropriated the funds. They won a key victory earlier this month when a U.S. District Court judge sided with that argument; though the ruling was stayed pending an appeal.

Fisher's sworn testimony, meanwhile, reveals early dissent in the IRS about the funding of the payments. Back in January 2014, he says, he and other IRS officials were taken by van to a government building and asked to read an Office of Management and Budget memo that laid out the administration's argument. They were not allowed to make copies of the memo or take notes.

Fisher, however, was not convinced, noting in his deposition that "there is no linkage to the permanent appropriation, nor is there any link to any other appropriation that was indicating what account these funds should be paid from."

Rep. Kevin Brady (R-Texas), who leads the Ways and Means Committee, tells the New York Times that Fisher's testimony is proof of what Republicans had feared. "The more we learn, the more it's clear that high-level administration officials knowingly circumvented Congress and undermined the Constitution," he says.

Yet ranking committee member Rep. Sander Levin (D-Mich.)--who released Fisher's deposition publicly last week--sees it another way.

Republicans had hoped to uncover a "manipulative political process" related to funding the payments, he says in a statement. Instead, while Fisher disagreed with the IRS' decision that the payments were appropriate, he notes in his testimony that he understands why the agency made that choice and says he was given "plenty of time to air my concerns."

To learn more:
- here's Fisher's deposition (.pdf)
- read the New York Times article
- here's Levin's statement