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House GOP lawsuit wages surprising fight over federal purse strings

House GOP opens new front in Obamacare fight

When the House GOP authorized a lawsuit accusing President Obama of overstepping his authority, the rationale it offered was a head-scratcher: the administration's move to delay the employer mandate, a requirement that House Republicans unanimously opposed.

The lawsuit filed Friday devotes only half of its attention to that issue, however. The other half takes up a topic much more important to Republicans in Congress, and indeed to any lawmaker in a divided government: the power of the purse.

The lawsuit accuses the administration of funding a provision in the 2010 Patient Protection and Affordable Care Act that Congress had not appropriated money for. The provision, Section 1402, makes coverage even more affordable for lower-income Americans by reducing their deductibles and co-pays.

The "reduced cost-sharing" goes hand in hand with the premium subsidies the act provides to those whose incomes are between one and four times the federal poverty level. The ACA requires insurers to meet the limits it sets on cost-sharing for those enrollees but also requires the federal government to cover all of the insurers' costs.

Sounds like an entitlement, right? But while Congress provided a permanent appropriation for the premium subsidies, the lawsuit alleges, it did not provide any funding for the reductions in cost-sharing, ignoring the administration's request for fiscal 2014.

Undaunted, the administration paid insurers about $4 billion from January through October for the cost-sharing subsidies, the lawsuit says. The money, it alleges, came out of the account for premium subsidies, contrary to the language of the appropriations bill that funded those subsidies.

The conflict here isn't just between what Congress appropriated and what the administration spent. It's also between what Congress said in the ACA and what it has done since then. The language in the ACA is unequivocal: the Department of Health and Human Services "shall make periodic and timely payments to the issuer equal to the value of the reductions." The House lawsuit argues that this language merely authorizes the payments, but it's not couched in the usual verbiage of an authorization bill. 

Ordinarily, entitlements continue until Congress enacts a new law cutting them off. Such has not been the case with Obamacare.  At the same time, however, the Anti-Deficiency Act requires money to be appropriated before it can be spent. Appropriations bills can't control the amount of spending by an entitlement program, but there still has to be an appropriation -- either a permanent one when the program starts or annual ones.

The lawsuit's claim that Congress had successfully defunded one part of Obamacare came as a surprise, given that the subsidies have been flowing for 11 months. And if the House GOP prevails on this issue, it will give appropriators new leverage over any entitlement that relies on annual appropriations, including food stamps. That leverage could prove extraordinarily valuable to Republicans as they tussle with President Obama over safety-net programs and the budget.

Follow Healey's intermittent Twitter feed: @jcahealey

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