Does The Defund Language In The House CR Shutdown The Entitlement Spending In ObamaCare? Answer: It Seems So
Gabe says no, the tax credits are in a part of the code that the CR doesn’t touch.
— Gabriel Malor (@gabrielmalor) September 23, 2013
Of course he’d say that, he’s a damn dirty RINO and a lawyer. Me? I’m not a RINO because I’m not a Republican.
But for fun, let’s look at the laws.
First, here’s the defund language from the recently passed CR.
That’s from page 17 of the House CR (pdf).
Now let’s look at the law Gabe references….
(a) Necessary amounts are appropriated to the Secretary of the Treasury for refunding internal revenue collections as provided by law, including payment of—
(1) claims for prior fiscal years; and
(2) accounts arising under—
(A) “Allowance or drawback (Internal Revenue)”;
(B) “Redemption of stamps (Internal Revenue)”;
(C) “Refunding legacy taxes, Act of March 30, 1928”;
(D) “Repayment of taxes on distilled spirits destroyed by casualty”; and
(E) “Refunds and payments of processing and related taxes”.
(b) Disbursements may be made from the appropriation made by this section only for—
(1) refunds to the limit of liability of an individual tax account; and
(2) refunds due from credit provisions of the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.) enacted before January 1, 1978, or enacted by the Taxpayer Relief Act of 1997, or from section 25A, 35, 36, 36A, 36B, 168(k)(4)(F), 53(e), 54B(h), 6428, or 6431, of such Code, or due under section 3081(b)(2) of the Housing Assistance Tax Act of 2008.
I’m not a lawyer but here’s how I read that…the law Gabe references is the provision for how tax credits are handled by the Treasury Department. And he’s right, they happen automatically and a CR has nothing to do with that. Where I think he’s wrong is that provision just explains how they are dealt with not their actual existence. There are lots of tax credits (mortgage deduction, children, etc) and this section authorizes the Treasury to pay on them when a taxpayer makes a claim under an existing credit.
What the CR does is repeal the existence of the ACA’s tax credits. Notice in the CR that “title I and subtitle B 6 of title II of the Health Care and Education Reconciliation 7 Act of 2010 (Public Law 111–152) are taken out of effect.
What’s that look like? Here’s the bills Table of Contents (pdf):
That’s where the ObamaCare subsidies and credits were created. If the CR becomes law as it is, it’s as if they don’t exist. If they don’t exist the part of the law that tells you how to administer them is irrelevant.
In short, if they don’t exist, it doesn’t matter that there’s another provision of law that allows the Treasury to pay other kinds credits. If you repealed the Earned Income Tax Credit, parents cold still claim the child tax credit.
Heritage Action says basically the same thing in their defund fact sheet (pdf):
. According to the nonpartisan Congressional Research Service (CRS), the Department of Health and Human Services (HHS) and the IRS, “will incur substantial administrative costs to implement the law’s private insurance reforms and its changes to the federal health care programs.” And whileObamacare provided $1 billion in mandatory implementation funding when it was enacted, HHS projects that this is largely spent. According to CRS, Obamacare “administrative costs will have to be funded through the annual
discretionary appropriations.” Furthermore, annual appropriations bills routinely carry funding limitations to block all sorts of activities (for example, the Hyde Amendment), as well make changes to mandatory spending. These latter provisions are called “changes in mandatory program spending” (CHIMPS). Even if these riders were not so common-place, the stakes of so many provisions of
Obamacare scheduled to take effect would present grounds for an exception.
What wouldn’t stop ObamaCare subsidies is a simple shutdown. In that case all current law stays the same in terms of entitlements. Of course no one is arguing a shutdown is going to stop ObamaCare, only a CR with defunding language will.
You can said this bad politics or that it won’t ever pass but I think saying that defunding doesn’t stop the ACA dead in its tracks (at least for 3 months, that’s all this CR is good for) is mistaken.
If I’m wrong, I’m sure I’ll hear about it.