Speeches & Floor Statements

Floor Speech: HHS secretary soliciting private funds for Obamacare

May 13, 2013 - May 13, 2013

    Friday's Washington Post reported that Secretary Sebelius of the Department of Health and Human Services "has gone, hat in hand, to health industry executives, asking them to make large financial donations to help with the effort to implement President Obama's landmark health care law...." 

    The article further said that the "unusual fundraising push" comes after Congress has repeatedly rejected the administration's requests for additional funds to set up the Affordable Care Act. The article said many of the secretary's calls have recruited support for Enroll America, described as the most prominent nonprofit working on the health care law's implementation.  Its president, Anne Filipic -- the article goes on to say -- joined the group in January after serving as White House deputy director for public engagement. 

    Today, the New York Times included an article by Robert Pear:  "Cabinet Secretary Solicits Large Donations to Publicize Health Care Law." 

In the article, it said: 

          “...Ms. Sebelius had made calls soliciting support from the health care industry, including insurance and pharmaceutical executives. 

          “....a spokesman for Ms. Sebelius, said she had suggested that health care executives and others support the work of Enroll America, a private nonprofit group that shares the president's goal of securing coverage for people without insurance. 

          “An insurance executive said that some insurers had been asked for $1 million [in] donations, and that ‘bigger companies have been asked for a lot more.’ 

          “Administration officials said private donations were needed because Congress had provided much less money than Mr. Obama requested to publicize the new law and get people enrolled in health plans subsidized by the government.”

    The article further talks about Ms. Filipic.  She worked on Mr. Obama's 2008 campaign.  She was deputy executive director of the Democratic National Committee.  She worked in the Obama White House as deputy director of the Office of Public Engagement.  She said her time is not political in her work for Enroll America.

    She says:

          “We are thrilled to be working with Secretary Sebelius and to have her support.

    Several executives who received these calls for money said "they were uncomfortable with the discussions because the federal government has the power to approve or reject the health plans they want to sell in insurance markets that will be run by federal officials in more than 30 states." 

    Secretary Sebelius's fundraising for and coordinating with private entities helping to implement the new health care law may be illegal, should cease immediately, and should be fully investigated by Congress. 

    Later this week, I will be sending a letter, with several of my colleagues, to the Government Accountability Office asking them to examine the issue.  We will be asking the GAO to examine the amount of coordination between the Department of Health and Human Services and Enroll America and whether Secretary Sebelius is trying to do through a private entity activities that Congress has refused to allow the department to do. 

    Such private fundraising, as these articles describe, circumvents the constitutional requirement that only Congress may appropriate funds.  If the secretary and others in her department are closely coordinating with the activities of Enroll America, which is headed by the former White House aide, then those actions may be in violation of the Anti-Deficiency Act. 

    The limits of the Anti-Deficiency Act were fully explored by Congress during the Iran-Contra incident, when Reagan administration official Oliver North raised funds and directed their spending through private entities in support of Nicaraguan rebels even though Congress had refused to appropriate such funds. 

    This produced a select joint committee of the Congress, including many of its most distinguished members -- the Iran-Contra joint select committee.  The Senate ranking members were Senator Inouye and Senator Warren Rudman of New Hampshire.  The House leaders were Lee Hamilton and Dick Cheney, who was the ranking Republican. 

    The report of the Iran-Contra Joint Select Committee  -- Senate Report No. 100-216 -- at page 413 said: 

          “The constitutional plan –”

    Referring to the U.S. Constitution --

          “did not prohibit the President from urging other countries to give money directly to the Contras.

    The rebel group in Nicaragua. 

          But the Constitution does prohibit receipt and expenditure of such funds by this government absent an appropriation.  This prohibition may not lawfully be evaded by use of a nominally private entity, if the entity is in reality an arm of the government and the government is able to direct how the money is spent.” 

    The report also said: 

          “Congress's exclusive control over the expenditure of funds cannot legally be evaded through the use of gifts or donations to the executive branch.  Were it otherwise, a president whose appropriation requests were rejected by Congress could raise money through private sources or third countries for armies, military actions, arms systems or even domestic programs.”

    Let me read this again.  This is the joint committee: 

          “Were it otherwise, a president whose appropriation requests were rejected by Congress could raise money through private sources or from third countries for armies, military actions, arms systems or even domestic programs.”

    That is page 412, page 413 of the Iran-Contra joint select committee report. 

    Friday's Washington Post reported that the secretary's spokesman said Sebelius is working with private entities on "our mission" of implementing health care law activities, although Congress has refused to appropriate more funds.  If the Department of Health and Human Services closely coordinates with Enroll America and with other such entities, then the analogy with Iran-Contra is strong. 

    It is hard for me to see the difference.  There is a difference in where Oliver North got his money in 1985, 1986 and 1987 with Iran-Contra.  Some of it came from the hostages-for-arms sale.  But the question is not as much where the money comes from -- although in this case the secretary may be raising it from people she regulates, which could also be illegal -- the question is where the money is going.  In the case of Iran-Contra, the money was going to a private entity, supporting a rebel army in Nicaragua, in contravention of the Boland amendment passed by Congress.  In other words, Congress had said no, and the administration did it anyway. 

    That is precisely, it seems to me, what is happening here.  Congress has said:  “No, we are not going to appropriate any more money -- or as much as you want -- to implement the health care law.”  And the secretary appears to be raising money from people she regulates, to give it to private entities with whom she coordinates, to do what Congress has refused to do. 

    The problem with that, first, is the Constitution of the United States gives the power of the purse to the U.S. Congress, in Article I.  No. 2, there is a federal law that says you cannot do through private entities what Congress has refused to do.  That is called the Anti-Deficiency law.  And, No. 3, there are some federal laws about raising money from people you regulate for whatever purpose. 

    The secretary's activities may violate those federal laws prohibiting raising private funds from those she regulates.  Federal law permits a narrow band of private fundraising activities, but this has always been interpreted very narrowly. 

    This would not be the first violation of the Anti-Deficiency Act by the secretary's HHS.  The General Accountability Office found HHS in violation of the Anti-Deficiency Act three times last year. 

    I am most concerned that the secretary's actions reflect a deep disregard, running throughout the administration, for the constitutional role of the elected representatives in the legislative branch. 

    We saw it in the president's decision in January of 2012 to bypass the Senate's role of advice and consent and make appointments -- recess appointments, which are authorized by the Constitution -- at a time when the Senate said it was not in recess.  A federal court quickly ruled these appointments were unconstitutional, because the Senate was not in recess, but the individuals continue to show up at the National Labor Relations Board and pretend they have the authority to issue decisions. 

    We see this in a number of executive orders the president has used to circumvent Congress on issues as important as immigration enforcement and in the number of czars whose responsibilities are intended for roles that need the Senate's advice and consent. 

    We see it at the Department of Education, where the secretary is turning a simple waiver authority in No Child Left Behind into a conditional waiver with the secretary using his authority to make decisions that should be made by Congress or should be made locally by state and local governments.

    The HHS secretary's actions may follow an administration pattern, but in this case it is in a pattern that appears it may be illegal and it demands investigation. 

    So I will be, as I said, with other members of Congress, later this week, sending a letter to the Government Accountability Office, asking them to look at these facts. 

    Mr. President, I wish to read a few paragraphs from the Iran-Contra report that was issued by the Joint Select Committee in the late 1980s: 

          “The Constitution contemplates that the Government will conduct its affairs only with funds appropriated by Congress.  By resorting to funds not appropriated by Congress -- indeed funds denied the executive branch by Congress -- Administration officials committed a transgression far more basic than a violation of the Boland Amendment.” 

    That was the amendment that said you cannot use federal dollars to support rebels in Nicaragua. 

          “The power of the purse –”

    Continued the Joint Select Committee.  This was written at a time when we had a Democratic Congress.

          “The power of the purse, which the Framers vested in Congress, has long been recognized as ‘the most important simple curb in the Constitution on Presidential Power.’  The Framers were determined not to combine the power of the purse and the power of the sword in the same branch of government.

          The constitutional process that lodges control of government expenditures exclusively in Congress is the Anti-Deficiency Act, which prohibits an officer of the United States from authorizing an expenditure that has not been the subject of a Congressional appropriation or that exceeds the amount of any applicable appropriation. 

    Thus, the Anti-Deficiency Act provides: 

          An officer or employee of the United States Government may not make or authorize an expenditure or authorization exceeding an amount available in an appropriation or fund for the expenditure or obligation; or involve [the] government in a contract or obligation for the payment of money before an appropriation is made unless authorized by law.” 

    I ask unanimous consent to have printed in the record following my remarks these excerpts from the joint committee's report; and I refer the record to Article I, Section 8 and Article 1, Section 9 of the Constitution, which says: 

          “No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law....”

    Then two other things.  One is the purported authority that the secretary's spokesman is citing for her actions in raising money.  I have not seen the authority for raising money from people she regulates.  But 42 U.S.C. section 300u-1(a) talks about grants and contracts for research programs, and says: 

          “The Secretary is authorized to conduct and support by grant or contract (and encourage others to support) research in health information and health promotion, preventive health services, and education in the appropriate use of health care.  Applications for grants and contracts under this section shall be subject to appropriate peer review.”   

    This small section relates to support for contracts for research and information programs in the form of grants or contracts.  The parenthetical, "encourage others to support" has to be read as encouraging others to support such programs.  It is far-fetched to say it gives the secretary authority to encourage third parties to give money to nonprofits providing Obamacare information that the Department of Health and Human Services cannot fund directly because Congress has refused to appropriate. 

    This small section and the words in parenthesis cannot amend the Constitution of the United States and invalidate Article I.  This section cannot supersede the Anti-Deficiency Act, according to the language of the Joint Committee.  There is obviously a way to have appropriate public-private contracts.  We have them all throughout government, public-private associations to try to improve our country.  We do that with HIV/AIDS, we do it with a whole variety of things. 

    When I was education secretary, I worked with the first President Bush to set up the New American Schools Development Corporation, which encouraged a private corporation headed by former New Jersey Governor Tom Kean, which would raise money to create models for private schools. 

    Then later on President Bush asked Congress to do some things in support of those schools.  All of us encouraged that, but that was quite different.  That was an effort that would be typical of many public-private partnerships in which the federal government is involved, where in this case we said we want to encourage the support of model schools.  Here is a private corporation that is doing that.  We encourage that.  Congress was not objecting to that.  Congress has not said:  “You cannot do that.”  Congress has not been asked to vote on an appropriation for the New American Schools Development Corporation.  Congress had not said:  “You cannot do that.” 

    So that would be true with dozens, maybe hundreds of public-private partnerships between the federal government and private organizations for the same goal.  But what we are talking about, and why the analogy between what Secretary Sebelius is doing and what Oliver North was doing in the Reagan administration in the late 1980s is so strong, is because in each case the money seems to be raised privately and spent through private entities for a function for which Congress has refused to appropriate money. 

    It is not so much where the money came from, it is more where the money is going.  The Constitution itself, in Article I, makes it absolutely clear no one can appropriate dollars for a federal program other than the Congress of the United States.  A subterfuge that goes around that, seeks to go around that by raising private money, putting it in private entities for the same purpose that Congress has either refused to appropriate money for or said that you cannot do, that is outside the Constitution.  It is not allowed by the Constitution of the United States, and it is against the Anti-Deficiency Act. 

    Then there is the separate question of whether it is appropriate to raise money from people the secretary regulates.  I am deeply concerned about this.  I hope the secretary will stop this action.  I hope the public-private partnerships we have throughout government will continue where they are appropriate, but we need for the executive branch of government to show proper respect to the people of this country who elect their members of Congress. 

    We are Article I.  They are Article II.  The purpose of the power of appropriations is to put a curb on the executive branch.  If the Congress says no, then the executive cannot spend money, nor can the executive go through a subterfuge of private organizations and private fundraising in support of the very same objective that Congress has refused to approve. 

    In this case, the secretary seems to say the reason they are doing that is because Congress has refused to appropriate more money to implement the health care law.  That seems to me to be just admitting a violation of the Anti-Deficiency Act, admitting a violation of the proper division of responsibilities in the Constitution. 

    Yes, Congress has refused to do that, but that is the Congress's privilege to do that.  When the Congress does that, the administration may not proceed to spend the money the Congress has not authorized, whether directly through the government or indirectly through private entities. 

    Later this week we will be asking the Government Accountability Office to look into these facts.  I am sure we will be hearing more about it.  I would hope in the meantime the Secretary will stop making the phone calls, stop coordinating with private entities to do things that Congress has specifically refused to do. 

    I ask unanimous consent to have printed in the record at the end of my remarks an article published July 8, 1991, "Bush Sets Up Foundation to Start Model Schools" as an example of an appropriate way to have a public-private partnership or a private enterprise that is encouraged by the government, but not in a way that seeks to do something Congress has refused to do.