Can Appropriations Bills Defund Obamacare?

  • Some have argued that because much of Obamacare constitutes “mandatory” spending— namely, new entitlements such as the massive Medicaid expansion and exchange insurance subsidies—Congress is powerless to defund the entire law as part of its annual appropriations bills. These claims are false.
  • Congress routinely enacts changes to mandatory spending programs as part of its annual appropriations process. The non-partisan Congressional Budget Office (CBO) recognizes these changes when analyzing spending bills and scores them as CHiMPS—changes in mandatory program spending.
  • In February 2011, the House of Representatives passed H.R. 1—legislation intended to reduce federal spending by $100 billion, consistent with House Republicans’ “Pledge to America.” CBO found 23 pages’ worth of CHiMPS in the House-passed version of H.R. 1. These reductions in mandatory spending ran the gamut from $26 million in savings over one year, and $74 billion in savings over ten years, achieved by reducing the maximum Pell Grant award (Section 1831), to $30 million in savings achieved by reducing mandatory appropriations to the Consumer Financial Protection Bureau (Section 1517).
  • Congress has already defunded mandatory programs within Obamacare—and done so through appropriations measures. Section 1857 of the continuing resolution Congress enacted in April 2011 (P.L. 112-10) “permanently cancelled” $2.2 billion in mandatory funding to Obamacare’s co-op health insurance program.
  • Congress has also defunded elements of health care entitlements for decades. Every year since 1976, Congress has enacted the Hyde Amendment, which bans federal funding of abortion. This provision, enacted as part of discretionary appropriations legislation, prohibits abortion coverage in the Medicaid entitlement program.
  • Historically, Congress has used the “power of the purse” broadly to make key policy statements through defunding. For instance, in 1982 Congress acted to block the Reagan Administration’s policy for supporting the Contra forces opposing the Nicaraguan government. As part of Public Law 97-377, Congress prohibited both the Department of Defense and the Central Intelligence Agency from furnishing military equipment and support to any group for the purpose of overthrowing the Nicaraguan government. Even though defense spending is not funded through mandatory appropriations, the example demonstrates that defunding has been—and remains—a powerful tool Congress can use to affect public policy.
  • Given the examples above, and numerous others, it is beyond dispute that Congress can use its power of the purse to defund Obamacare—both its mandatory and discretionary spending—in appropriations legislation this fall. The lone remaining question is whether Congress can summon the political will to do so.

This Fact Sheet was originally published by The Heritage Foundation.