Committee on Energy and Commerce

Fred Upton

#SubEnergyPower Examines 21st Century Electricity Opportunities and Challenges


WASHINGTON, DC – The Subcommittee on Energy and Power, chaired by Rep. Ed Whitfield (R-KY), today held a hearing on “The 21st Century Electricity Challenge: Ensuring a Secure, Reliable and Modern Electricity System.” A strong electricity system is critical to our economic and national security, and today’s hearing focused on efforts to modernize the nation’s electric grid to meet the challenges and opportunities of the 21st century.

“The challenges are significant – much of our grid is outdated, coal-fired generation facilities are shutting down at an alarming rate, reserve margins are inadequate in several regions, intermittent and remote renewable capacity is coming online, and cyber threats pose a growing concern,” said Chairman Whitfield. “But there are opportunities as well. Utilities plan to invest more than $60 billion in transmission infrastructure through 2024 to modernize the nation’s electric grid, while abundant fuel resources and advanced generation, storage, and distribution management technologies can help modernize and diversify the nation’s power portfolio. Further, ‘big data’ energy analytics and new information technologies offer a diverse suite of novel products and services that can identify and mitigate inefficiencies in the electricity supply chain while helping utilities meet changing consumer expectations.”

Thomas Siebel, Chairman and CEO of C3 Energy, spoke about the potential benefits of advanced grid technologies. “Smart grid analytics enables us to provide real-time pricing signals to energy consumers, manage sophisticated energy efficiency and demand response programs, conserve energy use, reduce the fuel necessary to power the grid, reconfigure the power network around points of failure, recover instantly from power interruptions, accurately predict load and distributed generation capacity, rapidly recover from damage inflicted by weather events and system failures, prevent cyber attacks, and reduce adverse environmental impact,” said Siebel.

Dean Kamen, Founder and President DEKA Research & Development Corporation, explained the dramatic changes occurring in our electricity system and the integration challenges ahead, stating, “In recent years there has been a great deal of innovation with distributed generation and renewable, smart grid technologies, as well as energy storage systems. While these technologies offer a promising future for the U.S. electric system, our collective immediate challenge is to develop the appropriate business models and regulatory structures to effectively manage the integration of modern technologies while ensuring the continued operation and viability of our nation’s electric grid. As we evolve toward a more diverse electric future enabled by new technologies, the challenge confronting this committee and our country is to manage this transition in a way that does not endanger the availability of electricity.”

Michael Atkinson, President of Alstom Grid, Inc., urged Congress to act quickly to address regulatory barriers to grid innovation and adoption. “We are facing an unprecedented period in which we are encountering a range of driving forces that are affecting our grid, including an increasingly digital economy and a convergence of new technologies, as well as cybersecurity and other threats to our grid system,” said Atkinson. “Unless we prepare now, our system could be vulnerable and might not adequately cope with challenges that already are being experienced. Additionally, we could lose significant economic opportunities and benefits. Congress can play a leadership role in helping to set the stage for ensuring and accelerating this transformation by fostering even greater collaboration between federal, state, and local governments, the private sector, and the entire ecosystem of stakeholders.”

General Manager of Lakeland Electric Joel Ivy, testifying on behalf of the American Public Power Association, also discussed some of the challenges to deploying advanced grid technologies, including the need to address cyber threats. He explained, "The threat of cyber attack is relatively new compared to long-known physical threats, but an attack with operational consequences could occur and cause disruptions in the flow of power if malicious actors are able to hack into data overlays used in some electric generation and transmission infrastructure. While APPA believes that the industry itself, with NERC, has made great strides in addressing cyber-security threats, vulnerabilities, and potential emergencies, we recognize that any true national emergency will warrant involvement from many federal entities.”

House Energy and Commerce Committee Chairman Fred Upton (R-MI) concluded, “Of course, Congress must decide the proper role of government in these changes to the electricity system. New mandates and subsidies are not the answer. But we do need to identify and address regulatory barriers to entry, market-distorting incentives, and artificial constraints on competition that will be critical to further innovation. Although the age of electricity is well into its second century, the pace of innovation is as rapid as ever. Federal energy policy needs to adapt in order to ensure that these advances can continue.”


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Grid Operator: Reliable Electricity At Risk Under EPA’s Plan


Power Supply for 50 Million Homes in Jeopardy

A new analysis by PJM Interconnection, the country’s largest regional grid operator, estimates that EPA’s unprecedented plan to regulate carbon dioxide emissions from power plants could trigger the retirement of up to 49 GW of its generating capacity as a worst-case scenario.

49 GW is the equivalent of the electricity used to power almost 50 million homes. By forcing affordable power offline, EPA’s plan will threaten reliability while increasing costs. According to PJM, “Electricity production costs are likely to increase with compliance because larger amounts of higher-cost, cleaner generation will be used to meet emissions targets.”

“PJM’s analysis should serve as a wake up call,” said Energy and Power Subcommittee Chairman Ed Whitfield (R-KY). “The president’s plan could cause 50 million American homes to go dark - you cannot just shut down the nation’s coal plants and still expect the lights to come on.” 

On Tuesday, March 17, Whitfield’s subcommittee will hold a hearing to examine some of the costs and consequences of EPA’s rule. More information will be available HERE.  

March 3, 2015

Analysis: PJM finds 49GW at risk from CO2 rule

Washington, 3 March (Argus) — The PJM Interconnection is projecting that up to 48,900MW of its fossil-fueled generating capacity could be at risk of retiring under first-time CO2 limits proposed by the Environmental Protection Agency.

That worst-case scenario would mean the retirement of 30pc of existing capacity on the largest US electric grid and will likely provide fresh ammunition to critics of the rule. PJM's worst-case scenario assumes higher fuel prices, nuclear retirements and limited availability of energy efficiency and renewables. A less-extreme scenario found that only 14,500MW of capacity is at risk of retiring.

The lower estimate is based on how PJM applied a metric called the net cost of new entry (CONE), which determines the capacity revenue a new plant needs each year to remain economic after factoring in energy and ancillary services revenue. If an existing plant needs at least half of net CONE to stay in business, the grid says that resource is at risk of retiring.

PJM typically calculates retirement risks based on the net CONE of a combustion turbine, considered the cheapest plant to build. Using this method, the grid found that as little as 6,200MW risks retiring because of the rule, with 14,500MW in a worst-case scenario.

But PJM also wanted to find out what would happen if combined-cycle generators are more frequently the lowest-cost resource, which could occur as they are dispatched more often and need less capacity revenues to remain economic. This alternate method found 48,900MW as the worst scenario.

The retirement estimates will form a basis for PJM studies into transmission upgrades required by the CO2 rule. The grid operator plans to use the average of the two worst-case scenarios for those transmission studies, which is 31,700MW.


Read the article online HERE

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Patient CARE Act: What They’re Saying


The Patient CARE Act is a bicameral legislative blueprint that repeals and replaces Obamacare with common-sense, patient-focused reforms that reduce health care costs and increase access to affordable, high-quality care. In contrast with Obamacare and its government-centered mandates and regulations, this proposal empowers the American people to make the best health care choices for themselves and their families. 

The Center for Health and Economy recently found that the Patient CARE Act would lower premiums, improve access to providers, increase medical productivity, and reduce the nation’s deficit by hundreds of billions of dollars.  The plan was unveiled earlier this year by U.S. Senator Richard Burr (R-NC), Senate Finance Chairman Orrin Hatch (R-UT), and House Energy and Commerce Chairman Fred Upton (R-MI).

The Chicago Tribune: If Obamacare FailsBy The Editors

“The best blueprint we've seen — call it Plan B if you wish — comes from Republican Sens. Richard Burr of North Carolina and Orrin Hatch of Utah, and Rep. Fred Upton of Michigan….Burr-Hatch-Upton could be the framework for Plan B, as in bipartisan.”

Bloomberg View: An Actual Republican Alternative to ObamacareBy The Editors

“A viable Republican substitute for Obamacare used to be the yeti of Capitol Hill: often talked about, never seen. But it has suddenly become real.”

The Wall Street Journal: 3 Republicans Revise Proposal for Obamacare AlternativeBy Louise Radnofsky

“A trio of congressional Republicans are putting out a fresh version of their suggestions for the party’s proposal for an Affordable Care Act alternative…”

Forbes: The Impressive New Obamacare Replacement Plan From Republicans Burr, Hatch, and UptonBy Avik Roy

“…a new and improved version of their proposal, one that continues to be a model GOP health-reform plan.”

National Review Online: A Creditable PlanBy The Editors                        

“This health-care proposal remains…the best one to have emerged from Congress.

National Review Online: A House-Senate Obamacare ReplacementBy Yuval Levin                        

“…Burr, Hatch, and Upton have proposed the most plausible and promising conservative health-care idea we’ve seen in Congress.”

National Review Online: Means and Ends in Health CareBy Yuval Levin

“At the core of this proposal, as of most other conservative health-care proposals, is the idea that what American health care needs is not consolidation and centralized control but decentralization and real competition.”

Brookings: Two Cheers for the GOP’s Burr, Hatch and Upton Alternative to ObamacareBy Stuart M. Butler

“…the Burr-Hatch-Upton plan is an important proposal from leading GOP lawmakers and includes approaches that contain the basis for agreement.”

Politico: Key GOP lawmakers outline an Obamacare replacement planBy Erin Mershon

“Three influential Republicans on Capitol Hill are set to release the most serious GOP alternative to Obamacare to date.”


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#SubCommTech Begins FCC Reauthorization


WASHINGTON, DC – The House Subcommittee on Communications and Technology, chaired by Rep. Greg Walden (R-OR), today heard from FCC Managing Director Jon Wilkins as members began their review of the Federal Communications Commission’s $530 million Fiscal Year 2016 budget request. As part of the committee’s effort to modernize the federal government for the 21st century, members discussed their work to reauthorize the FCC – a task not completed since 1990 – which is a critical part of the #CommActUpdate.

“Much has changed since the last reauthorization of the commission,” said Walden. “The industries and markets the commission oversees have without question undergone dramatic changes and continue to evolve at a rapid pace. But in the intervening years the FCC has struggled to reflect the evolution of technology that has brought about the integration of voice, video, and data services and the significant shifts in consumer consumption patterns that have resulted.”

#SubCommTech Chairman Greg Walden questions FCC Managing Director Wilkins during today’s hearing

“As I have noted before, it is a critical part of this committee’s work to foster a smaller, more nimble government for the innovation age,” added full committee Chairman Fred Upton (R-MI).

The subcommittee will hold a hearing with the FCC commissioners on March 19. Additional information about that hearing will be posted here as it is available.


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OPINION: Pitts in Option ready after ruling on health care


Option ready after ruling on health care

By Rep. Joe Pitts

Does the law mean what it says? That's the issue at the heart of the latest court challenge to Obamacare.

This morning in Washington, the Supreme Court will hear oral arguments in King v. Burwell. The plaintiffs are challenging the Obama administration's provision of tax subsidies to individuals in states that have not set up a health exchange. Pennsylvania is among the 34 states that declined to create an exchange.

More than five years ago, then-Senate Majority Leader Harry Reid (D., Nev.) rammed the Affordable Care Act through the chamber on Christmas Eve. The process of creating the legislation was secretive and sloppy. That, however, does not give the administration leeway to contradict what was put into the statute.

The law says that tax subsidies to purchase insurance are available to taxpayers who enroll for coverage in "an exchange established by the state." This would prevent anyone in Pennsylvania from receiving tax credits because the commonwealth elected not to set up an exchange. The federal government operates the exchange in our state through the website.

So what were the legislators and staff who drafted the bill thinking? Well, they were probably thinking that the federal government could easily get the states to do the difficult work of constructing exchanges and websites - if they were bribed. If states didn't set up an exchange, the thinking went, then their elected officials would have to explain to constituents why they were losing out on benefits.

It's not just a few words that back up the plaintiffs' case. Other parts of the law seem to assume that benefits are only meant for states with exchanges. Also, one of the architects of the law, Massachusetts Institute of Technology professor Jonathan Gruber, explicitly stated that this was a feature of the law, not a flaw. He said in an interview in 2012: "I think what's important to remember politically about this is, if you're a state and you don't set up an exchange, that means your citizens don't get their tax credits." Gruber tried to walk back these words, but only after his statement became a public embarrassment to the government's case.

Those who drafted the law vastly underestimated the level of opposition to Obamacare. They didn't anticipate that many states would not want to be complicit in the federal government's takeover of the health-care industry. States with already tight budgets didn't want the financial burden of creating and running exchanges.

Obamacare would be fundamentally changed if the Supreme Court sides against the administration. For a law that has never enjoyed popular approval, such a ruling would be a big chance to do things over and this time get it right.

If the court rules for the plaintiffs, House Republicans will not simply stand by and watch millions of Americans lose health insurance. We will be ready to act with legislation.

Our plan has two parts:

End the extensive federal mandates created by Obamacare and give choices to states, individuals, and families.

Create a new way to support Americans' purchase of insurance.

First, we have to ensure real choice and competition. Obamacare made an already expensive service even more costly by creating a host of new mandates. Any state that does not want to participate in the Obamacare exchanges should be able to opt out of big-government mandates and create a program that works best for its residents. This would, for example, let states get rid of the burdensome employer and individual mandates.

Our plan would also help drive the cost of insurance down by giving Americans choices that work best for them. We should allow Americans to shop across state lines. We can also lower costs by passing real medical liability reform that puts an end to junk lawsuits in our health-care system. And let small businesses band together to buy insurance, just as big companies do now.

Second, we will help people get the coverage they need. Our plan would change the tax code to help individuals buy insurance, just as the current code helps big companies. Congress can also consider additional ways to help Americans obtain coverage - like empowering states to draw up innovative coverage solutions tailored for their residents.

Should the court rule against President Obama, he will have a choice. He can either work with Congress to improve health care or watch millions of people suffer the consequences of his failure to provide solid health reform.

House Republicans will be ready. Will the president?

Read the full article online here

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HEARING POSTPONEMENT NOTICE: Health and Commerce, Manufacturing, and Trade Subcommittee Hearings Postponed


WASHINGTON, DC – Due to inclement weather and a change in the House schedule, tomorrow’s scheduled committee activity has been postponed. Rescheduled dates to be announced.

The Health Subcommittee hearing on “Examining the 340B Drug Pricing Program” will be rescheduled. Additional information, including a background memo and witness testimony, is available here.  

The Commerce, Manufacturing, and Trade hearing on “Oversight of the Consumer Product Safety Commission and the FY 2016 Performance Budget Request” will be rescheduled. Additional information, including a background memo and witness testimony, is available here.


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Upton, Ryan, Kline Respond to King v. Burwell Oral Arguments


WASHINGTON, D.C. – Chairmen John Kline (R-MN), Paul Ryan (R-WI), and Fred Upton (R-MI) responded to today’s Supreme Court oral arguments in the King v. Burwell case. The chairmen, who attended this morning’s oral arguments, are leading the House Republican working group to develop a plan to replace the president’s health care law over the long term and protect Americans affected by the decision in this case. Earlier this week they detailed some of their ideas to provide an off-ramp to the president’s health care law.

“We are here today because the Obama administration forced a flawed and partisan law on the American people. Its implementation has been one problem after another, and today’s case underscores just how far beyond the law the administration has gone to prop up this fatally flawed plan. The law is clear – and the Supreme Court should order the IRS to enforce the law as it is written. If it does, we will be ready to act. While the president insists he has no plan B, which would be malpractice if true, we are preparing a thoughtful solution that frees the American people both from the consequences of the administration’s illegal implementation, but also from this law’s many costly mandates. We will continue to work with our colleagues in the House and in the states on responsible policies that put the American people back in charge of their health care. There is a better way.”

Learn more about their plan HERE


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Committee Kicked Off Thoughtful Review of Cybersecurity


WASHINGTON, DC – The Subcommittee on Oversight and Investigations, chaired by Rep. Tim Murphy (R-PA), today held the first of a series of hearings on cybersecurity and the broader implications for businesses and consumers in today’s 21st Century economy. Today’s hearing provided an overview of the issue, focusing on the history, evolution, and future of cybersecurity.

“These are big, important issues, so it is imperative that we establish a clear understanding of the issues we face,” said Chairman Murphy. “So, today, we are going to do something a little different. We are not here to examine a specific cybersecurity incident, policy issue or legislative proposal. Today, we are going to take a step back and explore some fundamental questions.  Why does the cyber threat exist? Is it something that can be solved? And what does this mean for the future?”

Herbert Lin, Senior Research Scholar for the Hoover Institution at Stanford University, explained the fundamental challenges of cybersecurity, especially as society becomes more reliant on the Internet. “It’s true that over time we have gotten better at cybersecurity—that’s the bottom line. But the top line – how much we depend on cyberspace – has grown even faster, and with that growing dependence the threats have grown commensurately,” said Lin. He argued that the only way to eliminate all cyber security problems is to stop using information technologies, noting, “Cybersecurity is a never-ending battle, and a permanently decisive solution to the problem will not be found in the foreseeable future. Thus, the public policy question is not how the cybersecurity problem can be solved, but rather how it can be managed at an acceptable cost in dollars and effort expended by the various stakeholder parties who have something to lose.”

Richard Bejtlich, Chief Security Strategist at FireEye, provided insight into the breadth and scope of cyber risks and emerging threats and trends. “Serious intruders target more than government, defense, and financial victims. No sector is immune,” said Bejtlich. FireEye recently published reports showing that 96 percent of the organizations observed suffered compromises during two six-month periods. “Criminal groups appear to steal data for financial gain, while nation-state hackers may steal data to improve the healthcare systems of their own countries, or to support national commercial champions,” added Bejtlich.

Greg Shannon, Chief Scientist for the CERT Division at the Carnegie Mellon University Software Engineering Institute, described the future of cybersecurity, where technological innovation is headed and what actions society must take to create a secure foundation for future technology. “When discussing cyber security—past, present or future—it is important to understand the four mainstays of cyber technology and innovation: trust, people, efficiency, and measured outcomes. Innovation and the adoption of new technologies must take into account those four pillars,” said Shannon. To maintain a strong 21st Century Internet economy over the long-term, Shannon asserted, “Our nation needs a coordinated and integrated cybersecurity strategy to build trust between public and private entities and thwart our capable cyber adversaries. Cyber innovation and research need to address the threat in a more holistic manner.”

“As the Internet and information technology become increasingly entwined in our daily routines, cyberspace becomes a limitless and adaptive attack surface. The security challenges will be more diverse and harder predict.  And the consequences will be more severe. We may not be able to secure cyberspace but it is our collective responsibility to understand the threat in order to minimize its effect on our privacy, civil liberties, national security and economic prosperity,” added Murphy.

Full committee Chairman Fred Upton (R-MI) concluded, “Cyberspace has been, and will continue to be, an engine of economic, social, and cultural opportunity. We need to understand the nature and scope of the threat to the security of information in cyberspace, and develop an understanding of how to address these threats without jeopardizing the fundamental benefits that cyberspace provides. This hearing is just the beginning as our work continues.”


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#SubEnergyPower Examines Changing Energy Markets


WASHINGTON, DC – The subcommittee on Energy and Power, chaired by Rep. Ed Whitfield (R-KY), today held a hearing to examine changes in global energy markets. When it comes to energy markets, the transformation over the last decade has been dramatic and for the better. America is producing more while using and importing less, resulting in more jobs and lower prices at the pump. But, while the overall effects of our energy abundance are positive, they do present some new challenges under our current existing energy policy.

“There is no question that the America’s oil and natural gas boom has been very good news for America, but that is not to say that it doesn’t bring new concerns – we have simply traded one set of challenges for another,” said Whitfield. “Unfortunately, our energy policy is largely based on old laws rooted in assumptions of scarcity, and may no longer be up to the task of addressing these new challenges and taking full advantage of emerging opportunities.”

Adam Sieminski, Energy Information Administration Administrator described the United States’ impressive contribution to global energy supply, explaining, “The United States was the main contributor to global supply growth, adding 1.6 million b/d including 1.2 million b/d of increased crude oil supply.” EIA expects this growth to continue in the year ahead which will help keep oil prices low and benefit consumers.

John Kingston, President at McGraw Hill Financial Global Institute, talked about the United States’ competitive energy advantage and potential, stating, “When talking about U.S. competitiveness on energy, it’s important not to forget that natural gas is what gives the U.S. an enormous edge. … Most important to note today is the duration of this revolution: six years and counting. In terms of economic transformation, six years is just a warm-up. The changes in the U.S. resulting from these added flows have just begun.” In addition to the benefits of America’s energy revolution, Kingston noted the shortcomings of the recent fall in prices, noting, “The oil and gas extraction industry showed job losses of 2,000 for the month of January. This was the highest monthly loss since the recession. Moreover, regions that are heavily reliant on the energy sector could see a greater negative impact on employment and their surrounding economies.”

Amy Myers Jaffe, Executive Director of Energy and Sustainability at the University of California, Davis, spoke to the geopolitical influence of America’s new abundance, calling for the United Statesto lead from the front when it comes to energy geopolitics.” She explained, “A formalized national security assessment needs to be a more transparent metric for decision making on energy infrastructure and trade policy, similar to the manner in which environmental assessments are performed. Our international diplomacy should be addressing energy pro-actively.”

(From left to right: Adam Sieminski, Scott Sheffield, Charles Drevna, John Kingston, Amy Jaffe, Brad Markell, and Graeme Burnett)

The recent changes in energy markets have also raised questions about wither certain federal policies are still relevant and beneficial, particularly the ban on crude exports. Members questioned the panel about the impacts of lifting the ban.

Scott D. Sheffield, Chairman and CEO at Pioneer Natural Resources Company, fears the ban could unintentionally harm U.S. producers and consumers while benefiting OPEC countries. “If U.S. producers are forced to downsize further due to a protracted downturn caused by the export ban, it could take the industry many years to restore production growth. Loss of critical mass in the U.S. oil and gas sector equates to loss of energy security for the United States,” he said. 

Charles Drevna, President of the American Fuel & Petrochemical Manufacturers, expressed that while AFPM is not opposed to lifting the ban, the refining industry believes a more holistic energy strategy is needed to ensure all barriers to free and functioning markets are addressed. “AFPM does not oppose lifting the crude oil export ban, but urges Congress to base decisions on the facts while readdressing a suite of anti-free market policies contemporaneously. Enacting this type of comprehensive energy policy will avoid the mistakes of the past, which have bred a balkanized and conflicting set of priorities and policies that ultimately disadvantage U.S. consumers,” said Drevna.

Chairman Upton concluded, “We recognize that the export of oil and other liquid hydrocarbons presents different issues than natural gas. That is why we again are undertaking a thorough review and will consider all perspectives –including producers, refiners, and consumers. America’s energy abundance has greatly changed energy markets and presents a number of new opportunities, and we will carefully consider our approach to all of them.”  


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OPINION: Upton, Ryan, Kline in WSJ: An Off-Ramp From Obamacare


March 2, 2015

Upton, Ryan, Kline: An Off-Ramp From Obamacare

If the Supreme Court follows the law, there will be an opening for a sane health-care alternative. Here it is.

On Wednesday the Supreme Court will take on yet another legal challenge to the president’s health-care law, when the justices hear oral arguments in King v. Burwell. If the court rules against the administration, as any fair reading of the law would demand, millions of individuals and families will hit a major roadblock: They’ll be stuck with health insurance designed by Washington, D.C., that they can’t afford. Americans should have an off-ramp from ObamaCare—a legislative alternative that leads them away from an expensive health-care wreck and toward a patient-centered system.

To review: ObamaCare made health insurance even more costly by requiring plans to include Washington-determined benefits and levels of coverage. The only way to get people to buy these plans was to mandate them. And the only way people could afford these plans was through hundreds of billions of dollars of government subsidies.

But the law—as written—offers subsidies only to people who buy plans “through an Exchange established by the State.” In other words, if you bought a plan through the federal exchange—and more than five million people did in 2014—you’re not eligible for the subsidy.

Not one to worry over the large print, the Internal Revenue Service handed out subsidies to people on both the federal and state exchanges. This blatant disregard for the law has put millions on the hook—because if you received a subsidy and lose it because of the administration’s illegal actions, you’ll face big insurance bills you can’t afford.

The Supreme Court should tell the IRS to enforce the law as written—not as the administration wishes it had been written. As Chief Justice John Roberts wrote in 2012, “Members of [the] Court are vested with the authority to interpret the law” but “possess neither the expertise nor the prerogative to make policy judgments.”

But the question is: Then what? What about the people who will lose their subsidies—and possibly their coverage? No family should pay for this administration’s overreach. That is why House Republicans have formed a working group to propose a way out for the affected states if the court rules against the administration.

What we will propose is an off-ramp out of ObamaCare toward patient-centered health care. It has two parts: First, make insurance more affordable by ending Washington mandates and giving choice back to states, individuals and families. And second, support Americans in purchasing the coverage of their choosing. …

Read the complete piece online HERE


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