"I write now to inform you that the President has asserted executive privilege" over the documents, Deputy Attorney General James Cole told Issa in a letter released by the White House.
"Although we are deeply disappointed that the Committee appears intent on proceeding with a contempt vote, the Department remains willing to work with the Committee to reach a mutually satisfactory resolution of the outstanding issues," Cole wrote in the letter.
[Related: Reaction fast, furious over Obama decision]
Issa read from Cole's letter as his committee opened the hearing, and said he was "evaluating" the situation but would not hold off on the contempt vote. If the panel votes to hold Holder in contempt, it could lead to a full House vote on the issue, which would refer the matter to a Justice Department prosecutor. The attorney general had recently warned of a "constitutional conflict" on the issue.
Obama's decision is sure to ramp up election-year political warfare between the president and his Republican critics in Congress, and the fight could conceivably land in the Supreme Court.
Issa met with Holder late Tuesday to find a last-minute path out of the expanding constitutional conflict, but said afterward that they had failed to reach a satisfactory arrangement regarding lawmakers' access to documents connected to Fast and Furious. The operation aimed to track the flow of guns from the United States into the hands of Mexican drug cartels, but many firearms went missing and two turned up at the scene of the killing of Customs and Border Patrol Agent Brian Terry.
Republicans have accused Holder of misleading them on what he knew about the operation and when. The attorney general has blamed Republicans for playing politics by rejecting his offers to make some of the materials available. Obama has rejected Republican calls to dismiss Holder.
The White House, in an email to reporters announcing the move, noted that Obama's Republican predecessor President George W. Bush had invoked executive privilege six times, and former President Bill Clinton relied on the doctrine 14 times. Republicans hit back by sending reporters a snippet from a March 2007 interview in which Obama condemned the Bush administration's use of executive privilege "every time there's something a little shaky that's taking place" and urged that administration to "come clean."
By invoking executive privilege, the administration is essentially asserting a right to withhold documents that Issa's committee has sought using a congressional subpoena. The Supreme Court has ruled in the past that the privilege has its roots in the separation of powers enshrined in the Constitution. At issue is whether disclosing the documents could imperil ongoing investigations or reveal internal deliberations—something officials of both parties have warned could make it hard for future officials to offer candid advice for fear it could be made public.
"In brief, the compelled production to Congress of these internal Executive Branch documents generated in the course of the deliberative process concerning the Department's response to congressional oversight and related media inquiries would have significant, damaging consequences," Cole wrote to Issa.
"As I explained at our meeting yesterday, it would inhibit the candor of such Executive Branch deliberations in the future and significantly impair the Executive Branch's ability to respond independently and effectively to congressional oversight," Cole said.
"Such compelled disclosure would be inconsistent with the separation of powers established in the Constitution and would potentially create an imbalance in the relationship between these two co-equal branches of the Government," the deputy attorney general wrote to Issa.
Republican House Speaker John Boehner's office seized on Obama's decision, arguing that it suggested White House involvement in a "cover-up" of the errors in Fast and Furious.
"Until now, everyone believed that the decisions regarding 'Fast and Furious' were confined to the Department of Justice. The White House decision to invoke executive privilege implies that White House officials were either involved in the 'Fast and Furious' operation or the cover-up that followed," said Boehner spokesman Brendan Buck.
"The Administration has always insisted that wasn't the case. Were they lying, or are they now bending the law to hide the truth?" Buck said in a statement emailed to reporters.
But that's not necessarily true. Holder, who wrote to Obama asking him to invoke executive privilege, made no mention of any involvement by the White House in Fast and Furious, which was run out of the Bureau of Alcohol, Tobacco, Firearms and Explosives in Arizona. And an Obama administration official shared a list of "examples of assertions of executive privilege not involving presidential communications" dating back to former President Ronald Reagan's October 1981 decision to do so in connection to internal Interior Department deliberations about the Mineral Lands Leasing Act.
And White House Communications Director Dan Pfeiffer accused Republicans in Congress of neglecting efforts to spur job growth in favor of pursuing "a politically motivated, taxpayer-funded election-year fishing expedition."
"Given the economic challenges facing the country, we believe that House Republicans should work with the rest of Congress and the president to create more jobs, not more political theater," Pfeiffer said in an emailed statement.