The case centers round the drugs operation known as Fast and Furious, in which U.S. agents turned a blind eye to arms being smuggled across the Mexican border. The agents had set up the sting operation in the hope they could trace the smuggled guns to high-ranking traffickers linked to drugs cartels.
Agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives in Arizona, lost track of more than 1,000 weapons. Two of the weapons turned up at the scene of the killing of U.S. Border Patrol Agent Brian Terry.
George Bush's administration used executive privilege half-a-dozen times, including to protect then vice-president Dick Cheney and senior adviser Karl Rove, and was heavily criticised by the Democrats for doing so. Democrats accused the Bush administration of abusing the executive privilege power.
The Obama administration until now had resisted following suit.
Buck Brendan, a spokesman for the Republican House speaker John Boehner, suggested that the Obama decision moved the row from just involving Holder to enveloping the White House.
"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 Brendan.
"The administration has always insisted that wasn't the case. Were they lying, or are they now bending the law to hide the truth?"
The Republican case is that Holder misled Congress last year when he said he was unaware of Fast and Furious, but documents released later showed he had been briefed on it.
The Justice Department tried to explain the discrepancy by claiming Holder had misunderstood the original question.
The Obama administration view is that it has already released to the House committee all the documents directly related to Fast and Furious and that the subpoena is a fishing expedition, applying not to the operation but the response of Holder and other officials to it.
Holder met Issa on Tuesday and offered to hand over the requested documents in return for an assurance that this would end the dispute. Issa rejected the offer, prompting Holder to accuse Issa of political gamesmanship.
Elijah Cummings, the most senior Democrat on the committee, accused his Republican colleagues on Wednesday of not wanting a solution, saying the justice department had already provided thousands of documents.
Intellpuke: You can read this article by Guardian Washington, D.C., Bureau Chief Ewen MacAskill in context here: www.guardian.co.uk/world/2012/jun/20/obama-executive-privilege-eric-holder