By STAN ESCUDERODAYTONA BEACH,Fa. -- After eight long years of calling for the repeal and replacement of Obamacare the House Republicans decided to punt, failing the American people and President Trump and leaving Obama’s rotting and harmful health care law in place.
There is no way to sugar-coat this. The Republican effort to repeal and replace Obamacare was a massive and total failure.
The Republican House leadership’s bill was badly drafted and poorly managed. Little effort was made prior to the drafting of the bill to reach at least a general consensus among House Republicans. No effort was made to gain the support of at least some House Democrats. Bill managers failed to work closely with the Senate Parliamentarian to be sure how much they could include in the House Bill without falling afoul of the Senate’s arcane rules governing the process of budget reconciliation. Those Republicans in strongest opposition to the bill were also those least trusting of the Party Establishment; yet they were asked to trust that same Establishment to later remove or reform the 1442 regulatory authorities given to the Secretary of Health and Human Services by Obamacare. They were asked further to trust that aspects of the bill which were unlikely to pass budget reconciliation muster in the Senate would be addressed in separate House bills. Once the conservative “Freedom Caucus” concluded that the bill was “Obamacare LIte” the bill was dead, and soon began to stink almost as badly as Obamacare itself.
Even had the bill passed the House, it would never have passed the Senate without some Democrat support, which clearly was never going to happen. A case can be made that the House leadership was simply conducting an exercise designed to pass a bill, even though they knew it would fail in the Senate. This would have enabled them to escape blame for the failure, which would have fallen solely on the Senate Republican leaders.
An equally good case could be made that the Freedom Caucus reasoned that no bill which they could support could ever pass the Senate under budget reconciliation or avoid a successful Democrat filibuster. In this scenario, what the Freedom Caucus really wanted was to get the House to pass a hardline bill which could only get through the Senate if the Republican Senate leadership were to change the rules of that body and eliminate the 60-vote requirement altogether. After all, the conservatives reasoned, the so-called third phase Republican bills dealing with those parts of the repeal and replace program which could not be included under budget reconciliation in the original House bill would require a rules change to achieve Senate passage anyway. The same may turn out to be true for approval of the nomination of Neil Gorsuch to the Supreme Court and will certainly be the case for approval of any additional Supreme Court nominations. So why not do it and get it over with?
In the end, each House side fell afoul of the other, as the votes for passage were not there and were not going to be there. All the Dems had to do was sit on their hands and criticize. So the bill was pulled to prevent the even greater embarrassment of the defeat of a Republican leadership bill which enjoyed the public support of the Republican President, on the floor of a House controlled by the Republicans. It is hard to seem much more ineffectual than that.
Now the scheme is to move directly to tax reform, but that may prove more difficult than it would seem at first blush.
Obamacare includes 21 different taxes, all of which remain in force and will continue to be applied but their impact on the economy will change in hard-to-predict ways as Obamacare and its implementation continue to collapse.
The several elements of the GOP are not in agreement on what should be included in tax reform. There are many examples of this but the best known is probably disagreement over creation of an export tax similar to the value-added tax practiced in most European countries. Speaker Ryan insists that such a new tax is needed to balance the shortfall in government revenue to come from other tax reductions when faced with additional government spending on the military, the border wall, infrastructure and the continuing massive entitlement costs. Conservatives, including many of the same members who opposed the Ryan bill on Obamacare, argue that the election was won on promises of fiscal responsibility and criticism of the tax-and-spend Democrats, militating against any increases in taxes by the Republicans.
There seems to be general agreement on the need to reduce commercial taxation from its present world’s-highest level of 35%. But there does not yet seem to be agreement on whether the new upper limit should be 15% or 20%.
I assume that this relatively minor difference can be resolved. I also assume that reduced taxation and the return to the US economy of the more than two trillion dollars which American firms have held overseas to avoid US taxes will stimulate growth and jobs and that resulting increased tax revenue to the government will largely offset increased spending on the military and infrastructure (Note that I do not expect the President’s substantial proposed budgetary cuts in other government spending to survive the Congressional budget process.)
But on this also the Congress does not have time to screw around. These changes have to be approved and implemented in time for them to bear fruit and to impact the 2018 elections. With the failure of Obamacare repeal and replacement, it is even more vital than before that Trump’s tax reforms are soon in place if he is to have gains to show the people and translate them into gains at the polls, especially in the Senate races.
And all this still leaves the Republicans with the unfinished task of health care. I do not believe that President Trump will simply let it rot and fall from the tree by its own weight. The Dems have been too successful over the past eight years in casting health care as a right and an entitlement (though in fact it is neither) for him to be able to do that. Unable to let the corpse lie, he has two mutually exclusive choices.
He can attempt to negotiate fixes to the current law with the Democrats, hoping to bring enough of them around to pass something which he can claim to be a major reform. This would be very, very difficult politically. The Dems would never agree to repeal and would surely characterize any changes to the bill as Dem victories over a GOP hell-bent on repeal and replace. Politics being as bipolar as they are at the moment, President Trump would need to have well over 100 Dems in support of any reform program to overcome the anticipated opposition from conservative Republicans, who would criticize him as reneging on his campaign promises and betraying the populist movement he created. It’s hard to see this happening.
He can attempt to negotiate fixes to the current law with the Democrats, hoping to bring enough of them around to pass something which he can claim to be a major reform. This would be very, very difficult politically. The Dems would never agree to repeal and would surely characterize any changes to the bill as Dem victories over a GOP hell-bent on repeal and replace. Politics being as bipolar as they are at the moment, President Trump would need to have well over 100 Dems in support of any reform program to overcome the anticipated opposition from conservative Republicans, who would criticize him as reneging on his campaign promises and betraying the populist movement he created. It’s hard to see this happening.
The second possibility is to craft a new bill in the House with careful pre-drafting participation by all elements of the GOP. My assumption is that this could only be done if the new bill were to include clear repeal as well as reform provisions which fall well outside the limits of budget reconciliation which would apply in the Senate. The HHS Secretary would still have to reform the regulatory structure via decree but the new bill would also require advance agreement by Republican Senate leadership to eliminate the 60-vote filibuster rule so that this new health care bill and other parts of the Trump agenda could proceed despite Democrat resistance.
To me the latter seems the more likely course.