How Health-Care Policy Divides the Republican Coalition

by Fred Bauer

Making even Internet memes look durable, the American Health Care Act seems a quickly evolving legislative artifact. Whatever it is, though, it faces a key political problem: Will it blow up the potential alliance between conservatives and working-class-oriented populists (perhaps not two entirely distinct categories)?

In some respects, the AHCA is a very generic Republican bill. One could see a similar measure being supported by a President Jeb Bush, for instance. The AHCA embodies in many ways a version of Republicanism that likes to lead with fiscal issues, focusing on tax cuts and entitlement reform. It would cut capital-gains taxes for upper-income households (to the tune, the Congressional Budget Office estimates, of over $16 billion per year by 2020 — or a big chunk of the estimated price of a border wall). In one of its most transformative provisions, the AHCA would block-grant Medicaid to the states, a mode of entitlement reform long desired by many conservative wonks.

While it achieves many longstanding priorities for Beltway Republicans, it contains some provisions that could alienate members of the working class, such as Medicaid cuts. It is telling that elements of the Right who have been very sympathetic to populist themes — such as Ann Coulter, many Breitbart writers, and Arkansas senator Tom Cotton — have been unsparing in their criticism of the AHCA. The bill itself is currently extremely unpopular, supported by only 17 percent of Americans according to the latest numbers from Quinnipiac.

It might be especially divisive for the Republican coalition. Donald Trump’s presidential campaign was premised upon outreach to working-class voters, and an improved performance with this demographic was crucial for breaking the “blue wall” at the presidential level and for the GOP’s successful defense of its Senate majority. Perhaps a key slice of the working class is what Pew calls the “Hard-Pressed Skeptic,” a type of voter skeptical of international trade and large institutions but also anxious for government support (even as Skeptics have grave doubts about the efficacy of the government). In many ways, Donald Trump campaigned as a Skeptic, and this group likely formed a key element of his electoral coalition in Rust Belt states.

Republicans risk grave political danger if they lose the faith of working-class voters because of GOP decisions on health care and other policies. These voters might enjoy President Trump’s combative approach to institutional Washington, but that pleasure could soon sour if they think that the administration is not advancing their policy priorities. It’s possible that the most dangerous position for Republicans on health care is that the GOP passes some reforms to the financing of health care, enough for Democrats to accuse them of denying care to people, while also failing to pass any reforms that could expand access to health care (such as expanding the insurance market). That is to say, Phase 1 without Phase 3 might be a very uncomfortable position for the GOP.

Sometimes, political dangers can be gone around rather than faced head on. If the House remains at an impasse on the AHCA, congressional leaders could return to the table with a legislative strategy that defers some reductions in Medicaid expenditures in order instead to offer some targeted reforms to the insurance markets and other elements of the medical-delivery system in the United States. If health-care costs are brought down and if the economy improves, Republicans could then have more space for a thoroughgoing reform of the Medicaid system; a vibrant economy was a key context for the welfare reform of the 1990s, and entitlement reform can often proceed more effectively in a time of economic optimism.

A bad bill passed quickly might be far more damaging to the policy agenda of Republicans than a better bill (or set of bills) passed more slowly, and, as Ramesh Ponnuru has noted, Republicans might be able to add more regulatory elements to the AHCA if they take the time to do so. As they continue to negotiate the AHCA, Republicans might remember that the who’s-up-who’s-down newscycle has an increasingly small half-life; policy accomplishments — and shortcomings — live on.

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