Politics & Policy

In Replacing Obamacare, Republicans Face the Pottery Barn Rule

Paul Ryan and Mitch McConnell speak to reporters at the White House, February 27, 2017. (Reuters photo: Jonathan Ernst)
If you’re going to be blamed for disrupting a massive economic sector, you’d better make sure it’s your best shot.

Republicans are in a box. A yuge, terrific box of their own making, rhetorically crafted over the course of seven long years, but a box nonetheless. Its walls are equal parts procedural, political, and perceptual. Think of the GOP as Indiana Jones, sandbag in hand, trying to make off with the Democrats’ Golden Idol. Except that the idol swap is more like a bad game of Jenga, they lack the votes to start from scratch, and the electoral (if not actuarial) boulder is gaining on them either way.

Mixed metaphors aside, Ramesh Ponnuru is right when he points out that the harsh judgment on the American Health Care Act has been rendered without acknowledging the parameters within which Republicans are forced to work. Only so much can be done while maintaining the senatorial privilege of budget reconciliation, and even within those narrow confines you still have to account for ideological tensions both within and between the respective congressional chambers. So before delving into the bill itself, let’s stipulate that this isn’t anyone’s ideal. If mutual ambivalence is the hallmark of a good compromise, this bill is a doozy.

That said, I don’t recall any asterisks in the mountains of campaign literature promising to repeal and replace. There was no fine print about the filibuster in the TV ads, no disclaimers about the Byrd Rule in the radio spots. Fairly or unfairly, Republicans are being graded on a curve of their own making — even if that means campaigns floated political checks the conference can’t legislatively cash.

But let’s get back to the AHCA. By now the bill has been picked apart by the Left and the Right. We know what it is and what it isn’t. So the operative question is binary and twofold: First, is this the best reform Republicans can achieve within the constraints of what can be signed into law? And second, is it better than doing nothing?

Substantively speaking, I yield to thoughtful conservative health-reform voices, such as Avik Roy and Philip Klein. There are certainly elements to like in the plan, but it does seem to arbitrarily pick and choose which of the underlying regulatory rails can be touched. As for what can plausibly be passed, the repeal bill vetoed by President Obama in early 2016 is almost certainly off the table now that Republicans are playing with live ammunition. And even if “clean” repeal was a default option, it would leave any parallel replacement bill subject to an inevitable Democratic filibuster. Suffice it to say that any legislative sausage with a path to the president’s desk won’t be particularly pretty.

Assessing the second question is more complicated. Leaving aside the indignity of belly-flopping on the party’s most visible priority in the first 100 days, failure to pass a repeal measure would imperil the rest of the GOP’s legislative agenda. Beyond delivering on an explicit campaign promise, the most important aspect of ACA repeal is its role as a stalking horse for tax reform. Obamacare taxes represent half a trillion dollars in federal revenue over the ten-year budgetary window. Which is to say that a post-ACA baseline is imperative to lowering tax rates anywhere near the levels envisioned by President Trump and congressional Republicans. Indeed, the House tax-reform “blueprint” assumes these levies have been repealed in order for the internal arithmetic to work. And given the ongoing heartburn over border adjustability and changes to treatment of corporate interest expenses (both trillion-dollar line items in their own right), failure to eliminate the ACA’s taxes would likely deal a crippling blow to any permanent, substantial reforms to the code.

If Republicans truly believe Obamacare is in a death spiral and will collapse under its own weight, they had better be confident that nibbling around the edges of the law will be enough to stabilize the system.

On the other hand, the political Pottery Barn rule is in full effect  — as Democrats learned all too well, if you break it, you buy it. If Republicans truly believe Obamacare is in a death spiral and will collapse under its own weight, they had better be confident that nibbling around the edges of the law will be enough to stabilize the system. Otherwise this will be at best a pyrrhic victory, absolving Democrats and leaving Republicans exposed to whatever fallout is yet to come. And regardless of the macro effects, Democrats will be armed with countless heartbreaking anecdotes buttressed by ugly CBO coverage projections. If you’re going to be blamed for disrupting a massive economic sector, you’d better make sure it’s your best shot.

At the end of the day, Republicans have a fateful choice: pass this bill largely as is, pass it in a significantly modified form, or pass nothing at all. Unless the reforms can stand on their own merits, the GOP runs the risk of swallowing the spider to catch the Obamacare fly. And that’s a perilous move no matter how many seats they owe to the fly-swatter.

— Liam Donovan is a former GOP staffer who works in government relations in Washington, D.C.

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