The odds of passing tax reform are better, and they need a legislative victory.
For all the criticism from the left charging Republicans with enabling President Trump by voting, well, Republican, Senate Republicans seem to be breaking with the president’s priorities, refocusing their efforts on tax reform and defying Trump’s demands that they continue working on repealing and replacing Obamacare.
Senator John Thune, who was one of the 13 architects of the Better Care Reconciliation Act (BCRA) and a “yes” vote for all three of the Republican attempts to reform Obamacare, told Politico, “Until somebody shows us a way to get that elusive 50th vote, I think it’s over. Maybe lightning will strike and something will come together, but I’m not holding my breath.”
Thune is probably right that passing any health-care-reform bill at this point is politically infeasible, but Obamacare repeal in the future will not take acts of God or even sheer luck. First, Republicans just need a win.
Between Trump’s refusal to sell the BCRA to the American public and congressional leadership’s attempts to ram the bill through overnight à la Obamacare, the Republican House and Senate health-care bills became so politically toxic that Obamacare’s approval rating surpassed its disapproval rating for the first time since the law was enacted.
Sure, premiums are still skyrocketing: Rates in Arizona have soared to a 116 percent increase this year. Elsewhere, insurance companies are dropping out of the exchanges, leaving consumers with little to no choices: One-third of American counties — over 1,000 in total — are set to have a single insurer in Obamacare exchanges and nearly 50 counties are projected to have no insurers next year. In those counties, 35,000 Americans will have no access to insurance.
And the only real reason the situation is not worse is that, as Trump rightly points out, the federal government has subsidized an unsustainable market. Trump is correct that the federal government should not continue to bail out a fundamentally broken system. But he needs to get smarter. That would mean declining to brag on Twitter about the dumpster fire that is Obamacare; letting the exchanges deteriorate without being seen to encourage this; and returning to touting a comprehensive bill only after earning a win on tax reform. While nothing in today’s political climate can be described in earnest as “easy,” tax reform doesn’t face the same type of hurdles as constructing, campaigning for, and passing an Obamacare repeal bill does.
Paul Ryan, Congress’s resident tax wonk, is fully on board with collaborating with the Senate. While it remains to be seen how much Democratic support Republicans can peel off, the partisan lines are not as hardened as on the health-care issue. A letter from 45 Senate Democrats on Tuesday setting out conditions for a bill they could support at least gestured at their openness to compromise. They demanded that Republicans forgo the reconciliation process and require 60 votes; promise not to touch Social Security, Medicare, and Medicaid; and vow to leave taxes for the wealthiest 1 percent of Americans where they are. Senator McConnell has so far insisted that tax reform will be done through reconciliation, and he dismissed the Democrats’ letter as showing they aren’t interested in pro-growth reform. The Democratic senators who didn’t sign the letter, who are up for reelection in states that voted for Trump, could be willing to go along with a Republican bill passed through reconciliation, though.
The president has been, thus far, unable to lead any major legislative achievement. If he’s able to deliver on tax reform, both the passage of time and reignited enthusiasm would pave the way for Congress to reintroduce a new, better bill to actually repeal and replace Obamacare rather than the shoddy, half-hearted attempts to reform Obamacare in haste.
Make no mistake, this issue is not going away because Obamacare is not sustainable. United HealthCare pulled out of exchanges in 31 of the 34 states it once served, in anticipation of an $850 million loss in 2016. By next year, Aetna plans to pull out of Obamacare exchanges completely.
Which is to say that the chance to fix the damage will come. In the meantime, however, Republicans should look elsewhere. Because tax reform does not involve retracting an entitlement in the same way Obamacare repeal would, the GOP will be less reliant on Trump actually staying on message in this next stage of their legislative agenda. While there are losers as well as winners from any tax-reform plan, it should be easier for Republicans to message giving people their money back than it was to explain why they were taking a benefit away. The GOP can bet on progressives to complain no matter what, but tax reform should be an easier sell.
Of course, nothing is a given. But even slightly more favorable odds are better than rushing to pick up health-care after a major stumble. Republicans should continue to go forward, defy the president’s demands, and actually pass legislation. And all Trump has to do is not call their bill “mean.”
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