Politics & Policy

The Graham-Cassidy Conundrum

Bill Cassidy speaks to reporters after GOP luncheon, September 19, 2017 (Aaron P. Bernstein/Reuters)
At the very last minute, four Republicans must decide whether this is a compromise they can live with.

There are a lot of people who started this week unaware that Senate Republicans were still pursuing health-care reform. It’s possible this was by design.

During an earlier attempt, Senate majority leader Mitch McConnell understood that publicity would harm the effort’s chances, so he kept the bill secret and attempted to secure the necessary compromises behind closed doors. In the end the bill fell short, and McConnell had his pick of two interpretations of this failure. Was the main lesson that he needed to be less secretive about the process? Or was it that he needed to bring in more members to participate in the consensus-building?

I believe McConnell learned the second lesson — and, amazingly, used it to contravene the first.

The public narrative has been that when the leadership gave up, Senators Bill Cassidy and Lindsey Graham kept pushing, putting together their own legislation and a coalition to go with it. But practically speaking, this means McConnell stepped aside and let other Senate Republicans do the legwork — a way of pursuing secret consensus-building more effectively. In essence, he doubled down on pursuing Obamacare repeal in secret, and he did so by coordinating a leadership quarantine from the effort until now.

Why now? Republicans have until September 30 to pass health-care reform with 50 votes (Vice President Mike Pence would function as the 51st). After that date, doing so will require 60 votes, which effectively eliminates the possibility of passing anything that could plausibly be construed as Obamacare repeal, replace, or even reform.

The best they could do last time was 49 votes, with zero Democrats on board and three Republican defections. There is no way this Senate achieves a united Republican bloc and adds eight additional Democrats. It’s Graham-Cassidy or bust, at least for a while.

Since this bill is the only one left, and since so little time remains, McConnell has tried to secure an accelerated Congressional Budget Office score for it, but it looks like the agency will provide only a preliminary assessment. To be passed via budget reconciliation  —  the process that enables a bill to pass with just 50 votes  —  the legislation must not increase the deficit outside a ten-year window, and the CBO also estimates bills’ effects on health-insurance coverage.

Hilariously, the decision by President Donald Trump, House minority leader Nancy Pelosi, and Senate minority leader Chuck Schumer to agree to a funding deal early, which prevented a debt-ceiling standoff from swallowing up everything else in its orbit during the last week of September, could in the end pave the way for a focused Senate Republican effort to pass health-care reform in the next week and a half.

But to do so, two of four key senators will have to sign on. Assuming no Democrat will join the ranks, and assuming all other Republican members are on board (as they were with the previous bills), the Graham-Cassidy bill  will need two of the following four senators to vote yes: Rand Paul (Ky.), Lisa Murkowski (Alaska), Susan Collins (Maine), and John McCain (Ariz.).

Currently, it’s easy to see all four voting no. But each can be wooed by finessing the current bill. Rand Paul seems like the firmest no, and his complaints revolve around the level of spending — which would be difficult to change without alienating centrists. Murkowski has said she’s most concerned about how much money her own state will receive, and Collins has said she has a “number of concerns” including the bill’s treatment of Medicaid and pre-existing conditions.

Each holdout can be wooed by finessing the current bill.

There is no way to assuage McCain’s worries, but they are merely procedural: They have to do with the way in which all the health-care-reform attempts thus far have pursued passage — along party lines and without adequate time to consider and discuss the bills within committee. Ideologically, Graham-Cassidy is a bill that McCain’s track record suggests he would support. It doesn’t hurt that he and Graham are Senate pals, either.

In the House, with the Freedom Caucus provisionally on board, the biggest hurdle to passage in the lower chamber is gone. House speaker Paul Ryan has expressed confidence the votes are there. So all that’s needed is for two of the four aforementioned senators to come into the fold. As far as I can tell, McCain is basically a lock and one of Murkowski or Collins can be brought in by making a key modification.

But beyond its political prospects, why should anyone care about Graham-Cassidy as a piece of legislation?

According to Tyler Cowen, the best reason is because it is better for the economy than Obamacare. Cowen writes:

Any predicted increase in the uninsured is relative to the status quo, but perhaps the status quo isn’t stable. The CBO has estimated that the U.S. is on an unsustainable fiscal path, and over time will need to choose some significant mix of tax increases and spending cuts. Graham-Cassidy looks bad because it accelerates some of those fiscal adjustments, but American health-care consumption will end up being curtailed anyway.

There is an unfortunate tendency of Obamacare defenders to pick and choose which CBO messages they publicize. If the CBO estimates that a Republican health-care bill will cut insurance coverage, that estimate is played up. But when the CBO surveys the nation’s longer-term fiscal conditions, that is downplayed for fear it will discourage moves toward bigger government. Many fiscal conservatives, however, commit a similar error but in reverse.

So, what changes would Graham-Cassidy entail?

The first thing to note is that by 2020, the bill eliminates two of the three foundational elements of Obamacare: the federal subsidies and the individual mandate. The other foundational element, a ban on charging people more on the basis of pre-existing conditions, is endangered though not eliminated; states could choose whether to keep it. Instead of Obamacare subsidies, each state would get a block grant, which would have few strings attached besides that it be spent on health care.

Critics of Graham-Cassidy argue that the block-grant method leads to insufficient health-care spending, and also have a big problem with Graham-Cassidy’s capping of federal funding for traditional Medicaid. They point out that from 2020 to 2026, the federal government would spend a quarter of a trillion dollars less on health care than it would under current law.

One reason adherents like it has to do with a feature that past reform attempts have not had: a distinctly federalist character. Rather than relying heavily on Washington to give the health-care system its shape, Graham-Cassidy gives every state space to choose its own way. Conservatives tend to appreciate federalist legislation, and a block-grant system is the least restrictive form of federal grant.

But is there enough federalist magic here to pass the bill? For some conservatives, there are aspects to Graham-Cassidy that make it the worst option among all the repeal efforts. The spending levels, in particular, are the closest yet to Obamacare numbers.

Yet Graham-Cassidy seems built to accommodate differences in the way needed for legislative success. Red states will get a chance to shape their systems in ways that reflect their priorities, which, if conservative arguments are to be believed, will place heavy downward pressure on premium prices. And in general, Graham-Cassidy would redistribute funding away from blue states that expanded Medicaid under Obamacare and toward red ones that didn’t.

Ultimately, this is a traditional compromise bill that gives no one what they truly want.

Beyond defederalization, which is independently attractive to many conservatives, Graham-Cassidy would create a regulatory arena that facilitates greater fiscal restraint. States can’t just print money to overcome shortages, which is a major reason why, for all their complaining about total funding numbers, fiscal conservatives should prefer Graham-Cassidy over Obamacare.

But with this greater flexibility comes a greater opportunity to explore health-care programs that are to the left of the ACA’s largely market-based approach. Lindsey Graham described his eponymous bill as single-payer’s “worst nightmare,” calling out Senator Bernie Sanders by name. Senator Tim Scott (S.C.) likewise suggested this bill will prevent single-payer from even being considered in the future.

But while the bill’s passage could very well send the Berniecare proposal back into irrelevance, single-payer proponents could simply shift their attention to promoting universal-coverage models at the state level. Doing so has great potential benefit: Graham-Cassidy could furnish Democrats with a laboratory in which to demonstrate the fitness of single-payer and a chance to work out some of its initial difficulties so that it’s ready by the time they look to scale.

Ultimately, this is a traditional compromise bill that gives no one what they truly want. Conservatives charge it with keeping Obamacare’s infrastructure intact; faced with the prospect of Berniecare, centrists hold up Obamacare as the genuine middle-position alternative and see Graham-Cassidy as too reactionary; Democrats, for their part, universally oppose any adjustment of Obamacare in a rightward direction.

Ah, politics.

— Berny Belvedere is the editor-in-chief of Arc Digital. This piece originally appeared on his Medium page.


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