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World

GOP May Keep Some Obama tax Hikes to Save Health Care Bill

Mitch McConnell is hoping the added anti-drug money will help win over moderate GOP senators

Senate Majority Leader Mitch McConnell of Kentucky, (R), speaks to the media with Sen. John Barrasso, Republican Wyoming , after a Republican policy luncheon, Tuesday, May 23, 2017, on Capitol Hill in Washington, photo: AP/Jacquelyn Martin
4 months ago

WASHINGTON – Top Senate Republicans on Thursday considered keeping President Barack Obama’s tax increase on wealthier people’s investments and using the money to bolster their proposed health care subsidies in a bid to mollify moderate GOP lawmakers and salvage the party’s struggling bill.

Also in play was a proposal from conservatives to let insurers offer any plans they’d like, including ones with skimpy benefits and low premiums. To do so, a company would also have to sell policies that abide by the consumer-friendly coverage requirements Obama’s health care overhaul imposes on insurers.

Both proposals faced internal GOP opposition and procedural hurdles, and it was unclear whether either idea would survive. But the activity underscored that party leaders were stepping up efforts to craft a new health care bill, two days after Senate Majority Leader Mitch McConnell, Republican from Kentucky, postponed a vote on an initial version because conservative and moderate GOP senators were prepared to block it.

“Obviously we’d like to get rid of all” Obama’s tax boosts, No. 3 Senate GOP leader John Thune of South Dakota told reporters of possibly retaining the extra 3.8 percent investment tax. “But if it takes something like that to get our members on board to move this process forward, I think we have to consider that.”

Conservatives immediately said they opposed the idea, along with the chairmen of Congress’ two tax-writing committees: Senate Finance chairman Orrin Hatch, Republican from Utah, and House Ways and Means chairman Kevin Brady, Republican from Texas.

“I think we’re paying enough taxes in this country,” Hatch said.

Sen. Lindsey Graham, Republican from South Carolina, questioned the wisdom of retaining the investment tax boost.

“The more you do this, the more it’s like Obamacare. So eventually you’ll cross a line where saying you’ve repealed or replaced Obamacare will be hard to say with a straight face.”

The accelerated pace of closed-door Republican bargaining came with McConnell hoping to have a new version of the measure — with enough backing to pass it — by week’s end. His problem has been that the bill will die if just three of the 52 GOP senators oppose it, and the number of Republicans who have publicly said they would vote no or have raised serious questions has reached low double digits.

As a matter of GOP theology, the party has long opposed most tax increases. It has been especially eager to repeal the ones Obama enacted to help finance his law’s expanded coverage to around 20 million additional U.S. citizens.

The Senate Republican bill would repeal most of Obama’s tax boosts, which were largely on upper-income people and the medical industry. The nonpartisan Congressional Budget Office (CBO) said erasing Obama’s tax increases would cost the government $700 billion over the next decade, and Democrats say the GOP bill is mostly a tax cut for the rich.

But Republicans have discussed retaining Obama’s 3.8 percent tax increase on higher earners. Keeping that increase would save $172 billion over 10 years, and moderates want to use it to make the health care subsidies their bill would provide more generous.

The move would let Republicans argue they weren’t solely out to protect the wealthy and, they hope, make their bill less vulnerable to Democratic attacks for providing stingy subsidies. In its report this week, the budget office said that besides resulting in 22 million additional uninsured people by 2026, the Senate bill would increase many people’s out-of-pocket insurance costs, especially for older and lower income consumers.

Obama’s health law enacted an additional 3.8 percent tax on investment income for married couples making more than $250,000 a year and individuals making more than $125,000. The Senate bill would repeal the tax this year.

Also Thursday, Republicans said party leaders had agreed to add $45 billion for battling opioids abuse to their health care bill.

Senate Majority Leader Mitch McConnell, Republican from Kentucky, is hoping the added anti-drug money will help win over moderate GOP senators like Rob Portman of Ohio and Shelley Moore Capito of West Virginia. Their states are among many battered by rising death tolls from drug use and they’ve been pushing for the funds.

Those same senators are also insisting on easing cuts the GOP legislation would impose on Medicaid, the health insurance program for low-income and disabled people that their states also rely upon. There’s no indication an agreement has been reached to pull back on those reductions.

That leaves McConnell still short of the votes he needs to push legislation through the Senate repealing much of President Barack Obama’s health care overhaul. The measure would fail if three of the chamber’s 52 Republicans vote no, since all Democrats are opposed.

McConnell wants agreement on revisions by Friday so the Senate can approve it shortly after returning in mid-July from an Independence Day recess. Several senators have scoffed at that timetable, with Sen. John McCain, Republican from Arizona, saying, “Pigs could fly.”

The added opioid funds, which would be provided over a decade, were described by people who spoke on condition of anonymity because they weren’t authorized to discuss private negotiations.

ALAN FRAM
ERICA WERNER

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