GOP wrestles with big question: What now?

Greg Nash

Republicans at both ends of Pennsylvania Avenue are facing a big question this spring: What now?

As President Trump approaches his 100-day mark at the end of this month, congressional Republicans have few accomplishments to point to and are divided over how to proceed on his two biggest priorities: healthcare and tax reform.

{mosads}Congress is at the start of a two-week recess, and lawmakers say they will listen to feedback from constituents as they mull the next legislative steps of 2017. The internal debate boils down to whether they should stick to their strategy of working strictly along party lines to pass big-ticket bills or try to find common ground with Democrats, perhaps on smaller proposals.

Republicans are divided over whether to take another shot at healthcare reform, which failed in the House last month, or move on to tax reform.

Senate Budget Committee Chairman Mike Enzi (R-Wyo.) is waiting for a decision from GOP leaders before moving a new budget resolution that would set up a special process for passing tax reform with 51 Republican votes in the Senate.

Once the Senate passes a budget resolution focused on tax reform, the vehicle they had hoped to use to pass healthcare reform in the Senate with a simple majority becomes inoperable.

“Until the healthcare reconciliation is taken care of, it won’t happen,” Enzi said of a budget resolution laying the groundwork for tax reform. “Because that cancels out the previous reconciliation.”

Rep. Mark Meadows (R-N.C.), the head of the conservative House Freedom Caucus, told a local radio station Tuesday that discussions with Speaker Paul Ryan (R-Wis.) are “close” to producing a deal.

Opposition from the Freedom Caucus sunk the House bill last month, so an agreement with Ryan could pave the way for another vote. But GOP centrists are wary of any leadership deal with the Freedom Caucus.

Some Republicans think a potential solution is to merge the healthcare reform measure and the tax-reform bill. While the combined legislation would be massive, it would allow GOP leaders to use a single budgetary reconciliation vehicle to pass the legislation with a simple majority vote in the Senate, and it would enable them to pass a bigger tax cut.

That’s because legislation that passes with a simple majority vote under reconciliation has to be deficit-neutral beyond the budget window, which is usually 10 years.

Repealing ObamaCare would cut spending more than it would reduce revenues, and that would give GOP leaders a lot more room to cut taxes beyond the 10-year window.

“By combining the two, you could have a larger permanent tax cut than if you did them separately,” said Grover Norquist, president of Americans for Tax Reform, a group that advocates for lower taxes and less government.

“The one advantage that would come from combining them is that you could cut taxes more, because the spending cut is bigger than the [revenue] cut,” he explained.

Senate Majority Whip John Cornyn (R-Texas) says all ideas are on the table.

“Both of them are heavy lifts in their own right,” he cautioned. “I wouldn’t categorically reject it, but I’d like to see what that looks like.” 

In the meantime, Senate Republicans are pursuing parallel negotiations among themselves and with Democrats.

“We have to fulfill Trump’s pledges, and I think Trump wants to fulfill them,” said Sen. Bill Cassidy (R-La.), who has had discussions with fellow GOP senators about how to revive the healthcare effort since the House bill was shelved.

“We’ve got to give coverage, care with those with pre-existing conditions, no mandates, lower costs — we’ve got to lower premiums,” he added. “To do that you’ve got to stabilize the individual market.”

As insurance companies pull out of government-sponsored marketplaces in rural regions and other areas of the country where it is less profitable to provide coverage, Republican lawmakers feel obligated to come up with solutions, especially now that they control the executive and legislative branches.

“In Tennessee, in the Knoxville area, we already know that in the year 2018, there will be 34,000 lower-income Tennesseans with subsidies [and] with zero insurance options,” said Sen. Lamar Alexander (R-Tenn.), chairman of the Senate Health, Education, Labor and Pensions Committee. “I have a responsibility to find a way to deal with that.”

Humana, the only insurance company that participates in the federally sponsored healthcare exchange in Knoxville, has announced it will quit that market next year.

While some Republicans have called for letting ObamaCare implode and to revisit healthcare reform at a later date, other GOP lawmakers don’t want to be blamed for not doing anything before the 2018 midterm elections.  

Cassidy is pushing a proposal to combine the risk pools of people eligible to enroll in Medicaid as part of ObamaCare’s expansion of that program with people who receive federal assistance to buy insurance in the individual marketplaces.

Merging the two pools would increase the number of people buying insurance with government subsidies and make it more financially attractive for insurance companies to remain in otherwise unprofitable markets.

Alexander said he is working simultaneously on a GOP-only plan and reforms that could win Democratic support.

“I’m working with Republicans to see if we can come up with a Republican plan and talking with Democrats to focus on ways to stabilize the individual market over the next two to three years,” he said. The chairman added that one way to temporarily stabilize the individual marketplaces would be to examine cost-sharing provisions.

Senate Majority Leader Mitch McConnell (R-Ky.), however, has shown little desire for the Senate to pick up the healthcare debate while the politics remain unsettled in the House.

“The initial effort will be in the House, and I’m hoping that they can be successful and get something over to us,” he told reporters Friday.

Tax reform presents GOP leaders with another challenge. Their party is divided over whether to reach out to Democrats to move a bipartisan package or make an attempt to pass a GOP-only tax reform bill with a simple majority vote in the Senate under reconciliation. 

The latter option would require not losing more than two Republican votes in the upper chamber, where the GOP controls 52 seats.

Given how divisive the healthcare debate was and prevailing sentiment that the party is even more divided on tax reform than it was on healthcare reform, some Republican senators are warming up to the idea of overhauling the tax code with Democrat involvement.

“Where we need to end up is doing things on a bipartisan basis,” said Cornyn, who says one of the big lessons from the failure of the House healthcare bill is that it’s very difficult for one party to tackle major reforms all by itself.

Sen. Jeff Flake (R-Ariz.), who is up for reelection next year, said “I heard that talk” among fellow Republicans about growing interest in a bipartisan tax reform push.

But McConnell is skeptical of that approach. He thinks the chances of Democratic cooperation on a major tax bill are nil.

“I would love to be able to do tax reform on a bipartisan basis, but I think most of the Democrats today believe tax reform is a tax hike, and tax reform is about making America more competitive,” he said last week.

Senate Minority Leader Charles Schumer (D-N.Y.) appeared to confirm McConnell’s instincts Tuesday when he indicated that Democrats would be unlikely to cooperate on tax reform until Trump makes public his tax returns, something he consistently refused to do during the presidential campaign.

“It’s going to make tax reform much harder,” Schumer warned. “The average American is going to say, ‘Oh, he’s not doing that because it’s good for me, he’s doing it because it’s good for him.’ ”

If Democrats make the tax reform debate a fight about Trump’s tax returns right out of the gate, prospects for cooperation on a broader rewrite of the code seem less likely.

Tags Charles Schumer Jeff Flake John Cornyn Lamar Alexander Mike Enzi Mitch McConnell Paul Ryan
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