Obamacare Subsidies a Focal Point In Government-Funding Showdown

Republicans dropped demands for a border wall, but the health care fight remains.

Senate Minority Leader Chuck Schumer, accompanied by Sen. Debbie Stabenow, during a media availability after a policy luncheon on Tuesday.
AP Photo/Alex Brandon
Alex Rogers and Daniel Newhauser
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Alex Rogers and Daniel Newhauser
April 25, 2017, 8 p.m.

Talk of pay­ing for a bor­der wall this week fell away on Tues­day, re­veal­ing the real battle lines in a must-pass bill to keep the fed­er­al gov­ern­ment run­ning: wheth­er to fund a pro­vi­sion that helps low-in­come Amer­ic­ans buy health in­sur­ance.

With only three days to spare be­fore gov­ern­ment fund­ing ex­pires, the greatest im­me­di­ate ques­tion be­fore Con­gress is wheth­er the Trump ad­min­is­tra­tion will con­tin­ue provid­ing sub­sidies to in­surers to help lower out-of-pock­et costs for about 7 mil­lion low-in­come Amer­ic­ans un­der the Af­ford­able Care Act.

The idea has some sup­port among Re­pub­lic­ans. Sev­er­al GOP sen­at­ors said Tues­day they would sup­port Con­gress ap­pro­pri­at­ing the money in the fund­ing bill in or­der to keep the mar­ket­place stable. “I think we need to en­sure that Amer­ic­ans keep their cov­er­age,” said Re­pub­lic­an Sen. Bill Cas­sidy. But many con­ser­vat­ives, es­pe­cially in the House, will loathe fund­ing a piece of Obama­care that they have in the past char­ac­ter­ized as a bail­out.

So Demo­crats, led by Sen­ate Minor­ity Lead­er Chuck Schu­mer, House Minor­ity Lead­er Nancy Pelosi, and House Ap­pro­pri­ations Com­mit­tee rank­ing mem­ber Nita Lowey, say they are giv­ing Re­pub­lic­ans an op­por­tun­ity to bail them­selves out of an awk­ward po­s­i­tion.

In 2014, House Re­pub­lic­ans sued the Obama ad­min­is­tra­tion for is­su­ing the sub­sidies without con­sult­ing Con­gress. They ar­gued that since the sub­sidies were nev­er au­thor­ized dur­ing the con­gres­sion­al ap­pro­pri­ations pro­cess, the White House vi­ol­ated Con­gress’s rights. That court case is still pending, but since Don­ald Trump is now pres­id­ent, Re­pub­lic­ans es­sen­tially con­trol both sides of the ar­gu­ment.

Trump could drop the ex­ec­ut­ive branch’s de­fense of the case and end the sub­sidies at any time. Al­tern­ately, if the House pre­vails in the law­suit, the sub­sidies would be struck down. But without them, the Af­ford­able Care Act’s in­sur­ance mar­kets would be severely dam­aged, and since the GOP’s ef­forts to re­place Obama­care flopped last month, Trump and House Re­pub­lic­ans could be blamed for any dis­rup­tions to the mar­ket­place.

So Demo­crats are say­ing that it is ac­tu­ally in Trump’s and Con­gress’s in­terest to do away with any am­bi­gu­ity sur­round­ing the sub­sidies. Demo­crats are push­ing for lan­guage to cla­ri­fy that Con­gress does in­deed au­thor­ize the sub­sidies, ac­cord­ing to a Demo­crat­ic lead­er­ship aide.

Do­ing so would, in ef­fect, force House Re­pub­lic­ans to vote for a bill that renders their law­suit moot and up­holds a sec­tion of a law they re­vile. But leav­ing it to a judge to de­cide wheth­er mil­lions of low-in­come Amer­ic­ans can af­ford health care could be risky, es­pe­cially for the party that con­trols both cham­bers of Con­gress and the White House.

“Re­pub­lic­ans cre­ated this prob­lem for them­selves,” House Demo­crat­ic Whip Steny Hoy­er said in a state­ment. “Pres­id­ent Trump can in­struct his ad­min­is­tra­tion today to make clear that the cost shar­ing re­duc­tion pay­ments will con­tin­ue to be made. If Pres­id­ent Trump does not con­tin­ue cost shar­ing re­duc­tion pay­ments, or House Re­pub­lic­ans suc­ceed in stop­ping the sub­sidies in the courts, mil­lions of Amer­ic­ans will be ad­versely im­pacted.”

The sub­sidies would cost the fed­er­al gov­ern­ment $10 bil­lion in 2018, ac­cord­ing to the Kais­er Fam­ily Found­a­tion. But it would ac­tu­ally cost even more to get rid of them—about $12.3 bil­lion—since tax cred­its would have to rise as premi­ums in­crease.

Trump must sign a bill by Sat­urday to keep the gov­ern­ment up and run­ning. Con­gress is con­sid­er­ing a bill that would ex­tend the roughly $1 tril­lion gov­ern­ment spend­ing rate through Septem­ber, but it is likely law­makers will need first to pass a short-term meas­ure to avoid a shut­down this week­end and give ne­go­ti­at­ors a few more days to pass the le­gis­la­tion.

“It ap­pears that way, but I will not sup­port an ex­ten­ded CR. I will not vote for it. And I don’t think a num­ber of my col­leagues will either,” said Re­pub­lic­an Sen. John Mc­Cain, who has long said he will not sup­port a long-term con­tinu­ing res­ol­u­tion.

While it re­mains un­clear how Con­gress will ad­dress the sub­sidies, Re­pub­lic­ans offered a pro­pos­al to Demo­crats on Tues­day that did not fund a wall on the U.S.-Mex­ico bor­der, lower­ing the pos­sib­il­ity of a par­tial shut­down. The Trump ad­min­is­tra­tion as re­cently as last week had in­sisted on in­clud­ing money for a bor­der wall in this bill. But the ad­min­is­tra­tion backed off due to the broad op­pos­i­tion from Demo­crats and con­cerns from some Re­pub­lic­ans. The bill is ex­pec­ted to in­clude oth­er sub­stan­tial fund­ing for bor­der se­cur­ity.

As the fight over the Obama­care sub­sidies re­mains the biggest hurdle, Demo­crats have also raised oth­er, re­l­at­ively minor con­cerns, in­clud­ing wheth­er to back­fill a Medi­caid fund­ing short­fall in Pu­erto Rico and wheth­er to fund health be­ne­fits for coal miners.

Ap­pro­pri­at­ors are anxious to wrap up this year’s ap­pro­pri­ations pro­cess so they can move on to writ­ing bills to fund the gov­ern­ment for fisc­al year 2018. They are already be­hind be­cause they had to fo­cus on fund­ing for the rest of fisc­al year 2017 and be­cause of the pres­id­en­tial trans­ition.

“We’ve got 12 ap­pro­pri­ations bills to mark up for 2018, which we have not star­ted yet. We’re usu­ally done with that pro­cess by this time,” GOP Rep. Tom Rooney said. “We’ve got less than 12 work­ing weeks be­fore the Au­gust break, which means we couldn’t get them all done even if we wanted to.”

Adam Wollner contributed to this article.
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