On the first day of a marathon markup, House Ways and Means Committee Chairman Kevin Brady showed signs that he wants to avoid the minefield of introducing an Obamacare-repeal debate into his effort to rewrite the tax code. The question is, will he succeed?
President Trump and congressional conservatives are pushing GOP leaders to include in the tax bill a repeal of the mandate that individuals buy health insurance, a move that would essentially gut Obamacare’s revenue stream while giving tax writers a glut of money to use to offset pet provisions in their bill.
But in a statement at the panel’s first hearing on tax reform Monday, Brady said he wants to keep matters related to the Affordable Care Act out of the GOP’s tax-reform effort, listing a number of the law’s tax provisions, such as the medical-device tax.
“There is support on our side of the aisle for full repeal of the job-killing [regulations] and other excise taxes that increase health care costs for consumers that were included as part of Obamacare in order to pay for massive new entitlements,” he said. But, he added, “As such, we will move to these important policies separately and immediately after conclusion of our tax-reform efforts.”
Brady’s office clarified after the comments that he is not ruling out rolling a repeal of the individual mandate into the bill later. Brady himself, in an interview later Monday, said, “I’ve been asked by the president and members to consider that and I have asked for an updated score. That’s as far as that has gone at this point.”
He has good reason to be cautious, members and aides said Monday.
In the zeal to repeal Obamacare, Republicans have in the past seven years often fallen into the trap of overpromising and under-delivering—giving their base a chunk of red meat only to take it away at the end of a negotiation.
In the case of their tax bill, members and GOP leadership aides noted, there is some trepidation that if the House includes the mandate repeal in its bill, the Senate will not be able to pass it, and conservatives, wedded to the idea, would balk at the bill entirely.
That dynamic has played out before, whether it be with a shutdown of the Homeland Security Department or other spending bills. While there is no brinkmanship at play in this debate, Republicans are acutely aware that if they fail to deliver on this tax bill, they will have little to hang their hats on when asking constituents to reelect them.
So, at least in the beginning of the process, Republican leaders are treading cautiously on Obamacare territory while still holding out the option of including the measure later.
“There are some hills that I die on. This is not one of those,” said Republican Study Committee Chairman Mark Walker. “I’m worried about the Senate stripping it out and getting sideways on something when we’re getting this close to the finish line. So, would I like to have it? Absolutely. I was an advocate for it. But it doesn’t deter my ‘yes’ for this entire tax reform.”
Members of the House Freedom Caucus were equally circumspect Monday. Reps. Trent Franks and Mark Sanford, part of the group that has routinely used hard-line negotiating tactics to force leadership’s hand, noted that it may not be a deal breaker to pass tax reform without the mandate.
“Obviously I would like to see it in the bill,” Franks said. “You know I would like to get rid of it. But I do trust Kevin Brady. … I think it’s going to be very hard to reasonably get to ‘no’ on [the tax bill].”
Still, another line of thought among House Republicans holds that the bill would actually be easier to pass in the Senate if it included the mandate repeal.
“No one knows where precisely this goes, but I’m not sure you can pass it in the Senate without the individual mandate in there,” said one House Republican, speaking anonymously to discuss bicameral dynamics. “Getting after Obamacare is important.”
Sen. Tom Cotton has proposed the idea, and it is not clear that he would support a tax bill without it. It is likely that during the Senate’s open amendment process, he will offer a measure to include the individual-mandate repeal, if the House has not already done so.
So, as one House GOP aide put it, why not let him float that balloon? If the Senate proves it can pass that bill, the House can double back and pass it on second glance. It would also be possible to add it in during the expected bicameral conference report later this year or next, when House leaders have a better idea of how they need to tweak their bill to gain the support of their members—and how much revenue that entails.
Repealing the individual mandate could raise as much as $400 billion, which tax writers may need as the process moves on and revenue-raising provisions potentially get whittled down. There is talk, for example, of scaling back the proposal to cut the mortgage-interest deduction in half from $1 million to $500,000. There will also be pressure to make permanent a series of family tax credits that sunset after five years in the current bill, or keep tax credits covering adoption and high-cost medical bills that the bill ends completely.