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 First proposed by moderate Republicans, the idea is gaining traction
among party members, according to five sources involved in or
briefed on internal discussions. While no final decisions have been
made, a sense of urgency has increased as Republicans draft a
replacement bill to former President Barack Obama's healthcare law
before Congress goes on recess on June 30.
But keeping some of the taxes in the Senate bill risks alienating
conservatives. On Tuesday, 45 conservative groups and activists sent
a letter to Republican Senator Orrin Hatch of Utah, the chairman of
the Senate Committee on Finance, urging the Senate to repeal all
Obamacare taxes.
One cornerstone tax that could remain is the net investment income
tax, which imposes a 3.8 percent surtax on capital gains, dividends
and interest, the sources said. The taxes most likely to be
abolished directly impact consumers and the health industry,
including a tax on health insurance premiums, the so-called Cadillac
tax on high-cost employer-provided insurance and the medical device
tax.
Another proposal being floated is to keep all the taxes from the
Affordable Care Act, often called Obamacare, but to scale them back.
A group of 13 Republican senators led by Majority Leader Mitch
McConnell has not completed a full draft of the bill, but is sending
pieces to the nonpartisan Congressional Budget Office to assess the
impact of various provisions.
The CBO's assessment will help determine which taxes the Senate
needs in order to pay for its replacement bill. It is not clear
whether McConnell, or more conservative party members such as
Senator Ted Cruz of Texas and Senator Mike Lee of Utah, are
receptive to keeping some of the taxes.
"I think most of the taxes are going to go away," Senator John Thune
of South Dakota, the Senate's No. 3-ranking Republican, said on
Tuesday. "Our members are still having a conversation about if we
want to make changes that are in the end going to require some
additional revenue."
Spokesmen for McConnell and Cruz declined to comment. A spokesman
for Lee said he wants Republicans to abolish every tax that was
included in a 2015 Obamacare repeal bill that Obama vetoed.
Since Obamacare became law in 2010, Republicans have campaigned on
repealing the program that extended insurance coverage to 20 million
additional Americans through both subsidized private insurance and
an expansion of Medicaid.
They have argued that the law is too costly and represents undue
government interference in Americans' healthcare. President Donald
Trump promised to eliminate the law on his first day in office, but
Republicans, who control the White House, the House of
Representatives and the Senate, have struggled to coalesce around a
single plan.
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Under Senate rules, their bill must replicate the $133 billion in
savings projected by preliminary legislation that passed in the U.S.
House of Representatives last month. That bill would end Obamacare's
expansion of Medicaid in 2020, slash its federal funding by more
than $800 billion over 10 years and eliminate most of the law's
taxes.
Moderate Republican senators from states that expanded Medicaid,
including Rob Portman of Ohio, Shelley Moore Capito of West Virginia
and Dean Heller of Nevada, have proposed phasing out the expansion
over a seven-year period, from 2020 to 2027, to give state governors
more time to cut program costs. That timeframe also prevents
senators, who serve six-year terms, from having to run for
re-election when Medicaid cuts have been implemented, two former
Republican Senate aides said.
Some of Obamacare's taxes could also be repealed later when Congress
tackles new legislation overhauling the U.S. tax code, two current
Senate aides said.
"There's no question that the current debate is not centered on
eliminating all the taxes in Obamacare right now," Senator Tim Scott
of South Carolina said last week.
Under a process called reconciliation, the bill needs at least 50
votes to pass, with Vice President Mike Pence casting the
tie-breaking vote if needed.
In an interview with Reuters last month, McConnell said he did not
yet know how he would get enough votes for an Obamacare repeal.
"Think of me with a Rubik's cube, sitting there trying to think
about what combination will get you to 50," McConnell said.
(Additional reporting by Susan Cornwell; Editing by Michele
Gershberg and Diane Craft)
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