Senate Republicans tie tax plan to repeal
of key Obamacare mandate
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[November 15, 2017]
By Amanda Becker and Susan Cornwell
WASHINGTON (Reuters) - U.S. Senate
Republicans on Tuesday linked repealing a key component of Obamacare to
their ambitious tax-cut plan, raising new political risks and
uncertainties for the tax measure that financial markets have been
monitoring closely for months.
In comments that infuriated Democrats and left some senior Republicans
unsure what comes next, Senate Republican leader Mitch McConnell told
reporters: "We're optimistic that inserting the individual mandate
repeal would be helpful and that's obviously the view of the Senate
Finance Committee Republicans as well."
The finance panel, which had been in session for two days, abruptly
adjourned on Tuesday as Democrats slammed the Republicans' handling of
their tax proposals, for which formal legislative language has still not
been unveiled.
Ron Wyden, the committee's top Democrat, demanded more time for
Democrats to discuss the issue "because we were never told that
healthcare was going to be part of it and this just flew in literally
out of nowhere in the last 20 minutes."
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Tying Obamacare to the tax program introduces new risks for the
Republicans and for President Donald Trump. Together, they have yet to
score a major legislative win since Trump took power in January, even
with control of Congress and the White House.
The president, who has struggled in his relations with Congress,
suggested in a tweet on Monday that the mandate repeal should be added
to the tax plan, following up on a similar Nov. 3 tweet.
No final decision on such a move was made at the Senate Republicans'
weekly luncheon, Senator Susan Collins told reporters afterward. She
played a key role in July's collapse of a years-long push by fellow
Republicans to gut Obamacare, former Democratic President Barack Obama's
signature healthcare law, formally known as the Affordable Care Act.
"I personally think that it complicates tax reform to put the repeal of
the individual mandate in there," Collins said.
Asked if she would back the tax bill if a mandate repeal were added, she
said: "I'm going to wait and see."
Senator John McCain, who was also central to his party's failed
Obamacare repeal earlier this year, was non-committal on putting the
mandate repeal in the tax plan, saying: "I want to see the whole bill
before I decide."
The Senate and House of Representatives are developing separate tax-cut
packages they plan to reconcile eventually and send to Trump's desk for
enactment into law, an outcome Republicans are eager to achieve so they
can face U.S. voters next year with at least one major legislative
achievement.
House Speaker Paul Ryan, asked why the repeal of the Obamacare mandate
was not in the House version of the tax proposal, told Fox News on
Tuesday: "We didn’t want to complicate tax reform, make it harder than
it otherwise would be."
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The House had already agreed to eliminate the mandate in a healthcare
bill it passed in May, he noted, adding: "We want to see the Senate go
first and see if they can get that done and then we’ll discuss whether
or not it’s included at the end."
The Trump administration strongly supports the House version of the tax
legislation, saying its passage would be "an important first step in
achieving comprehensive tax reform," the White House said in a statement
on Tuesday.
U.S. financial markets have been watching closely, with U.S. stocks
rallying in recent months, partly on hopes of business tax cuts. They
showed little reaction to Tuesday’s developments.
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![](../images/111517pics/news_p22.jpg)
Senate Majority Leader Mitch McConnell, accompanied by Sen. Roy
Blunt (R-MO), speaks with reporters following the party luncheons on
Capitol Hill in Washington, U.S. November 14, 2017. REUTERS/Aaron P.
Bernstein
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CRUCIAL ELEMENT OF OBAMACARE
The individual mandate requires Americans to have health insurance
or pay a penalty to Washington, a provision that Republicans have
long opposed as government overreach.
But the mandate plays a critical role in Obamacare by requiring
young, healthy people, who might otherwise go without coverage, to
purchase insurance and help offset the costs of covering sicker and
older Americans.
Underscoring the devastating consequences for Obamacare if the
mandate were repealed, the nonpartisan Congressional Budget Office
said last week that such a change would increase the number of
Americans without health insurance by 13 million by 2027.
The CBO added that mandate repeal would raise the average insurance
policy premiums in the Obamacare marketplaces by about 10 percent
annually over the next decade.
Repealing the mandate would also lower the federal deficit by $338
billion over the same time period, the CBO said, a finding that
several Republican senators said influenced the move.
Eliminating the individual mandate would lower the number of
Americans with health insurance, meaning the federal government
would spend less on subsidizing coverage for lower- and
middle-income people, making that money available to pay for tax
cuts.
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Neither the Senate nor the House tax plans now includes repealing
the mandate. But both plan would add about $1.5 trillion over 10
years to the federal deficit and the national debt, which now
exceeds $20 trillion.
Congressional Republicans hope to pass tax legislation by the end of
the year and are moving fast, despite uncertainties.
They hold only a razor-thin 52-48 majority in the Senate. If
Democrats remain united in opposition, Republicans could afford to
lose no more than two senators from within their own ranks and still
secure passage of tax legislation.
Democrats have dismissed the Republican plans as deficit-expanding
giveaways to corporations and the wealthy.
Representative Lloyd Doggett, a senior member of the House tax
committee, said in a statement that the House tax bill was "just a
way to curry favor with Washington special interests – awarding tax
windfalls to large multinational corporations and the fortunate few
that sit way atop the economic ladder."
(Additional reporting by Richard Cowan, Makini Brice, Katanga
Johnson and Eric Walsh; Editing by Kevin Drawbaugh and Peter Cooney)
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