The Finance 202: Senate GOP Is Gambling Bigly By Rolling Back Individual Mandate In Tax Package

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Congressional Republicans are reaching for a booby-trapped bag of cash as they scramble to try to pay for their tax overhaul.

House and Senate Republicans are moving to repeal the Affordable Care Act's individual mandate - a surprise turn that would yield more than $300 billion in much-needed revenue even as it revives the toxic politics of the GOP's summertime drive to gut the landmark law.

Senate GOP tax writers incorporated the high-stakes maneuver into the latest version of their plan, released late Tuesday night. They applied the new revenue to making permanent the deeply-slashed 20 percent corporate rate at the heart of the tax plan; doubling the child tax credit to $2,000; and expanding access to a deduction for pass-through businesses. But the updated bill sunsets individual rate cuts at the end of 2025 to help the package comply with strict budget rules - a move that Democrats seized on to blast the GOP for prioritizing corporate interests over working people.

Senate Majority Leader Mitch McConnell, R-Ky., appeared to lean into that characterization on Tuesday when he appeared at the Wall Street Journal's CEO Council meeting in Washington.

Yet there's no certainty that Republicans will stick with the Obamacare gambit. They could drop it just as quickly as they picked it up, a testament to how freewheeling the decision-making on policy fundamentals remains. Already, there are signs it could explode the fragile consensus that Republican leaders have been trying to assemble among their caucus.

Senate Republican leaders decided to proceed with the strategy Tuesday after a survey at their weekly lunch showed it drew near-uniform if notional support from their members. House Republicans - further along overall as they aim for a floor vote this week on their version of a plan - aren't sold on the idea.

From The Washington Post's Mike DeBonis and Damian Paletta:

"Eliminating the individual mandate and having far fewer people signed up for insurance saves money because many of those people receive federal subsidies to buy coverage.

"But the elimination would cause substantial political problems of its own.

"The attack on former president Barack Obama's signature legislative achievement is likely to rule out the already slim possibility of support from Democrats, and the prospect of adding millions to the ranks of the uninsured could trouble moderate Republicans who voted down previous repeal efforts."

The trio of Senate Republicans who sunk the first Obamacare repeal effort in July would again become wild cards:

- Sen. Susan Collins, R-Maine, said including themandate repeal would "complicate" the tax measure because of its effect on insurance premiums. But she signaled she might be able to support it if it moves in tandem with a bipartisan bill to preserve other pieces of the ACA.

- Sen. Lisa Murkowski, R-Alaska, likewise said approving the bipartisan Obamacare fix negotiated by Sens. Lamar Alexander, R-Tenn., and Sen. Patty Murray, D-Wash., would help, per Bloomberg News's Steven Dennis, while registering unease about the impact on premiums: "Are you going to have a situation where your premiums are now going to increase? Tell me how that's making me a happier person in the middle class here. That's a consideration I think is very real and needs to be weighed."

- Sen. John McCain, R-Ariz., said he wants to see the entire tax package before commenting on its components.

If all three of those senators - or two, depending on how other Republican votes line up - demand the Alexander-Murray compromise pass as a condition for their support of a tax package that includes an individual mandate repeal, the whole thing could fall apart. That's because Alexander-Murray would need at least eight Democrats to clear its 60-vote threshold, and Senate Minority Leader Chuck Schumer, D-N.Y., on Tuesday said Democrats won't support it if Republican leaders are using it to advance their tax package.

Then, even if Senate Republicans managed to pass the health-care measure along with the tax package, the deal would meet resistance in the House. Conservatives there are leery of the Senate-forged compromise: "Talked to about a dozen House Republicans last vote series. None thought IM repeal+Alex-Murray would fly in House. Most said they just couldn't stomach A-M," tweeted The Post's DeBonis.

Moderates would balk at an unaccompanied repeal of the individual mandate. And for now, House Republican leaders don't look likely to add a major change ahead of an expected Thursday vote.

Stepping back from the whip count, the politics of the move are questionable. The specter of knocking out a pillar of the new health-care system drew a warning shot Tuesday from a number of healthy industry groups, including America's Health Insurance Plans, the American Hospital Association, and the American Medical Association. They admonished congressional leaders that the move would jack up premiums and reduce the rate of the insured (by 13 million, according to an estimate from the Congressional Budget Office).

Republican tax proposals are under water by 14 points with voters, according to a recent CNN poll. But voters trust the party even less on health care. Exit polling in Virginia last week showed it was the top issue for voters as Democrats romped statewide.

Former McCain political advisor John Weaver summarized the argument against the whole package: "A tax 'reform' bill which raises taxes on the middle class, strips millions of families of their health care, rewards the top 1 % & balloons the deficit is the final political nail in the coffin for the GOP," he tweeted.

Congressional Republicans of course would dispute the characterization. But as their grab for the individual mandate may reveal, the rush for a win on taxes is forcing some ugly reckonings.


Video: Senate Majority Leader Mitch McConnell (R-Ky) said on Nov. 14, he was "optimistic" about adding the individual mandate repeal to the tax bill. (The Washington Post)

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