Monthly Archives: July 2017

Office of Management and Budget Director Mick Mulvaney will be calling on his rabble-rousing friends and former colleagues to get in line behind a House budget proposal. | Getty

Republicans hope lobbying from key White House conservatives will ease opposition from the hard-line House Freedom Caucus.

By Rachael Bade and Sarah Ferris

07/13/2017 02:15 PM EDT

Updated 07/13/2017 06:20 PM EDT

House GOP leaders are bringing in the big guns to help ease their budget woes: Vice President Mike Pence and White House budget director Mick Mulvaney.

Pence and Mulvaney committed Thursday to helping GOP leaders muster support among their divided conference to pass a fiscal 2018 budget. Republican leadership and House Budget Chairwoman Diane Black are hoping that Mulvaney will be particularly helpful in wooing his former colleagues and friends on the hard-line Freedom Caucus, where he was once a member.

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The Freedom Caucus' opposition has the potential to be one of the greatest hurdles to passing the budget, which is crucial if Republicans want to pass tax reform on a party-line vote. Caucus leaders, who have pushed hard to include mandatory cuts to welfare programs in the budget, have said they will not support the fiscal plan until they also get the details of the Houses tax reform proposal.

But tax reform details are still far off, insiders say. And GOP leaders, not to mention Black, are eager to move on the budget before the August recess.

Its frustrating in a sense that theyre demanding that we stay here [through August recess] and work, which is fine with me, but they're not working while were here, said Budget panel member Tom Cole (R-Oakla.) of the Freedom Caucus threat to block the budget without tax details. I just think thats unrealistic Theyre not necessarily related."

The Vice President's office confirmed that Pence would be on the Hill to help get the budget passed. An Office of Management and Budget official confirmed that Mulvaney would be "working the phones" as well as making in-person pitches.

"The White House wants to be helpful in any way it can," OMB spokesman John Czwartacki said by phone Thursday. "The White House sees tremendous value on a 2018 budget resolution passing both chambers of Congress."

Black set out early to woo conservatives, even taking on GOP leadership as well as other Republican committee chairs to include $200 billion in entitlement cuts. Many moderates have balked at the proposal, with as many as 20 centrist Republicans in the Tuesday Group threatening to vote against such a plan almost enough to block it.

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Still, some Freedom Caucus members say those cuts are not enough. Vice chairman Jim Jordan (R-Ohio) suggested during a news conference Wednesday that $200 billion in mandatory cuts was, essentially, a rounding error compared to the nations larger spending issues.

Meadows also said the group would need to see the details of the tax plan. They're wary of Speaker Paul Ryan's proposal to increase taxes on imports to pay for other tax cuts and want assurances the so-called border adjustment is dead.

Without decisions on tax reform, there will not be enough votes to pass it in the House because of the conservative concerns, Meadows said.

Enter the White House. Mulvaney and Pence huddled Thursday morning with Ryan (R-Wis.), Black (R-Tenn.) and White House legislative liaison Marc Short to devise a strategy to get Black's budget passed. That plan includes talking not just to members of the Freedom Caucus but any recalcitrant Republicans to get the 218 votes needed on the floor.

The meeting followed several calls between Mulvaney and Black this weekend.

Several GOP sources following the budget process closely said they think the White House's pitch for opponents to back the budget will work, allowing Black to move the bill through committee as soon as next week. Two members of the committee, Reps. Mark Sanford of South Carolina and Mario Diaz-Balart of Florida, told POLITICO on Wednesday that they were told to expect a Budget Committee markup next week.

Mulvaney and Pence's first task will be helping Black move the bill through the panel, where some conservatives like Reps. Dave Brat (R-Va.) and Gary Palmer (R-Ala.), both Freedom Caucus members, have not yet committed to supporting the plan.

Palmer in an interview off the House floor Thursday said he wanted the budget to rein in more spending.

Im still looking at it. I think theres time to improve it," Palmer said, when asked if he'd support the budget. "At some point everybodys got to come to the realization that were on a path to fiscal disaster."

Palmer, however, might be one of the easier conservatives to win over: He does not agree with his fellow Freedom Caucus members who say they want to hold up the budget in order to squeeze out the details of tax reform.

"The Freedom Caucus doesnt speak for all its members," he said. "I think that the tax reform effort is a separate issue. I dont believe in holding something else hostage."

Palmer also praised Black for her work, saying he can't remember the last time a budget was crafted to trigger billions in cuts.

Brat said he couldn't back a budget without more tax details.

"How do you get corporate rates down when you're minus a few trillion [in deficits]? We have to know the answer to that question because tax reform is the Holy Grail," he said. "I am not able to take a budget vote until I know how all the big trillion-dollar pieces fit together."

Even if Mulvany and Pence are able to help Black move the budget out of committee next week, they'll have an even heavier lift with the rest of the conference. Freedom Caucus members have not yet taken a position on the issue, but they could soon.

"Why arent we seeing the tax plan? I think [our opposition is] a move to try to spur things along," said Freedom Caucus member Scott DesJarlais (R-Tenn.). "Its a shame we would have to do that but weve got to keep things moving."

To be sure, Ryan, the White House and Senate leaders have indeed begun working on a tax bill. But right now, those discussions and decisions are being made at a high level not with the rest of the conference.

The Freedom Caucus would like to have input in those discussions.

Asked about Mulvaney whipping the Freedom Caucus, Meadows on Thursday gave a hearty laugh off the House floor.

"We're not voting for the budget until we get all those other things done, and Mick Mulvany can come up here and we can have nice lunch ... and it ain't gonna change a single vote," Meadows said.

Meadows then called Mulvaney to press him on his intentions to whip the Freedom Caucus into passing the budget. He said Mulvaney denied that was his intention.

Alyssa Farah, a spokeswoman for the Freedom Caucus, said: "Chairman Meadows has a great degree of respect for Director Mulvaney and always appreciates his input on policy matters."

And that's just the conservative end of the House GOP conference.

GOP leaders and the White House will also have to presuade moderates in the Tuesday Group to back the budget. A few weeks ago, members of the group said they wouldn't vote for a fiscal blueprint until Republicans strike a broader spending deal with Democrats, which seems a world away amid the partisan rancor on Capitol Hill.

In other words, Pence, Mulvaney and Ryan have some serious work to do.

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GOP leaders enlist Pence, Mulvaney to help with budget woes - Politico

After years of subjecting ObamaCareto the harshest criticism, the Senate GOP's struggles to come up with a replacement over the past several weeks havebeen a revelation:A critical mass of Republican senators seem to be saying that wresting the health care security provided by the law from their constituents is a nonstarter.

That leaves Congresswith two possible paths forward. The most likely path is a form of triage that would try to control the bleeding, rather than address ObamaCare'sunderlying problems that explain why enrollment was weak even before premiums spiked, and why the law was unpopular before"mean" TrumpCare came on the scene.

Stabilizing insurance markets, principally by providing protection for insurers against high-claims customers, is a good idea and an important step. But let's be clear about what that won't achieve: It won't create a robust nongroup insurance market with rules that Americans can broadly support, and that work reasonably well for the finances of healthy and sick, old and young, working class and middle class.

To create a robust nongroup insurance market with lower premiums that serves people well will require taking the other potential path forward: transforming the Affordable Care Act, largely byinjecting the ingredient that Republicans say the law is most sorely lacking freedom.

While ObamaCare has helped thenear-poor and those with chronic conditions who otherwise might be stuck without affordable coverage, it gives a bad deal to pretty much everyone else, which iswhy the exchanges' pool of customers is too small, too old and too costly, and premiums have soared asinsurers likeUnitedHealth Group (UNH),Aetna (AET) andHumana (HUM) have mostly exited the markets.

Simply stabilizing theturbulent insurance-exchange markets wouldn't do anything to ameliorate ObamaCare's harshest reality:Even among working-class households earning 150% to 250% of the poverty level, supposedly among the law'sbiggest beneficiaries, just 1 in 3 people who lack insurance from other sources are getting coverage that will protect them from financial disaster. Most of the other two-thirds are uninsured, either because they or a spouse work full time and don't qualify for exchange subsidies, or else they've spurned subsidized bronze plans that carry $6,000-$7,000 deductibles despite the threat of a individual-mandate penalty.

While Americans aren't crying out for the freedom to buy the skimpiest coverage that insurers can dream up, and pretty much everybody would rather have insurance than not if the price is right many people would benefit from greater flexibility than the ACA allows, and the entire country would benefit from a bipartisan consensus on health reform that helps those who have fallen through ObamaCare's wide cracks.

That is whythe very best step for public policy, within the realm of what might be possible, would be to give people a choice between the comprehensive coverage that Democrats want them to have and that many people with chronic conditions or low incomes clearly need and the consumer-driven model that Republicans believe in, which allows people to opt for high-deductiblecoverage and set aside funds to cover basic medical needs.

This would involve turning ObamaCare's cost-sharing support into something more akin to working-class tax cuts and removing ObamaCare's heaviest-handed mandates, while preserving the ACA's critical protections and support.

A central problem with ObamaCare is that the rules stacked the deck in favor of those needing comprehensive coverage, leaving far too many in the working class with three unappealingoptions: a silver plan that costs too much; a bronze plan that won't pay their medical bills until long after they're in financial distress;or anindividual-mandate penaltyfor opting against coverage that may be of little use.

Think ofa couple, age 30, in St. Louis with income of $40,000 (about 200% of the poverty level) and a child covered by Medicaid. For this couple, the cheapest silver plan under ObamaCare offers pretty solid coverage but costs$2,430 likely too much for a young family that's probably already struggling to save anything. The cheapest bronze plan, costing $1,068, might be doable, but the $13,300deductible ($6,650 per person) could make a hospital stay financially devastating.

The chasm between ObamaCare's silver and bronze deductibles $700 vs. $13,300 is by design, though clearly a poor one. ObamaCare provides extra cost-sharing subsidies that shrink deductibles for modest-income households, but only if they buy silver plans. Those cost-sharing subsidies work exactly like premium subsidies, paid directly from the government to insurers each month, even if the policyholder gets no medical care.

Looking through the lens of these 30-year-olds in St. Louis, a bipartisan replacement, merging Republican principles and Democratic values, is easy to identify.

First, don't get rid of the comprehensive option. If this couple is trying to have a second child or one spouse has a chronic condition, they will be desperate for a low-deductible plan with a wide range of essential benefits.

Second, offer people the flexibility to choose a Republican option. A replacement for ObamaCare could give young, modest-income families the chance to set aside some savings for health expenses with two simple tweaks. Relax ObamaCare's age-rating restrictions that inflate insurance costs for the young, but only for high-deductible plans, keeping comprehensive plans affordable for older adults. (That could mean silver plans with a 3:1 age rating, bronze 4:1 and catastrophic 5:1.)

Next, let people use cost-sharing subsidies to reduce premiums, if they prefer, effectively making it a tax cut. Those two steps would shrink that St. Louis couple's bronze premium to zero, and they'd have about $900 left to put in a Health Savings Account to defray medical expenses not nirvana, but a dramatic improvement over what ObamaCare offers. Yes, this family would still be subject to very high deductibles, but no greater than under ObamaCare, and they'd have a $2,000 head start on their medical bills, giving them a chance to put aside some savings not because their tax credits are more generous than under ObamaCare but because they would be more usable.

From 100% to150% of the poverty level (about $12,000-$18,000 for a single), roughly90% of exchange enrollees sign up for silver coverage. Bronze-level deductibles would bealmost too extreme to bother if not for the mandate penalty though some percentage don't bother and remain uninsured. So here's a beautiful compromise that would inject some freedom and flexibility but not too much into the ACA.

ACA cost-sharing subsidies, which are even higher for this income tier, turn silver plans to ultra-low-deductible platinum plans.That option would still be available, but they also could opt to use their cost-sharing subsidy to cover a basic silver-plan premium and deposit the extra amount in a Health Savings Account. What's beautiful about this is that the bar on minimum coverage would risecompared to the ACA, yet people would still have more freedom to pick a plan that works for their finances and their health status.

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We also should do something about thesteep drop-off in cost-sharing subsidies that acts as a disincentive to earn above 200% of the poverty level and is an especially big deal for people with significant medical needs. A more gradual phase-out by300% of the poverty level would provide more constructive incentives, while delivering modest tax cuts to income-tax-paying households. Premiums could essentially be free for everyone up to 250% of the poverty level if a catastrophic-planoption is made available to people above 200% of the poverty level and they opt to apply their cost-sharing subsidy to the premium for the lowest-cost plan, roughly around the "copper" option proposed by the insurance industry and some moderate Democrats.

This is another compromise in which both sides win.Above 200% of the poverty level, ObamaCare's cracks widen in a serious way. The percentage of the uninsured under ObamaCare takes a big jump, and so does take-up of bronze coverage.Easing the cost-sharing subsidy cliff won't only make it more attractive for people to get coverage, albeit higher-deductible coverage, but it will allow people who need comprehensive coverage to get a better policy than they do under ObamaCare, since the bigger cost-sharing subsidy will effectively turn a silver plan to gold.

Meanwhile, freedom to choose a catastrophic plan with a 5:1 age-rating should satisfy the GOP that the reformed insurance markets will provide sufficient flexibility to meet the needs of all comers. Democrats should acknowledge that it's far better to let a young adult member of the working class get a higher-deductible plan for free than pay a penalty for going uninsured, and the broader, healthier risk pool will serve to hold down premiums for everyone.

As for the individual mandate, among the biggest issues of contention, if people earning up to 250% of the poverty level can get high-deductible coverage essentially for free and in most cases get extra cash on top there should be no need to threaten them with fines.

Above 250% of the poverty level, an alternative to the individual mandate is well worth considering. Among the reasons that the ObamaCare individual mandate doesn't work very well is that relatively young and healthy people who gamble on going without coverage can reasonably expect to win their bet and end up with a financial gain. ObamaCare encourages this kind of short-term calculation, sinceonly those who get sick pay a price.

A more logical approach would eliminate the incentive to go without coverage when one is young and healthy, then sign up when one's health starts deteriorating. Much like Medicare's late-enrollment penalties, the idea would be to very gradually shrink future tax subsidies based on how long people go without coverage. This should apply to both the individual market and employer market, or else people would have reason not to get coverage between jobs that offer insurance. The key for this to work in the constructive way intended is that subsidies must be sufficient to make coverage affordable, or else people would opt out for legitimate financial reasons and their future cost of coverage would gradually become even less affordable.

Even without this more constructive incentive, it's important to give members of the middle class a better deal than they get now. Those who earn too much to receive ObamaCare subsidies including young adults earning well below the official cut-off at 400% of the poverty level should be treated more equitably relative to their peers covered through the workplace.

A fiscally responsible solution would be to put a floor on tax credits for anyone buying coverage on the individual market equal to 25% of the cost of a silver plan, while limiting the income-tax benefit to 25% of the cost of employer-provided coverage and capping that benefit for high-income households. People in the 25% tax bracket (up to $91,151 for singles and $151,900 for married couples) who get coverage from an employer wouldn't be touchedby the tax change, while there would be minimal effect on those in the 28% bracket (up to $190,150 for singles and $231,450 for couples).

The sad reality today is that ObamaCare throws millions of modest-wage, full-time workers under the bus. There are some4.5 million uninsured full-time workerswho along with their spouses don't qualify for exchange subsidies, even if bronze-level workplace coverage costs close to 10% of income, which ObamaCare deems "affordable" but clearly isn't. That can amount to five times what people pay on the subsidized exchanges, sometimes even more. That's why perhaps a million other modest-wage earners solid numbers arehard to come by opt for"skinny" coverage at work that won't pay for hospitalization or surgerybut will keep them from having to pay a mandate penalty. This is worth repeating: The skimpy coverage that Democrats hate is exactly the kind of insurance-in-name-only-coverage that a lot of low-wage, full-time workers are settling for under ObamaCare.

Theemployer mandate is easy to dodgeand ends up harming the low-wage workers it was supposed to help. Getting rid of it is a progressive thing to do especially if it is done while fixing the individual insurance market.

Finally, we shouldallowstates that haven't expanded Medicaid to do so whilelimiting the expansion to 100% of the poverty level, easing the fiscal burden of the expansion on states, as suggested by Urban Institute scholars.

The Health Care Security & Freedom Act wouldn't deliver gold-plated insurance to most people, but it is the least we can do. All of these features would create a broad, stable risk pool, with affordable coverage options and plenty of flexibility to let people get the coverage that they believe suits them best. While they entail a fiscal cost, we can tackle that while stillputting the nation on a sounder fiscal courseand strengthening the social safety net.

Having a robust nongroup market for insurance that serves people well should be a priority for the nation. The dynamism of our economy will be better served if entrepreneurs and idealists who are willing to step out on a limb don't have to fear that their health insurance support will come crashing down. Demographic changes make it increasingly important for people to have the flexibility to step back from full-time work to help care for an aging parent or a sick child. Amid minimum-wage pressures and health care mandates, ultra-competitive markets and the advance of technology threaten to widen the cracks in our employer-centric insurance system that millions of workers, many with modest wages, are already falling into. And don't forget that we're entering the ninth year of an economic expansion. When the next recession hits, all of these pressures will multiply and millions more people will depend on insurance outside the employer system.

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6/30/2017 Combining Republican principles and Democratic values is key to replacing ObamaCare.

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The Health Care Security And Freedom Act Of 2017 - Investor's Business Daily