WASHINGTON ― Senate Republicans are now strongly considering including a repeal of the Obamacare individual mandate in their tax proposal, a decision that could greatly complicate the GOP’s efforts to cut taxes and could arm Democrats with a major talking point against the legislation.
Republicans don’t appear certain the individual mandate repeal will ultimately be part of their tax proposal, but it appears the Senate Finance Committee will include repeal language in the bill it reports to the floor.
“We’re optimistic that inserting the individual mandate repeal would be helpful,” Senate Majority Leader Mitch McConnell (R-Ky.) told reporters Tuesday after a closed-door meeting with Republicans.
Shortly after the meeting, Sen. Tom Cotton (R-Ark.) issued a press release saying the Senate Finance Committee had “accepted” his proposal to include the mandate repeal in the legislation ― a decision the Congressional Budget Office says would save $338 billion over 10 years, allowing Republicans to finance more tax cuts.
While Cotton sounded very sure of the decision, leaders were less definitive Tuesday, suggesting this may not quite be a done deal.
Sen. Orrin Hatch (R-Utah), chairman of the Finance Committee that is writing the Senate’s tax legislation, told committee members to ignore the question of whether leaders would ultimately include a repeal in the bill.
“No one needs to be talking about the individual mandate at this point,” Hatch said Tuesday. “Arguments, questions or statements about the individual mandate are a distraction from the meeting we’re having now, and, frankly, they’re a waste of this committee’s time.”
When Sen. Ron Wyden (D-Ore.) asked Hatch if the repeal would be in the bill, Hatch refused to say.
Other senators reported Tuesday that the decision is still up in the air.
Sen. John Kennedy (R-La.), who supports including the mandate repeal in the bill, said no decision has been made.
“If we include the mandate ... that will go a long way to solving this problem — probably would solve the problem,” Kennedy said of issues concerning how much Republicans can add to the debt in their tax bill, which they hope to pass under a process called reconciliation that requires only a simple majority of votes.
Under the agreement made for the reconciliation bill, Republicans can add only $1.5 trillion to the debt if they are to pass the tax bill with 50 votes (and a tie-breaking vote from Vice President Mike Pence). The extra money saved by repealing the individual mandate would help the GOP finance a number of other cuts, but it would also open up Republicans to the Democratic talking point that they’re paying for tax cuts by dismantling health care.
Including the repeal could also jeopardize the bill’s passage.
One of the three Republicans who voted against an Obamacare repeal over the summer, Sen. Susan Collins (Maine), said Tuesday that she would wait to see what ultimately comes to the floor, but she believes including a portion of the health care repeal in this legislation would hurt the tax bill, not help it.
“I personally think that it complicates tax reform to put the repeal of the individual mandate in there,” Collins said, “particularly if it’s done before the Alexander-Murray bill passes.”
The Alexander-Murray legislation is the bipartisan health care stabilization bill ― brokered between Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) ― that would fund the so-called cost-sharing reductions for insurers offering low-income people discounts while also giving states more flexibility on the plans they offer.
Republican Conference Chairman John Thune (S.D.) told reporters that part of the agreement moving forward is for the Senate to pass the Alexander-Murray legislation in exchange for including the mandate repeal in the tax bill. That agreement, however, seems fragile, as some GOP senators don’t seem to have completely signed off on the deal, and McConnell can afford to lose only two Republicans if he’s going to pass the tax proposal through reconciliation.
Sen. John McCain (Ariz.), another one of the three Republicans who opposed the Obamacare repeal over the summer, repeatedly told reporters Tuesday that he would have to see the final proposal before he decides whether he can support the bill, and Sen. Lisa Murkowski (R-Alaska) has been cagey about whether she could support the tax measure if it includes the mandate repeal.
The other issue is the House. Before the announcement in the Senate on Tuesday, passage of the House’s tax proposal, which doesn’t include a mandate repeal, appeared to be on a glide path. A decision in the Senate to include repeal may give some Republicans pause. And this ultimately could be a gambit by McConnell, with him perhaps reversing the decision to include the mandate repeal if it means he would have the votes from otherwise reluctant senators.
When HuffPost asked Collins on Monday whether there was already some pressure on her to accept this tax proposal because it didn’t, at the time, include the mandate repeal, Collins suggested keeping the mandate repeal out of the tax cut bill was a selling point for her.
“I think it’s a mistake to combine them,” Collins said, “because I think it means we’ll get no Democratic votes, and I’d like this to be bipartisan.”
This post has been updated with quotes from Hatch and Kennedy.