Mar. 24

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Healthcare Bill Vote Is Canceled Because the Votes Aren't There

Speaker Paul Ryan (R-WI) canceled yesterday's expected vote on the AHCA bill because his whips told him the votes for passage weren't there. Holding a vote on the bill and having it go down in flames would be hugely embarrassing for him, as well as for President Donald Trump, so Ryan bit the bullet and postponed the vote to have more time to cajole/threaten recalcitrant House members.

Trump, who sees himself as the Great Negotiator, failed to negotiate a deal with the House Freedom Caucus. The caucus has about three dozen members, all of whom are very conservative, and most of whom oppose the bill because they see it as "Obamacare Lite." They oppose the tax credits to help poor people buy insurance, saying it is functionally they same as the ACA subsidies. Both of them ultimately have the government pay for insurance for poor people, whether it is a direct subsidy or via the tax code. They don't believe that people should get free insurance just because they are poor, when most people in the individual market have to pay for it.

Another sticking point is the ACA's requirement that all insurance policies cover 10 essential health benefits (EHBs), namely:

Before the ACA, every state had its own list of benefits that health insurance had to cover. The ACA imposed a national standard on the EHBs. The conservatives want to kill the requirement that all insurance offers these 10 EHBs. Their reasoning is that seniors might not be interested in paying for maternity benefits or pediatric services, people who don't use drugs might not want substance abuse coverage, etc. If insurance companies were free to make each of these 10 items a separate option that people could accept or reject, coverage could be tailored to what the customer wanted and premiums could be lower.

The problem with letting people pick and choose which benefits they want would mean the pools for each option would be skewed toward people likely to use the service. For example, no men would ever choose maternity benefits and it would be chosen only by women in their 20s and 30s, and then only if they were planning to have children in the upcoming insurance year. Hospitals charge between $10,000 and $24,000 for a delivery, depending on complications. If an insurance company could reasonably expect that most women picking the maternity option were planning on having a baby within a year, they would have to charge something like $20,000 for that option. Under the ACA, everybody had to buy maternity coverage, spreading the cost over a large base. That is how insurance works.

Another problem with eliminating the EHBs is that some insurance companies would offer "junk insurance." Imagine, for example, a policy with a $10,000 deductible, then a co-payment of 50% up to $50,000, then no coverage above that. Such a policy could be priced very low, achieving the Republicans' dream of lowering insurance costs. Except if the customer got sick, it might not come even close to paying for the necessary care. But many people would be attracted to the low sticker price and not realize they weren't getting much insurance.

A third problem with eliminating the EHBs is that the Republicans' goal is to use the budget reconciliation process in the Senate to pass the bill with only 51 votes. Such bills must contain only items that affect the federal budget. Requiring or not requiring EHBs doesn't affect the budget. To solve this problem, some Republicans want Mike Pence, in his role as president of the Senate, to ask parliamentarian Elizabeth MacDonough for a ruling, and when she gives the expected ruling that eliminating EHBs can't be in the bill, just overrule her. Other Republicans fear that in the future any provision could be passed this way, de facto eliminating the filibuster on legislation, something that may be a bridge too far for them.

Finally, if Trump and Ryan give in to the Freedom Caucus and kill the EHB provision and agree to have Pence overrule MacDonough in the Senate, the House moderates are likely to balk. Crafting a bill that Freedom Caucus can live with and the moderates can also live with is clearly very difficult. But at least Ryan has the luxury of time to try and figure it out, right? Maybe not. The notoriously impatient Trump has apparently gotten tired of all this political maneuvering, and has issued an ultimatum: Vote Friday, or be "stuck with Obamacare." If the vote is held, and succeeds, then it will really make Trump look like someone who can cut through Washington B.S. to get things done. But if it fails, he will have given Ryan an out: "We needed more time, but Trump forced our hand." Of course, Trump will turn it around and point the finger at House Republicans, blasting their ability to get anything done. In other words, we may be on the verge of a GOP civil war less than 100 days into the Trump presidency. (V)

What Happens Next?

At this point, Paul Ryan has to consider what his options are. Politico has drawn up a short list of them:

At this point, it appears the decision may have been taken out of his hands. According to Rep. Chris Collins (R-NY), the vote will indeed take place Friday afternoon, though 24 hours is a long time in politics, so who knows? (V)

Congressional Budget Office Scores the New Healthcare Bill

After the Republicans changed the original AHCA bill at the behest of conservatives, the Congressional Budget Office went to work to score the revised bill. The result is that the same 24 million people would lose insurance as in the first bill, but the bill would reduce the federal deficit by only $150 billion over 10 years instead of the $337 billion that the original bill would have. So from a macroeconomic perspective, the revised bill is worse than the original. However, the bill could easily be changed one or more times before the vote, rendering this scoring moot. (V)

The Koch Brothers Are Trying to Buy "No" Votes on Healthcare Bill

The conservative Koch brothers have announced that they will provide millions of dollars in support to House Republicans who vote against the Ryan healthcare bill. Every Democrat in the House is expected to vote against it, but they are not eligible for the millions, even if they all vote "no."

This announcement puts the Koch brothers in direct opposition to both Donald Trump and Paul Ryan, both of whom desperately want the healthcare bill to pass. The Kochs want it to fail. This puts individual Republican members of Congress in a bind: Listen to your leaders or listen to the guys with the money. For many members, this is not a good place to be.

Openly buying votes in primary and general elections is rather frowned upon, but for House votes and Senate votes, there is no problem at all and the sky's the limit. The Koch network plans to spend $300 to $400 million in the 2018 elections. (V)

Voters Overwhelmingly Oppose AHCA

If Paul Ryan's AHCA comes up for a vote and passes on Friday, then it will truly be a demonstration of party discipline, since GOP representatives will not only be turning their backs on the money (see above), but also on the wishes of the voting public—a pair of choices not generally suited to remaining in office.

Polls have consistently shown that the AHCA is unpopular with voters, but the latest, from Quinnipiac, is particularly grim. Overall, only 17% of Americans approve of the law, with 56% disapproving and the rest undecided. Among Republicans, the "approve" number rises to only 41%, with 24% disapproving. Further, 54% of Republicans oppose cuts to Medicaid. These latter numbers are very bad, as they are not likely to improve much. Especially since they suggest that 13% of Republican respondents aren't actually clear what the bill does, and will turn against the AHCA once they learn that it guts Medicaid. Or, for that matter, once it costs them their health insurance.

Members of Congress, particularly those in the rank and file, tend to be risk averse. There is no chance that the members are unaware of what the polls are saying, which is going to make Paul Ryan's job that much harder. (Z)

Could This Be the End of the Line for Ryan?

If the AHCA does go down to defeat on Friday (or sometime thereafter), it will be a huge defeat for Paul Ryan. But will it be the last defeat? Could this be enough to cause him to throw in the towel and resign? It's enough of a possibility that the question came up during Sean Spicer's Thursday presser (for his part, Spicer said Ryan shouldn't resign).

Among the indicators that suggest that Ryan may not be long for his job (again, assuming the AHCA fails):

This is not to say that Ryan's departure is likely—after all, when he looks in the mirror in the morning, he still sees the 46th President of the United States, and quitting his job is not going to help with that. However, resigning is certainly not outside the realm of possibility, especially since the Speaker is now in almost exactly the same situation John Boehner was when he resigned (except that the issue then was the budget, instead of health care). (Z)

Schumer Plans to Filibuster Gorsuch

Senate Minority Leader Chuck Schumer (D-NY) has vowed to filibuster the nomination of Neil Gorsuch to fill the seat of the late Supreme Court Justice Antonin Scalia. Schumer said:

After careful deliberation I have concluded that I cannot support Judge Neil Gorsuch's nomination to the Supreme Court. His nomination will have a cloture vote. He will have to earn 60 votes for confirmation. My vote will be no, and I urge my colleagues to do the same.

Republicans need 60 votes to invoke cloture and cut off a filibuster. They have 52 seats in the senate. Schumer knows that red state Democrats up for reelection could be hurt by filibustering, so he could give the seven most vulnerable Democrats permission to vote for cloture. For Majority Leader Mitch McConnell (R-KY), 59 votes isn't any better than 52.

In response to a filibuster, McConnell could "go nuclear" and alter Senate rules to eliminate the filibuster on Supreme Court nominees. In a previous session of Congress, when the Democrats were in the majority, they eliminated the filibuster on all appointments except for the Supreme Court. McConnell could take the next step towards turning the Senate into the House by eliminating it for all nominations. The one thing that might hold him back is that he is an institutionalist and realizes that there is a possibility that in 2021 a President Elizabeth Warren nominates a 40-year-old far left wing judge for consideration by a Senate with 50 Democrats. Of course, a compromise is possible, albeit unlikely. For example, McCconnell could publicly state that if the democrats approve Gorsuch, he will not go nuclear on the next vacancy. (V)

Nunes Really Stepped in It

On Wednesday, House Intelligence Committee Chair Rep. Devin Nunes (R-CA) apparently got information that could misleadingly be used to support Donald Trump's claims he was wiretapped by Barack Obama. Inasmuch as Nunes' committee is investigating the ties between Trump and Russia, the appropriate things to do were to (1) Share any new information with the other members of the committee, and (2) Otherwise keep the information, which is presumably classified, under his hat. Instead, Nunes first went to the press, and then to the White House, with his revelations.

On Thursday, Nunes was widely criticized for his behavior. By Democrats, of course, from House Minority Leader Nancy Pelosi (D-CA) on down, but also from Republicans. Sen. John McCain (R-AZ), for example, described it as "bizarre." Robert Deitz, a lawyer for the NSA, DoD, and CIA under Bill Clinton and George W. Bush, was interviewed and was particularly aggravated:

What the hell is Nunes doing at the White House? The idea that a person working in a committee that down the road at least is supposed to be looking into Russian influence in US elections ... would go racing to the White House—and to do what? Get his tummy rubbed? I just find unbelievable.

In the face of this overwhelming censure, Nunes was compelled to apologize Thursday afternoon.

But while apologies are nice, Nunes appears to have irretrievably damaged the credibility of his committee, in particular as regards their ability to impartially investigate Trump. That view was expressed by members of both parties on Thursday, and was seconded in editorials from the New York Times and also the Washington Post. At this point, any "vindication" of Trump that the committee offered would not be taken seriously. Which means that we likely just got one step closer to the appointment of an independent prosecutor. (Z)

Trump Hotel Does Not Violate Lease

Donald Trump's D.C. hotel is in a building leased from the U.S. government. The lease says no government employee may profit from the lease. Many ethics lawyers said that now that Trump is a government employee, he is in violation of the lease. However, yesterday the General Services Administration announced that Trump is in full compliance with the lease because he transferred the lease to a revocable trust of which he is the sole beneficiary. So technically, Trump is no longer the lessee, his trust is. Problem solved. Furthermore, Trump will not receive any profits from the trust while he is president. The GSA letter does not deal with what might happen after Trump leaves office. Presumably he could then collect the profits that have accumulated in the trust.

Another issue not addressed is the Constitution's emoluments clause. Any foreign government that wanted to curry favor with Trump could book dozens of rooms and multiple grand ballrooms to have a magnficent party, with the best food, wine, champagne, and more. Spending $100,000 for one event is not uncommon at hotels in the segment Trump's hotel is in. The profits from that event would go to the trust for the time being, but Trump would surely be aware of the party. He might even be invited. (V)

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