Lawmakers on Capitol Hill had mixed reviews Wednesday for a new proposal pushed by President Donald Trump that would raise money for tax reform but potentially complicate the already thorny issue.
The President tweeted support Wednesday morning for an idea pitched by Sen. Tom Cotton, R-Arkansas, earlier this week, suggesting Republicans repeal the individual mandate in the Affordable Care Act to help pay for the tax cuts they desperately want to pass heading into next year’s midterm elections.
“Wouldn’t it be great to Repeal the very unfair and unpopular Individual Mandate in ObamaCare and use those savings for further Tax Cuts for the Middle Class. The House and Senate should consider ASAP as the process of final approval moves along. Push Biggest Tax Cuts EVER,” Trump wrote in a series of two consecutive tweets.
It was a sudden jolt in the conversation around tax reform, which had been dominated by news Tuesday night of a one-day delay by Republicans, who were planning to release the bill Wednesday but pushed it to Thursday due to ongoing negotiations.
But just hours after Trump took to Twitter, White House press secretary Sarah Sanders backed away from the tweets, saying the Trump administration wants to deal with health care separately next year.
“In terms of the mandate, we are focused on pushing through tax cuts and tax reforms separately,” Sanders said in the daily White House briefing. “Obviously we have never made it a secret that we would like to repeal and replace Obamacare, we’d still like to do that, but we think it is probably more likely to do something like that in the spring.”
Republicans have been haggling for weeks over efforts to cut the state and local tax deduction, also known as SALT, after members from high-tax states like New York and New Jersey sharply opposed the plan. Over the weekend, Republicans announced they would only partially repeal SALT and leave in place the property tax deduction.
But that meant Republicans suddenly needed to find a way to raise hundreds of billions of dollars to pay for tax cuts that they would have originally raised from scrapping the property tax deduction.
That’s when Cotton’s idea came into play.
Trump’s tweets Wednesday morning came just minutes after Sen. Rand Paul, R-Kentucky, was on Fox News advocating repeal of the mandate.
“Repealing the individual mandate is something in the Senate that is gaining some momentum and I think there (are) a lot of people saying, you know what, we could fulfill two pledges here, cut taxes and get rid of part of Obamacare,” he said.
If the individual mandate were eliminated, the federal government would lose some revenue because the uninsured would no longer have to pay a penalty. However, it would save a lot more money because fewer people will sign up for Medicaid or subsidized coverage on the individual exchange, according to the Congressional Budget Office.
Estimates from some Republican members of Congress have put the revenue from cutting the mandate in the ballpark of $300 billion. A Congressional Budget Office analysis from December 2016 found that eliminating the mandate would reduce the federal budget deficit by $416 billion between 2018 and 2026.
Many lawmakers simply argued that adding a major health care element to tax reform could potentially quash the whole bill.
“I think tax reform is complicated enough without adding another layer of complexity,” said Sen. John Cornyn, the Senate Majority Whip.
Even one of Trump’s strongest supporters dismissed the idea that congressional Republicans could be successful with the idea.
“I do not believe you are going to see anything health care related in this bill — at the eleventh hour 59 minute, 58 second mark, I don’t,” Republican Rep. Chris Collins of New York told reporters.
“There’s no time to even deal with it, that I see,” Collins said flatly, adding, “I believe we are too far along.”
Collins said the President’s tweets reflect his frustrations with the health care law: “I don’t blame him and there may be a lot of things all of us would like to see. I’d like to see the repeal of the medical device tax, but that’s not going to make it either.”
House Ways and Means Chairman Kevin Brady appeared to rule out the idea Tuesday on Hugh Hewitt’s radio show. “What I don’t want to do is to add things that could again kill tax reform like health care,” he said.
But he added a major caveat: If the Senate attaches it to their version of the bill, and it goes to conference, then Brady would support it. “Absolutely,” he said. He just doesn’t want to add it to the current bill in the House.
Others were still getting familiar with the idea. Rep. Lee Zeldin, R-New York, said it “wasn’t even on the radar” until earlier Wednesday.
“I would have to spend a little more time reflecting on that,” Zeldin told reporters, adding that it’s not a proposal that had come up in any meetings he had attended on tax reform thus far.
The topic was briefly discussed in a meeting Wednesday between White House legislative affairs director Marc Short and several House Republicans on Wednesday, according to multiple members. “(The President) knows people have been hurt by the mandate,” Short told reporters after the meeting. “He also knows it’s something that raises revenues and we can lower rates.”
Like Paul in the Senate, some conservatives in the House were open to the idea.
“I wouldn’t be opposed to that,” said Rep. Mark Walker, the chairman of the Republican Study Committee, a conservative group of members in the House.
Rep. Mark Meadows, chairman of the conservative House Freedom Caucus, described it as a “credible” option to raise money.
“If we put that in tax reform, you got a pay-for right there,” he said. “Sen. Cotton and I have had discussions in the last 72 hours on that. I think that’s a very credible pay-for.”
Brady, while walking out of the Capitol on Wednesday night, was asked once again whether the bill might include a repeal of the individual mandate.
“To be determined,” he said. “You’ll see soon.”
