How Republicans could still revive Obamacare repeal after their September 30 deadline

One big looming deadline had motivated Republicans’ now-cancelled push to repeal Obamacare this week: September 30.

On that date — this Saturday — Congress’s current “budget reconciliation” instructions, which set up the special process that lets the Senate advance a bill with a simple majority rather than 60 votes, expire.

Some commentary has treated this push as the GOP’s “last effort to replace Obamacare” (as an NPR report deemed it), assuming that the expiration of the budget reconciliation vehicle means the initiative as a whole is dead.

But the reality of what this deadline means for the Republican agenda isn’t quite so cut and dry. Because if the GOP does want to set up reconciliation again, they can — by passing a new budget resolution with new “reconciliation instructions.”

For now, it seems that the GOP intends to put the health care issue to the side and focus on setting tax reform on that reconciliation track.

If they do get a tax bill signed into law, however, they could return to the health care issue — by passing yet another budget resolution with new reconciliation instructions. So far from cleanly ending the story of Obamacare repeal, the September 30 deadline will likely only lead to a new period of uncertainty.

Republicans’ original budget reconciliation plan, and why it failed

Bear with me as we descend into the morass of Senate rules.

To start off: The key assumption underlying the GOP’s choices here is that they believe both Obamacare repeal and tax reform can only pass through the special filibuster-proof budget reconciliation process.

This assumption appears to be accurate. It takes 60 votes to advance an ordinary bill past a filibuster, Republicans only have 52 Senate seats, and Democrats have remained united against every version of Obamacare repeal all year. So, repeal effectively has to happen through budget reconciliation — where it can pass with just 50 Republican senators plus a tie-breaker vote from Vice President Mike Pence — or it won’t happen at all.

Now, for tax reform, a few Senate Democrats have indicated they might want to work with the GOP. But winning eight of them would be a tall order without major policy compromises that Republicans would really prefer not to make.

Republicans, then, decided to try to use budget reconciliation twice in 2017 — first for Obamacare repeal and then for tax reform. To actually put this strategy into action, though, they had to jump through some procedural hoops. Specifically:

  • To set up budget reconciliation, Congress first has to pass a budget resolution for a particular fiscal year that contains “reconciliation instructions.”
  • Once they do that, those reconciliation instructions can only be used for one bill that affects both spending and revenue (as Obamacare repeal does).
  • And they belatedly learned there was one more catch: Those reconciliation instructions expire at the end of the fiscal year — that is, September 30.

So back in January, congressional Republicans did pass a budget resolution for fiscal year 2017, which set up the reconciliation process for Obamacare repeal. They hoped that they would then get repeal passed and signed into law, and then pass a new budget resolution to set up reconciliation again for tax reform.

But this plan has gone off the rails. The Senate has failed to use reconciliation to actually pass a health bill (or anything else). And at the end of this month, their magical reconciliation vehicle will turn into a pumpkin.

So Republicans are trying to pass a new budget resolution, to get a new reconciliation vehicle

Yet all this doesn’t mean the death knell for Obamacare repeal — because Republicans will now try to set up the reconciliation process again.

To do so, they need to pass a new budget resolution. This is something that is theoretically within their capabilities, since it can be done with a simple majority in each house of Congress.

The GOP’s plan was, originally, that Obamacare repeal would be over and done with by now, so this new budget resolution could be used purely to put tax reform on the reconciliation track.

In recent days, a few Republican senators like Lindsey Graham (R-SC), Ron Johnson (R-WI), and Rand Paul (R-KY) have all argued that the new resolution should be written in a way that keeps open the possibility of Obamacare repeal.

That seems entirely possible, should Republican leaders want to do so. “They don’t have to choose between health care and tax reform in the budget resolution,” Ed Lorenzen of the Committee for a Responsible Federal Budget tells me. Instead, the resolution can be written in a vague way that would let them later use reconciliation for either (1) tax reform, (2) health reform, or (3) both together in one bill.

Now, though it’s often said that reconciliation can only be set up for one bill at a time, that’s not technically true. According to a Center on Budget and Policy Priorities analysis, a budget resolution can only set up reconciliation for one bill that affects both spending and revenues at a time. Theoretically, reconciliation could be set up for one bill that only affects revenues and a separate bill that only affects spending. So theoretically, if Republicans can manage to write a health bill that only impacts spending, and a tax bill that only impacts revenue, they could use reconciliation twice.

However, the experts I talked to don’t think that this is a viable strategy for the GOP. Major features of Obamacare — such as the subsidies for the individual insurance market exchanges — have been deemed by the Congressional Budget Office to impact both spending and revenue. Meanwhile, some features of tax reform, like refundable tax credits, have been scored as impacting spending.

So though a decision on this can be punted for now, Senate rules and congressional scoring practices do seem to suggest that Republicans will eventually have to decide on either using reconciliation for either health care, tax reform, or one bill combining both.

But despite all that, Republican leaders signaled Tuesday that they prefer to focus on tax reform in the new resolution for now. And that makes sense the GOP is desperate for a major legislative accomplishment and are said to fear that combining the two issues together could sink both.

Then, of course, keep in mind that if Republicans pass a new budget resolution for the 2018 fiscal year with new reconciliation instructions, they’ll face a similar deadline of the end of that fiscal year: September 30, 2018.

One more option: Republicans can later pass another budget for fiscal year 2019

Even if the GOP decides to focus on tax reform with this next budget reconciliation effort, there’s one more way they could get another bite at the reconciliation apple — by passing a new budget at some point next year. This could be for the 2019 fiscal year, which Sen. John Thune (R-SD) mentioned this as a possibility in an interview with Politico this week. Some experts told me that it might even be possible to do a second budget for the 2018 fiscal year.

Either way, this would essentially be the reverse of the GOP’s original strategy. First, they’d pass a budget setting up reconciliation for tax reform, and then pass tax reform. Then, they’d pass a budget setting up reconciliation for Obamacare repeal, and then pass that.

All this may seem a bit fanciful and unlikely to transpire, considering how soon this would take us to the 2018 midterms. Tax reform itself is hardly guaranteed to succeed. And of course, none of these procedural maneuvers would solve Republicans’ core problem of how to unite 50 senators around an Obamacare repeal bill.

Still, it’s possible the political situation, and the tenuous balance of power in the Senate, could change. For instance, Sen. John McCain (R-AZ) is ailing of brain cancer, and if his seat should become vacant, his replacement would be appointed by Arizona’s governor and would be more likely to support repeal.

One final nightmare scenario for Democrats is that Republicans could take a drubbing in the 2018 midterm elections — and then finally find their resolve to repeal Obamacare in the lame duck before the new Congress is sworn in, knowing for sure that this would be their last chance to do it.

So yes, Obamacare repeal may look dead for now. But so long as the GOP has majorities in both houses of Congress, another revival will remain a possibility.

This post has been updated with new developments.

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