Following the 2016 election, conventional wisdom was that the Obama legacy would be short-lived. After all, Republicans won the presidency and maintained control of both houses of Congress and they were destined to undo much of what our 44th president accomplished.
But since Republicans didn’t gain a 60 vote majority in the Senate, any legislation they attempted to pass would still be subject to a filibuster by Democrats. Rather than try to work with the opposition party to enact legislation, the Republicans came up with a grand strategy on how to avoid a filibuster on their two main priorities: Obamacare repeal and tax reform. They would use the process of budget reconciliation, which only requires a simple majority.
In order to understand what the failure to repeal Obamacare using budget reconciliation means, it is important to keep a few facts in mind. Reconciliation must be tied to a budget resolution and can only be used once in any fiscal year. Because of that, Republicans didn’t use the reconciliation process in 2016. Instead, they saved it for this Congress and wrote rules into the FY17 budget resolution that tied it to the repeal of Obamacare. The plan was to follow that up immediately with a FY18 budget resolution and tie that one to tax reform.
As Evan Horowitz explained prior to the failure to repeal Obamacare, they have now squandered one of their two attempts to bypass the need to work with Democrats.
…Republicans don’t have the option of temporarily setting health care aside to take up tax reform. If they try, they will lose their shot at two reconciliation bills.
They can’t easily switch the order either, since they’ve already passed a resolution officially stating that they plan to use [FY17] reconciliation for health care reform.
This is why Speaker Ryan said, after they failed to garner enough votes to pass Obamacare repeal, that the law would be with us for the foreseeable future. Once they move on the the FY18 budget resolution and reconciliation process on tax reform, they have forfeited the ability to us the FY17 process for Obamacare repeal. It is possible that they could use this same process in subsequent years to try again, but that is highly unlikely.
Unlike what the Republicans claim, Obamacare is not about to implode. So the ball is now in HHS Secretary Price’s court to see if he can make it unravel via changes in the regulations. That means that the focus will likely shift to the courts as those actions are challenged. In other words, Republicans are in for a long, hard struggle to damage Obamacare.
Meanwhile, Congressional action will shift to tax reform. Because the plan is to use the same reconciliation process, the question is: will it be any easier than repealing Obamacare? Stan Collender says no.
Repealing and replacing the existing system rather than starting from scratch where there wasn’t one before means that, just like with Obamacare, tax reform will create losers as well as winners. It’s virtually guaranteed that the companies who will pay more because of the proposed changes will fight at least as hard as those that will pay less. That will make the tax reform debate longer, tougher and much nastier than anyone is currently assuming.
Collender goes on to explain that using reconciliation to pass tax reform will require Republicans to pass a budget resolution by May/June.
The January fiscal 2017 budget resolution was largely pro forma; it made no substantive policy changes and was done just to get reconciliation instructions in place for ACA repeal. Many House and Senate Republicans held their noses and voted for it even though it had high deficits and what they considered to be excessive spending levels only so the ACA repeal debate could get underway.
By contrast, the fiscal 2018 budget resolution that Congress will consider later this year will be the real thing, with deficits and spending levels that will be anything but acceptable to many representatives and senators.
Finally, Republicans will once again have to deal with CBO.
CBO (and the Joint Committee on Taxation) will play an even larger role in the tax reform debate because whether the plan adds to the budget deficit will be one of the biggest issues. As was the case with ACA, a bad score from CBO on tax reform could easily force the legislation’s drafters back to the drawing board and substantially reduce support for the overall effort.
That covers the policy issues Republicans will face in tackling tax reform. But there are also political challenges. Right now they are still engaged in finger-pointing over their failure to repeal Obamacare. But as Alan Rappeport reports, the Trump administration might be more engaged on this issue than they were last round, and their plans don’t necessarily align with Speaker Ryan’s. Beyond that, some of the major players in the White House are at odds with each other on tax reform as well as on other issues. None of that even gets to the division among Republicans in Congress.
Prior to the collapse of their effort to repeal Obamacare, it might have been possible to imagine Republicans overcoming these challenges. But they have squandered momentum and, for now, failure hangs in the air.
Those are the issues with which the Trump administration and Congress will be grappling through the spring, summer and into fall. Meanwhile, two of Trump’s other big promises will languish. As regular readers here know, I’ve always been bearish on whether or not his infrastructure plan would see the light of day. And as I wrote recently, finding the funds to pay for his border wall is only the first thing that could derail that whole effort. The reality is that, when it comes to governing, Trump might be about to learn that health care isn’t the only thing that is complicated.
The 100th day of Trump’s administration is only a little over a month away (April 29th). It is now clear that he won’t even begin to meet the promises he made about what he would accomplish by then. But if the first year of his presidency ends without any real movement on Obamacare repeal, tax reform, infrastructure and a border wall, it would represent a massive failure. And at least when it comes to these issues, Obama’s legacy would live on.
