WASHINGTON – Senate Majority Leader Mitch McConnell announced Tuesday that he would cut the chamber’s August recess in half, saying the GOP needed more time to achieve its legislative goals given the protracted negotiations over health care legislation and continued opposition from Democrats on several fronts.
“To provide more time to complete action on important legislative items and process nominees that have been stalled by a lack of cooperation from our friends across the aisle, the Senate will delay the start of the August recess until the third week of August,” McConnell, R-Ky., said in a statement.
In addition to health care and appointments, the Senate will also devote time to passing a defense authorization bill “and other important issues,” McConnell said. The Senate will now remain at work through the week of Aug. 7.
The fate of the Senate’s health care bill remained uncertain Tuesday, although McConnell told reporters he plans to release a revised bill by Thursday morning and hopes to receive a Congressional Budget Office analysis of the new version by the beginning of next week so the chamber can vote quickly.
McConnell’s announcement appeared designed to give Republicans time to move to other matters, such as raising the federal debt ceiling, after dispatching with a health care vote.
“The debt ceiling must be raised,” McConnell told reporters.
GOP leaders are still tweaking their health care plan to attract more votes, especially from centrists. McConnell is prepared to preserve two of the Affordable Care Act’s existing taxes on individuals earning more than $200,000 annually and couples earning more than $250,000 for several years, according to multiple Republican lawmakers and aides briefed on the plan. One is a 3.8 percent tax on investment income, and another is a 0.9 percent Medicare payroll tax on wages and self-employment income.
By keeping these two taxes in place for anywhere between five and seven years, according to several Republicans, the federal government could steer more money to a stabilization fund to help offset consumers’ health care costs while the new GOP plan goes into effect.
But the ideological disagreement over how to revise the ACA continued among Republicans.
Senate Republican Conference Chairman John Thune, R-S.D., said the debate over how to address taxes in the bill is being “fairly hotly discussed and litigated” among GOP senators. While he stressed that nothing has been finalized, Thune said that “the direction I think a lot of our members want to move” is to keep some of the Obamacare taxes in place and use the revenue in other parts of the bill.
The ongoing debate highlights the party’s struggle to devise a health care plan that can satisfy a broad swath of lawmakers.
Sen. Ted Cruz, R-Texas, is pressing fellow Republicans to embrace a significant change to the ACA that would allow companies to offer minimalist plans on the private insurance market that do not meet current coverage requirements.
The Cruz proposal would let insurers offer plans that do not meet market requirements under the Affordable Care Act, such as coverage for preventive care, mental health care and substance-abuse treatment. While this would lower premiums for some Americans, health experts say it would also siphon off younger, healthier consumers and could destabilize the market for more generous plans.
Tuesday’s lunch offered Senate Republicans the first chance to convene as a group since they left for a week-long holiday recess, during which many constituents and industry groups attacked Senate leaders’ plan to rewrite the 2010 law known as Obamacare.
In an interview with Rush Limbaugh on Monday, Vice President Mike Pence endorsed the Cruz amendment and the idea that lawmakers should repeal the ACA outright if they cannot devise an immediate substitute.
Conservatives are pushing for the amendment to be included in the core legislation to ensure that it has enough votes to pass. Senate Majority Whip John Cornyn, R-Texas, said the final decision about what to include in the legislation would depend on CBO estimates of the budgetary and coverage impact for each proposal.
“We’re looking at maintaining all of the options,” Cornyn said. “There will be a base bill, but 51 senators will be able to amend it.”
Leaders worry that the Cruz amendment could violate complex budget rules that allow health care legislation to pass with 51 votes instead of the 60 necessary for most legislation.
Preserving the Medicare tax for five years, meanwhile, would give GOP leaders roughly $13.6 billion more to spend without affecting the bill’s deficit savings, according to the Joint Committee on Taxation, while keeping the 3.8 percent investment tax would add $68.7 billion during the same time period.
Senate GOP leaders are trying convey to members that they face a “binary choice,” according to one person familiar with leadership strategy, between getting a deal done among themselves or having to work with Democrats, which is a less palatable option.
Douglas Holtz-Eakin, a former CBO director, said it appears that Cruz’s amendment would send all of the young, healthy people who are cheaper to cover into one insurance pool – and leave sicker, older people “in a glorified high-risk pool.”
“It would be expensive and possibly not particularly stable,” Holtz-Eakin said in an interview. “If the public-policy goal is to give people access to affordable insurance options, there’s a set of people who would just not have access to that.”
Holtz-Eakin said he would expect insurers to flee the exchanges even faster than they are under current policy, driving up premiums and forcing the federal government to increase subsidies to keep up with the skyrocketing rates.
Eliot Fishman, Families USA’s senior director of health policy, and Cheryl Fish-Parchman, the group’s director of access initiatives, wrote in a blog post Tuesday: “Bottom line: If you create one pool for healthy people and one pool that only covers sick people – those with pre-existing conditions – you are thrusting sick people into a pool that is the very definition of a death spiral.”
The concern over how the change could create two separate pools of consumers, paying very different insurance rates, has prompted a group of more moderate rank-and-file senators to pitch a plan that they say would curb the risk of that sort of segmentation. Sen. Mike Rounds, R-S.D., said he spoke privately with McConnell on Monday night on the Senate floor.
Rounds said he wants to create a fixed ratio between the least expensive plan and the most expensive plan that each company offers in a given state, though he did not offer details on how this goal would be achieved.
“Once you establish that, based on an actuarial determination, that ratio wouldn’t change,” Rounds said.
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