Democrats and Republicans in the Senate have nearly completed a deal that would reopen the government and increase the Treasury Department's debt ceiling. President Obama has signalled his support, as have Democratic leaders in the House. But House Republicans aren't ready to give up on their dream of threatening shutdown and default to extract concessions. They're making yet another counter-offer, with some of the same demands Democrats rejected perviously—even though, within two days, Treasury is likely to exhaust the "extraordinary measures" it's been using to pay its bills.
Yes, it's the same old story as before.
Speaker John Boehner and his lieutenants met with the GOP caucus this morning. The subject was that emerging compromise in the Senate, which leaders Harry Reid and Mitch McConnell have been crafting since the weekend. That deal would provide the government with enough funding to last through January and increase the debt ceiling by enough to last through February. It would also establish bipartisan talks on fiscal policy, to deal (among other things) with the impending cuts from budget sequestration.
Originally, the compromise called for two apparently minor changes to Obamacare—new guarantees that people buying private insurance on their own were not defrauding the government, and delay of a special “reinsurance tax” designed to insulate insurers from the initial impact of taking on customers with serious medical conditions. As of Tuesday morning, the reinsurance provision was no longer part of the deal, although the precise contours of the deal were still in flux.
House leaders, who had started this fight in order to repeal or at least seriously weaken Obamacare, were not happy with the work product of what they are now calling the “surrender caucus.” One told National Review’s Robert Costa that the Senate plan was a “mushy piece of sh*t.” Another said, “If Boehner backs this, as is, he’s in trouble.” Not surprisingly, Boehner listened.
He and his allies are now talking about a new plan, according to multiple media reports. Instead of delaying the reinsurance tax, the new deal would delay or diminish a tax on makers of medical devices. The timing of the funding and debt limit extensions might be different. House leaders also want to prohibit members of Congress, the president, and his cabinet from using their employer contributions in the new insurance markets. The new version would be less far-reaching than the previous ones, which would have also affected congressional staff. The part about the president would appear to be symbolic, since, as far as I know, he and his family get their medical care from an in-house physician and military hospitals.
Oh, and there was talk—via Politico—that House Republicans would walk out the door after passing their bill, so that the Senate's only option was to accept or reject what the House produced.
Why wouldn't the Senate just say yes? Swapping out the reinsurance tax delay and swapping in the device tax delay is nothing more than substituting one special interest favor for another—instead of doing a favor for unions and employers, which hate the reinsurance tax, the House agreement would be doing a favor for the device industry.
But, without an offsetting cut or new source of revenue, the swap would also deprive the government of some money. (It’s supposed to generate $30 billion over ten years.) There's also a principle at stake. The architects of the Affordable Care Act, particularly those inside the administration, fought hard for provisions that would offset the law’s new costs, so that it would actually reduce the deficit. Those provisions included fees from or cuts to every part of the health care industry. If device-makers get a break, other groups, like hospitals and drugmakers, will want one too.
That may help explain why Democratic leaders are slamming the door on this idea. Here was White House spokeswoman Amy Brundage, in a prepared statement
Members of Congress don’t get to demand ransom for fulfilling their basic responsibilities to pass a budget and pay the nation’s bills. Unfortunately, the latest proposal from House Republicans does just that in a partisan attempt to appease a small group of Tea Party Republicans who forced the government shutdown in the first place.
Senate Majority Leader Harry Reid was even more blunt:
Introduction of this measure by House Republican leadership is unproductive and a waste of time. Let’s be clear: the House legislation cannot and will not pass the Senate, and the White House has said President Obama will not support it.
I am very disappointed that John Boehner would once again try to preserve his role as Speaker of the House at the expense of the country.
We have worked hard to rise above partisanship and find common ground in the Senate for the good of the nation. I am disappointed that Republicans in the House are trying to sabotage that success.
A source close to the negotiations emphasized that Democrats saw income verification as a concession they would make only in return for something like the reinsurance tax—in other words, they could support it as part of a routine one-to-one trade. But, the source added, “Medical device has been out for a while.”
The big question for now is whether the new House plan can even pass. Nobody seems too confident about that. Tea Party Republicans are angry, because it still wouldn’t do much to weaken Obamacare nor would it accomplish other conservative goals. "I don't know if it would pass the House or not," Alabama Republican Congressman Mo Brooks told Sahil Kapur, of Talking Points Memo. "There are sincere, deep thoughts of concern," said Congressman Walter Jones of North Carolina. But it's not like Boehner can count on Democratic support, either. Democratic Leader Nancy Pelosi is reportedly telling rank-and-file to vote no and Maryland Congressman Chris Van Hollen, who is close to leadership, told the Washington Post’s Greg Sargent that might get no Democratic support at all. (Pelosi counts votes a lot better than Boehner does, which is a pretty clear sign that the bill won't pass.)
The Senate bill, by contrast, is likely to pass. And it is likely to pass with substantial Republican support. When it comes over to the Senate, will Boehner allow a vote, even though it would likely pass with the Democratic votes that Boehner's own bill can't? Or would he try to concoct one last, desperate offer? Boehner said very little at his morning press conference, which could mean he's keeping his plans a secret—or that he's got no plans at all.