Republicans on the House Budget Committee, led by Rep. Paul Ryan, have released a new memo outlining the possible roadblocks to Democrats’ strategy of passing the Senate health care bill with the promise that the Senate would be able to make changes to it through the reconciliation process. I’d like to highlight a few of the key issues it raises.
The reconciliation instructions in last year’s budget said that any health care changes adopted through reconciliation would have to reduce the deficit by $1 billion between 2010 to 2014. The problem is, once the Senate bill is passed into law, Democrats can no longer claim its deficit reduction. The separate reconciliation bill must be scored to reduce deficits by $1 billion. But most of the changes that were in President Obama’s proposal (that is believed to have formed the basis for the reconciliation “fix” bill) would increase deficits relative to the Senate bill. That includes the expansion of federal Medicaid payments, more subsidies for the purchase of insurance, closing the Medicare prescription drug “donut hole,” and delaying the “Cadillac tax” on high value plans. These changes would cost about $75 billion, according to the White House. To meet the deficit cutting target, they’d have to raise more than that in tax revenue, but according to the House Republicans, the tax hikes Obama has already outlined are unlikely to be sufficient.
The Democrats’ strategy could also clash with pay-as-you-go (PAYGO) rules, according to the GOP document, because a lot of the deficit reduction that shows up in the CBO report would not count. Most notably, savings from Social Security and premiums collected from the new long-term care insurance program (or CLASS Act) could not be claimed. “Just making the adjustments for off-budget savings and the CLASS Act, the Senate-passed bill would increase the deficit by $5 billion through FY 2019, according to CBO’s cost estimate (CBO has not produced an estimate for FY 2020),” according to Republicans.
In addition, the document notes that House Democrats would have to be willing to take a leap of faith in approving the Senate health care bill. Even if at least 50 Senate Democrats sign a letter promising to make changes via reconciliation, they won’t be able to know ahead of time which measures would be able to survive challenges during the complicated reconciliation process.
Download a PDF of the full memo below.