Senate Republicans Ready to Repeal ACA Without Democrats

For over 50 years, Bloomberg Tax’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...

By Colleen Murphy

The Senate is ready to repeal the Affordable Care Act without any help from Democrats, Senate Majority Leader Mitch McConnell (R-Ky.) said.

McConnell said he hopes to move forward on dismantling the ACA “just as soon as we have the votes,” and said he expects little to no cooperation from Democrats on a replacement plan. Senate Republicans plan to pass a repeal bill using filibuster-proof reconciliation, meaning they can lose two Republican votes and don’t need Democratic support to move it.

“It’s clear that in the early months it’s going to be a Republicans-only exercise,” he said during a Feb. 17 news conference.

The admission comes a day after House Republicans met to rally around a plan to dismantle the law. Republican leadership distributed a briefing paper to conference members, which was obtained by Bloomberg BNA, that says the GOP conference is committed to offering monthly tax credits and loosening restrictions on tax-favored health savings accounts as part of their overhaul.

Congress is out for the next week. House Speaker Paul D. Ryan (R-Wis.) said Republicans will introduce a repeal-and-replace bill upon their return. Over the break, many lawmakers will hold town halls in their districts, which have become for the past several weeks a battleground for voters’ ire over efforts to dismantle the law.

McConnell said he wasn’t concerned about town hall protesters, adding “I can’t think of anything we’ve talked about more on both sides than Obamacare.”

Staying Relatively Mum

McConnell declined to say what elements of a replacement plan would need to be included in repeal legislation, something many Republicans say they need to see in order to back it, saying he wouldn’t reveal “every part of where we’re headed.” House leadership has been similarly vague, though they have promised to incorporate as many replacement elements into a repeal bill as possible.

The ACA’s taxes would be scrapped and penalties would be zeroed out during the transition period, according to the House document, a move that mirrors 2015 repeal legislation that passed Congress but was vetoed by former President Barack Obama. Republican leaders say the law’s taxes hurt families who already can’t afford insurance because of ballooning premiums.

Both spouses could make catch-up contributions to HSAs under the plan, according to the document, an idea also included in a bill introduced Feb. 16 by Senate Finance Committee Chairman Orrin G. Hatch (R-Utah), Sen. Marco Rubio (R-Fla.) and House Ways and Means Committee member Erik Paulsen (R-Minn.).

House Republicans have floated a cap on the employer health insurance tax exclusion as a way to fund replacement legislation. However, some critics of the plan, including some House Democrats, say it looks too similar to the reviled “Cadillac tax,” a 40 percent excise tax on parts of high-cost health plans.

‘Right Track.’

Though McConnell didn’t address the House document, it has drawn some interest from Republican senators.

“I think they’re on the right track,” Sen. John Thune (R-S.D.) told reporters, adding he hasn’t carefully analyzed the document.

Sen. Bill Cassidy (R-La.)—who introduced a replacement bill in January that keeps the law’s tax provisions in place—said he appreciated the use of refundable tax credits in the House paper.

“When I look at it, sure, there’s differences, but are we to a point where we have common ground? Absolutely,” he said.

To contact the reporter on this story: Colleen Murphy in Washington at cmurphy@bna.com

To contact the editor responsible for this story: Meg Shreve at mshreve@bna.com

For More Information

Text of the House briefing paper is at http://src.bna.com/miZ.

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Daily Tax Report