Tax Changes Likely in Senate Health Bill After Vote Stalls

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By Colleen Murphy and Laura Davison

Republican senators are likely to tweak the tax credits in their health care bill now that a vote on the measure won’t take place until after the Fourth of July recess, Sen. John Thune (R-S.D.) said.

A floor vote hadn’t yet been scheduled when Senate Majority Leader Mitch McConnell (R-Ky.) announced the delay during party conferences on June 27. Senators said they hope to figure out what could pass before leaving for the week-long break. Republican senators applauded the move, saying it gives them more time to settle differences on trouble spots such as Medicaid funding and coverage losses predicted in a June 26 Congressional Budget Office score.

“It affects a lot of people in a real way,” Sen. Bob Corker (R-Tenn.) said. “I think that some of the issues that people have raised, that are heartfelt issues to their own families, we exacerbate by the way the bill is now constructed.”

Pushing back the vote also gives Republican leadership more time to sway holdouts, such as Sens. Susan Collins (R-Maine) and Dean Heller (R-Nev.). Changes to the size of tax credits and the rollback of Medicaid in the bill could also be made without alienating conservative members who want to see market reforms, said Thune, the third-ranking Senate Republican.

Republicans can lose two votes and pass the measure, the Better Care Reconciliation Act, which is an overhaul of the Affordable Care Act. No Democrats are expected to support it.

Room for Change

The Senate bill would produce $202 billion more in net savings than the House-passed bill ( H.R. 1628) and would result in 22 million more people losing insurance over a decade, the CBO said.

“We’ve got some headroom fiscally we can work within on both the tax credits and the Medicaid provisions,” Thune said. “I would hope by the end of the week we have reached basically a conclusion with regard to the substance and the policy of this. Then it’s just a function of figuring out the timing.”

The Senate bill creates a system of tax credits that are adjusted based on age, income, and geography. The credits are capped at 350 percent of the federal poverty level instead of at 400 percent under current law. Credits in the House bill were only adjusted for age and capped at certain income levels.

A floor vote could be held soon after lawmakers return the week of July 10. Several senators threatened June 26 to vote against the procedural step needed to bring the measure to the floor, a signal of the deep disagreement over the bill as is.

“The politics of this doesn’t get any easier the longer you wait,” Thune said.

Thomas A. Barthold, chief of staff for the Joint Committee on Taxation, was seen exiting the Senate lunchroom June 27. Corker said he asked that the CBO’s scorekeepers attend the party lunches June 27 to answer technical questions.

Republican senators are expected to meet with President Donald Trump at the White House June 27. Vice President Mike Pence and White House press secretary Sean Spicer were also in the Capitol meeting with senators. Pence played a key negotiating role in the lead-up to the House’s May 4 vote.

On the Horizon

Passing a health bill would allow lawmakers to turn to their next policy priority: overhauling the tax code. Optimism about Republicans’ ability to pass tax reform legislation has waned in recent weeks as the House, Senate, and White House have failed to agree on a tax reform framework and the health care bill faced a series of delays as it moved through the legislative process.

Sen. Marco Rubio (R-Fla.) told Bloomberg BNA he didn’t think a two-week delay on a health care vote would affect tax reform. But it’s necessary for health care legislation to pass so Congress can undertake a comprehensive tax overhaul, he said.

“The more you do on health care, the more options you have on tax reform,” Rubio said.

House Ways and Means Committee Chairman Kevin Brady (R-Texas), the point-person on tax reform in that chamber, previously said the Senate’s progress on health care was encouraging, but that it wouldn’t be a deal breaker if the vote took place after the July 4 recess.

While health care is on the table “it’s hard to focus,” Rep. Devin Nunes (R-Calif.), a committee member, told Bloomberg BNA.

To contact the reporters on this story: Colleen Murphy in Washington at cmurphy@bna.com; Laura Davison in Washington at lDavison@bna.com

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

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