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McClintock Voted No On The Obamacare Budget

U.S. Congressman Tom McClintock voted no on the Obamacare budget.

McClintock was Wednesday’s KVML “Newsmaker of the Day”. Here are his words:

“Instead of a straight-forward measure to repeal Obamacare completely and to replace it with free market reforms that Republicans have long advocated, Congress has instead chosen a too-clever-by-half manipulation of the rules that I believe will make repealing Obamacare harder and slower, while further disrupting an already faltering health care market. Worse, by misusing the budget and reconciliation process, Congress has squandered its most important tools to bring spending under control before we bankrupt our country.

The annual budget sets levels of spending for the federal government. Once a budget is adopted, reconciliation provides for a single bill that can bypass the 60-vote procedural hurdle in the Senate – but it can only be used to the extent it modifies those provisions that have a direct fiscal impact on the Treasury. It can make no other changes. The joint leadership strategy is to use this process, in tandem with regulatory changes by the new Administration, to remove as much of the fiscal aspects of Obamacare as possible. It relies on follow-up legislation that will require 60-votes to actually repeal and replace Obamacare. And therein lies the problem.

Reconciliation does not repeal Obamacare. Rather, it takes out some parts and leaves others, making Republicans responsible for the ensuing market, without the votes to finish the job or replace it with free-market reforms. Since Senate Democrats are unlikely to cooperate on post-reconciliation fixes, we had better be very clear what the health care system will then look like under the best-case scenario.

Reconciliation can end the Obamacare subsides and replace them with tax credits. It can repeal the taxes and the tax penalty that is used to enforce the individual mandate. It can end the non-compliance penalties on businesses and return Medicaid to its pre-Obamacare condition.

However, reconciliation cannot repeal the underlying law. Insurance companies will still be required to offer Obamacare-compliant policies and still be required to guarantee issuance of policies. State governments will continue to be the primary enforcers of the insurance mandates, and will still have to approve any new plans.

In those states willing to approve non-compliant plans, insurers will have to decide whether to risk civil liability for selling consumers policies that are out of compliance with federal law.

HHS does have significant latitude through the regulatory process to re-define the parameters of many of these mandates, but the law will still require that the new HHS guidance is consistent with benefits found in a “typical” policy. It will still be bound by the Administrative Procedures Act that forbids changes that are considered “arbitrary and capricious.” And, ironically, this latitude will also depend on maintaining the Chevron deference doctrine. Chevron deference is a doctrine that courts will generally not question agency interpretation of laws – a doctrine the House has already voted to end.

What does all this mean to consumers? Since healthy people are no longer required to buy insurance and insurance companies are still required to issue policies to all comers, premiums for Obamacare-compliant plan premiums could sky-rocket. The availability of non-compliant policies will depend on how much legal risk insurers are willing to assume and whether the individual state is willing to approve them, meaning health insurance could become unavailable in many markets. The passage of follow-up legislation will be absolutely vital.

We are taking this path solely to by-pass a Democratic filibuster (because Senate Republicans stubbornly refuse to reform cloture) and to give the new President an early victory. We need to ask ourselves how this strategy is likely to play out. The House will send a reconciliation bill to the Senate. Under intense Democratic opposition, warning that it will cause chaos in health care, the reconciliation bill will pass and any follow-up legislation will be blocked. Obamacare will continue to collapse. Indeed, its collapse may accelerate because of added uncertainties in the market.

Democrats have already announced what their response will be: “Republicans passed this over our objections; we warned it would destabilize your health care; it has; and we Democrats will not let them get away with half-measures to try and mask the damage they’ve done.” The system will continue to deteriorate and public outrage will continue to build against Republicans for “breaking the ACA.” As the House sends reform measures over to the Senate, Democrats will block them with the refrain: “you broke it; you fix it; and this doesn’t do it.” The political dynamic, once favorable to Republican reforms, will have shifted. Under increasing public pressure, Republican attrition will ultimately force Congress to abandon the effort and extend Obamacare indefinitely.

Fortunately, there is an alternative. Pass a clean bill out of the House that completely repeals Obamacare and immediately replaces it with the patient-centered system long advocated by House Republicans. As Obamacare continues its collapse and public outrage mounts against Democrats for imposing the ACA, Republicans are in a strong position to say, “We warned Obamacare would fail; it has failed; here is the reform that will save your family’s health care; but the same Senate Democrats who created this fiasco now stand in the way.” With the House having passed the rescue bill, the President calling for it and Senate Republicans clamoring to pass it, pressure on the eight hold-out Democrats would be enormous. The Senate could then force Democrats to engage in a genuine filibuster until public pressure and Democratic attrition break it. The clean bill could then go to the President within months.

The tragedy is that if the “clean bill” option failed, the reconciliation option would still be available. Obamacare would continue to unravel on its own and the public would increasingly demand relief. But if the reconciliation option fails, the political dynamic will have already shifted, Republicans will have lost the high ground, and the clean bill option becomes improbable.

I also object to the misuse of the budget resolution for this purpose. Although it is described and intended as the pre-requisite for the reconciliation bill on Obamacare, it is nevertheless a budget resolution that maintains our current spending trajectory. Under the trajectory set by this resolution, the national debt will balloon from $20 trillion to $30 trillion over the next ten years and never balance. This poses a severe risk of a sovereign debt crisis within the decade. True, we are now beginning the 2018 budget process that can correct this trajectory – but only if the House passes it, which it failed to do last year. And it begins the 2018 budget process with Republicans having already endorsed an unsustainable fiscal course.

Now that we have a Republican president, the reconciliation bill is the most powerful tool we have to actually bring spending under control before we bankrupt our country – and we only get one per budget year. Not only is it ill-suited to repealing Obamacare, I am afraid that by using it in this fashion, we are squandering one of the last chances we have to bring mandatory spending under control before it bankrupts our country.”

The “Newsmaker of the Day” is heard every weekday morning at 6:45, 7:45 and 8:45 on AM 1450 and FM 102.7 KVML.