We’re very close to a grand bargain endgame, it appears, where the White House will claim they got revenues and the Republicans will claim that the revenues are only theoretical. A lot rides on a “trigger” for additional revenues and entitlement cuts if goals are not reached. This allows lawmakers to defer tough questions on those topics with a fail-safe attached. In one rendering, the high-end Bush tax cuts would expire if the tax reform didn’t come off. But another piece has come into the discussion:
That framework includes spending cuts, plus entitlement changes and increased tax revenues (as part of a tax overhaul) that would come later. But there are two big hurdles left: 1) on the substance, and 2) on soothing egos. On the substance, the most contentious matter is how you “trigger” the provisions to guarantee completing tax and entitlement reform. The Democrats have offered a trigger of letting the Bush tax cuts expire for those making $250,000 or more. Republicans, meanwhile, have countered that if those Bush tax cuts are hanging in the balance, they’d offer a trigger of their own to ensure Dem action: scaling back Obama’s health-care law and eliminating the mandate. Bottom line: If entitlement and tax reform is completed on time, then the Bush tax cuts and the health-care law don’t get touched. Also on the substance front, we’re hearing that there’s yet to be an agreement on the scope of the entitlement changes. And never mind the actual individual cuts on the discretionary side. Details, details. The K Street Army is gathering forces if this deal goes through because we haven’t seen this much change in the way government spends and gathers money in a generation.
I have only seen the Affordable Care Act changes discussed as a proposal that Republicans have offered. There hasn’t been any reporting that the White House accepted it. But there has been reporting that the trigger on the Bush tax cuts has been dropped, which means the revenue would be totally aspirational. That’s what riled Senate Democrats yesterday.
Some people may see this as just an end to the mandate, and not be all that concerned about it. I seriously doubt it would stop there. A separate report said that not only would the Administration consider the blended rate proposal for Medicaid, which would lower federal participation, they would rewrite the rule that funded almost all of the Medicaid expansion over the next five years. This would almost certainly result in far less enrollees under Medicaid than envisioned in the ACA. And half of the ACA’s coverage expansions come from Medicaid. So this would be not just a gutting of the mandate, but a gutting of the whole law, including its most valuable portions.
I find it hard to believe that, in pursuit of a big deal, the President would undercut the only signature law he passed in his first term. But the need for a grand bargain has bordered on monomania. If the President is bluffing, and making Republicans an offer they can’t accept, he’d doing a great job of hiding it.