GOP may keep some Obama tax increases to save health bill

Protesters block a street during a protest against the Republican bill in the U.S. Senate to replace President Barack Obama's health care law Tuesday, June 27, 2017, in Salt Lake City. Demonstrators with Utah's Disabled Rights Action Committee chanted and carried signs while blocking State Street Tuesday afternoon. Utah protesters criticized Utah Republican Sen. Orrin Hatch for supporting the bill and say it will cut life-saving Medicaid services and other health protections. (AP Photo/Rick Bowmer)

WASHINGTON (AP) — Senate Republican leaders considered keeping one of former President Barack Obama’s big tax increases on wealthier Americans and using the money to fatten proposed subsidies for the poor in a bid Thursday to placate moderate GOP lawmakers and salvage their struggling health care bill.

With a core priority tottering, top Republicans also assessed an amendment pushed by conservatives to let insurers offer plans with low premiums and scant benefits. To do so, a company would also have to sell a policy that abides by the consumer-friendly coverage requirements in Obama’s 2010 statute, which the GOP is struggling to repeal.

Both proposals were encountering internal Republican opposition, and it was uncertain either would survive. But the effort underscored how Senate Majority Leader Mitch McConnell, R-Ky., needed to mollify both wings of his divided party if he’s to rescue one of his and President Donald Trump’s foremost campaign promises.

McConnell postponed a vote on an initial version Tuesday, forced by conservative and moderate GOP senators prepared to block it.

By Friday, McConnell wants to add changes to the bill that would assure its passage after Congress’ week-long July 4 recess. For him to prevail, no more than two of the 52 GOP senators can oppose the measure.

But as senators charged out the Capitol’s doors Thursday to begin their break, there were no overt indications that GOP leaders had resolved their problems.

“We’re kind of at a stalemate right now, I’d say,” said Sen. Shelley Moore Capito, R-W.Va., who with Ohio GOP Sen. Robert Portman and others want to forestall reductions the measure would make in Medicaid. Discussions about easing those cuts were continuing, but progress so far was “not enough for me,” said Sen. Dean Heller, R-Nev.

The Medicaid program for low-income and disabled people has grown dramatically in their states and others, but the Republican bill would cut it, with reductions growing over time.

Sen. Bill Cassidy, R-La., said that while GOP leaders might have a package in hand Friday, “I’m not confident that’s going to, kind of, solve everybody’s concerns.”

Vice President Mike Pence met in the Capitol on Thursday with Capito, Heller and other GOP dissidents, including Sens. Susan Collins of Maine and Texas’ Ted Cruz.

The Senate bill would repeal most of the tax boosts Obama levied, around $700 billion over the coming decade. They were aimed largely at high earners and the medical industry and helped finance his expansion of coverage to about 20 million people.

Under a proposal by Sen. Bob Corker, R-Tenn., the bill would retain Obama’s 3.8 percent tax increase on investments by higher earners. Keeping that increase would save $172 billion over 10 years, and moderates want to use it to make the health care subsidies their bill would provide more generous.

Democrats say the GOP bill is mostly a tax cut for the rich. The nonpartisan Congressional Budget Office has said the Senate measure would raise out-of-pocket health care costs for many low earners while producing 22 million more uninsured people by 2026.

Corker said he was “very confident” that leaders would address the issue in the updated bill. He said cutting upper-income taxes and increasing health care costs for the poor “is not an equation that works.”

“Obviously we’d like to get rid of all” of Obama’s tax boosts, said No. 3 Senate GOP leader John Thune of South Dakota. “But if it takes something like that to get our members on board to move this process forward, I think we have to consider that.”

Conservatives said they opposed the idea, along with the chairmen of Congress’ two tax-writing committees: Senate Finance chairman Orrin Hatch, R-Utah, and House Ways and Means chairman Kevin Brady, R-Texas.

Obama’s health law enacted an additional 3.8 percent tax on investment income for married couples making more than $250,000 a year and individuals making more than $125,000.

Also in play was the proposal by Cruz to let insurers offer skimpier policies, which conservatives say would lower premiums.

Moderates oppose that, especially if it lets insurers raise premiums on people with pre-existing medical problems. No. 2 GOP leader John Cornyn of Texas suggested the proposal might not survive because Senate rules won’t allow it on the bill.

The leader of the conservative House Freedom Caucus suggested the Senate bill would be doomed if it excluded something like Cruz’s plan or House-approved provisions letting insurers charge higher prices to people with serious diseases. Many expect the House to try for quick passage of any health care bill the Senate approves, foregoing potential problems of negotiating a bicameral compromise.

“Is failure an option? Absolutely not,” said Rep. Mark Meadows, R-N.C. “Is failure on the doorstep knocking? Absolutely. So we’ve got to make sure we don’t answer that door.”

Republicans also said party leaders agreed to add $45 billion for battling opioids abuse to their bill. They were also considering a proposal by conservatives to let people use tax-advantaged health savings accounts to pay health care premiums.

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