FISCALAMITY SEPTEMBER 18, 2013
House Republican leaders finally have a plan. On Wednesday, at a meeting of the party’s full caucus, Speaker John Boehner announced how he intends to approach the two big fiscal issues on the agenda—funding the government past October 1 and authorizing the Treasury to borrow money so it can pay the government's outstanding bills. Conservatives have said they don’t want to take either step unless President Barack Obama and the Democrats agree to defund or delay Obamacare. On Wednesday, Boehner basically said, OK, let's try that!
Under his new plan, House Republicans will approve a “continuing resolution” to fund the government after October 1, when the existing C.R. expires. But the new spending bill will include a provision defunding Obamacare. Senate Democrats have made clear they won’t approve such a bill—and, even if they did, Obama would never sign one. In theory, the House could then pass a “clean” C.R. without the Obamacare provision. But Boehner might not have the votes to do that. And because Boehner's proposal will also include domestic spending at levels lower than most House Democrats support, Boehner can't count on Nancy Pelosi to deliver members of her caucus. That makes passage of anything a lot less likely—and a government shutdown a lot more likely.
That's part one of the plan. In part two, which Majority Leader Eric Cantor outlined, Republicans would attach an Obamacare provision to legislation raising the Treasury's debt ceiling. This provision apparently wouldn’t defund Obamacare per se. Instead, it would delay implementation for one year, in exchange for about one year’s worth of borrowing authority. But the point of the delay is to defund and destroy the law, as conservatives will happily tell you: "If it can be delayed once, it can be delayed again and again, and then repealed," Jeffrey Anderson and James Capretta write in the Weekly Standard. Of course, Democrats know this too. And Obama has sworn not to negotiate over the debt ceiling. Stalemate could ensue, leaving the government with no way to pay existing bills on time. Even the threat of such default could hurt the economy, just as it did during the debt ceiling debate of 2011.
The right's obsession with Obamacare is no longer surprising. As Jonathan Chait explains this week in New York magazine, opposition to the law "has come to fill the place in the conservative psyche once occupied by communism and later by taxes: the main point of doctrinal agreement." But the decision to tie Obamacare to these spending debates has its skeptics, starting with Boehner himself. He has warned that Republicans are likely to take the blame if the government shuts down. And he has said that default is not an option the U.S. should contemplate. His lieutenants seem to agree, as does most of the conservative establishment. Just the other day, the Wall Street Journal editorial page urged House Republicans not to threaten a shutdown or default over Obamacare, because Obama and the Democrats would never go for it—and Republicans would take the blame. But agitators on the right, like Senator Ted Cruz and former Senator Jim DeMint, see things a little differently. (You can read my theories for why here.) And because they can credibly threaten to rally right-wing voters against legislators who dare not support Obamacare delay and defund demands, Boehner and the leadership are giving in.
I imagine most of the coverage you’ll read in the next few days will focus on strategy—and the apparent insanity of what House Republicans are about to do. It's a newsworthy subject. How often is the Journal editorial page the voice of reason? But I think it’s worth pausing to think about the substantive implications of delaying and defunding Obamacare—a position that, strategic calculations aside, Boehner and the conservative establishment support fully.
In his press conference, Boehner said "it’s time to protect American families from this unworkable law." And he probably had in mind some of the law's very real failings and shortcomings, from implementation delays (about which you’re likely to hear more soon) to real disruptions (like part-time workers losing some hours). But the “unworkable” law actually works rather well in Massachusetts, the one state that launched a similar program several years ago. And already large numbers of people are better off. Millions of young adults have gotten health insurance, thanks to a provision that allows people under 26 to stay on their parents’ policies. Health care costs are growing more slowly than they have at any point in recent memory, and most experts think Obamacare is partly responsible.
Delaying or defunding Obamacare might or might not jeopardize these gains. But it would certainly stop the rest of the law from going forward. And the human toll from such a decision would be huge. The Congressional Budget Office estimates that, because of the law, the number of people without health insurance will fall by 14 million next year—and then nearly double, to 27 million, in the three years after that. As Robert Greenstein of the Center on Budget and Policy Priorities noted Tuesday, after the release of the latest Census report on income and health coverage, “This will represent the greatest improvement in nearly 50 years in health insurance or poverty due to a piece of legislation or other policy.”
Take away Obamacare, and those gains never happen. Nor is it just the uninsured who stand to lose out. Repeal Obamacare and people lose out on regulations guaranteeing them minimum levels of coverage, prohibitions of annual and lifetime limits, and (for low-income people buying on their own) extra protection against out-of-pocket spending. The benefits that Obamacare delivers come at a cost: Even the laws' defenders concede that some young, healthy people will pay more for coverage; the wealthy already owe more in taxes; parts of the health care industry are facing changes and sometimes decreases in revenue. But while Republicans claim Obamacare will bankrupt the country, the CBO disagrees. It predicts that the law will save money—and the repeal would actually drive up the deficit.
Does insisting on Obamacare defunding and delay defy political logic? Yes. But it’s the substantive claims Republicans make—the argument that a world without Obamacare is better than a world with one—that deserve the most scrutiny.
Jonathan Cohn is a senior editor at the New Republic. Follow him on twitter @CitizenCohn