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You're Hired: Tracking the Trump Administration Transition - July 19, 2017
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This is the July 19, 2017, edition of an email sent from November 2016 to September 2017 that covered Donald Trump's presidential transition, cabinet appointees, and the different policy positions of those individuals who may have had an effect on the new administration. Previous editions of "You're Hired" can be found here.
In today’s edition, we look at the Trump administration’s legislative priorities in the wake of an unsuccessful attempt by Republicans in Congress to pass healthcare legislation modifying key provisions of the Affordable Care Act (ACA) this week.
The future of healthcare
What was the healthcare bill?
The Better Care Reconciliation Act of 2017 (BCRA) was released on June 22, 2017. The bill was the Senate's version of the American Health Care Act (AHCA), which was passed by the U.S. House of Representatives on May 4, 2017.
The bill was a reconciliation bill, meaning it would have affected the budgetary and fiscal provisions of the ACA—commonly known as Obamacare—and did not contain a provision to repeal the law in its entirety. The bill proposed repealing the individual and employer mandates, adjusting the ACA's system of tax credits, and ending the ACA's Medicaid expansion. Medicaid funding would have also been converted from an open-ended entitlement to a per-member amount.
For a complete rundown of the bill, click here.
What happened to it?
Assuming Vice President Mike Pence would have broken a tie vote in the Senate, the healthcare bill needed at least 50 votes to proceed. By Monday, at least four Republican senators had said they would vote no on the revised version of the bill, leaving it two votes short:
- Sen. Rand Paul (R-Ky.): "I think it's worse. The old version repealed most of the Obamacare taxes; this repeals about half the Obamacare taxes. We were elected on a message of repeal, and this bill doesn't repeal Obamacare.”
- Sen. Susan Collins (R-Maine): "It is very likely I will vote no on the motion to proceed. The only thing that could change that is if the CBO analysis which comes out on Monday indicates that there would be far fewer changes in Medicaid than I believe there are now."
- Sen. Jerry Moran (R-Kan.): "This closed door process has yielded the BCRA, which fails to repeal the Affordable Care Act or address healthcare's rising costs. For the same reasons I could not support the previous version of this bill, I cannot support this one."
- Sen. Mike Lee (R-Utah): "After conferring with trusted experts regarding the latest version of the Consumer Freedom Amendment, I have decided I cannot support the current version of the Better Care Reconciliation Act. In addition to not repealing all of the Obamacare taxes, it doesn't go far enough in lowering premiums for middle class families; nor does it create enough free space from the most costly Obamacare regulations."
On July 17, 2017, Senate Majority Leader Mitch McConnell (R-Ky.) said that his party was unable to agree on a final version of the BCRA and would instead vote on a bill to repeal, but not replace, the ACA.
"As of today we just simply do not have 50 senators who can agree on what ought to replace the existing law. What we do have is a vote that many of us made two years ago at a time when the president of the United States would not sign the legislation that would repeal Obamacare and with a two-year delay give us an opportunity to build something better on a bipartisan basis,” McConnell said on Tuesday.
What comes next?
Although McConnell indicated he would push for a vote to repeal the ACA without replacement legislation early next week, four Republican senators came out in opposition to this approach on Tuesday and Wednesday:
- Sen. Susan Collins (R-Maine)
- Sen. Shelley Moore Capito (R-W.Va.)
- Sen. Lisa Murkowski (R-Alaska)
- Sen. Rob Portman (R-Ohio)
Some members of the Senate like Richard Shelby (R-Ala.) still want the vote. “We ought to vote and people ought to be recorded up or down because a lot of promises were made when they ran and some people seem to be nervous about keeping their promise," he said.
“My guess is we’re now headed toward normal committee activity, take 60 votes on the floor to try to solve these significant problems one at a time," said Sen. Roy Blunt (R-Mo.).
The upcoming August congressional recess, however, has placed additional pressure on Republicans to move forward with a vote. Although President Donald Trump said on Tuesday that allowing the ACA to collapse would make it easier for Republicans to change healthcare in the future, he called on Congress today to remain in Washington, D.C., until Obamacare was, at the least, repealed.
“My message today is very simple. We have to stay here. We shouldn’t leave town until this is complete, until this bill is on my desk,” Trump said during a lunch meeting with Senate Republicans at the White House.
Looking ahead to the Trump administration’s tax agenda
With the effort to repeal and replace the ACA halted for now, the Trump administration will turn its attention to the tax code this fall.
What has the White House already proposed?
The Trump administration released an outline of its tax agenda called the "2017 Tax Reform for Economic Growth and American Jobs" on April 26, 2017. According to the administration, the desired changes are revenue-neutral and simplify the tax code. Trump’s tax plan includes the following proposals:
- Reducing the seven tax brackets to three tax brackets paying 10 percent, 25 percent, and 35 percent;
- Doubling the standard deduction;
- Providing tax relief for child and dependent care expenses;
- Keeping homeownership and charitable gift tax deductions;
- Repealing the alternative minimum tax;
- Repealing the death tax;
- Repealing the ACA’s 3.8 percent investment tax;
- Lowering the corporate tax rate to 15 percent; and
- Establishing a one-time tax on overseas holdings.
Here are some of the tax items that have also been under consideration in the past few months, according to news reports:
- Border adjustment tax: Part of a proposal from Reps. Paul Ryan (R-Wis.) and Kevin Brady (R-Texas), this would tax imports but not exports. Supporters of this idea say it would improve manufacturing in the United States and increase the number of American workers. Those who oppose such a tax argue that it would put restrictions on industries that rely on imports, like large retail.
- Reducing payroll tax: Trump has also discussed reducing or eliminating the payroll tax in an effort to reduce taxes on middle-class families. This would, however, reduce or eliminate the way that the federal government funds Social Security.
- Full immediate expensing: This would allow businesses to write off new investments in the year that those investments are made.
What comes next?
Some of Trump’s proposals are likely to be modified as the White House and Republican congressional leadership negotiate the details of the tax bill. For example, Reuters reported on Monday that Republican members of Congress would prefer to see a corporate tax rate between 20 and 25 percent, rather than Trump’s campaign pledge of 15 percent.
Trump is also expected to hit the road to promote the tax plan in the fall, focusing on the Midwestern states essential to his 2016 presidential victory.
Before any tax bill can be put forward, Congress must pass its budget for the next fiscal year. The House Budget Committee released a draft budget on Tuesday.
See also
- You're Hired: Tracking the Trump Administration Transition
- Donald Trump presidential transition team
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