GOP Gimmick on Obamacare Repeal? Ignore the Math

(Bloomberg View) -- Republicans are playing games and using gimmicks as they struggle to repeal and replace the Affordable Care Act.

The height of this chicanery is that two House committees are drafting the legislation without analysis of the budgetary and insurance-coverage implications other than partisan claims.

An undertaking on that scale would usually have access to analysis from the nonpartisan Congressional Budget Office. But the CBO hasn't yet been able to score the hastily assembled legislation. And Republican leaders reportedly have not been encouraged by early discussions with the office, which is headed by Republican economist Keith Hall, who in the tradition of that job has a reputation for straight-shooting, detached analysis.

Ultimately, maybe in the House, and certainly if the bill reaches the Senate, Republicans will have to deal with CBO estimates, though early actions suggest they may try to ignore or brush aside the calculations.

"It's incomprehensible that any member can vote on something this significant without knowing how it affects the bottom line," charges Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget.

During the Obama years, it was the Republicans who demanded that everything be scored by the CBO before any action was taken. The office was set up more than 40 years ago to give Congress a nonpolitical, professional estimate of the cost of programs. It has, on occasion, drawn criticism from both parties, but it commands widespread respect.

The bills that will start winding through the House make other dubious claims. To avoid running afoul of budgetary restrictions, the authors of the legislation say the tax on expensive health-care plans, considered a cost-savings measure, will only be suspended for 10 years. But, privately, their calculation is that in a decade they can keep suspending it, making a mockery of budget restraints.

The Republican plan placates some governors whose states benefit from Obamacare's expansion of Medicaid coverage by continuing that program. But it does so only for several years, after which most of those current governors no longer will be in office.

The legislation still might meet resistance from some Republicans in the Senate where, under special rules, it only will take a majority to pass it. Thus, if Democrats remain unified in their opposition, Republicans couldn't afford to lose more than two of their members.

Few, if any, Democrats will support the legislation, as it now stands. While it stresses market-based solutions and consumer-friendly tax credits, in reality the plan provides a huge tax cut for the wealthiest Americans and cuts back on health-care funding for the poor.

The Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, estimated that a similar Republican proposal last year would have provided a tax cut of an average of $197,000 for the top one-tenth of 1 percent of taxpayers. This is because most Obamacare taxes that funded expanded coverage would be eliminated, including the 3.8 percent levy on net investment income over $250,000.

Moreover, some of this lost revenue would be offset by eventually cutting back on federal assistance for Medicaid, the federal-state program of health coverage for low-income citizens and some with disabilities.

The Kaiser Foundation, which specializes in health-care policy, assembled a preliminary calculator comparing the tax-credit benefits under Obamacare with those under the Republicans. Generally, this finds that older and lower-income people do better under Obamacare, while younger and higher income citizens "may receive larger assistance" under the replacement plan.

The Trump White House, so far, is backing the Republican efforts, and there is already talk that it plans to attack the CBO's analysis and budget estimates, which are likely to complicate subsequent Republican tax and spending initiatives. 

"It's inconceivable they would want to engage in a war on the CBO," says Douglas Holtz-Eakin, a prominent Republican economist who used to head that office.

But with this president, not much seems inconceivable.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Albert R. Hunt is a Bloomberg View columnist. He was the executive editor of Bloomberg News, before which he was a reporter, bureau chief and executive Washington editor at the Wall Street Journal.

To contact the author of this story: Albert R. Hunt at ahunt1@bloomberg.net.

To contact the editor responsible for this story: Katy Roberts at kroberts29@bloomberg.net.

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