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Individual Mandate Attached to Senate Tax Bill, Finance Members Say

Posted on November 15, 2017 by Dylan F. Moroses

As a way to offer more middle-income tax relief, Senate Finance Committee Republicans appeared to agree November 14 to include the repeal of the Affordable Care Act’s individual mandate in their tax reform bill.

Senate Republican Whip and Finance Committee member John Cornyn of Texas told reporters he thinks including the individual mandate repeal will “help us get to 50 votes.”

“It will give us some flexibility to use to pay down rates” for individuals and businesses, Cornyn said.

Revenue from repealing the individual mandate will "be distributed in the form of middle-income tax relief," Finance Committee member John Thune, R-S.D., told reporters. Thune said the move to repeal the mandate will likely require changes to the rate structure in the Senate's bill and that he expects seven brackets will be maintained but at different rates.

According to a Congressional Budget Office analysis on the individual mandate, repealing the provision would result in a $338 billion deficit reduction over a decade, mainly because the government would administer fewer subsidies since people would choose not to purchase health insurance.

By press time, Finance Committee Chair Orrin G. Hatch, R-Utah, had yet to unveil a new chair’s mark, which was expected late November 14. The individual mandate repeal is expected to be among several changes included in the updated chair’s mark, although other changes remained unclear. During an exchange with Finance Committee ranking minority member Ron Wyden, D-Ore., Hatch only suggested the new language would be introduced “later today.” Talking to reporters, Hatch said “you’ll have to see” when asked whether the individual mandate repeal would appear in the Senate GOP tax bill.

Finance Committee Republican Dean Heller of Nevada told Tax Analysts he was initially skeptical of including healthcare policy provisions in the Tax Cuts and Jobs Act, but said he would support the language if it were brought to a vote in the committee.

Outside the Finance Committee, other Senate Republicans said they expected the individual mandate repeal to be included in the bill before it leaves the taxwriting panel. Sen. Ted Cruz, R-Texas, told reporters there is “growing consensus” that the provision should be included.

“The mandate is profoundly unpopular," Cruz said. "It is profoundly unfair by the IRS fining people that can’t afford to be fined, and it provides savings, repealing this, that are sufficient to provide even more tax relief to even more hard-working Americans. I think the policy merits are really what’s driving this [as] more and more senators are seeing this as a win-win for everyone involved."

Senate Majority Leader Mitch McConnell, R-Ky., praised the Finance Committee's decision to include repeal of the individual mandate in its tax reform bill, saying at a November 14 Wall Street Journal CEO Council meeting that it would “give us a shot” at making the corporate tax rate permanent and provide additional funding to “plus-up the middle-class tax relief.”

He also dismissed the idea that bringing healthcare policy into the tax debate could derail the effort. “Every single member of my caucus . . . is opposed to the individual mandate,” including the GOP senators who voted against healthcare reform bills earlier in the year, McConnell said. He added that the individual mandate’s burden falls mostly on low-income individuals.

Earlier, White House National Economic Council Director Gary Cohn joined a chorus from the White House urging repeal of the individual mandate to be included in tax reform. Doing so would be “a real win,” Cohn said, echoing remarks by Treasury Secretary Steven Mnuchin the previous night.

On other items that could be addressed in the updated chair’s mark, Thune suggested that “we have a couple of issues to deal with to wrap it up, but I don’t think you’ll see a lot of amendments adopted” beyond the mark.

Upon hearing about Republican plans to include the individual mandate repeal, Wyden offered a motion — which failed — to adjourn until November 15. Wyden told reporters outside the committee markup that eliminating the individual mandate would cause health insurance premiums to rise because fewer healthy people would purchase healthcare.

The Republican plan would take healthcare away from millions and raise insurance premiums on millions more to help reduce taxes for the wealthy, according to Senate Minority Leader Charles E. Schumer, D-N.Y., who added that the repeal is a "backdoor attempt" to revive "Trumpcare."

"Does that sound familiar?" he asked. "Well it does to us, because that's why the healthcare bill failed, and that is why their tax bill is going to fail as well."

Jonathan Curry, Stephen Cooper, and David van den Berg contributed to this article.

Follow Dylan Moroses (@DMoroses3244) on Twitter for real-time updates.