The Senate will start its scheduled August recess two weeks late to work on legislative priorities, Senate Majority Leader Mitch McConnell, R-Ky., announced July 11 as lawmakers await an updated draft of the Better Care Reconciliation Act (BCRA) and a new Congressional Budget Office score.
Few details on the GOP legislation were available ahead of its expected release on July 13, but lawmakers speculated about the fate of the Affordable Care Act’s 3.8 percent net investment income tax on high-income earners and the 0.9 percent additional Medicare payroll tax for wealthy workers.
Forgoing repeal of those provisions in the interest of generating additional resources for lower premiums and increased subsidies in the BCRA would likely be unpopular with House Republicans like Ways and Means Committee Chair Kevin Brady, R-Texas, who has wanted full repeal of the taxes.
While he would not say whether he or the House would accept a bill that did not repeal the ACA’s investment income and payroll taxes, Brady did tell reporters, “I’ve been pretty clear that all $1 trillion of those tax hikes [in the ACA] need to get out of this economy if we want to grow” it. He added, “I’m hopeful at the end of the day that can be done.”
Brady said that despite his Senate counterparts’ struggles, ACA repeal “is the way to go.” Asked if he would accept Democratic overtures to shore up the ACA if the Senate bill fails, Brady said he is “still hopeful the Senate can deliver.”
Senate Finance Committee member Tim Scott, R-S.C., told reporters July 11 he expects the ACA’s net investment income tax to still be repealed in the Senate healthcare bill. A day earlier, Finance Committee member John Thune, R-S.D., said the proposal’s premium tax credits were being adjusted to provide more coverage for low-income workers.
Speaking to reporters during a weekly briefing, McConnell said his decision to start the recess on August 11 was due to “unprecedented” obstruction by Senate Democrats who delayed confirmation votes for President Trump’s Cabinet.
McConnell said the Senate “will be in session the first two weeks of August that we had originally anticipated not being here.” McConnell added that the Senate has a number of must-solve issues to work through during those two weeks unrelated to their work on healthcare, including agreeing on defense authorization and raising the debt ceiling.
“We simply . . . don't have enough time to address all of these issues between now and the originally anticipated August recess,” McConnell said. He did not mention working on tax reform before the recess.
McConnell said that updated legislative text of the BCRA will be released on June 13, and will be brought to the floor during the week of July 17.
“We'll be laying out a revised version of the repeal-and-replace effort, the text of that, on Thursday morning. We hope to have a CBO score by the beginning of the week [of July 17] and a motion to proceed to that bill next week,” McConnell told reporters.
McConnell’s announcement came in response to a recent letter from a group of Senate GOP lawmakers asking McConnell to delay the August recess. During a press briefing, lawmakers said they wanted more time to pass healthcare legislation and then move on to tax reform hearings. Sen. David Perdue, R-Ga., said that even if the Senate completes work in the next week, there are only 31 legislative working days in the current fiscal year to finish work on the debt ceiling, budget and reconciliation bills, appropriations bills, and tax reform.
The House has not said whether it would follow the Senate’s lead by also cutting into the August recess, though Brady said he believes that lawmakers need the entire month of August to connect with constituents.
“My view is August is an important month to connect with our voters on tax reform,” Brady told reporters during a weekly briefing, adding, “I think August is the perfect opportunity for us to be listening [and] engaging with our constituents back home and building support for tax reform.”
Brady said he would ultimately leave scheduling up to House Majority Leader Kevin McCarthy, R-Calif. McCarthy’s office did not return a request for comment.
Addressing the latest controversy on the administration’s ties to Russia, Finance Committee Chair Orrin G. Hatch, R-Utah, told reporters that the meeting Donald Trump Jr. had with a Russian attorney during the presidential campaign had “nothing to do with tax reform.”
Hatch noted that the president is waiting for Congress to develop a healthcare bill and that delaying the August recess will only be useful if Democrats agree to cooperate with Republicans. “I prefer to see votes up and down and decide these things on their merits,” Hatch said.
But Senate Minority Leader Charles E. Schumer, D-N.Y., said that adding more time in August will not solve Senate Republicans’ inability to devise a workable replacement for the ACA. “The problem is the substance of the bill. It provides massive [tax] cuts for the wealthy and puts a dagger into the heart of Medicaid,” Schumer said on the Senate floor. “We're willing to stay as long as [McConnell] wants,” he said, adding that Republicans do not want to leave Washington and face citizens angered by the Republican healthcare bill.
Finance Committee member Thomas R. Carper, D-Del., said the delay in the pace of Senate confirmations of Trump’s nominees is not caused by obstruction from Democrats, but rather a lack of people nominated to administration posts by the White House. “From January through June, the administration has sent us about 100 nominees for 600 positions. They can complain that we’re not doing enough to move nominees, but to be honest, they’ve been very slow in vetting and submitting names,” he said.
On tax reform, Carper said he hopes that committee lawmakers will revisit the work done by the bipartisan tax reform working groups in the 114th Congress and that tax reform hearings will take place and lead to floor consideration under the Senate’s regular order. Currently, Senate GOP leaders plan to use fast-track budget rules to pass tax reform and healthcare legislation with a Republican majority.
Signaling the need for legislative action on healthcare, Sen. Ted Cruz, R-Texas, told reporters that the individual mandate penalties imposed by the IRS on low-income workers are yet another reason the ACA needs to be repealed. Cruz read from a sheet distributed by Sen. Steve Daines, R-Mont., that included figures for each state and how many individuals paid penalties, broken down by income level.
"It was striking [that] in 2014, 1,066,360 Texans were fined by the IRS because they couldn't afford health insurance. So the federal government drives up premiums to make them affordable, and the IRS comes along and fines them because they can't afford those premiums. And what's particularly striking [is] those people paid $247 million in fines in 2014. Of those who were fined, 42.8 percent earned $25,000 a year or less, and 80.5 percent earned $50,000 a year or less. So what Obamacare is doing is taking our most vulnerable . . . and imposing fines on them because they can't afford health insurance," Cruz said.
Sen. John Barrasso, R-Wyo., confirmed that several provisions of the revised BCRA have been sent to the CBO for consideration, including the Cruz amendment to allow insurers to offer non-ACA-compliant plans as long as they include one plan that does comply.
Sen. Bob Corker, R-Tenn., told reporters that two bills will be released July 13: one including the Cruz amendment language and one without. He added that his understanding was they would both be subject to CBO analysis.
Dylan F. Moroses, David van den Berg, and Luca Gattoni-Celli contributed to this article.
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