Republican Waterloo?

Today the Republican Party got a lesson in how to govern and how not to govern. When they swept control of government in the elections last November they promised to do all sort of things. First on that list was the repeal of ObamaCare. This was going to be done on the first day and if not very soon.   But as they used to say in the movies, something went wrong on the way to the Forum.

For the past month Republicans have argued amongst themselves about what a new health care bill would look like. Trump promised that everyone would be covered in some manner and others promised that premiums and deductibles would come down from the highs they were seeing under ObamaCare. Competition would be the key and injecting free market principles would be the key to success. But today the Speaker of the House, Paul Ryan, got a call from President Trump and after discussing the bleak numbers they decided to pull the American Health Care Act (AHCA) from consideration.

So what happened and where do we go from here. Can Republicans overcome this major setback, one that has legislative and public relations after shocks, and right the ship?

In some ways the Republicans might have saved themselves from their own failures. The effort to sell this new version of health care was falling flat out in America. A recent Quinnipiac poll showed only 17% supporting the bill and a whopping 57% were in opposition. This should not have been shock to Republicans because they found it easy to shoot arrows at ObamaCare and the Democrats and their allies found the target just as easy. The public has gotten used to having some of the largesse provided in ObamaCare and they will not give that up as easily as many Republicans thought. The strong polling numbers for repealing the law did not reveal the soft underbelly where those that wanted it repealed did not expect to have any of their benefits reduced. The reductions in Medicaid would have been felt in many communities that voted for Trump and Republicans. Every poll was also showing that the most popular parts of the new health care bill were the ones that were already in place through ObamaCare. The three most popular ones remain insuring preexisting conditions, no lifetime caps on insurance and allowing children to remain on their parent’s policy until age 26.

There were some easy targets to dislike in the bill as well. The language in the bill requiring adults to pay a 30% penalty on their premiums for one full year if they allowed their insurance to lapse for more than two months. People polled on the replacement bill roundly disliked this. But the most telling numbers in the Quinnipiac poll were the reelect numbers. Voting for this bill to replace ObamaCare would not have endeared them to voters and the numbers suggested the public might actually turn on Republicans.

So I go back to my premise that they might have actually saved themselves by failing to garner enough votes to pass the bill. Pulling the bill from consideration is embarrassing but they can recover from that problem and sit back and watch as ObamaCare continues to implode, which it is doing. It will take things getting direr for the public to get behind a full repeal and replace bill.

In an ideal world this might force Democrats to realize they have to get in the game and start talking to Republicans about what a bipartisan program might look like. It might allow the middle of both parties to come together and freeze out the far right and far left and actually engage in a compromise that could pass. It would also lessen the political fall out for both parties. If they eschew this opportunity in the future the Democrats might find they are blamed for the current mess and the Republicans blamed for not fixing it. The old adage of a pox on both parties.

In the “where do we go from here” category that is now up in the air. The next big ticket on the agenda is tax reform. There is agreement on both sides of the aisle that we need tax reform but how we get there is where the disagreement comes into play. For the Republicans the failure today puts them in the hole for what they hoped to accomplish. There was a Trillion dollars of savings in the AHCA and that will put a major crimp in a total reform bill. What you might see now is a piecemeal approach that offers some tax cuts but does not get the full reform that is needed.

The funds for some of the changes were included in the health care bill and this will make it difficult to achieve some of the stated goals. Republican had wanted to reduce the corporate rate from 35% to 20% (Democrats agree this rate has to be reduced by probably not to that level), they wanted to reduce the top individual bracket from 39% to 33% and to allow business interests to write off investments (depreciate) at a more rapid rate. Democrats will fight on the individual rate simply because it is a good talking point with their base.

Now the President and the Republicans in congress will have to try and cobble something together that they can sell as tax reform. They will start that effort next week. In the backrooms there will also be discussions on what to do with healthcare reform as well. But make no mistake, this was not a good day for Republicans and they will have to get their act together. They have time but they cannot continue to have these very public failures.

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