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If Court Strikes Health Subsidies, GOP May Bypass Reconciliation

By Paul M. Krawzak, CQ Roll Call

May 18, 2015 -- Republicans took care to write their fiscal 2016 budget so that they could use reconciliation to attempt to repeal the Affordable Care Act. Their strategy also would give them the flexibility to use the expedited process to write a response—if needed—to an upcoming Supreme Court ruling on the law.

But even though the filibuster-proof reconciliation process would offer an almost sure path to get the GOP’s response or fix to President Barack Obama, it may not be the route that Republicans take—especially if they are serious about getting their measure signed by Obama.

If the Supreme Court rules in King v. Burwell that the government cannot offer health insurance subsidies in states that did not create their own insurance exchanges, it would rock the nation's health care system, with millions of Americans who depend on the subsidies unable to afford health insurance. The political pressure for Congress to come up with a solution would be intense.

If that happens, the GOP hopes to capitalize on the decision by passing a law to replace the subsidies and start undoing the health care overhaul. Anticipation of the court's action is building, and the justices could issue their opinion at any time, but likely not until near the end of the court term in late June.

In the event the court rules against the subsidies, the GOP has three obvious options:

  • Use reconciliation both to repeal the health care law, and to respond to the court decision. But that bill would surely be vetoed.
  • Use reconciliation for repeal of the health care law, and separately move a response to the court decision through regular legislation. If the attempt to repeal the law satisfies conservatives, Republicans might be able to unite around a more modest package to replace the subsidies with a GOP alternative without endorsing the health care law.
  • Use reconciliation only for the King v. Burwell legislation. Using reconciliation would ease its passage through the Senate. But some conservatives would object strenuously to giving up the use of reconciliation to put a repeal bill on Obama’s desk.

The reconciliation process allows legislation to bypass the usual 60-vote threshold in the Senate, meaning Republicans could advance the bill to the president without Democratic support.

But there are political and policy reasons to avoid reconciliation in this instance. The bill would need to draw some Democratic support to have any chance of being signed by Obama.

Getting enough Democratic backing would negate the need for reconciliation. From a policy standpoint, reconciliation is limited in what it can accomplish because provisions that do not have a budgetary impact are considered extraneous and can be struck from the bill.

House Budget Chairman Tom Price, R-Ga., characterized talks among House Republicans as leaning in the direction of using regular legislation--not reconciliation--for a fix for a court opinion that goes against the federal exchange. “I don’t think that final decision has been made but I think that’s what we have envisioned as being appropriate for a long time,” he said in an interview.

Sen. Richard M. Burr, R-N.C., anticipates moving the legislation through the standard process. He said he believes the bill could be written to draw support from Senate Democrats but he doubts it would get Obama’s signature. “That’s what I would expect,” said Burr, who sits on the Finance Committee and the Health, Education, Labor and Pensions Committee, the two Senate panels that would write a reconciliation bill.

Senate GOP Whip John Cornyn of Texas said no decisions have been made. “I think we’re working now to figure out the appropriate response,” he said. “Should it be a transition plan to deal with the people most immediately affected by King v. Burwell, and then to come back later and use reconciliation on a repeal-Obamacare vote?”

House and Senate Republicans are pretty much committed to using reconciliation to send Obama a bill that would repeal as much of the health care law as is possible under the constrained reconciliation process. They know he will veto it. But it will be their first opportunity, since the GOP takeover of the Senate, to put that bill on his desk.

When he vetoes the repeal, the GOP will have a message for the 2016 campaign: We tried to repeal Obamacare, and the president stopped us.

Beyond the issue of getting the president’s signature on a bill following the court decision, Price said another reason to avoid reconciliation is that it limits what a measure can contain. “If the Supreme Court decides in favor of the plaintiff, in favor of King, then I think it would be hard to do the right policy through reconciliation because I don’t think it would withstand the Byrd rule,” he said, referring to a law that applies to the Senate and limits the content of reconciliation bills.

Citing an example, Price said he wants to shift regulation of health coverage to the states. “When the federal government decides it, then it is a disaster as we have seen,” he said. “To make that policy change is not something you can do in reconciliation because it’s not spending or revenue.”

Wyoming Republican John Barrasso, who is heading up the Senate effort to devise a fix if needed, said GOP leaders are waiting on the court ruling before deciding how to use reconciliation. Even if the court rules against the subsidies, he said, the GOP plan of action will be influenced by whether the decision takes immediate effect or is delayed, and other unknown factors.

“Nobody predicted what the ruling was going to be last time,” he said, referring to the court’s upholding of the constitutionality of the health care law in 2012. “So we’re not going to put anything out there until we see exactly how they rule.”

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