Tag Archives: Mitch McConnell

Legislative Update: “Skinny” Repeal Bill

A little bit ago, Sen. McConnell introduced text of the Health Care Freedom Act, the “skinny” repeal bill, on the Senate floor. Text is available here, and a CBO score here. A vote is expected later this evening.

The substitute amendment as introduced would:

  • Repeal the individual mandate tax/penalties, retroactive to January 1, 2016, reducing revenues by $38 billion over ten years;
  • Suspend the employer mandate penalties for periods from January 1, 2016 through December 1, 2024, reducing revenues by $146 billion over ten years;
  • Extend the moratorium on the medical device tax from December 31, 2017 to December 31, 2020, reducing revenues by $5.8 billion over ten years;
  • Increase contribution limits to Health Savings Accounts for periods between January 1, 2018 and December 31, 2020, reducing revenues by $5 billion over ten years;
  • Prohibit federal funding for one year to any non-profit provider that offers elective abortions and receives more than $1 million in Medicaid funding (a change from $350 million in earlier drafts of repeal legislation, to address concerns by the Senate Parliamentarian that the provision only targets Planned Parenthood), saving $100 million over ten years;
  • Eliminates funding for the Prevention and Public Health Fund for fiscal years after 2018, saving $11.1 billion over ten years;
  • Increases mandatory spending for community health centers by $422 million in fiscal year 2017;
  • Provides $2 billion for states to prepare and submit Section 1332 Obamacare waivers;
  • Makes certain technical changes to the Section 1332 Obamacare waiver process;
  • Provides for an automatic approval of Section 1332 waiver applications 45 days after submission by a state;
  • Provides for a Section 1332 waiver to last for eight years unless a state requests a shorter duration, with additional eight-year renewal periods possible;
  • Prohibits Department of Health and Human Services from revoking an approved Section 1332 waiver during the eight-year period;
  • Does NOT amend the criteria used to determine the waivers, such that all state waivers must continue to cover as many individuals as Obamacare, and provide coverage at least as robust as under the law — a move that some conservatives may believe will severely limit states’ ability to innovate.

The Congressional Budget Office believes that the bill as a whole will reduce the deficit by a total of $178.8 billion — $135.6 billion in on-budget savings, and $43.2 billion in off-budget (i.e., Social Security) savings. In 2026, CBO believes that the substitute would, compared to current law, reduce the number of Americans in Medicaid by 7 million, the number of Americans in Exchange coverage by 6 million, and the number of Americans in employer-sponsored coverage by 2 million.

Some conservatives may be concerned that the bill does not represent a repeal of Obamacare, leaving in place most of the law’s taxes, its new entitlements, all of its regulations, and more than 400 of the 419 legislative sections of the original 2010 statute. Moreover, some conservatives may be concerned that, by effectively repealing the individual mandate but retaining Obamacare’s costly insurance regulations, the substitute would only increase the cost of health insurance for struggling middle-class families.

What You Need to Know about the Senate’s Obamacare “Vote-A-Rama”

It’s not a carnival ride—although it might prove even more adventurous. The Senate’s consideration of health-care legislation will soon result in a grueling series of votes dubbed “vote-a-rama.”

After 20 hours of debate on the budget reconciliation measure, equally divided between the majority and minority parties, the Senate will complete consideration of all pending amendments, with the process’ conclusion typically determined when senators exhaust all the amendments they wish to offer—not to mention themselves.

Here’s what you need to know about “vote-a-rama.”

1. It’s Physically Demanding

The “vote-a-rama” process during consideration of the 2010 reconciliation bill that “fixed” Obamacare provides an example. On Wednesday, March 24, senators began voting on amendments at 5:32 PM. Nearly nine hours later, at 2:17 on the morning of Thursday, March 25, senators had completed votes on 29 amendments. The Senate then took a brief break, re-convened at 9:45 the same morning, and disposed of a further 12 amendments over an additional four-plus hours, with a vote on final passage at 2 PM on March 25.

For 20-something or 30-something staffers—let alone senators several times their age—this lengthy process can prove grueling, with long hours, late nights, lack of sleep, and little food (or bad food) the norm.

2. It’s Mentally Confusing

Between votes on amendments, senators usually allow for brief one-minute speeches by the amendment’s proponent and an opponent (generally the majority or minority floor manager of the bill). However, as Senate procedural expert James Wallner notes, that habit has derived from custom and unanimous consent, not any formal rule. If any senator objects to the brief “well speeches” as part of “vote-a-rama,” then the Senate will vote on amendments without any debate or a summary of what the amendment does.

Even with the brief summaries by amendment sponsors, it’s often difficult for senators—and particularly Senate staff—to understand exactly what’s going on down on the Senate floor. Amendment text can occasionally change at the last minute, as can the sequence of amendments offered. On occasion, senators may have to “fly blind” without clear guidance or recommendations from their staff on how to vote. Coupled with the long hours and lack of sleep (for members and staff alike), it’s a recipe for mistaken votes and confusion.

3. It’s Hard to Pass Amendments with a Simple Majority…

As Wallner noted in an article earlier this week, the Senate’s rules essentially give preferential treatment to the underlying reconciliation bill, making it difficult to craft amendments that can pass with a simple (i.e., 50-vote) majority. The amendment must be germane (i.e., relevant) to the underlying bill, and cannot increase the deficit.

Moreover, to pass with a simple majority, an amendment must also comply with the six-part “Byrd rule” test. For instance, an amendment may not have only an incidental fiscal impact, make programmatic changes to Title II of the Social Security Act, or exceed the jurisdiction of the committees who received the reconciliation instructions (in this case, the Senate Finance and Health, Education, Labor, and Pensions committees). Other than simple motions striking particular provisions, amendments will face a difficult time running the procedural gauntlet necessary to pass on a 50-vote threshold.

4. …But It’s Easy to Get Amendment Votes

Even if an amendment does not comply with the budget reconciliation rules, senators can still offer a motion to waive those rules. The motion to waive requires the approval of three-fifths of senators sworn (i.e., 60 votes), which often does not materialize, but the motion to waive provides a way to get senators on the record on a specific issue. Many votes in a “vote-a-rama” series consist of a “motion to waive all applicable budgetary discipline”—i.e., the “Byrd rule” and other restrictions that make passing an amendment with a simple majority difficult.

5. It Will Result in Messaging Amendments

Perhaps the classic example comes from the Obamacare “vote-a-rama” in March 2010, when then-Sen. Tom Coburn (R-OK) offered an amendment that included the following language:

(b) Prohibiting Coverage of Certain Prescription Drugs—

(1) In general.–Health programs administered by the Federal Government and American Health Benefit Exchanges (as described in section 1311 of the Patient Protection and Affordable Care Act) shall not provide coverage or reimbursement for—

(A) prescription drugs to treat erectile dysfunction for individuals convicted of child molestation, rape, or other forms of sexual assault;

The “No Viagra for Sex Offenders” amendment drew no small amount of attention at the time, and led to political ads being run against the Democrats who voted against it (as some predicted prior to the amendment vote).

Democrats will almost certainly offer similar messaging amendments this year, including amendments unrelated to the bill, or even health care. They may offer amendments regarding the Russia investigation—those would likely be subject to a 60-vote threshold, as foreign policy is not germane to a budget reconciliation bill, but if Democrats wish to get Republicans on record, any vote will do.

Doubtless Democrats will offer amendments related to Donald Trump’s taxes—the reconciliation bill is in the jurisdiction of the Finance Committee, so these amendments could theoretically prove germane, but amendments specifically targeting the president (i.e., making policy, with only an incidental fiscal impact) could violate the “Byrd rule,” making them subject to a 60-vote threshold. For Democratic political consultants, the possibilities are virtually endless.

6. It May Lead to Chicanery—and ‘Strategery’

Senate Republican Leader Mitch McConnell (R-KY) has generally opposed allowing reimportation of prescription drugs from Canada or other countries, with one noteworthy exception. In December 2009, McConnell, along with several other Republicans, supported one of two reimportation amendments offered on the Senate floor.

While opposing reimportation on the merits, some Republicans supported these particular amendments because they wanted to break up the “rock-solid deal” between Democrats and Big Pharma—whereby pharma agreed to support Obamacare in exchange for a promise from Democrats not to support reimportation of prescription drugs.

As it happened, Democrats spent an entire week—from December 8 through December 15, 2009—without floor votes on amendments to Obamacare. The delay—effectively, Democrats filibustering their own bill—came in part because party leaders could not persuade fellow Democrats to vote against the reimportation amendment—and could not afford to allow the amendment to pass.

One can expect similar gamesmanship by the Democratic minority this time around, as evidenced by their tactical decision to abstain from voting on Tuesday’s motion to proceed to the bill until Republican senators mustered a majority solely from within their own ranks. If only three Republicans defect on an amendment, Democrats could have the power to play a decisive role in that amendment’s outcome. It’s an open question how they will do so.

For instance, will some or all of the 12 Democrats who voted against reimportation earlier this year—during January’s “vote-a-rama,” when the Senate passed the budget enabling the current reconciliation process—switch their votes so the amendment will pass, causing Republicans heartburn with the pharmaceutical lobby? When and how will Democrats use other tactical voting to gum up the process for Republicans? The answers range from possible to likely, but it remains to be seen exactly how the process will play out.

7. It Will Inflict Political Pain

Consider for instance a flashpoint in the reconciliation bill: Whether to defund Planned Parenthood. Two Republican senators, Susan Collins and Lisa Murkowski, have already stated they oppose defunding the organization. If one more Republican defects, Democrats would likely have the votes to strip the defunding provision. (While Democratic Sen. Joe Manchin previously supported defunding Planned Parenthood two years ago, in the immediate aftermath of sting videos featuring organization leaders, he has since reversed his position, and will presumably vote with all Democrats to strip the provision.)

To put it another way: Sen. Dean Heller (R-NV) may not just have to be the 50th vote supporting the underlying bill, he may also have to provide the 50th vote to keep the Planned Parenthood defunding provision in the legislation. Will Heller vote to defund the nation’s largest abortion provider—and what will happen to the bill if he, and the Senate as a whole, votes to strip the provision out? Senate leaders will face several of these white-knuckle amendment dramas during “vote-a-rama,” any one of which could jeopardize the entire legislation.

8. It Could Unravel the Entire Bill

Ultimately, with no agreement among Republicans to preserve the underlying bill text, and no clear roadmap on how to proceed, “vote-a-rama” could resemble pulling on the proverbial thread—one good tug and the whole thing unravels. What if Heller ends up helping to strip out Planned Parenthood defunding—and conservatives respond by blocking more funding for Medicaid expansion states? What if moderates vote to strip the “consumer freedom” amendment offered by Sen. Ted Cruz (T-TX), and conservatives retaliate by taking out the “side deals” included to assuage moderates’ concerns?

At the end of “vote-a-rama,” senators could be left with an incoherent policy mess, legislation that no one would readily support. It’s the big potential downside of the freewheeling amendment strategy—but a chance that McConnell apparently feels he has no other choice but to take.

9. It’s Why Senate Leadership Is Talking about a Conference with the House

In recent days, Senate Majority Whip John Cornyn (R-TX) and others have floated the idea that, rather than having the House pass the Senate’s bill whole, sending it straight to the White House, members may instead want to have a House-Senate conference to resolve differences between the two chambers. Some have gone so far as to propose the Senate passing a “skinny” bill—repeal of the individual and employer mandates, along with the medical device tax—as a placeholder to get the reconciliation measure to a conference committee.

This strategy would have one beneficial outcome for the Senate’s Republican leadership: By allowing congressional leaders to re-write the bill in conference, it would save them from having to abide by the results of “vote-a-rama.” If, for instance, senators vote to strip out Planned Parenthood defunding, or to add in reimportation language, congressional leaders could re-write the bill in conference to negate the effects of those votes—presenting a new measure to both chambers with a binary choice to approve the bill or not. (In other words, rather than a “wrap-around bait-and-switch” on the Senate floor, senators could instead face a bait-and-switch in conference.)

That leadership has mooted a conference committee speaks to the nature of the “vote-a-rama” ahead. Despite the complaints on both ends of Pennsylvania Avenue about the lengthy nature of the health-care process, Senate leaders are now looking to extend the process further via a House-Senate conference—because they may need to regain control of the legislation after a wild and unpredictable debate on the Senate floor.

This post was originally published at The Federalist.

Why the Motion to Proceed Is a Sucker’s Bet

In trying to win support for their Obamacare “repeal-and-replace” bill, Republican Senate leaders are making a process argument to their fellow senators: We know you don’t like the bill, but work to mend it, rather than ending the process. As Sen. John Thune (R-SD), the chairman of the Senate Republican Conference, argued, “We gotta get on the bill.…If we don’t at least get on the bill, we’re never going to know.”

It’s a typical leadership argument: The promised land is only one bad vote away, not two bad votes, not ten bad votes, only one bad vote away. (Until the next bad vote crops up.) But to skeptics of the bill—whether moderate or conservative—that argument should sound like a sucker’s bet.

Without a clear vision of the final legislation and an agreement from 50 Republican senators to preserve that vision on the Senate floor regardless of the amendments offered—both things that Senate Majority Whip John Cornyn (R-TX) last week admitted Republicans do not have—proceeding to the bill will result in a policy morass that could make the confusing events of the past week look tame by comparison.

As things stand now, a successful motion to proceed will result in an amendment process under which various provisions of the bill get struck—due to guidance from the parliamentarian, dissension within the Republican conference, or both. Then, a last-minute substitute amendment from Majority Leader McConnell (R-KY) will attempt to win over or buy off votes (or both), with the hope that he can dare enough Republicans not to kill the legislation just before the finish line. Here are the likely ways the bill could change—and not for the better.

The ‘Byrd Bath Bloodbath’

As I have previously written, the prior versions of the Senate bill had not gone through the “Byrd bath” testing which provisions comply with the Senate’s “Byrd rule” for budget reconciliation. Late last Friday, the Budget Committee minority staff released a list of provisions that could get stricken from the bill for not complying with the “Byrd rule,” including pro-life protections ensuring no taxpayer funding of abortion, or plans that cover abortion; funding for cost-sharing subsidies; a prohibition on Medicaid funding to certain entities, including Planned Parenthood; and a provision imposing waiting periods on individuals lacking continuous health coverage.

Multiple sources indicate that the list produced by Budget Committee Democrats comprised preliminary guidance on a prior version of the legislation. Therefore, that list should not be considered definitive—that all the enumerated provisions will get stricken.

Conversely, provisions not on the list released Friday could fail to pass Byrd muster, not least because the parliamentarian’s guidance can change. In 2015, a provision repealing Obamacare’s risk corridor program was stricken from that year’s reconciliation bill on the Senate floor, because the parliamentarian was persuaded by Democrats’ last-minute arguments.

Regardless of the specifics, the “Byrd bath” will doubtless make it more difficult for Republicans to present a coherent policy vision through budget reconciliation legislation, meaning the bill could change significantly from its introduced version on procedural grounds alone.

Death by Amendments

In calling for Republicans to vote to begin debate on the bill, Sen. Lamar Alexander (R-TN), a close McConnell ally, has argued that senators will “have a virtually unlimited opportunity…on the floor to make amendments to the bill and try to improve it.”

Alexander’s key phrase is “try to,” because the numbers are strongly stacked against Republicans wishing to offer amendments. If three of 52 Senate Republicans—only 5.8 percent of the Republican conference—defect on an amendment vote, the amendment sponsor will have to rely on Democrats to approve the amendment. And why would Democrats vote for any amendment that might help Republicans pass an Obamacare “repeal” bill?

The most likely answer: They won’t. As a result, it appears more likely that the amendment process could see Republicans stripping out other Republicans’ amendments—from Cruz’ “consumer freedom” provision to the various “side deals” included in the bill—than inserting provisions into the bill to win support. After all, if a provision is so popular that it could attract the votes of 50 Senate Republicans, why didn’t McConnell include it in the base bill to begin with?

The ‘Wraparound Bait-and-Switch’

As Politico notes, the myriad amendment votes don’t represent the end of the process—they’re merely the beginning: “At some point, [Senator] McConnell will introduce a substitute that will represent the Senate’s draft bill. It may be different than what is introduced…and could be subject to amendment on the Senate floor next week. The bill, in other words, will be a work in progress until the final vote.”

That’s exactly what happened the first time the Senate considered Obamacare legislation under reconciliation, in 2015. At the end of the process, McConnell laid down a “wrap-around” amendment—essentially, a whole new version of the bill replacing the prior substitute. Reports suggest McConnell could well do the same thing this time round: introduce a new bill just prior to the vote on final passage, then dare recalcitrant Republicans to vote against it.

Conservatives in particular should fear the “wrap-around,” for the new “goodies” potentially lurking in it. With McConnell having roughly $200 billion in taxpayer funds to distribute in the form of “candy” to members, and staff brazenly telling reporters they plan on “making it rain” on moderates by including additional cash for home-state projects, the “wrap-around” could well include all sorts of new last-minute spending intended to buy votes, and not enough time to scrutinize its contents. (Will we have to pass the bill to find out what’s in it?)

If this process works as outlined above, Alexander’s argument about amendments seems less an invitation to offer suggestions in an open process than a call for senators to go to McConnell’s office and work out a special deal behind closed doors in exchange for their vote.

Willing Disbelief

If the Senate votes to proceed to the bill and McConnell’s office turns into a trading floor, with staff “making it rain” taxpayer funds just like they promised, senators will claim themselves “Shocked—shocked!” that the process took an ugly turn.

They shouldn’t be. The signs are as plain as day. If senators have objections to the bill now, they should vote down the motion to proceed, for the bill—likely on substance, and certainly on process—isn’t going to get much better, and almost assuredly will get worse.

This post was originally published at The Federalist.

Self-Righteous Sanctimony from an Obamacare Hypocrite

Why would someone who never truly believed in repealing Obamacare attack others for wanting to keep it? Maybe because Mitch McConnell asked him to.

Avik Roy’s piece blasting Sen. Mike Lee (R-UT) for “preserving every word of Obamacare” contains flawed logic on several fronts. Let’s examine that first, before considering the source.

Roy essentially argues that the 2015 reconciliation bill that Sen. Lee and others supported did not repeal or reform any of the regulations raising premiums, but this year’s Senate Republican bill did. The first point is accurate but misleading, and the second point inaccurate, at least from a conservative perspective.

When it comes to the 2015 reconciliation bill, Republican leaders made a strategic choice—as current White House adviser Paul Winfree noted just after the election—not to litigate with the Senate Parliamentarian whether and what insurance regulations could be repealed under the special budget reconciliation procedures. Conservatives such as myself have argued that, while that 2015 bill represented a good first step—demonstrating that reconciliation could be used to dismantle Obamacare—lawmakers needed to go further and repeal the regulations outright.

It’s unclear from his piece whether Roy knew of this strategical gambit back in 2015, or knows, but doesn’t want to admit it—and to be candid, both could be true. The article contains the following statement of “fact:”

Senate rules require that the reconciliation process can only be used for fiscal policy—taxing and spending—not regulatory policy. To boot, reconciliation can’t be used to change Medicare or Social Security. [Emphasis mine.]

The first part of this argument does not follow: He’s claiming that reconciliation cannot be used for regulatory policy, while also arguing that the bill currently before the Senate—which is a budget reconciliation bill—would make massive changes to Obamacare’s regulatory apparatus, such that it warranted Lee’s support.

The second part of this argument is flat-out false. While the Senate’s “Byrd rule” prohibits changes to Title II of the Social Security Act (as per 2 U.S.C. 644(b)(1)(F) and 2 U.S.C. 641(g)), Congress can—and does—make major changes to Medicare under budget reconciliation. For instance, the Balanced Budget Act of 1997—a bill considered under budget reconciliation—included over 200 pages of legislative changes to Medicare, including major changes to Medicare managed care (then called Medicare+Choice) and the creation of the infamous Sustainable Growth Rate Mechanism for physician payments. Roy has previously argued that lawmakers could not make changes to Medicare under budget reconciliation—he was wrong then, and he’s wrong now.

So why should anyone believe the procedural and tactical arguments of someone who 1) never worked in the Senate and 2) has repeatedly made false claims about the nature of the budget reconciliation process? Answer: You shouldn’t.

Back to the arguments about the Senate bill’s regulatory structure. Roy claims that the bill currently being considered would make significant modifications to those regulations. But from a conservative perspective, the bill doesn’t attack some of the costliest drivers of higher premiums—specifically Obamacare’s guaranteed issue regulations. Moreover, it doesn’t actually repeal any of the regulations themselves, choosing instead to modify or waive only some of them.

If a bill can modify regulations under the budget reconciliation procedures, it can repeal them too—moderate Senators just lack the political will to do so. If you’re like me—a supporter of federalism who doesn’t believe Washington should impose a regulatory apparatus on all 50 states’ health insurance markets—then you might find the Senate bill did not sufficiently dismantle the Obamacare framework to make it worth your support. It appears Sen. Lee also came to that conclusion.

Now it’s worth examining why the article specifically attacks Mike Lee. The piece fails to note until the 16th paragraph of a 19-paragraph story that other Senators came out and opposed the bill as well. Continued concern from moderates—who didn’t want to repeal Obamacare—made it obvious that the bill was going to die—but no one wanted to deliver the coup de grace. Sen. Lee finally came out and did so, along with Sen. Jerry Moran (R-KS). It’s disingenuous for Roy to claim, as he does for most of the piece, that Senator Lee was solely, or primarily, responsible for killing the bill.

Why might he make such a claim? Jonathan Chait may have sniffed out an answer several weeks ago, when Roy made a winking non-admission admission that he had worked with Senator McConnell’s office on drafting the Senate bill. Given that fact, and the way in which Senate staff promised to “make it rain” on moderates by giving out “candy” in the form of backroom deals, it’s reasonable to ask whether Roy coordinated his attack on Senator Lee with Senator McConnell’s office—and was promised anything for doing so.

Nearly three years ago, Avik Roy published a piece claiming that “conservatives don’t have to repeal Obamacare” and that “there are political benefits to implementing the plan without repeal.” Last night, Roy didn’t even attempt to explain on Twitter how he could reconcile those prior statements with his purported support for Obamacare repeal. Yet now he wants to attack Mike Lee for not sufficiently supporting repeal? It’s a disingenuous argument.

When it comes to Roy’s flip-flopping on repeal, his factual inaccuracies, or his not-so-secret ties to Senate leadership on the legislation, when evaluating his attack on Mike Lee, conservatives would be wise to consider the source.

Chuck Schumer Admits Obama Administration Violated the Constitution

Last week, one of Washington’s leading Democrats made what should be considered a stunning admission, yet few in the media bothered to notice, or care. In response to comments from Senate Majority Leader Mitch McConnell (R-KY) about a potential bailout of Obamacare insurers, Minority Leader Chuck Schumer (D-NY) said: “Democrats are eager to work with Republicans to stabilize the markets and improve [Obamacare]. At the top of the list should be ensuring cost-sharing payments are permanent, which will protect health care for millions.”

Schumer’s statement contradicts the Obama administration, which argued in federal court that the cost-sharing reductions are already permanent. It’s also an implicit admission that the Obama administration violated both the U.S. Constitution and federal criminal statutes by spending funds without an appropriation.

Some background on the matter at issue: Section 1302 of Obamacare requires health insurers to reduce cost-sharing (i.e., deductibles, co-payments, etc.) for certain low-income enrollees who buy silver plans on health insurance exchanges. The law directs the secretary of Health and Human Services (HHS) to create a program to reimburse insurers for the cost of providing those cost-sharing discounts. But the text of the law does not actually disburse funds to HHS—or any other cabinet department—to make the reimbursement payments to insurers.

Not wanting to be bound by such niceties as the rule of law, the Obama administration started making the payments to insurers anyway, claiming the “text and structure” of Obamacare allowed them to do so. The House of Representatives sued, claiming a violation of its constitutional “power of the purse,” and last May, Judge Rosemary Collyer agreed, ruling that the administration violated the Constitution.

Schumer Admits Constitutional Violation

Schumer’s statement last Thursday stands out because the Obama administration and House Minority Leader Nancy Pelosi (D-CA) have claimed, both in court and elsewhere, that Obamacare made a permanent appropriation for the cost-sharing payments. The law did no such thing, and a federal district court judge so ruled, but they attempted to argue that it did.

By conceding that Obamacare lacks a permanent appropriation for cost-sharing reductions, Schumer’s admission raises some interesting questions. The Obama administration requested an explicit appropriation for the cost-sharing reduction payments, a request Congress promptly denied. If there isn’t a permanent appropriation for cost-sharing payments in Obamacare—as Schumer admitted—then the Obama administration spent money without an appropriation.

The executive spending money without an appropriation not only violates Article I, Section 9, Clause 7 of the Constitution—“No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law”—but also the federal Anti-Deficiency Act, which prohibits federal employees from authorizing expenses in excess of available appropriations—which, according to Schumer’s logic, do not exist for the Obamacare cost-sharing reductions.

The Anti-Deficiency Act includes not just civil, but criminal, penalties: “An officer or employee of the United States Government or of the District of Columbia government knowingly and willfully violating [the Act] shall be fined not more than $5,000, imprisoned for not more than 2 years, or both.”

By calling on Congress to “ensure” permanent cost-sharing reductions, Schumer has essentially admitted that President Obama violated the Constitution, and members of his administration may have violated federal criminal statutes by spending money without an appropriation. This prompts one other obvious question: When will Schumer endorse a special counsel to investigate these matters?

Don’t Endorse Law-Breaking

In deciding to pay the cost-sharing subsidies without an appropriation, the Obama administration and its allies have endorsed a strategy of ends justifying means: They wanted to provide health insurance to more Americans, therefore it was acceptable to violate the Constitution. And if the administration violated the Constitution long enough, and on a big enough scale, they could change the law to meet their will. Now that a federal court has ruled that President Obama did in fact violate the Constitution, that’s exactly what Pelosi and Schumer want to do: Change the law to accommodate the Obama administration’s law-breaking.

Conservatives shouldn’t buy it for a second. While liberals want the entire dispute to focus around ends—“Insurers must receive these payments, or millions of Americans will suffer!”—conservatives interested in the rule of law should focus on means: Did the administration violate the Constitution and federal criminal statutes, and who should be held responsible, and how?

Only after those weighty issues have been examined and adjudicated fully should Congress debate whether to appropriate funds for the cost-sharing reductions. To do otherwise would undermine the Constitution that members of Congress vowed to uphold, and further encourage the kind of flagrant law-breaking seen in the Obama administration.

This post was originally published at The Federalist.

Top Ten Ways Senate Obamacare Bill Is #FakeRepeal

1.     Retains Obamacare Insurance Subsides.  The bill modifies, but does not repeal, Obamacare’s system of insurance subsidies—an expansion of the welfare state, administered through the tax code.

2.     Retains Obamacare Medicaid Expansion.           The bill as written would never repeal Obamacare’s massive expansion of Medicaid to able-bodied adults, while it would not fully eliminate the enhanced match states currently receive to cover those adults until 2024—nearly seven years from now.

3.     Expands Obamacare Insurance Subsidies.             Rather than repealing all of the law “root and branch,” as Sen. McConnell claimed was his goal, the bill instead expands eligibility for Obamacare’s subsidy regime. Some conservatives may question the need to “fix” Obamacare, when the legislation should repeal Obamacare.

4.     Retains ALL Obamacare Regulations.         While modifying some and allowing states to waive others, the bill does not repeal any of Obamacare’s onerous insurance regulations—the prime drivers of the premium spikes that have seen rates more than double since Obamacare went into effect.

5.     Retains Obamacare’s Undermining of State Sovereignty.   Because the bill keeps in place the federal mandates associated with Obamacare, states must ask permission to opt-out of just some parts of Obamacare, which remains the default standard. This turning of federalism on its head will allow Democratic Governors—and/or a future Democratic Administration—to reinstitute Obamacare mandates quickly and easily.

6.     Appropriates Obamacare Cost-Sharing Reductions.    Unlike Obamacare itself, the bill actually spends federal tax dollars on cost-sharing reductions authorized, but not appropriated, under the law. While conservatives might support a temporary appropriation to ensure a stable transition as Obamacare is fully repealed, the bill does the former—but certainly not the latter.

7.     Extends and Expands Obamacare’s Corporate Welfare Bailouts.    The bill includes not one, but two, separate “stability funds” designed to make slush fund payments to insurance companies. Between now and 2021, the bill would spend at least $65 billion on such payments—over and above the cost-sharing reduction subsidies listed above.

8.     Includes Obamacare’s Work Disincentives.    The Congressional Budget Office previously estimated that the subsidy “cliffs” included in Obamacare would discourage work—because individuals could lose thousands of dollars in subsidies by gaining one additional dollar of income—and that the law would reduce the labor supply by the equivalent of over two million jobs. The Senate bill retains those subsidy “cliffs.”

9.     Continues Obamacare Pattern of Giving Too Much Authority to Federal Bureaucrats.      The bill gives near-blanket authority to the Administration on several fronts—from creating the “stability funds” to giving Medicaid incentives to states—that would allow federal bureaucrats to abuse this excessive grant of power.

10.  Obamacare Architect Admits It’s Not Repeal.  Speaking on CNN Thursday, famed Obamacare architect Jonathan Gruber said that “this is no longer an Obamacare repeal bill—that’s good.” He continued: “If you look at what’s criticized [about] Obamacare, it was subsidies, it was regulations…this law wouldn’t really change those…It really [doesn’t] change very much.” Those admissions come from an individual who received hundreds of thousands of dollars from the Obama Administration to consult on Obamacare.

A PDF version of this document can be found on the Texas Public Policy Foundation website.

How “Repeal and Replace” Legislation Could Increase the Deficit

Even if the Congressional Budget Office releases an estimate early next week claiming that the Senate Obamacare discussion draft reduces the deficit, the legislation could well end up increasing the deficit. That’s because the bill repeals most of the law’s taxes, but leaves one in place—for the moment. Under the discussion draft, Obamacare’s “Cadillac tax” on high-cost health plans would return in 2026.

The New York Times noted earlier this week that Republicans intend to offer an amendment to eliminate the tax outright. If an outright repeal of the “Cadillac tax” receives more than 60 votes in the Senate—as it has before—that would mean the legislation could (and likely would) increase the deficit in the long term, while still passing through budget reconciliation measures on a simple majority vote.

About the Heller Amendment

Congressional staff have considered this scenario for months—whereby the “repeal” bill can bust the budget, by using Democratic votes to repeal the “Cadillac tax,” just as they did in 2015. During consideration of that repeal-only reconciliation bill, Senate Majority Leader Mitch McConnell (R-KY) offered a substitute amendment sunsetting the tax in 2025. Sen. Dean Heller (R-NV) then offered an amendment to that substitute repealing the “Cadillac tax” outright. That amendment passed on a bipartisan vote, with 90 senators voting to repeal the tax.

Because that vote passed overwhelmingly (i.e., with more than 60 votes), the Congressional Budget Act restrictions on reconciliation legislation—that the provision not increase the deficit outside the ten-year budget window—did not apply, and would not apply in this case either. In other words, if the bill increases the deficit solely due to the “Cadillac tax” repeal amendment, and 60 senators have supported said amendment, the bill’s overall deficit impact doesn’t matter.

It’s the Spending, Stupid

Should this scenario transpire, and the reconciliation bill ultimately increase the deficit, congressional leadership may claim that the long-term deficit increase would be due to the full repeal of the Obamacare “Cadillac tax.” But an examination of prior CBO scores shows a different picture.

  • The initial House “repeal” reconciliation bill (H.R. 3762) from the fall of 2015—which repealed the “Cadillac tax,” but did not repeal Obamacare’s entitlements—would have appreciably increased the deficit in the long term, according to CBO; but
  • The revised “repeal” reconciliation bill that passed the Senate later in 2015—which repealed the “Cadillac tax,” and all the Obamacare taxes, while also repealing the law’s new entitlements—would have had a minimal, almost infinitesimal, deficit impact over the coming half-century.

Given this dynamic, some conservatives may argue that it isn’t the repeal of the “Cadillac tax” that would cause any increase in the long-term budget deficit—it’s the entitlement spending included in the bill.

Raise the Deficit, Raise Costs

Not only would repeal of the “Cadillac tax” increase the budget deficit, it would also increase overall health-care spending. Although crude—it taxes all health plans at 40 percent, rather than at filers’ marginal tax rates, and raises taxes overall—the “Cadillac tax” would, if ever allowed to go into effect, serve as a control on health care spending. Most economists agree that the current, unlimited tax exclusion for employer-provided health coverage encourages workers to over-consume health insurance, and thus health care. Limiting this exclusion—albeit without raising taxes—represents sound conservative policy.

Ironically, if this procedural gambit succeeds, Republicans will have raised both the budget deficit and overall health care costs. Those potential outcomes provide further evidence the bill would reprise Obamacare, not repeal it.

This post was originally published at The Federalist.

Are Senate Republicans Going Soft on Obamacare’s Taxpayer Funding of Abortions?

Senate Republican leadership continue to draft their “repeal-and-replace” health care bill in secret, but it sure looks like staff are preparing for the bill to endorse Obamacare’s funding of plans that cover abortion, by re-characterizing—and mischaracterizing—how current law treats the procedure. While text is not yet publicly available and will not be until Thursday at the earliest, here’s how anonymous sources described the “new” insurance subsidies to the Wall Street Journal:

Tax credits are likely to be structured in ways similar to the [Obamacare] subsidies as a way to preserve restrictions on abortion funding, according to Senate GOP aides. Provisions restricting the use of the House bill’s tax credits to pay for abortion hit procedural hurdles in the Senate.

The [Obamacare] subsidies, which are advance tax credits paid to insurance companies to lower the cost of health-insurance premiums, currently can’t be used to cover the cost of abortions.

The problem is, though, that Obamacare does have “taxpayer-funded abortions.” And that’s not what I said—that’s what Senate Majority Leader Mitch McConnell has said. Here’s his speech on March 17, 2010, as the House was preparing to vote on Obamacare (all emphasis added):

Americans woke up yesterday thinking they had seen everything in this debate already. Then they heard the latest….They heard that Democrats over in the House want to approve the Senate bill without actually voting on it. These Democrats want to approve a bill that rewrites one-sixth of the economy, forces taxpayers to pay for abortions, raises taxes in the middle of a recession, and slashes Medicare for seniors, without leaving their fingerprints on it.

Here’s McConnell the next week, the day after House Democrats voted for Obamacare and one day before it was signed into law: “Here is what the Democrats voted for last night: a vast expansion of the entitlement state that we cannot afford, massive cuts to Medicare, higher taxes, higher health care costs, worse care, taxpayer-funded abortions.”

Don’t consider McConnell a reliable source? The current vice president, Mike Pence, speaking in March 2010 during debate on the reconciliation bill intended to “fix” parts of Obamacare, noted that no provision in the reconciliation bill would fix its funding of abortion:

Mr. Speaker, the bill before us tonight doesn’t fix anything. It doesn’t fix the fact that this is a government takeover of health care that’s going to mandate that every American buy health insurance whether they want it or need it or not. It doesn’t fix the fact that it includes about $600 billion in job-killing tax increases in the worst economy in 30 years. It doesn’t fix the fact this bill provides public funding for elective abortion for the first time in American history.

And then there’s former House Speaker John Boehner. During his infamous “Hell no, you can’t!” speech on the House floor as that chamber was preparing to pass Obamacare, here’s what he said about the bill (soon to become law) and abortion:

Can you go home and tell your constituents with confidence that this bill respects the sanctity of all human life and that it won’t allow for taxpayer funding of abortions for the first time in 30 years? No, you cannot.

The current majority leader, current vice president, and former House speaker are all correct, of course—or at least they were seven years ago. Obamacare provides subsidies to plans that cover abortion, a significant break from the precedent used by the federal employee health plan, and one that will see more than $700 billion in taxpayer funds in the coming decade go toward plans that could cover abortion.

To repeat, the bill text is not yet available, but if it has strict pro-life protections in it, why are Senate staff suddenly trying to claim that a bill McConnell said has “taxpayer-funded abortions” in it actually prevents funding for the procedure? Are anonymous staff trying to lay the groundwork for a massive flip-flop that will alienate the entire pro-life community? Time will tell, but for those concerned about taxpayer funding of abortion, the initial soundings do not look good.

This post was originally published at The Federalist.

A Delayed Medicaid Phase-Out Is No Phase-Out At All

As the Senate attempts to develop its version of Obamacare “repeal-and-replace” legislation, lawmakers have floated a lengthy phase-out of the enhanced federal match associated with Obamacare’s Medicaid expansion. Reports indicate Majority Leader Mitch McConnell (R-KY) has suggested a three-year phase-out running from 2020 to 2023, while Sen. Rob Portman (R-OH) and others have suggested a phase-out that would continue until 2027.

Discussion of both proposals to date has omitted one key fact: Implementation of either phase-out plan—and thus scaling back a major part of Obamacare, on which Republicans have run the past four election cycles—hinges almost entirely on Republicans winning another presidential election. In the case of the Portman plan, it would also hinge on continued Republican control of the White House following the 2024 election.

If Republicans do not retain the White House in 2020, it’s highly unlikely that the tens of millions of able-bodied adults Obamacare added to Medicaid will ever transition off the program rolls.

Incentivizing States to Run Out the Clock

While neither McConnell nor Portman have released bill text (or even legislative specifications) for their respective proposals, it seems likely that each would use a phase-down approach to the enhanced Medicaid match. Rather than keeping the enhanced match at 90 percent for several years then dropping it down to the regular Medicaid match rate (which ranges from 50-74 percent this year), the proposals would likely ratchet down the match rates a few percentage points at a time each year—say, from 90 percent to 85 percent to 80 percent, and so on until reaching a state’s regular match rate. This gradual phase-down would require less spending than extending the 90 percent match to 2023 (or 2027) and creating a one-year cliff as the rate drops to the regular match level.

But if the federal match only begins to slow down in 2020—and slows down gradually at that—states that adopted the Medicaid expansion would have little incentive to start phasing people off the rolls, instead waiting to see the results of that fall’s presidential election. States would only have to pay a slightly higher match rate, and only for a portion of their Medicaid expansion, because the House-passed bill allowed states to continue receiving the 90 percent match for enrollees in Medicaid as of December 31, 2019 who remain continuously enrolled.

Under this scenario, the cost to states to retain their expansion in 2020 would rise, but not appreciably—by tens or hundreds of millions, depending upon the state’s size, but certainly not by billions. Many states, particularly “blue states,” would pay this added cost, at least for one year, as the price to see what happens on November 3, 2020.

If results go poorly for Republicans on that day, then a new Democratic president—along with Republicans who never wanted to end the Medicaid expansion in the first place—would likely act quickly to undo this provision and much of the rest of whatever “repeal-and-replace” legislation Congress can enact this year. Democrats could easily enact legislation undoing the Medicaid phase-out early in 2021, before most of the phase-out the McConnell and Portman plans envision would even have gone into effect.

Accelerate the Transition

For all these reasons, it seems dangerous to wait two-and-a-half years, until the brink of the presidential election cycle, to start the transition away from the enhanced Medicaid match. Granted, some states do have triggers ending the Medicaid match immediately if said match rate ever falls below 90 percent. But it would be perfectly reasonable to give state legislatures several months to adjust their laws to the new policy environment, while beginning the transition at some point in 2018.

Moderates wishing to keep the Medicaid expansion should keep in mind that all but two members now serving voted for repeal legislation in 2015 that ended the expansion completely—not just the enhanced federal match rate, but also categorical eligibility for low-income adults—after a two-year transition. Conservatives have already made major concessions, first by including “replace” provisions on the “repeal” bill, and second by allowing the expansion to continue, albeit at the traditional Medicaid match rate.

Having promised voters for more than seven years they would dismantle Obamacare, Congress shouldn’t kick the can down the road and hope that some future Congress will keep an earlier Congress’s word and actually let provisions undoing the law go into effect. In stating that a further postponement of the Medicaid transition beyond 2020 would jeopardize passage of the legislation, the Republican Study Committee points at an important truth.

Conservatives should stand fast to the promises of repeal—and members’ own voting records—by insisting that Congress complete the transition away from the enhanced Medicaid no later than the end of this presidential term.

This post was originally published at The Federalist.

Lessons of the AHCA Collapse

Like the British evacuation of Dunkirk more than seven decades ago, Friday’s abrupt decision to halt proceedings on the American Health Care Act (AHCA) prior to a House vote represented victory only in that it averted an even costlier defeat—an embarrassing floor vote seemingly destined to fail, or passage of a bill unloved by wide swathes of the public and lawmakers alike.

Whether that decision is ultimately viewed as a “deliverance”—as Winston Churchill dubbed the 1940 Dunkirk evacuation—will depend in no small part on whether lawmakers can, both individually and collectively, learn the right lessons from an entirely predictable defeat.

“What went wrong?” poses an erroneous query about this bill. The question is not why it failed, but why anyone thought it might succeed. Virtually all of the premises upon which the legislation was based proved faulty, and were easily proven faulty prior to its introduction. There’s little need for Monday-morning quarterbacking if only one can see the flaws in one’s strategy on the Sunday morning prior to the game.

Republicans Need to Remember How to Govern

Leadership outlined its strategy—such as it was—in a February 27 Wall Street Journal article: “Republican leaders are betting that the only way for Congress to repeal the Affordable Care Act is to set a bill in motion and gamble that fellow GOP lawmakers won’t dare to block it.”

Irrespective of what one thinks of the bill’s policy particulars—whether the bill represents a positive, coherent governing document and vision for the health care system—this thinking demonstrates that Republicans have to re-learn not just how to govern, but also how to legislate.

As a legislative strategy, the House’s gambit represented a puerile cross between the “chickie run” in “Rebel Without a Cause” and Hans Christen Andersen’s “The Emperor’s New Clothes.” Daring lawmakers to challenge the process, and attempting to bully and browbeat them into submission—“testosterone can get you in trouble,” as Rep. Mark Sanford (R-SC) reportedly noted during one meeting—does not a durable process make. Unsurprisingly, that process broke down after a mere 18 days.

While many stories have focused on Speaker Paul Ryan, some minds might turn instead to one of his predecessors, and an axiom used by the longest-tenured House speaker, Sam Rayburn: “There is no education in the second kick of a mule.” That the outcome seems predictable—indeed, was predicted by many in private conversations—makes it no less painful politically, or personally.

In circumstances such as these, there is a fine line between learning lessons and pointing fingers. Focusing on the personalities behind the legislative failure would only further enflame tensions, while serving little productive purpose. On the other hand, understanding the reasons the legislation was in many ways doomed from the start can help prevent future calamities. Of the flawed premises that lay behind the legislative strategy, three seem particularly problematic.

1. Starting with the House

The House’s decision to consider the legislation first seemed ill-considered at the time, given the difficulties the chamber encountered the last time it moved first on repealing Obamacare. In the fall 2015, Congress considered and passed, but President Obama vetoed, repeal legislation under special budget reconciliation procedures. Passing the bill represented a “dry run” testing what a Republican Congress could do to dismantle Obamacare, but for the Democratic president who remained in the White House.

But as I noted the week after last November’s election, the House’s 2015 repeal reconciliation bill suffered from numerous procedural flaws. That legislation originally repealed Obamacare’s Independent Payment Advisory Board (IPAB), even though such Senate procedures meant that this provision, with an incidental fiscal impact, could not remain on a budget reconciliation bill. The House-reported legislation also increased the deficit in the years beyond the 10-year budget window, subjecting it to a potentially fatal point-of-order in the Senate.

The House’s 2015 reconciliation bill contained so many procedural flaws that Senate Majority Leader Mitch McConnell had to introduce an entirely new substitute version of the legislation. Had he not, the Senate parliamentarian would have advised the Senate to strip the bill of its procedural protection as a reconciliation matter, forcing the House to start its process all over again.

Given that near-death experience fewer than 18 months ago, it made much more sense for the Senate to take the lead in crafting a reconciliation measure. At minimum, House staff needed to solicit greater feedback from the Senate regarding that chamber’s procedures during the drafting process, to ensure they wrote the bill consistent with the Senate’s budget reconciliation rules. Neither happened.

House leadership claimed they wrote their bill to comply with the Senate’s reconciliation rules. But experts in Senate procedure could readily see that AHCA as released suffered from multiple procedural flaws, several potentially fatal to the entire bill. Last week, days before its scheduled floor consideration, the relevant House committees released a managers amendment re-drafting the measure’s tax credit, precisely because of the procedural flaws in the initial version.

All of which makes one wonder why the House insisted on initiating action. The Senate not only has more detailed and arcane procedures to follow than the House, Republicans also hold a narrower majority in the upper chamber. While no more than 21 of 237  House Republicans (8.9 percent) can defect on a bill passing solely with Republican votes, no more than two of 52 Senate Republicans can defect in the upper chamber, a much narrower (3.9 percent) margin.

Due to both its procedural quirks and tighter vote margins, it made far more sense for the Senate to initiate legislative action. Yet this year, as in 2015, the House took the lead—and ran into the same procedural problems.

2. The Unrealistic Timetable

The day before House leadership released a document outlining their vision for what became AHCA, I published a lengthy analysis of the legislative environment. I concluded that any legislation featuring either comprehensive changes to Medicaid or a refundable tax credit—the former I generally favored, the latter I did not—just could not pass in the timetable allotted for it:

The likelihood that House Republicans can get a comprehensive “repeal-and-replace” bill—defined as one with either tax credits, Medicaid reform, or both—1) drafted; 2) cleared by the Senate parliamentarian; 3) scored favorably by CBO [the Congressional Budget Office]; and 4) with enough Member support to ensure it passes in time for a mark-up on March 1—two weeks from now—is a nice round number: Zero-point-zero percent.

Likewise the chances of enacting a comprehensive ‘repeal-and-replace’ bill by Congress’ Easter recess. It just won’t happen. For a bill signing ceremony for a comprehensive ‘repeal-and-replace’ bill, August recess seems a likelier, albeit still ambitious, target.

Nothing in the above passage proved inaccurate. House leadership even skipped steps in the process I outlined—going forward with markups without a CBO score, and not writing the bill to comply with Senate procedure until just before a scheduled House vote—yet still couldn’t meet their targets. This would lead most people to believe those targets were just too ambitious.

Two vignettes show the problems caused by the sheer haste of the process. First, the managers amendments released last Monday night had to be re-written on Tuesday night. In both cases, the House committees had to submit second-degree amendments “to address drafting issues,” because the original managers amendments had no fewer than ten separate drafting errors among them.

Second, the managers amendment included an extra pot of funds to increase the refundable tax credits given to those near retirement age. However, the legislation created that pot of money not by increasing the refundable credits, but by lowering thresholds for a deduction available to those who itemize medical expenses on their tax returns.

The decision to provide the additional funds through a deduction, rather than by adjusting the credits themselves, was almost certainly driven by the mechanics of budgetary scoring, and ultimately the bill’s timetable. While the Joint Committee on Taxation (JCT) could estimate the relatively straightforward financial effects of a deduction quickly, altering the tax credit levels for individuals aged 50-64 would create knock-on effects—would more individuals take the credit, would more individuals retire early and drop employer-sponsored coverage, etc.—taking CBO staff a week or more to model.

So, rather than “wasting” time coming up with a policy and finding out the effects of said policy, prior to House passage, congressional staff instead created a $90 billion “slush fund” and pledged to sort the details out later.

Just before Obamacare’s passage in March 2010, former House Speaker Nancy Pelosi infamously said “we have to pass the bill so that you can find out what is in it.” House Republicans took her multiple steps further: By including a “slush fund” designed to change later in the process, and proceeding to both committee markups and a vote on House passage without a final CBO score, congressional leadership guaranteed that anyone who voted for AHCA would not by definition have known what was intended to be in the bill, let alone the fiscal effects of such policies.

The end result was a group of members in vulnerable districts who voted for the bill in committee without a CBO score—and could suffer serious, if not fatal, political consequences for having done so. Some of these moderates hold substantial disagreements with conservatives on how to structure an Obamacare repeal. But it was not conservatives that compelled the moderates to cast a tough vote for the legislation in committee without a CBO score analyzing the bill’s fiscal and coverage impacts—it was the hyper-aggressive timetable.

3. Unproductive White House Coordination

While publicly President Trump and others made statements insisting that his administration was “100 percent behind” the House Republican plan, the divisions within the administration were an open secret on Capitol Hill. From staff to officials, many had misgivings about the policy behind the bill, the legislative tactics and strategy, or both.

Those differences helped affect the ultimate outcome. Ryan attempted to turn his legislation into a “binary choice”—either support this bill, or support Obamacare—granting conservatives some concessions during the drafting process, but few thereafter. By contrast, factions within the administration attempted to woo conservatives and fought House leadership, which resisted making changes.

Ironically, had the administration halted negotiations sooner, and demanded an immediate vote earlier last week, they might have had a better chance of winning that tally. (Whether that victory would have ultimately proved Pyrrhic is another story, but they might have eked out a victory nonetheless.) But because the White House and congressional leadership weren’t on the same page, the former’s negotiations with conservatives left moderates to slowly trickle away from the bill, such that by Friday, it was virtually impossible to find a coalition to reach 216 votes whichever way leadership turned.

Even as the momentum slowly sapped from the bill, the administration and Capitol Hill leaders remained at odds on tactics. The New York Times reported on Saturday that some in the administration wanted to hold a House vote, even an unsuccessful one, to find out who opposed President Trump. But making such a demand misunderstands the dynamic nature of votes in the House of Representatives.

While AHCA might have passed narrowly, it would not have failed narrowly. Once a critical mass of 30 or so Republican “noes” signaled the bill’s clear failure, members would have abandoned the politically unpopular legislation en masse—likely with the implicit or explicit support of House leadership. Having witnessed these “jailbreak” votes in the House, it’s possible that, had the White House forced the issue, the bottom could have fallen out on support for the bill. As a tactic to snuff out disloyal behavior, calling a vote on a doomed bill would have yielded little in the way of political intelligence—only more political damage.

Underneath Tactical Errors Is Philosophical Disagreement

Beneath the obvious tactical errors lie some fundamental disagreements within the Republican party and the conservative movement about Obamacare, the future of our health-care system, and even the role of government. As I have written elsewhere, those differences do not represent mere window-dressing. They are as sizable as they are substantive.

On the one hand, the conservative wing of the party has focused on repealing Obamacare, and lowering health costs—namely, the premiums that have risen substantially under the law. By contrast, moderates and centrists remain focused on its replacement, and ensuring that those who benefited from the law continue to have coverage under the new regime.

That divide between “repealers” and “replacers” represents a proxy for the debate between reducing costs and maximizing coverage, a debate that precedes Obamacare by several decades, if not several generations. Some have argued that facts on the ground—the individuals gaining coverage as a result of Obamacare—necessitate an approach focused on maintaining coverage numbers.

Others believe that “repeal means repeal,” that Republicans ran, and won, elections on repealing the law—including as recently as five months ago—and that breaking such a deeply ingrained pledge to voters would represent political malpractice of the highest order.

The drafters of the House bill attempted to split the ideological divide, in part by retaining the popular parts of Obamacare while minimizing the law’s drawbacks. Both the House bill and the Better Way plan that preceded it maintained Obamacare’s restrictions on pre-existing conditions, its requirement that insurers cover dependents under age 26, and its prohibition on annual and lifetime limits for health insurance.

But policy decisions come with trade-offs, and in health care in particular those trade-offs can prove troublesome. Barack Obama did not wish to impose a mandate to purchase health insurance, having fought against one during his 2008 primary campaign; but CBO scoring considerations forced him to endorse one in the bill that became Obamacare. Similarly, the “popular” insurance regulations that Republican leadership maintained in its bill were the same ones that raised premiums so appreciably when Obamacare went into effect.

The AHCA approach of repealing Obamacare’s mandates and subsidies while retaining most of its insurance regulations created what Yuval Levin, a policy wonk close to Ryan, called a “twisted, fun-house mirror approach” to prior conservative health policy that yielded “substantive incoherence.” Dropping the individual mandate while retaining most of the insurance regulations created a CBO score that showed substantial coverage losses while failing to lower premiums appreciably—the worst of all possible policy outcomes.

The ideological divisions within the Republican Party, and the incoherent muddle of legislation that attempted to bridge the two, may have been overcome had the House released its bill the morning after the election, on November 9. But it did not release the bill on November 9, or on December 9, or on January 9, or even on February 9. The House introduced its bill on March 6, with the goal of passing legislation through both chambers by April 6. That timetable didn’t envision reconciling ideological differences so much as it hoped to steamroll them. It was all-but-guaranteed not to end well.

Lessons For the Future

What then of the future? One can only but hope that Republicans follow the example of Kipling’s poem “The Lesson,” written during the Boer War: “Let us admit it fairly, as a business people should; We have had no end of a lesson: It will do us no end of good.”

But what are those lessons, and what good might result from heeding them? While the policy differences within factions of the Republican Party are sizable, the only way to bridge them lies through an open, transparent, and deliberative process—negotiating outcomes among all sides from the start, rather than imposing them from on high through fiat.

If, as President Reagan famously noted, “personnel is policy,” so too then process provides a key to optimal policy making. A good process by itself cannot create good policy, but bad process will almost assuredly result in bad policy outcomes. In the short- and long-term, five principles can provide the initial glimmer of a path forward from last Friday’s dark outcome.

1. Let the Senate Lead

The procedural details surrounding budget reconciliation, and the narrower margins in the upper chamber, both augur toward the Senate re-starting any action on health care. As a practical matter, tensions remain far too high—with tempers short, friendships among members and staff frayed, and patience thin—for the House to initiate any legislative action for at least the next few weeks.

On upcoming legislation ranging from appropriations to tax reform to additional action regarding Obamacare, the “world’s greatest deliberative body” will have to exercise its deliberative powers. The ideological gaps are no less narrow in the House than in the Senate—can Mike Lee and Susan Collins reach consensus on a path forward regarding Obamacare?—but the recriminations and scars of the past month smaller.

If the Senate, with its smaller margins and arcane procedures, can deliver a quality policy product, the House, having seen its legislation sink in mere weeks, might be much more inclined to adopt it as its own.

2. Listen

House leadership rightfully notes AHCA had its origins in the Better Way policy white paper released last June. Prior to that document’s release, leadership staff spent significant time and effort reaching out to members, interest groups, the think-tank community, and others to gain thoughts and feedback on their proposals.

But actual legislation is orders of magnitude more complex than a white paper. Moreover, Better Way and AHCA deviate from each other in multiple important respects. The Better Way proposal includes numerous provisions—incentives for wellness, conscience protections for health care professionals, and proposals to repeal sections of Obamacare regarding Medicare, and Medicare Advantage—never included in AHCA, or mentioned in any great detail as part of the House’s “three-phase” approach.

Meanwhile, AHCA doubles the funding for grants to states when compared to the Better Way proposal, and uses significantly different parameters for the state grants than the 2009 House Republican alternative to Obamacare referenced in the Better Way document.

It’s possible to speculate on why House leadership made all these changes, but leadership itself made very little attempt to communicate exactly why they made them, or even that they were making them at all. Saying that Better Way led to AHCA is like saying the Model T led to the DeLorean. The former are both health-care proposals just as the latter are both cars, but each differ in significant ways.

The process that led from Better Way to AHCA was almost as significant as the process that led from the Model T to the DeLorean, but was opaque to all but a few closely held staff. Even lawmakers who understood and supported every single element of the Better Way plan could rightfully feel whipsawed when presented with AHCA, told it was a “binary choice,” and they had to publicly support it within a few weeks of its introduction, or otherwise they would be voting to keep Obamacare in place and undermine a new president.

When the Republican Study Committee unveiled its health-care legislation in 2013, its public release culminated a months-long process of consultation and scrutiny of the legislative text itself. RSC staff reached out to dozens of policy experts (myself included), and spent hours going through the bill line-by-line to make sure the legislation would accomplish its intended goals, while keeping unintended consequences to a minimum.

AHCA would have benefited immensely from this type of under-the-radar analysis, rather than subjecting legislation not yet ready for prime time to the intense scrutiny that came with a white-hot political debate and a hyper-accelerated timeline.

3. Trust Experts

A note at the bottom of page 25 of a leaked draft of AHCA provides an important hint toward a larger issue. The bracketed note, in a passage regarding per capita cap reforms to Medicaid, calls for staff to “review with CMS [the Centers for Medicare and Medicaid Services] any conforming amendments required.”

Congressional staff I spoke with over the past few weeks questioned whether anyone within the relevant agencies had in fact reviewed the legislation, to provide the technical expertise necessary to ensure that AHCA could be implemented as written, and would actually result in a workable health-care system.

At the time the legislative process began, the Department of Health and Human Services (HHS) had relatively few political appointees—no more than a few dozen out of about 150 total spots filled, and a CMS administrator not confirmed until the week prior to the scheduled House vote. The combination of a stretched staff and mistrust between political and career appointees within the agencies could well have limited the exchange of critically important details regarding how to draft, and implement, the legislation.

In addition to working with career personnel at the agencies, congressional staff should also utilize the institutional knowledge of their predecessors. While working for the House Republican Conference in 2009, I made it a point to start the Obamacare debate by finding out what I didn’t know, reaching out to those who had gone through the “Hillarycare” debate 15 years prior. My idea came from an unlikely source—former senator Tom Daschle, who in his 2008 book “Critical” described how lawmakers went through a “Health Care University” of policy seminars in 1993. In trying to replicate those seminars for both members and staff, I hoped we could obtain some of the collective wisdom of the past that I knew I lacked.

As I had previously noted in November, most of the senior Republican health-care staff working on Capitol Hill during the Obamacare debate in 2009-10 have moved on to other posts. But they, and others like them, are not far removed from the process. Based on my experience, most would gladly offer technical guidance and expertise; in many cases, even the lobbyists would do so with “client hats” removed, in the hopes of arriving at the best possible product.

But reaching out in such a manner requires a deliberative and inclusive process; games of legislative hide-and-seek and talk of “binary choices” preclude the received wisdom of all but the select few participating in the policy-making.

4. Be Honest

The House Ways and Means Committee’s section-by-section summary of AHCA illustrates the dilemma lawmakers faced. Page three of the document, discussing verification of eligibility for the new tax credit, states that “the Secretary of the Treasury is empowered to create a system—building upon already developed systems—to deliver the credit.”

There’s just one minor detail missing: The “already developed systems” for verifying eligibility Ways and Means referenced are Obamacare eligibility systems. This goes a long way toward explaining the omission: If the House is using an Obamacare eligibility system to deliver a refundable tax credit (also included in Obamacare), how much of the law is it really repealing?

Capitol Hill leadership could never reconcile the inherent contradictions in their product. On MSNBC, Ways and Means Chairman Kevin Brady (R-TX) called AHCA “the best opportunity to deliver on our promise to repeal the awful law of Obamacare”—eliding the fact that the bill explicitly retains and utilizes portions of that “awful law.” When pressed, leadership staff relied upon absurd, legalistically parsed statements, afraid to admit that the bill retained portions of Obamacare’s infrastructure.

These Clintonian definitions—“It depends upon what the meaning of the word ‘repeal’ is”—do nothing but build mistrust among members and staff alike. At least some in the policy community felt that House leaders were relying upon Elizabeth MacDonough, the Senate’s parliamentarian, as a de facto human shield—claiming the House couldn’t repeal portions of Obamacare under budget reconciliation, when in fact leadership wouldn’t, for policy or political reasons.

The fact that House leaders claimed their bill comported with reconciliation requirements, yet had to re-write major portions of AHCA at the last minute because it did not, gives added credence to this theory.

Whenever “repeal-and-replace” legislation comes back before Congress, the leaders and committees preparing the legislation should include a list of all the major provisions of Obamacare not repealed by the measure, along with clear reasons why. Even if some members want a more robust repeal than that offered, transparency would at least prevent the corrosive mistrust—“You’re not being up-front about this, so what other things are you hiding?”—that comes from an opaque process.

5. Be Humble

More than perhaps any bill in recent memory, AHCA represented a feat of legislative hubris. As a policy matter, Obamacare imposed a more sweeping scope on the nation’s health-care system. But the tactics used to “sell” AHCA—“We’re doing this now, and in this way. Get on board, or get out of the way”—were far more brutal, and resulted in a brutal outcome, an outcome easily predicted, but the one its authors did not intend.

There is a different approach, one I’ve seen on display. Some job interviews are thoroughly unremarkable, but two during my tenure on Capitol Hill stand out—the chief of staff who described himself as a “servant leader,” one who ensures all the members of the team have the tools they need to succeed; and the legislative director who told me, “We want to make sure you have a voice.” Of course I took both jobs, and felt myself privileged to work in such inclusive and empowering environments.

In some ways, the process that led to AHCA represents the antithesis of servant leadership, with members being given a virtual ultimatum to support legislation many neither liked nor understood. But in its purest form, public service should be just that—service—to one’s constituents, and, in the case of elected congressional leaders, to the members who chose them.

A more humble, inclusive, open, and transparent process will not guarantee success. The policy differences among the disparate Republican factions are real, and may not ultimately be bridgeable. But an opaque, authoritarian, and rushed process will almost certainly guarantee failure, as it did in the case of AHCA.

Listening Is Crucial

Ultimately, the failure to legislate on AHCA lay in a failure to listen to the policy concerns of Members, and to the warning signs present from the start. One can only hope that Republicans learn from this proverbial mule-kick, and start listening to each other more carefully and more closely. That process can yield the wisdom and judgment that comes from understanding, which can only help to heal the many breaches within the party following the events of recent weeks.

On November 8, Republicans received an important gift from voters—the chance to serve the country. Recovering from last week’s setback will require leaders of a humbled party to recommit themselves to service, both to the American people and to each other, in service of a common good. The chance to serve the American people is solely within the public’s gift. That gift, if and when squandered, will likely not be renewed for a long time.

This post was originally published at The Federalist.