It is astonishing the number of people within the White House who seem to rush to their phones to talk with reporters and leak information. Based on these leaks, there has been no shortage of explanations for the Trump-Ryan health care debacle. Part of the blame for the failure lay in the fact that the bill was hastily thrown together in just a month or so with little or no discussion in the various committees that had roles to play and no clear vision of what its goal was other than for the Republican leadership to claim that they had “repealed and replaced” Obamacare. With health care being such a complex subject, such a slapdash effort was doomed to produce a patchwork bill full of holes.
Much of the blame also seems to fall on the atrocious negotiating that was done by the Trump team with recalcitrant Republican members of congress in their attempts to ram this turkey through, with Steve Bannon starting by telling the members who were invited for a meeting, “Guys, look. This is not a discussion. This is not a debate. You have no choice but to vote for this bill.” This approach seems to have backfired spectacularly with resistance to the bill actually growing.
It is becoming clear that Trump’s much vaunted negotiating style depends upon delivering threats and ultimatums and punishing those who defy him.
Trump is now doing the sour grapes thing, saying that he had not wanted to do health care first anyway (though he had boasted on the campaign trail that repealing and replacing Obamacare would be done on day one of his presidency) and that what he really wanted to focus on, and would now shift his attention to, was tax ‘reform’, an euphemism for how to rewrite the tax code to give more money to the rich.
But it turns out that the health care bill and the tax reform proposals are not independent but linked. According to Aaron Lorenzo, the Trump-Ryan health care bill created about $1 trillion in savings that they planned to spend on giving tax breaks to the rich. Now they will have to find that money somewhere else and that will not be easy.
The GOP was counting on wiping out nearly $1 trillion in Obamacare taxes to help finance the sweeping tax cuts they’ve got planned for their next legislative act. And now it’s unclear where all that money will come from.
“This does make tax reform more difficult, but it does not in any way make it impossible,” House Speaker Paul Ryan said at a news conference on Friday. “We will proceed with tax reform.”
While Obamacare taxes will remain, he said, “We’re going to fix the rest of the tax code.”
But now Republicans will have to look elsewhere for money to meet their top targets: bringing the corporate tax rate down to 20 percent from 35 percent, cutting the top individual tax rate to 33 percent from 39.6 percent, and generous new writeoffs for business investments.
“We’re going to analyze the complete impacts here. But clearly it makes a big challenge even more challenging,” said House Ways and Means Chairman Kevin Brady (R-Texas).
Even if the Republican health care plan had succeeded, tax reform wasn’t going to be easy. The House, Senate and businesses are already clashing over key elements of a House GOP plan, notably a provision known as “border adjustability” that would tax imports but not exports.
I have to admit that I don’t quite understand the linkage that well and have not been able to find a good explanation. Obamacare did impose a tax on the wealthy to pay for expanded access to Medicaid but I thought that repealing Obamacare would have not resulted in that tax money accumulating to the US Treasury but would have been an immediate and automatic tax cut to the wealthy. So that money would have disappeared. I thought that through tax reform. the Republicans were trying to give the rich another tax cut on top of that one. But it looks like the Obamacare taxes were a separate piece of legislation that would have remained even if Obamacare was repealed.
As Trump might say, the way he talked about health care, “Nobody knew that government was this complicated” when of course everyone except him knew.
I wonder how Trump is dealing with the widespread ridicule he is receiving as a ‘loser’, which is the biggest insult in his eyes. It must be really sticking in his craw.