Senate Republicans Make Big Changes To Their Original Tax Bill

Nov 15, 2017
Originally published on November 15, 2017 5:34 pm
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ELISE HU, HOST:

Republicans in Congress are moving fast to pass their tax bill. They're also making big changes to the original plan. Senate Republicans added a provision that would effectively repeal the individual mandate to have health insurance. They also introduced changes last night to phase out tax cuts for individuals while making the tax cuts for businesses permanent.

NPR congressional reporter Kelsey Snell has been following all of this for us. Hey, Kelsey.

KELSEY SNELL, BYLINE: Hi, Elise.

HU: So given the history of GOP efforts to roll back Obamacare this year which haven't worked, why are Republicans including the individual mandate in this tax bill?

SNELL: Republicans have made a political calculation. It's that the individual mandate is one of the least-popular parts of the Affordable Care Act. They assume that voters will give them some goodwill here if they get rid of the penalty for failing to get health insurance. It's something that people worry about.

There's also kind of a budgetary aspect to this. The Congressional Budget Office estimates that it would save about $330 billion over 10 years to get rid of this. That's mostly because they'd be saving on penalties that - sorry. They would be saving on subsidies. If people aren't applying for health insurance, they're not applying for subsidies.

HU: Politically, though, it seems like it would be a risk - right? - to wade back into health care. A number of polls have shown Americans want their health coverage preserved. So what's the calculation here?

SNELL: Sure. There are a number of Republicans who worry about mixing health care and taxes. I spoke with Senator Susan Collins, a Republican from Maine. Here's what she had to say.

SUSAN COLLINS: I think it greatly complicates our efforts to combine tax reform and changes in the ACA.

SNELL: Yeah, some people who oppose the earlier repeal efforts are more willing to back this plan because it doesn't touch those popular parts of Obamacare like protections for pre-existing conditions or women's health care. And Republican leaders are still pretty confident this can pass.

HU: We should talk about another dramatic change, which is that the Senate bill would make the tax rate cut for individuals temporary. They phase out while the corporate tax cuts would stay. What does that accomplish?

SNELL: This is all about the deficit. So this is one of those complicated Senate rules. And Republicans have to make sure that the bill meets two requirements on what's called the Byrd rule. One, it can't lose more than $1.5 trillion over a decade. They met that requirement. The second one is that it can't add to the deficit over the long term. And so that's - getting rid of tax breaks sooner fixes that problem. I spoke to Pennsylvania Senator Pat Toomey, and he said what a lot of Republicans were telling me.

PAT TOOMEY: Everything in our bill - virtually everything should be permanent. That would be my preference. We unfortunately have constraints, as you know. The Byrd rule basically precludes that. So we've got to deal with that. That's the reason that we have the temporary features for the most part.

SNELL: Now, critics say temporary tax breaks are never actually temporary because when you let something like that expire, you're actually raising taxes. We saw that happen with tax breaks that were passed under President Bush, and they were renewed over and over again.

HU: This afternoon, Wisconsin Senator Ron Johnson came out against this bill. He's usually a pretty reliable GOP vote in the Senate. So is that a sign, Kelsey, that this bill could be in trouble?

SNELL: So far he's the only Republican to publicly say he opposes that bill. They can lose two Republicans and still get this passed in the Senate. But Johnson laid out some pretty specific demands that it's possible they could meet before this goes into the Senate floor.

HU: NPR congressional reporter Kelsey Snell - Kelsey, thanks.

SNELL: Thank you. Transcript provided by NPR, Copyright NPR.