Senate moves forward on budget, still stalled on Obama health law

Credit: Jamie Dupree

With the strong support of President Donald Trump, the U.S. Senate was poised on Thursday to approve a budget framework for 2018 that would authorize an expedited effort in Congress on tax reform, but the President's public reluctance had seemingly scrapped quick action on a separate bipartisan deal involving a small piece of the Obama health law, a move that experts say will cost the federal government billions more in health spending.

On the Senate floor, the emphasis for GOP Senators has not been on their budget outline, which would bring the budget to balance in nine years, but rather on their plans for tax reform, the first real effort to rewrite the Internal Revenue Code since 1986.

"Because as we all know, our archaic tax code is a significant roadblock standing in the way of America's economic future," said Senate Majority Leader Mitch McConnell.

Despite some reservations from GOP Senators, McConnell looks to have the votes to push through this budget plan later today.

As for the President, he continues to press the case for tax reform, though in recent days he has been mentioning tax cuts much more than reform.

"Let's give our country the biggest Christmas present of all," the President said in a speech earlier this week. "Massive tax relief."

"It will be the largest tax cut in the history of our country," Mr. Trump told a bipartisan group of Senators that he called to the White House on Wednesday.

The exact details of that tax plan remain under wraps at this point; the emerging plan seems to be one where the House and Senate will finish work on the budget outline for next year, and then reveal the tax bill - most likely in November - and move quickly to vote on it in the House by Thanksgiving.

As for health care, there had been hope earlier this week that the Senate could move swiftly to approve a bipartisan deal to address certain payments to health insurance companies under the Obama health law - but that seems to have run aground, after the President went from supporting the plan, to opposing it, in less than 24 hours.

Sen. John Thune (R-SD), the third ranking Republican in the Senate, told reporters on Wednesday that the deal seems to be "stalled out."

One issue at play may be the complexity of the underlying Obama health law - it sounds simple enough to argue that if you cut off the "Cost Sharing Reduction" payments to insurance companies, then that should save money for Uncle Sam, and take money away from health insurance companies.

But as I wrote earlier in the week, doing that only means other subsidies kick in, and actually cause the feds to spend billions more.

The Congressional Budget Office has projected that the extra cost would be $194 billion over ten years.

The President had initially expressed his support for the health deal, but in less than 24 hours went from in favor of the plan, to a lukewarm endorsement, to outright opposition, charging it was a bailout for health insurers, a charge that Senators in both parties say is not accurate.