Senate Republican leaders are altering their tax bill to include a repeal the Affordable Care Act’s individual mandate, a major change as they now try to accomplish two of their top domestic priorities in a single piece of legislation.
Party leaders said Tuesday their tax bill will include a provision that would repeal the individual mandate, a part of the health care law that creates penalties for Americans who don’t have health insurance.
“We’re optimistic that inserting the individual mandate repeal would be helpful,” Senate Majority Leader Mitch McConnell (R-Ky.) said Tuesday after meeting with party members during a closed-door lunch.
Republicans had up until Tuesday resisted making the change, worried that injecting health care politics would imperil the tax bill. But many of their members have supported adding the repeal, a move President Trump has pushed repeatedly as well.
Repealing the mandate would free up more than $300 billion in government funding over the next decade, but it would also eventually lead to 13 million fewer people having health insurance, according to projections from the Congressional Budget Office.
Sen. John Thune (R-S.D.), chairman of the Senate Republican Conference and a member of the finance committee that is drafting the tax bill, said repealing the individual mandate will allow them to further cut taxes for middle-income families.
“It’ll be distributed in the form of middle-income tax relief,” Thune said. “It will give us even more of an opportunity to really distribute the relief to those middle-income cohorts who could really benefit from it.”
But the change could unnerve less conservative Republican senators, who voted against previous Senate efforts to repeal large parts of the Affordable Care Act, also known as Obamacare.
Republicans appeared to give differing explanations for what they would do with the extra money generated by repealing the individual mandate.
McConnell, speaking later at an event hosted by the Wall Street Journal, said the repeal would allow them to ensurecorporate tax cuts remain permanent and also to lower taxes for middle class families.
“It’s pretty appealing to us and it will be in the version that comes out of the finance committee this week,” McConnell said.
Trump has said the repeal should be focused on getting tax rates down for the wealthy, with any leftover mondy going toward cutting taxes for the middle class.
Sen. Rand Paul (R-Ky.) said Tuesday morning he would introduce an amendment to the tax bill that would repeal the individual mandate and use the savings to lower taxes for middle class families.
In addition to repealing the individual mandate, the updated tax bill could also likely include a new bipartisan health care agreement recently reached by Sens. Lamar Alexander (R-Tenn) and Patty Murray (D-Wash), according to Republican Sens. Bob Corker (R-Tenn) and Susan Collins (R-Maine).
That Murray-Alexander agreement would fund federal subsidies used to help lower-income Americans afford their health care.
The tax bills in the House and Senate would lower taxes for many Americans, but nonpartisan analysts have concluded millions would pay higher taxes, particularly if they lived in states such as New York, New Jersey, and California.
Those analyses have also concluded the biggest beneficiaries of the bills would be corporations and the very wealthy.
The addition of the mandate repeal will again leave Republicans facing their own treacherous internal divisions over health care. They spent much of the first eight months of 2011 trying to repeal or roll back the Affordable Care Act, President Obama’s signature legislative achievement. But they were repeatedly stymied by GOP defections in the Senate, with a handful of Republicans saying they wanted the changes to be either more sweeping or done in a bipartisan way.
Republicans control just 52 votes of the 100-seat Senate, and so the defection of three members would imperil any changes to the bill. They are trying to pass the tax cut bill through a process known as reconciliation, which means they only need a majority of support to pass the bill.
House GOP leaders have said they would explore whether to include a repeal of the individual mandate in their version of the tax cut bill, but they have so far not made that change. They are hoping to vote on their version of the measure as soon as Thursday.
The House and Senate must pass matching versions of the tax cut bill in order for Trump to be able to sign them into law.
The Senate Finance Committee is debating their version of the tax bill this week, and Republicans hope to approve it within days.
Republicans are hopeful they can pass the tax cut bill by early December, when they have a number of other issues they need to resolve and face the prospect of losing a Senate seat because of the special election in Alabama.