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Tuesday, September 27, 2022

Democrats’ big bill faces a cliff-filled future

WASHINGTON — As Democrats wrestle with what to include in their massive social spending bill, some of the biggest divides are rooted in guessing games over future Republican decision-making.

The budget rules that prohibit deficits after 10 years assure that many programs would come up for renewal in future years when Democrats may not control Congress, leaving the party grappling with giant partisan question marks hanging over the future of progressive priorities packed into the measure.

How likely, they wonder, would a future GOP Congress be to boost funding for child cash payments? Or subsidies for the Affordable Care Act? Or a new Medicare benefit? Never? Maybe?

Democrats have made this sort of gamble before — with less than ideal outcomes. But some say they have no choice but to take their chances again.

“In an ideal world, we would pass all good things in perpetuity. But we don’t live in an ideal world,” Rep. Gerry Connolly, D-Va., told NBC News. “And so you’ve got to try to work with the clay in front of you and do the best you can.”

And so for now, the measure remains seeded with new cliffs.

Democrats are considering a two-year change to the contentious state and local tax deduction cap of $10,000, all but guaranteeing another political battle when that deadline arrives.

Then there’s the expanded child tax credit, which was raised to a maximum of $3,600 per child in the American Rescue Plan and issued monthly, for one year. It is extended through 2025 in the current House version of the bill.

Democrats are betting that Republicans will be unwilling to let it expire — and if so, they say they’d be eager to battle it out in a campaign. But Republicans have largely coalesced around, at a minimum, eliminating the credit for the lowest income recipients, with Sen. Joe Manchin, D-W.Va. already sounding sympathetic to the GOP view.

The biggest such internal debate is over health care, where the party is caught between two expensive competing priorities: Fixing the Affordable Care Act and expanding Medicare to cover vision, hearing, and dental benefits.

For now, expanded ACA benefits are made permanent in the House bill, though that may change as Democratic leaders face pressure to bring down the price tag. Committee aides are keeping their options open to set expiration dates earlier to lower the overall cost.

In addition to increasing subsidies for private plans, the House plan would create a permanent new Medicaid program to cover low-income workers in states where Republican legislatures have declined to accept ACA funding.

Meanwhile, the Medicare expansion has a powerful champion in Sen. Bernie Sanders, I-Vt. who chairs the Budget Committee and can influence progressive votes in the House as well. As a result, the Senate plan is expected to be weighted in the other direction, with more funding to either stand up Medicare benefits quickly or fill gaps while it’s implemented.

To make the math on all this add up, the added benefits to the ACA may have to be temporary. The result would be a new cliff — with, potentially, major parts of the ACA at stake.

Some Democrats see potential advantages in setting up future standoffs over the ACA. Republicans balked at repealing large portions of the law in 2017 after a backlash in polls and were punished by voters in the next midterm election when Democratic candidates made health care a dominant theme.

“Longer terms are better so people can count on stability, but it’s hard to see Republicans forcing up health insurance costs or raising taxes on families once these become law,” said Jesse Ferguson, a Democratic strategist who has worked on a variety of health care campaigns. “They’ll oppose lower health insurance costs and lower taxes now, but they won’t want to be the ones responsible for raising them later.”

But the prospect of future standoffs with Republicans to maintain the bill’s benefits has some members nervous. After all, the reason Democrats need to fix the ACA’s Medicaid provision in the first place is that GOP leaders have steadfastly refused to accept billions of dollars in federal funding for a policy that polls well even in more conservative states.

And Republicans are voluntarily setting up a high-stakes standoff of their own this month by refusing to raise the debt ceiling, which risks triggering a government shutdown and financial crisis.

“I’m trying to get away from these cliffs,” said Senate Finance Chair Ron Wyden, D-Ore., citing his Clean Energy For America Act, an entry in the reconciliation debate that seeks to consolidate dozens of temporary energy tax breaks into one long-term solution.

Rep. Ron Kind, D-Wis., a retiring member in a GOP-leaning district, urged his colleagues this month to consider picking a few key areas to make decisive permanent change, especially in the ACA, rather than spreading the bill thin with underfunded and expiring items.

“Rather than put in place permanent federal programs that help our communities and our economy, we continue to kick the can down the road and pass short-term stop gap measures,” Kind wrote in an op-ed in The Hill.

And he warned that Democrats erred in 2009 by not ponying up for more robust health care benefits. “We tried to do too much with too little, and as a result, it took ten years to get this critical program on solid footing through the passage of the American Rescue Plan,” Kind said.

But despite the risk, some Democrats say they prefer to remain on the cliff’s edge.

Connolly suggested that it might be healthier for democracy if some benefits have to be renewed regularly, because it “builds in oversight and accountability.” He predicted that voters would be eager to preserve the child tax credit, and likely punish Republicans who ran on letting it expire after the midterms.

“And if they don’t, then we were wrong,” he said.


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