The Ways and Means reconciliation bill repeals the Affordable Care Act’s individual mandate, employer mandate, “Cadillac” tax, medical-device tax and Independent Payment Advisory Board.
But reconciliation is subject to what is called the Byrd Rule, which prohibits the Senate from considering “extraneous matter” as part of a reconciliation bill. While there are many tests for matters to be considered extraneous, the problem in this case is that the Ways and Means bill would increase the deficit after 10 years, according to Ed Lorenzen, a senior adviser at the Center for a Responsible Federal Budget. The problematic pieces are the Cadillac tax, medical-device tax and IPAB repeals, which all bring in revenue. The CRFB estimates the package would increase deficits in the second decade by around $500 billion.
“The exact amount of the deficit impact is uncertain, but the direction of the impact is pretty clear. The costs of the items that would be repealed are growing much faster than the savings in the bill,” Lorenzen said.
And that means Democratic votes would be needed to hit the 60-vote threshold necessary to waive the Byrd Rule for those provisions, which isn’t going to happen. A senator can raise a “point of order” against each provision in violation, and if there are not 60 votes to waive the point of order, the provision is removed from the bill and the rest of the bill can move forward.
Yet there are Democrats in both chambers who want to repeal the taxes, and even Hillary Clinton came out on Tuesday in opposition to the Cadillac tax. But Democrats won’t vote for repeal while it’s attached to a bill that attacks the parts of the law that they support.
“No,” said Sen. Debbie Stabenow when asked if she would support the repeals in such a situation. “It’s going to come to us, and as long as it’s part of this big package, even if it was voted on as amendment and then put into the package or something, no.
“If they were stand-alone, there’s certainly a willingness,” she added. “I want to fix the Cadillac tax. I would vote for addressing the medical-device tax in a way that is responsible—fiscally responsible. But not as part of reconciliation.”
Sen. Jeanne Shaheen, who supports repealing both taxes, when asked about the fact that both provisions were included in the reconciliation bill, quickly pointed out that “so is defunding Planned Parenthood, so I don’t support that.”
Lorenzen said Republicans do have another option to get all of the reconciliation pieces passed without Democrats. They could sunset the repeal in 2025 (the point at which the repeals are estimated to begin adding to the deficit), which would essentially mean delaying the implementation of the Cadillac tax, medical-device tax, and IPAB until 2026.
“But more likely, they could bring the bill to the floor, force Democrats to raise a point of order against each of those provisions, and try to get Democrats who support repealing those provisions to vote to waive the Byrd Rule,” he said. “But that vote will be framed as voting to allow a provision that would increase the long-term deficit, which allows members to say they would support repeal if it didn’t make the deficit worse.” Many Democrats have said they will not support a repeal of the medical-device or Cadillac tax that is not offset.