Trump Regrets Backing Paul Ryan’s Plan to Do Health Care First

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Tired of winning. Photo: Cheriss May/NurPhoto via Getty Images

On Monday in Kentucky, President Trump described his overhaul of the American health-care system as an irritating but necessary chore.

“We want a very big tax cut. But we cannot do that until we keep our promise to repeal and replace the disaster known as Obamacare,” Trump explained. “We gotta get this done before we can do the other.”

The president has voiced a similar sentiment several times in recent weeks. Unable to make a substantive case for a health-care bill that does the opposite of virtually everything he promised it would, Trump has taken to insisting on its grim necessity.

But after a week of negotiating with the recalcitrant reactionaries of the House Freedom Caucus, the president no longer believes that throwing 24 million people off their health care is a prerequisite for cutting his own tax rate.

The idea that Trump had to repeal Obamacare before slashing taxes was never his own. It was Paul Ryan’s.

The House Speaker insisted on this sequence because his dream of passing permanent regressive tax cuts depends on it. To avoid a Democratic filibuster in the Senate, Republicans must pass their tax plan in the form of a budget-reconciliation bill — a type of legislation that can pass with a simple majority in the upper chamber. But budget-reconciliation bills cannot increase the budget deficit outside of the ten-year period after they’re passed.

This means that Republicans can either put a ten-year time limit on their tax cuts — as they did under George W. Bush — or they need to find a way to make their tax cuts revenue neutral.

That latter gambit may sound impossible. And it probably is. But it’s a bit less impossible if Republicans repeal Obamacare first, as Jonathan Chait has explained:

The Republican plan to repeal Obamacare would eliminate all the taxes that were raised to help pay for the benefits — about $1.2 trillion over the next decade. This would lower the baseline of tax revenue, meaning that Republicans would need to design a tax code that raises $1.2 trillion less in revenue in order to be “revenue-neutral.” That makes it crucial for them to repeal Obamacare before they cut taxes.

Still, even with that $1.2 trillion handicap, it’s highly unlikely that Republicans can keep their tax package revenue neutral. The House’s plan to do so involves revising the corporate tax code in a manner that disadvantages major importers like Walmart — a move that several Republican senators have declared dead-on-arrival in the upper chamber.

Thus, the only reason why Trump had to put Obamacare repeal at the top of his legislative docket was to keep Paul Ryan’s naïve dream of permanent tax cuts alive for a little longer. Instead of beginning his presidency by pushing the GOP’s heinously unpopular vision for health-care reform, Trump could have notched an easy win on (temporary) tax cuts.

And the president is finally realizing all this. Per the New York Times:

Mr. Trump has told four people close to him that he regrets going along with Speaker Paul D. Ryan’s plan to push a health care overhaul before unveiling a tax cut proposal more politically palatable to Republicans.

He said ruefully this week that he should have done tax reform first when it became clear that the quick-hit health care victory he had hoped for was not going to materialize on Thursday, the seventh anniversary of the act’s passage, when the legislation was scheduled for a vote.

The president regrets listening to Ryan. And the Speaker is on the cusp of humiliating defeat as the House moves to vote Friday afternoon.

Steve Bannon smells blood.

Trump Regrets Backing Ryan’s Plan to Do Health Care First