Senate Republican leaders have announced a plan to marry their tax-cut
legislation with a sloppy effort to destroy Obamacare. Specifically,
they will eliminate the mandate requiring Americans to have health
insurance, so that they can free up three hundred billion dollars to add
some middle-class tax cuts to a bill focussed on the rich. This is the
legislative and intellectual equivalent of a terrifying and offensive
tweet from the head of state, and could have far more lasting impact.

The logic of combining the destruction of health insurance with a tax
cut for the rich does make some desperate political sense. Senate
Republicans needed to find more money. If the tax-cut bill increases the
deficit by more than $1.5 trillion, it would trigger the
so-called Byrd Rule, requiring a supermajority of votes in order to
pass. That is the same as saying it would fail, since no Democrats would
ever vote for it. The reason that the Republicans need more money is
that most of the tax bill’s benefits go to the very richest.
Even the bill’s main boosters, including House Speaker Paul Ryan and
Gary Cohn, Trump’s chief economic adviser, have had to admit that
they broke their promise that the middle class would benefit most. (Cohn
emphasized that giving the rich a large tax cut had not been the
“intention,” even if it is the bill’s reality.) The pending giveaway to
the rich has become broadly unpopular, according to polls
from ABC, Reuters,
and the AP.
Republicans, caught between the Byrd Rule and the middle class, had to
find a way to give something to average Americans while also lowering
future government spending so that the math would add up.

The Congressional Budget Office had, inadvertently, provided them with a
perverse solution. Last week, the C.B.O. released a report that showed that
repealing the mandate requiring Americans to have some form of health
insurance would lead to millions fewer being insured. That would mean
that the government wouldn’t have to pay the subsidy for their
insurance, and could save roughly three hundred billion over the next
decade. If those savings were then used to give the middle class some
form of targeted tax relief, then the Republicans could have a big
winner. They could cut taxes, win over wavering voters, and kill
Obamacare all at once. At least that’s the hope. It almost certainly
won’t work.

The new Republican proposal suffers from one major problem: it is
terrible. The nation doesn’t need a repeal of Obamacare or a big tax cut
for the rich. There is no solidly grounded theory that argues in favor
of huge tax cuts for the wealthy during a period of solid economic
growth, in which most benefits have already gone to the rich. This
proposal, though, is a particularly awful way to give tax cuts or to
eliminate Obamacare.

The individual mandate is essential for the success of Obamacare or, for
that matter, any successful national insurance policy. When people
can choose whether or not to be insured, those who are older or sicker
tend to be the first to sign up. Since they cost more money to care for,
their premiums are higher, making insurance less attractive to the
younger and healthier. This is no minor problem. If the individual
mandate is repealed, it could quickly lead to the dreaded
health-insurance death spiral, in which ever-rising rates scare off all
but the sickest, making rates rise still higher. By repealing the
individual mandate without replacing it with any alternative
health-insurance scheme, this proposal would have a first-order effect
of increasing the ranks of the uninsured by thirteen million people
during the coming decade. Some percentage of that group will, without a doubt, facing crippling health-care bills and economic collapse. The
real trouble will come in the second-order effects, as Obamacare
collapses in many parts of the country, leading to many more uninsured.
Ultimately, much of the cost of paying for these uninsured Americans
will fall on the government and, therefore, on taxpayers.

The proposal —is “proposal” too grand a word for what this is?—will have
a hard time passing the Senate. Senator Susan Collins, of Maine, who is
one of three crucial swing votes, has already signalled that she’s unlikely to support it. One other defection would kill the idea. What other choice, though, does Senate Majority Leader
Mitch McConnell have (aside from actually pushing thoughtful bipartisan
legislation)? He needs some kind of major legislation to pass through
his chamber before next year’s elections. It would be good if that legislation had the words “tax reform” in it, and even better if it
also had the phrase “Obamacare repeal” attached.

Sure, this idea is likely to fail. But so has everything else.
Republicans in Congress are already all but destined to pay the price
for failed legislation. Why not take the tiny chance that this will
pass, and even become law? The 2018 elections will come before the worst
effects of this proposal hit Americans. If this crazy idea works, it
would help erase the embarrassing chaos of the last year. The worst
effects of this proposal won’t be felt until after the 2020 elections
and, who knows, people might forget that it was the Republicans who
crafted this solution. Desperate times call for idiotic measures.