Shutdown Watch: A stopgap deal to avert a government shutdown?

House Tea-Publicans introduced a stop-gap spending bill late Wednesday night to allow negotiations on a spending agreement to continue through May 5 without the threat of a government shutdown. House Republicans introduce stop-gap spending bill to continue budget talks:

The short-term spending measure, which would extend current funding levels beyond the end of this week, comes as negotiators are nearing an agreement on a budget to increase military spending and border security and keep the government open through the end of September. The decision to begin work on a very short extension comes as no surprise, the final steps of a spending deal could drag on beyond the current April 28 deadline and congressional leaders are eager to minimize the threat of a shutdown, according to aides familiar with the talks.

“I am optimistic that a final funding package will be completed soon,” said House Appropriations Committee Chairman Rodney Frelinghuysen (R-N.J.). “It is time that this essential work is completed so that critical programs and activities — including national defense — are properly and adequately funded for the year.”

White House officials notified lawmakers earlier in the day that President Trump abandoned a threat to end subsidy payments under the Affordable Care Act, a concession to Democrats that is expected to clear the way for a bipartisan budget agreement. Trump had threatened to cut off the subsidies in an attempt to force Democrats to pay for a wall along the U.S. border with Mexico, a fight that became less serious after Republicans withdrew their border wall request this week.

“It is good that once again the president seems to be backing off his threat to hold health care and government funding hostage,” Senate Minority Leader Charles E. Schumer (D-N.Y.) said. “Like the withdrawal of money for the wall, this decision brings us closer to a bipartisan agreement to fund the government and is good news for the American people.”

Greg Sargent of the Washington Post had reported earlier on Wednesday that The White House just ratcheted up its threat to destroy Obamacare, a Democratic aide says:

House Democratic leader Nancy Pelosi spoke by phone last night with White House budget director Mick Mulvaney, and Mulvaney took the White House’s threat to sabotage the Affordable Care Act to a new level — its most serious yet, according to an account of the call provided to me by a Democratic aide familiar with the conversation.

On the call, Pelosi reiterated the Democratic position on the so-called “cost-sharing reductions” (CSRs), which subsidize lower out-of-pocket costs for millions of Americans. Democrats are insisting that these payments — which the administration has been making but has threatened to cease — must be included in Congress’ forthcoming spending bill to make sure that they continue. If they don’t, insurers, facing a big financial loss, would probably flee the individual markets, causing them to melt down.

But Mulvaney told Pelosi that the administration might not make its payment next month, the aide tells me. And not only that, Mulvaney “made clear that absent Congressional action, the administration would cease making payments,” the aide adds. A spokesman for Mulvaney didn’t immediately respond to an email requesting comment.

This appears to be a serious escalation of the White House’s threat to sabotage the exchanges. President Trump had said that he might stop the payments to try to pressure Democrats into agreeing to fund his wall on the Mexican border. But in recent days, Trump retreated on his demand for the wall, leading many to expect that the CSRs would continue, at least for the time being. And despite Trump’s rhetoric, leading Republicans, such as Paul Ryan, have said they expect the payments to continue while litigation over them is decided.

But now Mulvaney is threatening to halt the payments as soon as next month, according to the Democratic aide. And this has insurers predicting that they may end up exiting the markets if this comes to pass.

UPDATE: A spokesman for Mulvaney says the claim that he made clear that the administration would cease the payments is false [but remains an issue for leverage. A White House official told Reuters, “While we agreed to go ahead and make the payments for now, we haven’t made a final decision about future commitments.”]

In fact, Anthem Threatens to Leave Health Exchanges if Subsidies Are Halted:

Even as Anthem, one of the nation’s largest insurers, reported an improved financial picture for the last year, the company warned on Wednesday that it would consider leaving some federal health care marketplaces or raising its rates sharply if the government does not continue subsidies to help low-income people.

Joseph R. Swedish, the company’s chief executive, set a deadline of early June for a decision on the subsidies, saying Anthem would weigh increasing rates by at least 20 percent next year.

These subsidies, called cost-sharing reductions because they reduce the amount people must pay out of pocket when they go to the doctor, have become a political football as President Trump and House Republicans try to repeal the federal health care law and negotiate a spending bill with a deadline looming this week.

* * *

The company is deciding where to sell policies and what to charge for 2018, and it is telling state insurance regulators that it will need to make significant adjustments to its offerings if the government funding remains unclear by early June.

* * *

Another for-profit insurer that has a major presence in the market, Centene, announced its results on Tuesday. The company expressed confidence that there was support from both Republicans and Democrats for the subsidies and said it expected to remain in the market.

* * *

On Wednesday, Republican leaders were seeking to assure Democrats that the subsidies would continued to be funded, although there was no guarantee.

Continued from above:

The pair of GOP concessions eases chances that the government will shut down this weekend, but a number of smaller issues must be resolved before a spending deal can be finalized, according to several congressional aides involved in the talks. Democrats have refused to sign off on several GOP-written policy provisions, known as riders, including those that would restrict abortion access under the ACA and end Wall Street reforms passed under President Barack Obama.

Republicans have not indicated how they plan to handle the policy provisions, but most GOP negotiators said they were pleased with the direction of the negotiations, despite allowing Democrats victories on the border wall and health care. The spending bill is expected to include several White House priorities, such as increases in border security and defense spending, including an unspecified amount to repair fencing and new surveillance technology to patrol the nearly 2,000-mile border, the aides said. Democrats have said they support increased border security as long as no money goes toward building a physical wall.

The “cost-sharing reductions” (CSRs) under “Obamacare” will temporarily continue, but this issue needs to be resolved soon because the deadline is approaching for insurers to submit their health plans for the next “Obamacare” enrollment period.

The next status report to the Court in House v. Price (née House v. Burwell is due on May 22. Stay tuned.

2 Responses to Shutdown Watch: A stopgap deal to avert a government shutdown?

  1. A comment on a different site suggested a little bit of insight for analyzing Mr. Trump’s ‘strategy’ in various negotiations, and why we should expect it to fail.

    Mr. Trump comes from a background in commercial real estate development, and the developers typically have a massive amount of leverage in dealing with contractors, other suppliers, and local governments in pushing for favorable terms, deals, and other accommodations. Typically, developers are the ones with the money, and with the money comes the power to set the terms of the deal.

    Now, Mr. Trump must acclimate to a situation where he has to negotiate on a much more level playing field. Congress doesn’t have to bend to the President’s will – rather, the President has to accept (just as Obama did) that he can only get done so much without Congress’s say so. And other countries have a lot more bargaining power than do contractors, since they tend to have considerably more outside options and channels for leverage (perhaps not so much militarily, but in terms of outside options, treaties and agreements with other nations, etc.).

    Mr. Trump’s success (and, though I don’t like the guy or his plans for this country, I do hope that somehow, the country is better off after his term of office is up), will depend on how well he can learn to play give-and-take, vs. the take-and-take mentality that served him… adequately… as a developer.

    • For Sure Not Tom

      I had the same thoughts when Trump took office. He’s famous for being a terrible businessman but great at self-promotion. The gossip rags loved him in Manhattan and his schtick played well as a reality TV game show host.

      But now he’s in Washington DC, in politics, which, unlike his time as a WWE wrestler, is full contact. 535 Senators and Congressfolks care more about getting re-elected than landing the contract for gold curtains at a Trump property.

      They don’t need him.

      I suspect he will never learn give and take and will continue to distort his record to comfort his ego. He’ll put on a show when needed to distract (like that phony presser over a non-existant tax plan) and yell fake news when he gets called out.

      The country will end up poorer, but the ratings will be huuuuuuuge.