Democratic leaders are desperate to show their frustrated base that they are willing to fight President Trump’s agenda, and so a government shutdown when current funding expires at the end of this month remains a real possibility.
Struggling to find a winning message against Trump, Democrats seem to have settled on making the government shutdown a battle over expanding Obamacare. Republicans should not give in to their demands to help them patch up the problems created by that disastrous health care law.
One of the major failures of Obamacare is that it mandated that every insurance policy cover a specific package of benefits, forced insurers to offer coverage to everybody regardless of preexisting conditions, and limited the amount that insurers could charge older and sicker individuals.
The result of these policies was to significantly raised premiums, especially on younger and healthier individuals who were now forced to purchase much more coverage than they needed or go uninsured. Many of them chose to go uncovered, and without the profits generated from overcharging younger and healthier individuals, health insurers had to raise premiums even further.
Democrats refused to accept policies that would have loosened regulations and provided more choice to consumers. That could have given younger individuals the ability to purchase less-expensive coverage tailored to their individual needs. Instead, when Democrats gained power in 2021, they used the Covid emergency to simply make taxpayers pick up the tab for the higher premiums by offering more generous subsidies. What was supposed to be a temporary measure during the pandemic was extended again in 2022 through this year. Now Democrats are using the threat of a shutdown as a way to twist Republicans into extending them further.
Right now, we’re about two weeks out from the deadline, but Congress will also take time off for the Jewish High Holidays next week. House Republicans, if they stay unified, could pass a government funding bill without any Democrats, but in the Senate, Republicans would need to win over at least seven Democrats to avoid a filibuster. Democratic Leader Chuck Schumer is highly motivated to dig in to protect his left flank.
There’s an indication that some Republicans would be open to perhaps a temporary extension of the Obamacare subsidies to take the issue away from Democrats during next year’s midterms. Even though this would be sold as a modest compromise with a relatively small price tag (around $30 billion), this would be an egregious mistake. If Republicans are unwilling to let the subsidies expire now, there’s no reason to believe that they will ever be allowed to expire — and the Congressional Budget Office estimates that a permanent extension of the subsidies would be $358 billion over a decade.
Recall that Republicans ran in four election cycles between 2010 and 2016 on pledges to repeal Obamacare, but they failed to do so in 2017 when they finally had unified control of Congress. Yet when it came to the repeal effort, they had a very tough task of trying to get their whole caucus to agree on health care policy and pass something. In this case, the only thing Republicans have to do to make the extra subsidies go away is to simply do nothing and let them expire. For Republicans, with unified control of Washington, to take legislative action to enshrine a massive and costly expansion of Obamacare would be an immense betrayal of their voters.
Schumer told reporters that “Republicans have to come to meet with us in a true bipartisan negotiation to satisfy the American people’s needs on health care or they won’t get our votes, plain and simple.” A true bipartisan negotiation, however, would involve Democrats’ actually opening themselves up to deregulation and free market reforms, something that they have consistently opposed in lockstep.
Instead of caving in, Republicans should call Schumer’s bluff. If he is willing to shut the government down to funnel tens of billions more dollars each year to insurance companies, that’s a fight worth having.