Tax bill's care clause flexible, adviser says

WASHINGTON -- President Donald Trump's budget director said Sunday that the White House is open to removing a repeal of the Affordable Care Act's individual mandate from the GOP legislation to overhaul the nation's tax laws if it becomes a hindrance to the bill's passage.

"If we can repeal part of Obamacare as part of a tax bill and have a tax bill that is still a good tax bill, that can pass, that's great," Office of Management and Budget Director Mick Mulvaney said on CNN's State of the Union. "If it becomes an impediment to getting the best tax bill we can, then we are OK with taking it out."

On CBS' Face the Nation, Mulvaney said the White House "would love to see Obamacare taken apart all at once, bit by bit, however we can do it," but that if the mandate repeal "needs to come out in order for that good tax bill to pass, we can live with that as well."

He said it would be up to House and Senate negotiators to figure out whether to include it in a final legislative package.

The mandate repeal has become a point of contention in the GOP effort to pass the tax bill by the end of the year. In a strategy shift, Senate GOP leaders opted last week to include it in their legislative framework. The tax bill that passed in the House last week did not include the repeal.

White House legislative director Marc Short said the administration approves of the Senate's move to include the repeal of the individual mandate in its bill because it's a tax that predominately affects those earning $50,000 a year or less.

"The White House is very comfortable with the House bill," Short said Sunday on ABC's This Week. "We also, though, believe the individual mandate is a tax, and it is harming middle-income families the most. So we like the fact that the Senate has included it in its bill."

Treasury Secretary Steven Mnuchin said the individual mandate repeal hadn't been added to the Senate bill as a bargaining chip that could be removed later if it risked costing the votes of key Republican senators such as Susan Collins of Maine and Lisa Murkowski of Alaska.

"The president thinks we should get rid of it. I think we should get rid of it," Mnuchin said. "It's an unfair tax on poor people. To think that you put a penalty on people who can't afford to buy medical policies, it's just fundamentally unfair."

"This isn't a bargaining chip," Mnuchin said on Fox News Sunday. "Right now our objective is to keep it in," he said, adding that "we're going to work with the Senate as we go through this."

The individual mandate requires most Americans to obtain health insurance or pay a fine. Including it in the Senate bill gives GOP leaders in the upper chamber more revenue to work with in their version of the legislation because it would probably result in fewer Americans signing up for insurance and taking advantage of federal subsidies offered by the government to pay for coverage.

Critics of the maneuver say it would harm the nation's health care system. The back-and-forth has reignited debates over the Patient Protection and Affordable Care Act, the law that Republicans spent months this year unsuccessfully trying to dismantle.

Republican leaders are hoping that passing a broad tax overhaul will help them turn the page on their failure to repeal and replace the Affordable Care Act and give them a boost headed into next year's midterm elections. They are seeking to pass a far-reaching plan to simplify the tax code and slash taxes. The majority of the cuts would go to corporations and wealthy Americans.

Senate GOP leaders plan to take their bill to the floor for consideration after lawmakers return from Thanksgiving recess. It remains unclear whether they will have the votes to pass their measure, as some key Republican senators have voiced concerns. Republicans hold a narrow 52-48 advantage over the Democratic caucus in the Senate.

Collins, a centrist who has voiced several worries about the bill, said on This Week that the "biggest mistake" was including the mandate repeal. She expressed hope that it would be dropped from the proposal or that a plan to mitigate its effects, which she and other senators are pushing, would be adopted.

Collins did not say how she would vote on the bill. If the Senate passes its legislation, it would have to work out its differences with the House version.

"I want to see changes in that bill, and I think there will be changes," she said.

On State of the Union, Collins stated flatly that "I don't think that provision should be in the bill. I hope the Senate will follow the lead of the House and strike it."

Collins said the tax advantage that some middle-income consumers would get under the broader bill could end up being canceled out by repealing the mandate. They would face higher insurance premiums coupled with the loss of federal subsidies to help them afford the cost of insurance, she said.

"The fact is that if you do pull this piece of the Affordable Care Act out, for some middle-income families, the increased premium is going to cancel out the tax cut that they would get," she said.

Collins said she also wants to keep the top individual income-tax rate at the current 39.6 percent and that the state and local tax deduction, targeted for elimination in the Senate bill, should be continued.

Republican Sen. Tom Cotton of Arkansas said on Fox's Sunday Morning Futures that the mandate should be eliminated because lower-income people are still getting subsidies to reduce their premiums.

"The vast majority of people on the Obamacare exchanges are getting subsidies," Cotton said. "So if their premiums do go up, they're still going to get higher subsidies."

Asked whether Senate Majority Leader Mitch McConnell, R-Ky., would be willing to remove the mandate repeal if it becomes an impediment, Don Stewart, a McConnell spokesman, called that scenario a "hypothetical" one.

Sen. Ron Johnson, R-Wis., has already declared his opposition to the bill, saying last week that it doesn't cut business taxes enough for partnerships and corporations. GOP Sens. Bob Corker of Tennessee, John McCain and Jeff Flake of Arizona, and Rand Paul of Kentucky also have concerns about the bill.

Mnuchin, meanwhile, said he's had "very good discussions" with Collins, Corker and Johnson about the bill. He said he wants to make sure their views are heard and incorporated before the final vote.

Republicans cannot afford to lose more than two senators on the final vote, which would allow Vice President Mike Pence to cast a tie-breaking 51st vote in his capacity as president of the Senate. Democrats are not expected to support the bill, as was the case when the House passed its version.

If the Senate bill passes, lawmakers from the House and Senate would attempt to compromise on significant differences between their two versions on the treatment of deductions and other elements, with the goal of having a final bill to Trump by the year's end.

The House bill, passed on a party-line vote, would lower the corporate tax rate to 20 percent from 35 percent, shrink the number of individual tax brackets to four from seven, and scrap many popular tax breaks and deductions. Several Republicans from districts in high-tax states, including New York and New Jersey, voted against the plan.

Critics say both plans would drive up the federal budget deficit, despite assertions from the White House and many Republican lawmakers that tax cuts would pay for themselves over time by increasing economic growth.

"It's just not economically rational" to say that the plans would increase the federal deficit, Kevin Hassett, the chairman of the White House Council of Economic Advisers, said at the daily White House briefing on Friday.

Some independent studies dispute that, prompting critics of the tax plans to say they'll soon spur urgent calls for spending cuts.

The conservative-leaning Tax Foundation, a Washington policy group, said earlier this month that the House's tax bill would cost $1.98 trillion over a decade compared with current law. About half of that may be offset by higher growth, the foundation estimated.

Information for this article was contributed by Sean Sullivan, Sarah Kaplan, Mike DeBonis and Damian Paletta of The Washington Post; by Ros Krasny, Ben Brody, Mark Niquette and Randall Woods of Bloomberg News; and by Darlene Superville of The Associated Press.

A Section on 11/20/2017

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