Senate leadership mulls options to woo moderates, including keeping tax increase on certain investments and nixing cuts to subsidies for poor and elderly

As senators started to leave Washington for the Fourth of July recess on Thursday, a compromise over the beleaguered GOP healthcare bill that would attract enough votes to pass seemed distant.



Days after the Senate Republican leadership faced a revolt from both wings of their caucus over a draft bill to repeal and replace Barack Obama’s Affordable Care Act (ACA), lawmakers were considering whether to reach out to moderates by keeping the former president’s tax increase on wealthier people’s investments and retreating on cuts for subsidies to the poor and elderly.

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The Senate majority leader Mitch McConnell’s decision to postpone the healthcare vote he hoped would occur before the Fourth of July holiday was a stunning twist in Republicans’ seven-year effort to repeal Obamacare, raising the possibility that the demands from conservatives and moderates may be irreconcilable.

The legislation introduced last week, crafted in secret and pushed toward a vote without a public hearing, would repeal major pieces of the ACA, also known as Obamacare, and carve deep cuts into Medicaid, a public health insurance program for low-income Americans. The independent Congressional Budget Office has estimated that the bill would increase the number of people without health insurance by 22 million over the next decade.

Just as senators were leaving town, the agency released a new report that forecast the Republican plan to restructure Medicaid payments beginning in 2025 would result in dramatically deeper cuts in the following decade. By 2036, the analysis projects, the federal government would spend 35% less on Medicaid than under current law, compared with a 26% reduction in the first decade.



Trump repeatedly promised on the campaign trail not to cut Medicaid and has insisted on Twitter that the Senate proposal increases spending on Medicaid. While that is technically accurate, the bill significantly reduces spending on the program compared with funding under the current law, if the Republican health bill is not passed.

Over the past few days, Republican senators have paraded to McConnell’s office with requests, amendments and even demands to reshape the healthcare legislation in a way that would win their support.

Facebook Twitter Pinterest Protesters against the Senate Republicans’ healthcare bill hold a rally outside the Capitol in Washington. Photograph: Saul Loeb/AFP/Getty Images

By the end of the day on Thursday, the Republican senators had largely retreated into two camps: those with concerns about the plan’s impact on vulnerable Americans, including low-income and elderly people, and those resistant to axing the bill’s generous tax cuts.

“We pledged that we would repeal Obamacare,” said Pat Toomey of Pennsylvania, a conservative who supports the legislation’s rollback of Medicaid as drafted. “I don’t remember anybody going around saying ‘except for these job-killing tax increases’, so I expect that we will repeal all of the taxes.”

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But on Thursday, Bob Corker of Tennessee, an establishment Republican, said he expected the GOP leadership to scratch a provision in their legislation that would have eliminated an ACA tax on high earners.



Democrats and opponents of the GOP repeal effort had attacked their plan as a “massive transfer of wealth”, referring to it as “wealthcare”.

Corker said it was “not an acceptable proposition” for Republicans to put forward a bill that “increases the burden on lower-income citizens and lessens the burden on wealthy citizens”. His remarks echoed the sentiments of several senators who on Wednesday started to question whether the plan should eliminate taxes on wealthier Americans while dramatically reducing the benefits available to low-income, disabled and elderly Americans.

Mike Rounds of South Dakota, another establishment Republican, noted of Obamacare’s 3.8% investment tax, which had been a subject of debate among Senate Republicans: “I am open, like most of the members of our conference, to discussion on all of those items.”

Rounds added: “We’re still repealing 80% of all the Obamacare taxes.”

The tax, which applies to dividends and capital gains earned by individuals with incomes over $200,000, has not only become a target of Democratic critics but has been seen by Republicans as a way to pay for subsidies that moderates feel are essential in any replacement of the Affordable Care Act.

Meanwhile, Ted Cruz of Texas, a conservative who opposed the draft bill because it did not go far enough in repealing the ACA, offered an amendment that an increasing number of senators said they would support.

The proposal would allow insurers to sell plans that do not comply with the ACA’s regulations as long as they offered at least one plan that did. The healthcare law requires plans to cover services, known as essential health benefits, that include maternity care, prescription drugs and mental health and substance abuse treatment.

The House speaker, Paul Ryan, told reporters on Thursday that he thought his chamber could “move fairly quickly” on any legislation passed by the Senate.

The Wisconsin Republican said he viewed the legislative morass in the upper chamber as a hiccup and compared it to his struggles to pass ACA repeal legislation in the House.

“This is exactly what we did in the House,” said Ryan. “We brought it to the floor and then we pulled it back and then we brought [and] passed it. It’s basically the process Senate is going through.”

Ryan added that he was feeling “a sense of déjà vu” and that he had told McConnell “I know exactly how he feels”.

The House managed to assemble legislation that appealed to just enough conservatives and moderates in May, and Republicans narrowly approved the bill without help from Democrats.

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On Thursday, the North Carolina congressman Mark Meadows, the chairman of the House Freedom Caucus, told reporters that the House would move directly to a vote on the Senate’s healthcare plan once it had passed. Traditionally, the bill would be sent to a conference committee to iron out the differences between the House and Senate version.

However, the agonized legislative battles over healthcare reform meant that it was unlikely that the chambers would be able to reach a compromise and, instead, House Republicans would be forced to simply pass the Senate bill lest the conference committee deadlock.

But after the House vote last month, Republican congressmen and women faced hostile crowds at their town halls, with constituents enraged at their decision to repeal the healthcare law. Over the Fourth of July recess, Republican senators are expected to be greeted with protests and rallies in their district by constituents urging them not to support this plan.

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