President Donald Trump will oppose any congressional attempts to reinstate funding for Obamacare subsidies — unless he gets something in return, his budget director Mick Mulvaney said in an interview Friday morning.

The comments by the Office of Management and Budget chief delivered a severe blow to efforts by Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) to strike a bipartisan deal on funding the subsidies. Trump canceled those payments to insurance companies on Thursday night, raising hopes among some Democrats and centrist Republicans that the Trump administration could accept a bill that would revive the subsides while offering states more flexibility to opt out of Obamacare.


But Mulvaney panned those efforts, calling the so-called cost-sharing reduction payments “corporate welfare and bailouts for the insurance companies.”

“Instead of saying what we might support, I’d say I’m pretty sure what we won’t support, which is just a clean Murray-Alexander bill,” Mulvaney said, sitting in his spacious office in the Eisenhower Executive Office Building on Friday morning.

POLITICO Playbook newsletter Sign up today to receive the #1-rated newsletter in politics Email Sign Up By signing up you agree to receive email newsletters or alerts from POLITICO. You can unsubscribe at any time. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

“The president has said pretty clearly that he’s willing to talk to just about anybody about repealing and replacing [Obamacare],” Mulvaney continued. “But if the straight-up question is: Is the president interested in continuing what he sees as corporate welfare and bailouts for the insurance companies? No.”

The administration, however, opened the door to negotiations on the now-canceled payments. After speaking to Senate Minority Leader Chuck Schumer (D-N.Y.) on Saturday, Trump said that a temporary deal could be struck on shoring up the insurance markets. Mulvaney suggested the insurance payments could be a bargaining chip in a broader negotiation with Congress to either repeal President Barack Obama’s signature health care law — or fund Trump’s long-stalled border wall with Mexico.

Mulvaney is bullish about securing Trump’s priorities in a December funding bill, and he threatened — not for the first time — a government shutdown if Trump doesn’t get them.

“The president fully expects his priorities to be funded, and the wall is one of them,” Mulvaney said. “It would be highly unlikely for the president to sign a funding bill in December that does not fund his priorities.”

Mulvaney added that members of Congress he meets with probably “think that’s a credible threat.”

The government runs out of money on December 8, a deadline that will trigger high-stakes negotiations with the White House over how to avoid a government shutdown. An immigration bill, debt ceiling increase or wall money could all be in the mix with the Obamacare payments.

“It depends on what else it’s attached to, right?” Mulvaney said of the administration's position on the bipartisan health care payments proposal. “Take it on its own, I don’t know how you describe Murray-Alexander as anything other than a continuation of these subsidies, and I don’t know how much interest there would be on that. If it’s part and parcel … of a larger discussion on health care, then maybe it’s something to look at.”

The tough talk from Mulvaney represents a hard line by the Trump administration toward Congress after months of frustration at the GOP majorities' inability to repeal Obamacare. The president and his aides are foisting the issues of immigration, foreign policy and now Obamacare payments on Congress, hoping to extract conservative legislation out of a GOP-controlled legislative branch consumed by infighting.

Republican leaders are worried that Trump’s move to end Obamacare subsidy payments could backfire on them in the 2018 midterms, inciting voters upset about skyrocketing insurance payments. But Mulvaney said voters are far more likely to punish congressional Republicans for failing to live up to a seven-year promise: repealing Obamacare.

“There’s a long list of reasons that Republicans could pay a price for something in the midterms, and my guess is at the top of the list is failure to repeal and replace Obamacare,” Mulvaney said. "So do I think [stopping subsidy payments] turns [into] an issue in a midterm election? Probably not."

Democrats panned Trump’s Thursday evening decision as irresponsible and pleaded with GOP leaders not to cut off the bipartisan talks.

"I continue to be optimistic about our negotiations and believe we can reach a deal quickly — and I urge Republican leaders in Congress to do the right thing for families this time by supporting our work," Murray said on Friday morning.

With the dour view from the administration, House and Senate Republicans are planning to unveil a proposal next week aimed at increasing GOP support for the cost-sharing payments, Sen. Ron Johnson (R-Wis.) said in an interview on Friday. The plan would mandate the sale of catastrophic health care plans, expand the use of health savings accounts and require insurers to reduce premiums if they accept the cost-sharing payments.

"I've always viewed the higher hurdles (to passage of a bill as being in) the House. Doesn’t do us a whole lot of good to come up with an agreement in the Senate that can't pass the House," Johnson said. He said the Senate has had “excellent discussions, but in the end we need to make sure we can get House members on board."

Many Republicans, including GOP congressional leaders, have been urging Trump to continue the payments. But the White House viewed the failure of Obamacare repeal in the Senate as a breaking point, and saw no use in keeping up the payments without larger health care legislation on the horizon. The Justice Department also provided legal cover, pronouncing that the payments are unconstitutional.

That move by Trump also represents a significant internal win for Mulvaney, whose hard-line stances on spending and the debt ceiling have at times been spurned by the president. Mulvaney said he’d been trying to persuade Trump to end the payments since he was sworn in as budget director.

“I’ve been making the case from the beginning of the administration that we shouldn’t be making these payments,” said Mulvaney. “Not only are they bad policy, in terms of bailing out companies that don’t need to be bailed out, but No. 2, they’re unconstitutional.”