Monday, July 24, 2017

Note to President Trump: You Already Own It

by Michael Dorf
(cross-posted on Take Care with some minor updates here)

Last week, as the latest Senate GOP effort to repeal and replace the Affordable Care Act (ACA) failed, President Trump voiced support for simply repealing the ACA, with a replacement to come later. When that Plan B (which had originally been Sen. Mitch McConnell's choice for Plan A) failed a few hours later, the president quickly moved on to Plan C: "We'll just let Obamacare fail. We're not going to own it. I'm not going to own it. I can tell you the Republicans are not going to own it."

Although the very next day the mercurial president attempted to strong-arm GOP Senators into making another push for Plan A, that approach looks likely to fail, even if Plans A and B make it to a floor vote this week. Thus, for the near term it looks like Trump will be following his Trotskyite the-worse-the-better Plan C. While a clear violation of his oath to take care that the laws be faithfully executed, not to mention immoral, there is a question whether it will work as a political matter. Is Trump right that by "letting" (about which more below) Obamacare fail, the GOP won't own that failure?

As the president himself might say . . . WRONG! Announcing that you are going to let Obamacare fail means that you own it. Or at least it should.

Here's an allegory.

Five years ago Amy got off public assistance and moved with her family to a beautiful island that has many natural resources, including abundant seashells that Amy uses in her thriving scrimshaw business. Demand for scrimshaw being limited, however, Amy still finds it hard to make ends meet. She and her family can make a go of it because Amy's lease for the island specifies that her landlord will provide a ferryman voucher to help her purchase essentials (such as insulin for her diabetic daughter) when the ferry from the mainland arrives each month.

For years, the original landlord, Barry, paid the ferryman, and life was hard but good for Amy and her family. Then, six months ago, an investor consortium led by Don, Mitch, and Paul bought the island from Barry (in a forced sale). Don, Mitch, and Paul don't like Amy's family. They don't care about scrimshaw. They want to see Amy and her family back on the mainland as paupers, or at least they want her and her family to leave the island so they can give it to their buddies Charles and David, who will use it as a site for a uranium mine.

But Don, Mitch, and Paul couldn't get the other investors in the consortium to agree on a plan to do that, so they have now hatched another plan. They tell Amy that they will stop making the ferryman payments they owe under the lease so that she "fails on her own." However, they also tell Amy that they don't "own" the decision. It's Barry's fault for signing the lease in the first place. What are the odds that Amy, if she is paying any attention at all, will blame Barry rather than Don, Mitch, and Paul if they follow through on their "self deportation" scheme?

I have enough respect for my readers not to explain any of the foregoing, but I will venture four further comments.

1) Trump's contention that he and the rest of the GOP won't own any failure of the ACA marketplaces would be impossible to take seriously even if the ACA were failing on its own. The whole premise of the GOP campaign to repeal and replace Obamacare was that the ACA was imploding due to poor design that warrants fixing. To say now to the American people that Obama is to blame is simply beside the point even if it is true (which it isn't -- see point 2 below).

If I may be permitted another allegory, it's as if a team of firefighters comes upon a building that is on fire. They try to attach their hose to the nearest hydrant but they can't get it to connect. Rather than continue to try to fight the fire (by, for example, going back to the firehouse for a different size hose), the firefighters just walk away and tell the occupants of the house that they should blame the builder for failing to install sprinklers properly. Here's a visualization of that allegory:



2) Of course, it's actually much worse than that. As repeated studies have shown, the ACA, while far from perfect, is not failing on its own. The ACA will be in danger of failing, however, if the Trump administration continues to sabotage it.

How so? The administration has thus far not followed through on a threat to undermine the so-called individual mandate by turning the tax that some people must pay if they forgo insurance into a dead letter, but it has either taken or contemplated other measures to weaken both the individual marketplaces and Medicaid. Perhaps the most audacious (if not the most successful) so far is its use of funds meant for promoting the ACA exchanges for the exact opposite purpose. Here is an example of the Trump/Price taxpayer-funded campaign against the ACA:



Luckily, the anti-ACA propaganda campaign has had about as much success as a Trump casino. When I first clicked on the video after reading the Daily Beast story linked above, it had been viewed a mere 240 times. But no one should assume that the Trump administration will continue to be incompetent in its efforts to sabotage the ACA. The heaviest shoe could drop next month, when its next status report is due to the DC Circuit.

Recall that in 2014, the House of Representatives sued the Obama administration, arguing that the latter was illegally making payments for the cost sharing reduction (CSR)--the subsidies that help people purchase insurance on exchanges--because Congress had not allocated funds for the CSRs. The district court found that the House had standing and subsequently agreed with its argument on the merits. The judge enjoined further CSR payments but stayed her ruling to allow such payments to continue pending appeal. (A useful explainer can be found here.) The Obama administration appealed, but when the Trump team came into office, they informed the appeals court that the parties (meaning the GOP-controlled House and President Trump) wanted the appeal to be held in limbo while they tried to work out a solution on their own. On March 2, the DC Circuit agreed to the plan, ordering the parties to file periodic updates. In May, the parties told the court that they needed some more time, while the administration would continue to make CSR payments.

Presumably, the administration and the House had sought more time so that they could moot the case by repealing and/or replacing the ACA. Now that this appears unlikely, there is reason to fear that the administration will stop making CSR payments and inform the court that it is dropping its appeal. If so, what happens next is unclear. Democratic members of Congress filed an amicus brief in support of the Obama administration in the DC Circuit. Perhaps they could argue to the appeals court that it ought not to allow the appeal to be dismissed, although that would raise questions of standing and the merits; ordinarily a party can decide for itself to drop an appeal of an adverse ruling.

A more promising scenario in the event that the administration drops its appeal and ceases making CSR payments would be a new lawsuit by people who depend on those payments to purchase health insurance and/or by the insurance companies that receive them. Such individuals and companies clearly would have standing (as they would suffer a classic "pocketbook injury"). Moreover, the individuals could file suit where they live, which would mean that unless the plaintiffs are residents of the District of Columbia, the prior district court ruling in favor of the House would have no precedential force. (It would not even be binding in the District of DC because district court rulings are not binding precedent, but if filed in DC, the case could well end up back before Judge Collyer, the Bush II appointee who ruled against the Obama administration in 2016). With careful forum shopping, the plaintiffs could maximize the likelihood of obtaining a preliminary injunction requiring the Trump administration to continue making CSR payments pending litigation. However, there are no guarantees of this strategy succeeding either in the short run or the long run.

3) The foregoing analysis suggests a legal strategy for defenders of the ACA, but perhaps more importantly, it suggests a political strategy: Democrats seeking election in the 2018 midterms must make crystal clear to the public that Trump and congressional Republicans want to take away their health insurance. In the age of Trump, it sometimes looks like reality and policy don't matter, but the fact that the president has repeatedly boasted that he wants Obamacare to fail makes this a pretty easy messaging job.

Moreover, at least when it comes to health insurance, facts actually matter. Political pressure on vulnerable GOP Senators derailed the repeal and the repeal-and-replace efforts. The CBO scores showing that over 20 million people would lose their coverage under the various bills seemed to be crucial. This shows that whatever other horrors Americans may tolerate or even support, policy that aims to push people off of health insurance is extremely unpopular.

4) In the spirit of nonpartisanship, I offer a proposal that should be able to garner support from enough members of Congress and the president if they are willing to work together: (a) Amend the ACA to make crystal clear that it includes a funding stream for CSR payments; (b) amend the ACA in other relatively minor ways that even Democrats favor; and (c) to give Republicans cover, title the bill that does these things "The Repeal and Replace Obamacare Act of 2017." The Freedom Caucus won't support this measure, of course, but with Democratic votes, it could get through both houses of Congress--if GOP House and Senate leadership agree to work across party lines. And President Trump, who doesn't even know what was in the various bills that he has previously supported and/or opposed, also doesn't care what the new one will do either, so long as he can tout passage as a "victory." Part (c) allows him to do that.

So, what do you say, Mr. President? Do you want to be able to boast about a yuuuuge legislative victory? Or would you rather be a Trotskyite?

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