Political Risk Runs Both Ways

The Wall Street Journal reports White House Senses Political Risk on Healthcare Despite Shutdown Bravado

President Trump has projected unwavering confidence that he is winning the messaging war over the government shutdown. But behind the scenes, his team is increasingly concerned that the issue at the center of the debate will create political vulnerabilities for Republicans.

Advisers are worried that the GOP will take the blame for allowing healthcare subsidies to expire, raising costs for millions of Americans ahead of next year’s midterm elections, according to administration officials.

Inside the White House, aides are discussing proposals to extend the enhanced subsidies for Affordable Care Act health-insurance plans, the officials said. Trump hasn’t yet decided whether he will endorse such a proposal, according to the officials. Republicans say they will only hold negotiations with Democrats on the matter after the government is reopened.

The closed-door hand-wringing stands in contrast to the public bravado conveyed by the president and his top advisers. Trump has posted artificial-intelligence videos of House Minority Leader Hakeem Jeffries (D., N.Y.) wearing a sombrero. And he has said the shutdown gives his administration an “unprecedented opportunity” to make far-reaching cuts and target programs favored by Democrats. The administration is preparing to oust thousands of federal workers.

The emerging dynamic puts Trump in a bind: He is determined to crush the most concerted Democratic resistance since he regained the White House. But he also has to find a solution to a looming problem that threatens his agenda and the GOP majority in the midterms. The president’s love for a fight is pitted against his zeal for dealmaking.

Trump’s advisers have privately acknowledged this week that although their boss has long called for repealing Obamacare, allowing the subsidies to expire could cause political headaches for a president who was elected in large part because of voter frustrations with inflation and the rising cost of living. Voters have expressed deepening frustration with Trump’s handling of the economy in recent polls amid a weak jobs market and stubborn inflation.

Ending the subsidies would result in higher premiums for more than 20 million people. Of the 75 congressional districts where at least 10% of the population is enrolled in the Affordable Care Act, 62 are in red-leaning Florida, Georgia and Texas, according to Kaiser Family Foundation, a healthcare-policy think tank. More than half of the 62 districts in those states are represented by Republicans.

Trump pollster Tony Fabrizio in July issued a memo outlining the risks for Republicans for not acting. “By broad bipartisan margins, voters want to see the tax credits extended rather than expire at the end of the year, whether in the context of premiums doubling or 5 million families losing their health insurance,” the memo said. “This includes solid majorities of Trump voters and swing voters.” The findings have been presented by White House aides to Senate Republicans, an official said.

The White House is particularly sensitive to the House races next fall. Republicans have a razor-thin majority in that chamber, and a Democratic takeover would complicate Trump’s policy ambitions for his final two years and likely lead to investigations into the president and his allies.

Some moderates are floating possible solutions, including proposing a yearlong extension of the subsidies, until after the midterms. The Medicaid cuts in the Republicans’ sprawling tax-and-spending bill passed over the summer don’t fully take effect until 2026.

“Even though none of us were supportive of the ACA to begin with, we can’t walk away from the people that have had no place else to go to get their healthcare coverage,” said Sen. Mike Rounds (R., S.D.).

Democrats’ Strategy

If Democrats can hang on for the rest of the month, healthcare premium notices will be sent.

Consumers can start shopping for next year’s coverage on November 1. Some ACA participants have already started receiving notifications about next year’s premium increases.

About 24 million people are enrolled in ACA (Obamacare) coverage. Roughly that many people will not be happy with sticker shock.

TACO Coming Up

Expect a TACO from Trump by the end of the month. The Senate will easily go along.

Then expect Trump to browbeat any House Republicans who refuse to go along.

House Speaker Mike Johnson will sing the praises of Trump’s great deal, no matter what it is.

And Trump will brag about extending Obamacare.

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