John Thune Is Sure the GOP Will Win the Shutdown. The Real Question Is What to Do About Obamacare

Senate Majority Leader John Thune is confident his party is going to come out on the right side of the shutdown fight. What's less clear, at this point, is where the caucus goes after the shutdown, when negotiations around Obamacare may begin in earnest.

For a month, all but three Senate Democrats have refused to vote in favor of a House-passed continuing resolution to fund the government through November 21, insisting instead that Obamacare subsidies, which are set to expire at the end of the year, be extended as part of any funding bill. Thune has brought the GOP bill up for a vote more than a dozen times only for Democrats to slap it down every time.

Democrats have "followed Schumer into a box canyon, because they just seem like there’s really no way out," Thune said in a wide-ranging sit-down interview with National Review on Wednesday.

The White House and congressional Republican leaders have said for weeks that they will not negotiate in the context of a closed government. President Trump spoke with Thune on Monday and Tuesday and said he's "more than happy" to sit down with Democrats — but only once the shutdown is over, Thune explained.

Democrats are poised to run smack into a politically fraught deadline: Obamacare open enrollment begins on November 1 and Senate Minority Leader Chuck Schumer (D., N.Y.) has burned weeks that he could have spent negotiating to extend the subsidies that are set to expire. Democrats have kept the government closed "long enough that we can't have the conversation," Thune explained.

For Thune and most of his caucus, Democrats are missing the forest for the trees in their insistence on extending the subsidies, propping up a fundamentally broken system by shoveling more taxpayer dollars into it.

"They’re trying to blame us for what they say are going to be big premium increases. Those premium increases are going to be there anyway," he said. "The enhanced subsidy is a piece of that, but part of it is the way this program is structured in the first place. It’s just fundamentally inflationary."

"We do have a lot of our members who want to do something on health care, but it would take it in different direction," Thune said. That could include cost-sharing reductions like the one that was proposed by Louisiana Senator Bill Cassidy, which the parliamentarian eventually struck from the reconciliation bill earlier this year. He said Republicans are also considering proposals that put downward pressure on premiums.

As for the enhanced Affordable Care Act subsidies, "there are a handful, obviously, that are open to doing something and some sort of an extension with reforms."

While congressional Republican leaders have largely declined to engage in discussions about what a potential deal on Obamacare might look like, bipartisan sidebar negotiations in recent weeks have raised a range of potential reforms, including income caps for enrollees, Hyde Amendment protections that would prevent coverage for plans that cover abortions, and nixing auto-reenrollment.

In Thune's view, one of the many problems with these enhanced Obamacare tax credits is that the subsidies go directly to insurers, which incentivizes companies to auto-enroll as many people as possible into their plans. As a result, many people don't know they are getting coverage. In essence, the program is so flawed that "it would need to be significantly reformed to have any conversation about extending it."

And even with reforms, there's little appetite among Senate Republicans to extend pandemic-era subsidies that were intended to be temporary, drive health insurance costs up, and put more of a burden on taxpayers. After all, "not a single Republican, living or dead" voted in favor of Obamacare, the 2021 enhanced ACA subsidies, or the extension of those subsidies in 2022. What's more, "there’s a lot of reluctance to support a program that has really bad results."

Thune pegs Republican opposition to any sort of subsidy extension at around 80 to 85 percent in both the House and Senate. While Republicans continue to insist on a clean spending bill to open the government, Schumer is pushing a Democrat-drafted stopgap funding bill that would repeal major aspects of the reconciliation bill while adding lots of new spending. That approach is a total nonstarter, Thune said.

Where's Trump?

Trump, who has long been sensitive to health-care-related political developments, is considered a wild card on this issue. As the first year of his second term comes to a close, Trump's political team is looking for additional ways to cement his legacy as Republicans gear up for a competitive midterm cycle.

In June and July, longtime Trump pollsters John McLaughlin and Tony Fabrizio conducted separate surveys surrounding the expiring ACA subsidies, which they call "healthcare premium tax credits."

They reached the same conclusion. "Letting these tax credits lapse would be bad for the Republicans, because a lot of the working-class people that we attracted in the Trump coalition would be negatively affected by this, and it's very popular not to reduce the tax credits," McLaughlin said in a recent interview with National Review.

And he insisted Trump's political team took notice. "When we did our poll, it was a revelation to a lot of people on the Trump political team that made sense," McLaughlin added. "This would hurt the Trump coalition. You would have Trump voters who might stay home in the midterms because of this, or might actually vote Democrat because of this issue." 

Thune recognizes that the political sensitivities surrounding this issue in swing states and districts may prompt Trump to try and strike a deal to keep the credits in some form. If the president and the White House conclude that they want to do something on this, "that obviously drives us in a different direction," Thune said. But any deal would "depend upon the president then engaging in a way that would help move Republican votes in the House and Senate, who are probably, at this point not predisposed to doing something on that."

Privately, some Senate Republicans express hope that Trump won't agree to a deal to extend the subsidies, which would likely put pressure on his own party to fall in line to expand Obamacare. GOP lawmakers feel that they're on the 20-yard line or closer at this point, and that caving to Democrats' pressure campaign would be a mistake. They also quibble with the wording of many ACA-subsidy-focused polls, arguing that survey respondents are much more likely to express support for subsidies when they are labeled "tax credits" or when poll questions are phrased in such a way that voters believe expiring subsidies will cause premiums and overall health care costs to skyrocket.

It's indeed possible that the shutdown stalemate will end soon. Not one to raise his voice as leader, the typically chipper Thune delivered impassioned remarks on the Senate floor on Wednesday afternoon excoriating his Democratic colleagues for refusing to pass the House-passed continuing resolution to fund the government through November 21. Prompted by Senator Ben Ray Luján's (D., N.M.) push to pass a food stamp funding bill through unanimous consent, Thune expressed frustration that the Democrats won't simply vote to reopen the government so that government assistance programs Democrats keep fretting about are fully funded.

"You all have just figured out 29 days in that there might be some consequences?" he said on the Senate floor.

As Congress lurches toward the one-month-shutdown mark, hallway chatter suggests that lawmakers may soon get their act together. And after a seven-week-long session, the upcoming recess that's set to take effect on November 10 may push some Senate Democrats past their breaking point.

A Political Vulnerability — or Is It?

Congressional Republicans campaigned for years on repealing Obamacare, eventually coming up short in 2017, during the first year of Trump's first term. That even a small set of congressional Republicans could now vote to extend enhanced subsidies — effectively voting to expand Obamacare as a result — would mark an extraordinary ideological departure from their past commitments.

And a recent line of attack from Democrats suggests that Republicans may not be as politically vulnerable on the issue as their opponents think.

Senator Amy Klobuchar (D., Minn.) warned last week that "early retirees like Bill & Shelly will see their health insurance premiums increase nearly 300%—from $442 to $1,700 per month if Congressional Republicans refuse to extend the enhanced tax credits." Many Republicans point to this remark as proof that Democrats are eager to provide overly generous incentives not to vulnerable populations but to high-earning couples in early retirement.

Behind the scenes, Senator Rick Scott (R., Fla.) has spent recent weeks holding a series of Senate Steering Committee luncheons with conservative health care policy experts to inform his Republican colleagues about why, in his view, extending the subsidies would be a disastrous move.

As of this week, Senate Republicans say they aren't getting the impression that the White House is eager to extend expiring ACA credits. "I have had no indication to the White House that they’re interested in doing that," Senator John Kennedy (R., La.) said in a brief interview. Part of the calculus here, he said, is that the Democrats have been so unyielding in their demands to make the subsidies permanent. "They're the ones who made it temporary." He predicts that even if a reformed ACA subsidy extension passed the Senate somehow, "it will never pass the House."

"The Democrats promised when they passed Obamacare on a purely partisan basis that this was a way we’re going to reduce costs for health care. It’s turned out to be false," says Senator Steve Daines (R., Mont.). "You see the cost for Obamacare rising much faster than private insurance."

As fiscal hawk Ron Johnson (R., Wis.) sees it, the problem is that the enhanced subsidies simply mask the failure of Obamacare, namely that it has prompted premiums to skyrocket.

And what of the White House's unclear position on the matter? "You’ve always got political consultants inside the White House whispering in the president’s ear," a problem he believes is exacerbated by Democrats' and reporters' characterization of expiring subsidies as being disastrous for the GOP, Johnson said in an interview with National Review.

"So how effective those political arguments are? I don’t know, but hopefully they’ll look at the reality situation and not support extending these subsidies."