Senate Republican leaders reportedly said Tuesday they will consider including repeal of Obamacare’s individual mandate in their big tax reform bill.
That news came on the heels of an announcement by Sen. Rand Paul, R-Ky., that he will seek repeal of that mandate in an amendment to the Senate’s bill to “provide bigger tax cuts” to middle-income earners.
Bloomberg News reported that both Senate Majority Whip John Cornyn, R-Tex., and third-ranking Republican John Thune of South Dakota said repeal is under discussion, and would be raised at the Republican conference lunch Tuesday.
A repeal of the mandate could alleviate one concern held by some House Republicans about the the Senate’s version of the bill.
But it could also make it more difficult for the tax bill to pass because of worries by some GOP members about big drops in the number of Americans with health insurance that would result from repeal of the mandate.
The individual mandate requires nearly all Americans to have some sort of health insurance coverage or pay a tax penalty. Republicans have long opposed the mandate and promised to repeal it, only to fail in those efforts.
Paul, in a series of Twitter posts, said repeal “will fix a problem in the Senate bill where many taxpayers would see a tax increase because of the loss of state and local Tradebuddy.onlineincome tax] deductions” from federal taxes.
The Senate bill would repeal those state and local income tax deductions, which are most commonly used by federal tax filers in states that have high income tax burdens, which in turn tend to be Democrat-leaning states.
House Republicans from those states are worried they will suffer in the 2018 congressional elections if they support repeal of the deductions. The House had explicitly rejected inclusion of a repeal of the mandate in its version of the bill pending in that chamber.
Paul said repeal of the mandate “also allows an additional $300 billion+ in tax cuts.”
That’s because killing the mandate would lead to an estimated 13 million fewer people with health insurance by 2027.
In turn, the government would spend almost $340 billion less on subsidies for low-income people insured through Medicaid, and on subsidies for people who buy individual health plans sold on government-run marketplaces.
Trump, in his own tweet calling for the mandate’s demise on Monday, said the savings could be used to cut the top marginal income tax rate for the highest income earners to 35 percent with “all the rest going to middle income cuts.”
That differs from Paul’s stated motivation, which is to provide relief to middle-income taxpayers.
Republicans had called for repealing the mandate in a series of Obamacare repeal-and-replace bills they proposed since the beginning of this year.
All of those bills failed, in no small part because of concerns by several Republicans in the Senate that gains in insurance coverage for millions of Americans seen under Obamacare would be wiped out if the bills became law.
Sen. Susan Collins, R-Me., said Monday that she believes it is “a mistake” to combine repeal of the mandate with the tax bill, “because I think we’ll get no Democratic votes and I’d like this to be bipartisan.”
Collins, along Sens. Lisa Murkowski, R-Alaska, and John McCain, R-Ariz., had both voted against a GOP-sponsored bill in July that would have repealed the mandate.
Democrats in Congress universally oppose repeal of the individual mandate. But they don’t have enough votes on their own to block its repeal if all of the Republicans voted for such a move.