How The Health Care Fiasco Helps California Republicans

Tony Quinn
Editor, California Target Book

The collapse of the House Republican health care plan, and with it probably the effectiveness of Speaker Paul Ryan as well as the first hundred days of the Trump Administration, was a godsend to one group of people: the seven endangered California House Republicans who did not have to vote on a really terrible Obamacare repealer.

The bill continued the unfortunate Congressional Republican habit of putting forward legislation that gives tax cuts to the rich and cuts entitlements for everyone else.  The Ryan health care bill repealed most of the Obamacare taxes, which were imposed on the super rich when the bill was enacted in 2009, while at the same time throwing 14 to 24 million Americans off their health insurance and back onto charity care.  

When the Congressional Budget Office analysis reported that 14 million or more Americans would lose their health insurance the bill was essentially dead.  House Republicans were unwilling to kill the Obamacare guaranteed issue – companies must sell health insurance regardless of a person’s pre-existing conditions.  But they would not retain the Obamacare mandate on everyone to buy health insurance.

Without that mandate the insurance market would collapse, and the public seemed to understand this, as the measure had no support in the country, registering just 17 percent approval in the respected Quinnipiac Poll.  While right wing Republicans and their interest group allies essentially killed the bill, it was hemorrhaging support among more mainstream Republicans in the last 24 hours before being pulled.

That’s because the bill was poison in the House districts carried by Hillary Clinton in 2016, and that includes seven of the 14 Republican House districts in California.  

It would have been a terrible vote for Reps. Jeff Denham (R-Stanislaus) and Rep. David Valadeo (R-Kings), centrist Central Valley Republicans where there are a lot of people who benefited from Obamacare, but also for Rep. Darrell Issa (R-San Diego) who nearly lost last election.  Rep. Steve Knight (R-Antelope Valley) had a close race in a Clinton-carried district, and there are three Orange County Republicans, Rep. Dana Rohrabacher, Rep. Ed Royce and Rep Mimi Walters who were safe in 2016 but who will almost surely be targets in 2018 because they are also in districts Clinton carried.

Democrats are salivating about targeting these California Republicans, but they will not have a hugely unpopular Obamacare repeal vote on their records, and for that they should be grateful.  But the question remains, how could House Republican leaders have put together such an unpopular bill when they campaigned for seven years that they would repeal the disliked Obamacare law without gutting health care insurance?

In part, the answer is that you cannot take away an entitlement once granted; millions of Americans now get insurance through an Obamacare exchange, more millions were given free health care through the Medicaid expansion.  The Medicaid expansion in California is more generous than need be, with no requirement, for instance, that you be looking for a job which is a requirement in some states.

Nevertheless, House Republicans seemed to have no idea how unpopular taking away this entitlement would be; which is why their bill was surely dead in the Senate if it ever got there.

A more major failing was paying no attention to those who elected Trump and themselves them in the first place.  The bill put a lie to President Trump’s assurance he would not support taking away health care from those who now have it, a major part of his appeal to working class Americans.  But that is exactly what the bill did, especially in rural area that had supported Trump and the Republicans overwhelmingly in 2016.  

Working class Americans rejected the Democrats in 2016 because that party was too fixated on climate change and racial/gender preferences; they certainly did not support Republicans in order to see their entitlements slashed for tax cuts to rich people.  Yet the GOP health bill gave a $7 million tax break to each of America’s 400 richest families, and nothing to 120 million middle class Americans.  That’s not what Trump promised working class folks.

So now we are onto tax reform, and the Ryan wing of the GOP seems intent on repeating its Obamacare mistake.  The bill’s Medicaid cut was supposed to save $880 billion, and those savings were to be applied against the deficits created by big tax reform.  But as economists have pointed out, lowering the top individual rate from 39 percent to 33 percent, as the GOP tax reform bill doesmeans the top earners will gain the most from tax reform (as might be expected as they pay the highest taxes).  

The practical effect, however, is to cut benefits for the middle class to pay for tax cuts for the rich.  The big winners would be Hollywood millionaires, Silicon Valley hedge fund managers and the Orange County swells sipping their chardonnay who disdained the boorish Trump while voting for Hillary Clinton.  The big losers would be the oil patch workers in Kern County that voted overwhelmingly for Trump.  Some Populism that is.

A further complicating factor is that Ryan wants a border tax on imports as part of a major corporate tax cut.  The impact would be a big tax cuts for corporations while screwing the little guy.

That’s because the import a tax would raise the cost of everything that comes into America from somewhere else, from foreign automobiles to Mexican lettuce.  The big box stores bitterly oppose this; it would raise the price of almost everything they sell. 

The border tax will not survive; and if House Republicans make that the centerpiece of their tax reform, like Obamacare repeal it will die.  Better they try to find some Democrats, especially in the Senate, willing to work with them on broad based tax reform that mostly helps the middle class, not just corporations and upper incomes.

Vulnerable House Republicans, which is one half of all the California House GOP delegation, escaped a bullet by not having to vote on the flawed Obamacare repeal bill.  Now we will see if the House leadership has learned its lesson or continues to insist its members walk the plank for politically untenable proposals.

Comment on this article


Please note, statements and opinions expressed on the Fox&Hounds Blog are solely those of their respective authors and may not represent the views of Fox&Hounds Daily or its employees thereof. Fox&Hounds Daily is not responsible for the accuracy of any of the information supplied by the site's bloggers.