Senate Delays Vote on Healthcare Bill

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With no hearings or other public updates on overall tax reform this week, the focus was on developments concerning the Senate's discussion draft of its healthcare bill, the Better Care Reconciliation Act of 2017. The bill has many tax implications due to its repeal of most of the taxes put into effect in 2010 under the Patient Protection and Affordable Care Act (ACA).


On Monday, the Congressional Budget Office (CBO) and the Joint Committee on Taxation released a cost estimate for the proposed legislation. It predicted the bill would reduce the federal deficit by $321 billion over the next decade. It also forecast an increase of 22 million in the number of uninsured people in the country by 2026, compared to current law. That increase, including 15 million by 2018, is caused by the bill's repeal of the penalty for not having insurance.


The reaction to the report was largely along partisan lines. However, at least five Republican senators voiced their immediate unwillingness to support the bill in its current form, and by Tuesday that number had reached nine. The party cannot afford to lose more than two votes to pass the bill, assuming no Democrats vote in favor of it. Some GOP senators criticized the bill for its effect on insurance coverage and rates, especially in rural areas and among certain demographics, while others felt it did not go far enough to cut taxes.


On Tuesday, recognizing the lack of support within the party, GOP leaders delayed their plan to vote on the bill before the fourth of July recess. All Republican Senators met with President Trump at the White House to discuss moving the bill forward. Majority Leader Mitch McConnell (R-KY) told reporters that good progress was made, while Minority Leader Chuck Schumer (D-NY) said the bill is "fundamentally flawed at the center" and cannot be fixed by "tweaks."  On Wednesday, Trump said "I think we're going to get it over the line."


Republicans continued discussions on Thursday with reports that a revised version of the healthcare bill would be submitted to the CBO before the July fourth break. One change floated was the possibility that the legislation would no longer repeal the ACA's 3.8% Net Investment Income Tax on upper-income Americans. 


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