Business Headlines

Talks to Avert Shutdown Near Finale as Trump Yields on Obamacare

published Apr 26th 2017, 3:42 pm, by Steven T. Dennis, Anna Edgerton and Erik Wasson

(Bloomberg) —Republicans and Democrats worked to put the final touches on a $1.1 trillion spending bill needed to avert a U.S. government shutdown after the White House appeared to satisfy Democrats’ demand that President Donald Trump and Republicans protect a key piece of Obamacare.

The White House on Wednesday afternoon assured lawmakers that the administration will continue to make the payments at issue, which are used to subsidize coverage of lower-income Americans, according to a person familiar with the negotiations.

“This decision brings us closer to a bipartisan agreement to fund the government and is good news for the American people,” Senate Minority Leader Chuck Schumer said Wednesday afternoon in a statement. “There are outstanding issues to be resolved, particularly with riders, but this is a positive development for the negotiations.”

With government funding set to run out Friday, Republicans and Democrats in Congress have reached agreement on most elements of the sweeping spending bill, which remains under wraps.

The omnibus is also being delayed by fights over other policy areas, including Republican demands for changes to the Dodd-Frank financial law in the bill, a “conscience clause” provision to allow insurers to refuse certain procedures and language to restrict abortion coverage on Obamacare exchanges, a Democratic aide said.

The biggest issue was the billions in cost-sharing payments used to offset health premiums for low-income people. Insurers are threatening to raise premiums if they don’t get the subsidies and could further drop coverage in Obamacare markets.

House Democratic leader Nancy Pelosi said in a statement that negotiators had made progress on the health-care issue, though other disputes remained. She spoke twice on Wednesday with White House Chief of Staff Reince Priebus, according to a Democratic aide.

A clear White House decision to continue the payments may be enough to clear the current deadlock and allow the spending bill to move forward, although it’s unclear how quickly Congress would act. Lawmakers could pass a short-term stopgap to keep the government funded long enough to enact the broader package.

Earlier Wednesday, Trump’s budget director, Mick Mulvaney, said in a statement that Democrats’ demands for a fix amount to a “bailout” and were holding up a deal to fund the government past Friday.

“Let me be clear: The only thing standing in the way of a landmark defense and border security bill is a handful of Democrats who are insisting on an 11th hour bailout of Obamacare,” he said. “We can get this deal done today. There is no excuse not to.”

Holding Government ‘Hostage’

“This administration has made CSR payments in the past, and the only reason some are raising this now is to hold the government hostage and find an excuse to oppose a bipartisan agreement,” he said, referring to the cost-sharing funds.

But Democrats have feared the cost-sharing payments could be used repeatedly as leverage against them in the future or get nixed in the courts and blow up the insurance market. The payments are currently being challenged by House Republicans in a lawsuit questioning their legality.

Anthem Inc. threatened to raise rates for its Obamacare plans next year if the U.S. government stops funding subsidies for lower-income customers, raising the ante on the outcome of this debate.

Chief Executive Officer Joseph Swedish said on a conference call Wednesday that the insurer could raise its rates by 20 percent if the subsidies aren’t paid to insurers.

Pelosi, Mulvaney Call

Pelosi clashed with Mulvaney Tuesday night over the issue during a telephone call.

She reiterated to Mulvaney what has been the House Democratic negotiating position in the talks that CSR payments must be included in the omnibus, said a Democratic aide familiar with the conversation.

The aide said Mulvaney indicated that, while the Trump administration had continued the payments, officials hadn’t yet decided whether they would make the May payment.

The Democratic aide said Mulvaney made clear that, absent congressional action, the judge’s order ruling the payments illegal would stand and the administration would cease making payments.

But a White House official said on background that Mulvaney didn’t say the administration would end payments.

“Instead of working with Democrats to avert another disastrous Republican government shutdown, the Trump administration is cruelly threatening to raise health premiums on millions of families,” Pelosi said in a statement Wednesday, noting that Mulvaney helped push the GOP toward a government shutdown in 2013.

There is no certainty how the standoff might be resolved, with a partial government shutdown set to begin Saturday unless Congress acts.

Stopgap Bill

Congress could pass a short-term stopgap bill to prevent a shutdown, but Democrats have said they would only support such a measure if negotiations are nearly complete.

The outlines of the broader spending package have been largely to Democrats’ liking, including the GOP decision to omit $18 billion in domestic spending cuts proposed by Trump and Mulvaney.

Democrats had offered to increase defense spending if the deal included the CSR funding along with money for Puerto Rico’s Medicaid program and coal miners’ health benefits.

–With assistance from Billy House, Arit John, Terrence Dopp, Anna Edney and Laura Litvan.To contact the reporters on this story: Steven T. Dennis in Washington at ;Anna Edgerton in Washington at ;Erik Wasson in Washington at To contact the editors responsible for this story: Kevin Whitelaw at Laurie Asseo

The Author

Walt Alexander

Walt Alexander

Walt Alexander is the editor-in-chief of Men of Value. Learn more about his vision for the online magazine for American men with the American values—faith, family & freedom—in his Welcome from the Editor.

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