Failure to Launch

Republicans returned to their war on Obamacare on Thursday. It didn’t go well.

Sen. Lamar Alexander.
Sen. Lamar Alexander (second right) and and other senators talk on Jan. 8, 2015, on Capitol Hill in Washington.

Photo by Alex Wong/Getty Images

Now that Republicans are in control of both chambers of Congress, the push to slay Obamacare by a thousand cuts is officially underway. But if the first stab is any indication, Republicans are going to need some sharper knives.

On Thursday, Tennessee Sen. Lamar Alexander, the new chairman of the Health, Education, Labor, and Pensions Committee, convened a hearing on one of the measures Republicans have been championing as a means to undermine the Affordable Care Act: changing the way it defines full-time work. Under the law, any employer with 50 or more full-time workers must provide them with decent health coverage or pay a per-worker fine of $3,000. To expand coverage as broadly as possible, the law’s Democratic authors defined full-time employees as anyone working 30 or more hours per week. Since then, Republicans have been invoking anecdotal reports of employers cutting back the hours of workers who are just over the 30-hour threshold to keep from having to provide them with coverage—even though the mandate was postponed until this year for large companies and next year for smaller ones. GOP lawmakers say the solution is to define full-time workers as those putting in 40 hours.

Thirty hours “is a strange definition—one that sounds more like France than the United States,” said Alexander as he kicked off the hearing.

It was a good line, but the hearing went downhill for Republicans after that. Instead of leading the charge in eviscerating Obamacare, the 40-hour workweek bill is showing just how messy and politically fraught the business of gutting the law is going to be.

For starters, there is the basic problem that President Obama has made clear that he’ll veto the 40-hour measure. If he does, Republicans could still seek to use the proposal as a cudgel to attack the law politically, but even here there are problems. The Congressional Budget Office has given the measure a decidedly unfavorable review. It estimates that the bill would result in as many as 1 million workers having their hours cut to put them under the new 40-hour limit and thereby losing their employer coverage; about 500,000 workers being left without any health coverage at all; and the deficit increasing by more than $50 billion as a result of fewer employers paying the $3,000 fine, as well as more people turning to Medicaid and federal subsidies to purchase their own insurance after being denied employer coverage. 

Even worse, perhaps, several prominent conservatives have come out against the revision—notably Yuval Levin, one of the right’s most influential policy wonks, who wrote in National Review that changing to 40 hours would inevitably cause more Americans to lose hours than the 30-hour rule does, because there are far more workers just at or above that threshold than at the 30-hour threshold. “By setting the definition lower, Obamacare’s architects were trying to mitigate the damaging effects of the employer mandate some,” Levin wrote in a burst of intellectual honesty, “and by setting it higher Republicans would be worsening those effects.”

Alexander forged on Thursday despite this inauspicious context. He and Maine Republican Sen. Susan Collins, one of the co-sponsors of the 40-hour measure, invited a trio of witnesses to testify for their side: Doug Holtz-Eakin, the former CBO director and economic adviser to John McCain’s 2012 campaign; Andrew Puzder, the CEO of CKE Restaurants (Hardee’s and Carl’s Jr.), and Betsy Webb, the school superintendent in Bangor, Maine.

Puzder and Webb were in a tough spot: They were there to talk about how onerous the 30-hour workweek definition was for their enterprises, but what that really meant was having to explain why they were not providing health coverage to so many of their workers. This task was made more difficult by the contrast with the Democrats’ lone witness—Joe Fugere, the owner of a small pizzeria chain in Seattle who has, even before the passage of Obamacare, offered generous benefits to any of his employees working more than 24 hours a week.

Puzder said that CKE had offered coverage to more than 5,000 hourly employees who work more than 30 hours, but that fewer than 500 had taken the company up on it. Furthermore, many of their Hardee’s and Carl’s Jr. franchisees simply could not afford to provide coverage to part-timers. “Our franchisees are always trying to keep costs down—that’s the way American businessmen and women succeed,” he said. Unmentioned in Puzder’s discussion of the fast-food industry’s tight margins was his own compensation: $4.48 million in 2012.

Webb, the school superintendent, had a more sympathetic case to make, but it, too, had its dissonance. The 30-hour rule, she said, was causing Bangor problems with its substitute teachers. They do not receive health coverage, but some of the substitutes whom the district relies on the most bump up against the 30-hour limit. To avoid that, the district will need to scatter hours among more subs, thus creating more instability in its classrooms—if a teacher is out sick for a week, the district will need to retain two different subs in that classroom rather than just one. “I worry about students on free and reduced lunch status, with at-risk factors,” she said. “The consistency of the person they have in that room has a great impact.” It was a fair point, but left unspoken was the obvious follow-up: If these core substitute teachers were so integral to the district, shouldn’t they be getting health benefits?

The Democrats on the panel, in the minority for the first time in eight years, relished cross-examining the Republicans’ witnesses. Sen. Patty Murray of Washington, the panel’s top Democrat, noted that Puzder’s claim—that Hardee’s and Carl’s Jr. workers who did not get coverage at work could get Obamacare coverage instead—did not hold up in the many states that have rejected the law’s Medicaid expansion. Sen. Elizabeth Warren of Massachusetts quoted Yuval Levin’s criticism of the 40-hour change and noted the irony that Republicans were pushing a measure that would both raise the deficit and make more people reliant on Obamacare. “This bill is corporate welfare,” she said. “Big corporations would be able to cut their coverage, and taxpayers would get stuck with the tab. I’m against adding $53 billion to the deficit so corporations can push their responsibilities onto the government.”

This provoked Puzder, the CEO, into taking a shot at the CBO’s deficit estimate. “I love the CBO, but have they ever estimated anything that is accurate? I mean, really?” This off-message outburst—delivered with former CBO director Holtz-Eakin sitting right next to him—in turn earned Puzder a rebuke from his putative ally, Alexander, who reminded him that it was the CBO that had done the fast-food industry a big favor with its estimate of high job losses under a minimum-wage increase.

Not that there weren’t some awkward moments for Democrats, too. For all their warnings about employers dropping coverage if the mandate is switched to 40 hours, the fact is there are plenty of liberals who believe that the employer mandate should be repealed, period—that everyone would be better off if more people got coverage on their own, with government help as needed, rather than getting it through their jobs. When Sen. Bernie Sanders, the Vermont socialist, made this point, the discomfort on his side of the table was palpable. The Democrats also seemed unwilling to reckon with Holtz-Eakin’s main argument: that it was unclear why employers would drop people to under 40 hours to avoid covering them, when the fact is that employers had until now been choosing to cover those people even without a mandate.

But the Democrats likely would have been more willing to address his point if they had more faith that Holtz-Eakin and Republicans were genuinely trying to improve the law’s workings and reduce its undesired side effects. As it is, as Minnesota Sen. Al Franken noted, Holtz-Eakin’s current employer, the American Action Forum, asks visitors to its affiliated website to “help us stop Obamacare.” And Republicans have been distinctly unwilling to make obviously necessary tweaks to the law, such as fixing the wording glitch that has resulted in a Supreme Court challenge to it. Not to mention that Republicans on the health committee had ample opportunity to negotiate the language they preferred on questions like the employer mandate back in 2009, when Democrats were desperate to get some bipartisan buy-in for the legislation.

Now that they’re in control of the hearing room that Ted Kennedy once presided over as chairman, Republicans are trying to undo what was done without them. But their hearts don’t really seem in it. At one point halfway through the hearing, Alexander and Collins were the only Republicans in the room, while nearly all the Democratic chairs were full. By the end, it was hard to miss which side thought it had come out on top.

“This,” said Murray, the committee’s top Democrat, “was a very good hearing.”