It’s been a week since conservatives raised a fit over a leaked, early draft of the Republican health care bill, and neither House Speaker Paul Ryan nor any other managers of the secret bill appear to be budging. The main source of the split—refundable tax credits for individuals to purchase insurance, which conservatives deem a “new entitlement”—remains in the bill, according to a more recent draft obtained by Politico. When asked about the split various times this week, Ryan has reiterated a canned answer about how conservatives had little problem with the tax credits as recently as last year, a response that doesn’t hint at any second thoughts on his part. “We’re basically putting into law the [HHS Secretary Tom] Price plan as our replace plan,” Ryan said on a podcast Friday. “It’s very similar to the bill that Tom Price has worked on for so many years, that many conservatives co-sponsored last year.”
To review: Conservatives are raising hell over a central (and expensive) part of the all-but-finalized plan, and it’s not being changed to address them. What we’re seeing is the beginning of the process by which conservatives get rolled on health care. It has nothing to do with whether Paul Ryan is a secret “entitlement”-loving moderate or not. He is not. This is just the party’s best play.
The debate is over what, if anything, to offer lower-income people in the individual health insurance market in lieu of the premium tax credits that the Affordable Care Act offers. Conservatives are fine with offering tax deductions or nonrefundable tax credits as part of a replacement plan. They’re fine with this because they know that such deductions and credits are worth very little to those who most need assistance purchasing health insurance, and thus cost little. A refundable tax credit—which the ACA’s premium tax credits are!—is more like a check from the government for lower-income people, which is why today’s hard-right conservatives are derisively calling it an “entitlement,” a term they use to describe any financial assistance from the government for people who can’t afford basic living expenses.
“There’s a difference between tax credit and refundable credit,” Sen. Rand Paul, one of the most cavalier Republican critics of the leadership’s approach, said on Wednesday. “If they give you back some of your own money, that’s not an entitlement program. If they give you back somebody else’s money, that’s an entitlement program. So I’m not for a program that gives you someone else’s money.”
This would have been a successful Republican attack line against an Obama proposal. It is less so now. Limited government purists, like Paul, came to Congress in 2011 when yapping against spending was an effective, base-rallying political attack against a Democratic president. A generation of conservative Republican lawmakers has tricked itself into believing that voters actually care about “big government spending” because they did that one time back then. But there is now a Republican president and he is mostly on board with Ryan’s health care plan, to the degree that he understands any of this stuff. And most importantly, he wants ceremonial bill-signing photo-ops that make him look effective and accomplished. The base now rallies to him more than they do ideological commitments to low spending, which they only fleetingly cared about in the first place.
Giving people money to purchase health insurance—even if it’s not nearly as much money given by the Affordable Care Act, which also doesn’t give people enough money—is the best way to get that bill to Trump’s desk. It immunizes the party against the full brunt of the much more lethal political attack against the GOP: that it is taking away people’s health insurance and replacing it with nothing. With refundable tax credits, the line can at least be that they’re replacing it with something.
So what are the political consequences? Say you’re a conservative representative whose only real threat would come in a primary challenge. Are you going to be punished more for voting for a bill that offers some refundable tax credits for people to buy insurance, or for voting against the Trump-endorsed plan to repeal and replace Obamacare? Now say you’re a Republican representative from a lean-Republican or swing district and your threat is in the general election, i.e. the one that matters, and determines control of the House. You will be in the most trouble, of any representative, by voting for an Obamacare repeal that offers nothing to those who gained insurance over the last few years, imperiling Republican control of these seats.
Conservatives will get re-elected if they vote for a Trump-endorsed Obamacare repeal bill that spends some money to provide insurance. Moderates may not get re-elected if they vote for a Trump-endorsed Obamacare repeal bill that spends no money to provide insurance. Moderates have the edge. Conservatives will have to eat whatever unbendable small-government convictions they honed under a Democratic president and get with the new program.