Winning a Game of Chicken With Obamacare

To force recalcitrant Senators to pass a some sort of repeal of Obamacare Trump has hinted he may end subsidies for the exchanges.  If the payments are withdrawn, as I have recommended Trump do, premiums will skyrocket and force the Senate to pass subsidy funds since the House never appropriated money for those subsidies as the Constitution requires them to do before money is spent (to those of you who are not members of Congress, this means the subsidies were and are completely illegal budget expenditures).

The argument against Trump following this strategy is that he will be blamed for the collapse of the exchanges.

But this battle is quite winnable if one looks at what would happen in Congress after Trump cancels the payments.

The key for this gambit to work is that Senate Majority Leader McConnell (probably using the House bill as vehicle legislation to smuggle the new bill through using reconciliation’s rules) insists on attaching a partial repeal of Obamacare to whatever legislation is sure to be written immediately to revive the subsidies in response to Trump’s executive order.

If McConnell holds to this course (and the Trump White House can give him extra motivation by making it clear he will veto any subsidy fix that does lacks a partial repeal) there will be in existence a budgetary fix – and, for once, this budget fix would be Constitutional! – to “save” the exchanges waiting to move off the Senate floor.  The only way the fix does not reach Trump’s desk is if Democrats, or moderate Republican Senators, who shot down the bill last week do not vote it out of the Senate.

If Senate Democrats refuse to vote for the fix because it is conditional on a partial repeal also becoming law, Trump will be able to say it is the Democrats who are destroying the exchanges, not him, because they are either voting against the bill or holding it up with procedural motions.

McConnell could be bring up the joint fix and repeal bill numerous times until at least one Democrat or moderate Republican finally caves and votes to send the bill to the House.  Until one of those votes succeed, the burden will be on the Democrats to stop blocking the fix and Trump will no doubt enjoy pointing out repeatedly what the holdup is.

I imagine enough Democrats will eventually cave if they have no choice but to vote for partial repeal.

The House could then vote only on the Senate bill and send it to Trump’s desk.

 

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4 thoughts on “Winning a Game of Chicken With Obamacare”

  1. Mooch out.

    What is your reaction? Does this mean for Trump’s credibility?

    How would Hamilton respond to the recent Congressional bill over Russia?

    http://www.zerohedge.com/news/2017-08-02/trump-signs-russia-sanctions-bill

    Has Congress overreached? Is Trump beaten? Is this part of a gambit?

    http://www.unz.com/tsaker/sanctions-smoke-and-mirrors-from-a-kindergarten-on-lsd/

    How likely is a deal with Russia now?

    Earlier, you wrote a piece on Europe’s banking system, clearly the problems are not solved and cannot be solved under the current system. How optimistic are you over this recent report?

    http://www.zerohedge.com/news/2017-08-01/europes-banking-dysfunction-worsens

    Is this a case of Fractional Reserve Banking chickens coming home to roost?

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  2. Sorry for the delayed response, I’ve been traveling this week.

    Mooch out.

    What is your reaction? Does this mean for Trump’s credibility?

    On balance, it was a good performance by Mooch (if short for my tastes) simply because he got rid of Priebus. It is unfortunate that he couldn’t get along with Kelly, but if Kelly insisted then it’s better Scaramucci be removed before they get into an internal battle.

    How would Hamilton respond to the recent Congressional bill over Russia?

    Technically he would agree the Congress has the right to legislatively bind the President on foreign relations. However, Hamilton strongly preferred and often advised the President be granted broad deference by Congress to handle foreign policy.

    And given the health care derailment last week I suspect Hamilton would be of the opinion it is the President who is doing his job correctly and, if anything, it should be the President who should be restraining the Congress.

    How likely is a deal with Russia now?

    I’m not sure Trump had a specific deal in mind with Russia beyond relaxing tensions. I would expect Putin to still keep diplomatic options open since Trump is still his best bet.

    Earlier, you wrote a piece on Europe’s banking system, clearly the problems are not solved and cannot be solved under the current system. How optimistic are you over this recent report?

    I’m going to have to update my opinion of the European banking system.

    Also, I am working this week on updating Robber Baron Capitalism Part II as well as smoothing over some things with Part I.

    I intend to include my analysis of the 2000 and 2008 crashes in Part II.

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  3. Do you think Mooch was stabbed in the back by the New Yorker – it was supposed to be of the record right?

    “Technically he would agree the Congress has the right to legislatively bind the President on foreign relations. However, Hamilton strongly preferred and often advised the President be granted broad deference by Congress to handle foreign policy.”

    It seems a bit of a mess. I know that Congress has the right to ratify treaties but my sense is that this is quite unusual.

    You claim that the President should, preferably, be granted “deference”, but this is customary, it is not set down in black and white (or is it?).

    Here is a project for you and it would appeal to your literary talents as much as your analytical ones: conduct an interview with “Hamilton” and move through the key historical periods you mentioned in one of first essays. Get Hamilton to comment and then ask him if he would, in light of experience, desire any changes to the structure of the U.S system.

    For instance, would he see the tripartite system as flawed? Would he wish to see a government structured more like a corporation? (More executive power.)

    Looking forward to your economic posts. Did you see the posts I put up on praxeology? Part two was for you especially and at the end there was a list of articles pro and con.

    BTW have you read Ray Dalio on the economic “machine”? His views are similar, though differ on some key issues, regarding the Austrians.

    I watched his video and went through his book, its insightful and quite useful.

    Do you have a background in finance, stocks? What book, for beginners, would you recommend to understand it?

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  4. Do you think Mooch was stabbed in the back by the New Yorker – it was supposed to be of the record right?

    I’m sure he knew the conversation was on record. Even if he asked for confidentiality it wouldn’t be hard to look at the quotes to figure out it was him.

    Get Hamilton to comment and then ask him if he would, in light of experience, desire any changes to the structure of the U.S system.

    For instance, would he see the tripartite system as flawed? Would he wish to see a government structured more like a corporation? (More executive power.)

    There was nothing particularly wrong with the tripartite system as he would see it. The problem was the New Deal which transformed us into a quadpartite system with a Positivist Progressive class trying to absord the traditional 3 branches. Remove the 4th branch and the 3rd branch returns to functionality.

    Looking forward to your economic posts. Did you see the posts I put up on praxeology? Part two was for you especially and at the end there was a list of articles pro and con.

    Yes. They were useful though my opinion against praexeology hasn’t changed.

    BTW have you read Ray Dalio on the economic “machine”? His views are similar, though differ on some key issues, regarding the Austrians.

    I haven’t read him.

    Do you have a background in finance, stocks? What book, for beginners, would you recommend to understand it?

    I have no background in finance beyond what I’ve picked up from my own reading.

    Like

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