GOP Looking at CHIP Funding, Cadillac Tax Delay for Averting Shutdown

With little hope of an immigration agreement this week, Republicans in Congress are looking to head off a government shutdown this weekend by pairing another stopgap spending measure with long-term funding for the popular Children’s Health Insurance Program, daring Democrats to vote no.

The bill would leave in limbo hundreds of thousands of young immigrants brought to the country illegally as children. But Democrats would still be left with a difficult political decision: withhold their votes unless the plight of such immigrants, known as “Dreamers” based on never-passed proposals in Congress called the DREAM Act that would have provided similar protections for young immigrants, is addressed and risk a government shutdown; or vote to keep the government open and fund the Children’s Health Insurance Program, which provides coverage for nearly 9 million children.

The bill would set up another possible showdown in mid-February, with government funding set to expire Feb. 16. But it would give lawmakers time to continue negotiations on immigration and long-term government funding levels.

“With no imminent deadline on immigration and with bipartisan talks well underway, there is no reason why Congress should hold government funding hostage over the issue of illegal immigration,” Sen. Mitch McConnell, R-Ky., the Senate majority leader, said Tuesday.

The plan, put forth by House Republicans on Tuesday, does not extinguish the suspense on Capitol Hill this week. House Republican leaders may be unable to secure passage of the bill with solely Republican votes, since Republicans eager to increase military spending have been frustrated with stopgap spending measures.

“This is just buying time,” said Rep. Mark Sanford, R-S.C. “I think it’s the best of the available bad choices.”

House Democrats, most of whom voted against the last stopgap measure in December, are not likely to embrace this bill either, given the impasse on immigration — especially after President Donald Trump was said to have made vulgar remarks in a meeting on immigration last week.

The drama over immigration continued to play out Tuesday in a hearing of the Senate Judiciary Committee, where Democrats castigated the homeland security secretary, Kirstjen Nielsen, for refusing to confirm Trump’s vulgarity. At one point, Sen. Richard J. Durbin of Illinois, the No. 2 Democrat, had young unauthorized immigrants protected by the Obama-era program known as Deferred Action for Childhood Arrivals, or DACA, stand in the hearing room as he recited their impressive résumés.

In the meantime, Dreamers and those who support them protested at Republican lawmakers’ offices.

“We want to keep the government open,” Rep. Steny H. Hoyer of Maryland, the Democratic whip, said on Tuesday. “But we’re not going to be held hostage to do things that we think are contrary to the best interests of the American people.”

If Republican leaders can push the bill through the House this week, the Senate — where at least nine Democratic votes will be needed — is no sure bet. Some Democrats in that chamber — especially those considering a White House run — are expected to oppose any spending measure that does not protect the young immigrants.

But Democrats up for re-election this year may be reluctant to oppose the bill and risk being blamed for a government shutdown.

Trump moved in September to end DACA but gave Congress until early March to come up with a legislative replacement. Last week, a federal judge ruled that, for now, the administration could not end the program, and the government has now resumed accepting renewal requests for it.

As a result, Sen. Tom Cotton, R-Ark., argued on Tuesday that there was “no urgency right now to try to ram through a major change in immigration law by Friday.”

McConnell said that lawmakers have “at least until March, at a minimum, and possibly even longer” to reach an agreement on DACA.

In the bill to be passed this week to avoid a shutdown, Republicans would also suspend a tax imposed by the Affordable Care Act on medical devices as well as one on providers of health insurance. In addition, it would delay the law’s tax on high-cost employer-sponsored health coverage, known as the Cadillac tax.

Having dithered for months, Congress has suddenly discovered a painless, cost-free way to extend the Children’s Health Insurance Program, or CHIP. The bill would extend the program’s funding for six years.

“I cannot see the Democrats voting against the Children’s Health Insurance Program,” said Rep. Mo Brooks, R-Ala., “but they’ll be given that option in this funding bill.”

Lawmakers were able to break a partisan deadlock on the program, started under President Bill Clinton, after they received a new estimate from the Congressional Budget Office showing that the cost would shrink over time and that extending the program for eight to 10 years could actually save money.

Members of Congress responsible for the program said the new estimate should clear the way for a swift renewal of the program.

The solution results almost entirely from a curious quirk in the way costs are estimated by the Congressional Budget Office — and from the unforeseen consequences of Congress’ decision to eliminate a pillar of the Affordable Care Act, the penalties for people who go without health insurance.

“Thanks to the repeal of the individual mandate tax, CBO updated its score and gave us the momentum to push a long-term CHIP extension across the finish line,” said Sen. Orrin G. Hatch, R-Utah, the chairman of the Finance Committee. “We must stop holding CHIP hostage.”

Funds for the program lapsed at the end of September. Congress provided a short-term infusion of money last month, and the Trump administration has shuffled money among states to help those with the most urgent needs. Nevertheless, some states have informed families that their children could lose coverage because of delays and inaction by Congress.

Extending CHIP for six years “may have no cost” to the federal government, said Rep. Greg Walden, R-Ore., the chairman of the House Energy and Commerce Committee.

Sen. Ron Wyden of Oregon, the senior Democrat on the Finance Committee, said that extending the program for 10 years would save $6 billion, according to the budget office. “With this news,” he said, “securing kids’ health care for the long-term should be a no-brainer.”

The Children’s Health Insurance Program, created in 1997 with bipartisan support, is given credit for a big increase in the proportion of children who have coverage. But Republicans and Democrats have squabbled since last summer over how to pay for it.

In the tax bill signed last month by Trump, Congress eliminated the penalties for people who go without health insurance, starting in 2019. The Congressional Budget Office, like many health policy experts, believes that healthier people will be less likely to obtain insurance, so that people who remain in the health law’s marketplace — including children — will face higher premiums than they otherwise would.

Extending CHIP saves money, the budget office said, because it would be less expensive for the government than the alternatives — if many of those children enroll in Medicaid or in marketplace coverage subsidized by the government.

The taxes on medical devices, health insurance providers and high-cost employer-sponsored health plans were all imposed by the Affordable Care Act, to help pay for the expansion of coverage under the law. All three would have been repealed under the bill passed last year by the House to dismantle that law.

Many Democrats have joined Republicans in opposing the device tax, which they describe as a threat to innovative medical technology. The bill would suspend it during two years, 2018 and 2019.

Health insurance companies have strenuously opposed the tax on insurance providers, saying the additional costs are generally passed on to consumers, businesses, state governments and taxpayers. The bill would suspend it for 2019.

The “Cadillac tax” is meant to help rein in the cost of employee health benefits. Instead of taking effect in 2020, it would be delayed until 2022.

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