Republicans Reforming Entitlements: A Tragicomedy of Errors

The political future of President Trump’s effort to repeal the Affordable Care Act is becoming less certain by the day. In fact, in an interview with Bill O’Reilly on Fox News, the President said,

I think that, yes, I would like to say by the end of the year, at least the rudiments, but we should have something within the year and the following year.

And beyond Trump’s own hedging, it’s important to note the rhetorical shift from many key Republican lawmakers away from specific “repeal” language to the new term “repair.” They too are backing off their nearly seven year promise to wipe the Affordable Care Act from the books and start over.

It’s been two weeks of the Trump Administration and three weeks of the 115th Congress. How did we get here so fast?

To answer that, it’s helpful to look back to the last time a major pillar of the social safety net was under question.

After winning reelection in 2004, President George W. Bush was determined to spend his political capital on social security reform. Specifically, he wanted to create personal investment accounts in lieu of the traditional, pension-like retirement benefit.

This policy proposal was based on years of conservative reinforcement, funded think-tank research, and movement writers making its case in popular publications. None of which proved sufficient. The policy reform died an inglorious death. In fact, the more President Bush stumped for the change, at campaign style events across the country, the less popular it became.

So what can this failed effort to reform Social Security tell us about the potential Obamacare repeal?

The inescapable comparison between the insolvency of the Social Security Trust Fund and the “death spiral” of the healthcare market under the ACA shouldn’t be lost on anyone.

As early as 2000, during the first campaign, Bush outlined his Social Security reform plan to the applause of the conservative commentariat. Larry Kudlow wrote in National Review,

“What’s so interesting to me about George W. Bush’s freshly minted Social Security reform plan that provides for individual-retirement-account-investing in the stock market—set forth in a speech today in California—is that he makes it clear that he intends to strengthen and save Social Security, not to destroy it. This is smart Reagan-style politics. …. Give him credit. Enormous credit. This is 21st Century breakthrough stuff.” (Emphasis added)

The reform premise was based on the assessment that Social Security would not survive without a fundamental policy change grounded in a competing philosophical framework—and that making base-level changes to the structure and philosophy of the program would benefit more people, more sustainably.

This mirrors the “death spiral” analysis of those on the right, as well as their political rhetoric. And then, as now, the partisan divide on the “facts” was very apparent.

At the start of the 109th Congress, Rep. Paul Ryan introduced the legislative package for President Bush’s Social Security reforms in the House and Sen. John Sununu did the same in the Senate. Then the White House set out to build support for the reform with the 2006 midterms looming.

The 115th Congress began with dual budget reconciliation bills in the House and the Senate to begin the work of President Trump’s ACA repeal-and-replace, with 2018 midterms looming. However, unlike President Trump, Bush had won the 2004 election convincingly. He had an approval rating north of 50%, and perhaps most importantly had 55 Republican Senators ready to move.

But by the summer of 2005, Bush’s Social Security package was dead in the water. What started as a quasi-populist campaign promise to give the average, voiceless voter more money in retirement and more control over their future ended in a confusing morass of contrasting policy ideas. Here’s Peter Ferrera writing for Forbes in 2011 on what went wrong,

“By 2005, there was little evidence of the path-breaking, populist themes and rhetoric that the President had so brilliantly and successfully used in arguing for personal accounts during his 2000 campaign in particular.  Gone was the discussion of a better deal and better benefits from personal accounts.  We barely heard anything anymore about ownership, building personal wealth, and leaving an inheritance to children and family. Instead, the focus of the White House had moved to a huge cut in future promised Social Security benefits under the label of “price-indexing.”  As for tax increases, while the President proclaimed during the campaign that no tax increases was one of his 7 principles of reform, and that we could not ‘tax our way to reform’, tax increases were now ‘on the table.’”

ACA repeal faces a similar political challenge; if not a more difficult one given there are already competing policy proposals coming from within the GOP conference. The current law is not only more complex than Social Security, the impetus for change is much more nebulous. For some, premiums have gone up in real terms. For others, their cost savings come in the reduction of healthcare inflation. But for 20 million people, Obamacare provided access to insurance for the first time—and, for many, it literally saved their lives. As Republican members are experiencing firsthand, the personal testimonies of Obamacare benefits aren’t limited to Democrats in blue states.

Given the Congressional calendar, we should have a very clear understanding of where ACA repeal stands by the August recess. This is again similar to the fate of Bush-era attempted Social Security reform.

Legislative action takes time, particularly when using budget reconciliation. Previous Republican test-runs of an ACA repeal package have taken months to put together, and that was without the White House promising specific content and timeframe. So, to have something in place before members head back to their districts for the summer, Republicans need to, in all likelihood, have a reconciliation package buttoned up prior to the Spring recess (April 7-24)—giving them less than 40 working days to pull this off.

It’s one thing to offer ideological policy arguments within the House chamber—or on the Senate floor if you’re one of the eight GOP Senators defending a seat in 2018. It’s an entirely different thing to defend those ideas in town halls and crab feeds when confronted by constituents with opposing views.

None of these things mean certain failure for ACA repeal, to be sure. There is significant resolve among many Republicans to see this across the finish-line no matter the cost. That cost, however, could be immense. There is little public support for a full repeal of ACA and even less so without a clear replacement policy in place.

Recent history suggests it may be out of the frying pan and into the fire. In 2006, after the Social Security reform failure, Republicans lost their 12 year grip on the House majority. And, famously in 2012, in large part as a result of the ACA’s passage, Democrats lost a modern-record 63 House seats.

While it remains unclear at this point which outcome is more politically dangerous for Republicans in the long-term, successfully repealing the law or failing to, it’s clear that major domestic policy change is incredibly difficult legislatively and far more politically nuanced than campaigning.