By Tyler Durden | Zero Hedge
Summary of the chaotic day’s key events:
- GOP House leaders delayed their planned vote Thursday to repeal and replace “Obamacare,” which as AP put it was a “stinging defeat” for Paul Ryan and President Trump in their first major legislative test.
- The decision came after Trump failed to reach agreement with a bloc of rebellious conservatives. Moderate-leaning Republican lawmakers were also bailing on the legislation, leaving it short of votes.
- At least 30 Republicans said they opposed the bill, enough to defeat the measure. But the number was in constant flux amid the eleventh-hour lobbying.
- The bill could still come to a vote in coming days, but canceling Thursday’s vote is a significant defeat. It came on the seven-year anniversary of President Barack Obama signing the Affordable Care Act, years that Republicans have devoted to promising repeal.
- “No deal,” House Freedom Caucus Chairman Mark Meadows, R-N.C., said after he and his group of more than two dozen rebellious conservatives met with Trump to try to get more concessions to reduce requirements on insurance companies.
- The Republican legislation would halt Obama’s tax penalties against people who don’t buy coverage and cut the federal-state Medicaid program for low earners, which the Obama statute had expanded. It would provide tax credits to help people pay medical bills, though generally skimpier than Obama’s statute provides. It also would allow insurers to charge older Americans more and repeal tax boosts the law imposed on high-income people and health industry companies.The measure would also block federal payments to Planned Parenthood for a year, another stumbling block for GOP moderates.
- A Quinnipiac University poll found that people disapprove of the GOP legislation by 56 percent to 17 percent, with 26 percent undecided. Trump’s handling of health care was viewed unfavorably by 6 in 10.
- GOP leaders had targeted Thursday for the climactic vote, in part because it marks the seventh anniversary of Obama’s signing the measure into law. With the House in recess awaiting the outcome of the White House meeting, C-SPAN aired video of that signing ceremony.
- House Minority Leader Nancy Pelosi, D-Calif., couldn’t resist a dig. “You may be a great negotiator,” she said of Trump. “Rookie’s error for bringing this up on a day when clearly you’re not ready.”
- A key moderate who had been in the meeting, Rep. Charlie Dent of Pennsylvania, issued a statement saying he would be voting “no” on the health bill. “I believe this bill, in its current form, will lead to the loss of coverage and make insurance unaffordable for too many Americans,” said Dent, a leader of the Tuesday Group of moderate-leaning Republicans.
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Update 9: And the tiebreaker – no vote today, a vote is tentatively planned for Friday. House GOP leadership has just announced that there will not be a vote on the healthcare bill today. The entire House GOP conference will meet tonight at 7 p.m. to discuss next steps.
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Update 8: Now it gets chaotic, because on one hand some are saying there will not be a vote…
- HOUSE SAID NOT TO VOTE TODAY ON HEALTH CARE BILL: POLITICO
- HOUSE WILL NOT VOTE ON HEALTHCARE BILL ON THURSDAY -MSNBC, CITING REPUBLICAN LEADERSHIP SOURCE
… while others are saying there will”
- U.S. REPUBLICAN REPRESENTATIVE BRADLEY BYRNE, AFTER MEETING IN HOUSE SPEAKER RYAN’S OFFICE, SAYS IT’S “STILL THE PLAN” TO VOTE THURSDAY NIGHT ON HEALTHCARE BILL
- HOUSE WILL NOT VOTE ON HEALTHCARE BILL ON THURSDAY -MSNBC, CITING REPUBLICAN LEADERSHIP SOURCE
- TRUMP SAYS “I THINK WE’RE DOING WELL. WE’LL FIND OUT IN ABOUT THREE HOURS.”
- U.S. HOUSE REPUBLICANS TO HOLD CLOSED DOOR MEETING ON HEALTHCARE BILL AT 7 P.M. EDT/2300 GMT – SENIOR HOUSE REPUBLICAN AIDE
In short, total chaos, although it appears that the “no vote” is far more likely.
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Update 7: According to White House spokesman, Sean Spicer, despite the failure of talks with the Freedom Caucus, the vote will still be held “tonight.”
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Update 6: With the Freedom Caucus leaving the White House, the White House has made a final “take it or leave it” offer to the Freedom Caucus on the Health bill. The problem is that acording to the Freedom caucus, there were no concessions by the White House, and if a vote is held tonight, it would fail.
- FREEDOM CAUCUS MEMBER AMASH SAYS NOTHING NEW CAME OUT OF TRUMP MEETING, IF THE VOTE IS HELD TONIGHT, IT WILL FAIL
- HOUSE FREEDOM CAUCUS CHAIRMAN MEADOWS SAYS HOPEFUL CAUCUS’ “REASONABLE REQUESTS” WILL ULTIMATELY BE AGREED TO
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Update 5: Following The Freedom Caucus meeting without agreement:
- *FREEDOM CAUCUS MEMBERS SAY NO DEAL MADE: THE HILL
Rep. Phil Roe – known to be closely aligned with House leaders – told reporters that his sense on vote timing was “not today, probably tomorrow.”
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Update 4: Or maybe the White House is just getting ahead of itself. According to Fox News’ Charlie Gasparino, the “freedom caucus say their members are still a NO but @WhiteHouse still predicting a victory.”
Finally, here are the latest whip lists:
- CBS News: 31 “cannot support the bill in its current form”
- CNN: 24 “no” votes
- The Hill: 29 “no” votes
- Huffington Post: 29 “extremely likely to be against”
- NBC News: 30 “against the bill or leaning against it”
- New York Times: 29 “no” votes
- NPR/WNYC: 32 “opposed”
- Washington Post: 36 “opposed”
Update 3: Maybe those Wall Street forecasts, noted earlier, of a delay to today’s vote will be wrong after all. The reason: according to Cliff Sims, special assistant to Trump, there was a “lengthy standing ovation from the Freedom Caucus when @POTUS walked into the Cabinet Room just now” to which the aide added that there is “Big momentum toward #RepealAndReplace.”
So while centrists may be getting cold feet in supporting Obamacare repeal, the conservatives appear to be moving toward supporting the Trump legislation, and since it is their numbers that matter, the market’s bout of optimism may be justified, especially if the vote is to take place today as expected, which would suggest enough Yes votes have been whipped. Sure enough:
- REPUBLICAN REPRESENTATIVE MESSER, AFTER MEETING WITH HOUSE SPEAKER RYAN, SAYS STILL HOPING TO HOLD VOTE ON HEALTHCARE BILL ON THURSDAY
And then this:
- HOUSE REPUBLICAN STUDY COMMITTEE CHAIRMAN WALKER TELLS MSNBC HOUSE WILL VOTE ON HEALTHCARE BILL ON THURSDAY EVENING, BELIEVES IT WILL PASS
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Update 2: Earlier this morning we said the following:
“…the further we press into today without confirmation that Republicans have narrowed the opposition votes from their own party down to 22 or less (as of last night the estimate was 25-30) the more unlikely the vote is to proceed.”
It now looks like other analysts are coming around to that fact as well and are lowering their expectations of TrumpCare passing the House today. Per Bloomberg, Veda analyst Spencer Perlman has lowered his odds to 60% that a vote will occur before the weekend and Beacon Policy Advisors notes simply that the vote is “likely to slip until later today or possibly even into the weekend…”
More time likely needed on possible last minute provisions limiting benefits like hospitalization, ambulance services and maternity care, Veda analyst Spencer Perlman writes in note
Adding language limiting these benefits may be enough to “squeak the bill” through House, but Veda is increasingly doubtful will get done tonight
Sees 60% chance bill passes House before the weekend, previously saw 65% chance it would pass tonight; keeps 10% odds Senate will finish work before April recess
Vote is likely to slip until later today or possibly even into the weekend, Beacon Policy Advisors writes
Investors shouldn’t view delays as signal AHCA’s chances of passage are dying; instead, continued negotiations may be positive sign, signaling there’s still “willpower” to make concessions, forge agreements
Update 1: Proving that today’s Obamacare vote is encapsulated in complete chaos, here are the latest headlines.
First, one House Republican noted that there is 95% agreement on TrumpCare this morning which could be interpreted to mean that there are only 13 dissenting Republicans and that the bill would pass. Except that moments later, the same Congressman completely contradicted himself saying “we still have work to do to get votes on GOP bill.”
- REP. BRADY: 95% AGREEMENT ON HEALTH BILL AS OF THIS MORNING
- REP. BRADY: WE STILL HAVE WORK TO DO TO GET VOTES ON GOP BILL
Meanwhile, as we noted earlier, a 9AM Republican caucus meeting has allegedly been postponed…
- HOUSE REPUBLICANS POSTPONED 9 A.M. CAUCUS MEETING, ACCORDING TO A SENIOR REPUBLICAN SOURCE WHO PROVIDED NO FURTHER DETAILS
…Paul Ryan just delayed a press breifing to 3:30 from 11:30…
- RYAN DELAYS PRESS BRIEFING TO 3:30PM, WAS TO BE AT 11:30AM
…and ‘fake news’ MSNBC is reporting that Republicans are actually losing votes rather than gaining them…
- REPUBLICAN U.S. REPRESENTATIVE MO BROOKS SAYS 30-40 REPUBLICANS LIKELY TO VOTE ‘NO’ ON HEALTHCARE BILL -MSNBC
Bottom line, no one knows where this things is going today…
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To vote, or not to vote, that is the only question on the minds of Trump’s White House and House Republicans this morning, or as AP puts it, the fate of Trump’s domestic agenda is “on the brink”:
The GOP’s long-promised legislation to repeal and replace “Obamacare” stood on the brink just hours before Republican leaders planned to put it on the House floor for a showdown vote. Short of support, GOP leaders looked to President Donald Trump to close the deal with a crucial bloc of conservatives, in the first major legislative test of his young presidency.
If everything proceeds as planned, the Obamacare vote is currently scheduled for 7pm tonight. That said, the further we press into today without confirmation that Republicans have narrowed the opposition votes from their own party down to 22 or less (as of last night the estimate was 25-30) the more unlikely the vote is to proceed.
As we pointed out yesterday, the TrumpCare vote is the first high-stakes political battle of Trump’s Presidency and pits Trump against the more conservative elements of the Republican Party. For Trump, failure to pass healthcare reform would be a major blow as it was a signature component of his campaign and could signal that he will face an uphill battle against the Freedom Caucus to implement other policy initiatives. For conservatives, they must choose between supporting their party and a bill that has been dubbed “Obamacare-lite” at the risk of alienating powerful conservative funders, like the Koch Brothers and their various Super PACs, which got them elected in the first place.
Trump has been billed by some lawmakers as “the closer” to seal the deal on the replacement healthcare plan in a vote but, as of this morning, less than 12 hours from the scheduled vote, passage still looks questionable, at best.
As of last night, Trump signaled he was willing to meet some of the conservatives’ demands to knock out Obamacare’s insurance regulations — even though there’s no guarantee those changes would comply with the budget rules, and they could just get stripped out in the Senate. Here are some of the changes currently being contemplated/drafted, per Axios:
- Top Republicans may be willing to strip out Obamacare’s “essential health benefit” requirements to win the votes of the Freedom Caucus.
- These are the 10 categories of benefits that have to be covered under the law: outpatient care, emergency services, hospitalization, maternity care, mental health, prescription drugs, rehab, laboratory services, preventive care, and pediatric services.
- Still up in the air is whether the GOP will also be willing to strip out Obamacare’s other insurance regulations — like requiring insurers to cover pre-existing conditions and preventing them from charging sick people more than others.
- The Freedom Caucus wants them out because they think those are the reasons individual health insurance became so expensive under Obamacare — but the law’s supporters say those health plans used to be skimpy and will go back to being skimpy if the benefits aren’t required.
- The change of plans happened after the White House offered to try to get those regulations stripped out in the Senate, if the conservatives would vote for the House bill as is. The conservatives rejected that offer because they don’t trust the Senate.
- The risk, as Democratic aides warned, is that the Senate could just strip out all the insurance changes.
Trump also announced he’ll be hosting the Freedom Caucus at the White House this morning at 11:30, presumably as a last ditch effort to swing votes after changes to the legislation were drafted overnight. But, early reports suggest that House Republicans have postponed a planned meeting this morning, according to conference spokesman Nate Hodson.
As a reminder, here is a recap of some of the key components of the TrumpCare bill per Stone McCarthy Research:
The AHCA would eliminate the penalties for individuals who don’t obtain health insurance and large employers who don’t provide adequate coverage. The legislation would repeal subsidies for individuals receive for the purchase of health insurance and in their place create age-based tax credits.
The AHCA would allow insurers to charge higher premiums for older individuals, ease restrictions on what share of benefits insurance plans must cover and require insurers to apply a 30 percent surcharge on premiums for individuals who allow their coverage to lapse.
The legislation calls for cuts in Medicaid spending for those made eligible for the program by the ACA. Future growth in spending would also be curtailed through per capita limits on spending or through optional block grants made available to states. States could also impose work requirements on beneficiaries.
The AHCA would repeal many of the ACA’s taxes, including the surtax on high-income taxpayers’ net investment income, the increase in the Medicare payroll tax rate for high-income taxpayers and the annual fee on health insurance providers. The bill would delay the implementation of the tax on high-cost plans — the so-called Cadillac tax — until 2026.
If TrumpCare passes the House, the Senate can pass it with a simple majority, meaning Republicans can lose no more than two votes. That said, more than two Republican senators have publicly opposed the AHCA in its current form. The legislation could also be challenged by Democrats for violating reconciliation’s requirement that all provisions have a direct impact on the budget
As Goldman’s Alec Phillips points out, the financial markets will be looking to today’s vote, or lack their of, as an indication of Trump’s ability to execute other key components of his agenda like tax reform and border policies.
Financial markets are focused on the prospects for passage of the House Republican proposal to “repeal and replace” Obamacare because the vote is seen as a referendum on the ability of Congress to enact its broader policy agenda. While this view has some merit, we would note three important nuances.
First, the Senate is likely to pose at least as much of a challenge as the House, and reconciling the likely differences between the two chambers will be hard. This week’s vote is the start of a process that could last several more weeks, and may not be the hardest part of the process.
Second, passage of the health bill is not what is important for tax reform. Instead, the most important issue for financial markets is for Congress to be finished with this bill one way or another so that it can move forward with tax reform, which is likely to have a greater effect on corporate earnings and the real economy. While the prospects for the health bill are murky, we would be surprised if Congress has not begun debating tax reform by mid-year, even if it means putting the health bill aside to return to it later.
Third, while there are lessons for tax reform in the current health debate, there are also differences. The trouble that congressional Republicans face in achieving majority support for the health bill is a reminder of how difficult it might be to reach near-unanimous Republican support for major tax reforms, like border adjustment. However, there is likely to be much broader support for tax cuts than there is for the health legislation. Even if the health bill fails, we would continue to believe the odds of tax legislation passing by early 2018 are high.
Meanwhile, today is a fitting day for the TrumpCare vote as it marks the 7th anniversary of Obamacare becoming the law of the land.