Income Redistribution

Since last week’s government shutdown (Wednesday, to be exact), Republicans and Democrats appear to have been put into a checkmate position.

From President Trump:

“We have a negotiation going on right now with the Democrats that could lead to very good things,” adding that he’d “like to see a deal made for great healthcare.”

Democrats deny that talks with the White House are going on, also claiming they would be amenable to negotiations.

Simply No Erasers

From Chuck Schumer (D, N.Y.):

“It should be clear to Republicans that we cannot go forward unless they sit down and seriously negotiate with Democrats to address the healthcare crisis. It’s that simple.”

Democrats are demanding an extension of enhanced Affordable Care Act subsidies as well as restoration of cut Medicaid funding, though discussions have focused on the ACA subsidies, reports the WSJ. As Michael Solon notes:

The Biden-Schumer-Pelosi spending surge generated the highest inflation in 40 years, the highest interest rates since the subprime crisis, and the loss of the White House, Senate and House. Democrats still insist on no reductions in the post-pandemic spending that fueled their defeat.

Republicans counter that Democrats first need to vote to open the government before negotiating on any deal involving healthcare, including ACA funding, reports the WSJ.

If the subsidies aren’t renewed by the end of the year, millions of ACA insurance enrollees could see their health-insurance bills soar, often by hundreds of dollars or more a year.

According to Sen. Jeanne Shaheen (D, N.H.), bipartisan conversations among lawmakers have been continuing. For example, a proposal from Susan Collins (R, Maine) includes a commitment to move a set of full-year appropriations bills alongside a commitment to address ACA tax credits.

Donald Trump recently posted that he is “happy to work with” Democrats, after the government reopens.

Last month, House Republicans did pass a stopgap spending deal to fund the government through late November, but Senate Democrats repeatedly blocked that measure. The House isn’t scheduled to return to Washington this week to vote, a move designed to put pressure on Senate Democrats to pass the GOP bill.

There is support among some Republicans for enhanced subsidies. Other Republicans are resisting a continuation of the funding rolled out by President Obama.

Republican President Donald Trump says he wants a deal; he wants to see healthcare “much more so than Democrats.”

Escalating Pressure

Hundreds of thousands of federal workers have been furloughed (because) of the shutdown … others are working without pay. By the middle of October, federal workers, including members of the military, will start missing paychecks. That will start weighing on consumer spending and economic growth.

Russ Vought, director of the Office of Management and Budget, has threatened layoffs if the shutdown continues. That has yet to happen. White House press secretary Karoline Leavitt warns that federal food-aid programs for women and children will likely run out of money soon.

House Minority Leader Hakeem Jeffries (D, N.Y.) reports that neither he nor Senate Minority Leader Chuck Schumer has heard from Trump.

“The White House has gone radio silent,” says Jeffries.

Michael Solon, a senior fellow at the Hudson Institute, writes that Senator Schumer doesn’t seek to restore healthcare benefits but instead, “fraud and abuse.” Schumer’s repealing of the One Big Beautiful Bill Act’s healthcare provisions would:

• reinstate Medicaid emergency-room coverage for illegal aliens,
• block Medicaid work requirements on the able-bodied, restore states’ “provider tax” shell games.
• end the twice-annual income verification to continue Medicaid coverage. The big expansion of health benefits to a family of four with incomes over $124,800 wasn’t in Obamacare but a post-pandemic “Bidencare” add-on.

Mr. Solon also warns in the WSJ,

To slow America’s pace on the road to bankruptcy, Republicans must stop Mr. Schumer’s plan. Acquiescing to his shutdown demands would mean not one dime of the post-pandemic’s massive spending surge that generated high inflation and keeps interest rates high is ever recalled.