White House offers to fund Obamacare if Democrats fund Trump's Border Wall

Trump to Democrats: Pay for My Wall, or Obamacare Gets It!

Trump to Democrats: Pay for My Wall, or Obamacare Gets It!

Moneybox
A blog about business and economics.
April 21 2017 6:36 PM

Trump to Democrats: Pay for My Wall, or Obamacare Gets It!

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Mick Mulvaney has an offer Democrats can almost certainly refuse.

Photo by Chip Somodevilla/Getty Images

President Trump is apparently trying to add another item to his resume of bumbled hostage-taking efforts this week, by threatening to sabotage the Affordable Care Act unless Democrats vote to fund a border wall with Mexico.

Sound familiar? It was just about two weeks ago that our president was busy threatening to sabotage Obamacare unless Democrats agreed to negotiate a plan to repeal and replace it. Having gotten nowhere with that bit of bluster, it seems Trump has moved on to the wall, which he's trying to secure funding for in the appropriations bill Congress must pass next week to avoid a government shutdown. Democrats have previously threatened to filibuster any legislation that included money for Trump's metastasized stump-speech applause line, so the White House is attempting to play hardball. As budget chief Mick Mulvaney explained in an interview with Bloomberg Friday, the administration is offering $1 of funding for Obamacare's crucial cost-sharing reduction subsidies for every $1 of money Democrats pony up for the wall. Here's the full quote:

We’ve finally boiled this negotiation down to something that we want very badly, that the Democrats really don’t like, and that’s the border wall. At the same time there’s something they want very badly that we don’t like very much, which are these cost sharing reductions, the Obamacare payments. Ordinarily, in a properly functioning Washington, D.C., as in any business, this would be the basis upon which a negotiated resolution could be achieved. The question is how much of our stuff do we have to get, how much of their stuff are they willing to take, and that’s the way it should work. That’s the way that we hope that it works. We offer them $1 of CSR payments for $1 of wall payments. Right now, that’s the offer that we’ve given to our Democratic colleagues. That should form the fundamental understading that gets us to a bipartisan agreement.
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The implicit threat here is that, if Democrats reject this deal, the White House will cease making the subsidy payments, and likely bring Obamacare crashing down. It is not especially credible. Democratic leaders are already responding with snark: Before, Mexico was supposed to pay for the border wall. Now, Trump's threatening the health care of millions to get taxpayers to cover it.

For a full rundown of the CSR drama, see my piece on it from last month. But briefly: Trump is currently deciding whether to continue appealing a federal court decision in which a judge ruled that the Obama administration did not have the right to continue making subsidy payments to insurers that were required under Obamacare, because Republicans in the House never appropriated money for them. If the White House decided to drop the case and cut off the flow of subsidies, insurance carriers would likely flee the Affordable Care Act's exchanges, leaving the individual market in rubble.

While this would no doubt be satisfying to some Republicans, it would almost certainly be a disaster for Trump's approval rating. Voters tend to blame the party in power for their personal misery—and in this case, they'd have every right to do so, since the administration would be taking active steps to burn down the health insurance market. Trump has tried to deny this, insisting that Obamacare is failing already and that Democrats “own” its impending collapse. But if he really believed that, he'd probably still be using the subsidies as a bargaining chip to get his own health care bill passed, instead of repurposing them to enact one of his other gold-plated pipe dreams.

Democrats, for their part, have very little incentive to negotiate here, since they'd be trading a temporary reprieve for Obamacare for a permanent border wall. The Trump administration says its precious barrier should cost up to $21 billion. That would pay for less than three years of the cost-sharing reduction subsidies, according to the Congressional Budget Office's projections, and giving Trump his wall now would almost certainly encourage him to make more extreme demands the next time the subsidies need more funding.

Trump has made the Democratic party an offer it will most certainly refuse. Maybe one day he'll figure out this whole negotiation thing.

Jordan Weissmann is Slate’s senior business and economics correspondent.