The Next Great Republican Debt Limit Demand (That Won't Be Met)

Weigel
Reporting on Politics and Policy.
Jan. 31 2014 1:57 PM

The Next Great Republican Debt Limit Demand (That Won't Be Met)

The third and final day of the House GOP retreat was supposed to end with a few members talking to reporters about fiscal policy. Didn't end up happening; Republicans stayed in their hotel discussing their next moves when the debt limit needs to be raised. The most popular theoretical demand, as Bob Costa reports, is an increase in the limit paired with the end of Obamacare's "risk corridors." Josh Barro explains, better than I can, what this would mean.

The government is effectively reinsuring the insurers for the first three years of Obamacare: If claims exceed expectations during the first three years, the government will cover much of the excess cost; if claims are less than expected, insurers will pay the government.
The risk corridors will help insurers resist the temptation to raise premiums on the basis of first-year performance; if claims in 2014 are high, insurers can rely on the reinsurance payments and hope the participant pool broadens out by the time the risk corridor program ends in 2017.
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Well, you get what you wish for. Earlier this month I'd asked why Republicans failed to make this demand during the continuing resolution debate. Marco Rubio had been running around the Capitol asking for Republicans to end the "Obamacare bailout" with him. Only after the CR was passed did outside conservative groups start collecting endorsements for a "No Bailout!!!" campaign. Seemed a little late ... but the hope, as we now see, was to put this on the agenda for the debt limit.

Maybe I'm just poisoned by cynicism and recent events, but I don't see this happening. We've watched this drama before, and it ends when the Senate crushes whatever poison pill the House Republicans gave them. The Senate sends back a "clean" debt limit increase, with some less desirable riders; this is what passes. Yesterday, when he was asked about the debt limit fight, Oregon Rep. Greg Walden kept turning the conversation away from policy and back to how devastating the shutdown had been for his party. That's the guy tasked with keeping the GOP House. He's on message: The GOP doesn't want another crisis this year. It wants to win in 2014, then have a Republican Senate sign off on the demands.

Still, get ready for it. "Risk corridors." The "Obamacare bailout." That's the demand du jour, replacing the Vitter Amendment in these sorts of negotiations.

David Weigel is a reporter for Bloomberg Politics

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