House Republicans Considering a 'No Obamacare Bailout' Provision for Debt Ceiling Bill

At least some Republicans in the House have not resigned themselves to passing a “clean” debt ceiling bill.

An idea appears to be gaining steam to attach a “no bailout” provision for Obamacare insurance companies. By closing the “risk corridor” loophole in the law and attaching it to the debt ceiling bill, it will put Democrats on record as supporting a bailout of billion dollar companies. This would make all of the Democrat’s “income inequality” rhetoric ring hollow.


The Hill:

Majority Leader Eric Cantor (R-Va.) led the debt-limit discussion and said the leadership wanted a plan that could win 217 Republican votes and avoid the possibility of the House having to swallow a “clean” increase from the Democratic-led Senate, the source said.

Speaker John Boehner (R-Ohio) has lowered expectations for the debt limit, saying Republicans did not want to default and that the options had “narrowed” given President Obama’s stance and his unwillingness to accept major entitlement reforms without tax increases.

During the meeting, Boehner was asked about the size and duration of the debt-limit hike. He said it would likely last about a year, which would extend beyond the November midterm elections, the source said.

Targeting the risk corridors provision in the debt-limit bill gained the most support, although members brought up other ideas, including a provision on the Keystone pipeline. Party leaders were encouraged to hear support from members who have often voted against debt-ceiling increases that did not have major provisions, in particular Rep. Michele Bachmann (R-Minn.), the source said.

The leadership wants to move “sooner rather than later,” but there was no timetable given for a decision.

Democrats have warned Republicans against attaching any controversial provisions to a debt-ceiling increase.

“The more time Republicans spend dreaming up their latest debt limit wish list, the closer they are pushing workers and the economy toward another completely unnecessary crisis,” Sen. Patty Murray (D-Wash.) said Friday in a statement. “The American people are sick and tired of Republicans playing games with our economic recovery and Democrats have made it clear that Republicans don’t get to demand a ransom simply for allowing Congress to do its job.”

The healthcare law creates a temporary pool of money to pay insurers who enroll a higher-than-expected number of sick patients through 2016. The law transfers the money from lower-risk plans to higher-risk plans to keep premium prices stable.

The insurers will fund some of the payments, as the law requires companies with better-than-expected results to contribute to the pot. But Republicans say the government is likely to be on the hook for some of the payments, which they say would be tantamount to a taxpayer bailout of the insurance industry.

They also say the provision gives the Obama administration too much leeway to reimburse insurers.


In the short term, the no-bailout strategy for the debt limit bill has the best chance for political gain. Framing the issue would be vital, since the Democrats will try to make everyone forget that their party added amendments to each and every debt ceiling request from President Bush. Placing the Democrats in the position of defending a powerful interest group will make them look like hypocrites when they invoke their class warfare rhetoric to criticize Republicans.

Eventually, a debt limit bill will be passed — probably a clean one. But the fight itself will make Democrats in congress squirm. They will not only have to defend paying off rich corporations but also justify keeping Obamacare from imploding.


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