Updated 6:20 a.m.: Sen. Susan Collins emerged from a meeting Tuesday with President Trump and signaled she could be a “yes” vote on a sweeping tax reform bill pending in Congress.
The Maine moderate previously had expressed reservations about many components of the bill, such as the expiration of tax cuts for individuals after 10 years while corporate tax cuts are permanent.
“A lot of my concerns are being addressed,” Collins told reporters after a lunch meeting with Trump in Washington. Collins was a key vote against the repeal of the Affordable Care Act over the summer, one of three Republicans to buck the party and preserve former President Barack Obama’s signature domestic legislative achievement.
The tax reform bill would not repeal the ACA, but it would eliminate the individual mandate, a major part of the law that keeps young and healthy people in the insurance pool and puts downward pressure on premium costs. The mandate requires people who don’t have access to health coverage through an employer to purchase insurance or pay a tax penalty.
Collins told reporters that eliminating the mandate is not the same as repealing the entire ACA, which would have had devastating effects on the health care system, leaving millions uninsured and threatening rural hospitals, among other problems. But Collins also has said that if the mandate is repealed, there would need to be something to replace it to ensure a healthy ACA marketplace.
The replacements could be two ACA stabilization bills under consideration in Congress that Collins supports.
COLLINS RECEIVES TRUMP PROMISES
While making her most positive comments yet on the tax reform bill Tuesday, Collins stopped short of announcing her outright support, and she remains in the “undecided” category.
“I have had a number of good discussions with the White House and with my colleagues, and we are continuing to have productive negotiations. Many of these discussions have focused on my proposals to help middle-income families, including allowing a deduction for property taxes and helping to lower insurance premiums on the individual market to offset any increases that might result from repealing the individual mandate,” Collins said in a written statement.
“While my preference is still that the individual mandate repeal not be included in the tax bill,” she said, “if it is included, it is essential that we mitigate the impact on premiums with the Alexander-Murray bill and with bipartisan legislation I introduced with Senator Bill Nelson, D-Florida, that would protect people with pre-existing conditions while lowering premiums through the use of high-risk pools.”
The national media reported that Trump promised Collins he would support the two bills that would help stabilize ACA markets in exchange for repealing the mandate. But it was unclear whether the votes on those two bills would occur before or after a vote on the $1.4 trillion tax cut package, which could happen as early as Thursday and is being heavily pushed by Republican leadership. Democrats remain unanimously opposed, but they are in the minority in Congress.
Three Republicans would have to vote “no” in the Senate to jettison tax reform, so Collins, as a moderate swing vote, is being lobbied to support the bill. The House already has approved its version of tax reform.
IMPACT OF REPEALING ACA MANDATE
The ACA stabilization bills include Collins-Nelson, which would establish a reinsurance fund that would smooth out premium increases caused when ACA marketplaces have too many older, sicker enrollees. Reinsurance helps adjust for unhealthy insurance pools by providing funds to insurance companies.
The Collins-Nelson bill would fund the reinsurance program by $2.25 billion per year. Larry Levitt, a health policy expert with the Kaiser Family Foundation, said in a written statement Tuesday that there would need to be $10 billion annually to offset premium increases caused by repealing the individual mandate.
The Congressional Budget Office reported that ending the mandate would increase premiums by 10 percent and leave 13 million more Americans uninsured. In Maine, that would translate into an average premium increase of $2,350 and 50,000 more uninsured, according to the Center for American Progress, a Washington-based think tank.
Aviva Aron-Dine, a senior fellow with the Washington-based nonprofit Center on Budget and Policy Priorities, wrote that the “Collins-Nelson bill – or any similar federal reinsurance proposal – would not undo the mandate repeal’s effects on premiums, market stability or coverage.”
The second ACA stabilization bill, Alexander-Murray, would require that Congress pay certain subsidies to insurers that help low-income people with the costs associated with health care. Trump ended the payments – called cost-sharing reductions – this year.
The tax reform bill that Collins could support would balloon the deficit and provide hefty tax cuts for the wealthy, while raising taxes on about 50 percent of Americans in 2027, said the Tax Policy Center, a Washington-based think tank. Many of the tax increases in 2027 – when the tax cuts for individuals expire – would fall on those earning $75,000 or less. Tax cuts for corporations would be permanent.
Before 2027, those earning more than $30,000 would on average receive a tax cut, while those under $30,000 would see taxes rise, the CBO said.
The tax bill also would cause an automatic $25 billion annual cut to Medicare starting in 2018, the CBO projected. That’s because the revenue cuts in the tax bill would trigger automatic spending cuts under a 2010 “pay-as-you-go” law, which requires funding reductions for certain programs when Congress passes laws that increase the deficit. The automatic cuts could be waived by a future vote of Congress, and Collins previously has said she expects Congress to restore the Medicare funding.
SEN. KING WANTS A BIPARTISAN BILL
Collins also has asked that the top tax rate of 39.6 percent remain in place for those earning more than $1 million – it currently applies to those earning more than $418,500 – and to allow more generous deductions for state and local taxes, like the House bill does. The corporate tax rate would plummet from 35 percent to 20 percent under both versions of the bill.
Collins also has suggested a slightly higher corporate tax rate than the one in the current Senate bill. But in a hectic period in Washington – with furious horse-trading and deals being cut among different parties – it was unclear whether Collins’ suggestions would be considered for the reform bill.
Maine Sen. Angus King, an independent who caucuses with the Democrats, urged a bipartisan approach to tax reform, appearing at a news conference Tuesday with several centrist Democrats – but no Republicans.
King said that under a true bipartisan deal, “we could get 70 votes, I honestly believe, (for) a reasonable tax reform plan that is fair to the middle class and that expands the economy and doesn’t break the bank.”
He said the current tax reform plan would “explode” the deficit, and in the long-term, hurt the middle class.
Joe Lawlor can be contacted at 791-6376 or at: