Obama Says King v. Burwell Is an ‘Easy Case’
House Republicans are gearing up to grill Health and Human Services Secretary Sylvia Mathews Burwell this week over how the administration will handle any potential fallout if the Supreme Court strikes down federal subsidies for health insurance coverage in 34 states operating on the federal exchange. Burwell will testify before the House Ways and Means Committee on Wednesday, ahead of the high court’s ruling in the high-stakes case of King v. Burwell, expected later this month.
The plaintiffs in that case contend that the law’s language only provides for subsidies to people in states that created their own exchange. The Obama administration and authors of the law maintain that the law was intended to offer subsidies to all enrollees who are eligible based on their income regardless of which exchange they used.
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If the court rules against the administration, an estimated 6.5 million people could lose their subsidized health coverage. If that happens, experts say it could create a ripple effect throughout health insurance markets in federal exchange states. Nearly everyone agrees that such a ruling would be devastating for millions of Americans. However, there is little agreement over what, if anything, to do to stem such fallout if the court rules for the plaintiffs.
Asked why his administration has given little guidance to states on how to prepare for the potential loss of federal insurance subsidies, President Obama on Monday said, “there is no reason why the existing exchanges should be overturned through a court case.”
King v. Burwell “should be an easy case,” Obama said. “Frankly, it probably shouldn’t even have been taken up. And since we’re going to get a ruling pretty quick, I think it’s important for us to go ahead and assume that the Supreme Court is going to do what most legal scholars who’ve looked at this would expect them to do.”
Obama added that Congress could also resolve any problems raised by a court ruling “with a one-sentence provision.”
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That kind of response is unlikely to satisfy House Republicans, who are likely to again question Burwell’s previous claims that the administration does not have a “Plan B” in place if the court strikes down federal subsidies for millions of Americans.
Last week, during a Wall Street Journal breakfast, Burwell explained that the administration’s authority is limited. She added that her agency would work with states that are considering creating their own exchanges or using workarounds to avoid losing out on the federal subsidies.
“As always, we will stand ready to work with states, but in terms of administrative authority, we can’t do much,” Burwell said.
Republicans, who have long sought to repeal Obamacare, have criticized the administration for not having a contingency plan in place if the subsidies get struck down.
Marco Rubio Says There’s No Proof Tax Cuts Are Helping American Workers
Sen. Marco Rubio (R-FL) told The Economist that his party’s defense of the massive tax cuts passed last year may be off base: “There is still a lot of thinking on the right that if big corporations are happy, they’re going to take the money they’re saving and reinvest it in American workers,” Rubio said. “In fact they bought back shares, a few gave out bonuses; there’s no evidence whatsoever that the money’s been massively poured back into the American worker.”
For Richer or Poorer: An Updated Marriage Bonus and Penalty Calculator
The Tax Policy Center has updated its Marriage Bonus and Penalty Calculator for 2018, including the new GOP-passed tax law. The tool lets users calculate the difference in income taxes a couple would owe if filing as married or separately. “Most couples will pay lower income taxes after they are married than they would as two separate taxpayers (a marriage bonus), but some will pay a marriage penalty," TPC’s Daniel Berger writes. “Typically, couples with similar incomes will be hit with a penalty while those where one spouse earns significantly more than the other will almost always get a bonus for walking down the aisle.”
Trump Administration Wants to Raise the Rent
Housing and Urban Development Secretary Ben Carson will propose increasing the rent obligation for low-income households receiving federal housing subsidies, as well as creating new work requirements for subsidy recipients. Some details via The Washington Post: “Currently, tenants generally pay 30 percent of their adjusted income toward rent or a public housing agency minimum rent not to exceed $50. The administration’s legislative proposal sets the family monthly rent contribution at 35 percent of gross income or 35 percent of their earnings by working 15 hours a week at the federal minimum wage -- or approximately $150 a month, three times higher than the current minimum.” (The Washington Post)
New Push for Capital Gains Tax Cut
Anti-tax activists in Washington are renewing their pressure on lawmakers to pass new legislation indexing capital gains taxes to inflation. The Hill provided an example of such indexing that Grover Norquist recently sent to Treasury Secretary Steven Mnuchin: “Under current policy, someone who made an investment of $1,000 in 2000 and sold it for $2,000 in 2017 would pay capital gains taxes on the $1,000 difference. But if capital gains were indexed, the investor would only pay taxes on $579, since $1,000 in 2000 would be equivalent to $1,421 in 2017 after adjusting for inflation.” Proponents of indexing say it’s just a matter of fairness, but critics claim that it would be just another regressive tax cut for the wealthy. Indexing would cost an estimated $10 billion a year in lost revenues. (The Hill)
Bernie Sanders to Propose Plan Guaranteeing a Job for Every American
Sen. Bernie Sanders (I-VT) is preparing to announce a plan for the federal government to guarantee a job paying $15 an hour and providing health-care benefits to every American “who wants one or needs one.” The jobs would be on government projects in areas such as infrastructure, care giving, the environment and education. The proposal is still being crafted, and Sanders’ representative said his office had not yet come up with a cost estimate or funding plan. Sen. Kirsten Gillibrand (D-NY) last week tweeted support for a federal jobs guarantee, but Republicans have long opposed such proposals, saying they would cost too much. (Washington Post)