Would Senate Passage of an ACA Tax Credit Extension Matter?

Alex Brill | AEIdeas

Last week, under a rarely used procedure known as a discharge motion, the House of Representatives passed a three-year extension of the enhanced Affordable Care Act (ACA) healthcare tax credit, which expired on December 31.

A discharge motion, also known as a discharge petition, is a mechanism established in the House rules (Rule XV, clause 2) that allows the minority, with 218 signatories, to force a bill in committee to come to the floor for consideration. For last week’s vote, 17 Republicans joined all 213 Democrats to pass the bill (HR 1834) over the objections of House Republican leadership, creating both political pressure and a legislative vehicle for the Senate to advance a compromise. While House Democrats celebrate their victory, the legislative path forward for any renewal of this policy is tricky.

A small group of Republican and Democrat senators have been working on a policy that differs in important ways from the House-passed bill, including extending the enhanced credit for two years, excluding higher-income households from receiving the credit, and enacting reforms to limit fraud. At present, the major hurdle among negotiators relates to coverage of abortion services for ACA health plans. While the House-passed bill would increase the deficit by more than $80 billion, any compromise reached in the Senate will surely be less costly.

The debate over the enhanced tax credit was a driver behind the government shutdown at the end of last year, and Democrats are eager to charge Republicans with failure to constrain rising health insurance premiums. Republicans, generally critical of Democrats’ temporary enhancement of the credit during the pandemic, are searching for alternative policies that steer resources directly to consumers rather than health insurance companies.

If the Senate amends the House-passed bill, it must be passed by the House again before it can be sent to the President’s desk for signature. Given the diversity of views among House Republicans, the path forward is murky. As I see it, there are a few possible scenarios.

First, it is certainly plausible and perhaps most likely that President Trump could endorse a Senate deal and pressure House Republicans to accept it. Many Republicans believe that settling this issue with a compromise and an extension of the tax credit is critical to protecting the House Republican majority in the midterms.

Second, House Republicans could amend the bill and send it back to the Senate. The amended version could be radically different, reflecting conservatives’ broader reform objectives, or could include a “poison pill” that House Republicans know will meet objection in the Senate.

Third, Speaker Johnson could refuse to bring a Senate-passed bill to the House floor for a vote. Ordinarily it would be easy for the Speaker to simply ignore a Senate-passed bill– in any given year, dozens of bills that have passed the Senate are not considered by the House. In this case, however, the matter is trickier given the prominence of the issue.

Fourth, given that House Democrats and many Republicans are eager for a deal to renew the enhanced credit, another discharge petition could be used to force a floor vote on a Senate-passed deal. However, a petition could be filed only after the Speaker referred the Senate bill to the House Ways and Means Committee. If the Speaker instead held the bill at the desk, no discharge petition could be filed. Alternatively, any House member could introduce a new bill, identical to the Senate version, and force a discharge on that bill, but that approach would require the Senate to vote again.

As Congress grinds forward in the debate over extending the enhanced tax credit, both President Trump and Speaker Johnson have significant power to derail or influence the process. The President’s endorsement could make any compromise palatable enough in the House to become law Or the Speaker’s authority to control the House floor could block or at least further complicate any compromise from being adopted.