White House vows to continue funding Obamacare, averting showdown with Democrats

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Office of Management and Budget Director Mick Mulvaney, right, White House chief of staff Reince Priebus, center, and White House chief strategist Steve Bannon, behind Priebus. (Photo: Alex Brandon/AP)
Office of Management and Budget Director Mick Mulvaney, right, White House chief of staff Reince Priebus, center, and White House chief strategist Steve Bannon, behind Priebus. (Photo: Alex Brandon/AP)

WASHINGTON — The White House has assured Democrats it will continue to fund a key portion of Obamacare, clearing the way for negotiations on a series of spending bills to avoid a government shutdown, according to two sources familiar with the decision.

House Minority Leader Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., had demanded that Congress pay for the Affordable Care Act’s subsidies — which lower health care costs for 7 million people — as part of the emerging spending bill. The demand, and the Trump administration’s initial hard line against it this week, raised concerns of an impending government shutdown.

Director of the Office of Management and Budget Mick Mulvaney told Pelosi in a conversation Tuesday night that the administration would not accept a bill that included the payments, according to an aide briefed on the conversation. Mulvaney declined to commit to continue making the payments to the insurance companies in the future, the aide said. A Mulvaney spokesman told Politico he did not threaten the payments in the conversation.

But Wednesday, the Trump administration assured Democrats on Capitol Hill that it will continue paying the subsidies, taking the pressure off Congress to account for them in the spending bill, which must pass by Friday night to avert a government shutdown. (Multiple lawmakers said they believe a one-week extension of earlier spending levels will likely pass before a full deal passes next week.)

Trump’s chief of staff, Reince Priebus, talked to Pelosi two times Wednesday, an aide said.

“Our major concerns in these negotiations have been about funding for the wall and uncertainty about the CSR payments crucial to the stability of the marketplaces under the Affordable Care Act,” Pelosi said in a statement, referring to the subsides. “We’ve now made progress on both of these fronts.”

“Like the withdrawal of money for the wall, this decision brings us closer to a bipartisan agreement to fund the government and is good news for the American people,” Schumer said in a statement. “There are outstanding issues to be resolved, particularly with riders, but this is a positive development for the negotiations.”

The compromise is not a clear victory for Democrats, however. A lawsuit launched by House Republicans when President Barack Obama was still in office could soon threaten the Obamacare payments, which is why the Democratic leadership wanted Congress to officially take responsibility for them. The lawsuit asserts that only Congress — not the administration — can legally appropriate the billions of dollars owed to insurance companies under Obamacare. If Republicans win their case, the Trump administration will be ordered to stop paying the insurance companies, which could prompt insurance companies to flee the exchanges. (The next scheduled court date in the case is in May.)

Some Senate Republicans said Tuesday they believe the payments must continue to be made to keep the insurance market stable while their party continues to attempt to repeal and replace Obamacare.

“We want to keep the market stable,” said Sen. John Thune, R-S.D. “It’s probably going to require that the existing mechanism for doing that, these cost-sharing subsidies, be in place for a while.”

But it’s harder to imagine House Republicans passing a bill to give money to insurance companies for Obamacare — a law they’ve campaigned against for years — if their lawsuit prevails.

The Congressional Budget Office estimates the government will owe $7 billion to insurance companies for the subsidies in 2017.

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