Option one is to keep trying to modify the bill to win majority support: making it more generous to pick up moderates, or adding some deregulation to court conservatives. The basic structure of the bill, though, limits Republicans’ room to maneuver.
The bill was put together by starting with repeal of Obamacare’s spending and taxes, and then adding and subtracting elements to make the legislation work both substantively and politically. The product Republicans came up with, though, didn’t work particularly well either way. It reduced coverage levels, but didn’t do as much as Republicans wanted to lower premiums. No amount of tweaking is going to change the basic picture of a bill with which no one is very happy.
Option two is to drop health care for the time being — which President Trump is threatening to do if the bill fails. That retreat would be embarrassing after seven years of pledges to kill Obamacare, would anger many conservative activists, and would reduce the power of both Trump and House Speaker Paul Ryan.
It’s also not clear what other items Republicans could profitably take up afterward. Some supply-siders have complained all along that Republicans should have been advancing pro-growth tax reform instead of health-care legislation. But Republicans are deeply divided on a central provision of Ryan’s tax plan: a “border adjusted” business tax that is supposed to raise enough revenue to finance other parts of the measure. Nor is it clear that tax reform would improve Republicans’ political standing. Its direct benefits are concentrated on the country’s highest earners, and whether it will boost the economy substantially is a matter of speculation.
Other Republicans want to turn to the big infrastructure bill of Trump’s dreams. But there’s no legislation on it, and Republicans are even more divided on it than they are on health care and taxes.
If Republicans decide to leave health care, look for them to package it as a change in the sequencing of their strategy to repeal and replace Obamacare. They have been saying that passing the House bill is phase one, and phase two would be regulatory changes from the Department of Health and Human Services. They could say that they had decided to implement the regulatory changes first and then resume legislating. They might also hope that Obamacare will grow more unpopular, making it easier to repeal and replace it later.
Option three is to try a new approach on health care rather than either persisting on their current course or giving up. House Republicans have left deregulatory provisions out of their bill for fear, they say, that the Senate parliamentarian would rule that those provisions made the whole bill subject to filibuster. The Senate’s rules make it easier to pass changes to taxes and spending than to regulations. But the parliamentarian apparently was not consulted on what regulatory changes she would consider in-bounds, and Republicans might have more room to deregulate than they thought.
Regulations are at the heart of Obamacare, and of its problems. If Republicans could modify or eliminate more of them, they might find that their legislation would find more favor among conservatives (since it would replace more of Obamacare and reduce premiums more) and among moderates (since lower premiums would mean more coverage).
This option seems to me most likely to result in a relatively happy policy and political outcome. But it would take time both to figure out what regulatory changes the parliamentarian will tolerate and what the political process will. And the president’s patience appears to be running out.