Senator Chuck Schumer's government shutdown threatens to become the longest in American history, breaking the record 36-day stalemate in President Trump's first administration. The NewYork lawmaker fears his party's leftist base will torpedo his reelection chances unless he remains recalcitrant.
Schumer has frogmarched his Democratic Party minions into the Death Zone of politics. Republicans are refusing to take his bait of extending Obamacare subsidies in exchange for unlocking the doors of government. Now Schumer faces the real threat of a pyrrhic victory, caving without a political victory.
Pressure is ratcheting as airline executives, air traffic control union bosses, federal government worker union officials, small business associations and other groups are calling on Democrats to vote with Republicans to approve a continuing appropriation that Schumer voted for in March.
For those who insist both parties are at fault, this is the Big Lie. Republicans have voted more than 13 times for the so-called continuing resolution to fund the government at fiscal 2024 Biden-era levels. A few Democrats have broken ranks, but Schumer has corralled the votes to enforce gridlock.
Under Schumer's iron fist, Democrats have publicly made the shutdown about extending COVID-era Obamacare subsidies. This may be the most bone-headed issue to pick for a shutdown showdown. The media reporting reads like dispatches from Russian-controlled Pravda.
The shutdown is not about all Obamacare premium subsidies. It involves only the enhanced subsidies Democrats passed as part of American Rescue Plan (2021) and the Inflation Reduction Act (2022). Democrats voted to sunset the subsidies at the end of 2025. It was not a GOP idea.
These so-called enhanced subsidies, allegedly to help Americans during COVID, were nothing more than a scheme to put more individuals on Obamacare. Under the plan, some Americans were able to get plans with no premiums or very low premiums. These were pedaled as temporary measures.
Democrats figured once millions of Americans were hooked up to the government teat they would cry foul if they were weaned from taxpayer subsidies. This was a deliberate attempt to bloat the rolls with individuals willing to vote with Democrats to permanently latch on to the extraneous benefits.
To no one's surprise, the subsidies invited massive fraud. Estimates by the non-partisan Congressional Budget Office (CBO) put the numbers of improperly enrolled individuals at between 2.3 million and 6.4 million. An independent estimate fixed the number at 5 million, costing taxpayers an extra $20 billion.
The government uncovered insurance fraud as agents and brokers enrolled individuals without their consent in order to collect commissions. An independent study by Paragon Health Institute found 11.7 million enrollees--more than one-third of the entire Obamacare marketplace--made no claims.
Where did the billions of dollars in subsidies go? Into the pockets of unscrupulous insurance brokers and to insurance companies.
That wasn't the only political hustle. Obamacare subsidies were extended to households making 400 percent of the federal poverty cap. That allowed some Americans with incomes of $600,000 to qualify for government benefits. About one-third of the enhanced subsidies went to these wealthy individuals.
How come the media has not highlighted these benefits for the often maligned bogeyman: the fat cats?
This is what Democrats want their left wing base to believe is worth fighting for. More fraud and taxpayer waste to keep the government in limbo. There is no longer a COVID emergency and therefore there is no justification for making these costly subsidies permanent entitlements.
Permanently extending the enhanced Obamacare subsidies would cost $488 billion, increasing the deficit by $350 billion over ten years, while adding another $60 billion in additional interest cost to finance the spending.
Even without the extended subsidies, the CBO projects the cost of Obamacare--the ill-named Affordable Care Act--to top $1.32 trillion during the ten-year period from 2025 through 2034.
The approximately 24 million Americans currently enrolled in Obamacare health insurance plans face higher premiums next year, Democrats complain. They quote the progressive Kaiser Family Foundation forecasts that premiums through health exchanges will leap 26% on average next year, reflecting the rising cost of care.
However, the foundation estimates are based on those who enroll in the Silver or second tier plan--not the lowest. KFF also uses the expiration of the current enhanced subsidies in its calculation, which is skewed because it includes those Americans whose incomes are above the 400% of the poverty line.
A more accurate estimate is a study by the Centers for Medicare and Medicaid Services (CMS). It found the average Obamacare marketplace premium after tax credits is projected to cost $50 per month for the lowest cost plan next year. Nearly 60% of enrollees will have access to those plans $50 and below.
Those estimates are based on the expiration of the enhanced subsidies. This destroys the Democrats' talking point that failure to extend the supercharged subsidies will significantly increase premiums for the poorest Americans.
In fact, the cost for Obamacare coverage is significantly less than what most Americans pay for insurance through their employer. And they don't get the advantage of taxpayer handouts. Taxpayers are forecast to cover 91% of the lowest cost plan premiums for Obamacare, CMS reports.
Obamacare has left a shameful trail of broken promises. You could keep your doctor. If you liked your coverage, you could keep it. Premiums would go down $2,500 on average. Reality was far different than what President Obama and Speaker of the House Nancy Pelosi sold to the American people.
Millions found out their Obamacare plans did not include their doctor. In the first year alone, 9.3 million Americans lost coverage when their businesses stopped insuring them. Premiums ballooned 60% in just the first four years of Obamacare.
It is a failed experiment in government run health insurance. But like all government entitlements, politicians keep throwing your money at bad ideas. At least, Democrats and Republicans should agree that the COVID-era limited enhanced benefits can be accorded a Congressional burial.
