The 2026 CBO landmine in Cassidy-Graham

Redshift asked a great question yesterday:

I was just reading about the bill’s elimination of all Obamacare spending in 2026, and it occurred to me – is this bit intended to play games with deficit neutrality for their forthcoming tax cut bill? It’s the only thing I’ve heard about in the bill that has that time frame. It makes me think about how under reconciliation tax cuts that aren’t deficit neutral can’t be permanent (renewal vote after ten years), so maybe having that spending end right at that mark will allow them to make tax cuts permanent, without taking the political hit for cutting spending now. Can someone more knowledgeable confirm/debunk?

Almost but not quite. This is not a move for reconciliation. Reconciliation requires a bill bring down the deficit by the target amount in the ten year budget window AND not add to the deficit after the target window. If CG spending was a mandatory, infinite appropriation the combination of keeping most of the taxes and ratcheting down Medicaid spending via block grants would satisfy the deficit neutrality provision.

So it is not for reconciliation that the spending on the block grants get shut off in 2026 but the taxes continue.

It is a landmine that is waiting to be triggered in 2026.

Presumably, Congress would not want to throw millions of more people off their insurance (yes, that is a significant assumption) so they would want to re-appropriate the block grants. However under Congressional procedures, discretionary spending increases above the baseline should be off-set with “pay-fors” which are either higher taxes or reductions in other spending. If the spending and the taxes both sunset in 2026, Congress could pass a bill saying “Keep on doing what we’ve been doing on taxes and spending” and have the new block grant for another 10 years be off-set by business as usual.

However that is not how the bill is set up. The taxes continue into the future so they are already incorporated into the baseline. The individual insurance block grants are not in the baseline so they need to be offset. And that produces conservative leverage points for massive cuts to either the block grant or other discretionary spending. The trade-off that Cassidy-Graham is trying to set up is “Health Insurance OR (CHIP and SNAP and Education and FBI and IRS and LIHEAP) ”

If Democrats control both chambers, the work-around is to build their budgets on “current policy” instead of the more typical “current law” baseline. If there is at least one chamber controlled by Republicans, things get ugly.

39 replies
  1. 1
    Weaselone says:

    There seems to be one obvious flaw to this plan. I’m fairly certain red States will succeed in using these block grants to fund tax cuts…that leaves them even more up shit creak when they expire.

  2. 2
    JGabriel says:

    David Anderson @ Top:

    Presumably, Congress would not want to throw millions of more people off their insurance (yes, that is a significant assumption) …

    Perhaps a safer assumption that gets you to the same place is: Congressional Republicans don’t want to be blamed for throwing millions of people off their insurance …

    Though I still don’t see how they’re going to avoid it unless the bill fails to pass.

  3. 3
    Quantumman says:

    Called Alexander’s and Corker’s offices this AM, for all the good it will do. Told them to get a reprieve for us like Alaska is getting. I was diagnosed with cancer in March and things seem to be ok right now. I fear what may happen in the future in terms of coverage and cost if this bill passes and I have a recurrence.

  4. 4
    Redshift says:

    Ah, so it’s back-door sequestration instead of a sneaky route to permanent tax cuts. I bet they have staffers who specialize in this sort of evil, and is like to know their names.

  5. 5
    Kansi says:

    Just when you thought they had reached peak nefariousness….

  6. 6
    rikyrah says:

    thanks Mayhew for the answer.

  7. 7
    Amir Khalid says:

    @JGabriel:

    Congressional Republicans don’t want to be blamed for throwing millions of people off their insurance

    It’s a villain’s dilemma. They aim to undo everything Obama did, so they do want to throw millions of people off their insurance; they just don’t want to be blamed for it.

  8. 8
    Amir Khalid says:

    @Quantumman:
    I hope things work out, and you make a full recovery.

  9. 9
    gvg says:

    the WaPo has an article up explaining something about one of the provisions of this bill gets around funding abortions. In other words it doesn’t fund even the rape and life of the mother exceptions. this provision is expected to be stripped by another faction which will anger the extremists who put it in and might torpedo the bill. I did not understand the explanation but it reminded me that unable to compromise group does exist and could explain some of the to me irrational hatred of the ACA.
    I am so tired of the anti choice bastards. Year after year. Pressuring women to keep babies they don’t really want, with huge amounts of guilt too. If it were up to me federal funds would cover abortion period. and birth control too. the “prolife” jerks are such repressive idiots getting worse in trying to justify something that doesn’t make sense.

  10. 10
    tony in san diego says:

    @JGabriel: because it is far enough in the future that most of them will be retired by then

  11. 11
    Ohio Mom says:

    @gvg: Ditto to everything you said. Hate the pro-lifers more with every passing day. For their unparalleled hypocrisy if nothing else.

    As for me, I’ve made all the calls I can for today, including all the Senators on the list below except for Graham –couldn’t get through. Also got through to two of Portman’s offices, and wrote him an email.

    The reason I can’t make any more calls is because I’m reaching the Incredible Hulk side of things. Repeating the horrors of Graham Cassidy over and over to yet another intern makes me crazy. What is wrong with this country?

  12. 12
    WaterGirl says:

    @Ohio Mom:

    What is wrong with this country?

    You are not alone.

    For the past couple of years, I would find myself saying “What the fuck is wrong with these people?” at least once a day. Now, I am gobsmacked to the point of not even being able to say that. I left a BJ thread open last night when I went to bed and I was just reading through it to finish the thread.

    I just read about parents picked up by ICE while waiting for their child to have surgery? That’s so fucked up that I don’t have words. I need something seriously stronger than What the fuck is wrong with these people? Not only did ICE think that was okay, but someone at the hospital obviously called and reported these people. Who did this? Someone who works at the hospital? Some family member there with another patient?

    That was just one of about half a dozen horrendous things I read about on that thread. I don’t want to just go back to bed, I want to go rock in the corner. Pandora’s box has truly been opened by a Trump presidency.

  13. 13
    hedgehog the occasional commenter says:

    Called Bennet’s DC office; all lines busy. Called his Denver office and left a message thanking him for standing strong.
    Sent a fax via Resistbot to Cory the Useless. Text: “Vote No on Graham-Cassidy.468,000 Coloradans, your constituents, will lose health insurance. There is no protection for people with pre-existing conditions. Premiums for older Americans will skyrocket. My husband and i are both over 50 and he is diabetic. This is personal. Will you stand with Colorado? We will remember how you vote.”

    Will it help? I don’t know, but I refuse to stay silent. And to agree with Ohio Mom @11, WHAT IS WRONG WITH THIS COUNTRY and why do the fucking Republicans want to kill us??? (rhetorical questions)

  14. 14
    Raoul says:

    If there is at least one chamber controlled by Republicans, things get ugly.

    ^ Evergreen ^

  15. 15
    Ohio Mom says:

    @WaterGirl: The baby with pyloric stenosis struck an extra chord with me because Ohio Dad was born with that and had surgery as an infant to correct it (and has a big scar as a souvenir, though I imagine the surgery nowadays is a lot more delicate).

    Basically, the valve between the stomach and small intestine is extremely tight and doesn’t let very much if any food exit the stomach downward; instead, the baby vomits his food back up (it is almost always a boy who has PS). Needless to say, it is a lethal but very correctable condition.

    I was left wondering if this very tiny US citizen could/should have had the surgery sooner but for his parents’ obviously legitimate fears of inadvertently attracting the attention of ICE. And to come full circle on my comments, where were all the pro-lifers?

  16. 16
    Nicole says:

    I wonder if, a century from now, historians will look back at the inception of FOX News as the beginning of the end of the American experience. I mean, one could say the end of the Fairness Doctrine in broadcasting, really, but specifically for me, FOX News (and to a lesser extent, Limbaugh et al). It’s not just the propaganda; it’s that it’s presented in a way to get the viewer angry. I remember back in the mid-aughts, when Olbermann’s show on MSNBC was the only one talking about Iraq being a disaster, and I watched religiously, but stopped after a few months because I realized the show was making me angry, and while that was a high while I was watching the show, it carried over into a lot of my day- I was becoming angry a lot of the time. But I sure liked the high and was sad to give it up.

    Olbermann’s show, of course, was not peddling the blatant falsehoods that FOX does, but FOX, I think, also gives viewers that angry high (as does Limbaugh, et al). I think that’s why so many older folk get sucked into it. But it’s been around now for almost 30 years, which is time for more than one generation to grow up to a backdrop of the major news source for a lot of the nation being designed to make them angry against half of the country. And our schools don’t teach critical thinking in any meaningful way, so it’s hard to recognize the propagandizing.

    And in the case of Cassidy-Graham, the FOX viewers aren’t getting any of the accurate information, and they aren’t inclined to seek it out, because other sources don’t give them the same high as watching FOX.

    I remember a “Big Book of Jokes and Riddles” from my childhood, that had a cartoon drawing of two politicians screaming at each other in Congress, and then the next panel showed them with their arms around each other, saying, “Where shall we go for dinner tonight, friend?” And while that was the joke, I think I’d prefer that joke to today’s reality, when I think a lot of the elected representatives, the younger ones, really do viscerally dislike the members of the opposing party, because FOX News has brainwashed them into a team mentality for almost 30 years.

    But how do you persuade a lot of lonely, isolated people that it’s not even about the propaganda; that they need to stop watching FOX because it is brainwashing them into being angry, and it’s hard to think straight when you’re angry?

    I mean, yeah, it’s also terrible when your news is lying to you to make you feel better about things (see: how our side does in war) but when the news is deliberately crafted to keep you in a state of rage? That’s really scary. And really effective.

    Hell, my kid has started to dislike the American flag, because he has come to associate it with Trump. You know what’s hard? Trying to explain the co-opting of symbols as propaganda to a seven-year-old.

  17. 17
    WaterGirl says:

    @Ohio Mom: Unfortunately, those hypocrites are pro-fetus, not pro-life. My sister is one of them. It boggles my mind – she is a very smart, empathetic person in other ways but it doesn’t matter that the nazis are terrorizing people with torches and driving their cars into crowds and it’s a bonus to them is people are killed or injured. My sisters response: millions of babies are killed every year. I don’t even begin to know how to deal with that mentality.

    My question is how did half of our country get so fucked up? If we’re looking at just white people, the percentage is surely even higher than that. Forget “what’s the matter with Kansas?” … What’s the matter with white people???

  18. 18
    Waspuppet says:

    One thing I don’t get: I’m aware that Sept. 30 is the deadline to pass this piece of garbage under reconciliation. I also understand the half-clever move whereby they’re able to do this because they didn’t pass a budget last FY, and they can pass a tax cut for rich people under reconciliation for this FY.

    What I don’t get is, if they don’t pass this act of destruction by Sept. 30, why can’t they just try again afterwards under reconciliation for this FY? I know it means no reconciliation for a tax cut for rich people this FY, but can’t they just take that up again in a little while for next FY?

    I know having to wait for their tax cut will make rich people sad, but isn’t passing some sort of That N!&&@r Was Never Really President Act more important to the congressional GOP? And Hair Furor?

  19. 19
    Nicole says:

    @WaterGirl: It’s an accurate point, too- “What’s the matter with white people?” because the anti-abortion movement rose out of evangelicals blaming Pres. Carter’s for taking away tax breaks from religious schools that were deliberately keeping out black students:
    http://www.politico.com/magazi.....ins-107133

  20. 20
    Ohio Mom says:

    @Nicole: I often think along the same lines re: the end of the Fairness Doctrine and the rise of the likes of Limbaugh et al.

    In yet another instance of projection, we are blamed for coarsening the culture — is there anyone coarser than Rush?

  21. 21
    Ohio Mom says:

    @WaterGirl: I was being snarky and I remember about your sister and what a heartbreak she is for you.

    Erev Rosh Hashanah the Rabbi announced that our new rabbinic intern (when you live in the city that has the original Reform seminary, your congregation always has an eager young intern) will be spearheading a new social justice community project. The purpose is to counteract the political divisions in the congregation and find something “both sides” can work on to better the world.

    Now I am waiting for more information in order to be fair, but my immediate reaction was No way am I enabling any Republican to whitewash the results of their electoral actions by helping to make any project they work on a success.

    I can just see them doing something like an innercity after-school tutoring program and congratulating themselves for demonstrating that local, volunteer action can do it all, no need for big bad government.

    My husband told me not to worry, Republicans don’t do social action. He said that as he was carting the empty pop cans he collects at his office to the curb for recycling pick-up (he is the only Liberal at work and the only recycler).

  22. 22

    @Nicole:

    I wonder if, a century from now, historians will look back at the inception of FOX News as the beginning of the end of the American experience.

    No. Yellow journalism like that has a long tradition in the US. This is not even close to the worst of it. They’ll just view this as racial backlash, and in context of the race riots, lynchings, Jim Crow, and the civil war, it will not seem strange. Only barbaric.

    @Waspuppet:

    What I don’t get is, if they don’t pass this act of destruction by Sept. 30, why can’t they just try again afterwards under reconciliation for this FY?

    My understanding, and I’m definitely not an expert here, is that they need an official budget for reconciliation. One of those is not likely to happen during Trump’s presidency.

  23. 23
    Laura says:

    @Ohio Mom:
     is there anyone coarser than Rush?
    No. There is no one coarser than Rushbo.
    I agree with you, the repeal of the Fairness Doctrine opened the floodgates -though your language was much less coarse than the language I used.

  24. 24
    Yutsano says:

    @Frankensteinbeck: If it doesn’t happen by September 30th it doesn’t happen under reconciliation. Still think Cassidy doesn’t have the votes.

  25. 25
    Nicole says:

    @Frankensteinbeck: I hope you’re right; I know too the history of yellow journalism- if anything, the mid 1950s-1970s many of us grew up during were unusual in that news was not expected to be profitable (at least on TV) and there was a sense of it being an honorable profession, before it became about entertainment. It’s just that FOX and Limbaugh don’t need a literate audience (one had to, at least, be able to read to make use of newspaper propaganda). It’s an incredibly effective and pervasive and well-crafted product now, in a way that I think it just couldn’t be in prior eras.

    Hell, the fact that news is all immediate now is a huge change from even thirty years ago.

  26. 26
    Miss Bianca says:

    @hedgehog the occasional commenter: Good for you = been emailing Gardner’s office every day, now need to email Bennet to say thanks, and Gardner again to say, “it shouldn’t even have to be an ISSUE with you, as to whether or not you’re going to vote to strip thousands of Coloradoans of health care.” Le sigh.

    btw, how was the SCA gig over Labor Day weekend?

    @WaterGirl: yup. “What’s the matter with white people?” is a question ALL of us need to be posing, nonstop.

  27. 27
    WaterGirl says:

    @Nicole: I was not aware of that history. Thanks.

  28. 28
    Yutsano says:

    @Miss Bianca: I thought the author was using Kansas as a metaphor for white people. Granted I don’t want to speak for his intentions but that was my interpretation.

  29. 29
    TenguPhule says:

    @Weaselone:

    I’m fairly certain red States will succeed in using these block grants to fund tax cuts…that leaves them even more up shit creak when they expire.

    Feature, not a bug.

    When its time to find someone to blame, they’ll blame liberals and Democrats. Probably violently.

  30. 30
    TenguPhule says:

    @Redshift:

    I bet they have staffers who specialize in this sort of evil, and is like to know their names.

    And have a meeting with them in a quiet dark alley.

  31. 31
    TenguPhule says:

    @Ohio Mom:

    What is wrong with this country?

    The inmates are not only running the asylum, they’ve gotten into bio-hazard containment.

  32. 32
    Miss Bianca says:

    @Yutsano: No, I don’t think Thomas Frank is self-aware enough to realize that what he’s really asking is “what’s the matter with white people?”. from other things he’s written, I gather he’s a lefty-Marxist-scold in the Bernie sanders model, who thinks that if the neoliberal Democrats would only shed their false consciousness and embrace their inner socialist, that nice white Midwestern populists everywhere will flock to their banner. White tribalism per se as a problematizing factor in and of itself doesn’t seem to enter into his calculus.

  33. 33
    Miss Bianca says:

    oh, crap, used the Soc*al*ist word. Help, please!

  34. 34
    Miss Bianca says:

    @Yutsano: I’ll try again…

    No, I don’t think Thomas Frank is self-aware enough to realize that what he’s really asking is “what’s the matter with white people?”. from other things he’s written, I gather he’s a lefty-Marxist-scold in the Bernie sanders model, who thinks that if the neoliberal Democrats would only shed their false consciousness and embrace their inner soshulist, that nice white Midwestern populists everywhere will flock to their banner. White tribalism as a problematizing factor in class consciousness doesn’t seem to enter into his calculus.

  35. 35
    d58826 says:

    WAPO is reporting McCain is a NO and so is CNN

  36. 36
    JaneSays says:

    I had a pretty strong feeling he was gonna do the right thing. This is his last term in office – the Kochs no longer have any sway over him.

    Half the commenters here should feel pretty silly about their adamant negativity in the past few days about McCain’s vote.

  37. 37
    Ian says:

    McCain says no again

  38. 38

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