![The faces of Congressional leaders are hardly etched with joy, but they did manage to avert a fiscal crisis, even if only for a few months. [Credit: Bloomberg]](https://i0.wp.com/www.dougsbriefcase.com/blog/wp-content/uploads/2013/10/Credit-bloomberg.jpg)
The faces of Congressional leaders are hardly etched with joy, but they did manage to avert a fiscal crisis, even if only for a few months. [Credit: Bloomberg]
All is well in Washington. The government is spending and borrowing again.
The President last night signed a bill to reopen the government through mid-January and temporarily increase its borrowing authority. The measure that rushed through the House and Senate last evening differed in some critical respects from the tentative deal that I described in Tuesday morning’s blog. It dropped a provision sought by labor unions that would have delayed an assessment on everyone with group health insurance coverage, but included a watered-down version of Republican-backed language to require the government to be more careful in determining eligibility for Medicaid and new health insurance subsidies.
The income verification provision, never really workable in its original form, now merely requires HHS Secretary Kathleen Sebelius to “certify to the Congress that the exchanges verify eligibility [for Medicaid and premium subsidies] consistent with the requirements” of the Obamacare law. Since Secretary Sebelius already claims to be complying with that law, it is hard to see how this new stipulation will have any real effect.
The original version would have prohibited the government from paying out any subsidies until the HHS Inspector General determined that the department had “in place a program that successfully and consistently verifies … the household income” of applicants.
Such a certification, though much stronger than what was enacted, would have had few real world implications. The exchanges are struggling to execute their most rudimentary task: enrolling people in health insurance coverage. The Delaware State News earlier this week recounted the story of Janice Baker, a 59-year old dog kennel owner who reportedly became the state’s first Obamacare enrollee. Baker, who is happy with her new coverage, spent a total of 7 hours to complete the process. That included two attempts to enroll online from her home computer and two 90-minute conversations with online assistance, both of which ended in the government representative’s computer crashing. It requires enormous faith in government competence to believe that the exchanges can manage the additional burden of meticulously documenting each applicant’s eligibility for subsidies.
The $63 annual assessment on the roughly 159 million people who are covered under employer-sponsored plans will go forward on January 1, despite a vigorous effort by labor unions to have it delayed. The assessment will raise $10 billion from people who do not get coverage through the new exchanges to subsidize the coverage of the estimated 7 million people who will.
That $10 billion is a critical lifeline for insurers who have agreed to sell through the exchanges. When I wrote on Tuesday, press accounts were unclear on whether Senators had tentatively agreed to put off that $10 billion payment, something that would have dealt a serious blow to the success of the new health insurance exchanges. As it later turned out, they had only agreed to postpone the $63 assessment, allowing health insurers that sell through the exchanges to get their $10 billion anyway. Treasury would simply have borrowed the money, increasing next year’s deficit by $10 billion. The provision, in any event, did not survive.
The immediate crisis averted, Congressional Republicans will now seek to recover from their self-inflicted wounds. Their ill-conceived strategy of seeking to “defund” Obamacare produced only a requirement that the HHS Secretary, in doling out hundreds of billions of dollars in government health care subsidies, pledge to adhere to the very law that Republicans had set out to scuttle.
For the President, this is what passes for victory: the government will reopen for three months and can continue borrowing at least through early February and probably until sometime in March. Hardly the stuff of history, but given his stumbles this year on gun control, immigration, scandals at the NSA and IRS, the inauspicious launch of the new health care law, and his on-again, off-again threat to bomb Syria, this marks the high point of his second term. Call it the soft bigotry of low expectations.
Meanwhile, House and Senate budget negotiators will spend the next couple of months seeking an accord that would provide stability and order to the government’s fiscal affairs.
One can only wish them godspeed.