Trump Wants to Avoid a Government Shutdown by Funding a Border Wall and Illegal Obamacare Subsidies

The deal floated by the president reveals his governing priorities.


Gage Skidmore

If Congress doesn't negotiate a budget deal or temporary extension by the end of this week, the federal government will shut down. That's an outcome that President Trump wants to avoid. So his administration has proposed a deal intended as a compromise: If Democrats agree to fund Trump's border wall, Trump will agree to fund payments to health insurers that are keeping Obamacare afloat.

This is the deal that White House Budget Director Mick Mulvaney outlined over the weekend, and, tellingly, it appears to be Trump's preferred outcome: money for Obamacare and money for a border wall.

One complicating factor is that House Republicans have spent the last several years arguing in court that the Obamacare payments Trump wants to make are unconstitutional.

The payments, known as cost-sharing reduction (CSR) subsidies, are part of the statute of the Affordable Care Act. But Congress never appropriated any money to pay for them. The Obama administration, after initially requesting that Congress set aside money for the subsidies, made the payments anyway. House Republicans sued, arguing that under the Constitution, only Congress has the power of the purse, and that the Obama administration's decision to spend money that Congress did not appropriate violated the separation of powers. In May of last year, a federal judge agreed, ruling that the Obama administration's decision to fund the subsidies was illegal.

(The Obama administration appealed the ruling and kept making the payments. After Trump won, House Republicans suspended their suit, and so far the Trump administration has continued to make the payments as well, while repeatedly threatening to end them.)

The relevant history is clear enough. House Republicans argued in court that the CSR subsidies were unconstitutional. A federal judge agreed. And, as the Cato Institute's Michael Cannon points out, both Health and Human Services Secretary Tom Price and Attorney General Jeff Sessions have also said that the payments violated the law. This is the money that Trump wants to spend in order to pick up support for funding a border wall. This is the compromise he is willing to make.

That Trump now want to make these payments is both awkward and revealing.

There may be political and budgetary reasons, at this point, to continue funding the CSR payments, at least on a temporary basis. Without those payments in place, many if not most insurers would almost certainly drop out of Obamacare's exchanges, leading to a nearly instant collapse of the individual market. In addition to the toll of rapidly throwing millions of people out of their coverage, this would likely be a political nightmare, because even small disruptions make the always-difficult politics of health policy reform even tougher. In addition, Obamacare's subsidy system is structured in a way that could result in substantially higher costs to the government if the subsidy were cut off.

To the extent that the CSR subsidies provide the administration with options for tactical negotiation, that leverage should be to negotiate for better health care policy. The problem is that, by all accounts, Trump neither knows nor cares what that would look like. Instead, he remains focused on restrictionist trade and immigration policy—even as illegal immigration has fallen from its 2015 peak.

The president may yet soften on his demand for wall funding. But the fact that he has pursued this supposed compromise reveals much about his policy priorities and his approach to governance, as well as his political instincts. Trump has always branded himself a master dealmaker, and this is what his idea of a terrific deal looks like.

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  1. Christ, what an asshole.

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  2. This is turning out better than I had hoped. Nothing will get done for 4 years.

  3. Reason Magazine = More Right-Wing than the Military Times or Stars + Stripes

    To be fair, they do not yet have mandatory trans-inclusive policies in place.

    1. How you define the axes of the political spectrum is a subjective reflection of what you think the important issues are. If you think economics is everything, Reason is really far to the right. If the axis of interest is nationalist-internationalist, it’s left-wing.
      Just another reinforcement of why the Nolan chart exists.
      Of course, we might want to add more than two axes at that.

      1. Yes, a UBI and increased gas taxes/tolls are far to the right.

        1. Reason isn’t particularly supportive of either one of those things.

          1. Actually, yes they are.

      2. If you think economics is everything you are probably a Marxist.

  4. I wonder how long it’ll be before Trump realizes a “do it my way or else” style of negotiating just isn’t going to fly in national politics when he’s the president. I’m guessing he’ll never figure it out.

  5. Trump has always branded himself a master dealmaker, and this is what his idea of a terrific deal looks like.

    Well, duh. The only losers in this deal would be the taxpayers who have to pick up the tab for both the Obamacare subsidies and the border wall. Who gives a shit about them? Fuck ’em! /sarc

    1. Sarc not sarc.

  6. “If Democrats agree to fund Trump’s border wall, Trump will agree to fund payments to health insurers that are keeping Obamacare afloat.”

    Why should he care? It’s other people money. As long as his ‘ratings’ go up, he’s happy.

    1. No one in Congress wants to fund the border wall, and blowing up the ACA will be very very unpopular. This is how Trump talks himself in to problems. He’s attempting to leverage things that’ll hurt him more than anyone else if they go sideways.

    2. Wait, so if the Democrats turn him down he can blame them for the lack of Obamacare funding and use them as excuse for not building the border wall?

  7. Master Negotiator backed down, so they’ll probably get the subsidies for nothing:

    Wall ‘Will Get Built,’ Trump Insists, as He Drops Funding Demand

  8. Oh please oh please oh please let the Republicans vote to approve the CSR subsidies in order to fund the border wall, when they spent not just the last 7 years disparaging ObamaCare (rightfully), but they went to court to stop these specific subsidies from being spent, and even won the lawsuit. The moral bankruptcy of the modern Republican Party would then be complete. It would demonstrate that keeping out the icky brown people is more important than spending, taxes, “government takeover of health care”, ObamaCare, any of that. All of their bloviating about STOPPING SOCIALISM or UPHOLDING THE CONSTITUTION was just boob bait for the rubes. What’s most important is to STOP THE ILLEGAL INVASION!!!!!!! Might as well just change the name of the party to the National Front and get Marine Le Pen to run for president here, if she happens to lose in France.

  9. Just as Obama’s election exposed the Democrats true priorities – socializing healthcare, Trump’s election has exposed the Republicans true priorities – keeping out foreigners. The D’s will cave on immigration as long as we get more socialist in the process, and the R’s will cave on socialism as long as we get more nationalist in the process. And nobody cares about free trade anymore. It’s national socialism FTW.

  10. CNN loosing a great comedy article on the shutdown, although I don’t know that it was intentional:

    Front page headline: “7 ways a government shutdown will affect your daily life”
    Article headline: “7 ways you’re going to feel a government shutdown”

    Actual article (summaries mine):
    1) National parks closed
    2) Nothing that actually changes your life
    3) Nothing that actually changes your life
    4) Nothing that actually changes your life
    5) Nothing that actually changes your life
    6) Can’t get a gun permit
    7) Can’t get a federal loan

    Damn, dude. For the size of our discretionary spending that’s the best case for government remaining open they can make?

    1. You would think that when the government shuts down the national parks simply leave the gates open and let everyone come in. But no … if you don’t pay us, you can’t get into “public” land … is the official response of the “Deep State”.

      1. In the last shutdown, the NPS paid employees to block access to sites that don’t even have fences like the WWII memorial. It’s *supposed* to hurt.

      2. Back in the 90’s, when I lived in MT Glacier National Park closed every year in early fall (maybe they still do.) Of course ‘closing’ meant the gates were left open, and nobody was there to collect admission.

    2. So, denied access to services that we may or may not want that are exclusive government monopolies, and federal workers get a paid vacation?

  11. Given the guy is an old democrat this is hardly surprising.

  12. This can’t be happening because Obamacare is going to collapse any day now.

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