Let’s Say Trump Wanted Trumpcare to Fail…
A political thought experiment
If it looks like a loss, it’s probably a loss. Orchestrating what seems like a loss, but was really all part of the plan, is more supervillain than real-world politician.
Steve Bannon Is Not a Supervillain
Don’t get lost in conspiracy theories. Reality is bad enough.
And the collapse of Trump’s healthcare effort sure looks like a loss.
Republicans couldn’t even get the American Health Care Act through the House, which they control by 47 seats. Now they’ve moving on to other issues, leaving the Affordable Care Act in place.
This breaks Trump’s repeated, insistent promise to repeal and replace Obamacare “on Day 1.” It damages his personal brand as a dealmaker, and his political brand as an outsider who can get things done. And it made him seem weak, as his demands, cajoling, and threats failed to win over House Republicans.
Failure tends to breed failure. And with legislators, the press, and the public less impressed by/afraid of Trump, he’ll find future efforts more difficult.
But what if this was his plan all along? What if he always knew repeal and replace wasn’t happening, and orchestrated this failure to set up victories in the future?
I doubt it. But let’s try a thought experiment: assume it’s true and see where it takes us.
Should You Kill Your Child and Save the Masses?
A thought experiment about thought experiments
Win the Republican Civil War
Republicans’ unexpected electoral sweep papered over internal feuding, but it never went away.
The civil war is multi-sided, but throughout the Obama years, the main division was establishment v. anti-establishment. The establishment was open to compromise (comprehensive immigration reform, a “grand bargain” on deficits) while the anti-establishment contingent demanded total opposition. Calling the establishment weak, they argued Republicans could govern from one house of Congress, forcing Obama to adopt their agenda with drastic measures (shutdowns, debt ceiling standoff, etc).
There were arguments and primary fights, but anti-Obama sentiment kept them unified (more or less). And the lack of governing responsibility allowed votes for virtue signaling and message coordination — especially on Obamacare — without real consequences.
Trump’s primary run revealed another rift, perhaps larger than the first: conservative v. right-wing populist. The populists denounce free trade and immigration, clashing with business conservatives. They don’t mind big government — as long as it’s benefiting them — and they oppose entitlement cuts.
Disrespecting Elites is the Point of Trumpian Populism
Donald Trump is comfortable fighting in public. It’s what his supporters want.
Trump ran as an anti-establishment populist, and to reshape the Republican party, he needs to win on both fronts. Starting with healthcare, and losing, gave him the opportunity to do just that.
The failure of the AHCA looks bad for Trump, but it looks worse for Paul Ryan. The supposed policy genius put together a terrible policy, denounced by both left and right. After years being called the de facto leader of the Republican party, Ryan rose to the Speakership as the only person who could unite the warring factions, and then couldn’t even get House Republicans to back his signature legislation.
The president avoided blaming Ryan, praising him in public. But the morning after the legislation failed, he tweeted this:
That night, Judge Jeanine Pirro opened her show blaming Ryan for the debacle, and calling for his resignation.
I scrolled through Trump’s Twitter feed (you’re welcome), and while he often references things he saw on Fox, retweets video clips, and alerts followers to his upcoming appearances, this is the only time since becoming president he promoted a show in advance.
In calls to the New York Times and Washington Post, the president tried to blame Democrats, but he quickly shifted to Republican targets.
Conservative lobbying groups and think tanks opposed the AHCA, denouncing it as “Obamacare Lite,” as did the anti-establishment House Freedom Caucus.
Charles and David Koch, and other major conservative donors, were NeverTrump from the beginning. The Freedom Caucus is full of rejectionists, who seem to care more about fighting liberals than solving problems. Weakening them, while damaging establishment poster boy Paul Ryan, is worth the temporary hit.
The House Freedom Caucus and Healthcare Reform
Why did the Freedom Caucus thwart Paul Ryan’s Obamacare replacement bill?
There are already signs it’s working. Rep. Ted Poe (TX) resigned from the Freedom Caucus, bringing group membership down to 30. From Poe’s statement:
Saying no is easy, leading is hard, but that is what we were elected to do.
Saying no is the Freedom Caucus’ whole thing. “Leading” means following Trump.
Wriggle Out of an Impossible Promise
Republicans spent 7 years denouncing Obamacare and promising they had a better plan, but they clearly don’t. Conservative healthcare experts have plans, and individual Republicans have plans, but the Republican party as a whole does not.
Using the establishment/anti-establishment and conservative/populist dimensions, here’s the Republican party on healthcare:
That’s pretty complicated, and it’s still oversimplifying. For example, Murkowski and other moderates may align with right-wing populists on healthcare, but they clash on other issues, such as free trade.
And there’s hardly agreement as to what “real conservative reform” looks like. (Every self-identified Real Conservative believes some other self-identified Real Conservatives aren’t really conservative). “Free market” is a general principle, not a detailed plan. “Patient-centered” is just a buzzword.
But even if Republicans were united, the politics of healthcare are extremely difficult. There are a lot of stakeholders, and voters are risk averse.
Trump campaigned on the impossible: better care for less money, enacted immediately.
He knew it was impossible, but astutely recognized Republicans had been promising the impossible for years. It worked for them politically, and he wasn’t going to become president if they out-promised him.
But now that he’s in the White House, political constraints (and math) mean he can’t deliver. The only option is to sweep it under the rug.
Trump could have started with his pet issue, immigration. He could have taken Bannon’s nationalist/populist path and gone with infrastructure. Or he could have opened with tax reform. Those three, along with normal budgetary and national security concerns, would constitute a full agenda, allowing Trump to duck the healthcare question.
But Paul Ryan wanted to tackle healthcare first.
Ryan’s top priority is lowering taxes for the wealthy, and he had an ambitious plan. Permanent reductions have to be revenue-neutral, otherwise they expire after 10 years, like the Bush tax cuts. Ryan wanted to repeal Obamacare’s taxes first, thereby lowering the baseline before cutting the top marginal rate.
This gave Trump a great opportunity. Pretend to help Ryan with healthcare, watch it fail, pin the blame on others.
The best part? Ryan’s plan required passing a healthcare bill quickly giving Trump ample time for his real agenda once “Ryancare” failed. Everyone in Washington knows it’s Ryan’s timetable, not Trump’s. He’ll take the hit for rushing. As an added bonus, it weakens Congressional conservatives, smoothing the path for Trump’s populist spending increases.
Wait for More Leverage
The night Ryan pulled the bill, Trump called the Washington Post’s Robert Costa:
As you know, I’ve been saying for years that the best thing is to let Obamacare explode and then go make a deal with the Democrats and have one unified deal. And they will come to us; we won’t have to come to them. After Obamacare explodes.
Getting Democratic support won’t be easy. A “loyal opposition” might compromise; “the resistance” won’t. And even if they’re open to working with the president, they’ll want to improve the ACA, not scrap it.
Regardless, the worse the healthcare system gets, the more leverage Trump has to change it.
Problem is, Obamacare isn’t exploding. Most importantly, healthcare inflation remains relatively low.
A systemic explosion, something big enough to break down partisan politics, would see the right side of that graph spiking, like the mid-1970s.
The Medicaid expansion — which accounts for a little over half the 23 million gaining insurance under the ACA — is working well enough that Republican governors in states that implemented it, most prominently Ohio’s John Kasich, argue against its repeal.
In the individual market, where about 9% of Americans get their health insurance, there have been some problems. Last year, average premiums of benchmark silver plans sold on Obamacare exchanges jumped 22%.
However, this brought prices in line with the Congressional Budget Office’s original predictions. Every previous year, premiums remained below expectations as insurers competed for new customers. 22% increases every year would be disastrous, but most non-partisan analysts believe it’s a one-time correction.
And even if premiums jump again, ACA subsidies rise as costs increase. That would strain the federal budget, but not impose much burden on customers, limiting the political reaction.
The biggest problem is insurers exiting exchanges in rural areas because they were losing money. 32% of counties have only one insurer participating. Alabama, Alaska, Oklahoma, South Carolina, and Wyoming have only one in the entire state. As a result, 21% of Obamacare participants, almost 2 million people, do not have a choice of insurance company, eliminating any claim that the ACA creates market competition in those locations.
However, healthcare has always been more expensive in less populated, more isolated areas, and many rural residents had zero options on the individual market before Obamacare. The worst case scenario is returning to the pre-ACA status quo.
That’s a problem with significant human costs, but won’t give the president much political leverage over Democrats. All 10 Senators, and 18 out of 20 Representatives from the five states with one insurer are Republican, and rural counties went overwhelmingly for Trump.
Exchanges in other states have many participants — Wisconsin (15) and Ohio (11) have the most — indicating the problem is relatively isolated. At the national level, separate studies by the CBO and the Brookings Institute both concluded Obamacare is not in a “death spiral,” noting that sign-ups for 2017 are similar to previous years, with a similar risk pool.
Republican politicians and conservative media state Obamacare’s collapse as if it’s already happening, and Trump might believe it, but the evidence isn’t there.
Fox News: “Holy Crap, the President Actually Believes Us”
The conservative network grapples with being taken literally
The system could certainly explode in the future, but it isn’t collapsing now. It therefore makes sense for Trump to put healthcare aside.
In the meantime, there’s a lot he can do to make it worse.
Without needing Congress, the administration can alter regulations determining what insurance has to cover. It can reduce enforcement of the individual mandate, thereby weakening the incentive for younger, healthier people to buy insurance. And it’s already pulled ads that encouraged people to sign up.
These and other efforts could create the proverbial death spiral — fewer healthy people signing up → higher premiums → an even sicker customer pool → insurers exiting because they need a balanced pool to make a profit — or at least make the law weaker, giving Trump more leverage in the future.
The Biggest Loser
I don’t actually believe Trump planned all this in advance. He supported the AHCA too publicly, and worked too hard to pressure Congressional holdouts, for it all to be a ruse. Breaking his promise to repeal Obamacare hurts his standing with many Republicans. But this thought experiment offers an insight into how Trump can emerge from this failure.
Donald Trump is not really a successful businessman. He’s the world’s best failed businessman. He attached his name to an amazing array of failures—Trump Steaks, Trump Vodka, Trump Airlines, the USFL, Trump University—but his brand survived, and he always found someone else to sucker.
In his most impressive failure, Trump lost big in the casino business. But he structured it so he could write the losses off on his personal taxes. The business went bankrupt, and his investors lost a lot of cash, but Trump came out ahead.
The Apprentice was his one truly successful business venture, but his career looks more like a different reality show.
No one loses like Donald Trump. I don’t mean that he takes losing well — he certainly doesn’t — but that he’s great at screwing over his partners and getting others to take the blame.
From the start, the White House insisted the AHCA wasn’t “Trumpcare.” They obviously knew it wasn’t good. But if the president can pin the blame on Ryan, obstructionists in the House, and conservative lobbyists and think tanks, he can put healthcare in his rearview mirror, and tackle the next challenge with greater control of the Republican party.
The problem is, he’s stuck with this Congress for at least two years. He can’t declare bankruptcy, move on to new markets or seek foreign financing. And all but his die-hard fans think less of him now than they did last week.