The Fight at the Center of the Government Shutdown

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From the New York Times, I'm Rachel Abrams, and this is the daily.

As the government shutdown enters its second day, Democrats are determined to make this growing political fight all about the rising costs of health care.

Today, I speak to my colleagues Margo Sanger-Katz and Shane Goldmacher about why the Democrats are betting on this particular strategy and who is really to blame.

It's Thursday, October 2nd.

Margo, we are talking to you on the first full day of the government shutdown.

And Senate Democrats, in explaining why the government is shut down, have said that this is above all about surging health care costs.

And Democrats are basically saying that in some cases, Premiums for Americans, some Americans, are going to be doubling.

And I want to start there.

Is that accurate?

accurate?

On average, that is accurate.

So this applies to people who buy their own insurance.

So people, if you don't get insurance through work and you're not in a government program like Medicaid or Medicare, you might go to the Obamacare marketplace and buy your own insurance.

And the government has set up subsidies that help make that insurance affordable for people.

And some of these subsidies are set to expire at the end of the year.

And when that happens, it means the amount that people are going to have to pay for their health insurance is going to go up by a lot.

On average, KFF health research group has estimated it's like 114% increase, but there's actually a lot of variation under the hood.

For some really low-income people who have been paying zero for their health insurance, they're going to have to pay somewhere between like $35 and $60 a month.

But then, as you go like up the income scale, if you imagine someone who's making like around $65,000 a year, that's someone who might have to pay like $20,000 more a year in some markets.

Wow.

So you see these really big effects.

They're uneven and they do depend on how much you make, where you live and how old you are because nothing about Obamacare is simple.

But a lot of people and particularly people in red states that did not expand Medicaid are going to be looking at some very large sticker shock if these subsidies expire.

To hear the Democrats tell it.

The reason that they're shutting down the government is because they say Republicans are to blame for these rising health care costs.

And the Democrats will not agree to fund the government until Republicans back a spending bill that lowers those health care costs.

That's the overall message, right?

So, I guess I'm wondering, how do we actually get to this position that we're in in the first place?

Well, I think, as is the case with many political questions, the answer to that is a little bit tricky.

I think you have to go back to the politics of the Democratic majorities in the Biden era.

So, as you may remember, the Democrats had both the White House, the Senate, and the House.

So during the pandemic, when Democrats felt like they could spend a lot of money to help prop up the economy, they extended the subsidies into this current system

where the help is just much more generous.

And there was a debate inside the Democratic Party about how long the subsidies should get extended.

A lot of Democrats, including the White House and the Democratic leadership, really wanted to make this a permanent program.

They felt like this was an improvement on the original Obamacare program.

It was making insurance more affordable.

It was bringing in lots of people who were previously uninsured.

But they had kind of a small majority, and they had some members in their caucus in the Senate who were pretty conservative.

And one of them was Joe Manchin of West Virginia, sort of the most conservative member of the Democratic caucus.

He was concerned that the Democrats shouldn't spend too much money.

And it turns out that subsidizing the health insurance of millions of Americans is actually pretty expensive.

And they absolutely needed his vote to extend these subsidies.

Because Republicans were never going to vote for these extensions.

Yeah.

And so the compromise that the Democratic leadership reached with Senator Manchin was they would extend these subsidies, but only for a few years, not forever.

So there was an expiration date on them originally.

And there was also, I think, a calculation.

They specifically chose to have them expire now because they knew that Congress was going to have to revisit another set of expiring laws.

The Trump tax cuts also were set to expire at the end of this year.

And the Democrats were basically taking a gamble that probably they would have enough control in Washington that they would be able to make some kind of deal with Republicans, where, in exchange for extending the Trump tax cuts, which Republicans all wanted, the Democrats would be able to get them to also extend these Obamacare subsidies.

Of course, what happened is that Republicans swept to power and had full control of the government.

So they passed their major tax and domestic policy bill without needing any help from Democrats at all.

Not only were Democrats unsuccessful in getting Republicans to include these subsidies in their bill, but they also were unsuccessful in fighting off almost a trillion dollars in other cuts to health care, mostly in the Medicaid program.

So clearly the bet that the Democrats made when all of this went into effect did not pan out.

I think that's true, but it's also the kind of bet that Congress makes all the time.

It is not just Democrats who pass bills with these expiring provisions, hoping that a future Congress is going to make their temporary program permanent.

And I think if you look at what's happened since these subsidies were expanded in the last few years, enrollment in Obamacare has more than doubled, and most of the increase has been in Republican states.

Georgia, Florida, and Texas have had absolutely enormous increases in the number of people who are enrolled in this program.

And those are people who are really at risk of losing their insurance if they suddenly have to pay a lot more.

And the states that are going to see the biggest increase in prices for kind of middle-income people who earn a little bit more than $60,000 are also going to be in Republican states like Wyoming, Alaska, and West Virginia.

So I think Democrats feel like they have some leverage over Republicans.

Meaning that there might be some Republicans who are willing to extend the cuts now because of the benefits to their constituents, even if they didn't vote to extend the same subsidies the first time around.

Yeah.

Democrats think that maybe Republicans would actually be willing to support this program because so many of their constituents benefit from it.

But this is actually a pretty big gamble because the reality right now is that the government is shut down and Americans don't know when the shutdown is going to end.

And Republicans who control all three branches of government, they are out there saying, this is the fault of the Democrats.

Anytime you're shutting down the government, you're taking a pretty big risk.

And the reality is that Democrats do not have a lot of political control.

But

I think that they feel like healthcare is a really good issue for them.

It's one that they have run and won on in the past.

It's one that they feel voters trust them on more than Republicans, which is not true for a lot of other issues.

And so I think they feel like if they're going to have a fight, a big, prominent, messy fight that's going to get a lot of attention, they want to have it on this ground.

After the break, Shane Goldmacher on the last time Democrats used healthcare to win the political moment against President Trump.

We'll be right back.

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Shane, thanks for joining us.

Thanks for having me on.

So what's happening now, this fight around healthcare, echoes another fight from the not-too-distant past, and that's what we want to talk to you about.

So just to start, can you tell us the last time Democrats used the issue of healthcare to try to gain the upper hand against President Trump?

Yeah, I mean, it was the first year of his first term.

You think back to 2017, and the Democratic Party was feeling a bit overwhelmed, as Trump did so many different things at once and was involved in what they felt were so many scandals, and the Mueller investigation, and the FBI directors getting fired, and all these things.

And ultimately, Those were not the issues that the Democratic Party ran on in the 2018 midterms, the first midterm election election of Trump's first term.

What they ended up running on almost overwhelmingly.

This is the issue that is on the ballot.

This election is about health care.

Was health care?

How do we preserve the Affordable Care Act from the assault we know it will receive?

And this was a strategy that Nancy Pelosi and House Democrats came upon as Trump and the Republicans tried to repeal the Obamacare measure.

One thing we have to do, repeal and replace.

They They had a big repeal and replace measure.

Repeal and replace.

Repeal and replace.

Repealing and replacing the disaster known as Obamacare.

It didn't become law, but that didn't matter.

Democrats still used this issue and said, Republicans want to take away your health care.

Now that Donald Trump is trying to sabotage Obamacare, I'm running for Congress to protect and improve it.

And for all of the controversies of those first couple of Trump years, this is the one that actually broke through on television.

A year ago today, my own representative, Congressman Tom MacArthur, introduced a legislation that tried to take away health care from millions of Americans.

When I saw Congressman Bishop smiling at the White House after voting to gut protections for pre-existing conditions, something inside me broke.

This is the one that Democratic candidates in every corner of the country ran ads on.

Half the political ads, according to a study after the election in 2018 that democrats ran half of the ads talked about health care and just remind us how well did it work for democrats in 2018 i mean it worked pretty well in the house they won 40 seats and flipped the chamber and were able to be a check in the second half of that first term they impeached donald trump they took power and so Now you have Democrats again, a little overwhelmed by a sea of issues that the president is stirring up and settling now into this shutdown fight.

What is the thing they want to stop Trump on?

What is the thing they want to fight with Trump about?

Is it about his overreach in one place?

Is it about firings of U.S.

attorneys?

Is it about investigations?

It's back to that same issue.

It's healthcare.

And unlike in 2017 and 2018, where the Republicans had tried to act on this issue and failed, the current Republican Congress and President Trump have actually made changes to healthcare care policy.

And so the Democratic Party isn't just running on the theoretical threats of Republican changes to health care.

They're running on the reality of changes that are set to go into effect.

But just to point out one obvious difference.

Right now, this is not technically an election year, unlike 2018.

But the next election, of course, is a midterm election next November.

So with that in mind, how much does this Democratic strategy that we're talking about resemble the 2018 playbook well we don't know for sure right they have yet to run ads in a lot of these districts the campaign hasn't been fully formed yet but what you see in this shutdown is the Democrats basically trying to settle on an issue where they know they're on the winning side of public opinion and they're trying to basically lay the groundwork for voters to know one year from now where the two parties are on this.

And look, Ted Cruz and the Republicans pushed a major shutdown that that was a really big deal in 2013.

And guess what?

Republicans won a bunch of seats in the Congress the next year, right?

So the issue isn't just do you win this temporary argument around the shutdown?

It can also be, do you win the long-term argument of what your party is seen fighting for?

And that's very much what the Democratic Party is hoping for, that they can be seen fighting for health care, an issue that they've won before on and one they think that they can win again on.

In other words, they're betting that healthcare is going to be a bigger deal than shutting down the government.

Absolutely.

So how are Republicans responding to that strategy?

I think they're chiefly so far responding to the shutdown part of it, which is to say, first off, it's the Democrats who have shut down this government for this issue of health care.

And second, to pivot to areas where the Republican Party is more trusted.

And that so far has been immigration.

They've been talking about how the Democrats want to fight for health care for illegal immigrants, although the Obamacare subsidies that are at issue here that the Democrats are demanding be extended do not apply to people who are here illegally.

But that's the focus, right?

And they're doing it to try to send a signal that this is actually not about health care, but about spending money for people who are here illegally, which polls unpopularly, right?

The Democrats are staking ground on a place that is popular, and the Republicans are trying to to change the ground into a place that is unpopular.

Basically, each side is retreating to issues that are winning for them in their own way.

Their own safe spaces, so to speak.

It strikes me that for the strategy to work that you are describing, Democrats need to focus on healthcare basically for as long as possible, right?

Like, basically, is it actually to their benefit to have Republicans refuse to meet them halfway so they can keep kind of pounding on about these rising health care costs and blame it on the other side?

Look, I think that if the Democratic Party could snap their fingers and have Republicans actually negotiate over health care and strike a deal on this, they would take that in a heartbeat.

On a policy that they care about, that the Democratic base cares about, that impacts voters, they would absolutely take that.

And look, some Republicans are even open to negotiations on this exact policy, on whether there should be some subsidies extended for Obamacare, because this does impact voters.

But the Republicans are pretty universal on.

We all understand that Democrats and Republicans have policy disagreements.

And what you heard from J.D.

Vance.

You don't have policy disagreements that serve as the basis for a government shutdown.

As long as the government is shut down,

you're getting absolutely nothing.

Do the right thing, open up the people's government, and then let's fix health care policy for the American people.

Questions?

Shane, do you have any sense about which side has the upper hand right now?

I think it's really hard to say, right?

Like the Democratic Party is fighting on an issue that they think they have the high ground that is popular in polling, which is healthcare and making healthcare cheaper for Americans.

But there's a tricky thing here, which is in order to show that you're fighting for healthcare, you kind of have to own that you're shutting down the government to do it.

And voters don't want to see the government shut down for political demands.

And so each day that the government stays shut down and more and more more Americans are impacted by the government shutdown, that people start missing paychecks, that parks start closing, that services stop being offered, it becomes a bigger and bigger gamble for the Democratic Party.

Shane, thank you so much.

Thank you for having me.

On Wednesday evening, the Trump administration halted billions of dollars in funds for Democratic-led states while it readied to lay off scores of government workers, a plan seemingly intended to maximize pain from the shutdown.

In a series of social media posts, Russell T.

Vogt, the White House budget director, said that the administration had paused or moved to cancel the delivery of about $26 billion in previously approved funds across a range of programs, describing the money as wasteful or in need of further review.

We'll be right back.

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See you tomorrow.

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