Five years later, GOP still has no plans for health care or tax reform

The year 2010 was huge for Republicans, and not just because of their overwhelming triumph in the midterm elections. Five years ago, the GOP made two very big promises to the American people. On the very day President Obama signed the Affordable Care Act (ACA) into law on March 23, 2010, then-Senate Minority Leader Mitch McConnell pledged a bold Republican alternative on health care, declaring "I think the slogan will be 'repeal and replace,' 'repeal and replace.'" Just the month before, Rep. Paul Ryan (R-WI) unveiled his "Roadmap for America's Future," which like all of his subsequent GOP budget plans demanded tax reform that "broadens the base of taxable income, allowing for lower income tax rates."

But five years later, congressional Republicans have yet to deliver on either of those commitments. After their concerted campaign to undermine Obamacare at both the federal and state level, over 50 repeal votes, multiple court challenges, one defeat at the Supreme Court and hopefully one more to come, the GOP has failed to coalesce around a single healthcare proposal. Meanwhile, five years after now-House Ways and Means Committee Chairman Paul Ryan promised to simplify the tax code by "clearing out nearly all of the existing deductions and credits," he still hasn't named a tax break he'd close. All of which means that if these cowardly Republicans get their way, the only certainties are millions of uninsured Americans and trillions in new national debt.

Continue reading about five years of the GOP's broken promises, below.

Consider, for example, the official GOP response to President Obama's 2015 State of the Union address delivered by Sen. Joni Ernst (R-IA). Ernst didn't just promise that Republicans would "balance the budget." She also proclaimed:

Let's simplify America's outdated and loophole-ridden tax code. Republicans think tax filing should be easier for you, not just the well-connected. So let's iron out loopholes to lower rates—and create jobs, not pay for more government spending.

And which of those loopholes will Ernst and her Republican colleagues "iron out?"  They didn't say, and they never say. That's because the math is hard and the politics even worse.

To see why, start with the numbers. In its most recent assessment for fiscal year 2015, the nonpartisan Congressional Budget Office (CBO) estimated federal tax revenue at $3.189 trillion dollars. Discretionary spending—the budget for mandatory outlays on programs like Social Security, Medicare, interest on the debt, etc.—is about $1.1 trillion. Total spending is forecast at $3.656 trillion, yielding a projected deficit of $468 billion. But total tax expenditures, meaning all of the revenue lost to tax breaks, credits and loopholes, is estimated by CBO to reach $1.5 trillion in FY 2015. You read that right. Ernst's mystery "loopholes" add up to more than triple the entire annual budget deficit this year.

Which means if you lower tax rates to just two brackets of 10 and 25 percent, as Paul Ryan first proposed in 2010, you're not only going to produce a huge windfall for the wealthy. You're also going to hemorrhage red ink as far as the eye can see. Unless, that is, you close dozens of tax breaks that cost Uncle Sam hundreds of billions of dollars each year. But identifying even one tax break to limit or end is exactly what Chairman Ryan has refused to do for five years.

Since 2010, Ryan has offered some variant of his "Path to Prosperity" budget providing almost $5 trillion in tax cuts over 10 years with just two rates of 10 and 25 percent, slashing corporate taxes, repealing Obamacare, and gutting social spending. (Starting in 2011, 95 percent of congressional Republicans voted for the Ryan budget three years running.) While almost 70 percent of Ryan's spending cuts come from programs impacting poor and moderate income voters, already starved non-defense discretionary spending as a percentage of the U.S. economy would plummet to its lowest level since 1950. Meanwhile, according to CBPP, over its first decade Ryan's $5.7 trillion in tax cuts would deliver 55 percent of their benefits to the richest 1 percent of Americans. A family earning $1 million a year would pocket $330,000 a year while seeing its effective tax rate plummet to 15.4 percent. Yet even while—and precisely because—it pads the bank accounts of the gilded class, the Ryan budget inevitably drains trillions from the U.S. Treasury. So much for balancing the budget in 10 years.

Paul Ryan's 2012 GOP budget would have added more red ink to the national debt than President Obama's proposal.

Faced with oceans of red ink as large as $6 trillion in the various incarnations of his budget, Paul Ryan offered a magic formula for plugging the mammoth hole. He explained it to MSNBC's Morning Joe in March 2012:

Get rid of the special interest loopholes, special deductions, lower everybody's tax rates, bring in at least as much revenue to the government but grow the economy and create jobs, and get spending under control so we can pay off this debt.

But that answer only raises another question: Which of these "special interest loopholes" and "special deductions" would the Republicans' favorite wonk get rid of? Will Ryan call for limiting or ending the $99 billion-per-year home mortgage interest deduction? The $58-billion Earned Income Tax Credit Ronald Reagan called "the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress?" The $52 billion lost annually to the deduction for charitable giving? Almost three years in, it's a question Paul Ryan and his GOP colleagues still refuse to answer.

The top 10 most popular tax breaks.
attribution: Wall Street Journal

The identities of those mystery tax breaks have always been the problem with Ryan's bragging that his plan will "prevent an explosion of debt from crippling our nation and robbing our children of their future." Matthew Yglesias rightly mocked the 2012 version of Ryan's tax reform blueprint for cowardly avoiding those politically tough choices:

Thirteen pages dedicated to explaining his vision for revenue-neutral tax reform. And even so he manages to not name a single tax deduction that he's planning to eliminate. Home mortgage interest deduction? I dunno. Electric vehicle tax credit? I dunno. Deductibility of state and local income taxes? I dunno.

If Ryan knew, he wasn't saying. As the Washington Post documented in 2011, the trillion-plus dollars in annual tax expenditures isn't just larger than Uncle Sam's total take from the income tax each year, but the "ever-increasing tax breaks for U.S. families eclipse benefits for special interests."

The value of U.S. tax breaks now equals the total take from income taxes.

That's right. Much of the estimated $1.3 trillion in annual tax expenditures in 2015 (a figure almost triple the size of the entire 2014 budget deficit and equivalent to about a third of annual federal spending) benefit working and middle-income Americans. For example, the home mortgage tax deduction was worth $89 billion in 2011. Tax-deferred 401K accounts cost the Treasury $63 billion. The Earned Income Tax Credit had a similar $63-billion price tag that same year.

Tax expenditures cost the U.S. Treasury over $1 trillion a year.

So what deductions and loopholes are actually in the mystery meat that is Ryan's budgetary dog food? As Paul Krugman explained in Pink Slime Economics back in the spring of 2012:

We're talking about a lot of loophole-closing. As Howard Gleckman of the nonpartisan Tax Policy Center points out, to make his numbers work Mr. Ryan would, by 2022, have to close enough loopholes to yield an extra $700 billion in revenue every year. That's a lot of money, even in an economy as big as ours. So which specific loopholes has Mr. Ryan, who issued a 98-page manifesto on behalf of his budget, said he would close?

None. Not one. He has, however, categorically ruled out any move to close the major loophole that benefits the rich, namely the ultra-low tax rates on income from capital. (That's the loophole that lets Mitt Romney pay only 14 percent of his income in taxes, a lower tax rate than that faced by many middle-class families.)

Who benefits from U.S. tax breaks?
attribution: NY Times

But the kind of cowardice Krugman, Yglesias, and others highlighted didn't just manifest itself in Ryan's silence. Making those tough calls on tax breaks, the GOP's vice-presidential nominee insisted, wasn't his job. But when host Joe Scarborough asked "Which one of those [loopholes] do you eliminate?" Ryan chickened out:

We want to do this in the light of day and in front of everybody. So the Ways and Means Committee, which is in charge of the tax system, sent us the plan here, which is a 10 and 25 percent bracket for individuals and small businesses, and then they want to have hearings and, in light of day, show how they would go about doing this.

Appearing on Face the Nation just days later, Ryan again claimed that "We're proposing to keep revenues where they are, but to clear up all the special interest loopholes, which are uniquely enjoyed by higher income earners, in exchange for lower rates for everyone." But he once again pleaded the Fifth when asked which "special interest loopholes" he would do away with:

"That's what the Ways & Means Committee is supposed to do. That's not the job of the Budget Committee," Ryan said on Fox News Sunday. "What we're saying is, we want to do this in the light of day, not in some backroom deal. We want to have hearings in the Ways & Means Committee that Chairman Dave Camp has already started that work, to say what tax benefits should go."

But much to the dismay of then-Senate Minority Leader Mitch McConnell, House Speaker John Boehner and House Budget Committee Chairman Paul Ryan, Dave Camp (R-MI) finished his work a year ago. When the going got tough, the current Ways and Means Committee chief made the tough calls on loopholes he'd limit, deductions he would cap, and tax breaks he would end. (Some of them, like further limiting the mortgage interest tax deduction and ending the deduction for state and local taxes, would have disproportionately impacted blue state residents.) But when Camp delivered it in February 2014, it was dead on arrival. And it was the Republicans who killed it. As Forbes reported last year:

You can only stall so long on the details of tax reform. On February 26 the clock ran out. House Ways and Means Committee Chair Dave Camp, R-Mich., provided 194 pages of details, and now tax reform gold has turned to dust. The political damage will mainly be to Republicans who made tax reform part of their brand.

Where do we go from here? "I think we will not be able to finish the job, regretfully. I don't see how we can," said Senate Minority Leader Mitch McConnell, R-Ky. And when asked if he would allow a vote on the Camp draft, House Speaker John A. Boehner, R-Ohio, could only respond with what may be the quote of the year: "Blah, blah, blah."

After years of promising Americans that the Ways and Means Committee would answer the $6 trillion tax break question, Ryan turned his back on Chairman Camp:

He's a leading voice for Republicans on fiscal policy but Rep. Paul Ryan is noticeably restrained when it comes to his party's new blockbuster tax plan.

While applauding Ways and Means Committee Chairman Dave Camp's "courage" for releasing a comprehensive tax overhaul on Wednesday, Ryan (R-Wis.) ducked questions on the proposal's substance. He simply said he's excited to start a conversation about rewriting the tax code.

"This is the beginning of a good debate," Ryan said in an interview.

As Politico noted, "Other Republicans haven't shied away from expressing concerns about introducing legislation during an election year that puts in plain view the difficult choices that must be made to overhaul the code." It's no wonder Dave Camp had enough of Congress. And now that Rep. Ryan has picked up Camp's gavel, it's no surprise he's silent on that $6 trillion question. Nevertheless, the Wall Street Journal gushed last week:

Rep. Paul Ryan recently gave up a race for the presidency to devote all his energy to his long-time true passion - tax reform.

If tax reform is one of Ryan's passions, repealing the Affordable Care Act is surely another. As he put it in his January 6 USA Today op-ed, "You can't fix a fundamentally broken law; you've got to replace it." But for five years, neither Ryan nor his Republican Party have answered the question, "Replace it with what?"

Since Obamacare passed in 2010, various Republicans have kicked around a variety of ideas. Most have boiled down to the same formula: Repeal all of the ACA's patient protections and insurance coverage the CBO estimates will extend to 25 million Americans within a decade, while pocketing the trillion dollars in Medicare savings and new revenue provided by the fully funded Obamacare program over its first decade. Then, resurrecting the same outline Bill Kristol debuted over two decades ago, give people tax credits for buying insurance, offer high-risk pools, let them shop across stateliness, end the tax preference for employer coverage and implement strict malpractice reform.

In one form or another, President Bush, 2008 GOP nominee John McCain, 2012 nominee Mitt Romney and the 2014 Republican midterm playbook dusted off the same tired plan. And while conservatives like Avik Roy and Yuval Levin among others have offered their own alternatives, all the right-wing recipes suffer the same fatal flaw. None of them come close to covering as many people as Obamacare.

But when Ted Cruz stands on stage as he did in Iowa last week and declares, "Repeal every word of Obamacare," he and his Republican allies have another problem. By June, the Supreme Court in King v. Burwell could strike down the ACA's insurance subsidies in the 34 states that opted to let the federal government run their exchanges. If the Roberts Court does as GOP leaders want, millions of Americans—most them in GOP-controlled states—will lose their coverage. And the GOP will have come to up with the "replace" part of "repeal and replace"—and fast.

Yet after five years of virtually every Republican chanting "repeal and replace" in unison, Senate Majority Leader McConnell and House Speaker John Boehner have nothing for their caucuses to vote for (and for President Obama to veto). That's why Speaker Boehner and his second-in-command Kevin McCarthy (R-CA) took such great pains on Thursday to announce a GOP healthcare plan was on the way. As Boehner explained, his caucus isn't just going to vote to repeal Obamacare—they are finally starting to think about how to replace it:

"We have 47 new members of Congress on the Republican side who have never had the chance to cast their vote to repeal ObamaCare." But House Republicans are also working on alternatives. Boehner added, "Three committee chairmen who have jurisdiction over the health care policy in our country ... are working together to craft what we believe would be a better approach with regard to health care for the American people than ObamaCare. ... There will be an alternative, and you'll get to see it."

So far, all the House can offer is talking points, sound bites which, as ever. ignore the role of insurance companies in the American healthcare system. (Unveiling his Medicare voucher scheme in February 2010, Paul Ryan declared, "Rationing happens today! The question is who will do it? The government? Or you, your doctor and your family?") As McCarthy explained, the House bill that will repeal Obamacare will also provide this guidance to the committee chairmen:

Health care decisions should be made by patients and their doctors, not by Washington, D.C. We need solutions that reduce costs, give every American more control over their health care decisions, and provide access to world-class care with 21st Century cures and treatments.

Writing at TPM, Sahil Kapur documented how the Republicans have put themselves in a box of their own making. Even if the Supreme Court rules in their favor in King v. Burwell, the GOP is a loss about what to do next:

It's an opportunity that we've failed at for two decades. We've not been particularly close to being on the same page on this subject for two decades," said a congressional Republican health policy aide who was granted anonymity to speak candidly. "So this idea -- we're ready to go? Actually no, we're not."

Republican leaders recognize the dilemma. In King v. Burwell, they roundly claim the court ought to invalidate insurance subsidies in some three-dozen states, and that Congress must be ready with a response once they do. But conversations with more than a dozen GOP lawmakers and aides indicate that the party is nowhere close to a solution. Outside health policy experts consulted by the Republicans are also at odds on how the party should respond.

To grasp the extent of the GOP panic over the fallout from a Republican SCOTUS victory, look no further than House Energy and Commerce Committee Chairman Fred Upton (R-MI). In a letter to Health and Human Services (HHS) Secretary Sylvia Burwell, Upton asked the Obama administration to do the Republicans' homework for them. As The Hill reported:

"Given HHS's responsibilities, we believe it is prudent that the Department plan for the full range of potential outcomes and consequences of the Court's decision," leaders of the committee wrote in a letter to HHS Secretary Sylvia Mathews Burwell.

The lawmakers are seeking any and all information related to the administration's preparation—starting with "all scenarios considered or evaluated."

Five years after Mitch McConnell promised voters a replacement for an Obamacare program that's exceeded expectations while coming in under budget, Republicans still haven't come up with one. Well, that's not exactly true. As Michael R. Strain of the American Enterprise Institute put it last week:

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