Senate Democrats and Republicans took their best shots last week and came up short in addressing the COVID-era enhancements to the Affordable Care Act (ACA) premium tax credit (PTC), which is set to lapse in two weeks. Last week's votes confirmed the conventional wisdom that no proposal could reach the 60-vote threshold to advance. But the story doesn't end there.

Senate Democrats rallied around Minority Leader Chuck Schumer's (D-NY) proposal (S. 3385) to extend the enhanced PTC for three years. In the end, the bill fell nine votes shy of the 60-vote threshold (51-48). Four GOP Senators broke ranks to support it.

Senate Republicans offered an alternative plan (S. 3386) crafted by Committee on Finance Chairman Mike Crapo (R-ID) and Committee on Health, Education, Labor, and Pensions (HELP) Chairman Bill Cassidy (R-LA). This would redirect the enhanced PTC funds into a new type of health savings account (HSA). Enrollees with incomes below 700 percent of the federal poverty level who select a bronze or catastrophic plan on the ACA exchanges would receive an HSA contribution of $1,000 (ages 18-49) or $1,500 (ages 50-64). Other reforms, and new abortion and citizenship restrictions, were also included. 

Republicans were also able to muster a majority for the Crapo-Cassidy plan but still fell nine votes short of 60 (51-48). Nonetheless, the deadlock on Senate action doesn't preclude further debate on the issue.

Attention now shifts to the House, where Speaker Mike Johnson (R-LA) intends to schedule a vote this week on the Lower Health Care Premium for All Americans Act which includes (i) rules expanding access to association health plans, (ii) rules expanding access to "stop loss" insurance, (iii) codification of custom health option and individual care expense (CHOICE) arrangements, (iv) pharmacy benefit manager (PBM) reform, and (v) cost sharing reduction funding. Although extension of the PTC is not included in the bill, House Republican leadership may allow a floor vote on an amendment to provide for such an extension. However, it's doubtful Democrats will lend their support for the bill, meaning a close vote is expected. Yet even if the GOP plan passes the House, it won't make headway in the Senate.

Another emerging factor is the growing number of discharge petitions by House Republican members to force a floor vote on bipartisan bills to provide a limited PTC extension. Representative Jen Kiggans (R-VA) filed a petition for a one-year PTC extension with new income and fraud restrictions; and Representatives Brian Fitzpatrick (R-PA) and Jared Golden (D-ME) filed a petition to vote on a two-year extension of the enhanced PTC with income caps and program integrity measures through 2027. To succeed, a discharge petition needs 218 signatures to move a bill straight to the floor for a vote. Although that appears out of reach, the effort itself reflects growing unease among some Republicans about the political fallout from the expiring PTC enhancements.

Where does this leave things? Conventional wisdom suggests the political deadlock may be left for voters to sort out in the midterms 11 months from now, but there's still time and some policy space for a potential breakthrough. With a year-end resolution increasingly unlikely, the next opportunity for action may be the January 30 expiration of the current continuing resolution (CR). There's also the outside chance that Republican congressional leaders decide to address the issue via reconciliation, which doesn't require a 60-vote majority to pass the Senate. Reconciliation or not, it will be important to monitor these efforts for the potential use of tax revenue offsets, as well as the possibility that the bill becomes a vehicle for other tax policy, such as the work opportunity tax credit and other temporary tax relief "extenders" scheduled to expire at the end of the year. #TaxTake

In the News

Last week, The Hill named Marc a Top Lobbyist for the fifth consecutive year. 

Mike was featured on The Litigator's Edge podcast, where he offered an insider's perspective on shaping tax policy at the highest levels of government. 

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