Senate Republicans gave up on their last-ditch bid to repeal Obamacare Tuesday as opposition in their own ranks ended months of fruitless efforts to deliver on a seven-year promise, and leaders said they would turn instead to overhauling the U.S. tax system.

"We don’t have the votes" for the health-care bill, co-sponsor Bill Cassidy of Louisiana told reporters in Washington. "We’ve made the decision, since we don’t have the votes, we’ll postpone that vote."

Leaders decided the Senate won’t vote before Saturday’s deadline to use a fast-track procedure to keep Democrats from blocking a GOP-only bill. On Monday, Republican Senator Susan Collins of Maine added her opposition to that of GOP Senators John McCain of Arizona and Rand Paul of Kentucky, enough to sink the legislation in the 52-48 Senate.

Sen. Lindsey Graham, a Republican from South Carolina, center, speaks as Senate Majority Leader Mitch McConnell, a Republican from Kentucky, right, and Senator Bill Cassidy, a Republican from Louisiana, listen during a news conference after a Republican policy meeting luncheon at the U.S. Capitol.
Sen. Lindsey Graham, a Republican from South Carolina, center, speaks as Senate Majority Leader Mitch McConnell, a Republican from Kentucky, right, and Senator Bill Cassidy, a Republican from Louisiana, listen during a news conference after a Republican policy meeting luncheon at the U.S. Capitol. Andrew Harrer/Bloomberg

"It’s only a matter of when" the measure will be enacted, insisted co-sponsor Lindsey Graham of South Carolina. "We’re coming back to this after taxes."

President Donald Trump told reporters earlier Tuesday, before the decision was announced, that he is "disappointed in certain so-called Republicans."

Republicans have campaigned for seven years on repealing Obamacare, and they thought their goal was in sight when the GOP took control of the presidency as well as both houses of Congress in January. House Republicans passed a bill in May and celebrated at the White House Rose Garden with Trump, but their measure wasn’t acceptable to the Senate, which then was unable to agree on a plan of its own.

The House and Senate proposals were crafted in secret, with no public hearings or input from Democrats. Majority Leader Mitch McConnell’s own proposal stumbled to an embarrassing 49-51 defeat in July, with McCain providing the final "no" vote.

“We haven’t given up on reforming the health-care system," McConnell said Tuesday. "We’re not going to do it this week” but will come back to the issue later.

“It’s not Mitch’s fault," said Senator John Kennedy of Louisiana. "The problem is we’ve got too many people running around like free-range chickens.” He said the Graham-Cassidy plan is "dead as a doornail. Let’s go to tax reform."

Trump has repeatedly criticized congressional Republicans for failing to quickly send a repeal bill to his desk after repeatedly promising to end the Affordable Care Act.

Fiscal 2019

Graham and third-ranking Senate Republican John Thune of South Dakota said the next realistic opportunity for Republicans to repeal Obamacare will come in the 2019 fiscal year, which begins Oct. 1, 2018. The fast-track procedure for passing fiscal-related legislation with only 50 votes is tied to the annual budget resolution, and the GOP already has decided to use the 2018 budget to help pass a tax overhaul.

Graham said he’s been told it would be extremely complicated to tie tax and health-care overhauls into a single package in fiscal 2018. He said he expects the next effort on health care to go through the normal legislative process of committee hearings and amendments, which the GOP bypassed in this year’s unsuccessful effort.

The Graham-Cassidy proposal would turn Obamacare funds into block grants for the states and cut Medicaid funds to states that expanded the program under the Affordable Care Act. It would leave most of the Obamacare taxes in place.

Senator Lisa Murkowski, an Alaska Republican, said this week’s rushed procedure was a "lousy process" although in future efforts, "Giving control back to the states and flexibility are ideas I can get behind." She voted against McConnell’s earlier bill but hadn’t said how she would vote on the Graham-Cassidy plan.

Senate Democratic Leader Chuck Schumer said the GOP’s inability to pass the bill protects the health care of millions of Americans.

“The reason this bill failed is that the majority of Americans didn’t want it,” said Schumer of New York.

Shoring Up Markets

In the meantime, Senator Ron Johnson of Wisconsin said he would support Senate Health Chairman Lamar Alexander’s efforts to work out a bipartisan plan to stabilize Obamacare’s health insurance markets. Democrats now have a chance to step up and show they want to fix the system and not just throw money at it, Johnson said.

Alexander of Tennessee said last week that effort with the health panel’s top Democrat, Patty Murray of Washington, had failed. Murray said Tuesday that Democrats "are ready to keep working on the bipartisan path that could actually lead to a result."

Schumer said he spoke with Alexander Tuesday and that the Republican seemed open to restarting the talks.

Texas Senator Ted Cruz said Republicans shouldn’t give up, contending they are closer to 50 votes for repeal legislation than many people think.

McCain, Collins and Paul opposed the latest proposal for different reasons. Collins said it would cause too many Americans to lose insurance, while Paul said it preserved too many of the federal subsidies for health care. McCain said the proposal was too hasty and partisan.

Health insurers now face the prospect of deciding what insurance plans to offer in the individual Obamacare markets for 2018, and how much to charge, with little certainty over how the Trump administration will run the law. The deadline for insurers in many states to sign agreements to offer coverage in the marketplace is later this week. The companies and their industry groups have warned that the uncertainty will lead to much higher premiums.

—With assistance from Erik Wasson

Bloomberg News