Tax reform will have to wait for health care, Trump says
(Bloomberg) Despite a stalemate in Congress over a plan to repeal and replace Obamacare, President Donald Trump says his efforts on health care are “doing very well” and that he still wants a bill passed before tackling tax reform.
Trump said in an interview aired Wednesday morning on Fox Business that a GOP health bill will get done, even after members of Congress left last week for recess with no clear compromise in sight.
“We have to do health care first to pick up additional money so that we get great tax reform. So we’re going to have a phenomenal tax reform, but I have to do health care first,” Trump said.
Trump wouldn’t put a deadline on when a health care bill would be passed, saying it would happen “at some point.” He added that if it didn’t happen “fast enough” he would eventually move on to tax reform.
Companies and investors have been eagerly awaiting an overhaul to the U.S. tax system that the administration has promised will lower corporate taxes and make it easier to bring money back from overseas. But with health reform standing in the way, analysts now think it won’t be until the end of the year, at the earliest, when a tax plan could take shape.
“Markets, that have been expecting tax reform movement and action earlier in the year, based in part on administration and congressional statements, may be disappointed on this news and react accordingly,” said Terry Haines, an analyst with Evercore ISI.
During the interview, Trump also raised the threat that Obamacare’s insurance programs will fail if the government doesn’t keep making some payments to insurers. He appeared to be referring to what are known as cost-sharing reduction subsidies, which help lower-income people afford out-of-pocket medical costs, though he didn’t mention them by name. House Republicans sued to block the payments in 2014, though the Obama administration, and now the Trump White House, have defended them against the challenge as it goes through the courts.
“Even now as I came in here, payments have to be made that weren’t scheduled to be made on Obamacare,” Trump said. “If you don’t make them, it fails.”
Trump has repeatedly threatened to let Obamacare fall apart in order to force Democrats to negotiate with him. Halting the payments by ending defense of the lawsuit would cut off billions of dollars in funds to insurers, and would probably lead some to boost premiums, while others would likely quit Obamacare entirely.
The Trump administration hasn’t been clear on its plans for the payments. In a report this week, the Department of Health and Human Services told The New York Times that it plans to keep paying them as long as the lawsuit over the payments is pending. It later sent out a statement calling the report “inaccurate.”
“The administration is currently deciding its position on this matter,” Alleigh Marre, a spokeswoman for HHS, said in the e-mail. “The report was in reference to the current status of the lawsuit and is not an indication of what will happen in the future. No decisions have been made about how the administration will proceed.”
Trump was interviewed Tuesday by Maria Bartiromo for Fox Business Network’s “Mornings with Maria” program.