(Bloomberg) House Republicans won’t agree to fix Obamacare if the U.S. Supreme Court rules that the law bars health-insurance subsidies for millions of people, said House Ways and Means Committee Chairman Paul Ryan.

Republicans are developing a “contingency plan” to address the states whose residents would lose subsidies while lawmakers work on a full replacement for the Affordable Care Act, Ryan, a Wisconsin Republican, told reporters Friday in Washington.

“What’s the bridge out of Obamacare for people in the states that just lost it?” Ryan said during a Bloomberg Television interview Friday. “What we want to do is give the states freedom to let their people go into a patient-centered health care system, which will look like what we would ultimately like to replace Obamacare with.”

The court is scheduled to hear arguments March 4 in a case arguing that the law makes insurance subsidies available only in the states that have set up their own health-insurance exchanges.

A verdict against President Barack Obama’s administration would largely unravel the law in 34 states whose residents must buy coverage through the federal enrollment system, healthcare.gov.

Ryan also said he sees a relatively short window of opportunity to reach a deal with the Obama administration on revamping the business tax system.

‘2015 Thing’
“Tax reform is a 2015 thing for sure and I think it’s got to be done by the end of the summer,” Ryan said. “If we keep dragging this out, we’re not going to get there.”

Ryan’s preference, he said, would be to address individual and business taxation together. He and Obama disagree on whether individual tax rates should be cut, so Ryan said he’s trying to see if Congress can address business taxes now and deal with individual rates after Obama leaves office.

“I think we’re going to reform this tax code somewhere between one and three years away,” he said. “And if we can do part of it in year one, great. But if we have to wait for year three to do it all, so be it, as long as we get it done.”

One big hurdle to tax-code changes is that many businesses—including most small ones—pay taxes through their owners’ individual tax returns, intertwining the corporate and individual tax codes.

Small Businesses
Ryan said he’s considering “all options” on how to lower effective tax rates on small businesses—and wouldn’t list any.

Obama wants to use one-time revenue from the transition to a new tax system to pay for spending programs, including highway construction. He then wants the tax changes to be revenue-neutral over the long run.

Ryan wouldn’t say what his revenue target is.

“I don’t have a strong opinion on that right now,” he said. “I think it’s premature to get into that.”

Ryan is also working on trade, an area he said on Bloomberg TV is the “best chance” for an agreement with Obama.

“That’s an agenda where I think we see eye-to-eye,” Ryan said.

First, he would advance legislation that would set up an up-or-down vote on trade deals, which would pave the way for a deal with Pacific Ocean nations.

“His team has put together a very strong effort to see this through,” Ryan said of Obama. The lawmaker said he hoped Democrats wary of trade deals would wait to declare their positions as supporters try to build a bipartisan coalition.

“People are declaring positions against legislation that hasn’t occurred yet, that they haven’t even seen yet,” he said.

—With assistance from Alex Wayne in Washington.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access