John Boehner’s ‘Plan C’ hurts Congress, hurts taxpayers, fixes nothing

September 30, 2013

The National Review's Robert Costa reports that House Republicans are already mulling a "Plan C."

Hear me out: Let's make everyone in Congress's life worse for no reason than blame it on Obamacare. (Photo by Alex Wong/Getty Images)
Hear me out: Let's make everyone in Congress's life worse for no reason, then blame it on Obamacare. (Photo by Alex Wong/Getty Images)

Plan A, of course, was tying funding of the government to defunding Obamacare. The Senate brushed that off. Plan B, which House Republicans initiated over the weekend, ties funding the government to delaying Obamacare. The Senate will reject that too. Plan C is the most bizarre of the bunch: It ties funding the government to ruining the lives of congressional staffers. It's pointless and cruel, and in the long-run, it will make Congress worse and K Street more powerful.

Plan C is the "Vitter amendment," which asks members of Congress and their staff (as well as the president and top political appointees) to choose between going without health insurance or accepting a massive pay cut.

A bit of background is necessary here. When the Affordable Care Act was being debated in the Senate, Sen. Chuck Grassley (R-Iowa) proposed an amendment forcing members of Congress and their staffs to buy their health insurance from Obamacare's insurance marketplaces. The amendment was meant to embarrass the Democrats: The marketplaces are only for individuals. They don't allow large employers. So it wasn't really feasible for a large employer like Congress to join them.

Grassley expected Democrats to reject the amendment on technical grounds and then Republicans could say that even congressional Democrats didn't want to be part of Obamacare. It was, like Sen. Tom Coburn's (R-Okla.) silly amendment to bar Obamacare from buying Viagra for pedophiles, a press release dressed up in legislative language.

But then Democrats agreed to it.

The result was that Congress was the only large employer in the country whose employees were allowed to participate in the insurance marketplaces. And they weren't just allowed to participate in the marketplaces. They were forced to participate in the marketplaces. But there was no guidance in the legislation for how their participation in the marketplaces would work.

The way employer-sponsored insurance works is that the employer pays most of the cost. The way the exchanges work is that taxpayers subsidize people making less than 400 percent of the poverty line. But it wasn't clear if the federal government could pay for employee insurance on the Obamacare marketplaces and no one wanted taxpayers subsidizing congressional staffers.

In the end, the Office of Personnel Management, which manages federal employee health-care benefits, ruled that members of Congress and their staffs would be ineligible for taxpayer subsidies but that the federal government could continue contributing to the cost of their health insurance. That seemed to be the end of it.

But Republicans began claiming that Congress had granted itself a special and illegal "exemption" under Obamacare.

“Unless we make a change, Washington insiders will get a special exemption from Obamacare when it goes into effect on October 1,” Sen. Vitter said. “If Democrats in Washington are going to force Obamacare on the rest of America, they need to live by its provisions, too."

The result of Vitter's amendment -- and of "Plan C" -- would not be that members of Congress and their staffs are treated like everyone else under Obamacare. Rather, they would be a) the only employees of a large employer whose employer is no longer allowed to offer them health coverage and b) the only employees of a large employer whose employer is not allowed to contribute to their health-care premiums.

According to Vitter's staff, the amendment would also reverse the OPM's ruling making members of Congress and their staffs ineligible for taxpayer subsidies, and so Congress would now also be the only large employer in the country that wants to pay for its employees' health care but is instead dumping much of the cost on taxpayers.

The idea behind this amendment, as Vitter explains it, is that Congress should live in the same health-care system its foisting on everyone else. But that's not what the amendment does. Obamacare doesn't force large employers to dissolve their health insurance arrangements and send their employees to the marketplaces. Congress is creating a worse version of Obamacare and applying it only to itself.

As Patrick Brennan -- who opposes Obamacare -- writes at the National Review:

With the destructive effects of Obamacare looming, this punishment may sound appealing. But do we really approve of the idea in other circumstances? Do we believe that Congress and its staffers should pay the highest marginal tax rates, regardless of income; that every congressman must have served in the military to vote to declare war; that congressional offices have to carry out any and all reporting requirements and regulations they impose on a particular industry; and so on? There are probably better ways to prevent Congress from passing bad laws.

Plan C won't matter that much for members of Congress or the president. They make plenty of money. For them, buying health insurance might be an annoyance, but it will rarely be a hardship.

Rather, Plan C acts as a massive pay cut to congressional staffers who need health insurance, as they now have to pay for it themselves. The result of that kind of pay cut will be that top staffers leave Congress for employers who will pay them more -- and offer them health insurance. It'll be a boon for K Street, which will see a massive influx of new (and well-connected) talent. It'll be bad for taxpayers, who are directly subsidizing congressional staffers and, more importantly, paying the costs of a Congress that's worse at its job and more dependent on lobbyists.

And it won't undo the special treatment Obamacare gives to members of Congress and their staffs. That would mean ripping out the Grassley amendment entirely and letting Congress act just like any other large employer under Obamacare. But as has become a pattern, Republicans don't want to fix the things they say are problems with Obamacare. They want to make them worse and then use them as proof that the law really is as bad as they've promised. That's now led to its logical conclusion: Republicans in Congress demanding an act of self-mutilation against Congress's own benefits package.

The good news here is that Plan C might not be extreme enough to appeal to Republicans who want Obamacare actually stopped. The bad news, I guess, is that Plan C might not be extreme enough to appeal to Republicans.

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