The House GOP’s shutdown deal is a big improvement

October 15, 2013

House Republicans are working on their own plan to end the government shutdown and, at least in its current form, it's pretty reasonable.

Not a bad play. (Photo by Scott Applewhite/AP)
Not a bad play. (Scott Applewhite/AP)

On first glance the House plan looks very similar to the Senate plan: It funds the government through Jan. 15. It raises the debt ceiling until Feb. 7. It forms a bicameral budget committee that needs to report back by Dec. 13.

The changes are on the Affordable Care Act side. Like the Senate plan, it toughens income verification under the federal health-care law. It adds in a version of the Vitter amendment that affects members of Congress but not, crucially, their staffs. But it replaces the Senate plan's delay of the reinsurance fee with a two-year delay of the medical device tax.

The reason Democrats won't agree to this is that they don't want to give House Republicans anything as a reward for shutting down the government and threatening default. Politically, that's the right move. Additionally, it makes sense for Democrats to hold the medical device tax in reserve as a chip to use during the budget negotiations.

But on a policy level, there's really very little difference between this and the Senate deal. Aside from deficit reduction, there's no obvious justification for the medical device tax. It doesn't make the Affordable Care Act work better. It will destroy some jobs and drive some manufacturers overseas. All things being equal in an economy as weak as ours, it's probably better not to have it.

It would be different if House Republicans were proposing a way to pay for it. Then you'd have to compare the tax to its replacement. But so far as the GOP House aides I consulted know, there isn't a pay-for. So you can think of the House bill as a really, really inefficient bit of stimulus. But it's also a bit more evidence of how little Republicans care about the deficit when taxes are involved.

Another sensible option would be to simply reform the medical device tax. The Senate Finance Committee originally had a proposal that exempted the first $5 billion in sales which would mean the tax would only hit mammoth device companies like Medtronic and Boston Scientific that can bear it. But that's the kind of policy tweak that probably makes much too much sense for this Congress.

In fact, it's possible the entire deal will make too much sense for the House Republicans, Speaker Boehner is presenting it Tuesday morning, and it's entirely possible that his members will simply reject it, forcing him to come back with something much less reasonable, and thus much more certain to die a quick death in the Senate.

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