The Speaker of the House of Representatives Paul Ryan joined me this morning to discuss the American Health Care Act:
HH: Joined now by the Speaker of the United States House of Representatives, Paul Ryan. Speaker Ryan, welcome back to the Hugh Hewitt Show.
PR: Hey, Hugh, how are you doing? Nice to be with you.
HH: I am great, and I want to thank you and all Packers fans for J.S. Tretter, who has seen the future and moved to Cleveland. It’s a very good thing.
PR: I love the guy, actually. He really stepped it up in the Washington Redskins playoff game a year ago and played, what, he played center. He’d never played it before, and he really, really busted his butt. The guy, he’s a good kid, so congratulations.
HH: Oh, we are going to have such a great O line, Joe Thomas and J.C., and then we’ve got Zeitler coming in. Anyway, let’s get to work. I think you’ve done a very good job explaining the American Health Care Act as a multi-act play. We are in Act I, Scene III. Scene I, you introduce the bill. Scene II, Ways and Means. Scene III, Commerce. Scene IV is the Budget Committee. When do you get out of the Budget Committee with this bill, Mr. Speaker?
PR: That is next week. I think Wednesday they are bringing it up. It could be Tuesday, but I I’m pretty sure it’s Wednesday. And then, you go to the Rules Committee. So just so everybody understands, this is regular order. This is how the system was supposed to work, unlike the way the Democrats did it. Let me step back. We spent January to June of 2016 designing this plan where every House Republican participated if they wanted to in how to design this plan. That gave us the Better Way Agenda. It was basically modeled off of Tom Price’s legislation. And then, we introduced it to the country in June of 2016, and we all ran for election saying here is our plan to repeal and replace. Then, we win the election. Then, we proceed to work with the Trump administration, our Senate counterparts and the House Committees to take that plan and translate it into legislative text. Seven member meetings in February alone inviting feedback and explaining provisions to any House Republican who wants to see it. Then, you introduce it on Monday. The committees mark it up on Wednesday. Ways and Means, Commerce, now coming to Budget week 2. Week 3, Rules Committee and the floor. That is regular order. That’s as clear and transparent as it can ever get.
HH: Now on that point, on the very first day this broadcast moved to the morning, you were kind enough to come over to the Hillsdale College Kirby Center and be a guest, and you were followed by Senator Tom Cotton, your friend, my friend.
HH: He is one of your critics. He says you’re going too fast. What do you make of Senator Cotton’s criticisms?
PR: Well, I love this, because we’ve gotten criticized by other folks in the conservative movement for waiting too long. I think Drudge was hitting me for dragging our feet and not getting it done in time. Going too fast? Let me just describe what our 200 day plan is that we’ve mapped out with the President. First, repeal and replace Obamacare, then get Judge Gorsuch on the bench, then get the military funded, then get tax reform and the budget going. We have to do all of those things. Think of legislation as one train track with a bunch of trains on the track. If you don’t get these trains through the system, it slows everything else down. So if we didn’t get this done in time, according to our schedule, and we’re planning five weeks over this, this is a five week process of passing this bill, which is fairly lengthy. It slows absolutely everything down, pushes tax reform off past the summer. And the last thing we want to do is see the entire agenda that we all ran on, that we committed to our constituents we would act on, pushed outside of 2017. And so we think we’re doing this in a deliberative way. We spent a year on this legislation. Our members campaigned on this bill. Heck, about a dozen Freedom Caucus members co-sponsored the Price bill, which is what this is. So this reflects a Republican consensus, and that’s the point. It’s a consensus bill. That’s, we’re going through the growing pains of being an opposition party with Barack Obama to actually being a governing party with a Republican President Donald Trump. And that means we have to reach consensus on Republican priorities and principles. This reflects that. I think the big confusion is how reconciliation works, how the tools in the Senate are so narrow you can’t have everything you want in one piece of legislation. That’s why we have a three prong approach here, and that’s what I was explaining endlessly to people as recently as yesterday, how there’s three approaches here. This is the first part of a three-part approach to repealing and replacing Obamacare.
HH: So we’re in the first act of a three act play, and there are three plays in the cycle, and you can’t say that enough. But let me go to David Brooks, your second critic, in the New York Times this morning, who writes, “This thing probably won’t pass, but even if it passes, it will probably lead to immense pain and disruption that will discredit market-based social reform, cost the Republicans their Congressional majorities, and end what’s left of the Reagan era party.” I disagree completely with that.
PR: I totally disagree.
HH: But what do you say, Mr. Speaker?
PR: I disagree. That’s big government Republicanism. Look, David’s a nice guy. We just, I’m just more of a limited government, free enterprise conservative. I’m not a big believer that we should have a nanny state with a Republican veneer on it. And I just think that that’s what he’s basically advocating. I actually read the column. He’s basically saying we just need to have, you know, some big government, and we’ll make it nice Republican big government, and otherwise, no one’s going to exist, and we won’t be able to keep our principles. I just don’t believe that. Either you believe in your principles, or you don’t. And our principles are we should have a free market in health care, a patient-centered system run by consumers. That’s why we have risk pools, tax credits and health savings accounts. I co-authored the health savings account law in 2003. And the follow on was always going to be risk pools with tax credits so that we can have an individual market where we have real choice and competition. The problem is Bush was replaced with Obama and not with a Republican. And so we never got the follow on bill that we wanted after we wrote the HSA law. Now, we have that opportunity. Now, we have the opportunity of going with patient-centered care, where you buy what you want to buy, and if you don’t want to buy something, you don’t buy it. That’s freedom. That’s the market. That’s what we’re proposing.
HH: And the key part of this bill, I talked about this with Avik, and he has a criticism which we’ll come to, but he and I agree the Medicaid devolution in capping is the most significant entitlement reform of my 60 years on this planet. He, Avik says it is ten times more important than the welfare reform of 1996.
PR: Oh, for sure. It’s, welfare reform is a $16 billion dollar program. We’re talking about trillions in the end here in this program. We’re talking about hundreds of billions a year throughout the country. This is, this is so much bigger by orders of magnitude than welfare reform, because let me just describe exactly what this bill does for conservatives. This is why I’m so excited about it, and this is why I think people need to see the forest through the trees. We are de-federalizing an entitlement, bloc granting it back to the states, and capping its growth rate. That’s never been done before.
PR: And then, we’re taking another entitlement, an open-ended subsidy with the health insurance that the government makes you buy, and repealing it and replacing it with Republican tax policy that we’ve been talking about for 20 years. This idea we got was originally given to us by the Heritage Foundation like 20 years ago, and American Enterprise Institute and other think tanks. It’s Tom Price’s bill. It’s something that we as conservatives have always said if you really want to get free market principles injected into the health care system, you need to have an individual market where people care about what things cost, where people have real freedom, where those providers of health care services, be they insurers, doctors, or hospitals and everybody in between, compete against each other for our business based on value, based on price, based on quality, based on outcome. You don’t get that if you don’t have a viable individual free market. And that’s what this does.
HH: 100% agree. Let me give you Avik’s big criticism. I want to play it for you so that you can respond to him.
AR: I would really love for you to ask the Speaker about this, is when someone crosses the poverty line, okay, so if they’re below the poverty line, they’re on Medicaid. If they’re above the poverty line, in general, they’re going to be on these tax credits under the AHCA. The government subsidizes Medicaid for lower income people at about $6,000 dollars per year. But the tax credit that Paul Ryan wants to give people who are just above the poverty line is plus or minus $3,000 dollars a year. So that’s going to create a huge disincentive to work. If you’re just below the poverty line, and you have the opportunity to get another job that lifts you above poverty, and you find out that your health insurance benefits are going to get cut by $3,000 dollars, you’re trapping that person in poverty. So the very thing that Paul Ryan is trying to prevent, the discouragement from work, he’s actually creating more of that by creating such a gap between what Medicaid does to pay for health insurance versus what his tax credit does.
HH: Speaker Ryan?
PR: Yeah, so what we don’t want to do is try and encourage more Obamacare-type insurance coverage plans. What we want to do is have a viable market where the insurers can offer a lot of different competing plans that are more affordable. And again, we want health savings accounts to become very, very used quite a bit in this country. We want health savings accounts to be deployed all over the place so that we bring the consumer back into the game. The point that I think Avik is saying is you know, let’s just throw more money at these tax credits, and then everybody will be just fine. We don’t want to feed high health inflation. We want to cover the basic health insurance needs that people have, but have a market that bids down prices, and have health savings accounts to cover those out of pockets, so that we bring the consumer back into the game. The last point I’d say is the way the tax credit is designed is the way insurance works. It’s age adjusted. So it really depends on the age of the person. If the person is young, they’re pretty easy to insure. It’s cheap insurance. They’re young and healthy. So tax credit goes a long way. But if they’re older, they’re not. They’re more expensive to insure, and that’s why this tax credit is age adjusted. If you have a family, it grows with your family. So it responds to the way health insurance works. The bigger your family are, the more you get. The older you are, the more you get, because it costs more. So it’s designed to sort of shock absorb those things. Next year, though, but Avik’s jumping on a point that is important, and that is what I would call all the other poverty trap programs. Next year’s budget is where we want to take on welfare reform and what I call the poverty trap. I really think the way we need to fix the poverty trap is to have work requirements, time limits and customize welfare benefits to phase down the benefits in such a way that you don’t create such a cliff or a trap, or a huge work disincentive. The reason the credit was capped at a much higher level at the request of the Freedom Caucus, the Study Committee and the Tuesday Group, which is something we just did recently, is so that we don’t have that work disincentive, and so that those tax credits don’t phase out at a lower income level and create that disincentive. So I really think with all of the other things that we are planning on doing, especially with the welfare reform we’re going to be doing next year, that those things taken together will address these concerns that Avik is right to point out, but I think he’s a little off in this case.
HH: All right, now let me talk politics with you. President Trump is fully in the game, but he’s doing velvet glove. It’s pizza and bowling. Will the iron fist come out? And will he put people up to run in primaries if they obstruct what is, I think, a moment-killing obstruction at this point? We’ve got to get this, or the rest doesn’t follow. Do you agree that he’s going to go tough on people? And do you agree with my assessment of momentum?
PR: I agree with your assessment on momentum. I don’t, I’m not going to speak for the President on these things. It’s just not my job, and it’s, I just don’t want to do that. I’ll let him decide to say what he’s going to say when he wants to say it. But I do agree that this is momentum killing if we don’t do this and reduce or get rid of the trillion dollar tax increases in Obamacare. That just puts tax reform a trillion dollars further out of our reach. So there’s a lot that rides on this, not to mention just the schedule. We want to, we love Neil Gorsuch. We think he’s a great judge. We want to stay on schedule and get him in there as well. There’s a lot that rides on this with respect to the sequence of things. So we really believe when the noise settled down, and when people realize oh, you don’t have association health plans or interstate shopping in this bill, not because you don’t want to. Of course, we would want it in here. You don’t have it in here because of these Senate parliamentarian reconciliation rules. And that’s in the third part of this play, the third act of this play. Act I is this bill, gut the fiscal pieces of Obamacare and put Republican tax policy in its place. Act II, at the same time, Tom Price de-regulates the marketplace so insurers can compete, and people can buy what they want, and states get back into the game of setting up their own insurance regulatory structures like they used to.
HH: And Act III is the 60 vote bills. But let me…
PR: Act III, the 60 vote bills, which are association health plans.
PR: MedMal reform, all those things that we believe in.
HH: Let me ask you about what’s going to come next, and that is Act II, and whether or not, the Congressional Review Act is very powerful. It’s a simple majority bill. Would you ever be in favor of regulations that Secretary Price puts out that would be broad sweeping liberal regulations so that you and the House and the Senate by simple majority could reject them and bar the HHS from going back to that terrain?
PR: Yeah, so we passed the Raines Act already, and we also are passing what we call overturning the Chevron Doctrine, which are two ways of saying regulations, rules and regulations, you’ve got to back to the Congress for a final vote or approval on amendment. A lot of states do this. We’ve already passed the bill. It’s over in the Senate. Again, that takes 60 votes, so they’re going to work on that, you know, in the right time.
HH: But I think you’re missing my point. I think you could use, if Tom Price puts out a bad regulation purposefully, and you reverse it under the CRA, you bar the door. It’s disingenuous.
PR: Oh, yeah, that’s right. Oh, yeah, that’s what you would do in Year 4. And yeah, that’s what you would do at the end of an administration. That’s right.
HH: Okay, so if they put out bad rules, Tom Price puts them out purposefully so you can reverse them, I think that’s a legitimate tool in your toolbox.
PR: Yeah, you know, no one’s ever pitched that idea. I’ve never thought about that. That’s pretty clever.
HH: Think about that. It’s disingenuous, but transparently so.
HH: Finally, the CBO’s going to come out with a number, Speaker Ryan, that says 15 million people are going to lose their insurance. Now you can’t really lose what you don’t use, and can’t use. How are you going to combat that number to get through the narrow gate of 51 senators?
PR: That’s right. I’ve been telling our members just get ready. This is always what happens with CBO. We couldn’t, you know, we often mark up bills in what we call authorizing committees like Ways and Means and Commerce before you have a score, and then the score comes. That’s very typical. But we always know you’re never going to win a coverage beauty contest when it’s free market versus government mandates. If the government says thou shall buy our health insurance, the government estimates are going to say people will comply and it will happen. And when you replace that with we’re going to have a free market, and you buy what you want to buy, they’re going to say not nearly as many people are going to do that. That’s just going to happen. And so you’ll have those coverage estimates. We assume that’s going to happen. That’s not our goal. Our goal is not to show a pretty piece of paper that says we’re mandating great things for Americans. Our goal is to get a vibrant health care system that’s patient-centered, that brings down costs, that increases choices, that has a marketplace so that we lower the costs and increase, and therefore increase the access to affordable care. That’s our goal, and it’s not to win some coverage beauty contest, but you’re right. You’re going to see some number coming out, I have no doubt in my mind about that. I’ve spoken to our members about that. We’re going to talk to our members constantly about this, because we’re not going to get into a bidding war with the left about how much we can mandate or put entitlements out there for people. If you’re repealing one entitlement and bloc granting to the states another entitlement, the government’s not going to say we’re getting more entitlements. It’s just simple. But that is going to be, I think, something a little bit confusing to people. And we’ve been telling our members all along you know that’s what’s going to happen, so get ready.
HH: Come back and talk about it early and often, Mr. Speaker, and don’t forget, we’ve got to talk about impact investing someday another time, but congratulations on a good rollout, and good luck next week getting it through the Budget Committee.
PR: Thanks, much, Hugh. Take care.
End of interview.