There's a way Republicans could bring back Obamacare repeal — but it could wreck their tax plan

Mark Makela/Reuters

The Graham-Cassidy healthcare bill was dealt a fatal blow on Tuesday, but Republicans appear far from ending their quest to repeal and replace the law known as Obamacare.

Despite a setback on the latest round of repeal efforts, the GOP appears to be moving toward a new strategy, floating the idea of combining a healthcare overhaul with their soon-to-launch effort to reform the nation's tax code.

As of September 30, the ability for Republicans to repeal Obamacare and replace it with another system using the budget reconciliation process will expire. Reconciliation allows Republicans to pass a bill through the Senate on a simple majority vote without being subject to a Democratic filibuster, as long as the bill reduces the federal deficit.

The reconciliation rules that were used for the Graham-Cassidy bill, and all other recent Obamacare repeal efforts, were included as part of budget for fiscal year 2017, which ends September 30.

One idea circulating around Capitol Hill is to add instructions for a healthcare bill in a reconciliation rule for the upcoming fiscal year 2018 budget. That would allow another few bites at the apple on healthcare overhaul.

But there's one complication — Republicans also want to use 2018 reconciliation for tax reform.

Republicans can use reconciliation once per year for a single bill that affects revenues — so they chose to do Obamacare this year and tax reform under fiscal year 2018.

Combining Obamacare repeal and tax reform on one reconciliation bill is technically possible, but it would make the effort for both tax cuts and Obamacare repeal more difficult.

But delivering on an Obamacare repeal before the 2018 midterms elections remains a high priority for many Republicans.

Sens. Ron Johnson and Lindsey Graham, both authors of the latest Obamacare repeal bill, told reporters Tuesday that they would oppose any budget resolution that does not include the ability to combine repeal and tax reform via reconciliation. The two lawmakers sit on the Senate Budget Committee, where Republicans have only a one-vote majority.

Other Republicans, without going as far as Johnson and Graham, have suggested they also prefer a potential two-pronged approach on a reconciliation bill.

GOP Senate leadership has been mum on the issue and outside Republican groups have said it would be a bad idea to complicate tax reform with another issue that has proved to be divisive for the Republican conference.

"I don’t want to jeopardize tax. We’ve done this for eight months, it’s got to get fixed, let the committee keep working on it,” Sen. David Perdue told Politico. "So I really believe we’ve got to get to tax, that’s my top priority right now before we run out of time."

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