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Four GOP ideas for an Obamacare subsidies compromise

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A menu of options is starting to emerge around what a compromise might look like for extending a suite of Affordable Care Act tax credits, which have become a focal point in the current government funding standoff.

With the shutdown about to enter its third week, Speaker Mike Johnson and Senate Majority Leader John Thune continue to insist that any negotiation over the future of the enhanced Obamacare subsidies will need to happen after the government reopens.

Behind the scenes, however, Republicans on Capitol Hill and inside the Trump administration are discussing potential pathways to prevent the tax credits from expiring at the end of the year.

According to two people granted anonymity to share details about private discussions, some members of the House GOP leadership circle are having early, informal conversations with officials from the White House Office of Legislative Affairs and the Domestic Policy Council to develop a framework for a deal.

As they await President Donald Trump’s buy-in, members of House Republican leadership have discussed imposing minimum out-of-pocket premium payments for ACA enrollees, according to one of the people familiar with the internal conversations.

Ultimately, whatever they come up with has to be something not only Democrats can accept but also Republicans, who are sharply divided over whether to extend the credits at all. Some GOP lawmakers say the subsidies are fueling waste, fraud and abuse; others see political peril in letting them lapse, causing premiums to skyrocket and millions to lose health insurance.

“About 90 percent of members of our conference, they feel strongly … that Obamacare itself and the subsidies have failed,” House Majority Leader Steve Scalise (R-La.) told reporters Friday. “It’s helped insurance companies pack their bottom line, but it’s crushed families who are paying higher premiums.”

But the increased back-channeling inside the GOP is a strong sign the administration is preparing for eventual negotiations on the tax credits and possible wider health policy changes.

“I think what we’re seeing is the dam breaking here,” said House Appropriations ranking member Rosa DeLauro (D-Conn.) on a call with reporters Friday.

Here are some of the policy options currently under consideration among Republican negotiators that could become the basis for an agreement — or, at the very least, an opening offer.

New income limits

Conservatives complain that the expansion of the tax credits under former President Joe Biden removed income caps on the credits, which had previously restricted the subsidies to individuals making below four times the poverty line.

Key GOP negotiators in the House indicate openness to imposing new income caps. They include Reps. Jen Kiggans of Virginia and Brian Fitzpatrick of Pennsylvania, who are touting bipartisan legislation to extend the subsidies for a year.

Influential Democrats — such as Senate Appropriations ranking member Patty Murray of Washington and House Ways and Means ranking member Richard Neal of Massachusetts, have not rejected this proposal out of hand. Murray, for instance, has noted that the vast majority of beneficiaries of the credit make below $200,000 already.

Several Republicans in the bipartisan House Problem Solvers Caucus have likewise privately floated a $200,000 income cap.

Minimum out-of-pocket premiums

Paragon Health Institute, an influential conservative health policy think tank, has been hammering Republicans with data indicating there are millions of “phantom enrollees” in the ACA — individuals who don’t know they’re enrolled in plans because the premiums are fully subsidized by taxpayers. This has sparked interest among conservatives in mandating a minimum out-of-pocket payment to unlock eligibility.

“It doesn’t have to be big, but if you get a notice for a five-buck premium, all of a sudden, you’re like, ‘Wait a minute, what?’” said Sen. Dan Sullivan in an interview. The Alaska Republican is part of a “working group” of GOP senators trying to come up with a conservative framework for extending the subsidies.

Cutting off enhanced tax credits for new enrollees

Allowing current enrollees continued access to the enhanced tax credits could emerge as a palatable compromise and blunt the impact of premium hikes set to take effect this fall. The “grandfathering” of the subsidies would likely be accompanied by other guardrails to root out waste and fraud in the health plans.

But Melanie Egorin, a professor at the University of Virginia and a former Health and Human Services official under the Biden administration, points out that policy would be particularly tough as the labor market softens and people lose their Medicaid coverage due to new work requirements enacted through the GOP megabill over the summer.

“Creating a grandfathering [mechanism] in a time where the economy is not looking so great for many Americans, feels really unfair,” she said in an interview.

New abortion restrictions

Democrats and Republicans disagree in the first place whether the tax credits truly subsidize plans that cover abortion. But influential anti-abortion groups, such as Susan B. Anthony Pro-Life America, have mounted fierce campaigns to convince lawmakers and the public the plans make the procedure more affordable.

Conservatives sympathize with the argument, but the anti-abortion messaging campaign has in many ways made the policy fight more intractable. Sen. Jeanne Shaheen of New Hampshire, the top Democratic negotiator on the issue, and Sen. Ron Wyden of Oregon, the senior Democrat on the tax-writing Finance Committee, have already indicated that abortion restrictions are a nonstarter for any deal on the larger issue.

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Congress

‘You lose your credibility’: Democrats warn against turning a blind eye to a colleague’s misconduct

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House Democrats will soon have to choose between protecting an embattled colleague or insulating themselves from politically damaging accusations of hypocrisy.

The House Ethics Committee will begin the process Thursday of determining whether Rep. Sheila Cherfilus-McCormick warrants punishment as extreme as expulsion over accusations that she stole millions in FEMA funds and committed various campaign finance infractions.

The bipartisan panel that typically operates in secret is holding a public “trial” — the first in nearly 16 years — that will litigate those allegations as the third-term Florida Democrat faces federal criminal charges in her home state. Cherfilus-McCormick has maintained her innocence, saying “the full facts will make clear I did nothing wrong.”

House Democratic leaders have so far taken a hands-off approach to the saga.

Minority Leader Hakeem Jeffries and his office say that Cherfilus-McCormick is “entitled to her day in court and the presumption of innocence,” and Caucus Chair Pete Aguilar of California told reporters Wednesday he also would not “prejudge any outcome” of the Ethics Committee’s proceedings.

But after Democrats agitated for the removal of serial fraudster Rep. George Santos of New York ahead of a full Ethics process in 2023, the party could be vulnerable to political attacks if it doesn’t now police a credibly accused embezzler in its own midst.

“If they give us conclusions that this actually happened, and there’s no question of doubt as to the fact that laws were broken, then our colleague will have to face the consequences of that — it’s plain and simple,” said Rep. Stephen Lynch (D-Mass.) in an interview.

“You lose your credibility if you’re applying a different set of laws and a different standard to people of the other party,” he said. “I mean, how could we ever justify anything we do if we only apply that to Republicans, and we don’t follow the law?”

Rep. Becca Balint (D-Vt.) said her party has to be mindful of how voters perceive corruption in Washington.

“I think there’s pressure on all of us in elected office right now,” she said in an interview. “Neither party is trusted by the public that we’re going to fight corruption. … I know from talking with my own constituents that this is a real issue for both parties, not just Republicans.”

These warnings come as Democrats have repeatedly over the past several months declined to punish their own members as they faced allegations of wrongdoing. They restored Rep. Henry Cuellar of Texas to his post as the senior Democrat on the Homeland Security Appropriations subcommittee after he received a pardon by President Donald Trump; he had taken a leave of absence while being scrutinized for allegations of bribery.

Most looked the other way when retiring Rep. Chuy García of Illinois boxed out other potential successors and orchestrated his chief of staff’s ascension to succeed him. And they helped Del. Stacey Plaskett of the Virgin Islands dodge a Republican-led censure attempt following revelations she had texted convicted sex offender Jeffrey Epstein during an Oversight Committee hearing.

Now they’ll have to decide what to do about Cherfilus-McCormick.

A House Ethics subcommittee will meet Thursday afternoon to consider a motion for summary judgment — in effect, whether or not to declare her guilty. If it does, the full panel will schedule a hearing for a later date to determine what punishment to recommend, and the House will then vote to execute it.

Members of the subcommittee could suggest something as minor, though embarrassing, as a reprimand or censure. It could also call for her expulsion. House GOP leaders believe they will have the requisite two-thirds majority to expel Cherfilus-McCormick and plan to force such a vote, according to three people granted anonymity to speak candidly about top House Republicans’ plans. But leaders are waiting to see what the panel recommends at the conclusion of the trial.

In a statement Wednesday, Cherfilus-McCormick said she was “innocent” and a “fighter,” and she criticized the Ethics Committee for proceeding with the trial despite her request for a delay that would give “my legal team reasonable time to prepare.” The committee already delayed the trial once after Cherfilus-McCormick lost her representation.

“I urge the Committee to follow its own precedents and uphold fairness and not allow this process to be driven by politics or numbers,” she said.

Santos is the most recent member of Congress to be expelled for using campaign donations for personal expenses — an action his colleagues took after the Ethics Committee issued a report substantiating the claims against him but before it could hold a trial and recommend punishment.

“Some of my Republican colleagues thought it was premature. They thought that he should have gotten a trial before we expelled him,” said Rep. Nick LaLota (R-N.Y.), who pushed for Santos’ removal from office. “I always said that he admitted to the very thing we were accusing him of was enough process — enough due process — to throw him out.”

Cherfilus-McCormick, in contrast, is pleading not guilty — which LaLota suggested could give Democrats some political cover to give her the benefit of the doubt. He added, however, “The accusations are totally gross. Kind of looks like she did it.”

The last time the House Ethics Committee held a formal trial was in 2010 for the late-Rep. Charlie Rangel (D-N.Y.), who was ultimately censured for a vast range of violations, including tax evasion.

Ethics Committee Chair Michael Guest (R-Miss.) said his panel has been reviewing the Rangel proceedings as a guide for how to approach the Cherfilus-McCormick trial, saying the committee intends to “follow the map that has been laid out in the previous hearings.”

But the Rangel episode was also a deeply emotional and uncomfortable situation for many of the beloved veteran lawmaker’s peers, with Rep. Zoe Lofgren (D-Calif.), who was the chair of the Ethics Committee at that time, recalling in an interview that it was “a very depressing experience.”

Some House Democrats are now struggling with the uncomfortable task of having to potentially render career-ending judgment on a colleague.

“She’s a dear friend,” said Rep. Sydney Kamlager-Dove (D-Calif.). “I am waiting, I think, like everyone else, to see how all of this plays out in court. That’s something that we all have the benefit of getting. I think you are innocent until proven guilty.”

Meredith Lee Hill contributed to this report.

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Capitol agenda: DHS despair takes hold on Blue Light News

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The vibes are bad.

An overwhelming sense of frustration and despair is taking hold on Capitol Hill as lawmakers struggle to reach a deal on DHS funding before a two-week recess begins Friday.

The funding framework Republican senators sketched out with President Donald Trump Monday appears to be on life support and there’s no backup agreement. Democrats say Republicans suddenly gave up this week on negotiating new rules for immigration enforcement agents. Trump is showing little interest in driving a deal, blaming Democrats for backing out of agreements with Republicans.

“Because they don’t want to settle,” Trump said at Wednesday night’s NRCC dinner. “They want chaos.”

Bipartisan talks continued late Wednesday night, and Senate Majority Leader John Thune is leaving the door open to keeping senators in Washington into or through the recess. But Republicans privately expect to have attendance issues after several colleagues just skipped out on a rare weekend session to work through the SAVE America Act.

“I just want to go home,” said one GOP senator granted anonymity to vent.

What else we’re watching: 

— Sheila Cherfilus-McCormick hearing: Rep. Sheila Cherfilus-McCormick (D-Fla.) will appear before House Ethics Thursday for a rare public “trial” over financial fraud charges. House Democratic leaders are steering clear of condemnation as she faces a likely expulsion vote.

Cherfilus-McCormick faces accusations that she stole millions in FEMA funds and committed various campaign finance infractions. She has maintained her innocence, saying “the full facts will make clear I did nothing wrong.”

House GOP leaders believe they will have the requisite two-thirds majority to expel her and plan to force a vote. But leaders are waiting to see what the panel recommends at the conclusion of the trial.

— Judiciary takes up data center bill: The House Judiciary Committee will vote Thursday on a proposal aimed at easing the legal landscape for AI data centers.

Under Rep. Michael Baumgartner’s (R-Wash.) Protect American AI Act, data center permits would remain in place even when environmental reviews for the projects are challenged by litigation. It’s one of the first congressional proposals on data centers to receive a committee vote, and it comes as Trump pushes Congress to ease AI regulations.

Jordain Carney, Katherine Tully-McManus, Jennifer Scholtes, Hailey Fuchs, Riley Rogerson and Amelia Davidson contributed to this report.

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‘I just want to go home’: Despair settles over the Capitol as DHS deal hopes evaporate

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Finger-pointing, profanity, even “poppycock.”

An overwhelming sense of frustration and despair has overtaken Congress as lawmakers try to clinch a deal to end a nearly six-week shutdown of the Department of Homeland Security as a previously scheduled holiday recess looms.

The funding framework Republican senators sketched out with President Donald Trump Monday now seems to be on life support, and the Senate has yet to circle a backup agreement that would end the impasse over immigration enforcement tactics responsible for the ongoing DHS shutdown that’s spurring air travel disruptions as unpaid TSA screeners stop showing up for work.

Trump has shown little interest in bringing the two sides together on a deal. At a dinner hosted by the House GOP campaign arm Wednesday, with many lawmakers in attendance, Trump blamed Democrats for, he said, backing out of DHS funding agreements with Republicans in recent weeks.

“Because they don’t want to settle,” the president said. “They want chaos.”

Underscoring the deadlock, the Senate voted for a sixth time Wednesday against advancing a package to fund all of DHS.

“It looks like everybody is going to stare at each other for a little while,” Senate Majority Leader John Thune said Wednesday, before nodding at lawmakers’ best hope for getting a deal — their overwhelming desire to leave town.

“You know how it is around here, it’s not Thursday yet,” he said. “Sometimes you’ve just got to let things run.”

Bipartisan talks continued late Wednesday night after lawmakers aired rising frustrations earlier in the day that recent progress had seemingly reversed. Raw feelings replaced the optimism that sprouted up around talks between the White House and Senate Democrats that picked up before this past weekend and were further fueled by conversations between the White House and GOP lawmakers Monday.

Democrats say Republicans suddenly gave up this week on negotiating new rules for immigration enforcement agents after DHS officers fatally shot two people in Minnesota in January.

“For Republicans to now act as though Democrats have changed our position, as though we’ve moved the goalpost, is poppycock — bad faith,” Senate Minority Leader Chuck Schumer said in a floor speech Wednesday. “And for Republicans to send a proposal that has no reforms is bad faith, as well.”

Republicans, for their part, say Democrats are unwilling to take yes for an answer — even after they proposed leaving out ICE enforcement funding.

“I don’t know how they will ever satisfy their crazy online political base,” Thune told reporters, “because that’s what this is about.”

Lawmakers in both chambers are scheduled to return home Friday for a two-week break around the Easter and Passover holidays. If Congress doesn’t act by Saturday night, the DHS funding lapse will become the longest shutdown of any federal agency in U.S. history — exceeding the 43-day government-wide shutdown that ended in November.

Thune is leaving the door open to keeping senators in Washington into, or even through, the recess. But Republicans privately expect to have attendance issues after several colleagues just skipped out on a rare weekend session to work through a partisan elections bill.

One GOP senator, granted anonymity to speak candidly, summed up their feelings: “I just want to go home.”

Democratic Sen. Peter Welch of Vermont described colleagues as “mutually fatigued,” adding that senators are “getting tired of each other.”

Thune floated the idea of calling senators back if he lets them leave and there is an agreement on DHS funding after the Senate has adjourned. But leaving town, some of his own members fear, would deep-six any chance of momentum.

“I’m struggling for an argument for us to leave unless we settle some of these things,” Sen. Thom Tillis (R-N.C.) told reporters Wednesday. “We’ve got lots of plates spinning. And I am afraid if we leave until we get some certainty around them, a few of them are going to fall to the floor.”

Senate Republicans aren’t the only ones watching the clock. A group of centrist House Democrats huddled Wednesday morning with Sen. Katie Britt of Alabama, the Republican chair of the Homeland Security funding panel. According to a person granted anonymity to describe the private meeting, the House lawmakers were feeling “antsy” and worried their Senate Democratic counterparts were moving too slowly.

California Rep. Adam Gray, one of the Democrats who sat down with Britt, said House lawmakers wanted to “strike a sense of urgency” among Senate negotiators and “encourage them to get on it.”

“I don’t think we can just all sit around here. The American public is increasingly frustrated,” Gray added.

It’s not just their own schedules that senators are keeping a close eye on. With the Easter holiday coming up and spring breakers traveling across the country, lawmakers are bracing for the situation at airports to further deteriorate.

The head of TSA told members of the House Homeland Security Committee Wednesday that more than 480 screeners have quit since the shutdown began more than five weeks ago, calling it “a dire situation” and warning of a “perfect storm of severe staffing shortages and an influx of millions of passengers” ahead of World Cup games this summer.

Senate Democrats sent Republicans a counteroffer Wednesday, but it was immediately dismissed as unserious by GOP leaders.

Democrats are irked that the Republican framework does not include any of the immigration enforcement changes the two parties have been discussing since DHS agents killed Renee Good and Alex Pretti in Minneapolis in January. Those shootings largely united Democratic lawmakers behind demands for new rules such as barring immigration agents from wearing masks or entering homes without judicial warrants.

“We didn’t invent this out of thin air,” Connecticut Sen. Chris Murphy, the top Democrat on the DHS funding panel, told reporters Wednesday. “They murdered two Americans in cold blood. They are behaving illegally.”

Murphy said Democrats have made considerable concessions to Republicans during the weeks of negotiations, but some Republicans said Democrats had rejected deals and abandoned another that had been outlined at the negotiating table. Under that framework, only the DHS policy constraints agreed to before the Minneapolis killings would be enacted, but funding for ICE enforcement and removal efforts would not be included.

That’s why the proposal was pitched to Trump this week, Sen. John Kennedy (R-La.) said in an interview, in hopes of breaking the impasse.

“The whole deal had been premised on Senator Schumer and our Democratic colleagues opening everything else up besides ICE, and then we deal with ICE,” Kennedy said. “And they have backed off that.”

Riley Rogerson and Mia McCarthy contributed to this report.

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