Lifezette reports on the following email sent from Hillary Clinton, included in the Wikileaks Trove:
On September 26, 2015, Ann O’Leary, one of Clinton’s advisers, wrote “Madam Secretary – I wanted to be sure you saw this memo on the cadillac Tax.” The timing of this email is quite important. As I recounted on this blog, and in Unraveled, during the fall of 2015–after King v. Burwell settled the legality of the ACA’s core–Democrats began to publicly oppose the Cadillac Tax.
On September 21, The Hill reported that Clinton will come out against the Cadillac Tax. However, in a speech on September 24, Clinton did not say anything about the Cadillac Tax. She was still “examining” it. But by that point, Senators Schumer and Sanders, among others, publicly opposed the tax. Finally, on September 29, Clinton publicly opposed the tax.
With this context, consider Clinton’s reply to O’Leary on September 26:
Given the politics now w bipartisan support including Schumer, I’ll support repeal w ‘sense of the Senate’ that revenues would have to be found. I’d be open to a range of options to do that. But we have to be careful that the R version passes which begins the unraveling of the ACA.
There’s a lot to unpack there. First, Schumer’s support gave Clinton cover, because she was going with the “sense of the Senate.” But the second sentence is even more important. The Schumer/Sanders proposal would repeal the Cadillac tax, but make up for the shortfall in revenue by imposing “a surtax on the wealthiest people in this country.” Clinton, instead favors the Republican version, which simply repeals the Cadillac tax altogether, and does nothing to make up for the lost revenues. This has the effect of simultaneously keeping Clinton away from a tax increase, and appeasing labor unions that hate the Cadillac tax. It’s the best of both worlds.
But Clinton recognizes full well that this option “begins the unraveling of the ACA.” She’s right! The cadillac tax is one of the few mechanisms in the ACA to control costs. Once those cost controls are gone, noting will reign in rising premiums. Hence the Unraveling of the law, which paves the way for national health insurance.
Yesterday, I wrote a piece for National Review called “Obamacare is Unraveling ahead of schedule.” It is going to be published tomorrow. Now I need to update it!
Your point on R version is key. Our Bernie contrast rests on defending ACA, so crucial to cast this as a fix and to be on the lookout for R efforts to make this a Trojan Horse for broader dismantling of ACA.
I think Sullivan read Clinton’s email as saying “we have to be careful that the R version does not pass which would begin the unraveling of the ACA.” You have to alter a lot of words in the sentence to get to that meaning, but I don’t think it changes the point I made above. The version of the repeal Clinton ultimately supported did not find an alternate funding source. The Sanders plan would have raised tax on wealthy people. Clinton, in effect, supported the (lazy) Republican plan on eliminating (delaying for the time being) the tax, without any sort of offset.
Update 2: More from Business Insider:
Campaign adviser Ann O’Leary asked Clinton about her support for the so-called Cadillac tax built into the ACA, suggesting that she come out for a partial repeal. The Cadillac tax would impose a surcharge on high-cost health insurance plans with expansive coverage that employers provide for their workers.
Since many unions had advocated for getting these high-quality plans for their workers, these traditionally Democratic-leaning groups were opposed to the tax, leading to bipartisan support for a delay or repeal of that aspect of the ACA.
In Clinton’s response, the nominee appeared to support a Cadillac-tax repeal bill written by Republicans. Here’s the email in its entirety. (The Clinton campaign has not confirmed the authenticity of the emails.)
“Given the politics now w bipartisan support including [Democratic New York Sen. Chuck] Schumer, I’ll support repeal w[ith] ‘sense of the Senate’ that revenues would have to be found. I’d be open to a range of options to do that. But we have to be careful that the R version passes which begins the unraveling of the ACA.”
Clinton’s supporters, and critics, have found a few different ways to interpret her comments. Jeffrey Anderson, a Hudson Institute senior fellow and opponent of Obamacare, suggested that Clinton was advocating for the “unraveling” of the ACA altogether. The suggested reason: more support to pass a public option — in which the government would offer its own insurance to people to compete with private insurers — or a single-payer system, in which the government is the only insurance provider, similar to systems in the UK or Canada.
The second option is that Clinton simply misspoke. The email directly after hers in the chain, from foreign-policy adviser Jake Sullivan, read:
“Your point on R version is key. Our Bernie contrast rests on defending ACA, so crucial to cast this as a fix and to be on the lookout for R efforts to make this a Trojan Horse for broader dismantling of the ACA.”
Sanders, during the primaries, was more critical of Obamacare and loudly called for a government-sponsored plan. Chelsea Clinton, the eventual nominee’s daughter, memorably attacked him for this in the primary, saying Sanders wanted to “dismantle Medicare” and “empower Republican governors to take away Medicaid,” despite Sanders plan not really doing either.
Put another way, reading into the context that comes with Sullivan’s email, Clinton fat-fingered an email and was trying to establish a middle-ground between Sanders and more progressive Democrats and the Republican position. This version also suggests she was perhaps warning about the Republican version of the Cadillac-tax repeal bill because it had the potential to unravel Obamacare.
Throughout the campaign, Clinton has repeatedly expressed her support for the ACA on the trail and called for improvements and strengthening of the law.
The Clinton campaign didn’t immediately respond to a request for comment.
Update: New emails shed more light on this exchange.
On September 26, 2015, Ann O’Leary emailed Podesta, and others, asking whether the campaign should take a position on the Cadillac Tax:
Also, as long as I have all of your attention – on Cadillac Tax – the general consensus is that we should frame our position as Cadillac Tax should be repealed but that we should tax people who make more than $250K b/c they don’t need to have tax-payer funded subsidies. I have not nailed >>> this down with HRC. Should I try to do that today if we are going to announce this on Meet the Press?
Podesta wrote back:
I think we will pay a huge price with the WH on this one. Worries me.
Jen/Brian – Do you all want to try to land repeal of Cadillac tax + applying tax to $250K and above on MTP? Need to lock it with HRC and set it up with unions if we are going to pull trigger tomorrow. Please advise.
Jenn Palmieri suggested this would not be important enough to take attention away from the email scandal:
It doesn’t pass bar of news that would break through emails. So I don’t >> know that it is worth the effort.
O’Leary thought it was a worthwhile position to take:
I think it is more Q of political question – if we need to do it for >> political reason, this may be good venue. John – What do you think about getting out there on it tomorrow?
Fallon supported the outright repeal:
Can I ask what headline we are seeking with this? Because it strikes me as a clever attempt to be both for and against the cadillac tax. Why arent we just for outright repeal if we are going to cede back all the revenue anyway by holding <250k harmless?
O’Leary responded on 9/26/15 at 5:07 p.m.:
The idea is to go back to her 2008 position, which was that we should not be subsidizing higher earners on their health plans. But I agree that we will not be gaining much revenue nor will we be getting health savings by taking this position so and maybe cleaner just to go for repeal. The problem is that there are number of people who think that is a step too far. Let me check with her and get back on this chain after I hear back.
Robby Mook wrote:
I vote for repeal!
Several hours later, after Clinton’s email referenced above, O’Leary wrote:
Jen/Brian – HRC would like to go with the Senate Dem version of repeal with no caveats but strong message that it must be paid for and R version without pay for is unacceptable. Meet the Press worthy? If so, I want to work with Nikki and Amanda to set it up with unions.
This line is nonsensical. A Senate Dem version with “no caveats,” and a Republican version “without pay” are exactly the same. They both repeal the tax without funding it through higher taxes. This is not the Sanders proposal, which would have explicitly taxed people who make more than $250k a year. I have no idea how O’Leary got this from HRC’s email. I’ll have to sort this out at some point, I suppose.