The GOP Eyes Defunding Health Reform

Repealing President Barack Obama's health-care overhaul is a major goal of House Republicans' "Pledge to America," the agenda unveiled on Sept. 23. Total repeal is a long shot, even if the Republicans win control of the House in upcoming midterm elections. So Republicans are preparing a starve-the-beast approach—cutting off taxpayer funds that government agencies will need to issue new regulations and oversee expansion of insurance coverage.

The Congressional Budget Office estimates it will take as much as $20 billion over the next decade to write and support new regulations. The law Obama signed in March provided only $1 billion. Health-care reform is designed to add as many as 32 million people to insurance rolls by 2019.

GOP strategists are already plotting how they can defund health care, starting with sitting on the President's 2012 budget request, due in February. Aides to Representative Eric Cantor (R-Va.), the second-ranking House Republican, have carved out other ways they hope to choke off new health programs. Among the targets, they say, is funding for the health insurance exchanges that states are supposed to create so consumers can compare plans and buy coverage.

Also in their sights are the new agency meant to oversee research comparing the effectiveness of treatments and any funds Obama requests to hire federal workers to implement the law. One example: not funding a request for the IRS to monitor tax returns for compliance with insurance mandates. Representative Todd Tiahrt (R-Kan.), a senior Republican on the Appropriations Committee, says defunding is a serious idea. "There is definitely going to be a run at it," he says.

Budgetary brinkmanship involves political risks. If Obama vetoes a spending bill, and Republicans don't blink, the impasse could lead to a government shutdown. When a similar dispute erupted in 1995 between the then-Republican-controlled Congress and President Bill Clinton, the public mostly blamed Congress for the standoff; the Republican Party lost congressional seats in 1996 and Clinton was reelected.

Tiahrt thinks a 2011 shutdown might not play out the same way. The Tea Party's success in fielding candidates in primary races shows growing political support for pushing back big government, he says. The White House contends the Republican strategy carries other risks, including stripping senior citizens of new Medicare benefits and blocking consumer protections.

To Republicans, just talking about withholding funding has advantages: Attacks against health-care reform may well boost turnout among their supporters. Says Robert J. Blendon, a Harvard University professor who directs the school's opinion research program: "Repeal-and-replace is something that's easy to understand if you're an angry voter."

The bottom line: A House Republican plan to deny funds to Obama's health overhaul could be politically risky.

    Before it's here, it's on the Bloomberg Terminal.