The conservative tax and health care strategy that might blow up Obamacare repeal - Axios
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The conservative tax and health care strategy that might blow up Obamacare repeal

AP Photo/Lauren Victoria Burke

The House Freedom Caucus voted Monday night to oppose anything less than the aggressive 2015 Obamacare repeal bill, formalizing the deep division among Republicans about what to do with the health care law. Earlier Monday, Chairman Mark Meadows sat down with me to talk about what he does want, for both health care and tax reform. While he wants Obamacare repeal to happen fast, he eventually wants to combine its replacement with tax reform in the same package.

What's next: Figuring out whether moderates can stomach a straight repeal for now, with the assurance of a replacement to come in tax reform later this year, or whether this is just an opening bid from conservatives and they'll eventually submit to leadership's plan. If it's the former, Obamacare repeal might die.

Meadows wants as much of Obamacare as possible repealed in the next 30 days. When that's over, the House can get to work on passing the replacement and its tax reform agenda. That likely means combining the two efforts.

This is not exactly what leadership has in mind. It's trying to add as much of an Obamacare replacement as possible to the repeal bill, a strategy first advocated by moderates afraid of repealing the law without immediately replacing it. Meadows also has different ideas about tax reform, preferring to leave out a border adjustment tax — a key part of House leadership's plan.

He admits the danger in lumping the two huge policy efforts together. "When you put two very difficult concepts together, tax reform and Affordable Care Act, it lowers your thresholds in terms of the number of votes that you can or cannot get in terms of the Senate, whether it's 50 or 51," he told me.

"I think it would be very difficult" to combine the two efforts, Senate Finance Chairman Orrin Hatch told reporters Monday.

But some of the moderates pushing for passing a repeal and replacement at the same time might be open to the idea. "I think you could probably all do it in the second," Sen. Bill Cassidy told me in a hallway interview Monday.

The situation: Republicans have two different opportunities to pass major legislation without Democrats through a process called budget reconciliation. The plan has been to use the first reconciliation bill on Obamacare repeal and replace and the second on tax reform. But while leadership has been exploring how much of a replacement it can fit into the repeal bill, Meadows — along with a growing number of conservatives — are saying they want repeal and replacement done in separate bills voted on at the same time. He then wants to use the second reconciliation to replace Obamacare, along with tax reform.

Here's what he wants:

  1. Within the next 30 days, a vote on full repeal of Obamacare. This includes the individual mandate, the employer mandate and the law's insurance regulations. While these laws weren't included in a 2015 repeal bill because of reconciliation rules, Meadows thinks there are ways around that.
  2. Immediately vote on a replacement plan, also within the next 30 days. The replacement must include a way of dealing with pre-existing conditions. Assume it doesn't pass the Senate filibuster.
  3. Potentially vote on a tax reform package under normal procedure, without the border adjustment tax. Meadows thinks this would have a chance of passing with some Democratic support in the Senate.
  4. Include Obamacare replacement in the second reconciliation bill "that is, quote, being used for tax reform, but it doesn't have to be just used for tax reform."
House conservatives are generally united in their Obamacare strategy.

Ok, but: Putting an Obamacare replacement and tax cuts in the second reconciliation bill — without a border adjustment tax — will cost a ton of money. It's unclear where that money will come from, but it could very well require the bill to need 60 votes in the Senate if it's not paid for. Democrats are very unlikely to help pass anything Republicans put forward after an Obamacare repeal, especially if they also don't like the tax components. Republicans know this and could be very unwilling to jeopardize tax reform in this way.

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House and Trump administration to delay insurer subsidy case

(Atef Safadi / EPA Pool via AP)

The House and the Trump administration will seek an additional 90 days to resolve a pending court case over the legality of Affordable Care Act insurer subsidies, the Washington Examiner and CNBC report.

While the subsidies may continue to flow to plans operating on exchanges, the failure to reach a decision doesn't give insurers the certainty they're looking for. Plans must decide whether to participate in federal exchanges by June 21. If they don't get a guarantee that they'll keep receiving the subsidies, plans will likely drastically raise premiums or pull out of exchanges.

The Examiner reports the House and the White House are working on a plan to ensure the subsidies continue going to insurers, who pass them on to low-income enrollees.

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Supreme Court strikes down North Carolina redistricting

Jon Elswick / AP

The Supreme Court ruled Monday that North Carolina Republicans placed too many African-Americans in two congressional voting districts it re-mapped after the 2010 Census, according to the Associated Press.

Why it matters: The 5-3 ruling upholds a federal district court decision that argued North Carolina lawmakers packed more African American residents into the districts than was necessary, which was challenged by the state. But even with the new lines, Republicans continue to hold 10 of the state's 13 districts.

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Pittsburgh sours on Uber's driverless car experiment

Gene J. Puskar / AP

Nine months after Uber rolled out its self-driving car trials in Pittsburgh, the relationship is deteriorating, the New York Times reports.

Why it matters: Self-driving car companies are forming partnerships with cities that will allow them to test their vehicles on their streets. It's a high-risk, high-reward proposition for city leaders.

Pittsburgh Mayor Bill Peduto told The Washington Post this fall, "Is there going to be an accident in a robot car? Yes there is. But the greater goal is to make our streets safer in the long term. We have to start at some point and we can't wait for regulation to catch up with innovation."

The city's complaints: Uber began charging for rides that were expected to be free; it withdrew support from Pittsburgh's application for a major federal grant to overhaul transportation; and it hasn't hired local workers as it promised.

Uber's response: "Uber is proud to have put Pittsburgh on the self-driving map, an effort that included creating hundreds of tech jobs and investing hundreds of millions of dollars," Uber told the Times in a statement. "We hope to continue to have a positive presence in Pittsburgh by supporting the local economy and community."

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Another U.S. chemicals giant strikes global merger

Huntsman Corp. of Texas and Switzerland's Clariant have agreed to an all-stock merger that would create a specialty chemicals giant valued at around $20 billion (including debt). Clariant shareholders would hold around a 52% stake in the combined company, which is expected to generate $13.2 billion in annual sales and $2.3 billion of EBITDA.

Why it's a big deal: This tie-up is part of a trend of cross-border consolidation in the mega-chemicals space, following the pending deal between Praxair (Connecticut) and Linde (Germany) and PPG Industries (Pittsburgh) attempting to purchase Dutch rival Akzo Nobel. It's also notable for private equity buffs (yes, such people exist), as Huntsman was at the center of what arguably was the most contentious M&A failure failure of the financial crisis era.

Fun fact: "Huntsman... is best known for inventing the clam-shell styrofoam box for McDonald's Big Mac burgers." ― Reuters

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Report: Michael Flynn will plead 5th, decline subpoena

Saul Loeb / Pool Photo via AP

The Associated Press is reporting that Michael Flynn, the former general fired from his National Security Advisor role by President Trump for lying about his contacts with Russians, will decline a subpoena from the Senate Intelligence Committee.

  • The sourcing: "[A] person with direct knowledge of the matter... spoke on condition of anonymity to discuss the private interactions between Flynn and the committee."
  • Why this was coming: "Legal experts have said Flynn was unlikely to turn over the personal documents without immunity because he would be waiving some of his constitutional protections by doing so. Flynn has previously sought immunity from "unfair prosecution" to cooperate with the committee."

Background on the subpoena, here.

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First-class travel, hotel suites: WHO spending under scrutiny

Raphael Satter / AP

The World Health Organization nearly spent more on travel for its 7,000 staffers in 2016 — $201 million — than its combined programs for AIDS, hepatitis, malaria, tuberculosis, mental health, and substance abuse, which total $213.5 million, per the AP.

  • How it happened: Lax rules surrounding first-class travel and hotel bookings allowed WHO employees to ignore official travel policy. For example, the agency's Ebola head spent nearly $400,000 in West Africa during the crisis, often opting for helicopter travel.
  • Comparisons: Doctors Without Borders spent $43 million on travel for its 37,000 aid workers; UNICEF spent $140 million for its 13,000 staffers.
  • Worth noting: The agency's polio expenditures hit $450 million last year.
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Zuckerberg: I'm not using this trip to run for office

Jeff Chiu / AP

Facebook CEO Mark Zuckerberg announced in a Facebook post Sunday:

"Some of you have asked if this challenge means I'm running for public office. I'm not. I'm doing it to get a broader perspective to make sure we're best serving our community of almost 2 billion people at Facebook and doing the best work to promote equal opportunity at the Chan Zuckerberg Initiative."

His learned insight: Zuckerberg said he sees an opportunity for Facebook to connect users beyond people they already know, and is hoping to soon introduce a system that recommends "people you should know," like mentors and people outside of your social circle who can provide "a source of support and inspiration."

Read next: Inside Zuck's real political strategy

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Ford replaces CEO Mark Fields with autonomous driving exec

Carlos Osorio / AP

Ford will announce Monday morning that it is replacing CEO Mark Fields with Jim Hackett, who ran Steelcase furniture for 20 years before joining the car company, reports The New York Times. Hackett most recently headed Ford's autonomous vehicle subsidy, known as Ford Smart Mobility.

Under Fields, who served as CEO for three years, Ford shares dropped 40 percent. He also was criticized by investors and the board for failing to make Ford a competitive player in the development of high-tech vehicles for the future.

Between the lines: The shake-up shows that Ford is shifting its focus to accelerate its self-driving technology. As the NYT points out, Ford has lagged behind other large automakers like General Motors and tech companies like Google, both of which have already begun testing their own autonomous vehicles. Ford is promising it will have a fully operating driverless car on the road by 2021.

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Striking AT&T workers head back to bargaining table

CWA

Over the weekend, AT&T stores were closed in a number of cities — from San Francisco to Boston to D.C. — when 40,000 workers walked off the job on Friday after the company failed to reach an agreement with the Communications Workers of America union. (AT&T told Fortune the majority of stores stayed open.)

In Oregon, Sen. Jeff. Merkley joined the picket line with workers. In New York City, Mayor Bill DeBlasio signaled support on Twitter.

Why it matters: It's the first labor strike AT&T has faced since 2012. AT&T is the largest U.S. telecom company, and the only one with a major union presence in its wireless business — the fastest growing part of the company. As a result, AT&T is having to contend with the pressures of competing with nonunion rivals in the increasingly competitive wireless sector, a company spokesman told the NYT.

At issue: CWA says AT&T has cut 12,000 U.S. call center jobs while moving jobs overseas, and has shifted jobs from company-owned retail stories to third-party reseller chains. Workers are also frustrated about rising healthcare costs and changes to commission rates. AT&T, for its part, says it's offering fair wage and pension increases and healthcare benefits. "Our employees are returning to work, and we remain committed to reaching fair agreements in these contracts," a spokesperson said.

What's next: In an email to members Sunday evening, CWA rep Dennis Trainor said the union will be back at the bargaining table Monday: "We stood up not only for ourselves and for our families, but for all working Americans who are sick and tired of being taken advantage of by greedy corporations. This fight is even bigger than AT&T. Let's congratulate ourselves for a job well done and walk into work tomorrow very proud."

Updated to include AT&T statement.

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Tech adoption skyrockets among older adults

Over 40% of American adults ages 65+ own a smartphone, more than double the amount since 2013, according to the latest survey from Pew Research Center. At the same time, more than two-thirds of seniors use the internet — a 55% increase from 2000. And for the first time, half of seniors have broadband at home.

Reproduced from 'Tech Adoption Climbs Among Older Adults' Pew Report

Why it matters: Despite these milestones, seniors still report feeling disconnected from the internet and digital culture. The study also found that roughly one-third of older internet users say they have little to no confidence in their ability to use electronic devices to perform online tasks, and roughly half of seniors say they usually need someone else to set up a new electronic device for them or show them how to use it. As more aspects of daily life become dependent on technology, particularly health care, senior adoption of new technologies will become increasingly important.

Other takeaways: The study also found that broadband access was dependent on household income and education levels. It's important to note that tech adoption among seniors is happening as the average population of seniors is on the rise in the U.S. Today, people ages 65+ account for 15% of the overall U.S. population and that number is expected to jump to 22% by 2050, according to U.S. Census Bureau projections.