Good analysis here. I will say, I see a few plausible pathways to the expanded ARP/IRA subsidies - perhaps we should call them the Lauren Underwood Subsidy Schedule - being made permanent.
1. If the Dems do win a trifecta in 2024, we know that the Underwood Subsidy Schedule is a matter of strong intra-caucus consensus and could surely find its way into a 2025 reconciliation bill. There are all kinds of things the Dems might like to do with the Trump tax cuts that expire in 2025 but this is one they clearly agree on.
2. If the Dems hold one or two of the House, Senate, and White House in 2025 - a decent possibility - then they have some fiscal policy leverage and could get the Underwood Subsidy Schedule out of budget negotiations. A lot of the initially-temporary expansions to social programs in the early Obama years were made permanent in the bipartisan budget deals of his second term, and the expiring Bush tax cuts created both potential pay-fors and negotiating chips with Republicans. I suspect the Biden Administration has something like this in mind for the Underwood Subsidy Schedule. And Biden was often the Senate point person for those Obama-era deals.
3. Obviously a GOP trifecta in 2025 makes the expansion of the Underwood Subsidy Schedule least likely. But as you have noted here and elsewhere, the GOP has made grudging peace with the ACA other than in the dwindling number of Medicaid expansion holdouts. And the people hit hardest by the expiration of the Underwood Subsidy Schedule would skew older and higher-income - therefore presumably more Republican - than Obamacare enrollees as a whole, which may make the GOP less inclined to totally screw them. Now, I think they would more likely just administratively loosen rules on short-term plans again instead of spending extra money on subsidies. But the subsidy time bomb in 2025 is at least a potential problem for them, and their careful rhetoric around the ACA in 2022 makes me think they want to avoid the punishing backlash they courted in 2017-18.
Good analysis here. I will say, I see a few plausible pathways to the expanded ARP/IRA subsidies - perhaps we should call them the Lauren Underwood Subsidy Schedule - being made permanent.
1. If the Dems do win a trifecta in 2024, we know that the Underwood Subsidy Schedule is a matter of strong intra-caucus consensus and could surely find its way into a 2025 reconciliation bill. There are all kinds of things the Dems might like to do with the Trump tax cuts that expire in 2025 but this is one they clearly agree on.
2. If the Dems hold one or two of the House, Senate, and White House in 2025 - a decent possibility - then they have some fiscal policy leverage and could get the Underwood Subsidy Schedule out of budget negotiations. A lot of the initially-temporary expansions to social programs in the early Obama years were made permanent in the bipartisan budget deals of his second term, and the expiring Bush tax cuts created both potential pay-fors and negotiating chips with Republicans. I suspect the Biden Administration has something like this in mind for the Underwood Subsidy Schedule. And Biden was often the Senate point person for those Obama-era deals.
3. Obviously a GOP trifecta in 2025 makes the expansion of the Underwood Subsidy Schedule least likely. But as you have noted here and elsewhere, the GOP has made grudging peace with the ACA other than in the dwindling number of Medicaid expansion holdouts. And the people hit hardest by the expiration of the Underwood Subsidy Schedule would skew older and higher-income - therefore presumably more Republican - than Obamacare enrollees as a whole, which may make the GOP less inclined to totally screw them. Now, I think they would more likely just administratively loosen rules on short-term plans again instead of spending extra money on subsidies. But the subsidy time bomb in 2025 is at least a potential problem for them, and their careful rhetoric around the ACA in 2022 makes me think they want to avoid the punishing backlash they courted in 2017-18.