The $1.5 trillion question is, what does Lisa Murkowski want?
The Alaska senator, one of the critical Republican votes on the Senate tax overhaul, seems hellbent on remaining undecided about her party’s biggest legislative priority. The Senate version of the tax bill would permanently slash the corporate tax rate to 20 percent, allow its individual tax cuts to expire, and is projected to raise the deficit by $1.5 trillion dollars — worth it, Republicans say, for the economic gains they believe it would spur.
Murkowski was one of the decisive votes against Obamacare repeal — and now that the Senate tax bill includes repealing the law’s individual mandate, she, along with Sen. Susan Collins (R-ME), are eyed as potential pitfalls to passing the bill.
“Tax reform is complicated enough, and when you add health care reform in at the same time, it continues to complicate it,” Murkowski told reporters earlier this month, a variation of her common noncommittal refrain.
She has refused to take a definitive position, contorting herself to signal concerns about the 13 million fewer Americans who would have health insurance without the mandate while still leaving herself an opening to ultimately back the tax bill.
She told Roll Call she would consider voting for the bill if the Senate also passed a bipartisan Obamacare stabilization bill — then walked it back a few hours later. She clarified in a statement she supports a stabilization measure but “one should not assume this is a precondition for my support for the tax bill.”
A few days later, she wrote an op-ed for a local newspaper declaring she supported repealing the individual mandate. But then her office said the same day that did not necessarily mean she would support the tax overhaul.
Murkowski is a must-get: Senate Republicans can lose only two of their 52 members and still pass the plan. As a result, the bill also contains a big sweetener for her — a provision that could allow oil drilling in the Arctic Wildlife Natural Refuge. It has been a long-held dream of Alaska politicians for the revenue it would bring to the state.
The individual mandate, corporate tax rates and child tax credits — all of those problems might be beside the point for Murkowski. The tax bill is already a huge win for her.
Murkowski opposed every version of Obamacare repeal so far
Strategic silence has been Murkowski’s calling card throughout the most intense legislative debate this year. It became a running joke between the senator and Capitol Hill reporters that she had nothing new to say about the various Obamacare repeal bills that Republicans put forward in the spring and summer.
But in the end, she voted all of them down: A major repeal-and-replace plan, a clean repeal and even “skinny” repeal — which did little more than end the law’s individual mandate — proving a decisive vote against the GOP’s top legislative item.
Alaska, one of the states that did expand Medicaid under Obamacare, has seen its uninsured rate fall from 18.9 percent to 11.7 percent under the health care law. While Murkowski is still a Republican, and therefore still has problems with the law, she didn’t want to see those gains reversed. The Republican plans were projected to hit her state, which already has the highest health care costs in the country, particularly hard.
“When you ask Alaskans about their stories and what they want, they need increased affordability,’ Murkowski told me back in June. “Because we are slammed in every category, with premiums and the cost of care. Everything. They wanted decreased costs, increased access.”
The Trump administration was so frustrated with her that Interior Secretary Ryan Zinke reportedly called Murkowski to warn that her health care position had put her state’s standing with the White House at risk.
Now the tax plan takes aim at Obamacare. The Congressional Budget Office has estimated that 13 million fewer Americans would have insurance and premiums would increase an additional 10 percent most years, compared to current law, because fewer healthy Americans would be expected to buy coverage without the mandate.
She explained her opposition to the mandate in an op-ed for the Fairbanks Daily News-Miner. The individual mandate is still by far the least popular part of Obamacare, the foundation of Republican opposition, and many conservatives believe it is not as integral to the law’s functioning as its architects believed it would be.
Repealing the individual mandate simply restores to people the freedom to choose. Nothing else about the structure of the ACA would be changed. If you currently get tax credits to help pay for your insurance, you could still receive those credits if you choose to buy an exchange plan. If you are enrolled on Medicaid or received coverage under Medicaid expansion, you could still be enrolled if you choose to be. The only difference would be is if you choose to not buy health insurance, the government would not levy a tax on you.
In the op-ed, Murkowski reiterated her support for a stabilization bill negotiated by Sens. Lamar Alexander (R-TN) and Patty Murray (D-WA). But, as I detailed last week, Alexander-Murray won’t actually offset the effects of repealing the individual mandate. That bill is designed to address a whole different set of issues, problems brought on by President Trump’s deliberate sabotage of the health care law.
Nevertheless, it would give Murkowski cover to overlook the mandate’s repeal — a provision that would lead to millions more uninsured people and premiums increasing — and vote for the tax plan.
Why Arctic oil drilling is such a big win for Murkowski
Murkowski probably is eager to vote for the tax plan, but for reasons that have nothing to do with taxes or health care.
When Senate Republicans set up “budget reconciliation,” the special legislative procedure that would allow the tax bill to advance with only 51 votes instead of the usual 60, they added a special rider that would appeal to Murkowski and her Alaska colleague Sen. Dan Sullivan.
The provision would open sections of Alaska’s Arctic National Wildlife Refuge to oil and natural gas drilling — achieving a dream that Murkowski has been working on for the better part of a decade, a pursuit she picked up from her father Sen. Frank Murkowski.
Murkowski, as the chair of the Senate Energy and Natural Resources Committee, promptly passed the legislation in October. It would move in tandem with the tax bill on the Senate floor.
Vox’s Umair Irfan laid out the decades-long fight recently:
The 19 million-acre refuge, managed by the US Fish and Wildlife Service, was created in 1960 and remains the largest wildlife refuge in the United States. It’s home to polar bears, musk oxen, and migratory birds from six continents, and is the calving ground for the porcupine caribou. There are no roads and fewer than 500 people living in or near the refuge.
In 1980, President Jimmy Carter signed the Alaska National Interest Lands Conservation Act, expanding ANWR and opening the door to drilling in a 1.5 million-acre region of the refuge. However, there was a snag: Drilling would require an environmental impact study and approval from Congress.
Leaving the fate of oil drilling in ANWR to lawmakers has let this issue drag out for decades as support and opposition to drilling waxed and waned. Environmentalists have managed to successfully persuade Democrats (and some Republicans) to defend it.
But without definitive legislation supporting drilling, and without any rulings declaring ANWR completely off limits, the proposal has remained in limbo.
Alaska politicians have almost always supported opening up ANWR for drilling. State historian Terrence Cole told the Christian Science Monitor in 2015: “For elected leaders, opposing this is like opposing the midnight sun. It’s just not done.”
Murkowski, whose top campaign donors include oil and gas companies, made it one pillar of an ambitious energy plan she released in 2015. She accused President Barack Obama of declaring “war” on Alaska when his administration tried to expand protections for the refuge in his second term. After Trump’s victory last November, Murkowski tabbed ANWR as a top priority.
Environmentalists have long opposed opening up the refuge for drilling on various grounds: It’s not clear how much oil is actually there, there are ample other lands for drilling in the state, and any drilling of course jeopardizes the environment and would forever change the area’s landscape.
“Even if they don’t spill a drop, they are industrializing a wilderness area,” the Sierra Club’s Athan Manuel told Vox.
But ANWR could be a financial boon for Alaska, which helps explain why the state’s politicians and some of the public supports opening it to drilling. It goes back to the state’s permanent fund, which is filled by oil and gas production and then pays out to Alaska’s residents.
Every October, each Alaskan who has been in the state longer than one year gets a check for around $2,200, a dividend from the state’s $61 billion Permanent Fund. The fund is larger than any private foundation, endowment, or union pension trust, and is the largest sovereign wealth fund in the United States.
The money for the Permanent Fund comes from oil and gas production in the state. Alaska residents are paid a dividend from earnings on the fund, not the principal. That means the dividend check can go up or down, even to zero, depending on the fortunes of the state’s energy industry.
At its peak in the 1980s, the pipeline transported more than 2 million barrels of oil per day. But oil production is now a quarter of that, so the state is facing increasing pressure to raise cash.
The state’s budget deficit is now at $3.7 billion. And this year’s dividend payment from the Permanent Fund will be $1,100 — about half of what Alaskans have received in previous years, drawing the ire of many in the state.
Now Murkowski has her chance to resolve that issue and potentially yield a windfall for her constituents. The Senate energy committee, which she leads, has already approved the plan and sent it to the Senate floor, where it will link up with the tax bill.
With that win in hand, Murkowski will have to decide how far she is willing to go to save Obamacare. She staked her reputation and defied her party’s leaders by voting down three different repeal bills this summer and reaped the gratitude of the tens of thousands of Alaskans who could have lost insurance.
But those health care plans had nothing special for Alaska. The state would clearly have lost. This time, with the tax bill, she has extracted a huge concession for her state.
That is the calculus for Lisa Murkowski, who has proven to be one of the most inscrutable Republican senators in this time of fragile Republican governance. For the time being, she’s leaving her options open.