Sen. Peter Welch on shutdown: One of the existential fights here is the cost of health care

Key Concepts

• Government Shutdown
• SNAP (Supplemental Nutrition Assistance Program) Benefits
• Healthcare Affordability and Accessibility
• Affordable Care Act (ACA) / Obamacare
• Medicaid
• Premium Tax Credits
• Republican and Democratic Stances on Healthcare and Budget
• "Extortion" as a Political Tactic
• Clean Continuing Resolution (CR)
• Pharmaceutical Benefit Managers (PBMs)
• Prescription Drug Pricing
• Excessive Utilization

Government Shutdown and its Consequences

The transcript discusses the ongoing government shutdown, now on its 29th day, highlighting its severe impact on federal employees and essential services. Senator Peter Welch notes that TSA agents and other government workers are walking off their jobs to seek second employment due to non-payment. This situation raises the question of whether Democrats have made their point and should now negotiate to end the shutdown.

The Healthcare Battle: An Existential Fight

Senator Welch frames the debate over healthcare as an "existential battle." He criticizes Republican efforts to "unravel healthcare," specifically mentioning cuts to Medicaid and threats to the Affordable Care Act (ACA).

• Specific Impact: In Vermont, some families who previously paid $900 per month for healthcare premiums are now facing costs of $3,500 per month.
• Core Responsibility: The fundamental challenge, according to Welch, is to make healthcare affordable and accessible, requiring both parties to come to the table for discussion and negotiation.

The Role of Government Shutdowns as Leverage

The interviewer questions whether a government shutdown is a necessary tactic to achieve healthcare policy goals. They argue that the shutdown's consequences—unemployed individuals, people seeking second jobs, and unpaid workers—are detrimental and that the conversation about healthcare could occur without holding the government hostage.

• Senator Welch's Acknowledgment: Welch acknowledges the validity of this concern, stating that SNAP benefits are at risk unless his bill with Senator Josh Holly is successful. He notes that the President can use emergency funds to continue paying the military, similar to how SNAP benefits could be sustained.
• Republican Obstruction: Welch asserts that Republicans have refused for months to discuss continuing tax credits for individuals purchasing their own healthcare, which are set to expire, leading to significant premium spikes (up to 300-400%). He emphasizes that responsibility and the obligation to discuss lie with both sides.

Piecemeal Government Operations and the Breakdown of Process

The discussion touches upon the potential for a "piecemeal" approach where certain government functions remain operational while others are shut down. Senator Welch agrees that shutdowns are "terrible" and indicative of a "breakdown of the political process." He points out that this is the sixth shutdown in 30 years, alongside debt ceiling crises, signaling a serious systemic issue.

• Underlying Issue: The rising cost of healthcare, which is increasing faster than inflation, is identified as a critical underlying issue impacting American families and small businesses that have benefited from ACA tax credits.

The "Extortion" Argument and Objections to Shutdowns

The interviewer directly challenges the Democrats' use of a shutdown, labeling it as "extortion" if used to achieve policy goals, similar to how Republicans might use it to oppose the IRA or overspending. They argue that this is not the correct way to conduct policy.

• Obamacare Premium Increases: The interviewer suggests that many ACA premium increases are inherent to the law, with the expiration of pandemic subsidies being a minor factor (around 3%). They believe fixes to Obamacare are needed to prevent spiraling costs, but this discussion should happen after the government reopens.
• Call for Reopening: The interviewer asks Senator Welch if he is ready to vote with Republicans to reopen the government, suggesting he might be a "reasonable Democrat" others would follow.

Senator Welch's Stance on Reopening and Healthcare Negotiations

Senator Welch states he is "not there yet" because there has been "no discussion whatsoever" about how to address the healthcare issue. He reiterates his belief that the current approach, which leads to unpaid TSA workers, is "extortion."

• Moral Argument: The interviewer presses Welch on whether, "as a human being," he believes this is the right way to proceed.
• Senator Holly's Bill: Welch defends his and Senator Holly's bill to ensure SNAP benefits are provided, and the President's action to pay troops, as necessary measures.
• Administration's Healthcare Policies: Welch criticizes the administration's actions, stating they have "had an attack on health care as we know it." He highlights the "immense" Medicaid cuts and their impact on individuals, state budgets, and community hospitals. He also reiterates that the loss of premium tax credits will cause people to drop healthcare, citing the Vermont example of premiums rising from $900 to $3,200 per month.

Disagreement on the Extent of Tax Credit Impact

The interviewer challenges Welch's assertion about the impact of tax credit expiration, citing a journal that suggests it accounts for only about 3% of the increase. They argue this is "peanuts" and that a larger problem of unaffordability persists.

• Welch's Counterpoint: Welch acknowledges the interviewer is "right about that" but believes the impact is "much more than 3%." He emphasizes that if both sides were willing to sit down, there are Republican ideas to lower healthcare costs without "throwing people off of healthcare insurance."
• Potential Solutions: He suggests discussions should address PBMs, prescription drug pricing power, and excessive utilization. The core issue, for Welch, is making healthcare accessible by making it affordable, not by removing people from Medicaid or Obamacare.

Openness to Proposals and the Need for Discussion

The interviewer asks if Welch would agree with Republicans who suggest that zero-premium, zero-out-of-pocket plans contribute to fraud and enroll people who are unaware they are on these programs.

• Welch's Response: Welch states he is "absolutely open to looking at any reasonable proposals that can make health care affordable by not having as the way to do it throwing people off of healthcare." He reiterates that the "real issue here" is not throwing people off healthcare.
• President Trump's Control: Welch believes that the ability to sit down and discuss these issues is "within the control of President Trump." He notes that many Republican colleagues are open to discussions, but the President has not given them permission. He also points out that many of President Trump's own constituents will be negatively impacted.

The President's Focus and the Clean CR

The interviewer notes that some are questioning President Trump's whereabouts and focus, suggesting he is pursuing a trade deal in China while domestic issues like the shutdown persist. They mention a "clean CR" (Continuing Resolution) on Chuck Schumer's desk.

• CR Extension: The interviewer questions whether a one-year extension is sufficient or if a longer-term extension (10-year, $345 billion, or $1.5 trillion) is desired.
• Welch's Clarification: Welch clarifies he is not asking for $1.5 trillion but agrees that a one-year extension is necessary due to upcoming premium increases and the need for states to administer changes. He states the President could facilitate this with a phone call.
• Independent Senators: Welch expresses frustration that senators need presidential permission to act, asserting they should be "independent actors."

Challenging the Narrative of Democratic Error

The interviewer challenges Welch's position by suggesting Democrats knew the ACA premium supports would lapse after three or four years post-pandemic and that they are now using this as leverage for a $40 billion extension, framing it as an attempt to "extort" a solution because of a past mistake.

• Welch's Rebuttal: Welch counters that while premium supports expired, the pandemic saw increased utilization and decreased employment. He argues that healthcare costs have continued to escalate since COVID, while wages have not kept pace, creating practical challenges for families and small businesses that need to be addressed. He concludes by stating that while he understands the critique of a shutdown, the core issue remains the escalating cost of healthcare.