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White House drops threat of halting Obamacare payments after snag in spending talks

The White House on Wednesday afternoon notified lawmakers that it will continue Obamacare payments despite threatening to cut them off next month, in a step forward for negotiations over a government-wide spending package. 

These payments are made to health insurers to help low-income people enrolled under the health care law with out-of-pocket expenses. The payments are known as cost-sharing reduction (CSR) payments. Democrats wanted language included in a government-wide spending package to guarantee that the payments would continue after President Trump threatened to cut them off.

House Minority Leader Nancy Pelosi, D-California, released a statement Wednesday afternoon and suggested that the administration’s assurance was good enough. This came after she spoke to White House chief of staff Reince Priebus twice on Wednesday.

“Our major concerns in these negotiations have been about funding for the wall and uncertainty about the CSR payments crucial to the stability of the marketplaces under the Affordable Care Act. We’ve now made progress on both of these fronts,” she said. “More progress needs to be made on some of our priorities, and we continue to be concerned about poison pill riders that are still in this legislation. Our appropriators are working in good faith toward a bipartisan proposal to keep government open.”

Senate Minority Leader Chuck Schumer, D-New York, also called it a positive development.

“It is good that once again the president seems to be backing off his threat to hold health care and government funding hostage,” he said in a statement. “These payments are essential to ensuring that millions of Americans won’t see their premiums skyrocket, and they won’t be kicked off their plan. Like the withdrawal of money for the wall, this decision brings us closer to a bipartisan agreement to fund the government and is good news for the American people. There are outstanding issues to be resolved, particularly with riders, but this is a positive development for the negotiations.”

An Office of Management and Budget (OMB) official said the administration will continue to pay CSRs, but a final decision for how long that will last for hasn’t been made yet.

Earlier in the day, Speaker Paul Ryan, R-Wisconsin, said, “Obviously, CSRs -- we’re not doing that. That is not in an appropriation bill.”

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Democrats, however, had been demanding that they be included in the spending package that would fund the government through the rest of the fiscal year, or Sept. 30. Congress must pass a new spending bill by Friday night or the government will shut down on Saturday.

Pelosi spoke to Office of Management and Budget Mick Mulvaney Tuesday night in which she reiterated that the payments must be included in the omnibus package, but at that point, Mulvaney had suggested that the administration might cut them off, according to an aide familiar with their conversation.

“Mulvaney indicated that, while the Trump administration had continued the CSR payments, they had not yet decided whether they would make the May payment,” the aide said. Mulvaney has also offered a dollar for dollar exchange with Democrats -- funding the CSRs at the same level as a southern border wall, which Democrats have rejected.

Despite the hiccup, Ryan expressed confidence that Congress would still reach an agreement in time.

“We’re getting really close. The administration, [Office of Management and Budget], along with appropriators are getting down to the last final things. I think we’re making really good progress,” Ryan told reporters.

While time is running out, Ryan downplayed the idea of Congress passing a short-term continuing resolution (CR) to buy more time to reach an agreement.

“That’s not our intention or goal. We want to get this done on time. That’s our plan,” he said.

Rep. Larry Bucshon, R-Indiana, said inside the meeting, “The chairman just said that things are in a good place and we expect to have the government funded through the end of the fiscal year by the end of the week and not a CR.”

Former House Appropriations Committee Chairman Hal Rogers, R-Kentucky, said he thinks there will be an omnibus measure by Friday.

“I think we want to get the pain over with,” he said.