The attendees sat in rows of chairs, in front of a stage that was bordered by large-screen televisions. The crowd was shown video testimonials, made by AFP, from everyday people who were purported victims of the ravages of Obamacare. The victim-impact statements were somewhat incoherent, from a policy standpoint. Most of their complaints were that health care was too expensive, or only available intermittently, problems that other industrialized nations had solved by nationalizing the health care industry. But the overall tenor was consistent—Obamacare was a terrible burden, and Congress wasn’t doing enough to repeal it.
After the presentation, the crowd was led out onto a terrace in the delightful spring weather and given free boxed lunches. They milled around and talked, and were later led to Capitol Hill where they met with congressional staffers and representatives to share their demands. The popular revolt against the American Health Care Act had begun.
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Inside the US House of Representatives, resistance to Trump’s plan was led by the House Freedom Caucus, the group of lawmakers most aligned with Charles Koch’s worldview. Koch Industries was the second-largest contributor to Freedom Caucus members, according to Politico, ranking only behind the Club for Growth (which was partially funded by Koch’s political network). The caucus declared that the American Health Care Act was an unacceptable compromise of conservative principles.
Mark Meadows, the North Carolina congressman who chaired the Freedom Caucus, led an effort. On the day the bill was introduced, Meadows published an editorial on the Fox News website, declaring his principled opposition to it. “We call on congressional leaders to keep their word to the American people, to push a real repeal of Obamacare, and to do it now,” Meadows wrote. The sin of the AHCA, as it was called, was the inclusion of tax breaks that would help millions of people pay for health insurance—“families will be given up to $14,000 of other people’s money,” Meadows complained. He pointed out that the bill also forced insurance companies to fine their customers if they dropped their health insurance, a sneaky way to perpetuate Obamacare’s mandate to purchase insurance. The bill also included subsidies to insurance companies approaching $100 billion, Meadows said. It was one thing for the Freedom Caucus to obstruct the Obama agenda. Now the caucus was obstructing its own party, its own president, and the bigger Republican agenda.
Weeks dragged on, and Donald Trump began to look just as ineffective as Barack Obama had been. He couldn’t move the Freedom Caucus. The obstructionists in Congress knew that time was on their side; the longer the bill was delayed, the weaker Trump’s hand became. A left-wing resistance movement emerged, modeled on the Tea Party, that confronted Congress members at town hall meetings in school gymnasiums and auditoriums. New studies emerged showing the deep damage the bill might do by kicking millions off their insurance. With each day, the bill became harder to pass.
The halting effort to pass it was carried forward by Paul Ryan, the Wisconsin Congressman who was the Speaker of the House. Ryan conducted his duties with the enthusiasm of a funeral director, impeccably dressed, unmovably calm, but with a deeply morose look in his eyes. He gave reasoned speeches and laid out the necessity of passing the AHCA quickly out of the House. He couldn’t move the Freedom Caucus.
The crisis came to a head during the week of March 20. Ryan wanted to put the bill to a vote in the House. It wasn’t clear that the bill had enough votes to pass, but it seemed imperative to move it to the Senate before time dragged on much longer. Donald Trump made bold gestures to support the bill. He traveled to Capitol Hill and cajoled lawmakers. He said that they needed a win at all costs and needed to prove they could govern. Trump singled out Meadows in person and threatened to bring down the weight of the White House upon him if he wouldn’t bend. “I’m going to come after you,” Trump warned Meadows with a smile, according to media reports of the closed-door meeting.
Nevertheless, Meadows persisted. That week, Trump gave the group an ultimatum—either they passed the health care bill, or he would abandon the effort altogether and lay the blame at their feet.
This is when Charles and David Koch stepped in, to fortify the caucus. They did so in a way that was unprecedented. For forty years, Charles Koch prized his discretion in politics, funding candidates and lobbying groups through obscure cutout organizations with names like 60 Plus Association, Corner Table LLC, and PRDIST LLC. But on March 22, Charles and David Koch went public with their desire to change a legislative outcome. Americans for Prosperity and Freedom Partners (a clearinghouse organization for many of Koch’s donations) announced that they would support any member of Congress who voted against the health care bill. If the Freedom Caucus stood up against Trump, the Koch network would be there to protect them afterward. The two organizations announced they were compiling a “seven-figure reserve fund” that obstructionist Congress members could draw on if they voted no. “Republicans have been promising to fully repeal Obamacare since it became law. This bill doesn’t do that,” James Davis, the executive vice president of Freedom Partners, told Politico when the fund was announced.
This tactic carried risks. When the US Supreme Court handed down its decision in Citizens United, the court emphasized that it was still illegal to engage in quid pro quo corruption, meaning the explicit trade of money for a vote. If the announcement from Freedom Partners and Americans for Prosperity was not a promise of money for a specific vote, then it is unclear what it was. Regardless of the risks, the Koch’s support stiffened the spines of the Freedom Caucus members. In a private meeting with Donald Trump at the White House, the members said they still were not ready to support the bill. On Friday, March 24, Paul Ryan admitted defeat. He pulled the bill and cemented Donald Trump’s failure.
The bill showed passing signs of life over the summer as it was revived and changed in a minor way that ultimately won the support of Meadows and his caucus.I When the bill passed the House, Donald Trump hosted a televised celebration of the victory, alongside a smiling Paul Ryan and other House leaders. But the bill would meet a similar destiny as the cap-and-trade bill in 2010. It was sent to the Senate, where it languished. Eventually the bill was forced to a vote, even though support was weak and the leadership could only hope to pass it by the narrowest of margins. The bill was defeated by the Arizona Senator John McCain, who voted no.
Donald Trump had been hobbled in the Congress. And once he was hobbled, the Koch network pressed its advantage. The fight over health care had been a proxy war, a way for the Koch network to prove its strength. The real fight was still looming.
After he abandoned the Obamacare repeal, Donald Trump moved on to reforming the nation’s tax code. Trump had specific ideas about the ways to do this, and many of them ran counter to Charles Koch’s interests. The Koch network was ready for the fight. Once again, Americans for Prosperity chartered buses and paid for volunteers to travel to Washington, this time to protest against Donald Trump’s tax plan.
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The Republican party had a once-in-a-generation chance to rewrite the American tax code. It controlled all three branches of government, giving it the freedom to write a tax bill that was true to Republican orthodoxy and untainted by the Democratic impulse to raise taxes and support the social safety net programs.