Despite the GOP's failure to pass a scaled-back plan to dismantle tenets of Obamacare last Friday, 3rd District Congressman Republican Jim Banks still is optimistic the Affordable Care Act can be repealed and replaced this year.

"It hasn't failed yet. The Senators are still in Washington this week and working on trying to find a proposal that can get 51 votes in the Senate to move it forward. What that will look like, your guess is as good as mine," Banks said Wednesday morning after speaking at the Breakfast Optimist Club. "We passed the bill out of the House on May 3, I believe, so the Senate has been working on proposals since then."

On July 28, Republican Sens. John McCain, Lisa Murkowski and Susan Collins voted with Democrats to kill the plan to dismantle the tenets of the ACA.

Banks said, "One thing I think has gone wrong, or has contributed to the mess, is ... because of the slim margin of 52 Republicans in the Senate, and the arcane Senate rules, the Byrd rule requiring 60 votes to move something forward, and the legislative tactic of using reconcilation as the vehicle to move legislation out of the House to get out from under the 60 vote rule, that's confined the ability of Republicans to broaden their scope to get more consensus. That's where it gets complicated."

He said this was a case where government wasn't working because it's gotten too complicated. "That's confined our ability I think to move legislation forward to successfully repeal and replace Obamacare," he said.

"But I'm optimistic ... The Senate is still there working on finding common ground and passing something forward. And when it does, I think most members of the House would like to see whatever passes out of the Senate, rather than directly coming to the floor of the House to be voted on before it goes to the President, most of us would like to see the Senate version go to a conference committee where the House conferees and the Senate conferees merge the two proposals together," Banks said.

He noted the permanent repeal of the medical device tax was in the House bill. "I can't fathom a scenario where I would vote for a repeal of Obamacare that doesn't include a permanent repeal of the medical device tax," he said.

Medicaid

A big component of repealing and replacing Obamacare has to do with the expansion of Medicaid.

"The House plan would have rolled back Medicaid by a trillion dollars. It would have repealed the $1 trillion of Obamacare taxes including the medical device tax. It would have block granted Medicaid dollars to the state ... That's good public policy," Banks explained.

One of the components of the House Republican plan Banks said he liked was requiring those who are able-bodied, who don't have children, who can work but who choose not to and receive Medicaid to work. "They estimate that would impact maybe 9 million out of 60 million Medicaid recipients," he said. "I think that's good public policy."

Tax Reform

Banks said repealing and replacing Obamacare "kind of" has to be done before tax reform can take place.

"To get back to this reconcilation process, we can only have one reconcilation bill on the table at one time. And right now it's being used for Obamacare repeal. So if we're going to use reconcilation to trigger the process in the Senate to get out below the 60-vote rule to pass tax reform, we have to clear the field of health care before we get to tax reform," Banks explained.

"Now some of us believe that tax reform is so important that we need to get there one way or another," he said.

Debt Limit

The U.S. Treasury exhausts its borrowing authority on Sept. 29, which is the last day for Congress to act on raising the U.S. debt ceiling from its current limit of $19.8 trillion.

While Banks is opposed to raising the debt ceiling, he also said, "One way or another though we have to raise the debt limit in September to avoid a shutdown of the federal government,” Banks said. “I want to avoid a government shutdown, too, but I don't want to vote to raise the debt limit without some substantial reforms to non-discretionary spending, which is driving the $20 million national debt."

Non-discretionary spending includes Social Security, Medicaid and Medicare. Reform to those programs might consist of changing eligibility requirements without impacting the generations who rely on Social Security today and paid into it all of their lives, Banks said.

"So before I commit to a debt-limit increase, I, along with most other conservatives in the House, want to see some significant reforms included that would address what's driving the national debt," Banks said.

North Korea

An Associated Press story Tuesday reported that after decades of effort, North Korea has a missile potentially capable of reaching the continental U.S., but analysts say Pyongyang has yet to show the ICBM can inflict serious damage once it gets here.

"All options are on the table," Banks said in regard to what the United States needs to do regarding the Pacific country. "What I mean by that is we need to continue to increase our anti-missile defense systems, and that was a major part of the National Defense Authorization we passed a few weeks ago in our committee that passed out of the House, and that issue has been affected in the Senate because of Senator (John) McCain's health because he's the chair of the Armed Services Committee in the Senate."

The NDA for fiscal year 2018 includes an increase in funding for anti-missile defense.

On Wednesday, Trump signed the bill imposing new sanctions on Russia for interfering in the 2016 presidential election and for its military aggression in Ukraine and Syria, according to an Associated Press article. The bill also imposes financial sanctions against Iran and North Korea. In retaliation, Russia ordered a reduction in the number of U.S. diplomats living in Russia. The House overwhelmingly backed the bill 419-3, and the Senate followed with a vote of 98-2, according to the AP.

Banks said on July 4, North Korea tested its first successful launch of an ICBM. Until then, Banks said it was not known before that North Korea had those capabilities. When it tested its missile successfully, Banks said "at that point, we knew they could reach the United States and Alaska. But three days ago, they tested one that we now know can reach further distances that can hit major American cities. So, this is scary, this is real. This is serious. That's why the anti-missile defense is important and why the administration needs to be entirely focused on that threat."

All that being said, Banks said China is doing little to assist in efforts with North Korea. China is North Korea's greatest business partner and ally. "There would be no greater threat to North Korea than China shutting off economic activity, so China has not been willing to be a partner with us on those activities. So that's why I would support further sanctions on China to affect business dealings with North Korea. That's an option that's on the table as well," Banks said.

Russia Investigation

With the investigation into Russia meddling in the United States' 2016 election and the new sanctions passed, Banks said relations between the U.S. and Russia are "probably as poor as they've been since the Cold War if not worse in some ways."

With the sanctions passed against Russia last week and signed by Trump Wednesday, Banks said a significant part of those sanctions would retract the president's ability to roll back sanctions on Russia unilaterally from the White House and then preserve some of the existing sanctions that were already in place.

"There's not a lot that's new about the sanctions, but the realization that we know Russia sought to disrupt our election process, combined with the activities in Eastern Europe and disrupting stability among many of our allies in that part of the world. Last week there was a story that they were aiding the Taliban in Afghanistan; we know that they're aiding the actors in Syria that are on the other side of our interests in Syria - there's a lot going on there. Many of us believe that the president has had a blind spot toward Russia that is concerning. So, the sanctions bill that was passed almost unanimously in the House and in the Senate would retract the president's ability to roll back sanctions on Russia unilaterally," Banks said.