Obamacare forcing Trump’s agenda to wait

Now that the White House and Congress have taken up the herculean task of repealing and replacing Obamacare, everything else in Washington must wait.

That’s true for both procedural and political reasons. Republicans control only 52 Senate seats, so they are pursuing repeal through a complicated budget-related process called reconciliation. That allows them to avoid Democratic filibusters and pass legislation with just 51 votes rather than 60. The GOP healthcare bill is unlikely to get one Democratic vote in the Senate, much less eight.

Republicans are also going to spend political capital on healthcare, leaving them less of that capital to pursue other projects because any legislation on this issue will create winners and losers. Some people’s health insurance will become better and cheaper, some worse and more expensive. The Congressional Budget Office projection estimated that millions fewer will have coverage compared to under Obamacare, due to the individual mandate repeal and Medicaid cuts. Coverage lost by the abolition of the mandate is, of course, voluntary — not something taken away but something discarded.

Not everyone, anyway, believes those coverage estimates. “CBO scoring is like the National Weather Service,” quipped Peter Pitts of the Center for Medicine in the Public Interest. “You get all the best guys in a room with the best data and they all come up with the wrong answer.” But the CBO score still has a political impact, and blizzards do sometimes happen.

President Trump and House Speaker Paul Ryan, R-Wis., are pressing forward anyway. Trump predicted a “bloodbath” for Republicans in the 2018 midterm elections if they fail to keep their longstanding promises on Obamacare. Ryan said failure would be “momentum-killing” for the rest of the GOP agenda.

“Think of legislation as one train track with a bunch of trains on the track,” Ryan told conservative radio host Hugh Hewitt. “If you don’t get these trains through the system, it slows everything else down.”

President Trump and House Speaker Paul Ryan are pressing forward with the GOP healthcare bill. (AP Photos)

That doesn’t mean everyone is happy about it. Even before Trump’s speech to Congress in February, several GOP lawmakers told the Washington Examiner that tax reform was most important because it could noticeably accelerate economic and wage growth.

“If we get to 4 percent [gross domestic product] growth and 8 percent wage growth, the American people will be happy again,” Rep. Dave Brat, R-Va., said. “Then the Left will be irrelevant.”

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Although he is going along with the Obamacare effort, Trump appears to share that opinion. “I want to get to taxes,” he said in a March speech in Nashville. “I want to cut the hell out of taxes. But before I can do that — I would have loved to put it first, to be honest — there is one more very important thing that we have to do. And we are going to repeal and replace horrible, disastrous Obamacare.”

“We’re going to reduce your taxes,” Trump also said. “Big league. Big. Big — and I want to start that process so quickly. Gotta get the healthcare done, we’ve got to start the tax reductions.”

Tax reform won’t be easy either, thanks to the major debate over the concept of “border adjustability.” The corporate income tax rate would be cut to 20 percent and transformed into more of a consumption tax. Corporations would be taxed on products consumed in the United States rather than worldwide, in effect taxing imports but not exports.

There are several arguments for this change. It would move the United States toward a “territorial” tax system like many of its trading partners. It would seemingly keep corporations from moving jobs overseas to avoid taxation. Because America runs large trade deficits, taxing income from imports would raise an additional $1 trillion, helping to offset tax rate cuts.

Supporters also hope border adjustment will satiate the demand for protectionism without actually imposing large tariffs, as Trump has proposed, or risking trade wars with other countries. But opponents believe it will mirror protectionism too closely when corporations pass the tax on to consumers.

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Treasury Secretary Steven Mnuchin predicted that President Donald Trump‘s economic proposals will be able to boost growth significantly to annual rates above 3 percent.

“The broader plan is a tax cut,” argued Brian Reardon, a former special assistant for economic policy to President George W. Bush, in a March conference call with reporters. “Prices will be lower, not higher.” Border adjustment supporters believe changes in currency valuation will prevent tariff-style price increases. But some lawmakers, major importers and consumer groups are skeptical.

Trump has called border adjustment “too complicated” and there have been conflicting reports about whether the White House is warming to the idea. Nevertheless, tax and regulatory reform are the two biggest areas of common ground between Trump’s economic program and the “Better Way” agenda championed by Ryan during the 2016 campaign.

Trump and Ryan may disagree on what to do to companies that move jobs overseas, but they speak with one voice on the taxes and regulations American job creators face. Both want to cut them.

Another agenda item delayed by the Obamacare push is the infrastructure program Trump promised during the campaign. “We’re like a Third World country,” he said at an October rally. “Our airports, our roads, our bridges are falling down.”

Like tax reform, an infrastructure package could create jobs. It might also be easier for Trump to create construction jobs for his working-class voters through the infrastructure plan than to bring manufacturing jobs back by renegotiating trade agreements.

Infrastructure doesn’t excite conservatives as much as tax reform. Trump floated a $1 trillion infrastructure price tag during the campaign, although it has since been suggested that would be the combined total of private and public funds. That sounds too much like the $1 trillion stimulus package President Obama pushed through Congress and Republicans overwhelmingly opposed. Obama’s stimulus made the deficit balloon even as the unemployment rate was still hovering around 9 percent three years later.

This is an issue in which Trump could work with Democrats, however. “He won’t get Chuck Schumer, Nancy Pelosi and Elizabeth Warren,” said James Burnley, former secretary of transportation under President Reagan. “But he could get some sensible Democrats.”

It might also be easier for Trump to create construction jobs for his working-class voters through the infrastructure plan.

That might include Vermont Sen. Bernie Sanders, the independent socialist who caucuses with Senate Democrats and ran for the party’s presidential nomination against Hillary Clinton.

“Trump has talked appropriately about a collapsing infrastructure ― our roads, bridges and water systems,” Sanders told MSNBC’s “Morning Joe” this year. “If he is prepared to work with us on rebuilding America’s crumbling infrastructure and creating millions of jobs, and doing it in a way that doesn’t privatize our infrastructure or give tax breaks to billionaires, yes, let’s work together.”

According to Burnley, plenty of worthy projects could be funded through public-private partnerships, as long as strict cost-benefit analysis is used. He warned against the political bias in favor of new projects over maintenance of existing infrastructure. “Nobody holds a ribbon cutting when you fill a pothole,” Burnley said.

All these projects are going to have to wait, however. It is anticipated that an infrastructure bill will be delayed until 2018, in part because it is behind taxes and healthcare in the legislative queue.

Trump has issued executive orders greenlighting pipeline construction projects that were blocked by the Obama administration on environmental grounds. Others hope he will step up enforcement of the Open Skies agreement protecting American airline jobs against government-subsidized foreign competition, which wouldn’t require congressional input.

Immigration was another issue Trump campaigned on. He has issued executive orders on the subject, including controversial immigration and travel restrictions from six terrorist-infested countries that are majority Muslim. But those are tied up in court. Big changes to immigration policy require congressional action — action that is less likely to take place as lawmakers tackle healthcare.

Some work is being done in Congress to fund some version of Trump’s promised border wall, in lieu of Mexico paying for it. But there are periodic rumors that Trump may be open to a comprehensive immigration reform bill, like the doomed Gang of Eight proposal of 2013, usually followed by the president doubling down on his hardline stance from the campaign.

Some work is being done in Congress to fund some version of Trump’s promised border wall, in lieu of Mexico paying for it.

If Trump wants a more restrictionist immigration bill, he could back legislation introduced by Sens. Tom Cotton, R-Ark., and David Perdue, R-Ga. Their Reforming American Immigration for Strong Employment Act would significantly reduce legal immigration, reorient selection criteria away from family reunification toward a more merit-based system and eliminate the diversity visa lottery.

Cotton has emerged as a leading voice for immigration control in the Senate, replacing Alabama Republican Jeff Sessions, who is now attorney general. The RAISE Act envisions an even lower level of immigration than the 1990s Jordan Commission, whose proposal was defeated in Congress when social conservatives balked at limiting family reunification and business groups rallied against curbing low-skilled immigration.

Other immigration hawks would like to see Trump trade the formal preservation of Deferred Action for Childhood Arrivals, an Obama-era program that prevents the deportation of undocumented immigrants who came to America as minors, for mandatory E-Verify and tougher border security.

Any effort to pass a big immigration bill, whether it is like Cotton’s and Perdue’s, the Gang of Eight’s, or some Trump-negotiated middle ground, would take a great deal of work in Congress. That isn’t likely to happen this year.

Trump has never been a fan of entitlement reform. “I’m not going to cut Social Security like every other Republican and I’m not going to cut Medicare or Medicaid,” he said in 2015. But curbing entitlement spending has been central to Ryan’s career. He finally has both a Republican Congress and White House while he is speaker, and Trump’s budget director, Mick Mulvaney, is an entitlement reformer.

With the insolvency dates for Social Security and Medicare creeping closer, it might be tempting to use the GOP’s unified control of the federal government finally to address the issue. But that will be a taller task than Obamacare repeal and there is even less Republican agreement on what form reform should take. Social Security reform failed in 2005 despite a larger Republican Senate majority and the enthusiastic support of President George W. Bush, who had just won the popular vote and a second term.

No Democrats will be on board for entitlement reform either, as is the case with Obamacare repeal right now. “It’s representative of a Democratic congressional caucus that is going to say no to everything and believe that is somehow going to lead them to electoral success,” said Pitts, of the Center for Medicine in the Public Interest.

“I never give up on a dream,” Ryan told reporters this year when he was asked about whether he was abandoning entitlement reform. But he did say repealing and replacing Obamacare was a “start” to such reform, especially with the substantial Medicaid component.

Both moderate and conservative critics of the law have taken to calling the House GOP healthcare bill “Ryancare” rather than “Trumpcare.”

Some Trump supporters worry that the focus on Obamacare will crowd out the president’s agenda, consuming political capital that could be spent on jobs, immigration and trade policy no matter what happens with the GOP healthcare legislation. Both moderate and conservative critics of the law have taken to calling the bill “Ryancare” rather than “Trumpcare.”

“Ryan’s preferred legislation is frankly presented as a substitute for [Trump] doing what he said he’d do,” protested Mickey Kaus, a prominent liberal commentator who has supported the president mainly because of immigration.

A Fox News poll found that 33 percent of the public wanted Trump to focus on creating jobs, compared to just 7 percent whose priority was replacing Obamacare.

Congressional paralysis could lead to Trump doing more with executive orders on all fronts, although his experience with the travel ban is a reminder of the limitations of this approach. “I don’t think the House or Senate want this driven by executive orders,” Pitts said of Obamacare, although his observation applies to many other issues too. “That’s the hammer hanging over the heads of both parties.”

This post originally appeared on Washington Examiner


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