If All Else Fails, an Infrastructure Package Might Pass

The much ballyhooed $1 billion Trump infrastructure package has slipped into the shadows as the White House and the GOP-led Congress dote on repealing Obamacare and passing major tax cut legislation. But it all else fails, a bipartisan infrastructure deal might be a surprise Christmas gift to take home to voters.

The much ballyhooed $1 billion Trump infrastructure package has slipped into the shadows as the White House and the GOP-led Congress dote on repealing Obamacare and passing major tax cut legislation. But it all else fails, a bipartisan infrastructure deal might be a surprise Christmas gift to take home to voters.

As a second child, I know what it’s like to live in the shadows of an older sibling. I have plenty of friends and neighbors with three kids and I can only assume the level of attention drops off even more for number three.

President Trump’s $1 trillion infrastructure package seems more and more like that third kid. He or she keeps jumping up and down for attention, but the first two children, in this case, health care and tax legislation keep getting all the love. The question is, if health care and tax legislation keep misbehaving, how quickly will the third child become the center of attention? It’s possible it may be sooner than you think.

The ultimate backdrop is this: President Trump needs a big legislative victory in 2017 and, despite what he says, he hasn’t landed one yet. If all three of these big-ticket items get pushed to 2018, an election year, it’s going to be extremely difficult to get anything done. 

Democrats already have a disincentive to work with Trump. Their base despises him and generally doesn’t want to see their party leaders giving him any “wins.” This problem will only get worse with every passing day as we get closer to November 2018 and the mid-term elections. 

With only a two-seat majority, the Senate is generally the biggest impediment to moving any party-line legislation. We should know shortly whether tax cuts will have a chance of getting through the Senate.

This week, the Senate will be taking up the FY18 budget resolution. The centerpiece of the resolution is a broad outline for $1.5 trillion in tax cuts – and a secret parliamentary passageway to approve the tax cuts with only a simple majority.

Passage of the resolution doesn’t ensure that a tax package will be passed later in the year, but if the budget resolution is defeated, tax reform is basically dead. Then where does that leave us? Oh yeah, our new industrious, job creating and hardworking favorite child, Infrastructure Package.

The Trump administration could quickly turn its attention to a broad bipartisan deal that is supported by most Democrats and moderate Republicans. Infrastructure projects for roads, bridges, transit, housing, water infrastructure and veteran’s facilities are all politically popular and could quickly come together in the final months of 2017. It may be the first Christmas in years that the third child gets a bigger present than his two siblings.

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As Vice President, Federal Affairs, Joel brings to CFM broad public policy experience as a senior Congressional aide and successful private sector lobbyist.

Budget Reconciliation, Round Two

After failing to repeal Obamacare using budget reconciliation procedures, GOP congressional leaders will try again, this time with major tax legislation, which President Trump calls a “middle-class miracle,” but critics berate as a tax giveaway to corporations and wealthy Americans.

After failing to repeal Obamacare using budget reconciliation procedures, GOP congressional leaders will try again, this time with major tax legislation, which President Trump calls a “middle-class miracle,” but critics berate as a tax giveaway to corporations and wealthy Americans.

The GOP-controlled Congress is gearing up for another budget reconciliation battle, this time over taxes. The parliamentary scenario is eerily similar to the failed effort to repeal and replace Obamacare.

Like the flawed plans to scrap the Affordable Care Act, Republican congressional leaders are snubbing bipartisan efforts to write a tax plan. Oregon Senator Ron Wyden, the ranking Democrat on the Senate Finance Committee, has worked on bipartisan tax legislation before, but he says he wasn’t consulted on the latest proposal, which President Trump calls a “middle-class miracle,” but critics say gives large tax cuts to corporations and wealthy Americans.

That major tax legislation is attached to budget reconciliation is itself an issue, reflecting GOP unease over the impact of large tax cuts on the federal deficit. Republicans want to make a critical one-word change in budget procedures – from “current law” to “current policy” – that would have the effect of substantially reducing the apparent loss of federal revenue from tax cuts, perhaps by as much as $500 billion. Rep. Richard Neal, the ranking Democrat on the House Ways and Means Committee, criticized the new set of numbers as a “sleight of hand to fool the public.”

Making the deficit impact shrinks is intended to mollify House budget hawks who want to trim federal spending – and who typically refuse to vote to raise the federal debt ceiling, an action that also is pending, but rarely discussed. The budget package approved by a 219-206 vote in the House calls for a $5.8 trillion in spending reductions over the next decade for Medicaid, Medicare, education and national infrastructure.

Trying to pass a tax cut under budget reconciliation procedures is largely a gambit to skirt by the 60-vote cloture rule in the Senate. Under reconciliation, Senate Republicans would only need 50 “yes” votes, plus an “aye” vote by Vice President Pence, to pass the tax cuts. There are only 52 GOP senators, so the margin, as shown by the Obamacare repeal, is tight.

Unlike the effort to repeal Obamacare, Senate Democrats aren’t all in lockstep in opposition to the GOP plan. Three Democrats who face re-election in 2018 have kept their powder dry on tax legislation. Their votes may not be needed to pass the tax cuts, but Republicans are courting them to give their tax legislation the patina of bipartisanship. Trump flew to Indiana to put pressure on Senator Joe Donnelly, promising that “we will campaign against him like you wouldn’t believe” if he didn’t vote for the tax plan.

The battle lines over Obamacare translated more easily into mobilization and messaging – millions of Americans would lose health insurance. Taxation is more abstract. It is harder to get worked up over rich people getting tax breaks than people losing access to health care. Senate Democratic Minority Leader Chuck Schumer’s opening salvo – calling the GOP tax plan “wealth-fare” – hasn’t caught on.

Another dimension of the looming tax debate is its many parts. For example, the child care credit that Republicans have indicated will be included, is popular among Democrats. The potential removal of a deduction for state and local taxes will hit some states, including Oregon that relies heavily on personal income taxation, harder than others. The Portland Tribune reported Oregonians deducted $5.9 billion in state and local taxes from their federal income tax returns in 2015. About half of that amount came on tax filers with income between $100,000 and $500,000 and twenty-nine percent of Oregonians could see higher state taxes as a result, state officials say.

Oregon Democratic Senator Jeff Merkley is taking a point position in opposing the GOP tax plan, describing it as a “massive giveaway to the rich.” And Vox reports that campaigns, such as “Not One Penny” and the Trump tax chicken, are heating up.  TrumpTaxScam.org is posting a calculator to help people determine how the tax changes will affect them.

 

Economic and Political Realities of Climigration

Devastation caused by Hurricane Irma has paralyzed Puerto Rico and spurred Puerto Ricans to become climate refugees.

Devastation caused by Hurricane Irma has paralyzed Puerto Rico and spurred Puerto Ricans to become climate refugees.

The hurricane-caused devastation in Puerto Rico that has left large chunks of the island in the dark and without drinking water poses a major challenge for humanitarian aid. It may also pose an unexpected political challenge as many Puerto Ricans flee their island home, perhaps for good.

They are climate refugees. Not in the technical and legal sense of “refugees,” but in the practical meaning of the word. They are fleeing what they view as an untenable existence, not because of a perceived slow response by the Federal Emergency Management Agency, but because they see a worsening climate affecting their safety and economic well-being.

Climigration may not be limited to Puerto Rico, which has been hit by back-to-back Category 5 hurricanes. Residents in the US Virgin Islands, Florida Keys and southeast Texas may retreat to higher ground to avoid future exposure to winds, flooding and water surges in floodplains and coastlines.

These climate refugees may or may not believe in human-caused climate change, but they no longer doubt the climate is changing in potentially dangerous ways. The specter of entire islands with flattened buildings, no electricity and a decimated economy can be deeply disheartening. In Puerto Rico, death counts and damage estimates are impossible because many areas remain virtually inaccessible.

FEMA and President George W. Bush took a beating for a sluggish response to Hurricane Katrina. FEMA has gotten higher marks for its response to Hurricanes Harvey, Irma and Maria. For Puerto Ricans standing in an impossibly long line to get on a cruise ship bound for the mainline, FEMA isn’t the issue. They just can’t picture themselves trying to put their lives back together on an island with dim prospects.

If you have a serious illness, you don’t see much chance of getting the care you need. If you are in the tourism industry, it is hard to imagine many of the 2.3 million tourists who visit Puerto Rico returning any time soon. If you are living on the economic edge, falling into poverty seems likely. If you are a political official for a territory already in deep debt, there may not be any light in the tunnel.

US-citizen climigrants will settle in new places, with a likely concentration in Florida. Like Cuban refugees, Puerto Rican refugees will bring their political views with them, including their views about the impacts of climate change. Experiencing historic back-to-back hurricanes can leave a lasting impression. And that’s the political dilemma.

Apart from a herculean effort to rebuild Puerto Rico and other devastated Caribbean islands, there is a huge question mark about their future economic footing. As an island without any commercially viable natural resources, Puerto Rico must rely on manufacturing and tourism, both of which need to count on basics like electricity. Puerto Rico already has seen an out-migration of its population – a net loss of almost 450,000 people between 2005 and 2015. Island flight may accelerate, as evidenced by the exodus on flights bound for the mainland.

Climigration isn’t new in the long history of earth. That’s probably how many people wound up where they are. Most recently, more than 400,000 residents pulled up stakes and left New Orleans after Hurricane Katrina. Chunks of the city remain more or less in ruins.

Congress passed an initial hurricane relief funding package in response to the devastation in Texas, but has been preoccupied with other issues, including a proposed massive tax cut, after the devastation in Puerto Rico. The perceived slight is becoming a political issue on Capitol Hill, with Democrats urging swifter, stronger actions to assist Puerto Rico.

Ultimately as many as 1 million Puerto Ricans may move and take their first-hand view of climate change – and the political response – with them to new constituencies.

Consensus Plan to Reduce Poverty and Enhance Opportunity

Speaking of strange bedfellows, the conservative American Enterprise Institute and liberal Brookings Institution teamed up in 2015 to produce a consensus report on addressing poverty and enhancing opportunity. It started with facts and contained policies that crossed partisan divides.

Speaking of strange bedfellows, the conservative American Enterprise Institute and liberal Brookings Institution teamed up in 2015 to produce a consensus report on addressing poverty and enhancing opportunity. It started with facts and contained policies that crossed partisan divides.

Since strange bedfellows became the order of the day on raising the debt ceiling, providing disaster relief and keeping the federal government running for three more months, maybe it is time to revisit more cats and dogs proposals.

One of the more interesting products of diametrically opposed groups is the 2015 American Enterprise Institute-Brookings Institution consensus report on how to reduce poverty in America. The report was published after 14 months of painstaking work by 15 experts from AEI, a conservative think tank, and Brookings, its liberal counterpart.

On its website, Brookings touts the report “as a consensus plan to reduce poverty and restore the American Dream [that] bridges the partisan divide and suggests a way forward despite the political polarization and gridlock that paralyzed much of Washington.”

In the nearly two years since the plan was made public, little in the nation’s capital has changed. The unexpected deal last week between President Trump and Democratic congressional leaders on the debt ceiling, spending authority and disaster relief is probably just a political blip.

Instructively, the AEI-Brookings report begins with “facts on poverty and opportunity that progressives and conservatives can agree on.” Even if the report contained no recommendations, agreeing on the facts would be a major boon.

According to the report, the percentage of single women with children has quadrupled to 40.8 percent as marriage rates declined between 1970 and 2010. In 2013, single-parent households earned an average of $36,000 annually, roughly a third of married-couple family incomes. Most troubling, only 4 percent of children born to poor families ever become high wage-earners, while 43 percent remain poor into adulthood. The data draws a correlation between family composition and education, employment and wages, which have downstream effects on poverty rates and economic mobility.

To address family trends, the AEI-Brookings report recommends policies that promote marriage, delayed and responsible childbearing, parenting skills and job skill development for men and women.

Brookings experts conceded the importance of marriage and family structure, while AEI experts acknowledged the benefits of family planning, which can include use of contraceptives as well as abortions.

On the jobs front, the report cites the need for higher-level skills in the workplace and how people, especially men, without advanced skills can fall behind and never climb the economic ladder.  Recommended policies included making more jobs available and make work pay better than it does now for lesser educated and skilled workers.

Reinforcing that “a good education is important to achieving the American Dream,” the report says achieving the American Dream now more than that ever requires hard work and a good education. “The education level of adult heads of households has been increasingly associated with their income as the income gap between the well-educated and the less-educated has grown steadily over the last four decades,” according to the report.

Policies to cope with a shrinking American Dream include increased public investment in preschool and postsecondary education, modernizing the organization and accountability of educational systems, closing funding gaps and educating the “whole child” to promote social-emotional as well as academic skills.

The way forward, the AEI-Brookings report concludes, should adhere to three core values:

  1. That all Americans should have the opportunity to apply their talents and efforts to better themselves and their children, regardless of the circumstances of their birth;
  2. That all Americans have a responsibility to provide for themselves and their families to the best of their abilities before asking others for help;
  3. That all Americans are entitled to a basic level of security against the vacissitudes of life and, in a nation as rich as ours, to a baseline level of material well-being.

“The only way forward, we believe, is to work together,” the report’s authors insist. “No side has a monopoly on the truth, but each side can block legislative action.”

It is striking in these passages to see conservative and liberal thinking crisscross as policy recommendations converge on addressing poverty and enhancing opportunity. There are significant give-and-takes in the report, but the challenges facing many Americans rise above partisan thinking or ideological purity.

“Poverty is changing,” the report’s authors say, “and policy responses must change, too.” So far, despite the good work of strange bedfellows, they haven’t.

Hurricane Harvey Blows DC Political Winds in New Direction

Devastation caused by Hurricane Harvey has shifted the political winds in Washington, DC to focus on funding relief efforts, which may provide the political cover for Congress to raise the debt ceiling and allow more time to come up with a spending bill before the new fiscal year begins October 1.

Devastation caused by Hurricane Harvey has shifted the political winds in Washington, DC to focus on funding relief efforts, which may provide the political cover for Congress to raise the debt ceiling and allow more time to come up with a spending bill before the new fiscal year begins October 1.

Hurricane Harvey tore into Texas and its winds continued to blow all the way to Washington, DC.

Congress returns to town Tuesday and now topping its list of to-dos is passage of legislation to add billions more in funding to the Federal Emergency Management Agency to cover soaring costs to build after the ravages of one of history’s worst hurricanes in Texas.

President Trump has called for $7.9 billion in increased funding, even though Texas Governor Greg Abbott predicts it will require as much as $180 billion to recover what was lost or damaged in Houston, Corpus Christie, Beaumont and other Southeast Texas communities.

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The increased funding comes as Congress must find a way to approve legislation raising the US debt ceiling and a funding measure to keep the federal government’s doors open when the new fiscal year begins October 1. Those already prickly political issues were complicated when Trump said he was willing to accept a government shutdown to get a down payment on funding of his border wall.

Congress is already under a tight deadline to raise the debt ceiling and approve a FY 2018 spending measure and now also must deal with funding Hurricane Harvey relief, legislation to maintain the so-called Dreamers program and possibly increased expenditures to fight a war with North Korea.

Congress is already under a tight deadline to raise the debt ceiling and approve a FY 2018 spending measure and now also must deal with funding Hurricane Harvey relief, legislation to maintain the so-called Dreamers program and possibly increased expenditures to fight a war with North Korea.

Trump seems to have backed off the border wall threat under the cover of pressing for immediate relief funding to hard-hit Texas and parts of Louisiana, which he visited twice since the hurricane made landfall August 25.

Even though there is no direct connection between increased FEMA funding and raising the debt ceiling, which reflects past federal spending, hurricane victim relief may give GOP congressional leaders the leverage they need to push through both measures without a lot of political infighting, especially from the conservative wing of the Republican Party. Both Texas senators, who have bona fide conservative credentials, have expressed support for more FEMA funding. Relief aid would be touted by Trump and other politicians as a significant legislative achievement.

If that happened, there would be would more space – and perhaps legislative days – for what are expected to be intense political negotiations over spending for the next fiscal year. The Trump administration has called for massive budget cuts in many federal agencies – including FEMA, but those cuts may not have much political traction, even among many Republicans.

Instead, GOP leaders may try to raise the stakes for congressional Democrats by threatening to cut back on spending for health care for children to gain political concessions on revisions to the Affordable Care Act and possibly other political objectives. There are bipartisan Capitol Hill discussions occurring on ways to repair, as opposed to repeal, Obamacare, which could become part of the budget conversation.

Congressional spending decisions rarely follow a straight line and the hard negotiating never occurs in public view. While budget negotiators may ignore Trump’s budget outline, there are less likely to dismiss the President’s push for major tax cuts. While there also is willingness and even preliminary discussion of a bipartisan tax reform measure, agreement is virtually impossible before the end of September when some kind of a spending bill must pass. That suggests Congress will resort once again to some kind of continuing resolution, perhaps to the end of the year, to allow more time for the tax issue to ferment – and the hurricane relief bill to grow.

All that is murky enough political water, but it will get murkier. Trump will announce his decision to roll back the Obama-era decision to grant work permits to the children of undocumented immigrants, possibly with a 6-month delay to give Congress a chance to act. While a number of states have threatened to sue if the so-called Dreamers program isn’t scrapped, many GOP congressional leaders, including Speaker Paul Ryan, have expressed support for legislation that would maintain the program.

The other wild card that could blow up budget talks is the heightening war of words between the United States and North Korea over its nuclear weapon capability. Diplomatic options seem to be dwindling and some kind of military action is becoming more probable, despite predictions of enormous collateral damage. At a minimum, the United States would need to reinforce its manpower levels in Asia. There are reports military units already have been put on notice. As we learned in Iraq and Afghanistan – and earlier in Vietnam, fighting on the ground and dropping bombs from the sky is budget-busting expensive.

It is hard to imagine how the political situation in Washington, DC could get much worse. Well, its name is Irma and it may be heading to Florida coast later this week.

Congress Faces Political Test on Debt Ceiling Vote

Congress faces once more the political contortion act of voting to increase the US debt ceiling by the end of September, a task made even harder by President Trump’s demand to connect it with funding for his border wall with Mexico.

Congress faces once more the political contortion act of voting to increase the US debt ceiling by the end of September, a task made even harder by President Trump’s demand to connect it with funding for his border wall with Mexico.

The House and Senate return to the Capitol after Labor Day and face the grim task of raising the national debt ceiling to avoid US default on its obligations.

While the vote itself is a relatively simple one, the politics surrounding the vote are anything but simple. President Trump has made it more complicated.

Even though Treasury Secretary Steven Mnuchin has urged Congress to pass a “clean” debt ceiling measure, Trump has poured gasoline on that idea by connecting the debt ceiling increase with funding for his border wall, threatening to shut down non-essential parts of the federal government if he doesn’t get his way.

Congressional Democrats are unlikely to support a debt ceiling increase tied to border wall funding and would privately chuckle if a Republican president caused a government shutdown out of political pique.

There is no evidence funding Trump’s border wall would overcome the ideological objections of enough GOP conservatives to provide the votes to raise the debt ceiling.

Mnuchin first raised the need to increase the debt ceiling in March. Now he says it must be increased by the end of September or risk a federal government default.

In the recent past, increasing the debt ceiling – and forestalling uncharted economic consequences if it isn’t raised – has been accomplished with bipartisan votes. GOP congressional leaders have been forced to defy their conservative wing and deal with Democrats. Accommodating Trump would make that political formula impossible.

Trump’s unrelenting attacks against Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan, along with other GOP leaders, hasn’t created a climate of brotherly love and trust. The President’s pardon of Maricopa County Sheriff Joe Arpaio’s conviction of contempt of court related to racial profiling has roiled, not smoothed the political waters, creating yet another potential distraction.

With only a dozen days in session for the House and 15 for the Senate during September, there isn’t time for distraction.

Getting Congress to increase the debt ceiling has typically required presidential prodding, starting as far back as Jimmy Carter and Ronald Reagan. Even though raising the debt ceiling accommodates spending already approved by Congress, many Members of Congress grow queasy at the thought of constituents conflating past out-of-control spending with future out-of-control spending. Without presidential pressure, Congress has little incentive to crawl out onto this particular political plank.

As he has with so many other norms, Trump has broken with tradition. Until recently, he never brought up the need to raise the debt ceiling. His initial comment was to criticize GOP congressional leaders for not trying to pass it as a rider to a popular veterans bill approved just before the August recess. His next comment was to link the already tenuous vote with the contentious question of funding a border wall that Trump promised campaign supporters that Mexico would pay for, one way or another.

McConnell and Ryan have indicated their intention to raise the debt ceiling with as little political fur-flying as possible. That probably means a debt ceiling measure with no riders to assure Democratic votes. If Trump is still paying attention, he could rile up the GOP conservative base, making the vote even more miserable for Republicans.

The historic storm that crashed into Southeast Texas creating submerged areas the size of Lake Michigan and dislocating thousands of people could offer a timely political off-ramp for the debt ceiling vote. Trump chose the eve of Hurricane Harvey’s landfall last week to pardon Sheriff Joe and issue an official order on transgender people in the military. The President is headed to Texas this week to survey the damage. He may find it useful to talk about massive federal assistance. This could be the perfect distraction that lets congressional leaders slide through the debt ceiling increase.

Good Jobs Nation Tour Elevates Economic Issues

A labor-backed tour started this week that seeks to put pressure on the Trump administration to keep its campaign promises on jobs, but also may signal a move by Democrats to focus on bread-and-butter issues heading into mid-term elections next year.

A labor-backed tour started this week that seeks to put pressure on the Trump administration to keep its campaign promises on jobs, but also may signal a move by Democrats to focus on bread-and-butter issues heading into mid-term elections next year.

Potential Russian election collusion, failed repeal and replacement of Obamacare and a tone-deaf response to violence in Charlottesville has eroded, but didn’t eviscerate President Trump’s hard-core political support. The Good Jobs Nation tour that began this week could pose a more serious political threat.

The two-week tour is designed to put pressure on Trump to live up to his campaign promises on jobs.

“Trump ran as a working-class hero, so let’s look at the results,” Joseph Geevarghese, executive director of Good Jobs Nation, told The Washington Post. “We’re seven months into his administration and wages are flat. People are still getting pink slips.”

The tour pointedly started in Indiana, home of the Carrier plant that starred in the Trump campaign and the early Trump presidency when he announced a deal with company management to keep manufacturing jobs in the United States instead of shifting them to Mexico in return for $700,000 per year in state tax breaks. Labor leaders say Carrier is laying off workers and moving manufacturing to Mexico despite the deal Trump negotiated.

“He made promises to working-class people,” said Chuck Jones, who represented steelworkers at the Carrier plant. “He said if he were president, jobs would not be leaving this country. Guess what? They still are. He could be signing executive orders. He’s not lifting a finger.”

Organized labor is also irked at Trump for turning his back on an Obama-era rule on overtime and a regulation requiring companies bidding on government projects to disclose labor law violations because business groups opposed them. The Communications Workers of America is upset because the Trump administration has failed to respond to its request for an executive order relating to US-based call centers.

Ironically, Trump has defended his record in office by pointing to an uptick on the stock market, continued steady job growth and a slight increase in wages – indicators Trump the candidate scorned as not reflecting the true economic condition staring at many American workers.

Souring relations with blue-collar workers is not a good political sign for Trump or Republicans generally. Those workers provided the marginal votes that enabled Trump in 2016 to carry traditionally Democratic states such as Wisconsin, Michigan and Pennsylvania and give him an electoral college victory.

The analytics of congressional districts don’t look all that promising for Democrats heading into the 2018 mid-term elections, which means they will need to bear down on economic issues to erode GOP electoral advantages.

The analytics of congressional districts don’t look all that promising for Democrats heading into the 2018 mid-term elections, which means they will need to bear down on economic issues to erode GOP electoral advantages.

The tour doesn’t overlook that fact. One of the stops is in Wisconsin, which will feature Randy Bryce, a labor organizer who is challenging House Speaker Paul Ryan in his re-election bid next year. Wisconsin is where Taiwan-based Foxconn has announced plans to build a plant to make components for the iPhone in exchange for $3 billion in subsidies, a deal that organized labor is opposing.

Trump, GOP leaders and business groups are likely to dismiss the Good Jobs Nation tour as a political ploy by organized labor and leftist Democrats, noting the kickoff speaker in Indianapolis is Senator Bernie Sanders. While the tour itself may not strike a decisive blow to the Trump presidency, it will elevate questions about Trump’s economic plans and his inability, at least so far, to move forward an economic agenda that includes tax cuts and infrastructure investment. Whether Democrats can take advantage is an open question.

Blue and Red State analytics aren’t all that encouraging for a major Democratic comeback in the 2018 mid-term election. But polls do indicate that the issue Trump supporters watch closely is boosting the economy and spreading the benefits to include people who feel left behind economically.

In the words of former White House adviser Steve Bannon, “The longer they [Democrats] talk about identity politics, I got ’em. I want them to talk about racism every day. If the left is focused on race and identity, and we go with economic nationalism, we can crush the Democrats.”

It will be worth tracking whether the Good Jobs Nation tour reveals a crack in Trump’s blue-collar support or signals a new emphasis by Democrats on bread-and-butter issues.

Turning Campaign Promises into Policy Plowshares

Political candidates who make bold campaign promises face the harsh reality if elected of turning those promises into policies that can pass legislative muster or judicial review and wind up doing more good than bad.

Political candidates who make bold campaign promises face the harsh reality if elected of turning those promises into policies that can pass legislative muster or judicial review and wind up doing more good than bad.

Turning campaign promises into policy is tricky. Especially if the campaign promise is an oversimplified version of reality.

The attempt by congressional Republicans and President Trump to repeal and replace the Affordable Care Act is a case in point. What sounded like a slam dunk turned out to be a quagmire. Instead of a policy triumph, the GOP has a concrete anchor around its political neck.

The Congressional Budget Office is once again the bearer of bad news. CBO scoring of the various iterations of the repeal and replace bills helped sink them with predictions of millions of Americans losing health insurance coverage.

Now CBO says if Trump carries through his pledge to deep-six subsidy payments to health insurers, as provided for in the Affordable Care Act, health insurance premiums could rise 20 percent next year – and the federal budget deficit could balloon by $194 billion over the next decade.

Since the chief GOP objectives of repealing and replacing “Obamacare” were to lower health insurance premiums and cut the budget deficit, the CBO estimate wasn’t reassuring.

Tennessee Senator Lamar Alexander, who chairs the Senate Health, Education, Labor and Pensions Committee, is entertaining bipartisan legislation to “stabilize and strengthen” the individual health insurance market. He is working with Washington Senator Patty Murray. There is a similar bipartisan tandem working in the House. Both the Senate and House efforts involve retaining the cost-sharing subsidies that Trump threatened to jettison.

The failure to repeal and replace the Affordable Care Act provides lots of lessons. One of the most important is not to promise what you can’t deliver.

For the Trump administration, this is a lesson that could be applied across a wider policy spectrum, including throwing out trade agreements. Negotiations to update and modify the North American Free Trade Agreement, which Trump called the worst trade deal in history, are just beginning among the United States, Mexico and Canada. One of the loudest skeptics about wholesale changes in NAFTA are US automakers – one of the industry sectors the administration wants to help.

Like the Affordable Care Act that interacts with a complex web of health insurance and health care delivery systems, international trade has deep roots in commercial activity that can easily be upset, resulting in unintended negative consequences – including job losses. You may think tariffs on foreign goods will boost US industry, only to discover it may hurt more than it helps. That explains why Trump’s negotiation points in the NAFTA talks are a lot more restrained than his campaign proclamations.

Politicians of all political stripes deserve some sympathy. Most voters aren’t interested in policy details or complication explanations. They tend to react to sound bites and bumpersticker phrases. Opponents and pundits are quick to pounce on spongy policy pronouncements, so candidates opt to go with punchy and simple.

For all the griping about the non-responsiveness of governmental institutions, political leaders and agency bureaucrats do listen. And the legislative process, which was designed to be messy, works in most cases to get to a more nuanced policy place than a campaign promise.

The prospects of bipartisan legislation to address shortcomings of the Affordable Care Act and negotiations to modernize, not destroy, a major continental trade deal are examples of how government is supposed to work.

 

Managing Winners and Losers in Globalizing Economy

Globalization has produced winners and losers, which has soured many Americans and US policymakers on the undisputed benefits of free trade. The problem may not be trade, but the failure of US policy to keep pace with demands in a more competitive global economy.

Globalization has produced winners and losers, which has soured many Americans and US policymakers on the undisputed benefits of free trade. The problem may not be trade, but the failure of US policy to keep pace with demands in a more competitive global economy.

Based on the 2016 election, Americans seemingly soured on international trade. But that may not be an entirely accurate perception.

The election focused on workers dislocated by globalization. Less attention went to the benefits of trade, such as low-cost apparel and year-round fruits and vegetables. Foreign-sourced clothing has enabled American families on average to reduce spending on clothing from 7 percent to 3 percent of total household budgets.

Right or wrong, trade policies produce winners and losers. The losers received the attention in 2016, not inappropriately. US policies to compensate dislocated workers have been inadequate and, at times, non-existent. But that oversight does not override the everyday benefits that freer flowing international trade has brought to a broad swath of Americans.

Innovation Hub, an NPR program airing over the weekend, carried an interview with Edward Alden, author of “Failure to Adjust: How Americans Got Left Behind in the Global Economy.” Alden argues that America at large has benefitted from trade, but at the expense of some Americans who lost their jobs. The impact was predictable, as far back as 1971, but US policymakers have by and large dodged responsibility for finding ways to compensate trade losers, unlike many foreign contemporaries.

That responsibility, Alden says, includes both showing respect for dislocated workers and preparing the next generation to compete in a global economy.

Pete Peterson, an economic adviser to President Nixon, wrote a prescient paper in 1971 citing the upside of international trade and the dangers lurking in the future. He accurately predicted that some American workers would be left behind by globalization and implored for policies to prepare Americans for intensified global competition. You can’t say we weren’t warned.

“A program to build on America’s strengths by enhancing its international competitiveness cannot be indifferent to the fate of those industries, and especially those groups of workers, which are not meeting the demands of a truly competitive world economy,” Peterson wrote. “It is unreasonable to say that a liberal trade policy is in the interest of the entire country and then allow particular industries, workers, and communities to pay the whole price.”

Trump's Trade Pullout Roils Rural America

Today, trade has become a four-letter word. Republicans and Democrats have made protectionist arguments for border taxes, punitive penalties for US corporations moving manufacturing overseas and dumping or renegotiating trade agreements such as the Trans-Pacific Partnership. Nobody cried when President Trump withdrew from the TPP, even as China quietly stepped in to fill the void left by the United States.

That is exactly the point Peterson made in 1971. Much closer to World War II, Peterson could foresee the rise of a new generation of industrial leviathans, starting with Germany and Japan, which the United States helped to resuscitate. It may have been harder back then to project the economic rise of China, let alone Vietnam, India and Brazil.

Alden’s view aligns with Peterson’s. You can’t stop the ineluctable move toward globalization, but you have to adapt. Clinging to the past is like playing poker without ever looking at your cards. It also ignores the fundamentals of why globalization has advanced – trading partners are less likely to engage in war and free trade rewards the economy of advantage, whether it is technological innovation or low wages.

Trade pacts are intended to create rules that sufficiently even out advantages and disadvantages in bilateral or multilateral arrangements, but not necessarily to erase all disadvantages. Those disadvantages can be groups of workers or communities dependent on businesses on the decline.

Automation can amplify the perceived effects of globalization on job losses. Factories may remain in the United States, but employ fewer people because assembly lines are manned by robots. Remaining jobs are for people with different skills, such as running sophisticated machine tools or designing computer programs.

Digital technology has led to greater international integration, generating a flood of information flows that is reaching all corners of the globe. Information has become less proprietary and in many cases the cost of entry into business sectors has been significantly or totally erased, creating new waves of competition, such as outsourced tax preparation in India. There is evidence to suggest that cross-border data flows are becoming the most dominant form of international commerce.

One of the ironic twists of a more competitive global economy is the investment in the United States by foreign-owned companies. Asian and European auto makers manufacture vehicles in the United States, both to sell here and export elsewhere. Taiwanese-based Foxconn announced plans to build what it called a multi-billion-dollar manufacturing facility to produce Apple iPhones. It also has plans for an R&D facility in Michigan for self-driving cars. Chattanooga Tennessee sports two dozen foreign-owned companies that have helped lower the state’s jobless rate to 3.6 percent, a record low.

Traded goods are just a part of international commerce. The movement of capital, supported by financial services, plays a significant role. That’s why large banks are closely watching the details of Great Britain’s exit from the European Union, which could create barriers to service free-flowing capital. Data indicates financial flows have more than doubled since the beginning of the 21st Century.

Alden concludes that opposition to trade deals and globalization is the result of ignoring advice Peterson gave Nixon almost half a century ago. A more competitive world demands American keep its competitive edge, promoting innovation, investing in modern infrastructure, ensuring top-notch education and getting serious about retraining workers who suffer dislocation caused by trade (or by automation).

Today’s disillusionment with trade is linked to growing economic inequality, itself a reflection of a nonchalant attitude toward global competitiveness. People frustrated with their economic lot often blame immigrants. A better focus for their anger might be US policymakers who have failed to do what’s necessary to keep America competitive.

Tax Bill: Regular Order and No Border Tax

White House, GOP congressional leaders agree on process to write a tax bill and move it through the House and Senate under regular order – without the Trump administration’s proposed border adjustment tax.

White House, GOP congressional leaders agree on process to write a tax bill and move it through the House and Senate under regular order – without the Trump administration’s proposed border adjustment tax.

In contrast to GOP efforts to repeal and replace Obamacare, Republican congressional leaders plan to move tax legislation in regular order, which means starting with a bill and working it through committees. They also plan to put aside the Trump administration’s proposed border tax.

The news came in the form of a joint statement from the White House, House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell. This is viewed as an olive branch to Democrats to play a role in shaping, at least at the margins, of tax legislation.

The basic goal of the legislation remains the same – to promote economic growth and American jobs. Core ideas will be to lower tax rates and simply the tax code. “The goal is a plan that reduces tax rates as much as possible, allows unprecedented capital expensing, places a priority on permanence and creates a system that encourages American companies to bring back jobs and profits trapped overseas,” the statement read.

The flash points, as always, will be who benefits most from lower tax rates and how expected federal revenue losses will be offset. The statement didn’t offer any specifics, but junking the border tax idea, which would have taxed imports and exempted exports, removes one of the main ways the Trump administration proposed to offset revenue losses. That will make it harder to squeeze a tax cut into a budget.

In its statement, GOP leaders talked about “tax relief for American families” and helping small US businesses compete with larger business and larger business compete with foreign businesses.

Dropping the border adjustment tax, known as BAT, comes amid questions about its actual impact and the long-term consequences of shifting to a national consumption tax. Supporters claim it would bolster US manufacturing. Critics contend it could curtail US exports, raise prices for American consumers and possibly even spark a trade war.

There had been some thought that congressional Republicans would try to use the budget reconciliation process to move a tax measure. The health care legislative mess undoubtedly discouraged that thought. Republicans also believe there is willingness among some Senate Democrats to play ball on tax provisions. And they hope to have a more unified voice from business interests, if not others, in support of a tax code update. Inclusion of a border tax would have splintered the business community and probably doomed the legislation to vocal opposition from consumer groups.

No time table or specific provisions were included in the statement, but working through both House and Senate tax-writing committees will take time for public hearings, mark-up sessions and floor debates, not to mention an eventual conference committee to iron out differences. It is unlikely that serious work on tax legislation will start before lawmakers return from their August recess.

Looking Behind the Fuss over the CBO

The Congressional Budget Office, created in the Nixon era, has become a headline-grabber with its dramatic scoring on the number of Americans who would lose health insurance under various GOP health care plans.

The Congressional Budget Office, created in the Nixon era, has become a headline-grabber with its dramatic scoring on the number of Americans who would lose health insurance under various GOP health care plans.

GOP health care legislation has elevated the Congressional Budget Office (CBO) from an obscure arm of government to front-page news and a subject for snarky presidential tweets.
 
The ferocity of attacks on CBO’s integrity and accuracy prompted all eight former CBO directors to send a letter to Congress protesting the assaults, which most recently came from House Speaker Paul Ryan who called the scoring of Republican health care legislation “bogus.” A House member has filed an amendment to a major spending bill that would trim $15 million from CBO’s $48.5 million budget and result in a loss of 89 CBO jobs.
 
CBO was created in 1974 amid a fight between President Nixon and a Democratically controlled Congress over congressional competence to write budgets. CBO was made nonpartisan to produce independent analysis of budgetary and economic issues in support of the congressional budget process. The agency also provides cost estimates for legislation, but it offers no recommendations on policy questions.
 
CBO directors have been both Democrats and Republicans. Current CBO Director Keith Hall, a Republican who took over in 2015, served on President George W. Bush’s Council of Economic Advisers and was a critic of the Affordable Care Act, also known as Obamacare. Vermont Senator Bernie Sanders called Hall “outside the economic mainstream.” When a GOP-controlled Congress installed Hall, it came with a direction to embrace dynamic scoring when evaluating the macroeconomic effects of legislation.
 
“CBO’s approach produces consistent comparisons of competing legislative proposals and unbiased projections of the impact of policy changes,” the former directors wrote.
 
The directors concede “even nonpartisan and high-quality analysis cannot always generate accurate estimates,” but they add that CBO estimates are “more accurate, on average, than estimates or guesses by people who are not objective and not as well informed as CBO’s analysts.” They noted CBO is transparent in its analytic techniques to make estimates and often turns to outside experts for advice.
 
The current fight over CBO was ignited with its scoring of various GOP health care bills to replace parts of Obamacare. Those scores showed huge drops in the number of Americans who would be covered by private health insurance and Medicaid. President Trump, administration officials and congressional leaders have questioned the accuracy of the predictions.
 
Mick Mulvaney, director of the Office of Management and Budget, singled out a CBO analyst and questioned her objectivity because she previously worked at the Department of Health and Human Services under President Clinton. Douglas Holtz-Eakin, a Republican former CBO director who signed the letter, posted a tweet calling Mulvaney’s characterization a “disgrace.” Mulvaney subsequently apologized.
 
Republican sensitivities about CBO estimates on health care legislation date back to the Affordable Care Act, which critics note sharply under-estimated the cost Medicaid expansion and over-estimated the number of Americans who would enroll in the individual health insurance exchanges. Critics say CBO has a poor track record of predicting consumer behavior. Democrats have quarreled with CBO estimates, too.
 
Supporters believe that CBO continues to serve the purpose of giving a nonpartisan analysis of legislation that may not please either side of the political aisle, but arms congressional budget writers with a tool they can use to defend the constitutional prerogative of controlling the public purse. MIT economist David Autor says, "CBO has a good track record with a very difficult assignment. It errs, but not systematically or with partisan intent."
 
The kerfuffle over the CBO may be reprised as the Trump administration and congressional Republicans bring up tax legislation later this year. That process is guided by CBO’s cousin, the Joint Committee on Taxation, which scores tax proposals and effects on federal government deficits.

Schrader Offers Democratic Plan to Repair Obamacare

Oregon Congressman Kurt Schrader and nine other House Democrats offered what they called “real, concrete solutions” to cracks in Obamacare’s individual market health insurance. The plan won’t go anywhere until it’s clear whether Senate Republicans have enough votes to pass their own Obamacare replacement bill, with a vote expected next week.

Oregon Congressman Kurt Schrader and nine other House Democrats offered what they called “real, concrete solutions” to cracks in Obamacare’s individual market health insurance. The plan won’t go anywhere until it’s clear whether Senate Republicans have enough votes to pass their own Obamacare replacement bill, with a vote expected next week.

Led by Oregon Congressman Kurt Schrader, 10 House Democrats have floated a plan to fix Obamacare as Senate Republicans prepare to vote on a revamped alternative that still slashes Medicaid spending by $700 billion.

Schrader said the House Democratic plan proposes “real, concrete solutions that will stabilize and improve the individual market, making Obamacare work better for everyone and getting us closer to universal coverage for all Americans.”

One of the key elements in the Schrader proposal is a $15 billion annual reinsurance fund to pay health insurers that enroll higher-cost, sicker individuals. Obamacare contained a similar reinsurance fund from 2014-2016. The concept is to ease the cost burden for insurers of expensive care for some patients so average premiums for participants in the individual market can be lowered.

Other features include continuation of payments to insurers that offer discounts to low-income patients, changing the enrollment period from November to May to coincide with when taxpayers receive income tax refunds and expanding tax credits for buying insurance based on age, geography and income. The plan calls for robust marketing of health plans with subsidies and drawing bidding areas that provide more competition for underserved rural areas.

"Although we’ve made progress, Members of Congress have to acknowledge that too many Americans still struggle with costs, especially people in the individual market," Schrader said.

Schrader and his colleagues also would allow people nearing retirement age the option to buy into Medicare coverage and permit younger adults to purchase catastrophic health plans that include primary care coverage with anticipated lower premiums.

Oregon Senator Ron Wyden urged a bipartisan approach to stabilize the individual health insurance market. He also encouraged steps to lower prescription drug costs, such as allowing Medicare to negotiate drug prices with pharmaceutical companies.

The first inklings of Democratic willingness to work on cracks in Obamacare came after Senate Majority Leader Mitch McConnell indicated that if a GOP alternative fails to pass, the only avenue left is a bipartisan approach. President Trump and political conservatives have said failing to repeal and replace Obamacare would break a longstanding Republican promise. Kentucky GOP Senator Rand Paul has announced he will oppose the GOP health care bill because it doesn’t go far enough toward repealing Obamacare provisions.

Meanwhile, GOP moderates are worried about the impact of large cuts to Medicaid on elderly and disabled Americans, who consume the largest amount of Medicaid funding. In the revised version of the Senate health care bill, more money is set aside to combat the national opioid crisis in a play to win over some wavering Senate moderates, but it still might not be enough.

Maine Senator Susan Collins, one of the moderates unconvinced by the redrafted plan, pointed out there is a $70 billion math error. The Better Care Reconciliation Act includes an amendment by Texas Senator Ted Cruz that would allow bare-bones health plans also provides $70 billion in federal support for health insurers. Except the $70 billion Cruz would use for this purpose is already allocated in the bill. Tim Jost, a health care law expert and professor at Washington and Lee University, told MSNBC that the bill “gives an additional $70 billion to the states and then the Cruz amendment gives it to insurers that offer compliant plans in addition to noncompliant plans.”

Congressional Republicans are using the budget reconciliation process to replace Obamacare because this procedural is not subject to Senate filibuster rules. But the 52-member Senate GOP majority is thin and only can afford to lose two members to pass its health care legislation. Senate Minority Leader Chuck Schumer has said Democrats would work with Republicans if they dropped the reconciliation process. According to The Hill, some Republican senators, including Lindsey Graham, have entertained informal conversations with Democrats about a bipartisan legislative approach.

The GOP-backed American Health Care Act passed the House earlier this year with a narrow 2-vote margin. The changes under consideration in the Senate, including retaining two taxes imposed by Obamacare, might erode that margin and make a reconsideration vote in the House uncertain. House Minority Leader Nancy Pelosi has not offered to work with Republicans on Obamacare-related legislation. Pelosi did say the Schrader-led proposal offer “promising ideas to put solutions over politics to strengthen the Affordable Care Act and continue to lower costs for seniors and hard-working families.”

Senate Delays August Recess as Another Russian Collusion Shoe Drops

A bustling beginning on Capitol Hill after the July 4 break, including a 2-week delay of the next recess, was overshadowed by yet another shoe dropping in the Trump-Russian collusion matter that involved someone in President Trump’s immediate family.

A bustling beginning on Capitol Hill after the July 4 break, including a 2-week delay of the next recess, was overshadowed by yet another shoe dropping in the Trump-Russian collusion matter that involved someone in President Trump’s immediate family.

The Senate will delay its August recess, the shape of a revamped GOP health care bill was released and Republicans said they would include funding for President Trump’s border wall in the Fiscal Year 2018 budget. And another shoe dropped on the ongoing story of Trump team collusion with Russians in the 2016 presidential election.

It was quite a beginning to a week after Members of Congress returned from their July 4 break.

Senate Majority Leader Mitch McConnell announced the senatorial August recess would be delayed until the third week of the month to allow time to consider legislation to repeal and replace Obamacare and confirm presidential nominees. The lack of major legislative victories prompted several members of the Senate GOP caucus to urge McConnell to shrink the month-long August recess.

The Republican bill to replace Obamacare will be released later this week and, according to McConnell, voted on next week. However, its basic outline surfaced today. Senior Republicans said the Medicaid cuts in the earlier version would remain. What’s different will be retaining at least two of Obamacare’s taxes – the 3.8 percent investment tax and 0.9 percent Medicare surtax on upper-income earners – to boost the amount available by $230 billion for tax credits to push down premium costs – and woo wavering Republican colleagues.

They also said an alternative version pushed by Texas Senator Ted Cruz, which would allow insurers to sell bare-bones policies, could be an amendment that is considered. Neither the emerging GOP health care plan or the Cruz amendment will have scoring from the Congressional Budget Office until early next week.

At least two Republican senators – Alaska’s Lisa Murkowski and Maine’s Susan Collins – gave reactions to the media that didn’t sound like they had been convinced by the changes in the bill. If McConnell loses another Republican vote, the bill can’t pass.

One reason for the 2-week August recess delay is to catch up on the backlog of stalled Trump nominees. Senate GOP leaders blamed delays on foot-dragging Democrats. Data suggests part of the problem is the failure of the Trump administration to send formal nominations to Capitol Hill.

One reason for the 2-week August recess delay is to catch up on the backlog of stalled Trump nominees. Senate GOP leaders blamed delays on foot-dragging Democrats. Data suggests part of the problem is the failure of the Trump administration to send formal nominations to Capitol Hill.

Democrats, including Oregon Senator Ron Wyden, have urged McConnell to ditch the current GOP approach and engage in bipartisan negotiations. Wyden expressed willigness to find ways to bolster the individual health insurance market and the health exchanges. He also said pressure on insurance premiums could be relieved by pursuing strategies to curb the price of prescription drugs. Trump and, later, Vice President Mike Pence have suggested repealing Obamacare now with an effective date in 2020 to allow more time to reach a consensus on how to replace it.

GOP leaders signaled their FY18 budget will contain funding for Trump’s controversial border wall. Before the July 4 congressional break, conservative Republican lawmakers threaten to vote against any budget without funding for the wall. Now the political calculus may change with Democrats refusing to back a budget containing wall funding.

Nobody mentioned voting to raise the debt ceiling, which was breached in March. Instead, McConnell and other GOP Senate leaders deplored Democratic foot-dragging on confirming Trump administration nominees. According to The Washington Post, there are 145 formally submitted Trump nominations pending in the Senate. Only 48 Trump nominees have been confirmed, but Trump’s team has failed to submit a nominee for 382 of 564 key federal appointed positions.

President Obama by the same time in his first year in office had 200 of his nominees confirmed, with another 151 awaiting confirmation by the Senate. The average confirmation time for Obama nominees was 37 days, compared to an average of 44 days for Trump nominees.

The big news of the week, however, will probably be the release of an email string by Donald Trump Jr. that shows he agreed to meet last June with a Russian attorney after being lured by the promise of sensitive material detrimental to Hillary Clinton’s presidential campaign. The emails indicate the material was from the Russian government and was intended to boost Trump’s candidacy.

Trump Jr. says no material was transmitted at the meeting, which Jared Kushner and Paul Manafort also attended, but critics and some legal experts say that may be irrelevant. They noted it is illegal to solicit or accept items of value from foreign nationals, which presumably would include politically embarrassing dirt on an opponent. Some of the reactions on Capitol Hill ranged from calling the younger Trump’s behavior “problematic” to stronger references that included “treason.” Wyden, who sits on the Senate Intelligence Committee, said the emails remove any question about whether there was collusion between Trump and Russian officials and leave it to all Members of Congress to find out the extent of the collusion.

Hanging over congressional Republicans is the nightmarish possibility of heading home later this summer with no major legislative victories, little progress on priorities such as tax cuts and infrastructure investment and a president under siege. Trump officials said they won’t submit a tax proposal until September and details of an infrastructure package until next year.

Fine Day to Read the US Constitution

There is no better day than Independence Day to find a copy of the US Constitution, read it and join the decades old debates about what it says, what it means and how we should interpret it in our own time.

There is no better day than Independence Day to find a copy of the US Constitution, read it and join the decades old debates about what it says, what it means and how we should interpret it in our own time.

To celebrate the nation’s birthday, The New York Times published the US Constitution and its 27 amendments (in print form only) with annotated comments from prominent Americans and a preface by historian Garry Wills.
 
Even though the Constitution is the bulwark of American rights and liberties, many Americans are unfamiliar with the document, its origins and the debates over its meaning that have spiraled through our national history.
 
Washington Senator Patty Murray points to the Seventeenth Amendment that requires the direct election of US senators. Previously, senators were elected by state legislatures. Murray, who launched her political career by resisted state legislative efforts to cut preschool funding, said, “If these words hadn’t become law, I would almost certainly not be in the US Senate today.
 
Utah Senator Mike Lee, who just published his latest book titled Written Out of History: The Forgotten Founders Who Fought Big Government, underscores the importance of the very first clause in Article I of the Constitution that says “All legislative powers granted shall be vested in a Congress.” Lee observed, “Sadly, in the 20th Century, members of Congress started to give away lawmaking authority to the executive branch because they did not want to be held accountable to the people for unpopular laws.”
 
Vermont Senator and unsuccessful presidential candidate Bernie Sanders wrote, “At a time when the President is actively working to undermine the foundations of American democracy and openly admires the world’s strongmen, autocrats and dictators, we must, regardless of party and say, ‘This is not what our constitutional democracy stands for.’”
 
Times Supreme Court reporter Adam Liptak offers perspectives about the Constitution and capital punishment. He says the Fifth Amendment doesn’t help death penalty opponents by calling for grand juries involving “a capital or otherwise infamous crime.” However, the Eighth Amendment bans “cruel and unusual punishment.” Liptak quotes a dissent by Supreme Court Justice Stephen G. Breyer in 2015 who said flaws in the modern administration of the death penalty make it unreliable, arbitrary and warped by racism, which he equated with cruel. He also cited the late Justice Antonin Scalia who accused Breyer of spouting gobbledygook. “Capital punishment presents moral questions that philosophers, theologians and statesmen have grappled with millennia. The framers of the Constitution disagreed bitterly on the matter. For that reason, they handled it the same way they handled other controversial issues. They left it to the People to decide.”
 
Scalia’s observation about the death penalty and founding father disagreements is an interesting segue to the contemporary debate over originalism – – the view that the Constitution should be interpreted in the context of the time and mindset of the men who wrote it.
 
In the preface, Wills questions the wisdom and utility of an originalist interpretation of the Constitution. “Finding original intent,” Wills wrote, “is more complicated than just looking up words in dictionaries of the 18th Century. It means re-entry into a lost world.”
 
Take the Second Amendment, for example, which has generated an irreconcilable debate over gun rights. Wills says James Madison, who played a central role in drafting the Constitution and the critical role in adopting the first 10 amendments to the document, wrote the Second Amendment to pacify southerners, especially slave owners who wanted to maintain armed state militias to suppress salves and quell a slave insurrection. “The original intent consideration of the Second Amendment,” Wills said, “shows just how far the poison of slavery pervaded the Constitution” and has little to do with the modern-day debate over owning assault rifles. Ironically, Madison didn’t feel it was necessary to protect an individual’s right to own a gun because almost everyone in his time owned one.
 
Lee, who is a leader in the congressional Freedom Caucus, wrote an earlier book titled Our Lost Constitution: The Willful Subversion of America’s Founding Document. In both his newest and first book, Lee makes the case for federalism, with power shared by the central and state governments. It was a debate waged vigorously at the constitutional convention and, as Scalia observed, was spelled out with characteristic constitutional ambivalence. Which explains why both political parties argue the issue inconsistently. Conservatives want less federal oversight on environmental rules and voting procedures, but favor a federal ban on abortion. Liberals see an important federal role in education and enforcing anti-discrimination, but favor allowing states and cities to pursue anti-carbon policies consistent with the Paris Climate Accords.
 
Most people don’t carry a copy of the Constitution in their pocket, so Independence Day is a great day to find and read a copy. You might be surprised at what’s in there. And remember that the men who wrote it didn’t always agree on what it said and what it meant. We don’t always need to agree either, which may be one the most underappreciated legacies of our Constitution.

Looming Worker Shortage Could Lift Wages

New, qualified workers aren’t keeping pace with the retirement rate of Baby Boomers, which could give workers more market power and businesses an incentive to hire, train and keep their valued employees.

New, qualified workers aren’t keeping pace with the retirement rate of Baby Boomers, which could give workers more market power and businesses an incentive to hire, train and keep their valued employees.

While the GOP health care bill and Russian election meddling dominate the headlines, the issue that a majority of Americans from all political persuasions care about – jobs – is relegated to background noise.

The jawboning President Trump engaged in when first elected has proven illusory. Carrier is laying off workers. Ford is shifting production of one of its small cars from Mexico to China. Major brick-and-mortar retailers are reeling and shedding employment.

Despite pulling out of the Paris Climate Accord, the Trump administration isn’t making any significant progress on putting unemployed coal miners back to work in the mines. Facing bankruptcy, US-based solar panel manufacturers are filing anti-dumping petitions against Chinese and other foreign producers.

The economic stimulus that a large infrastructure investment package could make is on a political side rail, waiting for other issues such as a federal budget, tax legislation and a raise in the debt ceiling to move. States like Oregon are struggling to pass their own transportation financing packages that could generate jobs and address economy-choking congestion.

Despite all that, many American employers, especially in the manufacturing sector, say they can’t find enough qualified workers. So what gives?

Robert J. Samuelson, in his weekly column published in The Washington Post, offers some views on what is happening, and what could happen.

“For months, I’ve planned to write a column on the future of the US labor market. Stacked on my desk are reports on ‘the gig economy,’ ‘independent workers,’ ‘contingent workers,’ ‘freelancers’ and the like. All signify a new, less secure labor market. Workers won’t have long-lasting career jobs, as the old post-World War II employment model promised. Now it’s survival of the fittest. Workers who can adapt to constant change will thrive. As for everyone else, tough luck.

‘I never wrote that column.”

Samuelson believes circumstances may be conspiring to swing a degree of market power from companies to workers. It has nothing to do with economic policy or technology disruption. It has everything to do with demographics. He says America isn’t replacing retiring Baby Boomers fast enough or with people as qualified.

“If companies compete fiercely for scarce employees, workers would benefit,” Samuelson speculates. “Companies would increase wages and fringe benefits or risk losing their best employees to firms with more generous compensation packages.” That, in turn, could reverse the trend of worker wages becoming a smaller share of the overall economy’s gross domestic product, which fell from 63 to 57 percent from 2002 to 2012, and has risen only slightly to 58 percent since then.

Samuelson argues that improved worker training and higher pay should be “informed by common sense and market realities, not government regulations.” He also says industries vary, so there may not be a uniform solution to filling all employee vacancies and worker pocketbooks. “The goal now,” Samuelson claims, “is to convert the worker shortage into a better-paid, better-trained and more productive labor force.”

The growing worker shortage America faces is at once a serious problem and a golden opportunity. An enlightened business response, Samuelson concludes, might be equal parts human decency and economic necessity.

Absorbing wage and benefit increases and shrinking profits may be a hard pill for corporations to swallow, especially as they consider foreign sources of labor and replacing workers with machines. But at some point, business leaders need to recognize that consumer spending is a significant part of US economy and one of the best reflections of a healthy economy.

 

Senate To Turn into Three-Ring Circus Over Health Care Legislation

More Capitol Hill drama as Senate Majority Leader Mitch McConnell is pressing for a vote before the July 4 break on an Obamacare replacement, as fellow Republicans balk at the lack of any pubic process, hearings or debate and Democrats gird to shut down Senate business. Photo Credit: J. Scott Applewhite/AP

More Capitol Hill drama as Senate Majority Leader Mitch McConnell is pressing for a vote before the July 4 break on an Obamacare replacement, as fellow Republicans balk at the lack of any pubic process, hearings or debate and Democrats gird to shut down Senate business.

Photo Credit: J. Scott Applewhite/AP

You can exhale because there shouldn't be any Capitol Hill activity this week on President Trump and possible collusion in Russia. But take a deep breath as the Senate moves toward a highly contentious and audacious pre-July 4 vote on a health care bill that still hasn’t seen the light of day.

Senate GOP leaders reaffirmed plans to bring forward an Obamacare replacement measure in the next two weeks as Senate Democrats promised to bring all legislative action to a screeching halt, starting with talk-a-thon Monday night to list the deplorable provisions anticipated in the still-secret Republican bill.

Reports circulating on the Hill indicate there isn’t a consensus among Senate Republicans on key issues such as the level of Medicaid spending, addressing the national epidemic of opioid addiction and lowering health insurance premiums under the new plan for patients with pre-existing conditions. Senate GOP leaders have implied the bill, being drafted by a small workgroup behind closed doors, will get a vote whether or note there are enough votes for it to pass.

A website carried an elaborate explanation of how Senate Majority Leader Mitch McConnell might even might manage to limit floor debate when the GOP health care bill emerges from the work group. According to the explanation, McConnell could put a placeholder bill on the Senate floor calendar and let it suck up most of the 20 hours of allowable debate time. The real plan would be introduced as an amendment with little time left for a drawn-out floor debate.

Whatever the procedural strategy is, criticism is building for addressing contentious and emotionally charged health care legislation without a public hearing. The House, before it narrowly passed its version of an Obamacare replacement, didn’t hold any public hearings. It did come to the floor our of House committees, however, which apparently won’t be the case in the Senate under the current legislative scenario.

The secretive bill-writing strategy probably relates to the unpopularity of what the House passed, as reflected in public opinion polls and in raucous town hall meetings held by GOP lawmakers who voted for the bill. Trump, who initially praised the House bill, has since called it “mean" and urged senators to be more “generous.”

It doesn’t appear all Senate Republicans, including Florida Senator Marco Rubio, is on board with rushing a health care bill through a floor vote without any hearings and little debate. However, Senate GOP leaders are telling fellow Republican caucus members, this may be the one and only chance to vote to repeal Obamacare – a promise seven years in the making – before moving on to other legislative priorities.

Unlike the House, Senate Republicans want to have their heath care bill scored by the nonpartisan Congressional Budget Office before a floor vote. Reportedly, pieces of the new legislation have already been shared with CBO, though no results have been disclosed.

Democrats are doubtful that whatever emerges will be generous enough. They are hatching their own procedural strategies, including objecting to all requests to proceed with business on the Senate floor that requires unanimous consent or 60 votes to continue. Another tactic will be an attempt to force the referral of the House-passed American Health Care Act to a Senate committee.

Both sides will be frequently in front of microphones at press conferences and active on social media. Senators Bernie Sanders and Elizabeth Warren held a Facebook Live event to whip up opposition. Other Obamacare repeal opponents are urging a flood of emails and other constituent communications to sweep into Senate GOP offices.

Last week, Vox ran a story based on interviews with eight Senate GOP senators in which none of them seemed to have a glimmer of an idea what was in the Republican health care plan or the policy rationale for the provisions they couldn’t articulate. Those may be hard perceptions to shake if the Senate springs its health care bill for a vote with little notice and virtually no debate.

Restoring Cuban Restrictions Would Hurt Northwest Travel, Trade

Obama-era relaxation of travel restrictions to Cuba has been greeted with a flood of tourists to Havana, including on flights from the Northwest on Seattle-based Alaska Airlines. Restoring trade and travel restrictions could hurt tourism and maybe blunt emerging markets in Cuba for Northwest speciality agricultural products such as hazelnuts, wine and craft beer.

Obama-era relaxation of travel restrictions to Cuba has been greeted with a flood of tourists to Havana, including on flights from the Northwest on Seattle-based Alaska Airlines. Restoring trade and travel restrictions could hurt tourism and maybe blunt emerging markets in Cuba for Northwest speciality agricultural products such as hazelnuts, wine and craft beer.

President Trump heads to Miami later this week to announce he is restoring restrictions on travel and trade with Cuba. The move will please anti-Castro Cuban emigres who live in South Florida, but what does it mean for everybody else, including people who live in Washington and Oregon? Apparently a lot more than Cuban cigars and rum.

First off, reversing Obama-era relaxation of Cuban travel and trade restrictions doesn’t appear to be broadly popular throughout the country. Morning Consult, a DC-based non-partisan survey research firm, released fresh public opinion polling results this week showing 65 percent of American voters – and six in 10 Republican voters – favor continuing engagement with Cuba.

A group called Engage Cuba, which commissioned the poll, also released a report earlier this month that claims restoring some or all pre-Obama Cuban trade and travel restrictions could cost the US economy $6.6 billion and affect more than 12,000 American jobs. It also could make it harder for Cuban-Americans to visit relatives in Cuba

Last year, Miguel Fraga, first secretary of the Embassy of Cuba, visited Seattle and said loosened restrictions would make it easier for Americans to visit Cuba. In step with what has been a sharp rise in US tourism in Cuba, Seattle-based Alaska Airlines was among seven US air carriers to apply for rights to fly to Havana. The airline made its inaugural flight – the first from the West Coast – on January 5 starting in Seattle and flying to Havana from Los Angeles. Alaska also has a connecting flight out of Portland.

Earlier this year, Bruce Pokarney of the Oregon Department of Agriculture pointed to Cuba as a potential new market for Oregon specialty products such as hazelnuts, wine, craft beer, blueberries, apples pears, cherries and beef. The Salem Statesman Journal pointed out up to 80 percent of the food consumed by Cubans is imported. Before trade restrictions were relaxed by President Obama, the United States were already the leading agricultural products exporter to Cuba, with $300 million in exports in 2014 and $658 million in 2008.

The European Union and Canada are the largest exporters of wheat to Cuba. The United States has not shipped any wheat to Cuba since 2011, according to the Statesman-Journal.

“Obviously our top market is Asia,” Pokarney told the Statesman-Journal. “But we are always open to looking at new markets. It’s a situation where we want to maintain existing markets and find new ones.”

While foreign policy experts note Cuba has not pardoned political prisoners, permitted labor unions or condoned political activities, trade experts contend the 50-year-old US trade embargo of Cuba has proven ineffective in influencing Cuba’s human rights policies. Trade experts also say small American businesses are likely to be the biggest beneficiaries of more open trade with Cuba, which could boost exports in specialty products by more than $1 billion per year.

The rationale for maintaining or restoring a trade embargo and travel restrictions has more to do with politics, since Cuba long ago ceased to be a national security risk to the United States. A bipartisan majority of Americans seem to think it is a good idea to turn the page and re-engage with a nearby Caribbean neighbor. From the looks of Facebook posts of Washingtonians and Oregonians who have taken selfies while in Havana, it seems like the Northwest shares that view – and could share in some of the economic rewards of expanding engagement.
 

Senate to Tackle Health Care Amid Policy Chaos

Senate Republicans want to vote on their version of an Obamacare replacement by the end of July amid a chaotic legislative landscape with tax, infrastructure, budget and debt ceiling measures hanging in limbo in the shadow of investigations into Russian election meddling and possible charges of obstruction of justice.

Senate Republicans want to vote on their version of an Obamacare replacement by the end of July amid a chaotic legislative landscape with tax, infrastructure, budget and debt ceiling measures hanging in limbo in the shadow of investigations into Russian election meddling and possible charges of obstruction of justice.

The Trump administration plans to send a more detailed version of its infrastructure package to Capitol Hill, Senate Republicans want to vote on a health care bill by the August recess and a politically contentious vote looms on raising the debt ceiling.

In the background are ongoing efforts to craft tax legislation and assemble a Fiscal Year 2018 budget, while Congress awaits a Supreme Court decision on the modified Trump travel ban and manages around the shoes-keep-dropping Russian election meddling investigation. There also is continuing fallout from Trump’s decision to withdraw from the Paris Climate Accords and his tweet fight with the Muslim mayor of London following a terrorist attack.

You can’t say nothing is going in the nation’s capital, but you can understand why little is getting done. Depending on your viewpoint, Capitol Hill is a target-rich opportunity or ground zero for policy chaos.

The first concrete sense of timing on GOP legislative priorities came this week when Senate Republicans said they would produce their version of an Obamacare replacement by the end of July and vote on it, regardless whether they had the votes to approve it, before the end of July. The announcement came as several senators expressed doubt a GOP consensus plan could be developed that quickly. There were news reports that some Senate Republicans wanted to get the issue off the table once and for all, even if they had to explain to constituents why it failed.

Senators face the same dilemma as their House counterparts in finding a way to prevent health insurance premiums from rising while not lopping off millions of Americans from health insurance. The work group developing the Senate GOP plan is reportedly working with the non-partisan Congressional Budget Office to avoid a politically devastating score like what the House-passed version earned. But they are focused on curbing the cost of premiums, which could mean fewer essential services, less protection for people with chronic diseases or higher subsidies, perhaps funded by reduced Medicaid spending. 

Trump’s team dubbed this as infrastructure week as an attempt to build momentum for Trump’s proposed $1 trillion investment package and give his political base some positive news in the lead-up to former FBI Director James Comey’s much-anticipated testimony later this week. However, that plan was undermined as stories continued to drip about what Comey might say about pressure from the President to put aside the investigation of National Security Advisor Michael Flynn.

The Russian election meddling story didn’t go away either. In her NBC debut, Megyn Kelly interviewed Russian President Vladimir Putin who dropped hints about election-related hacking. There also was a report based on US intelligence sources indicating Russian military cybersecurity tried to infiltrate American voting systems.

The White House made news by appealing to the US Supreme Court to uphold travel restrictions on six mostly Muslim countries, followed by a series of tweets by Trump who insisted on calling the restrictions a travel ban. Opponents of the travel ban will file their briefs by Monday, which means there could be a decision any time after that. Some of Trump’s own legal team worried his tweets could undercut their arguments before the high court.

The infrastructure plan to be released may face additional complications because of Trump’s proposal to separate and privatize the US air traffic control system, an idea that doesn’t appear to enjoy uniform support among congressional Republicans, especially ones representing rural communities who fear the loss of air traffic control for their small airports.

There is no apparent action on a tax plan, despite the President’s tweet that it is moving along ahead of schedule, because no tax legislation has been submitted by the Trump administration. That is more or less true on the FY 2018 budget, too.

Lost in the shuffle is the vote to raise the federal debt ceiling, which Trump’s Treasury officials say must occur before the August recess. House and Senate GOP leaders generally agree on the importance of raising the debt limit, which was breached in March, but they need Democratic votes to pass it. Delaying the debt ceiling vote has given Democrats more bargaining chips and more leverage, at least in the short term.

Summers in DC are always hot and muggy outside. They may not be much cooler inside.

GOP Gets Breathing Room to Pursue Priorities

The appointment of special counsel Robert Mueller to lead the Russian meddling  investigation has given GOP congressional leaders breathing room to work on their stalled legislative priorities that reflect campaign promises.

The appointment of special counsel Robert Mueller to lead the Russian meddling  investigation has given GOP congressional leaders breathing room to work on their stalled legislative priorities that reflect campaign promises.

The appointment of former FBI Director Robert Mueller as special counsel in the ongoing Russian meddling probe may be bad news for President Trump and his associates, but good news for congressional Republicans. It could give them the political space to tackle their major legislative priorities before congressmen head home for an August recess.

And the agenda is daunting – replacing Obamacare, a major tax cut, progress on the Fiscal Year 2018 federal budget, an infrastructure package and passage of a debt ceiling increase.

The drip, drip of news revelations about the Trump’s team entanglements with Russians has distracted the White House and seemingly delayed any substantive tax proposal. The House narrowly passed an Obamacare replacement bill, with Trump’s support, but that legislation has bogged down in the Senate. The Trump FY 2018 budget proposal was pronounced dead on arrival on Capitol Hill, at least in part for what critics call a $2 trillion math error on how to pay for a major tax cut.

GOP congressional leaders felt under the gun to intensify committee probes into Trump’s Russian connections, until the Department of Justice appointed Mueller to lead the criminal investigation. Many Hill Republicans are hopeful that, with the investigative burden shifting from Congress to Mueller, they can focus less on the scandal and more on addressing their list of looming deadlines and campaign promises – a long list that Congress has made little headway on achieving.

However, the breathing space they now have still may not be enough time to pass their legislative agenda.

Senate leadership staff huddles this week to begin drafting from scratch a new alternative to the House-passed American Health Care Act (AHCA). The Senate has the benefit of the Congressional Budget Office score, which estimates 23 million people would lose health insurance over the next decade. New public opinion polls indicate Obamacare is more popular than the AHCA. Even if they are successful, it make take time to ensure all the details fit together.
 
On the other side of Capitol Hill, House appropriators are trying to figure out how to keep the government’s doors open when the new fiscal year begins October 1. Delayed action on fiscal 2017 spending, combined with the GOP’s decision to start with a health care overhaul, has put Congress months behind schedule on appropriations for FY 2018.

House appropriators are weighing an ambitious plan to pass a 12-bill omnibus appropriations package ahead of the August recess.  Given the very late start, appropriators would need to mark up their respective bills at a record pace to bring a full package to the floor before July 31. Even if they can pull off this monumental task, they will face an even bigger political hurdle garnering the necessary Democratic votes in the Senate.

Democrats retain some leverage in both the House and Senate in regard to passing a debt ceiling increase, which GOP conservatives won’t support, even though failure to raise the debt ceiling could result in US default on loans. How much leverage Democrats have and what they will use it for remains unknown.

Hope of passing tax and infrastructure legislation before August is dim, but getting a health care bill and an FY 2018 budget approved but the August recess would improve odds for addressing those issues by the end of the year.

While Mueller’s appointment gives breathing room to GOP lawmakers to work on their priorities, success is still tied to Trump and his ability to focus on advancing legislation without more self-inflicted controversy, such as his unsolicited comment about spending more on health care even though the AHCA, which he supported, would spend less.

Michael Skipper is CFM’s Federal Affairs Associate. Before joining the team in Washington, D.C., Michael worked on state affairs in Oregon, where he also studied political science and environmental policy at OSU. In his free time, Michael enjoys traveling, reading and spending time with friends and family. You can reach him at michaels@cfmpdx.com

 

 

Garrett, who will be CFM’s Manager, Federal Affairs, can be reached at his CFM email address: kirbyg@cfmdc.com.

Trump Budget Slashes into Social Safety Net

 Oregon could be one of the hardest hit states under the Trump administration budget proposal that cuts the food stamp program by $193 billion or 29 percent.

 Oregon could be one of the hardest hit states under the Trump administration budget proposal that cuts the food stamp program by $193 billion or 29 percent.

With the President across the ocean, the Trump Administration released its long-awaited FY 2018 budget blueprint, which seeks to bring the federal government back into the black by 2027, primarily by slashing domestic programs and relying on future economic growth generated from across-the-board tax cuts.

As with most presidential budget submissions, this one is mostly dead on arrival. Congressional leaders on both sides of the political aisle panned much of the proposal and are expected to push back against many of the more egregious spending cuts.

Here is a breakdown of the 1,288-page, $4.094 trillion budget, which has some good provisions, a lot bad ones and a fair amount of deception.

FY18 Budget - The Good

Infrastructure Proposal
Trump proposes a $1 trillion infrastructure plan with $200 billion of actual government spending over 10 years. Unfortunately, the proposal remains short on details, but we expect the funds to be available for a wide range of projects, including transportation, broadband, housing and veterans affairs. Here is what the Administration has to say about the Infrastructure Package:

“The President’s target of $1 trillion in infrastructure investment will be funded through a combination of new Federal funding, incentivized non-Federal funding and newly prioritized and expedited projects. While this Administration proposes additional funding for infrastructure, we will structure that funding to incentivize additional non-Federal funding, reduce the cost associated with accepting Federal dollars and ensure Federal funds are leveraged such that the end result is at least $1 trillion in total infrastructure spending. While we will continue to work with the Congress, states, tribes, localities, and other infrastructure stakeholders to finalize the suite of Federal programs that will support this effort, the 2018 Budget includes $200 billion in outlays related to the infrastructure initiative.”

FAST Act Levels… For the Most Part
The budget generally funds all highway and transit programs at FAST Act funding levels. This ensures full funding of a host of programs that directly benefit municipal governments and transit agencies. However, the New Starts Program was limited to projects already in the queue and thus the Administration is suggesting they do not want to fund any new commuter rail or bus rapid transit projects. Fortunately, Congress will likely restore these funds.

Clean Water Infrastructure Maintained
The budget seeks to fulfill Trump’s promise to promote clean water and build water infrastructure, including in communities like Flint, Michigan. The Administration resisted the impulse to cut this program and proposes $2.3 billion for the State Revolving Funds, a slight increase of $4 million from 2017. Trump also provides $20 million for the Water Infrastructure Finance and Innovation Act program.

COPS Hiring Bumped Up and AFG Maintained
Two popular public safety grant programs are protected in the budget. DOJ’s COPS Hiring Program would be increased to $207 million while Assistance to Firefighter and SAFER grants would be funded at roughly FY 17’s level. 

Senator Ron Wyden summed up his reaction to the Trump administration budget by tossing it into a wastebasket and posting a picture on his Twitter feed.

Senator Ron Wyden summed up his reaction to the Trump administration budget by tossing it into a wastebasket and posting a picture on his Twitter feed.

Tax Cuts for Everyone
For those of us that like ice cream with no calories, this one is for you. The Trump Administration includes approximately $3.6 trillion in tax cuts for individuals and corporations. This would be the largest tax cut in US history. 

FY18 Budget – The Bad

Military Spending
The Trump Administration stayed true to its campaign rhetoric and proposed increasing DOD’s budget by $54 billion in 2018. Unfortunately, this increase will be offset dollar-for-dollar by domestic program cuts, so it’s good or bad depending on your point of view.

Important Programs for Municipalities Eliminated
Staying true to the March budget outline, the full budget eliminates the TIGER program, CDBG, HOME, EDA, National Endowment for the Arts, National Endowment for the Humanities and Institute of Museum and Library Services. It also zeroes out the $150 million Essential Air Service that subsidizes commercial flights to rural airports and New Starts grants that fund new transit programs.

Entitlement Cuts
Funding for Medicaid, the health-care program for low-income Americans, and Children’s Health Insurance (CHIP) would be cut even more than the $880 billion over 10 years contained in the House-passed American Health Care Act. Funding for the Supplemental Nutrition Assistance Program, a modern version of food stamps that provided benefits to 44 million people in 2016, would be cut by 29 percent. The Administration also cuts $72 billion from the Social Security Disability Insurance program.

Sanctuary Cities Expanded
The budget includes a legislative change that would significantly broaden the definition of sanctuary cities, threatening more jurisdictions with prospect of noncompliance.

Unhealthy Decisions
Trump’s budget would slash the National Institutes of Health’s funding by nearly $6 billion, a nearly 20 percent reduction.  

School Choice Comes at a Price
In an effort to reduce the government’s role in public education, the Trump budget sends an extra $1.4 billion to the school choice program. However, the budget also places dozens of schools programs on the chopping block, including 21st Century Community Learning Centers, after-school and summer learning programs.

Rural Areas Cut
Trump eliminates the Rural Business-Cooperative Service, the water and wastewater direct loan and grant program and the single family housing direct loan program.

Selling Transmission Assets
While it’s short on details, the budget includes a proposal that would authorize the federal government to sell off publicly owned transmission assets operated by the Bonneville Power Administration.

EPA Targeted More than Most
The White House allocated just $5.7 billion for the Environmental Protection Agency, slashing its budget by $2.4 billion compared to FY 17. The move calls for the elimination of several EPA grant programs, including programs aimed at slowing climate change and cleaning up contaminated sites. On Page 164 of the EPA budget proposal, Trump’s team sliced into the budget to clean up Puget Sound. There didn’t seem to be any mention in the budget proposal of the Portland Harbor cleanup.

FY18 Budget – The Deceptive

The Trump Administration relies on some rosy forecasts to cut taxes and balance the budget in 10 years. According to the Committee for a Responsible Budget:

“In constructing its budget numbers, the President’s budget uses much more favorable economic growth assumptions than CBO, projecting average real growth of 2.9 percent over 10 years compared to 1.8 percent in CBO’s projection. Part of this is due to the Office of Management and Budget (OMB) assuming higher baseline growth of 2.2 percent, while the rest comes from the budget’s effects on growth.

OMB often assumes faster growth than CBO, in part because its growth estimates are inclusive of the President’s presumably pro-growth policies. Yet in the past two decades, OMB’s growth estimates have averaged just 0.2 points above CBO’s, with the largest difference being 0.4 points. The 1.1 percentage point difference between this budget and CBO is an outlier. Higher growth rates lead the budget to show much lower debt levels than would otherwise be the case, mainly due to higher projected tax revenue. Higher growth also means a larger economy and therefore lower debt and deficits as a share of GDP. OMB estimates nominal GDP will be 11 percent higher by 2027 than what CBO estimates.

In large part due to this growth, OMB projects debt under the President’s budget to fall from 77 percent of GDP ($14.2 trillion) today to below 60 percent of GDP ($18.6 trillion) by 2027. By comparison, our rough estimates suggest debt would total 76 percent of GDP ($21.3 trillion) using CBO’s economic assumptions. In other words, debt would be 16 percent of GDP and $2.7 trillion higher using CBO’s economic projections than it would be under OMB’s.”

Michael Skipper, Federal Affairs Associate, brings valuable Pacific Northwest-focused policy and political experience to CFM’s Washington, D.C., office.