Thursday, May 25, 2017

Has dismantling of American health care system begun?

Financial fAQs

We now know that the revised Republican repeal of Obamacare is really intended to dismantle and perhaps destroy any federally-funded health care program, which would return health care to either cash-starved states or private industry; to the high cost, broken healthcare system it was before Obamacare. And all this is to give the wealthiest among us a tax break they don’t need?

We know because the CBO and JCT estimate just out says that, in 2018, 14 million more people would be uninsured under H.R. 1628 than under current law. The increase in the number of uninsured people relative to the number projected under current law would reach 19 million in 2020 and 23 million in 2026.

We also know this because no public hearings were held on the House plan and none are planned for the still-secret Senate plan, something that Senator Diane Feinstein said has never happened before for major legislation in her 40 years in Congress.

And it is a very major bill. For instance, in 2026, an estimated 51 million people under age 65 would be uninsured, compared with 28 million who would lack insurance that year under current law, according to the CBO. Under the legislation, a few million of those people would use tax credits to purchase policies that would not cover major medical risks, but their costs would rise because no longer protected by the ACA prohibition against raising costs for those with pre-existing conditions, for example.

It therefore dismantles the possibility of affordable health care that covers pre-existing conditions for most Americans. It gives businesses and the wealthiest a juicy $664 billion reduction in taxes, which are the tax revenues needed to pay for the Obamacare state subsidies—mainly to reimburse states that cover their poorest Medicaid citizens. So, it’s to be paid for with a total of $1.111B in spending cuts for Medicaid and social security disability coverage.


It is what the white racist agenda of Tea Party Republicans and President Trump is leading us towards. It is what they mean by making American great again. Let us hope there are enough intelligent Senators to block what is being done in secrecy, in the hopes that most Americans won’t notice there is nothing great about leaving a total of 53 million in 10 years—mostly the elderly and poor—without any healthcare options except the most expensive, and a budget that wants to continue to redistribute our tax dollars to the wealthiest one percent where it will do the least good.

And in a coda, Senate Republicans face increasing pressure to rescue health insurance markets and protect coverage for millions of Americans amid growing fears that the Trump administration is going to let the markets collapse, said the LA Times.

This is because President Trump has repeatedly threatened to withhold federal aid that helps millions of low-income Americans afford their deductibles and co-pays.  The aid, which reimburses insurers for lowering out-of-pocket costs for low-income consumers, was paid by the Obama administration. But it is now the subject of a lawsuit by congressional Republicans, who argue Congress must approve the payments.

In recent days, leading hospitals, physician groups, health insurers and the U.S. Chamber of Commerce have pleaded with the Senate to step in, effectively going around the White House.

“Congress must take action now,” the groups warned in a letter to Republican and Democratic Senate leaders. “At this point, only congressional action can help consumers.”

Can it be any clearer that health care coverage for many, if not most Americans, is in danger of collapse? 


Harlan Green © 2017

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Tuesday, May 23, 2017

What Will Create Higher Growth?

Popular Economics Weekly

Amidst all the talk of Republicans promise to cut regulations and taxes to boost growth, there is one problem. Where are the workers that would boost growth? We are already close to full employment, and in fact Red states like Utah have an unemployment rate of 3.1 percent, per the New York Times  Binyamin Applebaum’s visit to the state.
“After eight years of steady growth, the main economic concern in Utah and a growing number of other states is no longer a lack of jobs, but a lack of workers,” says Applebaum. “The unemployment rate here fell to 3.1 percent in March, among the lowest figures in the nation. Nearly a third of the 388 metropolitan areas tracked by the Bureau of Labor Statistics have an unemployment rate below 4 percent, well below the level that economists consider “full employment,” the normal churn of people quitting to find new jobs. The rate in some cities, like Ames, Iowa, and Boulder, Colo., is even lower, at 2 percent.”
And this is when the Trump administration wants to build a wall and cut immigration quotas in half. There aren’t enough working-age American citizens to pick up growth, in other words. A corporate tax cut may encourage corporations to spend more on business investment. In fact, business equipment, in a positive indication for second-quarter business investment, rose a very sharp 1.2 percent, which should boost productivity from its recent very low 1.2 percent, and is the other component of GDP growth.

There’s a simple reason for the surge in business investment, as I said last week. Businesses need more automation, because they can’t find enough qualified workers to fill the 5.743 million, job openings reported in the Labor Department’s latest JOLTS report, which is far above total hirings of 5.260 million in April, a gap of 483,000.


Then there is the Trump administration budget proposal, which wants to slash healthcare and food assistance programs for the poor as they cut $3.6 trillion in government spending over 10 years, according to the White House's budget proposal for next year.

So instead of increasing revenues to pay for the Wall, tax cuts for the wealthiest, and more military spending, they are reducing revenues by cutting spending on the programs that pay for our social safety net. And studies have shown this will create an even larger hole in the federal budget.

It’s really elementary mathematics. Without the workers to produce them, and consumers with enough money to buy said products (e.g., those middle and lower income workers who lose their Medicare or Obamacare benefits), there can’t be higher growth. And the Fed has said if the federal government increases spending without the concomitant revenues to pay for that spending, they will continue to raise interest rates to avoid higher inflation.

This is the Faustian bargain that the current Congress is attempting to pass. Tax cuts for those making more than $200,000 per year ($250,00 for married couples) takes away much needed revenues that cover benefits for everyone else. For instance, repeal of the Affordable Care Act’s tax provisions would provide America’s wealthiest taxpayers with an immediate tax cut totaling $346 billion over 10 years.

That will not fly, as word gets out and more Town Halls are flooded with protesters over the proposed $800 billion in Medicaid spending cuts alone, cuts which would hurt the poorer Republican red states. So, unless lawmakers come to their senses, this could cause Republicans to lose their congressional majorities in 2018.

Harlan Green © 2017

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Wednesday, May 17, 2017

Increase Industrial Production Sign Higher Growth?

Popular Economics Weekly

Industrial production in April grew at the fastest monthly rate in more than three years on the back of broad-based gains in the manufacturing sector, reports the Federal Reserve. Industrial production grew 1 percent in April led by a 5 percent increase in motor vehicle production. It was because business investment is up sharply, as is consumer spending.

Business equipment, in a positive indication for second-quarter business investment, rose a very sharp 1.2 percent, reports Econoday, which could be a sign of a badly needed business expansion. “Production of consumer goods was even stronger, up 1.5 percent. Two negatives are hi-tech industries with a small decline and also construction supplies which posted a second straight dip that offers a reminder of this morning's disappointing housing starts report.”
There’s an obvious reason for the surge in business investment. Businesses need more automation, as they can’t find enough qualified workers to fill the 5.743 million, job openings reported in the Labor Department’s latest JOLTS report, much more plentiful than total hirings of 5.260 million in April, a gap of 483,000.

That also means an ultimate surge in badly needed Labor Productivity that has been lagging of late. From the first quarter of 2016 to the first quarter of 2017, productivity increased just 1.1 percent, reflecting increases in output and hours worked of 2.4 percent and 1.3 percent, respectively, said the BLS.

And without higher labor productivity, the US economy can’t grow more than the current 2 percent GDP growth rate. What was the rate during periods of higher growth? Until 2000, economic growth averaged more than 3 percent, while productivity averaged 2.5 percent until 2007.

 But then something happened. Average productivity plunged to 1.2 percent from 2010 onward. Why? Businesses stopped investing, for starters. This was partly due to the plunge in oil prices (from $100 to $30 per barrel last year), and consequent plunge in industrial production.

But our population also began declining, the other component to GDP growth (besides labor productivity). Until 2000, the U.S. population grew more than 1 percent, but since 2000 average population growth halved to about 0.5 percent.

Graph: CBO

The Congressional Budget Office estimates that we would need 2.8 million new workers per year to reach the 3 percent growth rate that Trump and Repubs want. Where will they come from? New immigrants, as the U.S. currently generates just 600,000 new job entrants per year, on average.

The baby boom is gone, in other words, and even the record-breaking millennial generation won’t fill the bill.  So we need more immigrants, not less, as well as higher labor productivity, if Repubs are to boost economic growth.

Harlan Green © 2017

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Monday, May 15, 2017

Builder Optimism + Affordability Higher

The Mortgage Corner

Good news is that rising wages and moderating home prices offset a rise in mortgage interest rates to give housing affordability a slight boost in the first quarter of 2017, said the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI) last week.

And In a further sign that the housing market continues to strengthen, builder confidence in the market for newly-built single-family homes rose two points in May to a level of 70 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This is the second highest HMI reading since the downturn.


NAHB.org
"The HMI confidence measure of future sales conditions reached its highest level since June 2005, a sign of growing consumer confidence in the new home market," said NAHB Chief Economist Robert Dietz. "Especially as existing home inventory remains tight, we can expect increased demand for new construction moving forward."

But housing construction is not yet catching up to demand, as I said in a recent column. The first quarter ended with a thud for housing starts which fell a very steep 6.8 percent to a 1.215 million annualized rate which is the weakest since November, said the NAHB. Posting similar declines were both single-family homes, at an 821,000 pace, and multi-family, at 394,000. Housing construction does show nearly double-digit year-on-year growth, though quarter-to-quarter movement is barely perceptible. 


It looks like employment is now ahead of housing, hence demand exceeds the supply of new housing, a good sign.
"Ongoing job growth continues to fuel demand for housing, while wage growth is helping to offset the effects of rising mortgage rates and keep home prices affordable," said NAHB Chief Economist Robert Dietz. "NAHB anticipates that housing will continue on a gradual, upward path throughout the year."
In all, 60.3 percent of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $68,000. This is up from the 59.9 percent of homes sold that were affordable to median-income earners in the fourth quarter.

The national median home price fell to $245,000 in the first quarter from $250,000 in the final quarter of 2016. Meanwhile, average mortgage rates rose nearly half a point from 3.84 percent in the fourth quarter to 4.33 percent in the first quarter.

But mortgage rates have fallen since then, which will increase affordability for first-time home buyers, in particular. The 30-year fixed conforming rate today is 3.625 percent with a 1 point origination fee in California, which means fixed mortgage rates have returned to rates last available in the 1950s.

So, once again, interest rates are not rising with expectations of higher inflation. Inflation is not even showing up in housing prices. So let us hope this continues, even if the Fed does raise short term rates a third time in June, as it has hinted it would do.

Harlan Green © 2017


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Thursday, May 11, 2017

The Declining Treasury Yield Curve—Recession Looming?

Financial FAQs

We are basically at full employment with a 4.4 percent unemployment rate, which should tell us we are nearing the end of this growth cycle.
Econoday reports, “The total number of employed Americans, and this includes both the self-employed and those on payrolls, is 153.2 million and a new record. This total has been rising steadily since falling to a cycle low in December 2009 of 138.0 million. Doing the math here means that 15.2 million jobs have been added during this expansion. The upward slope has been steady and is showing no sign of letting up. The peak in the prior cycle was 146.7 million, hit in November 2007.”



So how do we know we have reached a peak in growth? The National Bureau of Economic Research that tracks growth cycles tells us by using 4 economic indicators: including unemployment, real personal income and real GDP growth (less inflation), and industrial production. Those indicators have already surpassed their last peaks that were reached in 2007, so the question is how much higher can they go before they reach this cycle’s peak.

It is possible the economy may continue to grow with Congress and the White House politically deadlocked and unable to pass any stimulus spending, but that would mean the private sector starts spending more of their $4 trillion plus in unspent profits they have been hoarding, rather than wait for the tax cuts that Republicans have been promising. But don’t bet on that bridge to nowhere, as the saying goes.

On the NBER’s faq page, they define the beginning and end of recessions. “We identify a month when the economy reached a peak of activity and a later month when the economy reached a trough.
The time in between is a recession, a period when economic activity is contracting. The following period is an expansion. As of September 2010, when we decided that a trough had occurred in June 2009, the economy was still weak, with lingering high unemployment, but had expanded considerably from its trough 15 months earlier.”

So June 2009 was identified as the end of the Great Recession (the trough in activity), which began in December 2007 (its prior peak). Calculated Risk’s Bill McBride has followed those NBER recession indicators, and as of April, 2015, they have all exceeded their past highs.

I believe the most important indicator has been personal income, which exceeded its past peak in 2012, but has fluctuated a bit since then.


Employment is also important, but has tended to lag the other indicators in predicting a recession. It didn’t peak until several months into the Great Recession, but is now 2 percent above its last peak.

All four recession indicators are now above their pre-recession peaks. The problem now is we and the NBER Business Cycle Dating Committee aren’t sure that economic activity tops out until months later when the NBER sees a sustained drop in activity, as their 2010 example showed. This past quarter’s meager 0.7 percent GDP growth is still growth, by the way.

So another indicator that might indicate a looming slowdown is the decline in slope of the so-called Treasury Yield Curve, which shows the difference between short term rates regulated by the Federal Reserve, and long term fixed Treasury yields determined by the bond markets—such as the 10 and 30-year Treasuries.

The difference between those 2 yields is basically the profit margin made by lenders that have to borrow at short term rates and lend at the longer term interest rates. It is no longer as steep as it has been, which means lenders become more restrictive, which shrinks available credit, always a sign of slower growth.

So, if the Fed continues to raise short term rates, and because of market uncertainty or low inflation long term rates don't rise from their lows, then it could mean a looming recession.  But that is a big 'if'.

Harlan Green © 2017

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Monday, May 8, 2017

TrumpCare--The Un-American Health Care Act

Popular Economics Weekly

It’s incredible. Why have House Republicans just voted for a health care bill that only does one thing in the words of MIT Professor Jonathan Gruber, co-designer of the Massachusetts single-pay healthcare program and Obamacare?

On Lawrence O’Donnell’s Last Word he states that it gives the wealthiest what could be the single largest tax cut in history—almost $1 billion for those earning $200,000 plus per year—but cuts benefits to everyone else.

And this is when 23 percent of Americans have pre-existing medical conditions. The answer in the words of Paul Krugman has to be pure greed. Tax cuts are more important than protecting Americans from loss of coverage due to pre-existing conditions and soaring premium for everyone but the youngest and healthiest among US.

It was also an attempt to make the President look good, regardless of his broken promises that Obamacare benefits wouldn’t be reduced. Trump doesn’t care who loses, in other words, so long as he doesn’t look like a ‘loser’.

But what does it do for the white blue collar male Trump supporters who have suffered most from their loss of jobs, and whose mortality rate due to drugs and suicides is double that of other developed countries that lived through the same Great Recession?

Graph: CBO

The CBO graph pictures the suffering of 45-54 year-old white working class males in our post-industrial age. The rising red line is USA males, the falling lines are white males in other developed countries with Sweden having the lowest mortality rate “for all causes”. Even US Hispanics (blue line) had a falling mortality rate.

The House wouldn’t wait for the Congressional Budget Office latest ‘scoring’ of the costs of the bill, which confirms that House Republicans weren’t even concerned about its effects on federal and state budgets, much less on how many would lose their coverage, if taken off Obamacare.

The Congressional Budget Office projections on earlier House attempts to repeal projected that the revised GOP bill would realize $150 billion in reduced federal spending through 2026, which is less than half of the $337 billion in deficit reductions that the CBO had estimated for the bill's first version, said a CNBC summary of the report.
“But the newer version, like the first, is expected to lead to 14 million fewer people having health insurance in 2018, and 24 million fewer insured Americans by 2026 than would be covered if Obamacare remained as law in its current form. And an estimated total of 52 million people nationally would lack health coverage by 2026 if the revised bill becomes law, according to the CBO's projection. However, if Obamacare remained in effect, 28 million Americans would not have insurance by that year, according to the CBO.”

It cuts almost all Obamacare benefits, including to childcare, Medicare and Medicaid; even employers’ health care plans by turning over implementation to individual states. This is basically returning healthcare to the broken system it was before Obamacare that made US the unhealthiest developed country.

There were 20 mostly moderate Republicans that didn’t vote for the bill. The defectors were primarily centrists who had trepidations about voting for the bill after the addition of an amendment to let states apply for waivers from certain Obamacare provisions that prevent insurers from charging sick people higher premiums and mandate which services insurance plans must cover, said the Washington Post.

What are the effects of 24 million losing their health insurance? The New York Times Charles Blow cites a 2009 study conducted by the Harvard Medical School and Cambridge Health Alliance: “nearly 45,000 annual deaths are associated with lack of health insurance,” and “uninsured, working-age Americans have a 40 percent higher risk of death than their privately insured counterparts.”

Republican House members seem to have no idea that President Trump is leading their re-election chances over a cliff—just so he won’t look like the loser he really is.

Harlan Green © 2017

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Saturday, May 6, 2017

April Employment Up, Q1 Consumer Spending Weak

Financial FAQs

Total nonfarm payroll employment increased by 211,000 in April, and the unemployment rate fell to 4.4 percent from 4.5 percent in March, reported the U.S. Bureau of Labor Statistics today. Job gains occurred in leisure and hospitality, health care and social assistance, financial activities, Business and Professional Services, and government.

Both the unemployment rate, at 4.4 percent, and the number of unemployed persons, at 7.1 million, changed little in April, says the BLS. But over the year the unemployment rate has declined by 0.6 percentage point, and the number of unemployed has fallen by 854,000.

 

That is progress, and probably why the Federal Reserve will raise rates again in June. It said in its FOMC press release of this week’s meeting that it left a key borrowing rate unchanged and dismissed a weak first quarter GDP growth as temporary, meaning it is still on track to raise interest rates at a gradual pace.
“The [Federal Open Market Committee] views the slowing in growth during the first quarter as likely to be transitory,” the statement said. Job gains were described as “solid,” as were the fundamentals underpinning the continued growth in consumer spending. Business fixed investment “firmed,” the central bank noted.
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) declined by 281,000 to 5.3 million in April. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find full-time jobs. Over the past 12 months, the number of persons employed part time for economic reasons has decreased by 698,000, a good sign.

That may be due to very strong growth in both the service and manufacturing sectors. The 16 non-manufacturing (service) industries reporting growth in April include Construction, Retail, Healthcare, Real Estate, Finance & Insurance. The only industry reporting contraction in April is Agriculture, Forestry, Fishing & Hunting.

And in manufacturing 16 of the 18 industries reported growth in April. All parts of the survey registered above 50 percent, meaning most sectors were expanding, signaling continued growth. “The New Orders Index registered 57.5 percent, a decrease of 7 percentage points from the March reading of 64.5 percent,” said the ISM Manufacturing report “The Production Index registered 58.6 percent, 1 percentage point higher than the March reading of 57.6 percent. The Employment Index registered 52 percent, a decrease of 6.9 percentage points from the March reading of 58.9 percent.”
So, business activity is still growing in most of the U.S. economy. Then why doesn’t’ this translate to higher economic growth? Q1 GDP expanded at just 0.7 percent, while Q4 2016 GDP growth wasn’t much better at 2.0 percent. The culprit was lower consumer spending in Q1.

There was a drop in exports, and increase in imports. In other words, consumers bought more from overseas that it produced in the U.S. So, consumers are spending, but it doesn’t help domestic production, and hence GDP growth, so that consumer spending rose just 0.3 percent for the most embarrassing annualized pace since 2009, said Econoday.


Unemployment is unusually low and consumer confidence unusually high making the results difficult to explain. The effect of seasonal adjustments are exaggerated during the winter and may very well be holding back the results. Yet even for a first quarter, this one was slow.

Harlan Green © 2017

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Wednesday, May 3, 2017

Housing Recovery Still Uneven

Financial FAQs

Fresh data from real-estate website Trulia show that just 34.2 percent of homes have returned to the peak levels registered before the onset of the recession in 2008, reports Marketwatch’s Andrea Requier. What’s more, Trulia estimates it could take until 2025 for a true national recovery in home prices.

That’s almost twice the length of the S&L housing crash that lasted from 1986 to approximately 2006. Why the difference? Because the Great Recession was much worse, with many more homes lost, and incomes for most Americans still below that time. The Great Recession exacerbated already record income inequality, in other words.
Sam Khater, deputy chief economist for CoreLogic, agrees, says Requier. “What’s unusual about this recovery is that it’s been lopsided. Wealth — home equity and financial equity — have recovered. Incomes have not. One-half of all households have participated in the massive run-up of stocks, two-thirds have participated in the gains from home ownership. The flip side is the inverse, the people who have not participated. How has their recovery been?”
 Not very good, as mortgage debt has barely dropped from recession highs. As Regions chief economist Richard Moody pointed out in a research note, 30 percent of all owner-occupied households have no mortgage debt at all, meaning that the 50 million households that do have mortgages have less than the 57 percent equity that’s presented in the flow of funds data from the Federal Reserve in December.

 “We are absolutely not out of the woods as far as home-value recovery is concerned,” Trulia’s chief economist, Ralph McLaughlin told MarketWatch. “The housing-market crash was pretty monumental. The scarring of the housing market has not gone away and will be visible for the indefinite future.”

That means some two-thirds of homes are still below housing bubble prices that prevailed in 2006-07. Three cities in California, Las Vegas and Tucson, Arizona have suffered the most, but two cities in Florida—Daytona Beach and Ft. Lauderdale—aren’t far behind.

More enlightened economic policies would help—such as universal health care, a major cause of poverty; more spending in education and the research and development of new products, which would increase labor productivity, one of the 2 major ingredients for higher growth. The other ingredient is a growing workforce, and if Republicans succeed in reducing immigration, which supplies most of new workers, it will also dampen growth.

The homeownership rate slid 0.6 percentage point to 62.9 percent in the second quarter, the Census Department said Thursday. Will the homeownership rate continue to decline? Good question. There are many reasons for lower levels of homeownership, as we know, including delayed marriages, higher student loan debt, flat incomes since the recession, for starters.

So unless more is done to boost incomes (e.g, higher minimum wages), to introduce tuition-free public colleges (only in New York at the moment), more progressive taxation, and other stimulus measures, homeownership will not be able to significantly contribute to future economic growth.

And a whole generation may be left out of the housing market.

Harlan Green © 2017




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Tuesday, May 2, 2017

Consumer Spending Down, Recession Looms?

Popular Economics Weekly

Wow! First-quarter GDP was paltry enough at 0.7 percent but consumer spending was even more paltry, at only 0.3 percent for the most embarrassing annualized pace since 2009, said Econoday. Unemployment is unusually low and consumer confidence unusually high making the results difficult to explain.


Could it be that nothing is happening in Congress and the White House on all those promised initiatives? The 5-month budget agreement left all spending priorities in place for the rest of this fiscal year (i..e., until September). That meant no money for a border wall, no defunding of Obamacare (as promised), or Planned Parenthood, or cuts in the EPA budget that protects our environment.

All the post-election euphoria for change hasn’t translated into actions, in other words. So, consumers may be keeping their powder dry, as their savings rate rose 0.2 percent to 5.6 percent.

Another worrisome indicator is almost no inflation, as core Personal Consumption Expenditure prices had the weakest showing in 16-1/2 years, according to Econoday. Core PCE prices fell 0.1 percent to take down the year-on-year rate by a sizable 2 tenths to 1.6 percent.

And if there’s no inflation, or falling inflation, it means there’s falling demand, which means falling profits. And that’s when a business cycle ends. So unless Congress and the Trump White House decide to stop playing with people’s minds on repealing Obamacare, or trying to pass a budget that cuts taxes for the wealthiest while cutting benefits to seniors and the sickest, we could see a looming recession.

The ineptitude of government is at the moment startling. The budget agreement leaves everything in place, which includes, thanks to the Washington Post’s Daily 202:

1. There are explicit restrictions to block the border wall, but final agreement goes further, putting strict limitations on how Trump can use new money for border security (e.g. to invest in new technology and repair existing fencing). Administration officials have insisted they already have the statutory authority to start building the wall under a 2006 law. This prevents such an end run.

2. Non-defense domestic spending will go up, despite the Trump team’s insistence he wouldn’t let that happen. The president called for $18 billion in cuts. Instead, he’s going to sign a budget with lots of sweeteners that grow the size of government. Mitch McConnell made sure $4.6 billion got put aside to permanently extend health benefits to 22,000 retired Appalachian coal miners and their families.

Nancy Pelosi made sure $295 million was included to shore up Medicaid in Puerto Rico. Chuck Schumer got $61 million to reimburse local law enforcement agencies for the cost of protecting Trump when he travels to his residences in Florida and New York. There is also another $2 billion in disaster relief money for states, which bought a couple votes. (Kelsey Snell, our lead budget reporter, has more examples.)

3. The administration asked to slash spending at the National Institutes of Health by $1.2 billion for the rest of this fiscal year. Instead, the NIH will get a $2 billion boost – on top of the huge increase it got last year. Republican appropriators who care about biomedical research, including Rep. Tom Cole (R-Okla.) and Sen. Roy Blunt (R-Mo.), delivered.Trump also failed in his efforts to cut money for other kinds of scientific inquiry. For example, he proposed defunding the Advanced Research Projects Agency–Energy. Instead, it is getting a $15 million increase.

4. Trump fought to cut the Environmental Protection Agency by a third. The final deal trims its budget by just 1 percent, with no staff cuts. As part of a compromise, the EPA gets $80 million less than last year, but the budget is $8 billion.

5. He didn’t defund Planned Parenthood. Despite the best efforts of social conservatives, the group will continue to receive funding at current levels.

6. The president got less than half as much for the military as he said was necessary. Trump repeatedly prodded Congress to increase military spending by $30 billion. He’s getting $12.5 billion, with an additional $2.5 billion if/when he delivers a detailed plan on how to defeat the Islamic State.

7. Democrats say they forced Republicans to withdraw more than 160 riders. These unrelated policy measures, which each could have been a poison pill, would have done things like get rid of the fiduciary rule and water down environmental regulations. On the other side of the ledger, this budget blocks the Justice Department from restricting the dispensing of medical marijuana in states where it has been legalized.

8. To keep negotiations moving, the White House already agreed last week to continue paying Obamacare subsidies. This money, which goes to insurance companies, reduces out-of-pocket expenses for low income people who get coverage under the Affordable Care Act. The Trump administration justifies giving up on this because of the potential to resolve the bigger issue by repealing Obamacare.

Need we say more?  If ideology trumps common sense; such as the promised $1 trillion infrastructure bill, we can see the confidence balloon also lose its air. Then watch out below, as I've said.

Harlan Green © 2017

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