Tag Archives: republicans

Trump’s Tax Cut Plan Will… Pay… For… Itself!

Mother Jones

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Back during Steve Mnuchin’s confirmation hearings for Treasury Secretary, he said he was surprised that IRS staffing had gone down. This just reduces the number of audits they can perform, and therefore the amount of tax revenue they collect from high earners. Just think about it. If you increased hiring, it would pay for itself!

It was très adorbs. But Mnuchin is a quick learner, and he never brought that subject up again. Instead, he’s now talking about a much more acceptable kind of plan that pays for itself. The subject, of course, is tax cuts:

Treasury Secretary Steven Mnuchin said the economic growth that would result from the proposed tax cuts would be so extreme — close to $2 trillion over 10 years — that it would come close to recouping all of the lost revenue from the dramatic rate reductions. Some other new revenue would come from eliminating certain tax breaks, although he would not specify which ones.

“The plan will pay for itself with growth,” Mnuchin said at an event hosted by the Institute of International Finance.

The Congressional Budget Office will have a very different take on this, and their take is the only one that matters. So why does Mnuchin even bother with this tired old charade? Maybe so that Donald Trump can yell and scream about how the CBO is rigged when they say that his tax plan is a deficit buster? Maybe to give congressional Republicans an excuse to fire Keith Hall and install a new CBO director who will give them whatever numbers they want?

Who knows? Maybe it’s just reflex. While we wait to find out, however, here’s a chart showing income tax receipts following the five most recent big changes to tax rates. You can decide for yourself if tax cuts pay for themselves or if tax increases tank the economy.

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Trump’s Tax Cut Plan Will… Pay… For… Itself!

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Chart of the Day: Georgia’s 6th Congressional District

Mother Jones

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Jon Ossoff’s near win in the special election in Georgia’s 6th congressional district has spurred a lot of conversation about how this represents a huge electoral shift that may be a harbinger of disaster for Republicans in the 2018 midterms. Maybe. That’s a long time away, and a lot of things can happen between now and then. In the meantime, though, this chart from the Atlanta Journal-Constitution gives a pretty good idea about what really happened:

This is a district that’s been steadily shifting Democratic for years, in both presidential and congressional races. In 2000 it favored George Bush over Al Gore by nearly 40 points. In 2012 that gap was down to about 20 points. The 2016 election accelerated that trend, with Donald Trump squeaking by with only the barest possible victory. There was unquestionably both a long-term Democratic tailwind in the district and a Trump effect specific to 2016.

During that same period, congressman Tom Price went from a 40-point victory in 2006 (his first as an incumbent) to a 20-point victory in 2016. Remove the incumbency effect and it’s not surprising that Jon Ossoff cut that lead to a couple of points earlier this week. There’s a long-term Democratic tailwind and an incumbency effect specific to 2017.

If Ossoff wins the runoff—or loses a close race—it’s unclear exactly what this means. Is it a huge turnaround in electoral fortunes? Or a modest turnaround fueled mostly by the lack of an incumbent and only a little by the Trump effect? I suspect the latter, though I’m not quite sure what evidence we can bring to bear to sort this out. Come back in eight weeks and we’ll take another crack at it.

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Chart of the Day: Georgia’s 6th Congressional District

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Trump Is Now Threatening to Sabotage Millions of Insurance Plans

Mother Jones

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President Donald Trump is now threatening to wipe out health insurance for millions of people in order to make a political statement. In an interview with the Wall Street Journal Wednesday, Trump suggested that unless Democrats agree to his plans to dismantle Obamacare, he might use his executive authority to intentionally trigger a death spiral for the individual insurance markets.

Specifically, Trump threatened to stop making payments to insurance companies to reimburse them for subsidies that help offset the costs of deductibles and copayments for low-income people. Those subsidies are mandated by Obamacare; if the feds stopped reimbursing insurers for this expense, they would likely abandon the individual markets and leave millions without coverage.

The president seemed to acknowledge in the interview that halting the reimbursements would likely result in the healthcare markets collapsing, but he said he might go through with it in order to extract concessions from Democrats. “Obamacare is dead next month if it doesn’t get that money,” Trump told the paper. “I haven’t made my viewpoint clear yet. I don’t want people to get hurt…What I think should happen and will happen is the Democrats will start calling me and negotiating.”

Obamacare includes a host of mechanisms to make buying insurance easier and more affordable for people who don’t receive coverage through their employer and have to buy it on the individual market. The law primarily does this by offering subsidies—varying by income—to offset the costs of premiums for people who earn up to 400 percent of the poverty level. But the law was also designed to provide $7 billion per year in “cost sharing reduction” payments to insurance companies so that people below 250 percent of the poverty line would have lower deductibles and copayments.

These payments were explicitly included in the health care law, but through the convoluted quirks of legislative procedure, Republicans have alleged that Congress technically didn’t “appropriate” money for the program. The Obama administration went ahead and started making the payments anyway, and in 2014 House Republicans sued the White House, saying that the administration shouldn’t be able to spend that money. A federal district judge sided with Republican last year, and the Obama administration appealed.

After Trump’s inauguration, both the White House and Congress sought to stall the lawsuit, asking the courts to give them more time to figure out whether or not Obamacare will be repealed. When the GOP repeal bill failed last month, Trump was faced with a dilemma: He could order the his administration to keep fighting the House’s lawsuit, or he could ditch the appeal and end the reimbursement payments. It sounds like Trump may now be leaning toward the latter. In addition to his Journal interview, Trump reportedly has become active behind-the-scenes, as well. According to Politico, the president called Health and Human Services Secretary Tom Price and dictated a statement that he wanted the agency to release on the issue.

As Trump himself said, ending the program would be a disaster for Obamacare. It would cause insurance companies to flee the individual markets (which, in some parts of the country, already suffer from a lack of insurance options). And the remaining insurance offerings would jump in price. An analysis by the Kaiser Family Foundation found that premiums for a baseline plan would jump 19 percent if cost sharing disappears.

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Trump Is Now Threatening to Sabotage Millions of Insurance Plans

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Obamacare Is Doing Well, But Trump and Ryan Can Change That If They Want

Mother Jones

Today brings a couple of pieces of tentative good news for Obamacare. First there’s this:

The Trump administration says it is willing to continue paying subsidies to health insurance companies under the Affordable Care Act even though House Republicans say the payments are illegal because Congress never authorized them….The Affordable Care Act requires insurers to reduce deductibles and other out-of-pocket costs for certain low-income consumers. The “cost-sharing” subsidies, which total $7 billion a year, compensate insurers for these discounts.

….House Republicans sued the Obama administration, saying that the spending — in the absence of an appropriations law — was unconstitutional. A Federal District Court judge agreed and ordered a halt to the payments, but suspended her order to allow the government to appeal.

This is a huge deal. CSR payments are critical for insurance companies, and the Trump administration could have decided to stop defending the law and let House Republicans kill the payments by default. That could still happen, but it sounds like it won’t happen this year, at least. This was the single biggest bit of uncertainty facing insurance companies this year, and this announcement should ease a lot of their short-term concerns.

So with this temporarily out of the way, how does the overall Obamacare market look? According to Standard & Poors, profit levels for insurers are still too low, but they’re improving and the market seems to be in pretty good shape:

The U.S. ACA individual market shows signs of improvement, as most insurers’ 2016 results were better than 2015 results….2016 results and the market enrollment so far in 2017 show that the ACA individual market is not in a “death spiral.”

….We believe the continued pricing correction and network design changes, along with regulatory fine-tuning of ACA rules, will result in closer to break-even underwriting results, on average, for the individual market this year….As insurers continue to adjust their products and pricing, we expect some premium rate increase in 2018 as well. If it remains business as usual, we expect 2018 premiums to increase at a far lower clip than in 2017.

S&P’s biggest worry is Congress futzing around with things: “Every time something new (and potentially disruptive) is thrown into the works, it impedes the individual market’s path to stability.”

Two things are pretty clear. First, contrary to what folks like Donald Trump and Paul Ryan say, the Obamacare market is not on the verge of collapse. It’s working pretty well and is likely to get better in the future. But second, Trump and Ryan certainly have the power to put Obamacare on the verge of collapse if that’s what they want to do. Now we just have to wait to find out what they want to do.

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Obamacare Is Doing Well, But Trump and Ryan Can Change That If They Want

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We Still Don’t Know How Much Trump’s Victory Was About Race

Mother Jones

How much was race a factor in the 2016 election? It’s pretty obvious that Donald Trump explicitly appealed to racial sentiment more than any Republican presidential candidate in recent memory, but did it work? Did he pick up more votes from resentful, disaffected whites than any other GOP nominee would have?

At first blush, the answer seems to be no. Compared to Mitt Romney, Trump got a smaller share of the white vote and a bigger share of the black and Hispanic vote. That doesn’t support the idea that 2016 represented some kind of huge white backlash.

But there are other ways of looking at this. Here’s one from Phil Klinkner, a political science professor at Hamilton University. It’s taken from the latest release of the American National Election Survey:

This chart is pretty simple: it shows how much correlation there is between a person’s level of racial resentment and who they supported for president. In 2000, racial resentment was a weak predictor of who you voted for. In 2016 it was a strong predictor.

But this just adds to the haze. There are two reasonable ways of looking at this:

  1. Racial resentment has been a steadily better predictor of voting behavior for 16 years, with only a slight blip away from the trendline in 2012. Trump just happened to be the nominee in 2016, when it was bound to go up to its present level regardless.
  2. The trendline does inflect modestly upward in 2016. This might be because Obama bent it down a bit in 2012, or it might be because Trump bent it up in 2016.

Klinkner thinks race played a big role in the election. There’s no question this is true, but did it play a bigger than expected role? The two major parties have been splitting further apart by race for years, with Republicans becoming the party of whites and Democrats the party of non-whites. This means that to survive with an ever growing white base, Republicans have to cater to white resentment more and more. Likewise, Democrats have to cater to black and Hispanic interests more and more. This is a cycle with positive feedback, so it’s only likely to get worse.

Racial attitudes certainly played a bigger role in the election than in the past. But did Trump himself accelerate this partisan trend, or was he merely the beneficiary of it? That still seems like an open question to me.

Originally posted here:

We Still Don’t Know How Much Trump’s Victory Was About Race

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