THE MORNING PLUM:
President Trump spent some of the weekend on the phone with wavering GOP senators, pressuring them to get them behind the GOP repeal-and-replace bill. Meanwhile, Democrats and supporters of the Affordable Care Act are laying plans to escalate the pressure on moderate Republican senators who continue to worry, among other things, that the GOP bill’s deep cuts to Medicaid would result in tens of millions fewer people with coverage.
One key battleground right now is the question of whether GOP leaders will try to woo these moderates by getting rid of the GOP bill’s repeal of one of the ACA’s big taxes on the wealthy: the tax on investment income, which hits top earners. According to this useful Vox chart, at least six of the more moderate Republicans want more Medicaid money added. Basic math dictates that as long as the GOP bill cuts taxes enormously on the rich, the way to get that money back is to undo some of those tax cuts. Hence, some moderates want to restore that tax and put some spending back, so the bill doesn’t leave so many uninsured.
But here’s the thing: Even if Republicans do restore the investment tax, it could have a relatively minuscule impact on the overall loss of coverage the GOP bill would produce. Indeed, it might only restore a meager 22 percent of the Medicaid funding, according to one expert I spoke with.
A Tax Policy Center analysis found that more than two-thirds of the Senate bill’s tax cuts would go to earners in the top fifth of the income distribution. One of these tax cuts is accomplished by repealing the 3.8 percent tax on net income investments, which hits those over $200,000. The Senate GOP bill would cut spending on Medicaid by $772 billion over 10 years, leaving 15 million fewer covered by that program (22 million overall would lose coverage). Moderate GOP senators have expressed deep dismay about the Medicaid cuts, and GOP governors in states that have expanded Medicaid are pressuring these senators not to accept these cuts. Thus, some GOP senators have argued for restoring this tax, and one place the resulting revenue could be restored is Medicaid.
But how much would this actually accomplish? Probably not that much.
The Senate GOP bill’s repeal of the tax on investment would result in a loss of $172 billion in revenues over ten years, according to the Congressional Budget Office. Larry Levitt, a senior vice president with the Kaiser Family Foundation, points out to me that if you restored all of that money to Medicaid, that would only restore around 22 percent of the $772 billion in cuts to the program.
“Even if all the revenue from restoring the investment tax went to Medicaid, it would only cover 22 percent of the cuts, leaving 78 percent intact,” Levitt told me. Now, it’s possible that the GOP leadership might try to use those restored revenues to make subsidies for lower-income people on the individual markets more generous. It’s hard to say how that would impact the coverage numbers. We can’t know until we see their new proposal. But the bottom line is that restoring this tax would not put a huge dent in the GOP bill’s coverage loss. Many, many millions would still be losing insurance.
Meanwhile, even if Republicans did restore this tax, a good deal of the GOP bill’s tax cuts for the rich would still remain in place. Howard Gleckman, a senior fellow at the Tax Policy Center, which did the analysis finding that the Senate bill would largely benefit wealthy taxpayers, noted to me that other tax cuts that would stay in the bill, such as repealing the Medicare surtax, would largely benefit the top 20 percent, too.
“Even if Congress retains the net investment tax, a significant share of the tax cuts would still go to high-income households,” Gleckman told me. “This would be better than what they had, but it doesn’t fix the problem.”
Moderate Republicans do indeed have a problem on their hands. They have now conceded the GOP bill’s deeply regressive nature — they have conceded that the bill cuts enormous sums from health-care spending on the poor to finance big tax cuts for the rich. As Brian Beutler notes, by conceding this ground, they have made it harder for themselves to accept a small restoration of that spending via a limited restoration of the taxes on the wealthy, because this “places Republicans in the unenviable position of pinpointing just how many people should lose health care to finance specific tax cuts for the affluent.” In this scenario, the answer would still likely be: enormous numbers of people, numbering in the double-digit millions.
Of course, if this tax on investments is restored, and the money is plowed back into Medicaid or subsidies, or some combination of the two, it’s perfectly plausible that these moderates will claim that their objections went very far in mitigating the bill and the human toll it is likely to produce over time. But if so, when placed in the larger scheme of coverage loss that the GOP bill would engineer, that will basically be a scam.
* TRUMP HAS FAILED TO SELL HEALTH BILL: The Post reports that even some allies of Trump wonder why he has not done more to sell the GOP health bill:
The lackluster sales job, combined with recent controversial tweets and public statements targeting the media, has diminished the focus on the president’s leading legislative priority at a key juncture in the Senate, allies and analysts say. “It’s a mystery,” said Barry Bennett, a Republican operative who advised Trump’s campaign last year and remains close to the White House. “I don’t know what they’re doing.”
Yes, it’s a “mystery.” Or maybe the answer is obvious: Trump has no idea what’s in the bill, and there would be no way to sell it convincingly even if he did understand what’s in it.
* DEMS BLAST REPUBLICANS UP IN 2020 ON HEALTH CARE: Republican senators who face reelection in 2018, such as Dean Heller of Nevada, are already on defense over the GOP health bill. But Politico reports that Dems are also working to deter Republicans up in 2020 from voting “yes,” including Cory Gardner of Colorado, Thom Tillis of North Carolina and Joni Ernst of Iowa.
Keep in mind that these senators, all elected in the 2014 midterms, will be facing reelection in swing states in a presidential year. And some of the worst features of the GOP bill — such as the deep Medicaid cuts — are set to start kicking in that year, too.
* GOP SENATOR: TRUMP IS ‘WEAPONIZING DISTRUST’ OF MEDIA: Yesterday Trump tweeted video of himself body-slamming a person with the CNN logo superimposed on his face, triggering an uproar. Even Republicans such as Sen. Ben Sasse of Nebraska are condemning it:
“There’s an important distinction to draw between bad stories or crappy coverage and the right that citizens have to argue about that and complain about that, and trying to weaponize distrust. The First Amendment is the beating heart of the American experiment, and you don’t get to separate the freedoms that are in there.”
Well put. The larger context here is that Trump has been doing all he can to delegitimize the institutional role of the news media since the outset of his presidency.
* COMMITTEE TO PROTECT JOURNALISTS WEIGHS IN: The Committee to Protect Journalists has now condemned Trump’s tweet in a statement:
“Targeting individual journalists or media outlets, on- or off-line, creates a chilling effect and fosters an environment where further harassment, or even physical attack, is deemed acceptable,” Courtney Radsch, the advocacy director for the Committee to Protect Journalists, wrote in a statement on Sunday, adding that Mr. Trump’s comments may embolden “autocratic leaders around the world.”
As the New York Times delicately notes, the CPJ “usually focuses on countries where reporters’ freedoms are curtailed.” Nothing to see here, it’s all fine.
* WHITE HOUSE STILL BACKS FULL REPEAL: Marc Short, the White House director of legislative affairs, told “Fox News Sunday” that if the Senate can’t pass the GOP health bill, just voting for outright repeal should remain on the table:
“The way that we look at is to say if the replacement part is too difficult … then let’s go back and take care of the first step in repeal. … And then, at that point, if you’ve repealed it, you can come back with a replacement effort that could be more bipartisan.”
Once again, what this really means is that Trump and the White House have now fully endorsed leaving 32 million more people without coverage.
* WOULD MEDICAID CUTS EVER HAPPEN? Politico reports that some Republicans and Democrats believe the GOP bill’s Medicaid cuts (which would start in 2020) would ultimately get postponed:
There’s plenty of precedent for postponing pain, especially since one Congress’ attempt at fiscal responsibility may become a political liability to the next. … It is expected that those cuts would create huge gaps in state budgets, and governors would have to make up the money somehow — or else drop people or trim benefits. Those pressures have Republicans openly speculating that a future Congress would face immense political pressure to block or delay the cuts.
It’s true that these cuts could get undone later — another way in which postponing them for years seems designed to allow Republicans to dodge accountability for them now.
* A TRUMP TRADE WAR? VERY POSSIBLE: Some inside the White House want to start trade wars, and Paul Krugman looks at all the ways this is total folly. Among them:
It’s foolish to imagine that America would “win” such a war. For one thing, we are far from being a dominant superpower in world trade … trade isn’t about winning and losing: it generally makes both sides of the deal richer, and a trade war usually hurts all the countries involved. … Rapid growth in globalization has hurt some American workers, and an import surge after 2000 disrupted industries and communities. But a Trumpist trade war would only exacerbate the damage.
Yes, but this would apparently make Trump voters feel like they’re winning in some way. If you think that’s ludicrous, note that inside the White House, the actual belief is that the base will “love the fight.”