First, several readers commented that 24 million fewer Americans would have health insurance by 2026 rather than the 24,000 stated in my last blog.  Of course 24 million is correct.  No matter how many times I edit a blog I frequently miss something that should have been obvious to me.  Sorry about that.  If you are on my blogsite you can scroll down to read my previous blog on the American Health Care Act (AHCA).  The number has been corrected.

Rather than make my May 6 blog boringly long I left out some important points that I will pass along in this update.  They relate to certain provisions in the AHCA that will likely cause significant procedural issues in the Senate.  Representatives like Mark Meadows (R-N.C.), Tom MacArthur (R-N.J.) and certainly Speaker Paul Ryan (R-Wis.) should have realized the problems they were creating.  They can’t be totally ignorant of Senate rules.

As mentioned in several blogs, Republicans want to use the reconciliation process in the Senate to pass the AHCA.  That way they can pass it with a simple majority vote after 20 hours of debate and avoid a filibuster by Democrats that requires 60 votes.  But reconciliation has some restrictions.  The major one is the Byrd Rule, which is named for former Democratic senator Robert Byrd from West Virginia.

Among other things, this rule limits reconciliation to provisions that affect the federal budget, primarily spending or taxing.  And it limits consideration of other matters that are “extraneous” to the budget process.   Even some Republicans have pointed out ways the ACHA might run afoul of the Byrd Rule.  So it is highly likely that Democrats will challenge the following in the AHCA:

·         The MacArthur amendment that allows states to seek a waiver and opt out of the Obamacare’s regulations that require policies cover specific essential health benefits and require insurers to cover people with pre-existing conditions at the same rates as other insureds

·         The change to Obamacare that allows health plans to charge older policyholders five times what they charge young adults

·         The 30 percent surcharge on people who let their coverage lapse

·         The elimination of the Obamacare mandate on larger employers that requires them to provide health insurance to employees

·         The reforms to Medicaid, such as imposing work requirements and capping federal payments to states

This reconciliation will be a complex process.  It involves objections (points of order) by Democrats and rulings by the Senate parliamentarian.  It is likely that some of the above provisions will be stricken from the AHCA or require a vote of 60 members to remain.  In other words it could be a battle royal.

Several GOP senators have stated that the Senate will draft a separate bill using the AHCA as a guide.  Regardless, it is unlikely the AHCA will survive as it was passed in the House and could go back to the House for a second vote.

One report indicated that conservative Sens. Ted Cruz (R-Texas) and Rand Paul (R-Ky.) suggested that the parliamentarian’s rulings should be ignored if they get in the way of passing a GOP healthcare bill in the Senate.  But that suggestion evidently didn’t get much traction and it is not difficult to see why.

The GOP leadership has a justification for the AHCA.  I think they have advised their members to just keep repeating that Obamacare is failing and must be replaced.  But even if that were true, Obamacare could be fixed.  It should not amended by this monstrosity of a bill that primarily gives tax breaks to the wealthy while depriving millions of citizens of a health care plan.

or the past seven years Republicans have lambasted the Affordable Care Act known as Obamacare as if it were the worst law that was ever passed.  Starting in 2011 the Republican-controlled U.S. House passed over 50 meaningless laws trying to repeal it or cripple it; right-wing organizations spent hundreds of millions on grotesque TV ads trying to discourage people from seeking coverage under it; House Republicans caused a partial shutdown of the government in October 2013 trying to defund it; and every GOP candidate in 2016 vowed to repeal it.

After Trump won the election, Republicans in Congress were forced to start thinking about how they would fulfill their campaign promises.  Both the House and the Senate quickly passed a budget resolution for fiscal years 2017 through 2026 in January.  This would be the vehicle to dismantle Obamacare under the Senate’s reconciliation procedures with only a simple majority vote by Republicans.  The stage was set; all they needed was some language in a House passed bill.  This should have been easy, right?

But in an unbelievably inept process, the American Health Care Act (AHCA) was drafted by the GOP leadership behind closed doors with no input from Democrats and very little input from various factions of their caucus.  They knew Democrats wouldn’t support this bill and they should have known that House Freedom Caucus chair Rep. Mark Meadow (R-N.C.) and his 30 or so radical colleagues probably wouldn’t support it either.  What were they thinking?

Then the nonpartisan Congressional Budget Office report comparing the AHCA to Obamacare provided the following estimates — and the data was shocking:

·         14 million more Americans would be without health insurance in 2018.

·         24 million fewer Americans would have health insurance by 2026.

·         7 million Americans would lose their employer covered health insurance by 2026.

·         Medicaid funding would be cut by $880 billion over the next 10  years.

Due to the way the AHCA calculates its less generous tax credits based on age instead of income and location, the result would be a massive rearrangement of those who can afford health care insurance and those who can’t.  Coverage would be cheaper for younger, healthier people and much more expensive for older, typically less healthy people.   Primarily due to these statistics, the original AHCA didn’t even get to a vote in the House.

Trump initially said he was giving up on health care reform and moving on to tax reform.  But there was a reason he quickly reversed course and pressured House Republicans to press on and pass the AHCA; he needed it for tax reform.

Vice President Mike Pence was tasked with negotiating with Meadows and co-chair of the more moderate House Republican Tuesday Group, Rep. Tom MacArthur (R-N.J.).  MacArthur came up with the idea of allowing states to waive the Obamacare provisions that prevent insurers from charging higher premiums for pre-existing conditions and those that require policies to cover essential health benefits, like maternity and drug treatment.

States that achieve waivers can allow individual insurers to decide what constitutes a pre-existing condition and establish state standards for essential health benefits.  Although those with pre-existing conditions can’t be denied coverage, they can be charged more.  So waiver states would receive $138 billion over a 10-year period to help subsidize high risk pools where these folks can hopefully buy insurance.

The waivers turned off Republican moderates so another amendment was proposed to add $8 billion over five years to the state high-risk pool subsidies. This pitiful amount helped satisfy a few moderates and was enough to turn their no votes to yes.

Speaker Paul Ryan rushed the revised bill through the House without public input and even most Republican legislators didn’t know what was in the bill until the day they voted on it.  Some didn’t even know then.  Worse yet, the revised bill had not been scored by the Congressional Budget Office so those voting didn’t know its costs or its effects on insurance markets.  The process was pure politics, but they got it passed by one extra vote.

Most House Republicans were all smiles, even giddy with their victory.  Then a House leadership group was bused to the White House to meet with Trump in the Rose Garden.  After literally signing the death warrant for some Americans who will lose their health care under the AHCA, these Republicans celebrated.  Trump was ecstatic too; he finally got a major piece of legislation passed, if only by one chamber.  That was his major objective.

Now the AHCA moves on to the Senate where it will be significantly revised or replaced by a Senate bill.  It could be months before Trump gets legislation to sign — or maybe not.  This bill is the launching pad for reforming the tax system to benefit the wealthy, turning Medicare into a premium support program and dismantling the social safety net in the United States.  Republicans are eager to balance the federal budget and they will do it on the backs of the elderly and less fortunate if they can.

Obama wanted to solve a health problem with the Affordable Care Act; Republicans want to begin the process of enacting their radical agenda with the AHCA.  If the American people let them get away with this first step they will only have themselves to blame for what comes after.

Last December after being chosen by Donald Trump to be Treasury secretary, Steve Mnuchin was interviewed on CNBC.  He had this to say about Trump’s tax cut:  “Any reductions we have in upper-income taxes will be offset by less deductions, so that there will be no absolute tax cut for the upper class.”  Some commentators called this statement the “Mnuchin Test” for any tax plan.

Recently Treasury Secretary Mnuchin said that President Trump’s tax plan will “pay for itself.”  In government parlance a tax cut is called a “tax expenditure.”  Cutting taxes is like spending tax dollars on a government purchase except the dollars go to the taxpayer.  The cost of a tax cut is the amount by which it reduces revenues.  What Mnuchin said was that Trump’s plan will not reduce revenues.

It became clear when Mnuchin rolled out Trump’s one-page tax plan on Wednesday why he said it would pay for itself.  He believes this plan will spur economic growth, increase hiring and collect more revenue from businesses and individuals to offset the revenue lost by cutting taxes.  Needless to say, if that were true all politicians would want to cut taxes.  More jobs mean happier voters.

Mnuchin did not provide enough details to fully evaluate this plan.  Still, most experts have opined that it would greatly favor the wealthy and thereby violate the Mnuchin Test.  And some thought it would increase deficits by as much as $5 trillion over 10 years.  In my opinion it was a publicity stunt and not a serious proposal that deserves careful analysis at this time.

My research indicates that there is only one type of tax policy that arguably pays for itself and it is not a direct cut in taxes.  Rather it is a deduction that allows small businesses to offset income by the expense of up to $500,000 in new equipment purchased.  In effect this reduces the company’s taxes while the purchase of equipment enhances economic growth and creates jobs.  This tax policy creates a direct correlation between the burden of revenue lost and the benefit of increased economic activity.  House Speaker Paul Ryan’s tax plan includes this type of provision; Trump’s doesn’t.

On the other hand when tax rates are reduced for individuals or corporations it is difficult to predict what the beneficiaries will do with the extra money.  Individuals may put it in savings or invest it in China.  Corporations may increase dividends, buy back stock or invest in China.  Consequently the effect on the U.S. economic activity is far from certain.

Meanwhile, at the other end of Pennsylvania Avenue, Speaker Ryan has his own ideas on tax reform. He proposed a border adjustment tax that would put a 20 percent tariff on imports and provide an additional $1 trillion in revenue over the next 10 years.  This extra revenue would offset the revenue lost by reducing rates on individuals and corporations.  Ryan wants to insure that any tax plan passed by the House is revenue neutral so that it doesn’t increase deficits. 

Why is revenue neutral important?  Well, Republicans want to pass their tax plan in the Senate with a simple majority vote via reconciliation and avoid a filibuster that would require 60 votes. They also want their plan to be permanent.  In order for reconciliation legislation to be permanent, the Senate rules require that its provisions not increase deficits beyond 10 years.  Revenue neutral tax reform complies with these rules.

Ryan knows that Trump’s plan to lower the top corporate tax rate from 35 percent to 15 percent would result in increased deficits beyond 10 years, which would prevent it from being permanent.  But Mnuchin doesn’t seem to be concerned about that; he thinks a tax cut that only lasts 10 years like those of President George W. Bush is better than no tax cut.  This had to frustrate Ryan to no end. 

But adding to the deficits is a problem.  The Congressional Budget Office is currently projecting a deficit of $9.5 trillion over fiscal years 2018 through 2027.  Even if Republicans achieve a revenue neutral tax reform, the deficit projections will not change.  Consequently, in order to achieve the GOP goal of a balanced budget, federal spending must be drastically cut. 

How much would spending have to be cut?  Well, if the entire defense budget of $6.87 trillion were eliminated there would still be a 10 year deficit of over $2.6 trillion.  And if the entire budget for nondefense discretionary spending that funds the rest of the government were eliminated there would still be a deficit of $3.38 trillion.

If Trump gets his way with taxes, deficits will almost certainly increase; plus he wants billions of more spending for defense and $1 trillion for infrastructure.  Republicans in Congress love tax cuts and military spending but they also want a balanced budget.  Needless to say balancing the budget with Trump’s agenda will be impossible without draconian cuts to the mandatory spending programs like Medicare, Medicaid, Social Security and other so-called entitlements.

During President Obama’s administration Republicans made bold claims about turning Medicare into a premium support system and cutting entitlements.  Now they finally have a Republican president and control of Congress.  The question is, will they put their legislation where their mouth is?

I’m betting that they won’t have the political courage to do it. 

The Constitution of the United States proudly begins with “We the people.”  This cherished document was written in 1787 by educated men who had wealth and position. But they had the foresight to frame a government in this charter that was unique in a world dominated by kings and queens.

The Founders eschewed control by a monarchy so they created a representative legislature and provided for a president who answers to the people.  They fashioned the Bill of Rights designed to prevent an oppressive government that would stifle descent and impose a state religion.

These freedoms enabled the nation to grow and expand west in the first half of the 1800s. Transportation became critical for the efficient movement of goods and people so railroad tracks were laid from north to south and from east to west.  Great cities grew as the population swelled with immigrants and commerce boomed.  And when they reached the limits of the land, buildings had to reach for the skies, making steel a critical commodity.

In the first two decades of the twentieth century, railroad companies, steel companies and oil companies became the dominant entities.  The men running these corporations like Andrew Carnegie, J. P. Morgan, John D. Rockefeller and Cornelius Vanderbilt, were called “Robber Barons” as they amassed great fortunes by ravaging the country’s abundant natural resources, including its people.

Certainly these men get credit for helping to develop this great nation. But corporations are formed to enrich their shareholders.   They have no soul or conscience and there is nothing altruistic about them.   We know from numerous experiences that corporations cannot be trusted to do the right thing, either with the land or the people.

This fact was recognized during the early 1900s by Theodore (Teddy) Roosevelt.  He believed that government must be involved in protecting the nation’s natural resources and its citizens from corporate abuse.  When Teddy became President Roosevelt he established the national park system; and he championed antitrust laws to curb the excesses of the powerful monopolies that were being formed.

The website ushistory.org provides an excellent summary of the 1920s when America was experiencing a boom after World War I.  Businesses were making record profits and expanding at a rapid rate.  Unregulated banks were making loans to reckless investors who were “playing” the stock market.  Although corporations were rolling in cash, worker’s wages grew at a pitiful pace.  The richest one percent owned one-third of the assets.

At the beginning of President Herbert Hoover’s first term in 1929 Republicans held a significant majority in both chambers of Congress.  Due to the concentration of wealth at the top it is probably safe to assume that Congress was controlled by corporate America.  But the economy had become a giant bubble.

When the stock market crashed in October 1929 the United States and Europe were plunged into a deep, long-lasting depression.  Mr. Hoover’s minimalist approach to government intervention did little to spur the economy.  Yes, many banks closed their doors permanently and some corporations went under; but the real victims were the nation’s workers who suffered from massive, 25 percent unemployment.

In 1933 newly elected president, Franklin Roosevelt, pushed through ground-breaking legislation called the “New Deal,” which permanently altered the relationship between the government and the populace.  In 1935 he championed the Social Security Act to aid the elderly, the unemployed and the children.  And in 1938 the Fair Labor Standards Act to regulate child labor in factories and mills was finally passed.  Republicans loathed this government intrusion in business.

It took World War II to finally end the Great Depression.  Again, America prospered after the war as Europe struggled to rebuild.  Labor unions were strong because of Roosevelt but so were U.S. manufacturers.  Still, there was more to be done to alleviate poverty.  So in the 1960s social programs to aid the elderly and less fortunate like Medicare and Medicaid were enacted.  This legislation gave added security to a large middleclass.

Fast-forward to 2017 with Republicans back in control of the government.  Due in large part to the Citizens United decision by a conservative Supreme Court in 2010, corporations and “dark money” are again controlling Congress.  The share of assets owned by the wealthiest one percent of Americans has grown to over 40 percent.  While corporate profits have soared, wages have stagnated.  Since the “trickle-down” economics of President Ronald Reagan’s administration the middleclass has been slowly disappearing.

Now Republicans in Congress are eagerly eliminating safety and environmental regulations and are pushing to deregulate the banking industry.  They want to open up federal lands for mining and drilling; and they will cut federal budgets for agencies that protect both our citizens’ health and our national parks.

The GOP Obamacare replacement would put millions of Americans back on the uninsured rolls and cut billions from Medicaid funding.  But that is just the beginning.  Soon Republicans in Congress will propose cutting taxes for corporations and the wealthy, privatizing Medicare with a voucher system and cutting Social Security benefits.

When they are properly informed, the majority of Americans do not support these policies.  The people, however, hardly matter to these far-right conservatives.  They owe their allegiance and reelection to special interests and dark money.  And those Americans who aren’t rich — well, they will have very little voice in their government.

Welcome back to the 1920s.

Congress will be in their favorite status next week, recess, a.k.a. vacation.  After 85 days of President Donald Trump’s administration both Trump and the Republican controlled Congress are desperate to accomplish something. 

Clearly their preference was to first pass a repeal and replacement of the Affordable Care Act known as Obamacare and then tackle tax reform.  But intra-party wrangling over the GOP’s American Health Care Act (AHCA) prevented them from even taking a vote on this legislation. So what does that mean for tax reform?

Republicans want to pass both the AHCA and tax reform under a budget procedure in the Congressional Budget Act of 1974 (CBA) called reconciliation.  This procedure limits debate on reconciliation legislation to 20 hours and avoids a filibuster by Democrats.  But it has some drawbacks too. Due to a section of the CBA called the Byrd Rule, reconciliation legislation must not increase deficits beyond 10 years and it must not contain “extraneous” provisions that do not affect federal spending or revenues.

The AHCA would not repeal and replace Obamacare; it would simply amend it.  The Obamacare requirements that insurers cover people with preexisting conditions and that health care policies include coverage for certain basic health care benefits, among other provisions, do not affect federal spending or revenues.  Therefore any attempt by the AHCA to repeal those Obamacare requirements in a reconciliation bill would be invalid extraneous provisions.  That is why Sen. Rand Paul (R-Ky.) and others called the AHCA “Obamacare lite.”  And that’s why the Freedom Caucus would not support the legislation.  These Republicans wanted to eliminate virtually all the most popular benefits of Obamacare.

Speaker Paul Ryan (R-Wis.) wants to enact a revenue neutral tax reform plan that eliminates the estate tax and the Alternative Minimum Tax and lowers rates for the wealthy.  Revenue neutral means the plan will collect the same amount of revenue as projected under current law and will not increase the deficits.  This is important because in order for Republicans to use the reconciliation procedure to pass permanent tax reform the CBA requires that the legislation not increase the deficit beyond 10 years.  If it does, it must expire in 10 years like President George W. Bush’s tax cuts.  Ryan wants his tax reform to be permanent.

Repealing and replacing Obamacare with the AHCA before moving on to tax reform accomplishes two things for Republicans.  The AHCA would eliminate most of the Obamacare taxes and reduce revenues over the next 10 years by around $1 trillion.  And because the AHCA reduces spending by $1.15 trillion over that same period the revenue loses would be more than offset so currently projected deficits would be reduced by $150 billion.  Both of these results facilitate Ryan’s budget plans and his tax plan.

First, any time Republicans can claim to reduce budget deficits, they are thrilled.  But the AHCA would not only reduce deficits, it would cut $880 billion in Medicaid funding and virtually eliminate that program as an entitlement.  Make no mistake, Republicans are eager to wage all-out war on entitlements, including Medicaid, Medicare and Social Security.

Second, reducing currently projected revenues by $1 trillion would mean Ryan’s tax plan does not have to collect as much revenue to be revenue neutral.  The Congressional Budget Office (CBO) projects revenues of $42 trillion for fiscal years 2017 through 2026 under current law, which includes Obamacare taxes.  Ryan would much prefer to structure his tax plan to collect $41 trillion to be revenue neutral.  That enables him to give an even bigger tax cut to the wealthy.

Ryan also wants to include a border adjustment tax in his plan.  This tax would increase revenues by around $1 trillion over 10 years, which would also allow Ryan more flexibility to cut taxes.  Unfortunately for Ryan there are powerful lobbies like Walmart and other importers that are strongly opposed to this tax and I am not sure the White House supports it either.

Well, Republicans may make another attempt to pass a revised AHCA before the end of the recess or shortly thereafter and Trump seems to be in agreement.  But they may attempt to combine a revised AHCA and tax reform in a single reconciliation bill.  Or they may attempt reconciliation legislation with just tax reform and abandon health care reform.  Frankly, I don’t think they know what to do.

We probably won’t know what Republicans will try to salvage Trump’s first 100 days until they come back from recess and reconvene on April 25.  But immediately they must pass legislation to fund the government for the remainder of FY 2017 or cause a partial government shutdown on April 29. 

Wouldn’t it be ironic if the government shut down on Trump’s 100^th day in office?  And wouldn’t that be apropos based on what he has accomplished since he was inaugurated?     

On Friday President Donald Trump completed his 78^th day in office as the 535 members of Congress packed up and left Washington for their two-week Easter Holiday.  It didn’t seem to matter that critical legislation on funding the government after April 28 was unfinished or that very little had been accomplished since January 20.  Republicans certainly won’t have a lot to talk about at town hall meetings back home except the confirmation of Supreme Court nominee Neil Gorsuch.

Trump has signed 22 bills as president.  Eleven of these were noncontroversial measures like naming federal buildings.  The other 11 were roll backs of President Obama’s regulations, including the rule that prevented telecom and cable companies from sharing or selling their customers’ personal information without first obtaining permission.  I don’t think Republicans will brag about sacrificing their constituent’s privacy when asked about their successes. 

Of course the big failure in the House was the universally rejected American Health Care Act (AHCA), the Republican’s long touted repeal and replacement of the Affordable Care Act known as Obamacare.  For some moderate conservatives it went too far in eliminating health care insurance coverage and for the radical conservatives like Rep. Mark Meadows (R-N.C.) and his Freedom Caucus it didn’t go far enough.  Speaker Paul Ryan claims he will continue to try for consensus on this legislation but his chances probably aren’t very good.

Meadows was a self-described “developer” and sandwich shop owner in Western North Carolina. After being criticized by his party and his president for blocking the AHCA last week he is scrambling to make amends.  But in order to get his band of radicals to vote for a revised bill it will have to make health insurance even less affordable for those who need it most.  More moderate conservatives won’t agree to that and the Senate will present an even greater problem.  I think Meadows is in over his head.

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On March 30 Secretary of State Rex Tillerson inexplicably stated that Syrian President Bashar al-Assad’s fate was up to the Syrian people.  No doubt this pleased Russian President Vladimir Putin who is Assad’s ally in Syrian war crimes; but it was a reversal of a long held U.S. policy that advocates regime change in Syria.

Several days later the Syrian air force dropped bombs containing deadly sarin gas on the rebel-held Syrian city of Khan Sheikhoun.  Reports indicate that 86 civilians were killed, including 30 children and 20 women.  The timing of this attack coming so soon after Tillerson’s curious comment about legitimizing Assad’s regime makes one wonder if there was a cause and effect relationship.

Trump made a display of compassion for the victims and disgust with the Assad regime after seeing pictures of the carnage.  And now Tillerson is calling for Assad to be ousted.   But Trump also blamed his predecessor saying: “President Obama said in 2012 that he would establish a ‘red line’ against the use of chemical weapons and then did nothing.” 

While one can argue that Obama didn’t do enough about Syria’s chemical weapons, it is certainly not true that he did nothing.  Obama negotiated an agreement with Russia that was designed to eliminate all of Assad’s chemical weapons under international supervision.  Russia agreed to ensure the process.  In fact thousands of pounds of chemical weapons were removed and destroyed.  But the only actions that seem to impress Republicans are dropping bombs and killing people.  Obama tried to solve the problem without that.

Certainly the Syrian gas attack was horrific but Syrian and Russian bombings continue to kill women and children and pictures of their bodies, or what’s left of them, would be no less shocking and horrible.  So why isn’t Trump incensed about these atrocities?

Perhaps I’m cynical, but I believe that media manipulator Trump saw the poison gas attack as an opportunity to accomplish something his base could cheer, distance himself from Putin and give the networks a flashy issue to distract them from his miserable record and his Russian connections. 

Well, Trump didn’t solve the poison gas problem with a limited attack on one airfield, or accomplish much else for that matter.  The airfield was back in operation the next day.  And no doubt Assad has more chemical weapons and ample capability to deliver them, even on our troops fighting the Islamic State in Syria.   Sadly, Trump has no cohesive follow-on Syrian policy.

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Finally, Senate Majority Leader Mitch McConnell proved once again that he cares nothing about the Senate or the Constitution by ramming through the confirmation of Trump nominee Neil Gorsuch.  It is well documented that for eight years McConnell obstructed every part of Obama’s legislative agenda that he could, mainly with filibusters.  In 2010 McConnell stated that his main objective was to make Obama a one term president.  And last August he told a campaign gathering in Kentucky:  “One of my proudest moments was when I looked Barack Obama in the eye and said, ‘Mr. President, you will not fill this Supreme Court vacancy (with Merrick Garland).’”

McConnell has been a leader in making gridlock a fact of life in Congress and further politicizing the judiciary.  His actions have weaken our democratic process and I fear it will be a long time before Congress will return to the days when the minority party was the loyal opposition and compromise for the good of the country was possible.

President Donald Trump’s budget director Mick Mulvaney is a Tea Party Republican and a former member of both the far-right House Freedom Caucus and Republican Study Committee.  Together these two groups comprise the majority of Republicans in the U.S. House. During President Obama’s tenure they were the radical deficit hawks that refused to vote for debt limit increases unless the administration agreed to their spending cut demands.  In other words, they voted for catastrophic defaults on the nation’s debt.

With Mulvaney on the job I was expecting a lean Trump budget.  So it was no surprise that the fiscal year 2018 Budget Blueprint for discretionary spending that Trump released March 16 proposed drastic cuts in all federal spending except for defense, homeland security and veteran’s affairs.  Mulvaney claims that it simply mirrors what Trump promised the voters. 

But discretionary spending is only about 30 percent of the federal budget.  The big bucks are in the mandatory spending programs in Trump’s full budget for FYs 2018-2026 that is to be released in May.  If the full budget doesn’t include reductions in spending for Medicare and Social Security I will just be surprised; the Freedom Caucus and most Republicans in Congress will be outraged.

Still there is much more to be done with federal budgeting in the next few months as I have mentioned in earlier blogs.  By the end of April Congress must pass legislation that will keep the government running through the end of FY 2017 and a concurrent resolution on the budget for FYs 2018-2027.

The debt limit extension negotiated by then-Speaker John Boehner in 2015 expired on March 15, 2017.  So on March 16 U.S. Treasury Secretary Steven Mnuchin stopped borrowing to fund the government and urged Congress to increase the statutory debt limit as soon as possible.  He also implemented “extraordinary measures” that usually provide enough cash to fund the government for several months without borrowing. 

Typically in May Congress begins work on the 12 discretionary spending appropriations bills for the following fiscal year.  It seems likely that Trump’s Blueprint was intended to provide guidance for this process.  But even some Republicans are not really thrilled with the spending cuts Trump is proposing.    

The Blueprint’s 28 percent reduction in the State Department budget and the 31 percent reduction in the Environmental Protection Agency budget have been well publicized as being drastic and dangerous to national security and the environment.  But Trump’s budget cuts to other departments would be quite damaging too.  The Departments of Labor — Health and Human Services – Agriculture – Commerce – Education – Transportation — Housing and Urban Development and Interior would all suffer budget cuts from 12 to 21 percent.  I think cuts to education would hurt the most.

And Trump wants to totally eliminate funding for 19 independent agencies, including the Corporation for Public Broadcasting, the National Endowment for the Arts, the National Endowment for the Humanities and the Appalachian Regional Commission.  Even if Trump voters in West Virginia and Kentucky don’t care that much about the arts and humanities, they will suffer from the elimination of the Appalachian Commission that helps create jobs in their anemic economies.

Trump’s anti-science Blueprint would reduce the National Institutes for Health budget by 18 percent.  And it suggests that some functions of the all-important Centers for Disease Control would be block granted to the states.  It also reduces federal grants that support job training and shifts responsibility for funding these services to states, localities and employers.

Along with decimating the federal government, a key objective of the Blueprint is to wipe out most if not all funding to combat climate change.  This will likely mean that the Department of Defense would be prohibited from using its funds to predict how climate change might affect national security.  Other departments could be prohibited from gathering scientific data on climate change.  And federal support for clean energy projects that create thousands of jobs would be eliminated. 

Government funding for research contributes significantly to a stronger U.S. economy.  America won’t be made great again by weakening its leading position in science and technology.

Trump’s Blueprint emphasizes military might over diplomacy.  It provides an extra $54 billion for defense while cutting foreign aid and other international programs designed to prevent the spread of the Islamic State.  It also cuts funding for the United Nations, the organization that helps prevent regional problems from becoming global problems. 

Polls indicate that the majority of Americans support climate change initiatives, regulations to protect the environment, better education for their children and protection of our public lands.  Even the much maligned Affordable Care Act known as Obamacare is getting much stronger support these days.  But Trump’s policies oppose all of what the majority of we the people want.

There is no doubt in my mind that Trump’s Blueprint cuts many programs that benefit his supporters while weakening national security and damaging the economy.  But I am not sure that Trump even knows that.  He simply doesn’t understand how government works and doesn’t have the curiosity to learn.  Trump has a score card mentality; every executive order, memorandum and bill he signs is a point scored for him whether it is good or bad, helpful or hurtful.

Many voters were angry with the “establishment” last November but I don’t think that means they favor replacing it with policy disasters.

Speaker of the House Paul Ryan (R-Wis.) has been the darling of the beltway press for years, the blue-eyed conservative golden boy of Congress.  But on Friday he crashed and burned on national television.   After seven years of doing everything in their power to cripple Obamacare and label it a disaster, Republicans couldn’t come up with a replacement their caucus would accept.

Who knows what will happen to Ryan’s American Health Care Act (AHCA) but I don’t think we will hear much about it for some time.  And it is likely that President Donald Trump will attempt to sabotage Obamacare out of spite if he can.

The past two weeks of legislative fiasco highlighted a problem the GOP has had for a decade or more; it is actually three separate factions, conservatives, moderate conservatives and radicals.  Last week the radicals were in control.

The 50 or so members of the Tuesday Group are the moderate conservatives led by Rep. Charlie Dent (R-Pa.).  The 40 or so House Freedom Caucus members led by Rep. Mark Meadows (R-N.C.), plus some members of the Republican Study Committee, are the radicals.  Both groups can prevent Republicans from passing any legislation that requires all Republican votes and members of both groups opposed Ryan’s bill on Friday.

Many radicals, like Meadows, are in gerrymandered districts.  They are bullet proof at election time.  Why should they be worried about President Donald Trump whose latest approval ratings are under 40 percent?  Even the conservative Koch brothers thumbed their nose at Trump by offering campaign funds to any Republican that voted against the AHCA.

So where does Ryan go from here?  Trump wants to move forward on to tax reform, infrastructure legislation and building a border wall.  But remember, Congress has a lot to do in the next few months.  Government funding for the remainder of fiscal year 2017 must be legislated by the end of April and the House must reach agreement with the Senate on a concurrent budget resolution for FYs 2018 through 2027.  Plus Congress must raise the debt limit no later than the end of August and they must pass 12 appropriations bills for FY 2018 before the end of September.

Well, Meadows and his merry band of naysayers are salivating in anticipation of the budget and debt limit process, supremely confident after having scuttled the AHCA.  Make no mistake; their primary objective is to cut federal spending to the bone and balance the budget.  Consequently they will have little enthusiasm for spending billions to build a border wall or voting for infrastructure legislation if it involves government money.

Trump proved he is in over his head a few weeks ago when he said “Nobody knew health care could be so complicated.”  Well, he is about to find out that health care complexity is just the beginning.  If he thinks tax reform will sail through Congress by August he could be sadly disappointed.  (And losing the battle on health care won’t help.)

So what is the connection between the Obamacare replacement and tax reform?  According to the Congressional Budget Office (CBO) the final AHCA legislation repealed most Obamacare taxes and reduced federal revenues over 10 years by around $1 trillion.  It also reduced federal spending by $1.15 trillion over the same period.

The current CBO projection of revenues (the baseline) for FYs 2018 through 2027 is $43 trillion, which includes Obamacare taxes.  The AHCA would have reduced baseline revenues to approximately $42 trillion.  Ryan wants his tax code reform to produce the same revenues as the current tax code so it won’t increase deficits.  Now he must recalculate his tax proposal to collect $43 trillion instead of $42 trillion, which won’t be an easy task.  In fact, some Republicans are beginning to believe that tax reform — instead of just adjusting rates and deductions — will not be possible.

The current CBO baseline spending for FYs 2018 through 2027 is $52.4 trillion, which will result in a deficit of over $9.4 trillion.  The budget produced by the Republican controlled House last April slashed spending by $6.5 trillion and projected a balanced budget within 10 years.  Obamacare repeal was a huge chunk of their spending reductions.  Now that key part of their plan is gone, at least for the upcoming budget process.

A federal budget is a numbers game.  How much will we collect and how much will we spend.  The difference is either a surplus or a deficit.  Ryan’s health care bill provided Republicans with an $839 billion reduction in one of their favorite targets, Medicaid.  This spending cut was to be the spring board in up-coming budget negotiations to turn Medicare into a premium support program, cut Social Security and slash other so-called entitlements.  That key element of their plan has been eliminated too.

So the wreckage of last week’s legislative failure leaves a weakened Speaker Ryan with an energized Freedom Caucus and numerous funding deadlines where the negotiations will be difficult.  Trump could grow impatient because he doesn’t understand the process and turn on Ryan.  Some of his advisors already have.

The budget blueprint for FY 2018 that Trump submitted to Congress on March 16 appalled the Democrats and even some Republicans quipped that it was “dead on arrival.”  It looks like Trump’s first 100 days could end up being the biggest flop in modern presidential history.

Footnote:  I always take some flack when I throw a lot of numbers at my readers.  But folks, if we don’t understand some numbers the politicians can tell us anything and we have no way of knowing what they are saying.

It has been years since Republicans in Congress have been forced to govern.  All of their efforts since 2009 were focused on obstructing everything that President Barack Obama wanted to accomplish.  In fact that is all some of them have known since a large percentage were elected in 2010 and later.    

The Affordable Care Act known as Obamacare was their main issue in 2010.  So after the GOP took control of the U.S. House in 2011, Republicans wasted hundreds of hours trying to repeal it.  And even when they finally got a repeal bill on President Obama’s desk, they knew he would veto it.  Obstruction was all so easy and there were few consequences.

Republicans and their billionaire backers like the Koch brothers spent so much time and money denigrating Obamacare that repealing it became their leading campaign promise.  Of course presidential candidate Donald Trump hopped on that band wagon effortlessly and bragged that he had a cheaper, better health care program that would cover everybody.

Well, after seven years of promises to repeal Obamacare and lying about how bad it is, Republicans finally have their chance with President Donald Trump.  But lies do not translate into effective policies and they are woefully unprepared for the challenge. 

Former senator Judd Gregg (R-N.H.), who was involved in the battle over the Affordable Care Act in 2010, has been quoted regarding the Obamacare replacement as saying: “The Republicans are in an impossible position.”  “Most of the people who are in opposition to this have never governed, don’t know how to govern and don’t want to govern.”

Trump, Speaker Paul Ryan (R-Wis.) and other conservatives have desperately tried to convince Americans that Obamacare is not only a disaster but a failing disaster.  That way they can claim that any plan they devise will be an improvement.  But across the country those who have benefited from Obama’s health care program and those who understand its worth don’t substantiate these claims.

No doubt Ryan knew he was in a tough spot when he started fashioning what some are calling Ryancare. He has a loose coalition of gun-rights advocates, anti-abortion evangelicals and Tea Party conservatives in his caucus.  Those few moderate conservatives that still survive in the GOP really have no significant voice in Republican policies.  So the American Health Care Act (AHCA) that Ryan rolled out on March 6 that was designed to fit somewhere between what ultra conservatives wanted and what the rest of the party might accept totally missed the mark.

The 40 or so members of the far right Freedom Caucus chaired by Rep. Mark Meadows (R-N.C.) want Obamacare repealed with little or no tax credits and no Medicaid expansion.  On the other side there are a number of Republican governors whose states expanded Medicaid and the moderate conservatives, some of them in blue districts and states.  They see the downside from throwing millions of Americans back onto the ranks of the uninsured and don’t want to “own” this legislation come election time.

I don’t think Ryan knows where to turn.  If he satisfies the governors and moderates, the Freedom Caucus and other far right conservatives will block the AHCA.  If he yields to the repeal-or-nothing crowd, the AHCA will fail in the Senate even if it passes in the House.  A number of Republican senators have already stated flatly that it won’t pass in the Senate and some probably hope it never passes in the House.  What is poor Paul to do?

Well I think he has no choice but to tough it out with only minor changes like adding a work requirement for able-bodied adults who receive Medicaid.  He can claim that the AHCA is the best that can be accomplished; he can tell his caucus that it’s either the AHCA or Obamacare; and he can remind them of their promise to rid the nation of government controlled health insurance.  This is probably the best he can do, but will it succeed?

So what happens if the AHCA fails?  Will Trump issue another executive order to insure that Obamacare implodes or direct Secretary of Health and Human Services Tom Price to further undermine it.  Trump has stated several times that Republicans should just let Obamacare go into a death spiral and then blame the Democrats.  But who except strong Trump supporters will fall for that?

And what will happen to tax reform that depends in part on repealing Obamacare taxes?  After failing to replace the hated Obamacare, how hard will it be to push a massive tax cut for the wealthy through Congress? 

On top of that, funding for the government runs out at the end of April and raising the debt limit (which Republicans hate) will be required before September if not earlier.  Republicans have a lot to accomplish in a short amount of time but they are hung up on an Obamacare replacement by their own design.

We are almost 60 days into Trump’s chaotic administration and not much has been accomplished.  Trump is spending millions of taxpayer dollars on numerous weekend ego trips to Mar-a-Lago while in Washington important government positions remain unfilled, Congress is investigating scandals involving Trump’s connections to Russia and Republicans are battling Republicans. 

Will this administration and the Republican controlled Congress ever be able to get their act together and show they can govern?  I don’t think they know how.

The Affordable Care Act known as Obamacare is a very complex law that has numerous taxes, regulations and government subsidies, all of which Republicans hate.  In fact the vast majority of them want to simply repeal the law.  But political pressure from 20+ million Americans who would lose coverage without Obamacare caused them to come up with a replacement.

So last Monday House Republicans rolled out their American Health Care Act (AHCA).  The House and Senate conservatives who oppose it call it “Obamacare-lite.”

The GOP leadership is rushing the AHCA through Congress before the Congressional Budget Office has determined its cost and its effect on the number of individuals insured.  Of course the more people who are insured, the cheaper insurance is for everybody.  That was the whole idea behind Obamacare.  So I was eager to analyze how the GOP plan differs from Obamacare and here is what I discovered:

Individual and Employer Mandates – The AHCA repeals Obamacare’s mandates and its penalties for not having health insurance.  This will cause some younger, healthier individuals to exit the market.

Subsidies for out-of-pocket expenses – In 2020 the AHCA repeals Obamacare’s cost-sharing assistance that helps low income families pay deductibles and co-payments.  This increase in out-of-pocket costs could make their policies unaffordable.

Premium subsidies – Obamacare provides tax credits to middle-income Americans on a sliding scale to help pay premiums.  These credits are based on income, age and local health insurance costs.  The AHCA uses age instead of income to grant a flat tax credit amount for individuals earning less than $75,000 and households earning less than $150,000.  A person under 30 would receive a maximum subsidy of $2,000, a person age 40 would receive $3,000 and those over 60 would receive $4,000.

These less generous subsidies based solely on age will no doubt reduce the number of participants in the health insurance market.  And they will penalize older, poorer individuals in high premium markets.  According to the Kaiser Family Foundation’s interactive map, in 2020 a person in Henderson County, NC aged 60, earning $30,000 per year, would lose $10,160 in tax credits under the AHCA.  While the same 60 year old in states like Washington and Massachusetts might lose less than $1,000 in many cases.

Medicaid expansion – Obamacare expanded Medicaid to include some 11 million people in 31 states.  The AHCA would keep Medicaid expansion and continue federal funding as promised under Obamacare for two more years.  Then in 2020 it would cap federal funding per Medicaid enrollee based on state Medicaid spending in fiscal year 2016, with inflation adjustments thereafter.

According to the Center on Budget and Policy Priorities the AHCA formula will shift $370 billion of Medicaid’s costs to the states over the next 10 years.  Some states may have to ration care, perhaps having to decide on who lives and who dies.  Nursing homes and hospitals with emergency rooms would no doubt suffer significant revenue loss.

Tax-Free Health savings accounts – The AHCA would almost double contribution limits in 2018 to $6,550 for an individual and $13,100 for a family.  But those who need this law probably can’t afford these contributions and may not even pay much in taxes.

Older Americans pay higher premiums – Obamacare allows insurers to charge older insureds three times more than younger insureds.  The AHCA allows five times more.  This provision will no doubt price many seniors out of the market.

Other provisions in both Obamacare and AHCA – Obamacare and AHCA both require insurers to accept those with preexisting conditions, allow young adults to stay on their parents’ plan until age 26, require insurers to offer 10 essential health benefits and prohibit caps on annual and lifetime coverage limits.

Obamacare taxes – The AHCA repeals most of the tax provisions in Obamacare that were designed to help offset the cost of providing subsidies to lower income individuals.  The Joint Committee on Taxation in Congress has estimated that this repeal will reduce federal revenues by almost $600 billion over 10 years.  So seniors get higher premiums; the wealthy get lower taxes.

Planned Parenthood and Abortions – For one year the AHCA prohibits funding to organizations that primarily provide reproductive health care, which will effectively defund Planned Parenthood.  It also prohibits beneficiaries from using subsidies to purchase insurance that covers abortions except in the case of rape, incest, or life-threatening complications.

The American Medical Association has called the AHCA “critically flawed” and it is opposed by the AARP.  Major physician’s groups have said they have serious issues with or outright oppose the plan.  But I don’t think most Republicans are worried about opposition from health care organizations.  The Koch brothers and various right-wing groups also oppose their replacement bill and that’s who they fear the most.

Republican controlled states are among the poorest in the nation and have the most to lose with an Obamacare replacement.  And President Donald Trump’s promise that “his” Obamacare replacement will be better, cheaper and cover everybody certainly won’t be fulfilled by the AHCA.  Yet I wonder if low and middle-income Trump supporters and Republican voters even realize how badly this law will hurt them.

President Harry Truman probably said it best:  “How many times do you have to get hit over the head until you figure out who’s hitting you.”  Of course he was referring to Republicans.

Note:  Click on the link interactive map above to determine tax credit differences in other state counties.