Keeping to his campaign promises, President Trump has pushed House Republicans to repeal and replace the Affordable Care Act. However, Trump also urged Republicans to let Democrats handle the replacement of the program, noting that it’s an incredibly complicated piece of legislation. Now, Republicans have at long last provided a plan to do away with Obamacare. But that plan is already coming under fire from both sides of the aisle. What are the chances that it passes?
What Do We Know About the New Plan That Will Replace Obamacare?
For all the criticism Obamacare faces from those who find it too complicated, or chafe at being forced to pay for insurance even if they don’t want it, the plan provided health insurance coverage for 20 million Americans who otherwise would not have been able to have insurance. The new bill is already facing heated pushback from Democrats and Republicans alike. Surprisingly, many Republicans are opposing the plan on the grounds that it does not go far enough in gutting the ACA.
The new plan would offer individuals refundable tax credits to purchase health insurance and would not make insurance mandatory. The bill, called The American Health Care Act, would provide coverage to those with preexisting conditions, but allow insurance companies to ramp up fees and costs on slipped coverage, meaning that insurance companies could price out policyholders with higher premiums.
The AHCA would also alter Medicaid, giving each state a fixed amount each year from the government, which could potentially leave millions of seniors and people relying on Medicaid without coverage. In addition, the plan would also strip Planned Parenthood of funding for one year
According to House Speaker Paul Ryan, “The American Health Care Act is a plan to drive down costs, encourage competition, and give every American access to quality, affordable health insurance. It protects young adults, patients with pre-existing conditions, and provides a stable transition so that no one has the rug pulled out from under them,”
But will The American Health Care Act pass?
Watch the news from Wall Street Journal regarding the replacement of Obamacare:
Currently, Vice President Mike Pence is meeting with lawmakers to drum up support for the AHCA. But the truth is, it’s currently facing heavy opposition from both sides. In reality, the Republicans’ long-awaited repeal and replace may have to wait a while longer, as the American Health Care Act looks to be shut down before it can even get going.
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Featured image via PBS
Trump Advisor: Pelosi’s ‘Bodacious Plan’ Only Helps Her Left-Wing Interest Groups
As we mentioned Wednesday, House Speaker Nancy Pelosi unveiled the Democrats’ latest stimulus plan, and it carried a hefty $3 trillion price tag.
According to Stephen Moore, the bill seems to be nothing more than a way for Pelosi to bail out her favorite special interest groups.
Pelosi had mentioned to reporters last week that one of her motivations for being in politics is to make sure children are fed, saying “One in five mothers report that their children are not getting enough food. Three times the rate during the Great Depression.”
She added, “So in addition to putting money in people’s pockets – direct payments, unemployment insurance, some other tax credits, etc. – we really also have to put food on the table.”
Moore says Pelosi seems more interested in putting food on the tables of the wealthy than the poor she says she is motivated to protect.
Putting Food On The Wrong Table
Moore’s spending plan is a “goodie bag” that “pays off nearly every imaginable left-wing interest group,” she says. This includes teacher unions, trial lawyers, arts groups, environmental activists, postal employees and even super-rich Democratic donors.
He added, “This is a bodacious plan, preposterous in its financial irresponsibility, but the speaker and her colleagues see in this terrible disease the opportunity for a fiscal sweepstakes. She seized the moment.”
Amazingly, even a $3 trillion price tag isn’t enough for some of the more liberal Senators in Washington.
Bernie Sanders says the bill should be revised to “adequately” help Americans get through the crisis.
“[T]he Senate must improve this legislation if we are to adequately address the two most urgent needs facing working families right now: health care and economic security,” Sanders said in a statement.
Moore takes particular offense to certain items in the bill. He says none of them have anything to do with the coronavirus. He also believes that they don’t have anything to do with providing relief from the effects of the ongoing pandemic.
The list includes:
- Some $1 trillion for blue state budget repairs and pension bailouts.
- $50 million for “environmental justice grants to prevent, prepare for, and respond to coronavirus.”
- Restoration of the state and local (SALT) tax deduction for blue state millionaires and billionaires. This would be the biggest tax cut in history for the top 1 percent in income.
- $20 million for the National Endowment for the Arts and the National Endowment for the Humanities
- Extension of the $600 unemployment insurance supplement (on top of 100 percent replacement of wages through direct UI benefits. This is the scandal-ridden program that in some 30 states pays people more money to stay unemployed than to get back to work.
- $100 million for OSHA funding — we should be deregulating not increasing regulation
- Extending unemployment benefits and financial aid to illegal immigrants
- A postal service bailout.
Congressional Republicans and President Trump should “unanimously and loudly denounce this New New Deal scam,” Moore also says. He adds that these “would pad the wallets of those who are funded by programs that have zero to do with the virus itself. Coronavirus didn’t create the $100 billion Illinois and New Jersey pension deficits.”
What would help this country recover isn’t a massive payment to special interest groups. Instead, the country needs to come up with a solution for the working man, according to Moore. This includes “a payroll tax holiday that will most benefit low-income workers, deregulation, and lawsuit shields for workers and employers.”
GOP Wants Less Spending, More ‘Pro-Growth’ Measures In Stimulus Bills
With three massive stimulus packages already passed, GOP and Democratic lawmakers are starting to discuss what would be included in a potential, pro-growth fourth and even fifth round of stimulus.
There is some hesitancy on behalf of GOP lawmakers to continue spending money on relief measures. It exists with the tab already hitting $3 trillion and the federal deficit ballooning to record levels.
Many hope that as states slowly reopen, the boost in economic activity will reduce the need for additional relief.
“I just don’t think we need to act quite as urgently,” Texas Republican Senator John Cornyn, whose state started reopening this week, said. Meanwhile, other Republican Senators, including Missouri’s Josh Howley believe that we should do whatever is needed to avoid a recession. This would make any debate on spending seem trivial.
“If we enter a long-term recession or depression, the concerns we have about deficit spending now are going to look like a walk in the park,” Howley also said.
One idea that is gaining traction amongst Republicans is changing the focus of the aid packages away from simply spending money and instead look at “pro-growth” policies, although not every growth project will get the green light.
President Trump has mentioned infrastructure projects on numerous occasions. However, even those should get the axe, says Stephen Moore, a member of President Trump’s economic task force. Moore also recently disagreed with the president, saying there should be “no more spending,” even on much-needed infrastructure repairs.
On a Fox Business appearance, Moore said “There is a real movement among Republicans and conservatives around the country, especially taxpayer groups, no more spending. We’ve done almost $3 trillion of spending through the first couple of months of this, that’s enough. We don’t need more spending… government spending does not stimulate growth.”
Here are some other “pro-growth” tax measures that have been suggested to help boost our economic recovery without additional spending:
A Cut to Payroll Taxes
Moore said that Republicans are “rallying around” the idea of suspending payroll taxes as opposed to continued government spending.
“I think that’s going to be the big battle in the weeks ahead,” he also mentioned. “Do we do the payroll tax cut or do we have more government spending?” Moore then asked.
Suspending payroll tax would help incentivize employers to do more hiring by reducing their payroll costs. It will also give their employees a boost in their paychecks.
Full, Immediate Expensing
White House economic adviser Larry Kudlow recently said that one pro-growth policy he would like to see is an expansion of 100 percent immediate expensing.
“One-hundred percent immediate expensing across the board – plant, equipment, intellectual property, structures, renovations – in other words, if we had 100 percent immediate expensing we would literally pay the moving costs of American companies from China back to the U.S.,” Kudlow said.
Kudlow’s proposal would expand the type of deductible items beyond those allowed by the 2017 Tax Cuts and Jobs Act.
Deduction for Corporate Business Meals and Entertainment
President Trump has been in favor of bringing back the deduction for business meals and entertainment. It’s a way to help the restaurant industry. The deduction was eliminated as part of the Tax Cuts and Jobs Act.
Under the Tax Cuts and Jobs Act, Congress repealed the entertainment deduction. That caused confusion as to whether business meals were still deductible.
Limit Corporate Liability
Businesses start to reopen and bring back their employees. However, many owners expressed worry about what happens if their employees catch coronavirus while at work.
Providing a “blanket shield” to employers as they start to rehire workers is “essential to the recovery,” Moore told Fox Business. They want to have this in place so that they can avoid being sued every time a worker falls ill.
Treasury To Borrow $3 Trillion in Q2, Nearly Quintuple Previous Record
The Treasury Department announced it plans to borrow $3 trillion in the second quarter. They plan to use this to help pay for the various stimulus packages that have been enacted. The said packages aim to fight the economic fallout from the coronavirus pandemic.
That’s more than double what the Treasury borrowed in all of 2019. It is also five times larger than the previous single-quarter record. The year 2008 saw this record set in the depths of the financial crisis.
The Treasury also announced it will borrow $677 billion in Q3, bringing the full fiscal year total borrowing to an estimated $4.5 trillion. For comparison, it borrowed $477 billion in Q1 2020.
However, with the widespread expectations of additional stimulus or aid packages to fight the economic downturn, this amount will very likely balloon to even greater amounts in the coming months.
Borrowing Cash for Stimulus
Nancy Vanden Houten, an economist at Oxford Economics, said Monday, “Borrowing needs are skyrocketing as Treasury needs cash to fund stimulus measures and to compensate for a plunge in revenues caused by massive job losses.”
“Even before the pandemic there was going to be some increased funding needs going forward. But now all things are out the window,” said Mike Lorizio, senior fixed income trader at Manulife Investment Management.
The Treasury’s official statement reads: “The increase in privately-held net marketable borrowing is primarily driven by the impact of the COVID-19 outbreak, including expenditures from new legislation to assist individuals and businesses, changes to tax receipts including the deferral of individual and business taxes from April – June until July, and an increase in the assumed end-of-June Treasury cash balance.”
The Treasury is also acting as a backstop for the Federal Reserve. They issued guarantees for programs that are providing another $2.2 trillion in funding to businesses and households.
The offshoot of these aid packages is a stunning increase in our national debt. This increase happened in a very short period of time.
Increase in National Debt
Since March 1, the national debt has grown by $1.5 trillion to $24.9 trillion, a 6.4% increase. The budget deficit through the first six months of the fiscal year that ended in March was $744 billion. It is easily on pace to be the biggest deficit in U.S. history.
In mid-April the Committee for a Responsible Federal Budget projected that the budget shortfall will nearly quadruple to $3.8 trillion from $984 billion this year. The group added that the only other period in US history with a similar deficit-to-GDP ratio was while our country was heavily involved in World War II.
Fortunately for Treasury, it’s cheap to borrow money right now. Interest rates are effectively zero and will likely remain so for quite some time. It will continue as the economy tries to rebound from economic and job losses brought on by the coronavirus.
If and when rates move higher, it will become increasingly difficult to afford the interest payments on the debt. It will be even harder to find enough revenue to pay down the debt.
A report from Jefferies said, “At this point, Treasury needs to find every available avenue to raise as much cash as efficiently as possible.”
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