Why the GOP May Skip a Budget This Year

By Yuval Rosenberg and Michael Rainey Deal or No Deal on DACA? Sen. Jeff Flake (R-AZ) [said]( Thursday that a bipartisan group of six senators has reached agreement on a deal that would protect the legal status of undocumented immigrants brought to the United States as children. The preliminary deal could potentially break a deadlock that complicated negotiations to keep the government operating after January 19, when the current funding bill expires. But the proposed compromise met with pushback from congressional Republicans and President Trump. The White House said Thursday afternoon that no agreement has been reached yet, and Marc Short, Trump’s director of legislative affairs, told reporters that [“there is a ways to go”]( in the negotiations. Trump asked the senators to share more details of their discussions with other lawmakers to ensure that any agreement they reach can be passed, Sen. John Cornyn (R-TX) [said](. Further complicating matters, other lawmakers are working separately on immigration deals of their own and House Republicans have laid out a [hard-line immigration vision]( that suggests how difficult it will be to bridge internal GOP differences. For today, then, it looks like no deal. Republicans May Skip a Budget This Year, Suggesting Entitlement Cuts Are Off the Table Congressional Republicans may skip trying to pass a budget this year — a decision that represents “a blow to the party’s weakened fiscal hawks” and effectively eliminates the possibility of a party-line push to repeal Obamacare or revamp social programs, [Politico reports](. Republican leaders discussed the possibility at Camp David last weekend, Politico says, with Senate Majority Leader Mitch McConnell arguing that, with a slim 51-vote majority, he might not be able to round up the votes to pass a budget let alone more controversial deficit-reducing cuts to welfare, Medicare or other safety net programs. Congressional budget resolutions don’t actually enact spending or tax laws. They just set non-binding targets for federal spending and tax bills — and send political messages about the majority party’s fiscal priorities. It’s become common in recent years for Congress to not pass a budget, but foregoing a budget this year would sharply curtail what GOP legislators can accomplish since it would preclude them from using the same reconciliation tool that allowed them to bypass the threat of a Democratic filibuster last year and push through a tax bill on party lines. It also would be a black eye for Republicans “who for years railed against Democrats when they avoided one of the most basic responsibilities of Congress,” Politico’s Rachael Bade and Sarah Ferris write. Conservatives looking to cut government spending aren’t happy about the idea, which is being discussed at a time when congressional leaders are already considering a budget deal that would increase outlays by $200 billion over two years, and an $81 billion disaster relief package with no offsets — not to mention the idea of [bringing back earmarks](. “It’s the latest sign of the decline of the party’s fiscal conservatives under Trump, who has shown little interest in cutting government spending and has begun to mold the party into his own image,” Bade and Ferris write. House conservatives are likely to still try to pass a partisan “messaging budget” calling for mandatory spending cuts that reaches balance in 10 years, even if it can’t pass the Senate and doesn’t lead to a unified fiscal blueprint that allows for reconciliation. [Share]( [Tweet]( [Forward]( Extending CHIP Would Actually Save Money: CBO The Congressional Budget Office produced a [new cost estimate]( for extending the Children’s Health Insurance Program, finding that a 10-year extension would produce net savings of $6 billion. An analysis by the CBO last week found that a five-year CHIP extension would cost $800 million, substantially less than previous estimates. How could spending money on children’s health care result in net savings in the long run? CBO says the alternatives are more expensive: “the federal costs of the alternatives to providing coverage through CHIP (primarily Medicaid, subsidized coverage in the marketplaces, and employment-based insurance) are larger than the costs of providing coverage through CHIP during that period.” The dynamics involved are complicated, and include the effects of eliminating the Obamacare individual mandate as well as reductions in the federal matching rate for CHIP that kick in over time, but the CBO’s conclusion is getting attention in Congress, which has been unable to agree on how to fund the program. House Energy and Commerce Committee Chairman Greg Walden (R-OR) [said]( he plans to bring a six-year extension of CHIP to the floor for a vote next week. “If we go to six years, it may have no cost,” Walden said Thursday, referring to the CBO analysis, which shows a breakeven point at about the six-year mark (see the table [here](. The extension could be attached to a short-term funding bill that must pass by January 19. Trump Opens the Door to Medicaid Work Requirements The Trump administration will allow states to create work requirements for some Medicaid recipients for the first time, in what The Wall Street Journal [calls]( “one of the biggest changes in the program’s 50-year history.” The new [guidelines]( issued Thursday by the Centers for Medicare and Medicaid Services, will allow states to create programs that require adults to prove they are working, in training, in treatment, volunteering, providing care or otherwise occupied in an acceptable manner in order to receive Medicaid benefits. Ten states are waiting to impose such requirements, and Kentucky may receive permission to do so as soon as Friday, according to [The Washington Post](. Creating work requirements for “able-bodied adults” on Medicaid and other social programs has long been a goal for Republicans, and some Democrats as well. Ways and Means Committee Chairman Kevin Brady (R-TX) [stated]( his party’s view plainly in 2016, as the House was considering changes to the Temporary Assistance for Needy Families program: “First we will expect work-capable adults to work or prepare for work in exchange for receiving government benefits.” Critics of the plan point out that the majority of Medicaid recipients are already working, and that work requirements do little to reduce poverty. In a [report]( released in December, the Kaiser Family Foundation found that “among the adult Medicaid enrollees who were not working, most report major impediments to their ability to work,” with high incidences of asthma and arthritis, among other ailments. No Budget, No Problem? Send us your thoughts on the budget talks, a DACA deal or anything else. Email yrosenberg@thefiscaltimes.com. And follow us on Twitter [@yuvalrosenberg]( and [@TheFiscalTimes](. Americans Still Don’t Like the GOP Tax Plan If Republicans are going to sell the public on their tax overhaul before the midterm elections, they've got a long way to go. From the [Quinnipiac University National Poll]( released Thursday: “Voters disapprove 52 - 32 percent of the recently enacted Republican tax plan. Support is 76 - 7 percent among Republicans. White voters with no college degree are divided, with 41 percent approving of the tax plan and 38 percent disapproving. White men are divided at 46 percent approve of the plan and 43 percent disapprove. Every other listed group disapproves.” “The tax plan will increase their taxes, 33 percent of voters say, as 24 percent say the plan will reduce their taxes and 37 percent say it will not have much impact.” “The wealthy will benefit most from this plan, 66 percent of American voters say, while 22 percent say the middle class will benefit most and 4 percent say low income people will benefit most.” News - [New Tax Guidelines Rely on Workers to Double-Check Their Paychecks]( – Washington Post - [The Fed Delivered $80.2 Billion in Profits to the Treasury in 2017]( – New York Times - [Mnuchin: Deducting Property Tax as Charity Is 'Ridiculous']( – Politico - [GOP Leaders Reject Gas Tax Increase After Trump Floats the Idea]( – Washington Post - [Walmart Announces Raises and Bonuses — Then Closes 63 Stores Without Notice]( – NBC News - [Forget the Tax Cut, Walmart's Pay Hikes Help the Bottom Line]( – Axios - [As Companies Give Bonuses, Prospect of Pay Gains Still Hazy]( – Associated Press - [Local Governments Won’t Say What They’re Offering Amazon]( – Associated Press - [Why Do We Care That Congress Does Not Pass Appropriations Bills On Time?]( – FedSmith - [Here Comes A $1 Trillion — Scratch That — $2 Trillion U.S. Federal Deficit]( – Investor’s Business Daily - [Dozens of Anonymous Shell Companies Are Lining the President’s Pockets]( – ThinkProgress - [Under Tax Bill, Business Golf Is About to Get a Lot More Expensive]( – Golf Views - [The Real Reason Health Care Is Bankrupting America]( – Dr. Kenneth L. Davis, CNBC - [This Is How Congress Can Avoid a Bad Budget Deal for Americans]( – Romina Boccia, The Hill - [Bring Back Earmarks]( – James Warren, U.S. News - [No, Mr. President, Earmarks Were Horrible, Keep Them Dead and Buried]( – Liz Mair, Daily Beast - [Earmarks Are Inherently Corrupt. Congress Has No Business Resurrecting Pork Barrel Politics]( – Tom Coburn, The Federalist - [We're Embarking on an Unusual Fiscal Experiment: High Deficit Spending at Low Unemployment]( – Jared Bernstein, Washington Post - [Walmart's Wage Hike Is Smart Even Without Tax Cuts]( – Sarah Halzack, Bloomberg Gadfly - [The Economy Tamed Health-Care Costs. That's Ending]( – Karl W. Smith, Bloomberg View - [Take a Deal for the Dreamers. Build the Wall]( – Washington Post Editorial Board Copyright © 2018 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website, thefiscaltimes.com. 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