Trump Wants $15B in Spending Cuts — Half from Children's Health Care

Plus, an early read on Obamacare premiums for 2019 By Yuval Rosenberg and Michael Rainey Trump Administration’s Spending Cut Plan: $15 Billion — with More Coming The Trump administration’s proposed package of “rescission” spending cuts meant to quell conservative anger about rising deficits will be a bit bigger than previously expected. [The Washington Post]( and [Politico]( report that the administration will ask Congress for $15 billion in spending cuts, up from a reported $11 billion last week, but still much smaller than the $30 billion to $60 billion originally floated. The proposed cuts involve more than 30 programs, according to the Post, and will — for now — target only unspent funds from years past rather than money included in the $1.3 trillion spending bill passed earlier this year. The cuts outlined by the Post include: - $5 billion from the Children’s Health Insurance Fund (CHIP), which provides health care to low-income children. The White House told the Post the ability to use this money expired in September - $2 billion from CHIP’s Child Enrollment Contingency Fund, which is supposed to preserve funding in case enrollment is higher than expected. A senior administration official told the Post that states aren’t expecting to see that kind of surge because of the strength of the economy, among other factors. - $800 million from money provided under the Affordable Care Act in 2010 to test innovative payment and service delivery models - $133 million from a railroad unemployment program that expired in 2012. Once the White House sends the rescission request to Congress, lawmakers will have 45 days to vote on it, with a simple majority required for it to pass. This package of cuts is the first of several promised by the White House, Rep. Mark Walker (R-NC), head of the conservative Republican Study Committee, told the Post. “I hope it’s never painted that this is just symbolic or a political gesture,” he said. The White House is reportedly looking at other cuts that would involve funds approved as part of this year’s spending deal. But the current proposal, if approved, represents less than 0.4 percent of total government spending this year, according to the Post. Republicans in Key Races Turn Quiet on Tax Cuts So much for the Republican plan to aggressively sell the tax cuts leading up to the midterm elections. [Reuters’ David Morgan reports]( “The most vulnerable Republican incumbents in the tightest congressional races in the November elections are talking less and less about the tax cuts on Twitter and Facebook, on their campaign and congressional websites and in digital ads, the vital tools of a modern election campaign, a Reuters analysis of their online utterances shows.” Overall, the number of tax messages from Republicans in those key races has fallen by an average of 44 percent since January, and by as much as 72 percent in some cases. The analysis comes with a few caveats, though. Reuters did not include candidates’ emails, direct mail, private conversations or stump speeches in its tally of tax mentions. And conservative groups like those backed by the Koch Brothers are still spending millions to tout the new tax law. We’ve also still got about six months to go before Election Day, so the Republican tax talk could still ramp up significantly — though some polls show voters aren’t as enthused about the tax law as Republicans might have hoped. “Let me be very clear, our campaign moving forward will be based on lower taxes and less regulation,” Sen. Dean Heller, whose seat is considered to be the most vulnerable among GOP senators, told Reuters. “The trend you’ve seen in the first quarter of this year, I assure you, is not going to be the trend over the next six months.” Heller has continued to promote the GOP overhaul in his online messages, but his tax-related messages have fallen by 44 percent since the end of January. Happy Monday! We're excited to see what LeBron James does tonight. But we're just as excited to get your feedback and story tips. Really! Email yrosenberg@thefiscaltimes.com. And be sure to follow us on Twitter [@yuvalrosenberg]( and [@TheFiscalTimes](. Business Investment Is Looking Up, but the Tax Cuts Aren’t a Big Factor About a third of purchasing and supply executives say they plan to increase capital expenditures in 2018 compared to 2017, according to the Institute for Supply Management’s [semiannual forecast]( released Monday. Manufacturers expect to increase their capital spending by about 10 percent on average in 2018, a significant rise from the 2.7 percent bump predicted at the end of last year. Non-manufacturers expect to see a 6.8 percent increase in spending, down slightly from the 7 percent predicted in December. The most frequently cited cause for the enhanced capital spending in the ISM survey was the strong economy. Of the 35 percent of manufacturing executives who said they have increased their spending plans in the last six months, nearly 70 percent cited the “general business outlook.” Just 14 percent cited the tax bill that was signed into law in December. Among the 31 percent of non-manufacturing executives who plan to increase capital outlays, 58 percent cited the business environment, while 19 percent cited the tax overhaul. Early Signs Point to Obamacare Premiums Soaring Next Year Health insurers are starting to file their rate requests for 2019 and the early indications from Virginia and Maryland — the first states to make the information public — suggests that premiums of Obamacare plans are set to surge, according to [Bloomberg](. Most insurers in those two states requested double-digit rate increases for Affordable Care Act plans, with one company — CareFirst — asking for a 91 percent increase on a particular coverage option in Maryland. Insurers in other states will be filing their rate requests with regulators between now and late July. The Obamacare Mandate That Could Produce $12 Billion in Fines Republicans effectively eliminated the individual Obamacare mandate in the tax package signed late last year. Although the new regulation reducing the mandate penalty to zero doesn’t take effect until 2019, President Trump has cited the rule change as a victory over the health law so many conservatives oppose. “Essentially, we are getting rid of Obamacare. Some people would say, essentially, we have gotten rid of it," Trump told a crowd in Michigan two weeks ago. However, many parts of the Affordable Care Act are still in effect and will continue to operate even after the individual mandate is eliminated in 2019. In particular, the employer mandate, which requires companies with more than 50 employees to offer health benefits or face fine of roughly $2,000 per worker, will continue to play a significant role in the Obamacare system. The Congressional Budget Office estimates that the mandate will produce more than $12 billion in fines in 2018 alone. Some conservative groups are pushing lawmakers to stop enforcing the employer mandate, but the IRS is still working to enforce the law. According to [The New York Times]( Monday, the IRS is sending out notices to more than 30,000 businesses that have failed to comply. Trump Administration Rejects Kansas Plan for Medicaid Lifetime Limits The Trump administration said Monday that it will not approve Kansas’ request to impose a new lifetime limit on Medicaid benefits. “We seek to create a pathway out of poverty, but we also understand that people’s circumstances change, and we must ensure that our programs are sustainable and available to them when they need and qualify for them,” Centers for Medicare and Medicaid Services Administrator Seema Verma [said](. The background: Kansas is one of five Republican-led states looking to cap the amount of time a resident could be covered by Medicaid. The state had sought to create a three-year limit. Democrats had questioned the legality of lifetime limits and argued that creating arbitrary caps on coverage would be a [cruel]( blow to low-income Americans who might need the health care safety net. And some health care providers in Kansas [had warned]( that a lifetime limit would raise the state’s uninsured rate and lead to higher uncompensated costs for hospitals. Why it matters: The Trump administration and Verma have allowed states to make some sweeping changes to Medicaid, including the introduction of work requirements. The rejection of Kansas’ proposal indicates that there will be limits to conservative changes the administration will allow. News - [The Problem with Prescription Drug Prices]( – 60 Minutes - [‘Pharma Bro’ Martin Shkreli Is in Prison, But the Drug Price He Jacked Up Is Still High]( – Kaiser Health News - [Trump Made High Drug Prices His Issue. Democrats Think They Can Take It Back]( – Washington Post - [Guess What's in the Farm Bill? Funding for Health Plans Pushed by Trump]( – Washington Post - [Rescissions, How Do They Work?]( – Committee for a Responsible Federal Budget - [State Budgets Get Lift from Economy, Tax Bill]( – Wall Street Journal - [Everyone's Hiring, So Why Aren't Your Wages Growing Faster?]( – CBS MoneyWatch - [Profit-Laden Companies Are Resisting Bigger Wage Hikes]( – Axios - [Trump Praises the 'Tireless Dedication' of Federal Employees, but Says They Can Do Better]( – Nextgov - [New ‘Blue Water Veterans’ Deal Could Mean Benefits for 90,000 Vietnam War Troops]( – Military Times - [Can a ‘Policy Nerd’ Economist Win Over Republicans in Ohio?]( – New York Times - [Budget Chief Aims to Restore France’s Credibility in Europe]( – Financial Times Views - [Don't Be Fooled by the New Trump Spending Cut Coming Monday]( – Stan Collender, Forbes - [Tax Reform Is Working, Sen. Rubio]( – Rep. Erik Paulsen, Wall Street Journal - [Wait Before Declaring Trump’s Tax Cuts a Win]( – Noah Smith, Bloomberg - [Locals Fill Infrastructure Void Left by the Feds]( – Barry Ritholtz, Bloomberg - [An Unemployment Rate Under 4% Is Only Half the Story of the US Jobs Market]( – Komal Sri-Kumar, Business Insider - [Bernie Sanders’s Job Guarantee: Is It a Boondoggle?]( – Robert J. Samuelson, Washington Post - [Is This Tax Avoidance? No, Think of It as Tax Revenge for New Jersey]( – Allan Sloan, Washington Post - [As Election Looms, Policymakers Work Overtime to Finish Killing Obamacare]( – Sarah Lee and Justin Haskins, The Heartland Institute - [Mar-a-Lago Isn’t the ‘Winter White House.’ It’s Just an Embarrassing Cash Grab.]( – Walter M. Shaub Jr., Washington Post 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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