Trump Sued Over ‘Sabotage’ of Obamacare

Plus - Gearing up for a borrowing binge By Yuval Rosenberg and Michael Rainey Trump Sued Over ‘Sabotage’ of Obamacare Does President Trump have a constitutional obligation to uphold the Affordable Care Act? That’s the claim being made by four U.S. cities -- Baltimore, Chicago, Cincinnati and Columbus, Ohio – in a lawsuit against the president filed in federal court Thursday. Trump has “waged a relentless effort to use executive action alone to undermine and, ultimately, eliminate the law,” the lawsuit claims, violating his constitutional duty to ensure that the laws of the nation are faithfully executed. The suit quotes numerous Trump tweets in which he made his opposition to the Affordable Care Act clear, and “also cites Trump scaling back oversight of insurance issuers, cutting open enrollment in half, urging a federal court to throw out Obamacare’s protections for pre-existing conditions and undermining the individual mandate,” according to Heidi Przybyla of [NBC News](. Trump’s actions have reduced enrollment and increased costs, the suit charges, forcing cities to pay more for health care for patients lacking health insurance. Yale law professor Abbe Gluck told Przybyla that while other presidents have been accused of dragging their feet on enforcing legislation they disagree with, this is an unusual case because Trump has made his intent to sabotage the ACA so clear. “That’s what makes this case novel, first of its kind and really important. No scholar or court has ever said the president can use his discretion to implement a statute to purposely destroy it," Gluck said. The suit seeks to overturn Trump’s actions against the ACA and require him to take steps to expand enrollment and reduce prices. Treasury Gears Up for Borrowing Binge As the federal deficit rises, the U.S. Treasury plans to borrow $329 billion between July and the end of September, and another $440 billion in the last three months of the year. If those numbers hold, the Treasury will have increased its borrowing by 63 percent compared to the same six-month period a year ago. The Treasury’s Borrowing Advisory Committee said this week that the monthly debt sales will continue to rise as the deficit continues to grow over the next several years, [according]( to Josh Zumbrun and Daniel Kruger of The Wall Street Journal. Yields on Treasury debt have been rising as the borrowing binge picks up speed, with the 10-year note touching 3 percent this week, an increase of three-quarters of a point in a year. The sheer size of U.S. government borrowing is hanging over the bond market, Zumbrun and Kruger write, and many analysts think that increasing rates will lead to higher borrowing costs. Strong demand for relatively safe U.S. debt has kept those costs in check so far, however, although a stronger economy could reduce that demand significantly, sending interest rates higher. The Office of Management and Budget projects trillion-dollar deficits for the next four years (see the chart below), but most analysts expect that trend – and the related borrowing binge – to continue for much longer. The Journal’s Nick Timiraos [pointed out]( that the White House’s projected decrease in the deficit starting in 2023 relies on two key assumptions: - 3 percent economic growth is sustained over many years - Congress makes substantial spending cuts starting in 2024. If neither of those assumptions hold – and few economists expect them to – we end up with permanent trillion-dollar deficits and a long-term deficit-to-GDP ratio near 5 percent. “Deficits at 5% of GDP have only happened twice in the postwar period,” Timiraos notes, “and both followed periods of 10% unemployment.” Bernard Baumohl, chief global economist at the Economic Outlook Group, [said]( in a note to clients, "We're applauding strong growth — yet have no choice but to borrow the largest amount of money since the financial crisis a decade ago. And that's just the start, the US will [be] running trillion dollar deficits as far as the eye can see." Obamacare Premiums Would Have Fallen: Report Health insurance premiums in the federal marketplaces would have fallen if President Trump and Republican lawmakers had left the system alone, according to a new analysis from Matthew Fiedler of the Brookings Institution. Fielder’s analysis reached two main conclusions: - * The insurance markets established by the Affordable Care Act will be quite profitable in 2018, with profit margins greater than 10 percent. - * In a “stable” environment – in which the federal policies related to the ACA in 2018 remained in place in 2019 -- the average monthly premium would have fallen by 4.3 percent in the coming year. The report says that premiums would vary considerably depending on geography and types of plans, and the focus in on the nationwide average. Read Fielder’s [full analysis here](. Like this newsletter? Tell your friends they can [sign up here]( to get their own copy. We always welcome your feedback. Email yrosenberg@thefiscaltimes.com. Or connect with us on Twitter: [@yuvalrosenberg]( [@mdrainey]( and [@TheFiscalTimes](. Number of the Day: 44% The [“short-term” health plans]( the Trump administration is promoting as low-cost alternatives to Obamacare aren’t bound by the Affordable Care Act’s requirement to spend a substantial majority of their premium revenues on medical care. UnitedHealth is the largest seller of short-term plans, according to Axios, which [provided]( interesting detail on just how profitable this type of insurance can be: “United’s short-term plans paid out 44% of their premium revenues last year for medical care. ACA plans have to pay out at least 80%.” It’s Settled: Chickens Aren’t Cash The IRS appears to have settled one of the most vexing – or at least joke-worthy – questions it has faced in recent years: Are live Peruvian chickens the equivalent of cash? The question arose as U.S. businesses struggled to understand the new tax rules governing their foreign holdings. One company [asked]( Chip Harter, deputy assistant secretary for international tax affairs at the Treasury Department, whether live chickens in Peru were cash-equivalents and thus eligible for a lower tax rate. The Wall Street Journal’s Richard Rubin [tweeted]( Thursday that "the IRS seems to have decided that live Peruvian chickens are not, in fact, equivalent to cash," despite the thriving market for the creatures. As a result, a lower tax rate will be applied to chickens – and, presumably, other animals – owned by U.S. companies in Peru and elsewhere overseas. Those trading chicken futures, however, are out of luck: it looks like poultry futures contracts will be treated as cash equivalents and therefore face a higher tax rate. News - [The Senate Passed Another ‘Minibus’ Funding Package. Now What?]( – Brookings Institution - [After Years of Quiet, Democratic Candidates Can’t Stop Talking About Health Care]( – Margot Sanger-Katz, New York Times - [Insurers Seek Smaller Rate Increases on ACA Plans]( – Wall Street Journal (paywall) - [Trump Moves to Ease Obama Auto-Mileage Rules, California's Clout]( – Bloomberg - [Trump's Stealth Attack on Obama's Legacy]( – Axios - ['Medicare for All' Is the Dream. 'Medicaid for More' Could Be the Reality]( – Washington Post - [New Jersey House Race Becomes Ground Zero for Tax Debate]( – Roll Call - [Ross Signals More Tariff Pain Ahead in China Trade Battle]( – Bloomberg - [Opioid Prescriptions in]( [US]( Not Declined: Study]( – The Hill - [Apple Becomes the World's First $1 Trillion Company]( – MoneyWatch Views and Analysis - [Even Doubling Taxes Wouldn’t Pay for ‘Medicare for All’]( – Charles Blahous, Wall Street Journal (paywall) - [Yes, Medicare for All Is Expensive. That’s Not the Point]( – Diane Archer, Washington Post - [Behind the Debate over ‘Medicare for All’]( – Chris Deaton, Weekly Standard - [25 Years After the Family and Medical Leave Act, It’s Time to Aim Higher]( – Alan Barber, Center for Economic and Policy Research - [Double Trouble: Trump Policies Have Us Headed for Twin Deficits]( – Desmond Lachman, The Hill - [Index Capital Gains, but Not Without Congress’s Consent]( – Alan Blinder, Wall Street Journal (paywall) - [Why Baby Boomers Need Immigrants to Fund Their Retirement, in 2 Charts]( – Alexia Fernández Campbell, Vox - [Opportunity Zones May Create More Opportunities for Investors and Syndicators Than Distressed Communities]( – Steven M. Rosenthal, Tax Policy Center - [Medicare's Most Despicable, Indefensible Fraud Hotspot: Hospice Care]( – Ashleigh Garrison, CNBC - [Trump vs. Koch Is a Custody Battle Over Congress]( – Jane Meyer, New Yorker - [How SNAP and Medicaid Work Requirements Will Hurt Workers]( – Kalena Thomhave, American Prospect Copyright © 2018 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website, thefiscaltimes.com. Our mailing address is: The Fiscal Times 712 Fifth AvenueNew York, NY 10019 [Add us to your address book](//thefiscaltimes.us1.list-manage.com/vcard?u=40d2c5373681f5cd830b6d823&id=714147a9cf) If someone has forwarded this email to you, consider signing up for The Fiscal Times emails on our [website](. Want to change how you receive these emails? You can [update your preferences]( or [unsubscribe from this list](