Did Congress Just Outfox Trump on a Shutdown?

Plus, why Dems want to bring back earmarks By Yuval Rosenberg and Michael Rainey Congress Reaches Spending Deal to Avoid Shutdown. Will Trump Go Along? Congressional leaders have struck a bipartisan deal to avoid a government shutdown at the end of the month and put off a divisive fight over funding for President Trump’s border wall with Mexico until after November’s elections. The main question now is whether the president will go along. The congressional agreement, announced on Thursday by House Appropriations Committee Chair Rodney Frelinghuysen (R-NJ), couples two fiscal 2019 spending bills — those for Defense and for Labor, Health and Human Services and Education — with a stopgap measure to keep federal departments and agencies not otherwise funded operating through December 7. The two spending bills represent the bulk of the required appropriations for 2019, while the short-term “continuing resolution” covers the Department of Homeland Security, which oversees Trump's border wall. By linking those bills, lawmakers reportedly believe they’ve made it politically impossible for Trump to reject the whole package in pursuit of more money for his border wall. “If Trump vetoes it, he would force a shutdown — which would include a shuttering of some Pentagon operations,” Politico’s Sarah Ferris [notes](. Vetoing the package would mean blocking funding increases for the Pentagon that have been a top priority for Trump and congressional Republicans. The details of the final Defense and Labor-HHS-Education bills are expected to be released by the end of the week, but lawmakers reportedly removed partisan provisions that could have prevented an agreement, including Republican language to defund Planned Parenthood and destabilize Obamacare and Democratic efforts to ensure that federal money can’t be used to buy guns for teachers. The legislation is expected to get a vote in the Senate next week and in the House the following week, after representatives returns from their recess. The bottom line: This deal should keep the government from shutting down after the end of the fiscal year on September 30, but that’s not a certainty just yet. “While the announcement Thursday reduces the odds of a shutdown, midterm politics or the Freedom Caucus, a group of very conservative members allied with Trump, could always throw a curveball,” The Washington Post’s Erica Werner [says]( adding, “The deal could also cement another setback for deficit hawks, because it would continue the Trump-era tradition of boosting up spending levels in the hopes of receiving bipartisan support.” Chart of the Day Bloomberg’s Brian Chappatta [examines]( one legacy of the response to the 2008 financial crisis: global debt totaling $250 trillion, up from $84 trillion at the turn of the century and $173 trillion at the time of the crisis. In the U.S., government debt has risen while businesses and households have deleveraged. “This isn’t a uniquely American problem,” Chappatta writes. “Across the globe, government debt has soared over the past decade, both in nominal amount and as a percentage of GDP. While individuals and financial institutions have been busy getting their houses in order after the crisis, many large governments leaned on their captive buyer base — central banks — to binge on debt and pull forward economic growth.” House to Consider Billions in Cuts to ACA Taxes In addition to a package of bills that would [make the individual tax cuts permanent]( the House is expected to consider legislation this week that would delay or roll back multiple tax provisions in the Affordable Care Act. The Save American Workers Act ([H.R. 3798]( would: - Increase the threshold for the employer mandate from 30 hours to 40 hours per week (10-year cost: $19 billion) - Repeal employer mandate penalties for 2015-2018 ($26 billion) - Delay the “Cadillac tax” on high-cost insurance plans from 2022 to 2023 ($14 billion) - Repeal the tanning tax ($0.4 billion) The total cost for the provisions is about $59 billion, according to [calculations]( by the Committee for a Responsible Federal Budget, based on data from the Congressional Budget Office. Add interest costs of $14 billion, and the final total cost of the provisions comes to $73 billion over 10 years. Arkansas Drops Thousands from Medicaid More than 4,300 people will lose their Medicaid coverage in Arkansas for failing to meet the state’s new work requirements. Earlier this year, the Trump administration approved the new work rules, which went into effect in June for about 26,000 Medicaid recipients. Able-bodied Medicaid recipients in Arkansas are now required to report their work, volunteer and education hours online on a monthly basis. Failure to meet the 80-hour monthly requirement or to successfully report their activities to the state for three months results in a loss of benefits. Those who lose their coverage cannot reapply until next year. “Personal responsibility is important. We will continue to do everything we can to ensure those who qualify for the program keep their coverage, but it is equally important that we make sure those who no longer qualify are removed," Gov. Asa Hutchinson (R) said Wednesday as he announced that 4,353 people became ineligible for Medicaid at the end of August. Critics of the work requirements point out that many of low-wage workers will have trouble reporting their hours online. Arkansas has one of the worst rates of internet connectivity in the country, and the state’s website is reportedly down for maintenance for 10 hours every night. The number of people losing coverage in Arkansas could increase significantly in the coming months. Only 1,218 beneficiaries reported that they met the 80-hour work requirement in August, while 16,357 people failed to do so. Why Democrats Want to Bring Back Earmarks Minority Whip Steny Hoyer (D-MD) wants to restore earmarks as part of Democrats’ effort to “[fix government]( should the party win control of the House in November. The use of earmarks — funds for special projects, often decried as pork, that are included in legislation to secure votes — was banned by Republicans in 2011 amid accusations of scandal and waste, perhaps most notably the $223 million “bridge to nowhere” in Alaska. The ban came despite efforts by Democrats to clean up the earmarks process in 2007. “Republicans eliminated earmarks altogether, and the result has been an abdication of Congress’ power of the purse,” Hoyer said Wednesday at an event hosted by the political action committee End Citizens United. Hoyer said he would like to return to the rules instituted in 2007, which, among other things, required lawmakers to disclose and explain all earmark requests. Lawmakers on both sides of the aisle have expressed interest in bringing earmarks back, arguing that they play a vital role in breaking the gridlock seen in Congress in recent years. “From a standpoint of making the House function better and getting votes for things that are unpopular, there is no better tool than an earmark. Republicans, by getting rid of them, injured their ability to move legislative proposals,” Republican lobbyist Sam Geduldig [told]( Roll Call. Even some conservative Republican lawmakers appear to be interested in the idea. “There were clearly problems with the old system,” Rep. Tom Cole (R-OK) [said]( earlier this year. “There’s a case to be made against them, but I think in the end, the case for them is more powerful.” President Trump has also spoken favorably about them, telling a bipartisan group of lawmakers in January, “Maybe all of you should start thinking about going back to a form of earmarks.” The message isn’t likely to play well on the campaign trail this fall, however, and hawkish fiscal groups remain strongly opposed to the idea. “Earmarks are a lazy and unfair way to circumvent the appropriations process,” Tom Schatz of Citizens Against Government Waste said in a [statement]( Wednesday. “They have been roundly excoriated by the American people, who have made it clear that they want an end to business as usual in Washington. Earmarks for teapot museums, indoor rainforests, and bridges to nowhere should not be restored; they should be permanently banned.” News - [Congress Clears First Fiscal 2019 Spending Package]( – Politico - [House Panel Advances Key Bill in New Round of GOP Tax Cuts]( – The Hill - [House Cancels Friday Votes Due to Hurricane Florence]( – The Hill - [Congress Begins Formally Blocking Trump's Government Reorganization Plan]( – Government Executive - [House GOP Blocks Spending Bill Provision to Require Drug Price Disclosures in TV Ads]( – Washington Examiner - [House Republicans Urge Trump to Reconsider Opposition to Federal Pay Hike]( – Washington Post - [Senate OKs Trump Choice for IRS Head Over Democrats’ Protest]( – Associated Press - [Amazon's Bezos Launches a $2 Billion Fund to Help Homeless Families and Create Preschools]( – CNBC - [House GOP Plows Ahead with Tax-Cut Bills Despite Facing Uphill Battle]( – CNBC - [The One Thing Trump Can’t Sell: A Booming Economy]( – Politico - [Betsy DeVos Loses Student Loan Lawsuit Brought by 19 States]( – Bloomberg - [CMS Announces Patient Navigator Funding, Enrollment Changes]( – Patient Engagement HIT - [San Francisco Voters Favor New Tax to Help Homeless — Until They See the Cost]( – San Francisco Chronicle - [It’s Not Just You: 2017 Was Rough for Humanity, Study Finds]( – New York Times Views and Analysis - [Democrats Keep Claiming Health Care Will Help Them in the Midterms. This Time, They Might Actually Be Right.]( – Philip Bump, Washington Post - [Why Medicare for All Is a Rotten Deal for Most]( – Betsey McCaughey, New York Post - [Congress Should Move Poor Families to Healthy Neighborhoods]( – New York Times Editorial Board - [An Insurance Executive Explains Why We Need a Carbon Tax]( – Edward B. Rust Jr., New York Times - [Congress Must Not Delay the Cadillac Tax for Health Care]( – Alan Viard, The Hill - [Botching the Great Recession]( – Paul Krugman, New York Times - [To 'Counter' China's Growing Economic Might, Congress Throws Away $60 Billion]( – John Tamny, RealClearMarkets - [Democrats Don’t Care About Policy Compromise Anymore — Just Like Republicans]( – Clare Malone, FiveThirtyEight - [This Economy Is Definitely Not Obama’s Recovery]( – Stephen Moore, New York Post - [If 'Free College' Sounds Too Good to Be True, That's Because It Often Is]( – Corey Turner, NPR - [Who Lost the Most in the Financial Crisis? Ordinary Americans.]( – Nir Kaissar, Bloomberg - [Is California a Good Role Model?]( – Thomas B. Edsall, New York Times - [Hope for California's Broken Welfare Programs]( – Jonathan Ingram, RealClearPolicy Copyright © 2018 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website, thefiscaltimes.com, or through Facebook. 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](