Trump Cranks Up the Pressure Over His ‘National Emergency’

Plus, a surprising move for prescription drug prices By Yuval Rosenberg and Michael Rainey Trump Cranks Up the Pressure on Senate GOP Over National Emergency Senate Republicans are in a bind. President Trump on Wednesday refused to help them out of it. The Senate is slated to take up a resolution Thursday disapproving of Trump’s declaration of a national emergency on the border with Mexico. Four Republican senators have already come out in favor of the resolution, and their votes, combined with those of Senate Democrats, would be enough to terminate Trump’s emergency, forcing the president to issue his first veto. The problem for the GOP: Many Republican senators are uneasy about Trump’s declaration, concerned that it violates the constitution’s separation of powers and tramples on Congress’ budget authority. But they’re also uncomfortable with the idea of publicly rebuking the president and voting to terminate his emergency — and fearful of the political blowback such a vote could bring. Republicans thought they had found some middle ground that might get them out of their political jam. Legislation proposed by Sen. Mike Lee (R-UT) and reportedly backed by more than a dozen of his Senate GOP colleagues would revise the National Emergencies Act of 1976, reining in the power of presidents by ending national emergencies after 30 days unless Congress votes to keep them. That bill could have allowed Republicans to signal their concerns about executive overreach — and allay fears that a future Democratic president could take advantage of the precedent set by Trump — while avoiding an outright confrontation with the president and the anger it would create among the GOP base. If Trump had endorsed the effort — and agreed to cede some presidential power — he might have limited the number of defections on the resolution of disapproval, though it’s still not completely clear whether he could have peeled off enough votes to avoid passage of the resolution. But the president on Thursday [refused to endorse]( the Lee bill, scuttling the GOP senators’ efforts to buy themselves some cover. Instead, Trump ratcheted up the political pressure on Senate Republicans — and perhaps ensured an embarrassing congressional rebuke of his emergency declaration. "I told Republican senators, vote any way you want. Vote how you feel good. But I think it's bad for a Republican senator. I also think it's bad for a Democrat senator to vote against border security and to vote against the wall. I think if they vote that way, it's a very bad thing for them, long into the future," he told reporters on Wednesday, according to [Politico](. Trump also [tweeted]( "Republican Senators are overthinking tomorrow’s vote on National Emergency. It is very simply Border Security/No Crime - Should not be thought of any other way. We have a MAJOR NATIONAL EMERGENCY at our Border and the People of our Country know it very well!" Earlier Wednesday, House Speaker Nancy Pelosi also turned up the pressure on Republicans by [announcing]( that she would not bring Lee’s legislation up for a floor vote if it passes the Senate. “Republican senators are proposing new legislation to allow the president to violate the Constitution just this once in order to give themselves cover,” she said in a statement. “The House will not take up this legislation to give President Trump a pass.” Her move effectively rendered the GOP efforts around the disapproval resolution an exercise in messaging with no legislative bite. The collapse of the Senate GOP’s prospective deal leaves little time for Republicans to find another escape route. The latest [Morning Consult/Politico poll]( highlights the political peril they face with the party’s Trump-supporting grassroots. Seven in 10 GOP voters say they’d be more likely to vote for someone who supports Trump’s emergency declaration — but 60 percent of Democrats and independents say they’d be less likely to back such a candidate, meaning that falling in line with the president could also alienate key swing voters. Either way, voters say they’ll be thinking about the issue when they go to the polls, with 78 percent saying it will factor into their ballot choices in the next election. By contrast, less than two-thirds of voters in 2017 surveys said that the GOP tax plan or the party’s failed Obamacare repeal efforts would factor into their election decisions. So the border issue is clearly resonating with, and sharply dividing, the electorate. Takedown of the Day “Even by the standards of previous nonstarter White House blueprints … Mr. Trump’s effort this year stands out for dishonesty and warped priorities.” – [The Washington Post Editorial Board]( in a piece excoriating the Trump budget released this week A Surprise Move for Prescription Drug Prices Prescription drug prices did something last month they haven’t done in 47 years: They went down. The monthly Consumer Price Index [report]( released Tuesday showed a 1.0 percent decline in the price of prescription drugs in February. And on a year-over-year basis, the cost of prescription drugs is down 1.2 percent — the biggest annual decline since 1972. What’s behind the unusual decline in drug prices? MarketWatch’s Jeffry Bartash [says]( that drugmakers “are feeling the heat,” with both President Trump and Congress complaining publicly about the high cost of pharmaceuticals, and political pressure could be partly responsible. New generic drugs coming to market could also play role. But don’t get used to the falling prices, Bartash says, since most analysts expect prescription drug costs to resume their upward trend. Stephen Stanley of Amherst Pierpont Securities said the price decline was likely temporary and “extremely unlikely to be repeated on a regular basis.” Once Again: The GOP Tax Cuts Are Not Paying for Themselves A handful of supply-side enthusiasts are sticking to their claim that the Republican tax cuts are paying for themselves, with economist Art Laffer making that argument on [CNBC]( just last week. But the overwhelming consensus is that the tax overhaul has pushed the federal government deeper into the red. William Gale and Aaron Krupkin of the Tax Policy Center revisited the topic Wednesday, and concluded once again that the tax cuts are neither increasing revenues nor paying for themselves: “While some [Tax Cuts and Jobs Act] supporters are touting that nominal revenues were higher in fiscal year (FY) 2018 than in FY2017, that comparison does not address the question of TCJA’s effects. Nominal revenues rise because of inflation and economic growth. Adjusted for inflation, total revenues fell from FY2017 to FY2018. Adjusted for the size of the economy, they fell even more.” As the table below indicates, federal revenues were lower in every category in fiscal year 2018 compared to the projected revenues without the tax cuts. And the revenue declines for the calendar year are even greater, since the fiscal year includes three months (October to December 2017) before the tax cuts took effect. “None of these findings should be surprising,” Gale and Krupkin write, since just about every major analysis — including those by the Congressional Budget Office, the Joint Committee on Taxation, the Tax Policy Center, the Penn-Wharton Budget Model and academic researchers Robert Barro and Jason Furman — concluded that the tax cuts would significantly reduce revenues. And there’s no reason to believe that economic growth will make up the loss, the authors say, since those same analyses concluded that higher economic growth sparked by the tax cuts would cover an average of just 20 percent of the overall cost. Wait, are the Cleveland browns actually going to be ... good? Send your sports fantasies, story suggestions and general feedback to yrosenberg@thefiscaltimes.com. Or connect with us on Twitter: [@yuvalrosenberg]( [@mdrainey]( and [@TheFiscalTimes](. And if you like this newsletter, please tell your friends to [sign up here](. Democrats Take Aim at Capital Gains Sen. Tammy {NAME} (D-WI) and Rep. Bill Pascrell (D-NJ) reintroduced legislation Wednesday that would end a tax break on carried interest — the share of profits that hedge fund and private equity managers receive from businesses in which they have investments. The tax break lets fund managers claim the payments as capital gains, which are taxed at 23.8 percent, rather than ordinary income, which has a maximum tax rate of 37 percent. The Congressional Budget Office [estimated]( that ending the carried interest loophole would raise $14 billion over 10 years. Bloomberg’s Laura Davison [noted]( that while Democrats have proposed similar plans for years, the current effort is largely symbolic, with the bill having no chance of passing in a divided Congress. News - [Congress Warns Against Medicaid Cuts: ‘You Just Wait for the Firestorm’]( – New York Times - [HHS Secretary Azar Defends Trump Budget Cuts to Medicaid, NIH Programs]( – CNBC - [Trump's Medicaid Budget Plan Could Leave States and Enrollees Hanging]( – Modern Healthcare - [Trump's Cuts to Medicare Hospital Payments Trigger an Outcry]( – Associated Press - [House Democrats Investigate Trump-Backed Short-Term Health Plans]( – Bloomberg - [5 Pharmacy Benefit Managers Called for Next Round of Capitol Hill Hearings]( – Axios - [New Health Plans Expose the Insured to More Risk]( – Kaiser Health News - [‘Medicare-For-All’ Gets Buzzy in Unexpected Locales]( – Kaiser Health News - [How Much Difference Will Eli Lilly’s Half-Price Insulin Make?]( – Kaiser Health News - [Utah Is Testing the Trump Administration's Dreams of Limiting Medicaid Spending]( – Washington Post - [How a $238 Million Penthouse Turned a Long-Shot Tax on the Rich Into Reality]( – New York Times - [Lawmakers Question Pentagon’s Use of ‘Slush Fund’ to Skirt Budget Caps]( – Defense One - [The Pentagon Wants $14.1 Billion to Help the Air Force Develop ‘Space Warriors’]( – CNBC - [House Democrats to Give Trump’s Space Force a Makeover]( – Defense News - [New Family Leave Proposal Would Require You to Delay Social Security Benefits]( – CNBC - [Even SALT-Pinched Minnesotans Flocking to ‘Last Great Tax Haven’]( – Bloomberg - [Wealthy Parents in College Admissions Scam May Face IRS Wrath]( – CNBC Views and Analysis - [There’s A Fight Brewing Over Government Debt, Low Inflation and What to Do About It]( – Rich Miller, Bloomberg - [Trump's 2020 Budget Delivers Gimmicks, Soaring Debt and Broken Promises]( – G. William Hoagland, USA Today - [Gun Crazy: Trump’s Record-Setting Military Budget Is Bloated, Illegal, and Doomed]( – Fred Kaplan, Slate - [The Tragedy of Mick Mulvaney and the War Budget]( – Todd Harrison and Seamus P. Daniels, The Hill - [2020 Budget Request Reveals Slow Shift Toward Great Power War]( – Patrick Tucker, Defense One - [Put the Final Nail in the Coffin of 'Voodoo Economics']( – Moris Simson, The Hill - [Senate Republicans Should Disapprove of Trump’s Emergency Declaration]( – National Review Editors - [This Is How Submissive Republicans Have Become to Trump]( – Dana Milbank, Washington Post - [Why I Support the President’s National Emergency]( – Sen. James Inhofe (R-OK), Washington Post - [How to Provide Paid Family Leave Without Further Indebting the Nation]( – Sens. Joni Ernst (R-IA) and Mike Lee (R-UT), Washington Post - [End the Scandal of Surprise Medical Bills]( – Bloomberg Editorial Board - [The Catch-22 of American Socialism]( – David Von Drehle, Washington Post - [Turns Out There’s a Proper Way to Buy Your Kid a College Slot]( – New York Times Editorial Board Copyright © 2019 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 399 Park AvenueNew York, NY 10022 [Add us to your address book]( 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? [Update your preferences]( or [unsubscribe](.