Pelosi’s Border Bill Sets Up Another Clash with Trump

Plus, US debt projected to hit 'unprecedented levels' By Yuval Rosenberg and Michael Rainey House Looks Set to Pass $4.5 Billion Border Funding Bill House Democrats reportedly are set to pass an emergency $4.5 billion border funding bill Tuesday evening, setting up a likely clash with the White House and Senate Republicans. The House vote follows a flurry of intraparty negotiations over the legislation, with leaders including House Speaker Nancy Pelosi pressing to tamp down a [rebellion]( among members of the Progressive Caucus and Hispanic Caucus, who threatened to withhold their votes over concerns about providing more money to the Trump administration for what they see as cruel immigration policies and horrific treatment of migrant children being held at detention centers. “We need to stop funding the detention of children under any and all circumstances,” Rep. Alexandria Ocasio-Cortez (D-NY) said before going into a closed-door Democratic meeting in the morning, according to [The Washington Post](. After the meeting, according to the [Associated Press]( Ocasio-Cortez struck a softer tone, saying, “I oppose the situation we’re in, but my main goal is to keep kids from dying.” Reports have described [inhumane conditions]( at the border facilities, including inadequate food, water and sanitation as well as lice and flu. President Trump said Tuesday he’s [“very concerned”]( about the conditions at the detention centers, even as he claimed conditions are “much better than they were under President Obama.” House Democratic leaders offered concessions meant to address the concerns of liberals. Appropriations Committee Chairwoman Nita Lowey (D-NY) introduced changes Tuesday morning that would tighten health and safety requirements for the care of migrant children. Leaders reportedly [agreed]( to [additional changes]( sought by progressives later in the day. At the Tuesday morning meeting, Pelosi reportedly urged her members to support the legislation. “A vote against this bill is a vote for Donald Trump and his inhumane, outside-the-circle of civilized attitude toward the children,” Pelosi reportedly told her members. She also reportedly argued that passing the legislation would add to the House’s leverage when it comes to negotiating a compromise with the Republican-run Senate. “This isn’t an immigration bill,” Pelosi [told reporters]( after meeting with her members. “It’s an appropriations bill to meet the needs of our children, so we can move the needs that they have, but also the shame that we should have if they don’t have diapers and toothbrushes and care.” The votes of Democratic holdouts were crucial because House Republicans opposed the bill, saying it was too restrictive and that they preferred a bipartisan version passed by the Senate Appropriations Committee last week. That bill is expected to get a vote on the Senate floor this week. (Sen. Rand Paul (R-KY) has reportedly [threatened]( to delay a vote unless he can offer an amendment requiring spending cuts to offset the additional funding.) Many House Democrats say the Senate version doesn’t do enough to help migrant children. Even before Lowey’s changes, though, the White House threatened that President Trump would veto the House bill, saying it “underfunds necessary accounts and seeks to take advantage of the current crisis by inserting policy provisions that would make our country less safe.” The Department of Health and Human Services, responsible for the care of unaccompanied minors arriving at the border, has warned that it will run out of funds for housing the children at the end of the month. But with only two days left before lawmakers depart for a weeklong July 4th recess, lawmakers have little time for talks to reconcile the two versions of the legislation. Adding to the turmoil, the acting commissioner of the Customs and Border Protection agency, John Sanders, [is resigning]( effective July 5. The bottom line: If the House vote passes, it could set up a difficult, high-stakes negotiation with Senate Republicans and the White House. But the Senate version may be more likely to make it to the president’s desk. Progressives may have won policy concessions for now and House Democrats may have avoided an embarrassing defeat, but it’s not clear to what extent the final legislation will address their concerns. Read more at [Roll Call]( [The Washington Post]( and the [Associated Press](. Growth of US Debt Slows, but Record Levels Still Ahead The national debt will reach “unprecedented levels” over the next 30 years, according to the new long-term budget outlook released Tuesday by the Congressional Budget Office. Federal outlays will exceed revenues during the entire period, as increased spending on Social Security, Medicare and interest on the debt outpaces more modest increases in tax revenues. Debt held by the public is projected to rise from the current level of 78% of GDP to 144% of GDP by 2049 — far higher than the 106% of GDP recorded in 1946, on the heels of the historic military buildup during World War II. The CBO said the rate of increase in the debt has slowed slightly compared to last year’s estimate, largely due to lower interest rate projections. Future debt levels could be larger or smaller than current estimates depending on productivity growth and interest rates between now and 2049. Still, virtually all projections show a substantial increase in debt over the 30-year window. Some additional key details from the report: • Interest costs are projected to rise significantly. “In CBO’s extended baseline projections, net outlays for interest more than triple in relation to the size of the economy over the next three decades, exceeding all discretionary spending by 2046.” • Demographics play an important role. As analysts have long understood, the ongoing retirement of the Baby Boomers will drive Medicare and Social Security spending higher in the coming years. Rising health care costs per person are particularly important, since they amplify the effects of an aging population. • Annual deficits are expected to grow. The Republican tax cuts reduced federal revenues as a percentage of GDP and the most recent spending deal raised spending well above the caps imposed by the Budget Control Act, producing a deficit equal to 4.2% of GDP in 2019. The CBO expects the deficit to rise to 4.5% of GDP by 2029 and 8.7% of GDP in 2049 — far above the 2.7% average recorded over the past 50 years. • Stabilizing the debt could be painful. In order to hold the debt at its current level of 78% of GDP, the federal government would need to enact some combination of tax increases and spending cuts totaling 1.8% of GDP every year beginning in 2020. • Political decisions could make things worse. The CBO analysis assumes that current policies on government spending and tax levels will remain in effect. But if lawmakers decide to change those policies — especially raising spending above the budget caps in 2020 and overriding the expiration of the individual tax cuts in 2026 — then debt could be substantially larger, rising to 219% of GDP by 2049. • Rising debt levels come with increased risks. “The prospect of such large deficits over many years, and the high and rising debt that would result, poses substantial risks for the nation and presents policy makers with significant challenges,” CBO Director Phillip Swagel said. Those risks include a possible dampening effect on economic growth and a greater likelihood of experiencing a fiscal crisis. Read “[The 2019 Long-Term Budget Outlook]( from the CBO. Number of the Day: 14% From [Modern Healthcare]( “Patients' out-of-pocket costs for inpatient services increased by 14% on average between 2017 and 2018, according to a new report from TransUnion Healthcare.” Quote of the Day “It’s all but over, for the moment.” [– Politico’s Playbook]( reporting that “Republican and Democratic aides have come to the conclusion that a budget deal is almost definitely out of reach” for now. That means that lawmakers may have to scramble once again at the end of September or the end of the year to avoid a government shutdown and $125 billion in spending cuts. We want to hear from you! Love this newsletter? Hate it? Let us know by emailing yrosenberg@thefiscaltimes.com. Or connect with us on Twitter: [@yuvalrosenberg]( [@mdrainey]( and [@TheFiscalTimes](. And if you're in the "love" camp, please tell your friends to [sign up here]( for their own copy. News - [Pelosi Clinches Deal with Progressives on Border Spending Bill]( – Politico - [Acting Border Protection Chief Is Resigning Amid Uproar Over Shelter Conditions]( – New York Times - [House Democrats Move to Rein In Trump’s Immigration Crackdown]( – New York Times - [Nine Spending Bills Down, Three to Go in House]( – Roll Call - [McConnell Says No to Delay on Votes to Accommodate Dem Presidential Hopefuls]( – Roll Call - [After Backlash, House Effort to Boost Lawmakers’ Pay Is Being Delayed]( – Washington Post - [Democratic Candidates Keep Proposing Tax Hikes on the Rich to Pay for Ambitious Programs]( – Washington Post - [Trump's Plan to Lower Your Hospital Costs: Here's What You Need to Know]( – NPR - [Industry Doesn't Like Trump's Transparency Push]( – Axios - [Specialty Drugs' Steep Price Hikes]( – Axios - [Trump Is Tiring of Mulvaney]( – Politico - [Supreme Court to Hear Insurers' Bid for $12 Billion in Obamacare Money]( – Reuters - [A Private Prison CEO Is “Hopeful” About the Budget Deal’s Boost for ICE Detention]( – Mother Jones - [Blue States Roll Out Aggressive Climate Strategies. Red States Keep to the Sidelines.]( – New York Times - [The Polygamist Accused of Scamming the U.S. Out of $500 Million]( – Bloomberg Businessweek Views and Analysis - [America Should Be Horrified by This]( – Washington Post Editorial Board - [Democrats Are Trying to Deliver Aid to Children. Trump Is Threatening to Veto It]( – Greg Sargent, Washington Post - [I’m in the 1 Percent. Please, Raise My Taxes.]( – Eli Broad, New York Times - [Why Taxing the Rich Is Popular but Isn’t Always Easy]( – Laura Davison, Bloomberg - [Proposals to Tax the Wealthy Are Gaining Steam. That Could Help Some 2020 Democrats.]( – Tory Newmyer, Washington Post - [2020 Democrats Must Address Our Addiction to Military Spending]( – Katrina vanden Heuvel, Washington Post - [Repealing SALT Caps Would Cost Another $500 Billion]( – Committee for a Responsible Federal Budget - [Trump-Xi Trade Talks at G20: America's Biggest Weakness Is No Big Secret]( – Maya MacGuineas, FoxBusiness - [Health Care Price Transparency: Fool’s Gold, or Real Money in Your Pocket?]( – J.B. Silvers, The Conversation - [The Only Health Care Prices That Matter to Consumers]( – Drew Altman, Axios - [Self-Inflicted Medical Misery]( – Paul Krugman, New York Times - [‘I’m Republican. I Never Thought I’d Fight for Medicaid.’]( – Ricky Clay, Robin Jordan and Carrie McBane, New York Times (video) - [Sanders Goes All the Way on Student Debt Forgiveness]( – Helaine Olen, Washington Post - [Bernie Sanders and Other Democrats Are Embracing Free College. Europe Shows There’s a Cost.]( – Michael Birnbaum, Washington Post - [Canceling Student Loan Debt Doesn’t Make Problems Disappear]( – Kevin Carey, New York Times - [Funding the Fight Against Polio]( – Former Sen. Mark Kirk (R-IL), The Hill 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](.