Will Trump Blow Up a Hard-Fought Budget Deal?

Plus, the new fight over the 9/11 victims fund By Yuval Rosenberg and Michael Rainey Will Trump Blow Up a Hard-Fought Budget Deal? They’re getting closer. Treasury Secretary Steven Mnuchin [told CNBC]( Thursday morning that the two sides working on a deal to raise spending caps and the debt ceiling have reached agreement on top-line budget numbers for 2020 and 2021 and a two-year increase in federal borrowing authority. “I don’t think the market should be concerned,” Mnuchin said. “I think everybody is in agreement that we won’t do anything that puts the U.S. government at risk in terms of our issue of defaulting. I think that nobody wants a shutdown in any scenario. So I don’t think the market should be concerned, and we’re working hard. We’ll get there one way or another.” That doesn’t mean they’re actually close to a deal, though. The administration reportedly wants $150 in spending cuts to offset the increases, The Washington Post’s Erica Werner and Damian Paletta reported, adding that the goal “could be out of reach without slashing domestic programs that Democrats want to protect.” The administration reportedly also wants House Speaker Nancy Pelosi to guarantee that she won’t look to add policy riders to future spending bills, another demand that could potentially scuttle a deal. Mnuchin acknowledged Thursday that the parties “have a way to go.” And an unnamed senior administration official [told the Post]( that Pelosi’s optimism that the House could vote on a deal next Thursday “sounds like happy talk from the Speaker who has been absent from talks for the last three months and now is trying to create momentum after a bad couple weeks.” The Trump wild card: Trump administration dynamics add another level of risk to the ongoing talks. “Behind the scenes, the more important differences may not be those between Pelosi and Mnuchin but between Mnuchin and White House acting chief of staff Mick Mulvaney,” the Post’s Tory Newmyer [said](. And President Trump looms as an ever-present risk to blow up any agreement. “Trump has been warm to the proposal as it’s taken shape, according to multiple senators who have spoken with him in recent days. But GOP backers of a deal fear a last-ditch push from hard-line conservatives inside the administration and Congress to reject any bipartisan compromise,” Politico [reported](. Sens. Rand Paul, Mike Lee Ripped for Blocking Passage of 9/11 Victims Fund The bill providing compensation to 9/11 responders, which easily passed the House last week, stalled in the Senate Wednesday, as Sen. Rand Paul (R-KY) objected to an attempt to pass the legislation by unanimous consent. The background: The $7.375 billion fund was [created in 2011]( to provide financial aid to people who have developed diseases linked to exposure to toxic debris from the 9/11 attacks. As of February, the fund had paid $5 billion to more than 21,000 claimants. The issue: The fund is running out of money and it still has about 19,000 unpaid claims, The Washington Post’s Devlin Barrett [explains](. Under current law, the deadline for filing a claim is in December 2020, and the special master overseeing the victim compensation fund announced earlier this year that pending claims submitted before February 1 would be reduced by 50% while claims submitted later would be reduced by 70%. The new bipartisan legislation, which has 74 co-sponsors in the Senate, would extend the program through the year 2092 at an estimated cost of $10.2 billion for the first decade. The objections: Paul said the bill’s spending should be offset elsewhere in the budget, and the senator’s office said he is proposing cutting $2 billion a year from programs including agriculture, housing and mandatory spending, Barrett reports: “Paul said he objected because any program that would last decades ‘should be offset by cutting spending that’s less valuable. We need, at the very least, to have this debate,’ he said, adding that he would offer an amendment on the cost of the bill when it reaches the Senate floor. Sen. Mike Lee (R-Utah) also has placed a hold on the legislation, according to advocates.” Both senators said they aren’t trying to hold up the bill, but want votes on amendments. Lee said that he just wants to make sure the 9/11 fund has proper oversight to prevent fraud and abuse, and on Thursday he suggested funding the program for 10 years rather than the seven decades approved by the House. Lee [said]( that his amendment would provide $10.18 billion over 10 years, “the exact same amount the Congressional Budget Office estimated the program will need​.” The response: Former “Daily Show” host Jon Stewart, who has advocated for 9/11 responders, was among those blasting Paul. Speaking to [Fox News]( Stewart called the senator’s objection “absolutely outrageous” and accused Paul of trying to “balance the budget on the backs of the 9/11 first responder community.” Stewart also noted that Paul had supported the GOP tax cuts, which are projected to add $1.9 trillion to the national debt over 10 years. "You’ll pardon me if I’m not impressed in any way by Rand Paul’s fiscal responsibility virtue signaling," Stewart said. “He is a guy who put us in hundreds of billions of dollars in debt…. And now he’s going to tell us that a billion dollars a year over 10 years is just too much for us to handle? You know, there are some things that they have no trouble putting on the credit card, but somehow when it comes to the 9/11 first responder community—the cops, the firefighters, the construction workers, the volunteers, the survivors—all of a sudden we’ve got to go through this.” The bottom line: Democratic Sens. Kristen Gillibrand and Chuck Schumer of New York said Thursday they had reached an agreement with Paul and Lee to bring up the bill for a full vote [by next Wednesday](. Here’s How Eager Congress Was to Kill Obamacare’s ‘Cadillac Tax’ We told you yesterday that the House was set to vote to repeal Obamacare’s “Cadillac tax” on high-cost employer-provided insurance plans, with Democrats joining Republicans in a rare and surprising moment of bipartisanship to undo a plank of the health care law widely opposed by both business and labor. The support for repealing the tax, set to go into effect in 2022, was overwhelming. The vote Wednesday evening was 419 to 6. “Today, we’ll honor our promise to the hard-working men and women of the labor as we lift the Cadillac tax protecting health benefits that workers have negotiated,” House Speaker Nancy Pelosi said Wednesday, according to [The Washington Post](. Some health economists warned that repealing the tax would remove one of Obamacare’s main tools for lowering health care spending. “The full repeal of the Cadillac tax would eliminate one of the most consequential policy levers to actually lower health care costs,” Benedic Ippolito, a health economist at the American Enterprise Institute, told the Post. “When it comes to sensible policies about what to do about spending, ironically there’s bipartisan, bicameral agreement that we absolutely shouldn’t do anything.” The cost: The Congressional Budget Office has estimated that repealing the tax will add $197 billion to deficits over 10 years. What’s next: “The Senate has a similar bill with bipartisan support, but Senate Majority Leader Mitch McConnell (R-Ky.) has not yet said whether he will bring it up for a vote,” the Post’s Yasmeen Abutaleb reported. “McConnell has been reluctant to take up health-care legislation, Senate aides said, because Democrats probably would use the opportunity to criticize Republicans’ and the administration’s efforts to dismantle the Affordable Care Act.” Voting System Needs Millions More to Be Secure: Report Election infrastructure is still vulnerable to manipulation and states don’t have enough money to secure their voting systems before the 2020 election, according to a [new report]( published by the Brennan Center for Justice at New York University School of Law. Spurred by Russia’s extensive effort to interfere in the 2016 election, Congress included $380 million for election security in the [$1.3 trillion federal spending deal]( signed into law last year. But those funds, divided among the states, were only enough to fix the most obvious problems, leaving many vulnerabilities in place, one of the paper’s co-authors [told]( Joseph Marks of The Washington Post. “We’re facing foreign intelligence services that are throwing everything they have at trying to penetrate our elections, and states don’t have the resources they need to defend against that,” said co-author David Salvo, director of the German Marshall Fund’s Alliance for Securing Democracy initiative. Pennsylvania, for example, spent all of the $14 million it was granted on new voting machines that provide a paper trail of votes cast, an important upgrade. But it lacks funds to train its election workers and test its voting system, the report said. Alabama, on the other hand, spent its $6 million allotment on a voter registration database, auditing and computers, but doesn’t have enough to replace its voting machines. Lawrence Norden of NYU said that states need upwards of $1 billion to fully secure their voting systems, and ongoing funding to keep the infrastructure secure. But no additional funds are expected this year. Although Democratic lawmakers in Congress have introduced several bills to provide more money to the states for election security, Senate Majority Leader Mitch McConnell (R-KY) has [indicated]( that the issue is not a priority and is unlikely to receive any attention in the upper chamber. Cutting Turkey from the F-35 Program Will Cost the Pentagon More Than $500 Million The Trump administration’s decision to remove Turkey from the F-35 stealth jet program will cost the Department of Defense between [$500 million and $600 million]( according to Ellen Lord, the Pentagon’s acquisition chief. The White House [announced]( Wednesday that Turkey was losing its right to purchase the stealth jet due to its acquisition of a Russian anti-aircraft system. “Unfortunately, Turkey’s decision to purchase Russian S-400 air defense systems renders its continued involvement with the F-35 impossible,” the White House said in a statement. “The F-35 cannot coexist with a Russian intelligence collection platform that will be used to learn about its advanced capabilities.” The costs are driven by the need to finding new manufacturers for the roughly 900 parts currently produced by 10 Turkish companies for use on the F-35. Turkey, which had been expected to purchase 30 F-35s and has pilots training in the U.S., has been a partner on the stealth jet project and paid a small share of the developmental costs. Turkey had also been expected to host an engine maintenance site for the F-35. The Turkish pilots and maintenance personnel currently in the U.S. were ordered home Wednesday. There's a "Cats" movie coming starring Taylor Swift, Idris Elba, Judi Dench, Jennifer Hudson and a litter full of other stars. The new trailer is [here](. We made it through the first minute. Send your favorite T.S. Eliot works, story tips and feedback to yrosenberg@thefiscaltimes.com. Or connect with us on Twitter: [@yuvalrosenberg]( [@mdrainey]( and [@TheFiscalTimes](. And please tell your friends they can [sign up here]( to get their own copy of this newsletter. News - [As Washington Seeks Budget Deal, Negotiators Try to Sideline Mulvaney]( – New York Times - [Budget Deal or No Deal? Pelosi and Mnuchin Are Talking, but Not Inking Deal Yet]( – Washington Post - [Moderate Democrats Renew Calls for Balanced Budget Amendment as Spending Deal Nears]( – The Hill - [Democratic Lawmakers Accuse Their Own Party of Proposing ‘Deep’ Cuts to Health Centers for Poor]( – Washington Post - [Biden Versus Sanders: Top 2020 Contenders Snipe Over Healthcare Policy]( – Reuters - [Buttigieg Vows 'Fairer, More Just Health Care' After Young Man Dies Rationing Insulin]( – The Hill - [Rising Health Insurance Deductibles Fuel Middle-Class Anger and Resentment]( – Los Angeles Times - [Surprise Medical Bill Legislation Takes a Step Forward, but Will It Lead to a Step Back?]( – Kaiser Health News - [Puerto Rico Faces Tougher Scrutiny Over Federal Medicaid Funding]( – Reuters - [Big Banks Are Earning Billions of Dollars. Trump’s Tax Cuts Are a Big Reason]( – New York Times - [House Passes Bill to Hike the Federal Minimum Wage to $15 an Hour]( – CNBC - [IRS Rolls Out New Rules for Patients with High-Deductible Plans, Chronic Diseases]( – Axios - [Trump Says He's Looking Closely at $10 Billion Amazon Contract with Pentagon]( – Reuters - [San Francisco's IPO Tax Won't Be on the Ballot Until 2020]( – Axios - [Trump's USDA Buried Sweeping Climate Change Response Plan]( – Politico Views and Analysis - [No Budget. On the Brink of Default. It’s a Hell of a Way to Run a Country.]( – Maya MacGuineas, Washington Post - [Medicaid Should Be a Bigger Part of the "Medicare for All" Debate]( – Drew Altman, Axios - [Why the Wheels Are Coming off the Obamacare ‘Cadillac Tax’]( – Megan McArdle, Washington Post - [I Don't Love Obamacare, but It's Not Unconstitutional: Ohio Attorney General]( – Dave Yost, USA Today - [Warren’s Latest Proposal Tells a Morality Tale about the Economy]( – Paul Waldman, Washington Post - [Paid Federal Family Leave Faces Senate Uncertainty After ‘Huge Win’ in House]( – Joe Davidson, Washington Post - [The Amtrak That Works, and the Amtrak That Doesn’t]( – Justin Fox, Bloomberg - [‘Trump’s Going to Get Re-elected, Isn’t He?’]( – Thomas L. Friedman, New York Times - [Pushing Turkey Out of NATO Is a Terrible Idea]( – James Stavridis, Bloomberg - [At Last, Legislation to Stop Private Equity Abuses]( – Robert Kuttner, American Prospect [Like Us on Facebook]( [Follow Us on Twitter]( [Read Us On the Web]( 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](.