Trump Suffers Two Big Legal Defeats on Immigration, Wall

Plus, a $1 trillion hit for homeowners? By Yuval Rosenberg and Michael Rainey Trump Suffers Two Legal Defeats on Immigration and Border Policies The Trump administration suffered a pair of legal defeats on major immigration policies Friday, as a federal judge in Texas ruled that the president acted unlawfully in declaring a national emergency to secure funds for a border wall and a federal judge in New York temporarily blocked the administration’s “public charge” rule tying immigrants’ legal status to their use of government benefits. Trump National Emergency Ruled ‘Unlawful’ U.S. District Court Judge David Briones [ruled]( that the president’s February 15 declaration of a national emergency overstepped his authority by seeking to divert more funds toward barrier construction than Congress had appropriated. “Briones said Congress made clear in a January budget measure ending a partial government shutdown that border wall funding was being denied, beyond $1.3 billion for upgrades of existing barriers,” Politico [reports](. The ruling applies only to some $3.6 billion in military construction funds the administration is seeking to divert toward barrier construction, not to the $2.5 billion the administration is tapping from other Defense Department money or the $600 million it is shifting from the Treasury Department’s asset forfeiture fund. The Supreme Court in July [lifted]( a lower court ruling blocking the Trump administration from using the $2.5 billion in disputed Pentagon funds to construct fencing along the border with Mexico. Briones’s ruling did not specify what injunction he would impose. Instead, the judge gave the plaintiffs in the case — El Paso County, Texas, and Border Network for Human Rights — 10 days to propose specifics and then five days for the government to respond. “Today’s ruling vindicates the Founders’ wisdom and confirms that the president is not a king, and that he cannot override Congress’s power to decide how to appropriate funds,” said Kristy Parker, a lawyer for Protect Democracy, a nonpartisan nonprofit that represented the plaintiffs. Read more about the national emergency ruling at [NBC News](. Judge: New Public Charge Rule ‘Repugnant to the American Dream’ In the other major immigration ruling Friday, District Court Judge George Daniels issued a temporary nationwide injunction blocking the administration from enforcing new rules, set to take effect October 15, that would make it harder for immigrants to get green cards if officials determined they would likely use government benefits including Medicaid, food stamps, welfare or public housing vouchers. “Defendants do not articulate why they are changing the public charge definition, why this new definition is needed now, or why the definition set forth in the rule — which has absolutely no support in the history of U.S. immigration law — is reasonable,” he [wrote](. “The rule is simply a new agency policy of exclusion in search of a justification. It is repugnant to the American Dream of the opportunity for prosperity and success through hard work and upward mobility. Immigrants have always come to this country seeking a better life for themselves and their posterity. With or without help, most succeed." In a separate ruling on Friday, a district court judge in San Francisco [reportedly]( said the administration could not enforce the public charge rule within the jurisdiction of the 9th Circuit Court of Appeals. Ken Cuccinelli, the acting director of U.S. Citizenship and Immigration Services, defended the new rule. "An objective judiciary will see that this rule lies squarely within long-held existing law," Cuccinelli said on [Twitter](. "The public charge regulation defines this law to ensure those seeking to come or stay in the U.S. can successfully support themselves financially and will not rely on public benefits as they seek opportunity here." Read more about the public charge ruling at [NPR]( or [The New York Times](. Trump Signs Executive Order Aimed at Curbing Agency Spending President Trump on Thursday signed an [executive order]( aimed at cutting spending at federal agencies by requiring them to offset any increased outlays on mandatory programs with other cuts. The “administrative PAYGO” rule put into effect by Trump’s order was originally put in place under the administration of President George W. Bush in 2005, according to [Government Executive](. The mandatory spending it covers includes spending on Social Security, Medicare and Medicaid. “It is the policy of the executive branch to control Federal spending and restore the Nation’s fiscal security,” the order says. “This policy includes ensuring that agencies consider the costs of their administrative actions, take steps to offset those costs, and curtail costly administrative actions.” Congress faces a similar legal requirement and Trump signed a similar order in 2017, but that order only applied to that fiscal year, The Wall Street Journal’s Kate Davidson and Andrew Restuccia [note](. A 2010 Congressional Research Service (CRS) [report]( highlighted by Government Executive noted that, while the Obama administration has said it would continue the administrative PAYGO policy, it was difficult to gauge the measure’s success, even after several years of implementation, due to a lack of transparency about the processes involved. The bottom line: “It is not clear by how much the directive will reduce federal outlays and it is unlikely to change the trajectory of trillion-dollar annual budget deficits over the next decade after Mr. Trump and congressional leaders agreed to boost federal spending, and Republicans advanced a $1.5 trillion tax cut,” the Journal’s Davidson and Restuccia say. Medicaid Work Requirements in Question A Justice Department lawyer defending the Trump administration’s approval of work requirements for Medicaid recipients in Kentucky and Arkansas told a panel of federal appeals court judges Friday that the new rules were intended to help low-income people by encouraging them to join the workforce. The three-member panel from the U.S. Court of Appeals for the D.C. Circuit seemed skeptical about that and other claims government lawyers made about the purpose and purported effects of the requirements, [reports]( Amy Goldstein of The Washington Post. One judge said that the administration was “failing to address the critical statutory objective” of the Medicaid program — namely, providing health care to vulnerable populations. Nine states have received permission from the Department of Health and Human Services to impose work requirements on Medicaid recipients, and several more have applied to do so. The experiments have been hung up with legal challenges, however, as groups representing low-income citizens have sued to overturn the requirements. Trump’s Tax Cuts Cost Homeowners $1 Trillion: Analysis The Tax Cuts and Jobs Act has cost millions of homeowners a collective $1 trillion in lost property values, says Allan Sloan, a former senior editor at Fortune and now an editor at large at ProPublica. As many homeowners in pricey suburbs continue to lament, the 2017 law capped the federal deduction of state and local taxes at $10,000 and eliminated some mortgage deductions, producing higher tax bills for millions of homeowners as a result. Those heftier bills have put downward pressure on house prices across the country as buyers adjust their affordability calculations, Sloan says, reducing the growth in property values overall. Sloan’s conclusion is based on a macroeconomic analysis of U.S. housing prices by Mark Zandi, chief economist of Moody’s Analytics, who found that overall house prices in the U.S. are 4% lower than they would have been absent the tax law, due to the loss of deductions and the rise in mortgage costs driven by the larger federal deficit. Given a total value of U.S homes of roughly $26 trillion as of March 31, the loss comes to $1.04 trillion. Hurting in New Jersey: Using an economic model developed by Hugh Lamle, former president of the asset management firm M.D. Sass, Sloan explores how higher tax bills affect homebuyers as they calculate how much property they can afford to purchase. Concentrating on the areas that have been hit hard by the tax law changes — primarily high-cost, high-income areas on the coasts — Sloan shows how the tax law has produced six-figure losses in property values for some taxpayers. According to Sloan’s calculations, the hardest hit areas were in the New York area, with New Jersey’s Essex County (where Sloan lives, it should be noted) seeing an estimated 11.3% loss on property values due to the tax law. The four next worst-off areas were Westchester County, New York (11.1% loss); Union County, New Jersey (11.0%); New York County (better known as Manhattan), New York (10.4%); and Lake County, Illinois (9.9%). But corporations are doing fine: The numbers are even more painful for some homeowners if you consider the trade-off between higher individual taxes and lower corporate taxes produced by the tax law, Sloan says: “According to the Tax Policy Center, the Treasury will get $620 billion of additional revenue over a 10-year period because people can’t deduct their full state and local taxes. That, in turn, covers most of the 10-year, $680 billion cost of the income tax break that corporations are getting. So you can make a case that my friends and neighbors and co-workers in New York and New Jersey—and many of you all over the country—are paying more federal income tax in order to help corporations pay less federal income tax.” For the full analysis, which includes notes on methods, see [Sloan’s article at ProPublica](. US Surgeons General Say Dementia Is Top Public Health Crisis Four former surgeons general who served under presidents George H.W. Bush, Bill Clinton and George W. Bush are warning that dementia is the nation’s top public health crisis. In a guest commentary for the Orlando Sentinel, the former public health officials call dementia — the loss of cognitive ability due to Alzheimer’s and other diseases — is a national crisis: “Its scale is unprecedented, and its numbers, already tragic, are growing rapidly.” The number of people over age 65 living with dementia doubles every five years, they say, and with Baby Boomers aging, 14 million people in the U.S. will be living with dementia by 2050. “The convergence of an aging population and increased dementias without an appropriate infrastructure of care is potentially catastrophic,” the surgeons general write. They argue that dementia “garners neither the urgency nor the resources it deserves” and that the public should be as concerned and informed about brain health as it is about heart health, breast cancer and the dangers of smoking. “We have an obligation to mobilize every corner of the legislative, public policy, and health communities to inform and educate the public” about the latest science on dementia, they say. Among their recommendations: making annual cognitive assessments part of routine check-ups. [Read the full op-ed at the Orlando Sentinel.]( Your Prize for Making It Through the Week This cute red squirrel stockpiling walnuts in Pitlochry, Scotland (photo by Russell Cheyne of Reuters) is a good reminder to get out there and enjoy the fall weather. Have a great weekend! We'll be back in your inbox on Tuesday. As always, send your tips and feedback to yrosenberg@thefiscaltimes.com. And please tell your friends to [sign up]( for their own copy of this newsletter. 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