Tag: donald trump

ObamaCare: What Trump Should Do Now

With President Donald Trump frustrated all over again with congressional Republicans’ inability to coalesce around a bill repealing and replacing ObamaCare, it seems like a good time to dust off this National Review Online column where I offer 14 ways Trump can pressure Congress and build public support for legislation:

1. End Congress’s illegal ObamaCare exemption.

2. End ObamaCare’s unconstitutional cost-sharing subsidies.

3. End ObamaCare’s illegal “reinsurance” payments.

4. Block Big Insurance’s “risk-corridor” raid on the Treasury.

5. Investigate the Obama administration’s illegal spending.

6. Allow freedom of conscience and choice in contraceptives coverage.

7. Illustrate how Americans can avoid ObamaCare penalties.

8. Illustrate how ObamaCare makes it easier than ever for people to wait until they are sick to purchase coverage.

9. Publish ObamaCare’s vital signs.

10. Release the documents.

11. Praise states that refused to implement ObamaCare.

12. Direct states to prepare for ObamaCare repeal.

13. Renounce IPAB.

14. Let seniors opt out of Medicare without losing Social Security benefits.

To its credit, the Trump administration has been doing some of #9. But not enough. Read here for more.

The Five Most Important Takeaways from Trump’s Budget

It’s both amusing and frustrating to observe the reaction to President Trump’s budget.

I’m amused that it is generating wild-eyed hysterics from interest groups who want us to believe the world is about to end.

But I’m frustrated because I’m reminded of the terribly dishonest way that budgets are debated and discussed in Washington. Simply stated, almost everyone starts with a “baseline” of big, pre-determined annual spending increases and they whine and wail about “cuts” if spending doesn’t climb as fast as previously assumed.

Here are the three most important things to understand about what the President has proposed.

First, the budget isn’t being cut. Indeed, Trump is proposing that federal spending increase from $4.06 trillion this year to $5.71 trillion in 2027.

 

Will Republicans Expand ObamaCare?

Back when the GOP was selecting its nominee for president last year, I warned my Republican friends that on ObamaCare, Donald Trump might be worse than Hillary Clinton:

Good ol’ partisanship would stop Hillary Clinton from expanding ObamaCare even a little. A faux opponent like Trump could co-opt congressional Republicans to expand it a lot.

I even quipped that a President Trump might sell out ObamaCare opponents for 10 feet of border wall.

It looks like my prediction was eerily accurate. Even as the House Republican leadership and President Trump claim they are moving legislation that would repeal and replace ObamaCare (it wouldn’t), Trump is offering to expand ObamaCare in return for Democratic cooperation in funding a new border wall.

ObamaCare requires participating insurers to offer more comprehensive coverage to low-income enrollees, with the understanding that Congress would compensate insurers for that added cost. The thing is, the Democratic Congress and president that enacted ObamaCare never appropriated funding for those so-called cost-sharing subsidies. President Obama initially recognized the lack of an appropriation, but then began issuing those subsidies anyway–because ObamaCare would have collapsed if he hadn’t.

By that time, Republicans had taken over the House of Representatives, and they sued the Obama administration in federal court for encroaching on Congress’ power of the purse by spending federal funds without an explicit appropriation. A federal judge sided with the House. She ruled that paying those cost-sharing subsidies “violates the Constitution,” and ordered that they stop, pending an appeal, which the Obama administration timely filed.

That was the state of play when President Trump took office. His administration now has three choices.

  1. It can declare that it agrees with the court’s ruling and enforce the court order. This would mean ending the illegal payments that are the only reason ObamaCare is still on the books. If Trump ends those illegal subsidies, it is likely that even more insurers will announce they are leaving the Exchanges. As I have written elsewhere, taking this step would create even more pressure on Congress to repeal ObamaCare, particularly the law’s community-rating price controls that are causing health insurance markets to collapse.
  2. It can appeal the lower court’s ruling. This is the strategy the Obama administration pursued. It would be an awkward step given that Trump’s attorney general Jeff Sessions and Secretary of Health and Human Services Tom Price have each stated they believe these payments are unconstitutional.
  3. It can ask Congress to appropriate the subsidies. This may be the most politically awkward option of all. It would mean the first legislative change that congressional Republicans and the Trump administration make to ObamaCare would not be to repeal it, but to expand it. Funding cost-sharing subsidies would mean Republicans would be providing more money for ObamaCare than a Democratic Congress did at the height of its power.

According to Reuters, the Trump administration has chosen option #3:

President Donald Trump put pressure on Democrats on Sunday as U.S. lawmakers worked to avoid a government shutdown, saying Obamacare would die without a cash infusion the White House has offered in exchange for their agreement to fund his border wall…

Spending legislation will require Democratic support to clear the Senate, and the White House says it has offered to include $7 billion in Obamacare subsidies to help low-income Americans pay for health insurance, if Democrats accept funding for the wall.

Price, Sessions Force Trump’s Hand on Cost-Sharing Reduction Payments

In a recent op-ed at The Federalist, I argued Donald Trump has serious leverage over both Republicans and Democrats in Congress when it comes to ObamaCare:

President Trump can force Republicans and Democrats back to the negotiating table, and get a bill that keeps his promises to fully repeal Obamacare and to protect people with preexisting conditions…by simply undoing the illegal actions by his predecessor, which he has also already promised to do.

One of those illegal actions is the illegal exemption from ObamaCare that President Barack Obama granted members of Congress and their staffs.

Another is the illegal “cost-sharing” subsidies President Obama began issuing – and that President Trump is still issuing – to insurers participating in ObamaCare’s Exchanges. In a case where the House of Representatives challenged the payments, a federal judge ruled that issuing those payments “violates the Constitution” and ordered them to stop, pending appeal. The Obama administration was pursuing an appeal, but the Trump administration has not indicated whether it would continue to appeal that ruling or enforce the judge’s order. Trump must do one or the other.

Two of President Trump’s cabinet picks have practically forced his hand on this issue.

When the federal district-court judge issued her ruling striking down the cost-sharing subsidy payments, Health and Human Services Secretary Tom Price was a Republican member of Congress. He issued a statement endorsing the ruling:

Today, Congressman Tom Price, M.D. issued the following statement after a federal judge ruled in favor of House Republicans’ lawsuit against Obamacare, saying that the Administration does not have the power to spend money on “cost sharing reduction payments” to insurers without an appropriation from Congress:

“The ruling proves a momentous victory for the rule of law and against the Obama Administration’s overreach of Constitutional authority,” said Congressman Tom Price, M.D. “This historic decision defies the Obama’s Administration’s ask that the courts disregard the letter of the law and reasserts Congress’s power of the purse as defined by our nation’s founders in Article One of the Constitution.”

“In recent weeks, we’ve seen insurers announce that they will exit the exchange markets in 2017, further deteriorating patients’ access and choice to health care plans that they want. This is yet again proof that Obamacare is on an unsustainable path, and House Republicans must remain committed to repealing and replacing this law. As a member of the Health Care Task Force, I’m honored to be working with my colleagues to advance positive, patient-centered solutions to the challenges in our health care system.”

Price has made clear his view that Congress did not appropriate funding for these payments, and that continuing to make them would constitute executive overreach and violate the rule of law. If President Trump chooses to appeal the lower-court ruling, he would put Price in a situation where he would have to help implement a policy that he considers unconstitutional. Price arguably would have to resign.

Yesterday, Trump’s attorney general Jeff Sessions expressed his view that the payments are unconstitutional and that the lawsuit challenging those payments “has validity to it.” If Trump chooses to appeal the lower-court ruling, Sessions would be the guy who carries out that appeal. It would be…awkward for him to defend a policy he believes to be unconstitutional. If Trump asks him to do so, Sessions too may have to resign.

Continuing President Obama’s illegal cost-sharing reduction payments could cost President Trump two cabinet officials.

Could Trump Turn Democrats Against Single-Payer Health Care?

A new Reuters/Ipsos poll examines how Donald Trump impacts Democrats’ and Republicans’ conventional public policy opinions. The survey asked Americans to evaluate a series of questions related to statements Donald Trump has made on public policy. However, the poll only told half of the respondents that Trump had made the statement, the other half were simply asked if they agreed or disagreed with the position. Sure enough, the “Trump effect” turned Democrats’ away from single-payer health care and got Republicans somewhat less convinced of their opposition.

The survey asked respondents how much they agreed or disagreed with the following statement made by Donald Trump: “When it comes to health care, the government should take care of everybody and the government should pay for it.” However, only half the sample were told Trump made the statement, the other half were simply asked if they agreed or disagreed that government should pay for everyone’s healthcare.

At first, 68% of Democrats agreed that government should pay for everybody’s healthcare. However, this share drops 21 points to 47% among Democrats who were told Trump thought government should pay for everyone’s healthcare. Republicans’ support increased, but by 6 points, from 33% to 39%, among those who were told Trump made the statement. Initially, 61% of Republicans disagreed with the idea of single-payer, but opposition declined to 50% among those who learned Trump favored it.

The survey also found that Trump could make Democrats more supportive of the idea of American exceptionalism and turn Republicans against it. At first, a majority (53%) of Democrats agreed that “American exceptionalism—the idea that the USA holds a unique place in history—is insulting to people from other countries.” However, results flip among Democrats who were told that Trump made this statement. Instead, a majority (54%) come to disagree with the statement that American exceptionalism is insulting to people from other countries.  

Republicans operated in reverse. A majority (53%) of Republicans at first disagreed that the idea of American exceptionalism is insulting to people from other countries. However, a plurality (46%) came to agree with the statement when they heard that Trump believes American exceptionalism is insulting abroad.

The survey found several more instances of the “Trump effect” among partisans. Notably, majorities of both Democrats (69%) and Republicans (56%) agreed that “government officials should be forbidden from financially benefitting from their position.” However, when Trump was explicitly identified, only 23% of Republicans believed that “Donald Trump should be forbidden from financially benefiting from his position”—a shift of 33 points.

Syria and the Danger of Elite Consensus

There was near consensus in Washington, D.C. last week in support of the U.S. strike on Syria. Voices from the left supporting Trump’s action include Hillary Clinton, most of America’s European allies, Tom Friedman, and a large number of former Obama officials. On the right, the usual suspects like Senators John McCain and Lindsey Graham supported the attack, as did most Republican members of Congress, including some like Majority Leader Senator Mitch McConnell who opposed exactly such an action when President Obama was considering in back in 2013. Even the mainstream media appear to have decided it was time to strike Assad, at least to judge from much of the breathless “journalism” we’ve seen so far.

On first blush one might imagine that this consensus is a good thing, coming as it does during what has otherwise been an incredibly polarized first few months of Trump’s presidency. Finally, you might say, we agree on something. And all this agreement among the people we elect and pay to run U.S. foreign policy might also give you confidence that Trump did the right thing.

That confidence, sadly, would be misplaced. The truth is that the elite consensus on Syria, like Trump’s missile strike, is premature and ultimately dangerous to American national security.

The fundamental danger of elite consensus is that it undermines the marketplace of ideas. A democracy’s primary strength in foreign policy making is the ability to weigh competing policy proposals in the news media. Debate and deliberation reveal the evidence and logic behind competing claims and helps the public and political leaders assess the implications of different courses of action. This process, in theory, helps the United States avoid poor decisions.

Consensus, however, undermines this process by substituting doctrine for debate. Almost by definition, consensus requires little, if any, debate or deliberation. When was the last time elite consensus resulted from a free-flowing and vigorous debate in the United States? The natural outcome of debate is division and disagreement. Consensus emerges only when people already agree so completely on the key assumptions and value judgments involved that the conclusions are preordained and debate is unnecessary.

In the case of Syria, Republican and Democratic elites supported Trump’s missile strike not because they had an extended debate over its wisdom–in fact, there was zero debate before the surprise attack was announced–but because they all relied on the same basic doctrine that strongly endorses the value of military intervention, what Obama recently called the “Washington playbook.” Reliance on doctrine may be sufficient when the topic is how to handle routine issues, but it is clearly not the right approach when it comes to complex policy problems, about which both citizens and political leaders have incomplete information. Though beliefs are useful as general guidelines, they must be married to a careful consideration of the facts of the case at hand in order to produce sound policies. And the best way to assess the connection between beliefs and actions is to debate policy options in the marketplace of ideas.

Based on His Leaked 2005 Tax Data, Donald Trump Should Move to Italy (or the Isle of Man)

The multi-faceted controversy over Donald Trump’s taxes has been rejuvenated by a partial leak of his 2005 tax return.

Interestingly, it appears that Trump pays a lot of tax. At least for that one year. Which is contrary to what a lot of people have suspected—including me in the column I wrote on this topic last year for Time.

Some Trump supporters are even highlighting the fact that Trump’s effective tax rate that year was higher than what’s been paid by other political figures in more recent years.

But I’m not impressed. First, we have no idea what Trump’s tax rate was in other years. So the people defending Trump on that basis may wind up with egg on their face if tax returns from other years ever get published.

Second, why is it a good thing that Trump paid so much tax? I realize I’m a curmudgeonly libertarian, but I was one of the people who applauded Trump for saying that he does everything possible to minimize the amount of money he turns over to the IRS. As far as I’m concerned, he failed in 2005.

But let’s set politics aside and focus on the fact that Trump coughed up $38 million to the IRS in 2005. If that’s representative of what he pays every year (and I realize that’s a big “if”), my main thought is that he should move to Italy.

Yes, I realize that sounds crazy given Italy’s awful fiscal system and grim outlook. But there’s actually a new special tax regime to lure wealthy foreigners. Regardless of their income, rich people who move to Italy from other nations can pay a flat amount of €100,000 every year. Note that we’re talking about a flat amount, not a flat rate.

Here’s how the reform was characterized by an Asian news outlet.

Italy on Wednesday (Mar 8) introduced a flat tax for wealthy foreigners in a bid to compete with similar incentives offered in Britain and Spain, which have successfully attracted a slew of rich footballers and entertainers. The new flat rate tax of €100,000 (US$105,000) a year will apply to all worldwide income for foreigners who declare Italy to be their residency for tax purposes.

Here’s how Bloomberg/BNA described the new initiative.

Italy unveiled a plan to allow the ultra-wealthy willing to take up residency in the country to pay an annual “flat tax” of 100,000 euros ($105,000) regardless of their level of income. A former Italian tax official told Bloomberg BNA the initiative is an attempt to entice high-net-worth individuals based in the U.K. to set up residency in Italy… Individuals paying the flat tax can add family members for an additional 25,000 euros ($26,250) each. The local media speculated that the measure would attract at least 1,000 high-income individuals.

Think about this from Donald Trump’s perspective. Would he rather pay $38 million to the charming people at the IRS, or would he rather make an annual payment of €100,000 (plus another €50,000 for his wife and youngest son) to the Agenzia Entrate?

Seems like a no-brainer to me, especially since Italy is one of the most beautiful nations in the world. Like France, it’s not a place where it’s easy to become rich, but it’s a great place to live if you already have money.

But if Trump prefers cold rain over Mediterranean sunshine, he could also pick the Isle of Man for his new home.

There are no capital gains, inheritance tax or stamp duty, and personal income tax has a 10% standard rate and 20% higher rate.  In addition there is a tax cap on total income payable of £125,000 per person, which has encouraged a steady flow of wealthy individuals and families to settle on the Island.

Though there are other options, as David Schrieberg explained for Forbes.

Italy is not exactly breaking new ground here. Various countries including Portugal, Malta, Cyprus and Ireland have been chasing high net worth individuals with various incentives. In 2014, some 60% of Swiss voters rejected a Socialist Party bid to end a 152-year-old tax break through which an estimated 5,600 wealthy foreigners pay a single lump sum similar to the new Italian regime.

Though all of these options are inferior to Monaco, where rich people (and everyone else) don’t pay any income tax. Same with the Cayman Islands and Bermuda. And don’t forget Vanuatu.

If you think all of this sounds too good to be true, you’re right. At least for Donald Trump and other Americans. The United States has a very onerous worldwide tax system based on citizenship.

In other words, unlike folks in the rest of the world, Americans have to give up their passports in order to benefit from these attractive options. And the IRS insists that such people pay a Soviet-style exit tax on their way out the door.

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