Thursday, May 25, 2017
Will the Lies Turn the Base Against Trump/Pence?
Just about every financial path endorsed or proposed by the Trump/Pence administration is projected to cause that under-employed/unemployed bulwark of their political base to suffer dearly. The overriding explanation to this rob the poor to incentivize the rich is to bring manufacturing back to these shores and create millions of new jobs or reignite those jobs purportedly extinguished by over-regulation. Some fictional notion of massive growth, which is clearly contrary to the reality of any mature economy. But slashing and burning are coming. Like financial and environmental regulation. Stuff like allowing oil and mining companies to stop worrying about stopping leaks or dumping effluents into the air or local waterways. Or saving “taxpayer first” money by taking down the entire Consumer Protection Agency, which is clear a pain in the butt to corporate America but a saving grace for the consumer with no real power to address being ripped off by big companies otherwise.
This new notion of “taxpayer first” is a pretty obviously blessing to those who pay taxes at the highest brackets. Rich people and very profitable companies. For those who rely on nasty stuff like Social Security and public schools, who are struggling to make ends meet, hoping for a better life for their kids through college or trade school ($$$$$$$), who work for a living, they’re not on the dole, not on welfare, not overtaxing the system… just trying to live, well, their benefits are going down and their costs are going up. For those less fortunate, they simply will lose benefits that keep them alive, from food stamps (Supplemental Nutrition Assistance Program) to medical care. If the Trump/Pence budget submitted on May 23rd is implemented to any significant extent, we will have a lot fewer economically disadvantaged Americans to deal with. They will simply die off. Gratefully, revulsion to this budget is roiling through Congress on both sides of the aisle. Still this Trump/Pence budget betrays its core constituency like no other.
The proposed $1.7 trillion dollar cut to social support systems, even amortized over a decade and part of a reduction in domestic spending by a third, is the death sentence. You can skip over the elimination of the National Endowments for the Arts/Humanities, PBS, etc., and just drill down on the cost of healthcare, especially for those with preexisting conditions (most excluded from care without substantial likely premium increases making such policies unaffordable for the millions of people with serious issues), and you can see how those unable to afford the new, “taxpayer first” healthcare system, will either be moved to the economic edge of paycheck-to-paycheck existence… or over it. If they even have jobs. Vastly lower levels of healthcare at vastly higher costs to the consumer, kind of the opposite of The Donald’s campaign pledges.
“That [$1.7 number above] includes $616 billion from Medicaid, an entitlement program that [Trump] vowed as a candidate not to touch, and the Children’s Health Insurance Program, another entitlement… Other reductions include $142 billion over a decade from federal college loan programs and $72 billion from disability assistance…
“Yet many beneficiaries of the targeted programs are working-class Americans from whom Trump drew so much political support. The scale of proposed Medicaid cuts would probably lead to widespread coverage losses, according to independent experts, some state officials and advocates for children, the elderly and others who rely on the 52-year-old program.
“The House bill to roll back Obamacare — which Trump enthusiastically backed — would lead to about 10 million poor people losing insurance, according to the nonpartisan Congressional Budget Office.
“Medicaid is a pillar of the health law’s expansion of insurance coverage and has helped drive a historic drop in the nation’s uninsured rate. Nationwide surveys suggest at least 20 million previously uninsured Americans have gained coverage since 2014.
“The law makes hundreds of billions of dollars of federal aid available to states to extend Medicaid coverage, including to low-income childless adults, a population that had been largely excluded from the program. Historically it was limited to poor children, pregnant women, the elderly and people with disabilities.” Los Angeles Times, May 23rd.
While it is clear that the Senate will make major changes, “A [GOP] bill to dismantle the Affordable Care Act that narrowly passed the House this month [May] would leave 14 million more people uninsured next year than under President Barack Obama’s health law — and 23 million more in 2026, the [non-partisan] Congressional Budget Office said Wednesday [5/24]. Some of the nation’s sickest would pay much more for health care…
“In many states, insurance costs could soar for consumers who are sick or have pre-existing conditions, while premiums would fall for the healthy, the new estimate concludes… In states that obtain waivers from certain health insurance mandates, ‘premiums would vary significantly according to health status and the types of benefits provided, and less healthy people would face extremely high premiums,’ the budget office said…
“‘Unless you’re a healthy millionaire, Trumpcare is a nightmare,’ said Senator Chuck Schumer of New York, the minority leader. ‘This report ought to be the final nail in the coffin of the Republican effort to sabotage our health care system.’… Insurance is, by definition, a pooling of risks, but the budget office said the House bill could cause a fragmentation of the market.” New York Times, May 24th.
But defense spending will add half a trillion dollars over ten years, and the very notion of having an economy swell from his incentives to the rich is little more than political propaganda. Bringing manufacturing back to America? It will line the pockets of those who own the mechanisms of automation – labor-saving devices – and most definitely not workers such machines were designed to replace. By privatizing infrastructure development, Trump enables some very well-heeled companies to charge decades of tolls and other user fees to ordinary Americans using roads and bridges just to get to work. And seriously, he will not make much in the way of creating demand for much-maligned coal… so those workers will wait for a return to those jobs… in vain.
Donald now courts his conservatives, at the expense of his constituency, with deficit reduction as a major plank, along with tax cuts that will go well over 90% to those in the highest income brackets. The rich get richer and the poor and middle class live with the cuts to benefits and services as well as a sharp increase in the cost of living. But, claims Mr. Trump, a booming economy will float all boats… eventually. Nevertheless: “Drastic cuts to programs, from agriculture to Medicaid, have drawn blowback from lawmakers in districts whose constituents would stand to be affected by the slashes.” AOL.com, May 23rd. Dems as well as Republicans.
“In its inaugural budget, the Trump administration projected that booming economic growth would allow the president to keep a wide range of expensive campaign promises while eliminating federal deficits in 10 years… It is wishful thinking.
“The budget promises a deep tax cut for businesses and consumers that would not reduce federal revenue. An increase in military spending would be offset by trillions of dollars of unspecified or loosely sketched reductions in federal spending… And it all works because the budget assumes an acceleration of economic growth to an annual pace of 3 percent a year, much higher than the post-recession average of 2 percent.
“‘I see no way that’s going to remotely happen,’ said David A. Stockman, the budget director under President Ronald Reagan. He noted that the White House is depending on the continuation of an economic expansion that is already among the longest in American history. ‘It assumes you’re going to go 206 months without a recession, which has never happened,’ he said. Not in the United States, at least.
“Presidential budgets are political statements — wish lists that Congress never grants in full, and sometimes rejects completely. A preliminary version of President Trump’s plan already got a frosty reception on Capitol Hill even though Republicans control both houses of Congress. Many Republicans share the Democrats’ wariness about large-scale cuts to the social safety net. And increased military spending would require Democratic support to lift the caps imposed by the Budget Control Act of 2011, giving the minority party valuable leverage.
“Strikingly, Mr. Trump’s budget would increase the share of the nation’s economic output the federal government collects each year. The Congressional Budget Office projected in January that under current law the government would collect 18.37 percent of gross domestic product in 2027. Mr. Trump’s budget projects that the government would collect 18.43 percent — even after a proposed tax cut. Because the White House also projects faster economic growth, the combined effect would increase federal revenues over the 10-year period by an estimated $2.7 trillion.” New York Times, May 22nd. Yeah, even Republican economists have serious doubts.
But there is more of a direct dollar payback to those who need that extra cash the least, people who don’t hire waves of well-paid workers without a clear business plan to make more money. And if consumers have even less discretionary income to spend because life will be that much more expensive under all such changes… And if we have to replace all those undocumented workers to the other side of a wall Mexico will never pay for, exactly what do you think will happen to food prices and construction costs? Tax cuts for the rich do not address any of these issues.
“Even less specificity was offered on the tax plan, which Mr. Trump’s economic team has promised will become law by the end of this year. [Mick Mulvaney, director of the Office of Management and Budget] said Monday [5/22] that the budget projected that the proposed tax cuts would not increase the federal debt because they would produce offsetting economic growth.
“That assertion is disputed by a wide range of economists, both liberal and conservative. The Committee for a Responsible Federal Budget estimated last month that the ideas presented by Mr. Trump, including cutting the corporate tax rate to 15 percent from 35 percent and doubling the standard deduction for individual taxpayers, could reduce tax revenues by $7 trillion over 10 years.” NY Times.
Trump math gets even worse when you really look at it… counting numbers twice to get the desired result. “Former Treasury Secretary Larry Summers, in a Washington Post column on Tuesday [5/23], said that the idea was a ‘logical error of the kind that would justify failing a student in an introductory economics course.’
“‘Apparently, the budget forecasts that U.S. economic growth will rise to 3.0 percent because of the administration's policies — largely its tax cuts and perhaps also its regulatory policies,’ Summer wrote. ‘Fair enough if you believe in tooth fairies and ludicrous supply-side economics.’… The administration is saying the tax cuts will not only pay for themselves, but also earn the country enough to make up the deficit. Essentially, what they billed as a revenue-neutral tax plan will now evidently be revenue positive.
“As Summers put it this math does not work ‘in a world of logic… This is a mistake no serious business person would make,’ Summers said. ‘It appears to be the most egregious accounting error in a presidential budget in the nearly 40 years I have been tracking them.’ Maya MacGuineas, president of the Committee for a Responsible Federal Budget, also took issue with the apparent double-counting in a statement Monday [5/22].’ AOL.com, May 23rd.
Money lies seem to be everywhere you look, even in the little things: “Just before taking office, President Donald Trump promised to donate all profits earned from foreign governments back to the U.S. Treasury… But MSNBC has learned the Trump Organization is not tracking all possible payments it receives from foreign governments, according to new admissions by Trump representatives. By failing to track foreign payments it receives, the company will be hard-pressed to meet Trump's pledge to donate foreign profits and could even increase its legal exposure.
“The Trump Organization does not ‘attempt to identify individual travelers who have not specifically identified themselves as being a representative of a foreign government entity,’ according to a new company pamphlet. The policy suggests that it is up to foreign governments, not Trump hotels, to determine whether they self-report their business.” NBC News, May 24th.
Democrats may press non-economic issues to the fore, but perhaps they just don’t understand their own country well enough. While the pursuit of Russian collusion with the Trump campaign is clearly important to the survival of democracy, as equal treatment under the law is a basic American premise that must be sustained, and as humanitarian values and gender/ racial/religious equality are Western standards… in the end, “it’s the economy stupid.” If the Democrats are dumb enough not to prioritize that reality, knowing that until their economic world is stabilized, most Americans won’t care about much else, the Trump/Pence-Republicans will endure and triumph with their policies that almost always favor the wealthiest in the land.
I’m Peter Dekom, and Trump’s entire view of American wealth and how most Americans live and work is nothing more than Easter Bunny economics elevating the rich at every major decision threshold… at the expense of everybody else.