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The Political Ripples to Trump and Health Care Reform

Irwin M. Stelzer

The president’s health care reform and his radical budget: RIP. And with them perhaps the era of The Donald as we have come to know and love or hate it.

The man who thought he had engineered a hostile takeover of the Republican party found out last week that he hasn’t. Unless he learned that lesson, and learning unpleasant lessons is not Donald Trump’s long suit, we may be seeing the beginning of the end of the Trump phenomenon. That end could well come next year if the president’s current travails translate into Republicans’ loss of the Senate, and even possibly the House.

Restructuring the American health care system has long been a goal of American presidents. Harry Truman tried and failed in 1945. Bill Clinton, with his wife as point person, tried to push through Hillarycare in 1993, before retreating in disarray. Barack Obama tried—and succeeded. The number of people receiving health insurance increased, but Obamacare as constructed proved unsustainable. Among other things, it set very expensive standards of coverage and guaranteed health insurance to people with pre-existing conditions at premiums that do not reflect that risk to the insurer. That drove premiums up, but even with subsidies and mandates, not by enough to prevent insurers withdrawing from offering policies in many areas. But Obama succeeded in his main objective: changing the attitude of Americans. Most now believe that access to affordable insurance is an entitlement. Which is making it extraordinarily difficult for Trump to redeem the Republican campaign pledge to “repeal and replace” Obamacare. He deserves credit for not standing aside and letting Obamacare implode, which would have given him a freer hand in shaping a new system. But so long as people with pre-existing conditions are shielded from premiums high enough to reflect that fact, or insurers are not allowed to write policies that reflect risks they are taking, it will be difficult to devise a scheme that satisfies conservatives’ goals of lower taxes and an end to mandates. So far, no one has figured out how to do just that.

Bound by arcane self-imposed procedural rules, and led by speaker Paul Ryan, the House decided to tackle the job in three steps. Out came the first bill, down went the president’s popularity, and with it any notion he might have had that the Republican party has a new owner: him. The scampering of Republican feet as they abandoned the president could be heard in the corridors of power in D.C. Promising that all would come right when it ascended steps two and three, Ryan and the president removed Obamacare’s capital gains taxes on the rich, and freed young, healthy people of the requirement to buy insurance. Alas, in the short run—the time period of relevance to politicians who see the 2018 elections as ordinary people see tomorrow—that and other changes would result in higher premiums for the older, poorer, rural Americans who make up a large part of Trump’s core supporters, and less money to subsidize insurance purchases and fund Medicaid (the program to aid people too poor to afford insurance). Worst of all, the Congressional Budget Office (CBO) reckons that the new plan—Ryan fans call it Trumpcare, Trump fans call it Ryancare—would increase the number of people without health insurance by 24 million by 2026. Never mind that it would also reduce budget deficits by a hefty $337 billion—that’s mere money, whereas uninsured Americans are real people with medical needs that make compelling stories on television. Never mind that experts such as the Manhattan Institute’s Diana Furchtgott-Roth note that CBO estimates have been wildly inaccurate in the past and that markets will respond with attractive alternatives in the long run. Difficult to be heard above the roar of disenchanted Republican politicians who have had seven years to figure things out.

The health care mess is also affecting the president’s budget plans, revealed in part last week for the 27 percent of the budget devoted to what is called discretionary spending, the mandatory portion being set by laws that determine eligibility and other factors. Extraordinarily modest increases in defense spending, touted by the administration as a shift from soft to hard power but unlikely to have our adversaries quaking in their boots, and on veterans, homeland security (including the wall with Mexico, bill to be mailed to Mexico City in due course), and school choice are to be funded by major cuts in funding for the Environmental Protection Agency (-31 percent), State Department (-29 percent), Agriculture and Labor Departments (-21 percent each), and double-digit percentage cuts in six other agencies. Not a thin dime will be spent on programs and research related to climate change; or on partnerships with foreign health research institutes; or on a program that helps low-income seniors find work, or to support the arts; or on 19 agencies, ranging from the African Development Foundation through the U.S. Institute for Peace. If Trump has his way.

Which he won’t. Any slim chance he had of strong-arming congressmen to support this very radical and much-needed reallocation of the nation’s financial resources disappeared when Republicans in Congress declined to add antagonizing beneficiaries of programs being cut to the anger of voters who will almost certainly face the large increase in premiums next year instead of the (over-)promised relief they have been led to expect.

Until now, Democrats worried that many of their Senate candidates, running in states that Trump carried handily last year, would lose their re-election bids. Now, minority leader Chuck Schumer sees that geographic breakdown as a real advantage. By 2018 Trump supporters will be paying more or unable to obtain insurance at affordable rates, and many will see their favorite programs gutted in the Trump budget. Or, if Congress saves them, will at least wonder if Trump is really on their side, or on the side of the many of the administration’s Goldman Sachs alumni whose taxes the president aims to reduce.

Opinion polls show that the president’s approval rating, never high, fell to 39 percent from 42 percent, and his disapproval rating rose from 51 percent to 54 percent over last weekend. At this early stage in a president’s term, approval ratings are usually in the 50-60 percent range.

Republican legislators might amend the bill Trump is asking them to support, but the damage is done. They have let the president know that:

  • he will be on his own when he attempts to push through his tax reform bill;
  • they will not support raising tariffs on our trading partners;
  • and they are not prepared to run up deficits to fund an infrastructure plan in an economy so close to full employment that the Federal Reserve Board has finally set about raising rates.

But there might still be much to play for. Trump is on the right track in trying to roll back the regulatory state, despite a bit of over-enthusiasm; his supporters are pleased with his choice to fill a vacancy on the Supreme Court and want him to remain in a position to fill the next opening; and the health care and budget fights have only just begun. Best of all, the Democrats have nothing to offer voters except mud (for slinging), debt, and fears. And mandates on the proper use of toilets, mandates dear to the hearts of the San Francisco and New York congresspersons who lead their party in the House and Senate, respectively.

Most important of all, Hillary Clinton proved that elections are not won, but lost. Trump might be blessed in 2020 with an equally inept opponent.

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