May 08



Pres polls: (None)
Dem pickups: (None)
GOP pickups: FL IA MI OH PA WI

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AHCA Could Have Many Unintended Consequences

With almost any major piece of legislation, there are side effects that were not envisioned by lawmakers. This tendency is particularly pronounced when the law in question is rushed to a vote, without benefit of things like committee hearings, public comments, and CBO reports. Here are five possible consequences of the AHCA that Speaker Paul Ryan (R-WI) & Co. might not have considered:

• Jobs: Healthcare is one of the country's fastest growing sectors, accounting for substantial job growth. If the AHCA bill, or whatever the Senate comes up with as an alternative, is finally enacted into law, many fewer people will have health care, possibly tens of millions fewer. And fewer people getting health care means fewer jobs for doctors, nurses, lab technicians, hospital orderlies, and everyone else working in the medical sector, not to mention fewer jobs making MRI machines, hearing aids, and other medical equipment. About 20% of the GDP is related to health care, so if the sector contracts, it will take a lot of jobs with it. Many small businesses say that the ACA reduced jobs by increasing their costs, but that is far from clear. It may have reduced them in, say, restaurants, but the growth in health-care jobs may well have compensated for that.
  
  
• Why Work?: A reader observes that the AHCA, as currently constituted, would permanently boot Medicaid users if their income exceeds 138% of the poverty line in any given year. In other words, someone whose future economic prospects for next year were unclear would be very unwise to earn too much money this year. Thus, the bill disincentivizes both hard work and entrepreneurialism.
  
  
• Dumping Grounds: Another observation is that, under the AHCA's "opt out" provision—the one that was necessary to get the Freedom Caucus on board—those states that did not exercise the option (in other words, the blue ones) could quickly attract hundreds of thousands of new residents with pre-existing conditions. This could wreck the economies and health care systems of those states, and might force them to opt out, too. Of course, this could be exactly what the Freedom Caucus is hoping will happen.
  
  
• Bankruptcy: One underreported effect of Obamacare was that it cut the number of personal bankruptcies filed in the United States—by half. Needless to say, if the number of insured goes down, the number of bankruptcies is going to rise again. On the plus side, this increases jobs for bankruptcy lawyers.
  
  
• A Pandemic: It's been an unusually long time since the planet experienced an outbreak of disease that reached pandemic levels. The last one was in the late 1960s, and experts say that another one is coming. It will likely be some form of flu, and will not be treatable once people contract it. The key factor in determining whether the outbreak claims 20,000-30,000 American lives (like the Hong Kong flu of 1968) or nearly 1 million American lives (like the Spanish flu of 1918) will be how many people had their flu vaccines. The fewer people who have healthcare, the fewer people who will be vaccinated.

The Republican Party says that it favors job creation, hard work, and entrepreneurialism, while opposing bankruptcies. Presumably, members of both parties are against massive emigrations, states teetering on the brink of bankruptcy, and lethal outbreaks of disease. So, on these bases alone, the GOP should want to tear up the AHCA and go back to the drawing board. (V & Z)

Russia Investigation Will Resume Center Stage This Week

Donald Trump's health care "victory" is already receding in the rear view mirror. As we have observed, that win will get smaller and smaller as think tanks and the CBO weigh in with their assessments. Meanwhile, as the president travels around the Mediterranean, meeting with Christians, Muslims, and Jews, the headlines back in the U.S. figure to be dominated by news related to Russia and its interference with the presidential election.

To start, there's the hacking of France's election. It is likely that everyone's suspicions will soon be confirmed by the General Directorate for Internal Security, and that Russia will be declared the culprit. That will, of course, return Americans' attention to the hacking that took place on this side of the pond. Then, if that were not enough, former acting AG Sally Yates will appear before Congress this week to testify, in so many words, that the Trump administration is being untruthful when it comes to what they knew about former NSA Michael Flynn and when they knew it.

The Sunday morning news shows gave a preview of what is to come, as various GOP functionaries were peppered with Russia-related questions. Trump himself knows what's coming, and tried to get out ahead of it on Twitter Sunday:

When will the Fake Media ask about the Dems dealings with Russia & why the DNC wouldn't allow the FBI to check their server or investigate?

— Donald J. Trump (@realDonaldTrump) May 7, 2017

Unfortunately for him, even if the Democrats had behaved just as badly as Trump's people did—which they did not—it's always the party in power that gets the laser-like scrutiny. (Z)

Border-Adjustment Tax Is Dead in the Senate

One of Speaker Paul Ryan's dreams—a massive border-adjustment tax that would generate a trillion dollars in revenue and let him slash taxes for the wealthy—died yesterday, when Sen. David Perdue (R-GA) attacked the idea as a tariff that would hurt low- and middle-income consumers. Sen. John Cornyn (R-TX) has also closed the door on such a tax. Sen. Susan Collins (R-ME) is also against it. All it takes to defeat the tax is three GOP senators who oppose it, so it looks like the tax is dead on arrival in the senate.

Assuming Ryan accepts the inevitable and does not push for a tax bill that includes an element that the Senate will strip out, he has a big problem. He will either have to scale back the amount of his tax cut, find another revenue source, or blow a giant hole in the budget. None of these options is likely to be popular in the House, so putting together a majority will be an even bigger challenge than it was with the healthcare bill. (V)

Republican Leads in Montana Special House Election

A new poll sponsored by a Democratic super PAC gives Greg Gianforte (R) a lead of 49% to 43% over Rob Quist (D) in the Montana special election to fill the seat vacated by Secretary of the Interior Ryan Zinke. While partisan polls should be taken with a barrel of salt, when published, they tend to show that their candidate is doing well. When they show their candidate losing, they have somewhat more credibility.

Gianforte ran for governor of Montana last year and lost. He doesn't need a job for the income since he sold his company to Oracle for $1.5 billion, but he clearly has an interest in politics and some spare time. The Democrat, Quist, is a singer-songwriter and banjo player. The special election is May 25. (V)

Next Test for Muslim Ban v2.0 Comes Today in Virgina

After Judge Theodore Chuang of Maryland, which is definitely not an island in the Pacific, ruled against the administration's revised Muslim travel ban, the government appealed. The appeal will be heard today by the U.S. Court of Appeals for the Fourth Circuit in Richmond, Virginia. A panel of more than a dozen judges will consider whether Chuang was right in saying the ban violates the Constitution. What is unusual in this case that the appeals court is skipping the usual three-judge panel and going directly to an en-banc hearing, in which all the judges in the circuit take part. If the case goes against the administration, it will have to appeal to the U.S. Supreme Court to get it reversed.

Win or lose, a similar case is brewing on the West Coast. Earlier this year, a federal judge in Hawaii, which is an island in the Pacific (well, a group of them), also ruled against the ban. The government also appealed that case, which will be heard by a three-judge panel of the Ninth Circuit on May 15. If the two courts disagree, it is virtually certain the Supreme Court will take the case. If they both rule the same way, the Supreme Court doesn't have to take the case, although it could anyway. (V)

Kusnher's Sister Offers Green Cards to Chinese Investors Who Invest in Her Business

The textbook definition of corruption is when a government official or family member offers special treatment from the government to someone in exchange for giving them money in one form or another. Jared Kushner's sister, Nicole Kushner Meyer, clearly passed the test with her recent offer of green cards to Chinese businessmen who invest in the family's $150 million luxury Jersey City One Journal Square development. In her pitch at the Ritz-Carlton hotel in Beijing, Meyer wasn't subtle at all. She explicitly pointed out that her brother was a key decision maker for the EB-5 visa program, which grants visas to certain investors. Meyer also wasn't looking for general publicity for her project: She had reporters from the New York Times and Washington Post kicked out of the room, but the New York Daily News somehow got the scoop. A former White House ethics lawyer for George W. Bush called the event "incredibly stupid and highly inappropriate." (V)

Obama Unveils Plans for Presidential Library

All the presidents since FDR have built a presidential library (a few before him eventually got one, too, including his predecessor Herbert Hoover). Ostensibly, they are supposed to be a place where scholars can do research, and citizens can learn about the past. However, over time, they have taken a turn for the worse. The money used to build the library is generally collected while the president is still in office, raising the potential that donors—whose contributions are not limited by law—might try to purchase favors. Once built, the libraries turn hagiographic celebrations of the men they memorialize, while also serving as hubs for partisan advocacy. Meanwhile, more and more of the records that might be used for research have been classified, in some cases for as much as 100 years. And the federal government gets stuck paying the bill for operating costs.

Anthony Clark is a former Congressional staffer and is the foremost expert on presidential libraries, having literally written the book on the subject. He quite reasonably views the arrangement described above as a "scam." When Barack Obama revealed plans for his library this past weekend, Clark was very impressed at how much the 44th president is flipping the script. Donations were not collected while Obama was in the White House, and the costs of operating the library will be borne by the Obama Foundation and not the federal government. The structure that is planned is considerably more modest than other presidential libraries, and may end up as a branch of the Chicago library system. Rather than serve as a depository for inaccessible records, the Obama library will become a digital portal, making available non-classified records via the Internet.

Clark hopes that Obama's plan will become a model for future presidential libraries. That will happen only if, as he suggests, Congress passes a law requiring that to be the case henceforth. Failing that, there is zero chance that Donald Trump will follow Obama's lead on anything. Indeed, we can already be certain that the TRUMP Presidential Library will make the Las Vegas Strip and the Great Pyramid of Giza appear modest, by comparison. (Z)

Macron Crushes Le Pen to Become President of France

Trumpism is apparently not an export product. First, the Trump-lite candidate in The Netherlands, Geert Wilders, came in a disappointing second in the Dutch election in March. Yesterday, Emmanuel Macron crushed right-wing extremist Marine Le Pen in the French runoff. Macron got about 66% of the vote to Le Pen's 34%. While both Wilders and Le Pen share much of Trump's populism, they don't have a lot of his baggage, such as a history of making crude remarks about women. So the European elections were more about politics than personalities, and it is clear that Trump-like politics is nowhere near a majority in at least two countries, and probably not in any.

Both Wilders and Le Pen ran on <insert-name-of-country>-first platforms, but the voters weren't having it. Both Macron and the winner of the Dutch election, Mark Rutte, are pro-Europe and have little interest in isolationism, as Trump does. The rest of Europe breathed a sigh of relief with Macron's win, with the euro advancing against the dollar within minutes of the first projection that Macron would win big. If Le Pen had won, the euro would have collapsed. The next test of Trumpism in Europe is in September, in Germany, where the AfD Party is competing as a right-wing populist party. (V)

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