Vox - President Donald Trump’s 2019 budget planhttps://cdn.vox-cdn.com/community_logos/52517/voxv.png2019-03-12T16:40:00-04:00http://www.vox.com/rss/stream/167684192019-03-12T16:40:00-04:002019-03-12T16:40:00-04:00Trump’s budget request slashes retirement benefits for 2 million federal workers
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<img alt="Furloughed federal workers and those aligned with them protest the partial government shutdown in the Hart Senate Office Building January 23, 2019 in Washington, DC. Members of the National Federation of Federal Employees, the American Federation of Gover" src="https://cdn.vox-cdn.com/thumbor/QJdKQ2lOh48P4qRYDbB4LnIx8QE=/374x0:6347x4480/1310x983/cdn.vox-cdn.com/uploads/chorus_image/image/63225817/GettyImages_1098433410.0.jpg" />
<figcaption>Furloughed federal workers and contract workers protest the partial government shutdown in the Hart Senate Office Building on January 23, 2019, in Washington, DC. | Win McNamee/Getty Images</figcaption>
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<p>Each federal worker would lose about $75,000 in retirement savings.</p> <p id="6lG5PX">President Donald Trump’s <a href="https://www.vox.com/policy-and-politics/2019/3/11/18259789/trumps-2020-budget-proposal-cuts">grand vision for America in 2020</a> can be summarized this way: spend billions more<strong> </strong>dollars on the US military and immigration enforcement; cut billions of dollars from the social safety net. And do nothing to close the <a href="https://www.vox.com/policy-and-politics/2018/10/19/17989664/deficit-tax-cuts-donald-trump-disaster-relief">$1 trillion deficit</a> Republicans created with their 2017 corporate tax cuts.</p>
<p id="lgCdGA">The president’s 2020 <a href="https://www.wsj.com/public/resources/documents/budget.pdf?&mod=article_inline">budget proposal</a>, which he released Monday, managed to anger everyone from retirees to <a href="https://www.washingtonpost.com/health/2019/03/11/trump-proposal-would-slash-total-cancer-funding-while-boosting-pediatric-research/?utm_term=.e18b06736ba6">childhood cancer researchers</a>. It also angered millions of federal employees and retired government workers, who would see their pensions cut under the president’s budget request.</p>
<p id="tf5iyE">Randy Erwin, president of the National Federation of Federal Employees labor union (NFFE), blamed Trump for trying to make federal workers pay for the 2017 tax cuts, which disproportionately benefited the wealthiest Americans. </p>
<p id="WvIk82">“President Trump again sacrifices the middle-class families on behalf of the wealthy through his proposed pay freeze and needless cuts to earned benefits for federal workers,” Erwin said in a statement released Monday. “We saw during the 35-day shutdown earlier this year that many federal workers live paycheck to paycheck.” </p>
<p id="Im6Pfo">The proposal would cancel cost-of-living increases to pension income for retirees in one program, and would lower the annual adjustment to another pension program by 0.5 percent. The budget also scraps certain retirement benefits for employees who stop working before they are eligible for Social Security.</p>
<p id="y2ZyqM">Current federal employees would also end up paying more for their retirement benefits, without getting anything in return. </p>
<p id="Dmb0r6">All in all, the president wants to cut $148.9 billion from employee pensions in the next decade — roughly $75,000 per federal worker, according to NFFE. And it’s not a small workforce, either: The US government is the largest employer in the country, with 2.1 million civilian employees. The vast majority of them live outside the Washington, DC, area.</p>
<p id="xtY4sK">It’s unlikely that Trump will persuade Congress to pass his version of the budget, especially with the new Democratic majority in the House. He was unable to scale back retirement benefits for federal workers last year, even with Republicans in control of both legislative chambers. But his latest budget request reflects his growing hostility toward the federal workforce he oversees — a relationship that <a href="https://www.vox.com/2019/1/24/18194863/government-shutdown-worker-protest">nearly reached a breaking point</a> during the 35-day partial government shutdown that <a href="https://www.vox.com/2019/1/24/18194863/government-shutdown-worker-protest">ended in January</a>.</p>
<h3 id="YUcgeg">Trump doesn’t want federal workers to get annual raises</h3>
<p id="A5ag5L">Trump has tried many things to keep civilian government employees from getting annual raises since he took office.</p>
<p id="Wmj30Q">He first announced the across-the-board <a href="https://www.federaltimes.com/management/pay-benefits/2018/08/30/trump-intends-to-freeze-federal-pay-for-2019/"><strong>pay freeze in August</strong></a>, saying the federal government couldn’t afford the automatic 2.1 percent pay bump employees were supposed to get in 2019.</p>
<p id="8JyRBQ">Trump’s decision was swiftly met with widespread<strong> </strong>criticism from labor unions that represent federal workers, calling it “<a href="https://www.politico.com/story/2018/08/30/trump-cancels-pay-raises-federal-workers-804574"><strong>a slap in the face</strong></a>.”</p>
<p id="zCGeCJ">The president is allowed to cancel raises in the event of a “national emergency or serious economic conditions affecting the general welfare,” and past presidents have eased up on scheduled raises for federal workers. President Barack Obama, for example, issued a two-year <a href="https://www.nytimes.com/2010/11/30/us/politics/30freeze.html"><strong>federal pay freeze in 2010</strong></a> in response to the financial crash. And in 2012 and 2013, House Republicans stepped in to freeze pay for both federal workers and congressional staff.</p>
<p id="thgr51">But with today’s <a href="https://www.vox.com/policy-and-politics/2018/11/16/18095094/amazon-hq2-jobs"><strong>expanding economy</strong></a>, it’s hard to justify withholding raises from 2 million government workers, most of whom live outside of the nation’s capital. But Trump tried anyway.</p>
<p id="ocQAIH">In a letter he sent to Congress over the summer, he said the raises were “inappropriate” in light of the government’s fiscal crisis, which includes a $1 trillion budget deficit. He said employees should only get raises based on performance and merit, disregarding increases in cost of living or other factors.</p>
<p id="qCj0lc">“We must maintain efforts to put our Nation on a fiscally sustainable course, and Federal agency budgets cannot sustain such increases,” Trump <a href="https://www.usatoday.com/story/news/politics/2018/08/30/federal-pay-freeze-trump-cancels-2-1-percent-pay-raise-federal-workers-citing-budget-deficit/1145355002/">wrote</a>. The letter made no mention of the 2017 Republican tax bill, which slashed corporate tax rates and blew a hole in the federal budget.</p>
<p id="FJz4Cr">Trump officially canceled the pay raises in December — just days after he <a href="https://www.vox.com/2018/1/18/16905472/government-shutdown-2019-congress"><strong>shut down the government</strong></a> and withheld paychecks for nearly 800,000 employees. That included Border Patrol agents and Immigration and Customs Enforcement agents.</p>
<p id="krFNF1">Trump’s later decision to <a href="https://www.vox.com/2018/1/18/16905472/government-shutdown-2019-congress">reopen the government for<strong> </strong>three weeks</a> — without funding for a border wall — did not include a raise.</p>
<p id="AKhxxL">Members of Congress, though, tried to override his decision.</p>
<p id="hMubfl">In January, the House <a href="https://www.congress.gov/bill/116th-congress/house-bill/790"><strong>passed a bill</strong></a> that would give civilian workers a 2.6 percent cost-of-living increase for 2019. Senate Democrats introduced their own version of the bill calling for the 2.6 percent<strong> </strong>raise, which would match the increase given to military service members. But Senate Majority Leader Mitch McConnell never brought it to the floor for a vote.</p>
<p id="CAp9JF">A few weeks later, both chambers agreed to give federal employees a 1.9 percent pay raise, adding it to the 2019 spending bill that Trump signed in February (the workers <a href="http://www.nffe.org/ht/display/ReleaseDetails/i/173879">are still waiting</a> to get it).</p>
<p id="VqKaM9">Now Trump is hoping to save money by scaling back retirement benefits for the federal workforce too. But he can’t do that without Congress’s approval, and budget negotiations are starting to heat up.</p>
<p id="EA43KI">In the next few weeks, lawmakers will have <a href="https://www.vox.com/policy-and-politics/2019/2/26/18236238/government-funding-2019-sequestration-spending-caps">to reach a new deal over budget caps</a> to prevent automatic spending cuts, because of a sequestration policy that Obama negotiated with Republicans in 2011. The government recently surpassed the <a href="https://www.vox.com/policy-and-politics/2019/2/21/18233169/debt-ceiling-explained"><strong>federal debt ceiling</strong></a>, which limits how much money the government can borrow, but the Treasury Department used extraordinary measures to buy Congress more time to make a deal. </p>
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https://www.vox.com/2019/3/12/18261739/trump-budget-2019-federal-workersAlexia Fernández Campbell2018-02-19T08:50:02-05:002018-02-19T08:50:02-05:00Obama’s chief economist: Trump’s economic projections are “the most absurd I’ve ever seen”
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<img alt="President Trump Visits Equipment Manufacturing Plant In Pennsylvania" src="https://cdn.vox-cdn.com/thumbor/M7hg-KhF1rWgs7xtg3WXlEvICY8=/220x0:3680x2595/1310x983/cdn.vox-cdn.com/uploads/chorus_image/image/58735765/906699118.jpg.0.jpg" />
<figcaption>A fan attends a Trump speech on the economy in Coraopolis, Pennsylvania. | Jeff Swensen/Getty Images</figcaption>
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<p>Jason Furman on the budget, the Trump economy, and how Democrats should respond.</p> <p id="kow8zu">With the release of President Donald Trump’s <a href="https://www.vox.com/2018/2/12/17003804/donald-trump-budget-2019-read-pdf-full-document">2019 budget proposal</a>, the Trump economic vision is becoming clearer than ever. Trump envisions a world where the US taxes dramatically less and cuts spending significantly too, leaving little funding for things like roads, scientific research, and safety net programs. He predicts huge growth rates, of 3 percent a year, without explaining how he’d get there. And independent analysts believe his agenda will lead to trillion-dollar-plus deficits as far as the eye can see.</p>
<p id="lGjDfp">Jason Furman, who worked as deputy director of the National Economic Council and then chief economist in the Obama White House, finds this vision of the future alarming, to say the least. He’s totally supportive of deficits, even massive ones, when they’re needed to overcome economic downturns, but now that the economy is recovering and deficits are still large, he’s more worried. And the answer, he argues, is raising taxes and getting more revenue, especially from the rich but ultimately from everyone.</p>
<p id="WVb2Dj">I talked to Furman, who is now a professor of practice at the Harvard Kennedy School, on the phone about the fiscal future of the country; a lightly edited transcript follows.</p>
<h4 id="CWTylN">Dylan Matthews</h4>
<p id="pVCztp">You’ve said that Trump’s budget demonstrates that we have a revenue problem, not a spending problem. We aren’t taxing enough or getting enough money from the taxes we have. Walk me through your reasoning.</p>
<h4 id="KCEZKm">Jason Furman</h4>
<p id="CeGhxd">We have a large budget deficit over the indefinite future. I think a lot of the problem we have is that revenue is just exceedingly low, especially for this part of the business cycle. We won’t be able to have the type of government I think we should have — or the type of budget balance that everyone, in theory, thinks we should have — if we don’t have more revenue.</p>
<p id="EmTmbF">To put some numbers on that, revenue is projected to be only 16.3 percent of GDP in fiscal year 2019. The only times in the past 50 years that has happened were in the aftermath of the past two recessions. Even in the 1980s, you had tax cuts and a deep recession and we were collecting more than that in revenue as a share of GDP.</p>
<p id="nkk6Wr">The deterioration in the budget forecast relative to what was projected a year ago is largely because revenue has come down, both because the tax cut passed and because revenue collections are lower.</p>
<p id="45Dos1">Finally, you can look at the spending side of the budget, and you don’t see the type of out-of-control spending growth people talk about. The amazing thing is that Medicare in 2019 will be 3 percent of GDP. In 2009, it was 3 percent of GDP. That’s despite the fact that the number of Medicare beneficiaries has gone up from 45 million to 60 million. You’ve had a 33 percent increase in Medicare beneficiaries and no increase in Medicare as a share of GDP.</p>
<p id="hb9iDU">You’ve seen very surprising restraint in growth of spending programs.</p>
<h4 id="sM8YGZ">Dylan Matthews</h4>
<p id="Tbpkr9">Let’s dig into that a little more. Medicare is a big part of the federal budget, but it’s not the only big part — there’s also other health programs like Medicaid and Obamacare subsidies, there’s Social Security, defense spending, programs for the poor like the Supplemental Nutrition Assistance Program [SNAP, or food stamps], and so on.</p>
<p id="AErLgn">Is the situation only sunny for Medicare, or for the other parts too?</p>
<h4 id="OZlprN">Jason Furman</h4>
<p id="giVZp3">On Social Security, we’ve seen gentle growth. It’s a couple tenths of a percent of GDP more this year than it was a decade ago, and it will continue on that trajectory.</p>
<p id="HKvXiY">Low-income programs have been roughly flat as a share of GDP, and that’s largely because some of them, like TANF [<a href="https://www.vox.com/2016/6/20/11789988/clintons-welfare-reform">Temporary Assistance for Needy Families</a>, or cash welfare], are fixed in nominal terms. They’ve shrunk dramatically relative to the population and economy, while others like SNAP/food stamps have grown. All of that is roughly offset. So you have Social Security gradually growing while low-income programs are staying about the same relative to the economy.</p>
<p id="DoZ6mC">The extraordinary thing is health care. We’ve had a systemwide slowdown in health care costs. Layered on top of that, you had very substantial savings in the Affordable Care Act, all of which on [the] spending side has been sustained by Congress.</p>
<h4 id="ZMEiDH">Dylan Matthews</h4>
<p id="lzcXSp">These revenue and spending projections depend really strongly on how the administration sees the economy developing, and it sounds like they’re committing to some very unrealistic expectations for growth — 2.8 to 3 percent GDP growth per year, rather than the 1.8 to 2 percent growth the <a href="https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20170920.htm">Federal Reserve</a> predicts. How does that change some of the numbers we’re talking about?</p>
<h4 id="mx3LNj">Jason Furman</h4>
<p id="GUTqs3">The economic forecast made by the administration is done at a political level. You always want to look carefully at that. Even in our administration, there was a lot of technical advice that went into it, but there was certainly some political judgment that went into the forecast.</p>
<p id="vZk9DI">The economic forecast underlying the Trump budget is the most absurd I’ve ever seen. The second most absurd, just narrowly behind it, was last year’s Trump budget. The third most absurd is a really distant third.</p>
<p id="h11T3D">They’re forecasting economic growth about a percentage point higher than anyone else. If you look underneath the numbers, there’s not some implicit coherent theory of how we get that growth, other than having productivity grow at twice the rate we’ve had over the past decade.</p>
<p id="HHNGEX">It’s detached from reality.</p>
<h4 id="jc4PER">Dylan Matthews</h4>
<p id="PL4mOV">Let’s take the growth projections seriously for a minute. What kind of economy is the White House describing when they’re saying growth will reach 3 percent? What assumptions about the way things are going might lead to a prediction that optimistic?</p>
<h4 id="74y28J">Jason Furman</h4>
<p id="tUp9Wp">The biggest issue there is essentially the bandwidth: Do you look at just data from the past decade, in which case you’d be very pessimistic, or do you look at data from the past 60 years, in which case you’d be more optimistic? </p>
<p id="uzhTeW">How abnormal do you think recent history is versus how normal do you think the 1950s and 1960s are? Does it make sense to factor in the great productivity growth in the 1950s and 1960s in trying to infer what’s going to happen going forward?</p>
<p id="w2phVW">To get to 2.8 percent, you need to assume the same productivity growth rate we’d had over the past 50 years, you need to add a little to it, and then you need to assume that the labor force participation rate adjusted for age is going to rise reasonably strongly over the next decade, after it has fallen for about 60 years now for men and nearly 20 years for women.</p>
<p id="ZcrXbe">I don’t think there’s any basis in the past for an extrapolation like that. That’s not to say it can’t happen. Of course, it might happen, but it might be 60 degrees on Christmas Day in Boston also. I just wouldn’t go out and forecast that.</p>
<h4 id="lOspbK">Dylan Matthews</h4>
<p id="6IivWh">One of the more surprising things in the budget was the proposed cuts to Medicare, which both violate a promise Trump made but also bring to mind some of the cuts in the Affordable Care Act, which tried to save money by reducing wasteful and ineffective care rather than by reducing access or passing costs onto consumers.</p>
<p id="N06wKu">Is that fair? Are the reforms here good?</p>
<h4 id="nIFYCC">Jason Furman</h4>
<p id="XQvFTT">The Medicare savings in the budget were along the same lines as the policies that President Barack Obama proposed in his budgets. Some of them I think are especially good, like parity for the reimbursement of hospitals that set up a physician facility versus physicians that set it up. Right now we pay hospital-owned physician practices more, and that leads to greater consolidation and reduces competition. That’s something that’s not just about saving money on reimbursements; it’s about creating a level playing field and competition. I think a proposal like that is a good idea.</p>
<p id="TBIPDS">The bulk of the Medicare savings, though, are your usual provider cuts. You think providers are being paid a bit too much, you’re going to pay them less. I’d think they’re probably a fine thing to do if you’re doing a budget that asked for sacrifice from all sides, but they weren’t particularly inspired in terms of delivery system reform. The budget was less aggressive on Medicare Advantage than Obama’s were, and was actually much less aggressive on prescription drugs, notwithstanding the rhetoric, than Obama’s was.</p>
<p id="FXaDRS">So if the question is, “What do you think of the Medicare savings by themselves,” I’d say B+. Uninspired, mostly fine. But then there’s a second question of, “What do you think of saving money on Medicare in the context of, we’ve just had massive tax cuts and have no plan for additional revenue going forward?” I think that’s a different and very important tactical, strategic question that may well have a different answer than what you think about them on their own in a different context.</p>
<h4 id="Qk6re0">Dylan Matthews</h4>
<p id="ErW8CE">Speaking of the rhetoric, the White House has bragged a lot about the infrastructure investment in the budget, saying they could get $1.5 trillion in investment out of just a $200 billion contribution from the federal government.</p>
<p id="lIwRdU">Is that just nonsense? Are they doing anything for infrastructure?</p>
<h4 id="pGht8R">Jason Furman</h4>
<p id="VKVuW1">The budget gives with one hand and takes with the other.</p>
<p id="f6DEGp">It takes $122 billion out of the Highway Trust Fund. I’m sympathetic to the administration’s view that the Highway Trust Fund should pay for itself. I’m not sympathetic that they’re not proposing a way for it to continue to fund the current levels.</p>
<p id="gmbrCP">They have a new proposal that is centered around leverage. The higher the claimed leverage ratio for a public program, the more I’m suspicious that it’s a windfall for an activity that would’ve been done anyway. If I came to you and said that I had a plan that for every $1 you’ll get $1 trillion of investment, chances are that means the $1 trillion was going to happen anyway, and you’re just giving the happy investor $1 for free.</p>
<p id="tSlpWN">This $200 billion to leverage $1.5 trillion looks an awful lot like, at best, it would be for projects that don’t have a very large public benefit but have a large private benefit, and at worst it’s for projects with a large private benefit that would’ve happened anyway.</p>
<h4 id="qfH49X">Dylan Matthews</h4>
<p id="5DCGiR">During the 2008 campaign, when you were running his campaign’s economic policy team, President Obama famously <a href="http://www.presidency.ucsb.edu/ws/index.php?pid=78612">promised</a> to not raise taxes on anyone making under $250,000 a year.</p>
<p id="EQ2gdp">So you have a dynamic now where a Republican president like Ronald Reagan, George W. Bush, or Donald Trump comes in and cuts taxes across the board — in a way that mostly helps the rich, but lowers taxes for the middle class overall too, at least temporarily — and then a Democratic president like Bill Clinton or Barack Obama comes in and raises taxes on top earners, while largely keeping the cuts for people lower on the income scale in place.</p>
<p id="TrtG0R">That back-and-forth feels like it’s what has gotten us into the situation we’re in on revenue, where Republicans just keep cutting dramatically and Democrats aren’t willing to undo the cuts in full for fear of raising taxes on the middle class.</p>
<p id="cTComU">Is it time for Democrats to change their strategy, and accept that they might have to raise taxes for the middle class too, to get us out of this revenue hole?</p>
<h4 id="c03MRe">Jason Furman</h4>
<p id="YkN8rb">With my current hat, I have the luxury of recommending the policies I think are best and the priorities I think are the highest. In 2008, I was working for the Obama campaign, and I think he made the right call in making a pledge not to raise taxes below $250,000.</p>
<p id="WA8b5f">But certainly, pledges like that going forward would make it exceedingly difficult to fund the type of government we want to fund.</p>
<p id="dgtsNO">If you look at the 2017 tax law, there are really only two provisions that exclusively benefit high-income households. Now, there’s corporate cuts, there’s other things that <em>disproportionately</em> benefit high-income households. But if you want to only focus on high-income tax cuts, all you’d do is raise the top rate from 37 to 39.6 percent and bring the estate tax to where it was.</p>
<p id="7JEQc7">If that’s all you did, you’d get about $30 billion of revenue a year, or 0.15 percent of GDP. That’s nowhere close to enough to deal with our existing obligations, let alone what we want to do going forward. I think at least at a policy level, the right way to approach the next revenue debate is not picking and choosing which provisions to make permanent and which to repeal, but start from scratch with a reformed tax system, or a tax system that has a new tax instrument like a carbon tax, and do it on a scale that will make a lasting contribution to making progressive priorities sustainable and permanent.</p>
<h4 id="ixnF6r">Dylan Matthews</h4>
<p id="mbia3T">I’ve noticed more and more left-of-center people who write about economic policy getting skeptical about the need to reduce the deficit. Not just opposing efforts to cut social programs to reduce the deficit, mind you, but questioning whether it’s even desirable, especially when interest rates are as low as they are now.</p>
<p id="9ilcOE">Economically, the argument is that we could sustain much more debt than we have now so long as we control our own currency. (Japan, for instance, has far more debt than we do without experiencing massive inflation as a result.) Politically, the argument is that it’s stupid for Democrats to keep cleaning up the deficit messes Republicans make and that the party should instead just pass spending programs it wants and not pay for them.</p>
<p id="zfbODL">You think that’s all wrong. Why?</p>
<h4 id="RTWgFD">Jason Furman</h4>
<p id="S2pWHO">I’m data-dependent in my views. When I thought the deficit was going to be about 3 percent of GDP for the next several years and the debt was going to be roughly stable as a share of the economy, I thought it was a low priority to deal with.</p>
<p id="9FoX3p">Now that it looks like the deficit is going to be 5 percent of GDP starting next year, which is the highest it’s ever been as a share of the economy outside of a major war or recession, I think that starts to have some costs. I don’t think the costs are<s> </s>huge and catastrophic. But they chip away at capital formation and increase foreign borrowing, which reduces our future national income.</p>
<p id="3xBV1e">We still have a lot of other problems: We have a labor force participation problem, we have a productivity problem, we have an inequality problem. I still wouldn’t let the deficit become the consuming No. 1 issue, but I think it’s going to start getting in the way of achieving all of those other goals.</p>
<p id="lD9i2O">I hate worrying about the deficit. It’s not an end unto itself. It’s not that important compared to how families are doing in the economy. But I think it’s now getting to a point where it is important.</p>
<p id="C4IRWq">The second point is that you can’t evaluate any public policy without evaluating the financing for it. Everything sounds good when you don’t have to pay for it. The question is, is it worth the money?</p>
<p id="mDGvUi">In my view, the tax cuts that we passed at the end of 2017 weren’t worth the money, because we’re eventually going to have to repay it. I think there’s a lot of low-income spending and investments in the<strong> </strong>future, like infrastructure, that I think are worth the money. But I think one would do better if everyone stuck by PAYGO [a congressional rule requiring all new spending be paid for] because that requires you to ask, “Is this important enough that there’s something else I’m willing to do now [to pay for it]?” as opposed to pushing those costs off in an uncertain, indefinite way into the future.</p>
<p id="glbuDC">I think there are three arguments<em> </em>[for not worrying about deficits]. One is we need stimulus. I think that’s crazy when the Fed is raising rates. If the Fed is raising rates, they’re going to undo your fiscal stimulus.</p>
<p id="ExoVac">The second argument is that deficits don’t matter. I think that’s also wrong. The third is that there’s a lot of other important investments we need to make, so let’s make them now and let the deficit sort itself out in the future, and it’s not prohibitively costly to wait. That last view, I don’t think is crazy. It doesn’t happen to be mine because I think the costs of deficits are a little higher than some of those people think. I think the system works better if you try to obey norms, even if others aren’t.</p>
<p id="30ECpx">At a minimum, I’d be a PAYGO hawk — let’s pay for everything. I would also do what I could to get revenue.</p>
<h4 id="9H0Ah9">Dylan Matthews</h4>
<p id="mF3kIp">And to be clear: You’re describing your view so long as the economy stays healthy, right? If we go into another recession, this all changes.</p>
<h4 id="hoIFlb">Jason Furman</h4>
<p id="D3k9JD">Oh, absolutely. If the economy is turning down, I don’t care what our debt-to-GDP ratio is. I’m going to be out there advocating for stimulus. I think stimulus at a time of zero interest rates is much more powerful than the economics profession had previously given it credit for, and is a really important part of our arsenal going forward.</p>
<h4 id="IQgQVN">Dylan Matthews</h4>
<p id="AYMhte">You say you think the costs of deficits are higher than some lefties think. What costs, specifically, are you talking about? Is the fear just that deficits push up interest rates, which makes it harder for companies to borrow money and invest?</p>
<h4 id="JIqVCa">Jason Furman</h4>
<p id="fBUato">It is directly less savings. National savings is lower when the deficit is higher. That’s an accounting identity, unless private savings makes up for it, and the opposite is happening right now.</p>
<p id="eyTjSH">When national savings is lower, one of two things happens: either investment is lower or foreign borrowing is higher. Either one of those means national income is lower in the future. I don’t think you necessarily need to think of this manifest itself as lower interest rates leading to lower future investment, though I think that is partly how it manifests itself. There isn’t any really great solution to having low national savings when it comes to future income growth.</p>
https://www.vox.com/policy-and-politics/2018/2/19/17012288/trump-budget-proposal-obama-chief-economist-jason-furman-interviewDylan Matthews2018-02-13T16:30:01-05:002018-02-13T16:30:01-05:00Trump wants to replace food stamps with food boxes, for some reason
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<p>It’s like Blue Apron, but terrible.</p> <p id="YQYX2p">The Trump administration has proposed a radical overhaul to the food stamp program that would replace some people’s benefits with a “Harvest box” of products like shelf-stable milk, pasta, peanut butter, meat, and canned fruits and vegetables.</p>
<p id="WJLHqD">The changes are part of a <a href="https://www.vox.com/policy-and-politics/2018/2/12/16996832/trump-budget-2019-release-explained">dramatic</a> proposed cut to funding for food stamps, or SNAP, adding up to more than $200 billion dollars over 10 years. Switching to “Harvest boxes,” according to the budget, would contribute $130 million of that savings.</p>
<p id="HpcaSB">SNAP serves about 42 million Americans, which includes low-income working families, and seniors and disabled people on fixed incomes. Currently, people who receive SNAP have their monthly benefit deposited to an EBT card — basically a special debit card — that lets them purchase unprepared food at authorized grocery stores or local businesses.</p>
<p id="D2iTEi">Under Trump’s proposal, rather than getting all of their benefits to spend on groceries, SNAP recipients who receive more than $90 a month in benefits would also get a package of food that includes “shelf-stable” milk, juice, cereals, pasta, peanut butter, canned meat, and canned fruits and vegetables,<strong> </strong>all “100 percent American-grown and produced.” They’d pay for those boxes with their benefits and get the remaining value on the EBT card, the way the program works now.</p>
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<p lang="en" dir="ltr">On SNAP: This is absurd. The Admin wants to turn a portion of it into a delivery system, where the government controls what people eat, how much, and when they get it. This, in the name of "improving nutritional value" and reducing alleged "fraud." 3/ <a href="https://t.co/xhgXmuJOrJ">pic.twitter.com/xhgXmuJOrJ</a></p>— Chad Bolt (@chadderr) <a href="https://twitter.com/chadderr/status/963101362417553409?ref_src=twsrc%5Etfw">February 12, 2018</a>
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<p id="dQs8aa">The change would affect about 16.4 million households — about 81 percent — of those receiving SNAP benefits, according to the USDA.</p>
<p id="4dcWM6">The Harvest box proposal is scant on implementation details: How boxes would be distributed, for example, is left up to the states.<strong> </strong>One expert described the idea as “puzzling,”<strong> </strong>solving no actual problems with the program but creating plenty of new ones.</p>
<p id="SM6XjP">The idea of getting a box of preassembled food has brought on comparisons to buzzy startups like Blue Apron that send subscribers, who can pay more than $200 per month, a preassembled meal kit of fresh ingredients, unusual condiments, and recipes.</p>
<p id="AayXBU">The only thing the Trump proposal has in common with meal kit delivery services is the box. Its real effect would be giving people in need less choice about what they feed themselves and their families.</p>
<h3 id="Ob5Y7I"><strong>What is SNAP?</strong></h3>
<p id="3OeOXj">About 42 million Americans — <a href="https://www.cbpp.org/research/food-assistance/snap-helps-millions-of-children">including about 20 million children</a> — receive benefits through the Supplemental Nutrition Assistance Program, or SNAP, formerly known as food stamps. Eligibility is determined based on income, generally at or below 130 percent of poverty line. A typical family of four can’t make <a href="https://otda.ny.gov/programs/snap/">more than $2,665</a> per month before taxes, a little less than $32,000 per year, to be eligible. (Full disclosure: I previously worked as a SNAP case manager in New York City.)<strong> </strong></p>
<p id="q0WuP5">Right now, SNAP gives recipients broad choices about the food they buy, as long as it’s unprepared. They can buy healthy food or junk food, but they can’t buy prepared roast chickens or deli sandwiches. (They can buy seeds for planting, if available.) People buy food with EBT cards, which function as debit cards for eligible purchases. Items such as alcohol or cigarettes aren’t allowed, nor are any household items like paper towels or shampoo. People also can’t get SNAP benefits paid out in cash.</p>
<p id="faFRDk">The average benefit is about $126 per person per month, or about $254 per household per month, <a href="https://www.cbpp.org/research/food-assistance/a-quick-guide-to-snap-eligibility-and-benefits">according to</a> the Center on Budget and Policy Priorities. That comes out to about $1.40 per meal — whether you live in New York or North Dakota. </p>
<p id="sKwlTl">The SNAP program helps lift <a href="https://www.cbpp.org/blog/snap-lifts-millions-of-kids-out-of-poverty">millions of households</a> out of poverty each year. It usually responds nimbly during times of economic hardship, <a href="https://www.urban.org/sites/default/files/publication/25626/412613-SNAP-s-Role-in-the-Great-Recession-and-Beyond.PDF">such as during the Great Recession</a>, or even natural disasters, and functions as <a href="https://www.cbpp.org/research/policy-basics-introduction-to-the-supplemental-nutrition-assistance-program-snap">economic stimulus</a>. Ellen Vollinger, the SNAP director at the Food Research and Action Center, called SNAP an “economic multiplier.” For every $1 spent in SNAP benefits, it generates approximately $1.79 for the economy. </p>
<p id="XExBc7">But as the Trump administration sees it, the program would improve the food stamps program by delivering recipients healthier foods, saving taxpayers money, and cutting down on EBT fraud.</p>
<p id="ZMCc9F">SNAP has tried to promote better nutrition among its recipients — something policy makers have been grappling with, from <a href="https://www.washingtonpost.com/news/wonk/wp/2018/01/20/why-the-trump-administration-wont-let-maine-ban-soda-and-candy-from-food-stamps/">debates over soda bans</a> to expanding <a href="https://www.fns.usda.gov/ebt/snap-and-farmers-markets">SNAP use</a> at farmer’s markets. But food stamps are already a pretty efficient use of taxpayer money, and EBT fraud is relatively low.</p>
<h3 id="BpAEzs">Fraud in SNAP is real — but at a rate of about 1.5 percent</h3>
<p id="WmSIxv">Fraud in SNAP does exist — usually when people trade SNAP benefits for cash or other banned goods, known as food stamp trafficking.</p>
<p id="pmAG6L">But it’s a tiny share of the program overall. The most recent USDA statistics, released in 2013, put at food stamp trafficking <a href="https://fns-prod.azureedge.net/sites/default/files/Trafficking2009_Summary.pdf">at about $858 million dollars</a>. It amounts to about one cent for every dollar (compared to about four cents on the dollar in the 1990s). A 2017 USDA audit found that, in the past 16 years, <a href="https://www.usda.gov/oig/webdocs/27901-0002-13.pdf">trafficking rates fell to about 1.5 percent.</a></p>
<p id="zJXEnu">In fact, the move to EBT from physical food stamps <a href="https://www.urban.org/sites/default/files/publication/25626/412613-SNAP-s-Role-in-the-Great-Recession-and-Beyond.PDF">is credited</a> with reducing food stamps trafficking, because EBT leaves an electronic footprint to track both retailers and purchasers. EBT is not perfect — but the Harvest box doesn’t exactly seem fraud-proof. Recipients could sell a Harvest box for cash or claim a lost delivery and collect duplicates. </p>
<p id="ps2CwG">“It doesn’t seem like introducing more steps and more complexity and more intermediaries goes toward reducing fraud,” noted Stacy Dean, of the Center for Budget and Policy Priorities. </p>
<h3 id="MUMIcX">“Harvest boxes” are supposed to be healthier. But they also reduce choice.</h3>
<p id="6TJqIm">Previous research on SNAP <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4922898/">has shown</a> that people who do use the program have a slightly more unhealthy diet than those households who are eligible but don’t rely on the program. But the federal government has largely avoided banning certain foods or setting guidelines — and it’s not clear the Harvest box will adequately address these shortfalls.</p>
<p id="hLU8f0">USDA Secretary Sonny Perdue promised in a fact sheet that the program would provide “nutritious food to people who need assistance feeding themselves and their families,” and “all of it … home grown by American farmers and producers.”</p>
<p id="U6r5xl">This makes it seem as if the Harvest box is some farm-to-table treat, but it will mostly include items like “shelf-stable milk,” cereals, juices, and proteins.</p>
<p id="iLkcRP">The closest analogy that the federal government runs now is a program that distributes food boxes <a href="https://fns-prod.azureedge.net/sites/default/files/fdpir/pfs-fdpir.pdf">instead of SNAP benefits on American Indian reservations</a>. Available foods include canned beans, corn, and spinach; dried eggs; dried and canned fruit; peanut butter; and canned and frozen meat. It’s a far cry from a meal kit box with fresh grass-fed beef, kale, and a tiny container of Sriracha. (And also serves far fewer people — <a href="https://fns-prod.azureedge.net/sites/default/files/fdpir/pfs-fdpir.pdf">about 90,000</a>.)</p>
<p id="FrMF1i">Whether these Harvest boxes are healthy depends on what type of juice and grains make it inside, said Sara Abiola, an assistant professor of health policy and management at Columbia University. It matters, for example, whether the fruit is canned in water or syrup. </p>
<p id="v8hUCF">But more broadly, Abiola emphasized, while<strong> </strong>SNAP recipients might not always make the healthiest food choices, their decisions are rational in context — they tend to select relatively low-cost items that stretch a monthly budget, are filling, and easy to cook.</p>
<p id="CYuXHZ">People who struggle to buy food might also live in substandard housing, or share living spaces with multiple people. “What happens if your kitchen is not functional?” Abiola said. It’s “idealistic to think that folks are going to be able to cook a ‘healthy’ meal,” she said, of the food boxes. </p>
<h3 id="KImbSa">Harvest boxes would need a whole new infrastructure</h3>
<p id="O7ulLm">Harvest boxes would also seem to make the existing food stamp infrastructure a lot more complicated, undoing decades of changes that have streamlined the program.</p>
<p id="1ag4gW">The Trump plan harkens to the origins of the federal food stamp program during the Depression, said Elaine Waxman, a senior fellow at the Urban Institute. In that era, people in need received a mix of stamps that would cover normal purchases and special stamps to buy foods that the government considered “surplus.” </p>
<p id="Vf51JW">The “surplus” foods weren’t selected with the needs of hungry families in mind. Instead, they were agricultural products that were being overproduced, and farmers needed to offload some of them to drive up prices.</p>
<p id="UmpQ9T">The surplus food stamps were eliminated when the food stamp program started again in the 1960s. Electronic cards began replacing stamps around the 1990s. Waxman said it isn’t clear why the federal government would want to return to that system, particularly when the electronic system is much less complicated.</p>
<p id="BNb6wA">SNAP relies on the food distribution networks most Americans rely on, getting food to retailers where customers buy it. “It piggybacks off the marketplace,” said Dean. The government doesn’t have to spend money on things such as transporting food because the private sector has it covered.</p>
<p id="Wdlq3Y">The government does have food delivery services, like those that serve American Indian reservations or <a href="https://fns-prod.azureedge.net/sites/default/files/csfp/programFactSheet-csfp.pdf">elderly households</a>, but not at the scale of millions of food stamp households. It’s also worth considering the impact on local or rural businesses who might lose business if their customers have less money to spend on food at their stores. </p>
<p id="JUxTfw">And there are plenty of unanswered questions about how this would work: Would boxes be delivered door-to-door? Would people have to be home to receive Harvest boxes — a likely challenge for shift workers? Or would people have to visit a distribution center? What happens to elderly or disabled individuals? What about transportation costs, or accessibility, particularly in rural areas? </p>
<p id="VCDOTT">Harvest boxes would also be less reliable, because delivery can easily be interrupted while transferring benefits to a debit card rarely is. This is particularly relevant during events such as natural disasters, which Vollinger says SNAP has tackled effectively because of its ability to electronically distribute emergency benefits through EBT. </p>
<h3 id="wm1xvV">Congress probably won’t love Harvest boxes — but the threat of SNAP cuts are very real</h3>
<p id="KNxPyb">Harvest boxes could also end up being much more visible than ordinary SNAP benefits. Imagine a monthly delivery, stamped with a USDA label, sitting on a doorstep for all the neighbors to see — or having to go down to a local pantry or non-profit to pick up a food box every month.</p>
<p id="w6Tzgh">EBT cards, by contrast, are more discreet. People go to the store and swipe a card; they don’t have to hand the cashier physical coupons. And Abiola said research has shown stigma does prevent people from accessing benefits because of embarrassment or shame.</p>
<p id="IqjZ3Z">“It’s just undoing a lot of broader work,” Abiola said, of trying to get people “being comfortable with using that assistance.”</p>
<p id="W6WFZr">But to some Republicans in Congress, the idea of people being “comfortable” with government assistance is objectionable. In 2012, Rep. Paul Ryan (R-WI) warned about turning the social safety net into a “hammock that lulls able-bodied people to lives of dependency and complacency.”</p>
<p id="HF5OaD">Six years later, Ryan is the House speaker, and the Harvest boxes are part of a broader budget that <a href="https://www.vox.com/policy-and-politics/2018/2/12/16996832/trump-budget-2019-release-explained">hacks away at the social safety net.</a> </p>
<p id="IcrxfK">The Harvest box will probably face huge hurdles even in a Republican-controlled Congress because it’s such a dramatic change to SNAP. But it’s not impossible — and the budget still calls for another $85 billion in reductions. </p>
<p id="8WfrCy">The cash comes from a one-two punch of decreasing benefit amounts, and tightening eligibility requirements. The Center on Budget and Policy Priorities <a href="https://www.cbpp.org/blog/presidents-budget-would-cut-and-radically-restructure-snap-food-benefits">estimates</a> about four million people could entirely lose SNAP benefits entirely. Some of the biggest losers are working families with kids, the elderly, and the disabled. </p>
<p id="9NTS4E">“A reduction in funding of that size means lost meals for people in need,” said Triada Stampas, vice president for research and public affairs at Food Bank for New York City. “It’s on a similar scale to what was proposed in the White House budget last year.” She added that when SNAP benefits get cut, it puts more strain on food banks and pantries — which then struggle to meet the rising need. </p>
<p id="rhlMVO">“It’s an enormous cut in benefits,” Vollinger said of the Trump budget proposal for SNAP. “That’s really the biggest takeaway.” </p>
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https://www.vox.com/2018/2/13/17004636/snap-trump-budget-food-stamps-food-boxesJen Kirby2018-02-13T14:50:02-05:002018-02-13T14:50:02-05:00Trump’s budget proposal hurts the Rust Belt factory towns that voted for him
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<figcaption>The White House budget slashes millions of dollars in spending to revive economic growth in factory towns like Flint, Michigan. | Brett Carlsen/Getty Images</figcaption>
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<p>The White House wants to cut spending to help struggling US manufacturers.</p> <p id="ZXBIq3">President Donald Trump has promised that dying American industries and factory towns will come “roaring back” under his presidency. But if his budget proposal for 2019 is any sign, his administration won’t do much to make that happen.</p>
<p id="90OUz1">In the <a href="https://www.vox.com/2018/2/12/17003804/donald-trump-budget-2019-read-pdf-full-document">budget plan released Monday</a>, the Trump White House proposed slashing more than $300 million in spending on some of the few federal programs meant to boost manufacturing in distressed communities — the same industrial towns in decline that turned out heavily for Trump. The White House had proposed the same thing last year, though Congress kept most of the funding in place for 2018.</p>
<p id="fbCGX9">Trump’s administration wants to end key economic development programs run by the Department of Commerce. The budget calls for the Commerce Department to completely eliminate the Economic Development Administration (EDA), which, among other things, provides grants to help American manufacturers compete with global competitors. The administration also wants to do away with the Manufacturing Extension Partnership, which helps funds manufacturing innovation centers in every state and Puerto Rico.</p>
<p id="90swgw">These programs are “unnecessary,” and “duplicative,” according to the White House <a href="https://www.vox.com/policy-and-politics/2018/2/12/16996832/trump-budget-2019-release-explained">budget plan</a>.</p>
<p id="vWfpQZ">Yet the companies and workers that rely on that money disagree.</p>
<p id="7vshfw">“It really points out the hypocrisy of the president’s messaging,” said Scott Paul, president of the Alliance for American Manufacturing, a nonpartisan business and labor group in Washington, DC. “These programs help the very communities that have suffered the manufacturing job losses that Trump said he supported.”</p>
<h3 id="ldUU6O">Rust Belt states could lose millions in economic development grants</h3>
<p id="MFezmp">The budget plan aims to save $251 million by eliminating the Economic Development Administration. </p>
<p id="OeCPN7">The EDA bills itself as<strong> </strong>the only federal agency focused entirely on promoting economic development in the United States. It was launched under the Commerce Department in 1965. The agency focuses mostly on providing matching grants for local programs to boost business development in distressed areas. It has programs to promote business innovation in coal communities and in declining manufacturing areas. </p>
<p id="2PoRiq">In other words, these are the kinds of places that turned out heavily for Trump in the 2016 election.</p>
<p id="HiyEok">In Flint, Michigan, for example, the agency invested $1.9 million to build an automotive research center in partnership with a local university, according to its <a href="https://www.eda.gov/files/annual-reports/fy2016/EDA-FY2016-Annual-Report-full.pdf">2016 annual report</a>. The agency said four Fortune 500 companies<strong> </strong>wanted to partner with the center in 2016 to test self-driving cars and other automotive technology.</p>
<p id="lr9BQO">That year, the agency also invested $2 million in Bluefield, West Virginia, to renovate an old train station depot and launch a business incubator to revive the shrinking industrial manufacturing economy. The incubator helped launch a small business focused on producing industrial casings.</p>
<p id="z9uAvU">In fiscal year 2016, the agency invested $15 million in coal communities and $13 million to help struggling US manufacturers find new ways to compete in a globalized era. Most of the grants for manufacturers hurt by NAFTA went to states that supported Trump in the election — including Michigan, Pennsylvania, and Texas.</p>
<p id="3Ojf86">Now the White House wants to dissolve the entire EDA because it says the agency’s grants have “limited measurable impacts.” That is true to an extent. </p>
<p id="kiV66M">The Government Accountability Office (GAO) published <a href="https://www.gao.gov/products/GAO-12-930">a report</a> in 2012 saying that the agency needed to do more to fully measure the impact of its Trade Adjustment Assistance program for businesses hurt by international trade deals. However, the GAO’s economic analysis found that a manufacturer's participation in the program is “statistically associated with an increase in firm sales.”</p>
<p id="HGian8">“Notably, 73 percent reported that the program helped them with profitability; 71 percent that it helped them retain employees; and 57 percent that it helped them hire new employees,” the <a href="https://www.gao.gov/products/GAO-12-930">report concluded</a>.</p>
<p id="gTAlka">The GAO’s report suggested improving data collection, not eliminating the agency altogether.</p>
<p id="M2cTWy">In the past, the effectiveness of some of the EDA programs has been questioned. In 1999, the <a href="https://www.gao.gov/assets/90/88611.pdf">GAO concluded</a> that the agency’s spending on infrastructure development was not linked to an increase in employment in the early 1990s.</p>
<p id="NarAL9">Recent research is scarce, but a 2009 <a href="http://research.upjohn.org/cgi/viewcontent.cgi?article=1172&context=up_workingpapers">report</a> from the W.E. Upjohn Institute for Employment Research suggests the agency’s spending has a positive economic impact on the areas that receive funding.</p>
<h3 id="WxTjFT">Budget proposes scrapping manufacturing program</h3>
<p id="BKETOn">The Trump budget also proposes scrapping another manufacturing-focused program.<strong> </strong>The Manufacturing Extension Partnership, which was launched in 1988 through the Department of Commerce, is the main source of federal funding for states that are trying to grow their manufacturing industry. The Trump budget plan says eliminating the program will save $125 million.</p>
<p id="2G0iUr">The program partners with state and local agencies to operate innovation centers in every state. The idea is to help small and medium-size manufacturers develop new products and customers, expand and diversify their markets, and adopt new technologies.</p>
<p id="ogY5dG">For example, <a href="https://www.gao.gov/assets/670/662013.pdf">a 2014 audit</a> by the US Government Accountability Office described how the program helped a manufacturing firm in Pennsylvania respond to steep price increases in 2011:</p>
<blockquote><p id="fLPpxs">The Delaware Valley Industrial Resource Center ... trained company staff on methods to achieve efficiencies and helped identify areas for improvement in the company’s production process, resulting in increased productivity and reduced inventory levels that allowed the company to save space and lower costs, as reported by the manufacturing firm. </p></blockquote>
<p id="y08Bcw">Studies have shown that the <a href="http://research.upjohn.org/cgi/viewcontent.cgi?article=1229&context=reports">partnership works</a>, and that it <a href="https://www.gao.gov/assets/670/662013.pdf">spends its money</a> relatively well. </p>
<p id="4fESEv">A 2016 <a href="http://research.upjohn.org/cgi/viewcontent.cgi?article=1229&context=reports">analysis</a> by the W.E. Upjohn Institute concluded that the program generated a huge economic return for every federal dollar invested: </p>
<blockquote><p id="irg5Va">Comparing forecasts with and without MEP activities included, the study found that the $130 million invested in MEP during FY2016 generated $1.13 billion in federal personal income tax, which is an 8.7:1 return to the federal treasury. </p></blockquote>
<h3 id="XwDnef">These are “essential” programs</h3>
<p id="c0vMex">Scott Paul, of the Alliance for American Manufacturing, says these Commerce Department programs are far from unnecessary — “they are essential,” he says. And they represent only a fraction of what other developed nations spend to boost their own manufacturing economy. </p>
<p id="Cdg2LF">“Now you want to eliminate the small number of federal programs for them?” he asked. </p>
<p id="AVhH7V">Paul said he’s hopeful that Congress would never agree to make the cuts proposed in the White House budget. After all, last year the White House proposed the same cuts, which never happened. Instead of eliminating the EDA, Congress decided to cut its funding by $12 million for fiscal year 2018. The MEP funding remained intact.</p>
<p id="TTLLGC">“If you look at what has happened in the past, there is reason to believe there will be pushback,” Paul said.</p>
https://www.vox.com/2018/2/13/17004590/trump-budget-cuts-manufacturing-michigan-west-virginiaAlexia Fernández Campbell2018-02-13T11:10:02-05:002018-02-13T11:10:02-05:00Trump’s budget could help fight the opioid crisis — if it didn’t try to repeal Obamacare
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<p>One big step forward, one bigger step back.</p> <p id="cY0cnv">If you want to understand how little President Donald Trump has done so far on the <a href="https://www.vox.com/science-and-health/2017/8/3/16079772/opioid-epidemic-drug-overdoses">opioid epidemic</a>, just read this paragraph from his <a href="https://www.vox.com/policy-and-politics/2018/2/12/16996832/trump-budget-2019-release-explained">2019 budget plan</a>:</p>
<blockquote><p id="4LM2mo">In 2017, the President said: “I made a promise to the American people to take action to keep drugs from pouring into our country and to help those who have been so badly affected by them.” The Administration has taken a number of significant actions to address the crisis. The President created the Commission on Combating Drug Addiction and the Opioid Crisis and the Administration declared the opioid epidemic a nationwide public health emergency. The Administration provided nearly $500 million in new resources to States to prevent and treat opioid abuse and addiction in 2017, in addition to last year’s Budget that requested another $500 million.</p></blockquote>
<p id="KbyaDu">At first read, this might sound impressive. Trump not only created a commission to address the crisis head-on, but reportedly added $1 billion in funding to combat the epidemic.</p>
<p id="lukQ7P">But this paragraph is extremely misleading. Trump’s commission? The administration has only implemented less than a handful of its <a href="https://www.vox.com/policy-and-politics/2017/11/1/16589552/trump-opioid-commission-final-report">dozens of proposals</a>. The extra $1 billion? That money actually comes from the <a href="https://www.vox.com/policy-and-politics/2016/12/8/13858268/opioid-heroin-epidemic-congress-cures-act">21st Century Cures Act</a> — signed into law not by Trump but by President Barack Obama in 2016.</p>
<p id="J4Ds1y">This is the best that the Trump administration can come up with in its big budget plan: a commission that it mostly ignored and money that the previous administration approved.</p>
<p id="O2ZNCU">With the 2019 budget plan, that’s finally starting to change as the administration tries to do more on the opioid crisis. It takes some big steps forward — by potentially providing more funding and access for opioid addiction treatment. But it also takes some big steps back — by slashing other funding sources that help people access treatment for opioid addiction, particularly through the budget’s attempts to repeal the Affordable Care Act (“Obamacare”) and cut Medicaid.</p>
<p id="DQyB7U">“On balance, this is a net cut in health services for people with opioid problems,” Keith Humphreys, a Stanford drug policy expert who served in the Obama administration, told me.</p>
<p id="p2QROV">The budget plan still needs to be approved by Congress, and it’s very unlikely to get that approval. But it still provides some insight into the Trump administration’s priorities — and for the fight against the opioid crisis, that proves to be both good and bad.</p>
<h3 id="XyfKog">What Trump’s budget does for the opioid crisis</h3>
<p id="u4f9Mb">The big item in the new budget is more funding: The administration said it wants to add $13 billion over two years for the US Department of Health and Human Services (HHS) to address the opioid epidemic — $3 billion in fiscal year 2018 and $10 billion in fiscal year 2019.</p>
<p id="3q0N3i">Congress already promised the additional $3 billion for 2018 and $3 billion for 2019 in a recently approved <a href="https://www.vox.com/policy-and-politics/2018/2/8/16988236/congress-federal-budget-opioid-crisis">budget deal</a>. The Trump administration wants an additional $7 billion for 2019, rounding out the total to $10 billion for the year. </p>
<p id="gXNhqX">HHS’s <a href="https://www.hhs.gov/sites/default/files/fy-2019-budget-in-brief.pdf">budget summary</a> said the money will go toward its five-point strategy: improved access to prevention, treatment, and recovery services; more availability and distribution of overdose-reversing drugs (like <a href="https://www.vox.com/science-and-health/2018/2/12/16846242/naloxone-opioid-heroin-fentanyl-epidemic">naloxone</a>); better public health data and reporting; more research on pain and addiction; and better practices for pain management.</p>
<p id="JVR9mr">The details, however, are lacking beyond that. For example, the additional $7 billion — beyond what Congress already promised in its budget deal — is vaguely described as meant to “support additional work to address the opioid crisis and serious mental illness, including establishing a new grant program for Certified Community Behavioral Health Clinics that provide services to individuals suffering from serious mentally illness.”</p>
<p id="CLh7Kc">The lack of clarity is a problem. Will this funding expand access to treatment? Improve access to the opioid overdose antidote <a href="https://www.vox.com/science-and-health/2018/2/12/16846242/naloxone-opioid-heroin-fentanyl-epidemic">naloxone</a>? Pay for <a href="https://www.vox.com/policy-and-politics/2017/9/5/16135848/drug-war-opioid-epidemic">ineffective</a> law enforcement efforts? Go to something that isn’t even related to addiction? Something else entirely? All of the above? We just don’t know yet.</p>
<p id="8YxuwK">Either way, the budget suggests that <em>some</em> new funding will go to public health programs — and addiction treatment — to combat the opioid crisis. That could help address a big gap in the current epidemic: According to a <a href="http://addiction.surgeongeneral.gov">2016 report</a> by the surgeon general, only 10 percent of Americans with a drug use disorder get specialty treatment.</p>
<p id="DbbJcs">But this also comes with a huge caveat: The proposal also asks to repeal and replace Obamacare and cut Medicaid through a bill similar to <a href="https://www.vox.com/health-care/2017/9/20/16333338/obamacare-repeal-graham-cassidy">one pushed by Senate Republicans</a> last year. This would result in <a href="https://www.vox.com/policy-and-politics/2017/9/22/16350320/graham-cassidy-uninsured-brookings-usc-cbo">millions of Americans</a> losing health insurance, at least some of whom rely on that health insurance to get addiction treatment. </p>
<p id="CKoFHk">Humphreys of Stanford argued that the repeal of Obamacare could mean, even after accounting for the $13 billion in additional funding in the budget, that the proposal “would cut rather than increase funding for opioid use disorder treatment if enacted.”</p>
<p id="cok2X8">Here are the other big items in the budget related to the opioid crisis:</p>
<ul>
<li id="s1u9Cj">The plan would impose a new requirement on all Medicaid programs to cover all forms of <a href="https://www.vox.com/science-and-health/2017/7/20/15937896/medication-assisted-treatment-methadone-buprenorphine-naltrexone">opioid addiction medications</a>, such as methadone, buprenorphine, and naltrexone. These medications are proven to be very effective, with studies showing they reduce all-cause mortality among opioid addiction patients by <a href="http://onlinelibrary.wiley.com/doi/10.1111/add.13193/full">half</a> or <a href="http://www.bmj.com/content/357/bmj.j1550">more</a>. Yet some states exclude some of these medications from their Medicaid coverage, putting evidence-based treatment out of reach.</li>
<li id="rpV0xS">The budget proposes testing and expanding a Medicare payment program for community-based medication treatment for addiction, including, for the first time, Medicare reimbursement of methadone treatment.</li>
<li id="z1qRht">The proposal would dedicate funding to law enforcement efforts against opioids, including interdiction of drugs at the border and new crackdowns on drug trafficking. These kinds of approaches are generally <a href="https://www.vox.com/policy-and-politics/2017/9/5/16135848/drug-war-opioid-epidemic">not very effective</a>, but they’re a staple of US drug policy.</li>
<li id="goYb3z">The plan would take a number of steps to cut back on unscrupulous prescriptions of opioid painkillers, particularly through Medicaid and Medicare. The overprescription of these drugs was a <a href="https://www.vox.com/science-and-health/2017/8/3/16079772/opioid-epidemic-drug-overdoses">major cause</a> of the current crisis.</li>
<li id="SmvXmq">The proposal would cut the Office of National Drug Control Policy (ONDCP) budget by more than 90 percent, in large part by shifting the High Intensity Drug Trafficking Areas (HIDTA) program — which provides support to law enforcement agencies to combat drug trafficking — to the Drug Enforcement Administration (DEA). Because ONDCP (also known as the drug czar’s office) plays such a large role in setting national drug policy, some advocates worry that the smaller budget could hinder the overall federal response to the opioid crisis. There are also concerns about how the DEA, as a law enforcement agency, could mishandle HIDTA.</li>
</ul>
<p id="IblJEM">There are also <a href="https://www.whitehouse.gov/wp-content/uploads/2018/02/FY19-Budget-Fact-Sheet_Combatting-the-Opioid-Epidemic.pdf">continuing and smaller efforts</a> to address the drug overdose crisis, including existing grants and research.</p>
<h3 id="SklaNy">This seems to be more bad than good</h3>
<p id="uQranO">There’s no empirical cost-benefit analysis on this budget’s impact on the opioid crisis, but the early response from some experts is that it likely does more harm than good.</p>
<p id="es303n">The increases proposed in the budget, particularly the additional $13 billion over two years, are promising. But it’s not clear how the money will be invested once it goes out to the states — a big concern in an addiction field that <a href="https://www.vox.com/2018/1/10/16872012/opioid-epidemic-medication-addiction-map">for the most part</a> doesn’t use the best treatment for opioid addiction, and a policy area in which the primary response is often ineffective criminal justice efforts instead of evidence-based public health approaches.</p>
<p id="ITW4QL">“The number looks good,” Regina LaBelle, who served in Obama’s ONDCP, told me. “But [the government] is going to have a big job now to figure out how to spend it in the right way.”</p>
<p id="S1FF74">The $13 billion over two years also falls short of the tens of billions of dollars that some experts <a href="https://www.vox.com/policy-and-politics/2018/2/8/16988236/congress-federal-budget-opioid-crisis">argue</a> is necessary over the next several years solely to expand drug addiction treatment, although it’s certainly much better than many previous proposals. (The Obama administration’s largest one-time funding boost for the opioid crisis, for example, was the $1 billion over two years in the Cures Act.)</p>
<p id="JyX5Rc">Perhaps the biggest question of all, however, is the role of Obamacare and Medicaid cuts. According to a <a href="http://thehill.com/blogs/pundits-blog/healthcare/313672-keep-obamacare-to-keep-progress-on-treating-opioid-disorders">previous analysis</a> from Richard Frank of Harvard and Sherry Glied of New York University, coverage requirements in Obamacare helped 2.8 million people with drug use disorders. Efforts to repeal Obamacare — and its coverage requirements for addiction care — could, then, leave millions of people with drug use disorders without the means to pay for treatment. </p>
<p id="yatf2l">Medicaid is particularly important in this area. A <a href="http://content.healthaffairs.org/content/33/8/1407.short">2014 study</a> by Truven Health Analytics researchers found that Medicaid paid for about 25 percent — $7.9 billion of $31.3 billion — of projected public and private spending for addiction treatment in 2014. That made it the second-biggest payer of addiction treatment after all local and state government programs.</p>
<p id="cdy7v9">Yet not only would Trump’s budget plan end the Obamacare-funded Medicaid expansion, it would also make <a href="https://www.vox.com/policy-and-politics/2018/2/12/17005294/trump-health-care-budget-explained">additional cuts to Medicaid</a>.</p>
<p id="Hw3fT0">This could worsen a problem that some experts see in the response to today’s drug overdose crisis. “What we need to be doing is not just thinking about today’s opioid epidemic, which is critically important, but how we build a sustainable system to address substance use disorders writ large,” LaBelle said. “I’m afraid that if we don’t build some sort of sustainable system for states, we will not have addressed this issue in the long term.”</p>
<p id="nLViNL">It’s possible to imagine, for example, a world in which $13 billion funds a bunch of new addiction treatment clinics. But after fiscal year 2019, maybe the opioid crisis has waned or even ended, so Congress decides not to extend that funding.</p>
<p id="7CrN2q">That might not be a huge deal in a world where people have health insurance through Obamacare or Medicaid that will pay for addiction treatment because those people — and their insurance — will provide a steady source of revenue for those clinics to remain open. In this scenario, the $13 billion offered is enough to start a clinic, while Obamacare and Medicaid provide more sustained funding over time.</p>
<p id="8UZWsQ">But if Obamacare and Medicaid are cut, then suddenly it’s less likely that someone will have the insurance to pay for addiction treatment — and those clinics could be flatly out of revenue after the budget’s new funds expire.</p>
<p id="LmAmdv">This isn’t strictly theoretical. Vermont, for example, built a <a href="https://www.vox.com/policy-and-politics/2017/10/30/16339672/opioid-epidemic-vermont-hub-spoke">“hub and spoke” system</a> that treats addiction as a public health issue and integrates treatment into the rest of health care. Perhaps as a result, the state was the only one in New England to have an overdose death rate that wasn’t significantly above the national average in 2016. (For more, check out my <a href="https://www.vox.com/policy-and-politics/2017/10/30/16339672/opioid-epidemic-vermont-hub-spoke">in-depth breakdown of Vermont’s system</a>.)</p>
<p id="odvRIJ">But Vermont has managed to maintain this new system in large part with federal dollars, particularly through Obamacare’s insurance expansion and a special Medicaid waiver that states can obtain through the health care law. It’s that kind of federal support that budget-strained states need to sustain a full response to the opioid crisis — and it’s the kind of longer-term support that Trump’s budget, if enacted, would rip away by repealing Obamacare and cutting Medicaid. </p>
<p id="tLosyP">That would make it much more difficult for states like Vermont to keep their addiction treatment systems. The end result: States would end up more vulnerable not just to the current overdose crisis but the next one as well.</p>
https://www.vox.com/policy-and-politics/2018/2/13/17004656/trump-budget-opioid-epidemicGerman Lopez2018-02-12T18:01:57-05:002018-02-12T18:01:57-05:00Trump promised to rebuild the military. His new budget does that, if you squint.
<figure>
<img alt="President Trump Cabinet Meeting" src="https://cdn.vox-cdn.com/thumbor/2GFQLaKsXsw0Aj1BZLiY0Gzalh0=/175x0:3000x2119/1310x983/cdn.vox-cdn.com/uploads/chorus_image/image/58669995/903436940.jpg.0.jpg" />
<figcaption>Ron Sachs-Pool/Getty Images</figcaption>
</figure>
<p>Trump’s $686 billion request is big, but an expert found it to be “anticlimactic.”</p> <p id="JkjrSh">President Donald Trump just released his proposed defense budget for 2019, and it’s not as massive as the administration might have you believe.</p>
<p id="ZMOtdR">On the campaign trail, candidate Trump <a href="https://www.cnbc.com/2017/11/08/trump-pledge-to-rebuild-military-off-to-slow-start-mixed-results.html">talked</a> frequently about rebuilding the military and increasing defense spending to do so. Over his past year in office, he’s <a href="https://twitter.com/realDonaldTrump/status/961957671246159875">advocated</a> for giving more money to the military.</p>
<p id="qmjQuq">But Trump’s defense budget request for $686 billion — if passed by Congress — is still only a 2 percent increase from last year’s, experts tell me.</p>
<p id="mOO1sv">“Trump’s defense budget is anticlimactic,” said Mackenzie Eaglen, a defense expert at the conservative American Enterprise Institute. The modest increase won’t allow the military to do the things Trump talked about on the campaign trail any time soon, she said, like<strong> </strong>“rapidly grow the Army, build a 350-ship Navy, and increase the combat Air Force.”</p>
<p id="dqaK26">Fred Bartels, a defense budget expert at the conservative Heritage Foundation, told me that the 2 percent increase barely rises above <em>inflation</em>. That said, the request is a <a href="https://www.washingtonpost.com/world/national-security/trumps-budget-promises-the-pentagon-more-of-everything/2018/02/12/3bbe1036-1016-11e8-9570-29c9830535e5_story.html?utm_term=.788bd70b79ae">13 percent</a> increase from the 2017 defense proposal, and would add around <a href="http://www.businessinsider.com/trump-defense-budget-increase-size-of-us-military-2018-2">26,000</a> new troops.</p>
<p id="xEW5WV">And to be fair, Trump <em>did</em> request the <a href="https://www.bloomberg.com/news/articles/2018-02-12/trump-s-defense-plan-boosts-navy-missile-defense-boeing-plane-jdkgs7wa?utm_content=politics&utm_campaign=socialflow-organic&utm_source=twitter&utm_medium=social&cmpid%3D=socialflow-twitter-politics">largest</a> defense <em>base budget</em> ever at $617 billion. The Pentagon uses that money to, among other things, keep the lights on, pay and train troops, and buy and maintain weapons. Trump also proposed <a href="http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2019/FY2019_Budget_Request.pdf">$69 billion</a> to fund America’s wars; at the start of the previous administration, Obama requested around $160 billion — but that was when the US had around 100,000 troops in Afghanistan.</p>
<p id="hqWgJ4">Here’s the <a href="http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2019/FY2019_Budget_Request.pdf">overview</a> of Trump’s request, and the important takeaways.</p>
<ul>
<li id="doSpbF">$617 billion: Base budget for the Defense Department</li>
<li id="BZB4V5">$69 billion: Overseas Contingency Operations (extra funding for wars that Congress can’t limit, known as OCO)</li>
<li id="EXqH8R">$30 billion: “Other” national defense spending, which includes money for the Energy Department to oversee America’s nuclear weapons</li>
<li id="ooz6SA">$716 billion: Total defense spending</li>
</ul>
<figure class="e-image">
<img alt=" " data-mask-text="false" src="https://cdn.vox-cdn.com/thumbor/N02go1znfzXOXxtJeb1J2-UMAt0=/800x0/filters:no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/10211135/Screen_Shot_2018_02_12_at_2.29.43_PM.png">
<cite><a href="http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2019/FY2019_Budget_Request.pdf">Department of Defense</a>.</cite>
</figure>
<h3 id="c03Wzh">Trump wants more money to counter Russia</h3>
<p id="xkSV6j">Trump remains among the most Russia-friendly presidents in modern memory — but he still wants to push back against Moscow.</p>
<p id="tnSQLW">His defense budget request calls for an extra <a href="https://twitter.com/VeraMBergen/status/963111217157074946">$1.7 billion</a> for the European Deterrence Initiative, bringing the total to $6.5 billion. That’s a Pentagon program which allocates money for sending more US troops to Europe and training with European countries.</p>
<p id="H9eR4v">According to the budget request, Trump <a href="https://twitter.com/VeraMBergen/status/963111217157074946">wants</a> this increase “to better counter Russian coercion and deter Russian aggression in the region.”</p>
<p id="DIgFzL">The Kremlin may now have buyer’s remorse, since the US intelligence community revealed that Russian President Vladimir Putin <a href="https://www.dni.gov/files/documents/ICA_2017_01.pdf">aimed</a> to help elect Trump.</p>
<h3 id="joRktN">Trump wants to improve America’s missile defense. North Korea will notice.</h3>
<p id="kfRz43">Kingston Reif, an expert at the Arms Control Association, <a href="https://twitter.com/KingstonAReif/status/963131143078936576">noted</a> on Twitter that Trump requested more money for missile defense. The budget specifically asks for <a href="https://twitter.com/KingstonAReif/status/963138117904621568">20 more ground-based missile interceptors</a> in Alaska. That’s potentially big news.</p>
<p id="NeeXYT">The US has a total of 44 interceptors stationed in Alaska and California they could use if North Korea shoots a missile in America’s direction. But the missile defense system that uses those interceptors has only passed 10 of 18 tests. The military also conducts those tests under highly controlled conditions. </p>
<p id="tuN2qN">That’s worth highlighting: Even in the best conditions, the system that’s supposed to protect the US from a North Korean nuclear weapon has just over a 50 percent success rate. That’s why experts are generally pessimistic about US capability to stop a North Korean weapon headed our way.</p>
<p id="gnywz5">“Depending on the trajectory, we should not assume that we can, with any reliability, intercept intercontinental ballistic missile warhead targets,” Vipin Narang, a nuclear expert at MIT, told me last November.</p>
<p id="KDPKx2">It’s very likely that North Korea will notice America’s desire to add more interceptors — even if they are unreliable.</p>
<h3 id="hiaygd">It’ll be awhile before the Navy meets Trump’s 355-ship promise</h3>
<p id="SdNOIf">Trump <a href="https://www.defensenews.com/congress/2017/12/14/trump-just-made-355-ships-national-policy/">promised</a> a 355-ship Navy during the campaign, up from the about <a href="https://www.defensenews.com/congress/2017/12/14/trump-just-made-355-ships-national-policy/">277</a> it has now. Trump officially <a href="https://www.defensenews.com/congress/2017/12/14/trump-just-made-355-ships-national-policy/">turned</a> that promise into a policy last December — but this budget doesn’t provide the money needed to do that, as Eaglen noted earlier.</p>
<p id="Uhj8bc">In fact, Military.com’s Hope Hedge Seck notes the Navy says the plan to get 335 ships — 20 below Trump’s promise — won’t <a href="https://twitter.com/HopeSeck/status/963125087590387713">be achieved</a> until the 2050s.</p>
<p id="p3wUHO">That means it could take around 30 years to meet Trump’s goal — which will be long after he leaves the Oval Office.</p>
<h3 id="JvW9o2">“No longer can the military complain about not having enough money”</h3>
<p id="nA6ZqJ">The new budget request should still make the military happy, other experts said in interviews. </p>
<p id="Us7wNH">“No longer can the military complain about not having enough money,” Gordon Adams, former President Bill Clinton’s top White House budget official for national security, said in an interview. “It’s living proof that if you wail loud enough and long enough, get a Republican Congress and White House, and scare them all with tales of Russian and Chinese threats, you will get your wish — more money.”</p>
<p id="dYgUKc">Last week, Secretary of Defense Jim Mattis <a href="https://www.military.com/dodbuzz/2018/02/06/mattis-blasts-lawmakers-failing-reach-budget-deal.html">told</a> the House Armed Services Committee that the military needed more money, or America put itself at risk. Days later, lawmakers <a href="http://www.journal-news.com/news/local-military/year-deal-gives-big-boost-defense-spending-wright-patterson/esQYpM1azcr5q0kzxU24yO/">struck a deal</a> to lift previously imposed defense-spending caps — paving the way for Trump’s big ask. </p>
<p id="38jPvz">That led Mattis to <a href="https://www.defensenews.com/smr/federal-budget/2018/02/11/fy19-budget-puts-us-back-to-a-position-of-primacy-mattis-says/">tell</a> reporters on Sunday that the new budget “is what we need to bring us back to a position of primacy.” </p>
<p id="Mlo21X">The Pentagon’s top spokesperson, Dana White, <a href="https://twitter.com/ChiefPentSpox/status/963152933310222337">tweeted</a> that the budget “ensures we are ready for the fight of the future.” In other words, it refocuses the US’s attention on remaining as strong as possible to fend off threats from possible competitors like China and Russia. </p>
<p id="4f5yy1">In an interview, Mark Cancian, a defense expert at the Center for Strategic and International Studies, summed it up for me simply: “It’s a big bump.”</p>
<p id="Mapa23">It just may not be as big a bump as Trump made it out to be.</p>
<p id="X7JE6a"></p>
<p id="sA8pyN"></p>
https://www.vox.com/2018/2/12/17004456/trump-2019-budget-defense-686-billionAlex Ward2018-02-12T16:20:02-05:002018-02-12T16:20:02-05:00Trump’s health care budget, explained
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<img alt="President Trump Unveils His Infrastructure Initiative With State And Local Officials In The State Dining Room Of White House" src="https://cdn.vox-cdn.com/thumbor/Z3q3ukgEa7d7aMJZHWAd-aaTgXA=/270x0:2937x2000/1310x983/cdn.vox-cdn.com/uploads/chorus_image/image/58668619/917457308.jpg.0.jpg" />
<figcaption>Chip Somodevilla/Getty Images</figcaption>
</figure>
<p id="b6qK8D">If Donald Trump’s administration could do anything it wanted in health care, this is what it would do, as told by the FY 2019 budget the White House released Monday. </p>
<h3 id="4DcaZE">Repeal/replace Obamacare and overhaul Medicaid with Graham-Cassidy — but harsher</h3>
<p id="LWHHIv">At least officially, Trump isn’t giving up on repealing the Affordable Care Act. The budget proposes enacting a repeal-and-replace bill that closely resembles <a href="https://www.vox.com/policy-and-politics/2017/8/1/16074746/cassidy-graham-obamacare-repeal"><strong>the plan</strong></a> put forward by Sens. Lindsey Graham (R-SC) and Bill Cassidy (R-LA) last fall, which would have turned much of Obamacare’s funding for Medicaid expansion and premium subsidies into block grants for states to create their own health care programs. It would also overhaul Medicaid with a per-person spending cap. </p>
<p id="Z5RUCa">That plan, you will recall, <a href="https://www.vox.com/policy-and-politics/2017/9/25/16361380/graham-cassidy-cbo-score-lol-wat"><strong>was projected</strong></a> to lead to 20 million fewer Americans having health insurance in 2026, versus Obamacare, and a $215 billion cut to federal health care spending over 10 years.</p>
<p id="RhEb27">This is a good time to note that <em>presidents’ budgets don’t have any force of law and are rarely acted upon</em>. Nevertheless, they are a window into the administration’s priorities and can set the table for future policymaking — say, if Republicans expand their Senate majority in 2019.</p>
<p id="tPXyqB">The Trump proposal implements the deepest possible cuts for Medicaid and the Graham-Cassidy block grants, picking the lowest of the available growth rates (the regular Consumer Price Index, which is lower than the medical CPI) for the block grants. </p>
<p id="PHaul2">The net result is a $675 billion federal spending cut by 2028. That includes a $1.4 trillion cut to Medicaid (offset by spending on the block grants) after Trump <a href="https://www.statnews.com/2017/03/23/medicaid-cuts-trump/"><strong>promised</strong></a> during his presidential campaign not to cut the program. </p>
<h3 id="uPkQIo">Lower drug costs for Medicare and Medicaid </h3>
<p id="wddzJG">Trump has so far <a href="https://www.vox.com/policy-and-politics/2018/1/30/16896434/trump-drug-prices-year-one"><strong>neglected</strong></a> to follow through on one of his core campaign promises: fighting pharma and lowering drug prices. But his budget does have a few new proposals on drug costs.</p>
<p id="AfX6ag">First, state Medicaid programs would be allowed to establish drug formularies — tiered systems that give preferential treatment to certain drugs over others and which private insurers use to negotiate prices with drug companies. Drug pricing experts have been wondering if the Trump administration would approve <a href="https://www.vox.com/policy-and-politics/2017/8/10/16127264/voxcare-waiver-really-big-deal-medicaid"><strong>Massachusetts’s waiver</strong></a> to set up this kind of Medicaid formulary. </p>
<p id="Knl8CL">The catch, however, is that the administration says that it would need Congress to act in order to approve such changes in Medicaid. So while the budget nods toward proposals like the one in Massachusetts, it’s not clear whether that means the waiver will actually be approved.</p>
<p id="6NSauz">The White House is also proposing several changes to Medicare’s prescription drug benefit in the budget:</p>
<ul>
<li id="fiFqLC">Create an out-of-pocket maximum; above a certain threshold, seniors would not have to pay any more of their drug costs</li>
<li id="j4VqY3">Require private Medicare Part D plans to share the rebates they receive from manufacturers with beneficiaries</li>
<li id="ewMAPF">Give Medicare Part D plans more flexibility to set their formularies, which should give them more negotiating leverage with drug makers</li>
<li id="Q6uGwt">Allow for certain drugs to be moved from Medicare Part B, where there is a set formula for drug payments, to Medicare Part D, where there are some negotiations between private Part D plans and drug companies</li>
</ul>
<p id="hXMTQa">In summary, the most specific changes the White House is proposing would address cost-sharing for patients — out-of-pocket maximums and rebate sharing — which is good for the Medicare beneficiaries but doesn’t directly target underlying drug prices.</p>
<p id="rA7rn7">However, the administration is also starting to introduce some ideas that would tackle underlying costs. They propose doing this through the more expansive Part D formularies and by moving some drugs from one part of Medicare where there is no negotiation to another part where there is. </p>
<p id="yYhlrr">The net savings — some policies, like expanded formularies, save money; others, like the out-of-pocket caps, cost money — are a little less than $6 billion over 10 years.</p>
<h3 id="7dk84O">More targeted cuts to Medicaid and Medicare</h3>
<p id="N4a2x8">The big picture is the Medicaid spending caps, which would fundamentally change the nature of the program. You can add up $1.4 trillion in Medicaid cuts through the major reforms being proposed in the budget under Graham-Cassidy.</p>
<p id="iNViUJ">But the Trump administration has other ideas for Medicaid, too:</p>
<ul>
<li id="slOPYI">Deny benefits to people who cannot prove their immigration status ($2.2 billion in cuts over 10 years)</li>
<li id="z3GVtn">Increase beneficiaries’ copayments for improper use of the emergency room ($1.3 billion in cuts over 10 years)</li>
<li id="0NCIip">Allow asset testing, which adds up all the value of a person’s property and belongings, in addition to income as a test of Medicaid eligibility ($2 billion in cuts over 10 years)</li>
</ul>
<p id="DOpE5r">There are an additional $266 billion in Medicare cuts proposed in the Trump budget in the name of eliminating wasteful spending — though they are largely cuts in payments to health care providers, rather than cuts to eligibility or benefits.</p>
<h3 id="zSErYW">Insufficient response to the opioid crisis</h3>
<p id="He6gjG">Another core Trump pledge: combatting the deadly opioid epidemic that is now killing more than 60,000 Americans annually. But, like his previous executive order, the proposals in Trump’s budget fall far short of what experts say is actually needed.</p>
<p id="wfCfRA">Trump’s budget provides $10 billion for vaguely defined efforts to prevent opioid abuse and expand treatment, plus a couple billion dollars for border security.</p>
<p id="DqrSIs">That is a lot of money, of course, and it is more than the federal government has managed to pull together so far, even as the crisis gets worse and worse. But as Vox’s German Lopez has <a href="https://www.vox.com/science-and-health/2017/8/1/15746780/opioid-epidemic-end"><strong>documented</strong></a>, experts say that we need <em>tens of billions of dollars</em> to fight the addiction scourge. Opioid abuse cost the entire country $80 billion in a single year. </p>
<p id="YB9CqS">The funding included in Trump’s budget is more than advocates have come to expect in Washington’s stalled response to the crisis. But for a document in which the White House can propose anything it wants, it still isn’t nearly enough. </p>
<h3 id="LObhv7">Shrink the Department of Health and Human Services</h3>
<p id="nGTCEo">Finally, Trump proposes eliminating several notable pieces of the federal health care bureaucracy:</p>
<ul>
<li id="VQjvKy">Agency for Healthcare Research and Quality, which is tasked with evaluating best health care practices. (The White House says its mission is duplicated by the National Institutes of Health and other agencies.)</li>
<li id="b0Q11D">Community Services Block Grant, $700 million in annual grants for health care, food, and workforce programs. (The White House says again that this money is duplicative.)</li>
<li id="jlg3Ax">Health care workforce programs, which help train medical students and fund their education, etc. (The White House says there is little evidence that these programs improve the nation’s medical services.)</li>
</ul>
<p id="Im6cEH">Low-income home energy assistance, a $3.4 billion program that helps poorer people afford heating and air conditioning. (The White House says the program is stricken by fraud and abuse.)</p>
<p id="qhEsjh"><em>This story appears in VoxCare, a newsletter from Vox on the latest twists and turns in America’s health care debate. Sign up to </em><a href="http://www.vox.com/newsletters"><em><strong>get VoxCare in your inbox</strong></em></a><em><strong> </strong></em><em>along with more health care stats and news. </em></p>
<aside id="fcwx6p"><div data-anthem-component="newsletter" data-anthem-component-data='{"slug":"vox_care"}'></div></aside>
https://www.vox.com/policy-and-politics/2018/2/12/17005294/trump-health-care-budget-explainedDylan Scott2018-02-12T16:10:02-05:002018-02-12T16:10:02-05:00The gigantic cuts in Donald Trump’s latest budget proposal, explained
<figure>
<img alt="U.S. Government Shutdown Enters Third Day" src="https://cdn.vox-cdn.com/thumbor/M5YAksiNMFvXt8HJFZCppki3IeM=/158x0:2825x2000/1310x983/cdn.vox-cdn.com/uploads/chorus_image/image/58668363/908746132.jpg.0.jpg" />
<figcaption>Trump budget director Mick Mulvaney. | Chip Somodevilla/Getty Images</figcaption>
</figure>
<p>The budget proposes massive, historic cuts to everything from the EPA to Medicare.</p> <p id="Nb4c26">On Monday, President Donald Trump unveiled the <a href="https://www.whitehouse.gov/omb/budget/">second budget proposal</a> of his presidency, encompassing proposals affecting defense and non-defense funding for government agencies, tax changes, and funding for social insurance and assistance programs like Social Security, Medicare, Medicaid, and food stamps.</p>
<p id="WXDgAv">The budget broadly resembles <a href="https://www.vox.com/policy-and-politics/2017/3/16/14912638/trump-budget-2018-explained-cuts-growth">the budget Trump released last year</a>, and both closely follow budget plans put forward by House Speaker Paul Ryan when he was the House Budget Committee chair. Ryan’s previous budget proposals featured trillions in cuts to programs for the poor. While Trump largely leaves the non-disability portions of<s> </s>Social Security unscathed, and boosts funding for border security, veterans, and defense, he cuts just about everything else — including Medicare, which was largely spared in the fiscal year 2018 budget.</p>
<p id="Fs9tJO">The new budget also calls for passing an Obamacare replacement bill that deeply cuts Medicaid to far below its pre-Obamacare levels, making the tax bill passed in 2017 permanent, and slashing food stamps dramatically.</p>
<p id="Eq4f4M">As with last year’s, this budget assumes an extremely unrealistic economic growth rate — 3 percent, above the currently projected 1.9 percent. This assumption results in $3.1 trillion lower deficits than would otherwise result — which, since the budget claims $3.1 trillion in net deficit reduction through spending cuts, suggests the budget might not close the deficit at all if you use more realistic assumptions.</p>
<p id="7eG6XR">It’s an ambitious document that stands in marked contrast to the actual actions of the administration and its allies in Congress, who just last week agreed to a <a href="https://www.vox.com/policy-and-politics/2018/2/7/16987122/congress-massive-budget-deal-explained">massive increase in non-defense discretionary spending</a>, which this budget now proposes to <a href="https://twitter.com/MarcGoldwein/status/963091389755133953">cut by more than 40 percent</a>.</p>
<h3 id="6OQrpg">1) What are the big takeaways from the budget?</h3>
<figure class="e-image">
<img alt="Anticipated budget deficits under Trump’s plan" data-mask-text="false" src="https://cdn.vox-cdn.com/thumbor/XX3JgQt-L6INeEMz5Q5TBPMv_Ic=/800x0/filters:no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/10210545/DeficitsPOTUSFY19.png">
<cite><a href="http://www.crfb.org/blogs/overview-presidents-fy-2019-budget">Committee for a Responsible Federal Budget</a></cite>
</figure>
<p id="xAlQZr">According to the centrist, pro-balanced budget group the <a href="http://www.crfb.org/blogs/overview-presidents-fy-2019-budget">Committee for a Responsible Federal Budget</a> (which, regardless of its political leanings, is a reliable source of rigorous budget analysis), the president’s budget has a total of $3.1 trillion in budget savings relative to current law. It includes $1.75 trillion in new spending and tax cuts, $3.7 trillion in deficit reduction that’s overwhelmingly the result of spending cuts, $800 billion in reduced spending on wars and disaster recovery, and $300 billion in savings due to lower interest payments on less debt.</p>
<p id="Jtlnzb">The big proposed policy changes include:</p>
<ul>
<li id="rmoYJN">
<strong>A 42.3 percent cut to all “non-defense discretionary” spending</strong>, from the currently planned level of $756 billion in 2028 to $436 billion. This category includes funding for government agencies like the Environmental Protection Agency and the State Department, certain safety net programs like Head Start, law enforcement spending at the FBI and Department of Justice, and scientific research through the National Institutes of Health and National Science Foundation.</li>
<li id="aPZ9bz">A <strong>33.7 percent cut to the EPA</strong>, a <strong>29.5 percent cut to the National Science Foundation</strong>, a <strong>22.2 percent cut to the Army Corps of Engineers</strong> (a major infrastructure program), a <strong>21.4 percent cut to the Labor Department</strong>, and a <strong>26.9 percent cut to the State Department</strong>, among many other discretionary spending cuts.</li>
<li id="WcMv3B">
<strong>A $777 billion boost to defense spending</strong> over 10 years, paid for partially by reducing “overseas contingency operations” spending (also known as the war budget). By 2028, total defense spending will be lower, but over the next few years it will be significantly higher (7.9 percent higher in 2020, for instance).</li>
<li id="UuLkJS">
<strong>A 7.1 percent cut to Medicare</strong> by 2028, due to reforms meant to cut payments to providers and reduce wasteful treatment without limiting access to health care. The Affordable Care Act in 2010 included many similar provisions with related goals.</li>
<li id="gY0yDI">
<strong>A 22.5 percent cut to Medicaid and Obamacare subsidies</strong> by 2028, through repealing and replacing Obamacare.</li>
<li id="KhOB8z">
<strong>A 27.4 percent cut to SNAP (food stamps)</strong> and a <strong>20.1 percent cut to Section 8 housing assistance </strong>by 2028:</li>
</ul>
<div id="ZOLuK1">
<blockquote class="twitter-tweet">
<p lang="en" dir="ltr">Those SNAP cuts? They're massive and immediate. SNAP benefits are already small - just $1.40 per person per meal. Cutting the program in quarter in extremely cruel. <a href="https://t.co/aekrMdRZ9Z">pic.twitter.com/aekrMdRZ9Z</a></p>— Bobby Kogan (@BBKogan) <a href="https://twitter.com/BBKogan/status/963117307110285317?ref_src=twsrc%5Etfw">February 12, 2018</a>
</blockquote>
<script async="" src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div>
<ul>
<li id="aEaXIJ">
<strong>$550 billion in new tax cuts </strong>achieved by <a href="https://twitter.com/MarcGoldwein/status/963091973983887360">making the individual and estate tax provisions</a> in last year’s tax bill permanent.</li>
<li id="klZtEc">
<strong>$199 billion over </strong><strong>10</strong><strong> years for a new infrastructure program</strong> meant to generate $1 trillion through private partnership spending; this is offset by a<strong> 28.6 percent cut to transportation spending</strong> from <a href="https://www.whitehouse.gov/wp-content/uploads/2018/02/hist03z2-fy2019.xlsx">2017 to 2023</a>, cuts which over the same 10-year period <a href="https://twitter.com/BBKogan/status/963096402082574338"><strong>total $178 billion</strong></a>. Combined with cuts to water and other infrastructure programs, it’s not clear the budget actually spends more on infrastructure.</li>
</ul>
<p id="oHQXrD">In addition to the raw number figures, there are a number of new proposals for how to run these programs. The budget endorses the <a href="https://www.vox.com/policy-and-politics/2017/8/1/16074746/cassidy-graham-obamacare-repeal">Graham-Cassidy plan for repealing and replacing Obamacare</a>, which entails massive cuts in Medicaid spending and devolving much of the federal health care budget to the states. It attempts to significantly reduce Medicare spending by adding new restrictions on when doctors can offer “self-referrals,” expanding the use of Accountable Care Organizations (ACOs), and other changes.</p>
<p id="N0uKTA">On food stamps, the budget would reduce the amount that recipients get in vouchers to spend on food of their choice and <a href="https://twitter.com/chadderr/status/963101362417553409">introduce “USDA foods packages,”</a> “which would include items such as shelf-stable milk, ready to eat cereals, pasta, peanut butter, beans and canned fruit, vegetables, and meat, poultry, or fish” in order to “improve the nutritional value of the benefit provided and reduce the potential for … fraud.”</p>
<p id="VgsleR">The budget would eliminate loan forgiveness for students who go into public service, do away with subsidized Stafford loans, and establish a new, unified income-based repayment plan for student loans. Borrowers would pay 12.5 percent of their discretionary income every month and have their balance forgiven after 15 years (for undergraduate debt) or 30 years (for graduate school debt). This is projected to save $203 billion over 10 years.</p>
<h3 id="Q8hXN8">2) So are these changes going to happen?</h3>
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<img alt="Senate Democratic Leader Chuck Schumer Speaks At The University Of Louisville's McConnell Center" data-mask-text="false" src="https://cdn.vox-cdn.com/thumbor/2vhXMfqk9DC00QETnOjaSrwc-dM=/800x0/filters:no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/10209811/917387268.jpg.jpg">
<cite>Bill Pugliano/Getty Images</cite>
<figcaption>Senate leaders McConnell and Schumer, who will play a big role in deciding which of these changes take effect.</figcaption>
</figure>
<p id="lOBOw5">No — not likely. </p>
<p id="VPu5GN">The president’s budget is not law, and it is not actually implemented government policy. It is an opening volley in a months-long decision-making process established by the Congressional Budget Act of 1974, in which the House and Senate set spending levels for the various government agencies.</p>
<p id="ldxLiX">To pass, Trump’s budget needs to get at least 60 votes in the Senate, meaning at least nine Democrats would have to vote for the budget cuts or at least refuse to filibuster. That’s not particularly likely to happen.</p>
<p id="E2syA2">The main purpose of the budget request is to formally lay out the administration’s stance on fiscal policy. It details specific policy changes the administration wants, how much those changes will affect spending and tax revenue over the next 10 years, and how individual agencies will be affected along the way.</p>
<p id="MZRora">For example, <a href="http://www.crfb.org/papers/analysis-president%E2%80%99s-fy-2017-budget">President Obama’s final budget</a> called for $312 billion in new infrastructure spending, $150 billion for universal pre-K and child care, and $60 billion to expand access to community colleges, paid for (and then some) by cuts in prescription drug spending, a cap on the value of tax deductions, new taxes on investment income, and more. The budget gave relatively precise estimates for how much each of these proposals was expected to cost or raise, respectively, and estimates of how this would affect the overall trajectory of the deficit (down) and spending and revenue levels (both up).</p>
<p id="CZtCrP">But you’ll notice that Obama did not actually get $312 billion in infrastructure spending, or a cap on tax deduction, or a tax increase on capital gains. That’s because the budget request is only the first step in the process, and all the most consequential decisions are made by Congress.</p>
<p id="e7PVBO">The second step in the process is for the Senate and House budget committees to propose, pass, and reconcile resolutions laying out detailed spending and revenue plans for the coming fiscal year. These resolutions often incorporate ideas from the president’s budget, particularly when the president’s party controls one or both houses of Congress — but they don’t need to.</p>
<p id="wyR3CY">When Paul Ryan was chair of the House Budget Committee, his plans incorporated little if anything from Obama’s budgets. If House Budget Chair Steve Womack (R-AR) and Senate Budget Chair Mike Enzi (R-WY) have significant disagreements with Trump’s budget priorities, or enough members of their committees do, then the resolutions they each pass through committee could differ sharply from Trump’s plan.</p>
<p id="1TRGWI">Once Womack’s and Enzi’s committees have passed resolutions, the full House and Senate have to pass them as well, and then the two bodies have to reconcile whatever differences exist between them. Then, finally, a reconciled joint House-Senate budget resolution can be passed by both houses. Notably, budget resolutions can’t be filibustered, and because they’re concurrent resolutions rather than laws, they don’t require the president’s signature either.</p>
<p id="GtSx7N">But because they’re not laws, budget resolutions do not enact new taxes or spending programs.</p>
<h3 id="rRPL3b">3) Okay, so Republicans in each House will pass a budget they agree on, and then it can’t be filibustered. Then the cuts take effect?</h3>
<p id="gLOTOH">Not immediately; budget resolutions can’t enact that kind of change on their own. But they can enable it.</p>
<p id="UeiDVm">So far, Trump’s Congress has passed two budget resolutions: a FY2017 resolution meant to enable the passage of Obamacare replacement, and a <a href="http://thehill.com/homenews/house/357304-house-adopts-senate-budget-steps-toward-tax-reform">FY2018 resolution</a> that enabled the passage of last year’s tax bill.</p>
<p id="5T4Ufu">They still need to pass a 2019 resolution, which can include reconciliation instructions that could enable the passage of some of the mandatory spending reforms in this budget, particularly the health care cuts and the cuts to safety net programs like food stamps.</p>
<p id="8AYUkO">It’s definitely possible that Paul Ryan and Mitch McConnell will decide to include reconciliation instructions that enable such cuts. But the Senate’s Republican majority is smaller than it was last summer, when it became clear that the massive health care cuts in the various Obamacare repeal-and-replace plans could not make it out of the Senate. There was just too much moderate Republican opposition, and this time around only two Republicans have to defect to kill a plan.</p>
<p id="tVITpq">Still, if Republicans choose to, they can try to push through the mandatory cuts. The discretionary cuts, to agencies like the EPA, are a harder goal to achieve, since they cannot be included in a reconciliation bill. Thus, any bill that cuts their funding can be filibustered by Senate Democrats.</p>
<h3 id="vheBON">4) How big are the social program cuts included in this budget?</h3>
<p id="PdPptc">Massive. As with last year’s budget, this year’s includes some of the largest cuts to social programs and the safety net to be proposed by a president in decades.</p>
<p id="CrwHqL">The biggest proposed cuts, totaling nearly $2 trillion over 10 years, are to the non-defense discretionary budget. Those are also the least likely to take effect. Just last week, Republicans in Congress embraced significantly higher domestic spending levels, and in any case, discretionary cuts are filibusterable in the Senate. They can’t be achieved through budget reconciliation.</p>
<p id="rP4SxV">But the health care cuts <em>can</em> be achieved, and this time around, Trump has chosen not to spare Medicare, which his previous budget didn’t cut. He still wants to repeal and replace Obamacare, and in the process to cut Medicaid by either capping its per capita spending levels or block-granting it to the states. Either would <a href="https://www.vox.com/2017/6/22/15855262/senate-health-bill-victims-hurts-medicaid-poor">dramatically reduce the program’s effectiveness</a>. On Medicare, the administration’s focus is on trying to cut costs without reducing access to care by improving incentives to avoid wasteful treatments and changing how the program deals with providers.</p>
<p id="0SAVLO">The budget includes a bevy of cuts to non-health safety programs as well, most notably food stamps (which is cut by a quarter) and Section 8 Housing (which is cut by 20 percent). Disability programs also come in for cuts, and the budget includes a broad call for measures to improve “program integrity” by cracking down on faulty payments and making eligibility criteria stricter. The budget envisions such provisions raising $151 billion over the years. The budget also credits “welfare reform” measures (including the food stamps and Section 8 cuts) with $263 billion in savings over 10 years.</p>
<p id="JNb7xe">These are smaller net figures than the health care or discretionary cuts, but in percentage terms they are devastating to individual programs, some of which, like Low Income Home Energy Assistance Program (LIHEAP), are eliminated entirely.</p>
<h3 id="fjqJ5h">5) What’s this about Trump’s magical economic assumptions?</h3>
<p id="urxZVP">Oh, right, those.</p>
<p id="nAbPzF">In the budget, Trump assumes that real GDP growth will reach 3 percent this year and then stay between 2.8 percent and 3 percent for the indefinite future. For context, in 2016 actual growth was 1.5 percent, and it was 2.2 percent in 2017.</p>
<p id="lwsL3E">Most economists <a href="https://www.vox.com/the-big-idea/2017/3/21/14938698/growth-trump-economic-us-slowdown-demographics-stagnation">don’t view 3 percent growth as realistic</a>. Most <a href="https://twitter.com/jasonfurman/status/963125618555662336">private sector forecasters</a> foresee growth closer to 2.15 percent, the <a href="https://www.cbo.gov/about/products/budget-economic-data#4">Congressional Budget Office</a> projects numbers between 1.4 and 1.9 percent, and the <a href="https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20170920.htm">Federal Reserve</a> expects growth between 1.8 and 2 percent in the long run.</p>
<p id="X9y7Zt">In a <a href="https://www.whitehouse.gov/wp-content/uploads/2018/02/ap_2_assumptions-fy2019.pdf">supplemental document</a>, the White House’s budget staff estimated what the budget would look like with 1 percent lower growth every year from 2018 to 2028. This is a considerably more likely assumption. The analysis concludes that with these different projections, the US will raise $2.9 trillion less in revenue and spend $216.6 billion more. In total, the deficit over those 10 years will be $3.14 trillion greater, and $646.9 billion greater in 2028 alone.</p>
<p id="6TyfHE">Recall, from the beginning of this article, that budget analysts had concluded the budget includes $3.1 trillion in claimed deficit reduction. More realistic economic assumptions are enough to wipe away those deficit reductions entirely.</p>
https://www.vox.com/policy-and-politics/2018/2/12/16996832/trump-budget-2019-release-explainedDylan Matthews