Pelosi Takes Down Trump: No State of the Union in Her House

Plus, 7 million more uninsured

Pelosi Shuts Down Trump's State of the Union Speech in the House

As the partial government shutdown heads for its 34th day, the political brawling between President Trump and House Speaker Nancy Pelosi is revving up to new levels.

 

Here’s an update on where things stand:

 

• Pelosi Shuts Down Trump’s SOTU Speech in House Chamber: Pelosi said Wednesday that she will not allow Trump to deliver his State of the Union address from the House chamber until the government reopens. Earlier in the day, Trump said in a letter that he planned to deliver the address as previously scheduled. “I look forward to seeing you on the evening on January 29th in the Chamber of the House of Representatives,” Trump wrote. “It would be so very sad for our Country if the State of the Union were not delivered on time, on schedule, and very importantly, on location!”

 

In response, Pelosi said that when she invited the president on January 3 to deliver his speech in the House, “there was no thought that the government would still be shut down.” Pelosi said that “the House of Representatives will not consider a concurrent resolution authorizing the President’s State of the Union address in the House Chamber until government has reopened.” In other words, the earlier invitation has been rescinded, so don’t bother showing up on the 29th. Politico calls it “an unprecedented move that underscores how bitter partisan tensions have paralyzed Washington.”

 

• White House Asks for List of Programs That Will Be Hurt if Shutdown Goes Until March: Acting White House Chief of Staff Mick Mulvaney has asked agency leaders to detail the highest-impact programs that could be at risk if the shutdown drags into March and April, The Washington Post’s Damian Paletta and Juliet Eilperin report. They call that “the firmest evidence to date that the White House is preparing for a lengthy funding lapse that could have snowballing consequences for the economy and government services.”

 

• Senate Set to Vote on Competing Bills Doomed to Fail: The Senate will vote Thursday on two competing bills to reopen the government. One package is built around President Trump’s offer to extend legal protections for some immigrants for three years in exchange for $5.7 billion in funding for his wall on the southern border, though it also includes some provisions that would make it harder for asylum seekers to gain entry to the United States. The other is a House-passed Democratic plan to fund the government until February 8 without providing any additional wall money.

 

Neither bill is expected to pass, but the votes may indicate at least some movement to try to reach a resolution. “It will be the first time the Senate has stepped off the sidelines to try to end the monthlong government shutdown,” The New York Times noted.

 

“The key question is: which party on Thursday will suffer more defections? It’s quite plausible that a few moderates will back both bills,” The Hill said.

 

The other key question: What happens after both votes fail?

 

“Once the choreography has played out, and each side has killed the other's preferred solution, there's just a chance that a behind-the-scenes huddle among key leaders in the Democratic House and Republican Senate could figure out an escape route,” CNN’s Stephen Collinson suggests. At the same time, he writes that, “despite increasing media focus on their plight, the suffering of the stricken federal workers is not yet imposing enough political pressure on either Trump or Pelosi's Democrats to force a swift end to the shutdown.”

• House Democrats to Offer Trump More Money for Border Security – But Not a Wall: House Democrats are preparing their own answer to that “what’s next” question. They’re reportedly set to propose significantly higher spending on border security — potentially even meeting Trump’s $5.7 billion demand — just not for a wall. But they’re still insisting that Trump agree to reopen the government first. “There is serious and justified concern that this president will shut down the government every time he doesn't get his way legislatively,” House Speaker Nancy Pelosi reportedly told a Washington, D.C., meeting of the U.S. Conference of Mayors on Wednesday.

The Democratic proposal being drafted “will include border security improvements such as retrofitting ports of entry, new sensors and drones, more immigration judges and border patrol agents, and additional technology, among other measures,” The Washington Post reports.

“If his $5.7 billion is about border security, then we see ourselves fulfilling that request, only doing it through what I like to call using a ‘smart wall’,” House Majority Whip James Clyburn (D-SC) told reporters.

Shutdown Could Wipe Out Economic Growth in Q1

Kevin Hassett, chair of Trump's Council of Economic Advisers, said Wednesday that the U.S. economy may register zero growth in the first quarter if the partial government shutdown lasts through the end of March.

“It is true that if we get a typically weak first quarter and then have an extended shutdown, we could end up with a number that’s very, very low,” Hassett told CNN’s Poppy Harlow, adding that GDP growth could potentially come in at zero.

Hassett also said that he expected to “get that growth back” once the government reopens, with a “humongous” growth number as high as “4 or 5 percent” in the following quarter.

Polls of the Day

President Trump has said that he’d keep the government shut down for “as long as it takes” to get funding for a border wall, but a new CBS News poll finds that 71 percent of Americans say the fight isn’t worth it, and 66 percent say they want the president to agree to a spending deal without wall funding. (Asked what they want Democrats in Congress to do, 52 percent say Pelosi and company should agree to a budget with wall funding.)

Trump might be more interested in other poll findings, though: 65 percent of Republicans say he should refuse a deal unless it includes wall money, and 56 percent believe the wall is worth the shutdown, while 43 percent say it isn’t. The gap between those numbers and Trump’s overall approval rating among Republicans has some analysts suggesting Trump’s base may be moving away from him in the shutdown fight.

Overall, the poll finds that 59 percent of Americans disapprove of the job Trump is doing — one point higher than the previous high for his presidency.

Similarly, a separate Morning Consult/Politico poll found that 57 percent of registered voters disapprove of Trump’s job performance, while 40 percent approve. Among Republicans, Trump’s approval is 81 percent. Overall, 49 percent of voters say Trump is mostly responsible for the shutdown, up six points since the standoff began.



The CBS poll of 1,102 U.S. adults was conducted by phone from January 18-21 and has a margin of error of plus or minus three points. The Morning Consult-Politico online survey of 1,996 registered voters was conducted January 18-22 and has a margin of error of plus or minus two points.

Quote of the Day

“You could see an influx of people leaving the government payroll and coming over to the private sector because there are plenty of opportunities.”

– Jonas Prising, CEO of staffing firm ManpowerGroup, on the potential labor market effects of the prolonged shutdown, as quoted by Bloomberg

7 Million More Uninsured Under Trump

The number of Americans lacking health insurance has increased by 7 million since Donald Trump became president, according to data released by Gallup Wednesday.

The uninsured rate — the percentage of adults in the U.S. who say they have no health insurance — has risen steadily under Trump, reaching 13.7 percent in the fourth quarter of 2018, up 2.8 percentage points from the fourth quarter of 2016.

“While still below the 18% high point recorded before implementation of the Affordable Care Act's individual health insurance mandate in 2014, today's level is the highest in more than four years, and well above the low point of 10.9% reached in 2016,” Gallup’s Dan Witters said.

Who’s been hit the hardest: The largest increases in the uninsured rate were experienced by women, those in households making less than $48,000 a year, and young adults. About 21 percent of those under the age of 35 now lack health insurance, a nearly 5 percentage-point increase since 2016.

Economic growth isn’t helping as much as usual: Vox’s Sarah Kliff said the trend was surprising given the solid economic growth that has driven the unemployment rate to near-record lows. “Usually, when more people have jobs, it means more people with access to employer-sponsored health insurance. But even during this period of job growth, America’s uninsured rate keeps climbing,” Kliff wrote.

What’s behind the increase: Gallup cites several factors that likely are driving the uninsured rate higher, including:

  • rising Obamacare premiums,
  • sharply reduced funding for Affordable Care Act marketing and enrollment outreach,
  • repeated efforts by Republicans to repeal the ACA, which combined with Trump’s public declarations that “Obamacare is dead” may have increased uncertainty and reduced enrollment.

Number of the Day: $27.5 Million

As Congress and the Trump administration continue to hammer drugmakers over their prices, the pharmaceutical industry’s main trade group spent $27.5 million on lobbying in 2018, more than it had spent in any previous year, according to disclosure forms released Tuesday. Read more at STAT, Bloomberg or The Hill.

Is the Tax Cut Investment Boom Already Over?

Hassett, the Council of Economic Advisers chair, also defended the Republican tax bill in his interview with CNN, saying that the promised wave of investment by American businesses in response to the tax overhaul was on track. "There has been a capital spending boom this year," Hassett said, and the pattern of investment is “exactly what our models would predict.”

But the boom appears to have been faded quickly, Harlow said, citing a sharp slowdown in business investment growth in the third quarter of 2018 (see the chart below). In a report cited by CNN titled “The investment boom that wasn’t,” Bank of America’s Ethan Harris wrote, “It now appears the investment recovery was short-lived.” Overall, "There hasn't been a huge surge in response to tax reform," said University of Chicago business professor Eric Zwick. And moving forward, “We're not going to get the huge boom that proponents of the tax cut were discussing,” said Gus Faucher, chief economist at PNC.

By contrast, the tax cuts had a more significant effect on stock buybacks, which hit record levels as companies dispersed a windfall created by lower tax rates and the repatriation of profits held overseas. “While government statistics show that nominal fixed business investment increased just 8.2% through the first three quarters of 2018,” CNN’s Matt Egan wrote, “announced stock buybacks surged by 71% in 2018 to a record $1.04 trillion, according to TrimTabs Investment Research.”

The rapid demise of the investment boom comes as no surprise to analysts like Ian Shepherdson, chief economist at Pantheon Macroeconomics, who like many critics of the GOP tax cuts said that companies had plenty of cash on hand before the tax law passed, and that simply giving them more money wouldn’t necessarily inspire additional investment. "History shows that repatriated earnings tend to be spent on buybacks and dividends,” Shepherdson told CNN. He added that he saw "no evidence at all" that the tax cuts directly influenced business investment last year.

One factor that probably did play a role in the jump in business investment at the start of 2018 was oil. A recent study from Wharton found that U.S. business spending is now strongly correlated with higher oil prices, and oil prices rose sharply last year. Wharton’s Alexander Arnon wrote that “oil prices might even account for most of the increase in the growth rate of investment in 2018.”

Earmarks Could Make a Comeback, Under a New Name

Now that they’re back in charge of the House, some Democrats are pushing for the return of earmarks, which allow lawmakers to direct money to specific projects, The Hill’s Alexander Bolton reports.

The revival is driven in part by concerns that Congress has given up too much authority to the president by allowing executive agencies to determine spending priorities. Earmarks also make it easier for lawmakers to make deals and support bipartisan legislation, some experts say.

Rep. Emanuel Cleaver (D-MO) said that a majority of Democrats support the earmark revival, and that some Republican do, too. One prominent Republican who supports the idea is Sen. Lisa Murkowski (R-AK), who said, “This is something that was clearly set out in the Constitution as the role of the legislative branch. Nowhere does it say, you think about what these priorities are going to be and then give it up to the [federal] agencies to determine what the priority is.”

Earmarks were banned in the wake of the Tea Party revolution that swept Republicans into power in 2010. Earmarks had been tarnished by overuse and scandal, culminating in the Jack Abramoff affair that led to the imprisonment of former Rep. Randy “Duke” Cunningham (R-CA), who pled guilty to directing federal spending in exchange for bribes. The 2009 omnibus spending package contained roughly 9,000 earmarks worth about $5 billion.

If earmarks are brought back, though, one thing will be different. Since the term has become a “dirty word,” they will be referred to as “congressionally directed spending,” according to The Hill.

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