Trump Blasts Dems as Border Talks Stall

Plus, Obamacare hasn't reduced medical bankruptcies

Lawmakers Scramble to Avert Another Government Shutdown

Collapsed. Derailed. Fell apart. Broke down. Whatever description you choose, the bottom line on the bipartisan congressional negotiations over border security isn’t good: The talks, which had appeared to be progressing toward a deal, ground to an abrupt halt over the weekend, raising the chances of another partial government shutdown at the end of the week.

What This Fight Is About: This time, the sticking point isn’t funding for President Trump’s desired border wall but Democratic demands to cap the number of Immigration and Customs Enforcement beds available to detain undocumented immigrants arrested inside the U.S., not at the border, at 16,500. Democrats are seeking that cap in exchange for allowing some money to be used for physical barriers at the border.

Trump responded to the breakdown in talks by lashing out at Democrats on Twitter, falsely claiming that their demand for detention limits was new: “The Democrats do not want us to detain, or send back, criminal aliens! This is a brand new demand. Crazy!”

Democrats said they were pressing to limit the number of beds for detainees in Immigration and Customs Enforcement custody to make the agency focus on dangerous criminals and pull back on more sweeping deportation raids that they describe as cruel. “A cap on ICE detention beds will force the Trump Admin to prioritize deportation for criminals and people posing real security threats, not law-abiding immigrants contributing to our country,” Rep. Lucille Roybal-Allard (D-CA), one of the negotiators, tweeted. (Read more about the issue here.)

Trump is set to hold a rally in El Paso, Texas, Monday night, where he is expected to again try to make his case for a border wall.

What if Lawmakers Fail to Reach a Deal? Four top negotiators — House Appropriations Chairwoman Nita Lowey (D-NY), Senate Appropriations Chairman Richard Shelby (R-AL), Rep. Kay Granger (R-TX) and Sen. Patrick Leahy (D-VT) — met Monday afternoon to try to jump-start the talks and salvage an agreement. They were reportedly set to meet again this evening.

Lawmakers have until Friday, when current stopgap funding expires, to prevent another partial government shutdown, but they were working against a Monday deadline because of procedural rules for passing legislation, including one that requires legislation be released 72 hours before it comes up for a floor vote.

If the negotiators can’t reach a border security deal this week, lawmakers would need to pass another funding bill to avert a shutdown — and while the White House is open to such a bill, the two parties could still clash over the details, Politico reports.

How Does This All End? The Washington Post’s Colby Itkowitz outlines four possible outcomes:

1. They make a deal. Nobody wants a shutdown, so the pressure to strike an agreement providing funding for border security, including some barrier money, is real.

2. They narrow the fight. Lawmakers could fund the rest of the government and keep negotiating over Homeland Security. Senate Majority Leader Mitch McConnell (R-KY) has promoted the idea of passing full-year spending bills for all unfunded government agencies except the Department of Homeland Security Department, which could get short-term funding, The Washington Post reported. Democrats had pushed for this during the 35-day shutdown in December and January.

3. They buy more time. A short-term government funding bill covering all unfunded agencies would prevent a shutdown and allow negotiators to keep talking. “It’s hard to imagine anyone agreeing to this unless a deal is very, very close, and a couple of more days are needed to reach the finish line,” Itkowitz says.

4. Another shutdown. It’s not completely out of the question.

And what about Trump’s wall? “No matter what happens,” Itkowitz says, “Trump has strongly suggested that he will declare some kind of national emergency and move money around to put toward the construction of a border wall.”

Chart of the Day: The Debt Ceiling Cometh

The threat of another partial government shutdown at the end of the week “would complicate negotiations over the debt ceiling,” says Moody’s Investor Services. The debt ceiling — currently set at $20.456 trillion — is suspended until March 1, and if Congress hasn’t reached a deal to raise the limit by that date, the Treasury Department will begin to take “extraordinary measures” to avoid default on U.S. obligations. The Bloomberg chart below shows the increases of the public debt outstanding and the debt ceiling since 2008.

Goldman Sachs Projects Deficit Will Top $1 Trillion Next Year

The Congressional Budget Office projected last month that the federal budget deficit for this year would be about $900 billion, up 15 percent from last year but about $84 billion less than it had previously forecast.

Similarly, Goldman Sachs just trimmed its deficit projection for 2019 — though it says the deficit will be higher than CBO expects. In a new note to clients, Goldman economist Alec Phillips projects that the 2019 deficit will be $950 billion (4.5 percent of GDP), down from a previous forecast of $1 trillion.

Goldman still says the trajectory of the debt “remains problematic,” with the deficit likely topping 6 percent of GDP by 2029 and the federal debt likely to surpass 100 percent of GDP by then. The bank notes that CBO’s deficit outlook for each of the next four years, while slightly improved over recent months, is still nearly 1 percent of GDP larger than it was two years ago. “The main source of the deterioration continues to be a lower projected level of individual and corporate tax receipts following enactment of the 2017 tax law, and to a lesser extent the increase in discretionary spending that Congress enacted in 2018,” Phillips writes.

And while CBO’s baseline forecast said that the deficit wouldn’t hit $1 trillion until 2022, Goldman sees it passing that mark next year. “Over the next couple of years, we expect Congress to raise spending caps and to extend various expiring tax and health provisions, which accounts for most of the difference between our estimates and the CBO baseline,” Phillips explains.

Phillips also notes that actual federal spending has come in shy of the expected increases. While Congress boosted spending in 2018 and 2019, a significant portion of the allocated funding has not been spent, especially in the non-defense portion of the budget. “One potential reason for this might be the lack of federal net hiring; while the federal hiring freeze President Trump announced shortly after taking office has officially ended, federal non-defense employment is [8,000] lower than it was at the time of the announcement,” he writes.

Phillips also notes that the rising deficit doesn’t appear to be a priority for either party — or for the American public at the moment. “While this is likely to change eventually,” he writes, “there is little indication that political leaders will take proactive steps to reduce the deficit through tax increases or spending cuts in the next few years.”

Fiscal Fact of the Day

From the Tax Policy Center: “The share of federal taxes borne by the top 1% of households by income has nearly doubled from 14% in 1979 to 26% in 2015. This increase mostly reflects a growth in their share of total before-tax income, which has increased from 9% in 1979 to almost 17% in 2015.”

Obamacare Hasn’t Reduced Bankruptcies: Study

Medical problems are still the most common cause of personal bankruptcy in the U.S., according to a new study in the American Journal of Public Health.

Using a sample of 910 Americans who filed for personal bankruptcy between 2013 and 2016, researchers from the Consumer Bankruptcy Project found that medical issues contributed to 67.5 percent of all personal bankruptcies during that time. Earlier CBP research found that medical issues contributed to 65.5 percent of personal bankruptcy filings between 2001 and 2007, before the passage of the Affordable Care Act.

"Despite gains in coverage and access to care from the ACA, our findings suggest that it did not change the proportion of bankruptcies with medical causes," the authors wrote. They estimated that about 530,000 families file for bankruptcy each year due to illness or medical bills.

Dr. David Himmelstein, the lead author of the study, said that inadequate health insurance plays a major role in personal bankruptcy:

"Unless you're Bill Gates, you're just one serious illness away from bankruptcy. For middle-class Americans, health insurance offers little protection. Most of us have policies with so many loopholes, copayments and deductibles that illness can put you in the poorhouse. And even the best job-based health insurance often vanishes when prolonged illness causes job loss—just when families need it most. Private health insurance is a defective product, akin to an umbrella that melts in the rain."

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