Rand Paul Says No to Trump's National Emergency

Plus, Trump's new tune on the deficit

The GOP vs. Trump: Senate Will Likely Reject His Border Emergency

Sen. Rand Paul (R-KY) over the weekend became the fourth Republican senator to come out in favor of a resolution to block President Trump’s declaration of a national emergency to redirect funds toward construction of a wall on the southern border.

The resolution of disapproval has already passed the Democratic-led House. Paul’s pronouncement means that it will likely have the simple majority of votes needed to pass the Senate, where the 47 senators who caucus with the Democrats are expected to back it and Republican Sens. Susan Collins (ME), Lisa Murkowski (AK) and Thom Tillis (NC) have said they support it.

Senate Majority Leader Mitch McConnell acknowledged on Monday that the resolution will pass the upper chamber. “What is clear in the Senate is that there will be enough votes to pass the resolution of disapproval, which will then be vetoed by the president and then in all likelihood the veto will be upheld in the House," McConnell said.

Paul said his decision came down to constitutional considerations. “I can’t vote to give the president the power to spend money that hasn’t been appropriated by Congress,” Paul said in a speech Saturday, according to the Bowling Green Daily News. “We may want more money for border security, but Congress didn’t authorize it. If we take away those checks and balances, it’s a dangerous thing.”

Paul also published a piece on the Fox News website Sunday evening explaining his position: “I stand with the president often, and I do so with a loud voice. Today, I think he’s wrong, not on policy, but in seeking to expand the powers of the presidency beyond their constitutional limits.”

Paul’s decision “will be keenly felt inside the White House,” Vanity Fair’s Tina Ngyuen says. “Paul has been described as the ‘Trump whisperer,’ a fellow political iconoclast who enjoys a deeply personal connection to the president, despite their ideological differences.”

Other Republican senators, including Lamar Alexander (TN), Mitt Romney (UT), Marco Rubio (FL) and Roger Wicker (MS), have also voiced concern over Trump’s emergency declaration, though they have not said whether they will vote for the resolution to block it.

The Senate is due to vote on the resolution later this month, and Republicans are still searching for a way to avoid a potentially embarrassing confrontation with the president. Alexander last week publicly urged Trump to reverse course on the national emergency and Sen. John Kennedy (LA) speculated on CNN that the president might reconsider his declaration. There’s also still a chance that Paul or other Republicans supporting the resolution to change their minds in the face of pressure from the White House or potential maneuvering to amend the resolution.

“Republicans worry that in supporting Trump, they will be giving approval to a White House power grab that circumvents Congress’s constitutional power over spending,” The Washington Post’s Felicia Sonmez writes. “But if they oppose it, they face the wrath of not only the president but his political base — and possibly a primary challenge.”

Why it matters: Passage of the resolution in the GOP-controlled Senate would represent an extraordinary rebuke to Trump, but it may have limited practical significance given the president’s pledge to veto the measure. Congress likely wouldn’t have the votes to override a veto.

Still, Congress’ rebuke could factor into court cases challenging Trump’s national emergency, highlighting Congress’ opposition to Trump’s order. “A joint resolution underscoring that Congress has deliberately rejected the inclusion of border wall fencing in response to a presidential request could well move a court to say that this statute will not help finance it,” Ohio State University law professor Peter M. Shane writes at Slate.

Trump's New Tune on the Deficit

President Trump “is about to get religion” on the deficit, Politico’s Andrew Restuccia and Nancy Cook reported in a Politico piece Friday evening: “[A]fter mostly brushing off deficit concerns while pushing through a costly tax-cut plan, the White House now plans to reposition itself as an unlikely enforcer of fiscal responsibility led by its new top budget official, a veteran of the conservative group Heritage Action.”

The president’s budget proposal, due March 11, will reportedly call for deep cuts in non-defense spending while also looking to further boost spending on the military, in large part by keeping much of that money off the books. “Administration officials have been meeting for weeks to devise a strategy to dramatically boost defense spending, fulfilling a promise to Trump’s base, while at the same time placing a strong new rhetorical emphasis on deficit concerns in a bid to undermine Democratic demands for more spending on nondefense programs like foreign aid, education and environmental protection,” Restuccia and Cook wrote.

In other words, the Trump administration’s newfound “religion” is less about reducing the deficit, which grew 17 percent last year to $779 billion, and more about blocking Democrats’ spending priorities. Underscoring the point, Restuccia and Cook report that, “Privately, many White House officials also dismiss the notion that the federal debt is a major problem.”

Given the track record of the Trump administration and the president, the White House’s approach to the nascent battles over the fiscal 2020 budget — outlined in a recent op-ed by Russ Vought, the former vice president of Heritage Action and acting head of the Office of Management and Budget — is a “certain to face accusations of hypocrisy,” the Politico piece notes.

One example: Fiscal conservatives have in the past decried the use of the off-the-books Overseas Contingency Operations fund for defense spending as a “gimmick.” Acting White House Chief of Staff Mick Mulvaney once sponsored legislation to prevent the fund from being used in the way that the White House now proposes, Politico notes.. 

What fiscal hawks say: The administration still isn’t serious about tackling the deficit or reining in the national debt. The 2017 tax cuts are projected to add about $1.9 trillion to the debt over 10 years, and the spending deal that President Trump grudgingly signed last year will balloon the debt even further. But the administration still isn’t looking at the biggest drivers of our long-term debt, like entitlement spending. “The core structural problems remain and have not been addressed,” Michael Peterson, CEO of the Peter G. Peterson Foundation, told Politico. [The Fiscal Times is funded by Peterson but is editorially independent and separate from the Peterson Foundation.]

What fiscal doves say: The Politico piece “ignores the long history of GOP playing this same game,” Michael Linden of the liberal Roosevelt Institute said in a tweet.

The bottom line: With Democrats controlling the House, the president’s budget and its proposed spending cuts and budget maneuvers might not mean much. Congressional Republicans and Democrats can be expected to hammer out a deal of their own — lifting the debt ceiling and raising caps on defense and non-defense spending to do it. “Similar to last year, I think they will work out the agreement on the debt limit and an agreement to adjust the caps for 2020 and 2021,” William G. Hoagland, former Republican staff director of Senate Budget Committee, told Politico. “There will be pressure to try to make sure they don’t have to deal with it in an election year.”

Eli Lilly Introduces Generic Insulin at Half the Price of Its Humalog

With the pharmaceutical industry facing public outrage and congressional investigation over its high prices, Eli Lilly announced Monday that it will sell a generic version of Humalog, its most popular insulin, for $137.50 per vial, half the branded version’s list price. The new product will be called Lispro and sold by ImClone Systems, an Eli Lilly subsidiary.

Drugmakers are under growing political pressure to lower their list prices, though few concrete steps have been taken so far. One diabetes patient advocate said that she welcomed the price cut, but that pharmaceutical firms could do more: “While half-price is certainly an improvement, it’s still an unaffordable price for so many,” Elizabeth Rowley of T1International told The New York Times’ Katie Thomas.

The new generic version is aimed largely at those without insurance and those who pay a large portion of their drug costs even with insurance. Name-brand Humalog will continue to be sold at its regular price, $275 per vial, “to the insurers and employers who want to keep pocketing the large discounts, or rebates, they receive for purchasing brand-name drugs,” the Times’ Thomas said.

Sen. Chuck Grassley (R-IA), who chairs the Finance Committee that questioned seven pharma CEOs last week, tweeted that it was “Good news” but “only 1 piece of puzzle &more needs 2 b done” when it comes to a drug that has existed for about 100 years.

Sen. Ron Wyden (D-OR), the committee’s ranking member, was less enthusiastic, saying, “Regardless of the headlines and PR acrobatics, the Finance Committee is continuing to investigate how major insulin manufacturers set and increase the outrageous price of insulin, in addition to other business decisions related to the price of insulin. The company’s decision to offer a generic version of a several decade old drug will be part of the investigation.”

A letter sent to Eli Lilly CEO David Ricks by the Finance Committee last month noted that “the price for Humalog increased from $35 to $234 between 2001 and 2015, a 585% increase.” The government spends more than $1 billion a year on the drug through Medicare and Medicaid.

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Tissues by the Case: How Accountants Are Handling Tax Season

More accountants are finding themselves the bearers of bad news this tax season as clients see the results of their 2018 tax returns, the first under the Republican tax overhaul. Although most filers received a tax cut over the course of the year, their returns are producing very different results compared to the past, with many receiving smaller refunds and even surprise bills. As a result, some CPAs are stocking up on palliatives including chocolate and painkillers — “both for unhappy clients and for themselves,” says Laura Saunders of The Wall Street Journal.

Here’s a sample from Saunders’ report: “Kathy Brown, a tax preparer in Warsaw, Ky., says that 90% of her clients have gotten a tax cut. Still, most have smaller refunds or owe taxes. A California wildfire firefighter burst into tears on the phone with her when he found out his expected refund of about $1,500 had turned into a $2,000 bill due to withholding changes.”

Read the full piece here (paywall).

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