A $50 Million Fight Over Gun Research Funding

Plus, Pete Buttigieg unveils his health plan

A $50 Million Fight Over Gun Research Funding

As the gun-control debate rages on in the wake of the mass shootings in El Paso and Dayton, a key senator said Thursday that he would not support Democratic lawmakers’ calls to increase funding for gun violence research.

The Democratic-led House has already passed a spending bill that would provide $50 million to the Centers for Disease Control and Prevention and the National Institutes of Health for “firearm injury and mortality prevention research.” The legislation, if enacted, would mark the first time in decades that Congress has designated funding specifically for gun violence research, according to Roll Call.

But Sen. Roy Blunt (R-MO), chairman of the Senate Appropriations subcommittee on Labor, Health and Human Services and Education, reportedly suggested Thursday that the specific funding wasn’t necessary and shouldn’t be included in the Senate version of the appropriations bill.

“There has never been a prohibition on HHS doing whatever research they want to do in this area,” Blunt said in a statement that also called for appropriators on his committee to steer clear of controversial issues and avoid attempts “to fund partisan priorities.”

Is federal research on gun violence prohibited? No, not explicitly. But as Roll Call’s Andrew Siddons explains, “every Labor-HHS-Education spending measure for the past few decades has included language stating that no money can be spent ‘to advocate or promote gun control.’”

When that language — known as the Dickey Amendment after its author, former Republican Rep. Jay Dickey of Arkansas — was first introduced in legislation for fiscal 1997, the CDC lost $2.6 million from its budget, the same amount it had spent on firearm injury research the previous year. The CDC website says the agency interprets the appropriations language to mean that its funds cannot be spent on activities “designed to affect the passage of specific Federal, State, or local legislation intended to restrict or control the purchase or use of firearms.”

The result of the Dickey Amendment was a chilling effect on gun violence research. “Precisely what was or was not permitted under the clause was unclear,” two doctors known for their research into firearm-related injuries and deaths wrote in a 2013 article in the Journal of the American Medical Association. “But no federal employee was willing to risk his or her career or the agency's funding to find out. Extramural support for firearm injury prevention research quickly dried up.”

A 2017 study in the Journal of the American Medical Association found that gun violence was the subject of far less funding and fewer research publications than might be predicted based on comparisons with other leading causes of death. “Gun violence killed about as many individuals as sepsis,” the researchers wrote. “However, funding for gun violence research was about 0.7% of that for sepsis and publication volume about 4%. In relation to mortality rates, gun violence research was the least-researched cause of death and the second-least funded cause of death after falls.”

In the wake of the 2018 Parkland school shooting, lawmakers included language in a report accompanying spending legislation explicitly stating that “the CDC has the authority to conduct research on the causes of gun violence.” But the CDC has pointed to a lack of funding to dedicate to such research.

Why it matters, part 1: The dispute over $50 million, a small amount relative to the overall federal budget, is yet another sign of how difficult is for Congress to address the gun issue — and how unlikely it may be that President Trump and Congress take any substantive steps this time.

Why it matters, part 2: The funding issue is another area where Republicans and Democrats could potentially clash as they look to iron out spending bills for the coming fiscal year. “The dispute over $50 million for gun violence prevention research could pose an additional challenge in the effort to avoid a government shutdown this fall,” Roll Call’s Siddons says.

Pete Buttigieg Unveils His ‘Medicare for All Who Want It’ Plan

Democratic presidential candidate Pete Buttigieg unveiled a health care proposal Friday that would offer "Medicare for all who want it” while maintaining the current system of private health insurance.

Buttigieg says he wants to “make progress toward universal health care” by building on the Affordable Care Act. The South Bend, Indiana, mayor proposes to provide more generous subsidies to low- and middle-income consumers in the ACA marketplaces and to make a publicly-run “Medicare-type insurance plan” available to all. The goal is to boost enrollment by reducing the out-of-pocket cost of existing plans while using the government-backed health care plan to generate more competition between insurers.

A focus on rural America: Buttigieg’s proposal is especially focused on health care in less densely populated parts of the country, where providing affordable insurance and services has been particularly problematic. "The fact is if you live in a rural part of our country, you are more likely to get sicker and die younger than people living in cities," the proposal says. "That is wrong."

To improve insurance coverage and service availability in rural areas, the candidate proposes numerous new policies, including the expansion of student loan forgiveness programs for health care providers, more aggressive recruitment of immigrant doctors, increased Medicare reimbursement rates and more federal support for medical training outside of urban areas.

In order to promote greater use of digital communications in health care, Buttigieg proposes to “massively expand coverage of high-speed broadband Internet across the country” while investing in new facilities for telehealth. And to address persistent inequalities in health outcomes based on geography as well as race, Buttigieg proposes to designate special “health equity zones” that receive targeted investments to reduce disparities.

An incremental approach: The proposal to add a public option to the existing health care system places Buttigieg among the more moderate Democratic candidates, closer to former vice president Joe Biden than to Sens. Elizabeth Warren and Bernie Sanders, who are calling for a universal health care system modeled on Medicare that would eliminate private insurance. The Washington Post’s Paige Winfield Cunningham says the proposal “puts the mayor squarely in the camp of Democrats who’d rather focus on getting coverage to the remaining uninsured Americans rather than overhauling it for everyone else.”

But private insurers are put on notice: While Buttigieg has outlined a plan that keeps private insurers at the center of the health care system, he also makes it clear that current system needs to improve significantly. “If corporate insurers don’t lower costs to deliver something dramatically better than what is available today,” his proposal warns, “competition will lead us towards Medicare for All.”

Read Buttigieg’s proposal here.

Trump’s ‘Terrible’ New Tax Cut Idea

The Trump administration has been considering another tax cut that would primarily benefit the rich — and add about $100 billion to deficits over 10 years. The proposed change would reduce the taxes owed by investors when they sell stocks or other assets by adjusting the original cost of those assets for inflation, thereby reducing the reported profit.

The administration, urged on by 21 Republican senators and conservative anti-tax activists, is looking at bypassing Congress — where such a proposal has little chance of passing — and enacting the tax cut unilaterally, though it has held back so far reportedly out of concern that the move would be illegal. Top administration officials are divided over the idea, The New York Times reported last week. Some Republicans worry that pushing through a tax cut that benefits investors would invite renewed criticism that Trump’s tax policies have been giveaways to the rich.

The Los Angeles Times Editorial Board showed just how those attacks would go in a scathing editorial published Friday calling on the administration to reject what it calls yet another terrible Republican tax idea:

“In a sense, this is just another effort by the all-taxes-are-evil crowd to pay less for the services the federal government provides and shift the costs onto future generations. … Coming on the heels of a major GOP tax cut that’s spurring trillion-dollar deficits, the proposal is beyond fiscally irresponsible. It also represents the worst of trickle-down economics, given that the tax break would benefit the wealthy almost exclusively. According to the Tax Policy Center, households in the top 20% of U.S. earners, whose average incomes were $347,000, collected 90% of the taxable gains in 2018; more than half of the gains went to households in the top 0.1%, whose average incomes were $10.8 million. … In addition, the proposal would open an alarming new loophole for savvy (and wealthy) taxpayers to exploit.”

Read the full editorial at The Los Angeles Times.

Chart of the Day: Weak Effects of the Corporate Tax Cut

Business investment has risen since the GOP tax cuts were signed into law by President Trump in 2017, but it’s not clear how much a contribution the tax cuts made to the relatively modest investment boom. A survey by the National Association of Business Economics earlier this year showed that the tax cuts had little effect on businesses’ capital investment or hiring plans, and a recent study by economists at the International Monetary Fund found that expectations of stronger demand have driven the recent increases in capital expenditures, with the tax cuts having little or no effect.

This week, the authors of that IMF paper reviewed their analysis, emphasizing their theory that the U.S. economy has changed over the last 30 years in ways that mute the effects of corporate tax cuts. The authors argue that large companies that dominate their markets have a much weaker response to tax cuts than companies that operate in more competitive environments.

The chart below compares the growth effects associated with corporate income tax cuts in two kinds of economies: one in which companies have low market power and another in which they have a lot. The effects on real investment are particularly notable. In a “low markup” economy, corporate tax cuts worth 1% of GDP can be expected to produce a 4% increase in real investment. But in “high markup” economies, in which corporations have extensive market power, that same tax cut will produce less than half of the level of increased investment, according to the author’s calculations.

“The bottom line is this,” the economists write, “strong demand since the passage of the Tax Cuts and Jobs Act has been the principal driver behind corporate investment decisions—not the reduction in the cost of capital coming from the corporate tax cuts themselves. Moreover, the rise in corporate market power in recent decades appears to have muted the effectiveness of corporate tax cuts as a means for boosting business investment.”

Your Prize for Making It Through the Week

Slaughterhouse Poutine or Corn Stacker Cocktail? Those are just two of the dozens of unusual food options available at the Iowa State Fair, which runs through August 18. If you can’t make it to the fairgrounds, you can see some of what you’re missing with this guide to the best new foods at the fair, this list of the food-on-a-stick offerings, and this ‘best of’ from the Des Moines Register.

Send your tips and feedback to yrosenberg@thefiscaltimes.com. Follow us on Twitter: @yuvalrosenberg, @mdrainey and @TheFiscalTimes And please urge your friends to sign up here for their own copy of this newsletter.

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