Trump Admin Tells Supreme Court Obamacare Must Fall

By Yuval Rosenberg

Trump Admin Asks Supreme Court to End Obamacare

The Trump administration urged the Supreme Court to strike down
the Affordable Care Act in a legal brief filed by the Justice
Department late Thursday.

The 82-page brief reiterates the administration’s support for a
suit filed by Republican officials in Texas and 17 other states
that claims that the ACA became invalid in its entirety when the
individual mandate — the tax penalty for not purchasing health
insurance — was zeroed out by Congress in 2017.

“The entire ACA thus must fall with the individual mandate,”
Solicitor General Noel Francisco wrote in the brief, which was
filed shortly before a midnight deadline. “The individual mandate
is no longer a valid exercise of Congress’s legislative authority
in light of Congress’s elimination of the penalty for
noncompliance.”

A political gamble. Although the Trump administration’s
decision to stick to its guns on Obamacare repeal may please
conservatives who have vehemently opposed the health law since its
passage in 2010, success could be costly. If the court agrees with
the suit and invalidates the ACA, it could cost more than 20
million Americans their health care coverage and eliminate broadly
popular protections for those with pre-existing conditions, while
sowing chaos in parts of the health care market that have been
affected by the law. All that would occur in the middle of a
pandemic that has already killed more than 120,000 people and
caused a severe recession that has stripped millions of their
employer-based health insurance.

The White House said that the coronavirus played no role in its
stance on the issue. “A global pandemic does not change what
Americans know — Obamacare has been an unlawful failure,”
spokesperson Judd Deere said Friday.

Critics pounce. Democrats were quick to highlight the
tension between the growing health crisis and the administration’s
effort to eliminate health care for millions of people. “President
Trump and the Republicans’ campaign to rip away the protections and
benefits of the Affordable Care Act in the middle of the
coronavirus crisis is an act of unfathomable cruelty,” House
Speaker Nancy Pelosi said in a statement.

Even some Republicans think the plan is politically misguided,
given the context. GOP strategist Joel White
told The New York Times that it’s “pretty dumb to
be talking about how we need to repeal Obamacare in the middle of a
pandemic.”

More reliance on the ACA markets. A
report Thursday from the Centers for Medicare and
Medicaid Services shows that hundreds of thousands of newly
unemployed Americans have already turned to Obamacare for health
coverage. About 487,000 people signed up for coverage during a
special enrollment period after losing their jobs in 2020, an
increase of 46% compared to 2019. April was the biggest month for
new signups, which were 139% higher in 2020 than the year
before.

What’s next. The court hasn’t said when it will hear the
case, but oral arguments could take place in the fall, ahead of the
election.

The $600 Unemployment Boost Is Working — for Now

New data released by the Commerce Department on Friday highlight
how the $600 a week in enhanced unemployment benefits provided as
part of the government’s coronavirus response have helped offset
lost wages and stabilize personal incomes during the pandemic.

Bloomberg News’s Matthew Boesler
reports:

“Compensation of employees, a measure which includes wage and
salary disbursements as well as employer benefits, fell 8.3% in the
three months through May, according to monthly Commerce Department
figures on personal income and spending. But compensation of
employees, plus government unemployment-insurance benefits, rose
2.3% over the same period, thanks to a surge in payouts last
month.”


Personal income fell by 4.2% in May, the most since
2013, after soaring 10.8% the month before as the government sent
out millions of $1,200 coronavirus relief payments and unemployment
benefits helped cushion the damage from pandemic shutdowns. But
while overall income fell, personal income from unemployment
insurance rose to nearly $1.3 trillion in May, up $825.3 billion
from April, and the $600 federal boost to benefits made up $691.9
billion of the increase, according to Bloomberg. A federal
expansion of unemployment benefits to gig workers and other not
typically eligible for benefits accounted for $101.5 billion.

Those benefits likely helped fuel a record rebound in
consumer spending last month, though Americans also dipped into
their savings, which decreased by $1.9 trillion. Spending rose by
8.2% in May after record drops of 6.6% in March and 12.6% in April.
It remains 11% below pre-pandemic levels.

The fiscal cliff ahead: The question is whether the
rebound in consumer spending will be sustainable, given the surge
in coronavirus cases and expectations that incomes will fall if the
$600 in weekly benefits expires as scheduled next month and
millions of people see their unemployment checks cut sharply.
Economists worry that consumer spending and the economic recovery
could take a hit if government support efforts are removed and
millions of people lose their unemployment checks or see them
sharply reduced.

“Economists estimate that some 26 million people,
two-thirds of whom do not qualify for the regular 26-week state
unemployment insurance benefits, would be left without income,”
Reuters Lucia Mutikani reports.

Lawmakers are debating whether and how to provide
additional support to workers who have lost their jobs. Many
economists say the government will need to
do more to avoid more widespread economic pain in
August. "It is clear that the major force in keeping things from
falling apart is the enhanced unemployment compensation," Joel
Naroff, chief economist at Naroff Economics in Holland,
Pennsylvania, told Reuters. "Without action, income could crater in
August and spending will follow."

Poll of the Day: Widening Partisan Split on Coronavirus Threat
and Response

The stark and widening partisan split in perceptions of the
coronavirus pandemic is both astonishing and sadly predictable at
this point.

A new national survey released Thursday by the Pew Research
Center finds that 61% of Republicans say that “the worst is behind
us” when it comes to the virus, while 38% believe “the worst is
still to come.” Just 23% of Democrats say we’re past the worst of
the pandemic, while 76% say the worst is still ahead.

The Republican optimism likely reflects the messaging of
President Trump and his administration, who continue to try to

put a positive spin on progress against the virus,
even as case counts surge in the South and West, state health
departments report record numbers of new infections and several
states pause their reopening plans. “We did slow the spread. We did
flatten the curve. We’re in a much better place,” Vice President
Mike Pence said Friday a White House coronavirus task force
briefing, the first in nearly two months.


The partisan divide extends to views about how to
respond to the virus, Pew finds: “Republicans are now much less
likely to say an additional stimulus package is necessary than they
were in early April, while Democrats continue to overwhelmingly say
more economic assistance is needed.”

Overall, 71% of Americans say another coronavirus relief
package is needed, down from 77% in April. “Notably,” Pew says,
“the decrease has come entirely among Republicans, who are now
divided over the need for more economic stimulus (51% say it will
be necessary, 47% say it will not be needed). In April, two-thirds
of Republicans (66%) said an additional stimulus would be needed.
Democrats continue to be overwhelmingly supportive of additional
economic stimulus (87% say it will be needed, unchanged from
April).”

The survey also finds that, while just 25% of Americans
say the economy is in excellent or good shape, Republicans are
about five times more likely than Democrats to say it is doing well
(46% vs. 9%).

As for specific aid measures:

  • 88% of Americans support helping homeowners, renters and
    businesses weather the financial fallout of the virus;
  • 76% favor sending more financial aid to state and local
    governments, though there’s a partisan split on this issue, with
    91% of Democrats supporting the idea compared to 58% of
    Republicans;
  • 60% favor extending the $600 in additional federal
    unemployment benefits beyond the end of July 31, with Democrats
    (775) far more likely to support the idea than Republicans
    (39%);
  • 53% supports a temporary cut in payroll
    taxes.

The Pew survey was conducted June 16-22 among 4,708 adults. It
has an overall margin of sampling error of 1.8 percentage
points.


Read more at the Pew Research Center.

Deficits Could Average $2 Trillion a Year Over the Next Decade:
Report

The massive fiscal response to the coronavirus crisis will play
a big role in driving federal deficits to an average of $2 trillion
a year for the next 10 years, according to
new projections from the non-partisan Committee
for a Responsible Federal Budget.

“Both the economic crisis itself and the federal government’s
aggressive response have massively expanded deficits,” CRFB said
this week. “This borrowing is largely appropriate as deficit
spending can help offset the negative economic effects of a
recession and spread the costs of emergencies over time.”

But the huge increase in spending in response to the pandemic
will drive up long-term deficits, CRFB said, and accelerate the
growth of the national debt.

Some highlights from the report:

  • The response to the coronavirus crisis will increase the
    deficit by $5.7 trillion over 10 years, bringing the total deficit
    to $20 trillion over that time period.
  • The deficit will come to 17.9% of GDP this year, and average
    6.3% of GDP each year from 2021 to 2030.
  • The deficit will exceed the size of the economy this year, and
    equal 118% of GDP by 2030 and 220% of GDP by 2050.

Under an alternative scenario in which various temporary
tax cuts are extended and Congress passes another $1 trillion
stimulus package — both of which appear likely — the deficit would
hit 131% of GDP by 2030 and 269% of GDP by 2050.

Trump Says Politics Played a Role in Defense Contract
Award

Visiting the Fincantieri Marinette Marine shipyard in Wisconsin
Thursday, Trump said that the defense company’s procurement of a
$5.5 billion contract to build new frigates was based in part on
political considerations.

Describing the frigates as the “fastest, most advanced, and most
maneuverable combat ships anywhere on the ocean,” Trump added, “I
hear the maneuverability is one of the big factors that you were
chosen for the contract. The other is your location in Wisconsin,
if you want to know the truth.”

Robert Mackey of The Intercept
said that Trump’s comments could give competing
firms that lost out on the contract grounds to file a complaint
with the Government Accountability Office’s Procurement Law
Division, charging that the contract was awarded on political
grounds.

In a freewheeling, politically charged speech, Trump also took
credit for the appearance of new navy ships. “I’ve changed
designs,” he said. “I looked at it. I said, ‘That’s a
terrible-looking ship. Let’s make it beautiful. It’ll cost you the
same and maybe less.' I said, ‘This is not a good-looking ship.
Let’s change the design of it.’ And I got people in and we looked
at different designs.”

Some defense experts expressed doubts about Trump’s claim to
have intervened in the design of the new warship, and Marcus
Weisgerber of Defense One
said that it wasn’t clear what the president was
referring to. The new frigate is reportedly based on the design of
an existing warship used by the Italian Navy.

More concretely and on a smaller scale, Trump told his
audience that the defense contractor had given him a “beautiful
model” of a ship, which he said is “like a yacht with missiles on
it.”

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