Why a November Government Shutdown Just Got More Likely

Why a November Government Shutdown Just Got More Likely

Printer-friendly version
Plus, the $30 trillion question haunting Elizabeth Warren’s campaign
Thursday, October 17, 2019

A November Government Shutdown Is Growing More Likely

The dizzying whirl of events in Washington on Wednesday – including a House vote condemning President Trump’s withdrawal of U.S. troops from northern Syria and an explosive meeting at the White House that ended with the abrupt exit of Speaker Nancy Pelosi – make it harder to imagine that a deal can be reached to keep the government open when short-term funding expires at the end of next month.

Chris Kreuger of Cowen Research Group says the growing chaos in the nation’s capital means another shutdown could be in the cards: “Government shutdown on November 21 goes from plausible to probable,” he wrote in a note to clients Thursday.

So many distractions: Even before the blowup over Syria, Congress and the White House have been distracted by the ongoing impeachment inquiry into Trump’s handling of military aid to Ukraine. Its attention elsewhere, the Senate has done little to advance the 12 appropriations bills that need to be passed over the next five weeks, Roll Call’s David Lerman reported Wednesday, with Majority Leader Mitch McConnell and Minority Leader Chuck  Schumer blaming each other for the lack of progress and the deepening partisan rift.

Additionally, funding for Trump’s border wall — the issue that sparked a 35-day partial government shutdown earlier this year — remains unresolved. The House version of the Homeland Security bill provides no funds for a wall, while the Senate version provides the $5 billion the Trump administration wants. And Senate Republicans plan to “backfill” the $3.6 billion in military construction funds the administration is redirecting to the border, but Senate Democrats say they will oppose doing so.

Sen. Patrick Leahy of Vermont, the ranking Democrat on the Appropriations Committee, made it clear that he plans to stick to his gun on the matter. “Donald Trump gave his solemn word, over and over, that Mexico was going to pay for it,” Leahy said about the wall Wednesday. “As soon as the check arrives, let’s build.”

The Washington Post’s Erica Werner reported Thursday that the White House is also planning to dig in on the issue. “Trump is not interested in signing other domestic spending bills until there is agreement on the border wall,” Werner wrote, citing a senior administration official. The disagreement could produce another shutdown, Werner said, “bigger in scope than what happened less than one year ago.”

The bottom line: The levels of conflict and distrust are rising, and that bodes ill for bipartisan cooperation. “At their core, deals require trust,” Kreuger said. “That seems to be an increasingly rare commodity in a more dysfunctional Washington.”

The $30 Trillion Question Haunting Elizabeth Warren’s Campaign

There’s a $30 trillion question looming over Elizabeth Warren’s presidential campaign: How would she fund the cost of the Medicare-for-All plan she proposes?

The issue was the subject of repeated attacks on Warren at Tuesday night’s Democratic debate, with the Massachusetts senator again refusing to directly address whether she would raise middle-class taxes. Instead, as she has done throughout her campaign, Warren emphasized that, while costs will go up for the wealthy and corporations, she would not sign a bill that raises total costs on middle-class households.

There’s a reason Warren has been cagy on the question — a stark contrast to her approach on most other issues: She is still formulating her funding plan and considering the tax increases proposed by Bernie Sanders along with other revenue-raising options.

"She's reviewing the revenue options suggested by the 2016 Bernie campaign along with other revenue options,” a Warren campaign aide said in a statement to CNN. “But she will only support pay-fors that meet the principles she has laid out in multiple debates."

Coming up with an answer — especially a politically palatable one — isn’t easy. And a new analysis released this week by the Urban Institute highlights the size of the challenge. As we told you yesterday, the study looked at eight versions of health-care reform, including a comprehensive single-payer plan along the lines proposed by Warren and Sen. Bernie Sanders. It found that a government-run system similar to Medicare for All would raise national health care spending by $720 billion in its first year, and federal health-care spending would rise by $34 trillion over 10 years. Factoring in some tax offsets, the government would still be short some $32 trillion in revenue.

“How big a lift is it to raise $32 trillion?” Ronald Brownstein writes at The Atlantic. “It’s almost 50 percent more than the total revenue the CBO projects Washington will collect from the personal income tax over the next decade (about $23.3 trillion). It’s more than double the amount the CBO projects Washington will collect over the next decade from the payroll tax that funds Social Security and part of Medicare (about $15.4 trillion). A $32 trillion tax increase would represent just over two-thirds of the revenue the CBO projects the federal government will collect from all sources over the next decade (just over $46 trillion.)”

The tax increases Warren has proposed thus far — including a wealth tax, a corporate surtax, a higher estate tax and the repeal of the 2017 GOP tax cuts — would cover the cost of other programs she has proposed, but not Medicare for All. Warren’s proposals aside from Medicare for All would cost nearly $6 trillion, according to Bloomberg News, while her tax proposals would raise more than $7.3 trillion. “Her taxes as they currently exist are not enough yet to cover fully replacing health insurance,” University of California, Berkeley economics professor Emmanuel Saez, who has advised the Warren campaign, told Bloomberg News.

Raising middle-class taxes would have to be part of any plan to close that gap, experts say, though Saez told Bloomberg that those higher taxes would be more than covered by the wages gains resulting from a transition to a new health-care system that eliminates premiums for individuals covered by their employers. “It’s true that we might have to pay an extra tax but it can be structured in a way that we gain in extra wages, bigger than whatever extra tax will be there,” he said.

Read more at The Atlantic, Bloomberg News and CNN.

Opioid Crisis Has Cost the U.S. Economy at Least $631 Billion: Study

The opioid crisis has already cost the U.S. at least $631 billion, according to a study released this week by the Society of Actuaries. The figures cover the four-year period from 2015 to 2018, and by the end of this year the tally will reach as high as $845 billion. Individuals and the private sector have borne about 70% of the burden, with federal, state and local governments bearing a bit less than a third. The study estimates that the cost across all levels of governments was $186 billion.

The actuaries said the biggest cost was associated with lost earnings of those killed by opioids, accounting for about 40% of the total. Additional health care spending accounted for another third of the total cost. Police and legal activities, education, child-care and lost productivity accounted for the rest.

The report notes that the true cost of the crisis is likely higher than its estimates given the difficulties involved in accounting for every loss.

More than 400,000 people have been killed in the crisis since 1999, according to the Centers for Disease Control and Prevention.


Views and Analysis