Stimulus Talks Resume as Pelosi Trims Coronavirus Bill to $2.2 Trillion
House Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steve Mnuchin have resumed talks on a coronavirus relief bill after Democrats introduced a slimmed-down, $2.2 billion bill Monday evening.
Pelosi and Mnuchin spoke Monday evening and then discussed the new 2,152-page bill Tuesday morning, with Pelosi saying the conversation was “positive.” The pair are scheduled to speak again Wednesday, when Mnuchin is expected to provide a detailed response to the Democratic proposal.
“We’re in a negotiation, and hopefully we will come to a bipartisan agreement that will remove all doubt that the legislation will pass and be signed by the president,” Pelosi told MSNBC Tuesday.
What’s in the bill: The package is basically a reduced version of the $3.4 trillion Heroes Act the House passed in May. Pelosi said Tuesday that the bill addresses all of the issues Democrats say are most important, including aid for state and local governments and additional unemployment assistance, but on a shorter timeline to lower the cost by more than $1 trillion. “When we reduced it, we didn’t take out priorities,” she said. “We just reduced the timeline as to how long those benefits would last.”
Specific provisions include:
- $600 per week in enhanced unemployment benefits, lasting through January,
- another round of $1,200 stimulus payments,
- $436 billion for state and local governments,
- $225 billion for schools,
- $75 billion for coronavirus testing and tracing programs,
- $57 billion for childcare,
- $25 billion to maintain payrolls in the airline industry,
- $10 billion for food aid,
- an extension of the Paycheck Protection Program to aid small businesses.
Can it pass? Lawmakers are trying one last time to negotiate a relief package before the rapidly approaching election, but Pelosi’s smaller bill will still be a tough sell for many Republicans. Even with Pelosi knocking $1.2 trillion off her initial proposal, the two sides are still hundreds of billions of dollars apart. Less than three weeks ago, the GOP-controlled Senate was unable to pass a $500 billion relief bill, and despite President Trump’s call for Republicans to support “much higher numbers,” there’s no sense that many minds have changed in the upper chamber. Still, with Mnuchin reportedly open to a package worth as much as $1.5 trillion, there is some hope that an agreement could be reached.
Time is running out: The House is expected to leave town by the end of the week, leaving very little time to negotiate such a massive bill. “If no agreement seems likely,” Politico Playbook said Tuesday, “Pelosi and House Democratic leaders will hold a vote on their own $2.2 trillion bill as soon as Wednesday and then go home, guaranteeing that Congress won’t send more help until after Election Day.”
Trump’s Tax Cuts Didn’t Boost Job Numbers
The job market was remarkably strong before the coronavirus pandemic hit earlier this year, with the unemployment rate falling to a 50-year low. Even so, President Trump’s promise to be the “greatest jobs president that God ever created” was looking a little iffy, with the job creation trend running a bit lower than the one established during the Obama administration in the wake of the Great Recession.
“Trump’s signature legislative achievement, the 2017 tax reform bill, reduced taxes for the wealthy and corporations, but it didn’t translate into big gains in good jobs for average Americans,” Bloomberg’s Reade Pickert and Catarina Saraiva wrote Tuesday.
The quality of the jobs being created during the last three years had fallen, Pickert and Saraiva said, and Trump’s trade war with China depressed growth in the agricultural and manufacturing sectors.
All of that is water under the bridge at this point though, after the coronavirus wiped out years of gains in just a few months. “Now, as a result of the Covid-19 pandemic, Trump heads into the November election on track to be the first U.S. leader since World War II to oversee a net loss of jobs during a four-year term,” the reporters said.
Quote of the Day: The GOP's Preexisting Conditions Problem
“There’s a reason Donald Trump has never produced a health-care plan that protects consumers with preexisting medical conditions: Ending protections for the sick is the central mechanism that all GOP health-care proposals use to try to lower costs for the healthy. … Put another way: Reducing protections for patients with greater health needs isn’t a bug in the GOP plans; it’s a key feature.”
– Ronald Brownstein, senior editor at The Atlantic, in a new piece, “Republicans Are Trapped on Preexisting Conditions.” Read it here.
Short-Term Health Insurance Plans Promoted by Trump Spent Relatively Little on Claims in 2019
The short-term health insurance plans promoted by President Trump and his administration — and derided by critics as “junk insurance” — spent significantly less than Obamacare-compliant plans on paying out members’ medical claims last year, according to new data from the National Association of Insurance Commissioners.
The Trump administration in 2018 changed an Obama-era rule that limited coverage under cheaper, short-term plans to three months. The new rule allowed those plans — which, unlike Obamacare plans, are not required to cover preexisting medical conditions — to last for up to 364 days and be renewed for up to three years.
The data, highlighted by Modern Healthcare, show that health insurers selling those skimpier plans spent about 62 cents of every dollar in premiums on paying medical claims. The five insurers that earned the most in premiums from such plans spent about 55 cents of every dollar in premiums on claims. Obamacare plans are required to spend at least 80% of premium dollars on claims or rebate the difference to enrollees.
Enrollment surges: Yet as Americans hunt for less costly insurance coverage, enrollment in short-term plans jumped last year, rising from 86,600 at the end of 2018 to 188,000 as of December 31, 2019, Modern Healthcare reports. Insurers collected $248.2 million in short-term plan premiums last year, up from $109.6 million the year before.
Caveats about the numbers: The new data “likely captures just a fraction of the market for short-term, limited-duration health coverage, as these policies often fly under the radar of insurance regulators. The data also reflects enrollment in the plans at a point in time and not over the course of the year, so customers who had a policy but dropped it before then may not be counted,” Modern Healthcare’s Shelby Livingston cautions.
The bottom line: The new data suggest that there is substantial demand for cheaper plans, even though short-term plans “offer weaker coverage with more caveats that allow them to not pay," Justin Giovannelli, project director at the Center on Health Insurance Reforms at Georgetown University, told Modern Healthcare. Experts warn that people signing up for such plans might not realize that they are getting far less comprehensive coverage or may risk having their claims denied or coverage rescinded. Critics also fear that enrollment in such plans, particularly by healthier people, could undermine the Obamacare market by driving up premiums.
Charts of the Day: What's Driving U.S. Health Spending
Why does the United States spend so much more on health care than comparable countries do? It’s not just higher drug prices, as a new issue brief from the Peterson Center on Healthcare and the Kaiser Family Foundation shows. “While it is true that many brand-name prescription drugs are priced higher in the U.S. than in peer countries, health spending data indicates that other spending categories – particularly hospital and physician payments – are greater drivers of health spending,” authors Nisha Kurani and Cynthia Cox write.
(The Fiscal Times is an editorially independent organization funded by the late Peter G. Peterson and his family.)
Spending on inpatient and outpatient care accounted for 76% of the difference in per person costs between the U.S. and comparable countries, with Americans spending $6,624 per person in 2018 while peer nations spent an average of $2,718 per person. The United States also spent $736 more per person on administrative costs (more than 14% of the difference in total spending) and $513 more per person on prescription drugs and other medical goods (10% of the difference in spending).
- End the Stalemate Over Coronavirus Relief – Bloomberg Editorial Board
- The Picture of a Broken Tax System – New York Times Editorial Board
- Barrett High-Court Vote Against Obamacare Not as Certain as Democrats Claim – Lawrence Hurley, Reuters
- Republicans Are Trapped on Preexisting Conditions – Ronald Brownstein, The Atlantic
- Steven Mnuchin’s Deal Staved Off Catastrophe. Can He Make Another One? – Jason Zengerle, New York Times Magazine
- Yes, Donald Trump Is Still A Billionaire. That Makes His $750 Tax Payment Even More Scandalous – Dan Alexander, Forbes
- Trump’s Returns Make the Case for Funding the Tax Police – Eric Levitz, New York
- Our Plutocratic Tax System Was Built for Rich Cheaters – J.C. Pan, New Republic
- Trump Said He Would Bring Jobs Back to Ohio’s Manufacturing Workers. Instead, He Deserted Them – Catherine Rampell, Washington Post
- Trump’s Drug-Pricing Ideas Would Cost Taxpayers a Bundle – Peter B. Bach, Bloomberg
- Trump Is Encouraging Big Pharma’s Worst Instincts – Melody Schreiber, New Republic
- Why Biden Is Better Than Trump for the Economy – Nouriel Roubini, Project Syndicate
- Trump Paying $750 in Income Tax Shows Why He’s a Billionaire – Caleb Melby et al, Bloomberg
- Wilbur Ross's Census Shutdown Is Against the Rule of Law – Noah Feldman, Bloomberg