Hawley Calls for No Taxes on Healthcare

Sen. Josh Hawley
Tom Williams/CQ-Roll Call/Sipa USA via Reuters Connect
By Michael Rainey

Good evening. President Trump said Wednesday that he is pardoning Texas Democratic Rep. Henry Cuellar and his wife, Imelda, who have been charged with taking bribes from foreign entities. While announcing the pardon, Trump accused his predecessor, former President Biden, of weaponizing the Justice Department against his political opponents - an accusation Trump has made in reference to his own legal indictments.

"One of the clearest examples of this was when Crooked Joe used the FBI and DOJ to 'take out' a member of his own Party after Highly Respected Congressman Henry Cuellar bravely spoke out against Open Borders, and the Biden Border 'Catastrophe,'" Trump wrote on his social media platform. "Henry, I don't know you, but you can sleep well tonight - Your nightmare is finally over!"

Cuellar thanked Trump for the pardon and said he plans to seek reelection.

Here's what's happening on the fiscal front.

Hawley Calls for 'No Taxes on Healthcare'

Senators from both major parties said Wednesday that they want to do something about the Obamacare premium subsidies that expire at the end of the month, but they don't appear to have moved any closer to working out a plan.

At a Health, Education, Labor and Pensions Committee hearing focused on healthcare affordability, lawmakers said they understand they need to take action to prevent millions of people from seeing huge increases in their monthly insurance costs starting in January.

"If we don't do something on this issue, if Congress does not take action on this issue in the next few weeks, this will be a crisis for 24 million Americans and counting," said Republican Sen. Josh Hawley. "In my state, plans are already going up between 24 and 50%."

Hawley suggested that lawmakers lock themselves in a room until they come up with a plan.

Hawley's proposed solution involves allowing people to deduct their medical expenses on their taxes. "We did no taxes on tips, no taxes on overtime, earlier this year," he said. "How about no taxes on healthcare?"

Whatever its appeal and potential effects, Hawley's plan has no chance of becoming law before the subsidies run out in four weeks.

Republican Sen. Bill Cassidy, who leads the committee, called on lawmakers to find a short-term solution while leaving more structural changes for next year. "Let's try to find a way we can all live with," Cassidy said. "If there is going to be a big idea, that will not happen before Jan. 1, 2026."

Independent Sen. Bernie Sanders suggested simply extending the existing subsidies, as Democrats have proposed. Cassidy said high costs within the plans offered under the Affordable Care Act call for more significant changes. Cassidy has proposed converting Obamacare subsidies into health savings accounts connected to bronze-tier plans.

Sanders rejected the idea, saying that approach "is not going to guarantee health insurance to all people," and Democrats have shown no signs of interest in the Cassidy plan.

The bottom line: The Senate is expected to vote next week on Democratic legislation that would extend the subsidies, but the plan will likely fail given Republican opposition. That leaves lawmakers still scrambling to find a way out of the impending crisis.

Trump Plans to Roll Back Auto Mileage Requirements

President Trump announced Wednesday that he is proposing to roll back mileage requirements for gas-powered vehicles established by the Biden administration.

Under Biden, the Corporate Average Fuel Economy standards called for an 8% increase in each automaker's fleet-wide efficiency in 2024 and 2025, with a 10% improvement in 2026. From 2027 to 2031, the efficiency improvement requirement was 2% per year.

The more stringent requirements in the CAFÉ program, which was established by Congress in 1975, were expected to push consumers to buy more electric cars as part of a larger effort to combat climate change. Trump has rejected that effort as a "green new scam" that does little beyond raising prices.

"We're officially terminating Joe Biden's ridiculously burdensome - horrible, actually - CAFE standards that impose expensive restrictions and all sorts of problems," Trump said at the White House, surrounded by auto executives and Republican lawmakers.

The CAFÉ standards had already been rendered toothless in the Republican tax bill that became law earlier this year. A provision promoted by Sen. Ted Cruz cut the penalties for not meeting the standards to $0.

The Trump administration is now proposing to roll the CAFÉ standards back to 2022 levels. Automakers will be required to improve efficiency by less than 1% per year after that.

Chart of the Day: Private Job Losses

Employment at private companies in the U.S. fell by 32,000 in November, according to data released by ADP Research on Wednesday. Economists surveyed by Bloomberg had expected to see payrolls grow by 10,000, and the disappointing result means that private employment has fallen in four out of the last six months.

Nela Richardson, chief economist at ADP, said job losses were concentrated in small businesses. "It is those mom-and-pop, Main Street companies, firms, small businesses and establishments that are really weathering what is an uncertain macro environment and a cautious consumer," she told reporters. "I see them as a canary in the coal mine."

The report could influence officials at the Federal Reserve as they mull another cut in interest rates to end the year. "Wednesday's weak ADP report risks heightening concerns of a more rapid deterioration in the labor market ahead of the Federal Reserve's final policy meeting of the year next week," said Bloomberg's Jarrell Dillard. "It could hold more sway than usual as one of the few up-to-date reports officials will have by then, as the shutdown delayed the government's November jobs report."

Originally due December 5, the November jobs report is scheduled to be released on December 16.

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