The Stew Reporting on government and politics

It’s the economy—please?

Politics | Republicans want the midterm elections to be about growth and tax cuts, not Trump’s tweets
by Kyle Ziemnick
Posted 8/02/18, 04:49 pm

In a preview of Republican strategy for the 2018 midterm elections, President Donald Trump boasted to the world last week of America’s booming economy. The U.S. gross domestic product grew at a rate of 4.1 percent over the second quarter, the fastest in more than four years.

“If economic growth continues at this pace, the United States economy will double in size more than 10 years faster than it would have under either President Bush or President Obama,” Trump said.

Economic issues usually play a key role in federal elections. In exit polls, more than 50 percent of voters in the 2016 elections said that the most critical issue was the economy. And at a time when special counsel Robert Mueller’s investigation is dominating headlines, the economy could be a boon to vulnerable GOP candidates in the November.

Trump’s advisers have run with the news already. The economy will enjoy “at least” four or five years of sustained 3 percent annual growth, the best in more than a decade, Treasury Secretary Steven Mnuchin predicted on Sunday. “I don’t think this is a one- or two-year phenomenon,” he said.

Some economists are skeptical. According to Bloomberg, Bricklin Dwyer, a senior U.S. economist at BNP Paribas, said that the economic growth “is likely peaking.”

But for November’s elections, the GOP just needs one more positive quarterly report. If they get it, Republicans can credit their tax reform bill. The question of sustainability doesn’t weigh heavily on the minds of people who vote based primarily on whether they have lower taxes and more money in their pockets.

“Tax policy is a winning issue; it’s one that I think Republicans are smart to embrace,” Tim Kane, economist at the Hoover Institution, told The New York Times.

GOP strategists are hoping that the president will pick up on this positive result rather than focusing on defending himself. “The economy and tax reform isn’t an abstract issue like Russia,” former Mitt Romney adviser Ryan Williams told The Hill. “I wish the president would talk every day about the economy and tax reform instead of other things he talks about.”

The president said he will, although he has continued to tweet his displeasure over the Mueller investigation. “I will be campaigning for all of these great people that do have a difficult race,” Trump said on Sean Hannity’s radio show. “If it’s the economy, then we should do very well.”

Associated Press/Photo by Andrew Harnik Associated Press/Photo by Andrew Harnik Sen. Bernie Sanders unveiling ‘Medicare for All’ on Capitol Hill last September

Doubling taxes wouldn’t cover Medicare for All

Researchers at George Mason University have put a price tag on the universal healthcare plan proposed by self-proclaimed democratic-socialist Sen. Bernie Sanders, I-Vt.: $32.6 trillion over the first 10 years. Even doubling federal individual and corporate income tax receipts would not cover the full cost, according to the study. The senator’s Medicare for All plan would save on administration and drug costs, but increased demand for care would drive up spending.

Sanders’ 2016 presidential campaign site offers a much lower number, $1.38 trillion per year, but does not offer a cost analysis. Under Sanders’ quixotic plan all Americans would be eligible for Medicare, with no deductibles or premiums paid to insurance companies.

The Koch brothers–funded Mercatus Center at GMU, which performed the study, is not the first to reach such high estimates. In 2016, the left-leaning Urban Institute estimated Sanders’ plan would increase federal expenditures by nearly the same amount over the same time period—$32.0 trillion over 10 years.

Some, including Sanders himself, claim the report inadvertently supports single-payer healthcare because it suggests overall healthcare expenditures would go down. But that’s because Medicare pays providers about 60 percent of what a typical insurance company would pay. “No surprise, if you cut payments by 40 percent, it saves money,” said Charles Blahous, the study’s author. “It’s the provider cuts that would save money, not the single payer system itself.”

Suddenly, slashing the rates paid to doctors and other providers down to Medicare levels would provoke “at the minimum a political reaction [from providers] saying, in unison, we can’t live solely on the Medicare rates. This doesn’t work for us,” said Joe Antos, a healthcare policy expert with the American Enterprise Institute. —Laura Finch

Kevin Moloney/Fortune Brainstorm TECH Kevin Moloney/Fortune Brainstorm TECH Charles Koch at a 2016 Fortune magazine conference in Aspen, Colo.

Immovable donor vs. unpredictable politician

Liberal candidates have long used the billionaire Koch brothers as campaign targets, claiming their wealth gives them too much influence in the Republican Party. But Charles and David Koch disagree strongly with President Donald Trump on immigration and trade philosophy, and now the feud is spilling over into threats regarding the midterm elections.

The Kochs prefer freer markets and more open borders; Trump favors protectionist policies, like tariffs and a border wall. Last weekend, Charles Koch threatened to withhold money from midterm candidates who supported Trump’s trade policies. Koch also said that their Americans for Prosperity advocacy group would not assist Rep. Kevin Cramer’s GOP bid to unseat Democratic Sen. Heidi Heitkamp in North Dakota—only Republican candidates from Senate races in Florida, Missouri, Tennessee and Wisconsin are assured of help from the Kochs.

The Kochs and their network are “a total joke” and “overrated,” Trump tweeted on Tuesday. “I have beaten them at every turn.” A rift between two such major forces in the Republican Party can’t help its chances on Election Day. Conservative blogger Jennifer Rubin tweeted about the spat and other recent events, predicting doom for November. “Trump is the Dems dream organizer: Picks a fight with Koch, does parody of tax cuts for the rich, threatens a shutdown.” —L.F.

Justice Ginsburg: Five more years!

Supreme Court Justice Ruth Bader Ginsburg indicated this week that she has no immediate plans to retire, easing liberal fears that a Trump-appointed replacement for her seat would produce a dramatic conservative shift on the high court. President Donald Trump recently nominated conservative favorite Brett Kavanaugh to fill a seat being vacated by Justice Anthony Kennedy, a key swing vote on the nine-member court.

“I’m now 85,” Ginsburg said. “My senior colleague, Justice John Paul Stevens, he stepped down when he was 90, so think I have about at least five more years.” Her phrasing suggests the liberal icon is prepared to stay longer if necessary so a Democrat could possibly appoint her successor. Ginsburg’s remarks during the 2016 election made clear her disdain for Trump.

Elizabeth Slattery, who studies the Supreme Court for The Heritage Foundation, said she “wasn’t surprised” by Ginsburg’s remarks. President Bill Clinton appointed Ginsburg to the high court in 1993. She once vowed to stay on the court as long as Louis Brandeis, who served 23 years, and she has now exceeded that. Anne K. Walters

Kyle Ziemnick

Kyle is a graduate of the World Journalism Institute.

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Comments

  • Xion's picture
    Xion
    Posted: Mon, 08/06/2018 03:38 am

    It is fascinating to follow all of the new problems (good ones) that a strong economy is producing.  If you do a search on "unemployment rate vs labor force participation" you will see that there are many new job openings, but Americans aren't grabbing them.  These numbers are used by politicians calling for greater immigration to fill the jobs, but why won't American citizens get off the couch and fill these positions.  Apparently the incentives just aren’t there compared to the handouts. 

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