Trump’s infrastructure plans are empty promises not backed by money
It has been declared “infrastructure week” by the Trump administration. On the face of it, that should be excellent news. The U.S. economy would benefit enormously from an ambitious increase in public investment, including infrastructure investment. Such investment would create jobs and finally lock-in genuine full employment in the near-term, and would provide a needed boost to productivity growth (or how much income and output each hour of work generates in the economy) in the medium-term. Further, infrastructure investments would ensure that we do not leave future generations a deficit of underinvestment and deferred maintenance of public assets.
This clear need is why we at EPI have been such enthusiastic backers of the Congressional Progressive Caucus (CPC) plan to boost infrastructure investment. The CPC investment plan is up to the scale of the problem, and it confronts the need to make these investments head-on, without accounting gimmicks or magical thinking about where the money for these investments will come from.
Despite being long-standing and loud proponents of the need for more infrastructure investment, however, we cannot say we expect much from the Trump administration’s infrastructure week. Why not? Because the most common theme in the Trump administration’s approach to infrastructure is pure obfuscation about how it will be paid for. If you’re not willing to say forthrightly how you’re going to pay for infrastructure investments, you really cannot be serious about it. As the old adage goes, “show me your budget and I’ll tell you what you value”.
The recently released Trump federal budget plan guts infrastructure, period. Read the link—the damage the Trump budget would do to public investment and infrastructure is staggering. This alone should make any open-minded person extraordinarily skeptical of their claims to value infrastructure spending.
The Trump campaign plan on infrastructure was notable only for its shallowness and its determination to increase cronyism in infrastructure provision. The plan claimed that the problem with American infrastructure investment was a lack of innovative financing, and that the private sector could somehow be convinced to build infrastructure at no cost to taxpayers. This was obviously false. Even long-standing, bipartisan efforts to leverage private sector financing of infrastructure have ranged from disappointing to disastrous. And in no case did they provide a free lunch to taxpayers—unless taxpayers have a huge preference to paying tolls to private companies rather than the same amount of tolls or taxes to governments.
The problem holding back increased investment in American infrastructure is simple: politicians are simply unwilling to increase public spending in a transparent way. This must be overcome—America needs a significant investment in public assets, and it needs this investment to be transparent, subject to democratic accountability, and long-lived.
The sketch of the new Trump infrastructure effort included in their budget shows clearly that they do not get this. Instead, the plan is more obfuscation and magical thinking. They claim their plan will lead to $1 trillion in new investments. Yet only $200 billion in new federal spending is specified (and again, this must be balanced against the enormous cuts to public investment already embedded in their overall budget plan). Where does the rest of the funding come from? In a word, nowhere. There is hand waving about leveraging the private sector and vague claims that federal “divestment” from infrastructure provision will somehow empower state and local governments to do more (but without any new funding source for these governments!). But like Trump’s campaign plan, this is an unserious document meant to sound like an infrastructure investment plan, but one that would radically underinvest in projects overall, and which would prioritize projects that can provide profits to private entities (like toll roads to airports) rather than projects that provide the largest welfare boost to vulnerable communities (say replacing lead-laced water pipes for communities like Flint, Michigan).
As the Trump administration kicks off “infrastructure week”, remember that its recent budget is an absolute disaster for public investment
Back in March, the Trump administration released its “skinny” budget. The skinny budget laid out the administration’s priorities for the next two years of discretionary spending. This skinny budget made absolutely disastrous cuts to nondefense discretionary (NDD) spending. This matters to most Americans because the NDD portion of the budget is where the vast majority of public investment is funded.
NDD spending is already on an extraordinarily austere path under current law. The Congressional Budget Office (CBO) estimates that by 2027 NDD budget authority as a percentage of GDP will fall by one-fifth, reaching a historic low of 2.4 percent. Trump’s skinny budget wanted us to get to this anemic level by next year.
And the details of the recently released full ten-year budget are far worse.
The Trump administration’s budget would cut NDD budget authority as a percentage of GDP by 56 percent, slashing it to an unprecedented 1.4 percent of GDP by 2027. CBO estimates that NDD spending will account for just 13 percent of all federal spending over the next ten years, but half of it is public investment. The full Trump budget would be an unprecedented disaster for public investment.
Historical and projected nondefense discretionary budget authority as a percentage of GDP, FY1976—FY2027
| Year | President’s Budget | CPC budget | Historic | Current Law | Historical Average* |
|---|---|---|---|---|---|
| 1976 | 5.60% | 3.53% | |||
| 1977 | 6.73% | 3.53% | |||
| 1978 | 6.26% | 3.53% | |||
| 1979 | 5.80% | 3.53% | |||
| 1980 | 5.96% | 3.53% | |||
| 1981 | 5.11% | 3.53% | |||
| 1982 | 4.18% | 3.53% | |||
| 1983 | 4.05% | 3.53% | |||
| 1984 | 4.00% | 3.53% | |||
| 1985 | 3.79% | 3.53% | |||
| 1986 | 3.27% | 3.53% | |||
| 1987 | 3.30% | 3.53% | |||
| 1988 | 3.12% | 3.53% | |||
| 1989 | 3.07% | 3.53% | |||
| 1990 | 3.26% | 3.53% | |||
| 1991 | 3.50% | 3.53% | |||
| 1992 | 3.61% | 3.53% | |||
| 1993 | 3.64% | 3.53% | |||
| 1994 | 3.48% | 3.53% | |||
| 1995 | 3.14% | 3.53% | |||
| 1996 | 2.96% | 3.53% | |||
| 1997 | 2.89% | 3.53% | |||
| 1998 | 2.87% | 3.53% | |||
| 1999 | 3.09% | 3.53% | |||
| 2000 | 2.79% | 3.53% | |||
| 2001 | 3.14% | 3.53% | |||
| 2002 | 3.44% | 3.53% | |||
| 2003 | 3.48% | 3.53% | |||
| 2004 | 3.50% | 3.53% | |||
| 2005 | 3.78% | 3.53% | |||
| 2006 | 3.22% | 3.53% | |||
| 2007 | 3.14% | 3.53% | |||
| 2008 | 3.35% | 3.53% | |||
| 2009 | 5.53% | 3.53% | |||
| 2010 | 3.72% | 3.53% | |||
| 2011 | 3.32% | 3.53% | |||
| 2012 | 3.29% | 3.53% | |||
| 2013 | 3.27% | 3.53% | |||
| 2014 | 3.07% | 3.53% | |||
| 2015 | 2.98% | 3.53% | |||
| 2016 | 3.05% | 3.05% | 3.05% | 3.05% | 3.53% |
| 2017 | 2.80% | 2.88% | 2.88% | 3.53% | |
| 2018 | 2.40% | 3.14% | 2.75% | 3.53% | |
| 2019 | 2.25% | 3.25% | 2.71% | 3.53% | |
| 2020 | 2.10% | 3.34% | 2.69% | 3.53% | |
| 2021 | 1.93% | 3.45% | 2.65% | 3.53% | |
| 2022 | 1.82% | 3.53% | 2.62% | 3.53% | |
| 2023 | 1.71% | 3.53% | 2.58% | 3.53% | |
| 2024 | 1.61% | 3.53% | 2.54% | 3.53% | |
| 2025 | 1.52% | 3.53% | 2.51% | 3.53% | |
| 2026 | 1.43% | 3.53% | 2.47% | 3.53% | |
| 2027 | 1.35% | 3.53% | 2.44% | 3.53% |
*Historical average reflects the average nondefense discretionary budget authority as a share of GDP between FY1980 and FY2007 (the last year before the onset of the Great Recession).
Notes: For the president's budget, this figure uses CBO's projections of GDP. Data for 2016 represent actual spending. Data for 2017 exclude CHIMPs.
Source: EPI Policy Center analysis of Congressional Budget Office and Office of Management and Budget data.
This highlights the enormous gap between Trump administration rhetoric about boosting infrastructure investment and the reality of their policies. Trump campaigned on a $1 trillion infrastructure proposal, but has never backed this up with a real plan. First, the campaign’s original plan was simply not serious, and would not have led to anywhere near $1 trillion in net new investment forthcoming. Next, the skinny budget cut the Department of Transportation by 13 percent. And these are not just cuts to some abstract bureaucracy, included are cuts to actual infrastructure funding. About 21 percent of those cuts come from ending the TIGER discretionary grants program that fund state-level infrastructure projects.
Unemployment rate fell in May for the wrong reasons: Slack still remains
The latest data from the Bureau of Labor Statistics reveals a noticeable slowdown in job growth this year. Adding in May’s 138,000 net new jobs, monthly job growth averaged 162,000 so far in 2017, and just 121,000 over the last three months, down from an average monthly gain of 187,000 jobs in 2016. While employment growth would be expected to slow as the economy approaches genuine full employment, other indicators suggest we are not that close to full employment yet, so this explanation seems insufficient. Specifically, at this point in the recovery, we should be looking to not only add jobs, but also see stronger wage growth in those jobs.
But this is not what we’ve seen. Unfortunately, wage growth has been flat over the last year. The latest data indicates that year-over-year nominal hourly wages grew 2.5 percent in May. In fact, as shown in the figure below, wage growth has averaged 2.5 percent over the last two years. If anything, we’ve seen a bit of a slowdown in wage growth this spring, and it is still below levels consistent with the Federal Reserve’s 2 percent inflation target combined with trend productivity growth of 1.5 percent. So, why has wage growth continued to be below target levels after recovery has gone on so long? The simple answer is that while the recovery has been long, it has also been weak. And this weakness combined with the extraordinary damage done during the Great Recession means that slack remains.
Nominal wage growth has been far below target in the recovery: Year-over-year change in private-sector nominal average hourly earnings, 2007–2017
| Date | All nonfarm employees | Production/nonsupervisory workers |
|---|---|---|
| Mar-2007 | 3.44% | 4.17% |
| Apr-2007 | 3.13% | 3.85% |
| May-2007 | 3.53% | 4.14% |
| Jun-2007 | 3.61% | 4.13% |
| Jul-2007 | 3.25% | 4.05% |
| Aug-2007 | 3.35% | 4.04% |
| Sep-2007 | 3.09% | 4.09% |
| Oct-2007 | 3.03% | 3.72% |
| Nov-2007 | 3.07% | 3.89% |
| Dec-2007 | 2.92% | 3.75% |
| Jan-2008 | 2.91% | 3.80% |
| Feb-2008 | 2.85% | 3.79% |
| Mar-2008 | 3.04% | 3.71% |
| Apr-2008 | 2.89% | 3.70% |
| May-2008 | 3.07% | 3.69% |
| Jun-2008 | 2.67% | 3.62% |
| Jul-2008 | 3.05% | 3.67% |
| Aug-2008 | 3.33% | 3.89% |
| Sep-2008 | 3.28% | 3.70% |
| Oct-2008 | 3.32% | 3.93% |
| Nov-2008 | 3.50% | 3.80% |
| Dec-2008 | 3.59% | 3.90% |
| Jan-2009 | 3.58% | 3.72% |
| Feb-2009 | 3.43% | 3.65% |
| Mar-2009 | 3.28% | 3.53% |
| Apr-2009 | 3.37% | 3.35% |
| May-2009 | 2.93% | 3.11% |
| Jun-2009 | 2.88% | 2.88% |
| Jul-2009 | 2.69% | 2.76% |
| Aug-2009 | 2.44% | 2.64% |
| Sep-2009 | 2.44% | 2.75% |
| Oct-2009 | 2.53% | 2.68% |
| Nov-2009 | 2.15% | 2.73% |
| Dec-2009 | 1.96% | 2.50% |
| Jan-2010 | 2.09% | 2.66% |
| Feb-2010 | 2.09% | 2.55% |
| Mar-2010 | 1.81% | 2.27% |
| Apr-2010 | 1.81% | 2.38% |
| May-2010 | 1.90% | 2.54% |
| Jun-2010 | 1.76% | 2.53% |
| Jul-2010 | 1.85% | 2.42% |
| Aug-2010 | 1.75% | 2.36% |
| Sep-2010 | 1.84% | 2.19% |
| Oct-2010 | 1.93% | 2.51% |
| Nov-2010 | 1.79% | 2.18% |
| Dec-2010 | 1.74% | 2.02% |
| Jan-2011 | 1.92% | 2.17% |
| Feb-2011 | 1.83% | 2.06% |
| Mar-2011 | 1.83% | 2.06% |
| Apr-2011 | 1.87% | 2.11% |
| May-2011 | 2.04% | 2.05% |
| Jun-2011 | 2.13% | 2.05% |
| Jul-2011 | 2.30% | 2.26% |
| Aug-2011 | 1.95% | 1.99% |
| Sep-2011 | 1.94% | 1.99% |
| Oct-2011 | 2.07% | 1.72% |
| Nov-2011 | 1.98% | 1.82% |
| Dec-2011 | 2.07% | 1.87% |
| Jan-2012 | 1.79% | 1.40% |
| Feb-2012 | 1.79% | 1.45% |
| Mar-2012 | 2.14% | 1.71% |
| Apr-2012 | 2.09% | 1.65% |
| May-2012 | 1.74% | 1.44% |
| Jun-2012 | 1.96% | 1.54% |
| Jul-2012 | 1.69% | 1.33% |
| Aug-2012 | 1.86% | 1.33% |
| Sep-2012 | 1.99% | 1.38% |
| Oct-2012 | 1.51% | 1.28% |
| Nov-2012 | 1.94% | 1.43% |
| Dec-2012 | 2.11% | 1.58% |
| Jan-2013 | 2.06% | 1.89% |
| Feb-2013 | 2.19% | 2.04% |
| Mar-2013 | 1.88% | 1.88% |
| Apr-2013 | 1.97% | 1.78% |
| May-2013 | 2.14% | 1.93% |
| Jun-2013 | 2.17% | 2.03% |
| Jul-2013 | 2.04% | 2.03% |
| Aug-2013 | 2.26% | 2.23% |
| Sep-2013 | 2.08% | 2.28% |
| Oct-2013 | 2.25% | 2.27% |
| Nov-2013 | 2.20% | 2.37% |
| Dec-2013 | 1.98% | 2.26% |
| Jan-2014 | 2.02% | 2.31% |
| Feb-2014 | 2.23% | 2.50% |
| Mar-2014 | 2.14% | 2.35% |
| Apr-2014 | 2.01% | 2.40% |
| May-2014 | 2.13% | 2.44% |
| Jun-2014 | 2.00% | 2.34% |
| Jul-2014 | 2.09% | 2.38% |
| Aug-2014 | 2.21% | 2.43% |
| Sep-2014 | 2.04% | 2.27% |
| Oct-2014 | 2.03% | 2.27% |
| Nov-2014 | 2.03% | 2.21% |
| Dec-2014 | 1.86% | 1.92% |
| Jan-2015 | 2.19% | 2.01% |
| Feb-2015 | 1.93% | 1.61% |
| Mar-2015 | 2.22% | 2.00% |
| Apr-2015 | 2.26% | 2.00% |
| May-2015 | 2.30% | 2.14% |
| Jun-2015 | 2.09% | 1.99% |
| Jul-2015 | 2.21% | 2.04% |
| Aug-2015 | 2.24% | 2.08% |
| Sep-2015 | 2.32% | 2.13% |
| Oct-2015 | 2.56% | 2.32% |
| Nov-2015 | 2.39% | 2.12% |
| Dec-2015 | 2.52% | 2.56% |
| Jan-2016 | 2.51% | 2.45% |
| Feb-2016 | 2.38% | 2.45% |
| Mar-2016 | 2.45% | 2.44% |
| Apr-2016 | 2.61% | 2.58% |
| May-2016 | 2.52% | 2.33% |
| Jun-2016 | 2.64% | 2.52% |
| Jul-2016 | 2.76% | 2.61% |
| Aug-2016 | 2.55% | 2.46% |
| Sep-2016 | 2.75% | 2.65% |
| Oct-2016 | 2.74% | 2.50% |
| Nov-2016 | 2.65% | 2.50% |
| Dec-2016 | 2.85% | 2.54% |
| Jan-2017 | 2.56% | 2.39% |
| Feb-2017 | 2.84% | 2.48% |
| Mar-2017 | 2.63% | 2.34% |
| Apr-2017 | 2.51% | 2.38% |
| May-2017 | 2.46% | 2.42% |
*Nominal wage growth consistent with the Federal Reserve Board's 2 percent inflation target, 1.5 percent productivity growth, and a stable labor share of income.
Source: EPI analysis of Bureau of Labor Statistics Current Employment Statistics public data series
But, you say, the unemployment rate fell to 4.3 percent in May, its lowest in 16 years! Unfortunately, the unemployment rate fell for the wrong reasons and isn’t fully reflective of the state of the labor market. That is, in the past when unemployment was roughly as low as it is today, the labor force participation rate—notably that of the prime-age population—has been much higher. Today, there are lots of would-be workers on the sidelines not being counted, who would take a job if offered one. And, the drop in the unemployment rate in the past month is more of a sign of people giving up on finding a job than more people becoming employed. In the last month, the labor force participation rate fell 0.2 percentage points and the employment-to-population ratio also fell 0.2 percentage points. Taken together, that means that the slight drop in the unemployment rate is, in fact, due to would-be workers leaving the labor force, not getting jobs.
What to Watch on Jobs Day? Hopeful signs of stronger wage growth
More and more analysts, including many at the Fed, seem to have decided that the U.S. economy has reached full employment. They might be right, but the data on this is far from a slam dunk—and the costs of prematurely declaring full employment and working to slow the recovery far exceed the costs of waiting too long to restrain growth and allowing some wage and price inflation.
While the unemployment rate has ticked down considerably over the last few years, there still seems to be considerable slack in labor force participation, as evidenced most strongly in quite depressed employment-to-population ratios of even prime-aged (25-54 year old) workers. If this weren’t the case—if the apparent slack in these employment and participation numbers wasn’t real—we would be seeing faster wage growth as employers bid up wages to attract and retain the workers they want. So, what am I looking for in Friday’s jobs report, and what do we need to see to validate judgements that we have attained genuine full employment? Signs of stronger wage growth.
Year-over-year nominal wage growth has picked up over the last several years (as shown in the figure below). It’s now at about 2.7 percent growth, up from 2.4 percent the previous year, and up from an average of about 2.0 percent in 2010 through 2014. While this is certainly a welcome sign, it is still below levels consistent with the Federal Reserve’s 2 percent inflation target combined with trend productivity growth of 1.5 percent.
Under new bill’s election standard, unions would never win an election—and neither would the bill’s cosponsors
Before leaving for recess last week, congressional Republicans introduced a bill that would make it more difficult for workers to form a union and collectively bargain. The misleadingly named Employee Rights Act has been introduced in prior Congresses as well. The legislation would strip workers of many rights under the National Labor Relations Act (NLRA). For example, it would prohibit voluntary employer recognition of a union. (Under existing law, an employer is free to recognize a union and bargain with its workforce when workers show majority support for the union.) The bill also reinstitutes unnecessary delay in the union election process, mandating that parties litigate issues likely to be resolved in the election.
Perhaps most ridiculous is the bill’s requirement that a union win the support of the majority of all workers eligible to vote in the union election—not just those workers who vote. Imagine if the bill’s sponsor, Congressman Phil Roe (R–Tenn.), had had the same requirement in his own election. He would have lost, and so would all of his Republican colleagues who cosponsored the bill.
Votes cast for winning candidate as a share of eligible voters and actual winning share, 2014 and 2016 elections
| Votes cast for winning candidate as share of all eligible voters (Employee Rights Act election requirement) | Winning election results | ||||
|---|---|---|---|---|---|
| Sponsors | Congressional District | 2014 | 2016 | 2014 | 2016 |
| Rep. Phil Roe | TN 01 | 20.7% | 35.5% | 82.8% | 78.4% |
| Rep. Joe Wilson | SC 02 | 24.0% | 36.2% | 62.4% | 60.2% |
| Rep. Doug LaMalfa | CA 01 | 24.1% | 33.8% | 61.0% | 59.1% |
| Rep. Jeff Duncan | SC 03 | 23.0% | 38.8% | 71.2% | 72.8% |
| Rep. Rob Woodall | GA 07 | 25.2% | 38.6% | 65.4% | 60.4% |
| Rep. Gus Bilirakis | FL 12 | NA | 45.9% | Ran unopposed | 68.6% |
| Rep. Richard Hudson | NC 08 | 22.8% | 35.6% | 64.9% | 58.8% |
* US citizens, ages 18 and up are considered eligible voters (see Citizen Voting Age Population from the American Community Survey).
Sources: Authors' analysis of election data from ballotpedia and Citizen Voting Age Population (CVAP) data from proximityone.
The Employee Rights Act is a clear example of Republican contempt for workers’ rights to organize and bargain collectively. The legislation rigs the union election system, instituting standards for unions that no elected official could survive.
On the same day that Rep. Roe and his colleagues introduced their anti-worker legislation, Democrats introduced a bill to raise the minimum wage to $15 by 2024. The proposal would lift pay for 41 million workers—nearly 30 percent of the U.S. workforce. Raising the minimum wage to $15 per hour would begin to reverse decades of growing pay inequality.
H-2B crabpickers are so important to the Maryland seafood industry that they get paid $3 less per hour than the state or local average wage
Earlier this week, Washington D.C.’s WAMU aired a report highlighting—and celebrating—the hardworking Mexican women on Maryland’s Eastern Shore who pick crabmeat by hand. The Mexican women are in the United States temporarily, on a nonimmigrant guestworker visa called H-2B, which allows employers to hire migrant workers for non-agricultural seasonal jobs. The subheading of the story reads “Maryland crab processors say they couldn’t stay in business without Mexican guestworkers.” A tweet with an accompanying GIF from WAMU suggests that the reason employers hire H-2B workers to pick crab is because they’re so fast at what they do.
Fancy yourself a master #marylandcrab picker? There’s a reason these Mexican women come work on H2B visas — speed https://t.co/kzKnZJOw0n pic.twitter.com/uNLO1tEUXe
— WAMU 88.5 ? (@wamu885) May 22, 2017
Impressive to say the least. I don’t doubt how productive and valuable these workers are. Their bosses say they’re the heart of the crab industry. But upon closer inspection, it seems the seafood companies don’t really think this important work is worth a fair wage. The companies have lobbied tenaciously to make sure that the legal and regulatory framework of the H-2B visa program allows them to legally underpay their workers compared to what they would have to pay to attract workers in the free market—and the two employers featured in the WAMU story are perfect examples.
Policy Watch: Trump budget weakens protections for working people
This week, the Trump administration published its full budget request for fiscal year 2018. The proposal makes it clear that President Trump has no intention of honoring his State of the Union pledge to work to create “jobs where Americans prosper and grow.” The Trump budget would impose a major drag on economic growth and lead to job-losses totaling 1.4 million in 2020. Beyond the stark job-loss numbers, the budget proposal includes severe cuts to anti-poverty programs including food stamps and children’s health insurance. Below is information on the Trump budget cuts to worker protection programs.
The Trump budget reduces funding for the Department of Labor (DOL) by nearly 20 percent. Most of the cuts come from job training programs. However, the Trump budget also severely reduces funding for unemployment insurance program administration. On top of this cut, Trump’s budget would require this already stretched program to administer a new program— six weeks of paid family leave—with no new funding. Currently, only one in four jobless workers collect unemployment benefits and only 21 states have adequate reserves in the event of another recess.
One agency within the DOL would receive a substantial increase in funding under the Trump budget. The Office of Labor-Management Standards (OLMS) would see its funding increase by 20 percent. OLMS is responsible for enforcement of the Landrum-Griffin Act, which requires unions to report on their finances and gives the Secretary of Labor the authority to investigate unions and audit union finances. This budget increase stands in stark contrast to the National Labor Relations Board (NLRB) which would see its funding cut by six percent.. The NLRB is responsible for enforcing workers’ rights under the National Labor Relations Act which gives workers the rights to organize and join unions and bargain collectively with their employers for better pay, benefits, and working conditions. Unlike OLMS, which has jurisdiction only over union activities, the NLRB’s jurisdiction covers the right of all workers—whether union members or not—to seek better wages or working conditions. In spite of this, OLMS gets the additional funding in Trump’s budget while the agency tasked with protecting workers’ rights sees its funding reduced.
Costs will still rise significantly and coverage will still fall considerably under the new AHCA
Yesterday, the Congressional Budget Office (CBO) released its analysis of the American Health Care Act (AHCA)—legislation designed to “repeal and replace” the Affordable Care Act (ACA). The House of Representatives passed the AHCA earlier this month, in its second attempt at doing so , before the CBO released a score. The bill makes substantial changes to current law, which have large effects on both the costs of care and the coverage rates. I’m going to walk through some key provisions and their effects on specific populations, and compare these effects to those in the version of the AHCA that the CBO scored in March. The bottom line is that, if the AHCA becomes law, the number of uninsured Americans will grow by 23 million by the year 2026—just a bit lower than the 24 million more people who would have been uninsured under the original bill. This is the result of about 14 million fewer people on Medicaid, 6 million fewer with nongroup insurance coverage, and 3 million fewer with employer-sponsored health insurance; substantially fewer people will be on nongroup coverage under the House-passed bill than in the originally-score bill, while more will be covered by employers, likely because of provisions that make the nongroup market considerably less desirable.
The total change in coverage from all these sources is shown in the figure below, copied in its entirety from Figure 2 in the CBO cost analysis. The share of each age group without coverage under current law is shown in the first bars of each set in dark blue, under the March 23 CBO score in the second set in the lightest blue, and under the legislation passed by the House is shown in the third set (mid-tone blue). The three sets of bars on the left show coverage rates for nonelderly adults below 200 percent of the federal poverty line (FPL), while the three sets of bars on the right show coverage rates for those above 200 percent of FPL. The width of the bars represents the relative size of the population, so you can see that adults between 19 and 29 years of age are more likely to be lower income, while those between 30 and 64 years of age are more likely to be higher income. In general, low-income adults are more likely to be uninsured under current law, but that difference is exacerbated under the proposed legislation. However, no group is spared. While low-income people face much higher rates of uninsurance, even significant shares of high-income young and middle-aged adults will be less likely to be covered.
Trump’s budget will harm older workers by cutting Social Security disability payments
Breaking a promise not to cut Social Security, the Trump administration released a budget that would slash Social Security payments for disabled workers by shrinking many of the federal government’s disability-based programs by $72 billion over the next decade. Press coverage has emphasized that the budget avoids large cuts for programs that benefit mostly older workers, but this is inaccurate—especially for Social Security Disability Insurance (SSDI), which disproportionately benefit older Americans.
It is true that the Trump administration is desperate to cut programs like food stamps that overwhelmingly benefit poor children, but it is incorrect to claim that the administration’s draconian budget reductions spare older people. In fact, the administration’s budget cuts are remarkably comprehensive in their cruelty across the age distribution. Cuts to Social Security disability payments will especially burden older Americans, as they are precisely the individuals most likely to be disabled. Do you know people with cancer advanced enough that it prevents them from working? Or how about a family member with diabetes or arthritis? These and other illnesses prevent older Americans in particular from holding steady employment.
The figure below shows that the share of the population receiving disability insurance payments indeed rises rapidly with age. Nearly one-in-ten (9.9 percent) people between the ages of 50 and 65 receives SSDI, in contrast to the small shares of younger individuals receiving these payments. As a result, nearly three quarters of those receiving Social Security disability are between the ages of 50 and 65.
Trump’s budget tried to side-step taxes. Today’s Ways and Means hearing with Treasury Secretary Mnuchin should not.
Today, the House Committee on Ways and Means is holding a hearing on President Trump’s budget proposals, with Treasury Secretary Steven Mnuchin providing testimony.
In the past, Mnuchin has claimed that in the Trump administration’s tax plan, “there will be no absolute tax cut for the upper class.” This claim has been dubbed the “Mnuchin rule.” However, the Center on Budget and Policy Priorities has found that both the Trump campaign and House GOP “Better Way” tax plans flagrantly violate this rule. Tax Policy Center (TPC) estimated that 47 percent of the Trump campaign tax plan would go to the top 1 percent while 76 percent of the House GOP tax plan would go to the top 1 percent in their first years, and this regressivity just grows over time. And the scarce details from the administration on their tax plan have not deviated much from the campaign plan.
Despite this, yesterday at the 2017 Peter G. Peterson Fiscal Summit, Mnuchin again echoed (see 2:08 in the video) this claim, stating that “the president’s objective is to create a middle-income tax cut, it’s not to create tax cuts for the high-end.”