Friday, May 26, 2017

Being anti-Trump is not enough.

The morning onslaught of emails summarizing the starting point for the day, letting me know that this is day 126 of the Trump presidency. Politico. Axios. The Daily. The Hive. RedState. ZeroHedge. Sean Hannity (just to see who the Clintons killed recently). The breathless breaking news tweets, podcasts and texts. The daily wraps making sure we did not miss a thing, lest we were distracted by work.

The Trump presidency has become the most festering, counterproductive, time sink since the invention of Facebook, when the notion of a time sink burst into our vocabulary.

Two weeks ago, conservative talk show host Charlie Sykes wrote an op-ed in the New York Times, suggesting that the political battleground has shifted from those who are anti-Trump versus those who are pro-Trump, to those who are anti-Trump versus those who are anti-anti-Trump. Faced with a president who is proving objectionable or incompetent to many in his own party, Republicans are increasingly motivated as much by the rage and antics of Democrats as anything else. As if to make Sykes' point, the most recent Quinnipiac Poll suggests that Republican approval of Donald Trump is now lower than their disapproval of Democrats in Congress.

For a few months, from election day on past the inauguration, where Donald Trump pronounced his dark vision of the nation from the presidential pulpit, the furious reaction to what appeared to be the rise of the authoritarian right was warranted. But the influence of Steve Bannon and the threat of the alt-right appear to have waned, as the challenges of governing have overwhelmed the competence of a President whose political skills revolved around hyperbolic rhetoric and conspiracy mongering, and whose real world management skills were limited to running a tightly controlled family business.

After those furious first few months, the Trump fever has broken. Fears that democratic institutions might not be up to the task have proven to be ill-founded. The federal judiciary has played its role as proscribed, and the media has refused to back down from the name calling and derision from the Oval Office. Perhaps Donald Trump's greatest misjudgment was underestimating Rod Rosenstein, who has now firmly headed Trump's presidency down a new path.

The Trump presidency is now lapsing into something that may be less satisfying for Democrats to contend with: conservative government. MSNBC talk show host and former conservative member of Congress Joe Scarborough may rail on about the Republican Party having been taken over by a long-time Democrat, but the infrastructure of the Trump administration is deeply conservative, and fully prepared to do its best to support the agenda of Republican majorities in Congress. It is what political parties get to do when they win elections; they get to pass laws.

According to CBS News Nation Tracker polling, public attitudes toward the idea of Democrats winning back the House of Representatives next year has been highly ambivalent. Half of those polled think that a Democrat Congress would provide a needed check on President Trump, while half suggested it would simply lead to more gridlock or bad policies in Congress.

This is a devastating message to which Democrats should be paying close attention. Driven by anti-Trump rage, party activists are rapidly--and deliberately--undermining their party's ability to appeal to the political center. Their rage against Trump is accompanied by continuing bitterness over Bill and Hillary Clinton's control over the Democratic National Committee that rigged the system in favor of Hillary's nomination.

Penned in by activists on the left, Democrat leaders seem determined to ignore the yawning chasm of voters alienated both by Trump, and his sycophants in Congress, and the activist left. Rather than reaching out to broaden a prospective Democratic coalition, the Democrats are becoming a less-tolerant, narrower political party. Every time Chuck Schumer stands in front of a microphone to vilify this or that Trumpian outrage, he plays into the dynamic that Sykes described. Every time Nancy Pelosi demands that Sean Spicer or some other Trump factotum resign for this or that stupid statement, she devalues her own currency and diminishes her appeal beyond the Democratic Party base as aspiring Speaker of the House.

Just as Democrats are turning their back on the political center, Donald Trump seems to be making a concerted effort to alienate his own devoted followers and the faith they have invested in him. Trump's followers may have clamored for him to repeal Obamacare, but it remains to be seen if their faith in him will endure in the event that the House healthcare plan makes its way into law and millions of those supporters lose their health insurance, or take a loved one to the hospital only to find that their new Trumpcare insurance policies no longer provide hospitalization or emergency coverage. 

The problem that Democrats face is that even if Donald Trump turns his back on his promise to be the president for the working class and rural America, and instead delivers everything that the Republican donor class could have hoped for, that will not necessarily inure to the benefit of the Democratic Party. Donald Trump violating the trust that working class and rural Americans invested in him will not by extension ameliorate the distrust that those Americans feel toward Democrats. 

It may be that Senate Republicans will save Trump from himself. If they balk at Trump's healthcare plans and his tax plans and his budget cuts, Trump's dedicated voters may never know how close they came to seeing things get much worse for them than they already are. But who is going to save Chuck Schumer and Nancy Pelosi? As the threat to democratic institutions fade, and the urgency of the morning emails and tweetstorms subside, when are Democratic leaders going to pull back from all-Trump-all-the-time, and contemplate how they plan to reach out and broaden the Democratic Party into a viable majority coalition.

The 2018 mid-term election may be on everybody's minds, but it is the 2020 election that looms largest. Not the presidential election, but rather the governors and state legislature races that will determine the next round of decennial redistricting, and, in their wake, the landscape of our politics for the ensuing decade. Anti-Trump fever, which began as a tremendous motivating moment for Democrats, has become a trap. Far too many remain consumed with matters that now should be left to Robert Mueller, while far too few seem focused on the future of the Democrat agenda, message and coalition. That is the urgent task at hand if Democrats want to win what Republicans now have: majorities in Congress and the ability to pass laws.

As it stands today--as Charlie Sykes has warned--every time Chuck Schumer feels that irresistible draw to a microphone to launch one more attack on Donald Trump, he is not doing his party any favors. Instead, he is playing into the anti-anti-Trump narrative and increasing the likelihood that Republicans will once again win the decennial restricting battles, and Donald Trump will be a two-term president.

Read it at the HuffPost.

Follow David Paul on Twitter @dpaul.
Artwork by Jay Duret. Check out his political cartooning at Follow him on Twitter @jayduret or Instagram at @joefaces.

Friday, May 19, 2017

Killing Obamacare.

Obamacare is not dead yet, but Donald Trump is close to achieving his goal. If it was not killed on Inauguration Day--when Trump signed his executive order that, among other things, relaxed enforcement of the individual mandate--it will be, if, as reports have suggested, he decides to terminate the Affordable Care Act subsidies paid to insurance companies. Ending those payments, which subsidize deductibles for low-income populations, should effectively end the viability of the insurance exchanges created by the ACA that provide access to health insurance for low income families.

When Donald Trump supported a single payer approach--before he opposed it--he recognized that unless and until we are willing to let people die in the street, healthcare costs are something for which the entire nation is ultimately on the hook. If, at the end of the day, we are all going to wind up paying those costs, it is the cost structure itself that should be the focus of the healthcare discussion, rather than legislation that does little more than shifting costs and risks from one place to another.

While the ACA--Obamacare--covers a wide range of healthcare issues, at its essence it was built around two essential elements: first, prohibiting insurers from denying coverage to, or charging differential insurance rates for, people with pre-existing conditions, and, second, requiring that everyone purchase health insurance--whether through employers who are required to provide coverage or as individuals--to ensure that young, healthy people become part of the health insurance system. The objective was to create a single "community rating" structure within which rates would be established. The two elements worked in tandem, as they would enable insurance companies to offset the higher costs of less healthy insured populations, including those with pre-existing conditions--whose premiums would not be high enough to fund their expected costs--with revenues from healthier populations, who by definition would pay more into the system in premiums than they would receive back in benefits.

Problems began for participating insurance companies when fewer healthy individuals signed up than projected, undermining the expected economic balance of the program. The January executive order validated insurer concerns over the political risks inherent in participation in the newly created healthcare exchanges, and further undermined the economic tradeoff, leaving insurers with the prospect of losing the upside of original bargain--the young, healthy customers who would get back far less than they paid in--while still on the hook for the higher cost populations they were obligated to underwrite. The prospect of terminating the subsidy payments to insurers--as Donald Trump reaffirmed this week--promises to be the last straw for participating insurance companies; if the January executive order constituted two bullets to the chest of Obamacare, the termination of the subsidizes looms to be the bullet to the head.

Listening to Republican struggles to repeal and replace the Affordable Care Act, one could easily draw the conclusion--as I'm sure many Americans have--that Obamacare is at the root of healthcare cost escalation, however that is little more than political rhetoric. As illustrated in the graph here, National Health Expenditures have risen steadily over the past half-century, both in dollar terms and as a percent of the nation's gross domestic product (depicted by the solid purple line). Over the years, various healthcare reforms have sought to restructure how healthcare is funded and redistribute how the cost burden is shared across the population. The most dramatic reforms were the passage of Medicare, which put the funding of healthcare for the elderly on the back of the federal government, and Medicaid, which created a funding partnership between the federal government and the states for funding healthcare costs for those less able to pay. Obamacare, as it turns out, has had little impact on the public share of healthcare funding (shown in the red dotted line) which has similarly grown steadily over the years.

As much as Congress and the media talk about healthcare reform, Obamacare and its proposed replacement are less about the healthcare system overall than about the health insurance piece of the puzzle. That is to say, it is about who pays and how risks and costs are allocated, rather than about the provision of healthcare itself. As illustrated here, the preponderance of healthcare coverage in the United States is provided through private insurers, along with Medicare and Medicaid. Along with expanding Medicaid eligibility, the essence of Obamacare was to create a structure that would force healthier Americans that had previously chosen to remain uninsured to buy health insurance from private insurers in order to improve access for and reduce the cost paid by less healthy portions of the population.

While forcing one part of the population to fund the cost of services to another part of the population has been made by some to sound nefarious, we do it all the time. Risk and cost transfers across populations are commonplace in the provision of public services and taxation. Some public utilities--water and sewer systems come to mind--are able to charge fees on a user basis with little cross-subsidization. Other public services have subsidies inherent in their taxation and service provision models--essentially raising funds based on ability to pay, with little or no regard to the direct benefit received.

Public education, for example, is funded primarily by property taxes at the local level, and household funding contributions reflect differential wealth levels across a community, as calculated by home assessed values. Payment of those taxes by all homeowners is compulsory, and no consideration is given to whether a household has many children or no children; whether those children attend public schools or not; or whether a child has special needs that place a greater cost burden on the school district.

We have similar systems of cross-subsidization of service costs at all levels of government. Most obviously, on account of the progressive federal income tax, wealthy Americans pay the lion's share of federal taxes. According to the Congressional Budget Office data, the top 20% of taxpayers pay 69% of federal taxes, and the top 1% pay 25% of all federal taxes. Taking into account the distribution of taxes paid and direct services received--according to a Tax Foundation analysis--the federal government redistributes $2 trillion annually from the wealthier 40% of families to the less wealthy 60%. Similar transfers of tax dollars across populations are inherent in our public finance structure, including from wealthier, predominantly blue states, to less wealthy red states through the federal budget, and within states from urban centers to rural communities.

At a much publicized town meeting in early May, Representative Raul Labrador (R-ID) caused an uproar when he asserted--in response to the suggestion that the healthcare bill passed by the House would result in millions of families losing access to health insurance--that "nobody dies because they don't have access to health care." The next day, Labrador explained his response by pointing out that federal law requires that hospital emergency rooms treat anyone who shows up with a serious condition, regardless of ability to pay.

Labrador's explanation illustrated the central lie underpinning the House legislation: it really doesn't fix anything. GOP anger at Obamacare focused in part on the individual mandate, which forced healthy participants to effectively subsidize the cost of insuring those with pre-existing conditions. The House bill proposes to alleviate the share of those costs born by that young, healthy population, by transferring those costs and risks to others, notably, as Labrador suggests, to hospitals, which would become saddled with significant increases in "uncompensated care" costs. Accordingly, the House proposal is similar to an unfunded tax cut; it reduces the burden on one sector of the population, while preferring to ignore the other side of the ledger, and the fact that someday, someone will have to pay the price for the benefit that was conferred.

GOP obsession with the individual mandate as a fundamental violation of individual liberty ignores the fact that healthy individuals are already compelled to participate in group health insurance provided by employers. The notion that individual participation is part of a broader programatic structure that shifts costs and risks across populations is also nothing new. As noted above, we transfer costs from one group of people to another all the time. In the healthcare sector, in particular, funding for Medicare, Medicate and veterans healthcare--which now comprise 50% of National Health Expenditures--are funded from broad based tax revenues.

In addition to those direct expenditures, we provide massive public subsidies to the private insurance market though the tax deductibility of employer-provided healthcare. When Obamacare added tax credits for individuals, in conjunction with the individual mandate, it was simply leveling the playing field. While it is reasonable to argue that the individual mandate is inappropriately narrow in scope--as it essentially constitutes an income transfer from people in their 20s and 30s to people in their 40s and 50s, through age 65, when they become eligible for Medicare--it is not inherently different than the myriad other ways that we transfer costs and benefits across populations. In particular, it mirrors those programs, such as Medicare and Social Security, that are funded on a life-cycle basis, wherein people pay in when they are younger and receive benefits when they are older.

As Donald Trump has pointed out, healthcare is more complicated than it might seem to be. The underlying problem is that at the end of the day—unless we are going to let people die in the streets—healthcare costs are something for which the entire nation is ultimately on the hook. Given that is the case, Congress cannot pretend to have provided a real solution if all it has done is to shift costs and risks from one place to another.

Read it at the HuffPost.

Follow David Paul on Twitter @dpaul.
Artwork by Jay Duret. Check out his political cartooning at Follow him on Twitter @jayduret or Instagram at @joefaces.

Thursday, May 11, 2017

The Titanic. In real time.

Shortly after taking office as the 36th President, Lyndon Baines Johnson briefly considered firing then-FBI Director J. Edgar Hoover. But Johnson was no fool, he knew that Hoover kept files of dirt on hundreds of politicians. LBJ decided to keep him on. "I'd rather have him inside the tent pissing out," the 36th President famously concluded, "than outside the tent pissing in."

That is not the path that Donald Trump has chosen. Rather than thinking through the consequences of firing the man overseeing the Russia-Trump investigation, Trump threw caution to the wind and decided to unceremoniously and publicly fire his FBI Director. 

One week into his presidency, Trump summoned then-FBI Director Comey to dinner in the White House, where, like a newly installed third-world dictator, asked Comey to "pledge his loyalty" to him. Trump had good reason for concern. Two weeks earlier, Comey had privately briefed Trump on the infamous Russia dossier, prepared by former British MI6 agent Christopher Steele. The dossier described the involvement of Trump campaign officials in Russia's efforts to sway the results of the US presidential election, and the FBI was clearly taking it seriously enough to bring it to Trump's attention. 

As in all matters related to the Russia affair, there was an inherent asymmetry in information between the two men. Donald Trump, after all, knew the truth of whatever had transpired between his campaign and Russia's efforts to sway our election, while James Comey was the FBI Director tasked with ferreting out the truth. 

If Chris Steele's dossier is substantially correct--if there was, in fact, coordination between senior members of the Trump campaign and Vladimir Putin's inner circle to undermine Hillary Clinton--an independent James Comey, unbound by a pledge of fealty to the President, represented an existential threat to Trump's presidency. If, on the other hand, the Steele dossier is a complete fabrication, and was never any involvement by Trump associates in Russia's efforts to meddle in our election, as Trump has insisted, then Trump had nothing to fear from Comey, and, in particular, nothing that would make firing Comey worth the political cost. At that dinner--as at the time that Comey briefed Trump about the dossier--Trump knew the truth, while Comey did not. 

We have no idea whether in the intervening months James Comey has developed any greater insights into what actually transpired with respect to Russian meddling and the Trump campaign. All we know is that based on the reporting over the past two days, it is apparent that after that January dinner--when Comey apparently declined to pledge his loyalty to Trump--both Trump and Comey believed that it was only a matter of time before the President fired Comey.

The peculiar aspect of Comey's firing was how Trump chose to handle it. Instead of replacing Comey in a respectful and orderly manner, Trump clearly decided to do it in as disrespectful manner as he could. There was no face to face meeting, not even a phone call. Comey was not offered a chance to resign to spend more time with his family--the norm in these situations--or given the respectful send-off normally accorded a person in his position. Instead, Trump had his long-time bodyguard deliver the letter firing Comey to the FBI headquarters while Comey was out of town. Comey actually learned about his firing from a cable news broadcast while he was giving a presentation at the FBI office in Los Angeles. 

It was not enough to unceremoniously show Comey the door, Trump then made sure to insult and kick him on the way out. He went out of his way to attack Comey on Twitter, with his own tweets as well as retweeting a hit piece on Comey circulated by the Drudge Report. Then--with no sense of irony--he went on to deride Comey as a grandstander and a showboat. 

Comey is an institutionalist, and he understood from the outset that, notwithstanding his 10-year appointment, he served at the pleasure of the President, and could be dismissed at any time. It seems likely that if Trump had dismissed him with the respect and decorum due a person of his stature, Comey would have exited the stage quietly and let his successor deal with Russia, Vladimir Putin and Donald Trump. In contrast with LBJ's acknowledgement that it is best not to pick a fight with a man who has the capacity to retaliate, Trump has gone out of his way to pick a fight with Comey.

Trump seems to believe that he can defeat Comey one-on-one in the court of public opinion, but he has a tin ear when it comes to understanding the consequences of his own declining personal credibility. His only contact with the public is his campaign rallies, where his adoring supporters mislead him into believing that he has his finger on the pulse of the nation, and that the only problem he has is with Democrats who remain embittered over the election outcome. His problems, however, go much deeper than that.

Trump Rally: Harrisburg, PA. Plenty of empty seats.
The Quinnipiac Poll released this week showed a continued decline in Trump's poll numbers, with his generic job approval rating down to 36% job approval, with only 33% of those polled believing he is honest. The Republican Congress represents Trump's Maginot Line against whatever might transpire with respect to investigations into the Russia affair. Until now, Republicans in Congress have been terrified of crossing Trump and his supporters, but that fear will ebb as Trump's poll numbers decline and members look to protect themselves as their reelection in 2018 approaches. In a similar vein, Republicans in Congress cannot have missed the large number of empty seats at Trump's most recent rally in Harrisburg, Pennsylvania. Those empty seats mirrored the 10% decline in support among the Trump base evidenced in the Q-poll.

LBJ's admonition threatens to loom large over the coming weeks. By firing Comey, Trump has accomplished the opposite of what he intended; he put the Russia investigation on the front burner, and he has done so at a moment when his hold over Republicans in Congress is beginning to wane. By his own actions and insults, he has made an enemy of the man who knows the details of that investigation better than anyone. And he has removed any obligation for James Comey to keep what he knows to himself. Revenge, as they say, is a dish best eaten cold, and it is hard to imagine that Comey is not going to make Trump regret his words.

Follow David Paul on Twitter @dpaul.
Artwork by Jay Duret. Check out his political cartooning at Follow him on Twitter @jayduret or Instagram at @joefaces.

Wednesday, May 10, 2017

George Washington's fateful warning.

Perhaps there is no polling on deep yearning, but a fair share of American had to have watched the French election that culminated on Sunday with a sense of sadness. Faced with declining popular support for the mainstream conservative and liberal political parties, and a rising threat from the far right, those mainstream political parties came together to support a moderate centrist alternative. It could not happen here.

Early last year, as he considered launching his independent bid for the presidency, Emmanuel Macron, the former investment banker and government finance minister who is now the President-elect of France, looked at a political landscape that was not so different from ours. The demographics of discontent--stemming from globalization and immigration--and resentments of urban elites in France, mirror those that culminated in the rise of Donald Trump. French politics--like ours--had historically been dominated by traditional center-left and center-right political parties that had lost their luster, while--as across Europe--an energized nationalist populism was growing on the right. 

Against that backdrop, Macron ran a stridently centrist campaign: pro-trade, pro-Euro and pro-European Union. In the first round of voting, he won 24% of the vote against a field that included candidates from the major parties and Marine Le Pen, of the right-wing National Front. He then defeated Le Pen 66% to 34% in the second round run-off. 

The closest parallel in our politics might be Michael Bloomberg. An economic conservative and social liberal, Bloomberg took a long look at the growing dysfunction of our politics--and the yawning chasm of dissatisfied voters stranded between a Democratic Party that has headed to the left and a Republican Party that has long veered to the right--and in 2016 he considered an independent bid for the presidency. 

But we are not France; ours is winner take all system--for the most part--on a state by state basis. We do not have a provision for run-off elections among the top two finishers that might allow an independent challenger to build an alignment of moderates from both parties, as took place in France. As Marco Rubio observed when he explained why he was endorsing Donald Trump--a man whom Rubio had railed against as a fraud and a con man--our system forces a binary choice on Election Day, when the animosities engendered by the political parties come into vivid relief and ultimately rule the day. Against that backdrop, Bloomberg decided not to run. 

In his Farewell Address, George Washington reflected on the destructive consequences of party politics. "The alternate domination of one faction over another, sharpened by the spirit of revenge... is itself a frightful despotism... It serves always to distract the public councils and enfeeble the public administration. It agitates the community with ill-founded jealousies and false alarms, kindles the animosity of one part against another."

But for the idiom of the day, Washington's words could have been written this week. The frantic drive to repeal Obamacare, on display over the past month, has been nothing if not sharpened by the spirit of revenge, distracted public councils, ill-founded jealousies and false alarms. House Republicans finally came together to pass legislation that had no grounding in either sound policy or politics--it was driven simply by a misguided sense of party loyalty.

Republicans have been promising to repeal and replace Obamacare for seven years. What has been unclear from the outset is how much of the repeal and replace urgency was driven by hatred of the law itself, and the changes to health insurance markets that it engendered, or simply hatred of Barack Obama himself. Public polling over the years has shown greater public support for the Affordable Care Act than for Obamacare--two different names for the legislation--suggesting that opposition to the Affordable Care Act among the Republican base might not be as strident as many in the GOP came to believe it was. 

The oddity of the Trump presidency has been the willingness of Republicans to follow him in lock-step, even if the loyalty only goes one way. House Republicans acceded to Trump's demand that they take a second shot at passing repeal and replace legislation, even as many saw rising anger among their constituents as it became apparent that the proposed legislation might undermine their access to health insurance. For Trump, it was not about the details of the legislation, but rather about having a televised Rose Garden event where he could tout his victory. And if the price of a Rose Garden ceremony is greater suffering among his supporters in eastern Kentucky or the upper peninsula of Michigan--or even the loss of GOP control of the House--that is a price he is willing to pay.

The firing of Jim Comey is going to escalate the demands of party loyalty to new heights. As with the healthcare vote, the President will demand party loyalty on an issue that benefits him alone, and could easily damage the political futures of those who accede to his demands. Few in the GOP can truly have believed Trump's initial explanation that he fired Comey because of Comey's conduct of the Hillary Clinton email investigation, and evidence is increasingly pointing to the original sin of the Trump campaign: Russia. Republicans in Congress may not know what happened with respect to Trump campaign collaboration with Russia in its efforts to influence our presidential election, but they do know that Donald Trump wants those investigations to stop, and he needs their help to make that happen.

The ball now rests firmly with Republicans in Congress. Marco Rubio never relented on his conclusion that Donald Trump is a con man and a fraud, he simply embraced Trump as his party's con man and fraud. With the firing of James Comey, however, Rubio and his brethren will have a tougher assessment to make. As George Washington warned, party politics can lead people down a precarious path, where loyalty to party overwhelms loyalty to country, "and sooner or later the chief of some prevailing faction, more able or more fortunate than his competitors, turns this disposition to the purposes of his own elevation, on the ruins of public liberty." Two hundred thirty years later, Washington's words ring true.

In France, with its different election structure, two largest political parties set aside their differences and turned their energy toward the election of a centrist, rather than risk the rise of a right-wing populist demagogue. Donald Trump has made no secret of his disdain for our nation's political institutions and the constitutional separation of powers, and he has shown little tolerance for those who take an independent stance against his own interests--legal, political, financial or otherwise. At some point, Republicans in Congress will come to realize that their blind loyalty is a fools errand; Donald Trump has no interest in them, in their goals, in their reelections, or in their party. He has taken their measure, and he has decided that they do not have the courage to defy him. They are but means to his ends. As long as that remains true, both they and the nation, as George Washington foresaw, may pay a terrible price.