Monthly Archives: June 2017

The deficit is growing more quickly than Congress expected, setting the stage for a debt ceiling crunch

By Damian Paletta

The U.S. Capitol (Matt McClain/The Washington Post)

The U.S. government’s budget deficit is widening sharply this year, the Congressional Budget Office said Thursday in a report that could raise new questions about the tax cut package Republicans are trying to push on Capitol Hill.

CBO said the deficit would widen to $693 billion for the fiscal year that ends September 30. That is roughly 3.6 percent of gross domestic product, and would mark the largest budget deficit since 2013. In January, CBO projected the deficit would be $585 billion, of 2.9 percent of GDP.

The primary reason for the larger deficit is that the government is collecting less money in tax receipts than they expected.

The lagging receipts are likely one reason CBO also projected Thursday that the Treasury Department could run out of money to continue paying the government’s bill by early to mid-October if the debt ceiling — which is set by Congress — isn’t increased by then.

Treasury Secretary Steven Mnuchin, asked at a press conference Thursday about Congress acting on the debt ceiling, said of Congress, “for the benefit of everybody, the sooner that they do this, the better.”

Because the government runs a budget deficit — it spends more money than it brings in through revenue — the Treasury Department borrows money by issuing debt to cover the difference. But it can only issue debt up to a certain level set by Congress. Treasury Secretary Steven Mnuchin has said his agency has enough money to pay the bills through September. CBO’s estimate was slightly different, though it warned that Treasury had a $81 billion payment to military pension funds on Oct. 3 that could be difficult if cash reserves run low.

CBO said the reason the deficit grew more rapidly than expected this year is because tax receipts are only expected to …read more

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Teen kills boyfriend in failed YouTube stunt

A Minnesota woman killed her boyfriend Monday by shooting at a book he was holding over his chest, in a YouTube video stunt gone wrong. Monalisa Perez,19, was attempting to make a viral video with boyfriend Pedo Ruiz III, 22, to post to their YouTube account, according to a Norman County Sheriff’s Department arrest report.

…read more

Source:: CNN US News

How Trump is a little bit right and a lot bit wrong about Medicaid

By Damian Paletta and Carolyn Y. Johnson

President Trump on Wednesday said that the Republican plan to change Medicaid would lead to an increase in spending, not a cut, accusing Democrats of having “purposely misstated” the facts.

In a literal sense, he’s right. The total amount of money spent on Medicaid under the Senate Republican plan would grow, albeit slowly, from 2017 to 2026.

Democrats purposely misstated Medicaid under new Senate bill – actually goes up. pic.twitter.com/necCt4K6UH

— Donald J. Trump (@realDonaldTrump) June 28, 2017

But the accounting he uses to show Medicaid spending is wildly divergent from the way budget analysts, policymakers and many lawmakers account for spending levels. Medicaid spending under the Republican plan would not increase when accounting for the inflation of medical costs. In fact, it would mark a “a reduction of $772 billion in federal outlays for Medicaid” over 10 years compared with what would happen if the Senate bill is not enacted into law, the Congressional Budget Office said Monday.

In his Twitter post, which marks one of the only times he has weighed in on Medicaid since becoming president, Trump adopts an argument made many times by his budget director, Mick Mulvaney. Mulvaney has said that any absolute increase in government spending, regardless of inflation, should be considered an increase. This, however, is often not how government budgets are tabulated. Government budget officials look at what would happen under existing law, a process they consider setting the “baseline,” and then factor in whether a new proposal would increase or decrease that baseline.

Viewed through that lens, here’s how Trump’s chart looks.

The Senate Republican bill would, among other things, propose setting caps on Medicaid spending and then only increasing those caps by a measurement of inflation that increases more slowly than medical cost increases.

For example, Medicaid spending under existing law …read more

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Trump’s health care promises are coming back to haunt him

By Damian Paletta

Donald Trump greets supporters after a rally at Ladd-Peebles stadium on Aug. 21, 2016, in Mobile, Ala. (Mark Wallheiser/Getty Images)

President Trump was swept into office by a populist wave enthralled by his promise of better jobs and a tax cut for the middle class.

But in his first major legislative effort, changing health care laws, he is faced with a bitter populist backlash that has splintered the Republican Party and put his entire agenda on the ropes.

The Senate’s health care bill, which was put on hold Tuesday, would repeal parts of the Affordable Care Act, cap future spending on Medicaid, and cut roughly $700 billion in taxes over 10 years.

Some of these tax cuts would benefit primarily the wealthy, because their capital gains rates would be lowered. And the Medicaid cuts would disproportionately impact the poor, as it is a program run by states and the federal government delivering health benefits for low-income Americans.

The bill would also, according to the Congressional Budget Office, lead to 22 million fewer people having health insurance after 10 years.

When Trump campaigned, he vowed to protect Medicaid from cuts and his top advisers said they would not pursue tax cuts that allowed the wealthy to reduce the overall amount of taxes they pay.

But the House and Senate health care bills reverse both of those pledges. The bills are roundly opposed by Democrats, but Tuesday saw major cracks in the Republican Party’s support, at times invoking arguments often made by Democrats that the bill would help the wealthy at the expense of everyone else.

Sen. Rob Portman (R-Ohio) said he continues “to have real concerns about the Medicaid policies in this bill, especially those that impact drug treatment at a time when Ohio is facing an opioid epidemic.” Sen. Shelley Moore Capito (R-W.Va.) made a similar …read more

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