After the Amtrak Crash: Finding the Money to Fix Our Infrastructure
The Amtrak derailment in Philadelphia that left six people dead and dozens more injured has already prompted calls for increased infrastructure spending. "This one is a wake-up call," New York City Mayor Bill de Blasio said Wednesday on MSNBC’s Morning Joe. "We have got to get serious about investing in infrastructure."
There have been other wake-up calls before, and the dire need for infrastructure renewal isn’t news. Yet, as Politico’s Kathryn A. Wolfe reported, the deadly crash occurred just as a House panel was set to mark up a bill that would cut Amtrak’s funding for 2016 to $1.13 billion, or about $250 million less than the railroad service typically gets. (To be fair, it’s also not clear at this point what caused the horrific Amtrak derailment and whether infrastructure problems played a part or not — and the number of rail accidents each year has actually fallen significantly since 2006, according to Federal Railroad Administration data.)
Related: At Least 6 Die in Philadelphia Train Derailment, Scores Hurt
Even before the Amtrak tragedy, though, de Blasio and Oklahoma City Mayor Mick Cornett, a Republican, along with some two dozen other mayors were scheduled to travel to Washington, D.C. today to press Congress for a long-term renewal of the federal transportation authorization bill. The current funding law is set to expire May 31.
Pretty much everyone agrees that it’s well past time for the country to repair and rebuild its dangerously dated bridges, roads, railways, water mains and other critical infrastructure. The hold-up has always been over how to fund it.
Here’s one suggestion: The U.S. has spent some $110 billion on rebuilding Afghanistan, including billions that can’t be accounted for or that the inspector general has found have been wasted. That’s a drop in the bucket compared to the trillions in domestic infrastructure spending that some have called for. Still, clamping down on that waste in Afghanistan, and on other money being frittered away, might allow for some spending to be redirected to other necessary and more productive needs, like domestic infrastructure.
That’s not to suggest we must entirely abandon nation building abroad in order to rebuild this country. It’s just to point out that Congress should be able to find the money to address our national priorities, something it has miserably failed to do of late.
Majority of Tax Cuts Going to Filers Earning More Than $100K: JCT
Ahead of a House Ways and Means Committee hearing scheduled for Wednesday, the Joint Committee on Taxation prepared an analysis of the distributional effects of the 2017 Republican tax bill. The New York Times’ Jim Tankersley highlighted the fact that according to the JCT analysis, about 75 percent of the individual and business benefits of the tax cuts will go to filers earning more than $100,000 in 2019. And nearly half of the benefits will flow to filers earning over $200,000.
The Trump Budget's $1.2 Trillion in 'Phantom Revenues'
President Trump’s 2020 budget includes up to $1.2 trillion in “potentially phantom revenues” — money that comes from taxes the administration opposes or from tax hikes that face strong opposition from businesses, The Wall Street Journal’s Richard Rubin reports, citing data from the Committee for a Responsible Federal Budget. That total, covering 2020 through 2029, includes as much as $390 billion in taxes created under the Affordable Care Act, which the president wants to repeal.
The $1.2 trillion in questionable revenue projections is in addition to the White House budget’s projected deficits of $7.3 trillion for the 10-year period. That total is itself questionable, given that the president’s budget relies on optimistic assumptions about economic growth and some unrealistic spending cuts, meaning that the deficits could be significantly higher than projected.
Republicans Push Ahead on Medicaid Restrictions
The Trump administration on Friday approved Ohio’s request to impose work requirements on Medicaid recipients. Starting in 2021, the state will require most able-bodied adults aged 19 to 49 to either work, go to school, be in job training or volunteer for 80 hours a month in order to receive Medicaid benefits. Those who fail to meet the requirements over 60 days will be removed from the system, although they can reapply immediately.
The new work requirements include exemptions for pregnant women, caretakers and those living in counties with high unemployment rates and will apply only to those covered through the expansion of Medicaid under the Affordable Care Act. There are currently about 540,000 people on Medicaid in Ohio who receive coverage through the expansion, according to Kaitlin Schroeder of The Dayton Daily News, compared to roughly 2.6 million Medicaid recipients in the state overall.
Once implemented, the work requirements are expected to result in 36,000 people losing their Medicaid eligibility, according to state officials, though critics say the reductions could be significantly larger. Similar work requirements in Arkansas pushed 18,000 people off the Medicaid rolls in six months.
A larger GOP project: The creation of new work requirements is part of a larger effort by Republicans to limit the expansion of Medicaid, says The Wall Street Journal’s Stephanie Armour. Since the Affordable Care Act passed in 2010, 36 states have expanded their Medicaid programs under the ACA and the number of people in the program has grown by 50 percent, from roughly 50 million to about 75 million. But many red-state governors have expressed concerns about the cost of Medicaid expansion and worries about a lack of self-sufficiency among the able-bodied poor, and are embracing new limitations on the program for both fiscal and political reasons.
In 2017, the White House in 2017 gave states the green light to explore ways to limit the reach and expense of their Medicaid programs. Governors have proposed a variety of new rules, which require waivers from the federal government to enact. Kentucky, for example, wants to drug-test Medicaid recipients, and Utah wants a partial expansion and a cap on payments. Kaiser Health News summarizes the variety of waivers states have requested, which are governed by Section 1115 of the Social Security Act, in the chart below.
Legal challenges: Efforts to restrict Medicaid have received legal challenges, and U.S. District Judge James Boasberg blocked work requirements in Kentucky last year. The same judge, who has expressed doubts about the administration’s approach to Medicaid, will rule on the legality of work requirements in both Kentucky and Arkansas by April 1.
The bottom line: The Trump administration is seeking fundamental changes in how Medicaid works. Even if Boasberg rules against work requirements, expect the White House and Republican governors to continue to push for new limitations on the program.
Chart of the Day: Trump's Huge Proposed Cuts to Public Investment
Ben Ritz of the Progressive Policy Institute slams President Trump’s new budget:
“It would dismantle public investments that lay the foundation for economic growth, resulting in less innovation. It would shred the social safety net, resulting in more poverty. It would rip away access to affordable health care, resulting in more disease. It would cut taxes for the rich, resulting in more income inequality. It would bloat the defense budget, resulting in more wasteful spending. And all this would add up to a higher national debt than the policies in President Obama’s final budget proposal.”
Here’s Ritz’s breakdown of Trump’s proposed spending cuts to public investment in areas such as infrastructure, education and scientific research:
Chart of the Day: The Decline in Corporate Taxes
Since roughly the end of World War Two, individual income taxes in the U.S. have equaled about 8 percent of GDP. By contrast, the Tax Policy Center says, “corporate income tax revenues declined from 6% of GDP in 1950s to under 2% in the 1980s through the Great Recession, and have averaged 1.4% of GDP since then.”
