How true populists should think about Trump’s ‘big beautiful bill’

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The writer is an American -chief economist, the author of the American COMPASS, and writes the newsletter for understanding America

The increasing deficit and tax cuts put the Republican party in the end of the Republican in an unenviable position. Simply extend all tax cuts that add trillion dollars from debt. However, since the party has become more harmonious with the interests of the working class, the deep spending cuts that it traditionally defended along with low tax revenues have become less acceptable. The proposed cuts to Medicaid, the program that provides health care for the poor, has become the central point in the clash.

The copy of the beautiful bill of bill, Donald Trump, approved by the Republicans in the House of Representatives, is closely related to the old playing book, which reduces revenue by about $ 4 billion over a period of 10 years and seeks to alleviate the impact of the deficit through a set of discounts on spending, in the first place a reduction of $ 800 billion in spending on Medicaid. The proposed Medicaid cut in the Senate will be deeper.

Some members of congress and conservative commentators have expressed strong opposition to these discounts, led by senator Josh Holie, who calls the approach “moral error and political suicide.”

This is the wrong battle. The inevitable reality of the American financial crisis, in which payments of the highest benefits exceed the growing deficit and debt now defensive spending and the payment of deficit and debt to the top, is that Congress will need to increase taxes significantly, and significantly reduce spending or both in moderation if he wants to crawl in the budget.

The traditional republican approach to reducing spending and using savings to pay the largest tax cuts, and focus the pain at the bottom of the income ladder and gains at the top while leaving the deficit higher than before, is actually wrongly wrong and politically suicide. But this lives in the budget, Verayland, trying to completely reject the preferences, which follows unimaginable tax cuts while evacuating the need to spend discipline. Upon bankruptcy from the country, it should go without saying, does not serve the working class.

What conservative populists can do and they must do is to seek financial responsibility, but they pay various barters. Spending cuts towards the intended purpose: reduction in disability, not tax cuts. Tax rates must rise, and not to decline – for less affected by spending discounts and most able to afford their costs.

And when it comes to spending discounts, medicaid should already be on the table. The cost of the program has increased faster than social security or social security over the past 25 years. It has doubled as a share of gross domestic product during spending on other income security programs that has decreased during the same period.

The main problem is not the goal of providing health care to the poor, but in the mathematical medicaid structure. Each state decides its own coverage features, then receives a matching federal money. It is not surprising that the countries have deviated from their own budgets towards this spending, outside the scope of decreasing returns. In fact, the results of the best random experience controlled by Medicaid coverage, which was published in the New England Medicine Journal in 2013, found that “no significant improvements in the results of physical health measured in the first two years, but increased the use of health care services.”

The provider tax, specifically developed by the Senate, is the perfect clarification. The countries raised the fees they pay to the introductions through Medicaid and offered taxes to restore higher payments. Paying the provider may seem $ 110 instead of $ 100, then collect an additional $ 10 in the tax, but if the federal government covers half of the fees and $ 55 from Washington instead of $ 50. Suffice it to say, this does not improve the care of patients.

Does the restriction of this practice affect the benefits? It may mean less resources that flow to the country less than going to health care. But the absolute opposition of any arbitrary discounts, not initial. If the provider’s tax loophole does not exist, will the populists press for its creation for voters? The situation cannot be that more spending is always better.

The determined politicians must raise the interests of workers to demand the control of Congress and that everyone shares the burden. The modest spending discounts in programs such as Medicaid, associated with a modest increase in prices to the highest tax brackets, will be a good way to start. The Treasury and Treasury Secretary, Scott Besent, indicated their openness to raising taxes to the owners of the observers. The real populist will not accept anything less.