The federal government’s newly enacted budget is a massive “omnibus” act that spends $1.3 trillion and makes some members of Congress pleased and others angry. It’s a document that reflects a broken budget system. And, at the same time, it’s a business-as-usual document in a presidential administration that has promised structural change.
“There are a lot of things I’m unhappy about,” President Donald J. Trump told reporters at the White House Diplomatic Reception room. “But I say to Congress, I will never sign another bill like this again. Nobody read it, it’s only hours old.”
But the negotiations were not hours old. The back and forth between Democratic and Republican lawmakers was essentially a year late. This spending bill only funds the federal government between now and the end of September. But the process took so long because neither side had enough votes to pass the document on their own; Republicans needed votes from Democrats and to get those votes there had to be deals. Lots of deals. Business as usual.
And business as usual is good for Indian Country. Federal Indian programs, some of which had been slated for either elimination or deep cuts, continued on course.
The omnibus spending bill increases funding for the Indian Health Service by 10 percent, and the Bureau of Indian Affairs and Bureau of Indian Education by 7 percent to $3.064 billion. The IHS budget line s $5.5 billion. When the budget is compared to the president’s request, the increases are even sharper, more than 16 percent for the IHS and 23 percent for the BIA.
The bill includes a 3 percent set aside for Indian tribes within the funds available under the Victims of Crimes Act. The cap for these funds was set at $4.4 billion, which amounts to $133 million. As Ebarb wrote: “This is an important step forward for Indian Country, which has the highest rate of criminal victimization and had up until this point been left out of this funding. This funding will address the long standing inequity and meaningfully improve the landscape of victim services in Indian Country.”
The bill provides $50 million for grants to Indian tribes or tribal organizations to address the epidemic, and $5 million for tribes in the Medication-Assisted Treatment for Prescription Drug and Opioid Addiction program.
Infrastructure spending would increase for BIA and IHS construction, BIA road maintenance, and a $100 million competitive grant program is added under Native American Housing Block Grants in addition to the $655 million provided for the NAHBG formula grants.
President Trump said he signed the bill into law because it increased military spending. “I looked very seriously at the veto. But because of the incredible gains that we’ve been able to make for the military, that overrode any of our thinking.”
(The National Congress of American Indians is the owner of Indian Country Today and manages its business operations. The Indian Country Today editorial team operates independently as a digital journalism enterprise.)
Mark Trahant is editor of Indian Country Today. He is a member of the Shoshone-Bannock Tribes. On Twitter: @TrahantReports (Cross-posted on TrahantReports)
Congress did its job: The federal government’s budget is done. The last step was President Donald J. Trump’s signature and so now the government marches on. At least for the rest of this year, until the end of September.
But the White House said Friday that the president may veto the budget because there is not enough funding for a border wall or a solution for the so-called Dreamers. This is after the president assured House and Senate leaders that he would sign the measure into law.
A veto would mean the federal government would shut down at midnight and Congress would have to start a new round of budget negotiations. This will be even more complicated because many lawmakers have left Washington for a two-week recess.
There will be intense pressure from some Republicans for the president to sign this budget into law anyway.
Budgets are a guide to priorities: What programs are more important? Where is the support from Congress and from the people? Did the president get what he wanted?
That last question is the easy one. The money for the budget wall was minimal, at best.
It’s fair to say the administration’s budget was soundly rejected by a Republican Congress. Sure, Democrats contributed a great deal to this budget (and Democrat votes were required to make it so,) but even before that occurred, majority-party lawmakers were dismissing the harsh budget program changes sought by the president.
The president’s team had all kinds of ideas: Deep spending cuts, the elimination of public broadcasting, replace Medicaid with block grants, and, yes, even deeper spending cuts. Yet Congress enacted a budget that increased federal spending both for the military and domestic programs. It’s Congress, not the president, writing the checks.
How bad was the president’s budget? The National Congress of American Indians put it this way in recent testimony: “The president’s budget would cut the Bureau of Indian Affairs by about half a billion dollars, or 15 percent. BIA Social Services would be reduced by more than a third, Indian Child Welfare by more than a quarter, and critical human services programs, law enforcement and courts programs, environmental protection, housing, and education programs would face unconscionable reductions. Infrastructure programs, such as the Indian Community Development Block Grant would be eliminated, and the Indian Housing Block Grant and road maintenance would be reduced.”
Instead, Congress added dollars and protected programs that the White House sought to eliminate.
“This bill represents real progress for Indian Country, significantly increasing our investments in Native health care, infrastructure, economies, and communities. It rejects the president’s dangerous proposed budget cuts and instead provides funding increases that will lead to healthier communities and better outcomes across Indian Country,” said Sen. Tom Udall, D-New Mexico, in a news release. Udall is vice chairman of the Senate Committee on Indian Affairs and ranking member of the Appropriations Subcommittee on Interior, Environment, and Related Agencies.
The omnibus spending bill would have increased funding for the Indian Health Service by 10 percent, and the Bureau of Indian Affairs and Bureau of Indian Education by 7 percent to $3.064 billion. The IHS budget line is $5.5 billion.
Conservatives were not happy with the additional spending in the omnibus bill. “Republicans control the government, yet Congress still follows the Democrats’ playbook,” Sen. Rand Paul, R-Kentucky said. “Time and again, spending skyrockets, and conservatives are expected to fall in line to praise the party for making the big-spending status quo worse.”
However Rep. Tom Cole, R-Oklahoma, a member of the House’s leadership team praised the legislation. “Despite divisions, both sides of the aisle have the responsibility to deliver this legislation for the American people so that the federal government runs efficiently and effectively,” Cole said. “Neither side got everything it wanted, but the end product reflects a broadly supported compromise. A majority of Republicans and Democrats voted for this bill. President Trump urged its passage and has promised to sign this legislation. As we begin to consider funding for Fiscal Year 2019, it is imperative that Congress remain committed to the return to regular order in the appropriations process.”
The president will decide in the next few hours whether or not he got enough of what he wanted.
(The National Congress of American Indians is the owner of Indian Country Today and manages its business operations. The Indian Country Today editorial team operates independently as a digital journalism enterprise.) Mark Trahant is editor of Indian Country Today. He is a member of the Shoshone-Bannock Tribes. Follow him on Twitter @TrahantReports (Crossposted on Trahant Reports.)
UPDATE: The House of Representatives passed the $1.3 trillion fiscal 2018 omnibus appropriations bill. Thursday. The vote was 256-167. Next up: The Senate will vote on the measure.
Congressional leaders have agreed to a massive $1.3 trillion spending bill to fund the government for the remainder of this fiscal year. The House and Senate must still vote on the measure. The text of the 2,232 page bill was released Wednesday at 8 p.m.
The spending bill, which followed an overall agreement last month, increases spending for most domestic programs, including more than $3 billion for the Bureau of Indian Affairs and $5.5 billion for the Indian Health Service. Other line items include increased funding for tribes for the research and implementation of the Violence Against Women Act and renewed funding for the Special Diabetes Program for Indians.
House Speaker Paul Ryan said the legislation also “fulfills our pledge to rebuild the nation’s military. We are delivering the biggest increase in defense funding in 15 years.”
That includes a pay raise of 2.4 percent for military personnel — and an increase of 1.9 percent for most federal civilian employees.
The legislation would significantly boost funding for programs that deal with the opioid epidemic. “With nearly $4 billion, the funding bill makes the largest federal investment to date for fighting the opioid epidemic, which the president has declared a national emergency,” Ryan reported on his House web page. “It includes funding for treatment, prevention, and law enforcement programs that help save lives and stem the spread of this scourge.”
The spending bill includes $1.57 billion for President Donald J. Trump’s border wall as well as an increase for immigration enforcement, including additional law enforcement.
The House could vote on the measure as soon as Thursday (waiving a requirement for members to get at least three days to review the language of the legislation).
The Senate vote could come Friday, however, one senator could slow the process down because of rules that require unanimous consent. This would result in another, short government shutdown at least over the weekend. Sen. Paul Rand, R-Kentucky, did just that last month.
He has not said what action he will take on this spending bill, but he tweeted this morning: “It’s a good thing we have Republican control of Congress or the Democrats might bust the budget caps, fund planned parenthood and Obamacare, and sneak gun control without due process into an Omni…wait, what?”
Mark Trahant is editor of Indian Country Today. He is a member of the Shoshone-Bannock Tribes. On Twitter: @TrahantReports
Davids, 37, is a member of the Ho-Chunk Nation. She has a Ready-for-Congress resume. She is an attorney, a Cornell Law School alumna, a White House fellow during the Barack Obama administration, the former deputy director of Thunder Valley Community Development Corporation in Porcupine, South Dakota, and, this is something that could definitely help the Congress, she once founded a coffee company, Hoka Coffee in Pine Ridge.
She began her campaign on Feb. 15. In a tweet, Davids cited an urgency for Congress to act to stop gun violence, singling out the current member of Congress in that district, Rep. Kevin Yoder. “We need more than condolences from legislators. We need swift legislation for commonsense gun safety reform. We can’t allow lawmakers, like Rep. Yoder, who accept big money from the gun lobby to continue sacrificing our safety in exchange for campaign contributions.
The Kansas City Star noted that if elected she would be the first female Native American to serve in Congress and the first openly gay member of the Kansas delegation. “Until it got pointed out to me it wasn’t necessarily part of my thinking, but the gravity of it really hit me recently,” Davids told the Star. “It’s amazing how long we’ve been in a country, but we’re still having firsts.”
Davids posted this on her web site: “I am proud to call myself a Kansan. But I have been disheartened by the way our district has been represented in Congress. We deserve a voice who represents our values and interests … As the daughter of a single mother Army veteran, I know the importance of determination and service to country. As a woman and a Native American, I know how to stand up and fight for equity. As a lawyer, economic advisor, and advocate, I know how to build consensus and get things done.”
This is the year where women are breaking campaign records across the board. More women than ever — 400 plus — are running for Congress as a referendum on President Donald J. Trump and his policies. There have been 12,244 people elected to Congress since 1789. The first woman, Jeanette Rankin of Montana, was elected in 1916 and since then only 327 women (about a third of whom are serving now) have won a seat in the U.S. House or Senate.
Davids, and most of the other Native American women running for office, are running in competitive primary races. That means they need the resources *cough* money *cough* early in order to have a chance. Davids’ primary election is in August.
Kansas’ 3rd Congressional District includes Kansas City and some of its suburbs as well as much of eastern Kansas. The district “leans” Republican. Yoder won the seat last election with a margin of more than ten points, 51 percent to 40 percent for the Democrat.
It’s time to look at the money. How much money are #NativeVote18 candidates raising?
Yes, I know, this is a silly metric. After all there is no relationship to governing and calling up people you don’t know and asking them for money. Yet this is the system in place. A candidate is more likely to be successful if she or he can raise a lot of money.
So it’s no surprise that the big money collectors — even in Indian Country — are the ones who already hold office or who have held office recently. And it’s probably no surprise that the big money is headed down Republican alley.
The top money raiser is Rep. Tom Cole, R-Oklahoma. The latest Federal Election Commission reports were posted at the end of January and reflect fundraising for 2017. His net: $1.7 million, cash on hand.
Several tribes donated the maximum amount to Cole’s campaign. Oklahoma tribes, such as his own, the Chickasaw, and the Cherokee Nation, backed Cole as well as tribes from across the country ranging from Penobscot to Stillaguamish.
Some of the contributors have different agendas. Tribes, for example, support Cole because of his strong stands on tribal sovereignty. Yet the American Dental Association, another contributor, has worked against that very issue by challenging the tribes right to regulate mid-level dental practices. (Previous: Tribal sovereignty and the call for better oral health.)
Washington congressional candidate Dino Rossi comes in second for fundraising last year, netting a little more than a million dollars. This is remarkable when you consider he was not even a candidate until September. Rossi is Tlingit and Italian.
As I wrote in September: “One of his first jobs was working for Bernie Whitebear at Seattle’s United Indians of All Tribes. It’s interesting how some candidates make their tribal affiliation prominent and weigh in on issues that impact Indian Country. That would not be Rossi. But he doesn’t shy away (as many politicians do) from the conversation. It’s just not his focus.”
His campaign finance report bears that out. You won’t find a lot of tribal money.
The top Democrat for fundraising this cycle is Debra Haaland running in Albuquerque. She ended the year just shy of $200,000 in cash. Haaland, of course, and I can’t write it often enough, would be the first Native American woman ever elected to Congress. She’s running in a district that favors Democrats but she must win the primary first against seven other candidates. So far Sedillo Lopez, a former associate dean at the University of New Mexico Law School, has raised some $456,000 and reports $348,000 in cash on hand. Haaland has raised a total of $386,000 in contributions.
There is a huge difference between Haaland’s fundraising and Cole’s money. Most of her contributions come in $10 and $25 chunks. Small money. But that’s important because it could reflect interest by real voters instead of tribes and Political Action Committees and business interests. She does get some money from tribes, including her own, Laguna Pueblo, but not nearly as much as is found in Cole’s treasury.
The race for Oklahoma’s second congressional district could become the first election between two tribal members, the incumbent, Rep. Markwayne Mullin, and his challenger Tahlequah Mayor Jason Nichols. Both men are Cherokee.
But so far on the money side it’s not much of a contest. Mullin raised about $725,000 last year, netting $434,333.37. Nichols raised $17,575.52 and ended with $8,287.30 cash on hand.
The trick in any campaign is to raise as much money as needed to be competitive. That doesn’t always mean first. But it does mean having the resources to compete in media advertising, including social media, hiring staff, and organizing.
Several #NativeVote18 candidates showed no fundraising in the FEC reports. It could be because there fundraising is scant, or ramping up later, or because reports have not been filed yet.
The government is in its official shut down mode. And it’s a fight that has been brewing for a long time. It’s complicated because there are several different congressional factions, think of them as mini-political parties, that have different goals.
Remember this: The Republicans are in charge. This process could have been resolved within the caucus — if the GOP leadership had the votes. Back in September. And that’s the main problem. There are not enough votes for an affirmative solution. It’s so much easier for one faction or another to say “no.” (The House did pass their latest, short-term version with the support of the so-called Freedom Caucus. But several Senators in the Republican camp are still not on board because that solution doesn’t send enough money to the military and still other senators are not happy with another Continuing Resolution for any additional spending.)
Democrats have not had much say in the government since the election of Donald J. Trump as president. Senate leaders have used budget rules designed to pass legislation with 51 votes. But this short-term spending bill does not qualify — at least for now. More on that shortly.
There are three things on the Democrats’ “must” list. They want domestic spending protected (remember, one GOP faction wants deep cuts into government spending). Party leaders have been successful doing this with every Continuing Resolution so far because the alternative is the Budget Control Act and that would require deep cuts to the military (as well as domestic programs). Because of this threat, the faction in Congress that supports more money for the military has been willing to work with Democrats.
Democrats also want funding for the Children’s Health Insurance Program or CHIP. That is a huge program for Indian Country (along with Medicaid) pays the health care costs for more than half of all American Indian and Alaska Native children in the Indian health care system.
The CHIP program is in the House Continuing Resolution. But, as the National Indian Health Board posted last week, the House bill “does contain a 6-year reauthorization for the Children’s Health Insurance Program but does not include the Special Diabetes Program for Indians. This is a huge miss. The Special Diabetes for Program for Indians expires March 31. The ideal solution would be for the Senate to include both CHIP and the diabetes program in any deal that’s made with the White House.
The bill also does not fund Community Health Centers which could lose up to 70 percent of their budget.
The final sticking point for the Democrats is protecting the people who were brought to this country by their parents or other adults unlawfully as children. This issue is interesting because nearly everyone sees the value in finding a solution to the problem because the United States is their country in all but paperwork. Yet even the rhetoric is changing. A few days ago Republicans were talking about agreement on this point. Today the language is harsh, Republicans saying Democrats are trying to “protect illegal aliens.”
But the Senate bill that the president rejected was bipartisan. Immigration hardliners did not want the deal, even though it would have increased funding for the wall, because it was too lenient on Dreamers. The White House represents the most conservative element on immigration issues.
Of course none of these issues are new. But Congress has not had the votes to pass any plan. So the solution has been short-term spending bills. This government shutdown is about ending that stalemate, resolving the debates, and moving forward.
That said: Don’t be surprised if another “deal” is another short-term pass. But the goal is to force Congress into a real debate. Big picture stuff. (Yeah, right. I know, but I had to write it anyway.)
Rep. Tom Cole, R-Oklahoma, told National Public Radio that he doesn’t think “anybody’s going to negotiate very seriously with a gun to their head.” He said one of the problems is the Senate and the dysfunction over the “rule of 60.” Because of that, Cole said, the Senate hasn’t passed a single appropriations bill. “They didn’t do a real budget this year. The House did.”
The rule of 60 is the power of the minority to call for a filibuster. It takes 60 votes to end debate. President Trump took to Twitter Sunday to call for an end to that Senate rule. “Great to see how hard Republicans are fighting for our Military and Safety at the Border. The Dems just want illegal immigrants to pour into our nation unchecked. If stalemate continues, Republicans should go to 51% (Nuclear Option) and vote on real, long term budget, no C.R.’s!”
Of course Indian Country (and the economy) will be hit hard if this shutdown lasts very long. Lots of families, both government employees and contractors, could lose a paycheck.
The problem is we really don’t know exactly how the Trump administration will manage this particular closure. Some agencies, such as the Environmental Protection Administration, are using year-end funds to continue operation. The White House has posted a round up of agency plans. But we will know about the direct impact next week.
During the last government shutdown, 21-days that started on December 16, 1995, and continued to January 6, 1996, all 13,500 Department of Interior Bureau of Indian Affairs employees were furloughed; general assistance payments for basic needs to 53,000 BIA benefit recipients were delayed; and estimated 25,000 American Indians did not receive timely payment of oil and gas royalties,” according to the Congressional Research Service. The last time around furloughed employees were eventually paid. Eventually.
All told Standard & Poor’s estimated the U.S. economy lost $24 billion last time around.
The Indian Health Service and the Department of Interior posted planning memos in September about what is expected to happen. Basically: Many BIA employees will be furloughed, except for those that work in public safety or who are managers. However the Bureau of Indian Education will mostly continue working as normal.
Former Indian Health Service Director former IHS director Dr. Michael Trujillo told Congress that the government closure “caused considerable hardship within Indian communities. One result of staff furloughs was difficulty in processing funds for direct services and to contracting and compacting tribes so the delivery of health services could continue. Those staff that continued providing health services were not paid on time. Threats to shut off utilities to our health facilities and even to stop food deliveries were endured. We reached a point where some private sector providers indicated that they might not accept patients who were referred from Indian Health facilities because of the Federal shutdown.”
Correction: The chart I originally published was misleading. The CBO score for the tax bill (and most of the other measures) looks at the cost over ten years. Appropriations are made in a single year. So that made the tax bill appear more costly in visual form. I am working on a new version now, something that illustrates the downward pressure on federal spending but uses an apple-to-apple comparison. (I also added a sentence in the report below to stress that the tax cuts are measured over a decade.)
Funny thing: I was so intent on getting the area of the bubbles correct that I completely spaced the CBO’s measure of ten years as opposed to a single year for appropriations.
Two take aways. First. I still want to illustrate, visually, the downward pressure on the budget. The balloons I used were misleading, but the point remains the same. The pressure to cut is going to grow in intensity. Second: The reconfigured bubbles (which take up too much space because of their relationship) really show the problem of entitlement spending, such as Medicaid. That’s a whole different topic … but visually, wow.
Elections should be fought over policy not nonsense
Mark Trahant / Trahant Reports
Elections in America are usually fought over nonsense. Trivial topics. Stuff that grabs headlines. Or issues that remind voters why they are in Political Party A or B. (And for good measure there is always contention about the personality of a So So Candidate who does (or does not) connect with voters.)
This problem is particularly acute in the Trump era. The recent news cycle pits President Donald J. Trump versus Steve Bannon. The White House statement that Bannon “lost his mind” is attention grabbing. Our political minds want to know what this means for the next election and the Trump coalition (which still defies logic because it subtracts supporters, rather than reaching out and finding new ones).
But politics ought to be more about policy. What choices are being made in our name? What’s the best way to improve the lives of children, the next generation? How do we invest public resources, that means tax dollars, into making life better? These are questions that get far less attention than the latest presidential tweet.
Then the president and Congress have already set the rules for this debate when they passed tax cuts. Now, every act of Congress, every budget from the administration, will set out to justify (and pay for) that law.
This is the problem: The Congressional Budget Office predicts that the federal deficits will increase to $1.8 trillion over the next decade. “As a result of those higher deficits, debt held by the public would increase from the 91.2 percent of gross domestic product in CBO’s June 2017 baseline to 97.5 percent,” CBO said. That means that the annual budget deficit will be nearly equal to the entire economy.
But CBO is on the conservative side of this argument. The Committee for a Responsible Federal Budget warns that after adding interest costs the tax plan would be enough to “increase debt to 111 percent of gross domestic product … That would be higher than any time in U.S. history, and no achievable amount of economic growth could finance it.”
A federal debt that’s bigger than the entire economy. And, key phrase here, “no achievable amount of economic growth could finance it.”
Already leaders of the Congress — the same bunch who did proposed this tax legislation — are now saying the country cannot afford to spend money on social programs.
Congress gave corporations a tax break worth $1.3 trillion. And another $425 billion was rewarded to small businesses that pay their taxes on individual returns (so-called pass through taxes). On top of that (for desert, perhaps) the Congress gave the very wealthiest, those few who pay estate taxes on inherited wealth, a break worth $83 billion. Even though those numbers reflect a decade of revenue, it still means that many in Congress say there is not enough money to fund the government.
That’s a rotten framework. But it’s more complicated when you add one more layer: The Budget Control Act of 2011. That law was passed to limit Congress’ power to spend freely. It sets in place budget caps for domestic and defense spending. If the caps are exceeded, then an automatic sequester (remember that?) kicks in unless Congress passes a waiver. That deal linked spending for defense and domestic programs.
Now it’s a problem because the Republicans want to spend a lot more money on the Pentagon. They want that part of the budget to go up. But because it’s linked to domestic programs — such as those that impact Indian Country — that cannot happen without an agreement with the Democrats. Wednesday the leaders of both parties in the House and Senate met to try and make that happen. House Minority Leader Nancy Pelosi described the meeting as “positive and productive.”
Democrats, for once, have some power to bargain. More spending for defense cannot happen without their votes. (Republicans remain divided over all federal spending.) So Democrats are trying to see how much leverage they have and over what issues. It’s likely that domestic spending will be a part of any deal, and possibly the Children’s Health Insurance Program. Several Democrats, including Sen. Bernie Sanders of Vermont, have said they will not vote for any budget unless it includes a provision to protect immigrants who were brought to this country as children, the so-called Dreamers. (President Trump removed Obama-era protections for this group and it’s a moral imperative for Democrats (and many Republicans) to protect some 800,000 people from deportation. The Deferred Action for Childhood Arrivals, or DACA, began under President Obama.)
That’s a huge agenda. It’s likely that Congress will again push it forward past its deadline of Jan. 19. Even if there is a deal, say today, then the actual writing of the budget will have to go back to the Appropriations subcommittees to be put into legislative language. That will take time.
Federal spending on Indian Country ought to be in a different category, one that does not yet exist. There should be a line item for treaty obligations. Should.
So far the budget numbers are hard to know for federal Indian programs. The Trump administration’s budget was largely ignored. And the House and Senate committee numbers look lean, but fine. But the thing is until there is an actual deal, none of these numbers matter. After a deal each committee will have to go back and determine what money can actually be spent. If it’s a good deal, the numbers will stay the same or even improve. The alternative? No words.
Of course the bigger issue in Congress is about priorities. This Congress has already decided that tax cuts are the most important thing that had to be done. So every fight over the budget has to somehow go through that filter. There is not enough money because Congress is giving corporations $1.4 trillion so they can be more competitive and profitable. (Funny: thought they were both.)
As economist William G. Gale wrote for the Brookings Institute: “… tax cuts are not free; they eventually have to be financed with higher taxes or lower spending. And once those financing requirements are taken into account, most low- and middle-income households are likely to be worse off than they would have been without the tax cut in the first place.”
Worse off. Then Indian Country knew that before the tax bill ever reached the president’s desk.
Congress has yet to reenact the Children’s Health Insurance Program and states will soon run out of funds to prop up the program. That will mean that thousands of American Indian and Alaska Native children will lose their health insurance. And, the result is the Indian Health Service will have to stretch its already thin dollars to try and cover the budget hole.
The Children’s Health Insurance Program expired Sept. 30. This federal program insures young people and pregnant women who make just enough money not to qualify for Medicaid (but can’t afford private insurance). The idea is to make sure that every child has the resources to see a doctor when they are ill.
It’s hard to break down precise numbers because agencies lump funds from the Children’s Health Insurance Program or CHIP into Medicaid data. But we do know that the law worked really well. We also know there are more than 216,000 children that have health insurance because of Medicaid and the CHIP. Indeed, Native American children rely on Medicaid and CHIP at much higher percentages than other population groups. A study by Georgetown reported that 54 percent of American Indian and Alaska Native children were enrolled in Medicaid or CHIP as compared to 39 percent of all children. “Even though much progress has been made in extending Medicaid coverage to American Indians and Alaska Natives, the uninsured rate for American Indian and Alaska Native children and families remain unacceptably high,” the report said.
Overall the uninsured rate among non-elderly American Indians and Alaska Natives fell by 7 percentage points from 24 percent to 17 percent, according to the Kaiser Family Foundation.
This is a big deal and here’s why: The Indian Health Service is a health care delivery operation that works best when insurance (third-party billing in government-speak) pays for the medical costs. Medicaid, CHIP, Medicare, and other third-party billing now accounts for 22 percent of the IHS’ $6.15 billion budget.
But if Children’s health is no longer funded (because Congress did not reauthorize the legislation) then the Indian Health Service will have to make up the difference. That means taking money away from other patients and programs. It will be a critical problem for clinics because by law dollars from third-party billing (or Medicaid and CHIP) remain local.
Alaska is the state most impacted by Congress’ failure to act because two-thirds of the children in the Native health system are covered by Medicaid or CHIP. Other states where there will be significant hits: Montana, North Dakota, South Dakota, Washington, New Mexico, Oklahoma, North Carolina, and California.
The House of Representatives passed a CHIP reauthorization in early November. But that bill included a $6.35 billion budget cut to other health programs, including the Prevention and Public Health Fund, which provides money for vaccines, smoking cessation, and other initiatives to improve public health. The House would also ban lottery winners from being insured by Medicaid, tighten the timetable for people to sign up, and to change other rules.
It’s unlikely the Senate will agree. But the Senate is not moving quickly to pass its own legislation. The Senate is too busy working out tax cuts that will benefit large corporations and the very wealthy. (Previous post: What matters? Tax fight is about seven competing values.)
Across the country, some nine million low- and middle-income children rely on CHIP for health coverage. And, according to The Hill newspaper, States have asked the Centers for Medicare and Medicaid Services for funding to hold them over in the interim, and the agency has awarded about $607 million in redistributed funds to states and U.S. territories. Tribes will also lose hundreds of thousands of dollars in CHIP-related grants.
Last month, Utah Republican Orrin Hatch, who chairs the Senate committee responsible, called CHIP a “top priority” that had bipartisan support. The committee passed the bill October 2. But it’s up to Majority Leader Mitch McConnell, R-Kentucky, to bring the legislation to the floor for enactment. Then the House and Senate would have to iron out and agree on their differences before the bill can become law.
Why Indian Country should have a voice in this debate
Mark Trahant / Trahant Reports
There is no better way for any legislature — be it a tribal council, a state assembly, or a Congress — to telegraph what’s most important to a society than through tax policy. How a government collects revenue says what constituent groups are seen to matter. And, conversely, what groups and issues are insignificant. And, that of course, is Indian Country.
As Adrian Sinclair wrote in Cronkite News: “Indian Country once again does not have a seat at the table.” Tribes “aren’t treated the same as state and local governments across the board on a whole series of issues,” John Dossett, general counsel for the National Congress of American Indians, said after the hearing. “Tribes are … either ignored or they’re an afterthought.” He said there are many cases where state governments have more power than tribal governments, like the federal Adoption Tax Credit, which gives a credit to parents who adopt a child with special needs. But the credit only applies when a state court, not a tribal court, rules that a child has special needs.
So Indian Country is a perfect illustration for my larger point: A country’s tax policy shows what it values. The key to this idea is simple when a nation wants more of something, then taxes it less. And, other hand, if a nation wants less of something? Tax it more.
All interest on debt was deductible when the first income tax was created in 1894. Why? Because Americans did not like to borrow. It was almost immoral. As a writer for Harper’s Weekly warned a man in debt “must smile on those he hates, he must extend his hand where he would strike, he must speak pleasantly with a curse in his throat … He wears dependence like a yoke.”
But Congress made debt a better deal. You could borrow money for that new farm, or especially a home, and the government would subsidize the loan by making it a tax deductible transaction. By the 1920s car loans were the bigger deal. Americans were borrowing, buying and deducting. Congress created a monster with that policy and today debt is one of America’s great loves. Then in 1986 Congress switched gears: Today individuals can only deduct mortgage interest. But even that single benefit was generous. You could buy a big house. A bigger house. A ginormous house. And deduct 100 percent of the interest up to the cost up to $1.1 million of debt. And that tax deal includes second homes.
So as a policy the Congress was telling we the people buy bigger houses. And go ahead, get that second house in the woods or on the lake.
That’s what tax reform is, setting parameters for what the elected leaders think important for a national policy. So, if it becomes law, this tax reform will change the way we consumers spend money. Perhaps we’ll buy and build smaller houses and rent a cabin on the lake instead of purchasing one. This might be a good outcome for all of us. This is actually a pro-climate policy (please don’t tell Congress.)
This same priority process is true for renewable energy. Congress created incentives for wind, solar and other renewable energy. But, now the Republican plan is to reverse course, and reward oil, gas, and especially coal. Tax policy will favor fossil fuel development and renewable energy will therefore cost more. But will companies still invest? Who knows? We do know the calculations will be way more complicated. And, did I mention, renewable energy will cost more.
Let’s consider the overarching messages, the narrative, that will form policy in the tax bill before the Senate and the one already passed by the House of Representatives.
ONE: The bigger the corporation, the bigger the break
The tax bills paid by corporations are driving the legislation in both the House and the Senate. Republicans argue that if taxes are lower, companies will invest more in the United States (instead of other countries) and hire more people at higher wages. This debate is complicated because the current tax code is full of loopholes (something that Republicans say will be fixed). But the bottom line is that U.S. companies have a higher tax rate than what other countries charge, but, and this is huge, the companies actually pay less in federal taxes than what other other countries charge.
As the Harvard Business Review says: “First and foremost, corporate taxes are important because they help pay for government services. While they don’t account for as much U.S. tax revenue as they once did, they remain one of the central ways the government raises funds. According to the Tax Policy Center, “The corporate income tax is the third largest source of federal revenue, after the individual income tax and payroll taxes.”
The House bill cuts the top rate that large corporations pay from 35 percent to 20 percent. It would be the largest one-time drop in the big-business tax rate ever. And it’s a permanent change (the individual rates expire after a decade) at least until there’s another tax bill.
Companies will also get more deductions for purchasing new equipment. And there is an incentive for companies to move their profits back to the United States from low-tax countries.
The Senate bill is evolving. It also rewards big business. But in order to reduce the cost of the entire package, it delays reducing the corporate rate until 2019. (Imagine every business in the country holding off on just about any new activity because the tax laws changed next year.)
The metaphor: Multinational corporations rule.
TWO: It’s tough being rich
The New York Times’ Nicholas Kristof writes that it’s hard being a billionaire these days. “Why, some wealthy folks don’t even have a home in the Caribbean and on vacation are stuck brooding in hotel suites: They’re practically homeless! Fortunately President Trump and the Republicans are coming along with some desperately needed tax relief for billionaires.”
One way this works is be reducing the tax when someone inherits a wealthy estate. Both versions start this tax at $11 million. The House eliminates the so-called “death tax” in 2024 while the Senate keeps the tax but raises the exemption.
A second provision changes what’s called the Alternative Minimum Tax. The way that works is that after a tax return is completed, and there’s a whole slew of deductions, there is a calculation to see if that taxpayer should still pay something. The idea is to make sure that people earning more than $130,000 a year still pay an income tax, even if they find deductions in every corner. That goes away.
And there is one more goody for the rich. Charitable contributions can still be deducted.
The metaphor: Wealthy families so need our help. OMG.
THREE: Why work?
This part of the debate starts with the corporate tax rates. The Trump administration argues that cutting corporate taxes will benefit workers because companies will reward workers with better wages.
Treasury Secretary Steven Mnuchin claims that “many, many economic studies show that more than 70 percent of the burden of corporate taxes are passed on to the workers.” However economists are divided. As the Center for Budget and Policy Priorities points out “this claim is misleading … the evidence indicates that most of the benefits from a corporate rate cut would go to those at the top, with only a small share flowing to low- and moderate-income families. Mainstream estimates conclude that more than one-third of the benefit of corporate rate cuts flows to the top 1 percent of Americans, and 70 percent flows to the top fifth. Corporate rate cuts could even hurt most Americans since they must eventually be paid for with other tax increases or spending cuts.”
The bottom line is that the tax bill will not make life easier for people earning under $75,000 a year. The income tax portion might go down (depending on family size, smaller in this case is better) but costs will go up for education and health care.
And, on top of that, this tax policy will sharply reduce federal spending across the board. Last week the National Congress of American Indians (NCAI) and the Native American Finance Officers Association (NAFOA) came out against both the House bill and the Senate Finance Committee bills in part because of this point. “NCAI and NAFOA view it as deeply regrettable that neither the House nor the Senate bill takes seriously Indian Country’s priorities for tax reform,” a news release said. “With respect to tribal nations, unless tribal provisions are included, the current tax reform legislation amounts to little more than a $1.5 trillion increase in the federal deficit over the next ten years. This deficit increase will inevitably create pressure to cut federal programs and services that are extremely important to tribal communities. Deficit-financed tax cuts that lead to austerity budget cuts would affect all Americans, but would disproportionately impact American Indians and Alaska Natives who rely on federal funding of the trust responsibility as well as social programs.”
The metaphor: Workers don’t matter.
FOUR: Help mom and pop sell stuff
Most people who own a small business structure their entity as Limited Liability Corporations, S-Corps, or a partnership. This means that the income generated is reflected on the individual’s tax return. The House lowers the taxes on profits from 39.6 percent to 25 percent and has a 9 percent increase on the first $75,000. The Senate goes a different route with a new incentives for small business. This is “pass through income” because of the structure. And this part of reform really does solve a problem. Small business is critical — especially in Indian Country — but does not get the attention (or the breaks) that large corporations do.
Rep. Markwayne Mullin, R-Oklahoma, said last week, “As a former small business owner, I understand firsthand how burdensome the current tax code is on Main Street. The Tax Cuts and Jobs Act delivers relief to mom-and-pop shops in our communities so that they can hire more individuals, grow their business, and invest more in our local economy.”
The metaphor: Small business is cool, too.
FIVE: Elite colleges? Or is it, college only for the elite?
The House bill is an all-out attack on higher education. This is nonsense. Especially when the country needs to be competitive in a digital, knowledge-based world.
First up: Tax private universities’ endowments with a tax of 1.4 percent on portfolios that exceed $250,000 per full-time student. Only about a hundred schools would be affected, and it penalize colleges that have resources. Since those university operating costs will not go down, it’s not likely that this will result in more financial aid for students. The House also makes it impossible for tax-exempt bonds from private — and some public — institutions. This will make campus construction projects more expensive.
The House bill eliminates the deduction of interest for student loans. Americans now owe more than $1.4 trillion on student loans. It already is making it more difficult for young college graduates to buy homes, and transition into the middle class. This provision will be just one more thing. (And student loans are already stacked against the borrower. You can’t get rid of them in bankruptcy.) So instead of solving a problem, Congress is making it worse.
The House bill also repeals the Lifetime Learning Credit, eliminates the Coverdell savings accounts, but does expand the American Opportunity Credit.
The House bill would also classify tuition waivers as income (making a graduate student wealthy for tax purposes.) Imagine a “bump” in student’s income that is equal to tuition, some $30,000, $40,000 or even more.
Laurie Arnold, Colville, director of Native American Studies and an Assistant Professor of History at Gonzaga University, remembers trying to explain this to Congress when she was in graduate school. “Many members of Congress had children enrolled in large/research universities, yet had no idea that graduate students teach the majority of introductory classes at those institutions. In general, the disconnect about this was broad, and many Members fell back on the language that not taxing the stipends was simply another tax break.”
Stipends are now taxed. And Congress is keen to add tuition waivers to the tax revenue pool. This will make it more difficult for people to pay for graduate school, and increase the debt levels for those who do. As a national policy this makes no sense. None.
As UCLA neuroscientist Astra Bryant told Wired magazine: “I mentor two underprivileged undergraduate women, and my concern for them is that an increased tax burden would make it financially impossible for them to afford to pursue a PhD.”
And for Indian Country? There is already a shortage of graduate students and PhDs. Why should it be made more difficult?
“Let me distill that: over one third of American households had trouble putting food on the table, putting a roof over their heads, or getting medical care; blacks and Hispanics are falling further behind whites in net wealth; and 99 percent of Americans hold a diminishing 76 percent share of income in the U.S. These are all alarming trends, but to have one-in-three consumers report that they cannot regularly put food on the table in the U.S., one of the wealthiest countries in the world, is the most deeply disturbing,” Busette writes. “Such a miserly budget, in combination with the tax reform plan, could mean the loss of some very important services for low-income and poor Americans.”
The tax reform measures will require massive budget cuts. Soon. Tribal governments will be hit hard. We already know how difficult sequestration was for tribes a few years ago. The kinds of cuts that will be needed to pay for these tax cuts will cost significantly more than sequestration.
The Center for Budget and Policy Priorities pegs these coming budget cuts at $5.8 trillion, $800 billion in cuts below sequestration levels.
The metaphor: You can’t afford to be poor.
SEVEN: Obamacare? Really? Again?
A serious question: Which house of Congress hates healthcare more?
The House kept the Affordable Care Act insurance mandates, but eliminates medical deductions. So a family that is dealing with a catastrophic, expensive medical event won’t be able to offset any of those costs from their tax bill. Already this provision is limited to higher income taxpayers. It’s only open to people who itemize their deductions, an estimated 8.8 million claimed it on their 2015 taxes, according to the IRS. But for those families that need this break, it’s a big deal.
Then the best thing Congress could do to help people with medical debt is to legislate another expansion of Medicaid. As Kaiser Health News reported: “A study from the Urban Institute may shed light on why Medicaid eligibility remains a pressing problem: medical debt. While personal debts related to health care are on the decline overall, they remain far higher in states that didn’t expand Medicaid. In some cases, struggles with medical debt can be all-consuming.”
The Senate is using tax reform to repeal parts of the Affordable Care Act. Again. The Senate would “save” money by ending the requirement to purchase insurance. It saves tax dollars because the government would not have to pay the subsidies for those who sign up under the plan (including those from Indian Country who get no cost plans under the exchanges).
And, repeating myself here, should a form of these bills become law there will be cuts across the board. The Indian Health Service (as well as Medicaid) will need to restructure because it will have so many fewer dollars.
The metaphor: Healthcare is only for those who can afford it.
A cold December
Congress wants to wrap up this debate before the end of the year and begin the provisions in the new tax year.
One more thing about values. The two tax bills define what’s important to a society. Alaska’s Sen. Lisa Murkowski was a champion on health care and was a key vote to stop the last Affordable Care Act repeal effort in the Senate. But this time there are competing values. She has also been a longtime supporter of opening the Arctic National Wildlife Refuge to oil and gas development. That’s in the bill. It’s her provision. So is she willing to give up on health care for more oil? And what about climate change? Murkowski was eloquent at the Alaska Federation of Natives saying that she is witnessing first-hand the impact in northern communities. This tax bill gives fossil fuels a boost — at the expense of the climate.
What’s really important? We are about to find out.