COAL IN THEIR STOCKINGS

On the Wednesday before Christmas, on the White House Lawn, President Trump accompanied by a sizable gathering of republican legislators, came together to celebrate their only significant legislative achievement of the year. This was a public ceremony spotlighting a sweeping overhaul of the U.S. tax system. Mr. Trump was lavished with praise by the leaders of the House and the Senate. Obviously elated, the president exclaimed that it was "always a lot of fun when you win." Convinced as ever, he reiterated over and over again "we are winning."

Throughout the run-up to the vote on this legislation Mr. Trump promised that the tax bill constituted a fabulous Christmas gift for the middle class, and that he himself as well as his friends would actually lose financially because of it. However, that too proved to be political banter. At a Friday night dinner at Mar-A-Lago he reportedly greeted a gathering of his wealthy friends with: "You all just got a lot richer." How much richer? Alan Blinder, professor of economic and public affairs at Princeton University, and a former Vice Chairman of the Federal reserve, estimates that Mr. Trump's cut could amount to a minimum of $15 million annually. While billionaires found extravagant goodies in their stockings this Christmas, many others got lumps of coal.

Some of the people discovering coal in their stockings included: the millions of poor kids facing the imminent loss of federal funds for the Children's Health Insurance Program (CHIP), the 13 million people who may lose their health insurance, the older, sicker, segment of the population who will soon face significant premium increases, and the 800,000 DACA recipients whose fate was again left in limbo during year-end budget negotiations.

The CHIP program was created in 1997 when Senators Orrin Hatch (R-Utah) and Ted Kennedy (D-Mass) pushed a bipartisan campaign to create legislation that would secure access to healthcare for 10 million uninsured children nationwide as part of the Balanced Budget Act. Many of these children grew up in working households that made too much money to qualify for Medicaid. Reiterating his support for this program in 2007, Senator Hatch proclaimed that: "No child should have to go without healthcare. The healthcare children receive when they are young will largely determine their quality of life for their adulthood." Nearly half of the country's children ages 3 or younger receive healthcare through this program. However, funding ran out on September 30, 2017. Although prompted by many, Congress missed re-authorization, focusing instead on the tax overhaul. By the end of January, sixteen states, including California, Texas and Florida, will run out of federal funds. By the end of March this will include thirty states, and by June all but two will be out of money. After the tax bill passed without money being allocated to re-fund CHIP, Jackie Speier (D-Ca) lamented: "What we're doing here today is basically saying: "wealthy Americans, big fat Christmas gift for you; Tiny Tim, we're taking your crutch away, from you and all the other kids in the country, and we're putting a lump of coal in your stocking." (NBC News, Dec. 21, 2017).

By including the repeal of Obamacare's individual mandate, which penalized individuals who failed to have health insurance, the writers of the tax bill were able to pay for $338 billion in additional tax cuts over the next decade. However, contrary to a statement the president made, this does not mean that Obamacare has been repealed. What it does mean is that this move will result in an estimated 13 million fewer Americans having health insurance. Without the mandate many of the young and healthy will forgo insurance, diluting the insurance pool to the detriment of the old and frail, and affecting steep premium increases. The Congressional Budget Office forecasts an estimated ten percent increase in premiums in many areas, often for people who can least afford these. For example: a 60-year old not receiving subsidies could face premium increases of $1,781, $1,469, $1,371, and $1,504, respectively, in Alaska, Arizona, Nevada, and Maine. (David Blumenthal, Harvard Business Review, Dec. 19, 2017).

Finally, consider the plight of the 800,000 dreamers who President Obama protected with the Deferred Action for Childhood Arrivals (DACA) program. In September, Attorney General Jeff Sessions announced that, effective March 6, 2018, the administration was rescinding the program. Early reports, following discussions between the president and democratic leadership, suggested that a deal had been struck whereby democrats would support a budget agreement in exchange for a permanent DACA fix, including deportation protection, for program participants. Sadly, both continuing resolutions that were past to temporarily keep the government funded did not deliver on that promise. And many republicans appear adamantly opposed to such linkage. This leaves these individuals, many of which only know the U.S. as their home country, uncomfortably in limbo.

So, when President Trump uses "winning" as a mantra, or even as a strategy, we ought to remember, to paraphrase an old saying, that "winners see the gain, while losers endure the pain."

Happy New Year!