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TrumpBeat: Return Of The Facts

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It has become fashionable in some circles to suggest that the U.S. has become a “post-truth” or “post-fact” society. That might be an exaggeration, but it’s hard to deny that facts had a bad start to the month. First there was President Trump’s evidence-free claim that his predecessor had tapped his phone. Then there was last week’s Republican broadside against the Congressional Budget Office over its not-then-released analysis of their health care plan. Finally on Friday, the government released the monthly jobs numbers — finally, actual facts! — only to see the White House respond by accusing (first implicitly, then explicitly) the Obama administration of cooking the books in the past. (There is no evidence that it did so.)

This week, however, facts struck back. The CBO on Monday released its report on the Republican health care plan. As expected, the report predicted that the plan would cause millions of Americans to lose their health insurance. Less expected was what happened next: People listened. Rep. Ileana Ros-Lehtinen, a Florida Republican, said she would oppose the bill because it would leave too many of her constituents uninsured. Her New Jersey colleague Leonard Lance said the CBO report had “modified the dynamics” and that he wouldn’t support a bill that was likely doomed in the Senate in any case. By the middle of the week, the consensus in Washington was that the CBO had seriously weakened the bill’s chances of passage.

Then on Wednesday evening, a federal judge in Hawaii issued an order temporarily blocking Trump’s revised ban on travel from several predominantly Muslim countries. Judge Derrick Watson’s blistering ruling (“The illogic of the government’s contentions is palpable,” read one line) argued that, essentially, Trump couldn’t tell the courts that the ban had nothing to do with religion while his advisers were going around saying the opposite on television. Or, even more succinctly: Facts matter.

Watson’s ruling (and a similar one from a judge in Maryland on Thursday) will no doubt be appealed, and the GOP health care plan is likewise far from dead. But this week suggested that if Trump wants to enact his agenda, he will need facts as well as rhetoric on his side.

Taxes: Long live the AMT?

The world got its first glimpse of Trump’s income tax returns this week, and the overwhelming reaction was: “meh.” Despite breathless hyping by MSNBC, which first revealed the leaked documents Tuesday night, the two pages from Trump’s 2005 tax return backed up none of the most salacious rumors about Trump’s finances. No, he isn’t (or at least wasn’t) secretly broke — in 2005, at least, he earned more than $150 million in income. No, he didn’t manage to avoid paying income taxes entirely — he paid $38 million in 2005. And the documents included no details about Trump’s charitable giving, Russian ties or, really, much of anything else.

The documents could, however, have significant implications whenever the Republicans get serious about trying to reform the tax system. Specifically, the leaked returns could make it a lot harder for Republicans to repeal the Alternative Minimum Tax, as they have long promised to do.

The AMT is essentially a parallel tax code that is meant to prevent high earners from using accounting tricks to avoid paying income taxes. And apparently it works — or at least it did in one case. The AMT is the reason Trump paid $38 million in taxes instead of the $5 million he would have owed under the ordinary income tax system.

Early in his presidential campaign, Trump said his tax plan would “cost [him] a fortune.” It has long been clear that wasn’t true — independent analyses consistently show that his tax plans would cut taxes on the wealthy. But the new documents raise the stakes by making it clear that a single provision in Trump’s plan — eliminating the AMT — would have saved him $33 million in a single year. That would surely pose political problems. Trump, of course, could argue that 2005 wasn’t a representative year — but he would need to release his tax returns to prove it.

The Cabinet: Still some empty chairs

Trump held his first Cabinet meeting this week — with an incomplete cabinet. When members convened on Monday, four of Trump’s Cabinet-level nominees had yet to be confirmed: the secretaries of labor and agriculture, as well as the U.S. trade representative and the director of national intelligence. A couple days after the meeting, former Indiana Sen. Dan Coats was officially approved by the Senate for director of national intelligence with a 85-12 vote, but the three other positions remain vacant.

In a tweet on Monday, Trump accused “Senate Dems” of holding up his nominees. But it’s not entirely unusual that positions remain empty at this point, and Senate Democrats aren’t entirely to blame for the slow progress. Barack Obama didn’t reach a full Cabinet until April 28, 2009, when Kathleen Sebelius was sworn in as secretary of Health and Human Services after his original pick, Tom Daschle, had to withdrawal because of tax issues. Trump’s nominees have encountered a few scandals of their own. After several hearing delays, his former pick for labor secretary, Andrew Puzder, withdrew after a series of ethical issues arose. His new nominee, law school dean Alexander Acosta, was scheduled to appear before the Senate this week, but the hearing was delayed after the committee chairman instead traveled with Trump to a rally in Nashville.

Barring unforeseen scandals, Trump should have a full Cabinet soon. Acosta’s hearing has been rescheduled for next week, and Robert Lighthizer, Trump’s pick for trade representative, had his hearing this week. Trump’s nominee for agriculture secretary, former Georgia Gov. Sonny Perdue, just had his paperwork sent to the Senate for review. Further down in the administration, however, there are more holes: There are more than 30 other sub-Cabinet nominees awaiting confirmation, mostly in the Department of State and the Treasury Department, and over 490 positions still waiting for nominations.

The environment: Efficiency drain

Trump told car companies Wednesday that they probably won’t have to meet some long-term goals for vehicle fuel economy set by the Obama administration. What that decision will mean for the climate is less clear than it might seem.

First off, the history: In 2012, the Obama administration approved a new set of vehicle fuel regulations that will eventually require new passenger cars to get 54.5 miles per gallon by 2025, up from 36.6 miles per gallon today. (Ostensibly, anyway. There are a lot of loopholes in how these standards are implemented and tested, and the actual, real-world number would probably be less than 40 mpg.) The first part of the phase-in is pretty much set in stone at this point, but the Obama administration never finalized the second phase, which covers model years 2022 to 2025. That left the door open for Trump, who sent the rule back to the Environmental Protection Agency for further review. The process will take time, but could ultimately result in the rollback and replacement of the new fuel-economy standards.

The central question, of course, is whether fuel standards achieve their stated goal of reducing greenhouse gas emissions. The answer isn’t super clear, largely because a car’s miles-per-gallon rating is just one factor in a whole chain of interconnected variables. For example, improved fuel economy means cars emit less carbon for each mile they drive, but it can also encourage car owners to drive more miles since they’ll spend less on gas. (Though there’s a lot of disagreement about how big that rebound effect is.) And there is some research to suggest that the standards could have had negative effects, such as incentivizing manufacturers to make more large, gas-guzzling cars.

Partly as a result, greenhouse gas emissions from the transportation sector rose between 1990 and 2010, even as fuel economy standards stayed the same. That doesn’t necessarily mean the standards provided no greenhouse gas benefit — emissions might have gone up more without them — but it does demonstrate that there isn’t a clear one-to-one, cause/effect relationship between mileage standards and greenhouse gas emissions. This is why economists, as a whole, generally prefer other ways of dealing with the car-climate change connection — like carbon pricing, or just taxing gasoline.

The Fed: Yellen vs. Trump

As expected, the Federal Reserve on Wednesday voted to raise interest rates a quarter of a percentage point. Fed Chair Janet Yellen painted the decision as a vote of confidence in the economy: “The simple message is the economy’s doing well,” she said at a press conference following the meeting.

That interpretation of the economic data puts Yellen & Co. in direct opposition to Trump, who has consistently described the economy as weak. In raising rates, the Fed is easing off the accelerator, worried that if the economy heats up too much it will lead to faster inflation. Trump, by contrast, wants to cut taxes and boost infrastructure spending in a bid to achieve a 4 percent growth rate. Most economists, including at the Fed, consider that goal unrealistic at a time when the U.S. population is aging and global forces are leading to slower economic growth worldwide. In projections released Wednesday, Fed policymakers estimated that the economy’s long-run growth rate is at or below 2 percent per year.

In the short term, Yellen has the upper hand. She and her Fed colleagues can raise rates as often as they deem necessary to keep inflation under control. But Yellen’s term as chair expires next February, at which point Trump will have the power to appoint her replacement. What happens then is anyone’s guess. Typically, it is liberals who want to keep rates low to stimulate the economy, while conservatives worry more about inflation. Trump has previously indicated he would replace Yellen with a “dove” — someone who wants to keep interest rates low — but he could face opposition within his own party if he does so.

Congress: Which Democrats should progressives challenge?

Sure, we’re still in Trump’s first 100 days, but it’s never too early to start looking ahead to the 2018 midterms. Progressives are already looking to punish any Democrats who agree with Trump too often. Some of them are even pushing for someone to mount a primary challenge against West Virginia Sen. Joe Manchin — an effort that would probably prove futile given West Virginia’s heavy Republican tilt and Manchin’s own popularity in the state. If Democrats want to pick off a heretic in their ranks, they would be better off targeting members of Congress who have a history of voting with the Republican side of the aisle and are from places where any Democrat would have a good chance of winning in a general election.

By those parameters, the prime suspect is Rep. Henry Cuellar of Texas’s 28th district. Cuellar has voted with Trump 71 percent of the time, more often than any other House Democrat. The median House Democrat has voted with Trump just 5 percent of the time. Based on the presidential vote in his district (Hillary Clinton won by 20 percentage points), a generic representative from his district would be expected to vote with Trump just 14 percent of the time. Cuellar’s voting record has consistently placed him among the most conservative Democrats in Congress. During this Congress alone, he’s voted to permanently bar federal funding for abortion or health coverage that includes abortions. Cuellar also was one of only three Democratic votes in favor of repealing Obama-era regulations on natural-gas producers.

Another Democrat who could face a challenge is Rep. Jim Costa of California’s 16th district. He’s voted with Trump 40 percent of the time and, like Cuellar, his voting record has been consistently more conservative than that of his Democratic colleagues. That’s despite hailing from a district that President Obama won by 19 percentage points and Clinton won by 22 percentage points. A generic representative from Costa’s district should be voting with Trump closer to 13 percent of the time, based on the last presidential vote. Perhaps the most promising element for liberals who want to install more progressive Democrats is that Costa has a history of running poor races, which means he could be susceptible to a surprise challenge.

More from FiveThirtyEight

  • Trump’s first budget outline didn’t include many details, and probably won’t get through Congress, but it does give a glimpse into his policy priorities.
  • The Republican health care plan would leave millions more Americans without health care, and it would hit older and poorer families especially hard. The bill, already in trouble in the Senate, now could have trouble getting through the House, as well.
  • More health care! In this week’s chat, the staff dug into the numbers behind the GOP bill, while the podcast crew discussed its prospects for passage.
  • The Trump administration’s attacks on government data reached a new and dangerous level over the weekend.

Ben Casselman is a senior editor and the chief economics writer for FiveThirtyEight.

Harry Enten is a senior political writer and analyst for FiveThirtyEight.

Kathryn Casteel is FiveThirtyEight’s economics and policy intern.

Maggie Koerth-Baker is a senior science writer for FiveThirtyEight.

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