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Transgender ban: The economic costs
On Wednesday, five transgender members of the U.S. armed forces sued President Trump over his plans to ban trans troops from serving in the military. The suit, filed in federal court by two LGBT rights groups on behalf of the anonymous service members, came in response to Trump’s tweets last month announcing that transgender people will no longer be allowed to serve in the military. The ban hasn’t yet taken effect, but the suit argues that transgender troops are already being harmed by the uncertainty Trump’s tweets created.
The lawsuit doesn’t address it directly, but Trump’s ban could hurt trans people economically. There is little concrete data on trans people — the Williams Institute, a think tank at UCLA School of Law, estimates that 1.4 million adults (0.6 percent) identify as transgender — but research suggests that trans people face high rates of homelessness and unemployment. In other words, if trans people are kicked out of the military, they may have trouble finding jobs in civilian life.
Trans people aren’t the first marginalized group to see military service as a possible pathway to wider acceptance. Serving in World War II helped African-Americans demand the full rights of citizenship. Society’s support for gay marriage went up after the repeal of “don’t ask, don’t tell” in 2011. The military, which grants 12 weeks of paid maternal leave to service members, is ahead of many other institutions when it comes to providing maternal leave. There’s also research that shows how greater mobilization of men in the military during World War II drew many women into permanent employment.
Trump’s ban, in other words, could hurt not only trans people serving in the military but also trans people who never intend to serve. It could set back efforts to demand protections against employment discrimination for trans people, as well as efforts to demand equal status in society more generally.
“Military service in the U.S. has been traditionally understood as a peaceful obligation to citizenship,” said Beth Bailey, a history professor at the University of Kansas. “Participating in the military gives people grounds for claiming the full rights of citizenship and full legitimacy in American society.”
Drug policy: State of emergency
On Thursday, Trump declared the opioid epidemic a national emergency. In doing so, he followed the advice of his opioid commission, which called on him to declare an emergency as part of its preliminary recommendations late last month. Public health experts argued that the move could allow the administration to act more aggressively in response to the crisis by modifying health care programs like Medicare and Medicaid and allowing localities access to federal relief funds as it would during a natural disaster.
It wasn’t a foregone conclusion that Trump would take the commission’s advice. At a briefing on Tuesday, Health and Human Services Secretary Tom Price said that the administration could get the resources it needs to fight the epidemic without an emergency declaration. Some drug policy advocates likewise showed a little skepticism over how effective an emergency declaration would be and concern on whether the administration would use the power to further push a war on drugs, but others welcomed the suggestion as a push for the administration to act more urgently on the crisis.
It’s not clear, however, whether Trump will embrace the commission’s other recommendations, which were generally well received by public health professionals. Most of the commission’s recommendations focused on treating opioids as a public-health crisis by expanding access to treatment and making life-saving drugs more widely available. At Tuesday’s briefing, Trump focused instead on tougher law enforcement, as he has in the past.
“The best way to prevent drug addiction and overdose is to prevent people from abusing drugs in the first place. If they don’t start, they won’t have a problem,” Trump said, before before taking a question on North Korea.
Health care: Upward spiral
Though Republican efforts to repeal and replace parts of the Affordable Care Act have come to a standstill, we continue slowly moving toward a different milestone: setting prices for the insurance plans that will be sold on the individual marketplace in 2018. Final rates won’t be set in many states until the end of September, but we’re starting to get an idea of what prices could look like and, as with last year, there are likely going to be big regional differences in price changes.
On Thursday, the Kaiser Family Foundation released a report looking at insurance prices in 21 cities in 20 states. Providence, Rhode Island, had the lone projected decrease in the cost of premiums for its benchmark plan,1 likely dropping from $261 in 2017 to $248 next year. With the exception of Detroit’s, that is also the cheapest plan for 2018 in the cities Kaiser looked at. Meanwhile, Wilmington, Delaware, is at the high end of the cities, expected to see a 49 percent increase in cost, from $423 to $631. Notably, many of the cities that started with the lowest priced plans when the ACA marketplaces opened for 2014 are now seeing the highest costs. Researchers and insurance companies say this is no coincidence: Places where insurers priced plans too low initially have had a hard time recovering from the instability that ensued, and have tended to end up with higher-cost plans in the long term.
Before we dig further into those costs, a quick side note: The microscope (among politicians and the media) on Obamacare has largely focused on the private insurance marketplaces. That attention appears to have led many people with other kinds of insurance to mistakenly believe that they will be affected by instability in the private market. A poll, also from the Kaiser Family Foundation, released on Friday, found that even though about 7 percent of the population gets its insurance on the private market and 9 percent is uninsured (many of whom could, in theory, wish to purchase on the private market), 76 percent of people believe that everyone will be hit by those premium increases. In fact, the increases only apply to the roughly 15.4 million people who get their insurance through the private marketplaces (and some percentage of the uninsured who might purchase insurance if it were less expensive). Roughly 8.7 million of them receive subsidies from the federal government that will largely offset these costs.
For many of those people, however, the cost increases will be significant in some locations. Republicans have blamed those increases on the failure of Obamacare itself, which Trump has repeatedly said is in a “death spiral.” But Trump has also suggested that he will let the marketplaces collapse, and there are signs that uncertainty over the law is contributing to the cost increases. In the proposals for 2018 plans, insurers frequently cited concerns that the individual mandate (which requires that most people have insurance or pay a fine) wouldn’t be enforced, and that some of the discounts insurers are required to provide to the poorest enrollees wouldn’t be reimbursed by the federal government. Those concerns are leading them to ask for higher prices. In some cases, insurers even went so far as to put a price on that uncertainty: In Idaho, three insurers said that uncertainty around those cost-sharing payments is responsible for more than half of their requested price increases, saying that nonpayment alone will lead to a 17 percent to 23 percent price increase. In Michigan, insurers said concern that the individual mandate wouldn’t be enforced has pushed prices up 5 to 10 percent.
There are still steps that Trump and Congress could take to ease insurers’ concerns, such as pledging to maintain cost-sharing payments. It will be several more weeks before all of the prices are permanent, making this a crucial decision-making time for Congress and the Trump administration.
Environmental policies: Smaller dollars
Both as a candidate and as president, Trump has promised to free businesses from burdensome environmental regulations. So it might come as a surprise that a little over halfway through his first year in office, Trump’s administration is running only modestly behind his predecessors in the number of legal cases lodged by the Department of Justice against violators of the Clean Air and Clean Water acts and other environmental laws. As of July 31, the Trump administration had lodged 26 such cases, versus 34 under Barack Obama and 31 under George W. Bush at the same point in their first terms, according to data collected by the Environmental Integrity Project, a nonprofit watchdog that monitors government enforcement of environmental laws.
The story looks very different when it comes to the amount of those fines, however. The cases lodged by the earlier presidents were worth more than double in penalties compared to those lodged by the Trump administration — or even more once inflation is taken into account.
|ADMINISTRATION||TOTAL CASES||TOTAL PENALTIES|
The issue isn’t that the Trump administration is under-penalizing polluters, said Eric Schaeffer, the EIP’s executive director. Instead, it seems that the cases the administration is choosing to lodge are simply much smaller in scale than the ones that were lodged at the beginnings of Obama’s and Bush’s first terms.
It’s not exactly clear why that is, Schaeffer said. It could be a matter of timing — maybe all the larger cases will be lodged later in the year. But, he said, it’s also possible that this could be a result of the fact that the administration is taking longer to nominate political managers (and those that are nominated take a longer time to be confirmed) than any of the previous three presidents. Among the as-yet-unnominated positions is the assistant attorney general for the civil division (these kinds of violations are considered civil cases). The EPA’s assistant administrator for enforcement and compliance assurance was nominated May 12 and hasn’t yet been confirmed by the Senate. Meanwhile, many jobs that don’t require Senate confirmation also remain unfilled — thanks to a hiring freeze that has also slowed DOJ efforts at drug enforcement. Without those jobs filled “stuff just gets stuck and takes longer,” Schaeffer said. “Nobody can make a decision.”
Immigration: Adding up the cost
Last week, we noted that many economists think Trump’s new plan to limit legal immigration is a pretty bad idea. This week, we got some initial estimates of just how bad it might be.
As a reminder, Trump last week endorsed the RAISE Act (Reforming American Immigration for a Strong Economy). The bill would institute a so-called merit-based immigration system, in which green card applicants get preference if they have a college degree, in-demand skills or other qualifications. That concept has the support of some economists, although in some cases people who are sympathetic to the idea in theory took issue with the specifics. (Economist Ernie Tedeschi estimated that only 2.1 percent of adult U.S. citizens would qualify for a skills-based visa under the bill’s provisions.) But economists overwhelmingly panned the bill’s other big provision: cutting in half the number of green cards issued each year. Reducing the number of legal immigrants, they argued, makes little sense at a time when the U.S. labor force is shrinking due to the retirement of the baby boom generation.
On Thursday, analysts at the University of Pennsylvania released an estimate of what Trump’s immigration plan could cost the economy. Using the Penn Wharton Budget Model, a widely respected economic model developed to test the effect of various government policies, the analysts estimated that the RAISE Act would reduce U.S. gross domestic product by 0.7 percent by 2027 compared to projections under current law. That may not sound like much, but it’s significant: The model estimates the law would cost 1.3 million jobs by 2027 and 4.6 million by 2040.
Much of the loss in both GDP and jobs is due to the fact the total U.S. population would be smaller. On a per capita basis, the proposed law’s impact would be smaller — slightly positive early on, then slightly negative in later years. Still, for many purposes — such as evaluating the country’s ability to pay its debts — it is total GDP, not per capita, that matters most.