GOP Leaders Consider Changes To Healthcare Bill, Seek More Information On Border Wall

March 17, 2017
GOP leaders demand details before funding Trump’s proposed border wall; Republicans consider changes to healthcare bill; Consumer Sentiment Rises in March as Household Finances Improve; U.S. financial markets offsetting effect of central banks’ increase in rates.

Policy Watch

  • GOP leaders demand details before funding Trump’s proposed border wall. Republican leaders in Congress are requesting more details from President Trump about his proposed border wall before they make a decision on whether or not to appropriate significant funding for the project. Trump’s budget proposal submitted on Thursday requests an initial installment of $4.1 billion for the wall. Specifically, Republicans in Congress have questions about the design and how the administration would handle the rights of property owners whose land would be used to build the wall. Senate Republican Whip John Cornyn (R-Texas) said that the administration needs to outline “a layered approach” of “infrastructure, technology and personnel.” Cornyn and House Homeland Security Committee Chairman Michael McCaul (R-Texas), who has jurisdiction over the wall, are negotiating with the Trump administration to understand precisely what the administration has in mind. Senate Majority Leader Mitch McConnell (R-Ky.) said last week that it probably wouldn’t make sense to build a wall, which Trump had suggested during his campaign to be between 35 and 45 feet in height, along the entire length of the 1,954-mile U.S.-Mexico border. One of the biggest questions about the wall is how to build along 1,200 miles of border running through Texas, where most of the adjacent land is privately owned. McConnell said that there were some parts of the border where the wall wouldn’t be the best way to secure the border, and doubted that Mexico would repay the United States in some form for the wall. GOP leaders estimated would cost $12 billion to $15 billion. The total final cost could run to over $20 billion, according to other experts. [The Hill]
  • Republicans consider changes to healthcare bill. The Trump administration and House GOP leaders are considering two possible changes to their ObamaCare repeal-and-replace bill, called the American Health Act, as they seek to secure the 216 votes necessary to pass it through the House. Health and Human Services Secretary Tom Price privately told House Republicans in a closed-door meeting Friday that changes could include alterations to tax credits and giving states the option of imposing work requirements for Medicaid recipients. Those two changes have risen to the top of options that House Republicans are discussing to change their bill. Centrist Republicans have pushed for changes to tax credits in the bill to give more financial assistance to low-income Americans and older people, who they worry would not be given enough help to afford coverage under the current GOP bill. Medicaid work requirements are another change that different GOP groups have been open to. Some conservatives also want to add an option for states to block grant Medicaid, rather than use a system of capped per-capita payments in the current bill. The White House and congressional GOP leaders have been working together to draft a “manager’s amendment” for the legislation. [The Hill]

Economic Indicators & News

  • U.S. Industrial Production Unchanged in February. U.S. industrial production – a measure of output at factories, mines and utilities – was flat in February compared to a month earlier, according to the Federal Reserve on Friday. Output for January fell a revised 0.1% instead of an initially estimated 0.3% drop. Capacity use, a measure of slack in the economy, decreased by 0.1 percentage point to 75.4%, which matched economist expectations. The Federal Reserve said that overall industrial production was held in check by falling output at utilities “as continued unseasonably warm weather further reduced demand for heating.” In other areas, the report was broadly positive. Manufacturing output, the largest component of industrial production, increased 0.5% in February to reach its highest level since July 2008, up 1.2% from the same month a year earlier. U.S. business are anticipating stronger demand from domestic consumers and overseas. [WSJ]
  • Consumer Sentiment Rises in March as Household Finances Improve. Consumer confidence rose in March as Americans showed that they were more satisfied than any time in 16 years with the current state of their finances and the economy. However, the outlook on the economy remained sharply divided along party lines. The University of Michigan said Friday that its preliminary index of sentiment increased to 97.6 from 96.3 in February. The index of current conditions jumped three points to 114.5, the highest reading since November 2000. Households overall reported net gains in incomes and wealth at the strongest levels in a decade. Among Republicans, the expectations index was 122.4, while it was 55.3 for Democrats, illustrating the divide in consumer expectations since Trump’s election victory. Confidence remains near a 13-year-high with a stronger job market and prospects for faster growth under the current administration, yet threatens to go down in the absence of concrete policy action. [Bloomberg]
  • U.S. financial markets offsetting effect of central banks’ increase in rates. Though central banks around the world are moving away from low interest rates, financial markets are responding as if it were a low interest rate environment. A day after the Federal Reserve raised short-term interest rates a quarter percentage point, the People’s Bank of China raised a suite of key short-term interest rates and the Bank of England signaled a rate of increase too. The events mark a turn from the low-interest-rate policies many central banks have used in recent years to accelerate markets and slow-growing economies. Low rates encourage businesses and individuals to borrow, spend, and invest more, pushing up the value of asset prices. Following Wednesday’s Fed meeting, U.S. stocks climbed, benchmark bond yields sank, and the value of the dollar decreased. The Wall Street Journal sees this market reaction as a sign of growing confidence that global economic growth is picking up, lessening the need for central banks to keep their interest rates low to boost the economy. [WSJ]