Policy Watch

• HHS allows waivers for Medicaid to pay for long term inpatient mental health. The Trump administration, spurred to action by the opioid crisis, is loosening regulations on the so called “IMD exclusion,” allowing states to apply for waivers from Medicaid in order to pay for beneficiaries’ treatment in inpatient mental institutions. The exclusion was meant to phase out “psych wards,” and prevented Medicaid from paying for treatment in facilities with more than 16 beds. The waivers would allow Medicaid patients up to an average of 30 days of treatment in such facilities. [The Hill]

• Security Commission warns China tech abilities threaten US security. A panel of security experts found that China’s high-tech manufacturing exports threaten the security of US 5G wireless infrastructure, citing expertise at firms such as Huawei and ZTE. Further, the commission reported that China’s dominance in IoT devices also presented significant security vulnerabilities to the US, especially around data security. The report also included recommendations ranging from the rapid and secure deployment of US 5G technology to countering Chinese dominance in its One Belt One Road initiative. [WSJ]

• Trump officials conflict on trade war. Top Trump economic advisors Larry Kudlow and Peter Navarro are exposing an internal rift within the Trump administration trade and tariff policy. Navarro in a speech last week commended the President’s “courage” to reject a bad trade deal with China, which Kudlow asserted “did the President a disservice,” arguing that hawkish comments would inflame trade talks further. The public spat illustrates a broader conflict within the administration, as a cadre of pro-trade advisors such as Kudlow and Mnuchin, along with many Wall Street executives, have sparred with protectionist perspectives from the President and Navarro. [NYTimes]

  Economic Indicators and News

• Consumer price index gains 0.3%. The Department of Labor indicated the Consumer Price Index rose 0.3% last month after a 0.1% increase of the previous month, the biggest jump in nine months. Food prices and vehicle prices are down, while payments toward housing and gasoline prices increased, as did health care costs. Core CPI increased 2.1% in the 12 months since October 2017. Inflation pressures are likely building due to record low unemployment and accelerating wage growth. [CNBC]