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HomeSpotlight Story | Bird’s Eye View | Budget & Taxes | Politics & Leadership | Governors | Hot Issues | Once Around the Statehouse Lightly
States and local governments will face many challenges and opportunities as they navigate the turbulent waters of the coming Donald Trump administration.
Despite uncertainty about the precise policies of President-elect Trump and the Republican-controlled Congress, states may be playing under new rules on climate change, education, energy, health care, immigration and infrastructure, among other issues.
The biggest potential change — and the largest uncertainty — involves health care. Trump and GOP congressional leaders have repeatedly vowed to “repeal and replace” the Affordable Care Act (ACA), better known as Obamacare. House Speaker Paul Ryan (R-Wisconsin) intends to make repeal of the ACA the first order of business when the House reconvenes on Jan. 3, 2017, after the holiday recess.
Repeal will be easier than replace. Ryan has discussed with Vice President-elect Mike Pence a plan to phase out Obamacare over a two- to three-year period so that more than 20 million people who have obtained health insurance under the ACA with the help of federal subsidies will not be left high and dry.
But health policy experts warn that “repeal and delay” could destabilize insurance markets in the nation’s $3 trillion health care industry. “The idea that you can repeal the Affordable Care Act with a two- or three-year transition period and not create market chaos is a total fantasy,” Sabrina Corlette of the Health Policy Institute of Georgetown University told the New York Times. “Insurers need to know the rules of the road in order to develop plans and set premiums.”
Even had Hillary Clinton won the presidency, Obamacare would have faced an overhaul. Several insurers have reported losses on policies issued under the ACA, and some of them announced before the election that they would no longer sell health care coverage on the federal and state ACA exchanges (marketplaces).
Trump has promised to retain two popular features of Obamacare: covering persons with pre-existing medical conditions and allowing children to remain on parents’ policies until they are 26 years old. But it’s unclear how Republicans intend to pay for these benefits if the ACA is repealed. Obamacare attempted to finance these provisions and subsidies for policy holders by requiring most Americans to purchase health insurance or pay a tax penalty. Republicans have talked about substituting tax credits for subsidies; Democrats worry that such credits won’t be sufficient to provide coverage for those with low incomes.
States could also be affected by changes in Medicaid, the federal-state program that provides health care for the poor and disabled and is the second costliest item after education in many state budgets. When Congress passed the ACA, states were required to expand Medicaid to cover families and individuals with incomes up to 138 percent above the poverty line (now $33,534 for a family of four.) When the Supreme Court upheld the constitutionality of the law, it gave states discretion on this expansion. Thirty-one states have expanded Medicaid, not all of them to the full amount allowed.
Regardless of whether they have expanded or not, many states have sought more flexibility on federal Medicaid rules. They may get this if Rep. Tom Price (R-Georgia), Trump’s choice for health and human services director, is confirmed. Price, an orthopedic surgeon and fierce foe of Obamacare, favors giving states more leeway on health matters.
More flexible federal rules would allow innovations to reduce Medicaid costs and improve health care, as several states are already doing. But if Medicaid is reduced and the ACA repealed without adequate replacement, hospital emergency rooms will brace for an influx of sick people who lack insurance. Since the ACA became fully effective in 2014, uncompensated care at hospitals has declined $7.4 billion.
Here is how a Trump administration might impact other issues:
Climate and energy. During the campaign Trump called climate change a “hoax,” threatened to walk away from the Paris accord limiting greenhouse gas emissions and said he would scuttle the Clear Power Act championed by President Obama. Since the election, he has modified these positions, causing uncertainty about what he will do once in office.
But regardless of what Trump does, states such as California and Hawaii will continue pursuing ambitious goals of relying more on alternative energy. Many businesses will, too. Google, for instance, expects that 100 percent of its data centers and offices’ power will come from renewable energy sources by this time next year. Such actions make a difference. The shift of the American energy market away from fossil fuels to renewables has been driven more by economics than federal regulation, according to a recent report by the Breakthrough Institute. Ted Nordhaus and Jessica Lovering, the report’s authors, found that progress on reducing carbon in the atmosphere has been determined by specific energy, industrial and innovation policies, “not emissions targets and timetables or international agreements...”
Education. Trump proposed during the campaign a $20 billion grant program to encourage states to expand school choice through vouchers, charter schools and magnet schools. His choice of Betsy DeVos, a Michigan billionaire and charter school advocate as his secretary of education, suggests he intends to follow up on this promise in an effort to break up a public education system that Trump has called “a government-run monopoly.” Count on teachers unions and many Democrats to resist.
Infrastructure. For a report on state transportation needs, see “Election Issues To Be Considered by Lawmakers in 2017” in the Dec. 12 State Net Capitol Journal. Additionally, note that Trump’s promise to invest $1 trillion in U.S. infrastructure over the next decade has won cautious praise from Sen. Charles Schumer (D-NY), the new Senate minority leader. It’s unclear if congressional Republicans are as enthusiastic about infrastructure spending as Schumer and the president-elect.
Immigration. Any attempt at mass deportation of unauthorized immigrants by a Trump administration would provoke intense opposition from a myriad of state and city governments led by California, which is home to an estimated 2.4 million such immigrants. Conflicts also loom over “sanctuary cities” that protect immigrants from deportation by limiting cooperation with federal authorities. The Center for Immigration Studies lists 300 cities, counties and states as sanctuary jurisdictions, including the entire states of California, Connecticut, New Mexico and Colorado, and such cities as Boston, Chicago, New Orleans and New York. Trump has threatened to withhold federal money from jurisdictions that refuse to cooperate with immigration authorities. But local police officials say that unauthorized immigrants won’t report crimes if doing so could reveal their immigration status.
During the campaign Trump called for deporting to their countries of origin the estimated 11 million unauthorized immigrants who live in the United States. Since the election he has focused on deporting two million to three million immigrants he claims have criminal records. Most recently, Trump expressed sympathy for so-called “Dreamers,” the 750,000 or so immigrants brought to the United States as children, many of whom did not know until adulthood that they were not citizens.
Again, it’s uncertain what Trump will do as president. But while congressional action would be needed to advance most of Trump’s agenda, he has considerable executive authority on immigration, as Obama demonstrated in protecting Dreamers over congressional objections and even court decisions.
As president, Obama has also deported 2.5 million immigrants, most of them Latinos, and many for relatively minor offenses, prompting the Economist to call him “deporter in chief.” These family-splitting deportations caused anguish in Latino communities but otherwise provoked no widespread outcry. Based on the outspoken opposition to Trump’s deportation rhetoric, it may be different this time.
Resistance to a militant deportation policy is most likely in California, a notable outlier in the 2016 election. Clinton carried California by 4.3 million votes, much more than her overall national lead in the popular vote. Democrats won a super majority in the Legislature, where bills have been introduced to provide legal assistance for immigrants facing deportation.
Overall, the nation is now more Republican than at any time since Herbert Hoover was in the White House from 1929 to 1933. Republicans control the White House, both houses of Congress, 68 of 98 partisan legislative chambers and 33 governorships. Democrats in most states are back on their heels.
In the age of Trump, nonetheless, red and blue states alike will face tests that require more than partisanship. It’s too early to know the full nature of these challenges, but significant changes are in the wind.