The GOP's growing problem of how to pay for Obamacare replacement - Axios
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The GOP's growing problem of how to pay for Obamacare replacement

Pictures of Money / Flickr Creative Commons

Republicans may quickly learn there's no such thing as an easy way to pay for health reform. After years of attacking Obamacare's industry taxes and other funding sources, the GOP is running out of ways to pay for their replacement plan without using the options they've criticized so heavily in the past.

The first red flag came last week, when key committee chairmen threw their support behind repealing the Obamacare taxes along with the law's subsidies and mandates. This would immediately gut revenue that could be used later to pay for a replacement plan.

Now, powerful lobbyists are trying to knock out another big source of money: the GOP plan to limit the tax break for employer health coverage. If both funding sources go, there's not much money left for an Obamacare replacement.

The lobbying behemoth opposing Obamacare's "Cadillac tax," which is aimed at expensive employer-sponsored health plans, is now warning Republicans not to limit the tax breaks for employer-sponsored insurance benefits. The group, the Alliance to Fight the 40, says the two ideas are essentially the same except for one key difference: The tax would only indirectly be paid by employees, while the limit on the tax breaks would come directly out of their pockets.

If those lobbyists are successful, it could be a problem, budget wonks say — because Republicans won't have any money left for a replacement plan if they lose all of the Obamacare taxes and don't generate any new ones. "This is a big deal," said Ed Lorenzen, a senior adviser at the Committee for a Responsible Federal Budget.

Quick refresher:

  • Obamacare taxes are paid by insurers, medical device manufacturers and drug companies. There's also a tax on high-income households. Together, these would bring in about $680 billion over ten years, according to the Brookings Institution.
  • Obamacare's "Cadillac tax" is aimed at unusually generous employer health plans. The employer pays the tax, but opponents argue that gets passed on to employees.
  • A cap on tax-exempt employer benefits effectively means that the tax break only covers up to a certain amount, and then the employees pay taxes on the rest.

In both cases, the goal is the same: increase federal revenue and control health care costs.

Why the cap is in trouble: The Alliance is unquestionably effective. Two years ago, it fought hard against the Cadillac tax and won a two-year delay: Congress pushed back its implementation from 2018 to 2020. Almost every Republican in Congress came out in opposition to the tax, and many Democrats also had issues with it. The group is now going to make the case that a vote against the Cadillac tax should be a vote against a cap.

The employer benefit cap is a large source of revenue in a Republican replacement plan, although how much it saves depends on where the threshold is set. Yet even Paul Ryan, who has included a cap in his own health reform proposals, wouldn't commit to including it in the GOP health plan last week: "Where Congress goes on this is an open question," he said during his weekly press conference.

The link to the populism that elected Trump is pretty obvious. Taxing premiums will increase deductibles and cost-sharing for workers, the Alliance says, which is something polling has shown is the opposite of what Americans want.

Why the Obamacare taxes are in trouble: While some Republicans have said they're nervous about repealing the taxes because of the budgetary issues down the road, they may be on the losing side of the battle. Sen. Orrin Hatch, chairman of the powerful Finance Committee, said in a Chamber of Commerce address last week that "all of the Obamacare taxes need to go as part of the repeal process."

Why it matters: If a GOP plan has no taxes or limit on tax breaks for those insured by their employer, then only about 40 percent of the funding for Obamacare's coverage expansion would be available for the replacement plan, Brookings estimates. That means the GOP plan would have to significantly reduce the amount of people covered or the benefits offered, unless they find a different way to pay for it.

Wonks aren't the only ones pointing this out; Democrats are too. "How are you going to put a subsidy in place for people buying on insurance exchanges? How are you going to provide states with the Medicaid money that we promised them?" Senate Minority Whip Dick Durbin asked me. "Pull the string and it all starts to unravel."

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Photo: LM Otero / AP

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  • 69% of the surveyed young farmers had college degrees — significantly higher than the general population.
  • Why it matters: "This new generation can't hope to replace the numbers that farming is losing to age. But it is already contributing to the growth of the local-food movement and could help preserve the place of midsize farms in the rural landscape."
  • Where it's happening: "In some states, such as California, Nebraska and South Dakota, the number of beginning farmers has grown by 20 percent or more."
  • The millennials are "far more likely than the general farming population to grow organically, limit pesticide and fertilizer use, diversify their crops or animals, and be deeply involved in... farmers markets."
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Photo: Richard Vogel / AP

Uber's "latest misbehavior involving a data breach cover-up revealed this week could be the impetus for people to ride elsewhere," according to AP's Tom Krisher in Detroit and tech writer Barbara Ortutay:

  • "[R]iders have fled from the service before, but enough have stayed because of the Uber's convenience."
  • "[T]his week the state of Colorado fined Uber $8.9 million for allowing employees with serious criminal or motor vehicle offenses to drive for the company. Then came the stolen data, which has touched off more government inquiries."
  • Why it matters: Polling by Brand Keys Inc., a New York-based customer research firm, "found that in 2015 Lyft passed Uber as the most trusted of ride-hailing brands, and trust in Uber has been eroding ever since."
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How Trump risked a key intel relationship

Trump meets with Russian Foreign Minister Lavrov, left, and Russian Ambassador Kislyak at the White House in May. Photo: Russian Foreign Ministry Photo via AP

Astonishing reporting from Vanity Fair's The Hive, by Howard Blum ... "What Trump ... told Kisylak after Comey was canned ... During a May 10 meeting in the Oval Office, the president betrayed his intelligence community by leaking the content of a classified, and highly sensitive, Israeli intelligence operation to two high-ranking Russian envoys, Sergey Kislyak and Sergey Lavrov":

  • Israeli spies and counterterrorism forces had discovered that "ISIS terrorists were working on transforming laptop computers into bombs that could pass undetected through airport security." That led to new U.S. and British restrictions on flights from abroad.
  • "[T]he Israeli mission was praised by [the American espionage community] as a casebook example of a valued ally's hard-won field intelligence being put to good, arguably even lifesaving, use."
  • "Yet this triumph would be overshadowed ... when ... Trump revealed details about the classified mission" to the Russian officials in in the Oval.
  • Why it matters: "[F]resh blood was spilled in [Trump's] long-running combative relationship with the nation's clandestine services. Israel ... would rethink its willingness to share raw intelligence, and pretty much the entire Free World was left shaking its collective head in bewilderment."
  • Listen in.

P.S. Paul Manafort took at least 138 trips to Ukraine between 2004 and 2015 while consulting for Russian and pro-Russian oligarchs, McClatchy'sPeter Stone and Greg Gordon report:

  • "As the GOP platform committee drew up party positions a week before the Republican National Convention, a plank calling for the United States to provide 'lethal weapons' for Ukraine's defense was altered in a controversial and mysterious move."
  • An "American consultant in Ukraine said that Manafort ... had boasted he played a role in easing the language."
  • "Charlie Black, a onetime partner of Manafort's, says he remains baffled by the change. 'It was inexplicable to me that a majority of platform members would have taken a pro-Russian position on Ukraine.'"
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More than 620,000 Rohingya Muslims have fled Myanmar

Photo: Bernat Armangue / AP

This aerial photo shows the Kutupalong Rohingya refugee camp in Bangladesh, housing Rohingya Muslims who fled across the border to escape violence. More than 620,000 Rohingya have fled from Myanmar into Bangladesh since Aug. 25, when the army began what it called "clearance operations" following an attack on police posts by a group of Rohingya insurgents.

Go deeper: The big picture on the crisis

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Antsy shoppers wait for a Best Buy to open on Thanksgiving in Overland Park, Kansas. Photo: Charlie Riedel / AP

"With the jobless rate at a 17-year-low of 4.1% and consumer confidence stronger than a year ago, analysts project healthy sales increases ... The National Retail Federation ... expects sales ... to at least match last year's rise of 3.6% and estimates online spending and other non-store sales will rise 11 to 15%," per AP.

  • "Black Friday has morphed from a single day ... into a whole season of deals, so shoppers may feel less need to be out."
  • Stunning stat: "Analysts at Bain say Amazon is expected to take half of the holiday season's sales growth."
  • AP reports that Hatchimals are hot:
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Egyptian state TV is reporting that 184 people were killed and 125 more wounded in a bomb and gun attack on a mosque in North Sinai, Egypt, per AP. That number has been rising rapidly, and we will continue to update it as we get more information.

Police say men in off-road vehicles fired upon worshippers during Friday prayers at the mosque, in the town of Bir al-Abed. It appears that the explosion happened first, and the attackers fired on the worshippers as they fled.

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Franken apologizes over latest claims, cites "warm" personality

Al Franken at The BookExpo2017 in New York City. Photo: Dennis Van Tine/STAR MAX/IPx

Democratic Sen. Al Franken has issued a statement about the latest allegations that he groped women while posing for photographs, saying he has taken "thousands of photographs" and is a "warm person," but acknowledging he "crossed a line for some women." He says he is sorry he made "some women feel badly."

Why it matters: Franken is in survival mode after four allegations of unwanted contact, and facing an Ethics investigation and some calls to resign. He's walking a tightrope here, not denying the individual accusations while portraying them as rare missteps resulting from his "warm" personality, rather than a pattern of creepy behavior. He says he plans to win back the "trust" of his constituents.

Full statement

"I've met tens of thousands of people and taken thousands of photographs, often in crowded and chaotic situations. I'm a warm person; I hug people. I've learned from recent stories that in some of those encounters, I crossed a line for some women — and I know that any number is too many. Some women have found my greetings or embraces for a hug or photo inappropriate, and I respect their feelings about that.

"I've thought a lot in recent days about how that could happen, and recognize that I need to be much more careful and sensitive in these situations. I feel terribly that I've made some women feel badly and for that I am so sorry, and I want to make sure that never happens again. And let me say again to Minnesotans that I'm sorry for putting them through this and I'm committed to regaining their trust."

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Trump's morning tweets: NFL protests, Middle East "mess" and golf

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Worth noting: This White House treats golf as a clandestine operation, never saying whether or not Trump is actually playing, so this is a rare bit of candor.

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Survey: Only half of Americans think they know when online shopping is safe

Bonobos guide Reynaldo Sanchez inputs clothing information into the store's customer website. Photo: Bebeto Matthews / AP

Only half of consumers report they think they can tell which web sites are safe for online shopping and 35% of Americans claim they have stopped an online purchase out of security fears, according to the Global Cybersecurity Alliance (GCA) and Zogby Analytics survey.

Why it matters: Cyber Monday is next week. More fake web sites are launched during the holiday shopping season than at any other point during the year.

Shoppers beware:

  • The brands that are likely to have the most phishing attempts this year are Amazon, Walmart, and Target, according to the Anti-Phishing Working Group.
  • Clicking on false links from emails or typing in web site urls with slight misspellings, such as Walmaart instead of Walmart, can expose consumers to ransomware or to unintentionally releasing their financial or personal information.

The state of online shopping:

  • 77% of Americans reported they had mistyped an address in their browser and ended up at a different site than they intended, according to the survey.
  • 68% have clicked on a link in an email that has taken them somewhere else than they expected.
  • Only 13% reported changing DNS settings on their computer and 11% on their wireless router.
Tips, according to Gang Wang, assistant professor in the Department of Computer Science at Virginia Tech:
  • Avoid clicking on links that have been emailed to you to avoid phishing or spoofing scams.
  • Browsing on sites with https, not http, is safer, since criminals can monitor network traffic on http sites and lift credit card information, for example.
  • Shopping on mobile devices could be riskier than shopping on a computer, since url bars are smaller and reading whether they are shortened or legitimate might not be possible.
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Why it matters: If Broadcom buys Qualcomm — combined with Qualcomm's pending purchase of Dutch rival NXP — it would expand the chip-making market's Big Two into its Big Three:

Data: Gartner, Jan. 2017; Chart: Andrew Witherspoon / Axios
Qualcomm recently rejected an unsolicited $103 billion takeover offer from Broadcom, but all indications are that Broadcom will go hostile by nominating a slate of Qualcomm board directors by a Dec. 8 deadline. The effort would continue to be backed by longtime Broadcom investor Silver Lake, which has committed up to $5 billion in financing.
  • Private equity angle: Silver Lake does not have any hostile takeover restrictions in its limited partnership agreements, as do some other private equity firms. It did, however, object to The Blackstone Group's consideration of a hostile bid for Dell Inc. several years back, which would have rivaled Silver Lake's own deal for the company in partnership with Michael Dell. As for its rhetorical about-face, the (tenuous) argument here would be that Silver Lake is backing an existing management team (Broadcom) rather than being a purely hostile actor (no, Qualcomm wouldn't see it quite so generously).
Broadcom also last week finalized its purchase of network equipment maker Brocade, while smaller chip-maker Marvell Technology Group said that it would pay $6 billion to buy Cavium.