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The Commerce Department announced on Tuesday that the U.S. trade deficit had grown to $49 billion in January, the biggest it’s been in nearly five years.
That may seem like minor news in a week that also saw President Trump announce a new ban on travel from several majority Muslim countries and congressional Republicans reveal their plan to replace the Affordable Care Act. (More about both those issues in a bit.) But it points to an interesting question: How should we evaluate Trump’s success as president?
Trump, of course, cares deeply about the trade deficit. On the campaign trail, he talked repeatedly about how the U.S. is “losing” to countries such as China and Mexico that sell more products to the U.S. than they buy in return. This week, Trump’s top adviser on trade, economist Peter Navarro, published an op-ed in The Wall Street Journal arguing that the trade gap is a major drag on economic growth. It seems reasonable, then, to judge Trump’s economic performance in part on how successful he is at chipping away at that gap. (Tuesday’s data mostly reflected the period before Trump took office.)
Most economists are skeptical that Trump will be able to reduce the trade deficit. But they are even more skeptical that the deficit is a good way to judge the success of his economic policies. As Neil Irwin explained in The New York Times on Tuesday, the trade balance isn’t a scorecard — deficits aren’t inherently bad or inherently good. (A widening deficit can be a sign of an improving economy, because if Americans start earning and spending more, they will probably buy more goods from overseas.) And as former Obama administration economist Jared Bernstein wrote this week, the trade gap is a function of foreigners’ saving and spending decisions, too, meaning U.S. policymakers have at best limited control over its path.
So evaluating Trump on the trade deficit is fair (he chose the metric, after all) but also absurd (it’s a bad metric, and one he doesn’t control). This issue goes beyond trade. Trump has pledged to boost economic growth to 4 percent per year, a target few economists consider realistic. He wants to bring back manufacturing jobs, even though their disappearance is due largely to factors outside of any president’s control. His promises on crime, immigration, foreign policy and other subjects are often built on false premises. Trump’s critics will no doubt crow about his failure to achieve his stated goals. But a more impartial assessment will require a different, more objective set of benchmarks. Otherwise it will be up to Trump to set the terms of the debate.
Here are some of the major policy developments from the past week:
Health care: When “covered” doesn’t mean “accessible”
As he frequently does, White House press secretary Sean Spicer brought along some props — two stacks of paper — to a press conference on Tuesday. The stacks represented the Affordable Care Act and the Republicans’ new (much shorter) replacement for it. “Look at the size. This is the Democrats,” he said, pointing to the bigger pile. “This is us,” he said pointing to the smaller pile.
Spicer’s point was that unlike the sprawling ACA, the GOP bill is a paragon of small-government efficiency. What he didn’t mention, however, is a big reason that the Republican plan is so much shorter: It isn’t really a full replacement, just an addendum, adding or changing various provisions of the existing law. To fully repeal the ACA would take 60 votes in the Senate, which Republicans don’t have. And so, the American Health Care Act, as the GOP bill is called, is likely to go through what’s known as the reconciliation process, which only allows changes to provisions that directly affect the budget.
The reconciliation process doesn’t just make the GOP plan shorter; it also affects what’s in it. In particular, the new bill doesn’t cut what are known as essential health benefits, an ACA requirement that insurers cover a list of basic services including prescription drugs, treatment for mental health and substance abuse, and pregnancy care. Republicans, including Health and Human Services Secretary Tom Price, have decried these benefits, which increase insurance premiums (though it’s not clear by how much) by requiring broader coverage than insurers would otherwise offer. But these benefits don’t directly affect the budget, meaning it would be hard to repeal them using the reconciliation process. The AHCA does cut essential health benefits from Medicaid expansion, a telling sign that Republicans would still like to see these benefits go.
Just because health plans will still technically cover a wide range of services, however, doesn’t mean patients will be able to access them in practice. The GOP bill changes the law so that insurers can sell catastrophic coverage, plans that would not pay for most health services until a deductible is met. Under the ACA, out-of-pocket spending (including deductibles) can be as high as $14,300 for a family in 2017, which is about a quarter of the median U.S. household income. That means essential benefits could be out of reach to many if the House bill passes.
More health care: Scoring the scorers
Republicans released their health care plan (and passed it through two committees) before the nonpartisan Congressional Budget Office had a chance to do its usual analysis of the bill’s impact. And in case the message wasn’t clear enough, Republicans then launched a pre-emptive broadside against the CBO and its record. “If you’re looking at the CBO for accuracy, you’re looking in the wrong place,” Spicer said Wednesday. Republican Rep. Richard Hudson of North Carolina called the CBO analysis — an analysis that, again, does not yet exist — “a false argument that the Democrats have created.” (For the record, the CBO’s analysis of the ACA was imperfect but, on the whole, pretty good.)
Criticism of the CBO is neither new nor the exclusive province of Republicans. Back in 2009, it was Democrats who ripped the office over its analysis of a health care plan, in that case the bill that eventually became the ACA. But at least Democrats waited for the CBO to release its report before they attacked it.
It’s no mystery why Republicans are going on offense: They know that the CBO analysis, whenever it arrives, will forecast that millions of Americans would lose their health coverage under the GOP plan. That finding won’t be controversial among health care experts: The Republican plan would cut back insurance subsidies and phase out the ACA’s expansion of Medicaid, which together make a decline in coverage a near certainty. Several unofficial analyses have already reached the same conclusion.
One option for Republicans would be to concede that their plan would cover fewer people and then to argue that the benefits are worth the cost. Health care policy, after all, is all about tradeoffs — and plenty of people think the ACA got the balance wrong. That’s more or less the case House Speaker Paul Ryan made this week when he called coverage rates a “bogus” metric and said he was focused on cost instead.
The problem for Republicans is that Trump explicitly rejected that approach earlier this year when he promised “insurance for everybody” as part of the ACA replacement. In Trump’s telling, the Republicans can deliver more coverage (the ACA, after all, never achieved universal coverage), better care and lower prices. It doesn’t take a CBO report to know that’s a tall order.
Travel ban: A quieter rollout
On Monday, Trump signed a new executive order restricting immigration from six majority Muslim countries to the U.S. It replaced his original “travel ban,” signed in late January. That first order sparked strong opposition, including in the courts. The new order has, relative to the first order, flown mostly underneath the radar. There have not been massive protests at this point, and interest in the press has been relatively limited.
The new travel ban has not led the news since Monday. On the news aggregator site Memeorandum, which uses an algorithm to figure out which topics are leading online political coverage, the executive order was the 12th story listed on Tuesday at 9 a.m. It wasn’t even featured among any of the top stories at that time on Wednesday or Thursday. On both days, it was drowned out by coverage of the new Republican health care bill. In contrast, news about Trump’s original travel ban (signed Friday, Jan. 27), was the top story on the following Saturday, Sunday and Monday. In fact, it wasn’t until five days later, on Feb. 1, that a story not about the travel ban led Memeorandum. And even then, the travel ban was the No. 2 story.
In this case, it seems that the press is following the search habits of its consumers. According to Google Trends, searches for “travel ban” are up since Monday compared to those in much of February. They are not, however, anywhere near the peak following Trump’s original executive order. Searches for “travel ban” are less than half what they were.
Now, as the chart indicates, searches for “travel ban” spiked several times after Trump signed his first executive order. It’s possible that something stirs interest in the ban down the line. Perhaps a lawsuit such as the one brought by Hawaii against Trump’s new ban. But for now, there’s simply less interest from Americans in Trump’s new order than the old one. That’s probably good news for Trump given that so much of the original interest was negative.
More from FiveThirtyEight
- Lots of health care coverage! Perry Bacon Jr. broke down the groups that could make it hard for Republicans to pass their plan. Anna Maria Barry-Jester said the plan will affect people with different types of coverage differently. Nate Silver examined why it’s so hard for Republicans to agree on a plan. Harry Enten dug into the polling. And the politics team debated whether the plan will ever become law.
- The Republican health plan would also block federal funding for Planned Parenthood. That would have profound effects on women’s health care.
- The second version of Trump’s travel ban might be more politically palatable than the first, but it’s less clear whether the new version will pass legal muster. The ban might also affect doctors working in the Rust Belt and Appalachia.
- Wednesday’s “A Day Without A Woman” protests came nearly half a century after a similar strike. Women have made progress since then, but many of the earlier protest’s goals remain unmet.