Looking behind the numbers of the September jobs report

Published: Friday, October 06, 2017 @ 11:50 AM

As the Labor Department reported that the U.S. economy lost 33,000 jobs in the month of the September – possibly due to the impact of Hurricane Harvey and Hurricane Irma – the numbers behind that new jobs report did not seem to indicate a broader negative outlook for the U.S. economy, but it’s clear that economic growth still hasn’t moved into a higher gear as yet in the Trump Administration.

Here is some of what we learned:

1. This was the first monthly job loss since September 2010. Seven years. That’s how long it had been since the monthly jobs report went the wrong way, back during the second year of the Obama Administration. The loss of 33,000 jobs means the average monthly job growth so far in 2017 is just over 148,000 jobs. At this point in 2016, the average monthly job growth was just under 200,000 jobs. At this point in 2015, the average monthly job growth was 209,000 jobs. So, it’s clear that job growth so far during the Trump Administration has slowed from past years.

2. The unemployment rate headline was good. The national jobless rate dropped to 4.2 percent in September, which is the lowest since February of 2001, at the start of President George W. Bush’s Administration. The jobless rate did not go down because people were leaving the labor force – instead, the size of the labor force swelled by 575,000 people, which means many more people were actively looking for a job. The Labor Force Participation rate increased to 63.1 percent, the highest since March of 2014. So, those are strong numbers, despite the 33,000 job loss. But economists have long said that the economy needs monthly job growth of over 300,000 to help restore employment to many who suffered during the 2008-2009 downturn. And we haven’t been close to that.

3. The U6 rate lowest since June 2007. The broadest measure of unemployment is known as the U6 rate, which includes all unemployed, those who are working part time while looking for a full time job, and those who aren’t looking currently for a job – but still want one, and have worked in the last year. That rate dropped to 8.3 percent in September, the lowest U6 rate in over 10 years. That’s another good indicator about the psyche of the economy, and workers as well.

4. Where were the job losses and job gains? This is where we get into the impact of the hurricanes, according to the Labor Department. “Employment in food services and drinking places dropped sharply in September (-105,000), as many workers were off payrolls due to the recent hurricanes,” the report stated. One of the strongest areas of the U.S. economy continues to be in health care, which added 23,000 jobs in September. Manufacturing was flat, which was a change from the last year.

5. GOP calls for tax reform. As D.C. digested the first negative growth jobs report in seven years, Republicans in Congress reinforced their call for tax reform legislation, arguing a cut in rates will spur new economic growth, and help the economy create more jobs. “In the weeks ahead, the Ways and Means Committee will move forward with pro-growth, pro-middle-class tax reform legislation that Congress will ultimately send to the President’s desk this year, for the first time in 31 years,” said Rep. Kevin Brady (R-TX). Democrats meanwhile saw something different. “The U.S. economy is not working as it should for middle-class America,” said Rep. Joe Crowley (D-NY). One thing is for sure, this September jobs report was a curve ball for the markets.

Trump presses tax reform as Senate begins debate on GOP budget outline

Published: Wednesday, October 18, 2017 @ 2:08 AM

President Donald Trump urged conservative activists on Tuesday night to help lobby Senators in favor of a GOP tax reform package, as despite some infighting, Republicans seemed like they would be able to approve a budget outline this week in the Senate, a plan which would allow for future legislative action on a tax bill – without the threat of a Senate filibuster.

“Let’s give our country the best Christmas present of all – massive tax relief,” the President said in a speech at the Heritage Foundation, where his vow of big tax cuts drew large cheers from the audience.

“This is our once-in-a-generation opportunity to revive our economy,” Mr. Trump added, though he acknowledged that he doesn’t expect much support from Democrats in the Congress.

Before any tax bill can be brought up on the floor of the House and Senate, both chambers must approve a budget outline for 2018, which authorizes the use of the ‘budget reconciliation’ process for tax reform – helping the GOP to avoid a Senate filibuster. That was the same legislative tool used in a failed bid to overhaul the Obama health law.

In an important sign for the White House, Sen. Thad Cochran (R-MS) – who had been absent for weeks with an illness, returned to Capitol Hill on Tuesday – and then, GOP leaders won the support of another key Republican Senator, who has tangled repeatedly with the President.

“I support the Senate budget resolution because it provides a path forward on tax reform,” said Sen. John McCain (R-AZ), who still wants GOP leaders to add more money to the budget outline for military needs.

Still not ready to commit to the budget or tax plans was Sen. Rand Paul (R-KY), who lobbed a series of pointed jabs at both McCain, and Sen. Lindsey Graham (R-SC), accusing them of trying to use budget gimmicks to funnel more money to the Pentagon, instead of finding ways to restrain spending.

In a first test vote, the Senate voted 50-47 in favor of beginning debate on the budget framework for 2018, which would balance the budget by 2026. A House budget outline would achieve that a year later.

No Democrats joined with Republicans to begin the Senate debate, as right now, the White House faces a difficult task in getting any Democratic lawmakers to endorse the President’s budget or tax plans.

“It’s going to be hard to get the Democrats, because they’re obstructionists, and they vote in blocks,” the President said in his Tuesday night speech.

If no Democrats cross party lines on taxes, that makes it all the more important for the GOP to stick together in the Senate, or the GOP could face the same outcome as on health care reform.

No legislative language for a tax reform plan has been released as yet by the GOP. Lawmakers don’t expect to see all the details until next month.

With backing of Trump, key Senators reach deal to fund health subsidy payments

Published: Tuesday, October 17, 2017 @ 2:37 PM

Key Senators say they have reached a deal – backed by the President – which would fund payments to health insurance companies for two years, while also giving states more flexibility in how they deal with the underlying requirements of the Obama health law.

“Yes, we have been involved,” President Donald Trump told reporters when asked about the negotiations. “This is a short-term deal,” as the President again said he hopes to get Congress to approve a set of longer-term reforms which revolve around block grants to the states.

The plan, worked out by Sen. Lamar Alexander (R-TN) and Sen. Patty Murray (D-WA), was discussed by Senators at their Tuesday lunch meetings in the U.S. Capitol; no legislative text was immediately available.

The deal would reverse a decision made last Thursday night by President Trump, who moved to stop payments to insurance companies known as “Cost Sharing Reduction” payments.

Republicans have claimed for several years – and federal courts have backed them up – that the payments were never directly approved by the Congress, and thus should never have been made by the federal government.

Mr. Trump authorized the payments from the start of his administration in January, but regularly threatened to end them – following through on that late last week.

Trump move to end health insurer payments may cost feds billions more

Published: Monday, October 16, 2017 @ 8:41 PM

Even as President Donald Trump urged Senators on Monday to find a bipartisan deal on short-term fixes to the Obama health law, the consensus among health insurance experts is that Mr. Trump’s decision last week to no longer make payments to insurance companies to cover the health-related costs of some Americans might actually cost the federal government billions more in the years ahead.

At issue is the “Cost Sharing Reduction” payments that had been made by the Obama and Trump Administrations – that money helps subsidize insurance costs of some consumers in the Obamacare exchanges.

Those payments were never expressly approved by the Congress, leading many Republicans to charge that the spending had been illegal, and spurring the President to block the payments.

And that’s where the subject gets a bit complicated.

“The Congressional Budget Office estimated that not funding CSR would lead to a net increase of $194 billion in more spending over the next decade,” said health care researcher David Anderson of Duke University.

But wait – how would halting an expected $10 billion in payments in 2018, a move that would save Uncle Sam money – how would that lead to such a big cost for the feds over the next decade?

“While the federal government would save money by not making CSR payments, it would face increased costs for tax credits that subsidize premiums for marketplace enrollees with incomes 100-400% of the poverty level,” wrote officials of the Kaiser Family Foundation, which focuses on health care policy matters.

In other words, different subsidies doled out under the Obama health law would go up as insurance companies raise premiums to deal with the loss of the CSR federal payments – those are known as “Advance Premium Tax Credits,” which can go to families of four with a yearly income of up to $97,000.

“The biggest effect from the termination of cost-sharing subsidy payments is that premiums are going up to offset the loss,” said Larry Levitt of Kaiser, who labeled the impact of the Trump CSR decision, “confusing and complicated.”

One example of that started to appear on Monday in in Pennsylvania, as state officials said health coverage “rates will increase by an average 30.6 percent in the individual market ,” instead of by 7.6 percent.

One recent story from the Miami Herald found that the Trump move on CSR payments would mean a big increase for Florida in the amount of federal dollars spent to subsidize those who get their health insurance through the Obamacare exchanges in that state.

Some experts argue that Mr. Trump’s decision will have the biggest negative impact on insurance rates in states that are normally in the Republican column – especially if those states did not move to expand the Medicaid program during the Obama Administration.

In recent months, a bipartisan group of Senators had been working to figure out a way to tinker with the Obama health law, and make sure the CSR payments were made by Congress, led by Sen. Lamar Alexander (R-TN), who told reporters on Monday evening that he had already spoken with the President about his CSR decision.

Some GOP Senators have grumbled in recent weeks about the talks between Alexander and Sen. Patty Murray (D-WA), worried that it will contain little in the way of concessions by Democrats on the operations of the Obama health law.

That’s a concern for Republicans in the House as well, and could lead to a stalemate in Congress on any short-term effort to deal with the Obama health law.

“At this time, in my opinion, doing nothing is an acceptable outcome for liberal policy preferences while doing nothing moves policy further away from stated conservative policy preferences,” said Anderson of Duke University.

“I want to get healthcare that’s much more affordable and much better healthcare, and that’s what we’re doing,” the President said on Monday when asked about the CSR payments decision.

What that exactly means for the President is still not clear.

VIDEO: Trump and McConnell take questions after White House meeting

Published: Monday, October 16, 2017 @ 3:05 PM

With a lot of work still needed in Congress on key items of President Donald Trump’s legislative agenda, Mr. Trump met for lunch on Monday with Senate Majority Leader Mitch McConnell, giving off no signs of any ill will despite some sparring in the past, as both men vowed to push ahead on plans for major tax cuts and reform, emphasizing the need to get that done by the end of 2017.

“We’re fighting for the same thing – we’re fight for lower taxes, big tax cuts – the biggest tax cuts in the history of our nation,” the President said at a hastily assembled meeting with reporters in the White House Rose Garden.

“I want to underscore what the President said – we have the same agenda,” McConnell said, standing next to the President the entire time, as reporters verbally jostled to get his attention during a somewhat raucous Q&A that had not been on the original schedule for Mr. Trump.

“My relationship with this gentleman is outstanding,” Mr. Trump said of McConnell, not mentioning some of his tough statements and tough tweets about the Senate GOP leader in the past.

Here is the full Trump news conference, with McConnell: