How Trump’s policies could hurt the Rust Belt
(CNN)“The Rust Belt is so incredible,” President Donald Trump said in a speech in Indiana after winning the election.
The region has been credited by Trump himself for his victory. Speaking of Hillary Clinton’s loss, Trump has said, “It was a bad candidate who didn’t go to Wisconsin or Michigan like they should have.”
He tailored his economic message to winning voters there, promising to renegotiate trade deals like NAFTA and promising new manufacturing jobs. Those efforts are still underway.
Trump came into office promising to shrink government. And his proposals would do that.
But more often than not, the consequences of specific language he has endorsed would be felt disproportionately in the Rust Belt. This is not a phenomenon isolated to one bill or a partisan twisting of the facts, but rather something that repeats in data and projections for a number of proposals he supports. Here are a few:
It’s in the details of many of the health care plans proposed thus far where the Rust Belt sees the most hurt.
A lot of people in the Rust Belt have pre-existing conditions. But ensuring that people with pre-existing conditions can get health care, or care at the same cost as other people, has not been a requirement of most of all of the health care legislation Trump has pushed. This has caused such an uproar that the “Jimmy Kimmel test” turned into one of the biggest points of debate over proposals in the Senate.
The Republican bills could also be hard on Medicaid enrollees in the Rust Belt. With the exception of Wisconsin, which did not expand Medicaid, the Rust Belt has been one of the biggest beneficiaries of the expansion of Medicaid under the Affordable Care Act. Pennsylvania, Ohio, Illinois and Michigan are ranked numbers third, fourth, fifth and sixth in the US in how many people they have added to their Medicaid rolls due to the Obamacare expansion, according to the Kaiser Family Foundation.
But most of the bills proposed this year would have undone the expansion or set funding limits with caps or block grants on traditional Medicaid. (Note: supporters say the block grants would enable state governments to better serve their populations, but it is beyond dispute that block grants would curb the amount of money in Medicaid programs.)
Treatment for opioid addiction, which has high mortality rates in Ohio, Pennsylvania and Michigan, could also be jeopardized by bills Trump backed. The bills lacked requirements or allowed states to get waivers for essential health benefit guarantees, which cover substance abuse. Medicaid expansion rollbacks, which reduce access to care for lower-income individuals, could also negatively impact drug addiction recovery. Ohio has the third highest opioid death rate in the nation, according to the Kaiser Family Foundation.
One area where Trump’s policies may not impact the Rust Belt as much is his stopping payments for cost-sharing reductions (CSR) to insurance companies. Rust Belt states have a lower number of enrollees benefiting from CSR payments.
As the Trump administration doubles down on tax reform this week, analysts have pointed out that those at the very top of the income spectrum will fare the best in the proposed framework, with the top 0.1% of earners seeing after-tax income jump more than 10%. The plan’s mixture of estate, individual and corporate tax rate changes are projected to be most generous to high earners.
Rust Belt states Ohio, Michigan and Indiana are not home to large populations of $1 million household income earners. Rather, they’re in the middle or bottom of the pack, according a summary from the Institute on Taxation and Economic Policy. States with a higher percentage of millionaire earners voted for Hillary Clinton in the 2016 election and are near Washington, DC. Only 0.2% of Michigan’s households are expected to earn more than $1 million in 2018, putting it next to last behind West Virginia. In Ohio, the number is 0.5%. In Indiana, it’s 0.4%. Compare that with New Jersey, at 1.2%, the District of Columbia at 0.9% or Maryland at 0.8%.
The removal of the state and local tax deduction (SALT) will also adversely affect parts of Ohio, Wisconsin and Pennsylvania, according to The Heritage Foundation. The SALT deduction allows federal filers to deduct state and local taxes. They are highest in Northeast states — Connecticut, Maryland and New Jersey — but some areas of the Rust Belt, like Ohio’s 12th District or most of Wisconsin, have a high SALT tax rate.
In Wisconsin, the average SALT deduction in 2015 was $11,653, according to 2015 IRS data. In Pennsylvania, the number was $11,248 and in Ohio it was $10,444. Compare this with some blue states: In Washington, the average was $7,402. In Hawaii, it was $9,905. In Nevada, it was $5,989.
After Trump signed a ban on travel targeting people from seven Muslim-majority countries, there was great concern in the medical profession whether it would cause doctor shortages in the Rust Belt.
Initially, the ban created alarm when it seemed like many doctors beginning medical residencies in the US would be denied entry. A visa program that places foreign-born doctors in underserved areas was also impacted. Research by Raj Chetty and The Economist has found lower health quality and life expectancy in the Rust Belt and surrounding areas.
As the travel ban went through multiple versions, some restrictions were eased. An exception was added to allow student doctors entry, and some doctors who had their visas jeopardized are practicing in the country.
But the travel ban proposals have “caused chaos” for immigrant doctors, according to Mitra Akhtari, an economist at Airbnb, who analyzed the effects of the ban on doctors for the Immigrant Doctors Project while pursing a PhD in economics at Harvard. The Association of American Medical Colleges has continued to argue the Administration’s travel bans are contributing to doctor shortage problems in underserved areas.
Approximately 7,000 doctors are working in the US from one of the banned countries in the updated travel ban, Akhtari says. According to data from the Migration Policy Institute, more than 25% of doctors and surgeons were foreign-born as of 2010.
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