Rep. Phil Roe (R–Tenn.) is a member of the Republican Study Committee, the uber-conservative wing of House Republicans. A while back he got the assignment of coming up with a replacement plan for Obamacare, which he cheerfully admits was a difficult task: "I was asked to put together a plan that increased access [and] lowered costs but didn’t increase entitlements, so my hands were a bit tied," he told Sarah Kliff in an interview yesterday. But she says the most surprising part of the interview was this:

What I thought was going to be easy was I thought Medicaid, we’d just block-grant it to the states. That one actually is going to be a little harder than I thought. The reason is there are states like New York, states that expanded [Medicaid]. How do you cover that 10 or so million people on Medicaid?

As Kliff notes, every Republican is on board with block-granting Medicaid. The reason is that, in practice, it pretty much guarantees a steady reduction in Medicaid spending, which opens up budget room for more tax cuts on the rich. What's not to like?

So what is Roe's problem? Allow me to translate. If you block-grant Medicaid, you have to decide how big a grant each state gets. This would be based on how many Medicaid recipients each state has.

And that presents a difficulty. You see, blue states have all taken advantage of Obamacare's Medicaid expansion, while red states haven't. This means that blue states now have an outsize share of Medicaid recipients, and therefore would get outsize grants. Here's a picture to demonstrate the problem using everyone's favorite red and blue states:

These are rough numbers, but they're in the ballpark of what Medicaid looked like before and after Obamacare. Assuming a total block grant budget of roughly $350 billion, California's grant increases from $55 billion to $58 billion thanks to Obamacare's Medicaid expansion. Meanwhile, the share allocated to Texas declines from $25 billion to $22 billion.

I think you can see why Republicans would consider this a problem. Should they permanently lock in higher grants for blue states thanks to the odious Medicaid expansion? Or should they go back to the pre-Obamacare shares? But if they do that, the red states that accepted the expansion would suffer too. It's quite a dilemma, isn't it?

The House Oversight Committee has gotten hold of an email confirming a Washington Post story about Donald Trump's plan to fire and replace all the Inspectors General of every government agency. Luckily, the committee leadership has dug deep into this and confirmed that it's nothing to worry about:

House Oversight Committee Chairman Jason Chaffetz (R-Utah) said that the White House had told him the phone calls to inspectors general were a “mistake” and the work of a “junior person.” The inspectors general were later told to disregard the initial calls.

“I want to let you know that I’ve spoken with the general counsel at the White House on this topic,” Chaffetz said. “I think it’s safe to say that was a mistake, they wish it hadn’t happened, it’s not their approach, it’s not their intention.

If only Hillary Clinton had done this! It turns out that all you have to do if Congress is investigating you for some kind of misdeed is admit you made a mistake and say that it wasn't your intention to do anything wrong. Just think how much trouble we could have saved ourselves if only Hillary had known this.

So who was the "junior person" who ordered this purge? In a display of generosity, Chaffetz blacked out the name. No need to publicly humiliate whatever poor intern made this mistake, I suppose. Right?

A person familiar with the email said that the other person is Justin Clark, a Republican lawyer from West Hartford, Conn., who was deputy national political director of Donald Trump’s presidential campaign and who has been named deputy assistant to the president and the White House director of intergovernmental affairs.

Welcome to life in the Democratic People's Republic of America.

House Democrats have asked Secretary of Defense James Mattis to investigate potentially illegal payments from Russia's government to retired General Mike Flynn, currently serving as President Trump's National Security Advisor:

Defense Department rules make it clear that this restriction also applies to payments from entities owned by foreign governments, including state-owned press operations like RT. Nonetheless, Jason Chaffetz and other House Republicans have no interest in pursuing this. IOKIYAR.

Russ Choma has more here.

As part of his touching remarks about Black History Month this morning, President Trump boasted that he "ended up getting substantially more" of the African-American vote than past Republican candidates. Glenn Kessler briefly picks this apart here, but everything is better with a chart. So here's a chart. It shows the share of the black vote since 1972 for Republicans running against white Democrats:

Trump really kicked ass, didn't he?

February is Black History Month and Donald Trump is all over it:

 

Question: Is Trump really as ignorant and contemptible as he seems? Or is this deliberate on this part, a wink to his white base that he doesn't take this stuff seriously and is only reciting his lines because he has to?

In Israel, it's a new era:

Israel approved 3,000 more housing units in the occupied West Bank late Tuesday, the largest number in a wave of new construction plans that defy the international community and that open a forceful phase in the country’s expansion into land the Palestinians claim for a future state.

Emboldened by the new Trump administration and internal battles at home, Israel announced plans for the new units in about a dozen settlements a week after approving 2,500 homes in the West Bank and 566 in East Jerusalem.

....Mr. Trump seems not to share former President Barack Obama’s opposition to the settlements....[Husam Zomlot, strategic affairs adviser to Mahmoud Abbas, the president of the Palestinian Authority] said that Mr. Netanyahu was using this time of political transition in the United States to test how the new administration’s stance might differ from that of Mr. Obama. The Israeli prime minister is to meet with Mr. Trump in Washington on Feb. 15.

In return for Trump's support, perhaps Netanyahu will loan him a few experts in wall building.

Lots of Democrats want to take a scorched-earth approach toward the confirmation of Neil Gorsuch, President Trump's nominee for the Supreme Court. I'm totally on board with this. The Republican blockade of Merrick Garland was flat-out theft, and no party with any self-respect can let that go without a fight.

Still, I'm curious: how is this supposed to play out? If Democrats filibuster Gorsuch, then either Mitch McConnell kills the filibuster or he doesn't. If he allows the filibuster to stand and Gorsuch is defeated, Trump will nominate another conservative. And no matter how much McConnell is dedicated to Senate institutions, the second time around he'd kill the filibuster for sure. He's not going to allow Dems to filibuster Supreme Court nominees for four years, after all.

Substantively, then, it doesn't matter much. We're getting a conservative Supreme Court justice one way or another. But Jonathan Chait says a filibuster is important because Dems have to make McConnell own the brave new world he's created. Richard Yeselson agrees:

I'm fine with this. But why is forcing McConnell to kill the filibuster a win for Democrats? Personally, I think they should block Gorsuch just to show they have a spine. I just don't understand why anyone cares whether McConnell is forced to get rid of the filibuster.

POSTSCRIPT: When I first heard that Gorsuch was on Trump's short list a couple of days ago, I thought: I know it's just a coincidence, but I'd sure want to avoid anyone named Gorsuch. But no. It turns out it wasn't a coincidence at all: Gorsuch is indeed the son of infamous Reagan EPA director Anne Gorsuch Burford. Enough with the dynasties!

ANOTHER POSTSCRIPT: Anne Gorsuch Burford did her best to tear down the EPA, and perhaps her biggest blunder was her determination to scrap the rules for phasing out lead in gasoline. Thank God she failed.

Kadee Russ, formerly a senior economist for the CEA and now a professor of economics at UC Davis, has taken a rough cut at the distributional effects of a border adjustment tax, the front-runner among "sort of a tariff" tax plans currently making the rounds in Congress. A BAT would supposedly raise about $200 billion per year, but raise it from whom? Here's her estimate:

Isn't that a shocker? It's a regressive tax that hits the working class harder than it does the rich. What's more, the whole point of imposing a BAT is to raise money so that personal income taxes can be slashed on the rich top marginal rates on job creators can be reduced. This whole Trump presidency thing is working out really well for the working class, isn't it?

TECHNICAL NOTE: Russ calculated the cost of the tax by income decile. I merged her first eight deciles into four quintiles. Click the link to see her original estimates.

Ladies and gentlemen, our negotiator-in-chief:

Donald Trump, two weeks ago: "Pharma has a lot of lobbies, a lot of lobbyists, and a lot of power. And there's very little bidding on drugs. We're the largest buyer of drugs in the world, and yet we don't bid properly."

Donald Trump, today, after meeting with Pharma lobbyists: "I'll oppose anything that makes it harder for smaller, younger companies to take the risk of bringing their product to a vibrantly competitive market. That includes price-fixing by the biggest dog in the market, Medicare, which is what's happening."

All it took was a few minutes and Trump caved completely to the pharmaceutical industry. It's yet another defeat for the working class. Add this to the higher prices they'll pay if he puts his tariffs in place; the decimation of Medicare they'll suffer if Paul Ryan's vouchers are enacted; the nursing care costs they'll have to pay if Medicaid is block granted; and the subsidies for health coverage they'll lose when he repeals Obamacare.

Working class folks are losing bigly under Trump. I wonder when they'll get tired of losing?

I see that Peter Navarro, one of our many new trade gurus, is taking a break from attacking China and is now attacking Germany. Why? Because it's unfair that the euro area has lots of weak countries that have collectively produced a weak euro, which gives Germany an advantage in its export business. This is all true enough, and I'm no fan of 21st century German economic policy, but it's a little pointless right now. The euro isn't going away, and neither is the fact that Europe's overall economy is in pretty poor shape.

Still, I've been wondering when Germany would come into the crosshairs of the Trump administration. There's a pretty obvious reason to attack them:

Japan has mostly escaped Trump's ire for some reason, but I imagine they're next. After that, I guess Ireland is up to bat. None of this jawboning is likely to do any good, however. As long as the dollar stays strong, we're going to have trade deficits. And so far it's staying pretty strong:

Trump says he wants the trade deficit to decline. This means he wants our trade surplus to increase (from negative to zero), and for that to happen net national savings also have to increase. This is an accounting identity. Now, Trump very plainly has no plans to increase public saving by attacking the budget deficit. In fact, his tax plans will almost certainly explode the deficit to around the trillion dollar territory, which will reduce public saving. This means that private saving would need to increase by a trillion dollars or so for the trade deficit to go away. What are the odds of that?

Trump and his team can blather all they want. But if they want the trade deficit to decline, they need a weaker dollar and higher national savings. Nothing they're doing points in the direction of either one of those things. Until that happens, it's all just hot air.