Breaking News Emails
Donald Trump’s most ardent supporters are likely to be hit the hardest if he makes good on his promise to dismantle the Affordable Care Act and embark on trade wars with China and Mexico.
“I think you’re going to get a disproportionate impact on people who supported Donald Trump but maybe don’t realize that his policies may end up hurting them instead of helping them,” said Michael O. Moore, a professor of economics and international affairs at George Washington University.
Breaking News Emails
More Republican Districts Rely on Obamacare
According to Gallup data, the number of Americans without health insurance was just under 11 percent in the fourth quarter of last year, down from roughly 17 percent three years earlier.
Odds are, a large number of those newly insured were Trump voters: An analysis by the Kaiser Family Foundation found that 6.3 million of the 11.5 million Americans who used the ACA marketplace to buy their insurance last year live in Republican Congressional districts.
Policy analysts say that a rollback of the ACA would hurt older and rural Americans — two populations that favored Donald Trump over Hillary Clinton in the presidential election.
One ACA rule that would likely disappear under a Congressional repeal put limits on how much more insurers could charge older customers, said Josh Bivens, director of research at the left-leaning Economic Policy Institute. Rolling back those caps would mean that older Americans trying to buy health insurance would pay more, especially in areas where there was little competition in the insurance market, as is the case in many rural states.
“For older voters who aren’t in great health and don’t live in states that are densely populated, I think they’re going to be really hammered,” Bivens said.
The Americans who have the most to lose from a repeal are low-income families living in the 32 states that expanded Medicaid to cover more than just the very poor, Bivens said, but even the comfortably middle class — an income bracket that broke for Trump by a narrow margin in the election — could see their costs rise.
According to CNN’s post-election exit poll, Trump edged out Clinton by three percentage points among Americans who earn between $50,000 and $99,999. The Affordable Care Act’s premium subsidies are available to households with incomes of up to $97,200 for a family of four (to rise to $98,400 next year).
Likewise, Trump’s early trade agenda could hit a surprising number of American pocketbooks.
Smaller Cities Hit Harder by Trade War
By abandoning the Trans-Pacific Partnership, the new administration slammed the door on potentially lucrative Asian markets like Vietnam, said Daniel Ikenson, director of trade policy studies at the Cato Institute, a libertarian think tank.
“They’ve been somewhat difficult for U.S. exporters to penetrate, so those barriers to trade would have gone away or would’ve been reduced considerably,” he said.
A recent Brookings Institution study shows that, by the numbers, a handful of big cities like New York and Los Angeles do the heavy lifting when it comes to U.S. exports. But when you look at how important exports are to a city’s economy, a different picture emerges, one that shows smaller cities — many in red-state territory — with the most to lose from the isolationist policies Trump has embraced.
“As a share of a local economy, the most export-intensive places in the country are smaller — they tend to be in the Midwest in places like Indiana and Michigan, or the South,” said Joseph Parilla, a fellow in the Metropolitan Policy Program of the Brookings Institution.
Parilla pointed to vice president Mike Pence’s hometown of Columbus, Indiana, as one such example. “Half of its economy is devoted to exports… compared to about 10 percent of the nation’s economy,” he said.
David Brown, deputy director for the economic program at the Third Way, said rural areas that depend on agriculture are especially likely to struggle.
“Agriculture — it’s not the biggest part of the American economy, but in some parts of America, it’s virtually the whole economy,” he said. “U.S. farmers had a lot to gain from the TPP… and they’ve gained a lot from NAFTA,” he said.
Lower-Income Families Will Pay the Higher Prices
In addition to keeping American companies from growing exports, trade policy experts say the import tariffs Trump has threatened to impose on Mexico and other trading partners would wind up costing all consumers.
“When you look at what Trump wants to do by restricting imports, your mind first goes to consumers. If you put a 20 percent tariff on goods coming from Mexico, it’s a complete fallacy that this will be felt only in Mexico,” Brown said. “These are products from cars to tomatoes — everyone’s going to feel that effect,” he said.
Brown and other trade experts point out that the brunt of this will be borne by lower-income families, since poorer people spend a greater percentage of their income on goods than their wealthier peers. And rural Americans, living in places with less population density and less retail competition as a result, are more likely to notice those increasing prices.
“I don’t think many of the supposed jobs that are going to be created are going to be in those rural areas, so they’re not going to get the benefits, but they’re going to get the cost,” Moore said.
“One of the tricky things about tariffs is the benefits to seem to be concentrated and the costs are spread across the country,” he said. “People will be reminded of that.”