Trump's Congress address: Merit-based immigration will hurt several US cos

President Trump gave his first address to a joint session of Congress on February 28

Editor’s note: President Donald Trump gave his first address to a joint session of Congress on Feb. 28. The speech featured policy ideas that appealed to Republicans, and others that sounded more Democratic. We asked scholars to react to the substance of the speech and evaluate its tone for hints of bipartisanship.

Is there any hope for bipartisanship under Trump?

Jordan Tama, American University, School of International Service

In his first address to Congress, Donald Trump called for Republicans and Democrats to find common ground. He also espoused some positions that may find more support among Democratic lawmakers than among lawmakers in his own party, such as increasing government spending on infrastructure and boosting paid family leave.

What then are the prospects of bipartisan legislative accomplishments under Trump? Recent decades have seen a sharp uptick in partisan polarization and drop in congressional productivity. Could Trump break this cycle?

Probably not, for three reasons.

First, Trump has not shown that he is inclined to sustain the positive tone needed to build agreement with Democrats. Trump has repeatedly antagonized Democratic politicians through hostile and insulting rhetoric. Unless Trump abandons the petty and vindictive side of his personality – which seems unlikely – few Democrats will be interested in meeting him halfway.

Second, Trump’s authoritarian governing style, nativism, and frequent lying have generated such intense opposition to him among liberals that most Democratic politicians would alienate their core supporters if they cooperated with him. Witness the thousands of New Yorkers who rallied outside the home of Senate Minority Leader Chuck Schumer’s home to urge Schumer to take a hard line against Trump.

Third, on issues where Trump deviates from conservative orthodoxy, he might not receive enough backing from Republicans to get his agenda through Congress.

A remaining question is whether we are likely to see any significant congressional bipartisanship when it comes to opposing key elements of Trump’s agenda. Already, leading Congressional Republicans have criticized Trump for praising Vladimir Putin and calling for a massive cut in funding for the State Department. In the weeks ahead, it will bear watching not only whether Congress joins forces with Trump, but also whether it stands up to him.

An admission that government must be involved in health care?

J.B. Silvers, Professor of Health finance, Case Western Reserve University

On health care, Trump’s speech revealed four implicit beliefs – in maximal choice, limited assistance, the role of government and access to health insurance.

First, he suggests a goal of maximal flexibility and choice by individuals, insurers, and states regarding benefits offered, plan design and scope of coverage. The assumption is that competition will solve most of our problems, even though many of the provider and insurer sectors have consolidated to prevent this.

Second, he suggested that help to individuals to exercise these choices should come via the tax system and direct transactions with companies, rather than through the formal exchange markets of the ACA. The help is to come in the form of tax credits varying only by age, not income. The implication is that the tax system is more efficient than the marketplace exchanges. More important, giving tax credits based on age rather than income recognizes likely differences in insurance premiums, but it ignores variation in affordability based on income within each age group.

Third, the clear goal throughout the address was to reduce the role of government in health care as much as possible in order for the power of competition and purchasing power to work. This is to occur by allowing the sale of health insurance across state lines (which implies less state-by-state regulation of benefits and premiums); eliminating mandates on purchase and coverage; and cutting two regulations for every new one issued.

The implication is that individuals have the ability and finances (through their tax credits and health savings accounts) to make optimal choices without the government helping out or framing their decisions in spite of what we know from behavioral economics.

Finally, President Trump wants to provide access to coverage to everyone, including those with pre-existing conditions but only if they choose to join a high-risk pool. The reliance on high-risk pools – that would be supported financially by state or federal budgets – to cover those who definitely would not be offered coverage otherwise is an admission that private insurance in a competitive free-for-all will not meet his social goals without government backing.

His desire to somehow “ensure that … we have a stable transition for Americans currently enrolled in the health care exchanges” to the free markets he envisions is also an admission of the fragility of reliance on insurance companies alone to stay the course when risks escalate.

Trump suggests ‘merit-based’ immigration policy

Greg Wright, University of California, Merced

President Trump called for a “merit-based system” for immigration, which would represent a major change in U.S. immigration policy.

This could, for example, boost innovation. But, at the same time, it would require significant adjustments by U.S. companies, while raising the costs of services in many parts of the U.S. Importantly, it is unlikely that this policy would “save countless dollars, raise workers’ wages and help working families,” as President Trump claimed.

In short, a merit-based immigration system, like that in place in Canada and Australia, assigns applicants points based on their status in each of several categories, typically emphasizing an immigrant’s language fluency, educational attainment, age and whether employment has been secured prior to arrival. As a result, the system tends to select young immigrants ready to perform skilled work.

The benefits of a merit-based immigration system derive from welcoming a steady stream of the best and brightest from around the world, something the U.S. has done for most of its history through the H-1B visa and other programs.

It should be noted that recent immigration has already been tilted toward those with skills, so such a system wouldn’t necessarily provide companies with more able workers.

In fact, the primary effect of the introduction of a merit-based system would be to severely restrict low-skilled immigration, hurting companies in the agricultural or manufacturing sectors that are more reliant on such workers. One of the most consistent findings within the immigration literature is that companies are quick to replace low-skill workers with capital by replacing them with machines when conditions change. The wages of a few remaining workers would rise but most would likely lose out.

At the same time, costs such as dining out, landscaping, housework and elderly care would become more expensive as low-skill immigrant service providers become more scarce.

While a merit-based system would impose some coherence on U.S. immigration policy, which today is quite piecemeal and inefficient, it would severely restrict low-skill immigration. This is unlikely to increase Americans’ economic prospects, and in fact would probably reduce them.
 

Jordan Tama, Assistant Professor of International Relations, American University School of International Service; Greg Wright, Assistant Professor of Economics, University of California, Merced, and J.B. Silvers, Professor of Health Finance, Case Western Reserve University

This article was originally published on The Conversation. Read the original article.