Trump Trillion-Dollar-Plus Deficits Are Putting America On A Path To Fiscal Ruin

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My op-ed in today’s USA Today is linked below.

https://www.usatoday.com/story/opinion/2018/08/20/donald-trump-trillion-dollar-plus-deficits-fiscal-ruin-column/986236002/

Follow Stan Collender on Twitter @thebudgetguy

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Mick Mulvaney Sounds Like A Song From “Hamilton” While Saying Trump Was Wrong About His Parade

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Mick Mulvaney is one of the worst…if not the worst… directors of the Office of Management and Budget. Last year I even created The Mulvaney Award for ultimate federal budget hypocrisy and nonsense.

That’s why it wasn’t all that surprising when, Politico quoted Mulvaney saying that the military parade President Donald Trump cancelled because of its new and much, much higher estimated price wasn’t actually cancelled because of the soaring cost.

According to Politico, Mulvaney said he would have been in the room when the decision was made had it just been about the money.

Two things.

First, Trump himself tweeted Friday that the parade was cancelled just because of its cost.  His tweet came after a number of news outlets reported the new $92 million projection and Trump even cited the District of Columbia’s reimbursement request. In other words, cost indeed was the reason it was cancelled.

Second, Mulvaney’s words about not being in the room when Trump made the decision to cancel (Given that the tweet was posted at 7:57 am EDT that was probably Trump’s bedroom) the parade sounds way too much like one of the top songs from the mega-hit Broadway musical “Hamilton” to be ignored.

That song, “The Room Where It Happens,” is about Aaron Burr lamenting not being in the room where Alexander Hamilton, Thomas Jefferson and James Madison were making key decisions about several very high-profile issues.

Mulvaney sounds just like Burr did in the show. Different issue; same lament.

For a little more context about how Mulvaney’s statement was so much like that song, check out the clip below.

Follow Stan Collender on Twitter @thebudgetguy

Killing Trump’s Military Parade Was An Inside Job

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Yesterday’s killing of Donald Trump’s much-wanted military parade has all the signs of being a planned hit.

In case you don’t know, CNBC reported early yesterday afternoon that the cost of Trump’s parade had risen to $92 million from the original estimate of just $12 million. That 767 percent increase at least unofficially classified the parade as a federal budget boondoggle and made it into an even bigger subject of ridicule than it was before.

Even on a day when Aretha Franklin died, Omarosa released a new recording, there were multiple reverberations from John Brennan’s security clearance being revoked and the Manafort jury began deliberating, the $92 million cost made immediate news and lit up the twitterverse.

About seven hours later, The Washington Post and others reported that the parade, which had been planned for this November 10th, would now be postponed until sometime in 2019.

In other words, a leak (there was no official release of the revised cost estimate and absolutely no reason for the new number to be revealed yesterday) from someone inside the executive branch about the extraordinary increase in the cost of the parade quickly forced the White House to back down from one of Donald Trump’s pet projects.

The Pentagon didn’t say that Trump’s parade was cancelled, just that it had “…agreed to explore opportunities in 2019.” Left unsaid was that it will be harder to stage the parade next year because the already-high budget deficit will be even higher — close to or in excess of $1 trillion — and there could very well be a Democratic majority in one or both houses of Congress that will stop it from happening.

So while the White House and Pentagon may be implying that Trump’s parade was merely postponed, the more likely truth is that it was killed yesterday and won’t be heard from again.

The Pentagon is the most likely suspect for this murder. DOD, which will bear the vast majority of the costs and responsibilities for staging the parade, has long been opposed to it and has gone along with the planning only to appease a president who doesn’t often take no for an answer. DOD is the one that will benefit the most from the parade not happening.

The second possibility is that it was conspiracy between a member of Congress who didn’t want the parade to happen but was unwilling to challenge the president directly and the Pentagon.

A third possibility is that the leak came from the White House staff that has increasingly looked for ways outside the normal process to rein in Trump’s over-the-top tendencies.

Either way, it had to be someone on the inside.

Follow Stan Collender on Twitter @thebudgetguy.

Trump’s Military Parade Is Already 767% Over Budget. Where’s Congress?

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CNBC is reporting that the military parade Donald Trump has ordered the Pentagon to stage this November is now projected to cost $92 million, $80 million more than the original $12 million estimate. That’s a 767 percent cost overrun.

Yes, $92 million is basically a rounding error (0.2 percent) when it comes to total federal spending.

But that doesn’t mean the Trump administration shouldn’t be required to detail what it’s planning to cut to pay for its parade. Unless the fiscal 2019 appropriations are increased to cover the parade-related costs, the $92 million will have to come from existing programs.

Congress – specifically the House and Senate Appropriations Committees — should be demanding that information immediately while the fiscal 2019 are still being debated.

And that has to come from the Republicans on those committees because they’re the only ones with any real power on this issue. Requests for information from Democrats about the parade’s costs are likely to be ignored or slow-walked by the White House.

So far there’s only been the sound of crickets from the GOP.

Get Ready: This Fall’s Federal Budget Debate Will Be A Real Cliffhanger

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In alphabetical order…Michael Cohen, Stormy Daniels, Rick Gates, Paul Manafort, Omarosa Manigault Newman, Scott Pruitt, Vladimir Putin, Roger Stone and, of course, Donald Trump haven’t just dominated the headlines over the past six months, they’ve sucked the air out of most federal activities.

This is especially true of the federal budget which (it pains me to admit) is absolutely boring compared to all of the salacious, despicable and embarrassing stories with which it has had to compete for attention this year.

That’s about to end. Big time.

No, Manafort et. al. won’t be going away. If the brief history of the Trump presidency is any indication, new investigations, indictments, tweets and aberrant personalities will emerge this fall to supplant those that have already appeared.

But for the first time since this past March, the federal budget is about to return to the big screen in Washington…not as a comedy or action film, but as an old-fashioned cliffhanger.

Last March was when President Trump swore he would shutdown the government if the next funding bill Congress sent him didn’t include billions of dollars for the wall he wants to build between the Unites States and Mexico. He’s since repeated that threat multiple times.

The fiscal 2018 omnibus appropriation he signed in March will expire at midnight September 30. That means the GOP’s House and Senate majorities will soon be facing the implications of Trump’s budget blood oath from almost six months ago.

This is going to be pure melodrama with the fiscal equivalents of villains, damsels in distress tied to the tracks and, perhaps, one or more heroes and heroines.

If you think I’m kidding, watch the cliff hanger movie trailer below and then read the following top ten questions about what is coming over the next six weeks out loud. I’ll bet you can’t help but sound like you’re hyping the next installment.

1.  Will Donald Trump carry out his dastardly plot to shut down the federal government on October 1 if Congress doesn’t provide at least $5 billion for his wall?

2. Will Trump now insist that shutting down the government depends on him also getting funding for his just-proposed but much-ridiculed space force?

3. Will House and Senate Republican leaders try to fool Trump into thinking that the best moment to shut the government will be after the election during the lame duck session of Congress?

4. Will the Congressional Budget Office and Treasury Department reports that will released just weeks before the election that confirm Trump’s big deficits finally force Republicans to face the budget realities they have been so desperate to avoid?

5. Will the confirmed Trump deficits increase the already strong dislike of the GOP tax bill even further just before the midterms?

6. Will congressional Democrats, who were blamed for the last government shutdown, be blamed again?

7. Will congressional Republicans ease the political pain of a shutdown by passing one or more 2019 appropriations so some popular departments and agencies won’t be affected?

8. Will Office of Management and Budget Director Mick Mulvaney carry out his diabolical plan to lessen the political impact of a shutdown by classifying routine federal functions like national parks as essential government services that must stay open.

9. Does the House’s plan to pass another tax cut, which the Senate has already said it won’t consider, foolishly make a continuing resolution and government shutdown even more likely?

10. Which programs will really be tied to the track as the budget train gets ever closer?

 

Follow Stan Collender on Twitter @thebudgetguy

Don’t Leave Just Yet…There’s so much more here:

Attention Conservatives: The Deficit Is Not Just A Spending Problem
Trump’s Space Force Is Really A Space Farce
GOP Won’t Be Able To Hide From It’s Big Deficits Before The Election After All
Trump’s Deficits Will Cause Very Serious Challenges For Multiple Generations Of Americans
Here’s What I Told NPR This Morning About The Deficit (Spoiler Alert: It’s Not Pretty)
Trump’s Economic Lies, Damn Lies And Statistics Revealed For All To See
Raising The Chances Of A Government Shutdown This Fall To 60%
OMB Director Mick Mulvaney Says CBO Was Right After All

 

Attention Conservatives: The Deficit Is Not Just A Spending Problem

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A little over ten months ago, I appeared on C-SPAN Washington Journal with Romina Boccia from the Heritage Foundation who, as Congress was debating the tax cut that would reduce revenues by $1.5 trillion, had the gall to say repeatedly that the federal deficit was purely a spending problem.

(Assuming you didn’t get up early to see the show that Sunday morning or have already blocked all memory of it, you can grab your popcorn and watch it here.)

Unless you think of mathematics as fake news or garbage science, there are always two ways for the federal government to run a deficit: spend more than it collects each year in revenues or collect less in revenues that it spends. It’s a very basic calculation. No advanced degree is required.

Why raise this now?

First, because the myth coming from Heritage and others that the federal budget deficit is just a spending problem needs to be revealed as often as possible for what it really is: ultra conservative orthodoxy and GOP politics masquerading as unimpeachable basic economics.

Second, an oped by former Treasury Secretary Robert Rubin in today’s The Washington Post was a great reminder of just how ridiculous and easy it is to disprove the-deficit-is-all-because-of-spending lie.

Rubin, a Democrat who is at least as fiscally conservative as most Republicans claim to be, said:

“Tax revenue as a percentage of gross domestic product is expected to be 16.5 percent next year. The long-term average in a full-employment economy is 18.5 percent of GDP; if revenue were at that level for the coming decade, debt would be $3.2 trillion lower and the 10-year fiscal gap would be halved.”

In other words, the deficit is at least as much an issue of not enough revenue as it is of too much spending.

And Rubin acknowledged this in his next sentence:

“Returning to past revenue levels, however, will be inadequate over time, because an aging population will increase Medicare and Social Security costs.”

Honest and rational budgeting absolutely requires acknowledging that the federal budget deficit is the result of  both revenues that are too low for the spending Americans want and spending that is higher than the taxes Americans are willing to pay.

It’s not just one or the other and conservatives insisting that it is only spending is both absurd and easily shown to be false.

 

Trump’s Space Force Is Really A Space Farce

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It’s not at all clear whether Donald Trump’s space force plan appeals to Star Trek, Star Wars or Flash Gordon fans (for the record, my favorite character was Captain Pickard on TNG), but it definitely demonstrates that Trump doesn’t understand or care about the U.S. legislative process, congressional politics or the federal budget.

Legislation. Except in extreme situations, Congress’s typical response throughout U.S. history has almost always been what the framers of the Constitution intended: incremental changes and no rush to judgement. Enemy attacks and weather-related natural disasters have usually prompted a more rapid congressional reaction, as have the need to respond to challenges to the American psyche like Russia’s launch of Sputnik.

But the space force is not (or Trump hasn’t made the case yet) the result of an emergency that requires immediate action and the rapid creation of a new branch of the U.S. military. To the contrary, the White House’s space force announcement this past week left the very definite impression that this was anything but a dire situation that required immediate action.

Think about it.

1. Trump remained on his golfing vacation instead of dramatically returning to Washington, asking House and Senate leaders to call Congress back into session or making a nationally televised speech to demand rapid action.

2. Rather than make the ask himself, Trump had his vice president release the space force plan.

3. The written space force plan was barely an outline and gave the very clear impression that it was put together quickly without much thought.

4. The Trump 2020 reelection campaign has already said it plans to sell space force gear.

Contrast that with President John Kennedy’s speech in 1962 at Rice University where he announced his plan for the United States to go to the moon. As you watch the video clip below, note that Lyndon Johnson, Kennedy’s vice president and an icon in Texas where the speech was made, was sitting behind him. Note too that Kennedy provided the reason for his plan when he said this would enable the U.S. to “win” the space race that Russia had started.

Congressional Politics. The White House didn’t arrange for the GOP congressional leadership or all the House and Senate Republican members on the key military authorization committees and appropriations subcommittees to be at the announcement. There also didn’t appear to be any strong effort to get the military behind it or to prevent the Pentagon and its allies from saying less-than-favorable things.

For example, Retired General Marty Dempsey, a former chairman of the Joint Chiefs of Staff, tweeted this out on Friday.

Along with what appears to be a lack of collaboration by the White House that will be seen as a slight, this message to Congress not to move quickly by a Pentagon ally is one of the traditional excuses representatives and senators use not to take any action. Trump and his people should have known this.

The Budget. The Trump space force plan was revealed the day before the Treasury confirmed what thebudgetguy.blog and the rest of the federal budget wonk world has long been saying: the deficit is soaring because of the other Trump and GOP tax-loss and spending-increase policies. At the same time Washington’s soaring red ink was revealed for all to see, Trump was proposing to increase it further with billions, or hundreds of billions of dollars of even more spending.

Or maybe not. Trump might be proposing to fund the space force with cuts to other Pentagon programs, or to NASA, or to Social Security and Medicare. Or perhaps Trump wants a space force surtax, or possibly a federal user fee on all those who book a ticket on commercial trips to the Moon.

The space force plan omitted the budget details.

Also confusing as far as the budget is concerned is why Trump is pushing it now, with only about 50 calendar days (and about 15 legislative days) left before the start of fiscal 2019. There is virtually no chance that the space force will make it into any of the appropriations. Even a directive for a study will have trouble being approved.

At least for now, all of this means that Trump’s space force is more of a space farce than anything else. It’s much more likely to be an answer on a future episode of Jeopardy than a moment historians will note.

Follow Stan Collender on Twitter @thebudgetguy

Don’t Leave Just Yet…There’s so much more here:

Treasury Confirms Trump’s Huge Budget Deficits Are Real
GOP Won’t Be Able To Hide From It’s Big Deficits Before The Election After All
Trump’s Deficits Will Cause Very Serious Challenges For Multiple Generations Of Americans
Here’s What I Told NPR This Morning About The Deficit (Spoiler Alert: It’s Not Pretty)
Trump’s Economic Lies, Damn Lies And Statistics Revealed For All To See
Raising The Chances Of A Government Shutdown This Fall To 60%
OMB Director Mick Mulvaney Says CBO Was Right After All
You’ve Been Warned: Trump’s Trillion Dollar Budget Deficits Are Here