Month: August 2018

Trillion Dollar Federal Deficits Are The New Normal For The U.S.

As I said on Bloomberg Television yesterday…

 

Follow Stan Collender on Twitter @thebudgetguy

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We Now Have To Add The Trump Federal Employee Pay Freeeze To The Reasons Trump Might Shut Down The Government

 

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Donald Trump has added another reason he might cause a government shutdown a month from now: no pay raise for federal employees of domestic federal agencies and departments.

Trump notified House Speaker Paul Ryan (R-WI) on Thursday that he was cancelling the pay raise for the majority of federal civilian workers. (There was nothing to indicate that he was also cancelling the planned 2.6 percent increase for the military.)

Congress can, and in my estimation probably will, reject this. The House and Senate will likely put language that mandates the civilian pay raise in the continuing resolution that will be needed by October 1 to keep the government open.

The question then will be what will Trump with a CR that very openly defies him.

Vetoing the CR and shutting down the government is a real possibility.

The Senate has already approved a pay raise for federal civilian employees. The House is more than likely to go along with the Senate provision because not doing so would put Republican incumbents from districts with large numbers of federal employees in critical jeopardy of not being reelected.

Rep. Barbara Comstock (R-VA), who represents Northern Virginia, immediately comes to mind as a GOPer who would be in serious trouble if civilian employees were denied a pay raise. Not surprisingly, Comstock issued a statement opposing Trump’s freeze earlier today.

In an election where a Democratic takeover of at least the House is considered a definite possibility, making Comstock and several other Republicans more vulnerable and putting the GOP majority in further doubt makes absolutely no political sense.

There are two reasons why Trump would veto the CR and shutdown the government over this issue.

First, the CR would be abject defiance, something we know Trump doesn’t handle well or rationally.

Second, the pay raise is the kind of emotional issue that will appeal to Trump voters and, given Mueller et. al., Trump is likely to be eager to show his base that he’s more than willing to punish the federal government/deep state for all its sins.

That puts the civilian federal pay raise almost on the same level as the billions of dollars Trump is demanding to build a wall between the U.S. and Mexico as a possible reason for a government shutdown this year. They’re both anything-but-substantive issues that Trump can use to remind his voters why they voted for him in the first place.

That means both that there are now two potential shutdown issues and that a Trump-induced government shutdown a month from today even more likely than it was before.

Follow Stan Collender on Twitter @thebudgetguy

 

 

Current 60% Chance Of A Government Shutdown Very Likely To Increase Further

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Today, with exactly (and just) five weeks to go before the start of the next federal fiscal year, nothing has changed to make the odds of a government shutdown less than they were before the House of Representatives began its summer-Labor Day recess.

As a result, I’m sticking with my previous estimate that there’s a 60 percent chance the federal government will shut down this October 1.

That is, I’m sticking with 60 percent for now. If anything, the likelihood of a shutdown is only going to increase from here.

Yes, as Carl Hulse pointed out in the New York Times, the Senate did make some progress on the 2019 appropriations this summer (although I disagree with his assertion that the Senate has “got its groove back”).

But there are still only 11 legislative days left in September and Congress as a whole isn’t close to completing the work it has to do on all the 2019 spending bills to get them signed by the president before the government turns into a pumpkin at midnight September 30.

Besides, Congress getting the 12 individual appropriations to the president isn’t the most important question.

As I’ve been posting here for months and as Sarah Ferris reported in Politico last Friday, no one has any idea whether President Trump will sign any appropriations if Congress doesn’t provide at least $5 billion for the wall he wants to build between the United States and Mexico.

And although he no longer needs to pay for his military parade, you can’t help but wonder whether Trump will now also demand at least initial funding for his space force as the price for his signature.

To say the least, up to now Trump has consistently been inconsistent and unreliable when dealing with Congress on budget issues. Congressional Republicans have every reason to be very concerned about whether, if he has the need, Trump will shut down the government.

And given last week’s Cohen/Manafort/Pecker/Weiselberg/Mueller events, Trump seems increasingly likely to have the need to do just that. If, as seems likely, Congress again refuses to appropriate the billions he wants for his wall, Trump will be handed a relatively easy way to show that he’s in charge; to look tough on immigration, the most important issue he has ridden since the day he announced his candidacy; and to reconfirm his dealmaking abilities.

Congressional Republicans have every reason to be very concerned about whether, if he has the need, Trump will shut down the government.

Being able to dictate the terms of a deal on a continuing resolution — the funding bill most likely to be needed to keep the federal government from shutting its doors — should not be underestimated as a major motivation for the president.

Over just the last few weeks, Trump has been unable to control Robert Mueller, Omarosa Manigault Newman, Michael Cohen and Attorney General Jeff Sessions. He’s also had to order his secretary of State not to travel to North Korea because the North Koreans were not cooperating, deal with his tariffs not being well-received and confront the fact that his tax cut is less popular than the Affordable Care Act.

In addition, as his extensive use of executive orders and pardons demonstrate, Trump loves situations where he can make a unilateral decision…like being the sole person who may veto the CR.

Trump may also see this as his last chance the fund the wall. While there still might be an opportunity during the coming lame duck session of Congress, trump is likely to have far less leverage with recalcitrant Republicans then given that they will no longer be itching to get back to their districts and states to campaign for relection.

In addition, a Democratic takeover of one or both houses will kill almost all chances of the wall ever being funded before Trump has to run for relection.

All of this is why I think there’s still a 60 percent (but rising) chance we’ll have a government shutdown this fall.

Follow Stan Collender on Twitter @thebudgetguy

 

Trump’s Military Parade Boondoggle: An AWOL Congress

By Norman Ornstein* and Stan Collender

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In the larger scheme of things, Donald Trump’s military parade is dwarfed by the implications of the Mueller investigation, the deep corruption in the Trump family and cabinet, the failures in policy from Puerto Rico to pollution, the threat of a trade war and the dangers of a shooting war with Iran or North Korea.

But the story behind the ill-fated and outrageous demand for a parade is itself important—as a damning case study in the unwillingness of a Republican Congress to lift the slightest finger to provide a check and balance against a presidency showing deep signs of corruption, autocracy and inept governance.

Trump’s parade did become an issue when Pentagon officials pegged its cost at $92 million–more than three times an early $30 million estimate and a whopping 767 percent higher than the original $12 million price tag. About $50 million was to come from the Pentagon with another $42 million from interagency partners like Homeland Security. In response to those reports, Trump quickly cancelled his parade.

But the fact that the parade has now been cancelled doesn’t mean that the politically sordid process by which this boondoggle almost happened shouldn’t be considered.

The one question that is especially important: Where was Congress?

You remember Congress, the branch of the federal government that, according to the U.S. Constitution, has the power of the purse, must pass the laws that appropriate taxpayer dollars and has the responsibility to oversee how the president actually spends those dollars as the appropriations laws require?

That Congress was completely AWOL during the whole Trump military parade caper.

This was the GOP Congress’s “see no evil/hear no evil/speak no evil” approach to oversight.

Congress’s failure to deal properly with Trump’s parade included every one of its Constitution-given federal spending responsibilities and its role in checking the executive branch and its head.

First, neither the House nor Senate even considered let alone passed an appropriation for the parade. No hearings were held, no witnesses were questioned and no formal or informal cost estimates were reviewed. There were no formal questions about the costs, who would pay or where the money would come from, not to mention even basic objections about the value of doing it in the first place.

By not holding hearings, asking questions or raising concerns, Congress was implicitly approving of both the idea of the parade and having the Pentagon and other departments spend literally unlimited taxpayer dollars to make it happen. And beyond the costs, the idea of a president demanding the kind of parade normally employed by dictators was yet another sign, however petty, of a president who identifies more with the autocrats than democrats on the world stage.

Congress was completely AWOL during the whole Trump military parade caper.

On the money front, no appropriation meant that all of the departments and agencies involved would have to take money from their other accounts to pay for Trump’s parade. Congress absolutely should have requested information about which existing programs would be short-changed to do this.

To be fair, every federal department and agency has limited authority to repurpose its appropriations without getting Congress to vote on those changes. But that has typically involved the appropriations committees being notified and the departments getting at least informal approval for what was being planned. Here again, Congress appears to have completely forsaken its responsibilities and the agencies involved, notably Defense and Homeland Security, would have to take funds from critical national security programs.

Everything about the parade was farcical—the lack of planning and coordination, the sources of funding, the nature of the parade, the timing, the clear antipathy towards it among key figures in the Pentagon and the sinister implications of a North Korea-style tribute to Dear Leader.

Those are all questions that should have been asked when Trump first demanded the parade and while the planning for it was still in its early stages. If Congress didn’t get satisfactory answers so that it could protect taxpayers and democracy, it should have insisted the parade be cancelled until there were facts rather than guesses.

All of this means that, for a frivolous exercise involving tens of millions of dollars of taxpayer money taken from vital functions, the Republican Congress demonstrated its new standard of oversight: the “see no evil/hear no evil/speak no evil” approach.

To be sure, there are bigger outrages and boondoggles, waste of money and crony dealing than the parade Trump wanted. But this example underscores a larger brutal reality: The checks and balances the Framers expected by giving Congress the power of the purse and the power of oversight today is absent for an administration that requires it more rather than less.

As more facts emerge on Trump’s direct involvement in campaign finance misconduct and the ties between his campaign and Russia, and as malpractice and malfeasance in governance is on the rise, this fact is among the most troubling.

 

* Norman Ornstein (@normornstein) is a resident scholar at the American Enterprise Institute and co-author of One Nation After Trump: A Guide for the Perplexed, the Disillusioned, the Desperate, and the Not-Yet-Deported.

Follow Stan Collender on Twitter @thebudgetguy

Cohen And Manafort Increase The Chances Of A Government Shutdown

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yesterday, about an hour after Michael Cohen pled guilty and Paul Manafort was convicted, one of my favorite economists and CNBC analysts — Jim Pethokoukis of the American Enterprise Institute — asked a great question on Twitter:

My response to Pethokoukis’s question is that the Republican leaders of the House now really have to demonstrate to donors and voters (but especially the donors) that, no matter what’s happening with Trump, they’ll be much better off with a GOP majority. One of the primary ways for them to do that will be to barrel ahead with, in Jim’s words, “the phase 2 tax cuts” that Ways and Means Committee Chairman Kevin Brady (R-TX) has said he will bring to the House floor in September.

In other words, Cohen and Manafort make it even more likely that the House will debate and pass another tax cut before the election.

That same type of reasoning results in a similar conclusion about the chances of a federal government shutdown this fall: Cohen and Manafort increase the chances it will happen.

As I’ve been saying for quite some time, a shutdown was always going to be all about Trump and that’s even more true because of the Cohen plea and Manafort verdict. He now really needs to shift the narrative away from his legal and political problems to something where he is leading the discussion, grabbing the headlines and reminding his base why, in spite of everything else, it really likes him.

Immigration is that issue.

The best opportunity now for Trump to use immigration as that type of diversion will be for him to demand that the continuing resolution that will needed by September 30 to keep the government open include full funding for the wall he wants to build between the U.S. and Mexico. When Congress only gives the president a small fraction of what he wants, he’ll veto the CR and the wall/immigration shutdown will begin.

Trump has backed-down in the past when he has similarly huffed and puffed about the wall but was rebuffed by Congress. Given what just happened with Cohen and Manafort, he’s far less likely to be able to do that this time.

Follow Stan Collender on Twitter @thebudgetguy

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