Cohen And Manafort Increase The Chances Of A Government Shutdown


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