Tag: Donald Trump

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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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

 

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

Trump’s Deficits Will Cause Very Serious Challenges For Multiple Generations Of Americans

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The headline above is not partisan hyperbole or a rhetorical flourish: The $1 trillion-plus annual Trump budget deficits that are about to start will soon create huge policy challenges future generations of Americans.

While presidents submit and Congress adopts one-year budgets (when they bother to do a budget at all, that is), the spending and taxing policies put in place in those budgets are more or less permanent.

This is certainly true with federal spending because most of it is “mandatory”‘ and will continue until Congress and the president change it. Given that most mandatory spending (Social Security, Medicare and many veterans benefits, for example) are growing in popularity, reductions aren’t likely any time soon…and maybe not at all.

A second category of mandatory spending — interest on the debt — is only going to increase as interest rates rise from their recent lows and the national debt increases precipitously.

If anything, the Trump deficits will be larger than estimated.

But mandatory spending (which, depending on whose numbers you use, is between two-thirds and three-quarters of that side of the budget) isn’t the only federal spending that’s ongoing. Everything else may officially be classified as “discretionary” and require an annual appropriation to be spent, but Congress and the president seldom make more than incremental reductions in some of these programs. Overall, this spending goes up continuously.

The permanent nature of the federal budget is also true with revenues. The tax code essentially operates as mandatory spending because most of it continues until a change is enacted. Even when some provisions are set to expire (such as the individual tax cuts included in last year’s bill in 2025), the expectation is that, like annual appropriations, they will be extended.

All of this means that we’re not going to grow out of this. Unlike the trillion-dollar deficits in the early years of the Obama administration that occurred because of an economic downturn (you still remember the Great Recession, right?) and temporary tax reductions and spending increases, the Trump deficits are the result of permanent changes in taxes and spending when the economy is doing well.

If anything, the Trump deficits will be larger rather than smaller than estimated as (1) the U.S. economy worsens, (2) there are military or natural disasters that require federal involvement and (3) additional spending and tax breaks are adopted. An annual budget deficit and national debt increase of $2 trillion is very possible.

This underlying budget situation — permanent trillion dollar-plus deficits every year of the Trump administration and beyond — will force U.S. politics and politicians to face challenges that they’ve never had to face before. Consider just these five.

1. How will the federal government respond to the next economic downturn? Will Americans, who throughout U.S. history have expressed great anger about Washington’s red ink, decide that a deficit that approaches or exceeds $2 trillion is acceptable? Will policymakers have to limit their response to a downturn to show obeisance to the old limit-or-reduce-the-deficit mantra as they did in 2009 when the Obama stimulus was developed? Does this mean that the next economic downturn will be deeper and last longer than we’ve come to expect?

2. Is the same thing true of future military contingencies? How will the U.S. respond if there’s less tolerance for even higher deficits?

3. What will the need to finance a national debt that’s increasing by $1 trillion or more each year do to interest rates in the United States? How vulnerable will that make the American economy to the big foreign lenders like the Chinese?

4. How will the U.S. be able to respond to the needs of the next generations of Americans such as infrastructure, retirement and healthcare.

5. How will Congress ever agree to another budget if voting for deficits that are less than $1 trillion is politically unpalatable? Are threatened or actual government shutdowns even more likely now than they’ve been recently?

Follow Stan Collender on Twitter @thebudgetguy

Don’t Leave Just Yet…There’s so much more here:
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
Ryan And McConnell: Lock’em Up 
Today Marks The Demise Of The House Freedom Caucus
This Is Why Trump Will Shut Down The Government
Raising The Chances Of A Government Shutdown This Fall To 60%
OMB Director Mick Mulvaney Says CBO Was Right After All
Yes…Trump Will Shut Down The Government This Fall
You’ve Been Warned: Trump’s Trillion Dollar Budget Deficits Are Here To Stay

When Will Trump Realize He’s Being Played By Ryan And McConnell On The Shutdown And His Wall?

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House Speaker Paul Ryan (R-WI) and Senate Majority Leader Mitch McConnell (R-KY) supposedly have convinced President Donald Trump that he shouldn’t consider shutting down the federal government over funding for the wall he wants to build between the United States and Mexico until the coming lame duck session of Congress, that is, until after the mid-term elections.

This makes a great deal of sense from Ryan’s and McConnell’s perspective given that the continued GOP control of the House and Senate seems to be in increasing jeopardy. One of the last things they want a month before November is a Trump-caused government shutdown that the congressional Republicans running for reelection have to explain and defend.

But there are several reasons it doesn’t make much sense for Trump.

First, Ryan and McConnell have repeatedly promised Trump that they would get him the funding for his wall at some later date…and have never delivered on that promise.

Second, Ryan is a lame duck speaker who will have far less incentive after the election to do anything Trump wants on the wall.

When will Trump realize that the timing Ryan and McConnell are suggesting for a possible government shutdown is much better for them than it is for him?

Third, defeated and retiring members of Congress generally are not as cooperative or politically reliable after the election as they were before and, if the polls are correct, there will lots of defeated Republicans this November joining the already large number of those who are retiring.

Finally, and most important, the legislative battle over keeping the government open before the election rather than after is very likely to be Trump’s last chance to get funding for his wall given the leverage he’ll have over Republicans at that time.

In addition, if the Democrats do gain the majority in one or both houses of Congress (or even just pick up substantial number of seats), they will immediately claim a mandate to be a check on Trump and will be far less willing to compromise.

At the same time, congressional Republicans will look at the election results and not feel as obligated to follow Trump blindly as thy do now.

The question is if…or when…Trump will realize that the timing Ryan and McConnell are suggesting for a possible government shutdown is much better for them than it is for him.

And that they’re playing him like a fiddle.

Trump’s Latest Shutdown Threat Keeps Chances Of It Happening At 60%

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I’m keeping my prediction of a government shutdown happening this fall at 60 percent.

There were lots of questions about my 60 percent number after Donald Trump seemed to come to an agreement with House Speaker Paul Ryan (R-WI) and Senate Majority Leader Mitch McConnell (R-KY) last week over funding for the wall he wants to build between the U.S. and Mexico.

But Trump has again proved that he can’t be taken at his word about a shutdown. He tweeted this out a little after 9 am EDT this morning.

Today’s tweet provides some important clues as to the possibility of a shutdown.

First, Trump is using the threat of a shutdown to raise the immigration issue with his base. As I’ve said before, that may be very critical for Trump this fall.

Second, he’s signalling that he’ll blame House and Senate Democrats and, therefore, telling the congressional GOP leadership that the shutdown they’re desperate to avoid is less important to him than the wall.

Third, Trump is also telling Ryan and McConnell that he hasn’t yet agreed to anything.

As a result…I’m maintaining my previous estimate that there’s a 60 percent chance of a federal government shutdown this fall. I’m expecting that to go higher in the days ahead.

Follow Stan Collender @thebudgetguy