Tag: Kevin Brady

Raising The Chances Of A Government Shutdown This Fall To 60%

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I added a government shutdown countdown clock to the homepage of thebudgetguy.blog this week because the threat of a government shutdown this October 1 is real, growing and needs to be taken very seriously.

I know…there’s a countdown clock for everything these days. News and sports networks are using them so often for routine events that they’ve become a cliché and those that use them have become the butt of jokes.

But in this case it’s fully justified. The deadline for Congress and President Donald Trump to come to an agreement that will avoid a government shutdown this fall — which may be a much more frequent threat and occurrence these days than it used to be but would still be anything but routine – is approaching quickly and neither the White House, House Speaker Paul Ryan (R-WI) or Senate Majority Leader Mitch McConnell (R-KY) have done anything to make it less likely.

…the chances of a shutdown happening this year are greater now than they were even a few week ago.

Because of that, because the time left to prevent it from happening is steadily dwindling and because the other must-do tasks Congress has left are still multiplying, the chances of a shutdown happening this year are greater now than they were even a few week ago.

For these reasons I’m raising my previous estimate of a government shutdown occurring this fall from 50 to 60 percent.

There are five reasons a shutdown is now more likely.

1. The shutdown countdown clock shows that, as of today, there are only 69 days left before the federal government turns into a pumpkin on October 1. But the countdown clock shows calendar days, which includes weekends. When you subtract those, congressional recesses, religious and national holidays and days when Congress is in session but no votes are scheduled, the number of legislative days when the House and Senate are both working is probably less than half that number.

2. There’s been no movement at all over the $25 billion Trump wants to build a wall between the U.S. and Mexico. The president has already threatened multiple times to veto a continuing resolution — the funding bill needed to keep the government from shutting — if it doesn’t include these funds and the votes don’t currently seem to exist in either the House or Senate to provide them.

3. Vetoing the CR and shutting the government over funding for the wall will be Trump’s best way to enrage his base further on the immigration issue before the election. Ryan and McConnell may also see a wall/immigration-motivated shutdown as the best way to increase Republican voter turnout and protect GOP incumbents.

4. The House and Senate are now both planning to spend much of September debating things other than legislation that would keep the government from shutting. As I posted several days ago, Ways and Means Committee Chairman Kevin Brady (R-TX) has let it be known that the House will debate three tax cut bills even though they have no chance of being enacted. Meanwhile, the Senate is very likely to be tied up for days that month trying to confirm Supreme Court nominee Brett Kavanaugh.

5. Unless he starts a war, a government shutdown may be Trump’s best/only opportunity this fall to divert media attention away from (1) the Mueller investigation, (2) the Michael Cohen trial, (3) Paul Manafort, (4) Stormy Daniels, (5) Karen McDougal, (6) Vladimir Putin and who knows what else.

I’ll be updating this analysis weekly.


New GOP Tax Cut Plan Is Really All About Campaign Contributions


It was big news last week when Ways and Means Committee Chairman Kevin Brady (R-TX) let it be known that the House would debate and presumably pass another tax cut this September.

The Brady plan includes three separate bills that will (1) extend the individual tax cuts currently set to expire in 2025, (2) provide tax incentives for research and development and (3) enhance the tax code’s incentives to save for retirement.

Passing a tax cut just before the election sounds like every incumbent’s legislative dream come true.

But in spite of their obvious surface-level political attractiveness, it’s very likely that none of the three bills will be enacted this year.

The reason is something that congressional Republicans decided to do…or in this case not do…months ago: adopt a budget resolution.

As I explained in this post back in February, House Speaker Paul Ryan (R-WI) and Senate Majority Leader Mitch McConnell decided at the start of this year that there would be no fiscal 2019 budget resolution so that there would be no politically embarrassing votes for Republicans on the trillion-dollar budget deficits resulting from last year’s tax bill. No budget resolution meant no reconciliation and no reconciliation meant that 60 votes would be required on tax legislation. Even on a pre-election tax cut, that meant a filibuster would be probable.

This almost certainly explains the reluctance expressed last week by many Senate Republicans about taking up any tax cut that might pass the House this fall.

(In case you’re wondering how Senate Democrats can vote against a tax cut just before the election, I was told by multiple sources this week that Democrats will offer their own tax cut proposal that Republicans will vote against. That will given Democrats political license to vote against the GOP’s plan.)

So why is Brady, who must know that his bills are doomed from the start in the Senate, still planning to move ahead?

Brady is using his new tax cut scheme to solicit campaign contributions from corporations.

It has nothing to do with taxes, fiscal policy or economics: Brady is using his new tax cut scheme to solicit campaign contributions from corporations and industries who want something in these bills.

The best way for corporations to get Brady to pay attention will be to contribute to him, the GOP’s campaign arms, other Ways and Means Republicans, the leadership political action committees and the Trump reelection effort, and to do it before the election.

Hence Brady’s rush to do something now even if it is already set up to fail.

Brady and the rest of the House GOP will be looking for first-time or increased campaign contributions/political tribute from three categories of tax cut supplicants:

  1. The companies, industries and groups that didn’t get anything in the tax cut enacted last December.
  2. The companies, industries and groups that didn’t get all they wanted in the tax cut enacted last December.
  3. The companies, industries and groups that need a change from what they got last December (a so-called “technical correction’) because that bill was drafted improperly.

There are three reasons why, no matter how unlikely these bills are to be enacted, few in these three categories will be able to ignore the Brady plan.

First, kowtowing to the chairman of the House Ways and Means Committee is always a good thing to do.

Second, even if the bills aren’t enacted, having the provision you want included this time will make it much easier to get it included the next time a tax cut is considered, even if Democrats gain the majority in the election.

Third, there’s always the chance that legislative lightning will strike and one or more of the three Brady bills will be enacted after all.

The spin surrounding the Brady bills will have less to do with the proposed corporate tax changes and will instead focus on extending the individual tax cuts.

In reality, however, given that the actual purpose of the Brady plan is to obtain corporate campaign contributions, extending the individual tax cuts will be the least important of the three tax cut proposals.

It will also provide the GOP with the political cover to get what it really wants.

There’s so much more here:

OMB Director Mick Mulvaney Says CBO Was Right After All

House, Senate GOP Should Use This Year’s Appropriations To Stop Trump On Russia

Yes…Trump Will Shut Down The Government This Fall

The House and Senate Appropriations Committee Are A Total Disgrace

The Definitive Larry Kudlow Take Down

You’ve Been Warned: Trump’s Trillion Dollar Budget Deficits Are Here To Stay