Tag: Paul Ryan

The GOP Could Enact Another Tax Cut This Year

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When House Republicans passed their tax 2.0 last week and then recessed until the lame duck session that begins this November, the presumption was that this latest GOP descent into bigger budget deficits was nothing more than a pre-election ploy that would never go any further.

And with Majority Leader Mitch McConnell (R-KY) saying that the Senate had no plans to take up whatever the House passed before the election, that seemed like a safe bet.

But contrary to what’s currently being assumed, 2.0 could definitely become law this year.

It all has to do with the filibuster.

The House-passed tax bill may be filibustered in the Senate and there’s no way that enough Democrats will join Republicans to provide the needed 60-vote margin to stop the debate and get to a vote. This will be especially true in a lame duck when it’s two years before the next election and fear of voter retribution is at its absolute lowest point.

This can’t-stop-a-filibuster problem is the GOP’s own doing. While the reconciliation procedures of the congressional budget process would have prevented a filibuster, reconciliation only happens pursuant to instructions included in a budget resolution and McConnell and Speaker Paul Ryan (R-WI) decided early this year that there wouldn’t be one. That decision prevented reconciliation from being used and has stopped 2.0 from being enacted.

McConnell and Ryan were making a purely political calculation. They wanted to protect the GOP representatives and senators running for reelection from having to vote in favor of a budget resolution that projected trillion-dollar deficits.

But the need to protect these House and Senate members won’t exist after Election Day. That will make a budget resolution and reconciliation acceptable and, therefore, tax 2.0 doable.

It won’t be easy, but it’s certainly not impossible.

First, the House and Senate would quickly have to adopt a fiscal 2019 budget resolution with reconciliation instructions that require the 2.0 tax changes.

Second, the House-passed 2.0 would have to be designated as the legislation required by the just-adopted budget resolution’s reconciliation instructions or the House would need to re-pass 2.0.

Third, with a simple majority, the Senate could either pass its own 2.0 or…and much more likely…pass the House-adopted bill.

Fourth, the 2.0 bill now adopted by the House and Senate would then go to the president for his signature and enactment.

Don’t dismiss this out-of-hand.

The GOP has already shown its willingness to use the budget process very creatively when it passed two budget resolutions in 2017 so reconciliation could be used twice — once to try to repeal the Affordable Care Act and once for tax 1.0. This would just be a variation on that theme.

In addition, the Republican political considerations will all change significantly after the election, especially if they lose control of one or both houses. In particular, the GOP may want to increase the budget deficit as much as possible to limit what the Democrats are able to do legislatively when they’re in charge in the next Congress.

Finally, if it’s not enacted during this lame duck, the GOP’s ability to reward its supporters and donors with the tax changes provided in 2.0 may be gone for two years or longer. Republicans may want to go for it while they are still able to do so.

Follow Stan Collender on Twitter @thebudgetguy

 

 

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2018 Is The Year Of Federal Budget Debauchery

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I am not being hyperbolic or using click bait with the headline you see above.

I have been involved with the federal budget in some capacity for over 40 years and, based on that experience, it’s actually quite easy for me to conclude that 2018 has been the worst year in U.S. history for anything and everything related to the federal budget.

Consider this.

Big Permanent Increases In The Deficit. The numbers are indisputable regardless of whether you’re a budget traditionalist that hates red ink or a political or economic denier that thinks the federal deficit doesn’t matter. The U.S. budget deficit is going to be close to or exceed $1 trillion in fiscal 2019 and is projected by both Donald Trump’s Office of Management and Budget and the Congressional Budget Office to keep rising. A $1.5 trillion deficit in the near future is very likely and, if there’s an economic downturn, $2 trillion is definitely possible.

The blame for this year’s fiscal debauchery belongs squarely on the House and Senate Republican majorities and the GOP president.

What did Trump and the Republican Congress do this year when faced with these unprecedented-in-a-good-economy numbers? They ignored them and attempted to increase the deficit even further.

  • Trump still wanted $5 billion for his wall between the United States and Mexico
  • Trump proposed a new Department of Defense space force that will cost billions more than we’re currently spending.
  • Just before it recessed last week, the GOP-controlled House passed yet another tax cut that will add hundreds of billions more to the deficit and national debt if it’s enacted.
  • The fiscal 2019 appropriations that were enacted last week included billions of dollars in additional military and domestic spending.
  • There was also the $12 billion bailout for farmers to offset the impact of the Trump tariffs.
  • And there was the Trump $1.5 trillion infrastructure proposal.

About the only thing that occurred this past year that should be considered deficit positive was the decision to reconsider/reschedule/cancel the military parade Trump wanted to stage this November because its projected cost was much higher than expected. But, for the record, the deficit impact of cancelling Trump’s parade wasn’t even a rounding error in terms of the total deficit and national debt.

Two things made this all so much worse.

First, the spike in the deficit was due to enacted changes in law rather than the short-term tax decreases and spending increases that happen during an economic downturn. Contrary to the temporary trillion-dollar deficits that occurred during the Obama administration because of the Great Recession, these GOP deficits are permanent.

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Second, this huge deficit increase was put in place when the U.S. economy was in comparatively good shape and smart fiscal policy dictated the opposite of what was done. We’re already starting to see the impact of this with high interest rates.

The End Of The Congressional Budget Process. Congress’s decision to ignore the process this year effectively means that the Congressional Budget Act has been abandoned.

The biggest example of that abandonment started with the GOP leadership deciding early that, even though it was legally required, Congress would not adopt a budget resolution this year. The reasoning was quite cynical: they didn’t want the Republicans running for reelection to have to go on record in favor of the trillion-dollar budget deficits their tax and spending policies created.

Accountability for the deficit was one of the main reasons the Congressional Budget Act was adopted. The act created budget resolutions specifically to force representatives and senators to vote on a single piece of legislation that compared total revenues and spending o they could be held accountable for the deficit or surplus.

This year, House Speaker Paul Ryan (R-WI) and Senate Majority Leader Mitch McConnell (R-KY) unilaterally decided that the budget act didn’t need to be implemented specifically because that accountability could hurt the GOP’s chances of retaining its majorities.

It’s hard to see the Congressional Budget Act ever being fully implemented again because of the Ryan/McConnell ploy. While Congress has not adopted budget resolutions in other years, those failures were mostly the result of an inability or unwillingness to compromise rather than a willful disregard of the law.

The second biggest example of the budget process being abandoned was the House’s and Senate’s failure to oversee Trump’s repeated efforts to impound, transfer and reprogram funds away from congressionally mandated priorities. Appropriations were frequently used by the White House very differently from they way they were supposed to be used and Congress did nothing.

The blame for this year’s fiscal debauchery belongs squarely on the House and Senate Republican majorities and the GOP president. Their policies and decisions all made the federal budget situation much much worse.

It won’t be getting better any time — as in years or even decades — soon.

Follow Stan Collender on Twitter @thebudgetguy

Ryan And McConnell: #Lock’em Up

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Over at Politico, Burgess Everett has a story this morning that says Congress deserves credit for doing routine things like passing some (but not all) of the appropriations for the coming year.

I have a very different take: House Speaker Paul Ryan (R-WI) and Senate Majority Leader Mitch McConnell (R-KY) should be arrested and jailed for not even trying to comply this year with the budget laws that apply to Congress.

The chairmen of the two budget committees — Senator Mike Enzi (R-WY) and Rep. Steve Womack (R-AR) — should be jailed for the same reason.

And I’d have every member of Congress talk about this at the start of every speech they give in their state or district and every candidate raise it prominently at their campaign rallies so their audiences can rhythmically chant “Lock’em up.”

The congressional budget process is not supposed to be optional. It’s a law created by the Congressional Budget and Impoundment Control Act of 1974 that Congress is required to implement every year.

This is Conspiracy to Commit Budget Noncompliance in the First Degree

(Before you think this was an initiative enacted by Democrats in 1974 to embarrass the GOP in 2018, keep in mind that the budget act passed more than four decades ago with a level of bipartisanship that today is both unimaginable and quaint. It was approved unanimously in the Senate, with just six no votes in the House and signed into law by a Republican president.)

But led by Ryan, McConnell, Enzi and Womack, the GOP-controlled Congress this year isn’t complying with the budget act. To the contrary, the Republican congressional leadership intentionally decided not to do the most important thing the law requires — adopting a budget resolution for the coming fiscal year.

The budget resolution is the only part of the annual budget-spending-tax process that Congress is legally required to do. Appropriations and tax legislation is completely discretionary.

Ryan and friends decided to break the law and not do a budget resolution for totally political reasons. The revenue and spending policies the GOP has put in place since the last budget was adopted have ballooned the budget deficit and national debt. Not doing a fiscal 2019 budget resolution meant that House and Senate Republicans avoid having to vote in favor of those deficits before the election and stops them from handing a very-tough-to-explain issue to their Democratic opponents.

The Congressional Budget and Impoundment Control Act was adopted to prevent this exact thing from happening. Until it was put in place, representatives and senators voted for the tax cuts and spending increases that spiked the deficit and debt but were never required to vote on a single bill that showed the impact of those votes.

An annual budget resolution was supposed to be the answer to this problem. For the first time in American history, members of Congress were legally required to go on record on the deficit and debt so their constituents would know where they stood and could vote accordingly.

Compounding the crime of no budget resolution is the fact that this was an intentional decision by Ryan, McConnell, Enzi and Womack rather than, as has happened in the past, an inadvertent byproduct of the House and Senate or Republicans and Democrats not being able to come to an agreement.

That makes this a far more serious — Conspiracy to Commit Budget Noncompliance in the First Degree — and its leaders should be locked up immediately.

 

Follow Stan Collender on Twitter @thebudgetguy

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.

House Republicans Are In Almost Total Disarray As Summer Recess Begins

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Consider all of the following now that the House of Representatives has left Washington until after Labor Day.

Paul Ryan (R-WI) is a lame duck speaker who no longer seems to care about supporting Donald Trump or Trump’s legislative agenda.

Ryan has no heir-apparent who, as Ryan increasingly checks out, has the authority to take over what was an already very unruly House Republican caucus.

There are three candidates to replace Ryan who are openly campaigning for the job and dividing the GOP caucus. This competition will likely get worse when the House reconvenes.

One of the three speaker candidates is Jim Jordan (R-OH), the former chairman of the House Freedom Caucus. But the HFC, which had been so influential in determining the House legislative agenda this decade, now seems to be on its last legs. And Jordan has been accused by dozens of people of knowing about but not reporting sexual abuse when he was assistant wrestling coach at Ohio State University.

This is almost a textbook definition of political and legislative chaos.

That means Jordan may not be in the best position to become speaker (or minority leader  if there’s a Democratic majority) in the next Congress but, if he can hold the HFC together, he may be able to determine who does.

More House Republicans are not running for reelection for one reason or another than in any other recent election. Retiring members or those defeated in their primaries tend not to be as responsive to their constituents, their party or the White House toward the end of their terms. They also can’t be counted on to vote as reliably as might have been the case before.

The most recent generic polls show Democrats with a big lead over Republicans on who should control the House in the next Congress. The biggest reason for the Democratic lead is a strong desire for there to be a check on Donald Trump, and he isn’t going away anytime soon.

The House only has 11 legislative days left before the start of fiscal 2019 but doesn’t seems to have any agreed-upon plan on how to avoid a government shutdown on October 1 except to hope that Trump doesn’t veto the continuing resolution that will be needed to prevent it.

While the shutdown clock continues to run, House Republicans seem to be content to do things that are totally symbolic and remarkably unimpressive.

The most purely symbolic gesture last week was the weak version of a resolution to impeach Deputy Attorney General Rod Rosenstein that Ryan completely shot down less than 24 hours after it was introduced by Jordan and current House Freedom Caucus Chairman Mark Meadows (R-NC). The resolution never had a chance in the House and the GOP controlled Senate had no interest in it. It was never going to happen.

When the House reconvenes, the GOP plans to devote a significant amount of the limited time it has left before fiscal 2019 begins to three tax cut bills that have no chance of being enacted any time soon because…wait for it…the Republican-controlled Senate has already said it’s not interested.

And none of this even begins to anticipate what the House Republicans who are running for reelection and think they will need to energize the Trump base will do in September as the Manafort trial and Cohen investigations continue and as the Mueller probe moves forward.

In other words, this year’s legislative crunch time is about to get very real but House Republicans have little leadership, no plan, a very divided caucus, are very likely to be distracted and are relying on a notoriously unreliable Donald Trump to do the right thing.

This is almost a textbook definition of political and legislative chaos.

Follow Stan Collender on Twitter @thebudgetguy

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

 

 

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.