“The federal budget deficit swelled to $779 billion in fiscal year 2018, the Treasury Department said on Monday, driven in large part by a sharp decline in corporate tax revenues after the Trump tax cuts took effect,” the New York Times reports.
“The deficit rose nearly 17 percent year over year, from $666 billion in 2017. It is now on pace to top $1 trillion a year before the next presidential election.”
“A deep-pocketed Republican group that began the year vowing to focus on the tax overhaul has mentioned the GOP’s signature legislative achievement in just a fraction of its TV ads in 2018, a signal that the issue hasn’t been the political boon party leaders hoped it would be,” Bloomberg reports.
“The Congressional Leadership Fund, a super-political action committee that’s the largest-spending political group this cycle, has put out 31,220 broadcast spots in the first nine months of 2018, just 17.3 percent of which referred to the tax law… The data underscore concerns among Republicans that the 2017 tax law — championed by President Donald Trump and GOP congressional leaders — hasn’t gained traction with voters ahead of the Nov. 6 election that will determine control of the House and Senate. Instead, the GOP base has been more stirred up by issues like immigration and crime in the Trump era.”
Playbook: “Over the last few days, we’ve seen a massive ramp-up of the ‘build-the-wall’ rhetoric from key Hill Republicans — signaling that the Dec. 7 funding deadline will be a major funding clash over the physical border with Mexico.”
“Most of the government is funded through next year, but a slice of the government runs out of money on Dec. 7, and the insiders we talk to expect a clash could last weeks. The only backstop is Christmas and New Year’s. Democrats won’t be any help — especially if they win the House majority. Remember: It’s usually Hill leaders that have been skeptical of a fight over wall funding. Now they’re lining up, ready to go to war.”
A new Gallup poll finds that more Americans continue to disapprove than approve of last year’s sweeping tax overhaul bill signed into law by President Trump, 46% to 39%.
“Congressional Republicans have tentatively agreed to a 1.9 percent pay raise for the nation’s 2 million civilian federal workers, overruling President Trump who sought to freeze their pay,” the Washington Post reports.
“The preliminary deal between House and Senate Republicans is also likely to lift a salary freeze affecting hundreds of executive-level employees and appointees including Vice President Pence and members of the Trump Cabinet, according to lawmakers and aides.”
Stan Collender: “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.”
Speaker Paul Ryan said President Trump has told him he will sign a spending bill to avert a government shutdown, the Washington Post reports.
Said Ryan: “I’m confident he will sign it. … This funds our military, this funds opioids, this does a lot of the things that we all want to accomplish together and we’ve had very good conversations with the president.”
Playbook: “The White House and Hill Republicans say they think President Trump will sign the spending package that the House will pass today to avert a partial government shutdown. But there is a palpable fear lingering in the Capitol that Trump will want to distract from the Brett Kavanaugh hearing, and will do so by vetoing the bill, plunging the nation into crisis 41 days before Election Day. A few White House sources say the fear is unfounded, but a lot of people are on edge at the moment and that fear won’t lift until Trump’s signature is on the bill.”
“Watch for the Trump press conference this afternoon at 5 p.m., where we’re sure to get some additional clarification.”
“Congressional Republicans have found a solution to all their internal problems that plague their party: Delay them until after the midterms,” Politico reports.
“As the GOP fights to confirm Brett Kavanaugh to the Supreme Court, House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell are seeking to make as few political errors as possible before November. But they are setting up a lame duck that will be characterized by a race to replace Ryan, a government shutdown fight and brutal divisions on several long-shot pieces of legislation that will quickly morph into a nightmare for the party no matter the results of the elections.”
Playbook: “If you’re Trump, is there any cogent case to not shut down the government one week from today? Here is what a few of the president’s allies are whispering to us.”
“It wouldn’t hurt too badly. Congress has already passed a bunch of government spending bills, ensuring a shutdown would only be a partial stoppage of government funding. Trump has bills on his desk that fund critical parts of government. Much of the money Trump wants would come in Department of Homeland Security appropriations. So if he wanted to take a stand, it would be narrowly targeted to one department.”
“This is what he promised. If you are a Republican lawmaker who believes that the 2016 election was about Trump’s hard-line immigration policies — as many conservatives tell us they do — shouldn’t you take a stand on that while you can? Shouldn’t Republicans fear their base is going to stay home if an all-Republican Washington blows it on the wall?”
“Washington might not be red for long. This could be the president’s last chance to get a wall. The House is looking like it could be lost come January. No chance in hell that the leftward-drifting House will give him the wall if they get the majority in 2019. Zero. Zip. Zilch. If Ds win the House, there is no chance the president will get a wall in the lame duck, either.”
A new RNC survey has led Republicans “to a glum conclusion regarding President Trump’s signature legislative achievement: Voters overwhelmingly believe his tax overhaul helps the wealthy instead of average Americans,” Bloomberg reports.
Key finding: “By a 2-to-1 margin — 61% to 30% — respondents said the law benefits ‘large corporations and rich Americans’ over ‘middle class families.'”
“The result was fueled by self-identified independent voters who said by a 36-point margin that large corporations and rich Americans benefit more from the tax law — a result that was even more lopsided among Democrats. Republican voters said by a 38-point margin that the middle class benefits more.”
“The Senate on Tuesday passed a short-term spending bill that would keep the government running through Dec. 7, aiming to put off a fight over funding for President Trump’s border wall until after the midterm elections,” the Washington Post reports.
“GOP leaders designed the package to combine key Republican and Democratic priorities in an attempt to garner overwhelming bipartisan support — and give Trump a win on military spending, even as Congress delays a fight over the money he wants for his wall.”
“The legislation still must pass the House, which is expected to take it up next week. But it remains uncertain whether Trump will sign it. The president has toyed repeatedly with shutting down the government to try to get more money for the border wall.”
Washington Post: “Their demise technically came Tuesday when the Congressional Budget Office calculated the federal deficit at $895 billion for the first 11 months of fiscal 2018 — a stunning gap that was met with a collective shrug on Capitol Hill.”
“But the real death of the deficit hawks came late last year and early this year, as Republicans such as Speaker Paul Ryan who had railed against deficits in the first years of the Obama administration pushed through a massive tax cut despite CBO projections of a surge in federal borrowing.”
“Congressional leaders from both parties have finalized a plan to avert a government shutdown at the end of the month over President Trump’s demands to fund a border wall, and postpone that fight until after the November midterm elections,” the Washington Post reports.
“The bipartisan pact… reflects the desire of Republican leaders to avoid a nasty shutdown fight weeks before the midterm elections — even if it means sacrificing, at least for now, one of Trump’s most prominent policy goals.”
“House GOP leadership aides say they believe the White House is on board with their approach, but no one can be sure what Trump ultimately will do.”
“The recent changes to the tax code are giving business executives a new perk: the opportunity to deduct the entirety of a corporate-jet purchase,” the Wall Street Journal reports.
“President Trump signed more than 100 changes to the U.S. tax code into law at the end of last year. Among them: The price of a new or used airplane purchased by a company can be a 100% write-off against its earnings.”
A CBO report finds the federal budget deficit hit $895 billion in the first 11 months of fiscal 2018, an increase of 32% over the same period the previous year.
Axios: “This increase was due mostly to the new Republican tax law and Congress’ routine decision to increase spending, which grew by 7% compared to revenue growth of only 1%. The CBO now says the deficit will approach $1 trillion by the end of this fiscal year, but in April the agency didn’t expect the deficit to reach $1 trillion until 2020.”
“The White House and top congressional Republicans want to push for a House vote on a second round of tax cuts ahead of the midterms in hopes of bolstering their economic pitch to voters – but they’re running into opposition within their own party,” Politico reports.
“GOP leaders conceived of the second tax bill as a messaging win that would put Democrats on their heels ahead of the midterms, forcing them to vote against tax relief for the middle class. But the concerns over the bill are largely flowing from the Republican side, mainly from members fighting to keep hold of seats in suburban districts where President Trump is most unpopular – and that are key to the GOP’s hopes of keeping their majority.”
Taegan Goddard is the founder of Political Wire, one of the earliest and most influential political web sites. He also runs Political Job Hunt, Electoral Vote Map and the Political Dictionary.
Goddard spent more than a decade as managing director and chief operating officer of a prominent investment firm in New York City. Previously, he was a policy adviser to a U.S. Senator and Governor.
Goddard is also co-author of You Won - Now What? (Scribner, 1998), a political management book hailed by prominent journalists and politicians from both parties. In addition, Goddard's essays on politics and public policy have appeared in dozens of newspapers across the country.
Goddard earned degrees from Vassar College and Harvard University. He lives in New York with his wife and three sons.
Goddard is the owner of Goddard Media LLC.
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