“I probably could’ve made it balance. But you all would’ve rightly absolutely excoriated us for using funny numbers to do it.”
— Budget director Mick Mulvaney, quoted by the Wall Street Journal, on the Trump administration’s budget proposal.
“I probably could’ve made it balance. But you all would’ve rightly absolutely excoriated us for using funny numbers to do it.”
— Budget director Mick Mulvaney, quoted by the Wall Street Journal, on the Trump administration’s budget proposal.
“President Trump is expected to renew his call for drastic reductions to nondefense programs in rolling out his budget request Monday, even with hundreds of billions in new cash at hand,” Politico reports.
“While Congress busted strict spending caps last week — allowing for an extra $300 billion to be spent over the next two years — the Trump administration is still urging severe austerity for some arms of the federal government. Trump’s budget will lay out ‘an aggressive set of spending reforms’ to reduce the deficit by $3 trillion over a decade, according to a preview released by the White House on Sunday.”
Playbook: “The White House’s budget is especially irrelevant this year. In most years it’s treated with an eye roll. But this year, the president just signed a two-year spending framework into law.”
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White House budget chief Mick Mulvaney told CBS News that the two-year budget bill — passed by Congress and signed into law by President Trump — is a “very dangerous idea” and explodes the deficit.
He added he would “probably not” have voted for it as a congressman.
Stan Collender: “In fact, also forget about even projecting a balanced budget 10 years from now as Congress and the White House like to do. A $1 trillion deficit in a total budget of about $4.5 trillion means that spending would have to be cut by more than 22 percent to get to balance. But with interest on the debt and military spending at about $1.3 trillion and not going to be reduced, the amount available to cut drops to $3.2 trillion and the percentage reduction increases to more than 30 percent. Economic growth, which is already projected to be high, isn’t going to make up the difference.”
“A balanced budget isn’t going to be possible and any pretense that it is will be dropped.”
Associated Press: “Administration officials have downplayed the risk of simultaneously slashing taxes and boosting spending, arguing that the result will be faster growth that will then shrink the debt. But the higher deficits would come just as the Federal Reserve is on course to continue — and perhaps accelerate — the pace of its short-term rate hikes. The Fed’s rate increases will likely lead, in time, to higher borrowing rates for consumers and businesses and likely slow economic growth.”
“The market’s plunge over the past week was initially ignited by fears of higher inflation and interest rates. But investors have also had to consider a new threat: A two-year government funding deal that would add about $300 billion to budget deficits from higher spending. The Fed might have to respond by raising rates more aggressively to counter the stimulative effect of the spending increases.”
“The reason I’m here tonight is to put people on the spot. I want people to feel uncomfortable. I want them to have to answer people at home who said, ‘How come you were against President Obama’s deficits and then how come you’re for Republican deficits?'”
— Sen. Rand Paul (R-KY), quoted by the New York Times.
“The House of Representatives approved a major budget deal early Friday morning, ending a brief government shutdown overnight and sending the measure to the President for his signature,” CNN reports.
“The House vote was 240-186. The GOP-controlled chamber needed help from House Democrats to clear the bill. The Senate approved the measure earlier on Friday morning.”
“A government shutdown will begin at midnight. The Senate has recessed until 12:01 a.m. without passing a spending bill,” the Washington Post reports.
“The Senate planned to vote early Friday morning on a spending bill that would pour billions of dollars into the military and domestic programs while keeping the government operating.”
“The fate of the bill was uncertain in the House, where conservatives balked at adding billions to the nation’s debt and liberals demanded action on protecting young undocumented immigrants from deportation.”
“The federal government on Thursday night slid toward at least a brief shutdown as a single Republican senator, Rand Paul of Kentucky, held off a vote on a far-reaching budget deal that would stave it off,” the New York Times reports.
“Angered at the huge spending increases at the center of the deal, Mr. Paul delayed the vote for hours with a demand to hold a vote on an amendment.”
Washington Post: White House tells agencies to prepare for shutdown as budget bill stalls.
Jonathan Chait: “During the Obama era, Democrats frequently believed, but only rarely uttered aloud in official forums, that the Republican Party was engaged in economic sabotage. Not a coldly conscious plot, exactly. But it seemed just a little too convenient that the party had reversed its fiscal ideology at precisely the time when doing so would damage Democrats and thereby smooth the GOP’s return to power.”
“Now that Republicans have reversed their position once again, also in a way that happens to redound to their political benefit, the answer seems a little more clear. Republicans have used their control of government to virtually double the budget deficit, which had been hovering around half a trillion dollars per year, and will now likely run well over $1 trillion — during the peak of an economic expansion. There is no economic rationale for this behavior. Their policy is simply to support fiscal contraction under Democratic presidents and fiscal expansion under Republican ones. Cynicism is the only basis to explain their behavior.”
Politico: “The Senate will go first and is expected to pass the bill with relative ease. One wrinkle emerged Thursday afternoon with Sen. Rand Paul (R-KY) blocking speedy consideration of the measure until he gets a vote on an amendment to keep Congress under strict budget caps. Still, Senate GOP leaders believe they can work things out with Paul.”
“But the plan could unravel in the House, where conservative opposition is forcing Republican leaders to lean on Democrats for votes as House Minority Leader Nancy Pelosi digs in with immigration demands.”
Washington Post: “Ryan suggested in a radio interview Thursday that he would be able to deliver a majority of Republicans — about 120 votes — meaning about half of the 193 Democrats might be necessary to pass the deal. That could be a tough sell among House Democrats, who are livid that their demands for protections for ‘dreamers’ — immigrants brought to the United States as children now living in the country illegally — were not made part of the deal.”
USA Today: “With the clock ticking toward a midnight funding deadline, Senate leaders said they could not provide any update about the timing for a vote.”
Washington Post: “Republican lawmakers in 2011 brought the U.S. government to the brink of default, refused to raise the debt ceiling, demanded huge spending cuts, and insisted on a constitutional amendment to balance the budget.”
“On Wednesday, they formally broke free from those fiscal principles and announced a plan that would add $500 billion in new spending over two years and suspend the debt ceiling until 2019. This came several months after Republicans passed a tax law that would add more than $1 trillion to the debt over a decade.”
“With all these changes, the annual gap between spending and revenue in 2019 is projected to eclipse $1.1 trillion, up from $439 billion in 2015. And they are expanding the deficit at an unusual time, when the economy is growing and unemployment is low, a dynamic that often leads to shrinking budget gaps.”
Playbook: “When Paul Ryan was about to take the speakership from John Boehner, he railed against a package just like this. He took some heat yesterday in a closed Republican meeting from lawmakers who felt cut out by the process by which this bill was put together. He’s now putting this bill on the floor, and urging Republicans to vote yes. There’s a lot of chatter that a man seeking another term as speaker would never put this bill on the floor. At the moment, it’s just that — chatter. Ryan has said he’ll decide on his re-election in the spring after a conversation with his wife.”
Playbook: “Yes, this bill averts a shutdown, but that’s only a tiny sliver of what it does. It sets the stage to boost spending by roughly $300 billion over the next few years. It kicks in another at least $80 billion in disaster spending — even most Texans seem pleased, at the moment. And it suspends the debt limit until March 2019 — basically, telling Congress it can spend whatever amount of money it wants between now and then. That’s a big win for Republicans who don’t want to have to vote on the debt limit again before the midterm election.”
“The Senate is expected to take up — and pass — this bill in the early afternoon. They’ll probably pass this bill with 70-plus votes, and then leave town for the weekend.”
“Per Usual, the House is where this gets tricky. In order for this to pass, it will need to attract significant support from Democrats and Republicans alike. On the Republican side: we’ve heard estimates that anywhere from 120 to 150 Republicans will vote yes (the House has 238 Republicans). That would mean that, on the low end, roughly 70 Democrats would need to vote yes. (There are 193 Democrats.)”
“House conservatives revolted against a massive bipartisan deal to raise the debt ceiling and bust spending caps, complaining that the GOP could no longer lay claim to being the party of fiscal responsibility,” The Hill reports.
Said Rep. Mo Brooks (R-AL): “I’m not only a ‘no.’ I’m a ‘hell no.'”
“Senate leaders have reached an agreement on a two-year budget deal, adding billions of dollars in federal spending,” the Washington Post reports.
“The bipartisan accord would lift statutory budget limits by more than $200 billion and provide tens of billions of dollars in disaster relief funding. Senate leaders unveiled the deal Wednesday after months of negotiations — and after Senate Democrats agreed to set aside immigration policy demands.”
“The plan still faces head winds — particularly in the House, where conservative Republicans are balking at the increased spending and liberal Democrats want further assurances on immigration.”
“Top Senate leaders were working to finalize a sweeping long-term budget deal that would include a defense spending boost President Trump has long demanded alongside an increase in domestic programs championed by Democrats,” the Washington Post reports.
“As negotiations for the long-term deal continued, the House passed a short-term measure that would fund the government past a midnight Thursday deadline and avert a second partial shutdown in less than a month.”
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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