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Trump Abandons Fiscal Restraint Again, Raises Spending by $320B

What happened to the great dealmaker?

Early in his administration, President Trump signed a spending bill that vastly increased both military and domestic spending, since the former was being held hostage by Democrats so they could get the latter. And, he felt, we needed the military spending increase after Barack Obama had depleted the military’s coffer’s.

Trump said he’d never do it again. He just did.

I cannot believe that the military budget can’t be trimmed of waste in order to make way for lower spending increases. The military-industrial complex certainly has something it can give away.

But no, we’ll keep passing the bill to our children and grandchildren. And the problem could develop sooner. Where do we get the money to cover our bills for the next major crisis while we continue will trillion dollar annual deficits?

Trump knew what he was doing when he gave the budget deal to Treasury Secretary Mnuchin to negotiate. Mnuchin is no conservative. White House Chief of Staff Mick Mulvaney, a supposed budget hawk, is the big loser here.

As are the rest of us.

According to the New York Times:

White House and congressional negotiators reached accord on a two-year budget on Monday that would raise spending caps and lift the government’s debt ceiling, likely averting a fiscal crisis but splashing still more red ink on an already surging deficit.

If passed by Congress and signed by President Trump, the deal would stop a potential debt default this fall and avoid automatic spending cuts next year. The agreement would also bring clarity about government spending over the rest of Mr. Trump’s term.

I am pleased to announce that a deal has been struck with Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, Speaker of the House Nancy Pelosi, and House Minority Leader Kevin McCarthy – on a two-year Budget and Debt Ceiling, with no poison pills

“It’s pretty clear that both houses of Congress and both parties have become big spenders, and Congress is no longer concerned about the extent of the budget deficits or the debt they add,” said David M. McIntosh, president of the Club for Growth, a conservative group that advocates for free-enterprise.

The agreement, struck by Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin, would raise spending by $320 billion, compared to the strict spending levels established in the 2011 Budget Control Act and set to go into effect next year without legislative action. Spending on domestic and military programs would increase equally, a key demand of Ms. Pelosi, offset by about $75 billion in spending cuts, far lower than the $150 billion in cuts that some White House officials initially demanded.

The deal would lift the debt ceiling high enough to allow the government to keep borrowing for two more years, punting the next showdown past the 2020 elections. The negotiators hope to enact the accord before Congress leaves for its August recess.

Trump Budget Doesn’t Propose Eliminating the Deficit

President Trump’s guns and butter budget, to be released Monday, doesn’t even bother to pretend to eliminate the deficit over ten years, as other budgets have, according to the Washington Post.

He will call for a lot of spending cuts, some $3 trillion of them. But there are two problems here.

First, Democrats are holding defense spending hostage to maintaining and increasing domestic spending levels. We desperately need the military outlays after the irresponsible years of decline under Barack Obama, so Republicans have to give in, at least somewhat. And unless, as Trump stated over the weekend, Americans decide to elect more Republicans, Democrats ability to do this is not going to change. Trump has done too little, though, to highlight the damage Democrats are doing.

But the other problem appears to lie with all of us. Until we decide as a nation that we cannot pay unlimited entitlements – or rather, until we accept that we are going completely broke through spending on Medicare, Social Security, and Medicaid – we will run huge deficits and rack up debt.

Trump didn’t campaign on curbing entitlements for future retirees because he doesn’t care about it, and neither do voters. Let me offer my considered opinion on this: That’s bad.

Running up debt is fine. Until it’s not. Once creditors lose confidence in our ability to service our debt, they will run. That’s how countries suffer financial collapses.

There’s not a lot of give in the system. But there is a lot of tension. An economic downturn, a major terrorist attack, or a war could happen at any time. And those things cost money.

Maybe China will lend us the money to destroy their ally, North Korea. Now that would be ironic. Maybe they have a sense of humor. Of course they do!

From the Post report:

Trump’s budget plan will call for a range of spending cuts that reduce the growth of the deficit by $3 trillion over 10 years, but it would not eliminate the deficit entirely, said the people familiar with the proposal, who spoke on the condition of anonymity to discuss the plans before they’re publicly unveiled.

GOP leaders have prioritized the tax-cut plan and a major increase to military spending over their past calls for eliminating the deficit. A vocal minority of GOP lawmakers have complained about this shift, but they proved no match for the bulk of the party last week when spending levels for the next two years were expanded.

Still, when Trump proposes a budget that falls far short of eliminating the deficit, it could heighten complaints from conservatives who have said the Republican party has strayed too far.

In 2017, Trump’s budget proposal sought to eliminate the deficit over 10 years, though his budget writers were ridiculed for what some alleged was a $2 trillion math error.

The U.S. government spends more money than it brings in through revenue, a gap known as the budget deficit. The government ran a deficit of $666 billion in 2017. The deficit in 2019 is expected to eclipse $1.1 trillion, in part because of measures put in place since Trump took office.

Where is the Republican Attack Machine on the Shutdown?

Democrats are always so much better at spinning their nonsense than Republicans are. They whine, attack, and rally the troops every time there’s a big battle to be fought, while Republicans think somehow people will come around to their point of view. And Democrats do it in an organized fashion guided by a well thought out, long-term plan that nevertheless seems spontaneous. Republicans focus solely on today’s news cycle and think they can win the PR war via President Trump’s tweets.

The newest battle — the growing struggle over funding for the government, which runs out in a week — is a perfect example of this communications incompetence.

Republicans and Democrats are trying to come to an agreement on new spending legislation that would fund the government through September, the end of the fiscal year. If they don’t, or if they can’t agree to simply fund things at current levels, the government shuts down.

Every single time there is a debate about shutting down the government, Republicans get blamed. But this debate is coming right after an election in which Republicans seized the White House and maintained their majorities in the House and the Senate. That is, voters have just affirmed their agenda. And now it is the Democrats, not Republicans, who are in reality blocking “progress” and “getting things done,” which is the mantra you hear from Democrats during these shutdown debates.

The newly elected president wants funding for the wall with Mexico, the issue that was the banner for his campaign. Democrats won’t give him a penny for it. They don’t even want to give him cash to enforce existing immigration law. He wants to increase defense spending, but Democrats are resisting. What’s more, despite having lost an election, they have demands. Americans voted to end Obamacare, but Democrats are insisting that subsidies not only continue but be enshrined forever as entitlements.

So why aren’t Republicans running around their districts and states and flooding cable TV, shrieking and close to tears about the prospect that “intransigent” and “ideological” Democrats want to “shut down the government” for their own “partisan political gain”? You know, the crap Democrats say all the frigging time.

See, here’s how this kind of BS is done, as demonstrated by a master you’ll recognize.

Yeah, it’s junk, but it’s effective.

Why aren’t Republicans accusing Democrats of potentially allowing garbage to pile up at the Korean War Memorial, or whatever, and forcing the closing of our beautiful and sacred National Parks. And why aren’t they repeating the same phrases over and over until the idea is drilled irrevocably beneath everyone’s skulls and into their grey matter so that even the MSM has to report what they are saying due to the deluge of breast-beating?


I got no idea.

Utterly Irresponsible

The most astonishing thing about the budget President Obama submitted today is that he is not even pretending to try to do anything about the debt and the deficit. NOT EVEN FAKING IT. Okay, he’s faking it a bit. He’s pretending the deficit won’t go up. So let’s give credit where credit is due!

And credit, so to speak, is the name of the game here. You see, this is the first president I remember who proposes budgets and doesn’t even offer a path toward eliminating the deficit so our kids don’t have to finance our indulgence.

The deficit, Obama asserts this year, is okay. It’s all cool. What’s a mere deficit in comparison with the grand plans of great men? We’ll just run a deficit that rises in nominal terms but stays at about 2.5 percent of the economy, the “norm” over the last few decades.


That’s okay? What type of ethic is it that says to go and be profligate and don’t worry about piling on debt?

Obama Oval child
Obama consulting with his chief budget advisor

The deficit will decline to $474 billion under the president’s plan, and then rise to nearly $700 billion over ten years, while staying at roughly the same high level as a percentage of GDP, while total debt also rises nominally but stays at about the same percentage of the economy.

But look at the assumptions. Obama thinks that somehow the economy will grow at 3 percent this year and in 2016, which it hasn’t done so far during his  term. He assumes unemployment declines to 4.8 percent. That we will allow soaring Medicare and Social Security costs to squeeze out other “investments” and that the economy can withstand the $1.44 trillion in new taxes Obama has planned for us.

But here’s the real kicker: The forecast assumes no future recessions of any significance and of course doesn’t work in a major terrorist attack or a new war, any of which would send the deficit soaring again. That is, we’re planning to be in bad shape, and when the inevitable catastrophe occurs, we’ll be in really bad shape.

This is irresponsible. It’s juvenile. And it’s dangerous. How can the leaders of a great nation make such plans?

Obama would do nothing – absolutely nothing – about the future entitlement meltdown. Leave it for someone else. This would be way to hard for someone who can barely lift the phone to call Capitol Hill.

If you want a sense of this – according to the budget documents produced by the OMB, outlays in the federal budget for Social Security and Medicare are expected to double over 11 years from $1.35 trillion in 2014 to $2.6 trillion in 2025. Where’s that money coming from? Current payroll taxes will pay for only a portion of it, and an increasingly small portion. You didn’t think Social Security and Medicare were self-financing, did you?

By delaying decisions on what to do about entitlements, Obama is making future solutions far more onerous. By failing to rein in the deficit, the president is putting America out on a tenuous, brittle limb.

But who cares? As long as we have free birth control and free community college, all is well in the land.

Obama Debt: Over 8 Percent of $1 Quadrillion

The longterm U.S. debt under President Obama’s latest spending plan is far worse than his budget suggests, reaching a total of about $84 trillion – that is, 8.4 percent of a quadrillion dollars, or $0.084 quadrillion.

Yes, it’s time to start using the quadrillion number, because with trillions getting added to the debt at an accelerating pace, the numbers are starting to become meaningless again unless put in the proper perspective.

The Obama budget forecasts a startling federal debt of just over $25 trillion. But that’s only the beginning of the frightening story of the government’s longterm obligations.

Over future decades, Medicare – before taking into account Obama’s “cuts” – has an unfunded liability of close to $43 trillion, according to the most recent Social Security and Medicare actuaries report. That is what the government is currently obligated to pay out to this and the next couple of generations – but for which it has no method on the books of raising money. It just owes that amount, and would currently have to borrow to pay it.

Similarly, the unfunded liability of Social Security is about $20 trillion. And the government has about $6 trillion in unfunded obligations for federal worker pensions. All told, we’re in the hole for about $94 trillion, or nearly $0.1 quadrillion.

Obama’s budget makes cuts to Medicare over the next decade totaling about $370 billion – as you can see, a minuscule portion of the total obligation. And the cuts are mainly to health care providers, which doesn’t amount to the type of serious “reform” needed to save the program. What’s more, the reductions are unlikely to be fully realized because of the lobbying muscle of doctors, hospitals, and other providers.

Obama’s call for chained CPI is, however, a serious proposal that could reduce Social Security’s imbalance by 20-25 percent. So let’s assume under Obama’s plan, Social Security would have an unfunded mandate of about $15 trillion. And let’s be generous and lop $5 trillion off the longterm obligations of Medicare, bringing its shortfall to about $38 trillion.

We’re still at $84 trillion, or $0.84 quadrillion, in total indebtedness.

Now you understand why Republicans are demanding Obama get serious about reducing the debt and enacting entitlement reform, and why his current plan doesn’t seem very serious at all.

Grandma Minnie’s Recipe for Budget Disaster

President Obama’s budget reminds me of when my grandmother got a little older and gradually stopped making the delicious delicacies she’d been churning out all her life.

One day, late in her life, she served us some gefilte fish – a Jewish delicacy of thick chopped fish patties in a gelatinous sauce. It didn’t quite seem up to her usual standards. Kind of bland, this stuff. It looked the same as her normal offering – covered with lots of sauce and with some carrots added and so forth, but something was not right.

Then we looked a little closer.

What's really going on here? (Not an actual photo of Grandma Minnie)
What's really going on here?
(Not an actual photo of Grandma Minnie)

All of Grandma Minnie’s dishes were done with creative imprecision – a little of this, a little of that – somehow always yielding a relatively consistent great taste. It’s why none of her recipes were ever passed down – she couldn’t exactly explain how she did them.

But this time, we noticed, all the pieces of gefilte fish were about the same size and shape. This was not how Minnie Pawgan operated.

We knew: Store bought, but dressed up to look authentic.

President Obama has laced his FY 2014 budget proposal with some ostensibly appealing features: he used chained CPI to reduce Social Security benefits and made real cuts in Medicare, for example. But when you look a little more closely, this is just warmed over Democratic stuff.

The great claim that it raises taxes by about $580 billion – to be added to the $600 billion in increases passed as part of the January sequester deal – turns out to be a $1 trillion in tax increase when you include fees and things like a new cigarette tax. That now adds up to about $1.6 trillion. Obama ain’t getting anything close to that from Republicans, and he knows it.

The Social Security benefit cuts are just a drop in the bucket of what’s needed. The Medicare cuts are similarly tiny relative the the massive unfunded mandate that this, the greatest boondoggle in all of history, has become. What’s more, they fall mostly on providers, who, like the doctors have done every year since they got whacked in 1997, will surely lobby hard and get much of their money back.

And despite the tax cuts and spending increases, the deficit remains above $400 billion IN TEN YEARS.

Obama and budget director Jeffrey Zients discuss methods for disguising gefilte fish
Obama and budget director Jeffrey Zients discuss methods for disguising gefilte fish

Obama’s operatives were on TV today saying things like, as a percentage of GDP that’s pretty good. Well, it’s actually not that good, and of course it assumes we won’t have any new crises, whether resulting from the economy, al Qaeda, or a foreign war. And, I assume, no new Democratic presidents with vast spending ideas.

There are spending cuts which may or may not occur, and new programs – like guaranteed early childhood education – that will be impossible to revoke once established. They’ll live on whether the money’s there or not.

The budget enables Obama to present himself in 2014 as a moderate who tried as hard as he could, but the cruel Republicans walked away. And so, he will say, we need a Democratic House to get anything done.

He’s continuing to meet with Republicans, which is fine – he had a dinner with GOP senators Wednesday night. But this may well be part of the effort to obscure what’s really going one here. It’s at least as interesting that he is NOT meeting privately with Democrats to try to sell the budget to them, since they are furious about the cuts he decided to include. If he’s serious about this, he needs to do a lot of hand holding on the left. I don’t see it.

What’s more, this budget is two months late. Trains have already left the station in both the House and Senate. Another sign that Obama is more serious about politics than policy.

Grandma Minnie couldn’t fool us, though at her age, we forgave her for trying, because she hadn’t fooled us before.

Obama, who promised Obamacare wouldn’t raise our insurance premiums or force us to change doctors, who said that he would halve the budget deficit, and who said, cross-my-heart-and-hope-to-die, he wouldn’t raise middle class taxes – which he does in this budget – doesn’t have quite the same residue of trust.

Are Republicans Getting Smart?

I know this is hard to believe, but Republicans may be outmaneuvering President Obama on an important issue.

According to Politico, Republican leaders in upcoming weeks will be drilling into your brain that they want to balance the budget, while Democrats do not.

Because its true AND it polls well, they’ve found.

budgetIn a weird interlude of political honesty, Obama admitted last week he doesn’t want to balance the budget. “Our biggest problems in the next 10 years are not deficits,” he told Republicans during his Niceness Tour, the New York Times reported.

Why balance the budget when THERE ARE SO MANY PROGRAMS left to start or expand? How can Obama stop spending when there’s so much he needs to help you with. When you’re incapable of raising your children, eating the right food, planning for your retirement, keeping a job, finding your shoes, figuring out to go to the doctor, or resisting engaging in mass murder without EXPERT HELP.

But Republicans think Americans are smart, see, and the people know the fiscal Armageddon predicted by Nostradamus – I don’t know, I guess he predicted that – and by EVERY SENTIENT ECONOMIST is coming.

They know they gotta balance their own checkbooks, and figure Obama should balance his.

Politico reports:

Instead of focusing on selling the conversion of Medicare into a premium support program, Republicans will incessantly pound home the theme of balancing the budget, GOP leaders say. When talking about the Democrats’ plan, Republicans criticize it for attempting to raise taxes and the fact that it doesn’t balance the budget . . .

The internal party polling shows that Republicans think there’s massive political upside to talking about balancing the budget. In fact, Republican leadership think it’s the winning argument as the party again starts battling with Democrats over the nation’s fiscal future . . .

It’s not only the broad idea of balancing the budget that’s a winner, but how Republicans want to do it also polls well. Seventy percent of voters in districts Republicans are targeting, and 67 percent of swing district voters support balancing the budget by reforming entitlements and cutting spending.

I mean, really, Obama found a poll saying it’s okay not to be able to balance the budget in ten years? Seems like the Republicans may be onto something.

White House: No Budget for Weeks

The White House today said it will not release a budget for weeks, delaying well beyond the legal due date the publication of the president’s annual tax and spending blueprint.

White House Press Deputy Press Secretary Josh Earnest, who led the daily briefing today, said the release date was “weeks ahead.” The Hill is reporting that the White House has informed Congress to expect it April 8.

White House officials had previously indicated the budget would be out in mid-March. By law, it is supposed to be released the first Monday in February, which this year was February 4.

Obama aides have grumbled that having to deal with the sequester has backed them up on their budget work. House Republican staffers apparently have not been similarly hampered and plan to release their budget on Tuesday.

Please Don’t Expect Anything Out of Today’s Meeting

Today’s meeting at 11 am between President Obama and the Congressional leadership is one of those Washington things in which nothing gets done but which is specifically designed to tell the public that something is getting done. It’s a photo-op, and not surprisingly, photographers will be invited in to take pictures, and a couple of… Continue Reading

White House Preaches Comity but Retains Sharp Rhetoric

The White House is rolling out a new rebuttal to the GOP proposal, authored by Rep. Paul Ryan (R-Wisc.), to cut Medicare spending by revamping the program, saying Ryan’s prescription is necessitated only by the need in the plan to pay for the extension of the Bush tax cuts for the rich. “[The Ryan plan]… Continue Reading